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Clipping the dipping: House limits pension abuses

March 09. 2017 8:01PM

It’s called the New Hampshire Retirement System, not the New Hampshire Second Job System.

Under current rules, a municipal employee who has earned a pension can not start collecting that pension if he goes back to work full-time for another town. But that prohibition does not apply to part-time employees working less than 32 hours per week.

New Hampshire communities have gamed the system, hiring “part-time” police and fire chiefs who officially work just 32 hours per week. The new employees “double-dip” with both a pension check and a paycheck, and local taxpayers don’t have to pay into the NHRS for the new hires.

We don’t blame local officials or local employees for responding to these perverse incentives. But it is past time to change those incentives.

The House this week approved HB 561, which gives the executive director of the New Hampshire Retirement System authority to penalize retired part-time employees breaking the 32-hour limit. NHRS could suspend pension payments to employees who break the rules, and fine employers.

It’s a good step forward, but more needs to be done to curb double-dipping.

Gaming the system in this way only saves money for local taxpayers in the short-term. It weakens the solvency of the system, which relies on employer and employee contributions to fund future pensions. Double-dippers are drawing down the NHRS corpus, rather than building it up.

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