Retirement as a Springboard for a Second Career


Stephen Beale took a look at government retirees who keep working:

At least 11 retirees in the state pension system had their benefits suspended over the last six years for breaking rules on how much work is permitted during retirement, according to documents the state Treasurer’s office provided in response to a public records request. …

In 2014, approximately 450 retired teachers, nurses, college educators, municipal, and state retirees worked one or more days for a local or state agency.

My statement, in the article, is that the entire retirement system is set up as a sort of abuse.  Nothing stops retirees from taking up second jobs outside of government, where their baseline income and, often, benefits give them an edge in the marketplace, versus us private-sector schmoes whose work has to support us fully and lay the basis for our own retirement someday (theoretically).

If government pensioners weren’t retiring in their late middle age (or earlier), their continuing to pick up a little bit of light additional work wouldn’t be an issue.

  • Mike678

    Not sure what your beef is. 20 year Fed/State retirement is not a hidden option; anyone can apply and make these a career–and then move on to another career. What’s the problem? As long as the system is competitive, perhaps that will get us the clear thinking and/or forward thinking individuals in the gov’t service. I agree the pension benefits for PUBLIC sector unions are a bit much, but that is a separate issue.

  • Justin Katz

    I’m not following you. The scope of this post is pretty much state and local public sector union benefits. The offering may not be “hidden,” but its unsustainability has been. Employees are offered a deal that implicitly will have to cost taxpayers more than stated, and I’d offer Rhode Island as an example that the optimistic “maybe” scenario that you describe has the practical reality completely backwards.

    To my experience, on the average “clear thinking and/or forward thinking individuals” don’t really want to be locked in to serving time until some midlife retirement date and then seeking something completely new. Again, on average, the people attracted to these “set for life” deals are going to be more apt to be those who’ll work the system.

    Let me mitigate that statement, though, by suggesting that the great majority of people in and out of government probably don’t make their decisions on either basis. The more immediate need for work probably trumps, and people make their calculations based on an improvised cost:benefit analysis that applies a sort of sensed discount rate to benefits in the future.

  • Justin Katz

    I also want to challenge your premise a bit. Benefits might be hidden, but do you really think the general public understands how pensions and benefits work, really? My sense is that folks still believe that pensions are a retirement plan for old age, but what they’ve be come (and the way you present them), they’re more like a deferred payment plan. If they were the latter, they could be much less, because the assumption wouldn’t be that people have to live on them. Alternately, you could multiply employees actual earnings by 1.75 (or whatever) in order to get a sense of their real pay.

  • Max

    Lets not disparage or second guess the intentions of those that choose those jobs especially in the area of public safety and just agree that the system is designed for failure. The system was designed by those with political clout and agreed upon by those that benefited from their votes. Those plans could have been designed to succeed. I believe if you looked at the Jamestown P.D. pension plan you’ll find it fully funded at 100+ percent. The catch is the average years of service. If you compare it to other departments you’d find it very high. Many communities with their own private plans had poor track records of sometimes underfunding the plans and using them to dispose of their malcontents through disabilities. Cops with high blood pressure were retiring early because state law allowed it. Add those who chose to cash-in and the occasional legitimate disability and you have a recipe for failure.

    Most new hires are there for the love of the job. It takes time for a minority of them to become jaded and/or join the upper echelon of the union.