300 get jobs plus pensions
| • | Pensioners collecting salaries |
By Jim Dooley
Advertiser Staff Writer
Gray hair is everywhere in the Investigations Division of the state attorney general's office: nearly 30 of the investigators on payroll there are retired police officers collecting full pensions — some as high as $70,000 to $80,000 per year — plus $38,000 a year in salaries.
Each rehired retiree works for 89 days, takes a one-day break in service, then returns for 89 more days of investigating. State law says that a retiree who comes back on the public payroll for 90 days or more can no longer collect pension benefits. So every four months or so, the employees are dropped from the payroll, then return a day later, pensions intact.
It's a peculiar employment dance that is followed throughout state and county government in Hawai'i and elsewhere around the country. According to employment data collected through the state public records law, more than 300 retired state and county workers are back on the public payroll as 89-day hires, collecting full pension benefits plus salaries that in some cases are as high as they received before retirement.
Kathleen Watanabe, director of the state Department of Human Resources Development, said those numbers — collected as a result of Advertiser inquiries about retirees who are back on the job — came as "a real surprise" to her office and the state will be looking at ways to quantify how often the practice goes on.
"I think you've come across a real problem and one that we're going to have to address," Watanabe said.
Collecting a pension and salary at the same time — called "double dipping" — is not illegal and government personnel officials say it saves money in most cases. But the practice has also been criticized because it can block government workers from getting promoted and keeps longtime workers on the payroll for years.
"In the state system, we do not have the luxury of hiring replacement workers before the incumbent of a position retires," state Health Director Dr. Chiyome Fukino said.
'Hit the ground running'
Finding qualified replacements in a tight labor market and satisfying "complex internal approval processes" can be time-consuming, Fukino said. "A frequent and effective practice is to rehire the previous incumbent while these actions are proceeding."
And the employer doesn't have to pay for medical, vacation or pension benefit plans for retirees working under the 89-day plan, personnel specialists said.
Watanabe estimated that government payroll costs are slashed by as much as one-third when those benefit packages don't have to be budgeted. She also noted that there are fewer training expenses for retirees brought back to government jobs.
"They hit the ground running," Watanabe said.
The former police detectives working in the attorney general's office, she said, "are highly skilled, experienced and trained criminal investigators."
Hiring a retiree on the 89-day plan is supposed to be a short-term solution, Watanabe said, but employment records released to The Advertiser show that some retirees have remained on the state payroll for years.
• Department of Hawaiian Home Lands enforcement officer John W. Peiper Jr. has been collecting a pension plus salary for nearly a decade. He was rehired June 1, 1994, and is still working, collecting a pension plus salary of $49,344 annually.
"Mr. Peiper was the only enforcement officer in the DHHL who provided critical needed enforcement services for the department on a statewide basis," department official Lloyd Yonenaka said.
Another enforcement officer was hired last year, but Peiper stayed on the payroll to provide "critical needed field training for this employee," Yonenaka said.
• DHHL genealogist Linda Chang retired after 30 years of service to the department but was hired back in February 1995. At first she worked the equivalent of three days a week, then four days and since September 1999, she has been full time, collecting the same $49,344 salary as Peiper, Yonenaka said.
"Genealogy is a very specialized field," Yonenaka said.
"Working for more than 30 years with the department, specifically on Native Hawaiian genealogy, Linda Chang's expertise is invaluable and difficult, if not impossible, to replace."
• Schoolteachers Wallace Mitsui and Glenn Higa retired from the Department of Education in 1995, then were rehired at the state Defense Department's Youth Challenge Academy in June 1995, according to Lt. Jeffrey Hickman, public affairs officer for the department. The two pensioners have been on the 89-day program for nearly nine years.
Mitsui was originally hired as a counselor at the Youth Challenge Academy, then became deputy director of the program for "at-risk" youths, then was made director. He's paid $55,659 in salary, plus undisclosed pension benefits earned over a 31-year career with the Department of Education as a teacher, counselor and athletic director, mostly at Wai'anae High School.
"I retired at a relatively young age, 52," Mitsui said. "I'm an active person, I've been working most of my life with at-risk kids, and I wanted to keep contributing. They asked me if I could help out here, and I was glad to do it."
The adjutant general at the Defense Department hired Mitsui because "he was the best-qualified person available," Hickman said. Mitsui then hired Higa and another retiree, William Anana, to work at the Youth Challenge Academy.
• Jean Hashimoto, an account clerk at the Department of Labor and Industrial Relations, has been a rehired retiree since November 1995, earning more than $21,000 plus her pension benefits.
Her knowledge of federal programs has made her virtually indispensable, according to department official James Hardway.
"Without her knowledge, the accounting staff would not be able to meet federal requirements," which might mean loss of federal money, Hardway said.
A replacement for Hashimoto was recruited last year, but didn't finish the six-month probation period and was terminated, Hardway said.
Human resources director Watanabe said 89-day hires can be "a valuable tool" for government personnel managers, but Gov. Linda Lingle's administration is trying to strictly monitor them.
Individual departments have authority to sign up an employee on one 89-day hire plus one extension, but any extension beyond that must be approved in writing by Watanabe's department, she said.
One high-ranking official in the Lingle administration, John F. Souza III, has been on the 89-day plan since last August, according to records released by Watanabe. The head of the Special Services Division in the Department of Public Safety, Souza is paid $65,760 in salary plus full pension benefits earned over a long career with the Honolulu Police Department. Souza could not be reached for comment.
Souza was picked for the job on the recommendation of department director John Peyton, who worked with Souza when Peyton was in the U.S. attorney's office and Souza was with HPD. "Of all the people I know, he was the best qualified to do the job," Peyton said this year.
Hindrance to promotions
Critics say the double dipping system sometimes smacks of political patronage and imposes a "gray ceiling" on civil service workers who can't get promoted because retirees are still occupying government jobs above them.
Russell Okata, head of the Hawaii Government Employees Association, said the union opposes the practice because it is bad for morale among full-time civil servants.
"The practice impedes career public employees from being promoted," Okata said. "It prevents mobility in the system."
Honolulu Fire Chief Attilio Leonardi is a recent and controversial example of the phenomenon. After retiring last year from the $112,206-a-year job, Leonardi was immediately hired back as chief at the same salary by the Honolulu Fire Commission. Leonardi worked for 89 days — to April 6 — and then took a one-day break in service. He then began work for another 89-day stretch.
The commission said it wanted Leonardi to stay on for a limited time to finish important projects in the Fire Department. Initially the commission and Leonardi said the arrangement would be in place for "several" 89-day increments, but City Council members were told last month he may continue as chief for as long as two years.
"I know the chief does a good job, but I don't think he's the only person on the planet who's qualified," council member Charles Djou said.
Pension benefits are confidential, but based on formulas in state law, Leonardi's pension should be between $80,000 and $90,000 a year. That means that as long as the Fire Commission keeps him on the job, Leonardi is being paid nearly $200,000 a year in combined salary and pension benefits.
And Leonardi's net monthly income from the chief's job is substantially higher since he retired because he no longer has deductions for pension or medical plans.
According to data provided by the state Department of Human Resources Development, the person who is paid most for his combined income of current salary and pension is Rex Johnson, head of the Hawai'i Tourism Authority, who makes $240,000 per year.
Johnson is retired from a lengthy career in both the public and private sectors — he's a past director of the state Transportation Department and also of the local Nature Conservancy here — and he said he's collecting pension benefits from the Hawaii Employees Retirement System.
He said even if he wanted to rejoin the pension system as a standard full-time employee, contributing a portion of his salary toward future pension benefits, he could not. That's because the Legislature passed a law in 2002 specifically excluding the HTA executive director from participating in the ERS.
Legislators didn't want the high salary of the HTA director to disproportionately increase the director's future pension benefits, Johnson said.
Some legislators themselves are collecting both pensions and salaries.
Eight members of the House and two from the Senate are in this category, according to David Shimabukuro of the ERS. Under state law, retirees who are elected to public office don't have to abide by the 89-day rule and can simultaneously collect pensions and salaries without the one-day break in service imposed on other rehired retirees.
Shimabukuro won't identify those 10 legislators or how much they're receiving in pensions. In fact, Shimabukuro won't identify any retirees by name, nor will he say if specific retirees are collecting pensions. He said the attorney general's office believes release of that information might violate privacy protections built into the state's open-records law. The state Office of Information Practices is reviewing the issue.
Legislative employees also make the list of double dippers, including Paul Kawaguchi, chief clerk of the state Senate. Kawaguchi retired last year but was rehired this year, collecting a pension as well as $7,300 a month while the Legislature is in session from January through May. The rest of the year, Kawaguchi will work no more than 19 hours a week, dropping his pay to about $3,600 monthly.
The arrangement was worked out with Senate President Robert Bunda, who said Kawaguchi's "institutional knowledge of the system and rules of the Senate make him invaluable."
In the Honolulu city government, some 96 retirees were working as of April 1 either full or part time. That includes three council members — Ann Kobayashi, Gary Okino and Rod Tam — who don't have to abide by the 89-day rule, according to city employment records.
The Honolulu Police Department has the largest grouping of double dippers at the county level. Twenty-three retirees are back on the police payroll as central receiving officers. They help process arrestees in the cellblock, freeing up younger uniformed officers for patrol work. Rehiring the retired officers helps alleviate staff shortages at HPD, according to city spokeswoman Carol Costa.
There are two "89ers" at the top levels of the Oahu Civil Defense Agency, according to city employment records. Former Honolulu Police Department Deputy Chief Robert "Doug" Aton has been "acting administrator" of the agency for nearly two years, collecting a $68,000 annual salary plus full pension benefits accrued over a 32-year career at HPD.
Assisting him as a planner is Benjamin Dimond, a career city worker who retired two years ago as deputy director of the Budget and Finance Department. Dimond is paid $60,000 a year from a federal grant, Aton said.
Neighbor Island counties report having only three retirees each on their payrolls.
"If you really wanted to do some research on 'double dipping,' " Maui Personnel Director Lynn Krieg said, "try to look into the number of retired federal employees holding full-time state/county jobs with full benefits while collecting their full monthly (federal) pensions."
"These are true 'double dippers' who work the second job until they vest, then collect two retirement pensions in addition to their Social Security benefits," Krieg said.
Reach Jim Dooley at 535-2447 or jdooley@honoluluadvertiser.com.
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| Pensioners collecting salaries
In state and county government, a number of retirees who are collecting pensions have been rehired and are collecting additional salary. Among them: |
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John W. Peiper Jr.
Position: Department of Hawaiian Home Lands enforcement officer. Paid: Since 1994, he has collected a pension plus salary of $49,344 annually. Why: "Mr. Peiper was the only enforcement officer in the DHHL who provided critical needed enforcement services for the department on a statewide basis," department official Lloyd Yonenaka said. |
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Rex Johnson
Position: Head of the Hawai'i Tourism Authority Paid: $240,000 annually, and is collecting pension benefits Why: Johnson said he could not rejoin the pension system as a contributing full-time employee because the Legislature passed a law excluding the HTA executive director from participating. Legislators didn't want his high salary to increase his future pension benefits, he said. |
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Attilio Leonardi
Position: Chief of the Honolulu Fire Department. Paid: $112,206 a year in salary, up to $90,000 a year in pension benefits. Why: The Honolulu Fire Commission said it wanted to keep Leonardi on board for "several" 89-day increments to finish important projects. He may stay on the job as long as two years. |
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Robert "Doug" Aton
Position: Acting administrator of the O'ahu Civil Defense Agency Paid: $68,000 per year plus full pension benefits accrued over a 32-year career. Why: City says he is the best-qualified candidate for the job. |
Correction: Retired Honolulu Police Department Assistant Chief Robert "Doug" Aton is acting administrator of the O'ahu Civil Defense Agency. His title was incorrect and the wrong photo was used in a previous version of this story.
