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2010 July 26 - 12:00 am

MONEY TREE: Wash. College Workers Use Loophole To Boost Pay

SEATTLE (AP) — A Seattle Times investigation has found that at least 40 university or community college employees in Washington retired and then were rehired within weeks so they are now getting both a pension and a paycheck.

The Legislature has tried to crack down on these quick retirements, but the pattern continues, with state employees exploiting a loophole in state retirement laws.

A Times analysis of state payroll and retirement records shows that, as of the beginning of this year, about 2,000 people were collecting both wages and a pension from the state. In about two-thirds of those cases, however, retirees had returned to a state job on a part-time or on-call basis.

The Times has found that 58 workers — including the 40 in higher education — had retired and been rehired full-time within three months. Thirty work for either Washington State University or the University of Washington. A number of state agencies, mostly the Washington State Patrol, account for the cases outside of higher education.

Greg Royer, the vice president for business and finance at WSU, ranks among the state’s top-paid employees, with a salary of $304,000. For nearly seven years, he has also collected an annual pension of $105,000.

At Green River Community College, President Rich Rutkowski, 67, retired for a month in 2001 in a move approved by the college’s trustees. That enables him to collect $64,000 a year in retirement benefits on top of his $179,000 salary. Under his watch, three other staffers also have each retired for a month and then been rehired.

Some have been double dipping for more than a decade. At The Evergreen State College, Al Saari retired for a month in 1999. He now collects a salary of $78,000 and a pension of $39,000.

“I take it a day at a time,” said the 80-year-old project manager. “I’ll stay as long as I’m needed by the college, and I’m productive, and I feel good.”

The practice was troubling enough to WSU President Elson Floyd that after The Times began investigating, he directed senior staff to end the practice of hiring people back without an open job search.

And Royer has announced he will leave WSU, several months earlier than he’d planned. Royer declined repeated requests to be interviewed for The Seattle Times story.

The way the state retirement system was set up in 1947 left almost no margin for double dipping. State employees could retire and claim regular pension benefits only at age 60 or after 35 years of service. By age 65, all state employees were compelled to retire.

The system has changed many times since then. Compulsory-retirement ages were abandoned for most jobs, and rules were put in place to try to prevent double dipping.

Those rules were temporarily lifted in 2001 to encourage more teachers to return to work to relieve a shortage. That led to a flood of state employees retiring and getting rehired, prompting lawmakers to again clamp down on the practice in 2003. Lawmakers have been trying to plug loopholes since.

Rep. Steve Conway, vice chair of the Legislature’s Select Committee on Pension Policy, said when The Times contacted him it was the first he’d heard of the higher-ed loophole, and he would now look into it. He said only on rare occasions in which there was a genuine shortage of skilled labor was it acceptable to re-employ a retired worker.

“It’s not designed to let people make excessive salaries in the last years of their employment,” he said. “If there’s an abuse here, we need to correct it.”

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