Double dipping
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Double dipping is a term used to describe the act of receiving pension benefits while also accepting a salary, oftentimes from the same employer. For example, double dipping occurs when a member of Congress receives a paycheck while also receiving a pension from a previous government job.[1][2][3]
Usage
The phrase double dipping is most often used when referring to a politician who receives a pension from a previous government job while also receiving a salary from a current government job. Ballotpedia follows this usage.
Double dipping can occur in the retirement system when a government employee continues in the same job (through a process of retiring, then being rehired) while receiving pension benefits from that job. This can cause individuals to receive pension pay and regular pay from the same government source.[2]
Proponents of the practice say that supplementing one's retirement income with a second job does not place a burden on government pension systems. Those opposed to double dipping say that it overtaxes the state agency paying pensions, potentially damaging the state's overall pension health. In states with poor pension health, officials may raise taxes or seek other solutions to maintain pension payments.[4][5]
Pensions as dual income
One of the arguments against double dipping is that, since pensions are intended to replace an individual's income after retirement, a second income is unnecessary. Opponents cite cases where an individual takes a second government job, such as a seat in Congress, after already serving in another government position long enough to receive a pension. In some cases, individuals will receive pension income from a state or federal pension system while also receiving a salary from their work in the U.S. Congress. In 2012, around 90 members of Congress received a government pension alongside their congressional salary ($174,000 in 2012). In 2013, over 100 members, nearly 20 percent received a government pension in addition to their congressional salary. Although congressional jobs are a common source of double dipping, the issue can come from nearly anywhere in government where there is the potential for dual income.[6]
Early pensions
Double dipping can also occur when pensioners are permitted to receive their pensions prior to retirement. Some plans allow pensioners to receive their benefits as early as 55. This option gives individuals the option of retiring early, but it also allows pensioners to continue working until they are ready to retire.[7]
See also
- Changes in Net Worth of U.S. Senators and Representatives (Personal Gain Index)
- Public pension health by state
- Pension Terms and Definitions
External link
Footnotes
- ↑ Investopedia, "Double dipping," accessed April 28, 2015
- ↑ 2.0 2.1 Merriam-Webster.com, "Double dipping," accessed January 4, 2019
- ↑ The Wall Street Journal, "Congressional Pension Double-Dippers Club," May 2014
- ↑ Governing the State and Localities, "Looking twice at pension double-dipping," accessed April 28, 2015
- ↑ eHow, "What is double dipping in retirement systems?" accessed April 28, 2015
- ↑ National Journal, "Nearly one in five members of Congress gets paid twice," accessed October 14, 2015
- ↑ CNN Money, "Retirement - When can I access my pension money?" accessed April 29, 2015
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