How to end pension ‘double-dipping’ in the public sector

The Mail on Sunday always has something shocking as its cover story. It is the nature of the beast. But last week’s Scottish lead was particularly irritating. It explained the system of ‘double dipping’ in the police force. It works like this.

Officers retire on the usual “lucrative” pension terms (think two-thirds of their final salary) at 50. Then they get re-employed by their old stations in civilian roles on new salaries. The net effect, as the paper puts it, is that the public is “paying twice over for the services of the same police officer”.

In the Lothian and Borders force in Scotland, retired officers apparently make up some 8.5% of the work force. In the Strathclyde force, eight members of staff are retired policemen on salaries over £30,000. Four of those retired with a final salary of over £70,000 in the first place. The overall cost? “As high as £10m a year”, says the Mail.

I don’t think many people would be much bothered by the idea that police officers might work after 50, but I would think a good many would be bothered by the idea that the already grossly overstretched taxpayer pays them twice if they do.

So what’s the solution? There used to be a very simple one in the army (perhaps there still is – I don’t know). It worked like this: if you took a retirement job with the army, the amount of your pension was subtracted from the salary of the new job. The effect was to give you an income above your pension income as long as you worked, but not one higher than any non-pensioner taking the same job.

Something for the police to think about perhaps?

And just in case you think it is just a UK problem, here’s something on double dipping in the US. “Does it look bad? Yes. No question about it, it looks bad. Was it legal? Yes,”  says one US double dipper (who has taken home $1.14m in pensions at the same time as drawing a salary).