Nearly 20 percent of Hawaii legislators — the very people who decide the fate of public employee pension legislation — are getting state paychecks while drawing state pensions, a practice known as double dipping.

While double dipping is not prohibited in Hawaii, most state and county workers don’t do it, and the practice, often considered by critics a symbol of overly generous benefits, has become controversial enough nationally that some states have adopted or are considering bans.

"You’re going to see more and more instances where there will be increasing pressure on lawmakers to make these changes," said Sujit CanagaRetna, senior fiscal analyst at the Council of State Governments’ southern office in Atlanta.

Though double dipping tends to have a relatively small financial impact on many pension systems, including Hawaii’s, the dual-payment practice has come under criticism as system managers across the country struggle to address major financial challenges. Hawaii’s Employees’ Retirement System faces an unfunded liability of more than $8 billion.

Six Hawaii senators — a quarter of the 25-member Senate — and eight representatives in the 51-member House make up the Legislature’s double-dipping class, according to a Star-Advertiser review of their financial disclosure forms and data obtained from the ERS through a records request.

Gov. Neil Abercrombie, a retired state legislator, is a triple dipper, drawing not only a state pension of about $29,330 annually but also a federal one of $47,829 for his past service as a congressman, according to data provided by his office. Abercrombie’s retirement pay is in addition to his annual salary of $117,312.

As governor, Abercrombie decides whether to approve any legislation, including pension-related bills, passed by the Legislature.

One of the 14 legislative double dippers, Sen. Clayton Hee, also is a key player in determining what happens to pension proposals, including a controversial measure before the Legislature that would limit overtime use in calculating retirement benefits. Hee is chairman of the Senate Judiciary and Labor Committee, which handles pension legislation. He did not respond to a phone call and email seeking comment.

In all, the Star-Advertiser found at least 21 elected officials statewide who are double dipping, including city Prosecutor Keith Kaneshiro and city Councilwoman Ann Kobayashi, who said she donates her nearly $30,000 pension each year to nonprofits. None of the double dippers are building on their retirement benefits, nor are they contributing any longer to the ERS system. That’s because the period for enhancing their pensions stopped once they retired.

Elected officials who are not double dipping, however, still are afforded benefits or options generally not available to most other state or county workers, resulting in retirement packages more generous than almost everyone else’s.

One of the more lucrative benefits involves what is called a multiplier, a number used to help determine pension amounts. For most state workers, the multiplier is 2 percent; it is multiplied by the employee’s years of service and average final compensation to calculate retirement pay. For elected officials and judges, however, the multiplier is 3.5 percent, applied to the years in those positions.

That seemingly small difference — 1.5 percentage points — can make a huge difference upon retirement.

If a regular state worker and a legislator retired, for instance, each having 20 years of service and average compensation of $50,000, the employee would get a maximum pension of $20,000 a year, according to numbers provided by ERS. The legislator’s maximum pension would be $37,500, or 88 percent more.

Unlike most other workers, elected officials can retire after 10 years in office regardless of age and not be penalized in the form of reduced pensions. Other workers with at least 10 years of service must attain a certain age — typically 55 or 62, depending on their pension plan — before they can retire without penalty.

The ability to retire early creates a key incentive to save on health care costs. If a retiring worker has at least 10 years of service and was hired before July 1996, the state picks up the entire tab for the retiree’s medical insurance, including family coverage. That change can save the retiree thousands of dollars each year.

Elected officials also can "retire" at age 65 and start drawing their pension but remain in office, continuing to get their regular paychecks. No other state or county worker has that option.

"If you’re looking from the outside dispassionately, it would seem there’s an element of unfairness to this," said Sen. Clarence Nishihara, a double dipper who retired in 2002 after 30 years with the Department of Education. He said his pension is based on a multiplier of only 1.25 percent.

In the big picture for the ERS, the enhanced benefits afforded elected officials represent only a tiny slice of the agency’s financial obligations. Yet those benefits have contributed to a perception among many government workers that the financial pain of fixing the retirement system isn’t being evenly spread and that legislators are unwilling to target their own perks.

"That’s the thing that resonates with rank-and-file government employees," said Randy Perreira, executive director of the Hawaii Government Employees Association, the largest public-sector labor union in Hawaii.

While the more generous benefits were approved decades ago as a way to help offset relatively low salaries for elected officials, pay levels since have increased considerably, Perreira said. That change has prompted questions about whether lawmakers still should be getting enhanced packages.

"No longer can they stand on, ‘Gee, we need better retirement benefits because we’re underpaid compared with other people,’" Perreira said.

But several legislators defended their benefits.

Sen. Donna Mercado Kim, who draws a state pension of about $20,000 annually, said legislators are paid as part-timers but generally work full-time hours; don’t get overtime, sick leave, vacation or regular pay raises; and lack job security, needing to run for re-election every few years to keep their positions.

State legislators are paid $46,273 annually, with the Senate president and House speaker earning $53,398 each.

"It’s a give and take," Kim said. "We don’t get a lot of other benefits. Yet I work more than full-time."

Rep. George Fontaine, who retired in 2005 after 25 years as a Maui police officer, said the pensions he and other officers earned were in recognition for putting their lives on the line to keep Hawaii safe.

"The fact that I now draw a salary for the work I do as a state legislator should not disqualify me or any other person from the retirement that we paid into and earned," Fontaine wrote in a statement to the Star-Advertiser. He said his pension falls between $25,000 and $50,000 annually.

Because most elected officials don’t retire early and their compensation and years of service on average are lower than most other employee groups, their pension amounts average less than what the other groups get, according to ERS Administrator Wes Machida.

In written responses to Star-Advertiser questions, Abercrombie’s office said the governor recognized that retirement benefits for government workers are uneven and have been historically.

"Whether or not elected officials are ‘entitled to the retirement benefits’ they are afforded, it is the law," his office wrote. "Gov. Abercrombie has been at the forefront asking for pension revisement to ensure that the system we have can afford to deliver benefits for all retirees. The governor welcomes the discussion even if it means that his own benefits are adjusted to ensure that the whole system can be sustained."

Abercrombie deflected criticism of double dipping, not just for politicians.

Some retirees in non-elected jobs are drawing pensions while getting state or county paychecks. As long as the workers retire for at least six months, they can get part-time (less than half-time) or 89-day contract jobs and still draw a pension. Like politicians, these double dippers do not accumulate more retirement benefits.

"Retirees may have many years of relevant work experience and can contribute greatly to the state," Abercrombie’s office said. "Similarly, elected officials are chosen by the voters, and voters deserve to have a qualified candidate and not have choices limited because non-collection of a pension is a disincentive for anyone to choose to run for elected office."

Although the Constitution prohibits the state from taking away benefits that workers already earned, opinions vary on whether the state has the authority to reduce benefits going forward. The public-sector unions historically have opposed such approaches.

Still, some legislators say change is overdue.

"I don’t believe elected officials deserve any more retirement benefits than any other public servants and should be treated the same, and I would vote for such a measure," said Rep. Gene Ward, who gets a roughly $14,000-a-year state pension. Ward retired in 1998 after stints in the House, Peace Corps and Army.

To address the ERS’ unfunded liability problem, the Legislature last year reduced benefits for county and state workers hired beginning in July. The legislation, for instance, lowered the multipliers for all groups, including future elected officials.

But the new law, for the most part, does not touch benefits for current workers, including elected officials.

Given the fiscal challenges that lie ahead, Edward Zelinsky, a New York law professor who specializes in pension issues, panned the notion that legislators who are double dipping or who are accruing enhanced benefits would be able to lead the charge.

"These are the people who are supposed to be curing the problem and setting the appropriate ethical tone," Zelinsky told the Star-Advertiser. "But what message is being sent to workers when there’s this double standard?"

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