ALBANY (TNS) — Under a provision tucked in the state Senate’s budget proposal, retired government workers who choose to return to work for the state could earn up to an additional $15,000 a year without losing any of their pension income.
In a nod to a shrinking state workforce and growing cries about affordability that have spanned both the private and public sector, the provision would raise the current earnings ceiling for retirees from $35,000 to $50,000.
But it also comes as the state said it is struggling to fill open positions in civil service — and some said they believe offering workers the chance to “double dip” may provide at least a partial solution.
“It gives the employer a skilled employee at a reduced cost,” said Ed Farrell, president of the Retired Public Employee Association. He noted that employers — in this case the state of New York — don’t need to shell out for benefits since the employees already receive pensions. He called the measure a “win-win.”
Whether or not the provision survives in the final budget agreed upon by Hochul and leaders of the Assembly and Senate remains to be seen. Neither Hochul nor the Assembly has proposed raising the cap; instead, Hochul wants to extend a pandemic-era executive order that incentivized retired school workers to rejoin the workforce by waiving their income cap.
The Assembly’s draft budget nixes both proposals.
“If it helps us to maintain jobs, if it helps people to get more income to live on, if it helps to make sure that the process to hire people is moving faster ... why not,” said state Sen. Robert Jackson, a Manhattan Democrat who chairs the Civil Service committee. He added that he is unsure about the provision’s fate during the final days of budget negotiations.
But according to both state and union officials, New York may be facing a mass exodus of workers soon. An analysis of the workforce included in Hochul’s budget proposal said state government stands to lose more than 12,500 workers who are nearing retirement within the next five years — while recruitment efforts to attract younger workers have not had much documented success.
That is partially because the state is grappling with shifting attitudes to workplace culture and has not yet tailored itself to younger pools of workers, said Wayne Spence, president of the Public Employees Federation.
Spence has been pushing for the state to modernize its work culture in a bid to attract younger workers. But Spence said that the state usually lags behind the private sector in areas like remote or hybrid work flexibility, which he noted are especially attractive to younger workers.
Raising the cap is a stop-gap measure, at least temporarily, to make it more inviting for retirees to bring their skills back into the agencies they left behind years ago, Spence said. He said that he’s been hearing anecdotally there is more interest among union members about returning to the workforce after they retire, often so they can boost their retirement income in a tight economy.
“We see this as excellent,” Spence said. “That older workforce is now a key piece to at least keep New York going, while there’s an opportunity for reset.”
Beth Finkel, the executive director of the New York AARP, said that the shift is also pertinent to an increasingly larger swath of people who want to work longer.
The reasons behind wanting to work past retirement are multifold, Finkel said. Much of it is due to affordability, with more Americans needing to work later to have a higher quality of life as they age. But Finkel said there may be subtler reasons, like missing the social network at your job — or realizing you’re more bored in retirement than you expected.
“We know that many people want to work longer,” Finkel said. “And if they do want to, they should be able to have the option and a little bit more flexibility.”