"I guess you could give any one of us a 1099 and claim we're a contractor," Allred said, referring to the IRS form for payments to independent contractors.
"You have to go through a step-by-step process: Is this person a contractor, or is this person a state employee?" he added.
He cited the example of retired state Personnel Director Joe Smith, who entered into a consulting contract with then-Gov. Joe Manchin in 2005. While ostensibly working for the state as vendor, Smith had administrative authority in the governor's office, including signature authority to approve employee promotions and pay raises.
"The issue is the monetary impact on the system, and the political philosophy of whether someone should be able to draw a retirement check and a paycheck," Allred said.
The legislative interim committee is also looking at ways to reduce future state pension costs by reducing retirement benefits for future hires.
Options include increasing the normal retirement age for state employees from 60 to 62, increasing the employee contribution rate from 4.5 percent to 6 percent of salary; and reducing or eliminating credits for unused sick days and leave days.
Other options would be to reduce the multiplier for calculating pensions from 2 percent of salary times years of service to 1.75 percent or 1.5 percent, or to cap maximum pension benefits at 70 percent of salary, regardless of years of service.
Reach Phil Kabler at ph...@wvgazette.com or 304-348-1220.