County offers early retirement plan

July 26, 2010
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Kent County Commissioner Roger Morgan said the next step for the county’s new voluntary retirement incentive program is to hear what the employee bargaining units think about the plan the board adopted following an hour-long closed session last week.

“We don’t need 100 percent approval from all of our bargaining units, but we do need approval within the bargaining units as we move forward. We’re hopeful that they’ll take a look at this and move forward with it,” said Morgan, who served with Commissioners Harold Voorhees, Carol Hennessy and Richard Vander Molen on a subcommittee that developed the incentive program.

Bargaining units must agree to a handful of concessions for their members to become eligible for the incentive program. Those concessions include giving back 50 percent of the next negotiated wage increase and raising the annual pension contribution by employees from 6.5 percent to 7.5 percent. If a unit doesn’t agree to the changes, then employees that belong to that bargaining unit aren’t eligible for the early-retirement plan.

“There was a lot of work that went into this,” said Commissioner Brandon Dillon. “I think it’s balanced. I’m very hopeful our bargaining units will act quickly.”

“I think this is a very good proposal,” said Commissioner Harold Voorhees, who also sits on the county’s pension board with Morgan.

The idea behind offering qualified employees an incentive to retire early is to lower the number of workers who will have to be laid off in order to balance the 2011 general fund, which is facing a deficit of more than $9 million. But Morgan cautioned that the program won’t do away with having to let some workers go before the new fiscal year arrives Jan. 1.

“It’s not going to eliminate the need to lay people off because we’re still facing, I think, a $9.6 million budget deficit and our projections are showing us that we will save about $2 million with this process. So I think as we move along, it will probably lessen the impact of layoffs, but it’s not going to completely eliminate the need for layoffs to balance our budget,” said Morgan.

Employees who qualify for early retirement under the program have to be at least 55 years old and employed at the county for at least 15 years, or have 25 years of credited service at any age, or be 60 and employed for a minimum of 5 years.

Workers who opt for the program can choose one of the two incentives. The first has the county paying an employee’s health insurance premiums, at the single rate, for two years. The second lets an employee receive 25 percent of his or her base salary in two installments, with the first payment coming in the first pay period following retirement and the second coming next July.

Those who retire early would also receive the benefits they are due under their respective collective bargaining agreement.

“This is as much as we could have expected. It’s nice to be able to offer early retirement,” said Commissioner Keith Courtade.

The subcommittee began working on the plan in March; county committees met in closed sessions to discuss the proposal prior to the commission’s meeting last week.

“We looked at a lot of different programs. We looked at defined benefits as opposed to defined contributions. So we took a pretty broad approach when we looked at this, knowing that we have to negotiate with the bargaining units,” said Morgan.

Morgan said he hopes the commission hears from the bargaining units fairly quickly so the county will have a better idea of what next year’s spending plan will look like. The board is expected to adopt the 2011 general fund in mid-November.

“We’re hopeful that they will be back to us by the fall because we’re in the middle of the budget process now. Some of these budget decisions are going to hinge on what the bargaining units accept or do not accept,” he said.

The commission needs to cut expenses by roughly $7.5 million for next year and dig into the reserve fund for $2 million to cover the projected deficit. If the early retirement program does save the county $2 million for next year’s budget, then the reductions could be rolled back to $5.5 million and fewer workers would get pink slipped.

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