Retirement Offer Will Save State More Money Than Expected

By: Associated Press
By: Associated Press

Nearly one out of every 10 state workers plans to retire by the end of the year, about 1,400 more than expected and enough to save the state more than $60 million this budget year, a state spokesman said Monday.
A total of 4,755 workers will be gone by Jan. 1. Workers already eligible or close to retirement were offered slightly better pension benefits to leave, and about a third of them accepted the offer, said Kurt Weiss of the Department of Technology, Management and Budget.
Around 900 retired by Nov. 1, but "most of the people are sticking around to the end of the year," Weiss said.
Before the retirements, the state had about 52,000 employees. Past budget cuts have resulted in the state government work force dropping by more than 8,000 workers since 2000, or nearly 13 percent, according to the nonpartisan Senate Fiscal Agency.
The state could have 1,500 fewer workers next year after the retirements. While all vacancies for critical positions -- such as child protection caseworkers -- will be filled, just two out of every three retiring workers overall are expected to be replaced.
A spokesman for Gov.-elect Rick Snyder said no decisions will be made on how many vacancies will be filled until it's known how much money the state will save.
"We still don't have a clear enough picture of what the work force is going to look like once everyone is finally settled," Bill Nowling said. "We need to see what that is."
The Department of Human Services will see the biggest loss, with 1,306 employees retiring, many of them caseworkers who will be replaced.
Other departments with a large number of retirees are Community Health, with 565, and Corrections, with 439. Losing more than 300 workers each are the departments of Transportation, Natural Resources & Environment, and Energy, Labor & Economic Growth.
The retirement incentive was offered to workers 55 or older with at least 30 years of service -- who already were eligible to retire. It also was offered to those whose age and years of service equaled at least 80. Some workers who were close to that number bought years of service through the pension system to make them eligible for retirement, Weiss said.
Workers who don't retire by the end of December will have to pay 3 percent of their salaries into retiree health care funds through September 2013. That may be challenged in court by state unions.
The state faces a $1.5 billion deficit in the budget year that starts next Oct. 1. Snyder has said state workers should expect less compensation and benefits in the years ahead.


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