Penn Live News Article:
State employees with at least 29 years of service have been waiting with bated breath for word on whether an early retirement proposal will be part of the 2017-18 budget resolution.
Gov. Tom Wolf is the one who put the idea in their heads that such an incentive might be forthcoming when he announced it as part of his February budget address.
He is proposing that employees who currently have at least 29 years of service credit would be given the extra years of service needed to retire without penalty and with full benefits. Currently, employees must have at least 35 years of service or have their age and years of service add up to 92 to receive full benefits.
The administration estimated 2,000 state employees would be eligible.
Wolf still hopes it is part of the final budget package, said Wolf spokesman J.J. Abbott.
“The governor still believes that an early retirement program would be beneficial in the long-term for state government,” Abbott said.
But leadership of the GOP-controlled House and Senate say they have yet to see a proposal from the Wolf Administration about it, leaving them to think the governor has lost interest in pursuing it.
“The only information we have on the early retirement window was what was actually said in the governor’s budget address,” said House Majority Leader Dave Reed, R-Indiana County. “We haven’t actually been given any information on what they’re looking at.”
Reed indicated without a proposal, it’s difficult to evaluate the cost-savings that would be derived from it.
But administration officials suggest there is short-term and long-term savings attached to the proposal.
They point out that employees with at least 29 years of pension credit will receive a more generous pension benefit than employees who will replace them who were hired since Act 120 of 2010 took effect. That act reduced pension benefits by 20 percent. The pension law that was enacted last week, on average, will reduce benefits by an additional 10 percent for a career worker hired after Jan. 1, 2019.
Given that, the administration suggests that there would be immediate budget savings and ultimately offering the incentive will reduce the pension systems’ long-term liability.
Wolf’s Budget Secretary Randy Albright told the Pittsburgh Post-Gazette that the savings in next year’s budget would be about $25 million from not filling or not immediately filling vacancies created by the retirements. In addition, the administration figured the new hires would earn about 75 percent of what the retiring employees were paid.
BY JAN MURPHY
(Staff writer Charles Thompson contributed.)