An article in Governing magazine this week discusses the ongoing trend of governments offering early retirement incentives for employees, and the varied effects of these proposals on the government budgets. Their case study for the most attention was a recent offering from Calvert County Maryland:
Calvert County, Md., approved a plan last month to offer voluntary early retirement incentives to 44 eligible employees — all of whom have defined-benefit (DB) pension plans that cost the county over $1 million more than those with defined-contribution plans. Full-time employees who choose to take part will receive $1,000 per year of service, while part-time employees will receive $500 per year of service — all paid in one lump sum. If all of those eligible for the program participate, the county would have a one-time payout of $1.24 million. The county has a projected deficit of $9.3 million for fiscal 2014, but hopes that reducing its number of employees (especially those with costly DB plans) will produce significant savings.
Read the full article online at Governing magazine’s website, including a detailed interview with Tim Hayden, Calvert County’s Director of Finance and Budget.