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Some State Employees Given Opportunity To Retire Under New Agreement

by | Mar 12, 2013 8:25pm
() Comments | Commenting has expired
Posted to: The Economy, Labor, Legal

CTNJ file photo

State employees coalition announcing vote back in 2011 at a union hall

When Gov. Dannel P. Malloy took office back in 2011 he swore he wouldn’t offer any early retirement deal to state employees to encourage them to leave state service. But in between the two votes on the state employee concession agreement, he did offer to let 40 union employees with 25 years of state service leave under terms of the previous contract.

The State Employees Bargaining Agent Coalition challenged the Malloy administration on that decision and filed a “failure to bargain” complaint with the Board of Labor Relations in October 2011.

Late last week, the two sides reached an agreement that could see anywhere from 10 to 100 employees retire early.

The new agreement, which was posted on state employee union websites Tuesday, gives 1,100 to 1,200 state employees under the age of 55 and who have 25 years of state service the opportunity to retire early under the terms of the current 2011 agreement.

That agreement says that if an individual chooses to retire, their pension benefit will be reduced by 4.5 percent per year for each year they have not reached the age of 55 if they were a Tier I member and 4.5 percent for each year they had not reached the age of 60 if they were a Tier II member. They may also choose a cost-of-living increase as if they had retired prior to Oct. 1, 2011.

Sal Luciano, executive director of AFSCME Council 4, said it may provide some ability to retire to certain employees, but he doesn’t anticipate it will be a huge amount.

“You have to meet the requirements to accept it,” Luciano said. “I’d be surprised if a couple of hundred people take the offer.”

He said the deal isn’t as good as it would have been if these employees retired before the 2011 agreement was inked, but even that deal didn’t offer employees additional benefits for retiring early. Luciano described the earlier offer as a “fair retirement,” but not an “early retirement.”

The 2011 agreement motivated about 2,628 state employees to retire under the decreased 3 percent pension benefit penalty.

Linda Yelmini, director of the Office of Labor Relations, said she doesn’t expect a mass exodus of state employees because they must meet the criteria and there’s really no incentive to take the offer in a down economy.

If a Tier I employee is 47 years old and opts to take advantage of the offer, their pension will be reduced 4.5 percent for eight years, which means their total pension benefit would be reduced by about 35 percent, Yelmini said.

“People aren’t going to want to choose this option,” Yelmini said.

Those who retired before the 2011 agreement was signed only saw their pension reduced 3 percent per year and were entitled to a 2.5 percent cost-of-living increase once they reached retirement age.

State employees who qualified for the negotiated offer needed to guarantee that the state agency they work for won’t replace them. They will need to make a decision before May 1.

“We didn’t give anything extra,” Yelmini said.

She said they made the offer to a small group of state employees in 2011 as a cost-saving measure. At the time, layoffs were on the horizon and state agencies were asked to tighten their belts to help erase a $3.6 billion deficit. State employees who qualified for the offer needed to guarantee that the state agency that employed them wouldn’t replace them.

Luciano said the union coalition agreed to settle the matter with the state instead of going through prolonged litigation that wouldn’t benefit those seeking to retire early.

The state’s hiring freeze enacted on Jan. 22 likely will guarantee that if these employees leave, they won’t be replaced.

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Comments

(6) Archived Comments

posted by: perturbed | March 13, 2013  7:43am

perturbed

This agreement is useless as the double crossing union bosses that concocted SEBAC 2011 with Malloy. Luciano admits as much. Whatever it cost the unions to come up with such a worthless agreement—in yet more legal fees—is just more union dues wasted by self-serving, corrupt unions. There’s a fairly good representation of those guilty parties in the picture above. (But where’s Bob Krzys?)

If the unions cared about state workers at all, they never would have made the “grand bargain” with Malloy: SEBAC agreed to an unprecedented slashing of existing state employee pensions, and Malloy agreed not to veto the health care pooling bill that SEBAC (and Donovan & Co.) fought so hard to preserve.

This is one state employee that won’t soon forget. 2015 is not far away, and even if my fellow state workers were too short-sighted (or just plain stupid) to see how badly we were being screwed with SEBAC 2011, hopefully they’ll realize the magnitude of their mistake by August 2015 and vote to fire the existing SEBAC unions.

And in 2014 we need to make sure to vote for whichever gubernatorial candidate the unions oppose. (The last thing we need is more backroom deals between the governor and our own backstabbing union bosses.)

“In this together?”

Please!

—perturbed

posted by: dano860 | March 13, 2013  8:51am

Would someone please explain the difference between a tier 1 & a tier 2 employee?
I worked part time as an instructor & was offered this in the retirement package that I wasn’t eligible for but they offered it every year just the same…more waste.
This won’t save the State a cent if the jobs are back filled with new hires, it will cost more in the end.

posted by: rankandfile | March 13, 2013  2:52pm

Tier 1 hired before 7/1/84, contribute part of their pay to the plan, 3,153 members as of 6/30/12. Tier 2 hired 7/1/84 to 6/30/97 no contribution, smaller pension, 17,275 members as of 6/30/12. Tier 2a, 7/1/97-6/30/11, contribute, benefit same as 2, 25,780 employees. Tier 3 hired since 7/1/11, 1,981 members hired from 7/1/11-6/30/12

posted by: perturbed | March 13, 2013  9:37pm

perturbed

Just to add to rankandfile’s informative post above, Tier I could retire at age 55 with full benefits, which were/are way higher than those of any subsequent tiers. Tier II and IIa could retire with full benefits (far lower than those of Tier I) at age 60 (with 25 years) or age 62 (with 10 years). There was also an early retirement option for those at least 55 years old, with a 3%/year early reduction in benefits (15% total for 5 years early). Now those eligibility ages will rise to 63 (with 25 years) or age 65 (with 10 years) in 2022. And the early retirement penalty was doubled to 6%/year (30% total for 5 years early), and a penalty health care premium was added, effective immediately.

Tier III is left with the higher retirement ages, and a minimum early retirement age of 58, with a 30% reduction of benefits and a penalty health care premium.

As impacted as Tier III is, at least they know what they’re up against on the date of hire (well, pending any further screwing by our trusty union bosses). We older Tier II people had our pension benefits slashed retroactively, after up to 27 years of service.

—perturbed

posted by: William Wallace | March 14, 2013  11:20am

Could not agree more - the 2011 SEBAC “DEAL” between KING MALLOY and his Union minions was a historical - and quite possibly illegal - disgrace. The Tier I folks were thrown under the bus due to the fact that at that time they were no longer a numerical factor due to their dwindled numbers and were deemed expendable in the deal. Malloy and his Union pets may well rue the day they pulled off this back stabbing deal that will not go away.

posted by: Concerned State Employee | March 14, 2013  4:24pm

So if someone is 54 years old with 30 years of service, would they get 55.5% for the first year and then 60% thereafter, or would they only get 55.5% throughout their retirement years?  THANKS.