Retire-early state incentive backed by employee unions State estimates annual savings of $28 million.

March 03, 1992|By John W. Frece | John W. Frece,Annapolis Bureau

ANNAPOLIS -- Three labor unions that represent state government employees have thrown their support behind legislation that would save the state money and reduce its work force by offering veteran employees incentives to retire early.

House Bill 984, sponsored by Majority Leader D. Bruce Poole, would give workers with at least 25 years' employment -- regardless of whether they've reached retirement age -- the opportunity to tack on credit for three additional years' service and retire with full benefits as long as they agree to leave this spring.

Under the emergency bill, eligible employees would have to retire during a three-month "window" between April 1 and June 30.

To assure that the savings to the state are lasting and not quickly offset by hiring to file the vacancies, the legislation would require the state to abolish half the positions held by those who take early retirement.

"We're trying to find ways to reduce the cost of government without hitting people over the head," says Mr. Poole, a Washington County Democrat.

Representatives of the Maryland Classified Employees Association, Council 92 of the American Federation of State, County and Municipal Employees, and Teamsters Local 103 applauded the proposal yesterday.

"Jobs lost to attrition has to be better than jobs lost to layoffs and terminations," said Dale McConnell, secretary-treasurer of the Teamsters local.

The legislature's Department of Fiscal Services estimates that 1,544 employees, or 42 percent of the 3,677 employees eligible for such a program, actually would participate.

The average annual salary of those eligible was estimated at $32,644.

If half the positions then are abolished, the state work force would be reduced by 772 employees.

Based on those figures, the state would save an estimated $28 million in salaries alone during fiscal year 1993, which begins July 1.

But those savings would be offset slightly the following budget year, fiscal 1994, by about $2.5 million in higher pension costs.

The higher pension costs would continue annually for the next 27 years, although they would be reduced by an estimated 5 percent a year for each year the abolished positions remain vacant.

"If we can reduce the cost [of government] and not cause any more pain to people, that's the best way," Mr. Poole says. "It's what I call the no-pink-slip approach to downsizing government."

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