Neall offers incentives for retirement

April 03, 1992|By Dennis O'Brien | Dennis O'Brien,Staff Writer

Anne Arundel County Executive Robert R. Neall proposed an early retirement incentive package yesterday designed to save up to $3 million by sweetening pension benefits for 400 county workers.

Neall administration officials briefed the County Council on the plan yesterday, saying it comes after a review of other retirement incentive packages, a survey of 300 county employees and meetings with department heads about its potential effects on staffing levels.

"Whatever we do here, it is in no way going to compromise public safety or the delivery of services," Dennis H. Parkinson, Mr. Neall's chief administrative officer, told the council members.

The plan would affect all employees at least 50 years old and with 20 years of service. Fire and police department employees would need 20 years of service only.

The program calls for increasing the pension package by one additional month of benefit credit for each year of service. Employees would be able to choose whether they want the money in a lump sum, in the form of an annuity that would be paid annually until age 62, or as a bonus added to their regular pension checks for the rest of their lives. Lump-sum payments and annuities would be calculated using actuarial tables that take into account average life expectancy.

Under examples provided yesterday, the plan means a 60-year-old employee with 30 years of service earning $45,000 would receive an annual pension of $29,250, rather than the current $27,000. That same worker would be able to take the $2,250 annual bonus in a one-time payment of $24,750 or an annuity of $13,500 for two years until reaching the age of 62.

As part of the plan, departments may rehire key employees on a contractual basis at two-thirds of their former salary without fringe benefits, but only for up to two years. Any such hires must be approved by the county executive.

There is a 90-day window, so if employees don't retire by Aug. 31, they will not be eligible, Mr. Parkinson said.

Mr. Neall intends to introduce the package in legislative form at the council's April 20 meeting and implement it by June 1.

In many ways, it is similar to early retirement incentive plans that have been introduced as cost-cutting measures to government and private sector employees in recent months. Mr. Parkinson said similar plans in Baltimore County and in Maine, New York and Connecticut were reviewed as part of the research for the package.

Bennett H. Shaver, the former chief of the state pensions system, was retained by the county to review its pension system. He told council members yesterday that the retirement package has two goals -- to reduce the work force and to save money.

All employees, other than elected and appointed officials, eligible for retirement as of July 1, 1992, would be eligible. Mr. Shaver said 400 county employees are now eligible for retirement or early retirement, and that he anticipates 100 of them will take advantage of the package.

If that happens, he said, roughly 50 of those jobs will be abolished and the county will save between $2 million and $3 million each year for the next four or five years.

The county's 7,000 Board of Education employees have their own pension systems and are not eligible, but Mr. Parkinson said Mr. Shaver may work with the board to come up with a plan.

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