Age rule set for debate

Bill would eliminate eligibility condition for full pension

Delay on vote sought

Union workers say Owens promised `30 and out' deal

January 07, 2002|By Lynn Anderson | Lynn Anderson,SUN STAFF

A major change being proposed for Anne Arundel County's employee pension plan is expected to spark an emotional debate at a council meeting today.

County administrators, led by County Executive Janet S. Owens, support a bill that would allow employees to retire with a full pension at any age after working for the county for 30 years. Workers now must be at least 55 years old to collect a full pension.

"I feel that we have a fairly comprehensive bill here," said County Administrative Officer John M. Brusnighan.

But some council members, concerned about the cost of the new plan, could try to amend the pension bill at today's meeting, or at least delay a final vote for 30 days to allow more discussion.

Barbara D. Samorajczyk said that she would like "an extension to provide additional time to work this out." She said she and some of her colleagues are worried that the bill could cost the county as much as $3 million during the fiscal year that began July 1, about twice as much as county officials figured for pensions.

"Once a change like this is made, it will be almost impossible to undo it," said Samorajczyk, an Annapolis Democrat.

But county employees, some of whom are represented by the American Federation of State, County and Municipal Employees, say Owens promised them the new "30 and out" retirement plan as part of contract talks last year.

"Our members voted on the contract because [the pension clause] was in there," said AFSCME Local 582 President Mike Akers. He said employees accepted smaller cost-of-living raises - 9 percent over three years - in exchange for the pension deal. "If it doesn't fly ... it will be a terrible blow to morale."

The estimated $3 million cost of the new plan is based on preliminary calculations by consultant R. Scott Gregory, an Annapolis actuary who met last week with elected officials to point out potential pitfalls in the pension bill.

"It is reasonable to expect that [employees] will study their benefits and figure out that they have been offered a windfall that they can only get if they retire early," Gregory said. "A number will conclude that it is to their financial benefit to retire ... and take another job, even at a lesser rate of pay."

Under current policy, county employees who retire before they turn 55 receive a smaller pension.

But under the proposed plan, an employee retiring at age 50 with 30 years' county employment and an annual salary of $40,000 at the time of retirement would receive a pension plan worth $24,000 a year for life - the same as an employee who retires with the same number of years and the same salary at the age of 60.

The ultimate cost of the proposed pension plan is especially worrisome to council members because of recent budget forecasts, which predict a larger-than-expected deficit - up to $20 million from $10 million - in the current fiscal year, and a shortfall of as much as $34 million in the next.

Brusnighan said $1.5 million for the pension plan was figured into the current budget. He added that the county could save money if older, higher-salaried employees retired.

"We may have an opportunity not to fill some of those vacancies," he said. "Indirectly, there may be an added benefit."

County officials estimate that about 60 employees younger than age 55 would be eligible for the proposed "30 and out" program this year. Of that number, about half are thought to be seriously considering early retirement.

Teachers and other county employees who work in fire prevention and law enforcement, including the detention center, are not covered under the AFSCME contract. They have their own unions and their own labor contracts. Police and fire officials have a "20 and out" retirement clause.

The council will meet at 7 p.m. today in the Arundel Center, 40 Calvert St., Annapolis.

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