Accommodation Upon Cashing Out

I might be missing something, but this seems to be becoming a bigger deal than necessary:

But after hearing mayors, school administrators and union leaders warn of potential chaos 10 weeks before the end of the school year, Gallogly said she consulted with the state’s actuarial consultant yesterday and was told the state could move the deadline for employees to retire to any point prior to the June 30 end of the fiscal year, and still book this year’s $95-million state and local share of the savings from this long-term reduction in the state’s unfunded liability.

If the savings are in retirement payments, couldn’t the state just stipulate that retirees finish out the year?

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pitcher
pitcher
12 years ago

Yeah, the thought of dozens of teachers walking out on April 1 is more than just a joke. That can not happen. My thoughts were the same, just move the date to a point after the school year, then we can get rid of all those step 10 teachers, and replace them with step 1, at a huge cost savings to the towns.

rhody
rhody
12 years ago

Seems logical, and makes almost too much sense.
But the way teachers have been getting kicked around in here lately, who could blame them for wanting to leave early? LOL
Those new Step 1 teachers better have thick skins, for unruly kids won’t be the biggest obstacles they face (unless the kids already learned how to blog or drop a dime to ‘PRO).

pitcher
pitcher
12 years ago

Rhody, I’m not worried. As long as those Step 1s have Pat Crowley on their side, they’ll be safe and will always have a shoulder to cry on.

Ken
Ken
12 years ago

It’s reported that 1,433 public school teachers and 1,668 state employees and 19 retirement-eligible judges plus I think 22 state police would be eligible to retire before April 1.
This would make quite a dent in the retirement system not to mention cost to school departments trying to realign classes or paying for substitute teachers for the last three months of school year.
The judicial system of RI would be in a tail spin with lost of up to 19 judges and RISP would be stretch thin not to mention state of RI operations loss of additional 1,668 employees and their industrial knowledge.
The 3% COLA every year after a waiting period of three years is a big deal to the retirees and I am willing to bet you’ll see another mass retirement if the governor’s wishes are put into law.

Tom W
Tom W
12 years ago

Once we freeze the existing pension plan and convert all state and municipal employees to a defined contribution plan this will no longer be a problem.

Ken
Ken
12 years ago

Tom W,
Per study done last year, it will cost the state of RI an additional $500 million a year for over seven years to switch to a 401K retirement system on top of budget deficits and as with private plans, the state must make it’s contribution payments not down grading its percentage contribution like it is doing now with state retirement system..
RI has a budget deficit of $387 million and growing.
Show me the extra money for your 401K plan (higher taxes maybe?).

Tom W
Tom W
12 years ago

Ken,
1) I don’t believe that this figure was for a freeze. But even if it was, the short term higher expense is dwarfed by the long term savings.
2) As a start, place all state (and municipal?) employees on a 40 hour workweek (instead of the current 35). Hardly onerous. In turn that would enable a 12-14% reduction in the current workforce with zero impact on “man hours.”
That saving alone would probably more than makeup for the short term cost, even factoring in paying the unemployment of the former employees (a lot of which comes from federal money anyway).

Ken
Ken
12 years ago

Tom W,
I don’t see where putting state and municipal employees on a 40 hour work week (some are already working regular 40 hour work week) is going to create a surplus of $500 million.
As a matter of fact, it will cost each city and town plus the state more money to keep the buildings open and occupied the extra 5 hours a week. Some states have switched to a 4 day work week and some states including HI are experimenting with 4 day work weeks realizing significant energy saving by shutting down the buildings for one day.
BTW, the $500 million was the cost to covert to 401K type retirement system put out last year by governor’s study group and a GA study group.
RI does not have an $500 million extra each year for the next seven years.

Tom W
Tom W
12 years ago

Reducing the state workforce by about 13% would reduce the head-count by about 1800 (based on a state employment of 13,000).
1800 times $75,000 a year (conservative estimate of salary and benefits) equals about 135 million a year – in perpetuity.
Now reduce headcount further by technology (most registry of motor vehicle transactions could be done over the web; the Fed courts have already gone to electronic filing, reducing the need for clerks, etc.).
We could easily reduce the state headcount by one-half and nobody would notice the difference.
Additional hundreds of millions, if not billions, of savings every year.
And the above savings don’t include the (probable) hundreds of millions, if not billions, that would now be shaved off of the unfunded pension liability.
Reduce RI’s “social services” to no more than federal minimums, and we’ve saved hundreds of millions, if not billions, a year.

Ken
Ken
12 years ago

Tom W,
The State of RI technology infrastructure is 20 years out dated. The State of RI technology computer communications links are out dated.
People of the State of RI shot down a bond to build a new central computer center and upgrade equipment.
So in essence, some school districts and high schools have a more modern and higher-speed network than the State of RI trying to run government services.
With more and more State of RI employees leaving to protect long term retirement the state is loosing the industrial knowledge of how things get done in government service.
On the last retirement cycle you had a combined over 175 years of technical, design, programming experience and network knowledge walk out of state service.
Before banking on technology, you better look at what you’ve got for an information systems and infrastructure network (there is a person who drives to Johnston so he can direct connect to mainframe downloading a file once a month because baud rate from Providence is 72 baud).
Don’t forget, consultants talked State of RI into RI-Sail accounting and purchasing system which became RI-Fail. State of RI is trying to bring another accounting and purchasing system on-line but all accounting number have changed. So you need those employees with industrial knowledge hanging around keeping the paperwork moving.

George Elbow
George Elbow
12 years ago

What does it tell us when so many people are in a position that they could RETIRE “early”?
This just goes to prove that the benefits we are providing are insane.
How many people in the Private sector could afford to Retire in April if their employer told them that they would no longer receive a 3% Pension COLA …not that anyone in the Private Sector receive such nutbag benefits.
Again, this just proves the point that we need Pension reform starting Yesterday, not April 1.
Let them all leave tomorrow …but let’s get on with it.
And I if I hear one more idiot say that people are being “forced” to Retire, I’m gonna scream. No one is being “forced”. Those that leave are making a personal decision / choice.
They could just as easily chose / decide to stay and keep working and collect a paycheck.

Ken
Ken
12 years ago

George Elbow,
The amounts of employees quoted in PROJO eligible for retirement have worked 35 years or more thus retiring at 75%.
I don’t believe PROJO was indicating people that could retire early at reduced rate with time in service and age requirements met.
Personally with the way thing are playing out in RI, I’m all for and hoping the 1,433 public school teachers and 1,668 state employees including the 19 retirement-eligible judges plus I think 22 state police retire and any other municipal employees that can retire before 1 April 2009. Also any other person who meets the basic time in grade and age requirements for early retirement at reduced retirement (under 35 years).
Then this whole back and forth talk about the retirement system can be put to rest and don’t anyone dare to complain about the number of people retiring and how you can’t get service.
PS George Elbow, I just received a 5.8% retirement COLA from Social Security as did every other private SS retiree.

George Elbow
George Elbow
12 years ago

Ken,
First, people act like 35 years is a long time. Nonsense. For someone who started working at age 22 (say, after college, if they went), that means they are just 57 years old (many are even younger). That is way too young / early for them to be climbing aboard the taxpayer’s back.
Second, many teachers are eligible to retire after just 25 years, as are Police & Fire. Let’s get a detailed analysis of the ages and years worked of all the Retirees. I assure you that the only people who are able to Retire in their 40s and 50s are Public Employees.
Third, with respect to your SS COLA of 5.8%, was it applied to a base of 50%, 75% or 80% of your high five years like our RI public employees? I don’t think so.
Please don’t try to justify the nut-bag Pension system we have in RI. We all know it’s a sham.

Ken
Ken
12 years ago

George Elbow, To quote you in referencing COLA; “not that anyone in the Private Sector receive such nutbag benefits.” That is why I pointed out all private sector people received a SS retirement 5.8% COLA “nutbag benefit” increase this year not 3%. To also quote you in referencing working years till retirement; “First, people act like 35 years is a long time. Nonsense. For someone who started working at age 22 (say, after college, if they went), that means they are just 57 years old (many are even younger). That is way too young / early for them to be climbing aboard the taxpayer’s back.” If I remember correctly the industry standard for working till retirement is 20 years. So in the private sector I could start work at 18 and retire with a pension at age 38 or 22 after college retiring at 42 or 36 after military retiring at 56 or enlist in military full time at age 17 and retire after 20 years at age 36 with full benefits and free world-wide travel…..no complaints as long as it is private sector or US military….right George Elbow? The state of RI retirement web site indicates a person is vested after working 10 years and must work 35 years before they may retire at 75% of wage. Any years worked pass 35 years does not increase retirement percentage. A person can retire at age 59 with 29 years of service credit reduced benefits, or at age 65 with 10 years of contributing service reduced benefits. There is also reduced benefit eligibility at age 55 if you have at least 20 years of service. In real life, there is no “too young to retire” clause. Your taking too much of my time! Its sunny and 80 degrees so I’m going… Read more »

Tom W
Tom W
12 years ago

>>That is why I pointed out all private sector people received a SS retirement 5.8% COLA “nutbag benefit” increase this year not 3%. I’d rather have a 3% COLA on a 50k a year benefit than a 5.8% on the 12k average SS “benefit” (capped at about 25k), thank you very much. >>If I remember correctly the industry standard for working till retirement is 20 years. So in the private sector I could start work at 18 and retire with a pension at age 38 or 22 after college retiring at 42 or 36 after military retiring at 56 or enlist in military full time at age 17 and retire after 20 years at age 36 with full benefits and free world-wide travel…..no complaints as long as it is private sector or US military….right George Elbow? I don’t know about the military (but don’t begrudge them for they deserve far more than a clerk from the Registry of Motor Vehicles or part-time public school teacher), but here on planet Earth for the few in the private sector that get a pension, most (if not all) cannot start collecting until in their sixties, and certainly not the “full benefit” at any age. Moreover, the formulas are based on lifetime earnings, NOT 75% of the highest consecutive three years (which here in RI are goosed upward by the employees via overtime, extra activities for teachers, etc.). >>The state of RI retirement web site indicates a person is vested after working 10 years and must work 35 years before they may retire at 75% of wage. Any years worked pass 35 years does not increase retirement percentage. A person can retire at age 59 with 29 years of service credit reduced benefits, or at age 65 with 10 years of contributing service reduced… Read more »

George Elbow
George Elbow
12 years ago

Ken,
You dope, you’ve been in the sun too long and your Retired brain has been fried.
At the risk of repeating what Tom W. explained, in the Private sector 20 years is a magic number in that you need 20 years in before you can begin collecting a Pension.
But, unlike the Public sector, if you chose to begin collecting BEFORE age 62 or 65, you receive a much reduced payout (typically 5% for every year).
Also, Private sector pensions don’t pay anything close to the nut-bag rates at which the RI Public employees receive.
At best, you are lucky if you get 1.25% for every year you are in the Pension. So for someone that works 35 years, they get 43% of their base, whereas RI teachers receive 75% (and many receive 80% and 90% payouts). Also, Private Sector employers don’t pay annual COLAs.
Lastly, please don’t waste our time boring us with your usual rant about the nuances of Social Security. It’s off topic.

Ken
Ken
12 years ago

George Elbow,
“You dope, you’ve been in the sun too long and your Retired brain has been fried.”
Yes George Elbow, I’m a dope for retiring early at age 60 from the private sector and my retired brain has been fried from being in the sun for over 350 days each year.
You see selling my RI house at max inflated market price in less than 6 months, moving out of RI to the 50th state (HI) and purchasing a large condominium fully furnished with cash overlooking the beach, sunsets and 300ft-400ft waterfalls cascading off the mountains walking distance between two 18-hole golf courses where the average yearly temperature is 77.8 degrees and banking; saving ½ my retirement income a year over living in RI is being a dope. My winter heating bill is $0.00 and my taxes because HI respects senior citizens are grossly lower than RI which makes me a 20 year retirement dope according to your standards.
And yes, I did get a little extra sun today because the sights were really beautiful on the beach and all HI beaches are free with free parking, free bath-houses, free showers, free picnic areas and life guards not like RI.
PS: Records show Honolulu is the 3rd most expensive city in the USA to live in behind New York City and San Francisco.
George Elbow like you say I’m a dope and I’ll just have to suffer.

Monique
Editor
12 years ago

“What does it tell us when so many people are in a position that they could RETIRE “early”? This just goes to prove that the benefits we are providing are insane.”
Yes.
“And I if I hear one more idiot say that people are being “forced” to Retire, I’m gonna scream. No one is being “forced”.”
No.
“here on planet Earth for the few in the private sector that get a pension, most (if not all) cannot start collecting until in their sixties, and certainly not the “full benefit” at any age. Moreover, the formulas are based on lifetime earnings, NOT 75% of the highest consecutive three years”
Yes.

George Elbow
George Elbow
12 years ago

Ken,
Yes, we’ve got it. HI is paradise. I’m suprised you never bothered to mention that before. Thanks for the tip.
Now isn’t it time for some prune juice and a nap?
Just kidding. Enjoy the sun and the sights.
PS – RI can not respect it’s seniors because it needs every penny it can get to cover the cost of feeding the Public Employee Union pigs lined up at the trough.
You are living proof that one can NOT afford to live, work and retire in RI …unless you are a Public Employee living on the tit, collecting a taxpayer funded Pension that grows by 3+% EVERY year.

Justin Katz
12 years ago

George Elbow.
Please stop the name calling. It creates an unhelpful distraction.

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