Today's edition of The State reports that public employees are leaving their posts in droves, buying time and taking early retirement before devastating changes to the retirement system go into effect on July 1.
In fact, our lawmakers haven't even decided on all the ways they will change the system to make it less attractive to potential employees, but they're well on their way to destroying the commitments that decades of previous legislatures have made to public workers.
Reporter Adam Beam found an example that represents how the proposed changes victimize veteran workers, and explained how many of them are reacting.
An increasing number of state workers are electing to retire before changes are made to the state’s pension system.
Take Win Hughey, 56, for instance. In 1984, Hughey left behind the life of a women’s shoe salesman to manage a warehouse for the state’s prison system.
He says he did it because, as a state worker, he could keep his unused sick and vacation days to add an extra 7 percent to his retirement benefits. But beginning July 1, the rules for the state retirement system are expected to change. Already, the S.C. House has passed a bill to stop Hughey from using his unused days to increase his pension. The Senate will begin discussing that proposal next week.
But Hughey is not going to wait around to find out what happens. Instead, he will retire June 30.
“I’m 56. I planned to work until I was 62,” he said. “(But) there is no incentive for me to work.”
No incentive to work.
Governor Nikki Haley has just completed a media spree to sell her books, and she missed no opportunity to tell television interviewers that South Carolina is a fantastic place to start a business.
What she neglected to say is that South Carolina has little regard for the citizens who work for a living. If it did, veteran public employees like Hughey would find greater incentive to work than to retire.
Beam writes, "Hughey is one of the unintended consequences of retirement reform," but I respectfully disagree. What is happening to and among our public employees is entirely intentional; one has only to review the speeches of anti-public-employee lawmakers, and their proposed legislation, of the past decade to see the intentions spelled out clearly.
The only difference between then and now is that the consequences of bad economic decisions by lawmakers offer a convenient rationale that changes to the retirement system must now be made, or else. In fact, they don't -- but no matter, sufficient numbers of lawmakers now exist to adopt job-killing impacts to the state's public employment and retirement system.
Lawmakers are changing the state’s pension system in an attempt to reduce its $13 billion deficit. But anything that prompts workers to retire earlier than they normally would have retired – like cutting their benefits – costs the state more money. That’s because there are fewer people paying into the retirement system and more being paid by the system.
So far, 5,603 workers covered by the pension system have filed applications to retire this year – or 819 more than at this time last year.
And more and more of those filing to retire are buying “service time” – or credit for additional years of work – so they can retire early. Since November, 3,912 people have filed applications to buy added years of service covered by the retirement system. That’s 1,035 more than during the same period a year earlier.
For more tenured state workers, buying service time will become far more expensive after July 1 if the proposed pension changes become law.
The state’s two largest retirement systems have more than 216,000 active members. Not all are eligible for retirement.
As of July 10, 2010, the latest numbers available, the two systems had 19,774 people who were eligible or nearly eligible for retirement. An extra 819 people retiring this year represents 4 percent of that total deciding to retire.
(State law says you have to have at least 28 years on the job – or be at least 65 years old with at least five years of service – to be eligible for full retirement benefits. Police officers and firefighters can retire with full benefits after 25 years of service or if they are at least 55 years old with at least five years of service.)
Thus far, the higher number of state workers opting to retire has not “put undue stress on the system,” said David Avant, managing legal counsel for the state retirement system.
But added retirements could have a big impact on some local governments, whose workers – along with many public-school teachers – are covered by the state retirement system.
Now we get down to brass tacks. Here's where privatizers find their bread finally buttered after investing in legislative campaigns.
Apply enough pressure to local governments, and they'll eliminate public services, opening the door to contracting with private companies to provide the same services for a profit. That includes every category of services from emergency response personnel to municipal road repair, to law enforcement, to public education.
Draining the public pool leaves all boats run aground.
The prospect concerned Columbia city manager Steve Gantt so much that he had his staff calculate how many of the city’s roughly 2,000 employees were eligible to retire on June 30. The answer: 230, including the city’s chief financial officer and some senior managers in the police and fire departments.
If all of those city workers choose to retire, it would cost the city $1.5 million to pay off unused sick and vacation days, Gantt said.
“I can’t imagine if all those folks decided to bail so they fell under the old criteria instead of the new criteria,” Gantt said. “It is what it is, and we’d have to do what we have to do. But I do have some concern about the financial implications.”
What would your own community do if suddenly 12 percent of its firefighters -- including the most experienced ones -- were forced to retire? Or 12 percent of your public hospital workers, social service workers, teachers, police officers or sheriff's deputies?
Under the House plan, state workers would get to keep the benefits they already have accrued under the current system. However, they would accumulate lower benefits going forward for their service beginning July 1.
But Hughey said it is not worth it for him to stay. Instead, he plans to get another job in the private sector and use his retirement benefits as supplemental income.
“I won’t have as much time off with my family, won’t have the seniority,” he said. “I’ll have to work more. It’s OK, working doesn’t bother me. I just wish I had the (retirement) plan they said I could have.”
Did you catch that?
Hughey wishes that lawmakers would keep their promises to public workers.
Don't we all.
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