Is the county retirement plan working?
Published 10:00 pm Thursday, July 16, 2009
A retirement incentive passed by the Pike County Commission at the end of 2008 will begin to pay off as early as the next budget year if all goes as planned.
After taking an initial look at the proposed budget earlier this week, commissioners say they can see more clearly just how this plan might play out.
The incentive gave eligible employees an option to retire early, with a buyout of 75 percent of the total annual salary and benefits. The employees worked from the beginning of last budget year in October to the end of 2008, so there were no cost savings in those salary payments last year.
Commissioners hoped when passing the incentive, departments would be able to not replace those vacant positions. If the positions were replaced, commissioners hoped the new hire would be at a lower salary.
Eight county employees took advantage of the early retirement option: three in the sheriff’s department, four in the road department and one in the commission office.
Of those, only two sheriff’s positions were replaced. In addition, the commission approved $16,600 in raises for two departments, a move sparked by requests to increase compensation to employees who were handling additional responsibilities in the wake of the retirements.
The total buy-out cost to the commission is $300,000 in this year’s budget, but the savings in the next year will be around $200,000, said County Administrator Harry Sanders.
Sanders said the $200,000 estimate doesn’t include the additional costs of benefits.
While the commission might have intended reaping higher benefits, Sanders said the program is paying off as planned.
“The degree of satisfaction is kind of a strange thing to quantify,” Sanders said. “We wanted to be able to realize some savings. It would have been great to realize $1 million. I would say we’re very happy with these savings.”
Over time, Sanders said the retirement incentive savings will continue to increase. The Pike County Road Department will also see additional personnel cost reductions, as eight employees that have been lost to retirement or resignations, are not being replaced.