May be required to share pension funding and insurance expenses

Savings pegged at $1 million

Delaware State News

DOVER — Kent County Levy Court approved a plan Tuesday night to save money by offering retirement incentives to 34 veteran employees.

The workers will receive higher-than-average pensions if they quit by May 31.

"I can’t wait," said Jody Coulbourne, a clerk in the recorder of deeds office, who said she will accept the offer.

Ms. Coulbourne, 62, a 20-year county employee, said she probably would have remained on the job for another year if the proposal had not passed. "That was the plan, anyway" — at least until it appeared likely the incentive program would be adopted. Now, she has a long list of retirement chores, including sprucing up a vacation home in Bowers Beach.

County personnel director Allan Kujala told Levy Court commissioners the county could save $1 million in annual salaries and Social Security and Medicare contributions in the unlikely event that all 34 employees accepted the offer.

At a public hearing prior to the approval, no one came forward to speak. Several commissioners cited lack of opposition to the program as a reason to adopt it as one part of what is expected to be a wide-ranging effort to boost county revenue and curb expenses during the recession.

Levy Court also may employ such budget-balancing moves as increasing the county property tax rate and requiring remaining employees to contribute more to their benefits.

Mr. Kujala said before the meeting that the retirement incentive would raise eligible employees’ pensions by 10 percent, if they accept the offer. For example, someone who has spent 20 years on the county payroll and earned an average of $30,000 annually in his three most lucrative years would receive $1,100 a month by participating in the program — $100 more than usual.

Twenty of the affected employees are in positions deemed important enough to fill shortly after the retirements, but money is to be saved on those jobs because new employees would command lower salaries. The other 14 workers would be replaced only if county finances rebound.

The 34 affected workers are those who have 30 years' experience or who are eligible for retirement under a formula that combines experience and age. A 50-year-old worker, for example, could retire with an immediate pension after 20 years on the job.

The 34 employees have another option. Instead of taking a higher pension, they can retire by May 31 and receive a one-time $15,000 payment, plus the pension to which they ordinarily would be entitled. But Mr. Kujala said that alternative appears unpopular.

The program allows exceptions to the May 31 deadline if management determines a worker is needed for as long as a month beyond that date.

The program was approved 5-1, with Commissioner Eric C. Buckson dissenting. Mr. Buckson questioned the calculations used in estimating potential savings.

Levy Court President P. Brooks Banta was absent.

Worker retirement plan could save $750K annually

Delaware State News

DOVER — Kent County Levy Court will invite public comment Tuesday night on a plan to save as much as $750,000 annually in county employees’ salaries by making retirement more attractive to nearly three dozen workers who have remained on the payroll despite being eligible for pensions.

In a 7:15 p.m. hearing at the county administration building on Bay Road, county workers and Kent residents can discuss a proposal that would ensure fatter pensions to 34 employees if they quit by May 31.

If all 34 employees retired, 20 would be replaced by less-experienced personnel, who would earn lower salaries. The other 14 would not be replaced until the county government’s recession-wracked finances recover.

The retirement proposal is part of a wide-ranging effort to avoid a budget deficit amid the dismal performances of the real estate and development industries, two key sources of county revenue.

Other proposed parts of the effort to balance the budget include increasing the county property tax rate, requiring employees to contribute toward their pensions, freezing employee pay and continuing to limit hiring and tightly control other spending.

The 34 employees targeted for the pension offer are the only members of the county’s 320-member work force who already could have retired with a county pension, said Kent personnel director Allan Kujala.

"It’s not an early-retirement plan" allowing employees to retire at a younger age or with fewer years on the job than ordinarily required for a pension, Mr. Kujala said. "It’s a retirement incentive."

The affected workers would be credited with five additional years' service if they accepted the offer. "Five years essentially is equal to a 10-percent increase in your pension," Mr. Kujala said.

As an example, he said $1,000 is the usual monthly pension for a worker with 20 years' experience whose average salary during his three highest-paying years was $30,000. But that worker would receive $1,100 a month if credited with 25 years' service.

If Levy Court approves the retirement proposal, each of the 34 employers will have an additional option. They can take an immediate $15,000 and receive only the monthly pension to which they ordinarily would be entitled. But Mr. Kujala said that offer seems to have garnered little interest.

Kent County workers are eligible to retire with an immediate pension if they are at least:

•age 62 and have been employed for five years;

•age 60 with 15 years of service;

•age 55 with 20 years of service;

•any age with 30 years of service.

Levy Court Commissioner Allan F. Angel said he would like to reduce long-term costs by increasing the minimum service required to receive a pension. Five years, he said, is a relatively short period to serve before being vested in a pension plan.

"When you look at the corporate world ... you’re looking at eight-, 10-year vestings," he said.

In the past, Commissioner Angel said, the five-year vesting may have been needed to attract workers who otherwise would have opted for higher-paying positions elsewhere, but county salaries now are more competitive.