State Employees Retiring Early Before Benefits Scaled Back

State Employees Retiring Early Before Benefits Scaled Back

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SALT LAKE CITY (AP) -- Utah state government is losing some of its most veteran workers this month to early retirement because a new law taking effect Jan. 1 will cut back health-care insurance for retired state employees.

The new law changes how workers can convert unused sick leave into post-retirement health insurance. State workers with 30 years or more experience must retire by the end of the year or lose free insurance coverage for up to 10 years. The Utah Public Employees Association, the main state union, last week lost a court battle to prevent the law from taking effect. The deadline for the early-out is Thursday.

"We're having 14 retirement receptions this week alone," Jack Ford, spokesman of the state Department of Corrections, said Monday.

Almost all state agencies and departments are seeing more retirements this year, state personnel officials say.

"We're going up," said Jeff Herring, executive director of the state Department of Human Resources Management.

The deadline may lead to 1,000 retirements, Herring predicted, compared to a typical year when between 350 and 400 members of the government's 24,000-person work force retires.

Through the end of October, the most recent month data are available, 486 state workers filed for retirement, compared to 328 for the same period in 2004.

"I'm just lucky I was eligible," said Anne Nelsen, a manager in the state Division of Juvenile Justice Services, with 33 years with the state. Nelsen, 53, said she had to retire.

"I would have lost six to seven years of health insurance -- that's a lot of money. They are losing their high-level people," she said.

If Herring's prediction of 1,000 employees leaving in 2005 turns out to be correct, that's almost a threefold increase above the norm.

Some agencies are being forced to increase spending on overtime pay to accommodate for staff departures.

The corrections department's overtime spending of $853,700 so far this year is more than double what it was a year ago, said Ford.

"We are 87 people short through retirement right now," said Ford. Last year, 47 employees retired.

In arguing for the change in employee benefits during the 2005 session, Rep. David Clark, R-Santa Clara, the bill's sponsor, said the state simply couldn't afford the huge health-care costs that were coming down the road as baby boomers and then the next generation of state workers retired. Clark guessed that the fiscal impact would be more than $300 million in just a few years as health-care costs increase annually by more than 10 percent.

A preliminary study conducted for the state this summer shows that even with the new law, the state is underfunded by $51 million in each of the next 25 years. That leaves the state $536 million short of what's needed to pay for even the trimmed-back retirement health-care benefits.

(Copyright 2005 by The Associated Press. All Rights Reserved.)

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