Early retirement a bad idea for F’ville

Tue, 12/09/2008 - 4:27pm
By: Letters to the ...

To Fayetteville City Manager Joe Morton: I have looked at your proposed plan to allow early retirement for 13 eligible city employees and have come to the conclusion it would not be good for the taxpayers that would have to be responsible for paying for this plan.

However, it is very, very good for the employees involved.

I am not against employees getting a fair retirement. I was a union official before I retired and have fought for fair retirement plans for the working man/woman, but I am also a fixed income taxpayer residing in Fayetteville and feel you should be looking out for us taxpayers first.

Let me explain why I am against your plan.

You have stated that the first year’s cost would be only $77,505. The numbers just don’t reflect that figure.

If, as you say, the 13 eligible employees choose to retire under this plan (and who wouldn’t), they would receive a one-time bonus of $1,000 per year of service, and it takes ten years of service and age 55 to be eligible. So let’s say the average seniority would be 12 years ( I think it is more than that).

Twelve years of service times 13 employees would make 156 years of qualified service, multiplied by $1,000 per year. That would require an initial pay-out of $156,000.

I am assuming they would not get the $1,000 per year of service for the bonus years up to age 62, or will they?

This $156,000 does not take into consideration the actual retirement checks they would receive plus the cost of their health, dental, vision and life insurance premiums that the taxpayers would be responsible for.

In addition these 13 employees would get credit for years of service they did not work up to age 62. That means a 55-year-old employee with 10 years of service would actually get benefits for 17 years of service — a 70 percent bonus for life.

That is a very generous retirement bonus, one that a private employer would never consider as the stockholders would be up in arms if a plan like this was implemented in their company. The CEO would be fired for sure.

Now, these employees will have to be replaced by new hires that would not get benefits for the first year of service, and this is how you justify implementing your early retirement plan.

But, after the first year of service, the taxpayers of Fayetteville would be paying full health, dental, vision, and life insurance premiums for not only the 13 replacement workers but also the 13 retired workers.

I submit that your plan to save one year of benefit premium payments for 13 employees does not appear to be a good LONG-range plan for saving us taxpayers money. Indeed, it appears that in the long run it will cost us taxpayers more.

May I ask if you consulted an actuarial firm or person to work out the numbers as private employers and unions do whenever negotiating retirement plans? If so, what was the firm or person who crunched the numbers that your idea is based on?

Another question I have is exactly how many TOTAL years of service would the $1,000 per year bonus apply to if all 13 opted in?

In closing, I would like to say that many taxpayers in Fayetteville working in the private sector would love to have the opportunity to opt into such a proposed plan.

That of course will not happen, as private companies could ill-afford such a plan. As an ex-union negotiator, I could never even get close to such a generous plan for my members. I sure would have liked to.

When taxpayers are losing their jobs, getting their pay and benefits cut, retirement checks reduced with no chance of cost of living increases and their property values either frozen or going down, your proposed plan to save one year of benefit premiums does not take into consideration the total long-lasting affect on us taxpayers.

Vic Remeneski

Fayetteville, Ga.

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