December 03, 2008
Governor rejects retirement sweetener
Governor David Paterson has thrown cold water (at least for now) on state employees' dreams of a pre-Christmas retirement incentive.
Asked about reports that legislators are discussing a retirement sweetener, Paterson, said Tuesday (here): "I think the early retirement program is actually more expensive if we do it right now," Paterson told The Associated Press at an event in Washington. "First of all, one of the problems is nobody's retiring because nobody wants to be out of work in this environment, so no, we're really not....It's just not something we think is feasible right now." In Albany, Budget Director Laura Anglin issued a statement (here).The Governor has no intention of offering a retirement incentive at this time. He believes that such incentives are not effective in reducing our state's long-term expenses, and past experience has shown that, in most cases, retirement incentives produce greater costs than benefits to the state. The state last offered a retirement incentive in 2002 when it allowed employees over 55 with at least 25 years of service to retire with up to three additional years of pension credits, which cost the state an additional $250 million.
In November, Paterson offered a novel retirement incentive. He proposed that state workers who retire prior to December 31 would pay less for post-retirement health insurance than those who retired later.
Under the plan, retiree contributions to health benefits would be based on the number of years they worked for the state. Now all retirees--even those on the payroll for as little as 10 years--pay only 10 percent for lifetime health insurance.
For a description of Paterson's proposal, see here.
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