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Projection: 40 percent increase in state worker retirements this year

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* This is pretty amazing, but, when I think about it, probably predictable

Concerns about the shaky state budget, a new union labor contract and threats to alter state retirement plans have triggered a major exodus of state employees.

The State Employees Retirement System, which administers pension benefits to state government workers ranging from prison guards to child welfare workers, is projecting a more than 40 percent spike in the number of people retiring during the fiscal year ending June 30.

The system’s executive secretary, Tim Blair, said the state is on track to see more than 4,000 workers join the ranks of retirees this year, compared with about 2,750 last year. […]

The Department of Corrections has already seen more than 680 workers retire this fiscal year. The Department of Human Services has the next highest number of retirees at 585.

Gov. Pat Quinn’s spending proposal for the fiscal year beginning July 1 allocates money for about 51,500 workers, down from about 54,500 when he took office in 2009. It remains unclear whether the spike in retirements will drive that number even lower.

I’ve talked to several state employees over the past few months who’ve said they were getting out while the getting was good. That’s probably a decent plan, considering all the state’s problems.

posted by Rich Miller
Friday, Apr 13, 12 @ 10:55 am

Comments

  1. Count me in at the end of the year, although I have the paperwork ready to submit at at any time!

    Comment by Ready to Get Out Friday, Apr 13, 12 @ 11:05 am

  2. From talking with family and former co-workers, I’d bet on an even higher number the first half of next FY. The dedicated social worker or technician has had it with all the abuse, both internally and in the media. Everyone who can is leaving.

    Since very few people in State government actually know what they are doing these days, the institutional knowledge loss will be as bad or worse than 2002.

    Comment by Retired Non-Union Guy Friday, Apr 13, 12 @ 11:09 am

  3. Yep, my first day of retirement was February 1st. I’m a SURS Annuitant. I worked for over 31 years at the university, gave them 6 months notice, and they haven’t been able to find a replacement. I’m so vertically trained in the IT environment, that they can’t find any one person with the skillset that is needed to do my old job for the wages that they want to offer. The job has to be done, and I was the last long term (Read institutional knowledge loss) employee in my particular department. There’s no one left to train the replacement(s), if they ever find one, and if HB 4996 passes the senate, they won’t be able to rehire me to train them, or rescue the systems and custom applications that now support the college.

    Good work GA.

    Maybe I’ll incorporate and offer my services as a vendor. I think that might be cheaper than trying to hire me and pay me directly.

    Comment by PublicServant Friday, Apr 13, 12 @ 11:18 am

  4. Would things have been better under brady or would we have a civil war right now like wisconsin?

    Comment by Shore Friday, Apr 13, 12 @ 11:21 am

  5. Shore, I don’t understand your point. Because Democrats are doing what Brady would have done, there’s no civil war? Or Brady would have made deeper cuts and there would have been greater backlash?

    Comment by phocion Friday, Apr 13, 12 @ 11:24 am

  6. No and Yes, Shore

    Comment by PublicServant Friday, Apr 13, 12 @ 11:24 am

  7. PublicServant,

    Just hire on to one of the body shops as an independent contractor. Ask double what you were making in salary to cover your taxes, benefit cost, etc. The body shop will bid a contract at triple to cover their costs. The body shops already have the structures in place … and they know where to make the (required?) campaign contributions …

    Comment by Retired Non-Union Guy Friday, Apr 13, 12 @ 11:26 am

  8. Yeah, was a bit surprised when the hubby announced he is likely going out the end of June too. Planned on a couple more years…but enough is enough. Out here in his neck of the boonies, they’ve not replaced a retired or laid-off workers in ages. No body new at site in over 15 yrs and so many gone.

    Comment by Cindy Lou Friday, Apr 13, 12 @ 11:27 am

  9. I’d say it’s a good day if you can seriously consider retiring.

    Comment by wordslinger Friday, Apr 13, 12 @ 11:30 am

  10. @RNUG - What do you think I’m doing right now? Wouldn’t it be cheaper to just let me fill the offered position? I don’t like paying the “body shop” their blood money. If I’m doing the work, they should just pay me. Shoot, I’m a Service Disabled Veteran Owned Business thanks to my service in the Marines. I’m going to start my own firm and become one of those trickle down guys.

    Comment by PublicServant Friday, Apr 13, 12 @ 11:33 am

  11. I bailed at the end of CY 10 after 35 yrs. This past Jan I got my 3% cola–first raise in years. I had it better than most. But I certainly understand employees who are not respected by those they serve,led poorly by often inept mgrs, and that’s before more budget cuts and threats to retirement benefits. There is no realistic hope of things getting better any time soon. Therefore, the retirement bunker is the most defensible location to be. Weary workers want out. (Cassandra, pls spare me talk of lazy overpaid workers in cushy jobs unless you have names.)

    Comment by Langhorne Friday, Apr 13, 12 @ 11:35 am

  12. With retirement and pension rules likely to change, anyone who can leave will do so.

    There will be some who cannot afford to leave due to lowered income possibility and then there are those who actually enjoy their work and fellow employee relationships.

    The brain drain will be huge with little replacement training taking place. Fact is, it’s very hard to pass along experience if you are not in a position to mentor someone.

    I know 11 people who are bailing because of potential legislative actions.

    Comment by Sunshine Friday, Apr 13, 12 @ 11:35 am

  13. All of the comments thus far seem on target to me. It is not all about the threatening environment for the retirement systems. It is also about the poor treatment of long-time workers and the lack of value placed on their experience and expertise. As the state fills the knowledge gap with contractors and consultants, (as it has been doing), the cost for services thus provided will rise. And, as one commenter noted, there will be no one left to train any internal replacements.

    Comment by JustaJoe Friday, Apr 13, 12 @ 11:37 am

  14. –It is also about the poor treatment of long-time workers and the lack of value placed on their experience and expertise.–

    There’s a lot of that going on everywhere. Most people aren’ happy in their jobs.

    http://articles.nydailynews.com/2010-01-06/news/17944097_1_job-satisfaction-conference-board-research-group-lynn-franco

    Comment by wordslinger Friday, Apr 13, 12 @ 11:45 am

  15. Good news in that it could do away with some of the more costly Tier I pensions. Even more so if they leave now versus later and have accrued more benefit.

    Potentially bad news if too many people leave at once given how much the system depends on employee contributions to meet payments?

    Comment by Dirty Red Friday, Apr 13, 12 @ 11:48 am

  16. I, for one, am terrified with the state’s already low capacity in terms of staffing levels. We are in the midst of massivly slashing medicaid, also turning it into a managed care program. And that’s just some of the hard jobs that must be well thought out to do without hurting people or taxpayers more than necessary. There have been a lot of mistakes made in the past couple years and it hasn’t just been because of poor leadership. There are a lot of cases of state agencies just not being able to do the background work necessary because of lack of staff.

    Comment by Dave V Friday, Apr 13, 12 @ 11:48 am

  17. PublicServant,

    The contract people who are still there don’t know what they are doing. I didn’t even work in the contract section and had to explain to them that, under State contract rules, is was illegal under the 2002 ERI restrictions for them to hire me directly and that they could lose their funding if they did so … and this was after they had issued an RFP that I declined to respond to. Kept telling them they could hire me back under the 75 day rule at my old hourly salary plus tax payments but they couldn’t get it though their thick skulls; they believed they could only do that once or twice when it is, in fact, open-ended. So when they needed me, I ended up throwing the business to a friend with a body shop operation.

    In my opinion, they just want contractors instead of employees; you would be an employee under the 75 day rule. Employees have some legal protection; contractors can be torqued around. Plus contractor money comes out of a different line item in the budget. Follow the money; campaign contributions are quasi-legal “kickbacks” …

    Comment by Retired Non-Union Guy Friday, Apr 13, 12 @ 11:51 am

  18. The word for what is happening is “avalanche.”

    Comment by anonymice Friday, Apr 13, 12 @ 11:55 am

  19. The more state, county and local government employees that retire soon the better. There is no sense of urgency in government regarding the Illiois’ gov employee pension mess. Unanticipated, early commencement of annuities in sufficient numbers may disclose that present figures on pension soundness are way too optimistic. And those unfunded healthcare benefits the early retirees start drawing will become a real focus of attention.

    Comment by Cook County Commoner Friday, Apr 13, 12 @ 11:57 am

  20. I could have retired too but declined due to the precarious funding problems with the pension. The funding for my pension is much worse than the teacher’s pension. My pension fund is likely to run out of money in 2017-2018. I would rather be working earning my current salary than sitting on the sidelines wondering if I would end up in the federal pension bailout fund like the airline pilots. The legislators have some tough choices to make and when that happens they usually just ok the selling of bonds to fund the pensions and kicking the can down the road. That way they can still bring home the bacon that keeps getting them reelected.

    Comment by coalminer Friday, Apr 13, 12 @ 12:01 pm

  21. Yeah, I’ll be leaving at the end of June also.
    As a M/C, I figured if I held out long enough, my plight would improve.
    It hasn’t, and it looks like it won’t in the future.
    Even with 35 years in, I thought I could squeeze in a couple of more years.
    But I can see we’re heading:

    http://www.youtube.com/watch?v=zexCVdpQtcM

    Comment by JustAnotherPeon Friday, Apr 13, 12 @ 12:05 pm

  22. The number of teachers planning to retire in the next couple of years in my district is huge. They want to establish their pensions before future changes.

    Comment by Wensicia Friday, Apr 13, 12 @ 12:09 pm

  23. Still doesn’t address the ultimate question about what happens when the pension money runs out, contract or not. Either way, stay or retire, the final outlook seems to be the same — depletion and not much hope for growing out of the problem.

    Comment by vole Friday, Apr 13, 12 @ 12:10 pm

  24. coalminer,

    States are unique entities. Unlike private business, the State can’t cut and run and dump their pension problem on the feds. Since states have the power (but not necessarily the will) to raise revenue (taxes, bonds, fees, etc.), it is the State’s problem to solve. The people at the Con-Con understood this and they suspected the politicians would try to duck it; that’s why the pension clause was inserted into the Illinois Constitution. Go read the actual minutes of the discussions; it’s very clear the delegates expected this moment to come and they wanted to be sure the State was obligated to pay the pensions.

    Comment by Retired Non-Union Guy Friday, Apr 13, 12 @ 12:21 pm

  25. Out June 30,2011. 33 years.
    Wanted to beat the rush..
    Since then I’ve found that freedom is undervalued.

    Comment by Mouthy Friday, Apr 13, 12 @ 12:28 pm

  26. === The more state, county and local government employees that retire soon the better. ===

    Typical Right wing shortsightedness. If the state has to hire consultants to replace the mass exodus, that says the state money how, Genius?

    Comment by PublicServant Friday, Apr 13, 12 @ 12:31 pm

  27. “If the state has to hire consultants to replace the mass exodus, that says the state money how, Genius?”

    It’s about the value of a dollar versus time.
    A dollar paid into retirement in 1980 is not able to support the fund in 2012. This si because interest on that invested dollar has not been able to keep up with inflation.

    So the cost of a gallon of milk or gasoline has jumped 400%, but the compounded interest on that dollar over last thirty years has not.

    When the fund runs short due to this gap, the state has to make up the difference. That is why each year the fund is evaluated. Skipping payments has had an impact, but investments and inflation has had a greater impact. (IMHO)

    Comment by Jade_rabbit Friday, Apr 13, 12 @ 12:41 pm

  28. So if you pay for services in 2012, and you don’t have to pay for benefits associated with those services for the next 30 years, you are saving money in the long run.

    Comment by Jade_rabbit Friday, Apr 13, 12 @ 12:42 pm

  29. Well Jade, if you could actually back that theory up with some facts and figures, I’ll take a look at it. In the meantime, I need to get my consulting clothes on.

    Comment by PublicServant Friday, Apr 13, 12 @ 12:45 pm

  30. Discovering what is essential and what is not thus becomes the default position via attrition. So, are Quinn and the legislature essential?

    Comment by vole Friday, Apr 13, 12 @ 12:54 pm

  31. @RNUG - So the latest attempt at decreasing benefits involves recognizing that unilateral cuts just may be unconstitutional as well as against contract law. Who negotiates for us non-union guys? No negotiation, no cuts for me and you, I’d say.

    Comment by PublicServant Friday, Apr 13, 12 @ 1:00 pm

  32. I’d love to retire from my state job of a couple decades but have too many family expenses to afford to retire yet. I figure I can’t afford to leave until Lisa’s second Gubernatorial term.

    The Brain Drain with the glut of early outs is a real problem. Blago saddled the state with hacks in middle management that were never purged, and those hacks all came in with the attitude that anybody who came before them was A. Traitorous, partisan, and disloyal, B. Incompetent “suckers” lacking ambition, and C. Old and irrelevant. Thus, the “old hands” with the institutional knowledge and the civil service ethic were mostly sidelined or driven out and replaced by kids fresh out of school and campaign staffs, earnest but untested and unfamiliar with the ins and outs. This pattern remained under Quinn. The result has been a number of stumbles in policy-making and administration. Into this void steps the contractors, getting paid triple to tell you what you won’t listen to from your own existing staff.

    None of this is for the greater good of serving our taxpayers.

    Comment by Too young and pretty Friday, Apr 13, 12 @ 1:11 pm

  33. Jade, look at the SERS, which is not solvent, and the IMRF, which is solvent. The two systems have similar benefits. The difference being payments to the IMRF were made when due. Payments to SERS were not. I suggest that shows the main problem is not investments and inflation.

    Comment by Bigtwich Friday, Apr 13, 12 @ 1:14 pm

  34. Is the rule of 85 contract negotiated?

    Comment by Amused One Friday, Apr 13, 12 @ 1:24 pm

  35. Jade — $1 invested in 1982 at 6% would be worth $6.45 today. $1 invested in the mix of stocks for the Dow Jones Industrial average at the beginning of 1982 would be worth $11.81 at the beginning of 2012.

    Comment by anonymice Friday, Apr 13, 12 @ 1:38 pm

  36. Bigtwich–The State of Illinois does not pay into IMRF. The state has not fully paid into any other state retirement systems. THAT is where the problem started. The Pantagraph recently had an article about the fact that the City of Bloomington just re-negotiated the bonds they sold to pay IMRF what they owed for their employees who took early retirement a few years back. So, although not all cities are up to date with their payments–they are certainly not as far behind as the state of Illinois

    My IMRF retired friends remind me that they do not have the same benefits (no health insurance) and that since many had lower salaries than employees in the other systems, their pension is quite a bit less. Only a very
    few are at the high end of their pension scale.

    Comment by Nearly Normal Friday, Apr 13, 12 @ 1:41 pm

  37. Rule of 85 - Labor Agreement handbook, ARTICLE XIII, Section 3. Pensions, page 44.

    Comment by Ready to Get Out Friday, Apr 13, 12 @ 1:41 pm

  38. Anecdotally in my area the private sector hiring is picking up and starting to pick-off my agency’s non-hack competent professionals and manager of the “younger” generation. Simultaneously the old guard all have their retirement papers ready to go.
    Wordslinger is correct that things havent been great anywhere, but, that said, my agency is in real trouble very soon.

    Comment by Peter Snarker Friday, Apr 13, 12 @ 1:42 pm

  39. NN, You are right on the health insurance. I am not sure how the State pays for that. As for the lower salaries, both employee and employer contributions are a percentage of salary, so I am not sure that would be a factor.

    The IMRF pays a higher rate for service over 15 years while SERS does not and the IMRF makes 13 payments a year. And, yes the difference between the systems is the IMRF employers were not able to skip there required payments.

    Comment by Bigtwich Friday, Apr 13, 12 @ 2:00 pm

  40. Given this statement …

    She said the budget office has not concluded that changes to pensions and the union contract are the reasons for the rise in retirements.
    “We don’t necessarily see that as a trend, but that could be someone’s individual concern,” Kraft said.

    does the gov’s budget office care to offer up a theory as to why retirements are up 40 percent?

    Comment by Michelle Flaherty Friday, Apr 13, 12 @ 2:12 pm

  41. In the last months I have been honored to have meetings with several consultants and newer hires at the larger state agencies. Their analysis and explanations always sound good. When you point out to them the same suggestions they are making were tried and abandoned about 10-15 years ago, they look at you like that is not possible and their expertise from working in other states or professions will solve definitely the problem. Meet with state workers who were there then and now have to work with these people, they just smile and say “I know.” The brain drain is going to be huge and covered by people who have not got a clue as to what they do not know.

    Comment by zatoichi Friday, Apr 13, 12 @ 2:12 pm

  42. The last few posts dealt with ‘the Rule of 85 contract’ being renogiated. I believe the Rule of 85 is statutory, so if some have their way it will then require legislation to alter. If memory serves, either the RO85 or the increase in the annual service credit amount (currently .0167) was a legislative trade-off for ending the practice of paying for 1/2 of sick leave accumulated after the effective date of the Act, and adjustments to the number of years’ service required for retirees to obtain free health insurance. Nothing lasts forever I guess. If you aren’t gone, you’re vulnerable.

    Comment by Peanut Paid Worker Friday, Apr 13, 12 @ 2:17 pm

  43. I remember back when JAILBIRD George was Gov we state worker give up our raises for four months to be payed into the retirement system to help our reirement get out of the hole a little bit. But, Big George took that money and give his suckies big raises and nothing went to retirement.So all of yous ho think big George was a good man hopefully by now youve have opened your eyes. He shouldve got 20yrs like HOTROD did what a joke he was. [both of them]

    Comment by quincy Friday, Apr 13, 12 @ 2:39 pm

  44. “zatoichi” and “Too Young and Pretty” add valid comments. Unfortunately, those in positions to do something about the problems don’t seem to care.

    Comment by JustaJoe Friday, Apr 13, 12 @ 2:47 pm

  45. I have two years to go and can’t wait to retire. Not so much fear of changes to the system (because I think that is unconstitutional and will be held so by the courts), but I am very tired of being told that I am not worth the salary I receive and that I am responsible for the state’s debt. Just tired of the whole dreary, depressing atmosphere. As soon as I can, I’m outta here.

    Comment by lincolnlover Friday, Apr 13, 12 @ 3:00 pm

  46. quincy, what in God’s name are you talking about?

    Comment by steve schnorf Friday, Apr 13, 12 @ 3:01 pm

  47. I retired Nov. 1, after 28yrs. Had planned on doing 30 but the way the last few have been just couldnt stand the place anymore.
    If you look at how many jobs the Dept. of Corrections added in the early to mid 80s, and how many are now able to get out it really isnt a huge surprise. The way things are run now, anyone who can leaves as soon as they are able to, no matter what they will draw.

    Comment by SO IL M Friday, Apr 13, 12 @ 3:11 pm

  48. PublicServant,

    In the past, MC people mostly were automatically extended the same benefits on the same terms as the union contract, especially in the health insurance area. For retirees, the union has represented them in negotiations since the vast majority of retirees were formerly union. Doesn’t mean any of us non-union retirees or MC people agreed to the changes but we were given them (or, in some instances, had them rammed down out throat).

    What I see in the some of the latest proposals / attempts is a divide and conquer strategy on the State’s part. Pick off the non-Medicare retiree’s health insurance because they aren’t a very big segment of the retirees and there is nobody specifically looking out for them. Pick off the working MC people for different treatment because there is no one representing them. Pick off the high dollar retiree with some kind of targeted tax because there are only a few of them.

    To put it in deli terms, they are trying to salami slice off bits and pieces without having anyone notice … until it is de facto for enough people they can claim it is the norm and try to impose it on the rest of the retirees.

    Comment by Retired Non-Union Guy Friday, Apr 13, 12 @ 3:23 pm

  49. I won’t have enough time in for a couple years but am really worried about what might be taken from us. I hear rumors of an early out…. Too good to hope for?

    Comment by Early-out-dreamer Friday, Apr 13, 12 @ 3:27 pm

  50. Has anyone stopped and checked if the formula is working?

    If the state made the required payments, would the pension fund be able to support the 2012 life spans of people retiring at age 55? If the TRS and other funds would be solvent today, had the state made timely payments, I will be in support of the retirement system staying as is.

    I will change sides.

    I haven’t seen the Unions take the numbers that “should have been” and show me the “should have been” results. Everything else being equal. I’ve heard from the unions that the issue is that the state failed to fully fund the plans, and the state blames the boards that are stuck negoiating contact terms set at the state level.

    If the “should have been” numbers don’t pan out, the system is broken and change needs to happen.

    Comment by Jade_rabbit Friday, Apr 13, 12 @ 3:41 pm

  51. I have no gripe with public employees generally.
    But I am underwhelmed by the relentless self-pity in these comments. I notice none of the retirees gave their ages, only their years of service. So how old are these retirees? Most substantially less than 65, I’d bet.

    Comment by Jim Friday, Apr 13, 12 @ 3:43 pm

  52. Jim, I’ve no idea how old commenters are here, withthe exception of my hubby of course. No idea which agency anyone commentin gis from either…but hubby’s agency has a huge amount of workers being able to go out over the next five yrs. It’s an aging workforce. I need no early buy outs, no ‘85′, or the like. Fact the last couple who recently left my personal site was 68 and 69 yrs old. The youngest one , who retired from here a number of yrs ago was 60 if I remember correctly. Of course it’s different from site to site, agency to agency, but if I were you I would not hold my breath trying to ‘win’ on your bet

    Comment by Cindy Lou Friday, Apr 13, 12 @ 4:18 pm

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