A government employees' early retirement incentive bill was approved 5-2 Wednesday by the Senate Government Operations Committee. The bill, sponsored by Sens. David Jones, Almando "Rocky" Liburd and Donald "Ducks" Cole, is an amended version of a bill already heard several times, and rejected in a March committee hearing.
At that time, Corrine King, Government Employees Retirement System board chair, rejected the bill on the grounds that the government couldn't guarantee the $15 million the bill proposed to sponsor the program. The money would come from the government's $300 million bond issue.
King, along with Alphonso E. Nibbs, GERS staff attorney, appeared at Wednesday's hearing where she voiced disapproval of the current amendment on the same grounds.
She said in a prepared statement: "The board seeks to avert another legislative incursion into the Retirement fund by way of an unfunded legislative mandate." She added that the GERS has been unable to obtain positive assurances from the bill's sponsors that the $15 million would be forthcoming.
The bill, now known as the Public Employees Voluntary Separation Incentive Act of 2000, allows employees who are members of the GERS with at least 28 but fewer than 30 years of service to leave early and "buy" their remaining time through a system of advance credits by contributing 8 percent of their annuity over the remaining years. Senators changed the eligible time from 25 to 28 years when they discovered there weren't sufficient funds to cover that many employees.
The purpose of the plan is to reduce government payrolls by encouraging employees to leave early without penalties, senators said.
Employees would receive a cash payment upon leaving. Classified employees would receive a payment equal to 30 percent of their gross annual salary, and unclassified employees would receive 15 percent.
The amendment now includes employees from all three branches of government. Earlier it was limited to executive branch employees, which King had then called "unconstitutional."
King said the "risk is too great to go forward at this time, because the GERS hasn't had adequate time to study the latest amendment to the bill." But under questioning, she said the GERS would support an early retirement bill backed up by adequate funding.
Edward Phillips, American Association of Retired Persons state legislative chair, submitted a letter asked the bill be "tabled indefinitely." Phillips said the bill would "endanger the ability of the system to continue to pay annuities to current and future retirees." He said that while the bill proposes to reduce the government work force, AARP fears it would bankrupt the GERS.
Though many executive branch officials had been invited to testify, including Bernice Turnbull, finance commissioner, and government financial advisors Rudolph Krigger and Paulette Rabsatt, none appeared.
The bill was approved by committee Chairman Gregory Bennerson and Sens. Jones, Cole, Adelbert "Bert" Bryan and Allie-Allison Petrus. Sens. Lorraine Berry and Roosevelt David cast the dissenting votes.
The measure will now be forwarded to the Rules Committee and then the full Senate for a vote.
