More government employees qualify for generous early retirement incentives offered this year and now have until Sept. 30 to apply, thanks to an act passed by the V.I. Legislature and signed into law by Gov. John deJongh Jr. Friday.
The early retirement incentives were part of an economic stabilization act passed by the Legislature in June to fend off a looming budget shortfall of many tens of millions of dollars, while trying to avoid laying off large numbers of government employees. To try to increase voluntary retirement, the Legislature offered workers who have been with the government at least 30 years a one-time payment of $10,000 if they applied to retire by the end of August.
Many chose to take the cash payout and retire, causing some disruption in several government departments, as highly experienced employees leave with no one ready to fill their shoes.
Nonetheless, the legislation spawned fewer retirees and hence less savings in personnel costs than anticipated because the language in the act is more restrictive than maybe intended, Personnel Department Director Kenneth Hermon said in budget hearings two weeks ago.
The way the act was originally written, employees needed to have 30 years of "credited service" in the V.I. government as of July 5, the day the act was signed into law.
"The GERS defines credited service as service which has been paid for in its entirety to the GERS," Hermon testified to the Legislature.
As a result, those who reached the 30-year threshold since then, or who wish to pay into GERS, were excluded from the retirement program.
As of Aug. 12, the division had more than 270 retirement actions pending but had been told by GERS only 115 employees met the criteria for $10,000 incentive payments, he said.
The number of retirees has grown to 390, according to information supplied Monday by Government House spokesman Jean Greaux. This should cost the government $3.9 million in bonus payments, while saving $23.4 million in fiscal year 2012, if the positions are not refilled, according to Government House.
The act signed by deJongh last Friday removes the phrase "credited" from the law and extends the deadline for retiring workers to notify their workplace until Sept. 30.
