Monday, August 25, 2014
Despite $76,500 PR Person, Courthouse Rumors Abound
One of these changes is an adjustment of the life expectancy, and that's no rumor. Most courthouse employees have already been told about this, leading to the rumor that 90 workers have applied for early retirement.
Another proposal under review is a change in the accrual rate from its current calculation of 1/50 to 1/60. If this applies to existing pensions, it appears to me that it will have a detrimental impact. That decision must come from the Retirement Board.
Here's how it works.
Pension liability = Accrual rate × Final salary × Years of service
So, for a person whose salary is $70,000 and who has 30 years of service, the difference between a 1//50 and 1/60 accrual rate is $7,000 per year.
1 ÷ 60 × $70,000 × 30 = $35,000
1 ÷ 50 × $70,000 × 30 = $42,000
Is this rumor true? I tried checking it out on Friday with one of the County's fiscal experts, and was told all questions must be directed to Director of Administration Luis Campos. So I'm asking him
1) Does the Executive plan 800 lay-offs, or any lay-offs at all?
2) Have 90 workers put in for retirement this year?
3) What can you share about union negotiations?
4) Won't a change in the accrual rate have a detrimental impact on pensions?