Early retirement could save Fayette $1.6 million a year
Fayette County officials are hoping that an early retirement program for 44 employees will save a significant chunk of cash in the upcoming fiscal year budget.
If all 44 qualified employees retire, the county could save more than $1.6 million in salary on an annual basis. But County Administrator Jack Krakeel cautioned the county commission late last month that while some of the positions would be eliminated, others would require that a new employee be hired to take the former employee’s spot, although at a cheaper cost than the retiring employee.
The new employees would be hired only for positions deemed “critical,” Krakeel said.
“You clearly cannot eliminate all the positions,” Krakeel said.
Commissioner Lee Hearn said he felt that was a substantial cost savings the county needed to pursue. Commissioner Steve Brown said he didn’t have any problems with the proposal, though he would like to have seen more discussion on it early. Brown added that he understood the matter was fast-tracked because of the pending budget discussions the commission will undergo with staff.
Commissioner Robert Horgan said he thought the information presented at the recent county commission retreat was well-thought out and he wanted to pursue the matter further.
The commission adopted a resolution to pursue the early retirement plan, and authorized a contract for legal consultants to create the plan, which would be offered to employees 55 and over with more than 20 years of service to the county. That legal work is expected to cost the county between $10,000 and $12,000, Krakeel said.
The county is offering to provide the early retirees with an unreduced retirement benefit and credit for an additional five years of service which would also increase their monthly payment under the plan.
The county is also offering a post-retirement health insurance benefit for participants until age 65, but that benefit would be limited to the employee only, not their spouse or immediate family members, according to county documents.
The estimated average increased plan liability is $86,864 per participant, and the county would be paying that contribution into the plan from its cash reserves.