SALISBURY — Wicomico officials this week approved an early retirement incentive program for dozens of long-time county employees in an effort to further trim labor expenses in yet another challenging budget year.
The Wicomico County Council on Tuesday approved the early retirement incentive program after a lengthy debate about the potential savings and the need to fill the resulting vacancies with new hires at lower salary rates and benefit packages. Under the approved plan, nearly 80 county employees are eligible to take the early exit.
According to Wicomico County Human Resources Director Mike Thompson, employees eligible for the early retirement plan must have 25 years of service with the county, or be at least 55 years old with five years of service. The plan would add five extra years of service to a retiring employee’s pension plan, which could add thousands of dollars to their retirement benefit package.
After considerable discussion, the council voted 4-2 to approve the early retirement incentive plan, with Councilmen Joe Holloway and Bob Culver voting against the proposal.
Culver said he didn’t necessarily oppose the plan, but preferred to look at the larger retirement and benefit package for all employees before approving the proposal.
“I feel this is a great avenue to save the county money, but right now, there are just too many questions,” said Culver. “I think we should table this until we can look at it closer.”
Under the approved plan, 77 county employees are eligible to take early retirement, although it is unclear just how many might decide to opt for the program. Thompson said eligible employees would have to commit to the program by mid-May with a June 30 effective date, but also said he didn’t expect a rush to the door.
“If you approve this, it can be offered now,” he said. “But I don’t think you’ll see everybody jump on the bandwagon. In this economy and the way things are, I’m not sure you’re going to see a lot of people giving up jobs. People are going to want to hold on to what they have.”
Nonetheless, Culver pointed out even if half of the eligible employees took the drop, the county could be in a position to take on dozens of new hires to replace the retired employees at a time when there is so much uncertainty about the county’s employee salary and benefit package, including healthcare.
“If we take everybody that is eligible, we might have 30-40 new hires,” he said. “I feel like we need to have our ducks in a row. We don’t know at this point what we’re going to pay for health insurance, for example.”
The benefit for the county is replacing long-time employees who are close to retirement age anyway and who have climbed the salary ladder over several years of service with new hires starting on the front end of the salary and benefit scale. In many cases, the retiring employees might not need to be replaced, which would eliminate a substantial amount of salary and benefits from the coming budget.
“Certainly, we don’t want to lose experienced employees, but we also know there are some positions that won’t need to be filled,” said Councilwoman Sheree Sample-Hughes. “Other jurisdictions and municipalities are comfortable with it and I think we need these savings for this fiscal year.”
Joe Holloway took exception to the idea there are potentially dozens of employees who could retire without needing to be replaced, calling into question the efficiency of some sectors of the county government.
“We’re talking about retiring people and not replacing them,” he said. “That baffles me. It makes me question some of the management. If we don’t need them now, why do we still have them.”
Joe Holloway also questioned why employees 55 years old or older with just five years of service with the county should be eligible for the lucrative drop program.
“Early retirement means early retirement,” said Joe Holloway. “I thought the idea was to convince people to retire early from the county that have been here for a number of years.”
One concern voiced on Tuesday was a potential drop in the experience level and productivity level if the county’s top tier management-level employees took advantage of the plan. Sample-Hughes asked if there was any benefit to retiring the employees and bringing them back as a bridge to the new hires.
“What options are out there?” she said. “What if we retire people and hire them back on a contractual basis until we find their replacement? I guess it depends on the position and if the person below them is qualified to do their job.”
Others questioned the county’s benefit in retiring productive employees when they might continue to draw a large percentage of their salary.
“There has to be ceiling, right?” he said. “Some people could draw 90 percent of their salary with the service time they have. If they started when they were 20 or 25 years old, they could have accumulated the years of service to draw a pension like that.”
Culver made a motion to table the vote until it could be studied more closely, but the motion failed, 4-2. The motion to approve the proposal then passed by the same 4-2 vote.