Effort To Retain Key Employees Weighed

OCEAN CITY — Resort officials this week signed off on a key senior employee retention program aimed at providing incentives for longtime employees eligible for retirement to continue working with the town.

There has clearly been an experience drain at the top of Ocean City’s senior workforce in recent years with retirement ceremonies practically a weekly feature at City Hall. The town already has in place a Deferred Retirement Option Program, or DROP, in place providing an option for long-term employees to continue to work for the town while setting in motion their pension and benefits packages for a prescribed amount of time.

On Tuesday, City Manager Doug Miller introduced s key senior employee retention plan, the intent of which is similar to DROP, but the components of which are slightly different, and in some cases more advantageous for both the employee and the town. According to Miller, as an unintended consequence, the town’s attractive pay and benefits practices could induce a valuable tenured employee to retire before they otherwise would.

“We saw it today with two more retirements of long-time employees,” he said. “We should be proud we are such good employers, but we are seeing a lot of retirements.”

Of course, the town welcomes senior employees with decades of service to enjoy their retirement and the fruits of their many years of labor in most cases. However, there are some employees who have reached their salary cap, so to speak, and have maxed out their post-employment benefits package, that could otherwise retire and double down by beginning a new career.

For example, there are currently 35 town employees capped at their grade maximum and another 40 who are within 5% of being frozen at their grade maximum. Miller said many of them are key staff members in the midst of important projects who are otherwise eligible for retirement. The loss of those key personnel could be detrimental to the town at a critical time, which is why the proposed key senior employee retention plan is so important.

“While the town government wishes for its deserving employees to enjoy a fruitful retirement, sometimes due to the timing of specific projects or initiatives, the retirement of a key senior employee may place a hardship on the town and put the completion of a high-impact project at risk,” said Miller. “It is for these most valued employees and certain conditions that the town must have the flexibility to incentivize these individuals to stay until the important project, issue or initiative they are leading is complete or can be successfully transitioned to another employee.”

Miller explained a long-tenured employee might have the incentive to take early retirement even before they have reached the end of their working days because of the town’s attractive salary and benefits package. For example, after 30 years of service to the town, an employee in the defined benefit retirement plan can retire and receive 50% of their departing salary for the rest of their life.

“For those who wish to truly retire, this is a great benefit and with the addition of Social Security and proper planning, this can provide the employee with a very secure retirement,” he said. “But for employees who still have working years left, they may be induced to retire when they reach that milestone not because they no longer want to work, but because they don’t want to leave money on the table. Some employees have the ability to retire, take their pension benefit of 50% of their salary, and then obtain another comparable position elsewhere and make as much or more than with their position with the town.”

About The Author: Shawn Soper

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Shawn Soper has been with The Dispatch since 2000. He began as a staff writer covering various local government beats and general stories. His current positions include managing editor and sports editor. Growing up in Baltimore before moving to Ocean City full time three decades ago, Soper graduated from Loch Raven High School in 1981 and from Towson University in 1985 with degrees in mass communications with a journalism concentration and history.