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Jon Ortiz

The State Worker: California employee retirements are rising

Published: Thursday, May. 30, 2013 - 12:00 am | Page 3A
Last Modified: Thursday, May. 30, 2013 - 6:26 am

California will likely bid farewell to more than 10,000 state employees by the end of this year as a range of factors – from age to the economy to politics – prods them to retire.

The latest data from CalPERS shows that nearly 5,100 state workers took their pensions in the first five months of this year, up about 6 percent from 2012.

State retirements are trending toward levels not seen since Gov. Arnold Schwarzenegger's administration. A record 11,554 state workers took their pensions during the Father of the Three-Day Furlough's last year in office, 2010.

Age plays a huge role. Currently, four in 10 state workers are 50 or older. A 2011 analysis showed more than half of the state's managers and above could retire by 2016.

Still, there's more than age pushing state workers to the exits, said Michael Shires, a public policy expert at Pepperdine University.

Unemployment is down. Home values are up. The stock market is roaring. The world looks more secure to a prospective pensioner than it did a few years ago.

"I think people put off plans for retirement," Shires said. "But now uncertainty has washed away."

The security that drew them to civil service also has been shaken the last few years. New laws that rolled back pension formulas for new hires fired a warning shot. Several local government lawsuits are testing whether benefit calculations for current employees can be altered.

Then mix in the math. Employees retiring now are under the most generous formulas. Some can take home more in retirement once health insurance, pension, commute and other out-of-pocket costs of employment are figured in.

So why stick around?

"There's a sense that things are good right now," Shires said, "so people are retiring to lock in what they have."

The retirement rush has an upside for the state, since pension-takers tend to be at the higher end of the pay scale. A downside: Their knowledge and leadership often leave with them.

Meanwhile, after years of budget crises, the number of state workers has fallen. The state controller last month issued about 409,000 paychecks and direct payroll deposits, nearly 30,000 fewer than two years ago.

So, depending on your point of view, attrition is working its wonderful magic or government is starving for workers.

It's a fine line for the frugal Gov. Jerry Brown. Pat McConahay, spokeswoman for Brown's Department of Human Resources, said "the administration is well aware of this issue, and we're tackling the problem head-on."

That includes, she said, upgrading the state's job- search website, changing state culture to offer more life-work balance perks like telecommuting, and developing leadership succession plans at each department.

Higher pay was not on the improvement list.

Brown is in talks with nine unions with contracts that expire in July. The outcome of those negotiations could slow the retirement tsunami – or swell it.

Call The Bee's Jon Ortiz, (916) 321-1043. Follow him on Twitter @thestateworker and read his blog, The State Worker.

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About The State Worker

Jon Ortiz The Author

Jon Ortiz launched The State Worker blog and a companion column in 2008 to cover state government from the perspective of California government employees. Every day he filters the news through a single question: "What does this mean for state workers?" Join Ortiz for updates and debate on state pay, benefits, pensions, contracts and jobs. Contact him at (916) 321-1043 and at jortiz@sacbee.com.

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Note: The State Worker blog switched blog platforms in October 2013. All posts after the switch are found here. Older posts are available using the list below.


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