Treasurer’s Office Issues Release On Retirement Incentive Plan

Approximately 1,000 eligible state employees will be notified of opportunity.

Deadline to apply is July 31, 2009!

NEWS RELEASE
For Immediate Release-June 15, 2009
Press Contact: Jeb Spaulding (802) 828-1452 or Lisa Helme (802) 828-3706 
 
Vermont State Employees Notified of Retirement Incentive Program 
  
        MONTPELIER, Vt.-The Retirement Division of the State Treasurer’s
Office has mailed letters to approximately a thousand State of Vermont
employees informing them that they are eligible to apply for voluntary
retirement under the 2009 incentive program passed in the recent special
legislative session and signed into law by Governor Jim Douglas. The
letters were mailed June 12.
 
        State Treasurer Jeb Spaulding wants all employees potentially
eligible for the program to be aware of the fast approaching deadline to
apply. All applications must be received by the Retirement Division no
later than July 31.
 
        "I also want to encourage any employees who believe they are
eligible, but do not receive a letter from us, to contact my office to
have their situation evaluated by retirement personnel," said Spaulding.
"The legislation allows only 300 eligible employees to take advantage of
the retirement incentive. We want to make certain no one who is eligible
misses the opportunity to be considered for the program."
 
        If more than 300 eligible employees apply to retire through the
program, the Retirement Division will initiate a lottery process to
select the final group. Eligible employees must apply for the incentive
no later than July 31, 2009 by completing and returning required forms
to the division. The last day on the job for employees voluntarily
retiring through this program is generally August 31, 2009, with an
effective retirement date of September 1, 2009.
 
To be eligible for the retirement incentive program a person must meet
the following requirements:
 
*       Be employed as a State of Vermont employee on June 1, 2009;
*       Participate in either the defined benefit or defined
contribution retirement plans;
*       As of July 1, 2009, have either 30 years of service or will be
age 62 with at least five years of service; and
*       Have not initiated a purchase of service after May 1, 2009.

 
        Incentives are calculated based on years of creditable service.
Employees with five or more years of creditable service, but less than
15 years, will receive $750 for each creditable year served. Employees
with 15 years or more of creditable service will receive $1,000 for each
year of creditable service. The largest cash retirement incentive
eligible employees may receive is capped at $15,000.
 
        Incentives will be paid in two equal amounts in fiscal years
2010 and 2011. The first payment will be made within 90 days of an
employee’s retirement date. The second payment will be made within 30
days of the one-year anniversary of the employee’s retirement date.
 
        In addition to the cash incentives, the State also will continue
to pay 80 percent of the cost for the employee’s premium for health
insurance. This coverage is provided through the plan currently offered
to State of Vermont retirees, as long as they maintain eligibility
requirements for at least seven years following retirement.
 
"From a fiscal perspective, the retirement incentive program should
essentially break even in year one and provide an opportunity for
significant long-term cost reductions in future years," explained
Spaulding. "The idea is that this program will enable the State to
decrease the size of its workforce, but in a way that lessens the
economic hardship on employees caused by layoffs. Achieving these
savings will require administrative and budgetary discipline on the part
of all branches of state government. Of the potentially 300 positions
freed up by this program, the goal is to leave at least one-third
unfilled. Effective monitoring and management of these vacancies will be
critical to success."
 
        The law does allow an employer to stagger the retirement dates
of multiple retiring employees if necessary to continue normal operation
of business. However, no retirement date will be later than March 1,
2010. No employee may return to State employment for at least one fiscal
year without the approval of the Secretary of Administration for an
executive branch employee; Chief Justice of the Supreme Court for a
judicial branch employee; or the Speaker of the House and the President
Protempore of the Senate for a legislative branch employee.
 
        If needed, the lottery process will be instituted in early
August. The 300 employees selected through the lottery process will
receive estimate and final retirement paperwork by August 7.
 
        The Treasurer’s Office retirement staff will hold a number of
group retirement seminars the week of August 10 in Montpelier for
employees retiring through the incentive program. Employees with
questions about their eligibility for the program should contact the
retirement office by calling (802) 828-2305, or toll free in Vermont at
1 (800) 642-3191. 
  
Lisa Helme
Director of Financial Literacy and Communications
Office of the State Treasurer
109 State Street, 4th Floor
Montpelier, Vermont 05609-6200
Tel: 802-828-3706
Fax: 802-828-2772