From the Desk of the President (December, 2010)

 

Announcements:  

1) We will hold a special contract vote at the 12/1/10 General Assembly on the Employer's proposed Memorandum of Understanding (MOU) regarding the issue of reduced co-pays.  A letter with proposed MOU was mailed to your home address around November 22, 2010.  As noted in that letter, this will be the first order of business with discussion beginning at 5:30 PM.  Voting will not begin until 5:45 PM in order to give members time to participate in the discussion.  You must be a member in order to vote so you will need to bring a photo ID or your union card to check in.  If you are currently a fee payer and wish to become a member, dues authorization cards will be available.

2) Please remember to bring an unwrapped toy to the meeting for the Council 5 Child Care Providers Together (CCPT) Toys for Tots drive.  All toys will be presented by our CCPT members to the KARE 11 Toys for Tots drive. 

3) This is our Local 34 annual holiday meeting.  Food will be provided.  Bring your own beverage.  The meeting will be held in HSB L15 - the room right across from the elevator in the lower level (LL) of HSB.

I decided to turn my column for this month over to two of our members who are taking advantage of the PERA Phased Retirement Program.  I feel very strongly that this program has many benefits for those of our members who are closing in on retirement as it can be a great way to ease into the world of retirement.  Thank you to Mary Finstad and Don Nikkola who graciously agreed to write the following article. 

PRO (Phased Retirement Option) for PERA members - May, 2009 Omnibus Pension Bill

The Baby Boomers are reinventing retirement! We are living longer; we do not want to retire abruptly; our sluggish economy is boosting the option of Phased Retirement and the tight labor market has increased the interest of many employers in retaining their older, experienced workers. 

What is PERA Phased Retirement?  As defined on the PERA website, this “program is intended to facilitate a transition into retirement for a PERA member who is approaching full retirement while providing employers with a workforce planning tool that can for example, help transfer knowledge from the long-time employee to a new worker.”

Requirements:

§     Must participate in PERA’s coordinated fund, or Basic fund,

§     Must have worked at least 1,044 hours per year for the past five years,

§     Must be 62 years of age.

§     Employees do not need to be eligible for PERA’s rule of 90 to participate in the PRO.

§     Need to reduce work hours to half-time.

Benefits:

§     Allows employees to elect a slower, or phased retirement,

§     Allows public employers to retain the services of their retirement-eligible employees “a little longer,”

§     Incurs lower payroll costs,

§     Eliminates several of PERA’s administrative burdens,

§     Neither the PERA member nor the County is required to make any further contributions to PERA.

Phased Retirement is used to retain skilled older employees who would otherwise retire, reduce labor costs and to arrange training of replacement employees by older workers….and there is a shortage of entry level job applicants. (Investopedia.com).  “There seems to simply be an increased desire among individuals to stay active and stay involved and do it through the workplace in later years”. (Paul Yakoboski, Employee Benefit Research Institute-2000).  Requirements vary industry wide.  Corporations, universities and colleges, hospitals, Federal and local government have initiated Phased Retirement programs since at least 2000.

Benefits for employers:

§  Retention of trained and qualified personnel,

§  Reduced costs associated with training new employees to replace retiring employees,

§  Reduced costs achieved through lower salary and benefits expenses, made possible by employee shifting from full-time to part-time status.

 Benefits for employees:

§  Flexible work arrangements,

§  The opportunity to gradually transition into retirement rather than making a sudden, abrupt shift,

§  The opportunity to supplement retirement income or to increase future retirement benefits by deferring current retirement income.

(National Association of State Retirement Administrators [NASRA] 2002 IRS Request for Comments)

August 26 2008 - A survey by global HR consulting and outsourcing company Hewitt Associates showed that an increasing number of U.S. employers are considering implementing phased retirement programs to address an impending talent shortage as a quarter of the workforce nears retirement age.

Allen Steinberg, a principal at Hewitt Associates, commented:  "With the rising tide of boomer retirees, employers will be losing key talent at a time when attracting and retaining skilled workers will be more important than ever. At the same time, rising medical costs, lengthening life spans and the declining prevalence of traditional pension and retiree medical benefits mean that employees will either have to work longer, save more or live with significantly less than they are accustomed to.  As these trends converge, we believe phased retirement programs will continue to become more attractive options for both employers and employees - they provide employers with new ways to retain critical talent and, at the same time, help employees meet their needs."

The Hennepin County board of Commissioners encourages County departments to consider this program for it employees.

 We decided to participate in the Phase Retirement Option:

§  in order to gradually exit extensive careers at Hennepin County –we are not ready to completely retire;

§  reduced our hours to 40 per pay period;

§  continue to contribute to Social Security;

§  no longer contribute to PERA – nor does the County, thus reducing costs.

§  are willing and able to provide tacit knowledge to colleagues by virtue of accumulated years of practice.

§  participate in succession planning.

Mary Finstad and Don Nikkola  

Please contact Benefits if you have any questions about the program and whether you qualify.  You can also read more about this program at the Benefits intranet site.

Happy Holidays to all,

Jean