Annuitants face more cutbacks in budget parley

With the state’s budget crisis stretching into the new calendar year, the fate of thousands of retired annuitants hangs in the balance. Retired annuitants are employees who have already opted to leave their full-time job and collect a pension. But under state law, those workers can return to work on a part-time basis, and collect an hourly wage.

Unlike most state workers, who are unionized employees, retired annuitants do not have many of the same protections that full-time and other state workers have. So last summer, when the governor ordered every state department to reduce its costs, many retired annuitants were out of a job.

“These decisions are made on a department-by-department basis.  The question of how many will come back is up to each department,” said Dept. of Personal Administration spokeswoman Lynelle Jolley. “It’s a tool for departments to use. But if the terminated people can be brought back and the department can still meet their savings target, they’ve been given that leeway to do so.”

Before the governor issued his executive order last summer, there were about 5,700 retired annuitants sprinkled across state government. Under state law, these workers can work no more than 960 hours in a 52-week period – an average of about 18.5 hours per week.

Jolley says after the governor’s executive order, 10,000 temporary workers were eliminated from state payroll. But she did not know how many of the 5,700 retired annuitants were among those 10,000 temporary workers.

While many retired annuitants have survived the initial round of budget cuts – or were brought back to work after the budget stalemate ended in September, many are bracing for more. The governor has called a special session of the Legislature to deal with a shortfall in revenues, and there is an expectation that state departments will be asked to make even deeper cuts. And that means more retired annuitants may be on the chopping block.

Jolley says it is likely that departments will continue to have leeway in deciding how to score savings in their individual budgets. But with state services being cut, retired annuitants are one of the first places many departments will look to meet any new savings target.
Among the agencies that use lots of retired annuitants is the Department of Corrections. Though department sources did not have an immediate number of annuitants on the department’s payroll, they did say that many were cut as the state budget impasse dragged on this summer.

Many of those employees are retired peace officers, who collect some of the state’s most lucrative pensions. Peace officers, for example, receive three percent of their highest annual salary every month for every year of service in state government. So, a worker who has worked in the department for 30 years, and whose top annual salary was $100,000, for example, would receive a $90,000 annual pension.

Corrections sources said since the state budget was signed, many of the laid off retired annuitants have been brought back. But as with other state departments, their jobs may again be in jeopardy if the state’s budget forecast continues to decline.