“DROP” Program is an Incentive for Some to Retire Sooner
Monday, March 16, 2009
The city of San Diego could see an exodus of experienced staff in the next 3 months. The city’s pension board recently changed a benefit originally designed to motivate employees to retire later. KPBS reporter Alison St John has more.
The city has not offered employees near retirement a golden handshake like the school district, which is giving teachers an incentive to retire. Instead the city’s pension board has put a little tarnish on the incentive to stay on.
Last month, the board halved the guaranteed rate of return on so-called “ Drop” accounts: retirement accounts allowed to accumulate while the employee continued to work.
Christopher Bennett works at the Central Library. He says people who have been at the city for years are now planning to retire before the new fiscal year starts in July. He says, " It’s a huge incentive for our more experienced people who have been around - some of them for 27 years or more - to leave, and all of a sudden, boom, they’re gone because they’ve calculated what kind of an income they are going to be losing by staying."
The city’s personnel director, Hadi Dehghani, says he’s trying to find out how many people in key positions are planning to leave by June. " We don’t just don’t want to be caught by surprise," he says.
More than a thousand city employees are enrolled in the Drop Program.
Pension officials will offer workshops next month for employees trying to calculate whether to stay or go.
The change in the benefits will save the city tens of millions of dollars.
Alison St John, KPBS news.
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