Hundreds of state workers taking advantage of early retirement

JEFFERSON CITY, Mo. -- State workers have taken advantage of a new law that allows some retired employees to pay the same rates for their medical coverage as full-time workers, a state official said Friday.

The incentive was designed to save the state money because it is cheaper for the state to pay medical insurance to retirees than to pay full-time salaries to those eligible for retirement but still working. Under the plan, the state would pay retirees' insurance costs for the first five years after their retirement or until they become eligible for Medicare, the federally run health-care program for senior citizens.

State budget officials initially said the retirement incentive would save the state about $8.7 million this fiscal year -- a time when Missouri is struggling to balance its budget. That figure was based on an anticipated participation rate of 1,500 workers.

Gary Findlay, executive director of the Missouri State Employees' Retirement System, said as many as 1,400 more people applied for retirement dates from mid-June through September than during the same period last year.

"When compared with past experience, it would be reasonable to conclude that between 1,200 and 1,400 of the people who retired during the brief incentive window period did so predicated on the availability of the incentive," Findlay said.

Went into effect June 19

The incentive was open to workers who were eligible to retire between Feb. 1 and Sept. 1. The incentive went into effect June 19 when it was signed into law by Gov. Bob Holden and was open to about 4,600 workers. The deadline for applications covered by the incentive were due Thursday.

Linda Luebbering, the state budget director, said the incentive was successful even though the number of people who took advantage of it was slightly lower than expected.

"There were a lot of people who were skeptical," Luebbering said. "I think we did better than a lot of people thought we would."

Findlay said the state is expected to receive additional retirement applications in the mail over the next few days at which point a final total of retirement applications will be available.

No more than 25 percent of the positions vacated by those who choose the retirement incentive could be filled in order for the state to save money under the incentive plan.

Under a 1994 change in state law, state employees whose age and length of state service equal 80 are eligible to retire. For example, a worker who is age 50 and has 30 years of service is currently eligible for retirement.

The law also allows people who began working for the state at age 16 to retire as young as age 48, although the number of people effected by the provision is minimal.