DuPage paying the bill for high number of retirements

An unexpectedly high number of employee retirements has DuPage County officials working to find millions of dollars in their budget to help pay for the departures.

DuPage County Board members originally set aside $2.5 million for employee benefit payouts for the current fiscal year, which ends Nov. 30.

What no one anticipated is that the number of county employees choosing to retire would far exceed last year’s total of 25. So far, 92 county workers have either retired or announced they are leaving — a number that could rise.

As a result, DuPage currently estimates it could pay up to $4.5 million to departing workers. That total includes cash payouts for unused sick and vacation days and so-called retention bonuses for longtime employees.

“We were overwhelmed with the number of people who are choosing to retire relative to what we budgeted,” said Paul Fichtner, chairman of county board’s finance committee. “It’s a deficit that we have to fill.”

Fortunately, DuPage is collecting more sales tax revenue than projected, Fichtner said. He said the extra sales tax dollars are going to help pay the shortfall.

“We’re looking at finding that money,” Fichtner said. “We haven’t identified 100 percent of it yet.”

Some attribute the dramatic jump in retirements to the age of the county’s workforce and possible statewide pension reform.

“We have long-serving, good employees who have gotten to the point where they’re ready to move on,” said Jeff Redick, chairman of the county board’s ad hoc committee on human resources. “I also have no doubt that what’s happening in Springfield is having an impact.”

State lawmakers, led by House Republican Leader Tom Cross, talked behind closed doors for months about ideas to cut pension benefits for current government employees. But without a deal in place, pension reform supporters decided in May to put off the effort and try again in the fall.

Their most recent proposal would have left all of an employee’s accrued pension benefits alone. But in the future, a worker would have to decide to either pay more into the system, enter a less lucrative program under which all new employees now start or move to a 401(k)-style system.

Regardless of what happens, officials say they believe DuPage will continue to experience a high number of retirements for the next several years.

Fichtner said that means DuPage will need to budget more money annually for employee benefit payouts than it has in the past.

One large expense is a retention program created in the 1990s to keep senior employees from leaving for better-paying jobs. It essentially gives bonuses to workers based on seniority.

DuPage eliminated that initiative in late 2002 but still has to honor its commitment to the original participants.

Another long-standing policy requires the county to give departing employees cash payouts for unused sick time they’ve accrued.

“The reality of it is that these policies that are in place are handcuffing us now,” Redick said.

However, Fichtner said the county is going to see “some substantial savings” several years from now because it won’t be dealing with the retention issue anymore. Retirees also will be replaced with workers making a lower salary.

The county also could see savings from a series of recommendations expected to come from the ad hoc committee on human resources. The panel was formed to develop a sustainable and fair benefits package for the county.

Redick said the committee’s initial findings are expected to be available later this month, so they could be part of the county’s 2012 budget planning.

Committee members have spent the past few months reviewing pension benefits offered to county employees and elected officials. They also are analyzing the county’s salary structure, overtime policies and “special compensation,” such as vacation time, sick days and other benefits.

“Hopefully the plan that comes out of here is the one that eliminates the negative impact of some of the decisions that were made by boards long ago,” Redick said.

Redick said one specific policy that’s expected to be changed is DuPage’s practice of giving departing employees cash payouts for unused sick time. “We’re trying to refocus our way of doing business,” he said.