Mary Hansen
The State Journal-Register
City employees retired in greater numbers that year than any other in a five-year period. According to the city’s human resources office, 84 workers retired in 2015, compared to 60 so far this year.
City officials and others have different perspectives on why the bump in retirements happened. Some point to the Springfield City Council’s decision to get rid of a perk that allowed employees nearing retirement to cash in unused vacation days, “spiking” their future pension payments.
“The discussion at the time was should we cut it off now, or give people the opportunity to have that benefit,” said Mayor Jim Langfelder. “That’s what the council chose. We put it out a year further, and that’s why a lot of retirements happen in the last year, year and a half or so.”
The perk has been phased out, but the city is facing a lawsuit from unions and current employees to keep the incentive in place. A Sangamon County Circuit Court judge ruled in favor of the city in May, but the plaintiffs appealed. A hearing is set for Jan. 18.
‘Not going to wait’
Workers who notified the city before June 1 of their plans to retire by May 31, 2017, were the last to be able to cash in their vacation days and up their retirement payments. Retiring workers can still get paid for unused vacation time, but it will no longer impact their retirement earnings.
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Further buttressing the vacation-perk argument, more than 50 workers retired in the months before the council approved getting rid of it, according to an analysis of city data.
To get the perk, workers had to advise the city of their retirement plans at least four months and up to a year in advance. That means many could have made the decision a year before the council voted to get rid of the vacation payout.
Lost expertise
Municipalities like Springfield began paying attention to policies that “spiked” pension benefits when the IMRF started charging lump sums for perks that caused more than a 6 percent increase in workers’ final earnings.
Then-Mayor Mike Houston introduced a measure to eliminate vacation payout in 2014, but the proposal didn’t go far.
From June 2012 to December 2014, those accelerated payments cost the city $3.5 million. The cost has now reached $6.6 million, according to the city’s budget director, Bill McCarty. The savings on accelerated payments was one benefit to cutting the vacation perk, Langfelder said. Plus, the city would likely have to pay the new hires who replace the retirees less.
But there is a drawback. “You have a ’brain drain,’” Langfelder said. “That’s probably the greatest loss, the experience that you lose.”
The public works department has had more than 40 workers retire since 2012, with 11 workers leaving in both 2014 and 2015.
“They were considering it, and perhaps that incentive made them more inclined to do so. But overall, we anticipated them leaving,” Public Works Director Mark Mahoney said of the retirements. Losing employees with years of experience is a concern, he added.
Many recent retirements have been in the building and zoning division, and Mahoney said he has tried to hire back and train workers for those positions quickly.
Langfelder said he doesn’t think more retirements have affected the city’s ability to provide essential services.
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City retirements
Number of city employee retirements (including police officers, firefighters and City Water, Light and Power employees)
2012: 68
2013: 60
2014: 66
2015: 84
2016: 60
Source: City of Springfield Human Resources Department
Joe McMenamin for Ward 7 