With New County Pension, Retirements Could Soar

Orange County government bosses expect 814 workers to retire in July, taking advantage of a sweetened pension plan approved last year.

That’s nearly three times the average annual number of county employees -- about 300 -- who have retired in recent years.

Some 2,147 employees are eligible to leave July 1, but most will stay on the job, said human resources director Marcel Turner, because they hope to snag raises or promotions to further bump up their pensions.

“Quite frankly, a lot of people can’t afford to retire [yet],” he said.

Come July, workers are eligible to retire at 55 and receive 2.7% of their salary for every year of government service, up to 100% of their final annual pay. Under the old plan, they could retire at 62 with 1.67% of their final salary for every year.

Concern over the exodus prompted the Board of Supervisors in September to get a better handle on who might be leaving in July, how they will be replaced and the cost to the county of their departure. The vacancies will crop up throughout county government. For example, many seasoned park rangers are expected to retire.

County department heads were asked to prepare for the brain drain by asking key employees if they planned to leave, and to develop a succession plan.

There is no mandatory age at which someone must retire from government, and the county cannot force or encourage people to retire, because of age-discrimination laws, Turner said.

A contract approved last summer with employee unions called for workers to forgo raises and pay about 2% of their salaries into the retirement system to cover the new pension costs. The benefit added about $300 million to the county’s $1-billion pension obligation to cover all current and retired workers.

The number of retirees who have returned as part-time county workers -- receiving both a pension and regular pay -- has also caused supervisors concern. County Executive Officer Thomas Mauk reported this month that about 200 retirees were working for the county -- a number supervisors said was unacceptably high.

Mauk last week restricted the ability of retirees to be rehired while drafting a new policy that would allow such arrangements only in extreme cases.

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About 814 of 2,147 eligible county workers are expected to retire in July.

Number of retirees, by year

‘02-’03: 295

‘03-’04: 409

‘04-’05: 211

‘05-’06*: 814

‘06-’07*: 425

Source: Orange County Employee Retirement System

*Estimate based on employee questionnaires