The Future of Retirement Summit

Transcription

1 The Future of Retirement Summit Center for State & Local Government Excellence National Press Club, Washington, D C! April 16, 2013 Session 3: Who s on First? Adapting to Growing Presenter: Joe Adler, Director Montgomery County Office of Human Resources 101 Monroe Street, Rockville, MD joseph.adler@montgomerycountymd.gov

2 "#$%& ()*+,-.& ().$-% -% /01$234 5*0%062 Presentation Overview n Economic Realities and Workforce Planning n Maintenance of Effort Demands Effective Workforce Recruitment and Retention Plans n Example: Montgomery County Deferred Retirement Option Plan That Helps Maximize Retention and Orderly Succession Planning 2

3 County Experience of Budget Constraints and Impact on Workforce n Reduction in Workforce (RIF) for past 3 years n Modifications to Benefits and Retirement Plans n Emphasis on succession planning 3

4 Workforce Recruitment and T raining Strategies to Maximize Talent Pool n Hiring Preference for individuals with disabilities and veterans n Question A Hiring - Non-competitive hiring for individuals with disabilities n Manager Development Program n DROP Program for public safety personnel n County Executive Diversity Summit n Total Compensation Package as recruitment tool 4

5 Strategies for Employee Retention n Multiple Training Opportunities n Manager Development Program n Tuition Assistance Program n Flexible work hours n Compressed work schedules n 4/10 work schedules n Flex work schedules 5

6 Manager Development Program Results n 38 Graduates from the Cohort n 9 employees promoted to MLS positions n 40 Graduates from the Cohort n 8 employees promoted to MLS positions 6

7 K nowledge T ransfer Contracts for Succession Planning n Departments require a succession plan for all key staff positions n Situations where employee retires without sufficient notice: n n n n n Knowledge Transfer Contract used with retiring employee to maintain delivery of services Contract designed to share knowledge where significant loss of knowledge and skill will occur Contract approval process requires: justification, budget impact and adherence to strict contract requirements Employee may not work more than 702 hours in a 12 month period Salary limitations apply 7

8 Strategies for Employee Retention - continued Following items were suspended due to budget constraints; subject to be reinstated n Cost of Living Adjustments n Service Increments n Pay for Performance n Longevity Pay n Overall retention of county personnel is not an issue; staff turnover rate is low 8

9 Economic Context and Fiscal Consequences in Montgomery County F Y08! F Y13 9

10 Economic Impact on County Workforce 10

11 Realities of County Savings F Y10! F Y13 11

12 County Workforce T rends, F Y02-F Y12 Merit System Permanent Employees Number of Employees Year Full Time Part Time Totals 12

13 Workforce by Age Distribution, F Y2012 Permanent Employees by Age Age >=60, 1,075, 12% Age 20-29, 752, 9% Age 50-59, 2,560, 29% Age 30-39, 1,802, 20% Age Age Age Age Age >=60 Age 40-49, 2,617, 30% 13

14 Employees by Race/Ethnicity, FY12 Permanent Employees by Race/Ethnicity 2012 NOT DEFINED, 197 = 2% Asian (Not Hispanic or Latino), 552 = 6% American Indian or Alaska Native (Not Hispanic or Latino), 49 =1% American Indian or Alaska Native (Not Hispanic or Latino) Asian (Not Hispanic or Latino) Black or African American (Not Hispanic or Latino), 2,334 = 27% Black or African American (Not Hispanic or Latino) Hispanic or Latino Native Hawaiian/Other Pacific Islander(Not Hispanic/Latino) Hispanic or Latino, 783 = 9% Two or More Races (Not Hispanic or Latino) White (Not Hispanic or Latino), 4,867=55% Native Hawaiian/Other Pacific Islander(Not Hispanic/Latino), 5 = 0% White (Not Hispanic or Latino) Two or More Races (Not Hispanic or Latino), 22 = 0% NOT DEFINED 14

15 Employee Length of Service, F Y12 Length of Service Permanent Employees Number of Employees Years of Service 15

16 Workforce Turnover by Category, F Y12 Turnover - Separations by Employment Category Permanent Employees Employment Category # of Separations Percent of Total Officials & Administrators % Professionals % Technicians % Protective Services % Paraprofessionals % Office/Clerical % Skilled Craft % Service Maintenance % Category Unreported % % 16

17 Turnover by Race/Ethnicity, F Y12 Turnover - Separations by Race/Ethnicity Permanent Employees EEO Category # of Separations Percent of Total White % African American % Hispanic % Asian % Native American % Race/Ethnicity Unreported % % 17

18 Montgomery County Deferred Retirement Option Plans (DR OP)! Overview n FY99 collective bargaining agreements with Fraternal Order of Police and International Association of Fire Fighters resulted in the legislative recommendation for the DROP submitted to County Council n County established two Deferred Retirement Option Plans (DROP) in FY00 n Police employees participate in Discontinued Retirement Service Program - County directs individual s investment of funds in their DROP accounts. n Firefighter employees participate in Deferred Retirement Option Plan - County pays a fixed rate of 8.25% annually on funds in their DROP accounts. 18

19 Deferred Retirement Option Plans (DR OP) n DROP plan allows for retirement of eligible employees to continue to work and receive a salary and simultaneously receive pension payments credited to an account on behalf of the employee n DROP can be an effective employee retention and succession-planning tool implemented at a relatively low cost n DROP plans primarily created to retain public safety employees 19

20 Jurisdictions That Use DR OP Plan " Anne Arundel County, MD " Baltimore County, MD " Baltimore City, MD " Howard County, MD " Maryland State Police " Fairfax County, VA " City of Philadelphia, VA " State of Ohio Several jurisdictions (including Baltimore County, Sate of Alabama, City of Jackson, Mississippi) closed DROP to new employees citing high costs of plans. Source: Montgomery County Deferred Retirement Option Plans Report, June 26,

21 Jurisdictions That Use DR OP Plan - continued n Five of the eight plans are limited to public safety employees, three are available to all employees n Minimum number of years of service required for participation ranges from 10 to 32 years n Maximum length of participation ranges from 3 to 10 years n Half of the programs required employees to continue their pension contributions n Seven of the programs pay a fixed rate of interest on DROP accounts, ranging from 3% to 10% Source: Montgomery County Deferred Retirement Option Plans Report, June 26,

22 Montgomery County DR OP Program Police and Fire Department Comparisons 22

23 Comparison of Retired Police Data in Years When DR OP Was Available* Retirement Type # of Retirement At Hire DROP yrs old Average Age At Retirement Average Years of Credited Service Average Financial Data Monthly Pension Final Salary 54 yrs old 31 yrs $4,365 $86,295 Disability yrs old 45 yrs old 21 yrs $4,457 $78,833 Normal yrs old 51 yrs old 29 yrs $4,506 $84,519 Other* 8 25 yrs old 46 yrs old 22 yrs $3,428 $89,430 All Types yrs old 50 yrs old 26 yrs $4,391 $83,077 *Other types of retirements include early retirement and discontinued service retirements. Data for retirements that occurred from to and from to Source: Montgomery County Deferred Retirement Option Plans Report, June 26,

24 Comparison of Police DR OP and Non- DR OP Retirees n On average, a Police DROP participant retires two years later than someone who chooses normal retirement. The average years credited service is 31 for DROP participants compared to 29 for normal retirements that do not use DROP n Police DROP participants retired, on average, when they were 54 years old. They were three years older than normal police retirees (52 yrs old) and four years older than all police retirees (50 yrs old) n Average monthly pension benefit of Police DROP retirees is 3% lower than the average benefit for all normal retirees. It is 3% higher than the average retirement benefit for all retirees. Source: Montgomery County Deferred Retirement Option Plans Report, June 26,

25 Comparison of Retired Fire Employee Data, F Y2000! F Y2011 Retirement Type # of Retirement At Hire DROP yrs old Average Age At Retirement Average Years of Credited Service Average Financial Data Monthly Pension Final Salary 53 yrs old 30 yrs $4,344 $86,248 Disability yrs old 45 yrs old 21 yrs $3,614 $71,813 Normal yrs old 50 yrs old 27 yrs $4,214 $86,208 Other* yrs old 50 yrs old 28 yrs $4,652 $84,367 All Types yrs old 50 yrs old 26 yrs $4,060 $80,655 *Other types of retirements include early retirements and discontinued service retirements. Source: Montgomery County Deferred Retirement Option Plans Report, June 26,

26 Comparison of Fire Employee DR OP and Non Drop Retirees n Like Police DROP participants, Fire DROP participants have the highest average years of service of all firefighter retirements at 30 years. The average years of service for all normal retirees is 27 years and the average for all retirees is 26 years. n Fire DROP participants retired, on average, when they were 53 years old. They were on average three years older than fire normal retirees (50 years old) and three years older than all fire retirees (50 years old). n The average monthly pension benefit of Fire DROP retirees is 3% higher than the average benefit for all normal retirees. It is 7% higher than the average retirement benefit for all retirees. Source: Montgomery County Deferred Retirement Option Plans Report, June 26,

27 Concluding Comments n n n n Anticipate economic conditions and their impact on workforce capabilities and service delivery requirements. Engage Senior Administrators and Labor Union Leaders to sustain a well trained workforce. Strategically hire and retain workforce that delivers high quality services to constituents regardless of age, race, religion, economic conditions, gender, or disability. Deferred Retirement Option Plans can provide a costneutral strategy for retaining qualified staff that allows an organization to achieve effective succession planning. 27

28 Questions? Comments? Ideas for discussion? 28