Iowa’s Retirement Problem
I was recently made aware of an interesting problem that was exposed by the unusually high number of retirees throughout stage government as a result of the State Employe Retirement Incentive Program (SERIP). The problem is best explained with a real world example. Our organization’s Chief Information Security Officer (CISO) had come to our organization from another state agency and had only been with our organization a few years before retiring (though, not via SERIP). The problem is our organization was responsible for paying out the vacation and sick time he accrued even though he’d been at the other state agency for over 20 years.
Complicating this is SERIP itself which, by it’s very nature, encourages a high number of simultaneous retirements exasperating this problem. Yes, the retirements will save money in the long term, I don’t take issue with that. The problem is what it does to the current fiscal year’s budget which, in state government, would have been developed two years prior. We’re essentially making it possible for one state agency to be responsible for all the payout of an employee who may not have accrued those hours with them. The fix?
Actually, the solution is pretty simple and is both fair to state agencies and easy to budget for and that is to establish a revolving fund. State agencies would contribute to this revolving fund for each of their employees and those monies would be used to payout both vacation and sick time. Monies would flow back and forth between the fund and the agencies as vacation and sick time is accrued and used. Pretty simple, eh?
I don’t doubt there are things outside my field of view that could complicated this, but the only real barriers I see are resistance to change and petty politics. I’m surprised agency directors aren’t screaming for this type of reform after this last SERIP.