1,030 Early Retirees Could Save State $46.7M
The State of Minnesota will save an estimated $46.7 million over the next three years thanks to more than 1,000 employees who opted for early retirement in 2010, according to a recently released Minnesota Management and Budget report.
In total, 1,030 state employees accepted the early retirement offer, which includes two years of health and dental insurance. Those employees average about 29 years of service and must retire by June 30.
To be eligible for the offer, employees were required to have at least 15 years of state service. Elected officials were not eligible nor were employees who were already eligible for other retirement incentives.
According to the report, 420 of the 1,030 positions were eliminated, which will save about $29.65 million through June 2013. The remaining 610 positions have or will be refilled, but the state will still save an estimated $40.61 million on them because the positions are being refilled at a lower salary or aren't being filled right away. The state will spend an estimated $23.54 on the insurance incentive-resulting in a net gain of $46.7 million over the next three years.
“Significant cost savings can still be accomplished through a mix of not refilling positions immediately, refilling positions at a lower salary, and making strategic permanent reductions,” the report said.
About 40 percent of those who opted for the early retirement offer worked at the state's Department of Transportation. The Department of Employment and Economic Development accounted for the second-largest number of those who took the incentive, accounting for 12.4 percent of the total.
Eligible employees had to accept the early retirement incentive by December 31, 2010.
The State of Minnesota had more than 54,000 employees as of June 2010, making it the state's largest employer.