State Government – Week of Jan. 18, 2010

STAFF CONTACT:  Theresa Kehoe

SF 2062 – Early Retirement Incentives

SSB 3030 – State Government Reorganization and Efficiency Act

COMMITTEE ACTION

SF 2062 establishes a state employee retirement incentive program. Employee Retirement Incentive Program highlights include:

• An eligible employee is an employee or qualified employee is an employee under the IPERS system (97B) in which the employee’s intended first month of entitlement is no later than July 2010.
• Employer means any state department, agency, board or commission that employs individuals.
• Establishes a state employee retirement incentive program for eligible employees of the executive branch of the state. Elected officials and SPOC employee eligible for the enhanced sick leave conversion program under Code section 70A.23(4) are excluded from participating in the program.  The program is administered by the Department of Administrative Services (DAS).
• A qualified employee included an employee of a judicial district department of correctional services (CBC), an employee in the office of a statewide elected official, or an employee of the Board of Regents, if the Board of Regents elects to participate in the program.
• Health insurance contribution benefit is the amount representing the monthly contribution cost of an affordable group health care plan offered by the state, as determined by DAS, providing coverage to the participant and, if applicable, the participant’s spouse for the applicable time period. 
• Years of service incentive benefit is an amount equal to the entire value of an eligible employee’s accumulated but unused vacation, plus for eligible employees with at least 10 years of state employment, $1,000 for each year of state employment up to a maximum of 25 years of state employment. State employment service means service as a state employee under IPERS.
• To receive the incentive benefit, an eligible employee must:
  • Submit an application to participate in the program by April 15, 2010.
  • Acknowledge the employee’s agreement to voluntarily terminate employment with the state in exchange for the retirement incentives.
  • Waive any right to file suit against the state.
  • Acknowledge the employee’s ineligibility to return to employment with the state.
  • Separate from state employment by June 1, 2010.  (There is an amendment to change the date to May 28, 2010).
• An eligible employee shall be accepted to participate if DAS determines the employee meets the requirements of the program
• Program Benefits. Upon acceptance and separation from employment no later than May 28, 2010, a participant shall receive:
  • An amount equal to the entire value of the eligible employee’s accumulated but unused vacation plus, if the employee has at least 10 years of state employment, $1,000 for each year of state employment up to 25 years. Receipt of the years of service incentive benefit shall be in lieu of receiving a payment of the participant’s accumulated vacation upon termination of employment. 
  • The bill provides that this amount shall be payable in five equal installments each year during September beginning in September 2010.
  • A health insurance contribution  benefit to pay the cost for eligible state group health insurance for five years following the participant’s (or surviving spouse) termination from state employment.
  • However, a participant shall receive the health insurance contribution benefit only when the participant is no longer eligible for or exhausts the participant’s available remaining value of sick leave used to pay the state share for the participant’s continuation of state group health insurance coverage as provided in Code section 70A.23, subsection 3.
• An employer shall not fill vacancies created by employees participating in the program except upon approval of the Department of Management (DOM). 
• An employer shall not offer permanent part-time employment, permanent full-time employment, temporary employment, or retention as an independent contractor to a participant. 
• This section does not preclude a participant from membership on a board or commission.
• DAS and DOM may adopt emergency rules to implement this program.
• Reporting requirements. DAS, in collaboration with DOM, is required to present an interim report to the Legislature, LSA and Fiscal Committee by Oct. 1, 2010, regarding the operation of the program.  DAS is also required to submit an annual update for four years beginning Oct. 1, 2011, that includes information concerning the number of program participants, cost of the program (including any payments made to participants), number of state employment positions not filled due to the program, and the number of positions vacated that have been refilled.
• Legislative & Judicial Branch Employees
  • The Legislative Council may provide a retirement incentive program for legislative employees consistent with the program for executive branch employees. If the Legislative Council does participate, they must collaborate with DAS to establish the program as nearly identical as possible to the executive branch employees’ program. The program shall establish the same time guidelines and benefit calculations as provided under the executive branch program.
  • The Supreme Court may provide a retirement incentive program for judicial branch employees consistent with the program for executive branch employees. If the Supreme Court does participate, they must collaborate with DAS to establish the program as nearly identical as possible to the executive branch employees program. The program shall establish the same time guidelines and benefit calculations as provided under the executive branch program.
• The bill takes effect upon enactment.
• The Legislative Fiscal note shows a savings of $57.4 million in FY11 (all funds), including $26.4 million in the General Fund. [1/19: 10-5]

SSB 3030 is referred to as the State Government Reorganization and Efficiency Act. Highlights include:

• Establishing “e-Government” technology efficiencies and consolidations.
• Increasing government buying power by expanding group and cooperative purchasing agreements.
• Eliminating and/or merging numerous advisory commissions and state agencies.
• Reducing state printing by moving toward electronic documents.
• Expanding online training.
• Streamlining and improving government efficiencies, resulting in savings to Iowa taxpayers.
• Reducing middle-management positions by increasing supervisor to worker ratios (span of control).
• Expanding ways to recover revenue owed to state government.
• Improving the Area Education Agency (AEA) system by increasing transparency, efficiency and value to Iowa schools and students.
• Improving the efficiency and continuity of services and oversight of Iowa’s Community Empowerment program. [1/20: 10-4, Behn absent]