Everyone eligible is “DROPping” at Town Hall.
The eight general employees who are now eligible to enter the Deferred Retirement Options Program (DROP) after the Longboat Key Town Commission afforded those employees the right to enter DROP early before their pension plan is frozen next month have all decided to take advantage of the retirement incentive.
The cost for the DROP program — which allows employees to officially retire but continue to work for the town for five years while the town places their pension checks in an interest-bearing account — will cost the town an additional $58,332 per year. The total cost is nearly $1.75 million over a 30-year amortization, according to figures released by actuaries.
Commissioner Phill Younger, who voted against the additional retirement incentives, noted earlier this month that the five-year window general employees have to continue to work for the town while being in the DROP is two years longer than the three-year DROP given to firefighters.
“We’re actually increasing benefits for the general employees,” Younger said.
So far, only one of the town’s 43 general employees who qualify for an early-retirement incentive that the commission also approved on Aug. 14 has taken advantage of the option. The early-retirement option allows employees to retire at age 50, after 25 years of service, and collect a pension.
Information Technology Systems and Network Administrator Mark Stadts retired last week with an estimated monthly pension payment of $2,999.36.
The early-retirement option costs the town an additional $6,241 annually.
That amounts to an estimated $64,573 increase annually for costs associated with both provisions, for a $1,937,190 estimated total amortization cost over the next 30 years.
Those figures, though, are actuary estimates that count on a 7.5% return rate. If the pension plan continues to hit a 5.6% return rate, as it’s doing now, those numbers will increase further.
Mayor Jim Brown and Commissioners Jack Duncan, Terry Gans and Pat Zunz voted Aug. 14 to give general employees both retirement incentives Aug. 14. Town Manager Dave Bullock’s July 1 recommendation was to not offer the extra retirement incentives.
Vice Mayor David Brenner and Commissioners Lynn Larson and Younger voted against the retirement-incentives motion.
General employees can also avail themselves of a new 401(a) account that allows them to invest up to 15% of their salary into the plan.
Brenner said the reason he voted against the motion has already come true.
“I was worried everyone would take advantage of the option, and that’s what’s happened,” Brenner said.
Commissioners in support of the extra retirement incentives, though, argue that the benefits are only being offered to the eight employees who were eligible. No other present or future employees can take advantage of a DROP option.
“These are limited options just for those eligible employees,” said Brown Aug. 14.
The following employees have made known their intentions to enter the Deferred Retirement Options Program (DROP).
Employee retirement check
Donna Spencer $4,417.95
Accountant Sharon Johnson $319.59
Marilyn Dzikas $3,517.82
Specialist Maureen Monahan $3,666.32
Planner Steve Schield $4,452.93
Streets Service Worker
Dave Lovett $3,196.40
Accountant Sandy Moutoux $5,210.05
Public Works Project
Manager James Linkogle $2,705.75