Province offers retirement incentives to workers

Andrew Robinson
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Opposition critical of package

Finance Minister Jerome Kennedy speaks with reporters Tuesday afternoon outside the House of Assembly in St. John’s.
— Photo by Andrew Robinson/The Telegram

The provincial finance minister says a “modest retirement package” that eligible government employees can take advantage of will hopefully reduce the number of layoffs expected to coincide with the spring budget.

“Hopefully, if some senior people choose to retire, that will leave room for younger people to stay in the public service,” said Jerome Kennedy, who met with reporters outside the House of Assembly late Tuesday afternoon.

Earlier that afternoon, executive council clerk Robert Thompson sent an email to core public-service employees advising them of a voluntary retirement incentive package.

“The incentive is being used as a means of minimizing the impact of budgetary reductions on the public service,” he wrote.

Under the arrangement, employees who retire by April 30 can receive pay equal to 12 weeks of salary. They must have at least 25 years of civil service experience as of March 31, 2013, and also be retirement-eligible by that date.

The offer is also open to employees who meet those requirements as of March 31, 2014, and who also have paid leave, annual leave or overtime to bridge the one-year gap.

The offer has been extended to employees in core government departments and the Newfoundland and Labrador Housing Corp.

Kennedy said members of the Royal Newfoundland Constabulary are exempt from the offer.

According to Kennedy, approximately 400 employees are eligible. He said the province does not have a target figure in mind for how many it hopes will accept the offer.

“It’s another way to try to reduce the number of layoffs to achieve the reduction of positions in the core public service,” said Kennedy. “I have no idea at this point how many people will avail of the proposal, but I’m hoping that there will be a good uptake.”

Kennedy could not offer an estimate of how much money the province hopes to save through the initiative.

“Let’s say, for example, that there were 200 people who took advantage of the proposal. Well then, what we’d have to look at is how many of those positions would be absolutely critical to fill. … The rest that weren’t filled, the positions would be eliminated and thereby result in savings in future years.”

As for the cost associated with offering the equivalent of 12 weeks’ salary to 400 civil servants, Kennedy said it would be in the millions, “but not excessive millions.”

A hiring freeze has already been announced, and Kennedy said it will not last as long as some people have suggested.

“I’ve seen commentary that they expect the hiring freeze could last years — it’s nothing like that,” he said. “We’re looking at getting through the budget process and then seeing where we are at that point.”

Kennedy said there have been approximately 31 layoffs within government in the last few days. He said the province will have a clearer view of how many layoffs can be expected once the budget is ready.

Even if all 400 eligible workers were to accept the offer, there would still be layoffs, the finance minister said.

“We have targets that we’re trying to meet in terms of developing our plan to return to a balanced budget, and at this stage, I can’t even tell you when that will be,” said Kennedy.

“It’s a fairly aggressive plan, and to meet those figures, we then have to ensure that there’s a significant reduction this year, but we’ll know more as we move through this. But it will all be announced, and on budget day, what we’re hoping to do is to announce the impact on the public service in terms of layoffs and other budget reduction initiatives.”

Choosing to leave

NDP Leader Lorraine Michael said she is worried too many senior employees will choose to leave the public sector as a result of the government’s incentive package, and questions whether the government has fully analyzed the implications of making the offer.

“If you get a lot of people deciding to take retirement at the same time, you’re going to have, first of all, bulk payouts, and you’re going to have quite a number of people at the same time taking money from the pension plan. Have they costed all of that?”

Michael said if too many senior employees retire simultaneously, it will leave behind a knowledge gap and create a heavy workload for those who continue to work in government.

“I really do think it’s extremely serious to have large groups of people with the same length of (work) experience leaving any workplace all at the same time,” said the MHA for Signal Hill-Quidi Vidi. “It really does create a knowledge vacuum, and I think that’s very serious. Neither would I want all younger people laid off at the same time.”

Of the 400 eligible employees, Michael wonders if they are equally distributed among different departments or if some will be overburdened with retirements in the event employees accept the offer.

Liberal Leader Dwight Ball was surprised by Tuesday’s news of voluntary retirement incentive packages.

“It’s kind of forcing the hands of some of the people that are working in the civil service, and I think really what it does, it’s actually demoralizing in some ways.”

Within government offices, senior civil servants will feel pressured to retire, Ball said.

“If you don’t go, then the axe falls to me,” he said, speaking from the hypothetical perspective of a younger civil servant.

Ball accused the government of failing to adequately plan ahead to deal with its looming deficit, labelling its approach as “managing on the fly.”

He said eligible workers should have been given more time to make such an important decision.

Thompson’s email said those willing to accept the offer need to confirm their decision by March 20.

“Those kinds of announcements in advance would have given people an opportunity to actually make some sensible plans,” said Ball. “This does not. You’ve got to make this decision in merely a few weeks.”

While understanding the government’s intent to use this option to reduce layoffs, Ball said the amount of time it is giving employees to decide one way or another is disrespectful.

Twitter: @TeleAndrew

Organizations: Newfoundland and Labrador Housing Corp.Kennedy

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Recent comments

  • Very interesting....................
    March 06, 2013 - 22:02

    NOVA SCOTIA WILL BALANCE BOOKS: Dexter Provided by The Canadian Press By Canadian Press | Mar 6, 2013 8:03 am HALIFAX – Nova Scotia Premier Darrell Dexter says his government will balance its books when it tables the budget next month. Dexter made the commitment in a speech today before the Nova Scotia Chambers of Commerce in Halifax. The government had hinted in recent months that it might have trouble balancing the $277-million deficit as promised in 2013-14 because of reduced revenue from Ottawa and the offshore. However, Dexter now says the budget will be balanced. He also told the audience that his government will live within its means and balance the budget in subsequent years. FINANCE MINISTER (at the time) TOM MARSHALL: Newfoundland and Labrador The forecast in the April 24 budget was estimated around $258 million. There is a lower demand for commodities in the world market — that includes the price of oil and that includes minerals," Marshall said. Marshall is now estimating a deficit of approximately $726 million for the current fiscal year. Marshall went on to defend the Muskrat Falls project, calling it a self-financing project that will not add to the debt. However, the provincial government will borrow to pay for at least part of the Muskrat Falls equity investment. Marshall said dividends will cover this.

  • Dougie
    March 06, 2013 - 19:15

    I too would like to know the answers to these questions regarding exempts.

  • Tax Payer Requesting Information
    March 06, 2013 - 13:18

    What provincial government offices have been offered this retirement incentive? What provincial government offices are exempt? If exempt...what are these offices exempt from: hiring freezes, job-cuts, etc. and why are they exempt? We, the tax payers have a right to know

  • retirement
    March 06, 2013 - 10:07

    some senior employees would not retire even if it was handed on a silver platter to them. To selfish to let the junior person stay. Government departments have senior managers from the age 65-70 still working in management positions and holding down a large salary.... GREED is what it is called. MANDADTORY boot out when you reach 65 and but to be knocking of 70 and still within the public service sector is unreal .....

  • Retired health care worker
    March 06, 2013 - 09:11

    I had retired a few years ago from the Health Care with a pension,I always said the same thing if an employee can retired with a pension they should take advantage,move out and let the younger ones move in and let them work on building their pensionable years up.A lot of people say they can,t afford it,I don,t know why you no longer pay EI,Union Dues,or pension,so therefore you do have this lil extra money.There are no more lunches,you save a lil extra on gas.The only thing you miss is the overtime and the social life.It was a big step but I do better money wise and you do get used to it.But if employees do retire and they still lay off well people feel like they did it for nothing.

  • harry
    March 06, 2013 - 09:02

    i thought the retirement age was increased to 67 from 65 now its gone back to 50 n younger geezzz prosperity eh

    March 06, 2013 - 08:52

    Why is this package only offered to a select group of people? There are just as many health care workers,who are in this same position, would glady opt for this package.But's only the "core" group of people who are given the opportunity to avail of this opportunity.Discriminatory at the very least.

  • Graham
    March 06, 2013 - 08:38

    Retire about a dozen MHA'S at the most we need 28-30. The salary and perks alone saved by doing that will be worth millions. Oh well its a nice dream but come 2015 we will get to retire this government if nothing else. It cant happen soon enopugh as far as I am concearned. BYE BYE.......... KATHY.............. BYE BYE

  • Can You Answer This
    March 06, 2013 - 08:27

    Clarify please. What government agencies are included and which are not. RNC is exempt. Is Nalcor exempt? Is NLC included or exempt? Give the tax payers a list of what provincial government offices are included and are not. RNC is exempt from retirement incentive - are they exempt from job freezes and job-cuts? Nalcor is exempt from job freeze and job-cuts. Are the also exempt from the retirement incentive. Etc., etc.

  • Jack
    March 06, 2013 - 06:56

    Too bad Jerome Kennedy is discriminating against RNC officers as they won't be entitled to a severance package but other government employees do. Jerome Kennedy, since Police Officers are considered government employees, if you offer severance to provincial government employees, you have to do the same for the RNC.

  • Cold Future
    March 06, 2013 - 06:51

    "The offer is also open to employees who meet those requirements as of March 31, 2014, and who also have paid leave, annual leave or overtime to bridge the one-year gap." Is that for real-employees who can have a year's leave on the books-no wonder we are going broke-Could a business be run like that?