Gov. Mike Leavitt has given a tentative blessing to a plan making it easier for state employees to retire early and without costing taxpayers additional money.
In a closed session with Utah Education Association representatives recently, Leavitt reviewed the plan aimed at giving workers the chance to dip into their pensions before retirement age.Under current policy, a teacher with 30 years of service could retire at the age of 63, earning an average of about $21,000 yearly. However, teachers who retire before 30 years of service are heavily penalized.
For example, a teacher retiring at age 58 after 25 years of service would get just $11,360 per year after penalties, according to UEA president Lily Eskelsen.
Under the new plan, the same retiree could get $19,200 at no extra cost to the state.
Further, employees wanting early retirement could agree earlier in their careers to have more money deducted from their paychecks for later. Funding would come from annuities, 401K plans or other retirement savings plans.
Eskelsen said implementing the new plan would cost the state nothing, create incentive for employee financial planning, allow teachers no longer able or willing to teach to retire, and create incentives for those who stay.
In the 1980s, UEA had a similar bill that was passed in both legislative houses, only to be vetoed by then-Gov. Norm Bangerter.