Concessions Deal Leaves OT In
State Pension Calculations Through 2022
August 21,
2011|By Jon Lender,
Government Watch
State unions' ratification of a big wage-and-benefits
concessions agreement chased away the specter of thousands of layoffs and cuts
in services, but it didn't erase the increasingly noticed issue of state
workers' pensions being inflated by massive overtime payments.
On Thursday, state employee unions announced that, on the
second try, they had voted to ratify the concessions agreement that Democratic
Gov. Dannel Malloy called "historic"
ending two months of political turmoil.
On Friday, Senate Republican leader John McKinney
criticized Malloy for saying after the unions' announcement that he wouldn't
push House leaders to pass a bill to exclude overtime pay from the calculation
of state employees' pensions a bill that Malloy supported when the Senate
passed it more than a month ago.
McKinney said in an interview that Malloy "has said that he's different,
a real leader who takes charge
and will push
forward with reforms" but now it looks as if "he's engaged in
politics as usual" and not really committed to the pension-calculation
reform.
"His unwillingness to support this legislation
proves that it was used as political pressure" to get the employees to
ratify the concessions deal, McKinney
said. The same goes for the 3,000 or so layoff notices the administration
issued, he said, as well as the cuts to services and municipal aid listed in
one of the governor's austerity budget proposals.
Malloy lieutenants responded later Friday that although
the administration was unsuccessful in changing the pension calculation system
for the state's current work force of more than 45,000, the concessions
agreement represents significant progress in reducing pension costs. Changes
such as increased penalties for early retirement and making employees work
longer before retiring are part of health and retirement savings that will
amount to $21.5 billion over 20 years, they said.
Malloy's senior adviser, Roy Occhiogrosso,
responded: "On behalf of Connecticut's
taxpayers, Gov. Malloy has pushed more change and reform through this building
in the past eight months than the last two Republican governors did in 16
years. And there will be more over the next few years. The agreement that he
negotiated with the state employee unions represents the most fundamental
restructuring of the relationship between the state and its workforce that's
ever occurred. Is it perfect? No. Is it better than anything anyone here's ever
seen. Yes by a lot."
The fact remains, however, that state employees,
particularly those in police and prison jobs, often work extraordinary amounts
of overtime hours to inflate their paychecks during the three high-earning
years on which their pensions are ultimately calculated. The practice is
prevalent among thousands of "hazardous-duty" employees such as
state police, correction officers, and nurses who work in state prisons who
can retire after 20 years at any age.
Pumping up the pension-based years' salary is so much a
part of the hazardous-duty work culture that some of these employees will refer
to "my three high years" in casual conversation, even with a
newspaper reporter.
Back in June, when the state employee unions rejected the
concessions agreement, Malloy proposed that legislators pass the bill to
calculate pensions only on the basis of regular salary, with no overtime
padding.
The Senate passed the bill in a special legislative
session, with McKinney's
vocal support. But Democratic House Speaker Christopher Donovan of Meriden refused to bring
it up in the House for a vote, saying he would keep it on the legislative
calendar for possible revival if unions did not vote for a second time and
ratify the concessions agreement.
On Thursday, after the unions announced that they had
indeed ratified the deal, Malloy was asked at a press conference what should
now happen with the bill in the House. He responded that he no longer saw any
"necessity" for the bill even though the concessions deal would
extend the current, often-abused calculation system through the end of unions'
health-and-retirement benefits contract in 2022. The old contract, which
includes the same pension calculation provisions, would have run out in 2017.
Political insiders noted that if Malloy now pushed for
House action on the bill, he would have made things difficult politically for
Donovan because state employee unions had opposed the change in pension
calculation and Donovan needs their support in his quest for the 2012
Democratic nomination for the 5th District seat in the U.S. House of
Representatives.
Malloy went on to say Thursday that the concessions
agreement would change the pension calculation method for new employees hired
since July, basing it on their last five years' salaries instead of their
highest three. But that leaves tens of thousands of employees who could retire
under current conditions by 2022.
Malloy said overtime can be reduced through better
management practices.
But McKinney
said there is "no evidence that the governor and his administration have
done a single thing to deal with the issue."
At a press conference Friday, Malloy budget chief Ben
Barnes responded to a reporter's question about McKinney's comments by saying,
"I'm not saying that I disagree with Sen. McKinney that this is an issue,
but it's one of a whole lot of issues" and "we've made significant
progress on" on a number of them. "So I think for him to highlight
one area where we were not able to make progress in a negotiation misses the
point."
McKinney said that he's not missing any point, and that
Malloy and his people are on the wrong side of an issue that he'll keep talking
about.
The pension-overtime issue has come into sharper focus in
recent months. Last Sunday, it was reported in this column that full-time
nurses in state prisons have been making tens of thousands of dollars a year in
overtime even though part-time "per diem" nurses who could work the
same shifts for lower pay are being limited to 16 hours a week in the
prisons.
Per-diem nurses in recent years had been working more
hours, filling some of the shifts that full-timers now work for time-and-a-half
and double-time. But administrators at UConn Health Center,
which runs the medical unit in state prisons under a formal agreement with the
Department of Correction, cut back the per-diem nurses' hours. They did so
after consultation with the union representing the nurses, the New England Health Care Employees Union, District
1199/SEIU.
Malloy's office said last Monday, in reaction to the
Courant column, that the governor expects UConn President Susan Herbst to
"review the situation and act accordingly."
But McKinney called last week for a joint hearing by two
legislative committees appropriations, and labor and public employees to
uncover the extent of the problem and the reasons that UConn
Health Center has agreed with the union to limit the per-diem nurses' hours
even though there is no contractual or legal reason that it has to.
McKinney said that as of Friday, he had received no commitment from Democrats who
control the legislature and the committees on whether the hearing will be held.
However, one of the co-chairpersons of the labor panel, Sen. Edith Prague,
D-Columbia, wrote him a short letter Wednesday to say: "I too read [the]
article in Sunday's Courant, and was appalled. I also read your response in
[the] Courant and I agree with you that we should have a public hearing on our
pension system. I will discuss this with leadership."
The Senate's top leader, President Pro Tempore Donald
Williams, D-Brooklyn, said last week he hadn't made up his mind whether a
hearing would be useful or appropriate.
McKinney said that, "at the very least, the governor should be demanding
answers from the health center and all of his agencies: What's happening with
overtime? How much have you used? Is there oversight and a process to limit it .. and audit it?"
http://articles.courant.com/2011-08-21/news/hc-lender-column-pensions-0820-20110821_1_dannel-malloy-pension-costs-concessions-agreement/2