Monday, February 27, 2006

County Governments To Be Hard Hit by Aging Workforce

Two articles speak to the financial dilemmas facing county governments in the comng years as their workforces age. In Ocean City Today, Christine Cullen writes that while unfunded retirement benefits ended years ago for private employers, only now is the Governmental Accounting Standards Board requiring local governments to fund post-retirement insurance costs during the tenure of the employee. Thus, governments will have to set aside millions of dollars in segregated funds to cover the liability. Thus, for example, while Ocean City, Maryland, paid approximately $200,000 in retiree health benefits in 2003, and in 2005 the county paid close to $2 million, when the new system is in place, the city will pay $2 million annually, while the county would have to come up with $14 million, or nearly eight times the current amount.

Simiilarly, Bill Turque writes in The Washington Post about the job losses governments are facing. "Montgomery County estimates that 50% of its senior managers will be eligible for retirement by 2010. By next year, more than 70% of Fairfax's top officials will be able to leave and collect benefits." His story points out differences fro for public sector managers. For example, while private corporations have long used "succession planning" as a tool to groom executive talent, civil service regulations place sharp restrictions on designating heirs apparent. In addition, not only is the post-baby boom workforce smaller, but it also tends to hold government service in lower esteem than those who came of age in the 1960s and 1970s.

Source: "Health benefit costs could hit hard for governments" Ocean City Today (February 24, 2006)

Source: "Graying of Workforce Troubles County Governments"The Washington Post (February 26, 2006)

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