Retirement cuts may spark early retirements

Think you have a secure retirement, leaving the job when you thought you would? Guess again. Everywhere legislatures are changing the law. Watch out so you don’t end up like this guy.
A change to police and firefighter pensions in Minnesota that ups the penalty for early retirement could encourage more officers to retire sooner.
In Minnesota police and firefighters can retire early at age 50, though official retirement age is 55. Current law reduces an employee’s retirement benefit by 1.2 percent for each year before 55 that they retire. But the Legislature made a change in its last session that would increase that penalty to 5 percent. The change goes into effect July 1, so employees have to consider if they want to retire before then or wait until they are 55 to avoid the larger penalty.
The increase will be made gradually over the next five years, said Mary Vanek, who is executive director of Public Employees Retirement Association of Minnesota. The change was made because people are living longer and early retirements are a growing strain in the retirement fund, she said.
St. Cloud Police Chief Blair Anderson said he is anticipating officers in the next year will retire because of the PERA change but there’s no way to know how many will. His department has stepped up efforts to screen candidates more efficiently so there is less time between an opening and hiring a replacement.
But with so many officers expected to retire statewide, there are more suitors for the same candidates. “A lot of us are going to be chasing the same talent, if you will,” Anderson said.