Owensboro Fire Department Chief Steve Mitchell had planned on retiring sometime next year, but changes in the way the state’s retirement calculates payments prompted him to retire before the change goes into effect in January.

“It’s somewhere between $150 and $175 (monthly) I would have lost if I’d stayed until summer,” Mitchell said earlier this week.

The changes affect state workers who had already reached retirement eligibility based on years of service and had selected the option of having their spouse continue to receive their pension payments after the retiree’s death. In all, 10 hazardous duty employees from the Owensboro Police Department and OFD have announced their intentions to retire before the end of the year. 

City Human Resources Manager Josh Bachmeier said he could not say that every person who has announced their retirement is doing so because of the change, but the changes “were likely a consideration to retire prior to the end of the year.”

The changes are based on an “experience study” conducted by Kentucky Retirement Systems, which

see retirements/page a2

checks the system’s retirement assumptions against what the plan actually experiences. The study is conducted every five years and looks at factors such as retiree life expectancy and other things.

The experience study raised the projected life expectancy of people receiving benefits.

“They are saying, ‘You and your spouse are going to live longer,’” so retirement funds have to stretch over a longer period of time, Bachmeier said. 

“If your spouse isn’t going to have benefits after you’ve passed, those actuarial factors did not change,” he said. 

Mitchell said if he chose to not retire this year, he would have to work beyond 2020 to make up the difference of what he would have lost in retirement payments on Jan. 1. 

Bachmeier said, “a lot of people looked at those changes between Dec. 31 and Jan. 1, and obviously their benefit would go down on Jan. 1. They decided, ‘if I’m going to retire, I need to do it now.’”

In addition to the 10 hazardous duty employees, two non-hazardous duty city employees have announced plans to retire before the end of the year. Mitchell said five OFD employees, including himself, are retiring because of the changes.

“Obviously, losing a department head, you’re losing a lot of experience there,” Mitchell said. “In our engineering (retirements), we are losing two guys that have extensive experience on our ladder trucks, and those are specialty vehicles.” 

Mitchell said the department does have a program to develop future leaders and incoming Fire Chief James Howard is prepared to step into the command role. 

Major Gordon Black, who recently retired from OPD, said the changes in the retirement factor was not the sole reason he retired, but it was a consideration.

“It factored into the decision,” Black said. “You have to look at the big picture. I had a little over 26 years in the system.

“From what I understand, the amount difference is different for each person,” Black said. “It wasn’t substantial for me,” but, he said, “it helped me make my decision.

Katie Jones, payroll and benefits specialist with Daviess Fiscal Court, said she has not heard of any retirements occurring in the county because of changes in the pension system.

Lt. Scott Wedding, a member of the command staff at the Daviess County Sheriff’s Department, said there are only five employees with enough years in the system to retire and none of them are planning to do so.

Shawn Butler, executive director of the Kentucky Association of Chiefs of Police, said the change is causing retirements at police departments.

“This is occurring all over the state,” Butler said. “A lot of good chiefs (are retiring) as well as staffs ... I can’t tell you everyone is retiring for that, but some are.”

Butler said “everybody you’re losing (in hazardous duty professions) has to have a minimum of 20 years” on the job. “I understand people are living longer and they had to adjust the factors,” but the change is forcing out people otherwise might have kept working.

“We have a troubled pension system, but we are pushing people out the door who would (have been) paying into the pension system,” Butler said.

James Mayse, 270-691-7303, jmayse@messenger-inquirer.com, Twitter: @JamesMayse

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