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Gov. Baker Signs State Employee Early Retirement Plan

Republican Gov. Charlie Baker on Monday signed into law a bill offering incentives to thousands of state employees to take early retirement, cutting the state's payroll by an estimated $172 million in the next fiscal year.

Baker signed the bill hours after the House and the Senate, without debate, accepted compromise language that caps at 5,000 the number of executive branch workers who can opt for early retirement and allows the administration to designate certain critical positions that would be exempt from the program.

Eligible employees can apply for early retirement between May 11 and June 12.

Critics of the plan warned that early retirement could devastate key state agencies that would see a sudden wave of departures of highly experienced personnel. But the governor said he did not foresee major problems.

"I would remind everybody that this is the third time (Massachusetts) has done this in the course of the past 20 years and the two previous times about 4,500 people took advantage of a program like this and state government continued to do the work of the people," Baker said after a meeting with legislative leaders.

Passage of the bill marked another early victory for Baker in his dealings with the solidly Democratic Legislature on the state's finances. Baker proposed the early retirement incentives as part of a broader plan to close what his administration projected as a $1.8 billion gap between revenues and spending in the fiscal year starting July 1.

Employees must be at least 55 years old and have 20 years of service in state government to apply for early retirement. They can boost their pensions by adding five years to their ages or to their lengths of service.

Not all of the vacated jobs will go unfilled. The plan allows the administration to hire replacements until reaching a threshold of 20 percent of the salaries of those opting for the early retirement.

Some lawmakers questioned why the proposal was restricted to executive branch workers and not offered to other state employees such as those in the court system. Baker explained that he did not have control over the judicial branch.

Concerns also were raised about the ability of the state retirement board to handle thousands of applications in a short period of time and the possible impact on the plan on the state's unfunded pension liability.

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