By: State Sen. Greg Goggans
ATLANTA (September 14, 2009) –
Furloughs Won’t Affect Retirement
When furloughs for state employees became widespread this year, one of the questions raised was how that reduction might affect those nearing retirement. The retirement benefit for teachers and state employees is based on a calculation of the average of the two highest years of salary, which are typically the last two years but do not have to be.
The question became whether furloughs, and the resulting reduction in salary, reduce the average pay and therefore reduce the retirement benefits that employees are locked in on for the entirety of their retirement.
Based on the advice of the Attorney General and his interpretation of the law, retirement officials have ruled that furloughs will not affect an employee’s retirement calculation. The answer lies in the definition of “salary.” A furlough does not count as a reduction in salary so the calculation of an employee’s two highest years of salary is not changed due to a furlough.
Conversely, a pay cut, or reduction in pay, would in fact constitute a reduction in salary and would reduce the average for anyone within the two year calculation window. If an agency or school system actually reduces the pay or contracted time of employees or teachers, this would be a permanent change and would affect the two year calculation if the final years are the highest years of salary.
Please remember to contact me in my office on the issues that are affecting you and your area. I am here to represent you and it is an honor for me to work on your behalf. As always, I’d like to thank members of the Senate staff, who contribute regularly to my column.
Sen. Greg Goggans represents the 7th Senate District, which includes Atkinson, Bacon, Berrien, Clinch, Coffee, Echols, Lanier, Pierce and Ware counties and a portion of Cook County.
COLUMN
For Immediate Release:
September 14, 2009
For Information Contact:
Matt Colvin Broadcast Specialist
matthew.colvin@senate.ga.gov
404.656.0028