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Retirement Corner


By:  Dennis M. Gorski

O.S.T.R.A. President

July 2012


Welcome everyone to the first installment of the “RETIREMENT CORNER.” The purpose of this article is to keep you informed of the many changes that are occurring for present retirees and the changes that will occur for future retirees.


I will begin by telling you a little of my past and why I am qualified to write about retirement issues.  Most of the current retirees know my past, buy many of our active members may not remember me.


I retired in 2007 after approximately 28 years of service.  The last five years of my career were spent as O.S.T.A. President.  From 1998 until I retired in 2007 I was a Trustee of the Highway Patrol Retirement System.  I know how things work in state government and I know how the retirement system works.  Since my retirement I have stayed active by attending many bi-monthly board meetings and have attended every health care funding meeting.


There are three issues that I want to address in this article.  First, I will address the change in the mandatory retirement age from 55 to 60 years of age.  Second, I will address the changes in active member’s contribution rates.  Third, I will discuss health care funding changes.


First, the change in the mandatory retirement age from 55 years of age to 60.  This was the beginning of the “Master Plan.”  I was a trustee when the changes were introduced to the board.  I fought very hard to prevent the change.  I knew this was the first step to making our members work past the age of 48.  The state does not like such a young retirement age.  I was unable to convince other trustees and they voted to draft legislation and change the mandatory retirement age to 60.


The second issue is the change of the employee contribution rate from 10% of pay to possibly 14%.  The rate will be determined by the board.  Can our active members afford another 4% taken out their pay?  You have to remember active members have had only one 3% cost of living increase in the past 6 years.  If they take 4% of your pay for retirement it leaves you a minus one percent after six years.



The third issue I want to discuss is the changes that will occur in health care funding.  There is currently a health care committee considering changes. 


A number of changes have already been passed by the committee.  These changes deal with health care coverage and prescription drug coverage for retirees.  Other changes are still being considered.  The one change that worries me is the “HPRS Health Care Premium Contribution Scale.”  This scale shows what the premiums will be for health care for future retirees.  An example of this is f you are retiring at age 48 with twenty-five years of service, the premium for the retiree would be $189.15.  The premium for the spouse would be $378.30, for a total premium of $567.45.  When you add on the premium for eye care and dental, total cost will be close to $600.00.  If you retire with a pension of $36,000 per year and you subtract health care, dental care coverage, and eye coverage, plus taxes, your approximate take home pay will be around $2,000 to $2,200 a month.


So what do these changes tell you?  First, you will never retire at age 48.  You will work till at least age 55, if not longer because you will not be able to afford health care premiums.  Second, if the board approves the employee contribution rate change from 10% to 14%, future paychecks for active members will be smaller.  Third, even with these proposed changes it still does not solve retiree health care funding problems or the pension funding problems.


More money has to go into both and you cannot get more from active or retired members.  New sources of revenue will have to be considered and changes in the investing policy will also have to take place.


Stay tuned for the final changes for both active and retired members.




Dennis Gorski, OSTRA President