Governor Rell Issues Executive Order to Restrict

120-Day Contracts in Wake of Retirement Program

Order Requires Governor’s Office Approval of All Agreements,

Limits Retirees to Two 120-Day Stints at 75 Percent of Previous Pay

            Governor M. Jodi Rell today announced that she has issued an Executive Order that will sharply curtail the number of retiring state employees who are rehired on temporary, 120-day contracts to smooth the transition after the state Retirement Incentive Program takes effect. The order also formally limits retirees to no more than two 120-day contracts and limits their pay to a maximum of 75 percent of their previous salary.

            In May, Governor Rell negotiated a labor cost-savings agreement with state employee unions that includes a Retirement Incentive Program (RIP) expected to lead to about 3,500 retirements – about 500 more than originally anticipated.

            Under the executive order, any 120-day contracts must be part of an approved transition program developed by the affected state agency that will employ the retired worker. The contracts will require approval on an individual basis from the Commissioner of the Department of Administrative Services, the Governor’s budget office (the Office of Policy and Management) and the Governor’s Office itself.

            “We are achieving all of the savings we wanted from the retirement program and more,” Governor Rell said. “While easing the transition after the RIP is important, I will not allow these hard-won savings to be eaten up by putting retired workers – who are already collecting a pension – back on the state payroll for extended periods of time, at excessively high salaries or merely for the sake of convenience.

            “These 120-day contracts are supposed to be used sparingly and only for unusual circumstances,” the Governor said. “Unfortunately, there have been too many reports of ‘double-dipping’ becoming the standard practice instead of the exception. The controls I am putting in place will ensure that 120-day contracts are only used when really necessary – and only for a limited time – in the months after the RIP takes effect.”

            Executive Order No. 27 states that no more than two 120-day periods may be approved under the program for any individual retiree.

            Under the order, the compensation of any temporary worker who was not covered by a collective bargaining agreement when they retired may not exceed 75 percent of their salary at the time of their retirement.

            For temporary workers who were members of a union at the time they retired, their pay during the 120-day contract may not exceed either 75 percent of the minimum rate for the job classification they held or 75 percent of their salary at the time of retirement, whichever is greater.