Why MoDOT Management Has It Out For Their Employees
August 8, 2011
In a recent blog entry, I mentioned that MoDOT management would like to eliminate their mandatory contribution to the retirement fund, and that I would go into this more in another entry.
MoDOT management threw a fit regarding a shortfall in the retirement system funds in October 2009. Mostly due to the stock market problems affecting many investments in the recent recession, MoDOT was required to fund an additional $5.3 million to the retirement system. They didn't like this unexpected expense, so they funded it on the backs of employees by cutting 103 salaried positions through attrition. That forced the employees to make the sacrifice so no money would be taken from the roads (all while throwing away millions on contractor bonuses and wasting billions in interest payments on bonds - for details, please see my other blog entries).
By February 2010, it became apparent that contributions on top of the $5.3 million would be needed keep the retirement system sound. MoDOT management sacrificed their employees again by suspending MoDOT's match to the employee's deferred compensation program, generating $2.2 million for the retirement fund. And for the next year, it was anticipated that an extra $22.5 million would be required. It didn't actually turn out that way because the stock market picked up, and the retirement system's investments are once again in good shape.
The whole retirement episode brought to light MoDOT management's great distaste for funding the retirement system, and their disregard for their employees. The more they could cut expenses they had for employees, the more money they would have for the roads (and contractor bonuses, and interest payments, and their own big paychecks and perks).
MoDOT employees that were hired before Jan 1, 2011, like other Missouri state employees, did not have to contribute anything to their retirement fund. Workers were vested in the retirement system after 5 years.
Under legislation passed in Missouri last year, state employees hired starting Jan 1, 2011 will be required to contribute 4% of their salaries to their retirement and will not be vested until 10 years of employment.
So, MoDOT management's next logical step regarding the retirement expenses is to get rid of as many employees hired before Jan 1, 2011 as they realistically can. Then as the new-hires start populating MoDOT with their 4% contribution to the retirement system and few of them lasting past the vesting period of ten years, MoDOT's retirement costs will decrease dramatically.
Then in May 2011, MoDOT management ushered in the Bolder Five Year Plan, approved by their Commissioners in June. The plan calls for cutting 1200 of their 6300 employees, closing 131 buildings, consolidating 10 districts into 7, and selling off 740 pieces of equipment. Their excuse is that it's a "matter of survival".
I say it's a matter of ruthlessly disposing of loyal, long term employees who looked at the job as more than only a paycheck, all to come up with some extra money that still won't make a dent in meeting Missouri's transportation needs. They will be replaced with struggling new-hires in an unbearable, impossible work environment with few raises and with diminishing benefits, so few of them will want to be long-term employees and few will ever collect retirement pensions from MoDOT. The Bolder Five Year Plan guarantees this pathetic legacy for what was once a good, honorable state agency.