PARS Early Retirement Incentive Saves BIG Dollars for City of NapaCategories: Early Retirement Incentives,Hot Sheets
As the economic downturn continued to impact its revenues, the City of Napa sliced away at its projected $9.2 million deficit with $4.7 million in budget cuts and $3 million in labor concessions in the spring of 2010. With additional cuts still needed to bridge the gap, the City then deployed a PARS Supplementary Retirement Program (SRP) as an alternative to layoffs, that was projected to save an additional $1 million in the first year and nearly $5 million over 5 years.
The City’s Interim Human Resources Director, Mary Egan states:
“Through careful analysis, PARS tailored an early retirement incentive plan for us that successfully achieved budget savings while avoiding a large number of layoffs. The PARS staff was knowledgeable and well-organized all the way through and helped us implement the program very efficiently on a tight time schedule.”
The City of Napa Plan
The PARS SRP was offered to eligible Miscellaneous employees and a total of 20 enrolled in the plan. Following are some of the features of the City’s program:
- employed by the City as of April 6, 2010
- fifty (50) years of age as of August 31, 2010
- have at least two (2) years of City service as of August 31, 2010; and
- resign from City employment and retire under PERS effective no later than September 1, 2010
The City provided an annual benefit equal to 7% of the eligible employee’s base pay. The participating employee could elect to take the monthly benefit in one of the following actuarially-equivalent benefit payout options:
- Fixed payments paid monthly for 5 to 15 years
The PARS Post Analysis:
The PARS Post Analysis is a comprehensive model that quantifies the projected fiscal savings of an Early Retirement Incentive offer based on the actual plan enrollment. Designed by PARS over the last 28 years of analyzing Early Retirement Programs, it is the most complete analysis model in the industry. A similar initial analysis is provided to all agencies who are considering a plan based on the proposed eligibility group and compensation averages of eligible employees.
Contact PARS today for a complimentary analysis to determine the feasibility of your agency implementing a PARS SRP.
Once you decide that a PARS SRP plan is right for your agency, PARS will assist your agency with plan implementation and ongoing administration.
We recommend starting the process now to allow time for data collection, plan analysis and design, and coordination with agency representatives. Commencing now also will provide sufficient time for eligible employees to consider retirement carefully and to enroll in the program.
Call us today to take advantage of a PARS SRP.
We look forward to hearing from you!