City of Roseville Saves Money with a PARS Early Retirement IncentiveCategories: Early Retirement Incentives,Hot Sheets
The possibility of layoffs recently prompted the City of Roseville to look for a more humane way to reduce its workforce. With the help of PARS, the City designed a plan that offered an incentive for eligible City employees to retire early in lieu of cutting newer employers in less senior positions from its workforce.
In September 2010, the City Council authorized the use of the PARS Supplementary Retirement Plan (SRP) with the condition that the program must meet the City’s fiscal and operational goals. PARS went to work right away creating information and enrollment packets during an “enrollment period” for the 255 employees who met the following eligibility criteria:
- Regular employee of the City as of September 1, 2010
- 50 years of age with 5 years of City service as of December 23, 2010
- Resign from City employment effective no later than December 23, 2010
- Retire under PERS effective no later than December 24, 2010
The annual benefit the City provided was equal to 7% of the eligible employee’s base pay.
The incentive increased retirements over natural retirement attrition, a key aspect to achieving savings. A total of 40 employees took advantage of the PARS SRP and the City is projected to save $716,140 in year one and $3.36 million over five years.
Stacey Haney, Human Resources Director of the City of Roseville comments, “In these difficult financial times, we thought it important to make sure that our employees know that we care about them and wanted them to leave on good terms. The PARS program allowed the City to do that and save money. It was an easy and effective process.”
PARS Early Retirement Incentive
Agencies look to offer a PARS SRP in order to:
- Achieve budget savings (3-4 times natural attrition)
- Reduce the number of top-of-the-salary-schedule employees
- Reorganize departments or programs
- Reduce the impact of potential future layoffs
PARS will assist your agency to determine whether an early retirement incentive is feasible based on an in-depth analysis of your agency’s financial needs. The specific benefits and design features of your plan will be based on that analysis. However, planning and analyzing should start soon to afford your agency sufficient time to properly implement an incentive.
All of our plans include the following:
- A plan that meets the specific budgetary goals, needs and constraints of the agency
- An orientation presented to eligible employees in a clear, thorough, and thoughtful manner, with plenty of opportunity for individual questions, and without undue pressure to enroll
- A plan administered effectively by experienced professionals and with a well-coordinated administrative system developed over the last 28 years
Contact us today. We look forward to hearing from you!