California School Districts Find Budget Solutions with PARS Early Retirement Incentives

Categories: Early Retirement Incentives,Hot Sheets
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As California school districts again struggled to balance their budgets during the 2011-2012 school year, many Districts turned to PARS to create money-saving early retirement incentive programs. Here are three districts that found solutions through the cost-cutting PARS Supplementary Retirement Plans:

Montebello Unified School District

Although Montebello USD had offered early retirement incentives in two of the last three years, the District believed that offering another program this year would help them continue to avoid laying off staff.  The District worked with PARS to create a very innovative plan – one that provided higher benefits the earlier the employee notified the District of their retirement.  Because the District had offered plans in recent years, the District anticipated relatively low participation; however, they received excellent enrollment with nearly 25% of eligible employees signing up. To further assist the District in their budget planning, almost all enrollments were made by their first enrollment deadline in November in order to receive the maximum benefit.

Deputy Superintendent, Art Revueltas, describes how the PARS Supplementary Retirement Plan continues to be extremely beneficial to the District: “Without a doubt our PARS retirement incentives made it possible for our District to avoid layoffs for the past four years! Having higher-cost employees retire, even with an incentive, let us keep newer, lower-cost teachers.  With lower costs our District was able to save real dollars and build our reserve.”

Eligible Employees for PARS Enrolled PARS Retirees Percentage of PARS Retirees Projected Savings for 1st Year* Projected Savings over 5 years*
519 133 25.63% $1,002,790 $1,165,800


Moorpark Unified School District

In April 2012, the Moorpark USD School Board approved a resolution to offer a PARS Early Retirement Incentive to its senior faculty in order to reward them for their service and help the District save $100,000 in payroll costs over the next 5 years. To be eligible for the PARS plan, teachers needed to be at least 55 years old and have at least five years of service with MUSD.

Dr. Kelli Hays, Assistant Superintendent of Personnel Services for MUSD, states, “I think it’s a rare opportunity to really show value to our employees in a way that the public sector usually can’t. This type of financial reward is really a private sector phenomenon. So for us, it’s something different.” She continues, “This would allow us to hire new teachers—people who are either at the very beginning of their careers or those who may have been previously laid off —and build a new workforce of teachers.”

South Pasadena Unified School District

South Pasadena Unified School District offered a PARS early retirement incentive to certificated non-management, certificated management and classified non-management/confidential employee groups. To qualify for the incentive package, they either had to be 55 years old with five or more years of district service or 50 years old with 30 or more years of service. Out of the 95 eligible employees, 30 staff members accepted the PARS incentive and will receive 85 percent of their last year’s pay over five years, in addition to their state retirement benefits.

South Pasadena USD Superintendent Joel Shapiro comments that the PARS plan “will be essential in keeping the District out of the red.” Having senior employees retire now and hiring new teachers to replace them will generate significant savings. “In most cases there is a very big difference between the salary of the person retiring and that of their replacement, so the district can really save a great deal of money over time.”

Plan to minimize future budget challenges and contact PARS today!


Copyright 2012 PARS.

The contents of this publication reflect PARS’ understanding of the facts. Before taking any action based on this information, we recommend that you consult professional advisors regarding your agency’s specific objectives and circumstances.


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