Eastern Municipal Water District and Olivenhain Municipal Water District Achieve Savings with PARS Early Retirement Incentive

Categories: Early Retirement Incentives,Hot Sheets
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As the state’s financial woes continue to impact agency budgets throughout California, Eastern Municipal Water District (EMWD) and Olivenhain Municipal Water District (OMWD) took proactive steps to face their problem head on. The districts realized cuts were required to achieve the necessary savings. Each decided to offer a PARS early retirement incentive called Supplementary Retirement Program (SRP).

Eastern Municipal Water District

EMWD decided in April 2011 to eliminate 27 positions over 3 years. Natural attrition (regular retirements) would not achieve all 27 reductions needed so the District evaluated other alternatives to accelerate the rate of natural attrition and enable EMWD to achieve organizational restructuring and cost savings.

Paul Jones, General Manager of Eastern Municipal Water District states, “After evaluating the advantages and disadvantages of multiple programs, the PARS incentive program seemed the best fit. The PARS SRP is more flexible than other programs and it does not have any future cost variability. Staff reviewed the retirement incentives offered by other cities and counties and found that those who opted for the PARS Supplementary Retirement Plan have successfully met their organizational objectives to reduce staff and associated cost savings.”

The PARS SRP was offered to 86 eligible Miscellaneous employees and a total of 44 enrolled in the plan (51% participation rate) with a projected net savings of $8,356,249 over 5 years.

Olivenhain Municipal Water District

Olivenhain’s board approved a PARS SRP at its October 2011 board meeting. After this approval, PARS sent out enrollment packets to 22 eligible employees. The District’s goal was to increase and accelerate the retirement rate to facilitate restructuring and fiscal savings.

Kimberly Thorner, General Manager of Olivenhain Municipal Water District notes, “The PARS plan was a great fit for our district. We will benefit by saving money while still being able to replace all retiring employees with employees at the bottom of the salary range to maintain the current staffing levels.”

The PARS SRP is projected to save OMWD approximately $54,559 in year one and $218,062 over 5 years. The District’s Human Resources Department conducted its own analysis using exact hourly wages for possible replacements and their numbers supported the PARS post-analysis.

Payout Options for the Employees

Under the PARS SRP, employees receive a supplemental retirement benefit which can be paid out with 1 of 14 different options, chosen by the employee, which include:

  • Lifetime
  • Joint-and-Survivor
  • Lifetime with a minimum of 10 years payout
  • Fixed-term payments paid monthly for 5 to 15 years (guaranteed payout options; 5 to 9 years include rollover option)

Why Did They Choose PARS?

PARS is one of the few companies with a strong focus on analysis, design and implementation of early retirement incentive plans for public agencies.  Since 1984, PARS has helped public agencies create customized early retirement incentives to save dollars and reduce labor costs.  Nearly 700 cities, counties, special districts and school and community college districts have turned to PARS for custom plan design to meet their operational and fiscal needs.


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