HomeMy WebLinkAboutPOWERPOINT PRESENTATIONAgenda Item #4
PARS
EARLY RETIREMENT
INCENTIVE PROGRAM
City of Tustin
Human
Resources
Department
Over the past several years, the City has proactively reduced
operating expenditures
e.g. frozen positions, layoffs, increased employee contributions to
CalPERS, no COLA salary increases, and second tier retirement plans
■ The City faces continued financial challenges, particularly
stemming from dissolution of RDAs
PARS early retirement incentive program will allow for:
Short-term and long-term savings in personnel costs
Organizational restructuring
Designed to encourage employees to retire earlier than 1
otherwise planned
Provides a benefit equivalent to 7% of the employee's base
salary
Choice of one of 14 actuarially equivalent options
Lifetime benefit for the employee
■ Lifetime benefit for the employee and named beneficiary
Benefit for the greater of the employee's life or 10 years
Fixed payments for 5 - 15 years
All regular employees, excluding Executive Management, are
eligible to participate provided:
Full-time or part-time benefitted position as of June 5, 2012
50 years of age with 5 years of City service and CalPERS service as
of October 31, 2012
Resign from City by October 31, 2012
Retire from CalPERS by November 1, 2012
86 employees met eligibility criteria
A total of 35 employees have enrolled (13% of current workforce)
City Manager's Office/ RDA: of 12.25 authorized positions (16%)
Community Development: / of 18 authorized positions (17%)
Finance: 2 / of 17.75 authorized positions (11%)
Human Resources: : / of 6.5 authorized positions (15%)
Parks and Recreation: / of 15.5 authorized positions (19%)
■ Police: 9 / of 144 authorized positions (6%)
5 sworn positions
4 civilian positions
Public Works: 15 / of 71 authorized positions (21%)
■ 35 vacant positions
13 positions will be left vacant (37%)
13 positions will be filled at the same (or similar) classification level (37%)
9 positions will be filled at a lower classification level (26%)
All newly hired employees will be placed in a second-tier retirement plan with
reduced CalPERS contribution costs
Replacement of positions will be phased in between
November 2012 and July 2013
■ Cost of PARS early retirement incentive
Direct cost: $639,245 per year for 5 years
PARS and trustee administrative fees: $35,969 per year for 5 years
One-time payment for accrued paid leave for 35 retiring
employees: $714,000
Further reduces unfunded liability for General Leave
■ Unfunded liability prior to 2012 labor negotiations: $3,679,967
■ Cashout of Excess General Leave: ($245,276)
■ Cashout of remaining General Leave for 35 retirees ($714,000)
■ Remaining General Leave liability: $2,720,691
■ Liability reduced by $959,276 (26%)
■ Net annualized savings of $1,017,718
■ Net savings of $4,500,658 over 5 years
QUESTIONS?