CC PACKET 05051998 - Laserfiche WebLink

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MEMORANDUM DATE: April 6, 1998 TO: Mike Mornson, City Manager FROM: Roger Larson, Finance Director ITEM: EARLY RETIREMENT INCENTIVE PROGRAM In 1992 & 1993, the State of Minnesota offered an early retirement incentive option for employees who were 55 years of age or older and had completed 25 years of service. The basis behind this early retirement program was to offer a retirement option for long-term employees who wished to retire early and at the same time, save employers money. The program works as follows: A) The employer pays single health insurance premiums for a period of three years for employees who qualify and opt to retire early. B) Because long-term employees are at the top-scale of wage earnings, the employer savings come from hiring the new employee at a lessor salary than the incumbent (usually 85% - 90%). In July of last year, Council passed resolution#97-021 offering long term City employees the same early retirement incentive that was offered by the State in the early 1990's. The window of opportunity expired on November 30, 1997 with two employees opting to participate. At that same time, Council indicated they would review the program on an annual basis. In previous years, Council agreed to participate in the program if three-year savings of $5,000 per employee could be realized. The attached analysis indicates the employees who would qualify for early retirement and an estimated cost of replacing each of those employees. In reviewing the salary structure of the affected departments, and comparing the projected new-hire salaries to the Stanton Report, all of the positions listed seem to be workable.