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Home My WebLink AboutCC RES 98-042 RESOLUTION SETTING POLICY FOR EARLY RETIREMENT INCENTIVE FOR CITY OF ST. ANTHONY EMPLOYEES Meeting Sheet 1111111111111111I 103164 Box: 26 Folder: RES 1998 Document: CC RES 98-042 RESOLUTION SETTING POLICY FOR EARLY RETIREMENT INCENTIVE FOR CIN OF ST. ANTHONY EMPLOYEES ti • CITY OF ST. ANTHONY RESOLUTION 98-042 A RESOLUTION SETTING POLICY FOR EARLY RETIREMENT INCENTIVE FOR CITY OF ST. ANTHONY EMPLOYEES WHEREAS, the City of St. Anthony has considered a proposal for an early retirement policy for certain City employees; and WHEREAS, the City intends for any decision for such early retirement to be a voluntary act by the employee to be made in the employee's sole discretion; and WHEREAS, the City wishes to limit the period of time during which employees may elect to take such early retirement; and WHEREAS, the City is willing to provide certain post retirement medical insurance coverage for City employees electing such early retirement. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of St. Anthony as follows: 1. The policy shall apply only to full-time employees of the City who: (a) qualify for Public Employees Retirement Association ("P.E.R.A.") annuity payments as qualifying P.E.R.A. Basic or Coordinated Members, and (b) are age 55 or older on the effective date of the retirement, and (c) have completed 25 years of service as a full-time employee of the City on the effective date of the retirement. 2. The employee will be required to sign an election to take such early retirement, stating that the decision is the voluntary act of the employee made entirely in the employee's sole discretion. 3. Retirement must occur by October 1, 1998; however, the written decision to take the early retirement must be given by the employee to the City between June 1, 1998 through July 31, 1998. 4. The City's policy for early retirement must continue to be authorized by the • State of Minnesota. If such authority is modified or terminated, the City's • Ordinance 98-042 Page 2 early retirement policy will be subject to change on the basis of such change in the State policy. 5. Commencing on the day following the date of retirement, the City will pay individual Single Health Coverage for the retiring City employee (but not the employee's family) for a period not to exceed three years from the effective date of the retirement. Adopted this 12 day of Ma J , 1998. Mayor ATTEST: • City Clerk Reviewed for administration: AtkyMVag-er • • 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. A • 3-Year I Years of Present Cost of Cost of Net Employee Age Service Annual Salary* New-Hire" Savin s Insurance*** Savings Finance: (86%) Barb Hickerson 60 30 $ 34,625.00 $29,900.00 $ 35,600.00 $31,400.00 $ 36,700.00 $32,975.00 $106,925.00 $94,100.00 $12,650.00 $7,650.00 $5,000.00 Police: (91%) Dick Engstrom 59 32 $ 57,350.00 $ 52,200.00 $ 59,100.00 $ 54,850.00 $ 60,875.00 $ 57,625.00 $177,325.00 $164,675.00 $12,650.00 $7,650.00 $5,000.00 Public Works: (89%) Jim Lorbeski 55 35 $ 45,800.00 $ 40,850.00 $ 47,200.00 $ 42,950.00 $ 48,600.00 $ 45,150.00 $141,600.00 $128,950.00 $12,650.00 $7,650.00 $5,000.00 Liquor: (88%) Diane LeClaire 60 32 $ 38,975.00 $ 34,225.00 $ 40,150.00 $ 35,925.00 $ 41,350.00 $ 37,625.00 $120,475.00 $107,825.00 $12,650.00 $7,650.00 $5,000.00 (85%) Dick Murray 55 25 $ 24,500.00 $ 20,800.00 $ 25,250.00 $ 21,850.00 $ 26,000.00 $ 22,950.00 $ 75,750.00 $ 65,600.00 $10,150.00 $7,650.00 $2,500.00 * Assumes 3% salary increase in wages. ** Assumes 5% step increases for new hires. ***Assumes 5% increase in insurance costs (single coverage).