Fort Walton Beach Council agenda — 06-01-2010 Special-2010/2011 Budget Policy Workshop — reading text

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Members of the General Employees' Retirement Plan who are 52 years of age and have at least 10 years of credited service are eligible for early retirement. Normal retirement is 62 years of age with 10 years of credited service. 2. Members of the Police Officers Pension Plan who are 50 years of age with 10 years of credited service or have 30 years of credited service are eligible for early retirement. Normal retirement is 55 years of age with 10 years of credited service or 30 years of credited service. 3. Members of the Firefighters Pension Plan who are 45 years of age with 10 years of credited service or have 25 years of credited service are eligible for early retirement.Normal retirement is 55 years of age with 10 years of credited service or 25 years of credited service. 4. Early retirement has a penalty of, per month of early retirement: General 0. 25 %, Police 0. 50 %, Fire 0. 25 %. Discussion 1. As an incentive for retiring early, employees who meet early retirement age as of August 1, 2010 and elect to participate in this program would receive the following based on years of service with the City: a. 10 up to 15 years of credited service 50% of base salary not to exceed $ 15, 000. b. 15 up to 20 years of credited service 50% of base salary not to exceed $ 20, 000. c. 20 up to 30 years of credited service 50% of base salary not to exceed $ 25, 000. d. 30 plus years of credited service 50% of base salary not to exceed $ 30, 000. 2. The purpose of the payout is to compensate employees for the early retirement penalty, thereby making it more attractive to leave early. 3. The City reserves the exclusive right to either accept or not accept the application from eligible employees. 4. The City will determine the effective date of the separation of employment which shall not be later than September 30, 2010 unless specifically approved by the City Manager. 5. Employees who are approved for the program would not be eligible for re -hire by the City for 5 years from the date of separation. Policy Impact 1. Early retirement incentives are estimated at $ 132K with estimated payroll savings of $ 246K. 2. Accrued vacation and sick leave would be paid per Personnel Policies and Regulations. 3. The long term payroll savings for this program would be derived from a reduction of the salary and associated payroll expenses for the new hire versus the exiting employee, savings associated with a re- classification of the position once vacated, or elimination of the position altogether. 4. Fund balance would be used to fund the incentive payments and vacation /sick accrual payouts. Budget Impact Appropriate reserves for an Early Retirement Incentive Program as identified above and authorize the City Manager to execute agreements with approved employees and disburse incentive payments in accordance with the program offerings. 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