AgdaPkt 2004-04-12 - Laserfiche WebLink

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~.lm A.2 ummary of the Plan The proposed plan document will allow the City to offer the Separation Incentive Plan to individual employees or any class or group of employees that the City feels would benefit from such a program. The City may initiate use of the Separation Incentive Plan throughout the year. Eligibility for the Separation Incentive Plan is determined by the City, and is not a benefit option selected by employees. The following conditions must be met br an employee to be considered eligible for the Separation Incentive Pia,: . The employee has worked for the ~ity a minimum of five (5) years and is eligible for retirement under the Califomia Pub,ic Employee's Retirement System. . The employee must meet the minimum retirement age as defined by CalPERS for the appropriate bargaining unit (Age 50). . The employee must sign a Separation Incentive Plan agreement with the City. . The dollar amount the City will contribute to the plan will be equal to or less than the purchase of two years service credit from the Califomia Public Employees Retirement System. . The full cost of the Separation Incentive Plan must be covered by the participating department's budget for the year in which the employee retires or separates from service. . The action results in cost savings and/or increased efficiencies for the department, and . The Director of Human Resources and Director of Finance analyze and concur with the proposed action as approved by the City Manager. Alternative The altemative would bp. to continue the CalPERS Golden Handshake. However, the CalPERS plan has some very strict statutory requirements. For example: The City would have to offer the Golden Handshake to entire classifications not individual positions, and CalPERS requires that any vacancy created by a retirement under the Golden Handshake must remain permanently unfilled. Fiscal Impact There is no adverse fiscal impact associated with the adoption of this Resolution. There will be an Administrative fee of five and one-half percent (5.50%) of all contributions made by the City on behalf of employees, in addition to a trustee fee of 0.12% of contributions. Administrative and Trustee fees for each contribution will be covered by the participating department's budget, and will ultimately result in a cost savings for the City. Conclusion The Separation Incentive Plan will cost the city an average of $30,000 per participating employee, while a layoff costs the City approximately $10,660 in unemployment benefits. The Separation Incentive Plan therefore costs the City an additional $20,000 per participating employee, however it will assist in maintaining good will with outgoing employees and lets the remaining employee's see that the City is employee-friendly. jr!Cl:Utl iJUZ))t( Rn1 frlpL-- i;¡ tJI- Maria Rivera-Peña 'If--- Brian ponty Ed Everett Director, Human Resources Director, Finance City Manager Attachments: 1. Resolution 2. Plan Document (Attachment available for review in the City Clerk's Office) 3. Exhibit A (Attachment available for review in the City Clerk's Office) 4. Trustee Agreement (Attachment available for review in the City Clerk's Office)