Sunday, March 25, 2007

Corey...Corey...Corey


Corey...Corey...Corey...

posted by Da Manijment @ 1:39 AM 

1 Comments:

Anonymous Anonymous said...

Early Retirement Incentive Review
Presented to the
Audit, Budget & Technology
Committee
by the
PERSONNEL COMMISSION
and
HUMAN RESOURCES DIVISION
January 15, 2004
January 15, 2004 2
AGENDA
Introductory Comments
Chuck Burbridge
Personnel Commission
Overview by Kathryn Butler
Human Resources Division
Overview by Tom Killeen
Closing Comments & Questions
Chuck Burbridge
January 15, 2004 3
Introductory Comments
Overview
Why Offer Early Retirement Incentives?
Reduce costs
Reduce and improve workforce
Why Do Early Retirement Incentives Work?
Comparison of Two Incentive Programs
Why it works for one but not the other
January 15, 2004 4
Personnel Commission
Overview
Government Code Section 20904:
Provides two years of additional service
credit for employees who are at least 55
years of age
And have at least five years of service
credit
January 15, 2004 5
Personnel Commission
Overview, con’t.
State Government Code 20904 conditions:
The employees must retire within the specific
window period of 90-180 days
The District must pay PERS the actuarial
equivalent of the increased retirement benefit
The retirement will result in a net savings to the
District
January 15, 2004 6
Personnel Commission
Overview, con’t.
Section 20904 Conditions, Con’t.
The job classifications or organization units
eligible for the benefit must be designated
The benefit cannot be provided on the basis
of employee organization (bargaining unit) or
unrepresented groups (e.g., confidential
employees)
January 15, 2004 7
Personnel Commission
Overview, con’t.
Cost to the District based on the employees’
annual compensation and a cost factor
AGE COST FACTOR
50 -54 .39
55 -59 .54
60 -64 .58
65 + .54
May be made in payments within two years,
including interest
January 15, 2004 8
Personnel Commission
Overview, con’t.
Staff surveyed eligible classified
employees regarding their interest
1,410 responses received
665 would definitely retire
745 indicated they were not prepared to
make a decision at the time of the survey
January 15, 2004 9
Personnel Commission
Overview, con’t.
Administrators determined if their Division
would participate
Impacted positions were required to be left
vacant for at least four months
Half of these positions were to be
permanently cut
January 15, 2004 10
Personnel Commission
Overview, con’t.
Participation by:
Food Services Branch
23 job classifications
Office of the Inspector General
3 job classifications
Independent Analysis Unit
1 job classification
January 15, 2004 11
Personnel Commission
Overview, con’t.
$1,124,625.30
TOTAL SAVINGS
359.027.50
$365,586
$150,830.44
$239,255.94
NET SAVINGS
359,027.50
339,930.50
318,870.50
304,603.00
Half Positions Cut (6/12)
91,136
Vacant Four Months
$9,925.50
$25,655.50
31,583.50
43,140.50
Positions remaining
(salary savings)
($199,623.56)
($199,623.56)
Cost of Incentive*
2006-07
2005-06
2004-05
2003-04
INSPECTOR
GENERAL
January 15, 2004 12
Personnel Commission
Overview, con’t.
$11,401
$11,621
Net savings
+11,401
+5,655
Replacement at lower salary level
+55,293
Position to be kept vacant six months
-49,327
Cost of additional service credit
2004-05
2003-04
Independent
Analysis Unit
January 15, 2004 13
Personnel Commission
Overview, con’t.
$140,657.21
$222,983.01
$1,333,947.87
Cost Savings
2,862,135.07
Positions Cut
$140,657.21
$222,938.01
301,016.96
Positions remaining (salary savings)
$(1,829,204.16)
Cost of Incentive
2005-06
2004-05
2003-04
Food Services Branch
Savings for previously approved classifications:
$21,160.68
$41,331.83
$51,842.95
Cost Savings
$21,160.68
$41,331.83
$327,141.61
Salary Savings
($275,298.66)
Cost of Incentive
CAFETERIA WORKER II
SUPERVISORS AND
2004-05
2003-04
Area Food Services
January 15, 2004 14
Personnel Commission
Overview, con’t.
Conclusions
Applicable in limited situations
Reorganization
Impending layoffs
Can save money only by not backfilling
positions
January 15, 2004 15
January 15, 2004 16
Human Resources Division
Overview
Assembly Bill 1207
“Golden Handshake” (2 Yrs Service Credit)
Provides two years of additional service credit
for employees who are at least 55 years of age
and have at least 5 years of service credit
“2+2” (2 Yrs Service + 2 Yrs Age Credit)
In addition to the above, provides two years to
the age factor
January 15, 2004 17
Human Resources Division
Overview, con’t.
Effective Dates
The “Golden Handshake” is effective January 1,
2004, and has no ending date
The “2+2” program is effective January 3,
2004, through December 31, 2004
Eligible employees must retire within 60-120
days after the school board’s resolution and
completion of negotiations with employee
bargaining units
January 15, 2004 18
Human Resources Division
Overview, con’t.
Requirements
The incentive programs must result in a net
savings to the district
The incentive programs must be negotiated
with appropriate bargaining units
The incentive programs cannot be selectively
offered to certain employees
January 15, 2004 19
Human Resources Division
Overview, con’t.
Requirements, con’t.
All costs related to the incentive programs must
be paid by the school district
Employees are prohibited from paying any of
the costs related to the programs
January 15, 2004 20
Human Resources Division
Overview, con’t.
Post-retirement Reemployment
Benefits are forfeited if retiree returns to any
California public school service within one year, or
within five years, if return is to the former district
January 15, 2004 21
Human Resources Division
Overview, con’t.
Informal Survey of School Districts
Over two dozen California public school districts
were surveyed, including the largest 15 as well as
smaller districts. The Los Angeles County Office of
Education was also queried
None of the districts surveyed indicated that they
were preparing to offer the retirement incentives
provided under AB 1207
January 15, 2004 22
Human Resources Division
Overview, con’t.
CalSTRS Present Value Costs
The District must pay the CalSTRS actuarial
equivalent of the increased retirement benefit,
with costs ranging from an average of $18,733 to
$136,846 per retiree
CalSTRS Administrative Fee
The District must pay CalSTRS an administrative
fee of $250 per retiree, or $280 per retiree if
actuarial costs are being deferred
January 15, 2004 23
Human Resources Division
Overview, con’t.
CalSTRS Deferred Interest Costs
The District must pay the interest of the actuarial
costs if costs are deferred. The average costs of
deferral interest for eight years range from $3,161
to $23,093 per retiree
Retiree Health and Welfare Benefit Costs
The District must pay lifetime health and welfare
benefits for eligible retirees and dependent(s)
January 15, 2004 24
Human Resources Division
Overview, con’t.
Other Costs
Savings from normal employee turnover
historically has been used to fund salary step and
schedule increases
January 15, 2004 25
Human Resources Division
Overview, con’t.
Differences between CalPERS and CalSTRS
Retirement Incentive Programs
The CalSTRS programs cannot be selectively
offered or limited to certain employees
The District would have no control over the loss of
personnel in shortage fields who may not be
replaced by qualified persons (e.g. math, science
and special education teachers)
January 15, 2004 26
Human Resources Division
Overview, con’t.
Differences between CalPERS and CalSTRS
Retirement Incentive Programs, con’t.
The District would have no control over the
tremendous costs associated with the “windfall”
for employees intending to retire even without the
incentives
Unlike the CalPERS program, most of the
retirements would require replacement personnel
to be hired
There is no net savings to the District
January 15, 2004 27
Human Resources Division
Overview, con’t.
Methodology
“Golden Handshake”
60/30
58/28
“Golden Handshake” (No Backfill For 6 Months)
60/30
58/28
“2+2”
60/30
58/28
January 15, 2004 28
Human Resources Division
Overview, con’t.
Employee Categories
(Certificated Employees Age 55+ With 15+ Years of Service)
Preparation Table 5,210 (79%)
Early Education 104 (2%)
Adult Education 74 (1%)
Support Staff 209 (3%)
Administrators 1,022 (15%)
TOTAL 6,619 (100%)
January 15, 2004 29
Human Resources Division
Overview, con’t.
Demographics
Employees with 15 years of service
Age 55 and over: 6,619
Age 55 to 59 3,775 (57%)
Age 60 plus 2,844 (43%)
UTLA 5,597 (85%)
AALA 926 (14%)
District Represented 96 (1%)
January 15, 2004 30
Human Resources Division
Overview, con’t.
Program Cost Per Employee [Savings or (Loss) ]
“Golden Handshake” (Age 60/ Service 30)
One Year Four Year Eight Year
Preparation Table ($16,499) $50,118 $90,876
Early Education ($22,834) ($14,773) ($26,418)
Adult ($15,347) ($13,665) ($30,195)
Support Staff ($35,551) ($21,604) ($42,795)
Administrators ($28,203) $45,974 $88,520
TOTAL ($118,434) $46,050 $79,988
January 15, 2004 31
Human Resources Division
Overview, con’t.
Program Cost For Those Expected to Retire(Windfall)
“Golden Handshake” (Age 60/ Service 30)
No. Four Year Eight Year
Preparation Table 644 ($28,024,264) ($29,933,563)
Early Education 10 ($ 310,614) ($ 331,721)
Adult 7 ($ 145,381) ($ 155,215)
Support Staff 29 ($ 1,494,017) ($ 1,595,907)
Administrators 120 ($ 7,467,600) ($ 7,977,360)
TOTAL 810 ($37,441,876) ($39,993,766)
January 15, 2004 32
Human Resources Division
Overview, con’t.
Conclusions
The District does not qualify to offer either of the
two retirement incentive programs because there
is no net savings resulting from the offers
Even if the District did qualify, (which it does not),
the inability to selectively offer the benefits would
preclude any recommendation for offer
January 15, 2004 33
Human Resources Division
Overview, con’t.
Conclusions, con’t.
Without the ability to selectively offer the
incentives and thereby limit the offer to shortage
field personnel, the District could be confronted
with possibly a significant number of shortage
field vacancies for which qualified staff cannot be
recruited to backfill
The District has advised UTLA and AALA that it will
not offer the retirement incentives provided under
AB 1207
January 15, 2004 34
Closing Comments
Concluding Remarks
Questions

11:23 AM  

Post a Comment

<< Home