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Voluntary Early Retirement Plan

triciamtriciam 8 Posts
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In this struggling economy, we are trying to come up with ways to save a buck or two. We have never offered any type of early retirement plan. Is there anyone out there who could share their plan with me - just to give me some ideas? Or would be willing to share sample document? I am thinking an official document drafted by our attorney would be in order. Thanks for any direction!

By the way, it is needed post haste (if you know what I mean).
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  • ACU FrankACU Frank 2,188 Posts
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    When you say you're trying to save a buck or two, how much are you willing to spend now to save money a year or two down the road? What kind of break-even period do you need?
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  • sonnysonny 2,117 Posts
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    We have offered a VSIP (vol. seperation incentive package) with some success. You must be at your normal retirement date per our plans or within one year. Incentive was we pay three years of your health insurance or take cash equivilent (sp) there are lots of rules. . I suggest you work with an attorney.
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  • davidsdavids 427 Posts
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    We have offered a voluntary separation incentive program (VSIP) for three consecutive years. During the first two years, it was open to any employee who had at least five years of service. They did not have to be retirement-eligible. For the third year, the employee had to be eligible for retirement under our statewide public employee retirement system.

    The first year our incentive was a graduated lump-sum depending on years of service. The next two versions we offered a flat lum-sum amount plus a smaller amount per year of service. In all three years, employees could choose to receive the incentive as cash or in continued health insurance premiums (with several conditions). Over the three years we had 50 employees take the VSIP and saved a considerable amount of money.

    The main things to consider going into it are will you limit it to specific classes or groups of employees or make it open to anyone? If you make it open to all who meet the criteria, what will you do if an employee in a critical position opts to take the VSIP. You may have to fill that position and layoff someone else to capture the savings. (We reserved the right to reject an employee's application for the VSIP if they were in a critical position.)

    Also, there are some specific guidelines you need to comply with under the Age Discrimination in Employment Act (ADEA). Make sure you consult an attorney who is well-versed in ADEA.
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