HomeMy WebLinkAboutDocumentation_Regular_Tab 8D_3/7/1996 Memorandum
To: Village Council
From: Thomas G. Bradford, Village Manager /���
Date: 03/01/1996
Subject: Early Retirement Incentive Program; Agenda Item
As we discussed in the latter part of calendar year 1995,
circumstances are such that an Early Retirement Incentive Program
(ERIP) would now seem to have financial merit for Tequesta to
pursue.
As indicated in the attached correspondence from Mr. Palmquist,
the intent of an ERIP is to, replace employees that choose to
accept the incentive to retire with employees earning lower
compensation. The goal of the ERIP is that the savings in
payroll should exceed the value of incentives that are provided
so that the employer receives a net financial benefit.
The fee from the Consultant to provide this service is $3,000.
However, this does not include the calculation of accrued pension
benefits on the assumption that the FRS will do the same. I have
spoken to the FRS and they have indicated that they will do the
work but only reluctantly. Therefore, I am requesting that an
additional $90 for each potential retiree be allocated to cover
this expense, in the event that the FRS does not complete their
work in a timely manner. Estimating a potential of 15 retirees
requires another $1,350.
In addition to the above referenced funds, there is the
possibility that I will need to secure the services of our Health
Insurance Consultant, Black Ink Associates from Coral Gables,
Florida, in the event 'that the ERIP Consultant' believes that
health insurance alternatives will be needed to entice
retirement. Therefore, I estimate up to an additional $1,000 to
cover this expense. All told, this ERIP Project could cost
$5,350, but if successful, could save the Village tens of
thousands of dollars. _
It is recommended that the Village Council approve the Gabriel,
Roeder, Smith and Company Proposal ,in the amount of $4350.
•
TGB/krb .
Attachment
•
GABRIEL, RC)EDER, SMITH & COMPANY
Adtlafitab h Cu,ssultanb
— — *tit Stoward Professional Bldg. • rill Griffin Rd. • Suite 2(X)• Ft.Lin tletdak.Fl .13314 • 9!i4-791-3.FAX • g347911AMU4
February 29, 1996
Thomas G. Bradford, Village Manager .
Village of Tequeeta
P.O. Boot 3273 ,
357 Tsquesta Drive
Tequesta, Florida 33469-0273
Re: Early Retirement Incentive Program
Dear Mr. Bradford:
As requested, we are submitting a proposal to assist the Village in designing an Early Retirement
Incentive Plan(ERIP). We understand that the Village wishes to offer certain Incentives to older, long-
service employees for them to retire. Those employees,who elect to retire would then be replaced by
employees earning lower compensation.
The general outcome of such an ERIP Is that the savings in payroll exceed the value of incentives that
are provided. There is thus ■ net financial benefit to the employer.
We propose to provide the following services:
• Target the category of employees to whom the incentive would be offered.
• Design incentives that hopefully will be attractive enough for targeted employees to
accept the offer,yet not so generous as to eliminate potential savings.
• Estimate the financial impact of the proposed ERIP.
We estimate that our fee for this project will range from $2,500 to S3,000. This estimate does not
indude a calculation of accrued pension benefits available to each targeted person from the Florida
Retirement System(FRS). We anticipate that FRS will make these calculations. Hvwewr,if they are
not made on a timely brie,we could calculate an estimated FRS benefit for eedr person. Our charge
for these calculations would be S90 far each person. There probably will be about 15 employees
subject to these calculations.
Please contact us if there are any question.
•
Sincerely yours, '
ftt)Lr5L- •
J. Stephen Palmqulat
JSP/or •
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