HomeMy WebLinkAbout12.D.7. Proposed Phased Retirement Benefit
City of Shakopee /~.O~t
Memorandum
TO: Mayor and City Council
Mark McNeill, City Administrator
FROM: Kris Wilson, Assistant to the City Administrator
SUBJECT: Proposed Phased Retirement Benefit
DATE: February 3,2006
Introduction
The Council is asked to consider adopting a phased retirement benefit that would allow
qualifying employees to reduce their work hours, while still retaining their benefits. The
following proposed policy would allow for the transfer of skills and knowledge to a new
or promoted employee.
Background
As the baby-boomer generation nears retirement, the City faces a transition in its
workforce over the coming years. The following is draft language for a proposed phased
retirement policy:
Phased Retirement
Individuals who have been employed by the City of Shako pee for 20 years or more
and who are age 55 or older may be offered a phased retirement benefit, upon the
recommendation of the City Administrator and approval of the City Council. The
purpose of phased retirement is to allow long-term employees to work reduced
hours while maintaining their benefits and assisting in the training of a new
employee in their specialized skills and knowledge. In order to be eligible, the
employee must hold a specialized position that will require significant training of
a new or promoted employee. Employees offered and accepting a phased
retirement benefitshall work at least an average of 20 hours per week, but shall
receivefull insurance benefits, at the level they enjoyed prior to phased
retirement, as well as pro-rated vacation, holiday and sick leave for a period not
to exceed 6 months.
This is not intended to be an early retirement incentive program. In fact, it is largely the
opposite. The goal is to have certain long-term employees continue their employment
with the City long enough to allow for the hiring and initial training of their successor.
As stated in the draft language above, phased retirement would not automatically be
offered to every employee who reaches 20 years of service and is over age 55. In some
cases, when a long-term employee retires, there will be other employees already holding
the same position or an apparent successor already employed by the City and possessing
amajority ofthe necessary skills and knowledge. Other positions might be fairly easily
filled by a candidate with previous experience with another city or in the private sector.
The purpose of the policy, as proposed, is to provide the City with a tool for maintaining
the unique skills and abilities oflong-term employees for an additional six months, while
their successor is hired and trained.
Budget Impact
The cost to the City of providing health, dental and long-term disability insurance for six
months would be approximately $2100 for an employee with single health insurance or
$3500 for an employee with two-party health insurance. Conversely, it may reduce the
need for temporary or consulting help during the transition period.
Relationship to Vision: The purpose of this policy is to provide stability in city services
(Goal D), by making the transition from a long-time staff member to a new or promoted
staff member as smooth as possible. It also contributes to a financially strong city (Goal
E), by reducing the likelihood that we would have to hire an outside consultant to
perform essential functions while we conduct a search, interviews and training for a new
employee.
Requested Action: If the Council supports offering a phased retirement option to
qualifying city employees, it should direct staff to prepare a Resolution to amend the.
Personnel Handbook, and place the Resolution on the agenda for February 21.
.
- /!.'~vJ~~
~s Wilson
Assistant to the City Administrator