F'ville early retirement plan up for vote

Tue, 12/02/2008 - 2:38pm
By: Ben Nelms

The city of Fayetteville has made budget reductions during each of the past two years and instituted a hiring freeze more than a year ago. Following the trend of belt-tightening, council members Dec. 4 are expected to vote on a voluntary early retirement incentive program (ERIP) to help further offset budget concerns.

If approved, the program would be available to all employees aged 55 and older with 10 years of continuous service.

If the eligible employees elect to do so, they would receive their full retirement benefit based on the normal retirement age of 62.

Those choosing to participate would also receive a one-time incentive bonus of $1,000 per year for each year of credited service.

Participating employees would continue on the city’s health, dental, vision and life insurance programs. The city currently has 13 ERIP-eligible employees.

The city would save approximately $77,500 during the first year, if all eligible employees elect to enter the program, said City Manager Joe Morton.

He said the savings of more than $77,000 would be realized because new employees are not eligible to participate for the first year of service, so the city would not have to pay into the program for them.

Though not categorized as a “rich” plan, Morton said the city’s defined benefits pension program is 100 percent funded, noting that it is intended to be one that provides perhaps as much as 50 percent of salary after 30 years.

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