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Thirty-nine employees of School District 202 would be eligible for an early retirement package through the Illinois Municipal Retirement Fund (IMRF) beginning next year, said William Stafford, Chief Financial Officer.
“One strategy that we’ve suggested in reducing [the expenses associated with] the non-academic side of the house was the IMRF early retirement incentive (ERI) program,” said Mr. Stafford.” Employees affected would include custodians, safety staff, engineers and similar support staff.
“We have stepped up investigating [this strategy]; we’ve run some numbers,” Mr. Stafford continued. “We brought in our regional IMRF representative to talk with all thirty-nine employees who would be eligible.”
According to administrators, IMRF’s ERI is a program that enables employees that are at least 50 years of age and have more than 20 years of IMRF service to retire early. It allows them to buy up to 5 years of service and retire early as if they were 55, the earliest age an employee can retire from the IMRF system.
Employees eligible for the program are allowed to purchase five years of service at a cost of 4.5 percent of their salary for each year purchased. For employees who retire under this program the employer must assume higher retirement costs, because of the additional retirement years that are added. This additional cost can be amortized over five to 10 years or paid immediately to IMRF, school administrators reported.
Mr. Stafford reported that savings to the District could be realized because “most of the employees that take this option will not be replaced … and be part of our budget reduction initiatives.”
Mr. Stafford told the RoundTable that the District was “trying for a range of $500,000 to $750,000 in annual salary reductions” through the IMRF ERI plan.
With some discussion about implementation, the Board approved the early retirement incentive.