The Denison City Council will look tonight at establishing an early retirement policy as a means to save money.
The savings would come by offering long-time employees an incentive to retire early and hiring new employees, at a lower wage or salary.
Among the incentives often used is the payment of a percentage or all of the employee’s health care insurance premium, depending on the years worked, until that employee can receive Medicare.
Councilman Nathan Mahrt had the early retirement item placed on the agenda at the council’s October 15 meeting.
“The city can get some pretty large savings if we offer this and get some of the longevity that we’ve been paying out back, hiring newer employees,” he said.
Councilman John Granzen agreed with the idea of an early retirement policy.
“We have people out there that want to take advantage of it,” he said. “We should let them take advantage of it.”
Granzen later added that the main reason long-term employees don’t retire early is the price of the health insurance premium.
‘”The insurance kills them,” he explained. “and they don’t want to retire and have to buy their own insurance until they’re 65. It’s very, very pricey.”
City Clerk Lisa Koch drafted the early retirement policy using examples of policies used by other governmental entities.
Eligibility requirements of the draft policy the council will consider are the following.
The employee is in good standing with the city
Has reached age 55
Has completed 10 years of consecutive service with the city or the employee’s age plus years of service equals 88
Is not subject to discharge for cause or has not been discharged from employment from the city
Must submit a written resignation to the city.
Those who meet the requirements and have worked for the city for 10 consecutive years will have 50 percent of their single insurance premium paid by the city.
After 20 years of consecutive employment, the city will pay all of the single insurance premium.
Insurance for dependents of an employee/retiree who reach age 65 can be continued through the consolidated omnibus budget reconciliation act (COBRA), if the dependents are already covered by the city’s insurance policy.
Employees who take early retirement will not be eligible to be rehired by the city.
Among the local public entities that already offer early retirement are the Denison Community School District and Denison Municipal Utilities.