This seems to be an opportunity for boards to reduce the costs of employment. Why wouldnt all boards choose to extend this benefit?
Savings from an ERIP normally come from reduced compensation and benefits costs when an employee retires. These savings are best realized when the employee is not replaced after retirement. However, some local districts may need to replace an employee who opts for early retirement. The cost of replacing employees, as well as the cost of providing the enhanced retirement benefits, may well reduce or even eliminate short-term savings. Keep in mind two facts: (a) any savings realized from participation in the ERIP will be short-lived (one to five years) and will definitely end when the employee would have retired had there not been an ERIP and (b) the cost of providing enhanced retirement benefits will be long term increases in the total cost of employment. The law states that the districts liability to the pension systems (TPAF and PERS) shall be paid in level annual payments over 15 years. 2. Aside from cost, are there other considerations to be made when deciding whether to offer ERIP?
