City of Portland
Voluntary Retirement Incentive Program (VRIP)
May 1, 2013 - June 30, 2013
Due to a budget shortfall, bureaus are reducing their budgets by 10% for FY 2013-2014. This budget reduction will lead to a reduction in services to the public through elimination of programs and/or reduction in staff. Approximately one-third of the City’s workforce is eligible to retire. A recent survey conducted by the Bureau of Human Resources revealed that 53% of responders listed being unable to afford the monthly premium required for retiree health care coverage as one of the reasons they were not retiring. This voluntary retirement incentive program gives bureaus the option to offer a City-paid contribution of $20,000 into a Health Reimbursement Account (HRA) for approved retirement-eligible employees who voluntarily separate from City service through retirement. The HRA funds must be used for qualified medical related expenses, which include purchasing healthcare coverage to help bridge the gap to Medicare eligibility or to the summer of 2014 when the City expects the state health care exchanges to be fully implemented, providing affordable medical insurance options.
**Please click here for the Voluntary Retirement Incentive Program Application and Participation Agreement**
Provide an incentive for retirement-eligible employees to retire, thereby reducing the number of involuntary lay-offs and/or program reductions
Reduce unemployment costs
Create opportunities to restructure/realign work, thereby resulting in short and long-term savings, and avoiding future layoffs
Legally compliant – i.e., nondiscriminatory on its face or as applied
Affordable and provides for measurable cost-savings
General Program Parameters
In an effort to meet a specifically articulated business need, the incentive program aims to reduce involuntary layoffs and/or program reductions and to make more effective use of human resources. The program will be coordinated by BHR.
The incentive program would be available to all PERS or FPDR retirement-eligible individuals who retire on or before June 30, 2013, subject to certain limitations as set forth below
The incentive program is a management tool, not an employee right. No employee shall have a contractual right to a financial incentive offered through the program.
Management will be able to exercise discretion to approve or deny an employee’s application under the following guidelines:
Participation is voluntary and will be made available to all employees, although to be eligible, the employee must meet the eligibility criteria.
The program must result in savings to programs or positions (i.e., there must be a corresponding savings to offset the bureau contribution to the HRA).
Individual bureaus will determine the number of incentives by classification they can offer, that will meet the above goals and ensure retention of key skills and abilities.
In the event there are too many applicants, the tie-breaker shall be total years of city service (i.e., those employees with more years of city service will be given preference for approval over those with fewer years).
To meet the minimum eligibility threshold, an employee must be in regular status with at least 5 years of service. In addition, an employee must be eligible for retirement under PERS or FPDR criteria.
- The employee must submit in writing their intent to retire no earlier than April 10, 2013 and no later than May 10, 2013 and must separate from the City no later than June 30, 2013. Once the letter of intent is submitted and participation in the Voluntary Retirement Incentive Program is approved, it cannot be rescinded. Solely at the discretion of the employee’s bureau, the qualifying retiree may be allowed to work one additional month, through July 31, as a returning retiree under Human Resources Administrative Rule 3.06.
- The bureau contribution funding the HRA will be made on the last day of the eligible employee’s employment with the City ofPortland. Funds will be available for qualified medical expenses the day following voluntary retirement and termination of employment with the City ofPortland.
- In consideration for resignation and agreement the employee will not seek re-employment with the City in any capacity for two years including as an employee, contractor, or subcontractor; the employee’s bureau will contribute a one-time lump sum payment of $20,000 into an HRA on behalf of the employee. City Council may waive the bar on re-employment by ordinance if rehiring the employee is in the best interest of the City. Employees who participate in this program acknowledge retirement is voluntary and that the City has work available to them at the time of their retirement.
- Employees covered by a collective bargaining agreement must have Union agreement to participate.
The HRA Coverage Period will be administered by plan year; in its first year, the plan year will be condensed; beginning May 1, 2013 and ending June 30, 2013. In each subsequent plan year, the plan year will be designated as July 1st to June 30th.
All qualifying medical expenses shall be reimbursed during the Coverage Period. A participant shall be entitled to benefits under the Voluntary Retirement Incentive Program for expenses incurred in a prior plan year, but no reimbursement shall be made with respect to a request for reimbursement submitted more than 90 days following the end of the Plan Year in which expenses are incurred.
Unused balances will be carried over to another Coverage Period.