Adopt Resolution 17-06-143 to Approve Participation in the Public Employees Retirement Association Phased Retirement Option

The purpose of this case is for the City Council to formally approve the City's participation in the Public Employees Retirement Association (PERA)  Phased Retirement Option (PRO) as discussed at the May 23, 2017 work-session. 

Background
In 2009, the Minnesota Legislature adopted a law that allows for phased retirements by eligible PERA members.  The program is intended to provide employers with a workforce planning tool that can help transfer knowledge from long-time employees to new or less tenured employees and to facilitate a transition into retirement for a PERA member.
 
If the PRO is approved by the City Council, the decision to submit a PRO Agreement to PERA would be made on a case-by-case basis by the City Administrator, in cooperation with the HR Manager and Department Head, as deemed beneficial to the City in meeting the goals of the strategic plan.   In the event the PRO does not satisfactorily meet the expectations of either the City or the employee, the agreement can be terminated at any time.  
 
Quick Facts
•An employer is under no obligation to offer the phased retirement option.
•If participation is offered, the employer must reduce the employee’s hours of work, when compared to the individual’s previous work schedule, by at least 25 percent and limit the hours per year to 1,044 or fewer.
•The initial offer of employment under the PRO program is limited to one year.
•No employee deductions or employer contributions are payable to the retirement plan on the earnings of the phased retirement position.
•Participation in PERA’s phased retirement program stops at the conclusion of the employee’s initial or renewed agreement, whichever is later.
  
If the City would like to have the option of offering this program as an alternative to full retirement of its retirees and as a means to achieving its staffing needs, the following is a summary of the steps that would occur:  
 
1)  When an eligible employee requested the PRO, the City Administrator, in cooperation with the HR Manager and Department Head, would determine if the PRO is within the approved budget and beneficial to City business.
2) If so, a Phased Retirement Agreement would be submitted PERA.
3) The employee would begin working a reduced work schedule not greater than 1044 hours in a 12-month period.
4) The employee who begins the PRO terminates PERA membership, begins collecting a pension and continues to work with a reduction of hours, reviewed on an annual basis, for a maximum of five years.
5) The employee would participate in the City's benefit plan based on the current eligibility guidelines of the Personnel Policy.
 
Offering the Phased Retirement Option can be beneficial in the City's succession planning efforts, the ability to effectively evaluate the structure of certain positions, the opportunity for staff development and retention of talent.   With regard to Strategic Imperative III:  Smart, Citizen-Focused Government,  the Phased Retirement Option speaks to tactic #23, affording the City the opportunity to thoroughly evaluate staffing deployment and process effectiveness.  
  
Note:  There are several attachments to this case offering additional information, including the May 23, 2017 draft work-session minutes.   
 

There is no additional funding required to offer the phased retirement option; offering the phased retirement option to eligible employees would be a reduction to costs when compared to employees receiving the City's PERA contributions.  
 

To approve the City of Ramsey's participation in the Public Employees Retirement Association Phased Retirement Option.

Motion to approve Resolution 17-06-143 Approving the City of Ramsey's Participation in the Public Employees Retirement Association Phased Retirement Option.