Early retirement incentives could save Richmond millions
RICHMOND, Va. (WTVR) — For some workers in Richmond, retirement may be right around the corner.
In fact, city leaders are offering qualified employees a chance to retire early and get a lump sum of money to sweeten the deal.
“It gives us the opportunity to get substantial savings and personnel,” said Kathy Graziano, 4th District member of Richmond City Council. “The budget is tight. We have balanced the budget next year on some of those savings.”
Mayor Dwight Jones presented the plan to city council in March as part of his Bi-Annual city budget proposal that’s expected to save the city millions.
Leaders said the voluntary retirement incentive program is a way to balance the budget and maximize city resources without having to layoff employees.
“Private industry does it all the time and it apparently works for them. And I am hoping it will work for us, too,” Graziano said.
Under Richmond’s Voluntary Incentive program:
- City employees who are 55 years old and worked at least 25 years are eligible.
- If a city employee is 65 years of age and worked at least 5 years, they’re also eligible.
- The city is also willing to give workers who have at least 33 years of experience anywhere from $7500 to $22,000 to retire.
- However, city employees who agree to take the buyout, and then decide to go back into the workforce, could face challenges.
“The problem is that the employment market is loaded wtih jobs. But many of the jobs are being unfilled because employers are a little bit reluctant to fill them at this point right now. Not knowing what’s happening to the economy,” said Elinor Burstein, President, Placement Professionals, Incorporated.
Executive Search Consultant and career coach Elinor Burstein says be prepared to make a lot less and compete with college grads.
“They’re doing internships and by the time they graduate college, they actually have work experience in their field,” said Burstein. “And obviously commanding less money than a person that’s going to be working at 55 years old.”
Under the voluntary retirement incentive program, city workers who qualify would have to wait six months or up to a year to reapply for a city job.
If the plan is approved by city council, qualified employees could retire as early as this Fall.
Richmond offered the same program back in 1990 and 1991. City leaders say 389 eligible employees of which 253 (65%) participated in 1990. In 1991, 619 employees were eligible and 285 (46%) took advantage of the program.