Retirement/ResignationRetirement/Resignation

Incentive PlanIncentive Plan

Plan DesignPlan Design

85% of Employee “Base” 85% of Employee “Base” Pay for 2005-06Pay for 2005-06

Retire or Resign by 6-30-Retire or Resign by 6-30-06 or 8-31-0606 or 8-31-06

Payments to 403(b)Payments to 403(b) Payments over 5 YearsPayments over 5 Years Current Contract Sick Current Contract Sick

Day Severance also over Day Severance also over Five YearsFive Years

Advantages to EmployeeAdvantages to Employee

Provides Assistance Provides Assistance in making STRS in making STRS Medical Insurance Medical Insurance PaymentPayment

Supplements Supplements Retirement PaymentRetirement Payment

Allows Tax Deferred Allows Tax Deferred PaymentPayment

Advantages to Huron City SchoolsAdvantages to Huron City Schools

Controls Timing of Controls Timing of RetirementsRetirements

Positive Cash Flow to Positive Cash Flow to the District EVERY the District EVERY YEARYEAR

Saves Money for the Saves Money for the DistrictDistrict

ParticipantsParticipants

9 Teachers9 Teachers 1 Administrator1 Administrator

Annual SavingsAnnual Savings

Assumes:Assumes:

New Hires will be atNew Hires will be at

BA 3BA 3

New Hires will New Hires will progress through BAprogress through BA

ScaleScale

All new Hires will beAll new Hires will be

at MA 8 in FY 12at MA 8 in FY 120

20000

40000

60000

80000

100000

120000

140000

160000

Savings

FY 07

FY 08

FY 09

FY 10

FY 11

FY 12

Why FY 12 is CriticalWhy FY 12 is Critical

HB 66 begins the phase HB 66 begins the phase out of reimbursement for out of reimbursement for lost Personal Property lost Personal Property TaxesTaxes

Huron will lose $200,000 Huron will lose $200,000 that year in Personal that year in Personal Property Tax RevenueProperty Tax Revenue

This helps replace the This helps replace the loss without going to loss without going to votersvoters

Problems with Normal AttritionProblems with Normal Attrition

Average less than two per yearAverage less than two per year Teachers are staying longerTeachers are staying longer Negative Cash flow consequence in year Negative Cash flow consequence in year

following retirementfollowing retirement We do not control the processWe do not control the process