Retirement Incentive Plan
|As the Loudon County School
Board budget committee continues the budget planning process for the
next school year, an interesting idea was discussed. Board member Ric
Best proposed the board investigate the possibility of offering a
retirement incentive for certified employees of the school system who
have thirty years service with the Tennessee Consolidated Retirement
Several different options were discussed with the most important discussion centering on just how much to offer for the incentive. Amounts ranged from five thousand dollars or possibility a percentage of the employees salary. The board will continue the discussion at the next budget meeting.
Below is just an example of how the incentive could work. The board could see real cost savings if very many employees took advantage of the offer. The plan would be totally voluntary.
We have about 36 employees who would be eligible to take advantage of the plan. Average pay of those 36 is around $51,000.00
Let's say 15 took the option and we replaced those 15 with 15 new employees at an average pay of $35,000.00.
A savings of $16,000 x 15 = $240,000 per year.
If each of the 15 were given an incentive pay of, let's say $3,500.00 per year for 3 years, that would be $52,500 per year.
Overall savings in 3 years $720,000.00. Overall cost for 3 years $157,500.00.
Over, overall 3 year savings $562,500.00.
The figures above are just hypothetical and do not reflect any decisions by the board. But this is how the incentive plan could look.