FAQs: Early Retirement Incentive Plans

(updated April 3, 2008) - With the Jan. 31, 2008, announcement that staff reductions would be necessary to fill a budget hole and that Early Retirement Incentive Plans (ERIP) will be offered in some agencies, members want to know more.

Click on the links to Frequently Asked Questions listed below.

1. What is an Early Retirement Incentive Plan (ERIP)?
2. When do agencies offer ERIPs?
   
3. What agencies are offering ERIPs?
   
4. Why aren’t agencies offering longer ERIPs?
   
5. What are the time frames for participating?
   

OCSEA Education Factsheet

191 - Early Retirement Incentive Plans (PDF) updated March 2008

See Related

Website of the Ohio Public Employees Retirement System (OPERS)

State Budget Updates

Union leaders work to minimize damage to agency programs, jobs (March 12, 2008)

Agencies consider options to fill budget gap, including early retirement incentives (Jan. 21, 2008)  

Ohio Revised Code

ORC 145.297 - Retirement Incentive Plan

ORC 145.298 - Retirement incentive plan - closing of or layoff at state institution.

ORC 145.01 - Ohio Public Employees Retirement System Definitions

What is an ERIP?

State law permits Ohio's public employers to establish an Early Retirement Incentive Plan. Such a plan, if established, allows the employer to purchase additional service credit for eligible employees, enabling those employees to retire early. 

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When do agencies offer ERIPs?
An ERIP may be voluntarily offered as an alternative to layoffs when an agency determines it can save money in the long run by getting senior employees to retire sooner.

If the employer voluntarily chooses to establish an ERIP, the plan must remain in effect for at least one year and the "employing unit" must give employees at least 30 days advance notice before ending the plan. 

In other cases, the employer is mandated by state law to offer an ERIP either: 1) when  the state proposes to close a state institution; or  2) within a 6 month period the Employer lays off at least 50 employees or 10% of the number of employees in an employing unit.  The mandatory plan must be in effect from the time a layoff or proposed closing is announced until the effective date of the layoffs or closing.  

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What agencies are offering ERIPs?

The following employers are offering an agency-wide 1-year-ERIP: DR&C, MH, and ODJFS. 

MRDD is offering a 1-year-ERIP to affected employees at the following institutions: Athens, Cambridge, Columbus, and Dayton.

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Why aren’t agencies offering longer ERIPs?

Agencies that use an ERIP are effectively making pre-payments on pension and health care contributions, so any incentive is a significant cost that will increase their expenses.

Unless there is a major savings that results (e.g., hiring new employees at the lowest pay step or declining to “back-fill” positions), agencies will offer only the shortest ERIP required.

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What are the time frames for participating?

If an employee is eligible and wishes to participate, he or she should inform the employer as soon as possible in case the participation in the plan becomes limited.

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