School districts are presently contending with challenging budgets and will continue to do so in coming years. Reductions in state funding, reserve caps, rising CalSTRS/CalPERS contribution rates, salary inflation, declining enrollment and the “fiscal cliff” are leading districts statewide to consider ways to reduce costs now and/or in the future. However, approaches like reductions in force (RIF) are often disruptive and have a negative impact on employees and their families. Instead, districts should consider creating savings through a locally designed early retirement incentive.

For nearly 40 years, PARS has helped districts analyze, design, and implement strategic early retirement incentive solutions through its Supplementary Retirement Plan (SRP). A PARS SRP can help districts reduce costs by encouraging employees to voluntarily retire or separate from their district. Moreover, it can simultaneously reward valued long-term employees for their significant contributions to the district. By implementing SRPs with nearly 400 school districts throughout California, PARS has helped them to reduce costs, restructure departments, and hire new staff to fulfill current goals and priorities, all while providing a “win-win” situation for both the districts and their employees.

Pioneer and Leader — PARS created this innovative program in the early 1980s and continues to be the leading provider of customized retirement incentives. Districts can be confident that PARS has the experience and expertise to successfully manage this critical process.

Honest, Transparent Fiscal Analysis — PARS is honest and straightforward in its analysis. Prior to offering an incentive, PARS provides a complimentary comprehensive analysis to study whether an early retirement incentive would be fiscally beneficial. If it is not, PARS is committed to providing an honest result and will recommend against offering it. This is PARS’ reputation – our clients can trust us!

Locally Controlled Plan Design — The PARS SRP is not a one-size-fits-all program. In contrast, each PARS plan is designed to meet the unique goals and objectives of each individual district.

Hands-on, Administrative Support — PARS provides comprehensive turn-key administrative support throughout the installation of the plan and will continue to be the ongoing contact for district employees as long as they are receiving benefits from the plan. PARS’ goal is to take the administrative work off the desk of district staff and onto the desk of PARS’ team of experts!

Flexible, Tax-Deferred Options for Employees — PARS SRP benefit options give employees the flexibility to meet their own individual financial needs, including the ability to rollover certain options to their own IRAs or retirement plans. This flexibility increases the likelihood that the voluntary SRP will meet their objectives, thereby increasing participation and the savings to the district.

Other challenges that districts continue to face are their growing OPEB (Other Post Employment Benefits/retiree medical) liabilities and/or rising CalSTRS/CalPERS costs. While many factors contributing to these increases are out of districts’ control, utilizing a proactive approach and prefunding into an OPEB/pension prefunding trust can significantly help address them. For nearly 20 years, PARS and CSBA have been proud partners of the OPEB Solutions Program, which has been designed to provide districts with flexibility and a broad range of low-cost investment choices to meet their unique needs.