Title
Chief Administrative Office and Human Resources Department recommending the Board authorize the Director of Human Resources, with concurrence of the Chief Administrative Officer, to review and approve departmental requests to allow approved Phase 2 Retirement Incentive Plan applicants to extend their retirement date to no later than September 30,2026 to allow eligible employees to complete important fiscal year-end close and property tax roll preparation duties.
FUNDING: Retiree Health Fund.
Body
DISCUSSION / BACKGROUND
On September 16, 2025, with Legistar file 25-1498, the Board approved the Retirement Incentive Plan (Plan). The Plan aims to reduce salary and benefits expenditures by offering an opportunity for attrition through a voluntary separation incentive. The Plan in its simplest form provides as follows for those approved participants:
-If the participant retires from County service no later than December 31, 2025, they will receive $2,500 per year of full-time equivalent service, not to exceed $50,000 deposited into a Health Reimbursement Arrangement (HRA) account.
-If the participant retires from County service after December 31, 2025, but no later than June 30, 2026, they will receive $2,000 per year of full-time equivalent service, not to exceed $50,000 deposited into an HRA account.
The Plan is open to County employees, excluding elected officials and extra help, who have at least 5 years of continuous County service, and who are eligible to retire through CalPERS. Approved participants will be required to sign an Agreement and Release of Claims related to their voluntary participation and separation.
Post retirement, participants can request reimbursement of qualified medical expenses and/or medical insurance premiums from the HRA, which in addition to the one-time contribution, accrues investment earnings; participants currently have 30 investment options within the HRA.
The application period was open from 8:00 a.m. on Monday, September 29, 2025, until 5:00 p.m. on Friday, October 3, 2025. Within the application period, 101 employees applied and 95 were determined as eligible for the Plan. Within 30 minutes of the application period opening, 74 employees submitted their applications. Based on the original cap to the Plan approved by the Board, only 47 employees would have received the full amount they are eligible for, and one employee would have received 80% of the amount they are eligible to reach the maximum of $2 million.
On November 4, 2025, with Legistar file 25-1827, the Board approved expanding the Plan to allow for all eligible applicants to be approved and participate in the program.
The need has been identified to allow certain Phase 2 approved employees to extend their retirement dates to September 30, 2026, to allow them to complete important fiscal year-end and property tax roll duties. The Director of Human Resources and Chief Administrative Office had discussions about the request and agreed that it would be beneficial to the department and the County to allow this extension to ensure a timely and accurate year-end close and property tax roll. This extension would only be approved for Phase 2 participants that have already been approved for participation in the Plan and who are currently performing fiscal-related duties that are critical for fiscal year-end close and property tax roll processes. The Director of Human Resources and Chief Administrative Officer also discussed this request with the Budget Ad Hoc Committee, and they were supportive of the extension for this specific purpose.
Employees that have already been approved to participate in Phase 2 of the Retirement Incentive Plan and perform critical fiscal year-end and/or property tax roll duties may request to extend their retirement date to no later than September 30, 2026. The employee will make the request to their Department Head for consideration with sufficient justification as to the need to extend their retirement date. There is no obligation for Phase 2 approved employees to request to extend their retirement date. Department Heads will have 30 days from Board approval to request and justify any extensions for staff that perform critical fiscal year-end and/or property tax roll duties and have requested to extend their retirement date.
Any extensions granted by the Director of Human Resources, with concurrence of the Chief Administrative Officer, will not grant additional service credit for the calculation of the retirement incentive amount to any employee. Service credit will only be calculated through June 30, 2026, for purposes of the payment made to the employee’s HRA account.
ALTERNATIVES
The Board could choose to not approve the extension of retirement dates for the separation incentive.
PRIOR BOARD ACTION
11/04/2025 Legistar file 25-1827: Board approved the expansion of the Retirement Incentive Plan to allow for all eligible applicants to participate in the program.
09/16/2025 Legistar file 25-1498: Board approved the Retirement Incentive Plan.
04/08/2025 Legistar file 25-0654: Board directed staff to develop a Retirement Incentive Plan.
OTHER DEPARTMENT / AGENCY INVOLVEMENT
N/A
FINANCIAL IMPACT
There is no financial impact to this item since it is only allowing for an extension of approved Phase 2 Retirement Incentive Plan employees retirement dates with no changes to how the incentive payment is calculated.
CLERK OF THE BOARD FOLLOW UP ACTIONS
N/A
STRATEGIC PLAN COMPONENT
N/A
CONTACT
Sue Hennike, Interim Chief Administrative Officer
Joseph Carruesco, Director of Human Resources