Hundreds of Central Unified School District employees recently learned they are eligible for an early retirement incentive paying 80% of their final year’s salary over a five-year period.

To qualify, the employees must be age 55 or older, have worked for the district for at least five years, and agree to retire at the end of the current school year.

Out of the district’s approximately 1,650 employees, 346 are eligible and were notified they have until Oct. 30 to decide whether to enroll in the supplemental program, said  Jack Kelejian, assistant superintendent of human resources.

He called it a “win-win” for the district and its employees, adding, “I’m confident this offer will be well-received.”

Program Will Need to ‘Pencil Out’

But there’s no guarantee that the district will move forward with the retirement incentive, he said. Officials will calculate the cost of the retirement offer plus the costs of replacement employees, who likely would be at the lower end of the salary ladder, to determine whether sufficient savings might result, Kelejian said.

Central Unified made a similar offer back in 2006 or 2007 but didn’t proceed because “it didn’t pencil out,” he said.

The district is looking at potential avenues for cost-savings now in anticipation that revenues next year will drop sharply because of the economic downturn created by the COVID-19 pandemic, said Steve McClain, assistant superintendent and chief business officer.

“We know the economy is not what it was pre-COVID,” he said. “We have to make sure we’re controlling the costs.”

McClain said the district is mulling other cost-cutting measures but won’t know until January, when Gov. Gavin Newsom presents the 2021-22 budget, how deep the cuts will need to be.

The retirement packages would be prepared by Public Agency Retirement Services. According to its website, PARS has implemented more than 1,000 buyout incentives for more than 350 school districts, community colleges, and educational agencies across the U.S. The incentives have helped districts restructure their workforce and resulted in fewer or no layoffs.