Charles County, Md.

Buyouts, by their very nature, are startling and generally give the impression that unless some sacrificial lambs step forward, unpleasant layoffs are going to follow.

Charles County, Md., however, developed a voluntary Early Retirement Incentive Plan (ERIP) that drew a lot of interest and helped the county prevent budget trouble.

What makes the program even more of an accomplishment was the short time frame in which it was developed and executed — a little more than a month from when the county commissioners approved the plan’s details until the informational packages were in the employees’ hands.

Human Resource Director Steve Brayman said the time eligible employees needed to hear their options and make their decisions necessitated quick action. That meant a lot of work over December 2009 from the county’s pension plan provider — Prudential Retirement. Each employee could meet one-on-one with retirement advisors.

“They were looking at the (buyout offer) from both a financial and human resources perspective — how much would their payroll decrease and how would it benefit employees who participated,” said Patrick Landry, the Prudential actuary who handled Charles County’s account.

Out of 200 eligible employees, the county placed a premium on reaching 55 takers, which would relieve budget pressure with plenty of room to spare.

“It was our first time putting something like this together, and we thought it was extremely attractive,” Brayman said. “We’re pleasantly surprised at how successful it was.”

What made the difference was an extra three years the county would credit the retiring employee with in terms of both pension and health insurance subsidy.

“If they don’t need their whole salary, it was difficult not for them to take it,” Brayman said. “It wouldn’t enhance their pension to work longer, and in some cases, people said the health care subsidy was more important anyway.”

In the end, 47 employees took the offer, which still yielded a 10-year savings of $2.8 million.

Few of those positions have been filled, though Brayman said the county departments that lost employees have gotten more efficient and kept their services intact.

“We’re thankful so many people took the offer, but just as important, the people who are still there doing the work when we haven’t replaced the positions have helped us not have to reduce services,” he said. “It’s been a real team effort.”

Executing the plan cost a $272,751 contribution to the pension plan, and $50,000 for the actuarial and administrative costs to design the plan and consult with the personnel.

“It was a once-in-a-lifetime offer,” Brayman said. “Some people come up and say they wish they had taken it, but I’m not aware of anyone saying they shouldn’t have taken it. That’s a pretty good measure of success.

 “Prudential was key in insisting we didn’t want to make a second offer that was too lucrative, otherwise you’d have people waiting around for something better to come along.”

The plan was named “Best in Category” in the 2011 NACo Achievement Awards for Personnel Management, Employee Training and Employee Benefits.