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Government announces Voluntary Departure Program

Premier Brian Tobin today announced in Corner Brook a $10-million Voluntary Departure Program which will encourage the early departure of permanent employees who wish to leave the public service. The program will operate on a voluntary basis, and will apply to those employees who are within three years of receiving a pension and are: a) between age 50 and 54 with no less than 30 years service; b) at least age 55 with less than 30 years service, but whose age + service is equal to 85; and c) 60 years and over with between 5 and 25 years service.

"Employees within the public service have been waiting to hear from government on its human resource strategy for the future. We recognize the difficult work and family decisions that many people have to make at this stage in their lives. In making today's announcement, the government is keeping its commitment to be up front and fair with employees who may be nearing retirement age," said the premier. "We also are acting to help preserve the careers of some of our younger public servants."

"This program will provide an opportunity for those approaching retirement age, and who wish to do so, to leave without penalty," said Mr. Tobin. "More importantly, encouraging voluntary departure of these workers will allow us to preserve the jobs of younger workers and minimize the impact of workforce reduction."

"For every person who voluntarily leaves under this program, another layoff is saved within the public service," said the premier. "This is the kind of program that gives employees an incentive to leave the public service at an age when retirement is being closely examined. At the same time, the program helps government meet its restructuring goals."

While the program is targeted at people 50 years and older, the premier pointed out that the program is a modest one. Employees who are currently eligible for an unreduced pension plus normal severance pay of up to 20 weeks are not eligible to take part; no extra benefits will be extended to people in this category. Except where approved on a case by case basis, the program does not apply to deputy ministers or assistant deputy ministers.

The program provides benefits in accordance with government's existing redundancy policy, to a maximum benefit of 62 weeks. Under the program, employees who leave voluntarily will be paid at the same level as if they were laid off. All employees may choose to use their benefits to help offset early retirement pension reductions. The premier emphasized that the pension fund will not be adversely affected by this program.

President of Treasury Board, Paul Dicks, indicated that there are about 600 employees who are fully pensionable and about 400 who are within three years of a pension. "We expect that half of the employees who qualify for early retirement will take advantage of this program. This, coupled with the usual 50 per cent take up rate on normal retirements, will mean we will see about 500 people retire this year," said Mr. Dicks. "Accordingly, there will be 500 fewer employees affected by layoffs."

Mr. Dicks said that representatives of the Department of Finance and Treasury Board are meeting with unions, employees and employers to discuss how the program affects them. Employees interested in the program are advised to contact their human resource departments to discuss individual cases.

Employees taking part in the program are generally expected to leave by March 31, 1997.

Media Contacts:

     Karen M. McCarthy             Cathy Dornan
     Director of Communications    Director of Communications
     Executive Council             Premier's Office
     (709) 729-0110                (709) 682-9370

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BACKGROUNDER
Voluntary Departure Program

The objective of this program is to encourage and facilitate the early departure of those individuals age 50 and over. This will assist government in achieving its restructuring goals.

The voluntary departure program applies to people who are:

• a) between age 50 and 54 with no less than 30 years service;
  b) at least age 55 with less than 30 years service, but whose age + service is equal to 85; and
  c) 60 years and over with between 5 and 25 years service.

The program does not apply to individuals who are already eligible for an unreduced provincial pension. No additional benefits will be extended to the approximate 600 people in this category.

There are about 400 people who are within three years of a receiving a pension, and who are eligible for this program. The government expects half of the 400 employees to avail of the program. This, in addition to the 50 per cent usual take up rate on normal retirements, will mean that about 500 people will retire from the service this year. Subsequently, this means 500 less layoffs within the public service.

Here is how the program works.

STEP ONE

• Employees meeting the above criteria who are interested in leaving the public service must indicate their interest to their employer.

STEP TWO

• The employers may or may not approve each employee's case. The decision will be based on the elimination of a position.

STEP THREE

• If the employer approves the employee's case, the following benefits are available.

  A - Severance pay will be provided in accordance with the current rate structure. This applies to everyone who is eligible for severance under the policy and Collective Agreements.

  B - Redundancy pay, less the amount of severance pay received, will be provided in accordance with the current rate structure. This applies to everyone except temporary employees, executives and persons who are eligible for an unreduced pension (age 55 with 30 or more years of service; age 60 with 25 or more years of service).

  C - Employees may use their benefits to help offset the actuarial reduction in their pensions.