Voluntary Separation Agreement


The Voluntary Separation Program (VSP) agreement landed in my inbox last evening.

The actual contract agreement signed by qualified individuals is the same for AFSCME union employees as for non-AFSCME IMRF/management/“Chapter 3” employees. Due to the AFSCME side letter and the difference in required numbers of service years for the two groups, I had gotten the idea they were different, so having the agreement cleared that up.

I’ve also discovered that the employees who qualified and took the VSP are prohibited from being rehired to full-time city positions for two years — which was one of the mysteries that prompted me to ask for more information about the VSP agreement in the first place.

The real story, however, is that the VSP, which was arguably sold as a substitute for an Early Retirement Incentive (ERI) under IMRF (and for which the city does not currently qualify) was offered to employees as young as 36.

The VSP qualification was not based on age at all, but only on continuous years of service at full-time employment: 20 for AFSCME employees, 10 for non-AFSCME (which might be why AFSCME had a problem with it).

Of 27 AFSCME employees who qualified for VSP, 11 were age 50 or under as of April 7, 2010. Of the 16 non-AFSCME workers, 10 were 50 or under on that date. Three staff members in the non-AFSCME group who qualified were in their 30s.

Ironically, at least one of the qualified persons in their 60s did not take the VSP.

The other part of the story is the money. The city had to borrow $1.1 million to eliminate 34 positions via VSP plus layoffs and terminations of 20 people. Incentive payouts under VSP, then, would have come to a maximum of $280,000 for 14 people; and we know unemployment benefits for the laid-off group came to about $100,000. Regular compensation for the 19 laid off AFSCME workers would have been already in the budget — wouldn’t it?! — because it was contractually guaranteed through December 2010. That leaves an awful lot of vacation and comp time and whatever else.

The following pages appear in an appendix of the VSP agreement. We have the Older Workers Benefit Protection Act to thank for the listing of ages along with eligibility.

Click on any page to see enlarged images.