Retirement/Resignation Incentive Program

HENNEPIN COUNTY’S RETIREMENT/RESIGNATION INCENTIVE PROGRAM Issued by: Human Resources Department A-400 Government Center, Minneapolis, MN 55487-0040 [email protected] Authority: County Board Resolution 05-329R1 Issue date: July 1, 2005

The County’s voluntary Retirement/Resignation Incentive Program is designed to reduce the number of potential employee layoffs. The program is offered to non-organized employees who – as of their retirement or resignation date – are on County payroll in a paid status and have at least eight years of full-time-equivalent continuous service (16,640 hours). For a detailed description of your eligibility for the Program, the benefits it offers, and other important information, see the items below.

A. Employee Eligibility and Exclusions from Participation ...... page 2 B. Program Benefits ...... page 4 C. Minnesota Health Care Savings Plan ...... page 5 D. Factors to Consider ...... page 7 E. Health Coverage Continuation ...... page 9 F. Resources ...... page 12 G. Employee Information Sessions ...... page 12 H. Procedure and Participation/Release Form ...... page 13 INSTRUCTIONS (page 13) I. Questions and Answers page 14 J. Requesting an Estimate of Eligibility and Payout page 23

FORMS: Participation Agreement and General Release Form (pages 25 through 27) Request for Incentive Eligibility and Payout (page 28)

HAVE A QUESTION NOT ANSWERED IN THIS MATERIAL? E-mail the Human Resources Department at [email protected] and ask your Incentive Program Question or call 612-348-2163 and ask to speak with the Human Resources Representative for your Department.

IF YOU ARE COVERED UNDER A LABOR AGREEMENT: As of production of this document, the Incentive Program is intended for eligible non- organized (non-union) employees and for organized employees if it is approved by your bargaining unit. You are STRONGLY URGED to contact your union steward if you have questions about this approval AND to review this document to determine if the Program will be of value to you should your union approve the Program for its members. If your union approves the Program, the deadlines specified in this document will apply to you.

1 A. EMPLOYEE ELIGIBILITY and EXCLUSIONS FROM PARTICIPATION

You are ELIGIBLE to participate in the Incentive Program if you meet ALL of the requirements shown below.

(1) Length of service: You must have eight years of full-time-equivalent continuous County service (16,640 hours) from your most-recent date of employment in a permanent County position. To request an estimate of your eligible service, see page 28.

(2) Eligible by Department and/or job class: You are eligible UNLESS the Human Resources Director has approved the exclusion of your Department or your job classification from the Program as recommended by your Department. See “Ineligibility for Incentive Program” below.

(3) Approval by union: If you are covered under a labor agreement, the Incentive Program must be approved by your exclusive representative.

(4) Notice to County: You must notify the County by August 22, 2005, using the Participation Agreement and General Release Form, of your intent to terminate employment under the Program. This form is provided on pages 25-27.

(5) Payroll status: You must be on the County payroll in a PAID STATUS* as of your termination date.

(6) Termination date: You must terminate employment on or before September 17, 2005. NOTE: Otherwise eligible employees [as defined in Items (1) through (5) above] who terminated employment on or after June 17, 2005 may also participate in the Incentive Program.

* PAID STATUS means that, on your anticipated termination date (which must coincide with a regular workday), you must be receiving pay (regular salary, paid vacation, and/or paid sick leave) and are NOT on leave without pay.

If you are on Medical Leave Without Pay or Medical Layoff, you must return to work before your anticipated termination date subject to written medical verification (satisfactory to the County) provided by your primary health care provider. Your written documentation must indicate your ability to return to work and specify, if applicable, any medical restrictions or limitations which may effect your ability to perform the essential functions of your position. In the event there is any doubt regarding your medical ability to return to work and/or if the County would like clarification regarding medical documentation received from your health care provider, the County may request your permission to contact your provider directly and/or may require you to obtain a medical evaluation by a provider of the County’s choosing (at the County’s expense). If you are determined medically able to return to active County employment: (a) You must be eligible to return to either your own position or to an eligible vacant position before your anticipated termination date; and (b) You must terminate employment on or before September 17, 2005 in order to receive the Incentive Program benefits. If a vacant position is not available, you will be placed on the Employment Layoff list and will be recalled to employment with the next available vacancy. If you cannot medically return to active County employment, all other conditions of your Medical Leave Without Pay or Medical Layoff will continue to apply.

2 If you are on Personal/Educational Leave Without Pay or Employment Layoff, you must return to active County employment to either your own position or to an eligible vacant position before your anticipated termination date and must terminate employment on or before September 17, 2005 in order to receive the Incentive Program benefits. If no vacancy exists, you will be placed on the Employment Layoff list and will be recalled to employment with the next available vacancy.

Questions? Telephone the Human Resources Department at 612-348-2163 and ask to speak with the Human Resources Representative for your Department.

INELIGIBILITY FOR INCENTIVE PROGRAM: You are NOT eligible to participate in the Program if your Department has elected to exclude all of its employees from participation OR has identified certain job classifications in your Department which are excluded (subject to approval by the Human Resources Director). Exclusions are based on business need and budgetary considerations.

Hennepin County Medical Center has made a business decision not to participate in the Early Retirement/Resignation Incentive Program. In an organization full of critical positions, which are extremely difficult to recruit and replace, HCMC has reluctantly concluded that its participation in the program at this time would not be in the best interest of its patients, employees and the communities it serves.

NorthPoint Health and Wellness Center has elected to exclude certain job classes which have been difficult to recruit and are critical to business operations and direct patient care. Excluded job classifications are:

. Clinical Psychologist, Senior . Dentist . Dentist, Senior . Medical Laboratory Technician . Medical Laboratory Technician Specialist . Medical Technologist Supervisor . Nurse, Head . Nurse, Licensed Practical . Nurse, Staff . Nursing Specialist, Clinical . Pharmacist . Pharmacy Manager . Pharmacy Technician . Pharmacy Technician, Senior . Physician, Senior Associate . Social Worker, Senior Psychiatric

The Hennepin County Sheriff’s Office has elected to exclude certain job classifications from participation in the Incentive Program. The Department has indicated that it cannot risk losing these positions should a vacancy occur under the Incentive Program because these positions are extremely difficult to recruit and are critical to business operations. Excluded job classifications are:

. Sheriff, Chief Deputy . Sheriff, Deputy . Sheriffs Captain (continued on next page)

3 . Sheriff’s Crime Laboratory Technician . Sheriff’s Detective . Sheriff’s Detention Captain . Sheriff’s Detention Deputy . Sheriff’s Detention Lieutenant . Sheriff’s Detention Sergeant . Sheriff’s Inspector . Sheriff’s Lieutenant . Sheriff’s Sergeant . Sheriff’s Telecommunicator

Under federal law, if an employer excludes individuals in certain locations and/or job titles from an Incentive Program, the employer must provide the ages and job titles of the persons who were excluded, as well as the ages and job titles of employees who were included. The federal government requires this so that employees will be in a position to evaluate whether or not to sign a release of federal age discrimination claims. As explained above, Hennepin County Medical Center is excluded and certain job classifications at NorthPoint Health and Wellness Center and in the Hennepin County Sheriff’s Office are excluded from participation. A list of jobs (otherwise eligible for Incentive Program participation), jobs ineligible, and ages of employees in those jobs is included in this document.

B. PROGRAM BENEFITS

(1) Health Care Savings Plan Payment. Payment by the County, on your behalf, of $20,000 to the Minnesota Health Care Savings Plan. This payment is not subject to tax withholding either when it is placed in your account or when you withdraw funds to pay for health and/or dental premiums and out-of-pocket expenses. The County’s payment to the Plan is intended to be issued two weeks after your last regular paycheck or after your 15-day rescission period ends, whichever is later. Once funds are placed in your account, you may withdraw them to pay for eligible expenses at any time (i.e., there is no deadline by which you must begin to use the funds). For more information about the Savings Plan, go to page 5.

(2) Retiree Health Premium Contribution. The County will add, if you elect this Benefit and whether you are a full- or part-time employee, up to two years (24 months) to your age or years of County service (or in combination of both not to exceed two years) in order to qualify you for the County’s Early Retiree Health Coverage Continuation Benefit as described in Section E beginning on page 9.

(3) Total Incentive Program Benefit. The total cash incentive paid to you (the Health Care Savings Plan Payment and Retiree Health Premium Contribution combined) cannot exceed $20,000. In other words, if you elect the Retiree Health Premium Contribution benefit, your Health Care Savings Plan benefit is reduced by the County’s estimated monthly premium contribution toward Early Retiree Health Coverage Continuation paid on your behalf up to the date you would have otherwise qualified for retiree health coverage continuation If you choose not to elect the Retiree Health Premium Contribution benefit, you will receive the Health Care Savings Plan benefit in full ($20,000). Review Section E beginning on page 9 and Question (6) on page 15.

You may obtain an estimate of your total Incentive Program benefit. Go to page 28.

4 The Incentive Program benefits listed above will be issued to you only after you have signed a Participation Agreement and General Release Form (without rescission) AND you resign or retire from County employment on or before September 17, 2005.

For information about the procedure you must follow, go to Section H on page 13.

WHAT WON’T CHANGE

Your severance pay You are eligible for the County’s lifetime maximum of 800 hours of your unused vacation leave and unused sick leave, combined, when you leave County employment (as well as pro-rated stability pay if you are eligible for a pension from PERA when you terminate), unused deferred holiday hours, unused compensatory time, and banked Special Leave Without Pay. If you are retiring, you may elect to “run down” vacation before your actual employment termination date subject to approval of your Department – refer to Question (34) on page 23.

Your eligibility for a pension You may choose to apply for your pension upon retirement or resignation under the Incentive Program. To be eligible for a full, unreduced pension, you must either be age 65 with one year of PERA service credit or meet PERA’s Rule of 90 (age and years of PERA service credit must equal 90). To be eligible for a reduced pension, you must meet PERA’s age and service credit requirements (for example, to receive a pension, a Coordinated Fund member must be at least age 55 with a minimum of three years of service).

NOTE: The Incentive Program’s Retiree Health Premium Contribution benefit – adding up to two years (24 months) to your age and/or your years of County service – is designed to help you qualify for the County’s retiree health coverage continuation. It will not impact your eligibility for, or the amount of, your pension when you terminate employment.

C. MINNESOTA HEALTH CARE SAVINGS PLAN

1. This is a summary of the Minnesota Health Care Savings Plan as authorized by Laws of Minnesota 2001, Chapter 352.98. Much more detail concerning the Plan is available as follows:

Website: www.msrs.state.mn.us - click on Health Care (HCSP) Telephone: 651-296-2761

2. The Health Care Savings Plan (HCSP) is an employer-sponsored program that provides you an account to pay medical expenses and/or health and dental insurance premiums after termination of employment. Your funds are invested, as you choose, in any of seven available investment options.

3. Funds in your account accumulate tax-free when used for eligible expenses and, when paid to you, remain tax-free.

What if you die before your account is exhausted? Your spouse and tax dependents continue to use the account for health care reimbursements on a tax-free basis. If you have no spouse or dependents, your

5 designated beneficiary (anyone you designate) can continue to submit receipts for eligible expenses; however, at this point, reimbursements become taxable income.

How do you get started? MSRS will provide you with an enrollment kit which will include an enrollment form and your personal identification number (PIN). You will be able to use your PIN to access your account online.

How will your funds be invested? Your money will be invested in the Plan’s Money Market account, an interest-bearing account, until you designate otherwise. You will be able to choose between seven different investment options and can invest in as many of the seven options as you like. You will be able to change your investment selections once per month. A prospectus describing the seven options will be available at employee information sessions (see page 12) or can be obtained from the Plan directly.

Will you receive account statements? Yes. These are issued every six months and will be mailed to your home.

How will reimbursements be made? You must first pay your medical expenses (premiums and/or out-of-pocket expenses). Keep your receipts. To obtain funds from your account, submit a request for reimbursement from your account. You can do this every week. There is a $75 minimum reimbursement requirement; therefore, submit a claim once you have incurred at least $75 of eligible expenses.

Reimbursable Health Care Expense Examples Your HCSP account can be used to cover premiums you must pay for health and dental insurance, long term care insurance, and Medicare Part B coverage as well as out-of- pocket expenses related to these benefits. For example, if you elect County- sponsored health coverage and/or dental coverage, you must pay your required premiums in accordance with the County’s instructions and then request reimbursement from your HCSP account; the HCSP will arrange an automatic reimbursement with you if you pay ongoing premiums.

What documentation do you need to obtain reimbursement? To obtain reimbursement, you must submit documentation concerning your expense and/or premium cost when you submit a request for reimbursement. If you are paying ongoing premiums, contact the Plan for information about automatic reimbursement.

Can you request reimbursements for eligible expenses of your spouse or legal dependents? Yes.

Can you receive reimbursements for eligible expenses of a domestic partner? No. Federal law, which governs the HCSP, does not recognize domestic partner status.

How often will reimbursements be made to you? Weekly, subject to the $75 minimum as mentioned above.

How will you receive your reimbursements? Direct deposits will be made to your designated bank account.

Are there provisions for loans or emergency withdrawals? No.

6 Are there provisions to transfer funds to another plan? No. Federal rules involved in the creation of another health care plan you are considering may be different from those established for this plan.

Is there an administrative fee for services? Yes. The current fee is 15 basis points per quarter (15 cents per $100) with a maximum of $35 per quarter. The calculation is based on your account balance at the end of the quarter. For more information about fees, contact the Plan directly.

Much more detail concerning the Plan is available as follows: Website: www.msrs.state.mn.us - click on Health Care (HCSP) Telephone: 651-296-2761

D. FACTORS TO CONSIDER

The Incentive Program may be of value to you IF YOU CAREFULLY EVALUATE YOUR INDIVIDUAL CIRCUMSTANCES and THEN decide it is right for you. Every employee’s personal situation is unique. Only YOU can decide if the benefits and advantages this Program offers outweigh any disadvantages of leaving County employment during the Program period.

The County cannot advise you as to whether leaving County employment and signing the Participation Agreement and General Release during the Program period makes sense for you. Talk to your family, legal advisor, financial advisor, and/or other advisor(s). Only you can make this decision. Remember that there are many factors to consider – financial and non-financial. Take your time and think through your decision. Listed below are a few factors to consider, but you will probably identify other factors which apply to you. As you read the items below, jot down your thoughts AND make time to get answers to your questions!

 Your pension with the Public Employees Retirement Association (PERA). If you leave the County earlier than originally planned, how will your pension be impacted? What will your refund from PERA be if you decide to withdraw your employee contributions rather than apply for your retirement benefits? Will PERA be your ONLY retirement income, or do you have other sources of retirement income (for example, an Individual Retirement Account or other personal savings)? Obtain detailed information and/or benefit estimates from PERA directly to help answer these questions. Also, obtain detailed information from any other pension plan and/or IRA for which you are eligible. Plan ahead and don’t wait until the end of the Program period because PERA may not be able to respond in time.

PERA telephone number: 651-296-7460

 Other County-sponsored retirement savings. Are you are a member of one or more of the County’s deferred compensation plans? Are you a participant in the County’s Supplemental Retirement Plan? If “yes,” what are your account balances? Review your most-recent account statements and/or request a current account balance. Ask about payout options and taxation of funds if you decide to withdraw funds.

ING Plan: Telephone: 612-492-0208 State Plan: Telephone: 1-877-457-6466 (push option #2) Fidelity Plan: Telephone: 1-800-343-0860

7 Supplemental Retirement Plan (to request a statement and/or payout information): Preferred: e-mail [email protected] Telephone: 612-348-3281

 Health coverage.  Are you already eligible for the County’s early retiree health coverage continuation benefit? See Section E on page 9. If you are eligible, this means you will receive the FULL $20,000 payment to the Minnesota Health Care Savings Plan and can use these funds to help pay for your share of County health premiums (if any) or other eligible health expenses.  Will the Retiree Health Premium Contribution benefit – adding up to two years to your age and/or years of County service (or in combination not to exceed two years) – qualify you for the County’s Retiree Health Coverage Continuation benefit? If “yes,” remember that the $20,000 payment to the Health Care Savings Plan will be REDUCED by the estimated contributions the County will make up to the date you would qualify for the retiree health benefit under normal requirements. Refer to Section E on page 9.  Do you have other health coverage options if you leave County employment? Medicare coverage? Other coverage? What will be your cost if you enroll on a spouse’s health plan or another health plan?  How will the Minnesota Health Care Savings Plan benefit you? Review pages 5-7.

 Other income.  If you leave County employment, will you have sufficient income to meet your personal expenses? Consider ALL of your expenses such as rent, mortgage payments, health coverage costs, car payments, other family expenses, and so on.  What personal savings or “cushion” do you have? Think about your REASONS for maintaining these savings and whether you will have to “dip into” them if and when you leave County employment.  How will the Program’s payment of your severance pay supplement your income? Are you taking into account the tax withholding which will occur? Will you want to have your severance pay directed to your deferred compensation plan to defer taxation?  What about stability pay in 2005? Refer to Question (32) on page 22.

 Release of claims. Part of the Participation Agreement and General Release provides for a release of claims against the County. You will have at least 45 calendar days after receipt of this Program description (which includes the Participation Agreement and General Release Form) to decide whether to participate in the Incentive Program. The County advises you, during this 45-calendar-day period, to seek legal counsel about whether signing the Participation Agreement and Release Form is right for you. The County provides information on the breakdown of job classifications included and excluded from the Incentive Program and the ages of employees in those job classifications to assist you in your assessment of the potential impact of this Program. The list of job classifications is also provided with this document.

 Taxes. All lump-sum payments employees receive when they leave Hennepin County employment are subject to special tax withholding. These lump-sum payments include severance pay, pro-rated stability pay, compensatory time, deferred holiday hours, and banked Special Leave Without Pay hours. Federal withholding will be 25%. State withholding will be 6.25%. FICA withholding (if you

8 pay FICA) will be 6.2%, and Medicare withholding (if applicable) will be 1.45%. Consider what your NET, or “after tax,” payments will be once this withholding has occurred and take this into account in your financial planning.

 Likelihood of future involuntary layoffs at the County. A major reason for offering the Retirement/Resignation Incentive Program is to respond to reductions in federal and state funding to the County and to reduce the number of potential employee layoffs. Implementation of the Program – while an incentive to eligible employees to consider resignation or retirement – does not guarantee that involuntary employee layoffs will be avoided in 2005 and/or in future years.

 Personal factors. For many individuals – whether employed at the County or elsewhere – working provides enjoyment and a sense of accomplishment and purpose. On the other hand, for others, a job is “simply a paycheck.” What’s your situation? Do you enjoy your job at the County because it gives you a certain amount of satisfaction and sense of fulfillment OR do you believe you might find new challenges and opportunities elsewhere? Ask yourself these questions BUT ALSO consider all other factors which could impact your decision to leave County employment under the Incentive Program. For example, will your cost of living be higher or lower if you don’t work?

 Likelihood that an Incentive Program will be offered in the future. There are no plans, and there is no guarantee, to offer this or another Retirement/Resignation Incentive Program in the future.

E. HEALTH COVERAGE CONTINUATION

All benefit-earning County employees are eligible for County-sponsored health coverage continuation upon termination or retirement. Your cost toward coverage, and whether you will receive a County contribution toward health premiums, is based on a combination of your age, length of Hennepin County employment, and/or your eligibility for a full, unreduced retirement annuity from a public retirement plan such as PERA. Here are the County’s three health coverage continuation policies. To determine your eligibility for health coverage continuation, complete the REQUEST FOR INCENTIVE ELIGIBILITY AND PAYOUT form on page 28.

Continuation Category “A” If you meet either Requirement 1, Requirement 2, OR Requirement 3 shown below, you will be eligible for a County contribution toward single health coverage – until the end of the month in which you turn age 65 – as though you are actively working and have single coverage.* You may continue dependent coverage by paying the full dependent premium. You will have the same benefits, health plan and Open Enrollment options as active benefit-earning employees.

* Hennepin County reserves the right to modify or even eliminate this benefit and subsequent policy(ies) may differ from that described herein.

In 2005, your cost toward health coverage is as follows:

 HealthPartners Primary Clinic Choice single coverage $0.00/mo.  HealthPartners Primary Clinic Choice family coverage $654.92/mo.  BlueCross BlueShield Comprehensive Major Medical single coverage $139.34/mo.  BlueCross BlueShield Comprehensive Major Medical family coverage $883.84/mo.  BlueCross BlueShield Aware Gold single coverage $203.34/mo.  BlueCross BlueShield Aware Gold family coverage $1,055.34/mo. 9 Requirement 1  If you are at least age 55 at termination/retirement, you must have at least 20 years of full-time-equivalent years of County service (equal to 41,600 hours of County employment which does NOT need to be continuous).  If you are age 62 at termination/retirement, you must have at least 15 years of full- time-equivalent years of County service (equal to 31,200 hours of County employment which does NOT need to be continuous).  If you are age 63 at termination/retirement, you must have at least 14 years of full- time-equivalent years of County service (equal to 29,120 hours of County employment which does NOT need to be continuous).  If you are age 64 at termination/retirement, you must have at least 13 years of full- time-equivalent years of County service (equal to 27,040 hours of County employment which does NOT need to be continuous).

If you meet Requirement 1, you do not have to begin receiving your PERA retirement annuity at the point of retirement.

The Incentive Program’s Retiree Health Premium Contribution (page 4), if you elect this benefit, will ADD up to two years to your age, or up to two years to your years of County service, or in combination, to qualify you for the County’s contribution toward retiree health coverage. Examples:

 TWO YEARS ADDED TO YOUR AGE: You are age 53 and have 20 years of full-time-equivalent years of County service. The Retiree Health Premium Contribution benefit will add TWO years to your age (only enough months to get you to the month of your 55th birthday) to qualify you for the County’s contribution toward your single coverage (as though you are actively working and have single coverage) until the end of the month in which you turn age 65.

 TWO YEARS ADDED TO YOUR YEARS OF SERVICE: You are age 62 and have 13 years of full-time-equivalent years of County service. The Retiree Health Premium Contribution benefit will add TWO years to your years of service (only enough months to get you to the month in which you would reach 15 years of service) to qualify you for the County’s contribution toward your single coverage (as though you are actively working and have single coverage) until the end of the month in which you turn age 65.

 TWO YEARS ADDED IN COMBINATION: You are age 61 and have 14 years of full-time-equivalent years of County service. The Retiree Health Premium Contribution benefit will add ONE year to your age and ONE year to your years of service (only enough months to get you to your 62nd birthday with “15 years” of service) to qualify you for the County’s contribution toward your single coverage (as though you are actively working and have single coverage) until the end of the month in which you turn age 65.

NOTE: You may request an estimate of your non-continuous years of County service by completing and submitting the REQUEST FOR INCENTIVE ELIGIBILITY AND PAYOUT form on page 28.

Requirement 2 At the time you retire, you qualify for and apply for a full, unreduced retirement annuity (other than a deferred annuity) – based on a minimum of ten years (full- or part-time, or in combination) of Hennepin County service – from an approved Minnesota public service retirement program, such as PERA. (Example: PERA’s Rule of 90.)

The Incentive Program’s Retiree Health Premium Contribution (page 4), if you elect this benefit, will adjust your County service by up to TWO YEARS. Example:

10  TWO YEARS ADDED TO YOUR COUNTY SERVICE: You qualify for and apply for a full, unreduced retirement annuity (other than a deferred annuity), such as PERA’s Rule of 90, based on a minimum of eight years (rather than ten years) of County service (full- or part-time, or in combination).

Requirement 3 At the time you retire, you qualify for and apply for a retirement annuity (other than a deferred annuity) with at least 25 years of covered service from an approved Minnesota public service retirement program such as PERA, at least ten years (full- or part-time, or in combination) of which must have been with Hennepin County. (Coordinated Fund members are eligible for a pension with 30 years of service credit.)

The Incentive Program’s Retiree Health Premium Contribution (page 4), if you elect this benefit, will adjust your County service by up to TWO YEARS. Example:

 REDUCE 25-YEAR REQUIREMENT BY TWO YEARS: You qualify for and apply for a retirement annuity (other than a deferred annuity) with at least 23 years of covered service from an approved Minnesota public service retirement program such as PERA, at least ten years of which must have been with the County.

Continuation Category “B” – NO CHANGE WITH INCENTIVE PROGRAM If you don’t qualify for Continuation Category “A” but – at the time you terminate or retire – are eligible to receive a retirement annuity from a Minnesota public retirement plan such as PERA (your public pension service credit need NOT be exclusively with Hennepin County), you may remain in the County’s group health coverage program indefinitely by paying the full premium yourself. You will have the same benefits, health plan and Open Enrollment options as active benefit-earning employees. In 2005, your cost toward health coverage is as follows:

 HealthPartners Primary Clinic Choice single coverage $363.66/mo.  HealthPartners Primary Clinic Choice family coverage $1,018.58/mo.  BlueCross BlueShield Comprehensive Major Medical single coverage $503.00/mo.  BlueCross BlueShield Comprehensive Major Medical family coverage $1,247.50/mo.  BlueCross BlueShield Aware Gold single coverage $567.00/mo.  BlueCross BlueShield Aware Gold family coverage $1,419.00/mo.

COBRA continuation – NO CHANGE WITH INCENTIVE PROGRAM If you do not qualify for Continuation Categories “A” or “B” above, you may remain in the County’s group health coverage program for up to 18 months by paying the full premium yourself. You will have the same benefits, health plans and Open Enrollment options as active benefit-earning employees. In 2005, your cost toward health coverage is the same as that shown for Continuation Category “B” plus a 2% administrative fee.

QUESTIONS ABOUT YOUR ELIGIBILITY FOR HEALTH COVERAGE CONTINUATION? Complete the REQUEST FOR INCENTIVE ELIGIBILITY AND PAYOUT form on page 28.

F. RESOURCES

You may have very specific questions about other County benefits and how they will be impacted if you leave County employment. Here is a list of resources to help you find answers.

 Public Employees Retirement Association (PERA): telephone 651-296-7460 or click on www.mnpera.org.

11  ING deferred compensation plan: telephone 612-492-0208 or click on www.ingretirementplans.com.

 State deferred compensation plan: telephone 1-877-457-6466 or click on www.mndcplan.com.

 Fidelity deferred compensation plan: telephone 1-800-343-0860 or click on www.mysavingsatwork.com.

 Deferring severance pay (including lump-sum payments under the Incentive Program): contact a deferred compensation plan directly (policies may differ between plans).

 1% Supplemental Retirement Plan: telephone 612-348-3281 or click on [email protected].

 Minnesota Health Care Savings Plan: telephone 651-296-2761 or click on www.msrs.state.mn.us. The Benefits Unit also has Plan booklets; e-mail [email protected] or telephone 612-348-3530.

G. EMPLOYEE INFORMATION SESSIONS

General information sessions have been scheduled at various locations shown below.

If you feel an overview of the Program will be helpful, you may attend one of these sessions on County time with prior supervisory approval; a family member or advisor may attend with you. After a brief summary of the Program, a representative of the Minnesota Health Care Savings Plan will make a short presentation; the remaining time during the sessions will be devoted to answering general questions.

NO PRE-REGISTRATION IS REQUIRED. SEATING WILL BE ON A FIRST-COME, FIRST-SERVED BASIS.

Wed., July 6 9:00 – 10:30 a.m., Government Center, a-level Auditorium Thurs., July 7 2:00 – 3:30 p.m., Ridgedale Library, Robert Rohlf Room Mon., July 11 2:30 – 4:00 p.m., Century Plaza, Rooms 661/701, lower level Tues., July 12 2:30 – 4:00 p.m., Public Works, Medina, Large Training Room Wed., July 13 9:00 – 10:30 a.m., Health Services Building, Room 110 Thurs., July 14 1:30 – 3:00 p.m., Government Center, a-level Auditorium

12 H. PROCEDURE and PARTICIPATION/RELEASE FORM

Carefully review this Program description and get answers to your questions. Resources:

(a) Your departmental Human Resources Representative (call 612-348-2163 for his/her name) can:

 Answer questions about the Program.  Help you review your current County-sponsored benefits.

(b) The Human Resources Benefits Unit can:

 Help you determine if you already qualify for the Early Retiree Health Coverage Continuation OR if you WILL qualify if you elect participation in the Incentive Program. Use the REQUEST FOR INCENTIVE ELIGIBILITY AND PAYOUT form on page 28 to obtain this information.  Help you estimate your health premium cost (if any) in 2005 and how this may reduce your $20,000 Health Care Savings Plan benefit. Health plan premiums as well as the County’s contribution toward premiums change every year. The County will assume it will increase its contribution by 15% per year to give you an estimate. If the County overestimates its contribution for purposes of this calculation, such that you should have received more funds directed to your Health Care Savings plan account, the County will submit the balance to your account at the point you would normally qualify for the County health premium contribution had you continued working. If the County underestimates its contribution for purposes of the calculation, the County will absorb this cost with no penalty to you.  Again, use the REQUEST FOR INCENTIVE ELIGIBILITY AND PAYOUT form on page 28 to obtain information.

(c) Look at the issues you need to consider – refer to Section D – “Factors to Consider” on page 7. The County advises you to consult with a lawyer and financial advisor. The decision to participate in the Program is yours, and yours alone. Be comfortable with the decision you make!

(d) If you decide that this Program is right for you, go to the INSTRUCTIONS below. If you don’t think this Program is right for you, do nothing.

INSTRUCTIONS: IF YOU WISH TO LEAVE COUNTY EMPLOYMENT UNDER THE COUNTY’S RETIREMENT/RESIGNATION INCENTIVE PROGRAM, do the following:

(1) Make sure you have carefully reviewed all of the Incentive Program information. Refer to Question (10) on page 18 to find out about what kind of advance notice you must give if you intend to terminate employment. You have until August 22, 2005 to consider the Program and make your decision.

(2) You must complete the Participation Agreement and General Release Form (pages 25 through 27). Specific instructions are as follows:

(a) Sign and date the Participation Agreement and General Release Form. Have it witnessed (your form does not need to be notarized).

13 (b) Make TWO COPIES of your Participation Agreement and General Release Form.

(c) NO LATER THAN AUGUST 22, 2005,

 Give the original of your signed and witnessed Participation Agreement and General Release Form to your supervisor. This is your formal retirement/resignation notice to the County. It is the only way you can terminate County employment and receive the Incentive Program benefits. See Question (10) on page 18 for information about the minimum notice time you must give to your supervisor.

 Send one copy of your signed and witnessed Participation Agreement and General Release Form to the County’s Human Resources Director at A-400 Government Center, ATTN: Incentive, mail code 040.

 Keep the other copy of your signed and witnessed Participation Agreement and General Release Form for your records.

(3) Withdrawing your resignation under the Incentive Program: You may rescind your election to leave County employment and your Participation Agreement and General Release provided you do so no later than 15 calendar days after you sign your Participation Agreement and General Release Form. Your rescission must be IN WRITING. It can be delivered either by hand by 5:00 p.m. on the 15th calendar day OR by certified mail return receipt requested, postmarked by the 15th calendar day. Your rescission MUST be directed ONLY to the County’s Human Resources Director, A-400 Government Center, Minneapolis, MN 55487-0040 (mail code 040).

I. QUESTIONS and ANSWERS

What follows are typical questions and answers concerning the County’s Retirement/ Resignation Incentive Program. Read through the list of questions. You may find your question already answered. If you have a question not listed here, you may submit it to the Human Resources Department’s Benefits Unit by sending an e-mail to [email protected] or calling 612-348-3530.

* * * * *

(1) WHY IS THE VOLUNTARY PROGRAM BEING OFFERED? The County’s Retirement/Resignation Incentive Program is intended to help the County address financial needs and reduce the number of potential employee layoffs.

(2) DO I QUALIFY? The program is offered to any non-organized employee in an eligible job classification and Department who will have 16,640 hours of full-time-equivalent continuous service as of the effective date of their stated retirement or resignation date (which must be no later than September 17, 2005). This is equivalent to eight years of continuous full-time-equivalent service. Refer to the Section A –

14 “Employee Eligibility” on page 2. If you have questions about whether you qualify, complete and submit the REQUEST FOR INCENTIVE ELIGIBILITY AND PAYOUT form on page 28.

If you are covered under a labor agreement, the Program must be approved by your exclusive representative. Talk with your union steward. Also, if you are covered under the Sheriff’s Supervisors’ Association, please note that you must have 20,800 hours of full-time-equivalent continuous service as of the effective date of your retirement or resignation date (which must be no later than September 17, 2005). If authorized to participate, organized (union) employees are subject to the same deadlines for the Incentive Program as non-organized (non-union) employees.

(3) SHOULD I TAKE ADVANTAGE OF THE PROGRAM? The County cannot advise you as to whether leaving County employment during the Program period makes sense for you. Take your time and think through your decision. Talk to your family and/or others you trust. Consult your financial and legal advisors. Only you can make this decision. Remember that there are many factors to consider – both financial and non-financial.

The Incentive Program is intended to provide an incentive for employees to leave County employment with benefits not normally provided to terminating or retiring employees. The Program may be of value to you IF YOU CAREFULLY EVALUATE YOUR INDIVIDUAL CIRCUMSTANCES and THEN decide it is right for you. Every employee’s personal situation is unique. Only YOU can decide if the benefits and advantages this Program offers outweigh any disadvantages of leaving County employment during the Program period. Refer to Section D – “Factors to Consider” on page 7.

(4) HOW WERE THE BENEFITS OF THE PROGRAM DEVELOPED? County Administration and Human Resources developed the Program benefits.

(5) HOW CAN I GET AN ESTIMATE OF THE TOTAL INCENTIVE BENEFIT I WILL RECEIVE? All eligible employees who elect participation in the Program will receive the $20,000 payment toward the Minnesota Health Care Savings Plan. This payment is reduced by the County contributions toward your health plan premiums if you elect the Retiree Health Premium Contribution benefit which means that the County will add up to two years (24 months) to your age and/or your years of County service (or in combination) to qualify you for the County’s Early Retiree Health Coverage Continuation benefit.

To request an estimate of the County’s payment to the Minnesota Health Care Savings Plan, complete and submit the REQUEST FOR INCENTIVE ELIGIBILITY AND PAYOUT form on page 28.

(6) HOW WILL THE COUNTY CALCULATE WHAT IT WILL CONTRIBUTE TOWARD MY MINNESOTA HEALTH CARE SAVINGS ACCOUNT?

 If you want the County to add up to two years (24 months) to your age and/or your years of service in order to qualify you for the County’s

15 Early Retiree Health Coverage Continuation benefit, the County will do the following.

(a) In 2005, the County contribution toward your health coverage will be $363.66 per month. This contribution will begin effective November 1, 2005. (b) Beginning January 1, 2006, the County will assume its contribution will increase by 15% each year until the point you would have normally qualified for the Early Retiree Health Continuation benefit. (c) Therefore, in 2005, for November and December, 2005, the County will contribute $727.32 ($363.66 multiplied by two months). This amount will be subtracted from the $20,000 payment to the Health Care Savings Plan at the time of termination of employment. (d) In 2006, it is assumed that the County will contribute $418.21 per month toward your health coverage. This is equivalent to $363.66 plus 15%. This amount will be subtracted from the $20,000 payment to the Health Care Savings Plan at the time of termination of employment. (e) In 2007, it is assumed that the County will contribute $480.94 per month toward your health coverage. This is equivalent to $418.21 plus 15%. This amount will be subtracted from the $20,000 payment to the Health Care Savings Plans at the time of termination of employment.

Your personal situation – that is, how many months or years (up to two years) must be added to qualify you – will depend on your age and your years of County service at the time you terminate. The following gives you an EXAMPLE of how the benefit will be applied.

EXAMPLE: As of September 17, 2005, Martin just turned age 53 and has 20 years of full-time-equivalent years of service. Martin can elect the Retiree Health Premium Contribution benefit. By choosing this benefit, the County will add two years (24 months) to Martin’s age to qualify him for the Early Retiree Health Continuation benefit. Based on a September 17, 2005 termination date, Martin’s 24-month period begins on November 1, 2005 and ends on October 31, 2007. The total County contribution toward Martin’s retiree health coverage up to the date he would have had 20 years of full-time- equivalent service will be calculated as follows:

 In 2005, Martin will receive contributions for two months (November through December). The County contribution will be $363.66 per month (total contributions for 2005 = $727.32).

 In 2006, Martin will receive contributions for 12 months (January through December). The County contribution will be $418.21 per month (total contributions for 2006 = $5,018.52).

 In 2007, Martin will receive contributions for 10 months (January through October). The County contribution will be $480.94 per month (total contributions for 2007 = $4,809.40).

The County’s total contributions toward retiree health coverage, to the point Martin would have had 20 years of full-time-equivalent service, will be $10,555.24. This amount will be subtracted from the $20,000 payment to the Health Care Savings Plan. Therefore, Martin’s Incentive benefits will be as follows:

16 $10,555.24 Martin’s Retiree Health Premium Contribution benefit + $ 9,444.76 Martin’s Health Care Savings Plan benefit $20,000.00 MARTIN’S TOTAL INCENTIVE PROGRAM BENEFITS

This is an example only. To obtain an estimate of eligibility for the County’s contribution toward health coverage, complete the REQUEST FOR INCENTIVE ELIGIBILITY AND PAYOUT form on page 28.

IMPORTANT NOTE: The County contribution toward health coverage in 2006 and 2007 must be an estimate only. If – at the end of the time period during which the County contributed toward retiree health coverage as part of the Incentive Program – it is determined that the County overestimated its contributions in determining what funds are deposited in your Health Care Savings Plan account, the overestimated amount will be deposited in your Health Care Savings Plan account at the point you would have normally qualified for the County contribution toward retiree health coverage. If the County underestimated its contributions, this cost will be absorbed by the County, not you; in other words, there will be no change in the amount of funds deposited for you in your account.

 If you already meet the County’s age and length of service requirements to qualify for the Early Retiree Health Coverage Continuation benefit OR you decline the Incentive Program’s Retiree Health Premium Contribution benefit, the County will pay $20,000 (without any tax withholding) to the Minnesota Health Care Savings Account on your behalf. For information about your eligibility for health coverage continuation, submit the REQUEST FOR INCENTIVE ELIGIBILITY AND PAYOUT form on page 28.

(7) WHAT IF I CHANGE MY MIND AND DECIDE NOT TO LEAVE COUNTY EMPLOYMENT? The Program allows you to change your mind. You have 15 calendar days from the date you sign the Participation Agreement and General Release Form to rescind your decision. To rescind your election to participate, your notice must be in writing and must be submitted ONLY to the County’s Human Resources Director (A-400 Government Center, Minneapolis, MN 55487-0040, mail code 040). Do not submit your written notice to your immediate supervisor. Delivery of your written rescission to the Human Resources Director can be in person by 5:00 p.m. on the 15th calendar day or can be mailed by certified mail return receipt requested, postmarked by the 15th calendar day.

(8) WILL THE COUNTY OFFER THIS PROGRAM IN THE FUTURE? There is NO GUARANTEE that this or another Retirement/Resignation Incentive Program will be offered again. There are no plans to offer an Incentive Program on a regular basis in the future.

(9) WHERE CAN I GET GENERAL INFORMATION ABOUT RETIRING FROM THE COUNTY? The Human Resources Department’s Benefits Unit’s “I’m Thinking About Retiring” handout is an excellent source of information. Topics include the general resignation process (assuming no Incentive Program procedure), health coverage continuation, and other County benefits. Go to HCNET, click on BENEFITS, then click on RETIREMENT; the handout is in “web form” or you can download it. You

17 may also obtain a copy of this handout by e-mailing the Benefits Unit at [email protected] or telephoning 612-348-3530.

(10) PRIOR NOTICE OF RESIGNATION – WHAT IS MY MINIMUM NOTICE TIME? Depending on your job classification, you must give at least a 14-calendar-day notice or a 28-calendar-day notice. However, with the approval of your supervisor, this minimum notice time may be waived. To find out what minimum notice time applies to you, contact the Human Resources Department at 612-348-2163.

(11) SEVERANCE PAY – CAN I HAVE MY SEVERANCE PAY PAID DIRECTLY TO PERA TO BUY BACK SERVICE CREDIT? No, but you could put these funds in one or more of the County’s deferred compensation plans and then withdraw these funds from your deferred compensation plan to repay your PERA refund. Talk to your deferred compensation plan for more information – see Question (12) for telephone numbers.

(12) SEVERANCE PAY – CAN I DELAY RECEIVING MY SEVERANCE PAY UNTIL THE NEXT TAX YEAR? No. Severance pay is issued two weeks after your last regular paycheck. These payments are taxable in the year you receive them. However, you may wish to consider deferral through a County deferred compensation plan if you are eligible. This allows you to defer all, or a portion, of your severance pay and vacation pay by directing the funds into the County’s deferred compensation plans. For more information about severance pay deferral, you should contact a deferred compensation plan directly (rules may differ between plans).

 ING deferred compensation plan: telephone 612-492-0208 or click on www.ingretirementplans.com.  Fidelity deferred compensation plan: telephone 1-800-343-0860 or click on www.mysavingsatwork.com.  State deferred compensation plan: telephone 1-877-457-6466 or click on www.mndcplan.com.

(13) HEALTH COVERAGE – IS THE COUNTY OFFERING IMPROVED HEALTH COVERAGE CONTINUATION? Yes, for some employees who participate in the Incentive Program. Refer to the Retiree Health Premium Contribution benefit on page 4.

(14) HEALTH COVERAGE – I WON’T QUALIFY FOR RETIREE HEALTH COVERAGE CONTINUATION EVEN WITH THE INCENTIVE PROGRAM. CAN I CONTINUE COVERAGE? Yes. There are two ways you will be eligible to continue health coverage at entirely your own expense. In both instances, $20,000 will be paid, on your behalf, to the Minnesota Health Care Savings Plan. You can use these funds to pay for your continuation premiums shown below.

First, if you will qualify for a pension from PERA when you terminate employment, you will be eligible to continue County-sponsored health coverage, indefinitely, at entirely your own expense. (To determine if you qualify for a pension from PERA, contact PERA at 651-296-7460.) Costs in 2005 are as follows:

18  HealthPartners Primary Clinic Choice single coverage $363.66/mo.  HealthPartners Primary Clinic Choice family coverage $1,018.58/mo.  BlueCross BlueShield Comprehensive Major Medical single coverage $503.00/mo.  BlueCross BlueShield Comprehensive Major Medical family coverage $1,247.50/mo.  BlueCross BlueShield Aware Gold single coverage $567.00/mo.  BlueCross BlueShield Aware Gold family coverage $1,419.00/mo.

Second, if you don’t qualify for a pension from PERA when you terminate employment, you will be eligible for COBRA continuation which allows you to continue health coverage for up to 18 months. Costs in 2005 are as follows:

 HealthPartners Primary Clinic Choice single coverage $370.93/mo.  HealthPartners Primary Clinic Choice family coverage $1,038.95/mo.  BlueCross BlueShield Comprehensive Major Medical single coverage $513.06/mo.  BlueCross BlueShield Comprehensive Major Medical family coverage $1,272.45/mo.  BlueCross BlueShield Aware Gold single coverage $578.34/mo.  BlueCross BlueShield Aware Gold family coverage $1,447.38/mo.

Also, see Question (15) concerning continuation of life insurance, long term disability insurance, and dental coverage.

(15) OTHER BENEFITS CONTINUATION: CAN I CONTINUE LIFE INSURANCE, LONG TERM DISABILITY, AND DENTAL COVERAGE? You are not able to continue long term disability insurance but you ARE eligible to continue your County life insurance and dental coverage.

Life insurance: You can continue this coverage for up to 18 months by paying the full premium plus a 2% administrative fee. In 2005, your $20,000 Basic Term Life insurance cost is $1.22 per month. If you have Additional/Dependent Term Life insurance, your cost will be your current monthly cost through payroll deduction plus a 2% administrative fee. (These premiums are not an eligible expense under the Minnesota Health Care Savings Plan.)

Dental coverage: You can continue this coverage for the same time period you are eligible to continue health coverage. If you are eligible for indefinite health coverage continuation – see Question (14) – your cost in 2005 is $23.28/month for single coverage or $56.74/month for family coverage. If you are eligible for COBRA continuation – see Question (14) – your cost in 2005 is $23.75/month for single coverage or $57.87/month for family coverage. (These premiums, and out-of- pocket expenses, are eligible expenses under the Minnesota Health Care Savings Plan.)

(16) CONTINUATION COVERAGE PREMIUMS: HOW DO I PAY THEM? Premiums must be paid EVERY MONTH. Because the County does not have the capacity to send you a monthly bill, you will need to remember to pay your premiums every month. You will be encouraged to enroll in the County’s AUTO-PAY Program which allows you to pay your premiums via direct transfer of funds from your designated bank account. If you elect continuation, the County’s Benefits Unit will send you AUTO-PAY enrollment materials. For more information about AUTO- PAY, see Question (17).

19 (17) WHAT IS THE COUNTY’S AUTO-PAY PROGRAM AND DO I HAVE TO PARTICIPATE IN IT? What is the AUTO-PAY Program? The County does not send monthly bills to individuals who continue health coverage, life insurance, and/or dental coverage. So, you must REMEMBER to pay your premiums EVERY MONTH. AUTO-PAY is designed to make your monthly premium submissions easier and more convenient so that you don’t forfeit continuation coverage if you fail to pay your premiums on time. You designate your bank account from which your payments are withdrawn electronically. This could be a savings account, checking account, or Credit Union account of some kind.

Do I have to participate in AUTO-PAY? No, you are not required to enroll in AUTO-PAY. But enrollment in AUTO-PAY is an easy way for you to make sure your premiums are paid on time. You can enroll in AUTO-PAY at any time.

(18) LEAVE OF ABSENCES: I’M ON UNPAID LEAVE OF ABSENCE or LAYOFF. DO I QUALIFY FOR THE INCENTIVE PROGRAM? First, you must meet the eligibility criteria mentioned in Section A of this material (pages 2-4). Second, you must return to paid status (to your position or to an eligible vacant position) prior to terminating employment on or before September 17, 2005. Third, you are subject to the August 22, 2005 notice requirement described in Section H beginning on page 13 (even if you don’t return to paid status by August 22, 2005).

(19) MINNESOTA HEALTH CARE SAVINGS PLAN – WHAT IS IT? The Savings Plan is a health care expense reimbursement plan much like the County’s Health Care Expense Account but it has additional features. It allows you to use funds in the Plan to pay for health and dental insurance premiums and to cover out-of-pocket medical expenses. Funds in your account earn interest based on your investment selection(s). Funds you use are reimbursed to you tax-free. For a more detailed summary of the Savings Plan, go to pages 5-7.

(20) MINNESOTA HEALTH CARE SAVINGS PLAN – CAN I OPT OUT OF THIS PLAN? No. If you retire/resign under the Incentive Program, the County will submit, on your behalf, $20,000 or the reduced amount if you receive the Retiree Health Premium Contribution benefit, to the Minnesota Health Care Savings Plan. You cannot elect to opt out per IRS Regulations. For a more detailed summary of the Savings Plan, go to pages 5-7.

(21) MINNESOTA HEALTH CARE SAVINGS PLAN – CAN I ADD MONEY TO MY ACCOUNT IN ADDITION TO THE $10,000 THAT THE COUNTY WILL PUT IN? No. IRS rules prohibit voluntary contributions into this Plan. For a more detailed summary of the Savings Plan, go to pages 5-7.

(22) PERA – WHY ISN’T PERA PART OF THE INCENTIVE PROGRAM? Providing enhanced PERA pension benefits is not within the County’s control. Changing PERA benefits would require Legislative approval and would be

20 prohibitively expensive because any additional pension benefits would be expected to be funded on an actuarial present value basis.

(23) PERA – WHAT IS THE PENSION REDUCTION IF I DRAW MY PENSION NOW, RATHER THAN LATER? You are strongly urged to contact PERA to obtain specific information.

Telephone: 651-296-7460 Website: www.mnpera.org

(24) PERA – DO I HAVE TO QUALIFY FOR THE RULE OF 90 TO BE ELIGIBLE FOR THE INCENTIVE PROGRAM? No. Qualification for the County’s Incentive Program is not related to PERA; rather, it is based on eligibility described in Section A – “Employee Eligibility” on page 2. If you have questions about your retirement benefit, you are strongly urged to contact PERA directly.

(25) PERA – I WON’T MEET THE RULE OF 90 UNTIL AFTER SEPTEMBER 17, 2005. IF I QUALIFY FOR THE INCENTIVE PROGRAM AND RETIRE/TERMINATE DURING THE PROGRAM PERIOD, MUST I START RECEIVING MY PENSION RIGHT AWAY? Not necessarily; see NOTE below. You can defer (delay) applying for your pension until you actually QUALIFY for the Rule of 90 based on your age (your accumulation of service credit ends when you leave County employment); you are strongly urged to contact PERA to obtain specific information.

NOTE: If you do not receive your pension at the time you leave County employment, this could impact your eligibility for County-paid health coverage continuation to age 65 – see Requirements 2 and 3 in Section E – “Health Coverage Continuation” (page 11). Use the REQUEST FOR INCENTIVE ELIGIBILITY AND PAYOUT form on page 28 if you have any questions about your eligibility.

(26) PERA – IS THERE, OR WILL THERE BE, A RULE OF 85? Only the State Legislature can establish a PERA Rule of 85. Given PERA’s financial status, a Rule of 85 isn’t likely in the foreseeable future.

(27) REINSTATEMENT/REHIRE TO COUNTY EMPLOYMENT – IF I LEAVE, CAN I RETURN TO COUNTY EMPLOYMENT LATER? If you retire or resign under the Incentive Program, you may not return to a permanent position in your own or any other job classification. However, you may be rehired as an intermittent or temporary employee.

21 (28) ROLLOVERS – CAN I ROLL OVER MY SEVERANCE (UNUSED SICK LEAVE), UNUSED VACATION PAY, AND/OR STABILITY PAY? It is intended that these payments will be issued to you two weeks after your last regular paycheck, subject to tax withholding (refer to Section C which discusses “taxes”). None of these payments can be rolled over into an individual retirement plan or PERA. However, unused sick leave severance pay and unused vacation pay may be deferred into one of the County’s deferred compensation plans. There are certain requirements. For more information, contact a deferred compensation plan directly as plan rules may vary.

(29) SEVERANCE PAY – I HAVE OVER 800 HOURS OF UNUSED PAID LEAVE. UNDER THE INCENTIVE PROGRAM, WILL I RECEIVE ALL OF THESE HOURS, INCLUDING HOURS OVER 800 HOURS, IN SEVERANCE? No. The County’s standard severance policy still applies. This means that the maximum you can receive in severance, in your lifetime, is 800 hours of unused sick leave and unused vacation COMBINED.

It is possible that you will receive all, some, or none of your unused sick leave hours. Why? The County will determine if you were paid severance previously and then pay you the balance upon termination of employment up to the 800-hour maximum in your lifetime.

NOTE: Regardless of what severance you were paid previously, you WILL receive your unused vacation leave hours, compensatory time not used, deferred holiday hours, and Special Leave Without Pay (SLWOP) hours banked. Also, if you are eligible for a pension at the time you terminate your employment, you may be able to “run down” your vacation time subject to supervisory approval.

You may request an estimate of your anticipated severance pay (and/or unused paid vacation, compensatory time not used, deferred holiday hours, and banked SLWOP time) by completing the REQUEST FOR INCENTIVE ELIGIBILITY AND PAYOUT form on page 28.

(30) SEVERANCE PAY – I ALREADY RECEIVED SEVERANCE PAY WHEN I LEFT COUNTY EMPLOYMENT BEFORE. HOW DOES THIS FIGURE INTO THE INCENTIVE PAYMENT? Payment of severance is not included as part of the Incentive Program benefits. The County’s standard severance policy still applies. This means that the maximum you can receive in severance, in your lifetime, is 800 hours of unused sick leave and unused vacation COMBINED.

(31) SOCIAL SECURITY - WHAT ABOUT IT? Social Security retirement benefits can’t be received prior to age 62. You are strongly encouraged to contact Social Security at 1-800-772-1213 to obtain more information.

(32) STABILITY PAY – WILL I RECEIVE IT? Employees are eligible for pro-rated stability pay at the time they leave County employment if they qualify for a pension from an approved Minnesota public retirement plan (such as PERA) at the time they terminate employment. In this

22 case, stability pay is pro-rated based on the number of hours worked through November 30 in the year of retirement/termination.

(33) UNEMPLOYMENT BENEFITS – WILL I BE ELIGIBLE FOR THEM? Because participating employees are voluntarily resigning, the County will contest any unemployment compensation filing by an employee who resigns or retires under the Incentive Program.

(34) VACATION TIME – CAN I “RUN DOWN” MY VACATION TIME AND STILL QUALIFY FOR THE PROGRAM? IF I RUN IT DOWN AND HAVE VACATION TIME LEFT OVER, WILL I RECEIVE VACATION PAY IN A LUMP SUM FOR THE HOURS I DON’T USE? Yes. Under the Program, employees are able to designate a Last Working Day, go on vacation and then, at the end of their vacation, formally separate from County employment no later than September 17, 2005. Requesting vacation leave is always subject to supervisory approval. Your eligible UNUSED vacation leave, if any, will then be paid to you two weeks after your last regular paycheck. Remember that you could be subject to the 800-hour lifetime severance maximum; go to Questions (29) and (30).

J. REQUESTING AN ESTIMATE OF ELIGIBILITY AND PAYOUT

Do you want to know if you have the required eligible County service to qualify for the Incentive Program?

Do you want to know if you will qualify for County-paid retiree health coverage?

Do you want to know how the payment to the Minnesota Health Care Savings Plan will be reduced if you elect the Retiree Health Premium Contribution benefit?

Complete the REQUEST FOR INCENTIVE ELIGIBILITY AND PAYOUT form on page 28. Send your completed form to the Human Resources Department, ATTN: Incentive, A-400 Government Center, Minneapolis, MN 55487-0040 (mail code 040).

The County will attempt to respond to your request within three working days.

WHAT WILL YOUR INCENTIVE ELIGIBILITY AND PAYOUT ESTIMATE tell you?

The County’s response to your INCENTIVE BENEFIT REQUEST FORM will give you an estimate of your Incentive Program benefits. Based on your specified termination date, the County will provide four pieces of information: (1) Your estimated non-continuous hours of service since your most-recent date of hire; (2) Your estimated eligibility for the County’s Early Retiree Health Coverage Continuation benefit; (3) Your total Incentive Program benefits (i.e., the payment to the Health Care Savings Plan with, and without, your electing the Program’s Retiree Health Premium Contribution benefit; and (4) Other information. Details about these four pieces of information follow.

1. Your benefit estimate will provide your estimated continuous hours of service since your most-recent date of hire. This will tell you if you will have the required County service, as of your specified termination date, to qualify for the Program.

To qualify for the County’s Retirement/Resignation Incentive Program on the date you terminate employment no later than September 17, 2005, you must be eligible, as of your termination date, for unused paid sick leave as severance by having eight years of continuous County service (equal to 16,640 hours of service) (or, if you are covered by 23 the Sheriff’s Supervisors’ Association, ten years of County service equal to 20,800 hours of service) from your MOST-RECENT date of hire, rehire, or reinstatement to a permanent County position. Continuous hours include:

- regular hours - paid sick leave hours - paid vacation leave hours - paid holidays - Special Leave Without Pay hours used - military leave hours - compensatory hours used - Deferred holiday hours used

The County will use an estimate of your scheduled hours worked until your specified termination date. Scheduled hours (also known as “appointed” hours if you are a Medical Center employee) per pay period will be multiplied by the number of pay periods between the effective date of the current payroll information (as of the date the estimate is generated) up to your specified termination date. Example:

. As of pay period ending July 9, 2005, Mary has 16,300 hours of continuous service. . Mary’s scheduled work hours are 80 hours per pay period. . Between pay period ending July 9, 2005 and pay period ending September 17, 2005, there will be five pay periods. . Multiply 80 hours by five. This equals 400 hours. . Add 16,300 hours and 400 hours. This equals 16,700 continuous hours as of September 17, 2005. . Mary will have 16,700 continuous hours of service as of September 17, 2005. This exceeds the 16,640 hours required. Therefore, Mary will qualify for the Program.

REMEMBER: Your benefit estimate will be just this – an ESTIMATE of your continuous hours. The estimate assumes that you will meet your scheduled work hours as recorded on the payroll/personnel system (the list of hours that update continuous hours are listed above).

If you work less hours than your scheduled hours (leave without pay hours) or your scheduled hours change between now and your specified termination date, this may affect your eligibility for the Retirement/Resignation Incentive Program; if this occurs and you need a new estimate of your eligible service (continuous hours) based on a revised termination under the Incentive Program; refer to page 12 for guidance.

2. Your benefit estimate will provide your estimated eligibility for the County’s Early Retiree Health Coverage Continuation benefit. This response will be divided into two parts: (a) It will tell you if you will qualify for the County’s retiree health premium contribution benefit without your having to elect the Incentive Program’s Retiree Health Contribution benefit (adding up to two years to your age and/or years of service); and (b) It will tell you if you will need to elect Retiree Health Contribution benefit to qualify for County-paid retiree health coverage. Go back to Section E on page 9 if you have questions.

3. Your benefit estimate will provide your total estimated Incentive Program benefit. Using the information in Item 2 above, it will tell you: (a) the amount of funds which will be submitted to the Health Care Savings Plan; and (2) what funds will be used to pay for retiree health coverage if you elect the Retiree Health Premium Contribution benefit.

4. Your benefit estimate will provide other information. This will include your estimated severance pay, deferred holiday and compensatory time hours payable, Special Leave Without Pay hours accrued, etc.

Ret.Incentive/ 2005 Announcement 6-30-05.doc

24 Hennepin County Retirement/Resignation Incentive Program PARTICIPATION AGREEMENT and GENERAL RELEASE FORM

I, (Employee: print or type your name) ______, the undersigned Employee (“Employee”) in the Department of (Employee: print or type your Department) ______, voluntarily agree to resign or retire under Hennepin County’s Retirement/Resignation Incentive Program (“Incentive Program”) and to execute this General Release of All Claims (the “Release”). For purposes of this Agreement and Release, the term “County” refers to Hennepin County and includes the County’s past, present and future officers, officials, employees, volunteers, and agents.

A. Resignation or Retirement

By signing this Participation Agreement and Release, I will voluntarily separate from County employment and will either resign or retire on or before September 17, 2005 in exchange for the payments and benefits provided under the Incentive Program. I understand that by participating in the Incentive Program and signing this Agreement, I become ineligible to employment in a permanent position in my own or any other job classification with the County. My estimated date of resignation or retirement is:

(Employee: insert date) ______, 2005.

B. Benefits Paid under the Incentive Plan

I understand that the following benefits will be paid to me after I sign this Participation Agreement and Release, do not rescind it, and resign or retire on or before September 17, 2005.

(1) Health Care Savings Plan: Payment by the County, on my behalf, of $20,000 to the Minnesota Health Care Savings Plan.

(2) Retiree Health Premium Contribution: Election, by me, of the County adding up to two years to my age and/or years of service to qualify for County-paid early retiree health coverage continuation. My decision concerning election – or waiver – of this benefit is voluntary and is indicated below.

 I wish to receive the Retiree Health Premium Contribution benefit. I understand that this benefit will reduce the County’s payment of $20,000 to the Minnesota Health Care Savings Plan on my behalf. Initial here ______; OR

 I irrevocably waive the Retiree Health Premium Contribution benefit provided through the Incentive Program. I understand that, by so doing, the County will pay $20,000 to the Minnesota Health Care Savings Plan on my behalf. Initial here ______

25 (3) Maximum benefit. The total Incentive Program benefit (Health Care Savings Plan benefit and Retiree Health Premium Contribution combined) is capped at $20,000. In other words, if I elect the Retiree Health Premium Contribution benefit, the Health Care Savings Plan payment is reduced by the County’s estimated monthly premium contribution required up to the date I would normally qualify for retiree coverage.

C. My Acknowledgement of the Consideration and Purpose of the Release

I acknowledge that I will not be eligible for the payments and benefits under the Incentive Program unless I sign (and then do not rescind) this Participation Agreement and Release.

I received the Incentive Program materials authorized by County Board Resolution 05- 329R1 and reviewed them. These materials include descriptions of who is eligible for the Incentive Program, the time limitations under the Program, the reasons for excluding certain job classifications, and age-related information related to those exclusions. The County encouraged me, in writing, to seek counsel from a financial advisor and lawyer before signing this Agreement.

I have at least 45 calendar days to consider whether to sign this Participation Agreement and Release. I understand that I may knowingly and voluntarily agree to waive the 45 calendar day consideration period by electing to sign the Release before the 45 calendar days have passed. The County encouraged me to take my time and carefully evaluate my circumstances before deciding if signing this Agreement is the right thing for me to do.

D. What I Am Releasing

In consideration for the payments and benefits under the Incentive Program, I fully release and discharge the County from any and all claims, complaints, liabilities of any kind, known or unknown (each a “Claim”). I understand that by releasing the County from each and every Claim, I am releasing all of my rights to bring any Claim against the County based on any action, decision or event occurring prior to my signing this Agreement, including, without limitation, the terms and conditions of my employment with County and the ending of my employment. Except as permitted by law, I will not commence any proceeding relating to any Claim, and if the law permits me to commence such a proceeding, such as filing a charge with the Equal Employment Opportunity Commission, I agree that I may not seek or recover any monetary damages or other relief as a result of any such proceeding.

My release includes any Claim based upon THE AGE DISCRIMINATION IN EMPLOYMENT ACT, 29 U.S.C. §§621, ET SEQ.; federal, state or local employment discrimination laws, regulations or requirements, including, but not limited to Title VII of Civil Rights Act, 42 U.S.C §§2000e, et seq.; the Americans with Disabilities Act, 42 U.S.C. §§12101, et seq.; and the Minnesota Human Rights Act., Minn. Stat. Ch. 363; any other statute, ordinance, or regulation; any contract, quasi-contract or promissory estoppel; any tort, including wrongful discharge, misrepresentation, fraud, infliction of emotional distress, or defamation; or any other legal or equitable theory.

I also release and waive any rights and claims I may have under the Veterans Preference Act, Minn. Stat. 197.46; and the County’s Human Resources Act and Rules, Minn. Stat. 383B.38.

26 E. What I am Not Releasing

I am not releasing any claims for post-termination benefits, such as retirement benefits, under the provisions of any employee benefit plan. I also am not waiving any rights I have with regard to events that occur after the date of this Release.

F. If I Want to Rescind this Participation Agreement and Release

I understand that I have 15 calendar days from the day I sign this Participation Agreement and Release in which to change my mind and rescind it. In order for this rescission to be effective, it must be in writing and delivered to Rafael Viscasillas, Director of Human Resources, A-400 Government Center, 300 South 6th Street, Minneapolis, MN 55487-0040 within 15 days from the date I sign this agreement. I understand that my delivery of a written rescission can be either by hand by 5:00 p.m. on the last day or by certified mail return receipt requested, postmarked by the last day.

______[Print Employee name] [Employee Number)

______, 2005 [Employee Signature] Date Signed

______[Witness (does not need to be notarized)]

EMPLOYEE – Once signed, dated, and witnessed:

 Make TWO COPIES of this Form (pages 25-27).  Keep one copy for your records.  Give original copy (pages 25-27) to your supervisor.  Submit one copy (pages 25-27) to: Rafael Viscasillas Hennepin County Human Resources Director A-400 Government Center 300 South 6th Street Minneapolis, MN 55487-0040 (interoffice: mail code 040)

Ret.Incentive/ 2005 Announcement 6-30-05.doc 27 REQUEST FOR INCENTIVE ELIGIBILITY CONFIRMATION AND PAYOUT ESTIMATE

PLEASE PRINT

Employee: ______

Employee number: _____._____._____._____._____._____._____._____._____

Department: ______

Mail code: _____._____._____.

E-mail address: ______

Daytime telephone: ( ______) ______

Proposed termination date (xx/xx/2005): ______/ ______/ 2005 Must be on or before September 17, 2005.

I am requesting an estimate of my eligibility for and payout if I terminate employment under the Retirement/Resignation Incentive Program to be sent to my e-mail address (otherwise, it will be sent through interoffice mail).

SIGNATURE ______Date signed ______

SEND TO: Hennepin County Human Resources Director A-400 Government Center Minneapolis, MN 55487-0040 Mail code 040

Office use only: Received ______

Ret.Incentive/ 2005 Announcement 6-30-05.doc