PORTLAND – Forty-three school district employees have accepted an enhanced retirement incentive aimed at increasing interest among 224 eligible workers.

Initially, 34 employees expressed interest in retiring at the end of this school year under the district’s usual retirement incentive, said Joline Hart, human resources director.

The enhanced incentive, offered earlier this month, increased a one-time payout of $10,000 to as much as $20,000 for higher-paid employees.

The district will save about $2 million in salaries after paying about $679,000 in incentives in the first year, Hart said. The enhanced incentive helped school officials exceed their goal to save $1 million to $1.5 million in salaries in the coming year.

Despite the added incentive, a weak job market and rising health insurance costs kept many eligible employees from retiring this year.

”We had a lot more inquiries than acceptances,” Hart said. ”People are very worried about their health insurance costs in particular.”

The School Committee increased the incentive after learning that the city’s public schools could lose as much as $6 million in state and federal funding in the coming year.

Barring other budget cuts, a revenue reduction that large would require as many as 120 layoffs, or about 10 percent of the city’s school employees.

To be eligible for the incentive, employees must have reached retirement age, which is 60 or 62, depending on when they entered the state retirement system.

Under the usual incentive, employees chose between a one-time payment of $10,000 or annual payments equal to the worker’s portion of health insurance costs until age 65, when Medicare kicks in. Until then, the state retirement system pays 45 percent of health insurance costs and the retired employee pays 55 percent.

Under the enhanced incentive, employees will get a minimum of $10,000 or 30 percent of their latest salary, up to $20,000. The payments will be made in four annual installments starting in the next budget year.

The committee kept the minimum $10,000 payment for employees on the lower end of the salary scale, and increased the incentive to entice more teachers to retire, Hart said. Most teachers who accept the new incentive will get $16,000 to $18,000, she said.

The enhanced incentive also reduced the time eligible employees must have worked in the district to 10 years. In past years, the service minimum was 25 years.

If only 34 employees decided to retire this year, the district would have saved $1.7 million in salaries after paying $314,000 in incentives, Hart said. Last year, when 29 employees retired, the district saved $400,000 in salaries after paying $172,000 in incentives.

Of the 43 people who accepted the enhanced incentive, 21 are teachers, one is a nurse, one is a social worker, one is a guidance counselor and one is an assistant principal. Three are administrators, including Assistant Superintendent Jill Blackwood, and Hart, who has headed human resources for 23 years. Also retiring are six food service workers, six secretaries, two educational technicians and one custodian.

Gary Vines, chief negotiator for Portland’s teachers union, proposed the enhanced incentive.

Staff Writer Kelley Bouchard can be contacted at 791-6328 or at:

kbouchard@pressherald.com