Israel Discount Bank's (TASE: DSCT) early retirement program has begun. Sources inform "Globes" that a senior member on the national committee even announced that he intends to retire, and that he recommends that other employees for whom this is relevant join him. Last week, secretary of the national committee Avi Yuldoss, who has been working for Discount Bank for 38 years and is considered one of the strongest people on the committee, published a letter to employees announcing his decision to retire from the bank as part of the early retirement plan. "Taking advantage of the early retirement option is the right thing to do," Yuldoss wrote.
The program will cost NIS 500 million, and up to 500 employees are expected to retire from the bank at a cost of NIS 1.05 million per employee. The target that Discount Bank set for itself is not the number of employees who retire, but a budget target, and therefore when the budget allocation is reached, the program will end. There will probably not be another early retirement program until at least 2017. Reuven Spiegel is CEO of Israel Discount Bank.
From details of the program that "Globes" has received, it seems that the target population is 2,600 employees over the age of 50 who have been working for the bank for more than 15 years. For the first time, employees will be allowed to choose between receiving a one-time cash amount or a monthly stipend to be given to them (or their spouse) for the rest of their life. The committee views the option to choose between cash or a stipend as a great achievement. The Phoenix Benefits Group, which specializes in pension planning, will accompany the process.
Discount Bank director of human resources Yossi Peretz published a letter to bank employees today detailing the plan. Subsequently, each employee received a personalized letter listing his/her eligibility, the amount that he/she would receive in each circumstance, and his/her personal retirement conditions. Officially, enrollment in the retirement program will only begin at the end of the month, however 100 employees have already signed up, with equal amounts from branches and the headquarters, and 30 of them have already settled which program they will take advantage of.
Discount Bank workers committee chair Riki Bachar actively supports the retirement plan, since it complements the new work contract that was signed in June 2011. As for Bachar himself, he requested and was given approval not to retire at the end of the year as planned when he turns 67, but to stay on an additional two years during which time he will continue to act as committee chairman. The early retirement program is expected to save between NIS 100-150 million in 2012.
In place of the retiring employees, Discount Bank will hire new employees at a significantly lower cost. Also, a new employee will not be hired for each one retiring; only one new employee will be hired for every three who retire.
Published by Globes [online], Israel business news - www.globes-online.com - on October 5, 2011
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