An early retirement program could save Tuolumne County roughly $2 million over the next five years, according to projections released yesterday.

On Tuesday, county supervisors will consider implementing the program, which offers cash incentives to entice employees to leave early.

County officials hope the program, along with a handful of other measures, will help improve the county's financial future.

Since January, when the board voted to offer the program, 39 employees from 16 departments have signed up, said Assistant County Administrator Craig Pedro. All would retire before June 30; most will be gone before the end of April.

The program supplements the county's regular retirement benefits by providing early retirees with monthly payments based on 7 percent of their final salaries. The money can be paid out over a lifetime or over a fixed number of years. For example, a 59-year-old employee making $38,584 would receive $225 a month over her lifetime or $354 a month over 10 years on top of normal retirement benefits through the Public Employees Retirement System.

To be eligible, employees must be at least age 50, be vested in the Public Employees Retirement System and have worked for the county for at least five continuous years.

The early retirement program would be run through the Public Agency Retirement System, which provides retirement packages to hundreds of local governments in California and Texas, according to its Web site.

Additionally, county officials have developed a strategy for replacing the departing employees. About half the positions vacated by the 39 retiring employees would be eliminated, Pedro said. The remaining positions would be filled at a lower cost to the county.

County officials are also proposing staffing caps for most county departments. The caps would make it difficult for department heads to increase the size of their staffs beyond preset limits, Pedro said.

"The idea is that each department would have to live within these caps unless specific board action was taken to modify the caps," Pedro wrote in a report to the board.

Combined with the early retirement program and routine employee attrition, the staffing caps and replacement strategy should save the county an estimated $6.2 million over five years, the report states.

Some supervisors have expressed concern that the retirement program could leave the county without some of its more experienced employees. But Pedro said some of these employees would be retiring in the next few years anyway.

"It will be a loss, but in most cases, we are only talking about an acceleration of that which would have happened anyway," he said.

Offering a retirement incentive now might prevent layoffs down the road, Pedro said.

The early-retirement program is part of a larger county effort to deal with a financial crunch created, in part, by state budget cuts, Pedro said.

In the past several months, the board has approved a pair of unpaid employee furlough days and a hiring freeze. In April, the board is expected to consider scheduling another three furlough days.

Last month, supervisors voted to use nearly $1.7 million in contingency funds to offset losses and pay for salary increases for employees.