Early retirement packages are designed to incentivize employees to retire earlier than they would otherwise. An ERIP reduces the workforce and targets more experienced (typically higher-earning) employees.
These early retirement packages also reduce the employer’s risk of being sued of wrongful termination, and they avoid the negative effect on morale that layoffs could cause.
Even though your employer may offer you financial incentives and benefits, it will likely cost them less than your normal full compensation would.
Typically, insurance considerations (coverage amount and costs), pension vesting, and age/years of service will be the main criteria. Your employer may also choose to only offer early retirement packages to employees of certain seniority levels.