The Corzine administration yesterday unveiled details of a proposal for an early retirement program that aims to shrink the state workforce by 3,000 employees.

Under the plan, incentives would be offered to certain state employees aged 50 or older with at least 25 years in a state pension program, 60 or older with at least 20 but fewer than 25 years in a pension program and 60 or older with at least 10 but fewer than 20 years. Incentives range from additional service credit toward pensions to free health benefits.

Employees in some departments would not be eligible.

"New Jersey cannot fix the larger structural problems with the state budget without first shrinking the size, scope and cost of the state bureaucracy," said state Treasurer David Rousseau.

"This initiative will achieve the goal of a smaller government and create permanent budget savings. At the same time, we will maintain the ability of a smaller workforce to focus on core missions and public priorities," he said.

The early retirement program would save the state an estimated $130 million in the fiscal year that begins July 1, Rousseau's office said. That amount should grow to $165 million per year after five years.

But because of additional pension liabilities and other expenses, the program would take about four years to pay for itself, the treasurer's office said.

The announcement of program details signals Gov. Corzine's intent to move forward with the proposal, despite early opposition from lawmakers.

The early retirement plan has emerged as a key point of contention between the legislature and the governor.

Critics worry that it could cost the state more in the long run, as has been the case with similar incentives adopted by previous administrations. Treasury spokesman Tom Vincz said an estimated 6,700 state employees would be eligible for the program as proposed.

The Corzine administration argues that a strict cap on the number of employees who could be hired to replace the retirees would ensure that the program does save the state money.

Assembly Speaker Joseph J. Roberts Jr. (D., Camden) believes the proposal is "too broad," said his spokesman, Derek Roseman. But he "is optimistic the legislature and administration can reach agreement on a plan that will meet the state's fiscal needs without overburdening the pension system," Roseman said.

Rousseau has said that it would take 8,500 layoffs to achieve the same level of savings as the early retirements. Such a large-scale reduction in the workforce would cause significant disruption to the state's operations, he said.

Sen. Shirley Turner (D., Mercer) supports the retirement proposal as "far preferable" to laying people off.

"It's never a good time for people to lose their jobs," she said. "But particularly now, when we know that we're in a recession and unemployment is going up in the state and people are out there now looking for job opportunities, to lay off state employees would just exacerbate the situation."

Corzine has proposed a state budget of $32.8 billion, which would represent one of the largest year-to-year budget cuts ever. The plan includes eliminating the departments of commerce and personnel and scaling back state aid to municipalities, charity care and the property-tax rebate program.

According to the state constitution, the governor and the legislature must agree on a budget by July 1.

Contact staff writer Adrienne Lu at 609-989-8990 or alu@phillynews.com.