Posted on 10/19/2015 12:20:15 PM PDT by MichCapCon
A husband and wife who were both Ann Arbor police officers retired within a year of each other. The husband, a lieutenant, retired in 2009 at age 46. His wife, whose job title was telecommunicator, started collecting pension checks in 2010 at age 51.
Since 2009, the city of Ann Arbor has seen 43 individuals age 51 or younger retire and begin collecting police pensions.
Early retirements — many of which occur with employees still in their 40s — are not uncommon in municipal public safety departments. The practice is justified on the grounds that the high stress and sometimes physically challenging duties of the work become more difficult to sustain in middle age.
The problem for the city and its taxpayers is that Ann Arbor’s pension system is underfunded and its costs are skyrocketing. The city paid $2.9 million to fund employees’ pensions in 2006. By 2014, the figure had nearly quadrupled to $11.2 million. And still, the pension system is just 83 percent funded, meaning for every dollar the city has promised its retirees, it has only 83 cents set aside. In 2014, the system was underfunded by $89.6 million.
Police officers who retire early often go on to work in other law enforcement jobs for a different employer. For example, Ann Arbor Police Chief John Seto retired July 31, 2015, at the age of 48. One month later, the University of Michigan named Seto as its new director of Housing Security and Safety Services, the Ann Arbor News reported. Seto earned $130,491 as the police chief and will make $113,000 in his new position — plus his monthly pension checks from the city of Ann Arbor.
“Ann Arbor is fortunate to be served by a professional, competent police department,” said Ann Arbor City Administrator Steve Powers in an email. “The department is attractive to law enforcement professionals. The officers who reach the age and years of service requirements to receive a pension are well-trained and have received a variety of experiences. Because of their training and experience, they are desirable candidates for other police departments, the University of Michigan, or other employers.”
Leon Drolet, the chair of the Michigan Taxpayers Alliance, said early retirements can make sense for jobs in which employees are exposed to dangerous conditions and must meet physical standards.
“This is more of a problem with the pension system,” Drolet said. “The defined benefit pension system is unsupportable.”
Drolet said cities need to switch to a defined contribution, 401(k)-type system.
That’s the system used by Seto’s new employer, the University of Michigan. In its defined contribution system, the university contributes 10 dollars for every 5 dollars the employee puts into a tax-deferred savings account, up to 10 percent of the person’s salary. Under this approach, state taxpayers assume no long-term liabilities, funded or not, for retirement benefits of public employees.
“The record shows defined benefit pensions are just breaking the backs of taxpayers and city budgets,” Drolet said. “Cities make pension promises they can’t afford and their current leaders turn their heads.”
Who would want to stay on the streets in the current environment. Federal law enforcement has a 20 year retirement, but you have to stay until you are at least 50. Mandatory is 57.
Maybe it’s not good to have police officers over 50 patrolling the streets.
OTOH, unless their health is broken, why not have them get some other job, and start collecting their pensions at 65-67?
It’s no longer true that public servants give up higher private sector wages. A teacher or a police officer may start quite low, but within five years is usually making a very comparable salary, and after twenty to thirty years, a good deal better than someone in private employ.
I guess it’s Ok to bust the chops of these folks that are just playing by the rules that the cities approved. It’s funny, but I rarely read about the people bitching about politicians that do the exact same thing double and triple dipping, sucking off the public tit their entire life. Until we somehow make it illegal for Police and Firefighters to retire after their 20, irregardless of age and ban them from taking another public service job with a pension I guess there’s nothing to do.
I can’t even imagine what it’s like today to be a cop. Imagine having a job where the President of the United states treats you like an enemy, encourages thugs to attack you, where you have to make a split second decision between dying or risk going to jail for murder. Not enough money in the world, and they don’t make enough. What is the starting salary for a cop in a major city? $40k a year? That is absolute crap, McDonalds money and you can end up dead or in jail? No thanks. This administration treats cops like they do vets: Like absolute garbage while on the flip side it treats thugs, criminal foreign invaders and Islamo-Nazis as heroes. Bring a prototype bomb into a public school you get an invite to the White house and put on a global tour as a conquering hero. Get shot maimed or killed on the job and not even a nod.
The wording and concept here is way off base.
When a pension system is set up, the employer, in this case the cities, must make provision for every person covered under the system. The pension is not a gift from the city, but part of earned compensation. If employees retire early, then the pension authority should purchase an annuity with the funds set aside during the employee's career to cover the future payouts. If the cities have failed to set aside the funds for the pension, or they frittered it away, it is not the fault of the pensioner.
This is similar to Social Security. Workers have no choice but to pay into the system, yet the government morons scream that it is going broke and will run out of money. Never mind that they have used the funds collected to pay for their pet projects, balance the budget, etc. and MOST OF ALL to BUY VOTES of those who never paid in, because they're illegal aliens, or never worked.
There’s nothing to be done in these particular cases, but it shines a very bright light on the problem with gov’t employees, whether local, state or federal. We cannot afford the lavish retirements they’ve been given. Politicians in bed with unions has created an untenable situation for the taxpayer. People have to wake up.
If a cop can’t do THAT job after 20 years of service (& I would agree that it’s probably a job for the young & fit), they are still healthy enough to find something else to do for another 20. We’re all living longer, & we should expect that there are consequences...like a longer work life. And maybe more than one career.
I'm not disagreeing with what you're saying, simply pointing out that the couple in the article like many other Police and Firefighters are simply playing by the rules in effect and I am sure many of them do continue to work somewhere else, as the article stated.
It sucks, the deals that cities agreed to, that taxpayers are getting screwed but I have to bet that most people are also envious of those who can retire with a large pension and benefits after twenty years and would jump to take such a job if the had a chance. Until the rule are changed, all we can do is bitch.
This.
It is way past time for municipalities switch from a defined benefit to a defined contribution pension system. I work at a public university and my retirement plan is a self directed 403b defined contribution plan. Whatever is in my account when I retire is what I get to live on.
Well Duhhh....... obviously the pension sys needs to be revamped.
Communities cant afford to pay these people big bucks for another 40/50 years....
Plus if I was one of them I would have a serious back up plan for when the rug is pulled from under them in there late 70’s/80’s
You mean like the cop that was at least 60 pounds overweight and probably pushing 60 directing traffic in my area today? (Probably all he’s good for anyways).
“Until the rule are changed, all we can do is bitch.”
No argument there.
When the likelihood of being prosecuted and persecuted for doing you job seems inevitable. It is time to move on.
I think its fundamentally impossible to sustain a system where somebody works for 35 years, and potentially lives another 25-30. Even if the actuaries say it works, odds are it is based on the rosiest of predictions with investments, etc. It would require something like a quarter of salary going to the fund, or even more.
No, it is not the fault of the police officer...but this is one of the central problems of big government. It is very, very, oh so extremely easy to promise better pension benefits. And, I might note that in my city, every single fireman and policeman votes - prodded to do so by their chain of command, in a city with around 12 percent voter turnout. So, essentially, the politician who promises the best benefits gets elected.
Then, somewhere down the road, somebody has to be the adult in the room, once the thing goes broke. And that person is branded as the ‘bad guy’. No, the bad guys were the ones who kept making unrealistic promises and over the moon predictions. But that’s not how politics works.
And at the very end of the road, you get the ‘broken promise’. A city council, or perhaps a bankruptcy court just slashes the pension. A complete betrayal, and the blame is directed towards the contemporary politician - but the original sin was promising the pension in the first place.
My state (Kansas) is by no means the worst offender in this category, but until recently, the pensions at the state level were only funded 63%. Barring any huge influx of people into Kansas, that spells trouble....and a great risk for state workers. So what did the state do? They found suckers to assume the risk by selling $1 billion in Pension Obligation Bonds. Here is their thinking: In the history of the fund, we have average 8% return, and these bonds are at 4.86%...so over the long haul, we can invest this borrowed money at a higher return than what we borrowed it for. The state is using margins! (in a near zero interest environment).
At the end of the day, state workers in Kansas will get screwed...and they will blame the wrong people.
Can’t have them working into old age. Patrol work is a young man’s job. A compromise will need to be found elsewhere (maybe in pension costs).
...guess it’s Ok to bust the chops of these folks that are just playing by the rules that the cities approved.
Gee...how come people are only waking up to the fact that it’s unsustainable now? Did they not know this 20-30 years ago?
Of course they did, but the politicians didn’t care. They were buying votes, knowing full well that someone else would be left holding the bag when the bill came due. And that someone else is the taxpayer.
It’s really quite simple - the pension funds are broke. The promised benefits were LIES told by politicians to keep the cops and firemen from striking while those politicians ran that municipality. The only legal way to get out of those obligations is for the municipality to declare bankruptcy, throw out all current agreements, and start over.
Cops make $125K in my town, and retire at ~40. New cop is hired, and now town is paying $250K for one cop on duty. Another 20 years goes by, and another retiree starts drawing down, so my town is then paying $375K for one cop on duty. Clearly that’s unsustainable. It’s a Ponzi scheme.
The politicians are lying to everyone, and all the whining in the world about “broken promises” won’t make the money materialize.
One solution would be for the police and fire union dues to be redirected to the pension fund until it’s fully funded. The union’s there for the workers, right?
Most government retirement system are specifically built to push you out after 25 years. Which means if you start the job before you’re 25 you get to retire in your 40s. Don’t hate the player, these system have been in place for generations.
The municipal workers knew it was a lie too, but they hope to keep getting theirs until it all breaks. Then they get in front of a TV and whine. It’s like France or Greece.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.