When former Fire Chief Herman Williams Jr. left the public payroll for good last week after 47 years with the city, he took with him a retirement package of well over a half-million dollars - more than four times his annual salary.
Williams, 69, is the latest beneficiary of a special pension program that the city created in 1996 as an incentive to keep rank-and-file police officers on the force longer, which is also netting extraordinary six-figure sums for perhaps 20 or more top-ranking police and fire officials.
The little-known pension program - the Deferred Retirement Option Plan, or DROP - has become a hot concept in public pension circles nationwide, and it's easy to see why: It allows retirement-eligible workers to continue on the job while banking the equivalent of their pensions in an interest-bearing account that they can cash out when they retire -and then still collect their pensions.
Baltimore's DROP has paid out $42.8 million to about 500 police and fire employees. It is so generous that nearly every police or fire employee who reaches the 20-years-of-service requirement ends up participating; 1,100 are now in the program.
"I would submit to you if someone has 20 years in and they don't join the DROP plan, then maybe we should drug-test them," said Stephan G. Fugate, president of the Baltimore Fire Officers Association and chairman of the board of the Fire and Police Employees Retirement System.
"It's clearly a phenomenal program, and if you don't participate in it, something's wrong with you," he said.
Because of Williams' unusually long service and his department head salary, his payout is easily the city program's largest, at more than $400,000.
That money comes from the $2.3 billion police-and-fire pension fund instead of directly from the city's coffers, although he also received $122,000 from the city for accrued vacation, sick and personal leave.
As Williams notes, he paid 6 percent of his salary annually into the pension system and merely followed the rules to qualify for the money.
"It's substantial, but it's legal, and it's mine," Williams said with a chuckle.
"You have to remember I had 47 years with the city," said Williams, who retired Feb. 13 at an annual salary of $128,700 and will be collecting an estimated pension of more than $120,000 a year. "I've been good to the city, and the city's been good to me."
