Incentive offered to retain officers

Balto. Co. firefighters, police to get lump sums for delaying retirement

December 16, 2003|By Andrew A. Green | Andrew A. Green,SUN STAFF

Baltimore County police officers and firefighters who defer retirement for a few years and agree to slightly lower monthly pension benefits will receive hundreds of thousands of dollars in lump sum payments, the County Council decided last night.

A bill passed unanimously by the council, which could cost the county $5 million a year and could result in individual payouts as large as $500,000, follows up on an agreement that C.A. Dutch Ruppersberger, then county executive, struck with the public safety unions in 2001. County and union officials say it is an important tool to retain skilled officers.

"As our population ages, recruitment becomes an even more difficult issue. Increasing economic incentives is important for us to retain our experienced officers as long as possible," said County Executive James T. Smith Jr.'s spokeswoman, Renee Samuels.

According to actuarial estimates provided by the county, the incentives to stay on past the minimum for full retirement - 20 years for police officers, 25 for firefighters - would be significant.

A police colonel with 35 years' experience could retire at age 53 with a lump-sum payout of $512,743 plus $82,537 a year in pension; a retiring patrol officer with 27 years could retire at age 45 and get a $118,426 payout, plus $34,239 a year in pension. Without the program, the officers would receive annual pensions of $98,605 and $38,036, respectively.

Benefits for firefighters range from a lump sum of $128,475 plus $37,833 a year for a fire specialist with 32 years of experience to $446,897 plus $73,953 a year for a fire division chief with 35 years of service. If they didn't take advantage of the program, those firefighters would receive pensions of $42,100 and $86,253, respectively.

"It's an excellent retention tool for our highly experienced and qualified personnel," said Michael K. Day Sr., president of the Baltimore County Professional Firefighters Association.

The county estimates that the incentives will increase the average length of service for police and firefighters by 11 months.

The program is further evidence of the political influence of the police and firefighters.

Last year, the public safety unions pushed for a charter amendment authorizing the County Council to grant binding arbitration for their members.

Little dissent

Although many in county government privately opposed the idea, none spoke about it publicly, and the measure passed by a wide margin. The council enacted legislation to authorize arbitration six months later.

Cole Weston, president of Fraternal Order of Police Lodge 4, which represents Baltimore County officers, said the lump-sum payments provide an attractive alternative for officers who are willing to stay on the force longer and accept lower annual pension payments to get money they can use to put their children through college, pay off mortgages or invest.

"I think what people have to remember is, although there is a lump sum, there is then the reduced annual annuity, and so that this is just a different form of taking out, if you will, or collecting an earned pension benefit," Weston said.

Day said most of his members work longer than the minimum for retirement but that the new benefit has also become an important recruiting tool because other jurisdictions offer similar programs.

Programs elsewhere

Anne Arundel County instituted a deferred retirement option program (DROP) for firefighters three years ago and one for police officers two years ago. Baltimore and the Maryland State Police also have DROPs.

Arundel's program is, in some ways, more generous. Police and firefighters there are eligible to enter the program after 20 years of employment. Once they do, their annual pension benefits are frozen.

They continue to work for three, four or five years at full salary, while the county invests at a guaranteed return of 8 percent the pensions they would have received if they had retired. They receive the balance, plus their annual pension benefits, when they retire.

Baltimore's program is more generous yet. Firefighters and police are eligible at 20 years, but they are not required to retire after their three-year DROP period is up. If officers stay on four more years after their DROP period is up, they get their lump -sum payment, with guaranteed 8.25 percent interest, plus the full annual pension they would have received if they hadn't taken advantage of the DROP.

"It sure is an incentive to stay," said Thomas Taneyhill, executive director of the city's fire and police retirement system. "That was the idea."

5% rate of return

In Baltimore County, police officers and firefighters would not have to choose whether to take advantage of the program ahead of time; the benefits would be calculated retroactively. However, Baltimore County guarantees a minimum 5 percent rate of return on the pension benefits the officers would have received if they had retired earlier.

Day said the program is more generous than the benefits most private-sector workers receive but that the nature of the work is uniquely demanding. Public safety work is so mentally and physically taxing that workers can't be expected to put in as many years as they would in another job, he said.

"Just using myself, I've got two bad knees and a bad back," Day said. "It doesn't take long for that arthritis to start setting in."

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