Delayed pension proposal pondered

Plan would help retain senior police officers

January 18, 2004|By Larry Carson | Larry Carson,SUN STAFF

Hoping to entice veteran police officers to remain longer, Howard County is planning to join other area governments that have adopted a deferred pension deal that kisses retiring officers goodbye with a big wad of cash.

"We all compete in this same region. It helps us plan," said Howard police chief Wayne Livesay, a 32-year veteran who explained that the pension plan would allow him to know which senior officers would remain and for how long.

"If I have someone with 25 years, I know I've got them for the next three or four years," he said.

Although Livesay said he is committed to stay through the current term of County Executive James N. Robey - the county's previous police chief - he has a financial adviser evaluating his personal financial outlook.

Under the program, a 25-year officer who chooses to stay four more years could receive $181,165 as a lump sum at retirement. But the officer would contribute $29,411 toward that amount and would get a pension worth $3,036 less annually if the officer defers benefits to provide for a survivor - the typical choice.

A lieutenant could receive a cash payment of $241,276 after four years, after contributing $38,985. That pension would be worth $3,264 a year less with a survivor deferral, according to figures supplied by county human resources officials.

Livesay and Robert S. Lazarewicz, the county's Department of Human Resources director, said the option wouldn't cost the county money but would give officers with 25 years of service an attractive reason to stay on the job for up to four years longer.

James Oglethorpe, president of the Howard County Taxpayers Association, said the program might be OK if it is cost-free, though it might be cheaper to hire new officers at lower salaries.

"I'm a suspicious type. It seems like there are more benefits given them than they need to retain their officers," he said.

Called the Deferred Retirement Option Program (DROP), Howard's version is less lucrative than plans in Baltimore and Baltimore County. But it still would likely attract many of the 20 officers who have 25 years of service and are therefore eligible, according to James F. Fitzgerald, a 30-year veteran who is president of the Howard County Police Officers Association. The lump sum payout could help officers in their late 40s or early 50s who might need money to pay for a child's college education or to pay off a mortgage, he said.

"They like the idea. They wish it was more like Baltimore County and Baltimore City," Fitzgerald said of Howard's 352 officers. Anne Arundel County and the state also have versions of the plan.

Robey acknowledged the pension deal is not as rewarding as other counties, "but it's pretty darn lucrative. I wish I'd had it. I can't do a program that's going to bankrupt the county or fail."

The bill will be subject to a public County Council hearing Tuesday night in Ellicott City, followed by a vote set for Feb. 2.

If approved, the law would take effect May 1. Under its provisions, officers with 25 years' service could agree to work three or four more years. Their pension level would be frozen when they enter the program, but the county would invest their pension for those extra years of work and pay a lump sum when they leave.

In Howard County, police may retire at 20 years with half their pay, 25 years at three-quarters pay or 30 years with 80 percent of their salary as a pension.

Under DROP, a pension would be frozen at entry and would not increase based on the extra years of work. In addition, officers would continue paying 11.6 percent of their salary into the retirement fund until they stop working.

Unlike the other jurisdictions, Howard would not guarantee a minimum interest rate for pension funds invested, Lazarewicz said. Anne Arundel's 3-year-old plan guarantees 8 percent interest on pension annuities, while Baltimore City offers 8.25 percent. Baltimore County guarantees a 5 percent return. All three jurisdictions allow enrollment sooner, after 20 years service, and the city allows officers' pensions to increase as they serve the extra years.

Lazarewicz said Howard County's actuaries found that the plan would not cost the county more money. "That was the agreement up front" when the police and fire unions requested the plan, he said.

He and fire union President Rick L. Ruehl said the numbers don't work the same way for firefighters, who have slightly different pension requirements and salary levels.

County Council Chairman Guy Guzzone, a North Laurel-Savage Democrat, and western county Republican Allan H. Kittleman said they've been so busy with the coming vote on comprehensive rezoning that they haven't yet focused on the pension change.

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