As we struggle to repel the advancing enemy, two severe wounds have slowed our counter-attack. Retreat is no longer unthinkable. The jubilant send off parade down main street seems far removed tonight. Before assessing the mortal wounds, let's talk about how we got into this war - The Public Safety Pension War.
Back in aught two (2002), we will were riding high in public esteem, but somewhere that began to change. That was about aught five or maybe aught six? It doesn't really matter today. At first, the attacks were small and not well thought out. We just painted the the assailants as nut cases and shouted them down. You should have seen them go down in flames. They were no match for our actuaries and propaganda, but slowly they grew in number and obtained more and better weapons. Then came aught eight and the stock market began to tank. By aught nine the pension reforming barbarians were at our gate. They had a formidable mob assembled, but not enough to breach our walls. Tonight, they have us out-numbered. There are not enough boulders and hot tar to turn back the attackers.
The premise that the basic public safety pension is predicated on - public safety is an occupation requiring people in the prime of their physical abilities (similar to professional athletics). A simple solution for the consumer would be to administer a physical endurance exam every year and then fire everyone who could not pass it. Actually, that would be the model of efficiency - decisive and totally objective. The problem would be with finding enough qualified applicants for the jobs. Getting the old heave ho fifteen years before being eligible for Social Security and Medicare would not be very attractive to most potential employees.
The solution developed was a pension plan that kicked in between age 50 and 55; and paid from 75% to 90% of the last employment year's pay. This allowed employers to hire and keep well qualified employees. It was a solution that addressed both sides' issues. But slowly over time, changes were made that allowed manipulation of both the pension amount and the retirement age. What are these two points of contention?
Spiking - Spiking is the ability of an employee to unilaterally inflate the pension benefit. This is possible when overtime and cash for comp time and unused paid time off is used in the computation base for the last year. Many employees plan in advance to inflate their pension. Fortunately, most pension plans do not allow this. Those of you that are able to spike your pension are probably seeing red after reading my comments. I understand, but think about this. What if the chief told you that you could only work 30 hours per week once you were one year away from retirement? The city is trying to save money on pensions. Spiking has to go. Maybe your pension needs to be increased, e.g. 70% to 75%, but whatever the solution - "a deal has to be a deal." There can be no escape clause for either side.
Drop Plans - Let's see - the reason for having a retirement plan that starts at age 55 or lower is to have a younger and stronger force, but you want a five year extension for your employment when you reach retirement age? What is needed is the elimination of DROP Plans and a mandatory retirement age - possibly something based on rank:
Minimum Retirement Age 50
Mandatory Retirement Age
Police Officer - Age 55
Sergeant - Age 58
Lieutenant - Age 61
Captain - Age 64
All Others 67 (except the Chief)
This would be consistent with the case for the current pension structure. Hey man, you have to walk the talk. If we sell the early retirement as a necessity, then we need to retire early or find another argument - I don't know what it would be. You can rant and rave about how these are hard fought and won benefits, but that will not change the dilemma that confronts you today. The defined benefit boat is sinking. There are two large holes in the hull. You can either plug those holes, or ride the ship all way down to Davy Jones locker.