Do we pay police and firefighters too much?

October 26, 2011

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If you are registered to vote in Lansing, you probably got this card in the mail:

 

 

 

 

 

 

 

 

 


And this one, too:

Pretty scary, right? The life you save (by voting for the special millage) may be your own!! Itís a matter of life and death!

Yes, we do want our police and fire departments to be fully staffed, and we are willing to pay what it takes. But are we being taken for a ride? Are police and firefighters overpaid? Here is what police lieutenants, sergeants, detectives and patrolmen were paid in 2010:

  Count Average
Salary
Average
2010 Earnings
Lieutenant 8

$74,443

$80,988

Sergeant 30 $66,851

$75,406

Detective 21

$61,194

$69,975

Patrolman 152

$55,099

$60,362

And here is what the fire department's captains, lieutenants, FIRENG02s and firefighters were paid:

  Count Average
Salary
Average
2010 Earnings
Captain 26

$50,586

$80,992

Lieutenant 18

$47,050

$75,379

FIRENG02

50

$45,282

$71,456

Firefighter

88

$42,076

$66,596

Note that 2010 total earnings are often quite a lot higher than salaries. That is due to overtime and extras such as longevity, insurance opt-out payments and gun and clothing allowances.

Benefits for police and firefighters are good, too - especially the pension. Police and firefighters have their own pension system, separate from all other City employees. Membership is restricted to fire department employees who hold the rank of firefighter or higher and police department employees who hold the rank of patrolman or higher. They can retire at any age with 25 years of service, and if they are in a hurry to get out, they can purchase up to 5 years of service.

Pensions are calculated by multiplying FAC times the first 25 years of service (in years) times a "multiplier". FAC is short for "final average compensation". For all City employees, FAC is the average of the highest consecutive 2 years in the last 10.  For police and firefighters, the multiplier is 3.2%, higher than for any other City employees and more than twice the 1.5% state employees get. But there are maximums. Pensions are limited to 80% of FAC. (source: 2012 Actuarial Valuation, page 12)

Michigan state police also can retire after 25 years, but instead of calculating pension by multiplying years of service times FAC times a multiplier, they simply get 60% of FAC. Lansing's public safety workers get 80% of FAC (.032 x 25 = .80). That means their pensions are 33.3% higher than state police pensions. State police, however, don't contribute to their pension system, while Lansing firefighters contribute 7.58%, police supervisors contribute 8.5%, and police non-supervisors contribute 9.52%. And although Lansing public safety pensions increase by $525 a year compared to $500 for state police pensions, Lansing's increases don't start until age 60, while the increases for state police start within 2 years of retirement.

For pension details for some recent City of Lansing retirees, click here. Note that for Police and Fire retirees, pensions are usually higher than salaries. That is because - as noted above - actual earnings are often higher than salaries and also because "final leave payments" received at retirement further boost FAC. But most of all, it is due to that 3.2% multiplier. Pensions are so generous that few police and firefighters stay beyond 25 years, and about half purchase service in order to get out even sooner. I suspect that they already have other jobs lined up before they retire. So we are not only paying them well when they are on the job, but also after they've gone on to their next job.