A Counter-productive Pension System
December 23, 2011
The City of Lansing’s pension system is way too costly and is
causing us to lose our most experienced police and firemen. When
they can get a generous pension after only 25 years and then
supplement it with income from another job, they have a huge
incentive to leave as soon as those 25 years are up - or sooner,
since they can purchase up to 5 years of service.
Take for example Mark Ally, former Chief of Police. He retired
in March of 2010 at age 48. He had only 24 years and one month
of service, so he purchased another 11 months at a cost of
$107,812. He retired to take a job as senior director of risk
management for Emergent BioSolutions Inc. I don’t know how much
he is paid there, but they apparently made him an offer he
couldn’t refuse – especially when he knew that his new salary
would be supplemented by a
$90,356 a year pension from the City.
"This is a bittersweet moment for me," Alley said in a
statement, "because I love my job and the people I work with. At
the same time, this is a wonderful opportunity for (my wife)
Cassie and me to start writing a new chapter in our lives.". . .
"Mark Alley has served the citizens of Lansing with distinction
under three different mayors," (Mayor) Bernero told the Lansing
State Journal. "He is a natural leader, a consummate
professional and a man of great honor and integrity." (source)
In effect, Lansing’s pension system pays employees to work
elsewhere – not a prudent use of the Lansing taxpayer’s money.
Besides losing experienced police and firemen, a system that
handsomely rewards them for getting out early might tend to
attract people who are in it for the money rather than love of
the work, or a desire to serve and protect. “Dedicated to the
job” is a phrase often associated with public safety workers,
but it doesn’t seem to fit employees who take the money and run
before age 50.
If the rationale is that public safety workers are worn out and
ineffective after 25 years, it still makes no sense to give them
pensions big enough to support them for the rest of their lives.
Even if they are no longer physically up to the strain of public
safety jobs, they should not expect to quit working altogether.
They should get another job and work until age 65, like regular
folks, rather than expect Lansing taxpayers to support them and
their families while they do nothing.
Being ineffective after 25 years on the job doesn’t seem be the
reason, however. Mandatory retirement age is 60 for police and
70 for firefighters.
The ability to do the job and do it well shouldn’t be based on
age. With the proper physical conditioning, workers should have
the strength and stamina to be effective well past age 60. Nor
does being under 50 guarantee that they are physically fit.
Fitness should be determined by periodic assessments, not
assumptions based on age.
Few of the City’s public safety workers stay beyond 25 years. Of
the firefighters on the payroll in 2010, I found only 5. One was
Fire Chief William T. Cochran, who has been on the job 29 years
and 3 months. Of the other 4, one was 10 months past 25 years as
of the end of 2010, the other three were 4 months past. Of the
police, I found only one, Sergeant Frank Koenigsknecht. He
retired in June of 2010 after 31 years and 3 months on the job.
Of 19 police and firefighters who retired in 2011, only 2 had
more than 25 years, and of the other 17, 10 purchased service.
of a male who reaches age 50 is 81.6, which means that if he
retires at 50 after 25 years of service, he will receive a
pension for 31.6 years - longer than he worked. I calculated
life expectancy at age 50 at
this site, using 12/1/1961 for
There is no way to tell, but my suspicion is that few, if any,
stop working altogether when they retire from the City. Their
pensions range from $55-70,000, which is pretty good with no
deduction for FICA or city income tax, but another salary could
easily bring the total to over $100,000 a year. The likelihood
that most police and firefighters go on to other jobs is
indicated by the fact that about half of them don’t wait until
their 25 years is up. Like Mark Alley, they purchase a month or
2 or more of service, paying around $7000 per month, and I don’t think they’d do
that unless they had another job to go to.
Pension details for some recent retirees are
For the retirees we looked at,
police pensions averaged 93.9% of salary and fire pensions
averaged 92.6% of salary.
The salaries and pensions
received by public service workers make them a luxury we can't
afford. That is part of the reason our police force has shrunk
from 244 at the end of 2009 to about 187 at the end of August
2011, and our firefighter total has shrunk from 214 to about 179
in the same period. (The 2009 figures come from pages B-14-15 of
34 police and 11 firefighters were
in June 2011; and 23 police and 24 firefighters
retired in 2010 and 2011.)
This is from a
12/19/11 article in the
Washington Post about the International Association of
Firefighters union (IAFF):
300,000-member [IAFF] is an
influential force in politics.
Candidates seek out the union’s
valuable endorsement so they can
use it in campaign ads and hold
press events where they are
flanked by uniformed
firefighters. . .
officials — and even some
Democrats — blamed generous wage
and pension benefits in union
contracts for creating budget
11/21/11 article by Angela Wittrock of mlive.com.