City supplements $103,000 salary with $73,000 pension
March 23, 2012



Former Lansing police captain Ray Hall retired in February to take a job with University of Michigan-Flint as chief of police. He started his new job on February 20 at a salary of $103,000, according to this response to my FOIA request. His City of Lansing pension is $73,178.

Hall is 49 years old. He was 16 months shy of the 25 years needed to qualify for a pension with the Lansing Police and Fire Retirement System, so he purchased 16 months.

As I reported last fall, Mark Alley, Lansing's former chief of police, retired in March of 2010 to take a job as senior director of risk management for Emergent BioSolutions Inc. in Lansing. Since Emergent is not a public agency, they are not subject to the Freedom of Information Act and not likely to volunteer his new salary. We can only imagine. But we do know that his pension from the City is $90,356.

Alley retired 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.

Question #1: Should police and firefighters be allowed to retire after only 25 years of service? A lot of recent retirees are under age 50. The fact that mandatory retirement age is 60 for police and 70 for firefighters suggests that the City thinks they are capable of doing the job past age 50.

Question #2: If they are to retire after only 25 years, should the City be quite so generous with the pension? With their 3.2% multiplier - compared to 1.5% for state employees - pensions average over 90% of salary, and like Mark Alley and Ray Hall, many retirees go immediately to other jobs, or start their own businesses. This is suggested by the fact that about one third of retirees purchase service so they don't have to wait until they put in the entire 25 years. They can purchase up to 5 years of service.

Due to budget constraints, Lansing has cut its police force by 42 since September of 2010 (Lansing State Journal, 3/8/2012), yet it continues to pay 50-year-old retirees nearly as much as officers on the job.

20 and out

Ah, but there's more. Lansing's firefighters union (IAFF, International Association of Firefighters), is pushing for "20-and-out" - a one-time "window" of a few months during which firefighters can retire after only 20 years of service. They are retiring as young as 45 now; this means some will be able to retire at age 40.

I first learned about the proposal from the Police and Fire Retirement Board meeting minutes. I've gathered pertinent excerpts in this document. But I also submitted a FOIA request for the proposal and the actuarial analysis of the proposal. The City sent me actuarial analysis, but not the proposal "because it would frustrate the collective bargaining process." We wouldn't want that! Here is the City's full response. The actuarial analysis follows the cover letter.

The pension for firefighters who retire with less than 25 years of service will be reduced by 4.6% for each year under 25, and the actuary says this will make the proposal cost-neutral. However, I don't see where they've considered the extra years of family health insurance, or that the plan is to replace the retirees with laid-off firefighters.

The Board met Tuesday, March 20, but I wasn't able to attend.

Council member Carol Wood is a Police and Fire board member. Other members are a city resident appointed by the mayor, 2 police and 2 firefighters.

As indicated in the FOIA response, I was denied the early retirement proposal because FOIA exempts documents that are part of the collective bargaining process. There is a statement in the Police and Fire Board minutes that makes me wonder if the proposal wasn't initially made outside the collective bargaining process, but later included just to conceal it from the public. In the excerpts from the minutes of the January 17 meeting, it says Mr. Bryan Epling of the IAFF said "he believed that the Early-Out Incentive could be part of the collective bargaining." This was at least 3 months after the proposal first came up.