Wrong about police, firefighter pensions exceeding $100,000
July 3, 2017; updated July 5
An earlier version of this story was titled "Some Lansing police, firefighter pensions may exceed $100,000." My calculations turned out to be 30-65% too high. Sorry if I spoiled anyone's holiday.
After I posted the story, I realized I had a way to check my numbers. I had actual pension and FAC amounts for police and firefighters who retired in 2010, along with detailed payroll information for that year, so I was able to perform the same calculations as I did below for 2016. The problem seems to be that my calculation of FAC was way too high, and the only explanation I can think of is that not all of the final leave payment can be considered for pension calculation purposes.
There is another possibility, and that is that I am right. That means the City's Retirement Office has been calculating pensions incorrectly. If that is the case, retirees have been getting shorted on their pensions for many years.
Here is the story as originally presented:
The pension amounts below are ESTIMATES, not the real thing. I calculated them based on payroll information provided by the City of Lansing. I requested the information in early March and the City delivered on June 26. You can see it all by clicking Directory above, then Reports, then - under City of Lansing - 2016 Employee Wages.
The information was received as an Excel file, so I was able to sort it in various sequences, one of which was by final leave payment. The final leave payment is the payoff at retirement of accumulated compensation. Exactly what it includes, I don't know, but if it is included in the final average compensation (FAC), it has the effect of boosting the pension. For police and firefighters, FAC is total compensation received in the last 24 months, divided by 2. The pension is FAC times years of service times 3.2%. Police and firefighters can retire at any age after 25 years or after age 55 with 10 years.
For the above chart, I got the age and service amounts from the meeting minutes of the Police and Fire Retirement System Board. The rest came from the 2016 payroll information. To get FAC, I calculated monthly pay by adding up the figures from 3 columns - wages, overtime and miscellaneous - and dividing the total by the number of months (and fractions of a month) worked in 2016. I multiplied the monthly amount by 24, added the final leave payment, and divided by 2.
I used 25 for years of service for anyone under age 55, but used the actual years of service for those 55 or older. Several of the retirees didn't have 25 years on the job and had to purchase service to get it up to 25:
Ryan Cressman used 4 years, 5 months of reciprocal retirement service credit from City of Westland to get the 25 years required for retirement, but only the 20 years 5 months at Lansing was used to calculate the pension. I initially used the full 25 years. He corrected me on this.
My pension estimates may be wrong, but state law does not allow us (the public) to know the actual pension amounts for these retirees. Section 20h(3), Act 314 of 1965, Public Employee Retirement System Investment Act says, in part:
That provision was added 5 years ago, by Public Act 347 of 2012. Some weasel legislator was persuaded to slip it into a bill that was supposed to deal with investment of pension funds. I suspect it was at the request of public safety unions, and it was to stop me from posting pension amounts for City of Lansing retirees on this website. I pleaded with Governor Snyder to veto the bill - to no avail. It went into effect in April 2013. I tested it by FOIAing the pension amount for a Lansing retiree. My request was denied.
Since then, I've posted several stories on this:
I also asked Andy Schor, my state representative and current candidate for Lansing mayor, to remove the provision. He had the amendment drafted, but first wanted UAW Local 6000 to review it. He said he wanted "to be considerate of the thoughts of those that served to make our government work before moving forward with something like this." In doing his due diligence, he said, he found that many people objected to it. That was the end of it.
What pisses me off is that I am fighting this battle alone. Where are the professionals? I've looked, and I've never seen this FOIA exemption for pensions mentioned in print or broadcast media (except for Bridge Magazine, which printed a story I wrote). And where is the frickin' Michigan Coalition for Open Government?
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