By Alison Knezevich, The Baltimore Sun
10:46 PM EST, December 1, 2011
Several top police officers in Baltimore County retired this year with lump-sum payments of close to $500,000 under a program that has been ended because of concerns about its cost, according to figures released Thursday.
Deferred Retirement Option Programs allow employees who delay retirement to receive the one-time payments when they leave, in exchange for smaller annual pensions. County officials said the county must contribute $7.5 million to its pension fund this year for the program, according to an actuarial analysis.
Such programs, generally used to keep experienced workers on the job, have raised questions around the country as governments debate how much they cost in the long run. Baltimore City's public safety unions sued to try to keep a similar program after the city decided to eliminate it last year. Baltimore County ended the benefit for new public safety hires in 2007, although it still has one for other employees.
Three county police majors left their jobs this year with payouts of more than half a million dollars each, according to the figures. They also have annual pensions exceeding $150,000. Another six police employees — four captains and two lieutenants — left with payments of more than $400,000 each.
One police major, who retired June 1, left with a payment of nearly $520,000, plus more than $101,000 for unused vacation and comp time. The major's yearly pension will be more than $158,000. Public safety employees in the county can be paid for up to 50 vacation days and 480 hours of comp time when they retire.
Stephan Fugate, president of the Baltimore Fire Officers Association, said the Baltimore County police benefits seem high.
"Those numbers are, quite frankly, mind-boggling — not only the DROP benefit, but the pension benefit as well," Fugate said.
The Baltimore Sun requested figures on retirement payments for county employees who have retired since June 1 of this year. The county data did not link the payouts to names of retirees.
The County Council approved DROP in 2004. Police officers with 27 years of experience and firefighters with 32 years were eligible. The optional program was part of an agreement reached in 2001 by then-County Executive C.A. Dutch Ruppersberger's administration and public safety unions.
The program is intended to reduce the amount of salary that the county uses to calculate workers' pensions. The lump sum that they get when they retire includes the annual pension benefit that they would have gotten if they had retired when they entered the program, plus the contributions they made in the meantime and at least 5 percent interest.
Union officials emphasize that while the numbers are high, the beneficiaries are getting reduced pension benefits.
Michael Day, president of the Baltimore County Professional Fire Fighters Association, said the program has helped retain veterans.
"It kept people around longer," he said. "These dollar figures that the individuals are finally collecting is money that was due to them anyway."
One fire captain who retired this year received a roughly $336,000 DROP payment, with a yearly pension of about $99,000. Another got about $327,329, plus a pension of more than $96,000.
When the program first started, the county contributed $5 million annually to the pension fund, county officials said Thursday.
Most employees do not walk away with huge payouts, Day said.
"You're talking about brass," he said. "You're not talking about rank-and-file."
Baltimore County Fraternal Order of Police President Cole Weston emphasized that the program is optional.
"Some people take it, some people choose not to take it," he said.
Public safety employees hired after 2007 aren't eligible for the program. That year the county ended the public safety DROP, but started one for general employees as part of pension reform efforts.
That program is designed differently than the public safety DROP, said Don Mohler, chief of staff to County Executive Kevin Kamenetz. It is meant to save on retiree health care costs by keeping employees on the payroll until they are closer to eligibility for Medicare coverage.
DROP programs have been questioned elsewhere, said Keith Brainard, research director at the National Association of State Retirement Administrators.
In some places, people have questioned programs that let elected officials receive DROP payments, for instance.
"The size of some DROPs can create an appearance of an overly generous benefit," Brainard said. "That may or may not be a valid criticism. A DROP in and of itself is not an inappropriate benefit. … It depends on the circumstances."
Baltimore City's public safety DROP program started in 1996. In 2008, the benefit structure was reduced, Fugate said.
Last year, the city decided to phase out the program, and that decision is now part of a federal lawsuit filed by public safety unions, said Fugate.
Gary McLhinney, former president of the Baltimore police union, said there was good reason for starting the city's plan, which was Maryland's first.
"You can't look at DROP with today's magnifying glass," said McLhinney, who helped write the city's program. "You really have to look at what was happening in 1995 and 1996, and why we needed a DROP program. … And that's because we were having a mass exodus of police officers leaving the city."
McLhinney said half-million-dollar checks are not reflective of what most union members receive under DROP programs.
"Most rank-and-file people are not making that money," he said, "and in law enforcement, we pay people more money based on their responsibilities and rank."
In Philadelphia, Mayor Michael A. Nutter tried to eliminate the benefit this year. The City Council overrode Nutter's veto of a bill that kept the program but was meant to make it less costly. Philadelphia's program allows elected officials to enroll, which sparked public outrage.
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