The Perils of Not Honoring
the Pension Promise

by ALADS Board of Directors
The public safety disasters in San Jose and Dallas should serve as cautionary case studies for any public official tempted by the pitch of public pension opponents to slash or walk away from their pension promises. Those officials must keep in mind that their current and future public safety employees have a say in what happens if pensions are slashed. In the case of San Jose and Dallas, the result has been a mass exodus of officers and the inability to recruit new officers, leading to short-staffed departments and a soaring crime rate.

Previous blogs covered San Jose's initiative to slash public safety pensions and the drastic effects on the police force and public safety. The measure was put forward by then Mayor Chuck Reed who chose not to engage in real reform at the bargaining table which would have provided savings of $467 million. Instead, Reed sold the measure by engaging in a full scale war on public employees through derisive name calling and lies about the scope of pension deficits. When the measure passed, current officers and potential recruits had their say.

Officers left in droves and recruits stayed away. Department ranks plummeted from 1,350 officers to 850 officers as officers retired or left for other police agencies.  Recruitment was non-existent; Academy classes authorized for 60 cadets had less than 15 cadets, and many left for other departments upon graduation. The crime rate soared with murders up 33% and robberies 37% of 2004 rates.  Crimes went unsolved, sex crime detectives had to carrying 60 cases and there was only one property crime detective for the whole city.

Only when Chuck Reed left office did common sense return, with voters passing a measure repealing Measure B. This month, San Jose reached an agreement with public safety unions to boost there pay 20% over the next three years, as well as providing bonuses to encourage former officers to return to the department. 

In Dallas, the story of disaster is still unfolding. The Dallas public safety pension system is projected to become insolvent by 2028 via a combination of poor investment decisions and poor governance--during years of bad investments, city council members on the pension board were absent from board meetings more than 90 percent of the time. An additional factor was a DROP account provided to employees paying more than 8%, with officers encouraged to give up higher potential pension checks to enter the program.  As the magnitude of insolvency became clear in 2016, a " run on the bank" ensued by retired employees who withdrew more than $500 million from the system's DROP accounts before withdrawals were halted.
The most recent proposal by the city to deal with the crisis is an alternative plan that would cast off the failing retirement fund and create a new plan with lesser benefits which active employees would be able to join.  The pension system would then be left to devise how to pay out the money it had left to retirees and employees who chose not to join the new system.

The fallout is similar to San Jose, with 120 officers leaving the department between October - December 2016, many of the officers citing the issues with the pension fund as a motivation for leaving. In all, 365 officers left in 2016 and only 108 were hired, leaving an already depleted  Dallas department short 400 officers from its authorized strength of 3,500. And the city manager admitting future recruiting  goals had become "difficult if not impossible" to meet. And, just as in San Jose, crime is on the rise as the police force ranks shrink. Violent crimes, such as murder, robbery and aggravated assault increased over the previous year, with homicides up more than 26%. Unless they have substantial savings, the public safety retirees in Dallas will be left penniless.

Those retirees in Dallas, just as deputies in Los Angeles, do not contribute to social security during employment and therefore do not receive social security checks.

Further, even having worked in another job in addition to public safety--whether it be prior military service, private sector employment, or a public sector job--which contributed to social security will not result in a full social security check, thanks to the " Windfall Elimination Provision."  That law diminishes a social security check unless there was 30 years of employment in the social security contributing job, with lesser reductions for having worked 20-30 years in such a job.  In addition, the " Government Pension Offset" drastically reduces any social security payment paid to spouses, widows or widowers.
A guaranteed pension is a vital part of ensuring a law enforcement agency can recruit and retain qualified deputies and officers. The cities of San Jose and Dallas are textbook examples of how failing to honor that pension promise can devastate a law enforcement agency and seriously jeopardize public safety. 
The Association for Los Angeles Deputy Sheriffs (ALADS) is the collective bargaining agent representing more than 7,900 deputy sheriffs and district attorney investigators working in Los Angeles County. 

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