D.C. police officers will have to pay several times their salaries to switch from a 25-year to a 20-year retirement plan under a D.C. Council proposal, eroding its appeal to veteran officers, according to an actuarial study commissioned by the District.
Chief Cathy Lanier had raised concerns that the retirement plan could lead to a mass exodus of officers with 20 or more years of service.
But the report, by actuarial firm EFI, said there would be little to entice senior officers because of the costs associated with early retirement.
“Although there are thousands of participants who could transfer …, the high costs are likely to significantly limit the number of members who are willing to transfer,” according to the Jan. 22 report, obtained by The Examiner Wednesday.
Police and labor officials questioned the assumptions used in the report, including projections that everyone would retire at 20 years, and were expected to meet with EFI on the matter this week.
Under the proposal, a 40-year-old police officer with five years of service and a salary of $60,000 would have to pitch in an additional $120,000 to $180,000 to transfer to the 20-year retirement plan.
A 40-year-old officer with 15 years and a salary of $70,000 would have to pay an additional cost between seven or nine times his salary, or $490,000 and $630,000. The payments would have to be made before the officer retired.
The D.C. Council is weighing the matter as a way to improve police morale and stem the loss of experienced officers.
D.C. Councilman Phil Mendelson, who pushed the bill through his public safety committee on Tuesday, said he knew that the new pension measure was going to be expensive to the officers. But he said police union officials had convinced him that it would be a good recruiting tool.
“In the short term, it probably will not result in very many officers retiring after 20 years,” Mendelson said. “I don’t think many officers on the force today will opt in.” Still, he said, new recruits would be attracted to the option to serve fewer years before retirement.
But MPD union Chairman Kristopher Baumann, said EFI’s study was flawed. He said the firm has conceded that some of its cost of living calculations were inaccurate.
“It is completely inaccurate,” Baumann said.
