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| 5/1/2008 12:53:00 PM | Email this article • Print this article | | Comparison of LB 371 and other benefits plans | A comparison of retirement benefits proposed in LB 371 with the Nebraska State Patrol, Lincoln and Omaha Police retirement plans. Example: A certified law enforcement officer retires at age 55 with 20 years of service at a salary of $50,000.
LB 371: takes the last three years' salary, divides it monthly, then multiplies the average monthly compensation by the percentage the officer is entitled to. An officer receives 2.25 percent per year of service.
$50,000
$50,000
+$50,000
$150,000
Nebraska State Patrol: Similar calculations, but the State Patrol awards a higher percentage to retiring 20-year veterans.
$50,000
$50,000
+$50,000
$150,000
Lincoln Police Dept.: Similar calculations, but retirement is based on the last 12 months of service and awards a different percentage to retiring 20-year veterans.
$50,000 divided by 12 months = $4,167.00 final average monthly compensation
Multiply $4,167.00 by the retirement percent of 51.2% = $2,133.00
Omaha Police Dept.: Similar calculations, but retirement is based on the last 12 months of service and awards a different percentage to retiring 20-year veterans.
$50,000 divided by 12 months = $4,167.00 final average monthly compensation
Multiply $4,167.00 by the retirement percent of 55% = $2,292.00 final average monthly compensation.
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To Serve and Protect: New options proposed for officers' retirement
By Stephanie Ludwig
Reporter
One of the things Robert Bellamy, a corporal with the Washington County Corrections Center, loves most about his job is the ability to take pride in it.
He loves that his grandson is proud to tell his friends his grandfather is a cop. He loves talking to school-age children about anti-drug programs. He loves believing he can make a difference.
One thing that Bellamy dislikes about his profession, though, is the retirement plan that comes with his and most other law enforcement officer's jobs across the state of Nebraska. While there is little or no chance of the plan changing to benefit Bellamy before he leaves the profession, he feels there may be a chance to change it for future officers.
But a different retirement may be too large of a price tag for communities around the state to pay.
This is part two of a two-part series that provides a deeper look at the retirement system currently in place for law enforcement officers across the state of Nebraska, specifically in Washington County and efforts to change it.
***
In 1984, state law changed how law enforcement officers retired.
Before that time, law enforcement worked under various, non-uniform retirement plans. Now, a defined contributions plan is in place for all law enforcement units across the state, except for the Nebraska State Patrol, Omaha and Lincoln police and Douglas and Lancaster counties' sheriffs.
There have been efforts throughout the years to change to what many officers believe was a better plan.
One way has been through the Legislature. During the 2008 session, Legislative Bill 371 was introduced by Sen. Philip Erdman of Bayard. Called the Nebraska Peace Officer Retirement Act, the bill essentially would have given defined benefits plans to all Nebraska law enforcement units, no matter the classification. It also called for a 9.25 percent contribution on monthly wages by both employer and employee.
The bill was never heard on the floor.
Even though the bill did not pass, many law enforcement officers still stand behind it and are hopeful for something similar to be introduced next year.
"This provides opportunities for those in smaller communities," said Conservation officer Jon Reeves of Kennard. "There are many officers that use these as start-out positions, then move on to a place with benefits and better retirement plans."
Reeves, Bellamy and Sheriff Mike Robinson stand behind the bill wholeheartedly.
"We are the only state that we can find that operates under a defined contributions plan. Our neighbors use defined benefits plans," Reeves said, referring to Iowa, Kansas, South Dakota, Missouri, Colorado and Oklahoma. "Nebraska is behind the times."
Among the benefits the officers see to LB 371 include enticement for new recruits to work in Nebraska, retirement of older officers when they are still fit for duty, less sick leave from officers who are in ill health but can't retire and opportunities for officers to start their careers over later in life. The bill would also help replace top pay range officers with new officers, cutting salary expenditures and increasing employment opportunities in Nebraska.
"Right now we're so far behind the curve that, consequently, it's difficult for small agencies to work in law enforcement because of the pay, benefits and retirement," Reeves said.
He said that in many Class II towns and villages (having fewer than 5,000 citizens), there aren't any retirement plans for their officers. In fact, many forgo their own law enforcement, instead utilizing the local sheriff's department.
The Nebraska State Patrol, Omaha and Lincoln Police and the Douglas and Lancaster counties sheriff's departments are the only groups in Nebraska to have defined benefits plans. Schoolteachers and judges also have defined benefits for retirement.
"You want to say we're part of the Omaha metro area, then show it to your law enforcement," Robinson said. "Show them something to stay and retire for."
Washington County has not taken a stand either for or against the provisions in LB 371. Reeves and Robinson presented talking points about the bill to the county board in early April, and the board agreed to study the situation. Robinson estimated it would only cost the county one-tenth of one percent of the county's budget.
It may be different for cities, though. Part of the reason LB 371 did not pass was because many cities could not see a means to fund it, said Blair Police chief Joe Lager.
According to Lager, the bill was geared more toward Class I cities (cities with a population of 5,000 or more), who may or may not have the means to fund retirees 20-30 years down the line. For Class II towns and villages, that may be virtually impossible.
"All of a sudden there's a whole lot of money involved," Lager said. "Anytime you're dealing with taxpayer money you want to make sure it's well-spent."
That's thes main reason the city of Blair opposed the legislation when it was still alive. City administrator Rod Storm said the bill would have created thousands of dollars in non-funded liability, which in turn would be passed onto taxpayers.
"We need to protect the taxpayers of Blair," Storm said.
Phil Green likened a defined benefits plan to a contract that must be honored, no matter what the economy or society is like at the time of retirement. He said the defined benefits plan would have to be honored, even if an officer retires at age 55 and lives for another 40 years, costing the city hundreds of thousands of dollars, even if the city can't afford it.
Under a defined contributions plan, an officer's retirement is more dependent on the markets. The vesting schedule, or time they are eligible for retirement, is longer. Under LB 371-a defined benefits plan- an earlier vesting schedule means officers can retire earlier, giving them more time for a second career and the chance for a longer pension, depending on how long they live.
Green said that many companies nationwide are dropping defined benefits plans because they're just not realistic in the long term.
"If you go back to universally defined benefits plan, you'll be losing jobs statewide, in half the villages and towns because they could not afford to maintain them," Storm said.
Storm said that before the law was changed to the defined contributions plan in 1984, one town had to pass bonds in order to help pay for their city's retirement fund. He doesn't want that to happen to Blair.
"We all want more. The average citizen wants more. The average public employee wants more," Green said. "For the average citizen to make more, goods and services will cost more. If the average public employee wants more, taxes might cost more."
"It's a balancing act. We want to deal with knowns and be fair about it," Storm said. "We don't want to create an environment where we can sell out the taxpayers of the community."
The city officials mentioned that the League of Municipalities did attempt to negotiate with police unions to gradually up employee contributions from the current 6 percent to 9 percent, with the cities matching. The unions, however, refused the deal.
Blair Mayor Jim Realph is on the League of Municipalities Board of Directors.
Storm and Green said the city of Blair will support legislation that gives law enforcement officers defined benefits for retirement only if there is a definite plan to make up for the non-funded liability.
Chief Joe Lager perhaps said it best.
"I'm stuck between a rock and a hard place. Do I want better retirement? Duh. But the city, my boss, doesn't want to pay for it and what is fair? I don't know what's fairest," he said.
"It's tough. It's not an easy choice. It's not black-and-white."
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