July 13, 2012 09:37 AM
Lansing Kills Public Pension Perk
After a Better Government Association investigation found the Village of Lansing giving retiring police and firefighters raises on their last day of work, the board voted to repeal the pension sweetener.
By Patrick Rehkamp/BGA
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The village of Lansing’s trustees voted to immediately repeal a practice that improperly pads benefits for retiring police and firefighters, following a Better Government Association investigation into the matter.
Village President Norm Abbott Wednesday signed the resolution ending the nearly 20-year-old practice known as pension spiking.
"It kills the perk. It’s gone," Abbott said. "I love my police and fire department. They do a phenomenal job. But if you don’t have the money you don’t have the money."
A BGA investigation found that over the past 20 or so years about 40 veteran Lansing police officers and firefighters were given salary boosts by the village as they were retiring, spiking their individual pensions by at least $6,000 each in the first year alone.
All together, at least $2.5 million in added pension payouts have been distributed since this taxpayer-funded perk was created in 1993.
Under the now-defunct plan, retiring first responders could take a 25 percent boost or $12,000 raise, whichever is greater, on their last day of work.
The only requirement was that it be taken within six months of accruing 20 years on the job and turning 50 years old. The original intent was to entice older cops and firefighters to retire to help keep the payroll down.
Individuals can still retire at age 50 if they have 20 years in.
The six-member village board voted 4-0 in favor of the repeal, with Trustee Julie Butler abstaining from the vote and Trustee Tony DeLaurentis absent. Butler’s husband is a Lansing cop and DeLaurentis has a son-in-law on the force.
The Lansing police pension fund currently holds around $24 million, which amounts to just 50 percent of expected liabilities. The fire fund, which holds about $9 million, is 60 percent funded. Pension funds must be at least 90 percent funded by 2040.
A representative for the police pension fund could not be reached and the fire pension fund declined to comment other than say the board acted within its authority.
This story was written and reported by the BGA’s Patrick Rehkamp, who can be reached at prehkamp@bettergov.org or (312) 386-9201.