Dozens of retired Los Angeles employees are collecting such generous retirement pay that they exceed pension fund limits set by the Internal Revenue Service, saddling taxpayers with additional costs, the Los Angeles Times reported Monday, citing a data analysis it conducted.
Their lavish pensions have forced the city to establish an “Excess Benefit Plan” to pay what the pension system cannot legally cover, using money that could otherwise be tapped to fix sidewalks, fight homelessness or hire more cops, The Times reported.
In all, the little-known fund has paid $14.6 million to 110 retired employees since 2010, The Times’ analysis showed.
The list of recipients is dominated by former cops and firefighters whose million-dollar payouts from a separate retirement program drove their incomes well over the $220,000 annual limit the IRS allows pension funds to pay.
The top recipient of excess benefits last year was former LAPD Assistant Chief Earl Paysinger, whose $251,000 pension alone would have put him over the limit.
But an additional $1.3 illion lump sum payment Paysinger got through the Deferred Retirement Option Plan when he retired in 2016 catapulted him way over the top, requiring the city to pay more than half of his pension from the Excess Benefit Plan.
Next was former Assistant Fire Chief Emile Mack, who also received a $1.3 million DROP payment in addition to his $247,000 pension, according to city data from 2017, the last year for which complete records are available, according to The Times.
Joining them soon at the top of the list will be current LAPD Chief Michel Moore, who got a $1.27 million DROP payment and started collecting his $240,000 pension when he retired, briefly, earlier this year. He’s now collecting an additional $350,000 per year in salary from city taxpayers.
The DROP program came under scrutiny this year after a Times investigation found that nearly half of the cops and firefighters who have entered the program, which pays their salary and pension simultaneously for up to the last five years of their careers, subsequently took injury leaves, typically for bad backs, sore knees, carpal tunnel syndrome and other conditions that afflict aging bodies regardless of profession. The average absence was about 10 months, but hundreds took more than a year off, at essentially double their usual pay.
In response to The Times’ investigation, Mayor Eric Garcetti and leaders of the unions representing police and firefighters called for reform, requiring that people in DROP show up for about half of their scheduled hours in any given month in order to get the extra pension check. The proposal passed its first reading in the city council 12 to 0; a second vote is expected in January.
Supporters of the program suffered another blow last month when a city report showed DROP has never been “cost-neutral” as was promised to voters in 2001.
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