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How Do Pension Plans Impact Recruitment and Retention of Law Enforcement?
S. 546, among other provisions, requires the Government Accountability Office (GAO) to conduct a study to consider the comprehensive effects of recruitment and retention on federal, state, tribal, and local law enforcement agencies in the U.S.
By: Tony Roda, Williams & JensenAs part of its Police Week legislative agenda, the House passed the Recruit and Retain Act with a strong bipartisan vote of 370-18. The bill, S. 546, had been approved by the Senate in July 2023 on a voice vote. President Biden signed the legislation into law on May 24, 2024.
S. 546, among other provisions, requires the Government Accountability Office (GAO) to conduct a study to consider the comprehensive effects of recruitment and retention on federal, state, tribal, and local law enforcement agencies in the U.S. In particular, the study would identify the primary reasons individuals join law enforcement agencies and resign or retire from those agencies. The study also will drill down in an attempt to identify how the reasons may have changed over time, the effects of recruitment and retention on public safety, the effects of electronic media on recruitment, barriers to recruitment and retention, and recommendations for ways to address the barriers.
It is a timely study to launch. Communities, large and small, throughout the country are struggling to fill their ranks of law enforcement officers. It is important to note that the legislation instructs the GAO to “…endeavor to ensure accurate representation of law enforcement agencies…by surveying a broad cross-section…from various regions…different sizes…rural, suburban, and urban jurisdictions.” Although the study's findings are not due to be reported to Congress until 540 days after enactment of the legislation, when they are received, we expect Congress to pay attention.
One issue that is likely to be raised by law enforcement during the survey process is employee and retiree benefits. Specific to the interests of NCPERS' members are defined benefit (DB) plans. There have been some notable examples of changes to DB plans or the outright repeal of such plans leading to major disruptions in recruitment and retention of law enforcement personnel.
For example, I've heard it said by presenters at national pension conferences that the best place to find an Alaska-trained public safety officer is not in Alaska. It is, instead, in the lower 48 states, and it's not too difficult to understand why. In 2005, Alaska closed two of its statewide DB plans, including the plan for public safety employees. Since then, Alaska has been struggling to retain law enforcement officers. Alaska spends its tax revenue to train these personnel only to see them take jobs in other states with more robust benefit plans, including DB pension plans.
The experience of Palm Beach, Florida, which was well documented in a 2018 report by the National Institute on Retirement Security (NIRS), is also instructive. In 2012, the Palm Beach Town Council closed its DB plans for all employees, including public safety. The existing DB plans were replaced by a dramatically lower DB plan benefit coupled with a defined contribution (DC) retirement savings account. In its Executive Summary, NIRS's report states:
Employees' reactions to losing expected DB pension benefits were swift. The town's two public safety pensions had covered 120 employees at the end of 2011. In addition to the 20 percent of the town's workforce that retired after the change, 109 other protective officers left before retirement in the next four years. Mid-career public safety officers departed the forces in unprecedented numbers with 53 vested police officers and firefighters departing Palm Beach ‘s forces from 2012 to 2015, compared to just two such experienced employees in the four years from 2008 to 2011.
Much like in Alaska, experienced and well-trained public safety officers left Palm Beach for other jurisdictions. The Palm Beach benefit change was a failure and, in 2016, the Town Council voted to abandon the DC plans and restore the DB plan to a more generous benefit.
The two examples tell the same simple story. Law enforcement, and fire personnel, have unique and highly sought after skills that are applicable in any community. If their personal lives allow for it, they can vote with their feet if circumstances change in their jurisdiction, such as happened with the policy changes affecting DB plans in Alaska and Palm Beach. Thousands of miles of relocation were needed for an Alaska public safety officer, while only a few miles were necessary in Florida—possibly not even a change in home address, only in workplace. Yet, the results were the same. These highly skilled workers moved on, and benefit changes, specifically changes to their pension plans, were the cause.
Once the Recruit and Retain Act is signed into law by President Biden, GAO will create its methodology and begin its survey of law enforcement agencies. NCPERS expects that the importance of DB plans to recruitment and retention will be one of the most significant pieces to this puzzle.
Note: NCPERS 2024 Public Safety Conference, held October 27-30 in Palm Springs, is the premier learning and networking event for leaders of pension systems for fire, police, and other first responders. Sign up here to learn more.
Tony Roda is a principal at the Washington, D.C. law and lobbying firm Williams & Jensen, where he specializes in legislative, regulatory, and fiduciary matters affecting state and local pension plans. He represents the National Conference on Public Employee Retirement Systems and state-wide, county, and municipal pension plans in California, Colorado, Georgia, Kentucky, Ohio, Tennessee, and Texas. Tony has an undergraduate degree in government and politics from the University of Maryland, J.D. from the Catholic University of America, and LL.M (tax law) from the Georgetown University Law Center.
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