Add diminished retirement benefits to the list of factors being blamed for driving local police officers and firefighters from public safety careers.
Recruitment and retention of law enforcement officers is a major problem across Utah, with an estimated 600 open positions, said Tom Ross, president of the Utah Chiefs of Police Association.
“And it only keeps getting worse,” said Ross, police chief in Bountiful.
Roy City Manager Jason Poulsen is taking aim at the Tier 2 public safety retirement program. That’s the less lucrative retirement system the Legislature created in 2010.
“We can’t hire people because of the Tier 2 system,” Poulsen said.
Further, Tier 2 has spawned a morale issue because public safety employees hired before July 1, 2011, were grandfathered into the Tier 1 system.
Tier 1 workers need 20 years of service for full retirement, but Tier 2 requires 25. And the Tier 1 monthly retirement benefit is 50 percent of the average salary, compared to 37.5 percent for Tier 2 beneficiaries.
A Tier 2 police officer working side by side with a Tier 1 officer is deflating for the newer officer, Poulsen said, because “they have to follow the same rules, they have to follow the same laws, but they have to work five years longer and get paid 12.5 percent less.”
When the Legislature changed the retirement packages, its companion decision to thwart “retirement in place” double-dipping arrangements got most of the publicity. Some public safety employees were retiring after their 20 years, then being quickly “rehired” to keep doing the same job with the same benefits.
At the time, pension programs around the nation were suffering shocking investment losses due to the 2008 economic collapse. So Utah lawmakers decided to create Tier 2, which reduced the state’s pension liabilities.
“It was not just to diminish the benefit. It was more to have predictable costs to the employer,” said Utah Retirement Systems spokesman Brian Holland. “With a partial pension with a 401(k), the governments now know precisely what their liabilities are.”
The overall state retirement system, which covers teachers, police, firefighters and other local and state government workers, grew to $32 billion in 2017, according to the URS annual report.
That was a $3 billion increase from 2016 and pushed the system to a healthy funded ratio of 90 percent — the ratio of the pension’s assets to its liabilities, the agency said.
The public safety portion of the overall retirement system pulled in $422 million of investment income in 2017 and collected $146 million from the participating government agencies. It paid $173 in retirement benefits.
That comparatively rosy system picture isn’t much comfort to front-line hiring managers like Poulsen and Ross.
Poulsen was Roy’s fire chief for seven years before becoming city manager in August 2017.
“I’ve seen both worlds now,” he said. “Retention and recruitment is absolutely killing us, and the (Tier 2 retirement) system doesn’t work.”
To illustrate the situation, Poulsen said Roy used to get hundreds of applications for police and firefighter openings “but now we’re lucky to get 20 or 30.”
He concludes that more people are choosing careers with private employers rather than going into public safety.
“It has always been that the private sector pays better but government has better retirement, but now the private sector is still paying better and government retirement systems have been lessened,” Ross said.
And as Utah’s population expands, demand for police officers has increased by about 50 a year, Ross said.
Poulsen said smaller cities suffer in their position on the competitive food chain. Northern Utah law enforcement agencies say they regularly lose officers to agencies in the Salt Lake valley that pay more.
Statewide, 135 public safety workers in Tier 2 left their professions in 2016, many of them before becoming fully vested in the benefits they accrued until they quit, Ross said.
“So we’re having a harder time getting officers and losing the ones we’re getting,” he said.
Four years ago, police work in general became even more problematic for other reasons.
The Aug. 9, 2014, shooting of an unarmed teenager by police in Ferguson, Missouri, and subsequent events resulted in protests against police. Groups such as Black Lives Matter stepped up activism against law enforcement agencies.
“The scrutiny on law enforcement since 2014 has been unprecedented,” Ross said. “You put it all together, we just can’t staff our department.”
The police chiefs’ association is engaging state lawmakers about the retirement and pay issues.
“It’s interesting they are listening and hearing that the problem is continuing, and they have accepted that it is getting worse,” Ross said. “I don’t know what appetite there is in the Legislature in general to make changes.”
Ideas for improving Tier 2 include increasing the 401(k) portion of the benefit to offset some of the loss from the Tier 1 era, Ross said, or restoring the benefit percentage to 50 percent of average salary.
Public support is needed, too, Ross said, so part of his mission is educational.
“If we’re down 600 officers in the state of Utah, the public needs to be aware of that,” Ross said. “We need to have enough officers to be able to show up when people need them on critical calls.”
Poulsen said his impression of legislative interest in the retirement issue is that it’s “all talk.”
So he intends to rally support among other public officials, including cities, counties and school districts.