Despite not having to show up for work since June 2007, Manuel Avila received periodic increases in pay, managed to double his monthly pension and qualified for free healthcare for the rest of his life at the expense of city taxpayers.
Avila qualified for all those benefits while spending the past nine years on paid leave from the Paterson, New Jersey, police department because he was under investigation for having sex with a female prisoner at the city's jail. It gets worse, though, because that crime would never have happened if Avila's bosses hadn't already been trying to give his retirement benefits a little boost.
The Paterson Press and NorthJersey.com have the details on how Avila—apparently with plenty of help, or at least an abundance of people willing to look the other way—was able to boost his annual pension to about $70,000 from an estimated $32,000 if he had been forced to retire in 2007 when a police psychiatrist recommended removing Avila from the force.
"But instead of forcing Avila out of the police department, city law enforcement officials decided to allow him to stay on the job for another six months so he could reach a critical pension milestone of 20 years, the court records show," the Paterson Press wrote.
While there, he was charged with sexually assaulting a female prisoner. Those charges were dropped in 2010 after the city paid an undisclosed amount of money to the accuser as part of a settlement, but Avila remained on paid leave from the department until finally retiring this year.
The paper reports that state records show Avila's salary was $105,364 on June 1 of this year. In 2007, his salary had been $80,740, according to state records.
Even though Avila's pension payment hasn't been made public yet—the board responsible for that says the paperwork is still being processed—the paper estimated that Avila will get about $70,000 a year, up from about $32,000 a year if he had been forced to retire in 2007.
Paterson City Council President William McKoy describes the situation as "an immensely troubling demonstration of the abuse of the system." He told the Paterson Press that the decision to allow Avila to remain a police officers was never discussed with elected officials and called it a "conspiracy" within the police department.
With apologies to Bob Dylan, it would seem that KcKoy is saying "in Paterson, that's just the way things go."
If you're not one of the taxpayers who will have to pay for Avila's bloated pension (and his medical bills) for the next few decades, this story might even seem a little funny. But there's a pretty good chance that you're paying for someone like Avila, even if you don't know it.
It might be someone like Joe Derrico, a former New Jersey cop who started collecting a $69,000 annual pension when he was just 43 years old because he claimed to be disabled. He wasn't—as anyone who saw Derrico chasing down cars on "Bear Swamp Recovery," a reality TV show about the repo business, would have concluded.
Such scams aren't uncommon. For more than a decade, the New York Police Department ran an elaborate scheme that allowed dozens of cops to qualify for boosted pensions by claiming to be disabled when they really weren't.
These types of abuses go hand-in-hand defined benefit pension plans. Not officially, of course, but incentives matter and all the incentives in a defined benefit system are aligned to make this sort of thing happen.
If your pension is based on a formula, as defined benefit systems are—it's usually a formula including years worked and highest annual salary, but often including special rewards for employees who pass certain thresholds like 20 years in the same department—then getting a higher payout is all about tweaking the formula. If your bosses are getting their benefits the same way, there's a strong incentive to look the other way—or, as in Avila's case, to actively work to find a way to keep someone on the payroll an extra few months so they qualify for the higher benefit.
In a defined contribution system, like the 401(k) retirement plans more common in the private sector, those sorts of games can't be played. Your retirement benefits are the result of your own investments, not a guaranteed payout backstopped by taxpayers and based on a formula that can easily be abused without proper oversite.
Congratulations to Avila on his retirement. Thanks for the years of public service.