Pension Crisis

L.A.'s New Police Chief Pretended To Retire and Got $1.27 Million for It

Cash-in on a controversial, costly program from city's new top cop.

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LAPD Chief Michael Moore
Xinhua/Sipa USA/Newscom

Los Angeles' new police chief is a $1.27 million beneficiary of a controversial city "retirement" program that is so costly and prone to abuse that other cities which tried it have since abandoned it.

Michael Moore, a 36-year department veteran who had been managing operations as assistant chief, was named in June to replace retiring Chief Charlie Beck.

But before that announcement, Moore had enrolled in a program called the Deferred Retirement Option Plan (DROP). DROP is a program that allows Los Angeles public safety employees to draw pension earnings without actually retiring. To do so, employees have to be at least 50 years old and commit to retiring within five years. Those pension payments go into a special account that they receive as a special lump sum when they retire. So in short: They get paid their salaries as usual during those five years of work. Then when they retire, they also get the five years of pension payments they would have received had they been retired for the five years they continued to work. For Moore, whose retirement lasted all of 30 days, that lump sum was $1.27 million.

The stated goal of the DROP program is to serve as an incentive for veterans to remain for a few more years to help pass their wisdom along to the younger folks. But what really happens is thoroughly predictable: Employees attempt to game the system with frequent medical leaves. A previous Los Angeles Times investigation found that the city had shelled out more than $220 million over nine years to people in the DROP program who had taken medical and disability leaves during these final five years. So they're earning both their salaries and their pensions and not working. Then when the retirement actually comes, they walk away with a big, fat bonus check. Los Angeles has spent more than $1.6 billion in extra pension payments since the program began in 2001.

Moore is not accused of bilking the program in any way. But there is some very curious timing going on here, based on what the Los Angeles Times was able to track down. Moore actually did retire in January, when his five-year stint in the DROP program ended. That's required for you to get that payday. But he only "retired" for 30 days, took a road trip, visited his daughter, went skiing, and then returned to the job in March, and resumed earning $299,000 a year. Oh, and since he "retired," he is also bringing home a $240,000 annual pension.

This is permitted, the Los Angeles Times notes, but is extremely rare. It's only happened five other times since 2008. It is allowed when an employee's work is so specialized they may not be replaceable. But apparently even though the city had years to recruit a replacement for Moore and even though the very point of the DROP program was for Moore to train a replacement, they did not find the right person. Then at around the same time Moore "retired" in January, Beck announced that he was going to retire as well.

Why does the timing for all this matter? The chief of police is not eligible to participate in the DROP program. If Moore had been promoted up to the chief position before he had retired, he would have needed to agree to give up the $1.27 million that had been set aside. So the big question—one that may prove unanswerable—is whether Moore retired and came back specifically so that he could get that extra money before getting promoted to chief.

The Times says it was Beck who had approached Moore and asked him to stay on, months before Beck announced his own retirement. And Moore says he was blindsided himself when Beck decided to step down. Everybody wants to insist that the timing here is all a coincidence.

Ultimately, $1.27 million is a drop in the bucket of the city's spending. Los Angeles will contribute $1.2 billion to its city employee pension funds this year, about 20 percent of its budget. It's nevertheless an example of how unwilling the city leadership is to address or even recognize the financial problems caused by overly generous benefits for city employees. Garcetti still supports the DROP program even after the Times exposed the problems with it and even after the former mayor who helped introduce it, Richard Riordan, turned against it.

NEXT: Baltimore Cop Quits After Pummeling a Man for Disrespecting His Authority

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  1. Sounds fair.

  2. He realized he had much more veteran wisdom to impart. Very lucrative veteran wisdom.

  3. Forcing that decision on prospective leaders is a serious flaw in the DROP program, Moore said. It limits the pool of candidates because some qualified people simply aren’t willing to give up the money.

    If he’d been forced to decide, Moore said, “It would have been a very difficult decision to make.? I have a family to support.”

    And a city to bankrupt.

    1. Tip of the iceberg. But also remember another thing most people in middle america can’t calibrate: in LA, $100k/year is almost poor, and just barely scratches into middle class.

      1. Boo hoo. Cost of living is a choice one enters into willingly.

        1. And then they retire to a much cheaper place and live like kings on a 250k/yr pension

  4. “So the big question?one that may prove unanswerable?is whether Moore retired and came back specifically so that he could get that extra money before getting promoted to chief.”

    Was that wrong? Should I have not doe that?

    1. *done*

  5. People like Moore are the reason MMOs are broken.

  6. DROP is a program that allows Los Angeles public safety employees to draw pension earnings without actually retiring.

    Oh, FFS! I trust the employees must swear not to die before they retire.

  7. >>>when an employee’s work is so specialized they may not be replaceable

    L.A. Police Chief – Specialized in Graft, Irreplaceable.

    1. If there’s someone who is not replaceable then the senior leadership has screwed up and the cost of keeping that ‘essential’ dude around should come out of their own pockets.

      If that happened then I think we’d find that there were precious few ‘irreplaceable’ people on the team.

  8. Only in California. That place is going to blow one day.

  9. “And it’s so nice and legal, heh..heh….”
    /parasitic public ‘servant’.

  10. Try this thought experiment. Suppose he had a 401k and was 55 and eligible to withdraw his savings along with vested employer contributions? No one would bat an eye. It’s only because it’s a public retirement plan (and probably not actuarially sound) that people assume he’s done something wrong.

    It’s not his fault the retirement plan was set up the way it was. I’d have done the exact same thing.

    1. He did nothing wrong. The LA voters did a lot wrong.

    2. If he had a 401k then it would be a defined contributions plan and all the money in it would have been his anyway and he would be drawing down the principle he put in it over 20-30 years and the interest that principle earned.

      Instead he’s in a defined benefits plan which is money coming out of *current* taxpayers pockets and not his own.

      So yeah, no one would bat an eye if he withdrew money from the retirement savings account he had paid into for his whole career early.

      It’s not his fault the retirement plan was set up the way it was. I’d have done the exact same thing.

      Sure, its not his fault. And he’s done nothing illegal. He’s still a scumbag for doing it and you would be too in his shoes.

      1. You don’t have any idea how these pension plans work.
        The only “taxpayer” money is what is contributed to the pension fund, which is part of his total benefits package. While he is working, that amount is supposed to be paid into the system, just like his medical insurance, and sick pay, and vacation pay, and any other benefits agreed to in the compensation contract.
        All payouts to retirees come from that fund, which is not augmented by any government money, beyond what was supposed to be, through that compensation agreement.
        These plans aren’t Social Security, where money is not invested but just taken and spent on current recipients.
        The employees’ and the employer’s contributions are invested and the payments are made from the combination of those and the returns on the investments.
        How “healthy” the system is, generally is the fault of the employer – the government – not making the contributions they are supposed to. If these systems are going bust, it is not the fault of the recipients.

        1. Except that benefits package assumes an unrealistic growth rate so is essentially lying to paxpayers about true costs.

        2. You apparently don’t know how defined benefit pensions work.

        3. Except…he’s not really retired.

          And all the money comes from taxpayers.

          Good grief.

          Bottom line, both police and fire are raping the taxpayers.

    3. Not his fault? You don’t think he’s part of the union? Are you ignorant to union power in California?

  11. Nice month-long vacation and 1.27M bonus when he got back.

  12. Holy shit. He makes far more being a goddamn cop than I could dream of making as a fucking surgeon

    1. And rightly so, don’t you think? A surgeon, depending on the specialty, can only try and save lives but a police chief can, along with his crew, take lives practically on a whim by merely saying they were in fear of their lives. I bet the cops that shot up apickup that was a different make, model, & color than their suspect’s vehicle are still trying to live down firing over 100 rounds and not managing to kill a single person.

    2. You’d have to compare his salary to what the Chief of Surgery would make at a very large hospital.
      I’ll bet it would be comparable.
      He ain’t some flat-foot in Podunk, Oklahoma.

      1. Wegetit. You’ll defend the corrupt public benefits of fire and police because you are a part of it and you have to rationalize the corruption away. What’s Boston fire retire with disability rate up to now? 80%? Weird how so many get injured a year before they retire.

  13. Man, I picked the wrong line of work…or I guess I chose to work in the wrong state. I get a pension from Nevada but there’s nothing like in California to pad a pension. It’s percentage of your highest three years…period. No overtime, not shift differential, nothing added. Then again, Nevada is a right to work state and while there is a public sector union, no one belongs to it and it has virtually no power.

  14. Was that Bill Parker rolling in his grave creating a 7.0 Earthquake?
    This is crazy, stupid, and wrong.

  15. The stated goal of the DROP program is to serve as an incentive for veterans to remain for a few more years to help pass their wisdom along to the younger folks.

    That doesn’t even pass the smell test. You’ve been there 20-30 years and you haven’t ‘passed your wisdom on’ yet? Despite it being your fucking job at that level. But somehow doubling your pay will get you to do so?

    Now, if it was an early pension withdrawal with a concomitant reduction in pension payouts later – so you get a lump sum on retirement that, if you’ve planned ahead, you can do something with in exchange for a smaller payout later? That would make sense. But not as an incentive plan to get people to train the next generation.

    1. You, really don’t understand how this works.
      His “double” pay comes from COMPLETELY DIFFERENT SOURCES.
      The retirement money comes from the retirement fund, which is not something the City of Los Angeles operates or has to augment, beyond that which is required, by contract, for their employees, while working. The City does not contribute anything to the retirement system, for that employee, once the employee has retired, nor do they pay anything, directly.
      The DROP pay is simply the compensation he receives for actually working, as would anyone else in that position. Just as if he went to work, while retired, for Home Depot.
      There’s nothing nefarious going on here and, I can assure you, the City of Los Angeles does not want to pay its employees any more than they have to. There’s more things to waste money than on that, and some of them buy votes for the politicians involved.

      1. You should go read up on calpers current liabilities. And since you’re retired read an econ book. Go read up on Stockton and how one fifth of their budget, yes budget, goes to paying people who are retired.

      2. You, really, seem to be putting in extra commas for some reason, don’t understand that I didn’t write anything here about where the income is coming from.

        It makes no sense – wherever they get the money – to pay someone to stick around after retirement to ‘pass on his wisdom’. Either he’s already done that by then end of that 20-30 years or he doesn’t have any to pass on. In either case, there’s no reason to pay him so large a sum to stick around.

        Like every other job, elsewhere, if someone needs him they can call him for advice. That’s what ‘maintaining those personal relationships’ are for.

  16. How utterly predictable: LA is the fraud capitol of the nation. It’s the original home of professionally staged accidents designed to rob insurance companies at the point of a gavel, and the department of mexican voting [where SS cards can often be purchased within 50 feet of the doors of some DMV offices on a rotating basis]. The greater LA county is capable of generating 300,000 fraudulent votes in any cycle without triggering any kind of real investigation [with the help of the state and their usual practice of never, ever, ever counting military ballots under any circumstances].
    But if you think the police chief made off, better check out the city council and their fringe benefits. His deal looks like a boy scout arrangement by comparison.

    1. A bunch of assertions with nothing to back them up. Because ‘it is known’, right?

  17. Sounds like he did everything according to the rules. Blame the people who make the rules.

  18. Stop resisting you pathetic little peasants.

    Write the check already.

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