Ann Arbor Police Use Big Overtime Totals To Boost Big Pensions
Ann Arbor police detective David Monroe was known within the department for rarely turning down an opportunity to work overtime. For example, in 2021, his last full year with the department, overtime hours boosted Monroe’s total pay to $184,649.
They also contributed to Monroe retiring with an annual pension of about $159,160.
According to city records, Monroe was hired in 1987 and retired with 35 years of service. The department’s union contract permits officers to boost their pension payout calculations by adding the overtime they earn during their last five years on the job. This resulted in Monroe collecting pay that was 96.25% higher than his base salary during those years.
Ann Arbor police officers who put in overtime on University of Michigan football Saturdays are a familiar sight, and the extra revenue they collect as a result also pays off in higher pension benefits for the rest of their lives.
Monroe’s annual pension totals shown here are estimates, based on gross salary data and his years of service, as provided by the city of Ann Arbor. Ann Arbor police officers are not eligible for Social Security benefits because they don’t pay 6.2% of their paycheck into the program. For Monroe, that meant he kept about $9,100 of his pay in 2021 in lieu of contributing to Social Security.
Ann Arbor's pension system was 100% funded as of 2021.
"City managers ought to be concerned about employees taking advantage of their benefit rules," said James Hohman, director of fiscal policy for the Mackinac Center for Public Policy. "But they have saved money to pay for generous pensions and have set aside enough money to pay for the pensions their employees earned. There is a risk of future problems, but full funding stops even large pensions from burdening future taxpayers."
Editor's note: Ann Arbor's pension system funding was added to this story.
Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.