News Story

Michigan’s Former Top Cop Given $639k In 'Deferred' Pension Benefits While Still On Payroll

Government solution to officer attrition from early pension eligibility was legalized double-dipping

Former Michigan State Police Director Kriste Etue is sitting on a $640,000 nest egg of pension benefits awarded to her between 2012-2018, even as she continued working and collecting a regular pay check as the state’s top cop.

According to state retirement officials, Etue’s account with the Deferred Retirement Option Plan, or DROP, totaled $639,124 as of Feb. 13. That information came in response to a Freedom of Information Act request submitted by the Mackinac Center of Public Policy.

Etue, 61, was the most senior high-profile enrollee in the DROP program, which paid officers eligible for retirement to continue working - and drawing salaries - beyond the date when they could otherwise retire with full pension benefits, which come after 25 years of service.

She has been eligible to draw on pension payments accumulated in a deferred account since her full retirement in 2018, but has not chosen to do so. Etue is currently employed as the director of legislative affairs for the Transportation Improvement Association, a traffic safety advocate.

Separate from the past pension payments that were deferred or held for her, Etue is now collecting regular current pension payments estimated at about $92,000 annually.

The DROP program was enacted in 2004 in response to concerns that members of the Michigan State Police were using a law that let them stop working and collect a full pension at a relatively young age, thus depleting the ranks. The long-term solution to this problem – closing that pension system to new hires – was eventually adopted for employees hired after June 2012. But officers hired before that time are still earning and/or collecting benefits under the old system.

DROP has been criticized as a costly form of double dipping that places a strain on the state police retirement fund, which in 2019 had an unfunded liability equal to around 35% of the benefits it has promised. A post-retirement benefits fund that subsidizes health insurance coverage for retirees is also well short of having the resources it should have.

As of the most recent the annual report of the MSP retirement fund, 203 state employees were enrolled in DROP. The number of additional MSP employees who will become eligible in coming years was not readily available, according to a spokesman for the state Department of Technology Management and Budget.

A story in Michigan Capitol Confidential in 2017 reported that there were 177 enrollees and 594 others who were potentially eligible.

MSP spokeswoman Shanon Banner said in an email the DROP program provided financial benefits to the state because it allowed experienced officers to remain on duty at a time of high attrition. She pointed to a 2004 Senate Fiscal Agency analysis that forecast annual savings to the state’s General Fund of $3.3 million because the cost of health care benefits for enrollees in the DROP program would be shifted to the retirement fund.

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.