News Story

State Troopers Collect $400,000 Plus In Legal Pension Double-dipping Plan

Editor's note: This story contained inaccurate information provided by the state of Michigan's Office of Retirement Services. It has been corrected.

Dozens of Michigan State Police employees have received payments of more than $300,000 to $400,000 in addition to their annual salaries as part of a program to encourage employees to delay taking early retirement. One Michigan State Police employee received $459,924.

The payments are part of $29.5 million the state paid to 177 Michigan State Police employees from 2012 to 2017. Many others received more than $300,000 over the six-year period. Some received an extra $400,000 or more not to retire while still working.

Taxpayers footed the bill for these payments under something called the Deferred Retirement Option Plan (DROP), which was open to any employee with 25 years of service and hired before 2012.

Legislators created the program in 2004. Anyone who meets the standards called out in the law can get the equivalent of an annual pension payment even while working. An employee can receive these payments for up to six years; those who stay fewer than six years after becoming eligible enjoy a reduced payout.

The program was created as a response to a decline in the number of active troopers from about 1,340 in 2001 to 1,080 in 2004. Troopers are not hired one at a time, but in cohorts that go through a costly training school at the same time. Between 2002 and 2009, just two such groups of new officers were added to the department.

Of the 1,844 current enlisted members of the state police, 594 were hired before June 1, 2012, and are thus eligible for DROP as of June of this year. The payment is calculated based on a percentage of the employee’s pension. After a maximum of six years, the incentive is equal to 100 percent of what that employee’s pension would be. If the employee stays fewer years, the percentage is less.

In 2016, there were 17 Michigan State Police employees who made $109,000 or more.

When employees in the program retire, they receive the extra payments as well as monthly pension benefits.

The 25-year requirement does not have to be met solely by time with the Michigan State Police. Years of service in other law enforcement agencies, the military or the U.S. Peace Corps can count toward the total.

The State Police department declined to comment, as did the Office of Retirement Services.

In a comment for a June 22 Michigan Capitol Confidential article, the state police said the idea behind the program is to retain experienced enlisted employees, who traditionally leave the agency after 25 years of service.

“DROP was instituted to address the department’s inability to retain an adequate number of enlisted members in the face of mounting attrition,” said Shanon Banner, spokeswoman for the Michigan State Police, in an email. “At the time, as evidenced by the attached Strength Report from pay period seven of 2004, the department had 1,808 enlisted members, of which 1,104 were troopers. Thirteen years later, in pay period seven of 2017, the department had 1,875 enlisted members, of which 1,179 are troopers.”

Banner continued: “In 2017, despite the support of the governor and Legislature in hiring over 650 troopers since 2011, minimal gains in staffing have been achieved. Because attrition has been so high and is forecasted to remain high in the upcoming years, the argument for DROP is no less valid today than it was in 2004.”

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.