By staying 25 years, you'll get 90 percent of your ending salary, and that will translate to an average of an additional $600,000 over the course of their lifetime! Five extra years will get you $600,000, where else would you get that type of return?
BY DAN KLEIN
If you are a police officer who is in PERA Municipal Plan 5 (Albuquerque Police, Bernalillo County Sheriff, for example) I am writing to tell you don’t retire at 20 years and 70 percent of your ending salary. If you do, you are cheating yourself out of hundreds of thousands of dollars.
I know it’s tough being a cop right now. APD especially has a lot of issues, but it you want to steer the best course for your financial health, don’t retire at 20 years. By staying 25 years, you’ll get 90 percent of your ending salary, and that will translate to an average of an additional $600,000 over the course of their lifetime! Five extra years will get you $600,000, where else would you get that type of return?
These figures aren’t something I made up; they come from the PERA’s executive director Wayne Probst, who recently sent a letter to PERA participants detailing the changes to the retirement system and their long-term benefits for cops.
The beauty of this PERA program is that it does not harm PERA! It is fully funded within the retirement fund. This is better than return-to-work (double dipping) for several reasons. First, RTW is currently not allowed by statute, and the odds of it returning are nil. Second, you keep working in your same position, same seniority. You don’t have to leave and lose your seniority and come back working graveyard Southeast with bad days off. The department benefits, not only from your experience as a veteran officer, but it also benefits because it puts all officers on the same page. RTW has fractured APD with some RTW officers being given cushy jobs, and others working back in patrol. By not retiring and working to your 90 percent mark, the entire department benefits.
When I retired in 2003 there were only two options in PERA, 20years at 70 percent, or 22 years and ten months for 80 percent. With the lack of pay raises during that time there was no reason to stay. That has changed for APD officers in the last six months. Mayor Berry finally settled your court case over blocked pay raises from 2010. That has moved patrolmen/detectives up to $28 an hour. On Monday, the City Council, approved more money to add a longevity benefit of $10,000 per year for APD officers who stay beyond 18 years. This longevity has been done in a legal way that complies with PERA statute, that means it will be figured in to your retirement calculation.
The biggest compliant I get from APD officers is regarding the command staff and mayor. Most everyone who reads my columns know that I believe they are poor leaders and managers. That said, they will be gone in 18 months. Think of it this way, work to your first retirement goal, 20 years. After that you are not punching the clock for anyone but yourself. If they piss you off, then retire. If they don’t, keep working to 25 years and your 90 percent. Once you reach 20 years your career belongs to you, don’t shortchange yourself.
If this had been offered to me back in 2003 I would have stayed the additional five years, it’s a no-brainer. So my advice for APD officers is this: take a deep breath, keep doing great work, achieve the 20-year goal and then enjoy the final five years of building your retirement. Retiring at 90 percent means never having to work again unless you want to. Don’t let the current mess drag you down. Do what is best financially for you and your family.
PERA is on your side, listen to them; they are giving you excellent advice.