NOTE: This article was originally published on June 6, 2020, and updated on Sept. 29, 2021.
Pensions are a great reward and when they are revoked, they are a great punishment. Revoking a pension after being vested after years of work is the main reason many people go to work every day. Unfortunately, pensions are now a relic in the new era of 401(k)s, where most employees now assume more risk for managing their own finances during their entire working careers.
So it should come as no surprise that powerful public employee, police unions, and the US military are protecting their members from any forms of discipline or penalties when they are convicted of felonies, and this includes convicted members being allowed to keep their pensions.
In this CNN report, “350 officers convicted of felony crimes have already received pension payments or are eligible in the future,” according to a CNN analysis. These cops were found guilty of sexual and violent crimes, murder and rape, bribery, abuse of their positions, and embezzlement. CNN found that some of these convicted cops admitted to molesting young children.
This CNN report found that over 200 convicted cops have received pensions benefits of about $70 million, and that does not include any associated medical and health benefits.
These pension payments come from the police unions and are funded by contributions from police and public money.
But CNN found that despite their convictions, these convicted cops are still receiving hundreds of millions of dollars in monthly pensions.
Why haven’t their pensions been revoked after they were convicted?
Pensions Are a Great Reward and Incentive
Pensions paid to public workers, including police, fire, and teachers, are among the most coveted employment benefits that now exist.
Public pensions cover 77% of public employees (state and local) as of 2019. In contrast, only 13% of non-union private-sector workers have pension coverage, according to the Pension Rights Center. This makes pensions a powerful incentive for continued employment and for attracting qualified workers into the public sector.
These pension benefits vary widely between states and offer different payments, vesting requirements, and early retirement and survivor benefits, but taken as a whole, they are a valued element of any employee package, along with health, medical, and other welfare benefits.
Similarly, losing and revoking pensions is a powerful way to curb abusive or other forms of criminal behavior in the public workplace.
So, as Congress considers ways to reform police departments nationally, they should also consider a provision that any police officer convicted of a crime have their pension benefits revoked immediately. This also includes all survivor benefits for designated family members. This is the fastest way to achieve police reform.
Revoking public pensions is a powerful penalty for someone who has invested a decade or more in a job, only to have it revoked immediately after their conviction.
Pensions are a powerful incentive for anyone who has them. Pensions are designed to deliver their monetary benefits throughout retirement, and some plans also pay benefits to beneficiaries after the death of the retiree. These benefits are usually expressed as a percentage of salary after the last few years of service, after a certain waiting, or vesting, period. This period varies by state and plan, but often it is 10 years.
Working at a job for 10 years shows a high level of personal commitment to the job and the task. If a public employee, such as a cop, soldier, or teacher, becomes vested, it shows they have already made a commitment to the job and its benefits. So, when a vested person commits a crime and is convicted in court, their whole investment in their career can be measured by their pension benefits.
Specifics in the Derek Chauvin Case
Derek Chauvin, age 44, the cop in Minneapolis accused of killing George Floyd, is a 21-year veteran of the Minneapolis police force. Chauvin started working with the force at age 23. According to the Minneapolis Public Employees Retirement Association (PERA) handbook, a 21-year veteran would be fully vested in the pension plan, but because of his age, he is not eligible for full retirement benefits.
Minneapolis has a liberal vesting system and allows employees to be eligible to receive the minimum pension benefits in PERA after 36 months of public service (if the employee qualified for membership prior to July 1, 2010.) As defined in the handbook, being vested means the employee qualifies for benefits at the minimum allowable age. The normal retirement age is 55.
But since Chauvin, age 44, is not eligible for full benefits until age 55, he would fall under the provision where his public service ended after he was vested for a benefit, but is under age 50. In this case, the PERA allows him to leave his contributions with PERA and qualify later for a “deferred pension.”
Pursuing Police Reform by Eliminating Benefits
“When you terminate PERA-covered employment and leave your contributions in the fund rather than take a refund, PERA calculates a pension amount based upon your years of service and average salary at termination. You can begin receiving a lifetime benefit any time after reaching age 50, but benefits must begin before age 70½,” according to the PERA handbook.
The PERA system also allows for survivor and disability benefits as part of its pension benefits to vested employees.
If Chauvin is convicted, his pension benefits should also be revoked immediately.
This would send a powerful message to other public employees that accrued benefits earned after years of work would evaporate as a result of criminal behavior.
As millennia of actual, real-world experience shows, money is the best way, in the form of bonuses, raises or fines, and salary liens, to modify human behavior. My bet is that police and other public officials who take a bribe or beat a civilian will think twice about losing their pension if they are arrogant enough to think they will never be caught.
Military Pensions Should Be Revoked for Criminal Behavior
Applying this revocation rule to public employees should also be extended to the military. There are many generals who are making millions in pension benefits
Take the case of U.S. Army Lieutenant General Michael Flynn, who retired at age 56 after about 36 years of Army service. He then served in other high-level federal jobs, including as director of the Defense Intelligence Agency. He would be in the 0-9 pay grade as a lieutenant general.
Military senior officer pensions are determined either by the highest base pay for their last 36 months of service or by the Final Pay method that is based on years of service and the general’s salary during their last pay period.
The highest possible base pay for a general is $19,762.50 per month with over 40 years of service and the O-10 pay grade. A more average major general with between 26 and 28 years of service has a base pay of $13,647.30. A four-star officer retiring with 40 years of experience would receive an annual pension of $237,144, according to the Pentagon.
But for the military and elected officials, there is a different standard, especially if those people are convicted of a crime. For example, Oliver North, was convicted of shredding government documents, accepting a bribe in the shape of a security fence, and seeking to keep the truth from Congress in the 1986 Iran-Contra investigation. The U.S. Code lists nearly 40 offenses that carry a penalty of loss of government pension. They are for crimes, like espionage, treason, and sabotage.
The cases of Chauvin, Flynn, and North are good examples of how revoking pension benefits can curtail criminal behavior. If the monetary penalty is greater than the benefit obtained from a criminal act, people should change their behavior. If the benefits to the family are also cut, the penalty is even more severe.
So, as Congress considers ways to reform police departments nationwide, they should consider pension revocation as an effective tool. Money talks. It is a simple message to communicate.