NY State Cops and Firefighters Get $100K Pensions
Policy + Politics

NY State Cops and Firefighters Get $100K Pensions

REUTERS/Lucas Jackson

Retiring firefighters and cops in New York state are truly in an empire state of mind – 95 out of 933 (or about 10 percent) of those who retired in 2011 will receive annual pensions of $100,000 a year or more, according to the Empire Center for New York State Policy, a project of the Manhattan Institute for Policy Research. A decade ago, only 2 percent (20 out of 1,070) of firefighters or cops retired with this amount. And the average pension for police and fire personnel was nearly three times that of other members of the New York State Employee Retirement System ($60,798 compared to $25,721 respectively).

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The top-earning Police and Fire Retirement System member who retired last year was 59-year-old Peter Noonan, the police chief of the 83,000-population town of Clarkstown in Rockland County, New York.  After more than 30 years with the department, Noonan retired with a pension that will pay him $193,892 a year – tax exempt. He and his spouse also receive generous health coverage for the rest of their lives.

Though $193,892 a year seems like an extravagant amount for retired small-town police chief, it’s a significant pay cut from what Noonan was used to be making while working full time. In 2008, he earned $332,530, making him one of highest-paid police chiefs in the state (higher even than the police chief of New York City).

When Noonan first came to the Clarkstown department in 1978, he was hired as a police officer at a base pay of $11,250. He slowly moved up through the ranks and became police chief in 2004. Clarkstown is an affluent community about 30 miles from New York City with a median household income of about $96,000, and very low crime. In fact, it has been consistently ranked among the safest towns in America, even before Noonan took over. When The New York Times first reported on Noonan’s salary in 2008, many locals were shocked to learn he was paid so much to keep law and order in their safe and small town.

The generous packages come at a time when many states are cutting back on their pension obligations. A recent report from the Pew Center on the States found that public pension systems in 34 states were underfunded and the funding gap for state pension plans climbed by $120 billion in fiscal 2010. In 2000, more than half of state pension plans were 100 percent funded. The growing problem has prompted at least 43 states to enact reforms, but most affect employees who are entering the system, not leaving it.

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The New York pension system in particular has been a source of political tension lately. The state’s pension costs have risen considerably in recent years –from $1.3 billion in 2002 to $8 billion in 2012. The Pew report found that the state had a $9 billion funding gap in 2010. Though that’s relatively minor compared to other states like California, which has a $112 billion gap, the state has also failed to come up with funds for an $11 billion bill for retiree health care costs. Many cities across New York State are now borrowing from the pension fund to finance their obligations.

Police and fire personnel tend to have pensions that are larger than other state works for a few reasons. One is that many find it easy to rack up overtime hours. For example, in 2010 police officers in Yonkers, N.Y., worked as flagmen on construction sites in their last few years of service to inflate their pension benefits. One of them even managed to collect more from his annual pension payments when he retired at age 44 than he earned while working full time. Noonan reached $332,530 a year by accruing unused vacation and sick days, and hours upon hours of overtime. All of this was used to calculate how much he would receive in retirement, which is based on an average of a worker’s highest-earning years. 

In March, New York lawmakers approved major reforms to the pension system. The legislation included raising the minimum retirement age from 62 to 63 for state workers, requiring new hires to contribute more to their pensions, and lowering the state’s pension payouts for those hired on or after April 1. It also set limits on how much overtime workers could use in calculating their pension payments. State and city officials estimate the changes will save the state more than $80 billion in the next 30 years.

The reforms, of course, won’t affect Noonan and others retiring with over $100K pensions.