Police Chief Pete Carey
Police Chief Pete Carey doesn't need one of these.
was due to retire in April but chose to stay on, along with permission from Mayor John Suthers
, of course, under new rules of the pension plan.
Carey was participating in the Deferred Retirement Option Plan, or DROP, which ended in April. DROP allows a member of the Fire & Police Pension Association of Colorado, who qualifies for retirement by reaching the age of 55 with 25 years of service, to continue working. Instead of the city and Carey continuing to contribute to his pension plan, under DROP Carey's retirement pay is funneled into a special account for five years. So, for discussion purposes, if his retirement pay is $100,000 a year, that money goes into an account during the five-year DROP period, at the end of which he can access that $500,000 and begin to collect his annual pension.
The old rules would have required Carey to retire in April. The city says via email, "Pursuant to clarification/change to the Colorado Springs New Hire Plan Rules adopted by the FPPA Board of Directors effective January 1, 2016, at the City's discretion, a sworn employee may continue employment post-DROP and transition to an FPPA defined contribution pension plan."
Under that plan, according to FPPA's general counsel Kevin Lindhal, Carey will invest 8 percent of his salary, and the city will contribute 8 percent of his salary to a defined contribution plan following the five-year DROP period. Meantime, his retirement pay that had been going into the DROP account is discontinued.
"We adopted rules that provided for situations where the employer and employee agreed to allow the member to work past the 5-year DROP," Lindhal says in an interview. "There weren't provisions in the plan for what happened in that event."
The change, effective Jan. 1, came about at the request of several jurisdictions, he says.
The DROP program was created, Lindhal says, to allow an employee and an employer to better plan transitions. "The thinking was if there was certainty about when a member would retire, that was beneficial to the employer because they could better plan their staffing requirements, which is critical in public safety," Lindhal says.
When Carey entered the DROP program in 2011, he didn't know he'd be named chief the next year by then-mayor Steve Bach.
Working past the five-year DROP period means forfeiting your pension during that work time. "For someone to do that," Lindhal says, "there would have to be another reason to do that, like they became chief."
Last we checked in March, Carey is paid $182,778 a year.