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New York Post

 

Pension Tension & the Crime Spike

July 16, 2012

By Nicole Gelinas

Crime is up — and cops are down. City taxpayers are paying so much for yesterday’s crime-fighting that they can barely afford today’s.

A bloody start to July reminded New Yorkers about the bad old days: 21 people killed over the holiday week, including three gunned down after leaving a Queens club. Though murders are down, shootings are up 11 percent for the year, helping push crime up 4 percent.

It gets harder to keep New York safe as the number of cops falls. Little more than a decade ago, in 2000, the city had 40,451 police officers. Today, it’s 34,413 cops — an 18 percent drop.

Even four years ago, we had 35,561 officers — 1,148 more than today.

This a big switch from the protection New York thought it would have. Four years ago, the NYPD expected to have 36,284 people in the ranks by mid-2012 — 1,871 above today’s real numbers.

And City Hall expects a drop of another 104 cops over the next two years. The number of officers won’t rise until at least 2016.

What happened? Yes, Wall Street collapsed, and tax revenues plummeted. The city thought things would be better by now — and they aren’t.

But the other huge factor is cops’ pensions.

Last year, New York City taxpayers put nearly $2.1 billion into the cops’ $24.7 billion pension fund to pay for future benefits — up from more than four-fold from the 1999-2000 average. (Cops’ own contributions are $207 million, but they pay only 9 percent of the total.)

If pension costs for cops had "only" doubled in a decade, we’d have an extra $1 billion a year — enough to hire at least 5,000 cops.

One problem is that the pension fund isn’t earning the magical returns expected of it. It’s supposed to generate 8 percent returns a year — but has managed just 5.76 percent annually over a decade.

The desperation to achieve higher returns is on display in how much the fund (run by a board that includes the mayor, the police commissioner, the city comptroller and union officials) pays out in investment fees.

These fees now top $90.4 million — 405 percent of the $22.3 million in fees for 2000, even as the fund’s value has risen only 34 percent.

More than 200 high-priced investment "consultants" are slurping at the trough, up from 38 a decade ago. The recent roster includes a firm called Quadrangle, which got in trouble a few years back for political payoffs at the state pension fund.

But not even Bernie Madoff on crack could generate enough returns to pay what we’ve promised.

Benefit payments — the amount we send every year to retired cops — have nearly doubled since the head count hit its peak, to $2 billion a year.

That’s because we let cops retire so young (as soon as after 20 years of service) with a half-salary benefit, including overtime.

The NYPD has more than 12,096 retirees who are younger than 55, making an average of nearly $43,000 in pension benefits. This doesn’t include officers who were injured — nor does it include retiree cops’ annual "bonus" payment that starts at $2,500 and rises over time to $12,000.

Twelve years ago, the city had 3,526 retirees under 55, who made a benefit of less than $30,000.

Here’s a truly scary stat: New York is inching toward paying more retired cops than active ones — with 27,890 regular retirees now, up from 18,793 in 2000. (Include the 15,095 retired on disability, and we’re already there.)

As average wages and overtime have risen — from $60,955 in 2000 to $97,811 in 2010 — so have pension payouts, and thus the incentive to retire young.

To control pensions, you’ve got to first control pay — but current-worker pay is up 37 percent since 2000 even as the number of people we pay is down.

The scariest thing is that Gov. Cuomo and Mayor Bloomberg might say they’ve already fixed this.

This spring, Cuomo signed a law that requires new officers to work 22 years instead of 20, and that bases overtime on the last five years’ of work, not three. But New York won’t see any savings from that law for two more years — and even then, it barely slows the cop-pension explosion.

Bottom line: Unless the city gets less generous with future cop retirees, it’s going to have a lot fewer future cops — and more future murderees.

Original Source: http://www.nypost.com/p/news/opinion/opedcolumnists/pension_tension_the_crime_spike_uTj1WEOOpb45LkkKEQQLiN

 

 
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