PUBLIC DEFINED BENEFIT

PENSION PLANS

Public Safety
 Professional Athletes
No one questions professional athletes
retiring in their 20s or 30s
 Why?
■ Everyone wants their team to be the best
■ Balance between experience and performance
■ Performance degraded by sarcopenia, injury,
schedule stress
■ Lifetime health of the athlete
Professional Industrial Athletes
need “early” retirement as well
 Why?
■ Everyone needs safe communities. That means
public safety personnel who have the ability to
mitigate life threatening emergencies.
■ Balance between experience and performance
■ Performance degraded by sarcopenia, injury,
schedule stress, physical & mental trauma
■ Biological and chemical exposures
■ Lifetime health of the fire fighter, medic or police
officer
 Some bedtime reading
■ Cancer in Fire Fighters-2014 Journal Occ. Med, Daniels PhD.
■ Meta study, Fire Fighter cancers-2006 Journal Occ. & Env. Medicine, Dr.LeMasters
M.D
■ Cancer in California Fire Fighters-2015 Wiley libraries 2015
■ Rand Institute- Aging and Fire Fighter Injuries 2010
■ Sarcopenia and Fire Fighters-2004, Willardson
■ Aging and Fire Fighter Fitness-1991, Saupe
■ Fire Fighter Aging and Physical Performance-1995, Findlay
■ Still a Better Bang for the Buck…Economic Efficiencies of defined Benefit Pensions-
2017N National Institute of Retirement Security, Rhee & Fornia
Why aren’t defined contribution
plans like 401ks good enough?
■ A “successful” DC plan requires a long accumulation
period and a short deaccumulation period
■ DC plans do not provide for line of duty death or
injury protections to the employee or their family
■ Public safety and many other government employees
do not have any Social Security income. If they do, it
will not pay until several years post retirement
 What’s up with no Social Security?
■ Social Security originally only applied to the private
sector
■ When made available to local and state
governments, elections were made by governing
bodies on which workers would be covered and
which would not be covered in a series of “218
agreements”.
■ Some decisions to exclude certain workers were
financial and others by human resource factors.
Some other issues with Social Security that
hurt government workers with a
governmental pension.
■ If an employee works another job before, after or
during their career and earns 40 quarters of Social
Security credits he or she is still not likely to ever
collect nearly the entire S.S. benefit that would
normally be due them.
■ The same is true with the employees widow or
widower.
 Brief how and why
■ Several years ago congress saw this as a way to save
money in the Social Security system
■ Does not apply to the private sector
■ Does not reduce nor refund required payroll S.S. tax
payments in your pre or post career non
governmental job
 Governmental Pension Offset
(GPO)
■ Can reduce your Social Security by up to two-thirds

■ GPO penalty can be offset or eliminated by 20 years

of “substantial Earnings”

■ No other exceptions
 Windfall Elimination Provision
(WEP)
■ This provision applies to your spouses surviving
widow or widowers benefit

■ The “substantial earnings” test may reduce this

penalty as well
So what tool can I use as a
governmental body to create
retirement security for workers that
will attract them and retain them
that’s economically efficient?
Answer:
Governmental Defined Benefit Plans
 Define Benefit plans are a human
resource tool
■ Recruitment

■ Retention

■ Less known but equally important is for voluntary

career termination particularly in Public Safety
 Defined Benefit plans are economically
efficient
■ Unlike private sector DB plans, governmental
employees make contributions of around 7% to 15%
every pay period even when their employers skip
their payments
■ Fees are typically well below DC plans which
significantly reduces the cost of providing the
benefit.
■ Unlike DC plans, Defined Benefit plans provide
benefits for death and injury.
 THANK YOU
Tim Hill
Pension Resource Advisor
International Association of Fire Fighters
tahill@iaff.org

IAFF Press Secretary

Tim Burn
tburn@iaff.org