Planning is underway at San Diego County to let veteran sheriff\u2019s deputies and other public safety employees collect both their salary and their pension simultaneously \u2014 a practice that left a trail of controversy at the City of San Diego during its pension scandal in the early 2000s.<\/p>\n
That legacy has not impeded county officials from checking off key boxes to creating a deferred retirement option program, known as a DROP, after lobbying from the Deputy Sheriffs\u2019 Association of San Diego County, the powerful labor union for more than 2,000 sheriff\u2019s deputies.<\/p>\n
If implemented, it would be the first DROP in California for a county governed by the state\u2019s retirement law for county employees.<\/p>\n
With a DROP, participation is voluntary for employees eligible for retirement. Those in the program officially retire but can continue to work for up to five years, with their pension going into a special DROP account. Once they\u2019re off the payroll, the pension system pays the DROP account out to them in a lump sum, along with the normal pension they collect throughout their retirement.<\/p>\n
Like supporters of DROP in the past, the deputies union and county officials see it as a tool to retain experienced staff and minimize the upstart cost of hiring their replacements amid ongoing chronic vacancies in their ranks.<\/p>\n
But DROPs have faced long-standing criticism as a way for public employees to \u201cdouble-dip\u201d into public coffers. And at the San Diego Police Department, the mandatory retirement of DROP participants at the end of five years was set to cost the department dozens of experienced officers at a time when it needed to keep staff as vacancies grew<\/a>.<\/p>\n It\u2019s too early to know how a DROP could impact the county budget in the long term. A county-commissioned analysis predicted that the DROP will reduce overall pension costs.<\/p>\n But that same analysis determined the payroll cost alone of keeping on DROP employees could total $15.5 million in five years and $54.4 million in 10 years, in addition to an estimated $310,000 in new administrative costs for the county\u2019s multibillion-dollar pension system, the San Diego County Employees Retirement Association, or SDCERA.<\/p>\n A potential DROP also comes at a time when SDCERA\u2019s unfunded liability grew from $3.32 billion in 2016 to $5.1 billion last year, according to the system\u2019s financial reports.<\/p>\n Under state retirement law for counties, a DROP has to be \u201ccost-neutral\u201d for the pension system \u2014 meaning it can\u2019t increase costs for the system, and it can\u2019t reduce the value of payouts to retirees by more than 3%.<\/p>\n But in practice, the DROP at the city still cost taxpayers tens of millions of dollars all while abiding with how the city interpreted \u201ccost neutrality.\u201d<\/p>\n Officials at the county are looking to balance the uncertainty with the real and existing costs of overtime pay and of training new employees at the Sheriff\u2019s Office.<\/p>\n Between 2019 and 2024, the county averaged $65 million in overtime payments for deputies, and averaged a 10% vacancy rate over a similar period, according to a county actuarial report looking at plans for a DROP.<\/p>\n Supervisor Terra Lawson-Remer has backed the push for a DROP on the Board of Supervisors, arguing it\u2019s a way for the county to save money in the long term.<\/p>\n \u201cA properly designed DROP could save money, not cost it,\u201d said Spencer Katz, Lawson-Remer\u2019s spokesperson. \u201cWe\u2019re already incurring significant costs from persistent vacancies: mandatory overtime, recruitment churn and repeated training cycles \u2026 DROP could reduce that churn by helping retain experienced staff longer.\u201d<\/p>\n In a statement, Supervisor Joel Anderson said he supports \u201cthe great work our deputies do and want to ensure they continue on the job,\u201d though he didn\u2019t indicate a stance on DROP one way or another.<\/p>\n Supervisors Jim Desmond and Monica Montgomery Steppe and the deputies union did not respond to requests for comment.<\/p>\n Legacy of controversy<\/p>\n At the city, its DROP became a lightning rod during its larger pension scandal in the early 2000s.<\/p>\n The city implemented its program in 1997 amid a broader underfunding of the pension system, which eventually tanked the city\u2019s credit rating, grew its deficit and led to resignations of top city officials and federal investigations.<\/p>\n The city ended eligibility for DROP in 2005, but the cost was already ensured to reverberate for years to come.<\/p>\n In 2016, a report estimated that DROP will ultimately have cost the city $149 million<\/a>, a price tag set to be spread out over decades.<\/p>\n At the city, a high number of employees on DROP went on workers\u2019 compensation, with money still being deposited into their DROP accounts even though they weren\u2019t working. Hundreds of other DROP participants returned to city jobs as provisional employees<\/a>.<\/p>\n