May 7, 2012

POLICE OFFICERS in Montgomery County, far more often than their counterparts in nearby localities, tend to stagger into retirement, claiming fantastically generous disability awards so frequently that it’s a wonder county police stations don’t more closely resemble convalescent homes. Last summer, after years of dragging its feet, the county council finally got around to fixing this absurd system, which costs Montgomery taxpayers millions of dollars annually. Now the council must step in again to make sure the fix doesn’t fall apart.

The problem arose from a one-size-fits-all disability system that awards an officer two-thirds of his final year’s salary for life, whether suffering from a sore elbow or full paralysis. (Most claims are closer to the sore-elbow variety.) Better yet — for police, not taxpayers — the awards are tax-free, meaning officers could net an amount very close to their full pre-retirement salary, even if their disability was relatively slight.

The effect is that huge numbers of officers claim disabilities and retire with generous awards at a relatively young age, then go out and find other jobs paying almost as much as, and in some cases more than, they make as police.

The disability scheme has functioned as a parallel retirement system, in many years accounting for more than half of the force’s total retirements. And very few officers who apply for a disability pension are denied. Unsurprisingly, virtually no other local jurisdiction allows such nonsense, certainly not on the scale that Montgomery does.

In an effort to forge a more sensible arrangement, the county council last year created a two-tiered system that differentiates between genuinely incapacitated workers and those who can be reasonably expected to find other work. The former would be able to retire with 70 percent of their salary, tax-free, the latter with 52.5 percent. The idea was to make sure that seriously injured officers are covered while lightly injured ones — who account for most of the disability claims — are not lured into premature retirement by outsize awards.

That should have been the end of it. Unfortunately, in a concession to the Fraternal Order of Police, the legislation invited the union to chip away at the new system.

In negotiations with County Executive Isiah Leggett, the union was able to narrow the differential between total and partial incapacity pensions to a tax-free 66.7 and 60 percent of salary, respectively, thereby maintaining a robust incentive for officers to retire even if their injuries are relatively slight. What’s more, retired officers would keep on collecting that pension at the same level even after they start receiving Social Security.

The county challenged that outcome but lost in arbitration, as it virtually always does, given the tilted arbitration system. Fortunately, the council is not bound by the arbitrator’s decision, which would cost taxpayers tens of millions of dollars over the coming decades. The council can, and should, stick by its original legislation and reform a scam that has been allowed to fester for too long.