Zine Urges Changes in Special Police Pension

Los Angeles City Councilman Dennis Zine called for changes to a popular retirement benefit program Tuesday that LAPD Deputy Chief David Kalish used to boost his income just after he was suspended with pay for alleged sexual impropriety.

Known as the Deferred Retirement Option Plan, or DROP, the plan was adopted largely to stem an epidemic of Los Angeles Police Department retirements resulting in the loss of experienced officers and detectives beginning in the late 1990s.

Employees who join DROP continue working, but their pension allocation is paid into a special interest-earning account. Participants can draw upon the DROP money at retirement, in addition to receiving their standard monthly pension payout. Los Angeles police and firefighters with 25 or more years of service are eligible for the program, which began last May. Employees who sign up must retire within five years.

Zine said reforms are needed to disqualify those program participants found to have committed wrongdoing. Another growing problem that Zine wants to address is police and fire personnel who enroll in the DROP program before taking long-term disabilities.

“You have some people, sadly, who have taken advantage of the program and it was never perceived that would happen,” said Zine, who could not say how many of the 765 people enrolled abuse the program.

“This is a problem that could become a huge problem,” Zine said.

Under a proposal being crafted by Zine, anyone who goes on long-term disability would be barred from accruing additional DROP benefits until they return to duty. He said he is exploring changes that will deal with those who are charged with criminal conduct while in DROP.

Zine said the regular pension program would be unaffected by his proposal. Currently, officers can lose their salary 30 days after being charged with a crime, but do not lose their DROP benefits even if they are disciplined by the LAPD or convicted of a crime, officials said.

Also calling for changes Tuesday was Assistant Chief George Gascon.

“The chief of police should be able to decide who participates in the DROP program,” Gascon said. “A chief needs the ability to decide for the good of the department. Yet, as it stands, the chief doesn’t have that ability.”

Los Angeles Police Union Vice President Mitzi Grasso disagreed, saying that any calls for major changes to the ordinance are premature.

The program is “beneficial to the city, the Fire Department and the Police Department,” Grasso said. The union had already been working with city officials to correct any abuses or loopholes, she said.

Others on the council opposed changes. Councilman Jack Weiss said DROP has worked as intended by retaining experienced officers who otherwise would have retired. “I’d want to see some pretty good evidence this was a problem before making drastic changes to the program,” Weiss said.

DROP was authorized when voters approved a City Charter amendment in 2001, but the City Council did not begin the program until May 1, 2002, said Gary Mattingly, general manager of the city Pensions Department.

As a result, there have been no audits or program evaluations yet, although such a review is planned during the end of the five years authorized by the council, Mattingly said.

Mattingly said the program has not been cost-neutral, as originally proposed. The pension fund adds 5% a year to the money deposited by DROP participants, akin to an interest-bearing account.

That was supposed to be covered by the annual return on pension fund investments. But those investment returns declined by 10% last year and are still not making up the cost. As a result, the pension system must find the 5% elsewhere.

So far, about half the police officers and firefighters who are eligible have entered the DROP program, Mattingly said.

“The idea is to retain cops who are eligible to retire, and that is happening,” Mattingly said. Among those who have filed papers to participate is Fire Chief William Bamattre.

A proposal pending in the Legislature would make the DROP program available in 20 counties throughout California that are not part of the Public Employment Retirement System. Gov. Gray Davis vetoed similar legislation last year, citing cost to local governments, over the objections of police unions.

DROP has received more scrutiny after the allegations against Kalish. One of the LAPD’s highest-ranking officers, Kalish signed up for the program days after he was suspended March 29 after a five-month investigation into allegations that he had molested teenage Explorer Scouts during the late 1970s.

Some in the LAPD, reacting to Kalish’s decision to sign up for benefits right after his suspension, said he should not have qualified.

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Times staff writer Patrick McGreevy contributed to this report.