Los Angeles Police Chief Charlie Beck acknowledged a need to reform a controversial pension program that pays city police officers and firefighters nearly double at the end of their careers while allowing them to take lengthy injury leaves, costing taxpayers hundreds of millions of dollars.
In remarks at a budget meeting this week, Beck said concerns about injury leaves for those in the Deferred Retirement Option Plan — better known as DROP — were “well-founded” and expressed support for changing the policy to “de-incentivize” taking injury leave while in the program.
“Unfortunately, when the program was crafted 15 years ago, that wasn’t done,” Beck said of DROP.
Beck’s remarks were in response to a Los Angeles Times investigation that showed that nearly half of DROP participants in the previous decade missed work while in the program because of injuries ranging from cumulative ailments like carpal tunnel syndrome and high blood pressure to a fall from a defective office chair.
Police and firefighters who have reached the age of 50, and have at least 25 years’ experience, can enter the program, which allows them to keep working and collecting their salaries while also collecting their pensions — up to 90% of their salary — for five years.
DROP has cost the city more than $1.6 billion in extra, early pension checks, The Times’ investigation found, more than $220 million of which went to employees on injury leaves or out sick. Police and firefighters in the program from July 2008 to July 2017 were nearly twice as likely as those not in DROP to miss work for injuries, illness or paid leave, The Times found. The average absence was 10 months but at least 370 missed more than a year.
With his comments this week, Beck, who is retiring in June, joined a chorus of top city officials calling for reform to DROP after the publication of The Times’ investigation in February.
Five City Council members, citing “egregious examples of abuse, and likely fraud” uncovered by The Times, have supported a motion to revisit DROP policies “to prevent abuses in order to protect both taxpayer funds and the integrity of the program.”
Mayor Eric Garcetti has also called for reform, saying that DROP “is not an entitlement” and “is something we’ll keep if it works for our city and our public safety system, not simply because it has been there in the past.”
Three months after publication of The Times’ investigation, however, no reforms have been enacted. Garcetti and the council members who negotiate police and firefighter contracts, all of whom have received significant campaign contributions from the public safety unions, say they are waiting for the results of a comprehensive study of the program before taking action.
In the past, city officials have failed to act when confronted with potential problems in DROP, which is popular with rank and file police and firefighters.
In 2008, following anecdotal reports of cops and firefighters entering the program and then going on lengthy injury leaves, the City Council approved a quick fix — requiring participants to be on active duty the day they enter the program. That proved easily exploitable, with police and firefighters on injury leave returning to work briefly to sign up for DROP, then going back on leave at nearly twice the pay. In 2016, Garcetti and members of the City Council were presented with an internal report showing that DROP was no longer necessary to retain veteran officers, its stated purpose, and was costing more than had been promised to voters who approved the program in 2001. Instead of demanding reforms, Garcetti and the other elected officials ignored the report.
Beck’s brief remarks on Monday came in response to questioning by Councilman Bob Blumenfield. Beck referred to what he called an “easy change” in DROP policy, suspending pension payments to participants in the program while they are on injury leave.
“I don’t want to speak for my union, but I haven’t found anybody that objects to this,” Beck said.
Dustin DeRollo, a San Jose-based political consultant who represents the police union, declined to say whether the organization would support Beck’s proposal, noting that the union is working with Garcetti and City Council members to review the system. “We’re looking at the whole program and will not prejudge any ideas,” DeRollo wrote in an email.
Los Angeles Fire Chief Ralph M. Terrazas “firmly believes that the overwhelming majority of LAFD firefighters do not abuse DROP and he supports strict enforcement of policies that eliminate any possible fraud or abuse of the system,” according to an email from his spokesman, Peter Sanders. But any specific changes would need to be negotiated with the firefighters union, Sanders said.
Garcetti has publicly supported suspending pension payments to DROP participants who are out with injuries, calling it “one easy quick fix.” When San Francisco experimented with a DROP program in 2008, city officials imposed a similar policy but ended up scrapping the program three years later after finding it too expensive, even with the provision.
The other suggestion Beck offered to combat potential injury fraud in DROP is to lock up those who commit it. “I have one solution for abuse and it is state prison,” Beck said. He noted that the department had committed significant resources to prosecuting employees who abuse the system, adding, “I will aggressively send those that commit crimes in this area to jail and we have done that.”
Since publication of The Times’ investigation, there has been one arrest of a DROP participant accused of faking an injury. In March, police charged Terry Johns, a 32-year LAPD veteran who retired in 2016, with felony workers’ compensation fraud.
At a news conference following the arrest, Beck said internal affairs investigators had observed Johns engaged in activity “inconsistent” with his claimed injuries. Johns had retired as a Police Officer II, one of the lowest ranks in the LAPD. Public records show that Johns filed a claim for a bad back in 2014, soon after entering DROP. He has not responded to requests for comment.
The department has refused to provide any other details concerning the allegations against Johns or explain the two-year lag between his retirement and his arrest.