CHP and Cal Fire unions push for new deferred retirement plan

from Adam AshtonCalMatters

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A full career as a California Highway Patrol trooper or Cal Fire firefighter often ends with a six-figure pension that provides a comfortable retirement after countless hours spent in danger.

This year, unions representing CHP employees and state firefighters are seeking a different end-of-career incentive: the chance to collect one big check on top of that annual pension.

They support the legislation it would create an additional savings program to allow state law enforcement officers and firefighters to leave public service with pay. It’s called the Deferred Retirement Option Plan, which several local law enforcement agencies already offer their employees.

“It’s an apprehension tool,” said Jake Johnson, president of the California Highway Patrol Association. He said officers at the end of their careers may choose to continue working for the CHP instead of retiring if they have access to the supplemental savings plan, especially if they’ve already locked in a pension amount that fits their needs.

For now, the measure is moving through the legislature with bipartisan support in the Assembly. Supporters say it will help agencies keep experienced people in uniform and encourage veterans to stay to train younger officers.

“Unfortunately, both the Highway Patrol and Cal Fire are struggling to keep on board personnel who are ideally suited to direct the response when it is most needed in critical moments when a fire or disaster strikes us,” said an assemblyman Mike Gipsonthe Gardena Democrat who carries the bill. “The Deferred Retirement Options Program, known as DROP, is neither revolutionary nor untested. It has worked well in other parts of California.”

But some deferred retirement plans have a bad reputation among taxpayer advocates because they risk increasing the cost of already underfunded pension systems. Ten bills that would have created or expanded them in California have failed since 1999, according to a legislative committee analysis. Gov. Gray Davis vetoed five of them between 1999 and 2002, citing their potential to increase spending.

Separately, a Los Angeles deferred retirement plan allowed cops to receive seven-figure payouts while claims disability and is out of work. And a new program in San Diego County allows sheriff’s deputies to receive pensions by continuing to work in law enforcement, a practice that taxpayer advocates deride as “double dipping.”

“We’re talking about people who stay in public service for five more years, get a six-figure salary, then get a one-time payment of a million dollars each,” Assemblyman Carl DeMaioRepublican from San Diego, said during a debate on the measure last month. He was the only MP who voted against.

The CHP and Cal Fire unions counter that their proposal is simple compared to those vetoed by past governors and those that have recently gained attention in Los Angeles and San Diego.

• Late-career CHP officers and Cal Fire firefighters will stop contributing their salaries to their pensions and instead put money into the deferred retirement plan.
• They would stop adding additional years of service to their pensions if they participate in a deferred retirement plan, essentially freezing their retirement income the moment they join the program.
• Officers and firefighters can stay on the job for up to five years. CalPERS will manage the deferred retirement plan and guarantee participants a 5% return.
• When they retire, officers and enlisted men will receive a payout from the deferred retirement plan and begin receiving monthly pension checks from CalPERS.

What is the cost of the state?

Their deferred retirement offer leaves room for union bargaining and it’s unclear how much it will cost.

For example, whether the state will make employer matches to deferred retirement accounts is up for negotiation.

Today the state contributes 70 cents to CalPERS to fund CHP pensions for every dollar it pays in officer salary. 51 cents go into CalPERS for Cal Fire firefighter pensions for every dollar it pays in firefighter salaries for the same reasons.

The state will not have to make these pension contributions on behalf of officers and firefighters in a deferred retirement plan.

Those salary costs did not come up specifically in legislative hearings on the proposal, but Terrence McHale, the longtime lobbyist for public safety unions, noted in a January hearing that employees in a deferred retirement plan “will no longer accrue adjustments that are attributed to California.”

“There is no reason not to support this bill,” he told lawmakers. “It does everything we need it to do and it works for the administration and it works for both parties.”

Other pension legislation

The two unions maintain a steady presence at the Capitol. The CalMatters Digital Democracy database shows the CHP union has given $2.2 million to lawmakers since 2015, and the Cal Fire union has given $1.8 million. Cal Fire Local 2881 over the past few years has prioritized legislation and contract agreements that would improve working conditions by forcing the state to hire more firefighters.

The request adds to a long push and pull over how to compensate California police and firefighters. CHP officers and firefighters hired before January 1, 2013 can retire at age 50 with a pension formula that gives them 3% of their final salary for each year of service, meaning that California Highway Patrol employees with 30 years of service will receive a pension worth 90% of their final year’s earnings.

Employees hired since then must work until age 57 to receive a full pension, which is charged at the rate of 2.7% per annuma change detailed in a 2012 pension reform law championed by former Gov. Jerry Brown.

The average pension for a CHP employee with 30 years of service was $99,831 as of 2024, according to an analysis by Transparent California, an online organization that publishes California public employee salaries.

In addition to the deferred retirement proposal, the CHP and Cal Fire unions also support a proposal that would allow public safety officers to retire at 55 and with a more generous formula. it passed through the assembly by a 70-2 vote, but drew opposition from local employers and may have a tougher road to Gov. Gavin Newsom’s desk than the deferred retirement measure.

This article was originally published on CalMatters and is republished under Creative Commons Attribution-NonCommercial-No Derivatives license.