“Has special treatment been given? We need to get to the bottom of this,” said State Treasurer John N. Kennedy, who sits on the board that oversees the State Police’s retirement system.
The system was blind sided by a hitchhiker amendment, attached to a bill on the last day of the recent legislative session. But bond rating agencies in New York City saw media reports and already have asked about the special provision that applied to only two people: State Police Col. Mike Edmonson and Master Trooper Louis Boquet.
“I’d like to be able to report back to the rating agencies that we are on this,” Kennedy said.
“We have a fiduciary responsibility to investigate,” said System executive director Irwin Felps Jr., because of the potential financial ramifications of the changes on the system’s finances. “We are very concerned. Anytime you introduce special interest legislation there’s always unintended consequences.”
Felps said nobody approached the board about sponsoring legislation to make the change. There are also questions about whether the constitutionally required advertising done in advance of session to alert of pending legislation occurred, he said.
Felps said lack of transparency in the whole situation has been troubling to system members and retirees.
Late Wednesday, Edmonson said in an phone interview from Washington, D.C. that he had no problem with the board decision to investigate further.
“Let’s let the board review it and make sure things are the way they should be,” Edmonson said. “If not, let’s correct it.”
The legislation only provided he and another veteran trooper what any other colonel or trooper would be entitled, Edmonson said, adding, “It’s fair and equitable.”
He said he did not request the change. His staff told him there was legislation available “that would ‘fix not only you but other members,’” Edmonson said.
Edmonson and Master Trooper Boquet, of Houma, are the only two pension system members covered by the change which deals with their decision years ago to participate in the old Deferred Retirement Option Plan, called DROP, Felps said.
Under the old rules, a trooper had to make a decision whether to enter DROP when he or she reached 25 years of service or 50 years of age. DROP allowed troopers to continue working even though they were eligible for retirement. The downside was that troopers didn’t get full credit in their pension checks if they started receiving higher salaries after joining DROP.
Edmonson took DROP as a captain.
Through the last-minute change made in the legislation, Edmonson can receive lifelong pension payments based on the calculation of his higher colonel’s pay of $135,000 a year. That’s more than he would have received at captain’s pay, where it was frozen because of his DROP decision.
In Edmonson’s case, the change means that his pension will be based on his $135,000 a year full colonel’s pay instead of the lower captain’s pay when he entered DROP. He’s been paying into the retirement system as a colonel for seven years.
The Legislature’s actuary estimated a $300,000 cost to the system over five years.
The State Police system has not yet calculated what the increase in benefit would mean to Edmonson and Boquet, Phelps said. System actuary Charles Hall will be asked to do that, he said.
The State Police system has an unfunded accrued liability of $323 million — meaning its that short of having the funds to cover all its financial commitments over time.
It was is one of the state’s smaller pension systems with about 925 active members and a little more than 1,200 retirees.