Senator John Snow
16 West Jones Street
Room 2111
Raleigh NC 27601

June 29, 2007

Dear Law Enforcement Officer:
Earlier this session you wrote me about supporting a 25 year retirement for law enforcement officers. As you know, I introduced such a retirement for law enforcement officers through Senate Bill 1444 which you can read at http://www.ncleg.net. For the last 25 years a member of the General Assembly has introduced a bill similar to Senate Bill 1444 and every year the bill has been killed in committee.

The reason that these bills have not gone anywhere is because of the tremendous costs associated with providing a twenty-five year retirement. In fact, the first fiscal note that I received about SB 1444 stated that it would cost about $100 million in the first year and the costs will increase at a dramatic rate annually. The bill, at these costs, is simply not something that can be sold here in the Legislature. The League of Municipalities will fight a bill which cost this much and many legislators have indicated that they could not vote for something that is this costly. In fact, this cost concern is the main reason that the League of Municipalities has actively opposed a 25 year retirement for the last 25 years.

For this reason I began working with representatives from the Police Benevolence Association, the Fraternal Order of Police, the NC Sheriff’s Association, and the League of Municipalities to craft a bill that could be passed in both chambers of the Legislature. After listening to all of these groups my staff and I worked to produce a bill that we thought would be reasonable to both the League of Municipalities and your Representatives in the PBA, FOP, and NC Sheriff’s Association. Most importantly, we worked very hard to produce something that can be accepted here in the Legislature. The new plan cuts the costs enough that we think we can get the votes we need to pass this bill on both the floor of the House and Senate.

We gave the plan to the League of Municipalities and the Law Enforcement Representatives and allowed them to study it. About a week later I heard back from the League of Municipalities and their executive committee has agreed to support the new 25 year retirement plan. The next day I heard back from the Law Enforcement Representatives. They told us that they could not agree to the plan.

We have been working very hard on this new plan for the last few months and you have done an excellent job of communicating with members of the General Assembly about your need for a 25 year retirement. In my view this plan represents the best chance that the Law Enforcement Community has ever had to have a 25 year retirement and I do not want to let this opportunity pass, especially without letting you and your fellow officers weigh in on the proposal.

Below you will find a summary sheet with six plans on it. The first plan shows the retirement for regular state employees. The second plan shows the current retirement that State Troopers and State Law Enforcement Officers have. The third plan shows the new 25 year retirement plan that I have come up with for State Troopers and State Law Enforcement Officers. The fourth plan shows the retirement for regular municipal employees. The fifth plan shows the current retirement for Municipal Law Enforcement Officers. The sixth plan shows the new 25 year retirement plan that I have come up with for Municipal Law Enforcement Officers. I wanted to show you all six plans so you can compare what you currently have to what the plan would give you versus what regular municipal and state employees get for retirement.

You should know that if you want to have a 25 year retirement that doing away with the special separation allowance over a period of years (after the current generation of officers retires) must be part of the deal. The League of Municipalities will fight any type of 25 year retirement bill that does not include this provision. And as the history of this bill has shown – if the League is opposed to this bill then it is not going anywhere.

As I state earlier in this letter - this compromise bill is the best chance that the Law Enforcement community has had for a 25 year retirement in the last 25 years. However, your representatives at the PBA, FOP, and NC Sheriff’s Association and I need to know how you feel about this plan. If you will go along with it let us know and I will have the bill heard in committee as soon as I can. If it is truly something you oppose I need to know that too. However, please know that in preparing this current plan we went through several other proposals all of which proved to be too costly. This is truly the only bill which comes in at a cost that we can afford both financially and politically.

Despite the fact that we think we can pass this bill I need you to give this proposal some serious and critical thought. It affects your future and your family. You cannot afford to take this bill lightly. I encourage you to sit down with your retirement advisor and see if it is something that is good for you. Your representatives at the PBA, FOP, and the Sheriff’s association should have people on staff that can help you better understand this bill and how it will affect you personally. If, after reviewing this bill on your own or talking with your retirement advisor, you do not think that this is a good bill - do not support it. I do not want to sponsor a bill which is going to be harmful to you.

This session is passing quickly so please do not waste any time in getting back with me about this plan. To help speed up your comments and our responsive to you I would appreciate it if you would use an online survey. You can find the survey at http://www.senatorsnow.com. This survey will give you an opportunity to have your views on this proposal counted correctly and professionally and it will give you room to comment on the bill. If you have questions that neither your retirement advisor, the FOP, PBA, or the Sheriff’s association can not answer then feel free to email me at johnsn@ncleg.net. I will post all questions and their answers on my online office at http://www.senatorsnow.com so you can review both the answer and the question.

Please forward this message onto other officers in your department via email, take it into work and post this letter on the bulletin board, or go the distance and print a copy of this letter out and put it underneath everyone’s windshield wiper so they can look at it themselves. We need to hear back from you on the survey at http://www.senatorsnow.com by Monday July 9th.

Take care,

Senator John Snow

The Teachers' and State Employees' Retirement System
For State Troopers and other State LEO

Plan 1: General Employees:
All full-time permanent employees of State agencies, departments, universities, community colleges, public schools and employees of the Administrative Office of Courts except judges, district attorneys and clerks of court are required to be members. In order to retire on an unreduced retirement benefit, a member must meet one of the following conditions:
(1) Age 65 with 5 years of service;
(2) Age 60 with 25 years of service;
(3) Any age with 30 years of service.
Reduced retirement benefits are available at age 50 with 20 years or age 60 with 5 years.

The formula for the Teachers' and State Employees' Retirement System is 1.82% times AFC (average of four highest consecutive years) times the number of years of service. A member can receive about 50% of salary after 30 years of service.

Example:
Pension: AFC of $50,000 X 1.82% X 30 years = $27,300 for life;

Plan 2: Present Retirement for State Troopers and other State Law Enforcement Officers:
All full-time permanent law enforcement officers of State agencies, departments, universities, community colleges, and public schools are members of the Teachers' and State Employees' Retirement System. In order to retire on an unreduced retirement benefit, a member must meet one of the following conditions:
(1) Age 55 with 5 years of service;
(2) Any age with 30 years of service.

Reduced retirement benefits are available at age 50 with 15 years. Law enforcement officers have the same formula of 1.82% times AFC times the number of years of service. A member can receive about 50% of salary after 30 years of service. Also during a member's career, the State pays 5% of salary into the 401(k) Plan which is 100% owned and investment controlled by the members. At retirement this lump sum, if paid over the lifetime of the member, would equal about 20-25% of final salary. Another retirement benefit is the Special Separation Allowance, which pays each retiree up until age 62 a monthly allowance of .85% of salary for each year of service. A retiree with 30 year will receive about 25% of salary. Total of all benefits are about 100% of salary after 30 years.

Example:
Pension: AFC of $50,000 X 1.82% X 30 years = $27,300 per year for life;
Special Separation: Final Salary $53,000 X .85% X 30 Years = $13,515 per year until age 62
401(k) Plan: Additional Benefits from 401(K) Plan of about 20% to 25% = $10,600-$13,250 per year.

* REMEMBER YOU CANNOT ACCESS YOUR 401(k) MONEY UNTIL YOU ARE 59 ½

Plan 3: Proposed Retirement Benefits Changes for State Law Enforcement Officers:

In order to retire on an unreduced retirement benefit, a member must meet one of the following conditions:
(1) Age 55 with 5 years of service;
(2) Age 50 with 25 years of service. (five year phase-in that would reduce one year per year until 25 years)
Law enforcement officers would have the same formula of 1.82% times AFC times the number of years of service. A member could receive about 43% of salary after 25 years of service but would be eligible to retire at age 50.

Also, the 401(k) Plan would continue as it is now with the employer paying 5% of officers’ salary to the Supplemental Retirement Plan.

The Special Separation Allowance would be phased out over time, but those officers with five or more years of serviced when the changes became law would continue to be entitled to receive the separation allowance at the time they turned age 55 with five years of service or the time they would have completed 30 years of service.

Situation 1: For Officers Currently in the System:
Pension: AFC of $50,000 X 1.82% X 25 years = $22,750 per year for life;
Special Separation: Final Salary $53,000 X .85% X 30 Years = $13,515 per year until age 62
401(k) Plan: Additional Benefits from 401(K) Plan of about 20% to 25% = $10,600-$13,250 per year.

Situation 2: For Officers entering the System After the Date the Bill is Enacted:
Pension: AFC of $50,000 X 1.82% X 25 years = $22,750 per year for life;
401(k) Plan: Additional Benefits from 401(K) Plan of about 20% to 25% = $10,600-$13,250 per year.

* REMEMBER YOU CANNOT ACCESS YOUR 401(k) MONEY UNTIL YOU ARE 59 ½

The Local Governmental Employees' Retirement System
For County and City Officers

Plan 4: Present Retirement Benefits for General Employees:

All full-time permanent employees of local governments who elect to participate in the Local System are required to be members. In order to retire on an unreduced retirement benefit, a member must meet one of the following conditions:
(1) Age 65 with 5 years of service;
(2) Age 60 with 25 years of service;
(3) Any age with 30 years of service.
Reduced retirement benefits are available at age 50 with 20 years or age 60 with 5 years.

The formula for the Local Governmental Employees' Retirement System is 1.85% times AFC (average of four highest consecutive years) times the number of years of service. A member can receive about 53% of salary after 30 years of service.

Example:
Pension: AFC of $50,000 X 1.85% X 30 years = $27,750 for life;

Plan 5: Present Retirement Benefits for Law Enforcement Officers:

All full-time permanent law enforcement officers of local governments are eligible to be members of the Local Governmental Employees' Retirement System. In order to retire on an unreduced retirement benefit, a member must meet one of the following conditions:
(1) Age 55 with 5 years of service; (2) Any age with 30 years of service.
Reduced retirement benefits are available at age 50 with 15 years. Law enforcement officers have the same formula of 1.85% times AFC times the number of years of service. A member can receive about 53% of salary after 30 years of service.

Also during a member's career, the employer pays 5% of salary into the 401(k) Plan which is 100% owned and investment controlled by the members. At retirement this lump sum, if paid over the lifetime of the member, would equal about 20-25% of final salary.

Another retirement benefit is the Special Separation Allowance, which pays each retiree up until age 62 a monthly allowance of .85% of salary for each year of service for which he has credit for as a law enforcement officer. A retiree with 30 year will receive about 25% of salary. Total of all benefits are about 100% of salary after 30 years.

Example:
Pension: AFC of $50,000 X 1.85% X 30 years = $27,750 per year for life;
Special Separation Allowance: Final Salary $53,000 X .85% X 30 Years = $13,515 until age 62
401(k): Additional Benefits from 401(K) Plan of about 20% to 25%= $10,600-$13,250 per year.

* REMEMBER YOU CANNOT ACCESS YOUR 401(k) MONEY UNTIL YOU ARE 59 1/2

Plan 6: Proposed Retirement Benefits Changes for Local Law Enforcement Officers:

In order to retire on an unreduced retirement benefit, a member must meet one of the following conditions:
(1) Age 55 with 5 years of service;
(2) Age 50 with 25 years of service. (five year phase-in that would reduce one year per year until 25 years)
Law enforcement officers would have the same formula of 1.85% times AFC times the number of years of service. A member could receive about 45% of salary after 25 ears of service but would be eligible to retire at age 50.

Also, the 401(k) Plan would continue as it is now with the employer paying 5% of officers’ salary to the Supplemental Retirement Plan.

The Special Separation Allowance would be phased out over time, but those officers with five or more years of serviced when the changes became law would continue to be entitled to receive the separation allowance at the time they turned age 55 with five years of service or the time they would have completed 30 years of service.

Situation 1: For Officers Currently in the System:
Pension: AFC of $50,000 X 1.85% X 25 years = $22,750 per year for life;
Special Separation: Final Salary $53,000 X .85% X 30 Years = $13,515 per year until age 62
401(k) Plan: Additional Benefits from 401(K) Plan of about 20% to 25% = $10,600-$13,250 per year.

Situation 2: For Officers entering the System After the Date the Bill is Enacted:
Pension: AFC of $50,000 X 1.85% X 25 years = $22,750 per year for life;
401(k) Plan: Additional Benefits from 401(K) Plan of about 20% to 25% = $10,600-$13,250 per year.

* REMEMBER YOU CANNOT ACCESS YOUR 401(k) MONEY UNTIL YOU ARE 59 ½