By David Pendered
Atlanta’s unfunded pension liability of $374 million for police officers, and the cost of mandatory participation in the city benefits package, could impact Atlanta’s efforts to recruit police officers.
Atlanta police officers aren’t the only city workers facing unfunded pension liabilities.
The total sum is $1.25 billion of unfunded pension liability. This includes $374.5 million in unfunded pension liability for police, $274.3 million for fire and rescue and $602.3 million for the general employees according to Atlanta’s 2021 Annual Comprehensive Financial Report.
However, APD’s pensions are at issue because the hiring of police officers is central to the crime-fighting plan of Atlanta Mayor Andre Dickens. Dickens vowed during his campaign last year to hire 250 new APD officers. It’s not clear if this number is in addition to any officers who leave the department for retirement or other reasons.
Since Dickens took office in January, his administration has focused the spotlight on public safety enhancements. This effort includes the planned opening of a mini-precinct in Buckhead and innovative hiring efforts such as a recruiting drive on March 19 at Lenox Square shopping center.
Amid this hiring initiative, APD’s benefits could emerge as a significant issue as APD competes with departments across the country. Even before the recent nationwide push to hire police officers, recruitment has not kept pace with population growth as far back as 1997, a federal report shows.
Atlanta and 49 other large city departments had fewer officers per 10,000 residents in 2016 than in 1997. Despite APD hiring 118 additional officers during the time period, Atlanta had 2.5 percent fewer officers per 10,000 residents, according to a police staffing report released by the U.S. Department of Justice in 2019 and revised in 2021. The figure does not take into account the number of commuters who visit Atlanta every day for work or other purposes.
In terms of the benefits package, most new APD officers will come in at a grade required to pay a total of 11.75 percent of their gross salary into the city’s defined benefits and defined contributions packages, according to details of the pension package cited on page 114 of the annual financial report.
For a starting police officer paid $48,500 a year, the mandatory benefit payment of $5,699 a year is deducted before an officer sees net pay on a paycheck. The figure is based on a calculation of the rate of the defined benefit and defined contribution cited in the financial report and salary posted on APD’s recruitment page.
The cost of benefits includes a mandatory employee contribution of 8 percent into a defined-benefit package, with a 1 percent annual multiplier. In addition, a mandatory 3.75 percent of salary must be contributed to the defined contribution element. The 3.75 percent is fully matched by the city, according to the financial report.
Full vesting takes five years. According to the financial report: “Employees vest in the amount of the City’s contribution at a rate of 20 percent per year and become fully vested in the City’s contribution after 5 years of participation.”
The APD recruitment page does not appear to provide specific information on pensions.
The section on pension benefits consists of three paragraphs and concludes: “Current updates and details of all pension plans are available through Employee Benefits at 404-330-6260.” A recorded message says this is not a working number.
Atlanta’s pension system was revised in 2011, according to the financial report. During the administration of former Mayor Kasim Reed, the city’s pension system was restructured to reduce benefits for newly hired officers.
This package is especially important to city workers because it is the only job-related retirement package available. Atlanta does not participate in Social Security.