As 100 soon-to-be-laid-off Michigan state troopers wonder how they're going to make the rent, dozens of the State Police department's most veteran officers -- including its director, Col. Peter C. Munoz -- are racking up millions of dollars in retirement nest eggs.

The savings plan, which was launched in 2004 to keep veterans on the force, will lead to lump sum payments of up to $560,000 at retirement in addition to their annual pension checks. The payments -- which could total more than $40 million -- are now being questioned by state and police union officials.

"When we're talking trooper layoffs and having other state workers take unpaid days off, we should review any program which provide incentives for people to stay on working while in retirement," said state Rep. Tom McMillin, R-Rochester Hills. "This is a time we should be offering employees incentives to leave state employment -- not stay."

The Deferred Retired Option Plan was created in October 2004 when a trooper hiring freeze made some lawmakers think retaining retirees would be more cost-efficient than training and putting rookies on the road.

But rather than keep front-line, experienced troopers on the job, the program has also been mined by higher ranked and higher paid supervisors, who work desk jobs and rarely get on the road, according to the state trooper's union, which represents more than 1,000 officers.

"We would like to see them (lawmakers) make it more attractive for some of those in DROP to retire now," said Chris Luty, vice president of the Michigan Troopers Association. "We estimate for every one who retires, at least one, maybe more, of the planned layoffs could be averted."

When those in DROP retire, they will receive, depending on their pay, lump sum payments totaling $227,500 to $560,000. In addition, they will receive annual pension checks of $37,200 and above, about 60 percent of their annual pay.

With a minimum of $227,500 per officer, lump sum retirement packages to be paid out by 2014 will total more than $40 million.

Those accepted in the program must be retirement-eligible, which means they've got 25 years on the job, and agree to immediately have retirement benefits set aside for six years in an investment account at 3 percent annual interest while they receive full-time pay and benefits.

Large disparity found

Luty estimated the number of participants is equally divided between troopers and higher ranking officers. But a Detroit News review of 171 officers signed up for DROP as of Feb. 1, 2008, found a much larger disparity, with only a handful of troopers enrolled.

The News found 30 of those taking advantage of DROP were troopers, another 32 were sergeants and 40 more were detective sergeants. The remaining 69 -- more than double the number of troopers signed up -- were higher-ranking command officers, including Munoz, the department's director, a governor's appointee.

Munoz, who makes $130,000 a year, has salted away a retirement package to exceed $560,000 as of his Oct. 31, 2010, retirement date. That's in addition to the $78,000 a year he will be paid for life, even as he considers moving into another job.

A State Police official confirmed Munoz recently applied for and has interviewed for the post of U.S. marshal, Western Division, in Michigan.

At least one commander who signed up for DROP defended the program as good for the department and the state budget.

Capt. Mike Thomas, who is in charge of the State Police forensic labs, said the program benefits the entire state of Michigan.

"It (DROP) was offered to me and I enrolled and planned my retirement accordingly," said the 52-year-old Thomas, who will retire next year after 32 years with the State Police. "This program has helped retain invaluable experience throughout the department and also has provided an opportunity for a smooth transition for whomever comes after us."

In San Diego, a DROP program offered to police and other municipal employees has prompted a lawsuit against the police union in an effort to reduce the city's budget deficit.

Michigan lawmakers are now taking a tough look at DROP. State Rep. Richard Leblanc, D-Westland, has proposed a bill to permit DROP enrollees to retire after four years without penalty to accrued pension benefits, in an effort to save money and encourage more enrollees to retire.

DROP payouts depend on the amount of time officers stay in the job. Currently, an officer who stays less than a year in DROP collects only 30 percent. That percentage rises to 50 percent for less than two years, 60 percent for less than three years, 70 percent for less than four years, 80 percent for less than five years and 90 percent for less than six years.

"There are some people who might like to retire right now but are staying on because there is a 20 percent penalty," said LeBlanc. "I would like to propose a 31-day window where they could exit with no penalty.

'Look at everything'

"These are different times. Everyone is looking at ways to address our budget problems without layoffs. I don't think there is any one answer. I think we have to look at everything."

McMillin said it makes no sense to keep paying higher paid supervisors not to retire when some make the equivalent of two to three troopers.

"I think we need to be taking a hard look at it," said McMillin, a certified public accountant. "At least that's what I will be discussing in caucus."

But LeBlanc noted the State Police is not alone in offering a deferred retirement program. He said police agencies in Sterling Heights, Southfield and the Macomb County Sheriff's Department have similar programs.

"It doesn't surprise me there might be more command officers enrolled," LeBlanc said. "After 25 years, most troopers have received promotions or (are) eyeing opportunities elsewhere."

How DROP works

After 25 years on the job, Michigan State troopers are eligible to retire but may elect to remain on the job working at full wage and benefits and begin accruing retirement benefits set aside in an investment account for them at 3 percent interest.

The retirement pay, totaling about 60 percent of normal pay, is added to the accounts each year for six years. If the trooper retires before the six-year period, there are penalities. Command officers receive higher pension and retirement benefits based on higher salaries.

At the end of six years, retirement is mandatory and participants walk away with a minimum lump sum payment of $227,500, most of them considerably more, in addition to receiving annual minimum retirement pay of at least $37,200 a year for life.

For the full article, see Mike Martindale, "Deferred police retirement pay to cost strapped state millions", Detroit News, May 26, 2009.