La Plata's Plan to Combine Police & Public Works Enhanced Pension Benefits: A Case for Separate Approaches

By: Paul Guttenberg, Candidate for Town Council Ward I

Issue:

For several years, the Town of La Plata has been working towards enhancing retirement benefits for its Police Department. This effort is important to remain competitive with neighboring police agencies in attracting and retaining experienced officers.

Analysis:

The decision by the current Town Council to combine a proposed Police Department pension enhancement with the Public Works Department's retirement benefits has introduced significant challenges, leading to delays.

Addressing these complexities through a more focused, simplified and achievable approach is critical for securing fair retirement benefits for our police officers, general town employees, and ultimately to serve the best interests of La Plata’s taxpayers and residents.

Background:

Recognizing the increasing need to attract and retain experienced law enforcement professionals, the Town of La Plata initiated planning over two years ago to enhance retirement benefits for its police officers. This initiative is in line with La Plata’s decades-long commitment and investments to provide essential police services to our community.

Why Enhanced Police Pensions Matter:

Failing to offer competitive retirement benefits to our police officers carries substantial risks:

• Losing Skilled Personnel: Experienced and prospective police officers will be drawn to neighboring departments offering more attractive long-term benefits packages.

• Diminished Public Safety: A reduction in police force numbers will inevitably strain the department's capacity to maintain adequate coverage and ensure the safety of our town.

• Regional Challenges: There are examples of municipalities in the Mid-Atlantic region facing police retention issues that have resulted in severe police shortages, increased crime rates, and a decline in overall police services.

• Achieving Key Goals: The primary objectives of an enhanced police pension are to retain our investments in La Plata’s well trained, long-serving officers and to attract qualified new recruits, thereby maintaining healthy staffing levels and reducing the financial burden of overtime required to maintain expected Police service levels.

The Challenge of a Combined Pension Approach:

While the underlying goal of enhancing the police pension is commendable, the decision to combine this effort with the retirement benefits of the Public Works Department has introduced significant complications. This approach deviates from standard municipal practices and presents what I believe is an unnecessarily complex path forward.

Why Combining Pensions is Complex:

Integrating the retirement benefits of two distinct employee groups like Police and Public Works into a single enhanced plan presents numerous hurdles:

• Unusual Practice: Combining pension plans for public safety personnel and general employees is not a common or readily supported model in the municipal sector. Typically, municipalities maintain separate pension plans for public safety personnel and general employees due to differences in funding structures, risk profiles associated with the professions, and specific legal requirements.

• Complex Implementation: Designing and implementing a single 'hybrid' plan that addresses the distinct needs of both police officers and public works employees presents additional regulatory hurdles to pass with the IRS. Additionally, the limited availability of 'off-the-shelf' solutions from financial service providers for such an uncommon combined plan structure adds to the complexity and uncertainty about costs.

• Significant Delays: The fact that a clear plan and implementation timeline remains elusive after more than two years of deliberation underscores the inherent complexities of this combined approach, creating uncertainty for both employees and residents.

• Unclear Budget Implementation (2025): While the adopted 2025 budget allocates funds for a hybrid plan, a concrete strategy for engaging with plan providers and a clear pathway to implementation are still lacking.

• Conflicting Budget Discussions (2026): Budget planning for 2026 is being delayed by a reconsideration of retirement plans. Despite a prior council decision to pursue an enhanced pension (supported by a majority vote), an alternative 457 plan is now being rehashed. While a 457 plan allows pre-tax salary deferrals, it involves significant additional out-of-pocket costs for employees, potentially making it less appealing to our police officers compared to an enhanced pension with lower personal expenses. As a result, even with town investment, a 457 plan might not be as effective as the previously agreed-upon enhanced pension in attracting and retaining professional police officers.

• Distinct Needs of Police and Public Works: The fundamental differences in job responsibilities, risk factors, and career lifecycles between police officers and public works employees are the primary reasons why separate retirement plans are the established norm.

• Potential Legal Barriers: State laws often have specific eligibility criteria for police pension funds that Public Works employees, who are not sworn law enforcement personnel, will not meet. Addressing these distinct regulatory frameworks within a single plan adds considerable complexity and delay.

• Financial Forecasting Concerns: Combining employee groups with differing risk profiles and benefit structures can introduce significant complexities in actuarial assessments and potentially impact the long-term financial stability of a unified enhanced pension fund.

Despite these many significant challenges, the current Town Council is pursuing the development of a custom, combined pension plan. This necessitates engaging with a limited number of providers experienced in this uncommon approach and navigating complex regulatory approvals during the set up and establishment of this benefit plan, a process that will inevitably lead to further delays and increased uncertainty in the implementation timeline.

I know it is not the intention of the current Town Council to demoralize our Police Department or other town employees, however the outcome of not being able to manage this issue to completion after nearly three years must have a negative effect on their morale. Employees continue to not have benefits that attempt to keep pace with other regional municipal employers. We can, and should, do better for the civil servants who deliver for us every day in the Town.

Moving Forward: A Simplified Actionable Path

Given the complexities, ongoing delays, and impact to morale associated with the current combined pension approach, it is now time for the Town Council to reconsider its strategy. A more practical path forward is to take the following three actions:

ACTION 1: Separate and Prioritize

• Immediately decouple the efforts to enhance retirement benefits for the Police Department from those of the Public Works Department. This will significantly reduce complexity and allow for a more focused approach to each group's specific needs.

ACTION 2: Focus on Police Pension Enhancement

• Prioritize the establishment of an enhanced pension program specifically for the Police Department. This effort should leverage the scope and budgetary resources already identified and approved in the adopted 2025 budget. The urgency of addressing police retention and recruitment demands immediate attention.

ACTION 3: Evaluate General Employee Benefits Subsequently

• Following the successful implementation of the enhanced police pension benefit, the Town should then undertake a comprehensive evaluation of the current retirement benefits for all other town employee types, including those in the Public Works Department. This evaluation should focus on identifying the most cost-effective and beneficial strategies to support these employees in achieving their retirement preparedness goals and to enhance the town's overall ability to retain experienced public service professionals.

By adopting this straight forward simplified approach, La Plata can more effectively address the critical need to enhance retirement benefits for its police officers in a reasonable time, while also ensuring a thoughtful and appropriate strategy for the retirement security of all the towns valued employees.

For better town government we must increase La Plata’s voter turn out for our local elections.

Please Vote on May 6^th. You can find contact and candidate information for all the general election candidates on the town website. Please also share this information with your friends and family, and encourage them to vote.

Many candidates are also active on Facebook especially within the La Plata Community Group.

A “Vote Local” Plan For Town Council & Mayor

1. Plan To Vote:

• Please Verify Your Voter Registration Status. If needed, please update your voter registration before 7 April. If you are not a registered voter, please let this town election be your first! Links for first time Maryland voter registration are on this page.

2. Share Election Information:

• Please Share Election Information with Your Family, Friends & Neighbors Who Live in the Town of La Plata. www.voteguttenberg.org/vote-local/

3. Cast Your Ballot On Tuesday, May 6th 2025.

• Voting occurs in person at the La Plata Town Hall, located at 305 Queen Anne Street.

UPDATE: Voting hours are 7 am to 8 pm on election day, Tuesday May 6th.

I ask that you consider voting for me as your Town Council representative from Ward I.

More than anything I hope you take the time to vote, and that you encourage others to do the same. When residents vote in larger numbers, it increases the emphasis for elected town leaders to engage and respond to concerns expressed by the public.

Thank you.

Respectfully,

Paul Guttenberg, Candidate for La Plata Town Council Ward I