Friday, July 31, 2015

City Paper Looks At DROP

The City Paper has a really interesting story this week on the city's controversial DROP (Deferred Retirement Option Plan) retirement perk. The program, which provides retirees who lock in a departure date with a lump sum exit payment, has been the subject of intense debate. A key issue is whether the program costs or saves the city money.

City Paper Looks At DROP

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The City Paper has a really interesting story this week on the city's controversial DROP (Deferred Retirement Option Plan) retirement perk. The program, which provides retirees who lock in a departure date with a lump sum exit payment, has been the subject of intense debate. A key issue is whether the program costs or saves the city money.

According to the City Paper report -- entitled "The Billion Dollar Boondoggle -- DROP costs. They asked an acturary to review the program. Here's an excerpt:

To gauge the financial impact of DROP, City Paper asked Joe Boyle, a Philadelphia-area actuary — a financial expert who specializes in pension plans and risk management — to do an independent analysis of DROP. The program was originally billed as "cost-neutral" when it was unanimously passed by City Council and signed into law that same day, June 28, 1999, by former Mayor Ed Rendell. This newspaper made the request because the city's actuarial consultants have either avoided the issue of the cost of DROP, or given contradictory data in their reports.

Boyle analyzed more than 1,000 pages of documents, representing a dozen years of annual reports on the city's pension system, as well as three reports on DROP. His conclusion: DROP is "a runaway freight train."

For the full report, click here.

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William Bender, a Drexel graduate who landed at the Daily News in 2007, has covered everything from South Philly mobsters to doomsday hucksters. He occasionally writes about local food trucks and always eats everything on his plate, whether it be a bloody rib eye or a corrupt politician. E-mail tips to benderw@phillynews.com
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David Gambacorta, has been a reporter with the Daily News since 2005, covering crime, police corruption and all of the other bizarre things that happen in Philadelphia. Now he’s covering the 2015 mayor’s race, because he enjoys a good circus just as much as the next guy. He’s always looking to get a cup of coffee. Send news tips and other musings on life to gambacd@phillynews.com
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