City Council members whose idea of reform is to prop up the controversial DROP retirement perk will be thumbing their noses at Philadelphia taxpayers if they do that.
Mayor Nutter has a better idea: Scuttle the costly benefit for everyone, cutting the city’s current annual losses of $9 million to $22 million — even if that sparks a rush by some city employees to sign up before DROP dies.
That’s the starting point for a long-delayed debate at a June 8 hearing over the fate of the Deferred Retirement Option Plan.
A Council bill introduced Thursday would only tinker with the program, keeping DROP on the books as an ill-conceived benefit for city workers and a handful of incumbent Council members and other elected officials.
The perk lets retirement-eligible workers walk off with six-figure, lump-sum payments. It’s costly to the city’s woefully underfunded pension system, and DROP has never lived up to its billing as a way for city managers to plan the orderly replacement of key personnel.
While perfectly legal, its most outrageous use has been by elected officials who signed up for retirement but ran for reelection anyway. Following a so-called one-day retirement, officials can return to the city payroll in what can only be viewed as an end run around the intent of DROP.
Despite months of controversy, Council President Anna C. Verna — who at least bowed to political reality by scrapping her own reelection as she prepares to collect a $585,000 DROP check — put off grappling with the program until after the decisive May primary. During the campaign, unions representing police, firefighters, and other city workers demanded candidates pledge fealty to DROP, as most Council hopefuls did.
Now that the dust has settled, with Democratic nominees confident of reelection, Council could do the responsible thing and scuttle the retirement program. Voters made clear their disgust by spurning reelection bids by two political stalwarts enrolled in DROP: Councilman Frank Rizzo and City Commissioner Marge Tartaglione.
Instead, Verna asks taxpayers to believe that Council will be able to recast the lump-sum payments so that the perk supposedly proves cost-neutral to the city pension system.
While the Council proposal likely would trim the size of lump-sum payments, there are other provisions in the measure that would permit the up-front collection of pension payments by some retirees. That doesn’t sound cost-neutral, since the city’s general fund has to kick in millions of dollars each year to keep the pension fund solvent.
Any attempt at tinkering is beside the point, anyway. DROP serves no legitimate management purpose. More important, a city facing one budget nightmare after another — with schools being the crisis du jour — simply cannot afford to sweeten the regular pensions due to retiring city employees. Finally, there is no scenario under which incumbent elected officials should be able to take advantage of such a perk.
Council members who really want to move the city forward need to face up to the fact that it’s time for a clean break. Drop DROP.