Wheeling Approves Deferred Retirement Option for Fire Department
WHEELING — The city of Wheeling has approved a new Deferred Retirement Option Plan for eligible senior members of the Wheeling Fire Department, and city leaders will explore a similar plan for the city’s police pension fund to help retain veteran officers.
Last week, Wheeling City Council authorized the fire department to participate in the DROP program as proposed by the city and as administered by the West Virginia Pension Oversight Board. It’s the second such program the city has participated in, City Manager Robert Herron said, both in the fire department.
“Basically it enables firefighters who are eligible for retirement to enter the DROP,” he said, “and basically it freezes their pension for up to a five-year period where it is set aside, and they can continue to work in the fire department.”
At the end of the five-year period when participating firefighters leave the DROP program, they then receive a lump sum payment of five years worth of pension benefits that they would have received had they retired, Herron explained.
“The benefit to the city is that it enables us to retain senior members of the fire department for that five-year period,” he said, “and also it enables the pension fund to utilize those funds that otherwise would be drawn down.”
Herron noted that the first pension DROP program in which the city’s fire department participated saw their pension fund come out ahead by about $800,000 over that five-year period. Herron said the current DROP program for the fire department will conclude this year around June 30.
Initially, the city did take somewhat of a “hit” five years ago when the first DROP program was adopted, according to Herron, who explained that about 11 fire department employees entered the program. Had those employees retired five years ago, the city would have been able to replace them in the state pension fund at a lower annual cost.
“However, because this particular DROP program will include between five and six eligible employees, that cost has already been absorbed within the budget, and actually we’ll see a slight reduction,” Herron said. “So from a budgetary perspective, this time around it’s actually a benefit.”
Herron said there also was an actuarial study done that projects into the future for the five-year period of the upcoming DROP program, and in order to qualify, the financial outcome has to be actuarially either neutral or beneficial. The DROP program is approved by the Municipal Pension Oversight Board, which most recently gave the green light in December to the city’s new program.
“I fully support this,” Herron said. “It does enable us to retain valuable employees who otherwise would probably retire.”
Councilman Dave Palmer noted that a DROP program could also be utilized for the city’s police pension fund.
“I think we need to have a discussion probably with the chief to form some type of committee to see if we can find some interest for possible retention of our senior officers, and also for recruitment in the future of officers,” Palmer said.
The city manager noted that five years ago, there was not an overwhelming response of interest from eligible members of the police department to start a DROP program for officers nearing retirement at that time. However, recent discussions about police staffing and a growing desire to put more officers on the streets makes a DROP program for the police department worth revisiting.