Michigan DROPs Big Payouts to Retain State Police Employees

Editor's note: This story was updated with comments from the Michigan State Police.

The Michigan State Police has an incentive program that gives employees with 25 years of experience some $400,000 or more if they agree to stay with the department up to six years after becoming eligible for a retirement benefits.

An employee with 25 years on the job and an annual salary of $109,000 would walk away with an additional $435,725 after six years in the program, according to an analysis done by the Mackinac Center for Public Policy. In 2016, there were 17 Michigan State Police employees who made $109,000 or more.

The incentive is called Deferred Retirement Option Plan, or DROP, which was authorized by a unanimous vote of both the House and Senate in 2004. That was a time when legislators could not find money in a stressed state budget to cover the costs of training new classes of recruits to replace normal attrition. The number of active troopers had dropped from about 1,340 in 2001 to 1,080 in 2004. New trooper schools were authorized just twice during the nine-year period from 2002 to 2010.

Of the 1,844 current enlisted members of the state police, 594 were hired before June 1, 2012, and are therefore eligible for DROP. The incentive is calculated based on a percentage of the employee's pension. After the maximum six years, the incentive is equal to 100 percent of what that employee's pension would be. If the employee stays fewer years, the percentage reduces.

The 25-year requirement does not have to be met solely by time with the Michigan State Police. Years of service in other law-enforcement agencies, the military or the U.S. Peace Corps can count toward the total.

When employees in the program retire, they receive the incentive payments as well as monthly pension benefits.

Richard C. Dreyfuss, an actuary and adjunct scholar with the Mackinac Center for Public Policy, believes the incentive program is a form of double-dipping. That’s because officers get a type of retirement benefit while still working and collecting a paycheck. He also said the DROP programs generally are very expensive and often indicate an overly-generous early retirement system.

“If the DROP exists they take it, and if it doesn’t exist they take the early retirement,” Dreyfuss said. “Then they seek employment elsewhere because many of these individuals are not quite ready to retire. ... It’s a shame to me to see such experience and expertise just walk out the door.”

The Michigan State Police said the program was proposed in 2004 as a measure to retain experienced enlisted employees who traditionally left the agency after 25 years of service.

“DROP was instituted to address the department’s inability to retain an adequate number of enlisted members in the face of mounting attrition,” said Shanon Banner, spokeswoman for the Michigan State Police, in an email. “At the time, as evidenced by the attached Strength Report from pay period seven of 2004, the department had 1,808 enlisted members, of which 1,104 were troopers. Thirteen years later, in pay period seven of 2017, the department had 1,875 enlisted members, of which 1,179 are troopers.”

Banner continued: “In 2017, despite the support of the Governor and Legislature in hiring over 650 troopers since 2011, minimal gains in staffing have been achieved. Because attrition has been so high and is forecasted to remain high in the upcoming years, the argument for DROP is no less valid today than it was in 2004.”

The Mackinac Center submitted a Freedom of Information Act request to the state police requesting a list of DROP payouts from 2012 to 2017.