“Herb” Kohl is the senior senator from the state of Wisconsin. He’s a
democrat. He was first elected to office way back in 1988. Twenty-two
years in the senate comes with some important responsibilities. The good
senator is on the Appropriations, Judiciary, and Banking Committees. He
is the Chairman of both the Special Committee on Aging and the
Agricultural Appropriations Committee.
Bottom line; Herb Kohl has clout in D.C. He is one of
America’s elder statesmen. So when he asks for a favor it’s very hard to
say “no”. I wonder what Tim Geithner is going to do with Herb’s recent
letter asking for a change in the rules for retirement ages for cops and
fireman from the great state of Wisconsin and every other state in the
Union. Here’s what Senator Kohl is asking for:
that you amend the regulations to make clear that the public safety
employees safe harbor apply to WRS protective occupation participants.
These participants put their lives on the line every day to protect our
citizens and they deserve to retire with full benefits at the ages of 53 and 54.
I’ve got nothing against cops and I’ve always liked fireman. It’s not
that I don’t think this group of people shouldn’t get a leg up. But at
whose expense? What about those nurses, EMT folks, and ER Docs? What
about everyone else?
The country is about to increase the Social Security retirement age and
push back eligibility for Medicare to 67. And Kohl wants to cut the cops
a sweetheart deal where they can retire with full benefits 12 years
before anyone else.
We have two classes of workers in the USA; those that work for
government and those in the private sector. There are two different sets
of rules. The differences are in the number of holidays, benefits (far
superior health care), job security and retirement benefits. Senator
Kohl’s proposal makes the gap even larger.
Senator Kohl needs to understand that America is not the rich country
that it once was. Our states, cities and municipalities simply can no
longer afford the largess proposed by Kohl. The rules that he suggests
are fair and reasonable actually aren’t fair or reasonable at all.
Senator Kohl is not blind. Nor is he uninformed. He must know that a
suggestion like this is going to be received very badly by the folks who
have to pay for it. That said, watch out for this one. Kohl’s clout makes even this proposal a possibility.
It’s an even money bet that this will happen. Special interest politics
is the way of the land these days. But here’s my bet for the Senator: Those cops and fireman who will get this benefit will never see those checks.
The government promises they are relying on will be broken at some
point in the future. America does not have the resources to make these
promises anymore. We will go broke because so many of these special
interest promises have been made.
We can hope and even expect that our political leaders will do the
“right thing” in these difficult times. There is a broad awareness that
everyone is going to have to do a bit more and get a bit less in the New America.
But that does not seem to be the case with this Senator. He is working
against the best interests of the country. In the end, those that he is
trying to curry favor from will be the losers. I suspect the Senator
knows this. He doesn’t care.
The full letter from Senator Kohl to Tim Geithner:
Special Committee on Aging
Washington, DC 20510-6400
United States Department of Treasury
1500 Pennsylvania Avenue
Washington, DC 20220
purpose of this letter is to express my concern regarding the impact
of certain Treasury regulations on the normal retirement age (“NRA”) of
protective occupation participants, including police officers and fire
fighters, in the Wisconsin Retirement System (“WRS”). I ask that you
modify your regulations to ensure that these public safety employees
can maintain their current NRA under the WRS.
2007, the Treasury Department issued final regulations on NRA in
pension plans (the “NRA Regulations”)(1.401(a)-1(b)). NRA is a term
referring to the earliest age at which a pension plan participant can
retire with an unreduced benefit from their plan.
general, the NRA Regulations provide that, “normal retirement age
under a plan must be an age that is not earlier than the earliest age
that is reasonably representative of the typical retirement age for the
industry in which the covered workforce is employed.” The regulations
go on to provide that a NRA of 62 or older would meet this requirement.
However, whether an NRA of ages 55 to 62 meets the general rule would
be based on all of the relevant facts and circumstances - and an NRA
that is less than 55 years is presumed to be unreasonable (unless
determined otherwise by the IRS Commissioner).
the WRS, all state employees are in the same plan. General employees
constitute about 90.7 percent of the plan's active participants - and
protective occupation participants make up about 8.7 percent.
Protective occupation participants under the WRS include those
employees whose principal duties involve active law enforcement or
active fire suppression or prevention, frequent exposure to a high
degree of danger or peril and a high degree of physical conditioning.
Protective occupation participants include police officers and fire
NRA for general employees under the WRS is age 65. However, the NRA
age for protective occupation participants in the WRS is age 53 with 25
years of service or age 54 with less than 25 years of service.
the NRA for WRS protective occupation participants is less than 55
years, under the NRA Regulations, there would be a negative presumption
that the age is unreasonable. And if the NRA is deemed unreasonable,
the age may need to be raised to comply with the regulations.
public safety employees in other state pension plans avoid this result
through the public safety employees safe harbor in the NRA
Regulations. Under the safe harbor, a NRA under a plan that is age 50 or
later would meet the requirements of the regulations if substantially
all of the participants in the plan are qualified public safety
employees. However, even though WRS protected occupation participants
are qualified public safety employees, this safe harbor may not apply to
them. This is because they participate in the same plan as general
employees and do not constitute a majority of the total active
membership. Therefore, protective occupation participants within WRS may
not meet the “substantially all” requirement of the safe harbor.
ask that you amend the regulations to make clear that the public
safety employees safe harbor apply to WRS protective occupation
participants. These participants put their lives on the line every day
to protect our citizens and they deserve to retire with full benefits at
the ages of 53 and 54. Furthermore, these participants were promised
these benefits and relied on these promises. Therefore, it's unjust to
cut their benefits after the fact.
J. Mark Iwry, Senior Adviser to the Secretary, Deputy Assistant
Secretary for Retirement and Health Policy, United States Department of