Is Police Chief Cathy Lanier Worth $11 Million?
WTOP's Mark Segraves is first with the not-very-surprising news that the Gray administration has signed Metropolitan Police Department Chief Cathy Lanier to a new five-year deal. Lanier consistently gets high marks in public opinion polls, so it's no surprise that the mayor wouldn't want to part with the Fenty administration's most popular holdover.
LL suspects that much of the attention of Lanier's new contract will focus on her salary of $253,000 a year. That's one of the biggest in city government and a humongous increase from the $175,000 Lanier was making when she first got the gig in 2007.
But the real story is how much Lanier will be making once she stops working for District government, because the chief's entire retirement package could easily wind up being in the eight figures.
The math: Lanier's old contract put her pension payments at a minimum of 71.5 percent of her final salary. Segraves reports that in 2015, Lanier's salary will get a 5 percent bump to her $253,000-a-year salary. For argument's sake, let's say Lanier makes it to 2015 and gets the pay bump before retiring.
That would put her final salary at $265,650. Her pension would then be somewhere around $190,000 a year, plus a cost-of-living increase. FOP police union boss Kris Baumann (an outspoken critic of Lanier) estimates that the cost of living increases are generally about 2 percent.
Lanier was born in 1967, and probably has many years of good health ahead of her. It's entirely possible that she draws a pension for 40 years or more after she retires. How much might that cost? In 40 years, thanks to the magic of compound interest, Lanier's yearly pension would be more than $400,000. Add it all up, and 40 years of pension payments would total more than $11 million.
By contrast, Baumann says the average pension for the rank-and-file cop who retires after 25 years is about 62 percent of their final salary and shakes out to about $55,000 a year. In 40 years, that pension would be worth about $120,000 a year, and the 40-year total would be about $3.3 million.
That's a pretty big difference, no? And if you put Lanier's retirement package up against the average non-public employee's IRA, well, let's just not go there.
|Lanier's contract||Average MPD contract|
|Pension 1st year of retirement||$190,000||$55,000|
|Pension in year 10||$227,068||$65,730|
|Pension in year 20||$276,794||$80,124|
|Pension in year 30||$337,410||$97,671|
|Pension in year 40||$411,302||$119,061|
Photo by Darrow Montgomery