Murphy’s Law article: How The County’s Pension Fund Grew And Benefited A Few

Tom Ament's Pension Payout

If Ament elects backdrop, he goes back in time to when he was first eligible to retire. Under the Rule of 75, Ament could have retired in 1995, the first year the rule went into effect, when he was 58 and had 26 years of service. His last three years (or technically his last 78 biweekly checks) are figured from his last four years of salary, which were $101,762 (1995), $97,329 (1994), $95,901 (1993) and $93,127 (1992). We came up with an annual average of $96,000, which could vary slightly depending upon what month the salaries kick in and which month he retires.

With 26 years service for Ament multiplied by 2.5 (the elevated percentage of their salary that elected officials get for their pension), Ament gets 65% of his average salary for an annual pension, or $62,400. But under the new pension settlement, this is multiplied by 25%, giving him $78,000

The backdrop also gives employees a 2% annual cost of living increase in their pension amount. In Ament's case, that's $1,560, which is added to each year's pension amount. From there, the county gives him 8.5% monthly compounded interest on the original pension amount plus the COLA boost.

Plugging this into an Internet tool that allows for computation of monthly compounded interest, Ament would earn $1,196,150 by 2004 and would still collect his annual pension of $92,040 (which is computed by taking the original pension of $78,000 and adding the $1,560 COLA for each year served). If he serves until 2008, he earns a lump sum payment of $2,041,500 plus annual pension of $98,200 (which is higher because of four more years of COLA payments).

If Ament decided to bypass backdrop, he would get a pension based on his higher average salaries for 2002-2004, giving him an annual pension of $111,277. If he served another term, his higher salary average for 2006-2008 would bring his annual pension to $130,609. But that would mean passing up the $2 million lump sum payment. My guess is his accountant would advise against this.