Freedom 55? Try Freedom 45

You wouldn’t think of this particular profession as being well set up for retirement, but a significant chunk of them will receive up to half their yearly salary once they hang up their… swimming kit

Bloomberg News
Joseph D. Rush, Jr. joined the beach patrol in Atlantic City when qualifying tests were conducted in stormy weather at sea to judge an applicant’s mettle, local Republican leaders signed off on each hire and lifeguards attended movies free by flashing their badge. He retired in 2000 with an annual lifeguard’s pension of $30,000.

Lifeguard pension?

That’s right, lifeguard pension. It’s one of those relics from the lavish and loud Prohibition-era Atlantic City depicted in television and film. Despite just a four-month beach season and a battered casino industry, lifeguards who work 20 years, the last 10 of them consecutively, still qualify at age 45 for pensions equal to half their salaries. When they die, the payments continue to their dependents.
About 100 ex-lifeguards and survivors collected anywhere from $850 to $61,000 from the city’s general fund last year, according to public records. In all, it comes to $1 million this year. That’s a significant chunk of cash for a municipal government with annual revenue of about $262 million and, more importantly, it’s emblematic of the city’s broader struggle to downsize spending and contain a budget deficit that has soared as the local economy collapsed.

Kevin Lavin, the emergency manager appointed by New Jersey Governor Chris Christie to stabilize the finances of the city of 39,000, has cited lifeguard pensions as a possible item for “shared sacrifice” in a community already forced to fire workers and raise taxes. He intends to reveal more about his plans in a report that could come as early as this week.

Retired lifeguards don’t intend to sit idly by and watch their pensions carried away by the political and economic tide.
“We worked under the precept that we were going to get a pension, and that’s a certain amount of money,” said the 84- year-old Rush. “I’m not responsible for the mismanagement of the politicians, and I’m not responsible for the casinos leaving.”

As formerly-bankrupt Detroit was home to auto making, Atlantic City for decades was a one-industry gaming haven, the Las Vegas of the East Coast. Along the marina and beaches, patrolled by lifeguards, casinos shook money loose from their guests, generating a bounty for the city to subsidize the pensions for the part-timers and bankroll a municipal workforce well above the national average.
Budget Deficit

Today, the junk-rated city, where more than a third of its residents live in poverty, is struggling to avoid bankruptcy. Four ocean-side casinos -- one in three -- shuttered last year. Its tax base has eroded by 64 percent over the past five years. Investors in May demanded a lofty 7.75 percent yield on bonds maturing in 2040 even though the state could divert aid to make the payments if needed. The city closed a $101 million deficit this year partly by plugging in casino revenue it hasn’t received yet.

“Cities on a downward spiral have these legacy costs that are very difficult to eliminate,” said Howard Cure, director of municipal research in New York at Evercore Wealth Management, which oversees $5.9 billion in investments. “There are only so many people you can fire.”

Atlantic City, developed as a resort community in 1854, drew revelers long before its first casino opened in 1978. People eager to escape the stifling summer heat of nearby cities such as Philadelphia thronged its beaches, and drank and gambled illegally in back rooms during the Prohibition era with the complicity of city officials.


Keeping bathers safe was an important enough consideration that nearly from its start the resort city hired “constables of the surf” to watch over them, according to Heather Perez, archivist at the Atlantic City Free Public Library. In 1892, they were organized into the beach patrol.

Golden Era

The pension plan is the product of a 1928 state law sponsored by an Atlantic City Republican legislator named Emerson Richards, who lived in a palatial apartment near the lifeguard headquarters and threw parties, such as an annual Easter eggnog celebration, attended by political wheelers and dealers.

The statute creating the lifeguard pensions hasn’t been changed since 1936, according to state library records. Four percent of pay is deducted to help cover the benefit, which nonetheless needs to be subsidized by city taxpayers.

While many on patrol moved on after stints as high school and college students, others hung on to their positions year after year, particularly teachers who had the summers free, said Democratic state senator Jim Whelan, a former city mayor.

“What we call ‘teach and beach,’” said Whelan, who was also a lifeguard and teacher but fell short of qualifying for the lifeguard pension. “Not a bad life.”

Half Century
Rush was one of the longer lifers, working the beach for 52 years before, during and after a teaching career in Wilmington, Delaware. After retiring from that job in 1985, he extended the lifeguard season by working the winter months repairing boats and re-splicing rescue ropes.

“It’s a rough ocean,” Rush, who estimates he participated in 1,000 rescues, said. “You go save somebody, it’s a hard job. Just ask someone who was saved to see how important the job is.”

As part of his review, Lavin, the emergency manager installed in January, is looking at whether the benefit is in the community’s best interest, said Bill Nowling, his spokesman. “The city has limited resources and needs to make tough decisions about how it funds programs going forward,” he said.

The system wouldn’t be a burden if the city had managed it properly, said Michael Garry, president of the beach patrol union. He said he’s talking to lawmakers and Lavin on how to cut costs for the city.

“Nobody ever sits there and says, ’why do we need the police. Why do we need fire,’” he said. “We’re a little accustomed to having to justify everything about us."

--With assistance from William Selway in Washington.