Milwaukee County has been grappling for years with how to handle problems with its pension program.
On Thursday, the Board of Supervisors may have settled the matter, but the answer won’t be cheap.
Imagine, you’re 16 and working part-time for Milwaukee County as say, a lifeguard. Summer ends, you go back to school, but years later, you return to work for the county in another capacity. What you’re able to do is convert your earlier service into pension-eligible time. It gives you a significantly higher pension payout and perhaps an early retirement. By the way, the program violates IRS rules, but the county let you do it anyway. Paul Bargren is corporate counsel.
“One of the key arguments is that years ago, or even decades ago, the retirees or the employees relied upon information from the county or county employees in making the buy in or buyback purchases of service. And the employees or retirees argue that in fairness and in equity, the system cannot be allowed to change its position now,” Bargren says.
The county has attempted to back away from inflated payouts, but Bargren says three lawsuits resulted. Supervisor Patricia Jursik says she fears more, if the board votes to alter previous agreements. She says it’s only right people get what they signed up for and what the county promised.
“Quite frankly, when you hear from those retirees and you realize what we’re going to do to them if we follow the county execs original letter, it’s not something I want to do,” Jursik says.
Back in 2007, the board unanimously voted to reduce pensions and recoup money the county paid out if the payments violated federal rules, but Jursik says neither happened. She blames both former County Executive Scott Walker and current County Executive Chris Abele.
“This was not a board failure. This was failure of administration to follow policy, tried to fix it on their own, failed and now it’s before us again,” Jursik says.
Jursik says the county board has no choice now but to leave the pension payments intact. The supervisors voted Thursday to allow more than 200 current and former employees to receive inflated pension payouts totaling $36 million. The vote was 14 to 2, despite a warning from County Exec Chris Abele, that he would veto the measure. He says he wants to cut future overpayments to former employees to save the county around $10 million.
“For years I’ve worked hard to restore services for the needy and most vulnerable. I do everything I can to keep bus routes going and fares down and meal programs running and senior centers open, trying to catch up on deferred maintenance, we’ve added housing, added peer counseling and put millions into mental health. That matters, and I’m never going to apologize, as sympathetic as I am, to the 200 retirees here for strongly coming down on the side of the million people that we’re here to serve,” Abele says.
Abele says county has already paid out an extra $26 million in inflated pensions. He’s urging supervisors to talk with constituents about what they’d like the county to do. While Abele has threatened to use his veto power, it seems the county board has enough votes to make the final decision.
