Big Payout, Benefits for Arizona Fund Boss Fired for Misconduct

Pension360 has been closely following the story of Jim Hacking, the recently fired Director of the Public Safety Personnel Retirement System. He’s been embroiled in trouble of late, as his fund is in the midst of an FBI criminal investigation—centered on claims that the staff inflated real estate investment values to trigger bonuses—as well as a workplace investigation spawned from sexual harassment allegations.

When he gave illegal raises to five employees on his investment staff earlier this year, it was the last straw. He was placed on administrative leave and fired shortly after.

But he won’t be leaving without some handsome benefits. Those include a severance package, a pension, and the promise that the Retirement System will pay all Hacking’s legal bills and travel expenses.

From the Arizona Republic:

Jim Hacking, a former Arizona public-safety pension administrator who authorized illegal staff pay raises, will receive a severance of roughly $107,250, an annual pension of $86,704, and a commitment to cover all his bills should he be named in “any legal proceeding.”

Other records the newspaper obtained detail the lifetime annual pension Hacking is projected to receive for his roughly nine years of employment, as well as a $16,406 payout for unused vacation time.

More specifics on the settlement, of which the Arizona Republic obtained a copy:

The settlement calls for:

• Hacking to be paid through Dec. 31.

• Hacking and the retirement system to agree to not sue each other.

• The retirement system to pay all “reasonable” travel expenses should Hacking, who has a home in St. Paul, Minn., be required to attend a meeting, deposition or hearing in Arizona.

• The retirement system to cover all of Hacking’s potential legal costs.

“Should Mr. Hacking be personally named as a defendant in any legal proceeding arising out of or relating to actions taken in the course and scope of his employment, the system agrees to fully defend and indemnify Mr. Hacking against such claim(s), including court costs and attorneys’ fees,” the settlement reads.

Some additional background and context on this case from the Republic, in case you need a refresher:

Hacking’s departure comes after a year in which four high-level staff members quit amid allegations that the trust used inflated real-estate values in annual reports to improve its financial performance and trigger bonuses. Hacking denies the allegations.

The PSPRS board in December unanimously voted to extend Hacking’s contract by one year, even though the four staff members had resigned between June and September because of the real-estate controversy.

Tobin executed Hacking’s extension on March 11. That was four days after the board hired a criminal defense attorney to deal with a federal grand-jury subpoena in relation to an FBI investigation.

Hacking in November sought raises for five employees. He told the board the hikes were to replace a controversial bonus program the board had suspended. And, Hacking noted, his staff was doing more work with the exodus of the other employees.

A divided board approved the raises, but it also needed approval from the state Department of Administration under a 2012 personnel reform law Brewer pushed through the Legislature.

The Department of Administration had held off approving those raises because of the numerous controversies. In early July, The Republic asked PSPRS the status of those raises and was told the ADOA had approved them.

Department officials told the newspaper that the ADOA never approved the raises, then began an investigation. Although Hacking had actively negotiated with the ADOA this year on the raises and led state personnel officials to believe they had not gone into effect, Hacking ordered his human-resources director to implement the raises in December, according to trust records.

Hacking, 68, will receive a five-figure pension because, as PSPRS administrator, he oversaw the Elected Officials’ Retirement Plan and was entitled by law to receive a pension from that system, even though he never was voted into public office.