Milwaukee County Decides Against Reducing Future Pension Payments

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Last week, Pension360 covered the story of Milwaukee County pensioners who were facing benefit reductions because they had previously taken government advice that led to pension overpayments.

The County was considering docking over $10 million in future benefits from 217 public workers and retirees.

But the County Board’s finance committee on Thursday decided to scrap the plan, because they feared the lawsuits it might bring.

Board members were also sympathetic to pensioners who accepted overpayments only because they took the advice of county retirement planners.

More from the Milwaukee Journal-Sentinel:

The Milwaukee County Board’s finance committee on Thursday decided against reducing future pension overpayments amounting to an estimated $10.3 million to 217 current and future retirees.

The committee instead unanimously recommended approval of a Pension Board proposal to retroactively change county ordinances that would result in keeping the improperly high payments flowing to the group. The vote was 8-0 to adopt the Pension Board’s proposal.

An explanation of how the pensioners ended up receiving overpayments in the first place:

The group of 217 had been allowed to make purchases of extra pension credits — known as “buybacks” or “buy-ins” — under a benefit enhancement strategy.

By converting time they had worked as seasonal county lifeguards, parks workers and other part-time employees, the workers boosted their pensions under a program that skirted county laws and federal tax rules, the Milwaukee Journal Sentinel reported in 2007.

The strategy made some workers eligible for earlier retirement, free retiree health care and even a 25% pension bonus and lump sum payment.

In 2007, retirement system administrators and the Pension Board determined certain purchases of pension credits had been done in error. Board rules no longer permit purchases of pension credits.

Read more on the story here.


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Pension Checks of Some Milwaukee County Retirees in Jeopardy After Acting on Government Advice

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A few hundred Milwaukee County retirees are facing reduced pension checks in the future – all because they took County advice that for years resulted in benefit over-payments.

The retirees were receiving bigger payments because they were following County advice regarding “buy ins” and “buy backs.” But the overpayments they were receiving didn’t county ordinances or IRS rules.

In total, the County’s advice led to $25 million worth of overpayments.

So now the County wants retirees to give the money back. Milwaukee County Executive Chris Abele is leading the charge.

From Express Milwaukee:

Last April, Milwaukee County Executive Chris Abele sent a letter to more than 200 Milwaukee County retirees warning them that their pension payments weren’t valid and that he would take back any money they’ve been overpaid.

Nine months later, Abele is walking back from those comments.

But his new strategy, outlined in a Jan. 9 memo to county supervisors, would still take money away from 221 retirees whose only mistake was accepting the county’s own advice when setting up their pension plans.

“The county executive’s plan does not try to recoup any money from retirees,” emailed Abele’s spokesman, Brendan Conway. “It only adjusts future payments to the amount that complies with the law.”

And by “adjusting” them, Abele means “lowering” them.

Under this plan, the city would be getting its money back – by reducing future benefit checks for the retirees in question.

The union response:

“As we’ve come to learn about Abele, he’s making the situation worse,” said Boyd McCamish, head of AFSCME District Council 48, the county’s largest union. “Why does he insist on terrorizing retirees who have done nothing wrong?”


“It’s about the principle,” McCamish said. “If you are a retiree, a pensioner, you should feel no security at all even though you’ve been paying into these things all your life. One of the main things Abele’s trying to do, along with his buddies the Koch brothers, is to create and perpetuate what is known as the precarious workforce. So even retired people should feel levels of instability. Because when people are desperate and scared they will do anything and they will accept anything.”

Abele’s failed to win over the Pension Review Board in December with the plan.

City officials question whether it is legal to reduce future benefit checks based on overpayments stemming from advice the government itself provided.

“It does not seem clear to me that he can do that legally,” County Supervisor Theo Lipscomb told Express Milwaukee. “Another question is whether you morally should do that. These people relied on advice that the county provided.”


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