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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