Bruce Murphy
Murphy’s Law

Who’s To Blame For Yet Another Pension Giveaway?

Abele wants some 200 retirees to stop getting illegal pension benefits, but board members are outraged.

By - May 20th, 2014 12:03 pm
Sign-up for the Urban Milwaukee daily email

Life has been very good for Sue and Lev Baldwin, and we the taxpayers are paying for it. Lev Baldwin served as county sheriff but retired at the ripe old age of 53 in 2002. His retirement benefits included a lump-sum “backdrop” payment of $333,450 plus an annual pension for life of $70,440.

Lev assured himself of this huge payout by lobbying county board members to make sure elected officials were covered by the lucrative pension deal passed in 2000 and 2001. Then-county board chairwoman Karen Ordinans opposed the inclusion of elected officials, but Baldwin reportedly threatened to have the sheriff’s union oppose her brother, county supervisor John Weishan, in his next election. Ultimately both Ordinans and Weishan voted for the plan which included elected officials.

As for Sue Baldwin, she agreed to give up these big pension benefits while working in the administration of then-County Executive Scott Walker, but it turns out she had quietly gotten another pension sweetener that assured her, much to Walker’s outrage, of a pretty nice payout. in 2003, Baldwin, then 55, retired after just 19 years of service with a $50,377 annual pension under an early retirement pension option available to employees 55 or older with at least 15 years of service.

Actuarial tables project the Baldwins will both live into their mid-80s, by which time they would have together collected $4.1 million in total retirement payments from county taxpayers.

But as it turns out, Sue Baldwin’s pension may have been illegally inflated when she was allowed to “buy back” pension credits from employment as a young summer worker. Many county employees were allowed to do this, but as it turns out, some may have done so illegally.

Chris Abele

Chris Abele

The administration of current County Executive Chris Abele recently discovered this problem and has sent letters to some 200 retired county employees informing them their monthly pension benefits will be reviewed and lowered by a yet-to-determined amount as a result of illegal buy backs.

Included in that group are former Milwaukee County Clerk Tom Zablocki, who collected a backdrop payment of $375,322 and also gets an annual pension of $29,309 and former parks employee William Tietjen, who collected a $225,490 backdrop, plus an annual pension of $56,429. All told, the Abele administration estimates that $14 million in overpayments have so far been awarded to some 200 employees.

Many employees used the buy-back program to convert seasonal or part-time county stints in college and even high school into additional pension credits. But some may have done so illegally because they wrongly bought back pension time using money transferred from an employee’s deferred compensation savings account; because the buyback payment exceeded 25 percent of the employee’s annual salary; or because the buyback was made too late, the Abele administration has concluded. “The ordinances [regulating pensions] must be followed regardless of what the retirees were told,” county Corporation Counsel Paul Bargren told the Milwaukee Journal Sentinel.

But many county board members are outraged at Abele’s actions. Weishan, whose vote in favor of the 2000-2001 pension plan made Lev Baldwin a wealthy man, declared that Abele is being unfair to these retirees, and needs to come up with some better plan.

Superviser Michael Mayo, who also voted for the 2000 and 2001 pension plan, also took after Abele, saying “We cannot blame” the retirees, and “It is the county administration’s fault, not the County Board.” Mayo has extra reason to by sympathetic to these retirees: as the JS has reported, he paid $6,813 to purchase two years of pension credit for three summers he worked in county parks in the 1970s. This gained him a 33 percent increase in his pension.

County Board Chairwoman Marina Dimitrijevic also blamed the situation on Abele, and demanded detailed information on what Abele knew and when he found out about the problem.

But Dimitrijevic served on the board when it passed a unanimous resolution in 2007 “encouraging the Milwaukee County Pension Board “to cease any prospective payment of a pension benefit related to a buy in or buy back that has been determined to be in violation of Milwaukee County Ordinance or Federal law and… vigorously pursue recovery of any payments made in violation of County Ordinance or Federal law.”

But apparently the pension board never did anything to comply with this resolution, nor did the administration of then-County Executive Scott Walker. So did the county board ever follow up to make sure its resolution was being followed? “I know I didn’t,” supervisor Mark Borkowski sheepishly admits. “I don’t believe any of my colleagues did.”

It’s hardly surprising that Abele knew nothing about this 2007 issue when he took office four years later. Did Dimitrijevic or any other supervisor let him know about this issue? Not according to Borkowski. “No supervisor ever mentioned it to Chris,” says Abele’s spokesperson Brendan Conway.

It was Marian Ninneman, the county retirement system manager, who triggered the review of the pension buybacks after discovering a prospective retiree’s pension didn’t conform with county ordinances. And Ninneman wasn’t around in 2007.

Borkowski says Abele made a huge error by sending a letter out to the 200-some retirees before having computed the exact adjustment in their pensions. “You don’t send a letter like that scaring the bejesus out of people,” he says.

But if Abele had delayed sharing this distressing news with retirees, wouldn’t he then be blamed for letting them discover this through gradual leaks of the information?

Borkowski also believes the county may not have legal grounds to adjust the pensions. “Let’s face it, these people were advised by our HR people that they could do what they did. I think the county needs to look in the mirror on this. This thing is ripe for court action.”

It’s certainly possible the courts might stop Abele from demanding any repayment of past pension money wrongly awarded. But would the courts also bar the county from adjusting future payments? True, many of these 200 people are lower-level employees living on modest pensions; they are not in the category of Baldwin or Zablocki. But the entire buyback program reeks of the cronyism, nepotism and conflicts of interest that infected county government for decades, and have yet to be entirely stamped out.

I don’t doubt that taxpayers will be glad the Abele administration has finally put a stop to approving retiree pay packages that included illegal buybacks. This should have been done by Walker and the board back in 2007.

Update May 28: Supervisor John Weishan called to say he was never threatened by Sheriff Baldwin and denied that this had anything to do with his vote for a pension package that included elected officials.

Journal Sentinel Coverage of the Issue 

The county’s buy-back plan was uncovered through the dogged research of reporter David Umhoefer, whose 2007 story triggered the county board’s resolution and won him a 2008 Pulitzer Prize. But as important as Umhoefer’s story was, the reality is the buy-back plan would have had a far smaller fiscal impact if not for passage of the 2000-2001 pension plan. Its 25 percent bonus drove up the value of these pensions. Even more important, its backdrop provision had a huge benefit for anyone who could buy back time and become eligible for an earlier retirement. For each year they worked past their retirement date, the magic of compound interest (at 8 percent annually) drove up the value of their nest egg.

The Journal Sentinel, of course, has never computed how much of the buyback’s impact was due to the 2000-2001 pension plan, and never mentions my role in breaking that story in reporting for Milwaukeeworld.com and Milwaukee Magazine. I play the role of Voldemort here: “He who must not be named.”

The good news is that Umhoefer has every reason to aggressively follow up on this issue and how the county handles it. His colleague Steve Schultze, by contrast, who until recently served as county reporter, did a story that offered sympathy for the employees worried about losing some of the their benefits due to the illegal buybacks.

One of those employees was Bob Miller who retired in 2009 with a $129,243 backdrop and an annual pension of $35,208, county records show. Schultze, however, didn’t include this information in his story.

I’m told Schultze has now retired. It will be interesting to see who is chosen as the next county reporter.

Categories: Murphy's Law, Politics

11 thoughts on “Murphy’s Law: Who’s To Blame For Yet Another Pension Giveaway?”

  1. East Slider says:

    AAAAARRRRGGGGGHHH!!! What in the world did we the residents of Milwaukee County ever do to deserve this (soon to be gone-at least full time-thank God!) county board??? Did someone maybe cut a deal with the devil for success in some earthly endeavor in exchange for us being saddled with this downright ridiculous and scandalous group of sleazebags? Its just case after case after case of this board and their sleazy deals, which usually always seem to include sending yet another substantial sum of money to an at best, questionable recipient. This time around, they’re fighting tooth and nail to make sure that some retired county workers don’t get a fraction shaved off of the top of the crazy pension payouts they’re receiving-NOT that they’d LOSE their entire pension or anything even remotely close, just that they would lose a small fraction of what they’re getting from us taxpayers now! This at a time when for the rest of us living in the REAL WORLD have long forgotten the whole concept of defined benefit pensions, they still don’t just live on in the “County Workers Fantasy World” but you sure as hell better not even try to cut out a tiny part that may have been obtained ILLEGALLY! I’d say its a complete joke, but there’s really nothing funny about it at all! Besides the fact that we’re already being taxed to death here, we also have parts of the area that need help in all sorts of different ways, money wise. Nope, we’re not concerned about that, we’re concerned about the “pension millionaires” not losing a cent-SICKENING!!!

    Now, keep in mind that we already know that several of the board members are already making their plans to attempt to jump off of that sinking ship and on to other areas of government. (In fact, one of them already did, as we now have Ald. Stamper here in Milwaukee) I’ve seen a few of the Marina yard signs with the little Hoan Bridge drawing on them in people’s yards, mainly around Bay View. I honestly felt like pulling over and ringing the doorbells of those homes and just asking the occupants if they were INSANE!!!! Luckily, none of them were out in their yards so I was able to manage to keep driving!

  2. Tough Love says:

    There is NOTHING more GREEDY than a Public Sector Union/worker.

    But not to worry, as Taxpayers have ZERO intention of honoring these fraudulent deals.

  3. PMD says:

    “There is NOTHING more GREEDY than a Public Sector Union/worker.”

    You need to get out more. First stop, Wall Street or a board meeting for a major corporation.

  4. East Slider says:

    Just to clarify what you said Tough Love, you’re saying that there’s nothing more greedy than a “public sector union” worker correct? As opposed to meaning a public sector OR a union worker right? If the first choice is what you meant and I think it is, I’d pretty much have to agree, everything I’ve seen in the last 5, 10, or 20 years regarding members of public sector unions is pretty much just endless greed. Private sector unions are a different story, some are not so bad in my opinion, such as the trade unions while others are nearly as bad as the public sector unions, with the SEIU being the best example as they join in the absurd calls for paying fast food workers $15 an hour, which will accomplish one thing only, it will greatly speed up the eventual automation of fast food joints, thus putting a lot of formerly employed people out of work!

    PMD, I won’t deny for a second that you can find greed quite often on Wall St and at the big corp’s board meetings, but there’s one HUGE difference you’re totally forgetting there. Those guys/girls are being greedy with PRIVATE money, NOT PUBLIC MONEY! If someone invests in a company run by greedy people who take more than they deserve, well that’s still on the people who chose to invest there. On the other hand, we don’t get to choose whether or not we have to pay our ridiculous property tax bills and all of the other taxes we’re forced to pay!

  5. Melvin says:

    It was Walker and Republicans who allowed liberal Milwaukee county to downsize their own out of control county board. A much needed step in the right direction. Would never have happened otherwise. Bruce Murphy, would you agree?

    70% of Milwaukee county voters supported it, weird to see the inner conservative rise out of east side liberals.

    By the way, Weishan, Ordinans, Sue/Lev Baldwin all recall signers. Lev has enough time living on his fat pension he was actually out circulating the dumb thing himself.

  6. PMD says:

    “It was Walker and Republicans who allowed liberal Milwaukee county to downsize their own out of control county board.”

    Three cheers for local control, which the GOP loves, except when it doesn’t.

    Didn’t forget that East Slider. It’s just such a ridiculous blanket statement with no basis in reality.

  7. Melvin says:

    PMD it was your side who made the pension mess in Milwaukee County.

  8. PMD says:

    So that’s your defense? And my side? I’m so glad I don’t look at the world that way.

  9. Bruce Murphy says:

    Just a factual note: the infamous 2000-2001 county pension plan was passed by a non-partisan board that included more liberals and Democrats but had a minority of conservatives who favored it. Republicans like Tommy Thompson had long favored more government benefits (while Democrat John Norquist was very tight-fisted about worker benefits). Only in recent years have the parties begun to have differing views, though you still have someone like Abele, a Democrat more in the Norquist mold.

  10. bonehead says:

    Do humans even know what greed is? Is it eating more food than you need, wanting to outshine others at games, wanting to have more property, wanting more money than someone else. Then you say that you must not be greedy, so you practice non-greed – which is really silly, because greed can never cease by trying to become non-greed.

  11. David Ciepluch says:

    Improved pension and benefits have long been a tool to keep wages lower in the government sector for most of the average workers, and many times union labor. Feasting at the pension bucket by higher priced management and elected positions had nothing to do with a union contract or union labor greed. It was the greed of the decision makers to feast at the trough.

    Over the decades, management has always used the union labor wages as a benchmark for their wages and benefits. It does not matter if it is a the private or public sector. It is the greed of a few that has destroyed the decades of hard work, credibility, and lower wages by thousands of workers past, present, and future. The unions were not in control of the decision to benefit people like the Baldwins’.

    Private business is no angel and many have a sole goal of profit. Wall Street and other private business have always viewed and feasted on access to government contracts, pensions, and now public schools as another revenue stream they can plunder. The more that can be privatized including pensions, the more access to corruption, pillage, and graft without the knowledge of taxpayers. Schools alone in this country are a $500 Billion potential revenue stream they are working to plunder through the guise of charter schools.

    We elect people for good governance and management and as a watch person of cash flow. We do not elect people in private business and they are not always there to serve the interests of the public and the common good. Our elected officials failed us in the last decade on the County level and many thousands of us pay the price for that failure. Just as our children and grandchildren will pay trillions for a war in Iraq built on a lie.

Leave a Reply

Your email address will not be published. Required fields are marked *