Will County Give Pension to State?

Milwaukee County will begin studying the possibility of merging all or a portion of its pension system with the state’s Wisconsin Retirement System under a resolution approved Tuesday by the Milwaukee County Board of Supervisors.

The state’s only county-operated pension system has been in the spotlight once again following the forced resignation of pension director Marian Ninneman. That February resignation came on the heels of a recently surfaced 2014 report that detailed a number of underpayments and overpayments dating back to 2001. The bizarre issue of a Milwaukee County sheriff’s office employee Kevin Nyklewicz being granted the eligibility to retire with a pension, then having it revoked and then ultimately being granted the right to retire again has also garnered media attention and bafflement from many, including members of the board.

A lengthy floor debate preceded the vote with the majority of supervisors speaking on the matter.

The legislation, which would form a work group to study the matter, was first proposed by Supervisor Sheldon Wasserman. In his floor speech on the matter Wasserman noted “we need information. This is disastrous.” Wasserman told the board an outside attorney from Reinhart Boerner Van Deuren on retainer by the County Board told him that “we have the most complicated pension in the nation with 180 variations.”

Wasserman, a newly elected member of the board, previously served in State Assembly for 14 years. He noted that the inspiration for the legislation came from a call from a constituent who reported that the pension system was attempting to claw back $156,000 in pension overpayments. The constituent, who Wasserman said he would not name, worked for Milwaukee County for 30 years.

Sup. Deanna Alexander, in response to public concerns on the matter, noted that “if we look at what the law says, if you merge or move pension systems, you can’t cause a loss [to current or future retirees].”

Supervisors, including some of the board’s most liberal and conservative members, gave varying explanations for why they supported the measure, but all agreed the board needed more information. Many of the board members attacked County Executive Chris Abele and his administration for the problems with the pension system.

Sup. Steve Taylor blamed Abele for allowing the problems to happen under his watch: “This is not our problem. We’re going to have to clean it up obviously because the administration is not… I can see that we’re going to have to make a decision, it’s not going to be popular.”

Sup. Marina Dimitrijevic chided Abele for giving what she said was a merit-based salary raise to Ninneman following the 2014 report before ultimately forcing her to resign earlier this year. She noted that her support for the workgroup didn’t mean she was supporting a move to the state, saying “we’re not actually endorsing a proposal. How could we? We don’t have the information.”

Numerous supervisors noted that Gov. Scott Walker served as county executive when many of the errors in pension payments were made and therefore might not support taking over the system. Said Taylor: “I have a hard time believing (Walker) is going to want to take it over because… he didn’t fix it when he was here.”

In the second of a series of long-winded remarks before the board, supervisor David Sartori stated “there is no way in hell that WSR [sic] is going to take over the Milwaukee County pension system.” Sartori meant the WRS. He worked for the state for over 30 years and receives a pension from the Wisconsin Retirement System.

Wasserman, in his concluding remarks, said that, to date, the state has not said no to the proposal and would be required to work with Milwaukee County because counties are an arm of state government. Multiple supervisors, including personnel committee chair James “Luigi” Schmitt, suggested that one possible solution to the matter could be future county employees being enrolled in the state system with existing employee retirees staying in the county system.

The pension system erupted into a huge scandal gaining national attention following a 2001 story by Bruce Murphy reported that added benefits passed in 2000 and 2001 would make county executive Tom Ament a millionaire and give others huge lump sum payments. Ament signed a waiver of the backdrop benefit, but was forced to resign and seven supervisors were recalled from office — by that measure the biggest political scandal in the city’s history. Hundreds of employees have received lump sum pension payments of anywhere from $250,000 to $1.1 million.

Supervisors Willie Johnson, Jr., Michael Mayo, Sr., Supreme Moore Omokunde, Sartori and Peggy West voted against the measure. The legislation passed on a 12 to 5 vote, with supervisor Sequanna Taylor excused from the meeting for a family matter.

The legislation, should Abele not veto it, requires a report from the work group to be introduced in the board’s May meeting cycle. Abele has previously said he favors the proposal.

An approved amendment states that the work group will be “comprised of representatives of the Office of Corporation Counsel, Office of the Comptroller, and the Office of Performance, Strategy and Budget, Department of Administrative Services, a non-management front-line employee, and any other staff deemed critical.”

UPDATE: The county executive’s office issued the following statement: “The county executive is encouraged by the Board’s vote to study a move to the state pension system. He’s said repeatedly that we need to thoroughly examine all options available that will preserve the benefits retirees and future retirees have earned through their lifetimes of public service. We also need to protect the taxpayers and ensure that whatever system we end up with provides consistency and clarity. A move to the state system may or may not be the right answer but it’s at least worth looking into.”

Milwaukee County Has a New Lawyer

Acting corporation counsel Margaret Daun was confirmed by the board later in the meeting as the county’s new lawyer, but not before already becoming involved in the pension issue. Daun had previously rendered the opinion that Nyklewicz was eligible to retire with a full pension.

Daun, responding to a question by Mayo during the floor debate on the pension study, informed the board that no rounding was used in the retirement decision, despite claims by an article in the Milwaukee Journal Sentinel and by other supervisors. She offered to author a memorandum to the board guiding how she arrived at the decision.

Taylor called her “the right person at the right time” based on her past experience. Daun most recently served as the Executive Director of the City of Milwaukee’s 457(b) Deferred Compensation plan.

The corporation counsel represents Milwaukee County, not the board or county executive.