Court Says Advice Satisfies the Law in Milwaukee Pension Case

July 21, 2006 ( - The Wisconsin District 1 Court of Appeals has ruled that the advice the Milwaukee County Sheriff's Department received regarding its pension enhancement was sufficient to satisfy legal standards, even though the move led to 8,000 current and former county employees losing out on pension benefits.

The court rejected the appeal by thesheriff’s deputies and retirees who claimed that an ordinance theadopted in November 2001 to enhance benefits of some employees amounted to an illegal acquisition of property, according to the Milwaukee County Journal Sentinel.

On Thursday, the appeals court upheld a 2004 ruling by Reserve Circuit Judge Robert Pekowsky, who ruled that the deputies and retirees failed to show they had been denied any promised retirement benefits, the newspaper reported. However, the appeals court focused more on the fact that even though the result of the decision led to inflated pensions for some, the board fulfilled its requirement to seek advice on the effects the decision would have on the pension system.

The deal added a new pension option is known as a backdrop – the lump-sum payments that retirees can take in addition to their monthly pension check. Hundreds of retirees have collected six-figure backdrops; the top payout so far is $684,000, according to the newspaper (SeeNew Milwaukee County Exec Attacks Inflated Pensions). In February 2002, five of the county officials resigned amid accusations that they inflated the county’s plans to provide million dollar payouts to politicians at the expense of ordinary workers (See Pumped Pension Payouts Prompt Resignations ).

Judge Paul Lundsten said, “Nothing in the statute requires that the advice the pension study commission gives thebe accurate or sound. It only requires that the advice be given,” according to the Journal Sentinel.

The board received advice from the Pension Study Commission and then-Human Services DirectorDobbert, who was later convicted of two misdemeanors and one felony for his role in the pension enhancements.

According to the paper, the system was once fully funded, but its liabilities now exceed its assets by about $449 million. The pension board has asked for $59 million in tax dollars to bolster the fund in the 2007 budget.