Milwaukee Board Hits Mercer with Pension Lawsuit

March 30, 2006 ( - After effects of a controversial pension benefit plan approved in 2000 have again popped up to plague Milwaukee County lawmakers who have filed a $100 million lawsuit against their pension advisor.

The board and several other county entities filed the lawsuit seeking damages from Mercer Human Resource Consulting, which advised them on the plan that eventually led to financial troubles and a shakeup of the county government, the Associated Press reported. Plaintiffs of the federal court suit are the County Board as well as the county’s Employee Retirement System and the Pension Board.

The suit said Mercer “made repeated, serious actuarial mistakes, grossly underestimated costs and totally failed to assess the actuarial effect” of the benefits.

After news stories disclosed details of the lucrative pension plan in early 2002, including the six-figure, lump-sum payouts it made available for many retirees, several county supervisors were recalled. The county executive at the time, F. Thomas Ament, retired early rather than face a recall (See Milwaukee Voters to Replace County Exec ).

A county audit later found that the wage-and-pension deal would cost the county $111.7 million from 2001 to 2004, more than five times the amount supervisors calculated.

Mercer spokesman Charles Salmans said Wednesday that the New York-based company has voluntarily cooperated with previous investigations related to the pension benefits package.

The contract’s chief architect – former county personnel director Gary Dobbert – served a brief jail sentence after pleading no contest to one felony count of misconduct in public office and two misdemeanors false statement counts (See  WI Pension Calculation Designer Sentenced to Jail ).