Pumped Pension Payouts Prompt Resignations

February 7, 2002 (PLANSPONSOR.com) - Five Milwaukee County officials have resigned amid accusations that they pumped up the county's pension plan to provide politicians million dollar retirement payouts at the expense of salary increases for ordinary workers.

According to a report from the Associated Press, instead of giving bigger pay rises to its 5,000 full-time workers last year, Milwaukee opted to make its pension plan more generous.

Under the new rules:

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  • employees, who had worked past their retirement dates, could collect retirement benefits retroactively, and 
  • employees could be claim a larger share of their unused sick time at retirement

However, it came to light that under the new rules County Executive F Thomas Ament, who became eligible to retire in 1996, would receive a lump sum payment of $2.3 million, while several other officials would receive payments of $1 million or more.

Outraged citizens groups are leading a drive to recall Ament and other members of the 25-person county board, while Ament has filed a lawsuit challenging the signatures that the group has gathered in its effort to force a recall election, the AP reports.

The state Justice Department’s criminal division is investigating the matter.