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Friday, June 27, 2014

Issue of the Week: Abele Should Allow Pensioners To Keep Their Money

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Milwaukee County Executive Chris Abele should do the right thing and not penalize county retirees who took the advice of administrators and invested in its pension plan—even if that advice didn’t strictly adhere to county ordinances.

Earlier this year, Abele’s staff discovered that the county had provided faulty pension advice to its workers and roughly 200 of them had made questionable contributions. The problem arose in 2007, when Scott Walker was in charge, but his staffers didn’t fix it. Abele says his administration wasn’t aware of the problem until this spring, three years into his tenure.

Abele wants the money in question back, even though these retirees were following county experts’ advice and made life decisions and investments based on it. But Abele’s decision to fan the flames of a pension scandal in the vein of his political mentor Scott Walker is ill advised. According to testimony from Deputy Corporation Counsel Mark Grady to the pension board, the county may never recover that money and it will likely have to spend enormous sums on court fights over it if Abele stands his ground.

There’s a simpler solution instead: pass whatever ordinances are necessary to legitimize the advice given to these 200 workers by the county and then ask the IRS to sign off on them. It’s a win-win situation. The retirees will no longer have to worry about their monthly pensions, the county will avoid a costly legal fight and its pension system will finally be in compliance with IRS rules. And the county wouldn’t be on the hook for extra payments, since the pension payouts have already been factored into the actuarial calculations and should require no new county contributions.

We are calling on Abele to do the sensible thing and support this simple fix and not turn it into another right-wing drama-filled attack on county workers. After all, it took three years for his administration to find this problem and it’s his duty to resolve it in the most cost-effective, straightforward and responsible way—by supporting a change in county ordinances.