Wayne pen­sion sys­tem strained

It’s 60% funded but 40 re­tirees re­ceive more than $100K

The Detroit News - - Metro - BY CHRIS­TINE MAC­DON­ALD AND STEVE PARDO

Detroit — Wayne County’s pen­sion sys­tem is strug­gling, but its top of­fi­cials draw some of the most lu­cra­tive pen­sions in Michi­gan’s pub­lic sec­tor, a Detroit News anal­y­sis shows.

The sys­tem has at least 40 re­tirees who make more than $100,000 a year, the bulk of whom left since 2008 un­der a se­ries of early re­tire­ment buy­outs of­fered by Wayne County Ex­ec­u­tive Robert Fi­cano. In com­par­i­son, Detroit — whose re­tire­ment sys­tem is al­most four times larger than the county’s — has 23 re­tirees mak­ing more than $100,000.

Even more stark: all five state pen­sion sys­tems com­bined — to­tal­ing more than 225,000 mem­bers — have only 59 re­tirees mak­ing more than $100,000.

“That says to me there’s some­thing wrong with the sys­tem,” Ty­rone Carter, a re­tired Wayne County Sher­iff lieu­tenant who is run­ning for a county com­mis­sion seat, said Thurs­day.

“How many other places can you walk away with that type of money?”

Fi­cano’s staff said the buy­outs saved the county money and said the eco­nomic down­turn is one of the main cul­prits for the pen­sion fund’s prob­lems.

On Thurs­day, Wayne County Com­mis­sion­ers lamented the health of the sys­tem at a com­mit­tee meet­ing where of­fi­cials dis­closed the sys­tem lost 1.41 per­cent of its value last fis­cal year. It an­tic­i­pated 8 per­cent growth.

“I’m try­ing to fig­ure out why we’re so short — why we’re go­ing down the rab­bit hole so quickly,” said Com­mis­sioner Kevin McNa­mara, DCan­ton Town­ship.

Crit­ics say Fi­cano’s buy­out in­cen­tives are part of why the sys­tem — which has about 5,600 pen­sion­ers — is trou­bled, with only 60 per­cent of the cash it needs over the next 30 years. In com­par­i­son, Detroit’s sys­tems are health­ier at 87 per­cent and 97 per­cent funded.

Un­der Fi­cano, the county sys­tem has gone from 98.9 per­cent funded in 2003 to 60 per­cent.

June West, a spokes­woman for Fi­cano, said aside from the eco­nomic down­turn, the so­called 13th check pol­icy — an annual bonus the sys­tem pays to pen­sion­ers that’s to­taled $391 mil­lion since 1986 — also hurt the pen­sion fund. She cit-

ed a memo from a pen­sion board con­sul­tant that found in 2010 the sys­tem would be 90 per­cent funded if there had never been a 13th check pay­out.

“There was a dou­ble hit,” West said.

Among the re­cent re­tirees mak­ing $100,000: Dr. Michele Har­ris, health direc­tor, $159,477; Ron­ald Yee, direc­tor of re­tire­ment sys­tem, $152,856; Daniel Ker­ber, deputy air­port direc­tor, $136,050; Wil­liam Wolf­son, cor­po­ra­tion coun­sel, $125,020; Veda Sharp, direc­tor of Detroit-Wayne County Com­mu­nity Men­tal Health Agency, $123,090; Tim Taylor, hu­man re­la­tions direc­tor who was fired as a county con­trac­tor last fall for his in­volve­ment in the Turkia Mullin sev­er­ance scan­dal, $116,820; and Fred Berry, a former deputy who re­tired in 2011 as a Fi­cano ap­pointee, $105,927.

Berry now has a contract through the county’s home­land security depart­ment and oc­ca­sion­ally drives Fi­cano, West said.

West said the county may have more re­tirees mak­ing $100,000 be­cause it al­lows mem­bers to ac­cel­er­ate pay­ments af­ter re­tire­ment, but checks are re­duced later.

The county had to con­trib­ute nearly $40 mil­lion to the pen­sion sys­tem in 2011 and that is expect- ed to in­crease but hasn’t been de­ter­mined yet.

In 2008, while many oth­ers in the pub­lic and pri­vate sec­tor were mov­ing to­ward 401(k)-style plans, Fi­cano re-opened a county de­fined ben­e­fit plan, which al­lowed in more than 700 em­ploy­ees. Fi­cano then of­fered a se­ries of buy­outs, in­clud­ing the most re­cent in 2011 that let ap­pointees re­tire un­der that plan with 20 years ser­vice re­gard­less of age. They could also buy up to six years at dis­counted prices.

West said the moves saved the county cash be­cause opening the pen­sion plan came with wage and health care con­ces­sions and the buy­outs re­duces staff. The health care cuts alone saved $24 mil­lion a year, she said.

“It was not just a broad giveaway,” West said.

But crit­ics ar­gue the deals are un­sus­tain­able for the pen­sion sys­tem.

“(Fi­cano) has en­riched th­ese peo­ple by giv­ing them pen­sions they re­ally didn’t de­serve,” said Robert Mur­phy, a former Wayne County pen­sion board mem­ber. “All th­ese ben­e­fits, you have to pay for them.”

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