The Detroit News
Wayne pension system strained
It’s 60% funded but 40 retirees receive more than $100K
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.”