Sup. Theo Lipscomb has an editorial in the paper today calling for movement on the stalled cap for pension backdrop payments:
Milwaukee County now faces the opportunity to further limit losses from the pension error by capping the costly backdrop benefit; the present value of this change is estimated at about $15 million.
The County Board sought legal and actuarial advice on ways to cap the backdrop in 2011. I introduced a specific resolution and ordinance change to cap the backdrop in May, and that proposal was approved on a 7-1 vote by the County Board Committee on Finance, Personnel, and Audit in September.
The cap does not reduce the benefits earned by any employee currently eligible to retire and receive a benefit; it simply caps the benefit at the amount that an employee has accrued on the effective date of the change. The change and the savings are prospective.
Because both Milwaukee County and our active employees make contributions to the pension fund, both would save by reducing the unfunded liabilities of the pension fund. The biggest winners are taxpayers, followed by more than 1,400 current employees who will never get a backdrop but are paying for it now.
Unfortunately, one of the safeguards put in place after the scandal – a mandatory review of all pension changes by the Pension Study Commission – has delayed progress on this matter. The PSC first heard this item nearly six months ago and has failed to meet to discuss it again. Now, the PSC is scheduled to take up this item at its meeting on Thursday.
It's well past time that the County cap these outrageous payouts, often in the hundreds of thousands of dollars in addition to huge monthly pension payouts. I agree with Sup. Lipscomb and would point out that the PSC should stop holding up the process.
It should be noted that Milwaukee County Supervisor Michael Mayo chairs the pension panel and has the ability to get the cap proposal moving after nearly half a year of inaction. People should be calling on him directly to get off his butt and get something done.
This is exactly the kind of bureaucracy and red tape that everyone hates about local government. Too many people have too much power to hold up a process that has a pretty obvious to residents and the taxpayers of Milwaukee County.