A state representative wants to prevent public sector employees from boosting their pensions by working overtime or obtaining higher-paying jobs for relatively short periods of time.
Rep. Duey Stroebel, R-Saukville, said Friday that he doesn’t know if many of the state, local and school employees in the pension system are sweetening their pensions that way, but that his bill would help ensure fairness for those who don’t.
A study of the bill — which would calculate pension payments by using an employee’s highest five years of salary rather than the highest three — won’t be undertaken until after the bill is introduced and sent to a committee, he said.
“I’ve heard stories about UW professors, how one gets near to retirement and they get to be department chair,” Stroebel said. “I’m not saying it’s prevalent, but you do get the situations that undermine the actuarial foundation of the system, and those should be addressed.”
Calculating pension payments by using the highest five years of pay as part of the formula would help protect the future solvency of the Wisconsin Retirement System, said Stroebel, who has authored two other bills aimed at changing the system.
University of Wisconsin System spokesman David Giroux said professors take turns as department chair, and senior faculty members might be chosen more frequently because of their experience and expertise, but he said he hadn’t previously heard anyone say the practices were aimed at higher pensions.
“Department chairs rotate, but it’s usually because people want to go back to teaching and research responsibilities and are tired of the administrative duties,” Giroux said.
In 2010 a Wisconsin State Journal investigation revealed city work rules allowed the most senior bus drivers to snatch up overtime and other salary boosters that also helped increase their pension payouts.
Stroebel said he is also aware of news reports about civil servants receiving high-paying political appointments in their final years before retirement.
Stroebel’s proposal would take effect five years after enactment so that no employee near retirement would be affected, he said in a Friday morning email asking other legislators to become co-sponsors.
The memo said the pension system had been “abused over the years to the detriment of the taxpayers and other participants in WRS,” and stating that there were “examples” of the practice.
“There have been examples of employees who took unusual amounts of overtime for their final three years of employment for the purpose of increasing their pension under this calculation and then retiring,” the memo said.
A few hours later his office sent out a revised memo eliminating that wording and simply stating the bill would block the possibility of problems. Stroebel said the first email was a draft that was sent out unedited.
After the bill is introduced and sent to a committee, a full actuarial study would be done to determine the breadth of the problem, Stroebel said.
The state Department of Employee Trust Funds — which operates the highly rated pension system — will analyze Stroebel’s proposal, said ETF spokesman Mark Lamkins.
Jim Palmer, director of a group representing pension system members, didn’t return a call seeking comment.
In 2011, Stroebel introduced a bill to suspend pensions of public employees returning to work, but it wasn’t enacted. On March 16 he began seeking co-sponsors for a proposal to increase the minimum retirement age by five years.