Miller introduces bill to end "jackpot pension" loophole

State Rep. Fred Miller is proposing legislation to end “jackpot” pensions for county government employees, but a likely opponent in the 2010 race for Macomb County executive, Sheriff Mark Hackel, blasted the plan.

Miller, a Mount Clemens Democrat, has introduced a three-bill package that would eliminate overtime pay when computing a worker’s retirement pay. Miller said too many counties, specifically sheriff’s departments, allow workers approaching retirement to load up on overtime — time-and-a-half pay — to boost the “final average compensation” used to calculate their pension.

As a result, in many cases the monthly pension check exceeds a retiree’s former monthly paycheck.

“As we see tighter and tighter budgets, and revenues are dropping, we need to make sure these

(pension) systems are in place for the long haul,” Miller said.

As the House Labor Committee chairman, Miller said he sees no conflict between his pro-union stance and his insistence that “business as usual” when awarding pensions cannot continue.

“These public benefits that we have enjoyed in the past that benefited the few … we have to look at that. We need to think less ‘me’ and more ‘we,'” he said.

Miller’s legislation drew a sharp response from Hackel, who said the lawmaker is trying to punish unionized workers who have negotiated in good faith for retirement benefits. Reducing pension costs should be accomplished at the bargaining table, not in the Legislature, Hackel said.

“It’s easy to try to create legislation that’s popular by beating up on government employees,” the sheriff said. “It’s kind of in vogue.”

Hackel also suggested that Miller was making a “politically opportunistic” move in advance of the 2010 election year. Hackel and Miller are expected to run against each other for county executive next year in the August Democratic primary. County Treasurer Ted Wahby is also ready to jump into the race.

Miller said he did not propose the pension plan as a political ploy, but he did discover that the county’s pension costs have become a burden while he was reviewing county finances and contemplating a run for executive.

Hackel said the vast majority of overtime scheduled at his department is voluntarily accepted by the workers. Mandatory overtime is typically limited to a deputy who spends a lengthy time at a traffic accident or crime scene, or a jail guard who is forced to work a second shift when the facility is shorthanded.

Due to limited staffing, the sheriff’s department has annually racked up thousands of hours of overtime, but county Finance Director Dave Diegel has routinely quieted critics by saying the practice is cost-efficient. Time-and-a-half pay is cheaper than hiring additional workers who would each earn pay and benefits, he said.

Diegel said the sheriff’s department benefits are clearly “richer” than those in comparable Michigan counties. In addition, the county contributes about $5 million a year to the sheriff’s department pension system, while the “general county” pension plan, which represents four times as many workers, costs just $9 million annually.

At the sheriff’s department, “Their benefits are certainly richer than what anybody else in the county gets. No question,” Diegel said.

Members of the sheriff’s department’s four labor unions — representing deputies, corrections officers, command officers and captains — receive a pension based on their three top years of earnings, consecutively, out of the last 10 years of their employment.

During the last round of negotiations, county officials attempted to ratchet down the department’s pension formula but an arbitrator ruled against them. Going to arbitration — where the two sides present their last, best offer — is “always a crap shoot,” Diegel said.

Under Miller’s legislation, the provision that would eliminate overtime pay from pension calculations would be phased in. The legislation could not alter existing union contracts and it would not impact county workers who are already vested in their pension and approaching retirement.

Miller said that establishing state authority over counties on the overtime issue is fairly simple, but imposing the same restrictions on cities and townships would involve a complicated mix of amendments to several state statutes. For that reason, the original plan to rein in police pensions at all municipal levels was scrapped.

From the Macomb Daily

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