A city of Springfield pension panel has been applying an inappropriate methodology to award city police pensions and benefits upon retirement.
Former Police Chief Robert Williams is the latest in a line of twelve employees covered under the Police Pension Fund. A letter from the Illinois Department of Insurance says the Police Pension Board awarded retirement annuities to twelve department employees since Feburuary 22, 2012 — that’s when it determined the board’s method was improper.
Ward 7 Alderman Joe McMenamin, who isn’t in favor of the spike in the first place, says this is the first he’s heard of the Department of Insurance’s decision, and he says it’s outrageous.
“We should not have given these spikes and pay raises and increased pensions anyway,” he said. “Just the regular formula for the pensions is plenty.”
The city awards police officers a five percent pay spike, after 20 years of service, on their birthday and anniversary date, and if an officer retires during the pay period the spike is effective, the salary level after the spike is used to determine retirement benefits. The Department of Insurance decided that was improper, and the spike should be spread out over 26 pay periods. The city contends the payment should be spread over 12 months, so moving forward a “pay spike” would be 1/12th the size it is currently.
That decision is still under appeal. The city was told of the decision in February 2012, but has been continuing to award retirement benefits under the old formula — even though it’s not supposed to. The mayor, in a letter dated Tuesday, implied the city would follow the DOI’s order moving forward as an appeal does not equal a stay on the order.
Following the city council meeting Tuesday, Mayor Mike Houston deferred responsibility of the Department of Insurance’s claims — even though he knew about it.
“We were notified, but there’s nothing we could do about that because we do not control the management of the police pension fund. We only appropriate money,” said Houston.
Aldermen Frank Edwards, Sam Cahnman and Joe McMenamin, all speaking to WTAX, were surprised at the letter sent to aldermen, saying they had no idea the Department of Insurance made that ruling in February 2012.
“That’s a serious problem. We need to know about things like that,” said McMenamin. “If we don’t have all the information, then we don’t have all the information we need to make a rational decision about a new union contract.”