It appears the Springfield Fire Pension Board has also been issuing inflated pensions in direct conflict with Department of Insurance instructions.
As WTAX first reported Tuesday, the city decided to comply with an insurance department order on the police pension board stop annualizing police department five percent pay spikes when employees retire during a pay period when the spike is active.
For example, if an employee making $65,000 retired during a spike period, which is active during birthday and anniversary periods, their retirement benefits would be based on a $68,250. The Department of Insurance noted that’s improper, and the spike should be spread over 12 months, making the final salary $65,270.
The department’s ruling was made in 2007, but the Fire Pension Board has continued to award benefits under the improper math since then without appealing.
Ward 7 Alderman Joe McMenamin held a conference call with several members of the Illinois Department of Insurance Wednesday, prompted by the police pension fund discrepancies. He accused the fire pension board of ignoring the department’s order.
“I’m not familiar with any appeal that took place,” McMenamin told WTAX’s Ray Lytle. “We just ignored it.”
Don Craven, an attorney representing the fire pension board, said the order was not ignored — noting the board sent the Department of Insurance a letter asking how to rectify the situation but never heard back.
It’s unclear how much money has been “overpaid” under the formula. The boards, which meet quarterly, can review retirement benefit allocation only if they were distributed within the last 35 days.
To listen to the conversation between Ray Lytle, Ward 7 Alderman Joe McMenamin and Attorney Don Craven, click play on the audio link below.