By Journal Sentinelof the
The Wisconsin Supreme Court on Friday upheld Milwaukee County’s 2010 move to reduce pension benefits for nurses, which had been struck down by lower courts.
The high court’s ruling preserves millions of dollars in planned future savings by the county.
In a 5-2 decision, the court overturned a trial judge and the Court of Appeals, both of which had sided with Suzanne Stoker and her union, who claimed that enhanced pension benefits granted by the County Board in 2000 were vested property rights that even collective bargaining couldn’t undo.
“We conclude that the Legislature preserved Stoker’s rights and benefits already accrued but also gave Milwaukee County home rule authority with the flexibility to enact such prospective only changes,” Justice Annette Ziegler wrote for the majority.
In a dissent joined by Chief Justice Shirley Abrahamson, Justice Ann Bradley wrote, “It is only by repeatedly ignoring the language of the governing session laws that the majority is able to conclude that the county may reduce the pension multiplier, thereby dealing a blow to the rights of the employees.”
At issue was the county’s move to cut the pension multiplier — a key factor in determining pension payments — from 2.0 to 1.6 for pension credit earned starting in 2012. That amounted to a gradual 20% reduction in pensions.
Milwaukee County Circuit Judge William Pocan ruled in 2012 that the county nurses had an unconditional property right to their pension benefits. He cited the 1945 state law establishing pension rights for Milwaukee County employees, which says each worker “shall have a vested right to such annuities and other benefits and they shall not be diminished or impaired by subsequent legislation or by any other means without consent.”
The county and its Pension Board argued that the multiplier reduction didn’t violate that law because it applied to future pension service credit only and because the nurses’ union had approved the change. Pocan said, however, the benefit reduction could be done only with consent of individual employees.
The Court of Appeals affirmed Pocan in November 2013.
Stoker began working for the county in 1982. For many years, the pension multiplier was 1.5, but was raised to 2.0 in the controversial pension changes approved by the County Board in 2000, which allowed lucrative “backdrop” pension payments.
The financial strain of the pension enhancements led the county to reduce the multiplier to 1.6% in 2010 in a new contract with Stoker’s union, the Wisconsin Federation of Nurses and Health Professionals, Local 5001, AFT, AFL-CIO. Union officials later said the union was forced to agree to the cut, but always intended to sue.
Candice Owley, president of the union, said though it felt confident that precedent was on its side when the suit began, it later became apparent that the Supreme Court was routinely deciding cases against workers, and for employers.
“We’re disappointed, but not terribly surprised,” Owley said. “This reaffirms we need politics and money out of court elections.”
Brendan Conway, spokesman for Milwaukee County Executive Chris Abele, said the decision “protects employee pensions while also saving Milwaukee County taxpayers millions of dollars.”
He also said county officials believe the ruling suggests Abele’s reform of the pension backdrop provisions will also be upheld.