Washington auditors have determined that pre-retirement salary increases led to more than $30,000 in excess pension payments for three former firefighters, and the state projects it will save the system more than $140,000 by permanently reducing their combined pension values.
The Department of Retirement Systems concluded that a portion of the raises provided to the Lakewood, Pierce County, fire managers at the start of 2010 were improperly counted toward pension calculations because the pay increases were retirement incentives. The state had conducted an audit of the Lakewood cases after an Associated Press series earlier this year that highlighted late raises in an old pension system for law enforcement and firefighters.
Dave Nelsen, the legal and legislative services manager at the state Department of Retirement Systems, said Lakewood officials who approved the raises believed what they were doing was OK.
“I got no indication whatsoever that there was any desire to put one over on anybody,” Nelsen said.
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Former Lakewood fire officials Bob Bronoske and Mike McGovern will be asked to repay excess payments of $12,800 and $6,700, respectively, state retirement managers said. The $12,800 in extra payments that went to Greg Hull are billed to the city of DuPont, Pierce County. DuPont has been asked to cover more than $500,000 in his pension payments after the state determined he was improperly classified as a contractor when the city hired him out of retirement.
Along with that immediate collection of money, the state projects that the pension system will save more than $140,000 in future years from permanent reductions in each of their pension values.
Even with the reductions, Hull, Bronoske and McGovern will still have some of the most valuable pensions in the entire state — each of them more than $150,000 per year.
Hull, Bronoske and McGovern retired near the beginning of 2010. Shortly before departing, they received substantial salary increases in three different ways. Each got a 4.2 percent cost-of-living increase along with a new $500 monthly payment for their years of service. Local officials also agreed at the end of 2009 to give Hull and Bronoske a 4 percent increase in duty pay along with a 2 percent increase for McGovern.
By the time they retired, each of their salaries was near $200,000 per year.
In the Lakewood case, state officials concluded that the cost-of-living increase and the $500 monthly increase for years of service were allowable changes because they were not tied to retirement. They determined the duty-pay increase was improper because it was designed to compensate them for retiring early.
Hull said he believed the duty-pay increase was to compensate for extra responsibilities — not for anything related to retirement.
The LEOFF-1 retirement system used by those three Lakewood retirees is unique because it determines pension values based on the worker’s final salary. Other pension systems calculate the retiree’s benefit by looking at an average of the person’s salary over time.
State officials have been examining other pay increases in the LEOFF-1 system and have concluded that another person received overpayments because of late salary increases. The state has declined to release details on that case until it is fully resolved.