Ex-officials must repay overpaid pensions Four owe a total of $40,000 for illegally large benefits

April 08, 1997|By Tom Pelton | Tom Pelton,SUN STAFF

Anne Arundel County officials say they are forcing four former top officials -- including a former chief administrative officer -- to return a total of about $40,000 they collected in illegally large county pensions during the late 1980s and 1990s.

The demand for repayments is the most recent action in a battle that the administration of Republican County Executive John G. Gary has been waging with well-connected employees under his predecessors as county executive, O. James Lighthizer and Robert R. Neall, over unusually generous pensions offered from 1989 to 1993.

A recent county audit of the financially troubled pension plan offered to appointed and elected officials until 1993 found that as many as two-thirds of the retirees may have been getting incorrect pension checks, most of them getting too much.

"I am very disturbed by the findings of this audit," County Council Chairwoman Diane Evans, a Republican from Arnold, said yesterday. "These problems absolutely must be corrected, and they must be corrected as soon as possible."

The audit, released this week by county Auditor Teresa Sutherland, also revealed that the four former employees were receiving pensions so large that they may have violated federal laws limiting retirement benefits for government employees.

Among the four is Adrian G. Teel, a former county chief administrative officer, according to county sources. The names of the other three could not be confirmed yesterday.

The Internal Revenue Service limits pensions for government employees at $90,000 for a person who retires at age 62. It allows proportionally smaller pensions for employees who retire at younger ages.

The four county officials were receiving pensions that exceeded those limits. The county auditor refused to release their names and pensions, saying the state Freedom of Information Act does not require disclosure of retirement benefits.

County Attorney Phillip Scheibe said the county plans to reduce the size of pension checks for any of the four retirees who fail to return the roughly $40,000 they were overpaid.

"There were some violations," said Scheibe. "You can't pay out benefits that violate the IRS rules, or you will have to pay penalties. That's why we are addressing this problem. We are in negotiation with these people and are taking care of the issue."

Two of the retirees have repaid the county, one has agreed to a repayment schedule, and the fourth is negotiating with the county, said Lisa Ritter, public information officer for the county executive.

The pension plan offered to appointed and elected county officials until 1993 is in shaky financial condition. The plan had $15.4 million invested at the beginning of this year, but it faces a potential of $18.5 million in liabilities for future pension payments for the 88 current enrollees, according to county officials.

These future payments would put the plan $3.1 million in the red if the county lost an appeal of a lawsuit that retirees filed against the county for trying to reduce pension benefits in 1995.

Problems with the pension fund reach back to 1989, when Lighthizer, in the final months of his tenure, boosted benefits for top officials by 25 percent. He also lowered the retirement age from 60 to 50.

Lighthizer has said that he sweetened the pot for his employees because he worried that they might flee to more lucrative jobs.

Other problems with the pension fund may be linked to sloppy bookkeeping, according to the audit, which found that annual earnings had been calculated incorrectly for 13 people with pensions.

The audit also revealed that county officials incorrectly added up the years of service for 15 retirees. Two retirees received credit toward their pensions for time they were not actually county employees. Two other retirees continued receiving pensions even after they started working with the county again.

"The county auditor has made her report to us, and I have asked that the law office and the personnel office look into each element of the report before we report back to the County Council," said Gary, who ran for office in 1994 on a platform that included cutting back on the county's pensions.

Pub Date: 4/08/97

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