Ficano plans changes to retirement perks, but only tweaks controversial 401k perk
5:24 PM, Jul 9, 2013
9:12 AM, Jul 10, 2013
DETROIT (WXYZ) - Wayne County Executive Robert Ficano's office recently announced changes to the county's executive retirement plan, but the tweaks don't go as far as he first announced.
More than 18 months ago, Ficano said he wanted to cut down a lavish county perk that paid him and his appointees $5 for every $1 they put towards their 401k. When the perk became a news story, Ficano said he'd act quickly to end it, changing the 5-to-1 match to a 1-to-1 match.
Instead, Ficano failed to make any changes. When 7 Action News asked him why in April, he said it was a tougher task than he thought.
"When I looked at it, I thought it would be the only thing we needed to change," Ficano said.
"I realized that the county had its most difficulty with the pensions, so we wanted to change it all at the same time."
Less than a month after our story aired, Ficano finally acted. But he didn't do what he said he'd do. Instead of trimming the perk down to a 1-to-1 match, he changed it to a 4-to-1 match. It affects all new employees or those who've worked for Wayne County for less than 20 years. But if you've worked more than that, like Ficano, you can still keep the 5-to-1. This plan, he said today, makes the most sense. Contributions are capped at 10% of an appointee's salary.
"We researched the rules and we looked at what are the best practices that are supposed to be accepted by the State of Michigan," Ficano said.
"The governor's office published it-- came out with these particular regulations, so we're meeting those."
Ficano also reduced how much employees who receive a pension will get going forward. Instead of getting 2.5% of your salary for every year of service, employees will only get 1.5% going forward. Former County Auditor General Brendan Dunleavy said today that Ficano's changes are too little, too late.
"The problem is so big and what you did is so small to fix it. It's not going to make any difference," Dunleavy said.
He says Ficano's fixes won't go far enough in digging the county's pension fund out from a huge hole made worse, in part, by giving retirement deals to young appointees like Matt Schenk. As we first exposed last month, Schenk is only 41, spent 9 years at Wayne County and is set to collect a $96,000 a year pension for the rest of his life.
"Nobody did their job, and that's why you're here today," Dunleavy said.
"These are folks who should've been banging their shoe on their table saying: 'You can't implement this.' It will send the pension plan into bankruptcy or into financial stress. But instead they were saying, 'Me too.' "