Friday, April 21, 2006

Scott Walker Scores...Against His Own Team

In an unsurprising move, the actuarial firm Mercer Human Resource Consulting is claiming it’s not at fault for the Milwaukee County pension deal from 2000. The county is suing the firm for $100 million for not accurately projecting the cost of the deal.

What is eye-opening is that in filings with a federal court this week, Mercer cites statements made by Scott Walker during his 2005 budget address to help bolster its defense.

In the address, as usual, Walker bashed the Ament administration and county employees for supposedly putting Milwaukee County in such a dire fiscal position. Mercer is now using these statements as proof the deal was orchestrated solely by the Milwaukee County government, not the firm’s actuaries.

Well done, Scott. Hope those comments scored some good political points for you.

It probably took Mercer days to wade through all the Ament and county employee bashing Walker has done over the years to find that perfect quote. I bet it was like kids in a candy shop.

Despite the help by Walker, Mercer’s defense still appears relatively weak. In its filings with the court, Mercer did not deny the fact that its actuaries chose not to speak up and tell the county board at committee hearings the plan would not be cost-neutral.

As one of the Mercer actuaries explained later, he decided to stay silent while then-County Personnel Director Gary Dobbert told the board the plan would be cost-neutral because he “didn’t want to make Dobbert look stupid.”

In fact, and this is the real kicker, another one of the Mercer actuaries did essentially tell the board at a meeting that the plan would be cost-neutral.

According to the meeting transcript, Mercer actuary Glenn Soderstrom told the board: “There is some degree of uncertainty, but I am convinced I will never come to you and tell you, ‘Supervisor, please pony up $20 million next year.’ You would have the right to kick me in the rear end on that account because I think we would have warned you about the potential and surprises.”

As it turns out, the supervisors haven’t had to pony up $20 million because of the non-cost-neutrality of the plan. It’s actually been more like $64 million…and counting.

LATE UPDATE: Jim at Watchdog Milwaukee provides some excellent commentary on this story here.

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