- Pam Zubeck
- Former criminal prosecutor Dan Zook was penalized for drawing pension payments.
Imagine having to repay your own pension provider more than $700,000 through deductions from your pension check for the rest of your life.
That's the story we told last month, explaining how former prosecutor Dan Zook found himself the victim of a seldom-invoked clause in the El Paso County Retirement Plan. That rule requires workers who retire, collect pension payments and later return to work full-time for the county, to fork over the entire amount they collected when they first retired, including interest and an actuarial adjustment.
Now, it appears Zook isn't the only one snagged by the rule.
Several command level personnel at the Sheriff's Office might also get hit with a big bill. Details aren't known, because the El Paso County Retirement Plan refuses to release information specific to individuals, saying it's protected by privacy laws.
Pension board chairman Mark Lowderman refused to discuss the issue and even declined to comment on whether the costly rule has been changed, whether the board is interested in entertaining a change and whether pension staff has been encouraged to better inform retirees of the consequence of the rule before they retire.
"While I would like to comment," he says via email, "I've been instructed by counsel not to, since the Zook case is still under appeal."
At issue is one of the plan's rules that states, "In the case of reemployment of a retired member who received any pension payments prior to a reemployment, the pension payable upon his subsequent retirement shall be reduced by the actuarial equivalent of the pension payments ... he received prior to his normal retirement date."
For Zook, who worked for the District Attorney's Office from 1985 to 2005 and again from 2009 to 2013, this meant that he had to repay four years' worth of pension payments collected between those employment dates.
That came to about $173,405. He also was charged 8 percent interest compounded annually, which drove the debt up to $241,264. The amount kept growing to $273,547 after the pension fund applied a computation known as an "actuarial equivalent" that alters the amount to current dollars.
To recapture that money, the fund docked his new retirement benefit by $2,219 a month for life, and for the life of his wife, his beneficiary — an equivalent of roughly $720,000, if they live to normal life expectancies.
Although the pension fund and the Sheriff's Office wouldn't discuss details of any employee's situation, it appears that the rule is likely to be applied to Undersheriff Joe Breister, Bureau Chief Brad Shannon and Commander Tom DeLuca.
Breister and Shannon retired in January 2014 and DeLuca in June 2012. All three started at the Sheriff's Office around the late 1980s, and all three were hired back full-time by Sheriff Bill Elder in January 2015.
"Each drew full retirement during their time away, as they all met the rule of 75, making them eligible to draw retirement," sheriff's spokeswoman Jackie Kirby says via email. She was referring to a rule that enables an employee to retire if their years of service and age add up to 75.
When Breister retired as bureau chief, he made $111,500 a year, records show. Applying the pension fund's computation for benefits, it appears his annual pension benefit was about $61,000. If 8 percent per year compounded interest is added, since he returned to the county in 2015, he would owe the fund about $71,000. Each year, the amount owed grows by 8 percent.
Breister came back to work in January 2015 at a higher salary, $118,199, and now is paid $120,562 a year.
But as Zook says, "You can't dig your way out by working longer."
So it's possible Breister and the others will see their retirement benefit decline when they retire a second time.
According to the plan's rules, "If you are reemployed on a permanent, full-time basis after having retired, your monthly benefit payments will stop while you are employed. When you retire again, your monthly benefit will be recalculated based on any additional credited service and compensation, and will be reduced to reflect your previous benefit payments."
Thomas Pfiefle, the pension fund's executive director, says via email he couldn't confirm information for any individual and declined to identify how many county employees might be subject to the rule and in what departments they work. Zook is believed to be the first caught up in the rule, which has been on the books for decades. But Pfiefle notes, "There are others currently employed that will face similar offsets over their expected lifetime that Mr. Zook did when they re-retire."
Pfiefle notes, however, that the offset applies only if workers originally retired younger than 62, (Zook was 53 when he retired in 2005) in which case the payback amount is the sum of all monthly payments made during retirement before 62. Moreover, he says that the offset would never reduce the retiree's new monthly benefit below what it was during the original retirement.
For Zook, his monthly benefit remained virtually unchanged, despite his working an additional four years due to the plan docking his new, higher benefit to capture the four years' worth of retirement payments made to him. Zook sued the pension fund but lost at the District Court level. He's since appealed the decision to the Colorado Court of Appeals.
Pension board members, some of whom are not covered by the plan because they don't work for the county, include Lowderman, Ray Bernier and Nicola Sapp, elected by plan members, and Michael Pennica and Chris Long, appointed by El Paso County Commissioners.
County Commissioner Peggy Littleton, who serves as the board's liaison to the pension board, has said she wasn't aware of Zook's lawsuit before the Independent reported it.