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ERISA – Pensions

By: Derek Hawkins//July 25, 2018//

ERISA – Pensions

By: Derek Hawkins//July 25, 2018//

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WI Supreme Court

Case Name: Milwaukee Police Association, et al. v. City of Milwaukee

Case No.: 2018 WI 86

Focus: ERISA – Pensions  

When the Employee Retirement System (ERS) was created for the City of Milwaukee (the City) in 1937, the State granted each employee-member of the ERS the right to vote for the election of three employees to serve on the ERS Annuity and Pension Board (the Board) comprised of seven members. In 1947, the State granted all first class cities the opportunity to manage the ERS pursuant to the exercise of home rule powers. However, the State also protected individual rights of those persons who were members of an ERS because the State precluded amendment or alteration that modified “the annuities, benefits or other rights of any persons who are members of the system prior to the effective date of such amendment.” § 31(1), ch. 441, Laws of 1947.

In 1967, the City exercised its home rule over the ERS, consistent with the State’s protections of individual member rights. However, in 2013, the City amended its charter ordinance and reduced the voting rights of employees. Each employee-member was permitted to vote for only one employee to serve on the Board, rather than three, and employees could no longer vote for the employees of their choice. The City also gave the mayor three appointments, thereby increasing the size of the Board to eleven members.

Milwaukee Police Association (MPA) members and Milwaukee Professional Fire Fighters Association (MPFFA) members challenged the 2013 amendment, saying that it altered the “other rights” of employee-members of the ERS who were members prior to the amendment in violation of State law. Upon review, we conclude that the City’s 2013 amendment to its charter ordinance that reduced each individual employee-member’s right to vote for three employees of his or her choice to serve on the Board, while diluting employees’ voice on the Board, modified “other rights” and therefore, is contrary to State law. Accordingly, for the reasons stated more fully below, we reverse the decision of the court of appeals and restore the right of employee-members to vote for three employees of their choice to serve as employee-members of the Board. We also return the Board’s size to its size prior to 2013.

Reversed

Concur: R.G. BRADLEY, J., concurs, joined by GABLEMAN, J. (opinion filed).

Dissent: ABRAHAMSON, J., dissents, joined by A.W. BRADLEY J. (opinion filed). KELLY, J., dissents (opinion filed).

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Attorney Derek A. Hawkins is the managing partner at Hawkins Law Offices LLC, where he heads up the firm’s startup law practice. He specializes in business formation, corporate governance, intellectual property protection, private equity and venture capital funding and mergers & acquisitions. Check out the website at www.hawkins-lawoffices.com or contact them at 262-737-8825.

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