Prior to the year 2000, the City of Milwaukee, Wisconsin maintained a retirement fund called the Firemen’s and Policemen’s Survivorship Fund, which was one of several City-administered pension and/or retirement benefit plans available to City employees through the City’s Employees’ Retirement System (ERS). In October of 1999, the City settled litigation relating to the ERS by merging its various retirement and pension funds into a single fund (the Combined Fund). The settlement provided that the Survivorship Fund would merge into the Combined Fund if 90% of the Survivorship Fund members agreed to do so. Members of the Survivorship Fund in “active service” as of January 1, 2000, would (1) be awarded an additional two years of service; and (2) receive a lump sum upon retirement equal to 5% of the member’s accrued retirement benefit. Ultimately, enough members of the Survivorship Fund consented to merge with the Combined Fund, and the Survivorship Fund ceased to exist.
The City hired several police officers and firefighters effective February 21, 2000. Each of them signed the consent form to merge the Survivorship Fund into the Combined Fund, which applied retroactively to January 1, 2000. In 2021, two of these firefighters requested to collect the additional two years of service and lump sum and were denied because they were not in active service as of January 1, 2000, as required by the settlement agreement and related ordinances. The officers and firefighters hired on February 21, 2000, sued the City seeking a declaratory judgement that they were entitled to these benefits. The trial court ruled in favor of the City, finding that the Plaintiffs were not in active service as of January 1, 2000, because they were not hired until February 21 of that year. The Plaintiffs appealed to the Wisconsin Court of Appeals.
The Court affirmed. First, the Court was not persuaded that the Plaintiff’s retroactive participation in the Combined Fund, effective January 1, 2000, was equivalent to being in active service as of that date. Second, the Court agreed with the parties that being in “active service” should be interpreted in line with a City ordinance which defined the term as “the time spent as an appointed employee on the city payroll in a position qualifying for fringe benefits.” However, the Court found that the Plaintiffs did not meet this definition, because they could not have been “appointed employees on the city payroll” if they were not yet hired. Therefore, Plaintiffs were not entitled to the additional years of service and lump sum payment negotiated in the 2000 pension litigation settlement.
Klein v. City of Milwaukee, Appeal No. 2022AP1401, 2024 WL 1739469 (Ct. App. Wis., 2024).