Friday, September 24, 2004

[City Beat] Real Deal?

The Tom Jones pension issue is

still very much alive.

Posted By on Fri, Sep 24, 2004 at 4:00 AM

Former Shelby County mayoral aide Tom Jones is expected to be back on the Shelby County Retirement Board's agenda next month. And the board's decision could have expensive consequences not just for Jones but for other county employees.

The issue is whether Jones is entitled to early retirement benefits worth $3,090 per month because he was put back on the county employment rolls for four days earlier this year after he was 55 years old. In the county system, age 55 is a threshold for higher benefits. The board will have to determine whether Jones was an employee, even though he apparently did no work and was not paid. That decision will impact his pension.

Shelby County mayor A C Wharton is once again enmeshed in a story that won't go away. He said Monday he is "99 percent certain" he will recuse himself if the issue comes before the retirement board in October, because "the way I feel is pretty obvious."

Jones is serving a one-year term in a federal correctional facility in Forrest City, Arkansas, for embezzlement with a county credit card. After working for three county mayors, he was not reappointed by Wharton in 2002. In May, Jones exercised his "fall-back rights" as a civil-service employee 28 years ago. Some paperwork was produced, and apparently without Wharton being aware of it, Jones was approved by the administrator of the retirement board for an increase in his pension from $1,595 to $3,090 per month.

In July, Wharton, who serves as chairman of the retirement board, got wind of what was going on. At the August board meeting, he persuaded members to rescind the increase. A week later, he forced mayoral aides Bobby Lanier and Susan Adler Thorp to resign over their roles in the Jones case. Two other county employees were reprimanded for facilitating the increase, which would be worth more than $500,000 to Jones, 56, if he lives another 30 years.

Beyond that, Jones could set a precedent for other county employees who voluntarily leave county employment before they are 55 years old and then have second thoughts and come back to work for a few days under fall-back rights after they turn 55.

"The plan itself has a gap or glitch in it that applies not just to the Tom Jones issue," said Susan Callison, private attorney for the retirement board. "Let's assume I work for the county, and I quit to get a better job, when I am 54 years old. And then I realize I am getting a crummy pension or I don't like the job. Then I could go to, say, another county official and ask them to hire me after I turn 55 and let me work a few days. That is a flaw."

Theoretically, at least, the flaw could cost Shelby County, already in debt up to its eyeballs, millions of dollars in pension obligations. Callison said she does not know if other employees may have already exploited the loophole.

Callison said she still thinks such a "return" to county employment is not sufficient to trigger early retirement benefits. But in a letter to board members she wrote that there are "rational arguments both in favor of and against this conclusion." What got the county off the hook in August was a procedural error within the retirement system.

Now the issue is bigger than the retirement board. Another private attorney, Jeff Weintraub, has been hired by the county to look into the Jones case. Weintraub confirmed his hiring but said he could not comment at this time.

Among the questions to be answered:

Was Jones paid for the three or four days, and, if not, should he be?

Did he report for work, and if so, where and what did he do and for whom?

If it turns out that Jones was paid, "then I think it will be a harder case," said Callison, but she still believes it is "a common-sense sort of thing that he was not an employee." Weintraub will file his report before the October meeting of the retirement board. Then the board will vote, and "if there are seven votes in favor of Jones getting an early retirement pension, he will get it," Callison said.

County records show Jones was "hired" on May 28, 2004, a Friday. On June 1, 2004, a Tuesday after the Memorial Day holiday, Jones informed the county by letter that "I am resigning from county employment, effective immediately." He requested that his application for early retirement benefits be processed effective that day.

After the August reversal, he reapplied for an early retirement pension. His case was first set for September 7th but postponed until October 5th at the request of his wife, Carolyn Hays Jones, because the attorney she hired, Bruce Kramer, was in trial. •

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