LITTLE ROCK — The Arkansas Public Employees Retirement System’s board on Wednesday unanimously upheld a decision to cut off pension payments to Garland County Treasurer Jo West Taylor, agreeing with the system’s director that Taylor did not properly “terminate” employment before receiving benefits.
The unanimous decision came after a day-long hearing at the retirement system’s offices in Little Rock. Instead of vacating her office in 2008, Taylor, along with two other Garland County officials, took herself off the county payroll for a required 90-day period while continuing to perform her duties. Taylor and the other officials then returned to the payroll, receiving pensions in addition to their salaries.
During the hearing, Taylor’s attorney, Denise Hoggard of Little Rock, maintained that Taylor merely followed advice from the retirement system staff. Since an employee who is not receiving pay would not qualify as an active member of the retirement system, going off the payroll should meet the requirement under Arkansas Code 5-4-520 that an official “terminate covered employment,” Hoggard argued.
Board member Mike Jacobs, county judge for Johnson County, said he believed that Taylor acted in “good faith” and that “there’s blame that probably lands at everybody’s feet.” Still, he said Taylor’s retirement didn’t “pass the smell-right test.”
“I don’t think there could be any misinterpretation of how Ms. West Taylor resigned or didn’t resign,” Jacobs said.
Taylor is among six elected officials whose retirement benefits were cut off in May after system Director Gail Stone found that they had failed to meet the termination requirement, and her appeal was the first to come before the board. Four other officials have also filed notices that they plan to appeal Stone’s decision to the board, although three of the notices were filed after a 30-day deadline set by the board. The board has not yet decided whether to allow those appeals.
Hoggard said she and Taylor were disappointed with the board’s decision Wednesday.
“I think that Ms. Taylor relied on what she was told when she came here to get advice and counsel on the process,” Hoggard said. “I think it’s clear that the board, at least based on the comments here, believed that what she did she did in good faith.”
Hoggard said she didn’t know yet whether Taylor would appeal the decision to circuit court. She added that she was encouraged by comments from Stone and some board members that it appeared that another of Hoggard’s clients, Jefferson County Assessor Larry Fratesi, followed the proper procedures when he retired during the final three months of his term in 2004. Fratesi testified Wednesday that, unlike Taylor, he did not work during his retirement. The retirement system is continuing to review the retirements of Fratesi and two other officials and has not made a determination on whether they met the requirement to terminate employment.
Taylor and the other Garland County officials - Circuit Clerk Vicki Rima and Assessor Brenda Short - took themselves off the county payroll in September, October and November of 2008.
Taylor, who was defeated in the Democratic primary earlier this year, testified Wednesday that she and the other officials told Garland County Judge Larry Williams about their plans to take themselves off the payroll. She said she also spoke with Fratesi, who was then a member of the retirement system’s board, and two retirement counselors with the system.
Fratesi and the retirement counselors knew about her plans to retire and then return to work, and none of them told her she had to vacate her office, Taylor said. She said she would not have gone forward with her retirement if she had known that was a requirement.
“I wanted to be in this office for 20 years, not 18 like it’s going to end in December,” Taylor said.
Retirement system counselors Cheryl Wilburn and Shunika Bryant denied telling Taylor she could meet the termination requirement by simply taking herself off the payroll. Jay Wills, an attorney for the system, also noted that a counselor had made a notation that Taylor “will need to furnish letter of resignation from elected office.”
Taylor denied being told she would need to furnish such a letter, which retirement system staff acknowledged wasn’t usually required.
The only proof required of Taylor’s retirement was a form signed by Garland County Clerk Tammy Lambert certifying that Taylor “has or will terminate employment.”
Williams, the Garland County judge, said he initially had questions about the officials’ retirement plans but assumed they must be proper after learning about other elected officials who had done the same thing. He acknowledged he didn’t tell the Quorum Court about the officials’ plans and said he eventually apologized to the members for not doing so.
Fratesi said he did speak to Taylor but referred her to retirement system staff for advice on her retirement.
Taylor’s benefits will resume when her term ends at the end of the year.
The board did not decide Wednesday on a request by Taylor that she be allowed to return the benefits she has already received and have her retirement benefits recalculated based on a new retirement date. Wills has said that could result in a net payment to Taylor because her benefits would be increased, and she could withdraw up to five years of benefits in a lump sum. He and Stone told board members Wednesday that the law does not have a provision allowing officials or employees to “unretire” and then retire a second time.
The board is tentatively set to decide on the issue during a meeting Monday.
Arkansas, Pages 11 on 09/30/2010