Florida Politics has learned the city of Jacksonville has sued has sued former Police and Fire Pension Fund executive director John Keane and the fund itself for a declaratory judgement and ancillary injunctive relief in the 4th Judicial Circuit.
The complaint contends that “the board has exceeded its authority” in terms of administrating the fund, specifically with regard to the Senior Staff Plan, a retirement plan.
“In September 2000, the Board purportedly created a defined benefit pension plan known as the ‘Jacksonville Police & Fire Pension Fund Senior Staff Voluntary Retirement Plan’ (“Senior Staff Plan”) for the benefit of Senior Staff employees and other employees of the Board not otherwise enrolled in the City of Jacksonville Retirement System.”
Keane, as the document cites, is one of three members of the Senior Staff Plan.
The problem? The board had, according to the filing, no authority to set it up. Despite the city being responsible for unfunded liability, the suit contends that the PFPF did not make the city aware of that plan existing.
The PFPF thinks it had the authority to do that, according to its filing. City counsel disagrees.
“It is the City’s position that the Board’s action in creating the Senior Staff Plan was ultra vires and void ab initio, and the City seeks the Court’s determination as to the validity of the Board’s actions,” the filing contends.
The filing goes on to itemize unauthorized payments from the PFPF to Keane, for service rendered in 1998, 1999, and 2000, “merit increases” that “acknowledge the impact of inflationary pressures.”
As well, the board paid Keane and Richard Cohee retroactively for unused leave in 2009.
Additionally, “Section 415(b) of the Internal Revenue Code establishes a maximum dollar limitation on annual payments to a beneficiary from a defined benefit pension fund. Mr. Keane retired from the Senior Staff Plan on or about October 1, 2015. Mr. Keane’s total average annual pension benefit payments are approximately $303,000 exceeding the section 415(b) maximum by approximately $41,600 per year.”
In October 2015, the filing contends that the board approved a “excess benefit arrangement,” after the Jacksonville budget process was complete, thus circumventing Council approval.
The board, says the filing, had no authority to amend the SSP, as there was no authority to create it, which would render the arrangement void.
As well, the filing takes issue with Keane’s status as a contractor for the PFPF.
“Under Internal Revenue Service rulings, if the employer and the employee know at the time of retirement that the employee will, with reasonable certainty, continue to perform services for the employer, a separation from employment has not occurred, and the employee has not legitimately retired,” claims the filing.
Keane works for $130 an hour, an arrangement reiterated as recently as the last PFPF board meeting.
The filing also contends, “The Board’s actions in administering the PFPF while also administering the Senior Staff Plan is serving as two separate boards administering two separate defined benefit plans.”
With all this in mind, the city wants the court to invalidate the Senior Staff Plan and provide permanent injunctive relief, while directing Keane to repay money granted to him that the filing contends is outside Board authority.