Last July, Hal Cosper died suddenly of a heart attack at 66, leaving behind Janet, his wife of 31 years, just as the two were preparing for life in retirement.
Hal worked for the City of Marietta for more than two decades and was the city’s chief building official. After a long and distinguished career, Hal was in his final year of work and the couple was financially secure, thanks in part to the city’s pension plan which was expected to provide $2,500 per month to the household budget.
Here’s where things get head-shakingly ugly.
In the days and weeks following Hal’s death, Janet discovered Hal’s pension plan had a curious (one might even say cruel) provision. Under Marietta’s plan, the survivors of employees who die before they retire get no pension benefits from the city, even if the employee was fully vested in the plan.
Let’s dispense with something up front: This is not normal.
Keith Brainard, research director of The National Association of State Retirement Administrators, said there is a lot of disparity in pension plans. But not paying a vested employee’s spouse when their other half dies?
“I am not aware of another public pension plan that does not provide a survivor’s benefit for active workers who have vested in their retirement plan,” he said.
Although it does not make much sense, such a provision would be an incentive for experienced employees to take retirement as soon as possible, he said.
Janet, 61, thought it must be some sort of mistake.
“First, I went to his boss and he said, ‘You need to talk to the pension board,’” Janet Cosper said.
The pension board was no help. Minutes from the meeting last November dutifully record Janet Cosper’s attendance and comments, but show no discussion.
When his minister told him of Janet’s situation, Don Horton, a private retirement plan specialist, tried to help. But he’s made little impression on the city, he said.
“I have yet to ever come across a situation like this,” he said. “What they are doing is, in my mind, immoral.”
And if the city was a private company, what it is doing would be illegal under the Employee Retirement Income Security Act, a 1970s-era federal law that sets minimum standards for private pension plans. That law mandates survivor benefits in cases like the Cospers.
‘He knew the options’
But wait. There are two sides to every story, right? What does the city say about its decision to keep Hal’s retirement benefits?
“The current pension plan has been in place since 1987 and many former employees of the city have decided to retire over the years when they reached the point they were retirement eligible, because they knew of the plan’s provisions,” said Lindsey Wiles, Marietta spokeswoman.
Like every city employee, Cosper was informed of his retirement options “and he chose to continue to work for the city,” she said.
So, if Hal planned on dying, he should have retired first?
“That’s sounds rather harsh. The point is he knew the options that he had,” Wiles said. “It’s every employee’s responsibility to know the plan benefits.”
The arrangement also benefits the city, Brainard, the pension expert, noted.
By not paying out to spouses like Janet Cosper, he said the city is “money ahead” — actuarial talk for pocketing the cash it would have paid out had the plan included a survivor’s benefit.
Wiles said Cosper was informed about the lack of survivor benefits should he die before taking retirement, although there is no written record confirming how or when the conversation took place. Janet Cosper can’t say what her husband knew, but she said she certainly wasn’t aware of it.
“If we had any idea that he was putting his retirement benefits in jeopardy by continuing to work after you are eligible to retire we would’ve made a different decision,” she said.
With suddenly much less money coming in since her husband’s unexpected death, Janet’s part-time job answering phones in a dentist’s office has become much more important. She is not impoverished, but money is tighter than expected and Janet needs that little income to pay the cost of the health insurance she had to buy when the city cut her off from Hal’s policy.
Police, firefighters face same jeopardy
And while Hal’s death is bad, this same pension plan covers the city’s police and firefighters who take the chance of pre-retirement death every day. If one of the city’s first responders dies, even in the line of duty, their spouses and children get no pension benefit, except for the tiny fraction the employee contributed.
Three years ago this month, Marietta Firefighter Lonnie Nutt, a 21-year veteran of the city department, was responding to a medical emergency on the highway when he was killed by a heart attack at age 49.
Photos show city firefighters, decked out in their best uniforms, saluting Nutt’s flag-draped casket at the funeral soon after. But the city’s pension plan held nothing for his wife, Rosa.
“It’s so hard for me,” Rosa Nutt said. “The (department) gave me some vacation he didn’t take.”
The fire department also helped defray the costs of Lonnie’s funeral. But Rosa said she got little help from the city.
“It’s not enough, you know?”
Lonnie Nutt’s mother, Charlotte Nutt, said the city plan isn’t fair to surviving spouses like her daughter-in-law.
“In good conscience, I don’t know how they do it,” she said.
“I never said it was fair,” Marietta Pension Board Chairman Freddy Morgan explained.
No votes to change policy
Morgan is a city employee and does not appear to be a big fan of this aspect of the city’s pension. He can’t retire yet and understands his family is placed in some financial jeopardy by the lack of a survivor benefit should he die.
Morgan said the issue has come before the pension board for discussion but there aren’t enough votes to change it. Plus it would require the City Council’s approval as well.
So far, the council hasn’t taken that step. In January, however, the council voted to increase the life insurance payout for employees by $120,000 to a maximum of $300,000, paid in a lump sum. Wiles, the city spokeswoman, said the council made the change “as a result of this situation,” but did not make it retroactive to benefit Janet Cosper or Rosa Nutt.
Janet Cosper said she just hopes situations like hers and the Nutts’ raise awareness for current city employees.
The AJC submitted a records request to the city seeking all printed materials provided to employees that advertise the lack of a survivor benefit in situations like the Cospers. The city turned up a single PowerPoint slide and a 67-page plan booklet where the lack of a benefit in such situations resides about halfway in.
Morgan said he has warned employees who are vested in the plan and eligible for retirement that they should consider leaving.
“I told as many as I can and I know several on the pension board who have,” he said. “We’ve had employees retire for that reason.”
Janet Cosper said she took the matter up in a letter to Mayor Steve “Thunder” Tumlin, but she never heard back. The AJC requested an interview with Tumlin, but he’s not gotten back to us either.
