Work hard. Do your part. Get ahead. It's the American way.
But Dan Zook, who built a solid reputation and career as a criminal prosecutor over more than two decades, actually got punished — to the tune of $700,000 — for trying to go the extra mile.
Some might recall Zook, who joined the 4th Judicial District Attorney's Office in 1985. He prosecuted dozens of murder cases, including four death-penalty cases. One of those, for example, was the savage rape and murder in 1997 of Jacine Geilinski. In 2000, Zook won first-degree murder convictions against Lucas Salmon and George Woldt. Both are serving life terms.
During Zook's lengthy career, he participated in El Paso County's pension plan, which covers roughly 4,400 employees and retirees of the county and other agencies, including the local DA's Office. Full-time employees must join the plan. They contribute about 6 percent of their pay to the fund; employers match.
Zook took an early retirement in 2005, paying $48,000 to the pension fund for the privilege, and began collecting his benefit of $3,568 a month. But he didn't stay away for long. In 2009, he rejoined the DA's Office, and told the plan to discontinue his benefit. "The only information he received from the plan personnel is that his pension benefits would stop, and his contribution would resume during his reemployment," Zook argues in court documents. He also says that Howard Miller, the plan's executive at that time, told him he would build equity by returning to work. Miller died unexpectedly in 2012.
As a full-time employee, earning an average of $126,500 a year, Zook was required to rejoin the plan and contribute a percentage of his pay. Between 2009 and Dec. 31, 2012, when he retired a second time, Zook paid $35,000 to the pension fund and the county paid $35,000. Also during that time, Zook received annual reports that estimated his growing monthly retirement benefit. Just prior to his second retirement, his annual report stated his benefit had increased to $6,148 a month.
But Zook soon learned those extra four years of work had cost him dearly.
Plan officials told Zook he'd need to pay back pension payments collected during his first retirement and handed him a bill for $173,405 in benefits paid to him from 2005 to 2009. Adding 8 percent interest compounded annually drove the debt up to $241,264, and the amount owed grew even more by a computation known as an "actuarial equivalent" that alters the amount to current dollars. Total due: $273,547.
The plan's remedy was to dock his new retirement benefit by $2,219 a month, and to do so for life, and for the life of his wife, his beneficiary. That means the Zooks will end up paying roughly $720,000, if they live to normal life expectancies. (Zook was 61 when he retired, and his wife is seven years younger than he is.)
It also means he's receiving less than he expected in monthly benefits, about $3,500, though he worked those extra years.
"I owed more by going back to work than I made," Zook says. "Thousands of other [pension] plans don't do that."
Zook says he was never told he would have to repay the amount he received during his short-lived retirement. "I wouldn't have gone back to work. I never would have done that," he says, adding he would have insisted on working only part-time so that he didn't have to rejoin the plan. "They need to tell you when you come back to work, 'It's going to cost you.' This is so unconscionable."
The county's $323.7-million pension fund was about 76 percent funded as of January 2016, according to the most recent actuarial study available. In 2015, it failed to return the 8 percent investment on which future payments are based, the report said; it made 6.3 percent instead. The pension is overseen by a five-member board comprised of two citizens appointed by county commissioners, two employees elected by the plan's active members and the county treasurer. The board is autonomous and gets little, if any, oversight from commissioners.
Commissioner Peggy Littleton, for example, who's been in office six years, tells the Independent in an email, "I have not been made aware of this [Zook's case] by staff." And apparently there's no reason she should be. County Attorney Amy Folsom says via email the retirement board is "a separate entity" from the county.
Zook has responded to his debacle as you might expect: He's filed a lawsuit.
He's represented by his brother, David Zook, who worked for the DA's office from 1973 to 2005 before retiring. (In the 1990s, Dave Zook helped investigate and bring to justice the pension fund's manager and consultant, Mike Witty, who stole hundreds of thousands of dollars from the fund and its beneficiaries. Witty went to prison but has since been paroled.)
"It's totally unfair," says David Zook about his brother's case, calling it a case of "unjust enrichment" for the fund.
Still, Fourth Judicial District Judge Jill Brady sided with the pension fund; the Zooks filed an appeal to the Colorado Court of Appeals in September.
Pension fund executive Thomas Pfeifle declined to comment, citing ongoing litigation. In court papers, the pension fund argued its rule is clearly stated in the plan: "In the case of reemployment of a retired member who received any pension payments prior to a reemployment, the pension payable upon his subsequent retirement shall be reduced by the actuarial equivalent of the pension payments ... he received prior to his normal retirement date."
The plan has spent $188,220 in legal fees and court costs so far on the Zook case, of which $64,828 has been reimbursed by its insurance carrier, Pfeifle reports.
In her ruling, Judge Brady wrote, "Essentially plaintiff wants a different plan" and noted the plan's rule is unambiguous.
It's not the first time the Zook brothers have tangled with the plan. They sued in 2008 over a different rule that allows those who leave the plan to buy their way back in when they return. Neither was told of that rule either when each took a brief absence from full-time employment in the 1980s. They lost that case too.
Asked if they should have studied the rules more closely, Dave Zook says, "How many people do? Nobody does that. It didn't even occur to us." In fact, he named past pension board members who themselves didn't know about the payback rule.
"If a person were alert and didn't trust the plan and thought it could be an unconscionable plan like this is, you could have researched it and looked into it," he says. "But we didn't, and nobody else does either, I guarantee you."
Because his pension was reduced by the payback deduction, Dan Zook went back to work in 2013. He served as lead prosecutor in the 18th Judicial District Attorney's Office's death-penalty case against Aurora theater shooter, James Holmes, who killed 12 people and injured 58. Holmes is serving life in prison.
Dave Zook says county commissioners should keep an eye on the plan. "They should monitor and make sure it's the plan they want," he says.
Is it fair, he asks, to penalize a faithful employee with a lifetime grab on his pension checks?
"When Dan signed up the last time, he was told his [pension] benefit was going to stop, but that's it. That's all they told him," Dave Zook says. "Now he's paying back $719,000 when the original debt was $170,000."