Plymouth retirement board votes to withhold former town finance director’s pension

The Plymouth retirement board voted Friday to withhold pension payments for former town finance director Michael Daley, after previously alleging that he was making too much money as a consultant to municipalities to also receive his pension of nearly $10,000 a year.

“We voted to apply his pension to the balance that he owes us,’’ said Thomas Kelley, chairman of the local retirement system.

The contentious case is being closely watched by pension officials as an example of how far a single retirement system might go to crack down on so-called double dipping by retired public workers. And the legal wrangling in the case is far from over.

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The Plymouth board wants to force Daley to give up $324,000 in income he has earned from municipal bodies through his Financial Advisory Associates Inc. consultancy since 2007. That sum is far higher than the maximum the state pension oversight board has said Plymouth could recoup.

Daley and his lawyer insist that he has broken no rules and has properly taken the pension payments due him. The state pension oversight group, the Public Employee Retirement Administration Commission, has sided with Daley.

PERAC officials point out that Daley retired before a 2009 rule change that imposed upon consultants the same limit restricting how much other public retirees can earn from Massachusetts government bodies while also receiving a pension.

Even if it were proven that Daley did exceed the earnings limit, PERAC officials said, the most Plymouth could demand back from him is his annual pension payout of $9,700.

Daley and his lawyer, Nicholas Poser, did not attend the meeting Friday. Poser declined to comment on the vote until he is informed of the details by the board. But, he said, “How could they take his pension away when they don’t have substantial evidence as to what those earnings are?”

Daley and the Plymouth board have been engaged in a protracted legal fight since 2010 over his consulting earnings. Daley has refused to disclose documents detailing those earnings.

Michael Sacco, an attorney for the Plymouth retirement system who attended the meeting Friday, said the board arrived at the $324,000 figure by obtaining public records from the municipalities Daley lists as clients on his web site.

Asked whether the board would proceed even though PERAC disagrees with its action, Sacco said, “The board has sole jurisdiction to determine whether or not there are any excess earnings.’’ He added that PERAC “did not possess all the facts” when it weighed in on the matter.

In an e-mail to Daley’s lawyer after the meeting, a copy of which was obtained by the Globe, Sacco wrote that Daley has a right to an appeal. In the meantime, his pension checks will stop Aug. 1, according to the e-mail, and he will have to start writing the town a check for his health insurance premiums, which are currently are deducted from his pension payouts.

Sacco also asked Poser again to produce the documents detailing his consulting income.