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In Illinois, Public Pension Benefits Are Gaining Ground On Worker Salaries

Over the past decade, the average public pension in Illinois has been gradually catching up to the average salary of employees still working.

Critics of increased benefits say this is the result of years of generous salary increases and compounded COLA increases.

Others say that increased pensions are simply the result of higher public sector salaries, which Illinois needs to pay in order to retain good employees.

The Daily Herald reports:

The average 2013 pension was $31,674 for retirees in nine statewide and metropolitan Chicago public pension systems for government workers, teachers, legislators, judges and university professors, a Daily Herald analysis shows. That’s 60 percent of the $55,120 average salary for pension fund members who are still working.

Ten years ago, the average pension was less than half of the average salary.

…

The narrowest gap between average salary and average pension is for members of retirement systems where advanced degrees and training are required.

In 2013, the average Teachers’ Retirement System pension was 69.4 percent of the average pay for those still working, according to the system’s annual comprehensive financial report.

Judges have the highest average salary — $183,998 — and highest average pension — $105,341.

The gap between average pay and average pension is widest within retirement systems with more transient employees.

The 108,814 local government employees receiving IMRF benefits in 2013 averaged pensions of $13,243. That was 34.8 percent of the system’s $38,059 average salary. However, that’s still a big change from a decade ago when the average IMRF pension was 27.9 percent of the average salary of workers paying into the system.

One lawmaker told the Daily Herald that, although the upward trend is undoubtedly real, the decreasing gap between pensions and worker salaries has slowed over recent years.

“There was a long period of time where there were rapid (pay) raises in the public sector … (and) that growth is tied to the pension formula,” said state Sen. Daniel Biss, an Evanston Democrat who helped sculpt the state’s most recent pension reform plan. “But a lot has changed and we’ve seen a dramatic slowdown, particularly in the last five years.”

Arizona Is State Most Reliant on Pension Income

Arizona pensioners receive higher benefits than the average pensioner in the U.S., and the state itself is more reliant economically on pension benefits than many states in the country, according to a new report.

From the Arizona Republic:

Traditional pensions help more than 140,000 Arizonans make ends meet in retirement by providing an average income of $1,923 a month, according to a study estimating that more than 24 million Americans receive such benefits.

The report by the National Institute on Retirement Security, which used 2012 data, suggests that Arizonans rely a bit more heavily on pensions than Americans generally. The average Arizona pension amounts to roughly $23,074 a year, compared with average yearly benefits of $19,678 across the nation.

In terms of overall pension income, economic output generated by pensions and associated tax revenue, Arizona ranks 20th among the states. It is 17th in another measure: the number of jobs supported from spending by retirees who have pensions.

In general, every $1 in pension benefits generates nearly $2 in economic output, according to the report. Retirees support the most jobs in restaurants/food services, health care and retailing.

Screen shot 2014-08-04 at 10.19.21 AM — Credit: The National Institute on Retirement Security and the Arizona Republic. (Data is from 2012.)

Higher pensions are economically beneficial to the state because retirees spend large portions of their checks on food, medicine, housing or even luxury items such as cars. Higher benefits, according to the report, leads to higher economic output.

Photo: “Entering Arizona on I-10 Westbound” by Wing-Chi Poon – Own work. Licensed under Creative Commons Attribution

Nevada PERS to Release Member Data After Years-Long Legal Fight

A three-year legal battle concluded this week when the Nevada Public Employment Retirement System (NVPERS) agreed to release extensive data on its members, including benefits, in compliance with a state Supreme Court order from April.

The data to be released, according to a NVPERS notice (also embedded at the bottom of this post):

-Date of hire

-Date of termination

-Date of retirement

-Retirement option

-Employer name

-Contributions to system

-Service credit

-Beneficiary information

-Gross benefit amount

-Base retirement amount

-Adjustments to base

-Post retirement increase amount

-Retirement stop date and reason

-Marital status

-Fund status

-Gender

The court order forces a stark change in policy for a retirement system that had kept a notoriously tight grasp on its member and retiree records since the 1970s.

But a state Supreme Court order—an order issued last December but not clarified until this month—made it clear that, while individual retiree records will remain confidential, any reports based on that data produced by NVPERS are not confidential. In the words of the court:

Where information is contained in a medium separate from the individuals’ files, including in administrative reports generate from data contained in individuals’ files, such reports or other media is not confidential merely because the same information is also contained in individuals’ files.

That means NVPERS now must turn over what it calls its “actuarial feed”, or the detailed reports—containing substantial amounts of member data—it gives to its actuarial consultants. The consultants use the data to determine benefits and make projections.

More on the “actuarial feed” from WatchdogWire:

The agency described the “actuarial data feed,” which now is to be made public, as “an extensive report always thought to be confidential between the System and our actuarial consultant protected through a confidentiality agreement which has now been determined in part to be public information.”

Geoffrey Lawrence, director of research and legislative affairs at the Nevada Policy Research Institute, said the data-feed information is vital if researchers are “to build a clear understanding about how public pension liabilities have accrued in Nevada.

…

Under Nevada public records law, personal information remains confidential. Thus, PERS emphasized, it “will NOT release any Social Security numbers, contact information (addresses, phone numbers, or email addresses), bank information, or minor child information.”

This legal fight began in 2011, when the Reno Gazette-Journal filed a public records request asking NVPERS to release data on its members, including benefit payments and work history.

NVPERS denied that request, a move consistent with the System’s long-standing interpretation of the Nevada Public Records Act—the interpretation being that all individual member and retiree records are confidential.

The Gazette-Journal subsequently filed a petition to bring the case in front of a District Court. The court eventually ruled that NVPERS did indeed have to turn over the names of its retirees and the benefits they receive, among other data.

NVPERS appealed that decision all the way to the state Supreme Court, which issued its ruling in December. But NVPERS requested another hearing, held in April, to have the court clarify exactly what records it wanted NVPERS to disclose.

The results of that hearing were released just this month.

The data to be released by NVPERS can eventually be found on Transparent Nevada.

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Photo by Bruce Fingerhood via Flickr CC License

In Louisiana, A Behind-Closed-Doors Pension Tweak Could Carry Significant Costs

It was the closing hours of Louisiana’s legislative session, and a seemingly routine bill was whizzing through the Senate and House as lawmakers were preparing to leave for their recess.

But lost in the shuffle was the fact that this bill was anything but run-of-the-mill. That’s because it included an earmark, written behind closed doors and tacked on at the last minute, increasing pension benefits for two state police officers to the tune of $300,000.

Since the pension provision was attached to a larger, unrelated bill, the provision wasn’t debated and didn’t go through the traditional legislative process of passing through committees before seeing the floor for a vote.

From the Associated Press:

In the final hours of the legislative session, state lawmakers crafted a pension law change that gives Louisiana’s state police superintendent and one other trooper a sizable retirement boost, with no public debate of the implications or the cost.

The price tag is estimated to be $300,000.

The deal was struck in a six-person legislative committee behind closed doors, with the bill’s sponsor saying he had no understanding what the law change would do and no one directly taking ownership of the proposal.

“Either somebody’s not being candid or somebody didn’t read this bill. That much is clear,” said state Treasurer John Kennedy, who has raised concerns about the legislation.

The superintendent, Col. Mike Edmonson, says the change in the way his retirement benefits will be calculated was about fairness.

However, that argument was never given a public vetting because the merits of the law change didn’t go through the traditional hearing process for legislation. Instead, it was tacked into a bill dealing with a different subject and rushed through the House and Senate as they were getting ready to go home.

The board for the Louisiana State Police Retirement System is now investigating whether the pension provision went through the proper channels before being tacked on to the larger bill and subsequently passed.

The bill’s sponsor, Senator J.P. Morrell (D-New Orleans), wasn’t aware of the details of the earmark until his staff told him. From AP:

Morrell said he doesn’t know who sought the add-on to his bill, which initially dealt with the rights of law enforcement officers under investigation. He said he was told by legislative staff that the new language was an innocuous retirement fix for law enforcement officers.

But he acknowledges he didn’t follow up.

“When someone’s hitchhiking on your bill at the last minute of session and the hitchhiker was seemingly innocuous, it was my responsibility to make sure it was innocuous and I didn’t do that,” Morrell said.

Police Col. Mike Edmonson, the beneficiary of the pension tweak, said the change in benefits was fair. But he also expressed reservation about the process that led to the change.

“I do agree that the timing, the way it comes out at the end like that, it looks like it’s something that shouldn’t have happened,” Edmonson told the Associated Press. “It was fair. It’s just unfortunate that it came out in the last point of the session like that.

The previous formula used to calculate the two officers’ benefits was left over from a now-defunct retirement plan. The new tweak in the benefits formula for the officers puts them more in line with how other current state employees’ benefits are calculated.

Photo by Daniel Foster via Flickr CC License

Some NY State Police Officers Use Private Jobs to Boost Public Pensions

Publicly employed police officers are often contracted to work private events—from keeping the peace at retail stores around Christmas-time, to keeping an eye on the crowds at music festivals.

But an investigation by a New York newspaper found that several police departments in the state are letting the overtime racked up at private events count towards an officer’s public pension—a practice which the state Comptroller’s Office says is not allowed.

From the Times-Union:

The state Comptroller’s Office says overtime reimbursed by a private company does not count toward an officer’s pension benefit.

But the Times Union found that several Capital Region police departments — including those in Colonie, Schenectady and Troy — report private duty overtime to the retirement system.

“I think a lot of people might be surprised to the extent with which this happens around the state,” said E.J. McMahon, president of Empire Center for Public Policy, an Albany think tank. “You can actually bolster your pension with time spent working in uniform on private time.”

Taxpayers should care about the practice, McMahon said, because pensions are lifelong payments backed by taxpayer dollars.

The legality of using private duty details as part of the pension calculation is murky. Several retirees are appealing the comptroller’s position in state Supreme Court.

The retirement of a Guilderland police officer who worked overtime at Crossgates Mall brought the issue to the attention of many Capital Region police chiefs. As a result, Guilderland stopped reporting private work to the retirement system and, last month, Bethlehem prohibited officers from working the jobs.

Albany and Saratoga Springs also comply with the comptroller’s view that private overtime is not pension eligible.

But several high-ranking police officials have publicly raised concerns about whether its fair to disallow private jobs when calculating pension benefits. From the Times-Union:

“Anytime a man or woman is in police uniform, they are on police duty, period,” Colonie Police Chief Steven Heider said.

Heider considers the officers on-duty, accountable to the police department and exposed to the dangers of police work.

Last year, Colonie police collected about $120,000 in reimbursements from private entities for police details, which Heider said are assigned by rotation. About 40 percent came from patrols at Colonie Center mall.

The town reported the wages to the retirement system as pension eligible.

Colonie requested guidance from the comptroller about whether to report the wages as pension eligible, but never heard back, Heider said. If the comptroller advises Colonie to stop, the town will, he said.

Of the seven police departments in upstate New York’s Capital Region, three departments allow private duty overtime to count toward public pensions. Officers in those departments have racked up nearly $200,000 in private duty overtime last year, according to the Times-Union investigation.

Photo by Giacomo Barbaro via Flickr CC License

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