Wisconsin Reporter | Wisconsin eyes wide shut on personal pension data

Findings from TUA’s pension projects on Illinois and Wisconsin are featured in this story from the Wisconsin Reporter.
WisconsinReporterBy M.D. Kittle | Wisconsin Reporter
MADISON – Boy, that med school can really pay off.
Take Dr. Tapas K. Das Gupta, department head and chief of service at the University of Illinois-Chicago. Das Gupta tops the latest list of highest pension earners in Illinois, pulling down $439,672 in his last annual pension payment, according to Taxpayers United of America, one of the largest taxpayer advocates in the nation. The doctor expects to pocket $5.2 million in lifetime pension payments, according to TUA’s study ranking the top 200 government pensions in the Land of Lincoln.
Also on the list is Larry K. Fleming, a Lincolnshire-Prairie View School District 103 retiree at age 55 who banked a $258,163 pension payout last year. He stands to pull in nearly $12 million over a normal pension lifetime, according to the report.
Of course you can know the top 200 Illinois public pension earners all bring in more than $189,000 a year. That information is available to you because, despite a woeful public retirement system burdened by at least $90 billion in unfunded pensions liabilities, Illinois at the very least is transparent about its misery.
While Wisconsin arguably has one of the best funded defined benefit systems in government – although in real market value that may be like comparing a Dodge Neon to a Ford Pinto – the Badger State makes personal pension information off limits to the public. And that, of course, includes the state taxpayers who foot the bill for the $80 billion-plus Wisconsin Retirement System.
“Even in a state as corrupt as Illinois we can ask for individual pension information, and we did get in a timely basis,” said Jim Tobin, founder and president of Chicago-based Taxpayers United of America.
Wisconsin has codified pension privacy.
It’s all spelled out under Wisconsin Administrative Code ETF 10.70, defining “individual personal information.” Personal pension information is considered confidential under Wisconsin Statute 40.07, and is “never a public record.”
“Individual personal information is all information in any individual record of the department, including but not limited to the date of birth, earnings, contributions, interest credits, beneficiary designations, creditable service, marital or domestic partnership status, address, and social security number,” the statute states.
Information included in statistical reports and retirement system summaries in which “individual identification is not possible” is a matter of public record.
The state Department of Employee Trust Funds also is specifically prohibited from releasing lists of annuitants “except as required for the proper administration of the Department,” the law states. In other words, the names and the numbers associated with them aren’t anybody’s business outside the agency.
Rae Ann McNeilly, executive director of Taxpayers United of America, says Wisconsin hides behind its privacy statute. But it’s not alone. McNeilly said she has analyzed government pensions in 19 states and a little more than half don’t release pension-holder names and amounts.
“This isn’t just a Wisconsin problem. This is a national problem,” the pension expert said. “That’s part of the reason pension systems are able to get into so much trouble, because of a lack of transparency.” Unfunded government pension liabilities is estimated to run in the trillions of dollars.
While unions and some privacy advocates have argued such information should be kept out of the public eye, organizations such as TUA say knowing who earns what in publicly funded retirement systems is the right of the taxpayers who pay for them.
“Many pension funds stand behind the aggregate information as being transparent, but the dirt is in the details,” McNeilly said.
Case in point, Colorado, where state Treasurer Walker Stapleton was denied access when he wanted to evaluate a pension fund’s long-term viability. Stapleton, who, by law, sits on the 15-member Colorado Public Employees Retirement Association board which oversees a $39 billion pension fund, sued the board and lost.
Colorado and Wisconsin are among 18 states that keep some – or all – public pension information secret, according to Colorado Watchdog.org, one of Wisconsin Reporter’s sister bureaus.
Wisconsin Reporter on Tuesday attempted to contact several state lawmakers asking why Wisconsin keeps pension information private while so many other states shine a light. None responded to the question as of this post.
The lock on personal pension data hasn’t kept Taxpayers United of America from putting together estimates on individual pension payouts in Wisconsin.
“It is our belief that people relate to numbers when they see a name and the annual amounts they receive,” McNeilly said.
TUA’s latest report tracks the top 100 government salaries and pensions in Milwaukee. The report showed the highest paid Milwaukee city employee in 2010 was Kenneth Grams, a police lieutenant who earned total pay of $174,154. Grams total pension payout is expected to approach $3 million, in accordance with the IRS life-expectancy table.
McNeilly cautioned the pension numbers are estimates, based on salary information, which is public in Wisconsin, and the pension payout formula in the state. TUA plans to disclose updated salary and pension data for public employees in Milwaukee, Madison, Green Bay and Shawano, and their respective counties, sometime this summer.
The Department of Employee Trust Funds expects to disclose its latest Comprehensive Annual Financial Report, covering 2011, by the end of next month. Agency spokesman Mark Lamkins said the 2012 report is slated for release in late fall. Changes in the state’s collective bargaining laws delayed release of the reports, Lamkins said.

Palatine Patch | Study: Former Palatine Employees Among Top Illinois Pensioners

Findings from TUA’s Illinois pension project are featured in this story from the Palatine Patch.
palatinepatchTwo former District 15 employees and one former District 211 employee made the Taxpayers United of America list of top 200 pensioners in Illinois, according to the study that was released last week.
John G. Conyers, who retired from Palatine District 15 at the age of 57, receives an annual pension of $244,778. To date, Conyers has collected $2,014,291 in total pension payments. He is expected to receive $7.746 million in estimated pension payout over his lifetime, according to the study.
Robert A. McKanna, also retired from District 15, receives an annual pension of $191,382. McKanna, who retired at the age of 65, has received $840,556 in total pension payments to date. He is expected to receive over $4 million in total pension payments over his lifetime, according to the study.
Palatine Township High School District 211 retiree Gerald D. Chapman also made the TUA list. Chapman, who retired at the age of 57, receives an annual pension payment of $211,270 and is expected to bring in over $6.62 million in total pension payout over his lifetime.
In Illinois, six-figure pensions grew by 47 percent in one year to 9,900, said TUA president Jim Tobin in the press release. The top 200 pensions are all over $189,000 per year, according to the study.
“The purpose of our study is to put some perspective around individual pensions, to put them in terms to which the average taxpayer can relate,” Tobin said in the news release. “Illinois taxpayers, whose average household income is $53,234, and struggle with 9.3% unemployment need to know how much Illinois’ government retirees are being paid not to work and the astronomical accumulation of those payments over an average lifetime.”
Tapas Das Gupta, retired from the University of Illinois at Chicago, collected $439,672 in his last annual pension payment and will accumulate $5.2 million in lifetime pension payments.
Beverly Lopatka retired from DuPage Government High School District 88 receives an annual pension of $399,652, and should receive a lifetime payout of $11,524,643. Larry K. Fleming, retired from government school district Lincolnshire-Prairie View 103, is estimated to receive the highest lifetime payout of $11,868,155.
TUA call from sweeping reform in the pension system in Illinois. TUA estimates over 25,000 six-figure pensioners by 2020 if changes are not made, according to the TUA news release.

Daily Herald | How a retired teacher's pension adds up to $400,000

Findings from TUA’s Illinois pension project are featured in this story from the Daily Herald. The story appeared on the front page of the Herald’s print edition, viewable here.

DH_thumbSomething different appeared in the recently compiled annual list of the state’s highest paid public pensioners.
A retired suburban high school teacher was No. 4 on the list put together each year by Taxpayers United of America.
That’s unusual, considering for years the top 10 has been dominated by medical doctors who had state jobs teaching things like neurosurgery and proctology at the University of Illinois at Chicago. But this time, Beverly Lopatka’s name showed up wedged between a retired orthopedic surgeon and a retired radiologist on the list. And next to a $399,652 figure.
According to officials at the Teachers’ Retirement System, Lopatka will receive that amount in 2013 from three different state retirement benefits — including one stemming from a rule that caught several of Illinois’ legislative pension experts by surprise. Lopatka will receive $89,988 from her personal pension and another $111,543 in survivor benefits from her late husband Robert, who was a school district superintendent. She’ll also receive $198,121 from a completely legal, but little known, provision called a “reversionary benefit.”
Attempts to reach Beverly Lopatka, who now lives in another state, were unsuccessful. However, there were others who had plenty to say about the controversial benefit program.
“It sounds preposterous,” said state Rep. Elaine Nekritz, a Northbrook Democrat. “I don’t know how you get that and a survivor’s annuity. This is the first I’ve heard about this.”
That’s from a legislator so embroiled in the state’s pension reform debate that many consider her to be the leading legislative expert on pension law in Illinois.
Reversionary pensions have a tragic prologue. They are almost always chosen by a retiring public worker with a terminal disease, TRS officials said. Lopatka’s husband, a former superintendent at Community High School District 88 in Addison, was diagnosed with cancer and died in 2003, two years after retiring, according to published reports from the time. Reversionary pensions work like this: The choice has to be made upon retirement. There are no take-backs or coming in late. A retiring worker chooses a “dependent beneficiary.” That means a spouse, a child under age 22, a child of any age suffering from a physical or mental disability, a civil union partner or a dependent parent. When the retiree dies, some beneficiaries receive not only the reversionary pension but also survivor benefits, which amount to half of the retiree’s original pension.
TRS calculates a reduction of the retiring worker’s pension to cover the cost of pension payouts lasting longer than actuaries initially projected. Retirees get that slightly reduced amount until they die, then the beneficiary begins collecting that same payout. TRS officials said the reduction makes reversionary pensions “actuarially neutral.”
However, opponents believe allowing someone to take over another person’s pension after he or she dies can’t help but affect funding of the pension system.
“It’s got to throw off the actuarial tables,” said Rae Ann McNeilly, executive director of Taxpayers United. “This just further illustrates the immorality of the whole system.”
In the Lopatka case, the husband’s pension was reduced 12.6 percent, according to TRS records. Because of cost-of-living adjustments that are compounded annually, the reversionary benefit would have gained back the amount lost due to the reduction within about four years. Combined, the Lopatkas contributed $466,078.15 to their retirement fund during their careers, according to TRS records.
McNeilly’s organization wants the legislature to move all of the state’s public pension programs into a 401k-type system. They believe that will significantly reduce the taxpayers’ burden in funding pensions.
TRS spokesman Dave Urbanek said the effect of reversionary pensions on the overall fund is “not statistically significant.”
But some disagree.
“It may be statistically insignificant, but it’s not insignificant to taxpayers,” said state Rep. Darlene Senger, a Republican from Naperville. “It’s kind of a dumb benefit to have, in my opinion. Reversionary pensions haven’t come up at all in the pension debate, but what will solve this dilemma is a pension cap.”
Senger and many other legislators believe limiting the amount someone can receive as a retirement benefit will cut taxpayer costs. However, others remain opposed to that plan and argue the proposed cap is still too high.
Reversionary pensions are rare. The benefit has been around since 1947. Officials at TRS believe the benefit was the program’s original “survivor annuity.” But when survivor benefits were made part of the plan, the reversionary component was kept for special circumstances. Urbanek said there are only 188 people receiving this type of annuity out of the system’s more than 105,000 beneficiaries. Only 62 of the 102,776 beneficiaries are receiving similar benefits through the Illinois Municipal Retirement Fund, officials there said. Among retired judges, state employees, legislators and statewide officeholders, only a “handful” receive reversionary benefits, officials at the State Retirement Systems said. Of those 188 receiving TRS reversionary benefits, a search of the fund’s records only uncovered 30 others who receive the same three payments as Lopatka. And none get even half of what Beverly Lopatka receives.
Marilyn Breiding is one of those 30. The former Rolling Meadows High School speech therapist and home economics teacher retired in 2002 after nearly 34 years, though she still volunteers at the district and in the community. Her 2013 pension payout will amount to $191,068, according to TRS records. Breiding said it was difficult for her and her late husband Philip to decide on the reversionary benefit because it meant acknowledging he was going to die.
“He had cancer and he knew he wasn’t going to live much longer, so that’s how it came about,” she said. “It helps a lot, but I’d rather have him.”