Illinois Press

Madison Record|Former SIUE chancellor among highest paid SURS' beneficiaries

Taxpayers United of America’s (TUA) Director of Operations, Jared Labell, was quoted by Madison Record about the recent State University Retirement pension data analysis.


Former Southern Illinois University-Edwardsville chancellor David Werner is among the highest paid beneficiaries of a state pension system that has $22.4 billion in unfunded liability.
Werner, who retired at age 62 in 2004, receives $252,704 in benefits annually from the State Universities Retirement System (SURS). To date, he has collected $2,487,936. He contributed a total of $246,018 into his retirement. At age 85, he will have received $5,724,518 in payments – 95 percent of it from taxpayers.
In its analysis of a pension fund that benefits state university staff, administrators and faculty, Taxpayers United of America (TUA) says that SURS is in “dire need” of reform.
TUA director of operations Jared Labell said that individual SURS’ retirees are some of the highest paid state employees, and therefore are the biggest pensioners.
Labell noted that for every dollar a SURS government employee contributed to their own retirement, taxpayers matched with a subsidy of $4.67.
He said that last year, a SURS financial officer warned that the system faces a risk of having assets depleted in less than 10 years.The investment official, Daniel L. Allen,, wrote in a memo that Investment policy alone could not close the plan’s deficit because it is “too large.”
While there are 69,381 active members in the politically controlled SURS defined-benefit plan, there are approximately 12,000 active members of a self-managed retirement plan that is similar to a 401(k) style plan.
Labell said the self managed plan, which has been offered to state university employees for nearly two decades, gives government employees more power over their own retirement savings fund.
He said that the self managed plan makes “retirement costs more sustainable over time, and protects taxpayers from budgetary uncertainty from year to year.”
“If the (self managed plan) option was given to all current state employees and mandatory for all new hires, this one reform would go a long way in improving Illinois’ unfunded government pension liabilities,” Labell said.
SURS statistics:
• 3,955 collect pensions in excess of $100,000;
• 15,628 collect pensions in excess of $50,000;
• The average 2016 annual SURS pension is $35,751;
• The average amount that employees paid into their own pension fund is $48,764, or 5 percent of their estimated lifetime pension payout;
• The average estimated lifetime payout is $947,211;
• The average age at retirement is 61;
• The average years of employment are 18;
• The net return on investment for SURS in fiscal year 2015 was only 2.9 percent, or $593,600,000;
• In fiscal year 2015, taxpayers paid $1,590,900,000 into the government pension fund;
• In fiscal year 2015, SURS government employees paid $340,000,000 into their own pension fund; and
• At the end of fiscal year 2015, SURS had a 42.37 percebt funded ratio with a $22.4 billion unfunded liability.
“As funding shortfalls accrue for SURS and the other government pension funds, Illinois’ political caste will be to blame for the bankruptcy of their constituents and the eventual reduced benefits for pensioners,” Labell said.
“Continuing the defined benefit pension system in Illinois guarantees that a constitutional crisis will ultimately erupt between the state constitution’s pension protection clause and the insolvency of the pension funds. The unions, bureaucrats, and politicians will argue for expanding the tax burden of Illinois residents to fund their pensions, but tax hikes and cutting of services will not solve this problem, only systemic reform will.”
In its press release, the TUA listed the top 200 beneficiaries. Werner was 55th on the list.
At the number one spot was retired professor of oral and maxillofacial surgery from the University of Illinois-Chicago, Dr. Leslie Heffez, who collects $564,298 in annual benefits. Heffez retired at 55, and his accumulated pension payout is estimated to be $22.3 million.
“Without systemic reforms, the problem of government pensions will only get worse over time,” Labell said.
“What many in the political class don’t seem to understand is that there is a breaking point, and eventually ever-higher tax increases will cause taxpayers to leave their city, county, or state for areas that are more economically friendly – commonly referred to as ‘voting with your feet.’”

Chicago Tribune|Working chumps seek outlet for anger over state financial mess

Taxpayers United of America’s (TUA) Founder and President, Jim Tobin, leading The Chicago Tax Revolt of 1977 was discussed by Chicago Tribune.


There’s a simmering resentment in Illinois and America. Sometimes it boils over, and you see anger at Donald Trump rallies. Mostly, though, you see resigned frustration in the faces of Chicago teachers walking off their jobs. There’s a sense of defeat among the South Side Oreo cookie-makers protesting at the Kenilworth home of the Nabisco CEO.
They’re the working chumps. They believed if you worked hard all your life you’d be able to enjoy a few years of happy retirement with your grandchildren. They didn’t count on having to pay $300,000 annual pensions for public workers who enjoy a slightly more comfortable retirement.
I’m not sure how old I was when I started working, but I think I was about 8. My first job was selling tomatoes in the neighborhood for nickels and dimes. Our parents raised 12 kids and Dad grew up on a farm in Michigan. We had a huge garden in our west suburban backyard. Dad would freeze it in the winter so my brothers could play hockey.
Mom and Dad would take us up to Michigan, where we’d pick green beans, blueberries, strawberries, apples, pears or whatever fruit or vegetable was in season. Then they’d can them or make preserves at home later. If the weather was good, we’d stop at the beach when the picking was done.
Sometimes we’d stop at Dairy Queen for a treat. Sometimes we wouldn’t, and we were told it was because we’d misbehaved. Years later they told us that some days they just didn’t have the money to buy us 35-cent cones.
If our parents ran our family like the state runs our government, we’d have had ice cream every day and just put it on the credit card.
My first real job was at 14 as a dishwasher in a Poppin’ Fresh Pies restaurant. You had to be 16 to work, but I took my birth certificate to the library, made a copy, and used Liquid Paper and a typewriter to change a 5 to a 3 and make me two years older so I could work.
Restaurants are a good place for young men with healthy appetites to work, and through high school and college, I worked as a cook at Wolf’s Head Inn in Indian Head Park and later as a waiter at Candlelight Dinner Playhouse in Summit.
When I graduated from college with a journalism degree I worked as a reporter for my hometown weekly newspaper, The LaGrange Sun. The paper closed a few years later, and back then the best offer I could get as a reporter was $300 a week, about $15,000 a year. It wasn’t enough, so I spent the 1990s working concrete.
To this day, every morning when I wake up, the first thought as I open my eyes is, “Thank God I don’t have to do concrete today.”
Concrete work is hard, possibly the hardest of the trades, though roofers don’t have it much better. Painters have it easiest. Plumbers, carpenters, electricians — they all get to walk on solid ground and stay clean for the most part.
Concrete guys are down in the mud, setting forms for footings and foundations upon which the rest of the house is built. The mud gets everywhere — all over your clothes, in your vehicle, in your home. There are a few nice days where you’re actually glad you get to work outside, but most of the time it’s too hot or too cold, too windy, too wet or too dry, which makes the ground too hard to dig.
After concrete, I got back into newspapers and later, public relations. Now, I’m back in newspapers. Except for a few short periods as a freelancer, I’ve been working almost every day for about 35 years.
I get upset when public servants are awarded overly generous retirement benefits. I don’t necessarily want to vilify the individuals; it’s the system that’s broken. I’m mad at the state leadership that does nothing to fix it.
This is a completely normal reaction. Most honest, hard-working people believe that others shouldn’t get something for nothing. In 1976, while I was walking the neighborhood selling tomatoes from a basket, Ronald Reagan was pounding the campaign trail with a story about Chicago’s “welfare queen.”
Reagan never mentioned her by name, but she was real. Her name was Linda Taylor, but she had 33 aliases. Pulitzer Prize-winning reporter George Bliss of the Chicago Tribune coined the term “welfare queen” to describe how she committed fraud on a grand scale, driving a Cadillac to the welfare office to collect hundreds of thousands of dollars in benefits.
People were outraged then, and would audibly gasp at campaign rallies when Reagan said how much she made. Now we’ve legalized and systematized a different kind of fraud on a magnificent scale, and taxpayers are funding outrageous benefits for a privileged class of public workers.
Forty years ago, some people in Illinois got really mad and said enough is enough. The Chicago Tax Revolt of 1977 started in the northern suburbs of Cook County when property taxes skyrocketed following a quadrennial reassessment. Protesters were led by James Tobin, a libertarian who founded Taxpayers United of America. A year later, Howard Jarvis made the cover of Time magazine for leading the Prop 13 property tax revolt in California.
I’m angry, but I’m not going to hold my breath waiting for the executive, legislative and judicial branches to solve the state’s financial crisis. I equally blame political party leadership, legislators, governors past and present, unions, lobbyists and others for the gridlock and deficit spending.
As for the present state of the state, my personal theory is House Speaker Michael Madigan doesn’t care how bad things get in Illinois. I think he’ll hold on to power until his daughter, Attorney General Lisa Madigan, runs for governor in 2019, then he’ll step down.
Gov. Bruce Rauner doesn’t care if historically black Chicago State University shuts down. I think he’s outraged that half the $4 billion Illinois spent on higher education last year paid for employee retirement benefits. By his logic, state schools should close rather than continue the death spiral of deficit spending.
Working chumps like me are left wondering, where’s the outrage? Maybe we need a “pension king,” someone who personifies the egregious abuses of the state benefits system. Maybe that person becomes a lightning rod for criticism and the subject of so much public anger that state leaders are finally forced to do something about the growing legion of retirees collecting six-figure pensions.

Madison Record|TUA: Illinois taxpayers pay exponentially more than 'multi-millionaire pensioners' into SERS

Taxpayers United of America’s (TUA) Director of Operations, Jared Labell, was quoted by Madison Record about the recent State Employee Retirement pension data analysis.


For every dollar that an employee enrolled in the State Employee Retirement System (SERS) pays into their own retirement fund, taxpayers are forced to pay $6.78, according to analysis conducted by a taxpayers’ watchdog group.
“Taxpayers are forced to pay 678% more than the multi-millionaire pensioners pay into their own SERS pension fund annually,” said Jared Labell, Taxpayers United of America’s (TUA) director of operations.
In its ongoing review of the state’s various under-funded pension plans and its calls for systemic reforms, TUA last week issued a report listing the top 200 SERS government retirees, all of whom receive in excess of $118,000 in benefits annually.
Topping the list with a $207,623 annual pension is psychiatrist Sadashiv D. Parwatikar, retired from Chester Mental Health Center. Parwatikar already has collected $2,207,725 in benefits.
“The accumulation of those (Parwatikar’s) payments, over a normal lifetime, will reach about $3.8 million,” Labell said. “Personal contributions to that gold-plated pension were only $121,041.”
He also stated that SERS, the third largest of the government employee pension funds in Illinois, is “critically underfunded” at 35.27 percent. Only the General Assembly Retirement System (GARS), which state legislators benefit from, fares worse in funding at 16.4 percent.
The TUA found that the total number of SERS pension beneficiaries is approximately 66,465. It also found that:
• 880 collect pensions in excess of $100,000;
• 13,960 collect pensions in excess of $50,000;
• The average 2016 annual SERS pension is $35,568 (Many retirees also collect social security);
• The average amount that employees paid into their own pension fund is $36,269, or 3 percent of their estimated lifetime pension payout;
• The average estimated lifetime pension payout is $1,038,456 (social security not included);
• The average age at retirement is 60;
• The average years of employment are 24;
• In fiscal year 2015, taxpayers were forced to pay $1,804,319,356 into the government pension fund;
• In fiscal year 2015, SERS government employees paid $266,139,156 into their own pension fund;
• The net return on investment for SERS in fiscal year 2015 was only 4.79 percent, or $681,377,052; and
• As of the end of fiscal year 2015, SERS had a 35.27 percent funded ratio with a $28 billion unfunded liability.
The TUA has been outspoken in its criticism of the “political class” which has favored political expediency over fixing the pension funding shortfall problem.
Labell placed blame for problems on “pressure from government sector unions to maintain the system for their own benefit and at the expense of the majority of taxpayers,” as well as “the legal precedents that have been codified into law to uphold this unsustainable system, and the legislators who find it politically expedient to preserve the status quo.”
He said that law makers and judges have a vested interest in sustaining government pensions because they too will receive multi-million payouts, even though their pension funds are poorly managed. Their pension funds are two of the worst funded in Illinois.
Funding of the state’s pension systems in order of best to worst:
Illinois Municipal Retirement Fund – 87.3 percent
State University Retirement System – 44.1 percent
Teacher Retirement System – 42 percent
Judicial Retirement System – 35.4 percent
State Employee Retirement System – 35.27 percent
General Assembly Retirement System – 16.4 percent
The state’s total unfunded pension obligations are estimated at between $111 billion and $113 billion.
“Taxpayers have paid more than their fair share for these lavish government employee benefits, and yet the unions, bureaucrats, and politicians continue to push for expanding the tax burden of Illinois residents to fund their pensions, instead of calling for reform to this broken system,” said Labell.
“As shortfalls in the funding of these government pensions mount, the political class in Illinois should expect nothing short of bankruptcy of their constituents to guarantee these egregious pension payments continue. After all, the Illinois state constitution currently protects only the government pensioners, and not the taxpayers, so there is undoubtedly a lopsided caste system in Illinois, created and expanded over many decades for the benefit of the minority of Illinois residents who are employed by the government.”
In its analysis of the top 200 SERS pensioners, the TUA found that Cindy L. Benson, retiring from Personal Services – Sworn, ties with her counterpart, James C. Morrisey, for the highest estimated lifetime pension payouts of its study. Both retired at age 50 and each could collect more than $7.6 million in taxpayer funded pension payments over the course of their retirement. Their current annual pensions are $125,539.
Kamal Modir, who retired from Singer Mental Health Center in Rockford, tops the TUA list for the highest total SERS pension collected to date at $2,652,929.
“His own payment into this extravagant government pension was a mere $101,605 – or 2.5 percent – of his estimated lifetime pension payout,” said Labell.
The TUA, as well as other pension reform advocates, support changing public pension systems from the current defined-benefit system to 401(k) style retirement savings accounts – which could only happen by amending the state constitution to remove the employee pension protection clause.
Recent attempts at pension reform have failed. A bill passed by the state legislature in 2013 was struck down by the Illinois Supreme Court last year when it sided with public unions in ruling that the state was obligated to protect public worker pensions.
Legislation introduced by Republican lawmakers this session would give retired government workers a choice in collecting benefits over several years, or cash out immediately but with a smaller lump sum. The bills remain under consideration in the House Personnel and Pensions Committee.

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Taxpayers United Of America: (TUA). is a nonpartisan, 501(c)(4) taxpayer advocacy group. Founded June 27, 1976 in Chicago, Illinois by activist and economist Jim Tobin, TUA works on behalf of taxpayers to reduce local, state, and federal taxes. In the past forty years, TUA has saved taxpayers more than $200 billion n taxes and has become one of the largest taxpayer organizations in America. Check All posts. s.

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