Rae Ann McNeilly, TUA’s Director of Outreach, discussed Cedar Rapids’ pension payout system on KGAN CBS 2. To watch the report, click here.
(KGAN) CEDAR RAPIDS—How much money are government and city workers making during retirement?
Too much, says Taxpayers United of America.
“We don’t want to villify the people who are receiving salaries and pensions from taxpayers,” said Rae Ann McNeilly of Taxpayers United of America. “It’s to villify the system.”
A system which pays government and public city workers multi-million pensions paid by taxpayers, according to the group.
The group wants drastic pension reform. Instead of pensions for retired city council members, make them pay into a 401 K account, suggests the group. And make that financial information public.
“The question begs what are we hiding if we won’t give individual pension amounts- pension payouts,” asked McNeilly.
The state, however, says city and state retirement funds are available to the public online.
Officials from the Iowa Public Employee’s Retirement System say of the 100,000 retired workes getting a pension, the monthly income for each is about $1,200. Money partially funded by the workers themselves.
“The employee contributes to the fund, the employer contributes to the plan, and over the career, the contributions are pooled and invested,” said Donna Mueller, CEO of I-PRES.
“The trust fund with the contributions and investments pays out pensions to the members who draw pensions from I-PRES,” Mueller said.
Thursday, January 19 2012, 12:48 AM CST
TUA’s pension project on Cedar Rapids, Iowa, is featured in this article from The Gazette.
CEDAR RAPIDS — Representatives of a national group stopped here Wednesday to say it’s time for public employees in Iowa to be moved from a pension system to a less costly 401(k) retirement program like those used in the private sector.
To make its point, the Chicago-based Taxpayers United of America estimated that the lifetime public pension payouts will near or exceed $2 million each for the top 50 highest-paid city employees in Cedar Rapids and Iowa City.
Some of the payout is based on money paid into the system by the public employees.
As Cedar Rapids Mayor Ron Corbett pointed out, local governments can’t do much about employee pension arrangements because it’s a state system. And at the Statehouse in Des Moines, pension reform has not been mentioned as a priority this session, nor did Gov. Terry Branstad focus on the topic in his Condition of the State speech.
Still, Taxpayers United outreach director Rae Ann McNeilly said said defined-benefit public pension systems pay such extravagant benefits that the programs are “breaking the bank,” or will in the future. Many private-sector employers — if they offer any pension benefits at all — have moved to a defined-contribution system such as a 401(k), which typically costs employers less and doesn’t guarantee an annual payout.
McNeilly pointed to Rhode Island as one state that has worked to modify its state pension system, by raising retirement ages and incorporating a 401(k)-like feature.
She and Christina Tobin, the taxpayers group’s vice president, said elected officials and top government employees perpetuate public pension systems without question because they benefit from them. The key is to elect different people, the two said.
Tobin’s father, James Tobin, founded the taxpayers group 35 years ago. He ran for governor of Illinois in 1998 as a Libertarian Party candidate.
Iowa’s public employees pay into the state’s public retirement systems, as do taxpayers in the jurisdictions where the employees work.
On July 1, most state and local employees in the Iowa Public Employees Retirement System will be paying 5.78 percent of their income into the system, while taxpayers will be paying in an amount equal to 8.67 percent of those salaries, according to IPERS.
Meanwhile, public safety employees in the Municipal Fire and Police Retirement System of Iowa will be paying 9.4 percent of their salaries into that system, and taxpayers in their jurisdictions will be paying an amount equal to 26.12 percent of the employees’ salaries, according to the program.
Taxpayers United of America said lifetime pension payouts will exceed more than $3 million for top police and fire officials in Cedar Rapids and Iowa City because they can retire earlier and so are likely to draw payments over more years.
The group’s calculations are based on certain assumptions, such as that most public employees will draw benefits for 24 years after age 62, while police and fire officials will draw them for 30 years after age 55. Also, the group estimates that the typical IPERS employee with 35 years of service would receive an annual pension payout of 65 percent of the average of their highest three years of pay.
Some of the payout is based on money paid into the system by the public employees.
As Cedar Rapids Mayor Ron Corbett pointed out, local governments can’t do much about employee pension arrangements because it’s a state system. And at the Statehouse in Des Moines, pension reform has not been mentioned as a priority this session, nor did Gov. Terry Branstad focus on the topic in his Condition of the State speech.
Still, Taxpayers United outreach director Rae Ann McNeilly said said defined-benefit public pension systems pay such extravagant benefits that the programs are “breaking the bank,” or will in the future. Many private-sector employers — if they offer any pension benefits at all — have moved to a defined-contribution system such as a 401(k), which typically costs employers less and doesn’t guarantee an annual payout.
McNeilly pointed to Rhode Island as one state that has worked to modify its state pension system, by raising retirement ages and incorporating a 401(k)-like feature.
She and Christina Tobin, the taxpayers group’s vice president, said elected officials and top government employees perpetuate public pension systems without question because they benefit from them. The key is to elect different people, the two said.
Tobin’s father, James Tobin, founded the taxpayers group 35 years ago. He ran for governor of Illinois in 1998 as a Libertarian Party candidate.
Iowa’s public employees pay into the state’s public retirement systems, as do taxpayers in the jurisdictions where the employees work.
On July 1, most state and local employees in the Iowa Public Employees Retirement System will be paying 5.78 percent of their income into the system, while taxpayers will be paying in an amount equal to 8.67 percent of those salaries, according to IPERS.
Meanwhile, public safety employees in the Municipal Fire and Police Retirement System of Iowa will be paying 9.4 percent of their salaries into that system, and taxpayers in their jurisdictions will be paying an amount equal to 26.12 percent of the employees’ salaries, according to the program.
Taxpayers United of America said lifetime pension payouts will exceed more than $3 million for top police and fire officials in Cedar Rapids and Iowa City because they can retire earlier and so are likely to draw payments over more years.
The group’s calculations are based on certain assumptions, such as that most public employees will draw benefits for 24 years after age 62, while police and fire officials will draw them for 30 years after age 55. Also, the group estimates that the typical IPERS employee with 35 years of service would receive an annual pension payout of 65 percent of the average of their highest three years of pay.
TUA’s pension project on Cedar Rapids, Iowa, is featured in this article from Eastern Iowa Government.
January 18, 2012, 2:17 pmBy Rick Smith/SourceMedia Group News
CEDAR RAPIDS — A national “taxpayers” group stopped here Wednesday to say it’s time for the state of Iowa and Iowa’s local governments and schools to move public employees from a public pension system to a less-costly, private-sector-like 401(k) retirement program.
To make its point, Taxpayers United of America, Chicago, Ill., estimated that the lifetime public pension payouts will reach near or exceed $2 million each for the top 50 highest-paid Cedar Rapids and Iowa City city employees.
Some of the payout is based on money paid into the system by the public employees.
Rae Ann McNeilly, outreach director for the group, said the group’s hope is that an average Iowan might respond, “I’m paying out $2 million in pension benefits on my $45,000 salary,” she said.
McNeilly said such “defined-benefit” public pension systems pay such extravagant benefits that the programs are “breaking the bank” or will. Many private-sector employers — if they offer any pension benefits at all — have moved to a “defined-contribution”system such as a 401 (k) where employers’ typically pay less and the system doesn’t guarantee an annual payout.
McNeilly pointed to the state of Rhode Island as one state that has worked to modify its state pension system, which Rhode Island has done by raising retirement ages and incorporating a 401(k)-like feature into the system.
McNeilly and Christina Tobin, the taxpayers group’s vice president, said elected officials and top government employees perpetuate public pension systems without question because they benefit from them. The key is to elect different people, the two said.
Tobin’s father, James Tobin, founded the taxpayers group 35 years ago. He ran for governor of Illinois in 1998 as a Libertarian Party candidate.
Iowa’s public employees pay into the state’s public retirement systems as do taxpayers in the jurisdictions where the employees work.
On July 1, most state and local employees in the Iowa Public Employees Retirement System or IPERS will be paying 5.78 percent of their income into IPERS and taxpayers will be paying an amount equal to 8.67 percent of the employees’ salaries into the system, according to IPERS.
On July 1, public safety employees in the Municipal Fire and Police Retirement System of Iowa will be paying 9.4 percent of their salaries into the system while taxpayers in the jurisdiction will be paying an amount equal to 26.12 percent of the employees’ salaries, according to the program.
Taxpayers United of America noted that lifetime pension payouts will exceed more than $3 million for top police and fire officials in Cedar Rapids and Iowa City because those officials can retire earlier and so are likely to draw payments over more years. The assumptions built into the group’s estimates are that most public employees will draw benefits for 24 years after age 62 while police and fire officials will draw them for 30 years after age 55.
The group estimates that Dale Helling, who recently retired as assistant city manager in Iowa City, will receive about $3 million via his pension payout.
It turns out that Cedar Rapids City Manager Jeff Pomeranz, unlike other Cedar Rapids city employees, is something of an example of what Taxpayers United of America wants to see. Pomeranz does not participate in the IPERS system and instead receives deferred compensation that he puts into a 401(k) account.
