Findings from TUA’s pension project on Las Vegas, Nevada, are featured in this story from KTNV Channel 13 Action News. To see video of the story, click on the image below.
Las Vegas, NV (KTNV) — A government watchdog group is sounding the alarm about what they call Nevada’s “lavish” pension system.
Taxpayers United of America says Nevada’s generous pensions have the potential to bankrupt the state if they continue.
While exact pension payouts are not made public, the group says their own math estimates thousands of public workers stand to earn hundreds of thousands of dollars each year in retirement.
“They are excessive amounts. They are excessively high and the word staggering keeps coming to mind,” says Rae Ann McNeilly of Taxpayers United of America. “This is an unsustainable system and would be ultimately crushing taxpayers and city and state budgets.”
The group says Nevada has the most generous pension program of the 14 states they have looked at so far.
They advocate phasing out pensions and moving towards a more sustainable 401-k system like many private companies have already done.
For more on the report including estimated pensions for the top 100 public workers, visit Taxpayers United of America’s website.
Finding from TUA’s pension project on Las Vegas, Nevada, are featured in this article at the Las Vegas Sun.
While the state retirement system appeals a court order to release individual pension data, a privately funded nonprofit group has taken it upon itself to estimate pensions for hundreds of public employees throughout local and state government.
And though many of the group’s results are fairly astronomical, they are not completely accurate — a fact that even Taxpayers United of America, the report’s author, concedes.
The data, released Monday by Taxpayers United, assumes employees reach their fully vested retirement potential (which earns them an annual pension equal to 75 percent of their three highest salary years) retire at 55, then live another 30 years and get an average of 3 percent in annual cost-of-living boosts.
State retirement actuarial tables say life expectancy is 82 years, most public employees quit or retire after about 20 years, and around age 64. After 20 years of employment, they are eligible for a pension equal to about 50 percent of their three highest salary years.
Here’s one example of how those small changes can account for huge differences in estimated retirement pay:
Former Rebels basketball coach Lon Kruger is at the top of Taxpayers United’s list of pension payouts to UNLV employees. Kruger earned $606,000 in gross annual wages during his tenure at UNLV. By the Taxpayers United spreadsheet, his estimated annual retirement payment would be $466,000, earning him $17 million over the life of his retirement.
But if you put Kruger’s numbers into the “benefit calculator” on the state Public Employees Retirement System website, you get a different number. It estimates his annual payment around $113,000, if he retires at 65. Then if he lives to 95 and gets a 3 percent bump each year, his total earnings would be about $5.5 million. If he lives to 82, the amount is $2.7 million.
Kruger, who turns 60 in August, now is head coach of the Oklahoma Sooners.
Dana Bilyeu, executive officer of the Nevada Public Employees’ Retirement System, noted that the average annual payment to public employees in the system is $29,000. That compares to about $22,000 for those who receive Social Security retirement benefits. Public employees do not contribute to or earn Social Security.
“This is extreme in every single scenario,” Bilyeu said of the Taxpayers United estimates. She added that the PERS actuarial tables — which take into account life expectancy, retirement age and other factors — would have been readily available to the group.
Rae Ann McNeilly, outreach director for Taxpayers United of America, said the point of making the estimates was to show “how the system allows for outrageous pensions that the taxpayers just can’t sustain.”
“And the reason for them is to keep the union bosses and elected officials in power,” she added. “That’s the game that they play. They make it sound like it’s for the employees and the children. It’s not.”
She would like to see Nevada enact a law to put new hires in 401(k) retirement plans.
McNeilly has some support. A push for more austerity by Clark County commissioners in recent years has bolstered county staff to take tougher stands in union contract negotiations. A new contract with county firefighters, for instance, has for the first time language that obligates firefighters to pick up their portion of state-mandated increases in retirement contributions.
County Commissioner Steve Sisolak said McNeilly’s point was one being recognized in other states and cities.
“With life expectancy increases and earlier retirements, there’s not enough money to sustain those benefits over time,” he said. “That’s what these jurisdictions are running into.”
He recalled years when Lake Mead was so full, spillways were opened to release the water into the Colorado River below the dam. “Now look at the downturn,” he said. “You have to look ahead.”
He thinks the system should be “tweaked.” One area would be to base retirement payouts on all of an employee’s public work history, not just the three highest salary years.
McNeilly said the state retirement board could do more to make policy decisions like that easier. They could drop their appeal and release personal retirement information.
“That’s the big story here is, give us the information,” she said.
TUA’s release on Bill Zettler’s book, Illinois Pension Scam, was featured in the following article at examiner.com.
June 15, 2012. Springfield. While many states across the nation are having difficulty paying for government employee pensions, Illinois is widely considered to be in the worst shape in the country. You know it’s bad when authors start writing books about it. And according to the most recent book written on the subject, Illinois’ government employee pension system isn’t just 50th in the nation, it’s a scam.
The book is titled, ‘Ilinois Pension Scam’ by Bill Zettler. The work’s own description begins with an excerpt from Webster’s Dictionary, ‘Scam: a fraudulent or deceptive act.’
The author quotes surveys and other data to support his condemning conclusions. One statistic comes from Pew Research which found that, ‘Illinois ranks dead last with only 51% of its pension obligations funded.’ The book suggests that dilemma isn’t the result of poor financial planning alone, as the state’s public sector unions continue to insist. Along with it, the author suggests that a mutually beneficial alliance has been in control of Illinois’ pension system for nearly a half century. That alliance includes, ‘collusion between public sector unions and the politicians they have funded with member dues.’
According to the data provided, Illinois public sector unions have seen 130 benefit increases since 1970. That amounts to an average of 3 benefit hikes per year for the last 42 years. One specific result of those benefit increases is the number of 6-digit pensions among state retirees. Creating millionaires among simple municipal employees, the state’s pension system currently awards $100,000 annual payments to over 6,700 retirees. According to author Bill Zettler, that number is increasing by a staggering 20 percent per year. In less than 8 years, Illinois taxpayers will be forced to fund more than 25,000 6-digit pensions.
Taxpayer watchdog speaks-out
Showing their outrage over the bloated state employee pension system in Illinois, the taxpayer advocacy group Taxpayers United of America has been speaking out and raising awareness. In the group’s latest release, they quote Zettler’s book ‘Illinois Pension Scam’ to illustrate their argument. ‘How much pension should be paid to part-time employees with partial careers?’ TUA quotes the book.
According to Taxpayer United’s Jim Tobin, the book’s shocking statistics, “raise many questions, especially when comparing salaries and pension benefits of Illinois government employees with workers in the private sector.” By contrast, Tobin quotes Crain’s Chicago Business in confirming that only 3% of private sector workers are covered by a ‘defined-benefit plan’ such as government employee unions are. Just 20 years ago, 28 percent of private sector employees had similar plans.
The numbers
TUA extracts a number of other statistics from Zettler’s book to illustrate their point. Those details include (from Taxpayers United of America):
- The average retired government-school teacher was a part-time employee with a part-time career.
- Teachers work 170 days or 34 weeks a year or less (182 workdays minus 12 sick days or personal days, per the standard teachers’ contract). Teacher pensions that teachers describe as “modest” are four to seven times larger than Social Security.
- The average pension in the Teachers Retirement System is $46,000. Average age of retirement is 58, and the average years worked is 25.
- For private-sector employees with college degrees, a career typically begins at age 22 and ends at its earliest after 40 years at age 62 or more likely after 44 years at age 66. For government-school teachers on the other hand, less than one percent work 40 years or more before they retire, and the average teacher works only 25 years.
The book’s author Bill Zettler concludes, “Twenty-five years is not a full career nor are 170 days a full-time job.”
Taxpayers United of America isn’t the only group shining a spotlight on Illinois’ pension “scam”. Local taxpayer watchdog group For the Good of Illinois has also been critical of the cushy state government pension plans. In just two instances uncovered by the organization, one retired union teacher is receiving over $100,000 per year while the other is receiving over $100,000 per month. Each worked only one day as a teacher in Illinois to qualify for those multi-million dollar benefit packages.
For additional information, read the April 5 edition of this column, ‘Secret Memo shows No Confidence in Illinois State Pensions’.
According to Jim Tobin and Taxpayers United, one of the reasons they are publicly raising a warning is to offset the self-interested and less than honest media campaign being waged by the state’s teachers unions. Tobin’s statement concludes, ‘The Illinois Education Association (IEA) and other public unions, in their members’ letters to the media, claim that the average pensions of government state employees are “modest” and “reasonable”. TUA concludes that million dollar pensions for part-time work over a part-time career are neither “modest” nor “reasonable”.
