Findings from TUA’s pension project on Pittsburgh and Allegheny County are featured in this article at post-gazette.com. UPDATE: An update to the original release that this article is based on has been made here.
A Chicago advocacy group stopped in Pittsburgh on Monday to promote its campaign for scaled-back government pensions, but retirees and others said there’s more to pension figures than meets the eye.
Representatives of Taxpayers United of America are on a multistate tour to demand an end to defined benefit plans for government employees. During the first of four stops in Pennsylvania, the group provided the names and pension amounts for 85 city and Allegheny County retirees, saying the numbers show that government pensions are overly generous, straining municipal coffers and out of step with private-sector benefits.
“The math just doesn’t work for defined benefit systems,” Rae Ann McNeilly, the group’s director of outreach said. Many municipalities have contributed to unfunded liabilities with unreasonable earnings forecasts for retirement fund portfolios, she said.
Pension woes have afflicted Pittsburgh, which narrowly avoided a state takeover of its underfunded pension last year. The state pension funds for teachers and commonwealth employees also are seriously underfunded.
Taxpayers United calls itself a nonpartisan nonprofit. Christina Tobin, the group’s vice president, said it has a political action committee that’s made contributions to a handful of candidates.
The group said it obtained pension data by making Right-to-Know requests of city and county pension funds. It provided lists of 85 city and county retirees with annual pensions ranging from about $37,000 to about $180,000.
But officials said at least two of the figures — including the $180,000 attributed to retired city parking supervisor Charles Dayieb — were inaccurate.
“I don’t know where they got that one,” Mr. Dayieb, who officially retired 11 years ago but works two days a week as a store clerk, said with a laugh. Jim South, an attorney for the city’s municipal pension office, said Mr. Dayieb’s annual pension is about $27,000 a year; Mr. Dayieb put it closer to $20,000.
The 25 city police retirees with the biggest pensions receive from about $37,000 to about $52,000 annually, while their 25 counterparts from the fire department receive about $52,000 to about $72,000, the group said.
Joshua Bloom, attorney for the firefighters union, said the numbers lack context. Firefighters receive no Social Security, he said, while some worked extraordinary amounts of overtime.
In addition to naming retirees and their pensions, Taxpayers United estimated a “lifetime pension payout” for each. For the 25 city firefighters, the lifetime estimates ranged from about $1.6 million to about $2.1 million over 30 years.
Mr. Bloom said the estimates were offensive, partly because firefighters have a lower life expectancy than other demographic groups.
According to city data, former city solicitor George Specter is the non-public safety retiree with the biggest pension — about $52,000 a year.
He also draws a salary of about $115,000 as general counsel for the city’s Urban Redevelopment Authority.
Mr. Specter couldn’t be reached for comment. The agency’s executive director, Rob Stephany, said the city pension reflects Mr. Specter’s long career with the city.
Mr. Stephany said government agencies have a tough time attracting and retaining engineers, lawyers and other professionals. While their expertise is needed to protect the public’s interest, he said, they command higher salaries in the private sector.
With an annual pension of about $77,000, retired corrections officer Russell Strathen ranked fourth on the group’s list of highest-paid county retirees.
Mr. Strathen, who confirmed the amount of his pension, said he worked a lot of overtime that enabled him to “make a lot of money” and build his pension. If he hadn’t agreed to work those shifts, he said, other officers could have been forced to work overtime even if they would have rather been home with their families.
“You cannot leave inmates unattended,” Mr. Strathen said.
Mr. Strathen retired about two years ago after about 23 years on the job. He said the county could hire more officers if it doesn’t want to pay overtime to the current complement.
“I understand the public anger over it,” he said of public pensions. “You know, it’s a benefit I obviously took advantage of. It was there.”
The group wants to halt defined benefit plans for new government hires and put new workers on 401(k) plans. It also wants current government employees to begin contributing more of their salaries toward their pensions.
On Wednesday, the group will be in Harrisburg to press its demand for new pension laws and to highlight the pensions of state legislators. “There are some hefty ones there,” Ms. McNeilly said.
Findings from TUA’s pension project on Pittsburgh and Allegheny County are featured in this article at the Pittsburgh Post-Gazette. UPDATE: An update to the original release that this article is based on has been made here.
A Chicago-based advocacy group today highlighted what it called overly generous pensions to local government retirees and called on state officials to change pension laws.Government employees with defined benefit plans receive far better benefits than private-sector employees — and the plans are straining taxpayers’ ability to fund them, representatives of Taxpayers United of America said during the Pittsburgh stop on their multi-state campaign for pension reform.
“The math just doesn’t work for defined benefit systems,” Rae Ann McNeilly, the group’s director of outreach, said.
That message is familiar in Pittsburgh, which narrowly avoided a state takeover of its underfunded pension fund last year. The state pension funds for teachers and commonwealth employees also are serious underfunded.
Taxpayers United provided lists of city and Allegheny County government retirees who receive pensions ranging from $38,000 to $180,000 a year.
“What we’re doing is creating awareness,” Christina Tobin, vice president of Taxpayers United, said.
The group wants to halt defined benefit plans for new government hires and put new workers on 401(k) plans. It also wants current government employees to begin contributing more of their salaries toward their pensions.
On Wednesday, the group will be in Harrisburg to press its demand for new pension laws and to reveal the pensions of state legislators. “There are some hefty ones there,” Ms. McNeilly said.
Rae Ann McNeilly, TUA’s Director of Outreach, discussed the need for transparency in the South Carolina pension system in the following article from the Charleston Post Courier.
South Carolina’s pension system paid retirees more than $2.5 billion in benefits last year. But taxpayers whose contributions to the troubled system have ballooned over the past decade have no way of knowing who gets what.
That’s because a 2008 state law exempted pension records from the state’s Freedom of Information Act, even though other states routinely make that data public.
The information being withheld conceals possible sweetheart deals and other abuses that could drive up costs in a system struggling to close a $13 billion shortfall, taxpayer watchdogs and government transparency advocates said.
Mark Sanford, who was governor when the little-known exemption took effect, said restricting access to the records is “ridiculous” and “a bit shocking.” He said he had been unaware of it before being contacted by The Post and Courier.
“It’s totally and unequivocally flawed and wrong in that it cheats the taxpayer of seeing where their money goes,” Sanford said in an interview last week. “Yet it is in keeping with the relatively closed nature of the South Carolina political system that very jealously guards its prerogatives.”
He added, “People should be able to see how their money is being wasted.”
Public workers contribute a percentage of their wages to help fund the pension system. The state — taxpayers — contributes a match that actually is a higher rate than employees pay in.
Sam Griswold, who represents the retired government workers whose records are in question, cannot understand why the records are not public. Griswold, spokesman for the State Retirees Association of South Carolina, said he attempted to get retirees’ names and addresses as part of an outreach effort for his group. But the state denied him access to the information.
“Any state employee who makes more than $50,000 gets their name published in the newspaper,” Griswold said. “I don’t know why the same rules wouldn’t apply.”
Supporters of the public-records exemption said it is needed to protect retirees’ confidentiality.
“There’s too much chance for misuse of personal information,” said David Avant, general counsel for the Budget and Control Board, which oversees the S.C. Retirement Systems.
Avant said his 84-year-old mother, a retired teacher, receives a pension.
“We need some protection of these records from folks who could use it to their detriment,” he said.
But it’s not the rank-and-file former public servants who have watchdogs concerned.
Rae Ann McNeilly, of Taxpayers United of America, a nonprofit watchdog group based in Chicago, pointed to October newspaper reports showing a union boss in Illinois legally scored a six-figure pension after working as a public school substitute teacher for one day.
McNeilly also pointed out a so-called double-dipper: The Illinois comptroller now draws a six-figure salary while also collecting a six-figure public pension from a different post she formerly held.
“While this is egregious, the real story is in the thousands of people doing this below the radar,” she said.
Closing the records
Pension records are open in Illinois and many other states. New Jersey makes pension data available online. Two Oregon newspapers recently won a public-records court case that required that state to disclose pension data as part of a legal settlement.
Across the country, the level of disclosure varies widely, said Keith Brainard, research director for the National Association of State Retirement Administrators. Some states provide full details, while others, such as South Carolina, do not, he said.
Avant, the Retirement Systems’ attorney, said the records were considered closed by that department’s own regulations even before the Legislature’s bill restricted public access to them by law in 2008.
In response to a February public-records request from The Post and Courier, the state provided a list of monthly payments due to the 131,000 retirees and their beneficiaries in the system. Names and job descriptions were not included.
The law states: “All records of all active, retired, and inactive members maintained by the South Carolina Retirement Systems are classified as confidential records. These records are exempt from the disclosure requirements of Chapter 4 Title 30,” which is the S.C. Freedom of Information Act.
The language was a small part of a 43-page bill that dealt with the Retirement Systems’ investment expectations and set guaranteed cost of living adjustments, among other provisions.
Then-Gov. Sanford vetoed the bill — he objected to measures that would increase the systems’ shortfall, according to his May 2008 veto letter — but the Legislature overrode it.
Former S.C. Rep. Dan Cooper, the Piedmont Republican who sponsored the bill, said the S.C. Retirement Systems requested the records exemption.
“It was primarily to protect people’s privacy,” said Cooper, who resigned from office in June.
Cooper said state retirement officials tied confidentiality concerns to the Health Insurance Portability and Accountability Act, or HIPAA, the federal medical privacy law.
But Jay Bender, an attorney for the S.C. Press Association, said he doubts HIPAA applies to pension records.
“If someone is getting a disability payment, I’m not sure how that’s a medical record,” Bender said. “Citing HIPAA is widely abused.”
Avant said that “even if HIPAA didn’t specifically apply, we still have lots of confidential medical records,” including disability and health benefits. That was “one of the considerations” for closing all records, he said.
Some retirement officials also were concerned that money-managing solicitors would use the records to target people who receive large pensions, Avant said.
Griswold, who represents state retirees, took issue with that claim.
“People get solicitors calling them for all kinds of things,” he said. “I don’t know why they’re singling out retirees.”
The bill’s co-sponsor, former S.C. Rep. William Cotty, a Columbia Republican, said he was unaware of the provision blocking public access to pension records. But he sees no problem with it.
“I don’t know what benefit there is for the public to know,” said Cotty, an attorney who did not run for re-election in 2008. “Why does John Doe have a right to know what I receive out of that share?”
Members of the Legislature are entitled to public pensions.
He continued: “You’re fishing with no bait. You don’t even know what you’re fishing for.”
‘What are they hiding?’
That lack of knowledge is exactly the problem, said Pete Sepp, a spokesman for National Taxpayers Union, an independent watchdog group in Alexandria, Va.
“There might be special deals that might never come out unless details are disclosed publicly,” said Sepp, whose group has fought for congressional pension records to be open. “The state-level systems have all kinds of quirks that have been negotiated but might never see the light of day.”
McNeilly, of Taxpayers United, spelled out some of those quirks.
Douple-dippers collect public pensions and public salaries simultaneously. For example, a state worker could retire at age 55 and receive a $100,000-a-year pension, then return to work for a city.
In South Carolina, more than 22,000 employees have returned to public jobs after retiring and are receiving pensions and salaries, according to the S.C. Retirement Systems’ 2011 annual financial report.
That means double-dippers represent about 17 percent of the more than 131,000 people currently receiving pensions, according to data provided by the state.
But without pensioners’ names or positions, it is impossible to know among which departments or jobs this tactic is common.
Other abuses include “spiking,” which happens when employees sharply increase their salaries in the final years of work through 11th-hour promotions or excessive overtime.
In South Carolina, pensions are calculated with a formula that averages employees’ pay usually over their final three years of work.
In other states, such as Massachusetts, reports show public employees have tried to obtain disability pensions after fabricating injuries in league with shady doctors.
“There are millions of taxpayers in the state of South Carolina who are chipping in to these programs,” said Sepp, who has testified before Congress about pension records. “Taxpayers providing the funding are in the dark.”
Bender, the S.C. Press Association attorney, questioned how government pension records are different from salary records, which are public.
McNeilly said she sees no compelling reason for the records to remain closed.
“What are they hiding?” she said.
