Wisconsin Reporter | Packing on the pensions

Findings from TUA’s pension projects on Milwaukee, Wisconsin, are featured in this story from the Wisconsin Reporter.
packingonthepensionsBy M.D. Kittle and Alyssa Hertig | Wisconsin Reporter
MADISON – The good people of Wisconsin’s 6th Congressional District first elected Tom Petri to serve as their representative in the U.S. House in a special election in April 1979.
Times have changed in Wisconsin and national politics, but the 6th District’s representative hasn’t.
Now into his 18th term, Petri, a Fond du Lac Republican, is a fixture of Wisconsin’s congressional delegation. He also is the beneficiary of a $174,000 annual salary and will ultimately benefit from what the National Taxpayers Union calls the “single most personally valuable perk to a Member of Congress” – his federal government pension plan.
As it stands, the veteran congressman expects to earn a pension north of $100,000 per year, based on his earnings and what would be his 36 years in Congress upon the close of his latest term.
“Congressional pensions are typically 2-3 times more generous than those offered to similarly-salaried workers in the private sector, and are even more generous than pensions for most federal workers,” the National Taxpayers Union asserts on its website.
But Petri isn’t waiting to draw a federal pension. The long-serving lawmaker came to Congress after a six-year political career in the Wisconsin state Senate.
Last year, Petri collected $14,878 from his Wisconsin Retirement System pension, in which he was vested after five years of public service.
In 2011, Petri received $14,950 in legislative pension payments, according to data from the Center for Responsive Politics.
Since 2008, the congressman has pocketed some $64,000 in state legislative pension payments, according CRP, a campaign fundraising and political information tracker. Admittedly, the pension payments are a drop in the bucket for a lawmaker whose net worth, placed somewhere between $9.52 million and $45.41 million, ranks him 22th wealthiest among his House peers, according to CRP.
Petri sees nothing wrong with cashing the pension checks he rightfully earned.
“Rep. Petri simply believes that he earned his state pension through his public service in the state legislature and he has chosen to take it at this time,” Petri spokesman Lee Brooks said in an email to Wisconsin Reporter.
But to critics, the practice of congressional members drawing government pensions while building potentially hefty federal pensions stinks of double-dipping.
That’s how Petri’s fellow Wisconsin congressman, U.S. Rep. Ron Kind, sees it.
“It does smack of a bit of double-dipping,” he told Wisconsin Reporter. “That’s an increased financial burden on taxpayers.”
Kind, who began his congressional career in 1997, is not eligible for a state public sector pension. The congressman served as La Crosse County’s assistant district attorney for about four years, and as a practicing attorney before that. He said he’s hopeful his congressional brethren will “delve into” the issue, following the lead of states that have curtailed the practice of drawing from other public pensions while still being paid to serve the public.
After eight terms in office, Kind is looking at an annual federal pension of $53,244.
A side of retirement
Petri is among three members of Wisconsin’s congressional delegation to draw a state pension, according to financial disclosure reports posted on the Center for Responsive Politics.
U.S. Rep. Gwen Moore, D-Milwaukee, in 2011 collected $13,628 in legislative pension payments, and $7,770 from the Wisconsin Deferred Compensation Fund,   a supplemental retirement savings program available to all active state and university employees. Moore served two terms in the Wisconsin state Assembly and three terms in the state Senate. Before that, she worked for the city of Milwaukee as a neighborhood development specialist and for state agencies such as the Wisconsin Housing and Economic Development Authority.
In 2010, Moore drew a $13,628 legislative pension, and $27,418 in deferred compensation. Her pension in 2009 was $12,440.
As of July 30, Moore had yet to file her financial disclosure for 2012. She asked for and received an extension to file her annual Financial Disclosure Statement Report, due by Aug. 13.
In 2011, Moore claimed her net worth was $0, with assets of between $50,001 and $100,000. The Center for Responsive Politics ranked the congresswoman 406th among House members in terms of wealth.
The 4th District congresswoman, should she retire in 2015, would draw an estimated $29,580 federal pension, based on a formula that applies years of congressional service and the average of the three highest years’ salaries upon leaving office. Other adjustments are made for age at retirement and marital status.
Moore’s office did not respond to Wisconsin Reporter’s request for comment.
U.S. Rep. Jim Sensenbrenner, R-Menomonee Falls, also sought a 90-day extension on his 2012 financial disclosure, now due Aug. 13.  The congressman, who has served the 5th Congressional District since 1979, pocketed a $29,861 state pension payout in 2011, the benefit of his decade in the state Legislature.
Sensenbrenner, who ranked 34th in the House in personal wealth in 2011 with a net worth pegged somewhere between $13.42 million and $18.98 million, according to CRP, has collected nearly $100,000 in state pension payments since 2008.
The long-time politician would collect an annual federal pension payout of well above $150,000 for 36 years of service under the old Civil Service Retirement System, which covers members of Congress elected before 1984. Members can opt out of the CSRS for the lower paying Federal Employees’ Retirement System, although few do. Sensenbrenner’s annual federal retirement check is estimated at $106,000 under the FERS plan.
In Congress, retiring lawmakers get pensions worth up to 80 percent of their $174,000 salary — or $139,200 — if they serve 32 years, according to a 2011 piece in USA Today. The average pension for 455 retired federal lawmakers is $57,590, according to the Congressional Research Service.
It’s all government money
Sarah Bryner, research director at the Center for Responsive Politics said the term “double-dipping,” is somewhat apt, although congressional members drawing state pensions are not drawing from the same funds.
“On one hand, it’s all government money,” she said. “I would say it is interesting. There is no clear-cut case of nefariousness or conflict of interest. These are people who are perfectly, legally entitled to their pension.
But Bryner said the pension data poses an important question: whether members of Congress are out of touch with their constituency.
“Sensenbrenner is good example of someone quite wealthy and collecting a (state) pension,” Bryner said.
The Wisconsin congressman, however, runs nowhere near the top earners of public pension payouts among congressional members.
U.S. Sen. Diane Feinstein, D-California, pocketed $54,925 in pension payments for her time as mayor of San Francisco, according to CRP and a recent investigation in the National Journal.  Feinstein has received about $850,000 in retirement benefits over the past two decades, according to the magazine. Feinstein ranked as the second-wealthiest member of Congress to collect a pension in 2012, according to CRP, which estimates the senator’s net worth somewhere between $42.8 million and $98.7 million.
“One lawmaker, freshman Rep. Joyce Beatty, D-Ohio, received $253,323 from her government pension last year — a sum that, combined with her congressional salary, will make her better paid than President Obama this year,” the National Journal piece noted.
U.S. Rep. Ralph Hall, at 90, is the oldest member of the House. According to the National Journal, Hall spent a decade in the Texas Legislature before beginning his hold on his congressional seat.
“The Republican (who was a Democrat until 2004) has been collecting a Texas state pension ever since. In those 32 years he earned some $1.3 million in retirement benefits. (Many years in the 1980s he didn’t list specific amounts; this analysis presumes his pension remained flat during those years.)” the magazine reported. Hall collected a pension of $65,748 in 2012.
More than 100 members of Congress collected public pensions atop their taxpayer-financed $174,000 salary in 2012, according to the National Journal examination.
Then there are the multi-public pension accruers.
Milwaukee Mayor Tom Barrett, a former U.S. representative, is eligible for an annual federal pension of around $25,000 a year for his five terms in Congress. The Democrat also earns an estimated state pension of about $7,200 per year, a benefit he collects for his service in the state Legislature. An analysis by Taxpayers United of America projects Barrett could earn nearly $3 million in pension benefits from the city of Milwaukee and in Social Security, over his lifetime, depending on age of retirement and length of life.
Some members of Congress who are eligible for a public pension choose not to collect it.
Bryner said that might send a message of fiscal responsibility to constituents, but there may be little substance beyond the symbolism.
“It doesn’t seem in most cases that a person’s pension is going to have a significant affect on their behavior in Congress,” the campaign finance tracker said.

Wisconsin Reporter | Public workers haul in millions in pensions, study finds

Findings from TUA’s pension projects on Milwaukee, Wisconsin, are featured in this story from the Wisconsin Reporter.
WIreporterBy M.D. Kittle | Wisconsin Reporter
MILWAUKEE – Tom Barrett presides over a $1.42 billion budget and a “company” with some 8,300 employees, but with all that responsibility the Milwaukee mayor only ranks seventh on the list of top paid city employees with $145,635 annual earnings.
Perhaps more striking, his estimated $2.86 million lifetime pension also ranks seventh among his Milwaukee peers, according to a new report by Taxpayers United of AmericaThose figures demonstrate how the public pension system is simply unsustainable, say members of that group.
TUA estimates show that Barrett will draw an annual pension of $127,945, and eventually net nearly $3 million if the 59-year-old mayor retires within the next year and lives to the age of 86, life expectancy based on the all-powerful Social Security Administration’s actuarial table.
At a press conference Wednesday in downtown Milwaukee, Taxpayers United released its long list of hefty pension earners, scores of city, Milwaukee County and Milwaukee Public Schools employees who could collect at least $1.5 million in government-paid retirements.
The top salary in city government, according to data obtained by TUA through open records requests, was Bevan K. Baker, the city’s health commissioner, who earned $148,413 in 2012. The nonprofit TUA estimates Baker’s annual pension earnings at $129,890, with a lifetime pension payout of more than $2.7 million.
Milwaukee Public Schools Superintendent Gregory Thornton stands to receive the highest pension payout. Last year, his salary was $265,000, with about $75,000 in fringe benefits.  TUA estimates Thornton’s annual pension at $211,500 with an estimated lifetime payout of a stunning $4.4 million.
Thomas Harding, director of Milwaukee County’s Mental Health Complex Behavioral Health Division, earned $254,068 last year, and TUA estimates his lifetime pension payout would be just under $4.3 million.
The Chicago-based TUA, one of the nation’s largest taxpayer advocacy organizations, takes a critical position on what it sees as a public pension system based on big promises that will be impossible to keep.
“Looking at the top salaries in Milwaukee and estimating pensions for those employees, it is easy to see that a system that pays so many millions of dollars to people whom do absolutely nothing is unsustainable,” said TUA president Jim Tobin, a resident of Shawano. Tobin and crew plan to release pension estimates on his hometown government as well as Green Bay and Brown County in August.
With as much as 80 percent of local taxes going to pay for salaries and benefits of government employees, Tobin said local and state governments are going to be forced to take a fresh look at their priorities.
“As more retirees have to be paid out of that 80 percent, less money is available to pay current employees for the services we need today,” he said.
Badger State’s big secret
Tobin, a vocal supporter of the efforts of Gov. Scott Walker and the Republican Party in curbing collective bargaining for most public sector employees in Wisconsin, blasted the state and its lawmakers for protecting what he calls a “secret statute” that prohibits the release of personal pension information.
That’s why TUA’s projections, criticized by public officials, can only approximate pension earnings. They come with a list of caveats and assumptions.
Projections assume the employee will work 41 years or more in the pension system and retire at age 65 with 70 percent of salary drawn from the last few years of that career. They use IRS life expectancy tables, at 86 for women. And they factor in about $26,000 annually in Social Security payments, to which those earning more than $100,000 a year are entitled. Social Security payments would add more than $500,000 to the employees retirement fund over 21 years.
Public officials have said TUA’s approximations are imperfect at best, with employees at varying experience levels on the pension spectrum and with no promise that younger employees will remain in the system.
MPS spokesman Tony Tagliavia said it appears the group’s pension approximation on Thornton is “grossly overestimated.”
“Perhaps most significantly, the superintendent had only worked in Milwaukee Public Schools for three years…and the group’s calculation assumes 41 years of MPS service,” Tagliavia said.
Rae Ann McNeilly, executive director of TUA has a curt answer to critics:
“Release the actual pensions and we won’t have to estimate,” she said at the press conference.
McNeilly said TUA sent letters to Walker and legislative leaders Wednesday asking them to change the pension privacy law.
Wisconsin Administrative Code ETF 10.70 defines “individual personal information.” Personal pension information is considered confidential under Wisconsin Statute 40.07, and is “never a public record.”
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 cannot release 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.
“The State of Wisconsin refuses to release actual pension payments in an effort to hide  the huge payments from taxpayers. We can’t let them get away with that so we estimate the pensions for current government employees, giving taxpayers an idea of what their ‘public servants’ get paid not to work,” Tobin said.
Illinois, “arguably the most corrupt state in the nation,” Tobin said, releases full pension information, with recipients’ names.
The latest Illinois data show a retired school administrator earns nearly $400,000 per year in a state pension, and could collect more than $11.5 million in retirement checks over her lifetime after retiring at 56.
Perhaps that’s why Illinois’ public pension debt exceeds $100 billion, an unfunded liability growing at an estimated $17.1 million per day.
Like ‘bubonic plague’ to ‘E. Coli’
McNeilly acknowledges that the Wisconsin Retirement System, the Badger State’s public pension program, is one of the healthiest in the nation, nearly fully funded by existing accounting standards.
“That’s like saying instead of having the bubonic plague they only have E. coli,” she said.
When new – and truer – pension accounting rules go into effect next year, unfunded liabilities from California to Wisconsin to New Jersey are going to look worse than they are today, with return rates dropping by as much as 50 percent.
Pension reform advocates have long called for public retirement funds to peg their return rates to market levels, in the 3 to 4 percent range, as opposed to the higher troublesome rates.
That’s really not a problem in Milwaukee, where the city’s public pension system is nearly fully funded, said deputy comptroller John Egan.
A report earlier this year by Pew Charitable Trusts rated the City of Milwaukee Employees’ Retirement System the top city pension system in the United States.
In January, the system was funded at 113 percent, according to city officials.
Egan said he hadn’t seen TUA’s pension data so he couldn’t respond to the report, but as things stand now taxpayers won’t be on the hook in the future.
“It’s much like a 401(k). The money is already there,” he said.
But it’s not quite like a 401(k), where employer contributions can and do change based on market conditions. And the city’s return rate is now at 8.25 percent, according to Egan. Such rosy estimates took a beating during the recession when pension investments plummeted.
Egan pointed to the late 1990s when returns soared well into the double digits.
“You have to look at pensions from a long-term perspective,” he said. “To look at what the current rate is doesn’t make sense to me.”
But return rates that didn’t pan out and political promises over the years are the reason so many pensions are running in the red. With 12,128 retirees, another 10,714 active employees and 3,887 inactive employees, Milwaukee and its taxpayers have a lot riding on its pension investments, Pew Charitable Trust praise notwithstanding.
Tobin would like to see government pensions replaced with 401(k)-style retirement savings accounts, and employees be forced to increase contributions to their benefits – something Wisconsin’s public unions have and will continue to fight against tooth and nail.
Officials from Milwaukee County did not return requests for comment.

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.