Take Kenneth Young. He’s at the top of the list.
Young, a former Hennepin County worker, collects the highest annual pension of any retiree in the county – $183,000 a year.
David Landswerk was the Superintendent of the Wayzata School District. He collects the highest annual pension for a retired educator – $176,000.
There are retired public workers from all walks of life that collect a six figure pension. Like one time Hennepin County Administrator Dale Ackmann, who gets $170,000 a year. Retired Ramsey County Sheriff Charles Zacharias collects $157,000 a year.
We counted 312 six-figure pensions in Minnesota as we checked records of the three biggest state pension programs. We looked further and found 165,000 Minnesotans received a total of $3.4 billion dollars in benefits from state and local pension plans in 2009.
Here’s how a public pension works: important to know because you help pay for it. An employee contributes 13% of their income to a pension. Their public employer contributes 14%. The money is invested and the gains from those investments make up the remaining 73% of an employees promised pension. If the investment return doesn’t match or exceed what’s needed to make up that 73%, the money must come from somewhere.
Right now, the state is $246 million short of that difference on a yearly basis. Taxpayers make up the rest. One more thing, public employees are guaranteed a return on their investment of 8%. That’s down from 8.5% last year.
Jim Tobin with Taxpayers United of America studies public pensions, including Minnesota’s. He says the state can’t keep doing this indefinitely.
Richard Maus is a typical pensioner. He’s a retired teacher from the Robbinsdale School District and collects $30,000 a year in retirement benefits. He says he contributed more than $300,000 to his pension during his career. Maus calls it a promise between him and the state. The state got his money and now it’s time they start to pay me back.
The average pension for a retired teacher in Minnesota is about $28,000 a year. Laurie Hacking runs one of the state’s three main pension plans. Hacking says the state has been disciplined, proactive and really has had fairly modest benefit levels.
When the economy crashed in 2008, lawmakers made some reforms to pension plans. Dave Bergstrom is with the MSRS, Minnesota State Retirement System. He says we reduced our overall costs by $6 billion by freezing cost of living adjustments and tweaking other benefits.
Those reforms don’t stop a select group of people from earning two, even three public pensions. It’s completely legal, state law allows it.
We knocked on doors, sent dozens of letters and found many of them reluctant to talk about doubling or tripling up. Only Ramsey County Commissioner Tony Bennett would sit down with us.
Bennett collects $54,000 a year as a retired St. Paul Cop. Another $17,000 a year for his time as a state legislator and now earns a salary of $84,000 a year as a Commissioner. When he retires, Bennett will collect a third pension that he is entitled to. That makes him what some call a triple dipper – something opponents raised when he ran unsuccessfully for reelection as a County Commissioner earlier this year. To his critics he says: “I guess I would say some of them ought to walk in the shoes of the people who have had to do them. I don’t begrudge any police officer or fireman, or soldier today who is getting a pension from anything and what they’ve had to go through”.
How many double or triple dippers are there? We looked, we checked, we can’t tell you. The state doesn’t keep track. Minnesota’s pension system is running to catch up with its’ commitments.
Representative Morrie Lanning – District 9A – wishes the general public were more tuned in. As a state lawmaker, Lanning sees potential trouble. A look at the recent Pew Center Study and you’ll see why. it reveals Minnesota pensions are 80% funded. That means, for every dollar paid to a pensioner, the state is 20-cents short. Lanning says if we don’t do the right things with regards to pensions the taxpayers are going to have to pay more in the future. Lanning thinks the state needs to look at lowering the rate of return promised to state employees.
Lawrence Martin oversees pension law at the capitol and helps write it. He sees two options: either the members or employers are going to have to pay more or there will be additional taxes for the state in the form of incomes, sales or property taxes.
Critics of public pensions suggest a private sector solution like 401K or Social Security.
Even retired teacher Richard Maus agrees, in order to keep the state’s pension plans afloat, change has to happen. Maus say’s it’s a fixable, rational, recognizable problem, but the longer the state waits, the bigger the bump it’s going to take.
The three main public pension plans are: MSRS, the Minnesota State Retirement System, TRA, Teachers Retirement System and PERA, Public Employee’s Retirement Association. Police officers, firefighters, sheriff’s deputies, correctional officers, teachers, administrators, college faculty, state employees, some Met council workers, judges, city & county workers qualify.