Yearly archive for 2013

Findings from TUA’s pension project on Dekalb, Illinois, are featured in this story from the Daily Chronicle. To see video of the story, click on the image below.
DeKALB – Jim Tobin says the state’s pension system will collapse unless it switches from a defined-benefit system to a defined-contribution, 401(k)-type system, similar to what many private-sector workers have.
The president of Taxpayers United of America, who spoke Wednesday in DeKalb, said the current pension system was helping to make a number of DeKalb County retirees into multimillionaires.
A 2011 investigation by the Daily Chronicle showed 101 people who had retired since 2000 and worked at a public agency in DeKalb County collected six-figure pensions annually.
“Illinois’ government bureaucrats have been feeding off taxpayers in DeKalb and all across the state for the last 30 years, receiving gold-plated pension benefits in return for the votes they give politicians,” Tobin said.
Several proposals have been made to address the shortfall in the state pension system, but state legislators have yet to make sweeping changes.
Ideas have included shifting the burden of teachers’ pensions from the state to local school districts, as is the case for Chicago Public Schools. Reducing the amount of pension payouts to which an annual cost-of-living adjustment applies has been proposed, along with increasing the retirement age for workers and increasing the amount employees must contribute to the pension system.
However, any changes that effect those already receiving benefits likely will be challenged in court.
Not everyone agrees with Tobin’s portrayal of retirees. Cathy Hill, president of the DeKalb County Retired Teachers Association, said it’s a disservice to assume every teacher receives a lucrative pension payout.
“We just don’t make that much,” Hill said. “All we want is what we were promised.”
Tobin and Taxpayers United want to change the promises in the state’s pension system. They want to raise the retirement age to 67, increase employee contributions by 10 percent, increase health care contributions by 50 percent, eliminate all cost-of-living adjustments and switch to a defined contribution system.
“They can still get their million-dollar pension payouts,” Tobin said. “We’re not cutting their pension payouts. They are just paying a little bit more. Instead of paying 3 percent or 6 percent, they’d be paying 10 percent or 12 percent.”
The group also wants to eliminate pensions for new hires and replace them with a 401(k)-style account.
Despite repeated calls for action on pensions, the 97th General Assembly adjourned without addressing the problem. This led to Fitch Ratings downgrading the state’s financial outlook from stable to negative earlier this month.
Using a Freedom of Information Act request, Tobin compiled a list of the top 100 pension earners at Northern Illinois University and local school districts, respectively. He also compiled a list of the top 20 pension earners at the city of DeKalb and the top 25 in the DeKalb County government. The lists can be found online at www.TaxpayersUnitedOfAmerica.org.
The lists include a retiree’s employer, their annual pension, how much they contributed to it and their age at retirement. Tobin and his staff created the list making the assumption of a cost-of-living adjustment of 3 percent compounded annually, and that a retiree lives to be 85 years old.
By Tobin’s count, some of the teachers and other government retirees will have collected millions of dollars. Kevin Hickey, who retired as deputy sheriff of DeKalb County in 2010, tops the county list, collecting a lifetime pension payout of more than $5 million by the time he’s 85.
“I don’t think any of these people are deserving of what they are receiving,” said Tobin, who later described the payouts as immoral. “These people are receiving million-dollar pension payouts. It’s ridiculous. It’s absurd.”
Dave Urbanek, the public information officer for the state’s Teachers’ Retirement System, said teachers outside of Chicago must contribute 9.4 percent of their salary to their pension, although some school districts pay a portion of that requirement under union contracts.
Increasing the contribution requirement would mean less take-home pay, he added.
“You have to weigh the current needs of the teacher versus their retirement needs,” Urbanek said.
Urbanek said the average teacher pension is $48,000, and that if it were extended over time, it would be $960,000. But it’s not that simple.
“The money is not put in somebody’s mattress. It’s spent … all over,” Urbanek said. “To say people are getting rich on pensions is simply not correct.”
Top local pension earners
Name    last job    annual pension    contribution    age at retirement amount collected
Joel Milner    NIU research professor    $261,396    $429,142    63    $1,341,262
Robert Hammon    School District 427 superintendent    $145,925    $149,037    58    $954,285
Kevin Hickey    DeKalb County deputy sheriff    $109,864    $129,874    56    $258,493
Kim Williams   City of DeKalb information and technology director    $94,671    $85,137    56    $238,526

Jim Tobin, President of Taxpayers United for America, was quoted in an article from the Daily Herald on a convicted sex offender receiving a taxpayer-funded pension. 
Round Lake Beach taxpayers continue to provide a pension to a now-retired police officer who was convicted of molesting a 16-year-old girl while off duty and is on a law enforcement agency’s sex-offender registry.
Citing state law and a legal opinion, Round Lake Beach Mayor Richard Hill said the village determined it can’t end Leroy Kuffel’s pension. Hill said as far as he’s concerned, Kuffel’s case is closed.
“We don’t want to exhaust any more (village) funds,” Hill said of fighting the pension, alluding to previous legal costs related to Kuffel.
Kuffel’s pension went from $52,145 to $53,709 on Jan. 1 because he now receives 3 percent raises annually for the rest of his life, according to village records obtained through a Daily Herald Freedom of Information Act request.
Similar to a vast majority of states, Illinois law dictates no pension benefits will be paid to a retired police officer convicted of any felony relating to, arising from or in connection with the job. Round Lake Beach Village Administrator David Kilbane said officials have not pursued a change in the state’s pension forfeiture regulations to cover off-duty felonies in response to the Kuffel case.
Some states have strengthened pension forfeiture rules to address police and other government workers convicted of felonies while off duty. For example, police officers in Ohio lose their pensions if convicted of certain felonies, including a sex offense against a minor, under a law revised in 2008.
Government watchdog Jim Tobin, president of Taxpayers United of America’s Illinois branch, continues to voice concerns about public employee pensions that he contends should not top an average Social Security annual income of $22,000. He said not only are most state and municipal pensions too generous, but they also should be denied to police officers and other public employees convicted of felonies, regardless of whether the crime was job-related.
“You could be convicted of murder and still get a government pension, let alone molest a 16-year-old girl,” Tobin said. “Anything goes in Illinois.”
In Illinois, towns under 500,000 in population are required by state law to establish and administer a police pension fund that’s fed by a property tax levy. The fund, typically controlled by a local board, is for the benefit of police officers, surviving spouses, children and certain other dependents, according to state statute.
Hill said he’s split on his thoughts about Kuffel’s case — a pension earned for service on the job is just that.
“If it (the conviction) was connected to (Kuffel’s) job in any way, I’d like to see it taken away,” he said.
Kuffel, 55, of unincorporated Lake Villa Township, was a police officer for 29 years when he was charged with aggravated criminal sexual abuse in April 2009 and retired soon after his arrest.
He was convicted in a Lake County circuit court jury trial in May 2010 and he was sentenced to a 60-day local jail term and 30 months of additional confinement, with release only for work and sex-offender treatment.
At trial, the girl testified she became close to Kuffel as she was ending a relationship with his son. The teen said Kuffel brought her a pair of gym shoes, paid her wireless telephone bill and took her to dinner often.
Testimony showed the 16-year-old girl and Kuffel had sex twice in February 2009 and once in March of that year. She testified all three of the sexual encounters were at Kuffel’s house.
Speaking on behalf of his client, attorney Charles Smith of Waukegan said there was no testimony about Kuffel being on the job when the molestation occurred, so he has every right to the pension that required personal contributions of 9.91 percent of his salary.
“It had nothing to do with his duties as a police officer,” Smith said of Kuffel’s conviction.
Classified as a “predator” on the Lake County sheriff’s sex-offender website, Kuffel began receiving monthly payments based on a full-year starting pension of $48,060 on Sept. 20, 2009, according to Round Lake Beach records. His final salary was $66,290 when he retired.
As of July 1, Kuffel was old enough to qualify for the lifetime 3 percent raises annually, which gave him an extra $340 per month for the rest of 2012, Round Lake Beach police pension fund documents show.
Kuffel’s pension is projected at $70,079 when he reaches the common retirement age of 65 in 2022. He would top $1 million in total pension received in 2026.
If Kuffel were in Ohio, he wouldn’t collect a pension.
Under the revisions that became law in May 2008, the Ohio Police and Fire Pension Fund’s forfeiture regulations were tightened. A criminal court judge must order a pension forfeiture if a law-enforcement officer is convicted of certain felony offenses.
Ohio Police and Fire Pension Fund spokesman David Graham said a conviction for a sex crime against a minor would result in a cop losing the annual retirement payments. An affected officer is entitled to receive any personal contributions accumulated toward a pension.
Democratic Pennsylvania state Sen. Larry Farnese soon intends to reintroduce legislation that would prevent state and municipal employees, including police, from collecting pensions if convicted of a sex offense against a minor and ordered to register with authorities under Megan’s Law, said his spokesman, Cameron Kline.
Farnese’s proposal would amend Pennsylvania’s Public Employee Forfeiture Act. Kline said Farnese began pushing for the change in 2011 after a Philadelphia newspaper’s story about retired city police officers receiving pensions after convictions for felonies that included involuntary deviant sexual intercourse and unlawful contact with a minor.
“The main reason we introduced the (pension) legislation is as a deterrent, so this does not happen again,” Kline said.