TUA’s annual study of the top Illinois pensioners was featured on CBS Chicago WBBM Newsradio. To listen to the story, click on the player below.
[audio:https://www.taxpayersunitedofamerica.org/wp-content/uploads/audio/pensions-tafoya2-apr30.mp3|titles=Jim Tobin on WBBM Newsradio]
CHICAGO (CBS) – A taxpayer group that monitors the state’s pension problems said there are more retired state workers than ever drawing pensions of more than $100,000 per year.
Taxpayers United of American said more than 11,000 people receive six-figure pensions from the state, and by 2020, that number will balloon to 25,000.
The anti-tax group’s annual report also said more than 78,000 state pensioners receive more than $50,000 a year.
TUA founder Jim Tobin said, at the rate things are going, Illinois will not be able to sustain payments in the long-run.
“These people are … contributing very small amounts into their million-dollar pension payouts, and expect us – the taxpayers – to work until we drop so they can retire in their 50s and live the Life of Riley on our dollars,” Tobin said. “It’s an obscene, immoral system.”
Tobin said the pension reforms approved by the Illinois General Assembly and the governor last year are not enough. He said state workers need to pay more into their pensions and their health care premiums.
The TUA report pointed out educator Larry K. Fleming, who retired at age 55, receives more than $258,000 a year in state pensions, and stands to collect more than $11 million in his projected lifetime.
“He paid a whopping $326,000, or 2.8 percent of his estimated lifetime payout,” Tobin said.
View Release as PDF
CHICAGO—Taxpayers United of America (TUA) today released the results of their updated study of the top pensioners of Illinois state pension funds, including SURS, TRS, IMRF, and GARS.
“Illinois leaders, Gov. Patrick Quinn (D), Michael Madigan (D), and John Cullerton (D), insist that we have a revenue problem,” stated Jim Tobin, president of TUA. “They point to the so called pension reforms passed last year, which have not curbed the growth of unfunded liabilities and in fact, Illinois’ government pension liabilities have grown to $187 billion.”
“It is unconscionable that these lawmakers, also known as The Most Notorious Tax Villains, support increasing the state income tax on as many as 85% of Illinois through a graduated income tax, or at the very least, making the ‘temporary income tax surcharge permanent.”
“It has never been clearer that the job-killing policies of raising taxes to prop up the gold-plated government pensions, and the union votes that follow, are more important to these Tax Villains than the future of Illinois itself.”
“How can any government bureaucrat look at the individual pension payouts and deny that this system is unsustainable? There are over 11,054 state pensioners now receiving more than $100,000 per year. By the year 2020, there will be 25,000. There are over 78,526 state pensioners receiving annual pension payments over $50,000. These lavish pensions are funded by taxpayers who get an average Social Security pension of about $15,000.”
“Illinois still has the second highest unemployment rates at 8.4%, the second highest property taxes in the country, and the lowest rating in the country for its general operating bonds. The tax and spend Tax Villains responsible for the financial fiasco need to be fired at the ballot box in November.”
“What does $187 billion in unfunded pension liability look like to Illinois residents? Well, I’m sure you all remember Tapas das Gupta, who has topped our list since we have been publishing the list. His annual pension has grown to $452,843. Of course his estimated lifetime payout gets him a spot on millionaires’ row at, $5,276,384.”
View the State of Illinois Top 200 Government Pensions as of April 1, 2014.
“Not far behind Gupta is Edward Abraham whose annual pension is $439,965, or $9,073,587 in estimated lifetime payouts.”
“There are at least five government retirees in these funds that are on track to receive more than $10,000,000 in taxpayer funded payments. One such retiree may realize $11,535,660. Larry K. Fleming retired from Lincolnshire-Prairie View District 103 at the age of 55 and is now receiving $258,163 per year. He paid in a whopping $326,507 or 2.8% of his estimated lifetime payout.”
“These are shocking amounts for taxpayers to be on the hook. And while these represent the highest pensions, it does not diminish the fact that every Illinois resident, man, woman and child, share about $15,000 in unfunded liabilities for these state pension systems alone. On top of this is the unfunded liability for healthcare and the other 600+ local pension systems that don’t participate in the statewide pension funds. It is also shocking to realize that so many government retirees will be paid not to work for more years than they are actually employed!”
“Illinois’ government employee pensions are in dire trouble with no end in sight. Government employees, like the vast majority of taxpayers should save for their own retirement. Taxpayers simply can’t afford to pay so many, so much, to do absolutely nothing and retirees can’t afford the inaction of Illinois lawmakers who are afraid to alienate the special-interest money that keeps them in office.”
“Without sweeping and immediate reform, Illinois’ pension system will collapse. We need to fire Quinn, Madigan, Cullerton, and every one of the Tax Villains who support a graduated income tax or any other tax increase intended to prop up the failed government pension system rather than muster the political courage to end unfunded pension liabilities forever.”
“Pension reform must include raising retirement age to 67, increasing employee contributions by 10%, increasing healthcare contributions to 50% for employees and retirees, eliminating all COLA’s, and replacing the defined benefit system with a defined contribution system for all new hires. It’s mathematically impossible to tax your way out of this problem. Illinois has more than 11,000 retirees collecting more than $100,000 in annual pensions; in 2020, that will be over 25,000 six figure pensioners.”
*Lifetime estimated pension payout includes 3% compounded COLA and assumes life expectancy of 85 (IRS Form 590).
President Jim Tobin and Executive Director Rae Ann McNeilly were interviewed by CBS 58 News for a story about double dipping within the Wisconsin pension system.
MADISON — A Wisconsin legislative audit shows thousands of state employees are retiring, and getting rehired by their former employer a few months later. This is what many call double dipping, collecting a pension while also collecting a paycheck from the government..
Rae Ann McNeilly, Executive Director of Taxpayers United of America (TUA), says government workers are doing this because they can practically double their income while in their 50s.
“We’ve been taxed to death so these people can live high on the hog,” complains TUA President Jim Tobin.
Pension systems in some states prohibit the practice, but Wisconsin isn’t one of those states.
Employees working for city, county or state government in Wisconsin receive contributions to their pension fund. Up until 2011, nearly 100 percent was paid by the employer — or the taxpayers. As a result of reforms, now many workers must contribute about 50 percent to their pension fund, and the taxpayers foot the other half.
When workers are eligible to retire — often at the age of 55 — they leave their job and begin collecting a monthly pension check for life. But after 30 days they can be rehired — for the same job at the same pay, and it’s all perfectly legal.
The state report said government agencies rehire pension-collecting workers because they have the skills and experience needed for the job.
The audit says most of the rehired employees only worked part-time for less than a year while also collecting a pension, but some stayed on the job — cashing both checks — for years and years.
Some blame the unions for the practice, but Wisconsin Professional Police Association Executive Director Jim Palmer says he agrees that returning to the same job after retirement sounds ridiculous.
“It’s not something we see in a law enforcement setting,” said Palmer.
He says many officers do go back to work part-time for the government after retiring, often at a technical college or smaller agency where salaries are considerably lower.
Palmer says many officers can only afford to take those jobs because they are collecting a pension check in addition to a part-time paycheck.
“If they can hire an officer who is retired and has a wealth of experience, that’s of great benefit to a local municipality,” Palmer noted.
Rep. Duey Stroebel (R-Saukville) said in an email that the latest state budget for 2013-2015 included provisions he suggested to curb double dipping, by cutting off state pension checks to anyone who goes back to work more than 26 hours per week at a government agency.
But Rep. Stroebel acknowledged that a recent state audit showed 7,856 past retirees continue to collect a full-time paycheck and a pension check from the state because they were grandfathered in before the change. He said that number does not include part-time workers, people who had been double dipping prior to January 2005, and people who returned as independent contractors.
Auditors say state agencies paid $1.7 million for goods and services provided by 266 pension-collecting retirees from 2007 to 2012.
Rep. Stroebel refused to discuss the issue on camera, and so did 50 other legislators — both Democrats and Republicans — contacted by CBS 58 about double dipping, though one scheduled an interview that he later canceled.
Sen. Glenn Grothman (R-West Bend) told us by phone the double dipping controversy had already been hashed out and both parties had reached a compromise, so lawmakers didn’t want to talk about it anymore.
“Nobody is working on that issue. The compromise wiped that issue from the table. Nobody is looking to take it any further,” he insisted, a sentiment echoed by others approached for an interview.
The bottom line is there appears to be no political will in Wisconsin to eliminate double dipping altogether.
But Tobin’s TUA group isn’t satisfied with that.
“It’s done in the politicians’ minds, but not in the minds of the taxpayers,” he added. “Much more has to be done. Wisconsin pension liabilities are growing much faster than the ability of taxpayers to pay them.”
Palmer refutes that, and says Wisconsin has a fully funded pension system this is “one of the healthiest in the country.”
The Department of Employee Trust Funds says the state paid out a total of $4.2 billion in pension benefits in 2012, an amount that’s been increasing since 2008 when the total was $3.8 billion.
TUA says the exact cost of double dipping is unknown, because Wisconsin won’t release the amount collected by each individual government retiree — information released in 33 other states.
“Stop hiding the pensions behind these secrecy laws. The taxpayers have a right to see what each person is drawing in a pension,” added McNeilly.
TUA puts together its own estimates of future pension payments for the highest paid state employees based on their publicly-available current government salary.
You can see those estimates at this link:
https://www.taxpayersunitedofamerica.org/wp-content/uploads/WI-State-Grid.pdf
