Dispatches|Report: Severe fixes necessary for Illinois pensions

Taxpayers United of America’s Executive Director, Jared Labell,  was featured on Dispatches with John Biver, discussing TUA’s 10th Annual Report on Illinois State Pensions.

Conservatives have failed so miserably in the information war that this line could be spoken by a policy analyst: “For many of these [government employee] pensioners they’re already recouping all of their contributions barely over a year of retirement. They’ve already made that money back.” That’s Taxpayers United of America’s Jared Labell in the interview excerpted below.
Things will never improve fiscally or economically until conservatives get serious about reaching more of their fellow citizens about the horrendous facts about things like the legalized-theft public employee pension systems. People need to hear the message, and then be rallied into action:

Taxpayers United of America’s Executive Director, Jared Labell, was interviewed by Illinois News Network about TUA’s 10th Annual Report on Illinois State Pensions and the crushing financial impact the unfunded pensions have on Illinois’ taxpayers.
A taxpayer group has some fixes they say are severe but necessary to shore up the state’s growing unfunded pension liability.
Taxpayers United of America released their 10th Annual Report on Illinois State Pensions. The highlights include more than 15,600 state pensioners collecting more than $100,000 annually. More than 92,300 pensioners make more than $50,000 annually.
Taxpayers United of America Executive Director Jared Labell said for the top 400 pensioners the average pension contributions made over an entire career is only about $40,000 more than what the average annual pension is.
“For many of these pensioners they’re already recouping all of their contributions barely over a year of retirement. They’ve already made that money back,” Labell said.
Read more: Taxpayers United of America

Here’s a link to another post over at the Taxpayers United of America website:

Chicago Teacher Pensions Exacerbate City’s Property Tax Hikes
“The pension fund’s own analysis states that in the past decade, the number of retired and vested members now exceed active contributors. Government pension payments to CTPF beneficiaries have increased 77% in the last ten years, jumping from $751 million in 2006 to $1.3 billion in 2015. During that same period of time, the total annual return on investments swung as low as -22% in 2009 and as high as 24.8% in 2011,” said [Jared] Labell.
Read more: Taxpayers United of America

Chicago Teacher Pensions Exacerbate City’s Property Tax Hikes

View as PDF CHICAGO—Taxpayers United of America (TUA) today released the results of its study of the Chicago Teachers’ Pension Fund (CTPF). The study evaluates data collected for more than 25,000 individual pension recipients through Freedom of Information Act (FOIA) requests, analyzes the overall solvency of the pension fund, and explains how these findings relate to property tax increases for Chicago taxpayers.
“The Illinois General Assembly passed a stopgap budget that threatens to raise the state’s income tax by 30% come this winter,” said TUA Executive Director, Jared Labell. “That budget included opening the door for an additional $250 million property tax hike for Chicagoans, just to help reduce Chicago Public Schools’ budget shortfalls and pension liabilities, although it does nothing to solve the fundamental problem. And don’t forget the historic $588 million property tax increase passed by the Chicago City Council last year. Taxpayers should be alarmed by the vast sums of money flowing to retired government employees, rather than paying for current needs or services, but that’s due to decades of mismanagement by politicians and the unreasonable demands of the Chicago Teachers Union (CTU).”
According to the CTPF’s most recent Comprehensive Annual Financial Report (CAFR) for the year ending June 30, 2015, the unfunded liabilities grew for three reasons during the past twenty years: contribution shortfalls (50%), plan changes and experience (35%), and investment shortfalls (15%). There were 28,114 beneficiaries collecting CTPF pensions, totaling $1.3 billion in pension payments last year. The number of retirees have also increased by nearly one-third in the past decade. There are 29,706 active members currently contributing to the fund, which includes teachers, administrators, certified officials, and other CTPF staff. The average annual salary for an active member in 2015 was $72,565.
The pension fund’s own analysis states that in the past decade, the number of retired and vested members now exceed active contributors. Government pension payments to CTPF beneficiaries have increased 77% in the last ten years, jumping from $751 million in 2006 to $1.3 billion in 2015. During that same period of time, the total annual return on investments swung as low as -22% in 2009 and as high as 24.8% in 2011,” said Labell.
“But even with annualized return rates of 6.6% during the past ten years, the CTPF funded ratio still remains at an abysmal 51.8%, which represents a net pension liability of more than $10 billion, having increased by a half-billion dollars since the previous year,” said Labell. “These pensions are unsustainable. To fully fund these pensions, the Chicago City Council would have to drastically raise property taxes, far beyond the historic increases they have already approved, however, bankrupting taxpayers and driving property owners out of Chicago is no solution to this financial mess.”
The average retirement age for these former government employees was 61, based on the data TUA obtained through FOIA requests for this study. The average annual pension was $51,454 for these government retirees, whereas the median household income for Chicagoans is $47,831. Perhaps shocking to taxpayers, but 974 of these pensioners collect more than $100,000 annually and 14,420 beneficiaries collect more than $50,000 annually.
“The government pension system is incapable of remaining afloat without massive influxes of tax dollars. Taxpayers should not be expected to foot this bill without serious and systemic reforms to prevent future catastrophic financial conditions arising from this fiasco,” said Labell.
Former Schools Superintendent Manford Byrd tops our list for the highest current annual pension of $190,634. He paid $126,561 into the pension fund while employed, and he will collect a lifetime pension payout of more than $2.5 million, having only contributed a mere 5% to his estimated lifetime pension payout.
Former executive director of CTPF, Kevin Huber, is currently receiving an annual pension of $91,541. His estimated lifetime pension payout tops our study, totaling more than $6.1 million. He paid $235,332 into the pension fund, contributing only 4% to his estimated lifetime pension payout.
Former Deputy Schools Superintendent Robert Saddler retired in 1993 at the age of 59. His current annual pension is $169,225 and he has already collected $2,175,932 in retirement. While employed, he contributed $108,335 to his pension, which is roughly $61,000 less than his current annual pension, so he will have only contributed about 4% to his estimated lifetime pension payout.

Click here to view the list of 25,163 Chicago Teachers’ Pension Fund retirees in this study.

“Taxpayers are understandably shocked by the first round of tax hikes appearing on their property tax bills this summer,” said Labell. “Unfortunately, those property tax bills will grow exponentially worse if no action is taken.”
“According to the Cook County Clerk’s office, the average 2015 Chicago property tax bill rose by 12.8% to $3,633.19, which is more than a $400 increase from the previous year. Last year’s historic property tax hike will be implemented over the next four years, so Chicagoans haven’t even begun to feel the worst of it. Combine those scheduled increases with other proposed property tax hikes for teacher pensions and other city employees, and the result is a toxic blend of bad news for Chicago’s finances and taxpayers,” said Labell.
“Now is the time for taxpayers to talk to their neighbors, their elected officials, and other property owners. Taxpayers must demand accountability from CPS, CTU, the Chicago City Council, and Mayor Emanuel. If we do not act now, taxpayers risk being taxed out of their homes to prop up the city’s insolvent teachers’ pension fund.”

Government Pensions Gobbling Up Tax Dollars in Henry County

View as PDF Geneseo, IL – Taxpayers United of America (TUA) has released its most recent government pension study exposing individual pensions for Henry County government retirees, as well as Geneseo and Kewanee municipal, local school, and police retirees.
“There are more than 240 retired government teachers in Henry County collecting pensions that will accrue to seven-figure estimated lifetime payouts. Unlike the private sector, these government school retirees will become multimillionaires by not working and retiring on average at 57,” said Jim Tobin, President of Taxpayers United of America (TUA).
Across the five state pension funds and the Illinois Municipal Retirement Fund (IMRF), there are more than 15,661 government pensioners collecting six-figure annual pensions and more than 92,386 retirees collecting over $50,000 annually.
The median household income across Henry County is only $52,518 and the poverty rate is 11.3%.
“On average, these government pensioners will have contributed only about 9.8% to their own lifetime retirement payout. Taxpayers are on the hook for every penny of any shortfall in pension funding, whether funding the system through state income taxes or property taxes for IMRF, and the last decade has been disastrous. Forcing taxpayers to pay such a heavy portion of someone else’s retirement is criminal,” said Tobin.
“In the private sector, employees are forced to pay into Social Security for every dollar they earn, receiving an average annual pension of only $16,000 from Uncle Sam! That total pales in comparison to the amount of tax dollars siphoned away by government retirees every year.”
“More than five hundred Henry County government retirees are former IMRF employees in a county of barely fifty thousand residents. This should serve as a warning to taxpayers who are concerned about their rising property taxes, as cities like Geneseo and Kewanee in Henry County are forced by law to raise property taxes without a referendum to fund IMRF pensions,” said Tobin. “It’s legal plunder of hardworking taxpayers for the benefit of the political class.”
Jack B. Schlindwein, who retired in 2013 at age 54 from Geneseo CUSD 228, is set to receive the highest estimated lifetime pension payout in this study. His current annual pension is $116,882, and he contributed a total of $168,380 to his own pension, easily recouping his total contributions within two years of retirement. He has already collected $302,595. His taxpayer-funded pension payout will accumulate to more than $5.3 million! And his personal investment in that payout is a mere 3.2%.”
Harold E. Ford also retired from Geneseo CUSD 228, but in 2003, and at the age of 55. He currently receives the largest annual pension in the study, collecting $140,577 a year in retirement. The total contributions made to his own pension while employed, $138,952, were less than what he collects during a single year of retirement. His annual pension payments, with compounded annual cost of living adjustments, will accumulate to more than $4.4 million! His personal investment was only about 3.1%.”
Click to view the complete list of the following:

“The financial situation in Illinois is dire. Concerned residents and taxpayers must demand reforms from their local politicians and state legislators. Resolving the crisis is possible, but it won’t be an easy road, considering how many current and former government employees are entrenched in the system,” said Tobin.
“Transitioning new hires to 401(k)-style defined contribution pension plans would be a good start to halting the growth of the problem. As for the current unfunded liabilities, allowing municipalities, school districts, and other taxing districts to reorganize through Chapter 9 bankruptcy, or pursuing federal legislation to preempt the Illinois Constitution’s pension-protection clause, are both becoming very real possibilities if systemic reforms aren’t pursued soon,” said Tobin.
TUA’s most recent 10th Annual Illinois State Pensions Report contains additional data concerning the state’s government pension crisis and elaborates on further solutions to this long-term problem.