In what they call a "a first-of-its-kind Sun-Times analysis," reporters Tim Novak, Art Golab, and Chris Fusco have unearthed some eye-opening statistics about the "17 largest retirement plans for government workers in Chicago, Cook County, and the state of ...
In what they call a "a first-of-its-kind Sun-Times analysis," reporters Tim Novak, Art Golab, and Chris Fusco have unearthed some eye-opening statistics about the "17 largest retirement plans for government workers in Chicago, Cook County, and the state of Illinois." According to their research, 3,958 retired politicians, judges, school administrators, and other government employees have pensions that pay them at least $100,000 a year. Some big names are cashing in too, including Sen. Roland Burris, former Gov. Jim Thompson, former State Comptroller Dawn Clark Netsch, and former State Treasurer Judy Baar Topinka. The report points out that, in aggregate, pension payments cost state and local governments $800 million a month. (See update below.)
The piece certainly highlights some problems with the system. One example is the generous retirement packages that state lawmakers bestow upon themselves. After 20 years of government service, members of the General Assembly -- who make at least $71,000 a year for the part-time work -- can collect a pension based on 85 percent of their highest salary (compared with 75 percent for most other government workers). According to an AFSCME analysis of State Employees Retirement System data, the average monthly payout for beneficiaries of the General Assembly Retirement System (GARS) is $4,003, even though the average length of (part-time) service is only 14 years.
That being said, the article's lede -- "Want to retire with a fat pension? Get a government job in Illinois" -- is totally over the top. While those 4,000 pensions may be too large, it's important to remember that they represent slightly more than one percent of the 374,041 retirement accounts reviewed by the paper.
Indeed, the truth is that the overwhelming majority of government jobs in Illinois don't leave you with a fat pension. As we've noted before, those enrolled in the State Employees Retirement System of Illinois take home, on average, $20,436 in retirement for over 24 years of service. When you combine workers in all five pension plans, the average retired Illinois state worker gets just $17,112 a year. Of course, these figures appear nowhere in the Sun-Times piece.
The article also fails to mention that 75 percent of Illinois workers (most of whom are teachers) don't pay Social Security taxes while employed, therefore they don't get any Social Security benefits when they retire.
The problem with the pension system, which we've explored repeatedly, isn't necessarily that the packages offered are too generous -- it's lawmakers' bad habit of borrowing against the funds to cover other expenses (and avoid raising the income tax). On that note, state legislators ought to look to their own generous benefits calculations before pushing teachers and other moderate-income state employees into a two-tiered system.
Apparently, today's Sun-Times article is the first in a four-part series. It would be nice to see them call out lawmakers' pension-relate gimmicks and double talk more explicitly in future installments.
UPDATE (4:45 pm): After a back-and-forth with Anders Lindall at AFSCME Council 31, we now realize that the $800 million per month figure flaunted by the Sun-Times is misleading as well. It seems the paper conflated the total of all benefits paid out each month to the 374,000 beneficiaries with the amount that must be covered by state and local taxing bodies. The pension systems generate revenue through three sources -- employer contributions, employee contributions, and investment gains.The latter two don't cost the state any money. As such, that total cost is inflated.