Posted on 07/11/2013 5:48:52 AM PDT by afraidfortherepublic
MILWAUKEE – Tom Barrett presides over a $1.42 billion budget and a “company” with some 8,300 employees, but with all that responsibility the Milwaukee mayor only ranks seventh on the list of top paid city employees with $145,635 annual earnings.
Perhaps more striking, his estimated $2.86 million lifetime pension also ranks seventh among his Milwaukee peers, according to a new report by Taxpayers United of America. Those figures demonstrate how the public pension system is simply unsustainable, say members of that group.
BIG MONEY: Milwaukee Mayor Tom Barrett stands to collect millions in from his public retirement pension. TUA estimates show that Barrett will draw an annual pension of $127,945, and eventually net nearly $3 million if the 59-year-old mayor retires within the next year and lives to the age of 86, life expectancy based on the all-powerful Social Security Administration’s actuarial table.
At a press conference Wednesday in downtown Milwaukee, Taxpayers United released its long list of hefty pension earners, scores of city, Milwaukee County and Milwaukee Public Schools employees who could collect at least $1.5 million in government-paid retirements.
The top salary in city government, according to data obtained by TUA through open records requests, was Bevan K. Baker, the city’s health commissioner, who earned $148,413 in 2012. The nonprofit TUA estimates Baker’s annual pension earnings at $129,890, with a lifetime pension payout of more than $2.7 million.
Milwaukee Public Schools Superintendent Gregory Thornton stands to receive the highest pension payout. Last year, his salary was $265,000, with about $75,000 in fringe benefits. TUA estimates Thornton’s annual pension at $211,500 with an estimated lifetime payout of a stunning $4.4 million.
Thomas Harding, director of Milwaukee County’s Mental Health Complex Behavioral Health Division, earned $254,068 last year, and TUA estimates his lifetime pension payout would be just under $4.3 million.
The Chicago-based TUA, one of the nation’s largest taxpayer advocacy organizations, takes a critical position on what it sees as a public pension system based on big promises that will be impossible to keep.
“Looking at the top salaries in Milwaukee and estimating pensions for those employees, it is easy to see that a system that pays so many millions of dollars to people whom do absolutely nothing is unsustainable,” said TUA president Jim Tobin, a resident of Shawano. Tobin and crew plan to release pension estimates on his hometown government as well as Green Bay and Brown County in August.
With as much as 80 percent of local taxes going to pay for salaries and benefits of government employees, Tobin said local and state governments are going to be forced to take a fresh look at their priorities.
“As more retirees have to be paid out of that 80 percent, less money is available to pay current employees for the services we need today,” he said.
Badger State’s big secret
Tobin, a vocal supporter of the efforts of Gov. Scott Walker and the Republican Party in curbing collective bargaining for most public sector employees in Wisconsin, blasted the state and its lawmakers for protecting what he calls a “secret statute” that prohibits the release of personal pension information.
That’s why TUA’s projections, criticized by public officials, can only approximate pension earnings. They come with a list of caveats and assumptions.
Projections assume the employee will work 41 years or more in the pension system and retire at age 65 with 70 percent of salary drawn from the last few years of that career. They use IRS life expectancy tables, at 86 for women. And they factor in about $26,000 annually in Social Security payments, to which those earning more than $100,000 a year are entitled. Social Security payments would add more than $500,000 to the employees retirement fund over 21 years.
Public officials have said TUA’s approximations are imperfect at best, with employees at varying experience levels on the pension spectrum and with no promise that younger employees will remain in the system.
MPS spokesman Tony Tagliavia said it appears the group’s pension approximation on Thornton is “grossly overestimated.”
“Perhaps most significantly, the superintendent had only worked in Milwaukee Public Schools for three years…and the group’s calculation assumes 41 years of MPS service,” Tagliavia said.
Rae Ann McNeilly, executive director of TUA has a curt answer to critics:
“Release the actual pensions and we won’t have to estimate,” she said at the press conference.
McNeilly said TUA sent letters to Walker and legislative leaders Wednesday asking them to change the pension privacy law.
Wisconsin Administrative Code ETF 10.70 defines “individual personal information.” Personal pension information is considered confidential under Wisconsin Statute 40.07, and is “never a public record.”
Information included in statistical reports and retirement system summaries in which “individual identification is not possible” is a matter of public record.
The state Department of Employee Trust Funds also cannot release lists of annuitants “except as required for the proper administration of the Department,” the law states. In other words, the names and the numbers associated with them aren’t anybody’s business outside the agency.
“The State of Wisconsin refuses to release actual pension payments in an effort to hide the huge payments from taxpayers. We can’t let them get away with that so we estimate the pensions for current government employees, giving taxpayers an idea of what their ‘public servants’ get paid not to work,” Tobin said.
Illinois, “arguably the most corrupt state in the nation,” Tobin said, releases full pension information, with recipients’ names.
The latest Illinois data show a retired school administrator earns nearly $400,000 per year in a state pension, and could collect more than $11.5 million in retirement checks over her lifetime after retiring at 56.
Perhaps that’s why Illinois’ public pension debt exceeds $100 billion, an unfunded liability growing at an estimated $17.1 million per day.
Like ‘bubonic plague’ to ‘E. Coli’
McNeilly acknowledges that the Wisconsin Retirement System, the Badger State’s public pension program, is one of the healthiest in the nation, nearly fully funded by existing accounting standards.
“That’s like saying instead of having the bubonic plague they only have E. coli,” she said.
When new – and truer – pension accounting rules go into effect next year, unfunded liabilities from California to Wisconsin to New Jersey are going to look worse than they are today, with return rates dropping by as much as 50 percent.
Pension reform advocates have long called for public retirement funds to peg their return rates to market levels, in the 3 to 4 percent range, as opposed to the higher troublesome rates.
That’s really not a problem in Milwaukee, where the city’s public pension system is nearly fully funded, said deputy comptroller John Egan.
A report earlier this year by Pew Charitable Trusts rated the City of Milwaukee Employees’ Retirement System the top city pension system in the United States.
In January, the system was funded at 113 percent, according to city officials.
Egan said he hadn’t seen TUA’s pension data so he couldn’t respond to the report, but as things stand now taxpayers won’t be on the hook in the future.
“It’s much like a 401(k). The money is already there,” he said.
But it’s not quite like a 401(k), where employer contributions can and do change based on market conditions. And the city’s return rate is now at 8.25 percent, according to Egan. Such rosy estimates took a beating during the recession when pension investments plummeted.
Egan pointed to the late 1990s when returns soared well into the double digits.
“You have to look at pensions from a long-term perspective,” he said. “To look at what the current rate is doesn’t make sense to me.”
But return rates that didn’t pan out and political promises over the years are the reason so many pensions are running in the red. With 12,128 retirees, another 10,714 active employees and 3,887 inactive employees, Milwaukee and its taxpayers have a lot riding on its pension investments, Pew Charitable Trust praise notwithstanding.
Tobin would like to see government pensions replaced with 401(k)-style retirement savings accounts, and employees be forced to increase contributions to their benefits – something Wisconsin’s public unions have and will continue to fight against tooth and nail.
Officials from Milwaukee County did not return requests for comment.
Well Duh!
Public ensions rise to the top as topic in Milwaukee again
FReep Mail me if you want on or off, this WI interest ping list.
1. Politicians want to get elected and reelected.
2. Unions contribute to their campaigns and gurantee turnout.
3. Politicians negotiate sweetheart deals with the unions.
4. Politicians underfund pensions so they can buy goodies for their contituents and buy more votes.
5. Before the stinky hits the fan, the politicians have moved on and/or retired.
6. Retirees and the taxpayers get screwed.
California has the 8th largest economy in the world, and yet 80% of every dime they spend is on salaries, benefits, and pensions.
These public employee unions will eventually bring all of the States down.
Perhaps the real reason why public-sector pension costs have not been tackled is that the full bill has never been revealed to taxpayers.
http://www.economist.com/opinion/displaystory.cfm?story_id=13988606
When I receive my property tax bill there is a pie chart showing where the money is allocated. A big piece of the pie is always public schools. However, that piece of the pie is never cut to show how that money is spent on schools.
I can understand “retiree” and “active employees”, but what the heck is an “inactive employee”?
Employees confined to "rubber rooms"?
“....but what the heck is an “inactive employee”?”
Most of them?
It is nothing more tham Dem money laundering on public dime:
1. Dems want to get elected and reelected.
2. Unions contribute to their campaigns and gurantee turnout.
3. Dems negotiate sweetheart deals with the unions.
4. Dems underfund pensions so they can buy goodies for their contituents and buy more votes.
5. Before the stinky hits the fan, the Dems have moved on and/or retired.
6. Retirees and the taxpayers get screwed.
LOL. Funny, but too bad it’s true. The more union employees, the more money that gets funneled to Democrat campaigns and the higher the salary of the “management”. So its a win/win for these folks to hire as many people as they can get away with, even if most of them sit around shuffling papers for no reason. More likely, they spend time harassing business owners and others seeking permits and such.
In San Diego, the roads and sewers are falling apart, but we have plenty of city employees who sit around all day calculating how large their pensions will end up being.
And they are worth EVERY penny we spend on them, aren’t they?
*SPIT*
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