Adam Andrzejewski: The “Pension Palace” for Illinois Lawmakers

Posted By on April 3rd, 2016

http://www.forbes.com/sites/adamandrzejewski/2016/03/31/the-pension-palace-for-illinois-lawmakers/#2e25ae144d20

Nobody knows how to game the system for personal gain like an Illinois lawmaker. The political class voted themselves tens of millions of dollars in lifetime pension payouts. It’s time end their ‘pension palace.’

Illinois lawmakers have one of the sweetest retirement deals on planet earth. It’s supposed to be a ‘part-time’ job in the general assembly, but now taxpayer funded legislator pension costs exceed most base salaries. Last year, taxpayers paid a whopping $71,818 per legislator ($15.8 million in FY2015) to fund their ‘golden parachute’ retirement plans. See the top all-time General Assembly Retirement System pensions here.

At OpenTheBooks.com, we looked at who’s receiving what, when and for how long. The results would make Public Enemy #1, the 1930s bank robber John Dillinger, blush. For example, the #1 all-time pension goes to a 31-year long-forgotten state senator. Retiring from Springfield in 2000, with a pension spiking stop at the Chicago schools, Arthur Berman (D) now takes $19,652 a month ($235,824) in annual pension – nearly four times more than he ever made as a Springfield lawmaker.
 Here are just some of the Illinois lawmaker ‘big-dogs’ from both parties:
    • Retired Chicago Mayor Richard J. Daley (D) makes $132,384 a year in state lawmaker pension – from a short eight-year ‘career’ as a state senator (plus some pension spiking tricks).
    • Former Governor Jim Edgar (R) costs taxpayers $337,816 per year: a $156,324 pension, plus an $181,492 salary (FY2013) at our flagship University of Illinois at Champaign.
    • In 2010, former Governor George Ryan (R) had a $197,028 annual pension ($16,419/month), but it was stripped away by the successful public corruption prosecution conviction.
 Even former Speaker of the House Denny Hastert (R) cashed in for a $28,020 ($2,335/month) legislative state pension before heading off to his congressional career.

Both Democrats and Republicans have engineered a system of compliance and largesse – give no pain to party leadership and the lawmaker gets all the gain. As soon as lawmakers ‘retire,’ they move into a pension palace.

Of course, even the losers get into pension palace. Consider the ‘casualties’ of the 2014 elections:

  • Governor Pat Quinn (D) lost re-election and immediately started collecting $133,164 ($11,097/month). Quinn was also a previous treasurer and lieutenant governor.
  • State Treasurer Dan Rutherford (R) lost in the republican primary for governor and immediately started collecting $132,624 ($11,052/month). Rutherford was a previous state representative and senator since 1993.
  • House Minority Leader Tom Cross (R) lost the race for state treasurer and immediately filed for his $81,012/year ($6,751/month) pension. Cross was a state representative since 1993.
  • State Senator Kirk Dillard lost two republican primary gubernatorial elections, served in the state senate from 1994-2014, and filed for his state pension: $6,831 per month ($81,972/year).

Widely reported in 2011, former State Treasurer and State Representative Dawn Clark-Netsch (D) paid back $10,000 from her pension to the state. She thought the benefits were too lucrative and inappropriate.

Yet, Illinois politicians who feel such remorse are rare. For example, former State Representative Judy Erwin (D–Chicago) spent ten years in the house and then was able to spike her pension with an appointment to the Board of Higher Education with a salary of over $191,000 annually. Edwin’s pension is now #3 on our list in FY2015: $164,004 per year ($13,667/month).

Another example is the former State Representative Gary Hannig (D) who served ten years through 2009. In the same year, Hannig took the top job at Illinois Department of Transportation paying $150,228 per year. He stayed only 27 months, just enough time to pump his pension to $150,960 annually ($12,580/month). Then-Governor Pat Quinn rehired Hannig at nearly $150,000 in a new position – as his Director of Legislative Affairs. All told, Hannig was making $300,000. Not bad for a ‘public servant.’

New Governor Bruce Rauner (R) and 37 legislators – first led by State Representative Tom Morrison (R) in 2011 – refused to participate in the lawmaker pension plan. That’s a full one-fifth of the Illinois General Assembly – from both parties. These declinations saved Illinois taxpayers tens of millions of dollars in future payouts.

Incredibly, the General Assembly Retirement System is only 16.8% funded (FY2015). So despite hundreds of millions of taxpayer dollar funding over the years for a very small number of participants, it just wasn’t even to satisfy lawmaker greed. Taxpayers are on the hook for an even bigger future bill.

In Illinois, the pension palace is one part of the housing bubble that never burst. But, when it does, everyone in the state but the beneficiaries will pay.

Update:  In 1995, State Rep. Dave Leuchtefeld (R) was the first to opt out of the General Assembly Retirement System. In 2010, two months before Tom Morrison, State Rep. Ron Sandack (R) opted out of the pension and healthcare benefit. Sandack has since advocated for his HB138 legislation that would kill pensions for lawmakers.

Who are ‘The Big Dogs of Illinois Municipal Government 2016?’ Read our recent Forbes editorial.

Adam Andrzejewski is the founder and CEO of OpenTheBooks.com – the world’s largest private repository of public spending. This article is based mostly on our FOIA requests.

 

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