Governor and State Legislator Retirement Benefits

Most people have probably heard the rumor that U.S. Congress members can retire after just one term and get their full salaries and benefits including a Cadillac health insurance benefit for the rest of their lives.

My hub “The Truth About Congress Members Pensions,” pretty well debunked those ideas, but here is the real issue that voters should be upset about. It is not U.S. legislators or the president who are cleaning up on pensions and benefits after they leave office – although they still do far better than most average taxpayers. It is the state legislators and governors, in many states, who make out like bandits – maybe that was a bad comparison . . .

Every state manages their own finances and every state has a different pension plan and benefits program for it’s elected and appointed officials, and their hired employees. In this article I will explain what the retirement benefits are for elected officials in five different states.

There simply is not space to list all the different plans every state has for their retired elected officials, and other employees, and every state is different. Some have big differences while others may have small differences compared to each other, but if you see what is happening in the five states I have chosen, it may give you an idea of things that may be happening in your own state (if yours is not one of the five reported on here) regarding pensions for retired state officials.

The five states I have chosen to highlight in this article regarding their retirement situation for their elected and appointed officials and their hired employees are Texas, Massachusetts, Wisconsin, Colorado, and California. I chose these five states because I have lived in every one of them at different times for at least a year or two, sometimes longer.

As it turns out, two of them are red states, two are blue states, and one is a swing state (purple). I don’t know if the political party in power in these particular states makes any difference in regard to their pensions and other retirement benefits programs for their state’s employees, since most of these plans are long term and most were put in place several years ago. It probably does not matter which party is in power in a state, but it is something to keep in the back of one’s mind.

One of the reasons so many government workers in some states are making out so well with their retirement is because they are double dipping. So let me explain what ‘double dipping’ means for any of my readers who may not be familiar with that phrase.

Someone who retires from their government job and then comes back to work for their own state or local government, or for a different state or local government, often in the same job they had before ‘retiring,’ or sometimes in a new capacity, and then gets paid both their retirement and a wage or salary from the government, is double dipping. Whether elected, appointed, or hired, state workers who collect both a wage and a retirement benefit from the same state or two or more different states, are double dipping. Some teachers, judges, legislators, and other types of state workers are doing this (double dipping) right now, and it is costing taxpayers dearly.

What these people are doing is barely legal, but extremely unethical. Gaming the system in this manner puts the retirement funds of all workers paying into it at risk because it is overburdened. It is violating pension laws and it is costing taxpayers, often unknowingly, millions of additional dollars every year over what it would cost to hire a non-retired employee. As you might imagine, proving that they never intended to retire from their jobs, but did so on paper for a few days essentially to give themselves a raise, is hard to prove.

Many of these people let their managers know when they tender their letter of resignation that they want to come back to work once the required 30-day separation period is over. Doing that is not considered a “good faith termination,” which is generally required by pension laws.

By letting their managers know they want to come back after the 30-day separation period, they are basically saying they do not really want to retire nor do they intend to retire. They are simply resigning as a formality to give themselves a raise. If their retirement is discovered to not be a ‘good faith termination,’ and therefore violates pension laws, there could be legal repercussions for them.

Some states are trying to pass laws to reduce or prevent double dipping, but as you might imagine, getting legislators to vote for themselves to have a tougher time double dipping is not popular.

Eric Litke writing for the Stevens Point Journal.com, reports that a new Wisconsin law that took affect in July 2013 is attempting to reign in the abuses of double dipping in that state. Now retirees must wait a minimum of 75 days (up from 30) before they can be rehired and then they can only work for a third of the usual hours (1392 hours max for the year) the particular job they take normally requires. The new law does not address double dipping over state lines, however.

Litke gives many examples. I recommend anyone who is interested in double dipping in Wisconsin read his article: (http://www.stevenspointjournal.com/article/20140201/SPJ019803/302010162/Some-Wisconsin-school-administrators-collect-both-pension-salary)

There is a lot of money involved in the practice of double dipping and the following examples are only focusing on school administrators. If school administrators are cleaning up in the hundreds of thousands of dollars, what are legislators and judges getting?

Litke gives the examples of 2 school administrators who are receiving pensions from other states while receiving salaries in Wisconsin. Kathleen Williams of Wausau Wisconsin tops the list receiving $157.994 in a salary from Wausau and a pension from the state of Illinois in the amount of $183.043 totaling $341.037 a year.

Attila Weninger of Stevens Point Wisconsin receives a salary of $155,500 from the Stevens Point School District and a pension from Illinois in the amount of 180,302 totaling $335, 802 a year.

These are examples of how double dipping works and how it benefits those who are doing the double dipping and how it costs taxpayers big bucks. Wisconsin is by no means the only state where this is happening. (See more on Wisconsin below.)

For more information on double dipping and on politics in general:

Watchdog.org

http://watchdog.org/64675/audit-finds-public-double-dipping-a-plenty-in-wisconsin/

Eighty-two-year old Diane Feinstein (Democrat) served 10 years as mayor of San Francisco, and 9 years as a San Francisco Supervisor before being elected to her current seat in the Senate in 1992.

Ms. Feinstein has received about 850,000 in retirement benefits over the past 20 years along with her Congressional salary (currently 174,000 per year, plus a yearly allowance for her office,) and other benefits. She is reportedly worth somewhere between 42.8 and 98.7 million dollars, (watchdog.org).

Pensions for California legislators are based on number of years of service and their salary while serving. No legislator can collect more than 2/3 of his or her final salary.

There is also a death benefit paid to specified beneficiaries or survivors if a currently serving legislator or a retired former legislator dies.

For the governor and lieutenant governor, pension benefits are figured at 5% per year up to 8 years or 40% of their final salary. If they serve for 24 years or longer it is 60% of their final salary. The retirement age is 60. If a governor or lieutenant governor chooses to retire before age 60 their benefit is reduced by 2%.

Legislators and governors, etc., must have served at least 4 years and attained the age of 55 before they can retire. If the governor or lieutenant governor would choose to retire at any age prior to 55, they would be required to have served at least 20 years.

Healthcare benefits will be the same for legislators, and the governor and lieutenant governor and all other constitutional officers in keeping with The Affordable Care Act better known to some people as ObamaCare.

There is also disability coverage for all elected and appointed officials.

For further information copy and paste the URL below into your browser:

http://www.calpers.ca.gov/index.jsp?bc=/member/retirement/serviceretireoverview.xml

The Legislative Analyst’s Office states, ”Voters Ended State Pension Benefits for State Legislators. Proposition 140 (1990) prohibits accrual of state retirement benefits by Members of the Legislature first elected on or after November 7, 1990. The Legislators’ Retirement System (LRS)—managed by CalPERS—remains to administer benefits for (1) Members of the Legislature first elected prior to this date, (2) state elected officials (except judges) who elect to join LRS, and (3) four legislative statutory officer positions listed in Section 9350.55 of the Government Code. Judges are in two separate CalPERS-managed systems, the benefits for which were reduced for judges elected or appointed on or after November 9, 1994.”

The above statement seems clear to this writer that not everyone taking office in the California legislature or the California governor’s office, as well as some other positions, have been effected by the above law even though they took their office post November 7, 1990.

The Orange County Register says current governor “Brown [Jerry] and a handful of other top officials are eligible for generous benefits under a special pension fund so obscure that few people in government know how it works and many thought it had been eliminated 20 years ago by outraged voters.”

“Founded in 1947, LRS was established by the California State Legislature as a special pension system to serve . . . members of the California State Legislature. Later, it was expanded a little to include constitutional officers, like the governor and attorney general, as well as four unelected legislative statutory officers who hold special responsibilities at the State Capitol,” (The Orange County Register).

Many people believe Prop. 140 was the end of LRS. “But Prop. 140 didn’t kill LRS, it merely shrunk it. Today, LRS membership is open only to the state’s eight constitutional officers, the four members of the Board of Equalization, the four legislative statutory officers and lawmakers first elected to the Legislature prior to 1990, who are grandfathered in,” (The Orange County Register).

So apparently Prop. 140 did not end all pensions for California elected officials, including some members of the legislature. Please reference the URLs below — copy and paste them into your browser for more information on this issue.

Legislative Analyst Office

http://www.lao.ca.gov/handouts/state_admin/2012/Pension_Benefit_Policy_4_13_12.pdf

Orange County Register

http://www.ocregister.com/2010/08/13/the-mystery-of-jerry-browns-pension/

The most recent information I could find on the Colorado retirement plan for elected and appointed officials, and hired employees, is from 2006 and there have been some changes since then.

Retirees have had their benefits cut. Not just future retirees, but also current retirees have, and are experiencing, benefits cuts. Colorado is struggling to get their retirement plans solvent over the long run.

Employees of the state of Colorado, including elected officials, who were hired or took office after July 1, 2005, become vested after 5 years of service.

Employees and elected officials can retire at age 50 if they have provided 30 years of service. They can retire at age 60 with 20 years of service, or at 65 with 5 to 19 years of service.

Employees and elected officials who have provided 35 or more years of service can retire regardless of their age. There are other requirements for persons who desire to take early retirement.

Retired Colorado official’s monthly benefits are calculated by determining the highest average salary where contributions to the retirement plan were made for 3 periods of 12 consecutive months of service for each period. When that number is arrived at, it is halved and that is the benefit that retirees receive.

After 5 years of service, if a member of the Colorado Legislature should become permanently disabled, they may be eligible for benefits. If a member dies before retirement age is attained, their spouse or eligible children under age 23 may receive benefits.

Colorado state employees, including elected officials, contribute 8% of their salaries or wages to their retirement accounts. The state contributes 10.5%. In some cases where the retirement benefit is dependent on the job classification, the state may pay an additional 5%.

More Information on Colorado State Retirement Plans

List of salaries and recent benefits and benefit cuts to Colorado state employees: Copy and paste the following URL into your browser for more information . . .

http://ballotpedia.org/wiki/index.php/Colorado_state_government_salary

Explanation of all benefits available to all Colorado state employees

http://www.leg.state.co.us/OSA/coauditor1.nsf/All/6EAC64CA12B6DB7387257296006753E9/$FILE/1828%20Defined%20Contr%20Ret%20Plan%20June%2006%20rel%20Mar%2007.pdf

Massachusetts seems different than the other states I looked at, unless I missed something in the others. Massachusetts actually adds to pensions of legislators or other Massachusetts government officials when they perform voluntary administrative work. There is no paycheck for the work itself. It is a volunteer position, but there is a pension for people who do it. Jobs like sitting on the board of a hospital or library.

Both elected and appointed officials have added anywhere from 4,000 to 16,000 dollars a year for life to their pensions by adding their years of volunteer service into the years they served in the legislature. They need only to serve for a single day in a year to count that as one full year of service!

Currently, according to masslive.com, the state of Massachusetts pays out more than 1.2 Billion dollars in pensions even as some of the people collecting them are cutting programs for citizens. At least 106 retired employees are receiving $100,000 a year or more in pensions as of this writing.

There is no minimum age or minimum number of years of service a former legislator must serve in order to collect his or her pension. Several former legislators have started collecting their pensions sometime during their 40th decade.

Both Republicans and Democrats have, and continue to take advantage of the current pension laws in Massachusetts. The current governor, Democrat Deval L. Patrick (Democrat) is pushing for reforms, and he has reportedly signed at least 3 bills into law over the past 3 years that will save Massachusetts taxpayers millions of dollars. However, even though the retirement benefits reforms will save over the long run, there will likely be no major changes in the near future. Most major changes will not affect current retirees or current office holders. It will be 20 to 30 years before change is noticeable. In the meantime Massachusetts, like most states, is struggling with the current economic situation.

Currently, the governor of Massachusetts is paid $135,000 a year and the lieutenant governor is paid $120,000 a year.

Nan East, writing on eHow reports: Massachusetts is one of only 10 states in the U.S. that has a full-time legislature. The base salary for all Massachusetts legislators is $61, 440 a year. Leadership positions pay more. For example, the Speaker of the Massachusetts House is paid an additional $35,000 a year over his or her regular base salary. There is also a $600 a month expense account per legislator as well as additional bonuses, tax breaks, and benefits for various reasons. Most Massachusetts legislators make at least 75,000 a year after everything available to them is added in.

In 1998 voters passed an amendment to the Massachusetts Constitution tying legislator’s pay to the average Massachusetts household income, which has enabled legislators, as well as the governor, lieutenant governor, and other state officials to receive raises automatically, without any politician’s involvement and without informing the public that raises were being given, on a regular basis. Massachusetts’ legislator’s pay is reviewed and reset every two years. For more details on this subject, check out the references posted at the end of this section.

For more information:

The Enterprise

http://www.enterprisenews.com/topstories/x459331232/OUR-OPINION-Legislators-pay-cut-long-overdue

MA House of Representatives average salaries

http://www.ehow.com/info_7748183_average-salary-massachusetts-house-representatives.html

Masslive.com

http://www.masslive.com/news/index.ssf/2009/04/mass_legislators_plan_to_refor.html

State Budget Solutions

http://www.statebudgetsolutions.org/publications/detail/governor-patrick-signs-pension-reform-legislation-saving-ma-5-billion

Boston.com

http://www.boston.com/news/specials/pension_abuse/

Commonwealthmagazine.org

http://www.commonwealthmagazine.org/Departments/State-of-the-States/2010/Fall/Legislative-pay.aspx

Ninety-two-year-old Ralph Hall, the oldest member of the federal House of Representatives first elected in 1980 from the 4th District in Texas served in the Texas legislature for 10 years before being elected to his current seat in the House.

In the 32 years since becoming a member of the House of Representatives in Washington D. C., Hall has collected 1.3 million dollars in retirement benefits in addition to his salary.

(watchdog.org)

Something a lot of people, including a lot of Texans probably do not know is that the Texas Legislature only meets every other year. That is correct, once every two years. They meet on every odd numbered year on the second Tuesday of January.

The Texas Legislature meets once every two years in Austin, the Capitol of Texas, and each legislative session is limited by the Texas Constitution, to 140 days. The governor of Texas, and only the governor, can order a special session that extends beyond the 140 days, as he (Rick Perry since 2000) did recently in order to pass limitations on abortion.

The short sessions that take place every other year should be remembered when considering that state legislators have linked their pensions to the salaries of state district judges who work every year for a lot more than a 140 days in most cases. By linking their pensions to the state judge’s salaries, legislators receive a raise in their pension benefits every time judges receive a salary increase (Odessa American).

That is not all. Legislator’s pensions can equal as much as 100% of a state district judge’s salary. Republican Tom Craddick will receive $125,000 a year when he retires from the Texas State Senate -- unless legislators decide to increase judge’s salaries even more before Craddick retires. In fairness, Craddick has held his office for 44 years. However, almost 60 legislators will receive more than 40,000 a year when they retire. Current salary for legislators in Texas is $7,200.00 a year (not every other year) plus other benefits. Keep in mind, the governor and legislators barely work for 140 days every other year.

Generally most people have to actually retire from their job before they can collect their pensions. Not so with many lawmakers all over this country – see double dipping above.

The current governor of Texas, Rick Perry (Republican), receives a salary of $150,000 a year, and on top of that, a pension of another $92,000. It is all perfectly legal, but perhaps one can see how it is the individual state laws, rather than the federal laws, that allow politicians to clean up.

Rick Perry is expected to run for president in 2016. If he should win the election, he will receive his retirement of $92,000 from when he served in the Texas legislature, plus an additional retirement benefit for his years served as governor, plus his salary as president. Even as Governor Perry is receiving $242,000 in salary and retirement from the state of Texas, he is denying his constituents medical care that would be paid for by the federal government.

For more information:

Wikipedia.Org on the Texas Legislature

http://en.wikipedia.org/wiki/Texas_Legislature

TexasWatchdog.org

http://www.texaswatchdog.org/2011/09/state-lawmakers-find-clever-ways-to-boost-their-pensions-texas-legislators/1317054408.column

Odessa American of Odessa TX : Texas State Legislator’s Shady Pay Raise

http://www.oaoa.com/editorial/views/texas_opinion/article_4048637c-ca3e-11e2-b6a7-0019bb30f31a.html

TX Gov Perry’s situation

http://www.nytimes.com/2012/02/26/us/politics/perrys-on-the-job-retirement-lifts-pension-perk-from-shadows.html?pagewanted=all&_r=0

Washington Post on Rick Perry

http://articles.washingtonpost.com/2011-12-16/politics/35286595_1_rick-perry-perry-campaign-spokesman-retirement-benefits

Jim Sensenbrenner, 72-year-old member of the U.S. House of Representatives has received nearly $100,000 in pension benefits since 2008 in addition to his salary ($174,000 plus perks) as a representative from Wisconsin’s 5th District. His Wisconsin pension is estimated to be around $30,000 in addition to his salary for serving in the U.S. House. Sensenbrenner’s estimated wealth is between 13.4-18.98 million dollars.

The Wisconsin Department of Employee Trust Funds has provided the following information regarding pensions and benefits paid to Wisconsin state workers.

For a state employee to receive retirement benefits they must first of all be vested, meaning (in the case of Wisconsin state employees) that they have worked as a permanent Wisconsin state employee for at least 8 years.

Previously only 5 years of service were required to be vested and so some elected officials who came in before the change that now requires 8 years of service, will be able to receive pensions with less service if that is applicable to their situation. Some are already collecting retirement benefits from the state of Wisconsin while also collecting salaries as members of the U.S. Congress

Another requirement of Wisconsin state government retirees is that she or he must be at least 55 years old. There are a few state workers who are allowed to collect benefits at age 50 and that is because of the category of work they have done, however, most employees must be at least 55.

The usual retirement age for elected employees is 62.

For more information:

Wisconsin State Journal

http://host.madison.com/news/local/ask/footnote/footnote-what-health-and-retirement-benefits-do-the-governor-and/article_0f32d940-3ba5-11e0-a5d7-001cc4c002e0.html

Calculating Your WI Benefits

http://etf.wi.gov/publications/et4107.pdf

Story about Tom Petri and 3 others double dipping

http://wauwatosa.patch.com/groups/wisconsin-reporter---wauwatosa/p/packing-on-the-pensions-wi-reps-collect-state-retirement-on-the-federal-dime_b6806e19

Three more WI Congressmen Double Dipping

http://watchdog.org/98511/packing-on-the-pensions-wi-reps-collect-state-retirement-on-the-federal-dime/