$100,000+ pensions for 27 retired state pols
BYTHE BETTER GOVERNMENT ASSOCIATION April 29, 2011 1:42AM
Updated: September 24, 2012 6:25AM
Some of the state’s best-known politicians, including former governors and lawmakers, are reaping hefty and guaranteed annual pension payouts backed by Illinois taxpayers.
A Better Government Association investigation found that 27 of the 286 retired office holders — nine percent — are enjoying annual pensions of more than $100,000. In some cases, retirees draw their pensions while also working in other government-related posts or lucrative private-sector jobs. Thirty retirees, or 10.5 percent, have drawn more than $1 million each so far.
The annual $100,000-plus pension club is a virtual “Who’s Who” of famous Illinois politicians, including former Govs. Jim Edgar and James Thompson; former Senate President Emil Jones; former Comptroller Dawn Clark Netsch; and former Attorney General Roland Burris.
Moreover, Illinois taxpayers will keep on paying for their politicians’ retirements well into the foreseeable future unless there’s a radical change in state pension law. The public-pension reform law that passed last year won’t cut into payments for the current crop of state public office retirees or those of aging incumbents, who in the next few years could leave the state payroll to draw their own pensions.
That group of elders could include Gov. Quinn, 62, who also served as state treasurer and lieutenant governor, and 69-year-old Michael Madigan, who was elected to the Illinois House of Representatives in 1970 and has been speaker for most of the past 30 years.
“No one really knew in the past how much we’re paying for these pensions,” says suburban Chicago pension consultant William Zettler, who favors an overhaul of the current state-employee retirement system. “Nobody dreamt they are as high.”
At the end of fiscal 2010, the General Assembly Retirement System was only 26 percent funded with $66.2 million in assets and $251.8 million in liabilities.
Zettler obtained the pension data under the Freedom of Information Act, and provided it to the BGA, which confirmed the data.
GARS plan participants contribute up to 11.5% of their pay annually and their retirement payouts depend on the total number of years served. For example, those with 20 years of service can collect up to 85% of their final salary for their remaining lifetime. Moreover, if a participant retires at age 60 or older, that person gets a 3 percent pension increase every year.
Leading the GARS list of annual pensions is former state Sen. Arthur Berman, who collects $203,428 annually, according to the data, which is as of March 7.
The Chicago Democrat retired from the General Assembly in 2000 with a salary of $59,657. But he later took a higher-paid position with Chicago Public Schools and his pension was determined based on the higher salary under a reciprocal state-pension system agreement that ended in 1994.
“Everything I did was legal,” Berman, 75, asserts. “I served in the Illinois Legislature for 31 years and survived 22 elections. People ask me how I did it and I tell them all I did was campaign 365 days a year.”
Edgar, who was governor from 1991 to 1999, collects $134,853 a year, Thompson, governor from 1977 to 1991, gets $127,215 annually.
Edgar notes that he was a CEO running the government of a big state, but didn’t earn the type of multi-million benefits awarded to top executives at publicly-traded companies.
“I didn’t get the stock options and bonuses,” he says.
Edgar defends pensions for state officials and says curtailing benefits “is going to affect who you draw in” to serve public office.
The 64-year-old Edgar is a distinguished fellow with the Institute of Government and Public Affairs at the University of Illinois, a position he’s held since 1999. Edgar teaches and lectures for the U. of I. system and is contributing to a pension program for state university employees. He is paid $177,000.
Edgar is also paid to serve on two corporate boards: nut marketer and distributor John B. Sanfilippo & Son, which paid him $100,760 in fees and stocks last year, and personal-grooming products giant Alberto-Culver Co., which paid him $162,136 in fees and stock last year, Securities and Exchange Commission filings show.
Meanwhile, Thompson, 74, has been a partner with the law firm Winston & Strawn since 1991. While there’s no breakout of Thompson’s compensation, Winston & Strawn reported profit per equity partner of $1.39 million last year, according to trade publication American Lawyer’s web site.
Thompson didn’t respond to requests for comment.
Former Gov. George Ryan forfeited his pension after his convictions on felony corruption charges. And whether former Gov. Rod Blagojevich — facing trial on corruption charges —will get his pension has yet to be determined.
One of Blagojevich’s most controversial decisions was naming Burris to fill the U.S. Senate seat vacated in 2008 by President Obama.
Burris, who is also a former state comptroller, draws a $129,162 annual pension.
“It’s legal and the law allows it and that’s all I’ve got to say,” says Burris, who recently retired from the U.S. Senate and is not eligible for a federal pension.
Netsch, who logged 22 years of state service as a lawmaker and comptroller, gets an annual pension of $121,720. She is a professor of law emerita at Northwestern University.
“This is a continuing subject of debate and a good target for people who want to make all public officials look like thieves and crooks,” says Netsch.
While big names of statewide office holders draw the most attention, the bulk of the General Assembly’s retiree roster consists of rank-and-file lawmakers from the House and Senate.
Among the state’s Top 10 retirees are former lawmakers Edward Petka of Will County, who ranks second-highest with $161,280; Judith Erwin of Chicago, who is third-highest with $141,476 and John Friedland of Kane County who is fourth-highest with $140,649.
Erwin, 61, is now a managing director at ASGK Public Strategies, a position she’s held since February.
“For nearly 30 years, I made employee contributions as required,” she says. “I have been fortunate to work in state government but I never did anything to impact my pension. I followed the rules.”
Petka is a 30-year legislator who retired as a 12th Circuit Court judge last year. Petka, 68, drew a salary of more than $174,000 as a judge but under a reciprocal agreement no longer permitted in Illinois, drew a much higher General Assembly pension.
Friedland served 25 years in the House and Senate. He retired from the General Assembly in 1992 but draws a big pension based on a salary he earned working for the Fox River Water Reclamation District until early 1993.
“I just followed the rules and regulations when I was in,” he says.
After 20 years in the Legislature, Erwin went on to become executive director of the Illinois Board of Higher Education, a job she held from 2005 until August of last year. She resigned for mixing politics and state business. She resigned from her $191,000 a year agency job, paid a $4,000 fine and agreed never to seek or accept state employment again.
For incumbents, becoming eligible for a GARs pension is a fairly easy bar to reach in terms of time of the job and age. A member is eligible to start drawing from a pension at age 62 after working at least four years in the system. Members with eight years of work can collect pensions at age 55.
Berman counters that a public pension and health care insurance is a well-earned benefit necessary to draw capable people to serve in office.
Among those enjoying that guarantee is the current flock of incumbent state lawmakers and constitutional office holders including the current governor and speaker of the house.
Asked about the possibility of Madigan drawing a large pension some day, his spokesman Steve Brown defends his boss, saying that the speaker ran a “multi-million dollar operation” for decades. Madigan performed a job comparable to a private-sector business, Brown says.
Gov. Quinn’s budget spokeswoman Kelly Kraft wouldn’t comment on her boss eventually drawing a sizable state pension. “Governor Quinn is currently working and not collecting a pension,” she says.
But Kraft says Quinn is interested in discussing greater restrictions on state pensions. The governor “feels large state pensions that are already being collected need further review and is open to further discussions on this matter,” she says.
Some changes are already in place, sparked by a pension-reform bill signed into law last year.
Under the new law, legislators and state officials who begin their jobs after Jan. 1, 2011 are subject to new eligibility rules.
Now, new hires--including brand new lawmakers and office holders--will have to wait until they are 67 years old, with 8 years of service, to qualify for benefits. A General Assembly member with 8 years of service can retire at 62 but will receive decreased benefits under the revamped pension rules.
Retirement benefits will be figured on a maximum salary of $106,800 while cost of living increases will rise at the rate of inflation or no more than 3 percent (whichever is lower).
Backers of the pension law say these reforms will save the state $200 billion over the next 35 years.