Pension secrets drawing attention

Pension secrets drawing attention

April 11th, 2011 By James Salzer/The Atlanta Journal-Constitution in News

HIGHEST FIVE BENEFITS

Teacher Retirement System (All former employees of the University System):

  1. $297,987

  2. $263,175

  3. $241,758

  4. $238,585

  5. $236,305

Note: All benefits are per-year payouts

Georgia taxpayers pour about $1.3 billion into state pensions each year, but retirement system officials can't tell you how much individual retirees are getting.

That's because state law prohibits the Teacher Retirement System and State Employees Retirement System from disclosing the pensions received by the 125,000 retired teachers, university staffers, state workers, judges and lawmakers receiving benefits from the plans.

About 1,100 of those retirees receive more than $100,000 a year, according to figures provided to The Atlanta Journal-Constitution by the two retirement systems. A few get more than $200,000, and one, a recently retired employee of the teacher retirement system, receives almost $318,000 a year for life.

But under state law, systems are not allowed to tell the public who those retirees are. The state is keeping those secrets at a time when many private-sector employers have stopped offering pensions to their workers - a fact likely to anger taxpayers who pay to support state workers' pensions but have no pensions of their own.

About 36 percent of private-sector workers are enrolled in traditional pension plans, compared with about 86 percent of public employees.

Georgia law exempts from the Open Records Act "any business, financial, or personal information in the possession of such retirement system concerning a party." Most state pension systems have similar secrecy clauses, although there are some notable exceptions.

Some state leaders say they're ready to repeal the exemption. After all, the salaries of current state employees are open to the public at open.georgia.gov.

"State taxpayers contributed a substantial portion of the retirement benefits, so they are stakeholders in the retirement plan," said House Speaker Pro Tem Jan Jones, R-Milton. "I certainly believe we should treat all expenditures of the state which are funded by taxpayers openly and transparently."

State Rep. Hank Huckaby, R-Watkinsville, represents the other side of the argument. Huckaby was director of the Georgia Residential Finance Authority, budget director under Gov. Zell Miller, chief financial officer for Gov. Sonny Perdue, and a top administrator at the University of Georgia before he retired in 2006.

"At the point you retire you are a private citizen and that's your private financial information," Huckaby said. "I don't particularly want my financial information public."

Throughout the 1990s, reports of padded retirement benefits often left state officials red-faced.

Under one old state law, some fired state workers were able to draw pensions calculated as if they had remained on the job until age 65. Another let members of the Employees Retirement System with 34 years of service retire at any age with full benefits as if they had worked to age 65. It was dubbed "34-and-out."

The laws and pension programs were changed, but a few employees, often with political connections, continued making news by getting generous payouts from the "involuntary separation" provisions.

There also still are 2,668 state employees - those hired before July 1, 1982 - eligible for "34-and-out" retirement benefits. Other employees are under newer, less generous plans.

The AJC, The Associated Press and other news organizations regularly ran lists of the biggest pension beneficiaries from the State Employees Retirement System.

Lawmakers approved legislation in 1997 making it tougher for the limited number of people eligible for "involuntary separation" - those hired before April 1, 1972 - to get the extra benefits. During the same session, lawmakers also exempted retirement system investment information and information on retirees from the Open Records Act.

Jeffrey Ezell, executive director of the $54 billion Teacher Retirement System, said he thinks TRS didn't give out information on the retired teachers and University System employees it served even before the law was passed. "I think maybe it just codified what we were doing," Ezell said.

Most state pension funds don't make the names of retirees and their pensions available to the public, said Jack Dean, editor and publisher of PensionTsunami.com, a website that tracks pension news.

Among those that do allow the public access are California, Massachusetts, New York and Maine, he said.

In California, the Foundation for Fiscal Responsibility used the open records law to put together a website database with more than 16,000 retired government employees, teachers and university staffers who receive pensions of $100,000 or more a year.

Georgia lawmakers who served on retirement committees and in the Legislature during the late 1990s say they don't remember much about the 1997 law that exempted pension information from the Open Records Act. Former Gov. Roy Barnes, then a member of the state House, worked on the "involuntary separation" bill, but he said he can't recall the exemption legislation.

Barnes said, "Generally, it's my opinion everybody ought to be entitled to know who is getting what pension."

Likewise, Attorney General Sam Olens said recently that he would support a move to make pension information public.

"In my personal opinion, it should be open," said Olens, who is pushing open-government legislation.

Georgia's pension programs are fueled by contributions from employees and the government. Georgia's teachers and employees put more than $600 million a year toward their pensions, according to state audits. Taxpayers chip in about $1.3 billion.

Most retirees don't get big-money pensions. The average pension for a retiree in the state employee's system in fiscal 2010 was about $29,000. In the teacher's system, it was about $35,000.

Some are receiving much bigger payouts because they were highly paid by the state when they retired and they spent decades in the system.

Employees vest for the benefits after 10 years. When gubernatorial administrations end after four or eight years, some staffers often try to get other state jobs to make sure they get the 10 years to qualify. That happened late last year, when Gov. Sonny Perdue was ending his eight years in office.

While most state employees don't get huge pensions, some do. They are generally the people who ran agencies, were doctors at the state's medical college or were highly paid for other reasons.

For instance, when Dan Graveline retired as director of the World Congress Center at the end of 2009 after about 33 years on the job, he was making almost $435,000 a year. Using the formula of 2 percent of salary times years of service would put his pension at about $287,000 a year.

The Employees Retirement System can't disclose names, but it can note the agency from which someone retired. In figures provided to the AJC, it listed a former World Congress Center employee receiving a $291,000 pension.

The highest listed pension for either system was a nearly $318,000 pension being paid to a recently retired employee of the Teacher Retirement System. While the ERS couldn't confirm who received that pension, the only ones with high enough salaries to earn such a pension are the staffers who run the investment divisions of TRS.

Bobbie Jean Bennett, a retired state merit system director and now president of the Georgia State Retirees Association, said she can understand why the benefits aren't made public.

"If the public could make a value judgment based on what that person contributed [to the state], I would say, 'yes, they need to know,'" Bennett said. "To release that information just makes them angry because they don't have any way of valuing the individual, what they did for the state."

But Tim Callahan, a spokesman for the Professional Association of Georgia Educators, the state's largest teacher organization, said he doesn't understand why such information is secret. He noted that salaries of existing employees are public information.

"I don't think it [secrecy] is a good thing. I think it should be open and above board," Callahan said. "My view is that it should be transparent, and for that not to be transparent certainly creates a question of why it is being kept secret.

"My sense of it is there is something there to hide, that's why it's being hidden."