Duluth, St. Louis County retirees see six-figure pensions
April 21, 2012 at 7:00 pm in Duluth News Tribune
A Chicago-based watchdog group shows that 17 retired city or county workers receive pensions of more than $100,000 a year. Continue Reading
Duluth, St. Louis County retirees see six-figure pensions
73 Comments
Hmmm, wonder how many would be outraged if federal legislation was passed that prevents pension millionaires from receiving social security benefits?
I know everyone is pretty well brainwashed into beleiving that those over 65 are untouchable when it comes to social security or medicare cuts, but how about basing it on income levels when it comes to making cuts to save the future of those programs.
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Being there is this interest to tax the rich, the millionaires, I can think of no place better than to start with these government Cadillac retirees. How about 30% tax right of the top for starters?
This is what the DFL and Democrats want. So lead by example and increase the taxes on these millionaire former “public servants” who I prefer to call self-serving.
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You know that pension benefits are taxed, right? Are you suggesting that pensions be taxed at a higher marginal rate than ordinary income, or are you saying any income over 100k should get a 30% tax rate?
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I would doubt it, there are a lot of people that don’t understand simple concepts.
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I’m kind of numerically challenged. Can you explain to me how someone making $100,000 a year ends up being classified as a millionaire?
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20+ years of retirement at $100,000 + per year = 2,000,000 or more.
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What is the normal formula? Didn’t know it was that complicated. Do tell !
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Oooh, this sounds like a fun game, let me try:
$1000000/(67-18)yrs=$20408.2 yr
$20408.2yr/(40 x 52)hrs~=$9.82hr
So by that logic a person working a $10 hr job is already a millionaire. Or it could be that your formula is off and does not match the actual definition of net worth which is assets – liabilities at a set point in time. Please try to use actual facts and accepted definitions when presenting an argument, otherwise it just debases the value of your words.
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I think your words help my argument. They make more in retirement than a lot of people make in an entire lifetime. Good for them. Don’t come crying to me every November that we need more tax revenue.
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If you had $one million in the bank and could figure out how to make 10% interest on this (quite a trick these days) you could take home $100,000/year.
So I would say it if very reasonable to say these people are living like retired millionaire. Because they are.
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If you purchased an annuity with a specific income for a lifetime – say $160,000 a year – it would cost a 65 year old $2,400,000 and a 55 year old $2,800,000 today. See
http://www.immediateannuities.com/
Clearly these $100,000+ gilt-edged pensioners have pensions that are valued well over a million dollars.
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The article states that many of these people receiving big pensions do NOT get Social Security becuase they opted out of it in return for making bigger contributions on their own into the pension system. Since they are not part of the social security system, they actually saved their employers a bit of money while employed because the agency employing them did not have to pay the employer’s portion of their Social Security.
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Drop the spin flavored Kool-Aid Duluthian3! LOL
All people should be allowed to opt out of social security, not the the privledged government union class OR all people earn money should have to pay in.
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It’s so easy to spend somebody else’s money.
It used to be that government jobs provided job security; now they provide wealth too. And incredible health insurance packages, too. But revealing that compensation seems to be considered a “personnel matter” and is normally not revealed to the taxpayer.
40 years of employment might allow someone to retire from a government job in their late 50s, when they could and often do get another job.
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True of military pensions as well.
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Again, read the article! Only 14% of the PERA is taxpayer-funded. The vast majority of funding comes from investment earnings – 73%! PERA has through the years done an outstanding job of growing the pension fund through prudent investment decisions. Pensioners receive annual increases in their benefits only to the extent that the investments warrant it. An important part of these high earning pensioners receive high payments is that their investment in PERA has grown through the years.
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There are many households (even with two parents working full time) that don’t make as much money as these people who are retired…
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Remember…Kathryn Martin at UMD got a half a million golden parachute on top of her pension. I’m not angry with the individual’s who are getting these inflated numbers. It’s the system that allows this to happen that makes me want to vomit.
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It’s been reported by multiple sources…UMD Statesman for one. The number they gave was $535,000. Not sure if golden parachute was the proper term…call it a retirement bonus or whatever you want.
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Curt, we have had the story from the StarTribune on our website since it was printed on February 27, 2012. It’s under the UMD Stuff section.
The story states ‘One of nearly a dozen university executives to step down in the past two years, Martin was granted a two-month sabbatical, a 15-month “administrative transitional leave,” a final deposit to her retirement fund, and a severance check. Total: $535,700.’
The story is titled U execs are paid handsomely on their way out on the StarTribune and we titled it “UMD taxpayer funded rip-off” as that is what it is.
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Well said Cribmaster. This is the taking of our money, more and more through increased taxes, new taxes and fees, for the so so-called “distribution of wealth” and is nothing less than another self-service part greedy of our society. But this is not banks, CEO’s, or corporations in this case, but government workers and their unsustainable Cadillac retirements.
Vintage DFL politics!
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US Forest Service? College Professors? Where was any of that discussed in the article? And again, 86% of the pension fund is not public funds! And this pension system has been in place for decades, under the direction of Republican, DFL, and Reform Party governors. How does this translate into ‘DFL public money laundering’?
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Ironic that a former Director of Social Services tops the list. Add the arrogance of the librarian with her “So what?” and no longer can the argument be made that public service is a selfless profession.
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The ‘arrogance of the librarian’? You make it sound as if she personally were padding her pension out of the children’s book fund. She is receiving what she was promised in exchange for her years of service – 86% of which was contributed by her or earned by investment in the market. No one would begrudge a private sector retiree receiving the same pension under the same circumstances.
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What is the average pension? Second, just like most civil service jobs in the past, they were not in the social security system whereas almost all civil service jobs these days pay into social security and have much much smaller pensions. Again, where is the information, what would a new civil employee get and what were the differences between social security payouts and public pensions for the older plan members? Third, most civil service retirement programs depend on investment returns and employee contributions, not taxpayer money. If your own retirement savings tanked in 2008, so did the retirement plans. If the retirement program does not have enough money to meet payouts, the blame should be shared by employees not contributing enough and poor investment decisions and projections by the administrators of the program. If government and the employees were honest, taxpayer money would not be needed to fund civil service retirement. This was a poorly written article that left out a lot of information and did nothing to explain the issue.
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Fisherperson, I agree this was not well written and most likely to complex for this reporter.
People who pay into social security get nowhere near the return on their money paid in and social security is insolvent. PERA is 76% funded and improving.
Then there is the hypocrisy of many of these government Cadillac retirees, or soon to be, as they and their DFL political party are same people that are admittedly against privatization of social security, yet don’t pay in to social security, and are denying us the same opportunities.
Why can’t all citizens pay in to PERA and get this type of retirement and opt out of social security?
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Poor attempt at spinning Katydid.
Simply put, how many people are leagally taking $2 million over 20 years from social security? End of story.
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No lie Katydid NOT. This is straight from the Social Security Administation website:
Unlike workers in the private sector, not all state and local employees are covered by Social Security. Some are covered only by their public retirement pension program; some are covered by both public pensions and Social Security; and some are covered by Social Security only.
http://www.ssa.gov/pubs/10051.html
Stop with the DFL lies!
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The story states:
“Firefighters and police CONTINUE to be exempt from Social Security, but most city and county employees hired after 1968 now participate in Social Security.”
AND
other than firefighters and police “”two people were on both lists, having worked for both the county and city — did not pay into Social Security but instead made larger contributions to their pension funds. They don’t receive Social Security benefits in retirement but reap higher pension payments.”
Either you a lying DFL spinster or another victim of the failing public education system where most the money goes to government union teachers working and retired. Imagine that!
Deceive and Lie cover the D and the L but what the F for? Anyone?
Vintage DFL Duluth!
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The current pension system is great for the people who are in it, and it is an abject failure for the taxpayers of Duluth and St. Louis County.
This recession has revealed many bad and expensive habits adopted during the ‘fat’ years. It’s time to replace the unsustainable defined benefit plans with 401(k)-style plans, with contribution rates based on private sector benchmarks. After years of taxpayers assuming a disproportionate share of the cost – and risk – of government pensions, it’s time to impose fair cost-sharing between taxpayers and government employees.
The pension as well as the free health care retiree health benefits long-term costs threaten to break the backs of local taxpayers. Unions in the public sector have created cartels with their political allies, mostly in the Democratic Party, to the exclusion of the taxpaying public.
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I don’t believe that county workers recieve retiree health care and new city workers do not
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A big issue with retiree health care was that retiree over 65 wern’t on medicare at that point the city would have been paying for a “supplemental” policy instead they were paying it all that has been changed so retirees at 65 have to go on medicare. Most of the people on the city high pension list were straight PERA (pulic employee retirement assocaiation) they did not pay into social security-same as the railrood or steal plant. So many on the list do not draw social security unless they woked somewhre else. New employees after around 1970 or so had to pay into social secutity and PERA. Employee hired after 1986 do not qualfy for the “rule of 90″ (age and time worked) and with the changes in social security they will not bbe retiring untill at least 65. I know many on the list and most are in their 80 one is 92
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Who cares if they don’t get social security? You don’t need it if you get a hundred grand a year pension.
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Just a little perspective, the Governor of MN salary is $120,303. These people in retirement are making close to what he does working.
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Our troubles with government are more complicated than “tax the rich”. We have a huge spending problem. It would be interesting to see what Isd 709 pays out in pensions. You know 709 will be knocking on our doors this fall for more money.
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What you’re missing is that Minnesota’s 3 major pension plans (including PERA) are woefully underfunded. Creative accounting practices and actuarial tricks that mask the critical level of unfunded liabilities. Even using the state’s extremely aggressive ‘assumed’ rate of 8.5 percent annual return on its investments (highest in the country), the pension funds are about $10.5 billion short of being able to pay off its future obligations. For every $1 the state has promised to pay retired civil service workers and teachers, it expects to have about 79¢. The taxpayers are borne with the responsibility for coming up with the rest of the money.
How one can justify government retirees making more in pension payments than they did while working or more than private sector taxpayer salaries is beyond comprehension. Check out these numbers from the source cited in this article – Taxpayers United of America. XXX retired from the St. Louis government, has an annual pension of $127,592 with an estimated lifetime payout of $4,949,291. Retired Duluth employee, XXX, has a lifetime estimated payout of $4,418,020 based on her actual annual pension of $113,896. Here’s a list of 30 retirees with estimated lifetime payoffs of over $3,000,000 – see http://tinyurl.com/6s92qmt
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Wow ! Thanks for the info!
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I wonder how commentary on the public pension system would go if the article focused on the lowest 1% of pensioners with, say, 20 years of employment. Can we get an article on that?
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Again, real time perspective. St Louis County salaries, Jan 2012: County Administrator – $151,486; Public Health & Human Services Director – $133,598; County Sheriff – $127,046; County Attorney – $127,046.
Financial Strategists have been telling people for years to have personal savings, Roths, IRAs, pensions, Bonds because no one fund will be enough in retirement. Well, except if you have been lucky enough to be upper PERA.
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As a public employee who pays into PERA, my monthly projection at 55 yo is $660/month and at 67 is $1200/month. Is $15,000/year from PERA at 67 years old going to be low enough for you all?
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Key question is how long have you worked for the City/County and how many years will you have paid into the system at age 65?
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At age 65, I would have been paying into the system about 33 years.
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It appears these were the pension plans in place at the time these folks worked in their various jobs and that tax payers aren’t paying more than a small amount of the total monthly cost.
However, that being said, a couple thoughts came to mind while I was reading the article. First of all, when people are in government many times when speaking to the public they tell you they are “serving” the general populace of your locality. Politicians are expecially fond of this term….I’m happy to serve the people of the City of Duluth for instance. I’m question though exactly who’s serving who here though. It appears that maybe the general populace might want to get in on some of these pension plans if we can…..If this is what serving pays…..I’d like to “serve” too.
Secondly, when questioned about the whole pension thing, both Janet Schroeder and Ben Boo said it “sounds a little high”. I’m not sure how to read that. Are they saying it sounds higher than the actual pension payments to them actually are, or are they admitting that this public retirement gig is almost a little bit to good to be true in their opinion ?
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jessica said:
“If this is what serving pays…..I’d like to “serve” too.”
What’s stopping you? As far as I know, city/county job applications are open to anyone qualified.
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with all the comments here most are pretty reasonable…one question? if it were you would you take the the retirmnent wages…. I find it hard to belive there would be anyone saying nay..they screwed up in the pension formual big time on this one. But if John q public was offerd this they’d take it. they earned evidently and you would all say that about yourselves if you were making this money.
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Just stopped by to see how the conversation was going. Found my two links with facts had almost a 5:1 thumbs down rating. What is it about trolls that want to make sure facts are hidden? Are they afraid of them? I’ll just keep posting them so that the readers have some source other than opinion.
http://www.bankrate.com/financing/retirement/social-security-benefits-vs-taxes/
http://www.urban.org/publications/412281.html
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Some people are definitely opposed to letting facts get in the way of what they believe.
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