Another outrage over state pensions

Another outrage over state pensions

Not everyone needs to be a state employee to get a state pension.

Gail Purkey worked for nearly seven years for the state of Illinois before she took a job as a lobbyist with a teacher's union.

With insufficient time served to qualify for a state pension, Purkey cashed out her roughly $5,000 in pension contributions in 1988 and took it with her to a new job at the Illinois Federation of Teachers.

Now retired for two years from her private lobbyist job, Purkey is collecting an annual $101,000 state pension, a sum ostensibly based on a career as a state employee.

How does an employee of the private sector end up with a generous state pension despite not only not working long enough on the state payroll to qualify, but also cashing out of the state pension system besides?

The usual explanation applies — it's another example of business-as-usual beneath the statehouse dome in Springfield.

Purkey was a beneficiary of special legislation passed by House Speaker Michael Madigan in the 2006 post-election veto session. The bill was aimed at taking care of a handful of employees of the teachers' union, which donated generously to former Gov. Rod Blagojevich and Democratic legislative leaders in that year's election campaign.

The legislation granted Purkey, whose highest state salary was $36,800, a one-time-only six-month window of opportunity to join the State Employees' Retirement System, using both her time as a public employee and her roughly 20 years of work with a private employer to qualify.

Purkey not only qualified for the six-figure pension but free health insurance as well.

At least two other union members were able to take advantage of this Madigan-sponsored gift. Previous news reports indicated that the union executives were able to qualify for six-figure public pensions by working one day each as a substitute teacher.

That report so embarrassed legislators and Gov. Pat Quinn that they passed legislation in January aimed at wiping out the benefit, although there are legal questions as to whether pension benefits once earned — however they are earned — can be taken away.

Purkey's special treatment provides more proof, as if any was needed, of how the state's beleaguered public pensions systems, which are underfunded by more than $80 billion, have been abused for political purposes over the years.

The pension systems are now teetering under the pressure of possible insolvency, prompting Gov. Pat Quinn to repeatedly urge legislators to take action. So far, legislators have refused. Most recently, Quinn called for a one-day special legislative session to deal with the problem, but members of both the Senate and House met only briefly before adjourning and returning home to campaign for re-election.

Both House Speaker Madigan and Senate President John Cullerton recently said they expect to wait until after the November election before taking up the pension issue again.

As is usually the case when stories like this are disclosed, none of the principals has any memory of who did what.

Purkey said she just "followed what the law said." Madigan's spokesman, Steve Brown, said he has no "recollection" as to whether his boss was trying to help Purkey.

Madigan and Purkey are definitely connected. She worked for him in the Illinois House and for Madigan's wife at the Illinois Arts Council.

Concluding that the best defense is a good offense, Purkey is trying to portray herself as being an inappropriate target of criticism over the pension deal. She said that buying her state time cost her an estimated $666,000, a contribution she claims was a "help to the system."

But her numbers don't add up. She transferred $480,000 in her union retirement account to the state, a lateral move, and paid the rest herself. Purkey did so not to be generous to the state's pension system, but because she knew she was getting a far better deal from the state than she would have from the union.

With two years of pension revenues already under her belt, the 58-year-old Purkey will make back all her contributions in five more years and collect the $101,000 annual pension for the rest of her life, not to mention the annual 3 percent cost-of-living increases and the health insurance.

Taxpayers, no doubt, are tired of reading about and subsidizing these kind of shenanigans. But they'll keep happening as long as those who commit or condone them are returned to Springfield. Bear that in mind as Election Day approaches.

Sections (2):Editorials, Opinion
Categories (2):Editorials, Opinions

Comments

News-Gazette.com embraces discussion of both community and world issues. We welcome you to contribute your ideas, opinions and comments, but we ask that you avoid personal attacks, vulgarity and hate speech. We reserve the right to remove any comment at our discretion, and we will block repeat offenders' accounts. To post comments, you must first be a registered user, and your username will appear with any comment you post. Happy posting.

Login or register to post comments

Sid Saltfork wrote on September 26, 2012 at 2:09 pm

Way to go News Gazette.  Pick an example of corruption; and portray the thousands of state employees and retirees as culprits.  Keep it up until the howling mob is convinced that all of the public employees pensions should be stolen including what the employees paid. 

Currently; Quinn is demanding that all state employees take a two step decrease in their job classifications along with a two year freeze on raises, and step increases.  Also, he is demanding the employees, and retirees pay more toward their health insurance.  That adds up to a $10,000.00 annual decrease for most state employees, and their families.  That means that car dealerships, banks, food stores, clothing stores, charities, churches, restaurants, and newspapers can expect a drop in income all across the state.  Many families will lose their homes.  Think how a $10,000.00 loss of annual income would affect a family who have not had a raise in income for over the past two years.  The average income of public employees is not even middle class by some definitions.  Who in their right mind will ever work for the State of Illinois?  Who would ever trust the State of Illinois? 

If the News Gazette wants to persecute public employees with conservative, corporate propaganda; why not be honest about it's tax breaks as a newspaper with the public also?  The legislators, and governor have continued to fund their pork barrel projects spending for "campaign donations", and votes by not paying into the employee pension systems.  Yet, the politically biased News Gazette blames the public employees.  Shame on you!

midwestmomforlife1 wrote on September 26, 2012 at 4:09 pm

 

I am outraged by the deliberate theft of funds from the state pension system.  Aparently the state legislature looted the system by special rules to give the system's money away to people like Gail Purkey.  Now, when people who rightfully paid into a system in accordance to rules set forth for decades, they are told the money is not there. 

Most members of the state retirement system are like myself - earning a very modest salary for decades.  The modest salary was acceptable, because of the promises of the entire system.   The projects that I worked on brought outside money to the University and  paid indirect costs (more than of 50cents per dollar spent on research goes to the University) which funded other parts of the University.  These grants, and projects are awarded based upon stringent competition.  Thus research teams work extreme hours with at very high levels so that the next projects will compete successfully. If the next grant was not funded, our jobs disappeared. 

We are not the freeloaders described above.  Our work supported the University and the State of Illinois.  We also contributed to the retirement system for decades.  Our retirement for the most part is modest, as our salaries were modest.  It is very frustrating to watch the promises made to us disappear.  Furthermore, I reject and object to the notion that I and other members of the state pension plan do not deserve the promises given to us for our work.  Why do you even make this suggestion?  

 The state had their hand in the cookie jar.  

The very institution which demanded a share of our salary for decades - took it and gave it to someone else.  When politicians wanted our funds, they just changed the rules and for their own purposes.  It is an outrage.  Why isn't this considered a theft?  All those involved should be identified.  

The money should be returned and someone should be prosecuted..

 

illinois1953 wrote on September 26, 2012 at 8:09 pm

I dont think Jim Dey could write an editorial without the word pension mentioned multiple times. Keep stirring the pot Jim. Keep bringing up the extreme examples to somehow justify the rest of us losing what we worked hard for. How about some stories of the other side? The people who worked all their years, paid into the system,and are being labeled as the bad guys. Gee what a concept, getting both sides of a story!

EL YATIRI wrote on September 27, 2012 at 6:09 am
Profile Picture

Another example of how the NG is just a partisan propaganda rag.  The Illinois GOP has targeted Madigan, and the NG is dutifully carrying out its marching orders.

Republicans ought to remember the "glass house" axiom.

How about a story about how the Illinois GOP has been recieving money from Ken Griffin, CEO of Chicago hedge fund Citadel LLC, and his wife, Anne Griffin in violation of the limits on campaign donations?

Why is Blagojevich constantly mentioned and never George Ryan?

How about a story about Joe Walsh's conflicts of interest and the money he gets from Honeywell and Northrop Grumman while he sits on the committee of Homeland Security.  Or the money he gets from big pharma while he sits on committees involving health care?

Illinois is corrupt to the core and the GOP is living in a "glass house".

Citizen1 wrote on September 27, 2012 at 6:09 am

We taxpayers paid our part for years too.  We also paid our part into Social Security.  Now our Social Security will be much less than we were promised if we get it at all.  And we will have to work longer to get it, in some cases over ten years longer than public employees have to work to get their pensions.   Both sides robbed Social Security and Public Pensions.  Sorry if I don't feel sorry for you.  Public employee got a far, far better deal for much less work.  Give a little and you might get something.  Continue to scream like spoiled brats and you just may get a sum total of zero.  And I say rightly so. 

Sid Saltfork wrote on September 27, 2012 at 1:09 pm

Typical misinformed, howling mob mentality being spouted.  University state employees do not pay into Social Security.  They pay into their pension system only.  The state employees are required to pay into both.  In the past; the university employees retirement was based on .022% of every year served within a 5 highest year average.  A clerical earning $30,000 per year for the past 5 years with 25 years of service would receive $16,500 per year in retirement.  A state employee would get .0167% for every year earned plus Social Security.  A state employee earning $30,000 with 25 years of service would receive $12,525 per year plus Social Security.  The earliest age for retirement is 55 years of age.  That is 7 years before the minimum Social Security age of 62.  Not many state employees retire before the minimum Social Security age.  Social Security at age 62 is approximately 25% of the highest quarters of income.  It equals out to about what the retired state university employee receives. 

In regard to your statement: "Public employee got a far, far better deal for much less work"; how do you know that to be a fact?  Do you think correctional guards, psychologists, clericals, IT specialists, lab workers, etc.... are lazy employees?  No, you know nothing except for your imagined, stereotypical state employee.  You are just part of the misinformed howling mob whipped up by the conservative, biased media.

We do not expect people like you to "feel sorry" for us.  We expect the State of Illinois Constitution, and contract law to be upheld in the courts as it has in other states that tried to steal their employees pensions.  You, Sir, can stick your head .................. in the sand, and rant all you want.  It will be settled in the courts; not in the public forum.