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Friday, August 15, 2008
Ind. Gov't. - "Indiana taxpayers contribute millions to lawmakers' generous pension plan"
Legislators passed a law in 2004 to make confidential the amount of their contributions, and the state's contributions, to their pension plans. Here are some ILB entries from that time:
Indiana Law - More on PERF Privacy and the Star's editorialThe March 19, 2004 entry begins:The Indianapolis Star editorial last week on "PERF privacy" (see the March 11 Indiana Law Blog entry here, or simply scroll down) caused me to wonder why the push to keep PERF records confidential, other than protecting the obvious such...
Posted in The Indiana Law Blog on March 14, 2004 02:13 PMIndiana Law - Even More on PERF Privacy
Last week the Indianapolis Star ran an editorial on "PERF privacy," criticizing HEA 1285, now awaiting action by Governor Kernan. The Star editorial said the bill would "close public employee pension records to public scrutiny." (Access the Indiana Law Blog...
Posted in The Indiana Law Blog on March 15, 2004 08:18 AMIndiana Law - More Information on Proposed PERF Information Lock-Down
More information is available this morning on the proposal, via HEA 1285, to amend various retirement fund laws, including the General Assembly's, to limit public access to fund records. House Enrolled Act 1285 was presented to Governor Kernan on March...
Posted in The Indiana Law Blog on March 16, 2004 09:08 AMIndiana Law - Governor Kernan Signs PERF Confidentiality Bill into Law
Last evening Governor Kernan announced that he had signed into law HEA 1285. As a result, the law is now in effect, retroactive to September 1, 2003. This new law will prevent anyone from accessing PERF information, other than member...
Posted in The Indiana Law Blog on March 19, 2004 09:59 AM
Last evening Governor Kernan announced that he had signed into law HEA 1285. As a result, the law is now in effect, retroactive to September 1, 2003. This new law will prevent anyone from accessing PERF information, other than member names and years of service, through a FOIA request.Today Matt Tully of the Indianapolis Star has a story headlined: "Indiana taxpayers contribute millions to lawmakers' generous pension plan: Taxpayers contribute 20% of state lawmakers' salaries to their pensions every year -- a total of $14.2 million since 1992."" It begins:
If you want to understand why so many people don't trust politicians, take a look at the Indiana Legislators' Retirement System.The Star has created a database so that you can look up a current or past legislator and see the total amount of both the legislator's and the state's contributions to his or her pension. For instance, here is a link to the report on former state Sen. Joseph W. Harrison, who authored HEA 1285 in 2004, the bill that provided that the public may only access legislators' names and years of service, not the amount of the legislators', and the state's, contributions.State lawmakers created this generous perk for themselves in 1989 and then defended it for nearly two decades. The program has allowed lawmakers to quietly build up government retirement accounts beyond the means of average Hoosiers -- even though most lawmakers have other full-time jobs with benefits or are already retired.
How generous is it?
"That is about as lucrative a program as I've ever heard of," Tom Hardin, a financial planner with Canterbury Investment Management in Zionsville, told me. "You wouldn't be able to find that anywhere -- in corporate America or elsewhere."
But you can find it at the Indiana Statehouse, where under the lawmakers' plan, taxpayers hand out a $4 match for every $1 lawmakers invest in their accounts. Year after year, the state contributes an amount equal to 20 percent of a legislator's salary, including hefty per diem payments in many cases.
According to a file leaked to The Indianapolis Star and verified by state officials, lawmakers have contributed $3.6 million to their pension accounts since 1992, when they put the finishing touches on the system. During that same time period, taxpayers contributed $14.2 million to the lawmakers' accounts. (You can go to IndyStar.com to search a database showing how much the state has contributed to each lawmaker's account.)
Be aware that, as Tully's report notes, the Star database does not include accumulated interest or other ROI:
That doesn't include investment returns. Those figures aren't publicly available. But according to the annual return rates on different funds available to the General Assembly, lawmakers who accumulated [for instance,] $160,000 in contributions since 1992 likely would have more than $215,000 in their accounts -- considerably more if they chose a more aggressive fund.Tully has a second story today, headed "Pension rules are changing, but the deal's just as sweet." Some quotes:
Lawmakers tweaked the rules, but come January, their pension benefit remains far more generous than other state workers'.Read today's ILB entry in conjunction with this one from March 4, 2007, headed "Senate passes a non-transparent and convoluted pay raise bill."State lawmakers sure can put on a good show.
They staged one in the winter of 2007 before approving a bill to set new rules for their prized pension program. The old rules had become a political grenade, angering voters and producing unflattering headlines. So lawmakers crafted a new set of regulations, and on a February afternoon they stood on the floor of the Indiana Senate and praised their selflessness. * * *
In the end, the new law, which takes effect in January, will ensure lawmakers continue to receive special treatment. And it guarantees their generous pensions are protected. * * *
Come 2009, those rules will change. The special treatment afforded to legislators will not.
Here is a list of all the ILB entries on "legislative benefits."
Posted by Marcia Oddi on August 15, 2008 10:26 AM
Posted to Indiana Government | Indiana Law | Legislative Benefits