STUMP » Articles » Lunchtime Pension Post: Around the Web in 20 Minutes » 3 May 2016, 12:30

Gotta do it quick.. the clock is running!

ILLINOIS: MEET THE HIGHEST PAID SUPERINTENDENT

Recently, at the Actuarial Outpost, someone noted this cool map of Illinois school pensions/, and found some really large numbers.

Somebody found some really large numbers among current salaries:

(CBS) — Troy Paraday is the highest compensated superintendent in Illinois, even though his Calumet City School District 155 is small and the students are failing.

He makes even more money than the CEO of Chicago Public Schools.

2 Investigator Pam Zekman asks: How could this happen?

Paraday makes a base salary of $315,814, but he also gets an annuity of more than $31,000. The board also pays his pension contribution of $36,000 plus $29,000 for insurance and other benefits.

With everything, that’s about $400,000 a year.
…..
Paraday oversees three schools with just 1,200 students.
…..
Paraday’s latest contract awards him a 6 percent pay raise every year until he retires in 2018.

The Illinois Policy Institute estimates his first year pension could top $297,000 — adding up to $9 million if he lives to the age of 80.

Now, I know that life expectancy for men (especially currently employed) goes beyond age 80. An American man aged 60 has an expected age of death about 84.

But while trying to find Paraday’s birthyear to do a calculation just for him, I came across this story from 2011:

JOLIET | Calumet City District 155 School Superintendent Troy Paraday was sentenced to four years of probation Wednesday after pleading guilty to aggravated driving under the influence in a 2008 Homer Glen car crash.

Will County Judge Daniel Rozak also accepted a request from Paraday’s attorneys that one of his prior guilty pleas for driving under the influence of alcohol should not be held against him.

Had that plea for a 1984 incident in Woodford County, Ill., been used as a factor against Paraday, a prison term would have been mandatory, and he could have been sentenced to up to seven years. Because it wasn’t, Rozak was able to treat the DUI charge as a misdemeanor.

Hmmm. He might not live to age 80.

Of course, Uber exists now, but taxis existed back then. You’d think with that salary, he could’ve sprung for a few.

CENTRAL STATES KEEPS LIMPING ALONG

Remember what I said about an ugly July yesterday? There I was talking about Puerto Rico. There’s also the Teamsters Central States plan retiree cuts:

About 273,000 union workers and retirees are about to learn the fate of their pensions.
The struggling Central States Pension Fund is in such bad shape that it’s seeking government approval to cut benefits — and the ruling is expected to come this week.

It would be the first time the government green-lights pension cuts under a new law giving the Treasury Department authority to approve, or reject, cuts proposed by a multi-employer, private fund as a way to head off insolvency.

Previously, failing pension funds could reduce future benefits for current workers, but they couldn’t touch those already being paid to current retirees — until now.

The Central States Pension Fund covers workers and retirees from more than 1,500 companies across a range of industries, but most of its retirees were truck drivers.

….
The Treasury Department appointed attorney Ken Feinberg, who’s known for overseeing the 9/11 victim compensation fund, to review the plan. He has until May 7 to make a decision. If he approves the plan, it will be put to a vote for the plan’s workers and retirees. But no matter how they vote, Feinberg has the final say.
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If ultimately approved, the cuts could go into effect as early as July 1.

This is likely to be a bigger issue than Puerto Rico in the election, I think. It’s going to affect local politicians. I’ve already seen both Republicans & Democrats in the majorly-hit states making official statements.

You really should watch the video that plays on the page.

No decision yet, and I’ll post once Feinberg does make a decision.

REBOOT ILLINOIS: DON’T MAKE ME TELL YOU AGAIN

There’s nothing healthy about 80%.

There’s something in that opinion piece, but that pic annoys me so much. Quit it. Quit it now.

KENTUCKY

Daily Caller covers Kentucky’s budget/pension issue:

Kentucky Republican Gov. Matt Bevin has put forth a budget to help fund the unbalanced state pension program, but some argue its a small fix to a much bigger problem.

Bevin was elected late last year on a campaign of reform and fiscal responsibility. The state public-sector retirement program has become a huge cost for the state under previous administrations. Bevin proposed a budget April 27 that would add additional funds to the pension program but some argue the plan is only a temporary fix and much more must be done to help reform the system.
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“The problem is that until we deal with the expenditure side of the issue, the additional funding will be a patch, a kind of band-aid,” Waters told The Daily Caller News Foundation. “We still must address the rich benefits we have been giving out as a state. Until we do that its like having the front and the backdoor open.”

The pension system has funding problems due in large part to excesses retirement benefits among other issues. Waters adds the issues are extensive and it will take more than just one budget to get it fixed. He notes that in the short time Bevin has been in office he has fought significant opposition to reform the system.

Maybe the benefits are excessive. I’ll have to look at that.

But whatever the issue, Kentucky has underfunded its pensions for years, even by its own measurements with “happy” assumptions. My prior post on Kentucky.

ARIZONA

A special election is coming up in Arizona on pensions:

Along with education funding, Arizona voters will decide in the May 17 special election whether to change the state’s pension system for police officers and firefighters.

Proposition 124 would change the Public Safety Personnel Retirement System by adding a new cost-of-living-adjustment formula for employees and retirees to reduce the system’s costs. The measure is part of a pension-reform package the Legislature passed this session.

If you vote “yes”
A “yes” vote would cap annual cost-of-living adjustments for retirees and employees in the retirement system at 2 percent. It would also tie pension cost-of-living adjustments to the consumer price index for metropolitan Phoenix.

The proposed changes stem from calls to reform the underfunded public-safety pension system. Economic downturns in 2001 and 2008 ate into money the system has to pay out, said John Ortolano, president of the Arizona Fraternal Order of Police, which supports the measure.

I’ll come back after the election to see how it went.

…and I hear the clock chime — my 20 minutes are up!