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Are you among the growing number of workers whose employer does not offer a pension plan or whose employer has frozen existing benefits?
Don’t expect your state legislators to feel your pain. Their pension plans are in excellent shape thanks to the 4-to-1 match Indiana taxpayers have been contributing since 1992. And don’t feel sorry for the lawmakers when their plans are pared down, effective Jan. 1. The new plan is still far more generous than what almost all other workers enjoy.
Details about how the generous perk has accumulated are now available only because the information was leaked to the Indianapolis Star. Several years ago, legislators adopted a law keeping confidential specific information about their publicly funded retirement benefits.
What the leaked information revealed were benefit packages for part-time work far exceeding anything found in the private sector. For the past 16 years, the state has been kicking in a contribution equal to 20 percent of a legislator’s salary – compared to private-sector contributions that generally don’t exceed 3 percent.
For Indianapolis-area lawmakers, whose generous per-diem payments are figured as part of their salary for federal tax purposes, the benefits packages have grown particularly large. Sen. Beverly Gard, R-Greenfield, has had her $32,727 contribution matched with a $130,908 taxpayer contribution. Rep. William Crawford, D-Indianapolis, has invested $32,710 of his own to $130,842 of the state’s money.
Not bad for a part-time gig. Gard is a retired biochemist, who most likely has a pension package through Eli Lilly, her former employer. Crawford earns $77,000 a year from Ivy Tech Community College, where he is also accumulating benefits under the Public Employees’ Retirement Fund with a 15 percent contribution rate.
Rep. Phyllis Pond, R-New Haven, joins Gard and Crawford among the top 10 for contributions. The retired public schoolteacher has contributed $29,751 of her salary since 1992, while taxpayers have matched that amount with $119,005.
The generous packages represent the consolation prize lawmakers awarded themselves in lieu of raises in 1989. With bipartisan support, they created the 4-to-1 match, and it was finalized three years later. That didn’t eliminate their complaints about an $11,600 base salary, however. So in 2007 they made a grand show of cutting their pension benefits – while increasing their pay.
“It is high time that we address this in the way we have today, to finally deal with an issue that has dogged our legislature for 22 years,” said Senate President Pro Tem David Long, R-Fort Wayne. “This couldn’t be a more transparent and open process than what we are undertaking now.”
What they did was to almost double their base salaries but cut the 4-1 pension match to 2-1 – a hit that won’t be terribly noticeable. Under the old plan, taxpayers’ 20 percent contribution amounted to $2,320 of the $11,600 base. Effective next year, taxpayers will contribute about 9 percent of the $22,600 base salary – or $2,034.
In addition, lawmakers tied their salary increases to the average raise given every year to state employees of similar salary brackets. That means senators and representatives will never again find themselves in the uncomfortable position of voting themselves a raise.
Sen. Gary Dillon, R-Columbia City, was author of the legislation, which was supported by all northeast Indiana legislators except for Sen. Dennis Kruse, R-Auburn; Rep. Phil GiaQuinta, D-Fort Wayne; Rep. Win Moses, D-Fort Wayne; and Pond. All the legislators, however, have benefited from the generous pension package.
Lawmakers like to talk about the sacrifices they make to serve, but they mostly overlook the generous benefits their service affords. That’s why voters must remind them.
