List of Top 200 Pension Earners Shows Potential for Big Payouts
It’s no surprise that working for the city can land someone a pretty sweet retirement deal. A taxpayer watchdog group Tuesday released a list of the top 200 pension earners in Chicago, and all of them make more than six figures annually. The top earner on that list could make more than $7 million off of taxpayers over his lifetime.
But are high benefits the only reason Chicago taxpayers are drowning in red ink?
All of the top 200 earners could make multiple millions if they live to be 85, according to a list of city data compiled by the right-leaning nonprofit Taxpayers United of America.
Many of the top earners retired in their 50s and early 60s and enjoy 3-percent compounded raises every year.
Here are the top five earners:
Dennis Gannon is number one with a pension just under $200,000 annually and stands to make as much as $7 million over his retirement. Gannon was actually a top labor leader who took advantage of a loophole to have his city pension based on his non-city job as a labor leader, even though he didn’t originally work long enough with the city to qualify for such a high pension.
And there are some retired aldermen on this list – the top five earners are:
The report’s author says that this is what’s bankrupting the city, and other layers of government in Illinois.
“All these people in the top 200, all of them are pension millionaires,” said TUA President Jim Tobin. “And this is one of hundreds of local pension funds. There are state pension funds. There just isn’t enough money to pay these people. The system has to be reformed and the pensions cut.”
But not every observer agrees with that outlook.
It’s worth remembering the city has raised property taxes, water and sewer fees, and more over the last four years to start to stabilize its four dangerously underfunded pension systems. The city paid either nothing or woefully underfunded the required annual payments for many years.
Ralph Martire of the left-leaning Center for Tax and Budget Accountability says that’s to blame for the city’s pension mess, not individuals who may take advantage of loopholes.
“That stuff is not defensible, and I don’t think we should allow it. That said, it’s not the material driving problem, it’s barely a rounding error in the cost,” he said. “The real problem has been the failure to make the actuarial required contribution, which was affordable if they chose to make it, which they chose not to. They chose not to by designing a statutory payment system that literally allowed them to underfund the pension system for generations, and we’re literally paying for that now.”
And just as they diagnose the problem differently, they have different solutions.
Tobin says taxpayers should be allowed to vote on a constitutional amendment allowing lawmakers to cut retiree pensions.
Martire says there will need to be more revenue, especially in about 2021, where taxpayers will owe upwards of a billion more on top of what they’re paying into the systems now.
Follow Paris Schutz on Twitter: @paschutz
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