Ex-Minnesota employees highlight clash over changing pension system

Ex-Minnesota employees highlight clash over changing pension system

Peter Passi
Duluth News-Tribune
April 22, 2012

A Chicago-based watchdog group that trains its critical eye on public employee pensions has turned its scrutiny to Duluth and St. Louis County.

The group's figures, confirmed by the Public Employees Retirement Association of Minnesota, show that 17 retired city or county workers receive pensions of more than $100,000 a year.

At the top of the county list was Robert Zeleznikar, a retired director of social services, who receives $160,051 a year in pension payments after 40 years of employment.

Although the Taxpayers United of America uses the numbers as an argument to replace defined-benefit pensions with defined-contribution accounts such as 401(k)s, PERA and union officials said the amounts cited by the watchdog group are far higher than most public workers' pensions.

"Many government retirees make more in pension payments than private-sector taxpayers make in salaries," said Christina Tobin, vice president of Taxpayers United of America, questioning whether those levels of retirement pay are sustainable.

But state PERA executive director Mary Vanek said that by focusing only on the highest-paid public pension recipients Taxpayers United doesn't present a complete, representative picture.

"They've picked a demographic that clearly skews the facts," Vanek said. "The important thing to realize is that less than one-quarter of 1 percent of PERA participants get more than $100,000 per year."

In the fiscal year that ended June 30, 2011, PERA paid a little more than $100.4 million to 5,004 retirees, said Susan Barbieri, communications officer for Retirement Systems of Minnesota. That translates to an average annual pension of $20,700.

Taxpayers United of America compiled a list showing the top 25 government pensions received by Duluth and St. Louis County retirees. Topping the city list was Janet Schroeder, who retired as the director of Duluth's libraries 20 years ago.

Vanek of PERA confirmed that the information about monthly payments came from her organization, as it is a matter of public record.

Schroeder said she made much less at the library than directors in similar posts across the country and less than others who worked for the city.

"I have no idea why they would have me higher on the list," she said.

Schroeder noted that individual workers aren't in the driver's seat when it comes to determining pension pay. "We have no say, really, on what the pensions are," she said.

As for being labeled a "pension millionaire" by Taxpayers United, Schroeder was dubious.

Ben Boo, former Duluth mayor, St. Louis County purchasing agent and state legislator, said he hasn't paid attention to his pension since retiring 20 years ago, saying PERA does all the figuring for him.

The numbers attributed to him - $8,449 a month or $101,393 a year - seem high, he said. As for pension reform, he said, "Those were the rules that were in place."

Boo said his salary as mayor was $48,000, and his top salary as a legislator was $20,000.

Zeleznikar, who retired in 1992 from St. Louis County at the age of 64, declined comment about his position at the top of the list.

Though the Duluth and St. Louis County pension payments might sound generous, Tobin said local pension figures are very much in keeping with what her organization has found in other communities, as well.

"It's an eye-opening experience when you see the names and amounts being paid in your community," said Rae Ann McNeilly, director of outreach for Taxpayers United.

For a variety of reasons, public pensions as far above the average are expected to be increasingly rare.

During the stock market's go-go years, when investments were performing well, PERA provided far more generous annual increases in its payments to retirees.

Vanek said many of the people on the Taxpayer United list have been drawing benefits for 20-plus years and received nice bumps in payments between 1992 and 2003 to reflect the fund's handsome investment gains at that time.

Those kinds of benefit increases are not expected to return in the foreseeable future. PERA now makes only a 1 percent upward adjustment each year.

In addition, unions have willingly made recent concessions in pension compensation to keep the system solvent, according to Alan Netland, president of the Northeast Area Labor Council.

Government unions should be outlawed. Period.

But the fact that they have collective bargaining rights is sheer insanity!