Remember that post on the aldermen of Chicago getting a nifty boost in their pensions?
Guess who also “lucked out” in optimizing his take in the Chicago pension game?
Two years into his reign as Chicago’s longest-serving mayor, Richard M. Daley took advantage of the state’s convoluted pension system to significantly increase his potential payout while saving $400,000 in contributions, a Tribune/WGN-TV investigation has found.
Daley, a former state senator, made it happen by briefly rejoining the legislative pension plan in 1991. He stayed there just one month before returning to Chicago’s municipal pension fund, but the switches made him eligible for benefits worth 85 percent of his mayoral salary — a better rate than all other city employees receive.
He was just 49 years old at the time. Even if Daley had never won another election, he could have started collecting a public pension at age 55 of $97,750 a year. Without the steps he took, his public pension benefits at that age would have been worth just $20,686.
Of course, Daley went on to win five more elections, remaining ensconced on the fifth floor of City Hall for the next two decades. When he retired last May, his pension benefits had grown to $183,778 a year — about $50,000 more than he would have otherwise received.
There is a lot more at the link.
But wait, here’s yet one more wrinkle:
The maneuvers not only boosted Daley’s benefits but also saved him hundreds of thousands of dollars in pension contributions, records show.
Normally, when people transfer pension credit into a more lucrative plan, they have to pay in extra money to compensate for the increased benefits, according to pension fund experts interviewed by the Tribune. The terms of the transfer should also be based on their current salary.
Yet under another obscure state law, Daley was able to transfer his years of service with Cook County and the city of Chicago to the state legislative pension fund without making additional contributions.
Funny how Daley was such a master of obscure state laws.
And how much it enriched him without having to dip into his own pocket.
I wonder how many other Illinois politicians were as savvy? I bet it wasn’t just Daley who took advantage of this situation.
And this is just one of the many reasons I am against politicians being allowed state pensions. They make up various benign-sounding laws and they exploit the hell out of them for their own personal gain.
I think there should be an encouragement for people not to be in public “service” as a politician. They should be encouraged to make an honest wage somewhere.
In any case, if I were Daley, I’d be squirreling that money away. Who knows how long it will last, especially given GARS (the General Assembly Retirement System) is the worst-funded of the Illinois state pensions.