A KSTP-TV news story on Sunday about high pension payouts to some retired state employees was criticized today by the three major state pension funds.
Says a statement from the Retirement Systems of Minnesota:
Sunday night KSTP ran an error-ridden, sensational story about the pension systems that focused on people receiving high pension amounts and argued that public pensions are not sustainable.
Most of the allegations in the report are just flat-out wrong.
The three statewide retirement systems, covering more than 175,000 retirees, are the Minnesota State Retirement System, the Teachers Retirement Association and the Public Employees Retirement Association.
In a statement, the organizations make these points, challenging the news story and offering perspective:
- Most public pensions in Minnesota are not in the six figures. Only 36 out of 35,000 Minnesota State Retirement System benefit recipients receive over $100,000 per year, 190 out of 55,000 Teachers Retirement Association benefit recipients, and 240 out of 84,000 Public Employees Retirement Association. Most of these people were in plans that contributed 8 percent of their salary to their pensions. Most did not contribute to Social Security and are ineligible for those benefits.
- PERA’s average pension is $1,300 per month, MSRS’s is $1,600, TRA’s is $2,300. This works out to annual payments in the $20,000 range – a far cry from the six-figure annual payouts KSTP tried to pass off as the norm for public retirees.
- MSRS is 86 percent funded, PERA is 76 percent funded, and TRA is 78 percent funded. Combined, the systems have $53 billion in assets. We have legislation in place to stabilize the three systems over the long haul.
- The Taxpayers United spokesman stated that the promises cannot be kept. This is not true. The pension systems, together with their boards of trustees and state legislators, work continually to ensure the long-term financial viability of the funds.
- KSTP referred to Taxpayers United data, which contains inaccurate information about lifetime payout. Taxpayers United took factual data on pension amounts and extrapolated lifetime payouts — these calculations are wrong. Taxpayers United also suggested that the simple solution would be to put new hires in a 401(k) account. We studied that, and once you choke off the fund by funneling new members contributions into a 401(k), the state would have to kick in an extra $2.76 billion to fund the current retirees and members for the three Minnesota statewide systems. Not a smart move.
- KSTP continues to use “double-dipping” or “triple-dipping” to refer to retirees who collect pensions from more than one system (MSRS and PERA, or TRA and PERA). Despite numerous communications from the pension systems, KSTP reporters ignored explanations of how job changes affect a person’s pension and continue to imply that there’s something wrong with receiving pensions from two or three plans. Clearly, they do not understand that multiple pensions don’t accumulate concurrently; that when someone changes jobs, the pension from their old job ceases to accumulate.
Wrote Susan M. Barbieri, communications officer for the Retirement Systems of Minnesota:
Yes, KSTP does have a political agenda. They walked in here with preconceived notions and wouldn’t let facts get in the way of the story they wanted to tell