Poshard, The Prince Of Pensions
Former Congressman Glenn Poshard / YouTube
Glenn Poshard lost the governor's race in 1998, but these days he's a pension winner – collecting more than $200,000 in taxpayer-subsidized retirement benefits a year, more than the current governor makes in salary.
Poshard's take is one of the biggest among former Illinois politicians.
If you don't see the video above, click here and watch it on CBS2.
But how his retirement payout became so lucrative is a case study in the complexities and excesses of Illinois' pension systems – which have been a massive drain on taxpayers and threaten to undermine state finances for generations because of the debt obligations the retirement funds carry.
What's more, a Better Government Association review found Poshard – who has long positioned himself as a political outsider and reformer, and who recently was named to Governor-elect Bruce Rauner's transition team – capitalized on legal loopholes in the pension systems to greatly enhance his payouts over time.
Poshard collects $189,979 a year in state pensions from three separate public-sector retirement systems, more than the $177,412 salary currently paid to Gov. Pat Quinn, the BGA found. Among former governors, only Jim Edgar gets more in retirement: $205,425, having recently picked up a second pension from his days teaching at the University of Illinois. Former Gov. Jim Thompson gets $143,181 in state pension benefits, records show.
In addition to his state-government pensions, Poshard collects a $15,000-a-year federal pension for his 10 years in the U.S. Congress representing a southeastern Illinois district, bringing his total retirement package to slightly more than $200,000 annually, according to records and interviews.
To date, he's collected more than $1.4 million in state pension benefits, and if he lives until he's 80, that $200,000 he's now getting could increase to an estimated $280,000 a year.
Rauner has vowed to reform Illinois' pension system – suggesting as one possible model a switch for new state workers to a 401k-style program.
Rauner's spokesman said Poshard was tapped for the incoming governor's transition team – which is designed to help Rauner, who beat Quinn in this month's election, hit the ground running when he takes office in January – because Poshard "has a tremendous amount of knowledge about southern Illinois as well as the university system and is respected across party lines."
"His role with the transition is voluntary and not focused on pension issues," the Rauner spokesman said.
Poshard started his career as a Downstate public-school teacher, and served in the General Assembly and in Congress before running as the Democratic nominee for governor in 1998. After losing to Republican George Ryan, Poshard ended up as an administrator at his alma mater, Southern Illinois University, finally retiring as the school's president.
The cornerstone of Poshard's generous state pension is the five years he served as a state senator. Of all state pension systems, the General Assembly Retirement System, or GARS, has the most deluxe features, designed and passed by members of the General Assembly.
Chief among those features is a formula that allowed him to collect a pension starting at 85 percent of his final state-government salaries – which averaged $165,000 as an SIU administrator during his first of two stints at the state government-run college.
Poshard also was allowed to increase his years of state service and thus boost his state pensions by counting unused sick time, un-served state Senate time, and credits purchased for past jobs in the military and while working his way through college, the BGA found. Overall, Poshard's state pensions are based on 30 years of service and credit.
In a telephone interview, Poshard said he has done nothing unethical and "never tried to game the system."
"I can tell you, I worked hard my whole life," said Poshard, 69. "I never shortchanged the state."
Poshard is currently working with his wife for the Poshard Foundation for Abused Children, the nonprofit they founded 15 years ago to help abused children in southern Illinois. The Poshards draw no salary from the group.
In 2003, shortly before he turned 58, Poshard retired from his job as vice chancellor of SIU and began taking his three state pensions, initially collecting about $140,000 a year in total.
"I'm grateful for what I got. I'm happy with it. I can't pass judgment on whether the overall pension was too generous," said Poshard.
Because of Illinois' pension reciprocity law, he was able to combine his time in three systems, and use the $165,000 salary earned as vice-chancellor of SIU as the base salary for his pension for his entire career including his time as a teacher (where his salary never topped $38,000 a year) and as a state senator (where his annual salary never exceeded $36,000.)
As a result, Poshard currently receives the following pension payouts: $76,910 a year from GARS; $65,594 from the State Universities Retirement System, or SURS; and $47,475 from the Teachers' Retirement System of Illinois, or TRS, according to records and interviews.
Thus far, Poshard has collected $1.4 million from those Illinois pension funds, which are supported by deductions from employee paychecks, direct taxpayer contributions and investment income from the pension systems.
Pension deductions from Poshard's paychecks over the years, as well as his purchase of service credits, amount to roughly $135,000. In other words, taxpayers are covering roughly 90 percent of Poshard's state pension payouts.
Working The Angles
Unlike most Americans, Poshard planned ahead for his retirement.
At age 42, while a candidate for Congress in 1988, then-state Sen. Poshard contacted the GARS office – after he was told he was eligible to buy pension credits – to check on his benefits and determine how to maximize his pension years down the road.
A handwritten note in the file said that Poshard "was leaving town & wanted to know right away" what it would cost him to buy credit for the two years remaining in his term as state senator, an office he would vacate if elected to Congress, according to interviews, and records obtained under the Illinois Freedom of Information Act. An initialed handwritten note in his pension file states: "situation discussed at length during office visit of 11/17/88."
Poshard decided to pay the $7,860 for 23 months of credit, increasing his years of service – on paper – to seven years in the General Assembly system.
It was money well spent. The credits now increase his annual pension by $20,000, records indicate.
Later, Poshard bought another 1.25 years of credit in the university pension system from lower-level jobs he had nearly 30 years before while an undergraduate at SIU. The credits cost $5,598 and today are worth $5,000 a year.
Another piece of the pension puzzle was the purchase of 2.5 years of credit from SURS for his time in the U.S. Army in the 1960s. (Poshard wasn't in the military long enough to draw a military pension.)
"I bought in what they told me I could buy in," Poshard said. "I did what was possible."
Poshard's years of service in the Illinois system were also boosted by 1.73 years of unused sick time from his days as a college employee and as a schoolteacher. That added time is now worth about $8,500 a year in extra pension payouts.
Concerned About 'Future'
After Poshard lost the governor's race Ryan in 1998, he left Congress and returned to Illinois.
He and his wife had decided to start their foundation, but Poshard did not know what his job prospects were. He wasn't old enough to draw his state pension, then estimated to pay $30,300.
"We were concerned about our future," Poshard said.
So he decided to take his congressional pension, but at a reduced rate because he wasn't yet 62, when the full federal pension would be due.
Poshard, who has a doctorate in higher education administration from SIU, got the vice chancellor job in 1999 that set the stage for the pension he receives today.
Upon his 2003 retirement from that job, all his careful planning seemed to unravel when state pension administrators told him he'd be getting $131,688 – rather than the $140,556 they'd led him to expect.
He wrote a letter appealing the decision, pleading that he'd already pledged $25,000 a year for SIU scholarships, and hoped to set aside money for his grandchildren.
"I cannot go back and break commitments on scholarships or charitable causes or on future education commitments to my own grandchildren," he wrote.
State officials then said their staff had "not correctly understood" the formula because it was "so complicated" and decided to honor the original, higher estimate. Poshard, however, insisted in the interview with the BGA that the original estimate was correct all along.
Either way, Poshard did not stay retired.
In January 2006 he became president of SIU, a job he held until retiring again in June 2014 with an annual salary of more than $300,000. He continued to collect an annual $100,000 in state and federal pensions during those eight years at the helm of the taxpayer-supported school, with main campuses in Carbondale and Edwardsville and a total of 32,000 students.
While SIU president, he was not allowed to collect his full university pension – the part funded by SIU contributions – but SIU more than made it up to him with an annual $55,066 retirement "annuity," effectively a cash bonus.
Poshard Has Pushed Reform
Since 2003, Poshard's annual state pension has grown by about $50,000 thanks to Illinois' automatic annual 3 percent cost-of-living adjustment, or COLA. Yearly COLA hikes are blamed for greatly magnifying benefits and therefore pension debt in Illinois – and Poshard has previously observed their detrimental effects for taxpayers footing the bill.
"The biggest driver of the unfunded [pension] liability is the 3 percent COLA increase, which is not attached to any measure of inflation or deflation," Poshard said in 2013, testifying in front of state legislators looking at pension reform.
Poshard said in an interview that he and other university presidents advocated reducing the SURS cost-of-living benefit by 50 percent.
"I worked really hard to put a proposal on the table that we thought would work," he said. "The philosophy behind it was everybody has to pay a little bit."
He said the plan had the support of many retirees who are concerned the SURS system would collapse without reform. But the proposal was not approved by the Legislature.
Asked his reaction to a reduction of his own pension if the system were reformed, he said: "It's fine, of course."
This story was written and reported by the Better Government Association's Chuck Neubauer, Patrick Rehkamp and Sandy Bergo, who can be reached at email@example.com or (301) 651-9525.