Including first lady, 165 get more than $80K in WV state pensions
By Joel Ebert, Staff Writer and Samuel Speciale, Charleston Gazette-Mail
West Virginia’s first lady, newly retired from her longtime position as the president of Southern West Virginia Community and Technical College, is now drawing more than $110,000 in annual retirement benefits, according to state pension data.
Joanne Tomblin, who retired in June after 15 years at the helm of the college, is set to receive $111,260 in annual benefits, or nearly $9,300 every month. Before she retired, the school paid Tomblin an annual salary of $166,336.
Tomblin, 62, is one of 165 state pension recipients who draw more than $80,000 in annual benefits, according to information obtained by the Gazette-Mail through an open-records request. That group, which includes public employees, teachers, state troopers and judges, collectively receives nearly $1.3 million every month, or more than $15.5 million each year. Tomblin’s annual benefits make her the 17th-highest earner and one of 40 state pension recipients who top $100,000.West Virginia has nine retirement systems — one each for public employees, judges, deputy sheriffs, emergency medical workers, and municipal police and firefighters, and two each for teachers and state police. Some are closed for enrollment, but the nine systems serve more than 140,000 active employees and retirees.
While each plan is different, with employees contributing varying amounts to their respective funds, all enrolled state workers — whether they have worked for 25 years, five or are newly hired — have a pension of some size waiting for them when they retire.
For instance, Robert Claus, a former state trooper, receives $113,153 each year despite only paying into the system for seven years, while Gail Hall, a former teacher who contributed for 54 years, receives $90,911.
It’s an archaic system but one preferred by state governments, even when private companies have mostly ditched defined benefits for cheaper 401(k) plans. That’s because they attract employees who might not make as much working for the government as they would in the private sector, said Jeffrey Fleck, executive director of West Virginia’s Consolidated Retirement Board.
“It’s been a recruiting tool for decades,” he said.
In an attempt to analyze West Virginia’s pension system, which in recent years has accounted for 10 percent of the state’s budget, the Gazette-Mail created a searchable database of all recipients who receive more than $80,000 in annual benefits. That database can be found at www.blogs.wvgazettemail.com/capitolnotebook.
About 57 percent of those drawing more than $80,000 a year have begun receiving benefits since 2009. Since then, the number of retirees meeting that threshold has significantly increased — by as little as nine in 2010 and as many as 22 in 2014. As of Aug. 5, the state’s pension systems have seen 12 new people added to the $80,000 club this year alone. The increase in the number of individuals who began collecting more than $80,000 is a rather recent phenomenon. From 1987 to 2009, there was only one year — 2001 — when more than 10 people collected more than $80,000 in a single year. However, in the past five years, including 2015, each year an average of 15 individuals making more than $80,000 have been added to the pension rolls. In total, the number of state pension recipients drawing more than $80,000 in annual benefits has increased in recent years. Two years ago, the Charleston Daily Mail conducted a similar review of the nine-plan system and found that 98 people met that threshold. They collected a total $9.2 million each year. Those numbers have since increased to 165 recipients and $15.5 million in annual benefits.
With 60 retirees drawing more than $80,000, teachers make up the largest portion of the club. State troopers are next, with 57, while the judges and public employees retirement systems have 36 and 12 members meeting the threshold, respectively.
In 2013, the largest number of individuals collecting more than $80,000 a year in pensions were judges. A total of 35 judges received pensions over the threshold, followed by 29 state troopers, 27 teachers and 7 public employees.
No one enrolled in the deputy sheriff, emergency medical services or municipal police and firefighters retirement systems, most of which recently were established, meets the $80,000 threshold.
Below is a look at the four pension systems with members who made the cut:
Public Employee Retirement System
Under this system, employees can retire with full benefits when they are 55, as long as their age combined with their years of service total 80. Employees also can retire at 60 with as few as five years of service.
There are 12 pension recipients in the Public Employee Retirement System who receive more than $80,000. They collect $1.1 million in benefits annually. Two former public employees — Joe Hatfield and Arturo Lumapas — collect more than $100,000. Hatfield, who annually collects $136,119, is the second-highest pension recipient in West Virginia.
For this plan, active employees contribute 4.5 percent of their gross monthly salary, which goes into a general fund. As of July, the employer contributes 13.5 percent of the employee’s salary. Previously, it was 14 percent.
Upon retirement, a pension recipient’s yearly benefits are determined by taking his or her final average salary and multiplying it by years of service and then by 2 percent. The final salary is an average of the highest 36 months of salaries over the last 15 years of service.
The Public Employees Retirement System is broken into categories for state employees and non-state employees. State employees, as their name would suggest, worked for the state government. Non-state employees are those who worked for a city, county commission or any other local government agency not affiliated with the state.
This plan is 81.3 percent funded.
Teachers Retirement System
Along with public employees, the Teachers Retirement System is the largest in the state. The two systems operate differently, though.
Teachers, principals, school service personnel and county- and state-level administrators in West Virginia can retire at any age with full benefits, as long as they have 35 years of service.
There are 60 pension recipients in the Teachers Retirement System who receive more than $80,000. They collect $5.6 million in benefits annually. There are 16 who collect more than $100,000, including the state’s top benefits recipient, Olen Jones. Jones, a former Marshall University provost and president of the West Virginia School of Osteopathic Medicine, paid into the system for 45 years and draws $169,674 annually.
For this plan, employees contribute 6 percent of their monthly salaries, while the employer, be it a county school board or the West Virginia Department of Education, contributes 7.5 percent.
Benefits are determined by using the same formula as the public employee plan, only the final average salary is calculated by taking the five highest-salary years out of the last 15 years of employment.
At 66.2 percent, the Teachers Retirement System is West Virginia’s least-funded pension plan. While still considered underfunded, the state has dramatically improved the system since 1991, when it was only 9 percent funded.
Judges Retirement System
Under this retirement system, employees can retire at 65 with 16 years of service, 12 of which must come as a sitting judge or justice. They also can retire at any age with 24 years of service, of which 12 must come as a sitting judge or justice. Those appointed or elected after July 2005, however, are required to serve 14 years on the bench before they can receive retirement benefits.
There are 36 pension recipients in the Judges Retirement System who receive more than $80,000. They collect $3.4 million in benefits annually. Thomas Steptoe, a two-term House of Delegates member and Jefferson County circuit judge of more than 20 years, is one of those recipients. His father was a member of Steptoe & Johnson PLLC, an energy-law firm with political ties across the state.
Although four judges collect more than $100,000, none of them are among the top 10 pension recipients in the state.
Judges contribute 7 percent of their monthly salaries, and the judiciary contributes the remaining amount needed to actuarially fund the system.
Benefits are based on the current salary of a judge’s successor. Judges elected or appointed before 2005 receive benefits equal to 75 percent of their former office’s current salary. Those elected or appointed after that date receive 75 percent of their own final average salary, which is calculated using an average of the highest 36 consecutive salary months.
The judges plan is West Virginia’s best-funded retirement system. Because of better returns on investments than expected and more money than required being contributed, the plan is 155.8 percent funded.
State Police retirement systems
West Virginia has two retirement systems for the State Police, although only one plan is open for enrollment.
Under the open system, troopers can retire at 50 with 25 years of service or at 52 with 20 years of service. Under the old plan, they could retire earlier.
There are 57 pension recipients in the State Police Retirement System who receive more than $80,000. They collect $5.3 million in benefits annually. Three of the top five pension recipients have paid into the troopers’ retirement system. The highest recipient — Clifford Akers — annually receives $122,095 for his 20 years of service. In total, there are 18 retired troopers who collect more than $100,000.For this plan, employees contribute 12 percent of their base salary and the employer contributes 13.5 percent.
Benefits are paid in monthly installments in an amount equal to 2.75 percent multiplied by the years of service multiplied by the final average salary, which is the average of the five highest-salary years within the employee’s last 10 years of service.
The state trooper plans are 86.1 percent and 105.5 percent funded, respectively.