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Critics Question Perry's Move to Collect Pension

Gov. Rick Perry has sparked a wave of criticism, and some unanswered questions, after filing paperwork this week revealing that he is collecting both a salary and a pension from the state of Texas. Critics say there are rules designed to prevent such arrangements. Perry and his aides say its perfectly legal.

Gov. Rick Perry in Council Bluffs, Iowa, on Dec. 14, 2011

SPENCER, Iowa — Gov. Rick Perry has sparked a wave of criticism, and some unanswered questions, after filing paperwork this week revealing that he is collecting both a salary and a pension from the state of Texas.

The Republican presidential candidate, who is trying to pull off an electoral surprise in Iowa, disclosed to the Federal Election Commission Thursday that he was earning a gross monthly retirement annuity of $7,698, or about $92,000 a year. Aides said the governor officially retired as a state employee in January but continues to draw his $150,000-a-year salary, and he expects to retire again with a higher pension as a member of the “elected class” when he leaves office.

Aides cited an obscure provision of the Texas Government Code, chapter 813.503, that they say allows him to legally draw full-time pay and then retire twice.

But critics are crying foul.

“We’ve never heard of this,” said Craig McDonald, director of Texans for Public Justice, a liberal watchdog group in Austin. “It’s a total shock that the governor is collecting a retirement while he’s making his big old gubernatorial salary.”

McDonald said the arrangement undermined Perry’s core campaign message about career politicians who profit from public service.

“He raises questions about excessive perks and the revolving-door lobby and says he wants to cut congressional salaries. This guy needs to look at his own front porch and clean it up before he goes after Washington,” McDonald said.

Perry was asked about his unusual retirement arrangement during a swing through Cherokee, Iowa. The governor is trying to convince Iowa voters to give him another look after his campaign sputtered

“I would be surprised why someone would not take a retirement that they were eligible for. It's just kind of good estate planning in my opinion," Perry said.

One Democratic operative, though, questioned whether Perry is indeed eligible to retire from a job he never left without violating any rules designed to prevent just that.

Jeff Rotkoff, founder of an anti-Perry Democratic political action committee connected to Texas trial lawyer Steve Mostyn, said state employees generally are required to sign a sworn termination agreement, under penalty of perjury, when they retire. He said the paperwork makes clear that employees must agree that their pensions will be canceled if they stay on the payroll after retiring and cannot have a commitment from their present employer to be re-hired.

"It is clear that Rick Perry broke both of these rules in his highly unusual decision to game the system and double dip retirement pay and his governor's salary. Perry should come clean and disclose the details of this unethical transaction,” Rotkoff said. “Texans — and the American public — deserve to know if Perry signed his name to an agreement that he not remain on state payroll or be immediately rehired after his retirement. If he did, it is appropriate to ask if he committed perjury, or if he owes Texas taxpayers a refund.”

According to a provision of the Texas Administrative Code dealing with the Employee Retirement System, federal tax laws require that employees leave their jobs in order to qualify for retirement.

The provision states:

In order to satisfy Internal Revenue Service requirements that a retirement is bona fide and results in a termination of employment, a retirement shall be canceled and membership reinstated:

  (1) If the member holds a position in the class from which he retired during the calendar month following retirement; or

  (2) If a retiring member has a commitment from his present employer to be rehired. At the time of retirement, a retiring member must disclose to the retirement system any commitment from his present employer to be rehired.

(b) If the person attempting to retire establishes that the only service credited in the month after the proposed date of retirement was as the result of an oversight on the member's part or on the part of the employee's department, the member may petition the executive director for relief. The executive director may, for good cause, permit the retirement to be effective on the last day of the last month in which credit was established. The applicant must refund any annuity paid for a month prior to the new effective date of retirement.

Perry spokesman Ray Sullivan said the governor did not have to sign any termination or separation agreement, but he did not immediately provide any documentation related to Perry’s retirement. The provision of the law Sullivan cites allows transfers of credits between the “employee class” and “elected class,” but does not specifically spell out how to retire from both of them while staying in the same job. Pension records of Texas elected officials are considered private under state law.

It is not uncommon for state employees to retire and continue working for the government. But under a law Perry signed in 2009, employees are required to wait 90 days before taking a new state job. Perry also signed legislation in 2005 to financially penalize school districts that rehire retired teachers.

There is a separate provision, Government Code 812.203, that prevents state lawmakers from collecting their retirement benefits while still serving. For example, when Rep. Delwin Jones, R-Lubbock, got re-elected to the Legislature in 1988 after a 16-year hiatus, the state suspended the retirement payments that he had been receiving as a former member. Now that he’s retired again, Jones is again collecting a legislative pension, a larger one that reflects the additional 22 years he served from the second tour of duty.

“Once I was sworn in it stopped my retirement pay, and all I could get was my legislative pay,” he said. “I agree with that. I don’t think I should draw retirement and still be in the Legislature.”

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