This is one in a series of occasional stories about ethics and transparency in the part-time Texas Legislature.
State elected officials, from the governor on down, have the kind of pension benefits that people in the private sector can only dream of. The benefits are vested after just eight years. They can retire at age 50 with 12 years of service. There are multiple avenues to boost their pension amount. There is even a provision allowing them to double dip their salary and retirement benefits.
And it is all completely secret.
Individual records held by the state’s public pension systems — including the one that state lawmakers pay into — have an airtight exemption from the landmark 1973 sunshine law that was designed to let taxpayers know how public money is being spent. The secrecy has made it difficult for voters to know what kind of pension benefits their elected representatives are getting — or helping give to others.
Now some lawmakers want to start peeling back the layers of pension privacy, both for the Legislature and various public retirement systems that state and local policymakers say have been reluctant to cough up information about the health of their retirement plans. State Rep. Bill Callegari, R-Houston, chairman of the House Pensions Committee, has filed House Bill 13, designed to increase and standardize reporting requirements for all public pension systems in Texas.
State Rep. Giovanni Capriglione, R-Southlake, wants to repeal altogether the provision that makes the records private. He said his legislation, HB 526, would shed light on controversial practices like large lump sum payments and salary “spiking” — a tactic that workers sometimes have used to boost their retirement benefits right before they leave their jobs. Capriglione said he doesn't want the state to release sensitive personal information like account numbers or home addresses.
Capriglione’s measure would also allow citizens to see what state pension benefits their current and former legislators are receiving. Although members of the Legislature only make $7,200 a year in salary, their retirement benefits are tied to the salary of a state district judge, currently set at $125,000.
So a state legislator with 20 years of service can retire at age 50 with an annual pension of $57,500. That figure can be boosted by provisions that allow lawmakers to buy additional years, add military service and get credit for service in other state pension systems. But they don't have to tell taxpayers about any of it.
"If you're an elected official, that needs to be disclosed 100 percent,” said Capriglione, who has decided to opt out of the pension benefit for himself. “The public has a right to know almost everything that we’re doing.”
The retirement generosity legislators have bestowed upon themselves was thrust into the public spotlight when Republican Gov. Rick Perry was running for president in late 2011. That’s when he revealed on federal disclosure forms that he was taking both his $150,000 salary and a $92,000 gross annual pension — a legal double dip.
That benefit is only available to elected officials, who are allowed to retire as state employees and still retain membership in the "elected class." Perry, without ever leaving his job, retired from the “employee class” in early 2011 and will be allowed to retire again, from the elected class, once he leaves office for good.
Bob Bullock, who spent most of his life in state government, revealed his intention to double dip before the Democrat became lieutenant governor in 1991. Perry had to disclose his pension under federal rules; the state forms don’t require it.
Two state lawmakers, Rep. Chris Turner, D-Grand Prairie, and Rep. Donna Howard, D-Austin, are pushing proposals that would require all state elected officials and high-ranking bureaucrats, like major agency heads and appointees, to disclose any state pension benefit when they submit financial disclosures to the Texas Ethics Commission. Turner has a separate bill to ban double dipping by elected officials.
Requiring current legislators to reveal pension income on their ethics disclosures would not allow public inspection of all "elected class" pensions. Over the years, the Legislature has extended the elected class benefit to nonelected officials, such as high-ranking officers of the House and Senate and legislative agencies. The Employees Retirement System could not say this week how many nonelected officials — current or former — are in the elected class or whether revealing how many fit into that category would run afoul of the secrecy guidelines.
The privacy protections kept the government watchdog group Texans for Public Justice from getting any information about the state pension income of former lawmakers who are now lobbying their colleagues on behalf of special interests. In 2011 the group submitted a list of the lawmaker-turned-lobbyists to ERS and the state comptroller's office and asked how much money they were being paid in pension benefits.
After being turned down, TPJ filed a lawsuit in Travis County late last year. Last week a judge ruled the state could not release the data because the Legislature had drawn the privacy provision so tightly. In recent years, lawmakers even took power away from the Texas attorney general to determine whether a request for information about pension records, no matter how minor, violates the privacy law.
"The taxpayers are chipping in a big chunk for these pensions, and they ought to be able to see where their money is spent," said Craig McDonald, director of the watchdog group. "What's outrageous is, not only did they shut it off by legislation, but they shut off any outside review. It's clearly in their interest not to get the public angry."
The effort to make the pension system more transparent has drawn opposition by various public sector employee advocates, some of them concerned that it will lead to calls for ending traditional pensions and replace them with "defined contribution" retirement benefits, such as a 401(k) plan. Others consider the release of their pension information an invasion of privacy.
Gary Anderson, director of the Texas Public Employees Association, said employees have come to expect that their pension income is "private information." Anderson pointed out that most of the retirement benefits that state employees receive comes from earnings from investments made by the ERS fund, and he said state retirees don't "spike" their pay or get automatic cost-of-living adjustments.
According to ERS figures, the average state retiree in the ERS is 68 years old and draws $18,800 a year after 22 years of service. By comparison, a Texas legislator with just eight years of service could retire at age 60 and make $23,000 a year.
Capriglione said he has been surprised at the objections to his efforts to open the pension system up to public scrutiny.
"I never thought I'd come here and say I want to make public records more public and have people battle me on that," Capriglione said. "I hope when we get these bills passed we find out why."
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