Pension Problems: State worker’s payout 7 times larger than expected

As if the state’s pension debt isn’t enough there are now more problems.  This time it has to do with the pension payouts.  An error causes a former state employee to collect a pension nearly 7 times what was supposed to be paid out.

Bill Zettler wrote “Illinois Pension Scam”, a 300 page book on the state’s pension issue.  He’s also the Director of Research for the Family Taxpayers Foundation.  For a decade he’s poured over the benefits of thousands of the state’s retirees and he says in this case the mistake was very obvious.  Zettler says “This woman worked less than 10 years and her pension was over $130,000 a year, that doesn’t sound right to me.”

The State Employee Retirement System confirming there has been a mistake.  A nearly $137,000 dollar yearly pension was way off.  It should’ve been about $20,000 per year for 63-year-old Carolyn Brown Hodge since she contributed $25,000 over her 10 year employment with the state.

Brown Hodge was once Governor Quinn’s Deputy Chief of Staff.  She resigned in late 2009 and later retired after an Ethics Commission fined her $1,000 for using state property for political work.  Back then, she didn’t feel she did anything wrong but resigned to avoid any “cloud” over Quinn’s administration.

Brown Hodge says she is “ready and willing to pay back anything owed.”  She goes on to say, “in fairness, if any interest is owed I’m willing to pay that as well.”

It’s not the first time this happens.  In January, an Appellate Court ruled in favor of David Sharpe, a former secretary of state investigator being paid about $3,200 a month for under a year.  That’s a $600 overpayment each month.  The State Employee Retirement System tried to recoup the money but according to the court, the pension board has 35 days to correct it.  Since the mistake wasn’t caught in time Sharpe doesn’t have to repay the money and they can’t re-adjust his pension.  In Carolyn’s case it’s been well over the 35 days too.  In fact, it’s been 3 years or about $374-thousand dollars.

So what happens now?  Zettler says we need to look at Senate Bill 3309, “the law would allow the state to go back and collect the past due amount so her pension would go to $1,400 a month.”

Representative Larry Walsh is one of the sponsors of Senate Bill 3309 and says, “I don’t know whether we are going to recoup that money because it’s happened before we passed the law.  It’s something the courts will have to decide if there will be some repayment or adjustment.

WGN spoke with the Executive Director of the pension system, Tim Blair, who did not want to be on camera.  He says they’ve checked and there are no other errors.  They’ve also put in place some internal controls for checking and entering data.  As far as Senate bill 3309, it passed the Senate and now needs to be approved in the House sometime this week.

Brooke Anderson, a spokesperson for Gov Quinn, sent WGN a statement saying, “We have nothing to do with this.  The State Employees Retirement System is independent by law and does not report to the Governor’s Office.  They have made a serious mistake that needs to be rectified right away. All overpayments should be immediately recouped.  The individual you interviewed has not worked for the State of Illinois since 2010 when she was let go.”

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