How State Lawmakers Pump Up Pensions in Ways You Can't

September 24, 2011 -- At age 55, South Carolina state Sen. David Thomas began collecting a pension for his legislative service without leaving office.

Most workers must retire from their jobs before getting retirement benefits. But Thomas used a one-sentence law that he and his colleagues passed in 2002 to let legislators receive ataxpayer-funded pension instead of a salary after serving for 30 years.

Thomas' $32,390 annual retirement benefit — paid for the rest of his life — is more than triple the $10,400 salary he gave up. His pension exceeds the salary because of another perk: Lawmakers voted to count their expenses in the salary used to calculate their pensions.

No other South Carolina state workers get those perks.

Since January 2005, Thomas, a Republican, has made $148,435 more than a legislative salary would have paid, his financial-disclosure records show. At least four other South Carolina lawmakers are getting pensions instead of salaries, netting an extra $292,000 since 2005, records show.

Pension perks aren't unique to legislators in South Carolina.

More than 4,100 legislators in 33 states are positioned to benefit from special retirement laws that they and their predecessors have enacted to boost their pensions by up to $100,000 a year, a USA TODAY investigation found. Even as legislators cut basic state services and slash benefits for police, teachers and other workers, they have preserved pension laws that grant themselves perks unavailable to voters they serve or workers they direct.

Oregon: Double dipping

In some states, lawmakers add expenses, per diem allowances and stipends to their base salaries. That inflates the compensation that's used to calculate retirement benefits, which are typically a percentage of final pay. In other states, legislators have written a special definition of salary that applies only to their pensions. Additional tactics include:

•Basing pensions on salaries legislators are not paid or were paid in non-legislative jobs.•Collecting state pensions while also collecting legislative paychecks.•Retiring earlier — at a younger age or after fewer years — than other state workers, or with richer benefits.

"It's mind-blowing hypocrisy," says state Rep. Stephen Webber, a Democrat from Missouri. State lawmakers there meet for roughly five months a year and are paid slightly more on average than a state worker, but records show a typical lawmaker's pension averages 30% more than a state worker's. The reason: rules legislators wrote for themselves.

"The whole two-tiered system really encapsulates how we've operated here in Missouri and in the rest of the country," he says. "Lawmakers treat themselves differently."

The generous systems mean that at least 570 lawmakers in 19 states have qualified for pensions that will pay them as much as — or in one case 17 times more than — their base legislative salaries, USA TODAY found.

That represents nearly 10% of the 5,900 lawmakers in the 40 states with legislative pensions. About 450 are lawmakers in Mississippi, Kansas, South Carolina, Texas and New Mexico, a state where lawmakers receive no salary but can get a pension with five years of service.