The top pension payouts to retired public educators in Michigan go mostly to former community college presidents. That makes sense — those are typically the highest paid school employees in the state.
But there’s one exception: Iris Salters, the former president of the Michigan Education Association. She takes home a hefty $148,000 annual pension. Salters taught in Kalamazoo for 32 years, but she never earned near that amount as an educator. So how did she land such a lucrative, taxpayer-funded pension payout?
It’s because of a little-known pension spiking scheme the MEA exploits for some of its employees. When people leave their school district to go work for the MEA, they are no longer a government employee and do not qualify for additional public pension benefits. But the MEA gets school districts to pretend that they’re just “loaning” these employees to the union, so that they can continue to accrue taxpayer-funded pension benefits, even though they work full time for the union, a private entity.
Most of the recent leadership in the Michigan Education Association has exploited this loophole:
■Paula Herbart is the current president of the MEA. She was a teacher in Fraser schools but left during the 2012-13 school year to go work for the union; part of her salary is paid by the district and reimbursed by the union to allow her to continue to accrue years of service to boost her future pension payout.
■Steve Cook was president of the MEA prior to Herbart. He was a paraprofessional in Lansing Schools for 15 years before leaving the district to work for the union. His pension for work he did as a public employee should be about $8,000 annually — instead his retirement income is six figures.
■Iris Salters was the president before Cook. She came to the MEA in 1999, increasing her pay up to $235,000 by the time she left in 2011. If she had stayed as a teacher in Kalamazoo, her pension at most would have been $36,000 a year when she retired.
■Luigi Battaglieri preceded Salters as president of the union. Prior to coming to the MEA in the early 1990s, Battaglieri earned $34,000 as a teacher in Fraser. He now gets more than $85,000 a year for life.
And it isn’t just the heads of the union — other union officials and employees also take part. Plus, the MEA runs its own retirement system on top of those funded by taxpayers.
But this isn’t even the only way the MEA and other unions are artificially inflating pension costs for taxpayers. In a similar scheme, union members across Michigan are “released” from their duties as government employees to do work for their private union. At least 70 districts have provisions like this in their contracts.
To stop these inappropriate schemes, the Michigan Legislature is considering Senate Bills 795 and 796. Taxpayers should not be on the hook for funding the retirement benefits of employees of private and largely political organizations, or picking up the tab for pensions being spiked by work not being done on behalf of the public.
Jarrett Skorup is director of marketing and communications at the Mackinac Center for Public Policy.