System rewards high-ranking public workers with as much as $16,000 a month in retirement, a review finds.
Don Omodt made a good living as Hennepin County sheriff in the 1990s.
He's making a better one as a retiree, with an annual government pension just under $150,000 a year, or $12,419 a month.
So is Dale Ackmann, who left as Hennepin County administrator in 1992 and now collects $14,039 a month. Likewise, former state Transportation Commissioner Richard Braun gets $11,365 a month from the state and the University of Minnesota, where he taught.
Omodt, Ackmann and Braun are all part of a small but special group -- high-ranking public employees whose pensions rode the crest of rising stocks in the '90s.
They are also emblematic of a flawed pension system that proved unsustainable.
Dave Bergstrom, head of the Minnesota State Retirement System, called the top retirees "a very unique group." Most, he said, retired as long as 30 years ago and received large, annual increases fueled by the stock market's bull years that remained in effect even when the market spiraled downward.
Over several years, the Legislature moved to reform the state's pension plans in response to the nation's economic collapse. Though the changes that curtailed benefits for subsequent retirees were widely reported over the past half decade, the group that benefited most from the more generous plans has received little attention.
But a review of the top 100 pension earners in each of Minnesota's three most prominent public retirement plans shows that the group continues to quietly enjoy significant payments.
Among them is former Gov. Arne Carlson, at $7,421 a month. But he's far from the highest.
According to state records, former Wayzata schools Superintendent David Landswerk's pension tops $176,000 annually. Right behind him is Leila Anderson, a former Bloomington schools superintendent who gets $168,803 a year.
"The teachers' retirement [plan] did a fabulous job of investing," Anderson said. She added that she does not get Social Security or Medicare and pays nearly $600 a month for health care coverage.
Mary Vanek, who administers the Public Employees Retirement Association of Minnesota (PERA), which covers mostly city and county employees, said she sent a letter alerting some of the top pension earners, including Omodt, that their monthly pension payments might soon be part of the national debate over public sector pensions.
"I just didn't want them to be alarmed if their names showed up in the paper," said Vanek, who declined to disclose which retirees she alerted other than Omodt.
Of the 100 top monthly pension earners in the PERA system, no one gets less than $9,332 a month, or $111,984 a year.
Ackmann, who retired from Hennepin County nearly 19 years ago, said the size of the payments have left him somewhat uncomfortable.
"I wouldn't call them ungodly, because that's not an appropriate term. But I think they were somewhat surprising, let me put it that way," said Ackmann, who was the chief administrator for Minnesota's most populous county for 15 years. "I think what they ought to do is look at reducing some of them a little bit, at least."
Ackmann receives the fourth-highest PERA monthly benefit. Former Hennepin County Medical Examiner John Coe leads the PERA list at $16,250 a month.
Average payout far lower
PERA's plan covers more than 80,000 retirees and beneficiaries, with an average monthly pension payout of $1,300. Well over half of PERA's retirees get less than $1,000 monthly. Vanek pointed out that, like Anderson, most of the top recipients are not covered by Social Security.
Additionally, state pension officials said, some beneficiaries put as much as 9 percent of their salaries into their pensions, further boosting their returns.
After 20 years as a state Supreme Court justice, Lawrence Yetka stepped down in 1993. He gets $10,001 a month, a pension he considers so generous that it led to him volunteering as a substitute judge in retirement.
"It was a very, very welcome surprise," he said of his monthly benefit. "I volunteer my services to make up for that. I didn't think that I should be paid separately for sitting on the bench [while] drawing a pension of that amount."
Omodt, who served 28 years as Hennepin County sheriff, said much of his pension money has gone to caring for his now-deceased wife and his children.
While that "sounds like a lot of money," Omodt said, "there was hardly a Saturday or Sunday that I didn't work. So I think I gave back a lot to the citizens."
John Wicklund, an assistant executive director of the state Teacher Retirement Association (TRA), said that "the large [annual] increases were paid under a flawed statutory increase mechanism that was later capped, and subsequently repealed."
Under the old system, a monthly retirement payment of $1,000 in 1994 increased to $1,316 by 1998. Stock market gains raised it to $1,838 by 2002. In 2000 alone, according to the TRA, the annual gain was 11.14 percent.
Former Bemidji State University President Lowell Gillett, retired since 1990, gets $10,453 a month, putting him 38th from the top of the TRA list.
"I turned [age] 65 at the right time," he said.
Gillett said he was surprised at the size of his pension for the first several years, which rose about 10 percent a year for the first several years. "We were very comfortable," he said of his retirement.
Braun, the former state transportation commissioner, left that job in the mid-1980s. He said he later earned more money as a professor at the University of Minnesota than in his state job. His monthly retirement benefit is the second highest in the MSRS plan. "I'm surprised that I'm that high on the list," he said.
"It's not like these people were out there gaming the system," said Laurie Hacking, TRA's executive director. The state's pensions plans, she added, face "some financial challenges, but it's caused by the market downturn, not because our benefits are out of whack."
Don Betzold, a former DFL state senator who specialized in pension issues, agreed that the top pension recipients were anomalies who benefited from good timing and perfectly legal circumstances.
But he added: "It worked out quite well for them."
Mike Kaszuba • 651-222-1673