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Colorado PERA Retirement Benefits and Retread Coaches

Discussion in 'Colorado Football Message Board' started by skibum, Nov 13, 2012.

  1. skibum

    skibum Peed in your Cheerios. Club Member

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    A discussion about Hankwitz in Barzil got me thinking about the economics of the PERA retirement and coaches at CU. The short version is that for coaches with time spent coaching at public schools in Colorado (both high school and college) the structure of the retirement benefits for public employees in the state is such that what appears to be a smaller salary can confer huge monetary advantages to coaches when they hit retirement years.

    Gary Barnett is actually a good case study for this effect. Basically, public employees receive a percentage of their "high 3" salaries when they retire. The percentage varies according to both how many years spent as a public employee, and what age they are when they decide to start receiving those benefits (which may or may not be the age they "retire" or quit working as a public employee). The higher the number of years they work for the state, the higher the percentage. The earlier they elect to start receiving benefits, the lower the percentage. Between GB's career at Air Academy high school, Ft. Lewis, CU as assistant, and CU as head coach - he worked as a public employee in Colorado for 25 years. Because of that 25 years, he could start receiving benefits as early as age 55 (and without any discount for being under 65). The chart for benefits shows that he gets 62.5% of his average salary for the highest paid 3 years of his career in Colorado (which, of course were his last 3). If my memory serves, he was making around $700k before his final contract which bumped him up to around $1.2MM (but he was fired halfway through that contract). The end result is that he probably receives a public employee retirement benefit in the neighborhood of $500k/year - for the rest of his life.

    Tad Boyle is another interesting hire. His numbers aren't quite as favorable, but the economics say he's going to stay for at least 3 years at the higher salary (he's at about $500k/year right now). Presume he stays at $500k for the next three years, and decides to move on elsewhere. When he turns 65, he will be able to draw 25% of his average "high 3" salary as a retirement benefit. $125k/year. Not bad. I think we can safely assume that he will be around through 2015-16 at least.

    Presuming Jon Embree stays next year - he would also be in line to receive 25% of his salary as retirement benefit when he turns 65. If he's fired this year, it would be 22.5% of the average of 2 years as HC + whatever he made for 1 year as TE coach. Again, not too shabby.

    For Mike Hankwitz, the discussion of whom brought this up, if CU were to bring him back, even for just one year, it would provide around a $40,000/year boost to his retirement income (any time after one year increases that substantially each year). Which means we could pay him below market rates for his services (and we all know how much the current admin loves to do that).

    The point of this is not to deride the public employee retirement program (save that for the politics forum), but rather to point out that the structure of the retirement program is such that it enables the CU administration to pay below market rates for certain coaches, because those coaches receive benefits disproportionate to the cost of their salaries. So, to pull two random names out of the air, CU could pay someone like Les Miles less than we would have to pay someone like Mike Bellotti, because Miles would receive a much larger retirement benefit than would Bellotti, due to Miles' prior history as a state employee.

    It's just something to keep in mind when we're looking at possible coaching changes - at both the HC and OC/DC levels. (side note: Stitt is at a private school, so this thinking doesn't apply there).


    Final side note to really piss you off: that 5th year the idiot from Boise received? It means that when he turns 65, he's going to be getting about $135,000/year in retirement benefits - underwritten by the taxpayers of Colorado. Had he been fired when he should have been? Zero. :pissed:
     
  2. Lt.Col.FrankSlade

    Lt.Col.FrankSlade Well-Known Member

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    I am pretty sure that the "official" salary for CU coaches is quite low. For example, Embree only receives a $250,000 base salary from CU. I think that is the figure that his retirement package will subsequently be based upon.

    Embree also receives compensation for radio, TV, and public appearances, as well as money for sponsorship support (i.e. Nike), and money for the football camps. I don't think any of those monies are figures for retirement purposes.

    Assistant coaches don't get all the perks and therefore I think most everything they receive in pay comes directly from CU.
     
  3. skibum

    skibum Peed in your Cheerios. Club Member

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    On the one hand, I want to think you're right. But... the DP (I think) had an article on Barnett's retirement benefit package a few months ago, and it quoted a retirement benefit that was pretty outlandish (and would have to include some of the salary payments in excess of the purported "base salary" - one of the points of the DP article was that the retirement calculation was really ****ed up when it came to high salary coaches at the state schools). If the Nike portion was paid directly by Nike, it would not be included, but if it was funneled through CU in any way - well, it would almost assuredly have to be included.
     
  4. Hugegroove

    Hugegroove Club Member Club Member

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    Skibum, thanks for pissing me off!
     
  5. Tractor

    Tractor Club Member Club Member

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    Interesting. What other states have this? Do you guys know? Seems like quite an incentive to come coach here if we're alone in this regard
     
  6. Duff Man

    Duff Man Moderator Club Member Junta Member

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    We are not alone. The "highest paid state employee" moniker is thrown out all the time.
     
  7. Hoops Fan

    Hoops Fan Club Member Club Member

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    The notion of such high levels of PERA retirement benefits begs the question of where the money will come to make the payments. Given the state of the economy now, economic prospects for the future and the fact that PERA is not fully funded to the point of being able to pay out all anticipated retirement benefits without significant additional burdens on taxpayers, I think that there will be a reckoning down the road that limits PERA pensions, especially the high fliers like these guys. But, in the end, they will be relatively well off if they are wise with what they will have earned on the job. I am not worried about them. :)
     
  8. BlackNGold

    BlackNGold Club Member Club Member

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    The denver post gets its information from Internet Message boards. Anyway the PERA is only on the base salary, bumps are limited to 7% a year...so if you make a 100,000 and your salary jumps to 150,000 - PERA only uses 107,000 to calculate. The post would have no way of knowing what Barnett's PERA payout is - it is protected information. Barnett is doing okay with it since he was a public employee a long time. On the other hand Hawkins had 5 years so he would get about 12.5% of his 3 highest years - I suspect his base was around $250000.
     
  9. JPinCO

    JPinCO VP of Quantified Self Club Member

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    It's been about 12 years since I was a state employee, but as I recall you aren't eligible for public employee pension benefits unless your entire term was a cumulative 20 years at a minimum (at the time I was hired). So it would apply to GB if your estimate in his total tenure as a state employee, but not to Talkins. JE probably has a good 10 years as a state employee. I think you have to be an employee when you retire to be eligible, so I'm not sure any of them are eligible unless they retire while employed with the state.

    Most recent info:
    http://www.ncsl.org/issues-research/labor/recent-changes-in-the-age-for-retirement.aspx

    2011 rules on eligibility:
     
  10. skibum

    skibum Peed in your Cheerios. Club Member

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    It's the 65 & 5 years of service that gets the idiot from Boise in the door. He can't claim the benefits until he turns 65, but when he does - those benefits will be there waiting for him. (the same will be true for Embree, Boyle, etc one day)
     
  11. JPinCO

    JPinCO VP of Quantified Self Club Member

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    No. He doesn't meet the minimum age requirement. He would have to been hired at 60 and retired from the state job at 65 in order to be eligible for a five-year pension. A employee hired at 25 has to work a minimum of 35 years to be eligible for the defined benefit.

    Page 6:
    https://www.copera.org/pdf/5/5-5.pdf
     
  12. BuffUp

    BuffUp W.T.T.F. Club Member

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    I pay into PERA and s**t like this really angers me. In five crappy years he built quite a nice nest egg. I have fellow employee's that have retired and then came back to work here drawing their retirement check alongside their 3 figure salary...sux
     
  13. BuffNut99

    BuffNut99 Club Member Club Member

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    People, our head coaches are not in the PERA system. They are at-will employees ("officer and Exempt Professionals), not state classified employees who get enrolled into PERA. Barnett may be an exception because he was an employee so long ago. But Hawkins, Embree, Boyle, assistants, et. al are not enrolled in PERA.
     
  14. unionbuff

    unionbuff Club Member Club Member

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    Agree with 99 - you guys are getting worked up over nothing. Now I don't know how they are classified, but even if Hawkins and Embree are paying into PERA, they'd only be eligbile for the money they put into it. And even then, you are vested in your money after 5 years (so Hawkins may be covered). You cannot collect PERA retirement funds unless you have a combination of 80 years (age at retirement + years of service) and it may even be 85 now for those not grandfathered in. If Barnett worked in the school system for awhile, then he my be able to collect PERA, but there is no way that coaches who are here for less than 30 years & don't retire from PERA are receiving PERA benefits.

    And if 99 is correct about the way they are classified, then none of this is an issue at all.
     

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