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Sunday, March 14, 2004

Indiana Law - More on PERF Privacy and the Star's editorial

The Indianapolis Star editorial last week on "PERF privacy" (see the March 11 Indiana Law Blog entry here, or simply scroll down) caused me to wonder why the push to keep PERF records confidential, other than protecting the obvious such as Social Security numbers. After all, state employee and public official salaries are matters of public record, and retirement amounts are calculated based upon amount earned and years of service.

This story today in the Munster NW Indiana Times, titled "Prison doesn't deter pensions: Lake County's corruption icons still manage to retire with benefits," gives an indication of why access to this information is important, but also raises more questions. Some quotes from the story:

It is likely icons of past public corruption in Lake County and their families are living off state pensions, or soon will be.

Indiana law guarantees retirement benefits to former officials who also are ex-convicts if they worked enough years in office.

Leisa Julian, general counsel for the Indiana Public Employee Retirement Fund, said state law does not permit her agency to revoke a member's retirement plan.

However, PERF officials refused Freedom of Information requests by The Times to disclose individual records showing how much it pays Lake County officials convicted of lining their pockets within the last two decades and who now are at or approaching retirement age. * * *

Indiana once had a provision to stop benefit payments if the public employee or official was convicted of a crime, but that was changed in 1978.

The state will seize a public employee's contributions and benefits to repay any money stolen from his public employer, but PERF doesn't disclose any individual's restitution records.

State law not only protects wayward public officials retirement packages, but also shields it from public view. PERF may only disclose the names of pension plan members and their years of service.

That last paragraph caused me to go back and reread the Star editorial from last week ("Our position is: The legislature's bid to close public employee pension records to public scrutiny deserves a veto") and the bill, HEA 1285, that was the subject of the Star's position. My findings after a line-by-line review of the bill and the current law:
SEC. 2. Amends IC 2-3.5-3-4, re legislative retirement, to provide that "(f) Legislators' retirement system records of individual participants and participants' information are confidential, except for the name and years of service of a retirement system participant."

SEC. 3. Amends IC 5-10-5.5-3, re excise police and conservation officers' retirement, to provide that "Records of individual participants in the retirement plan created by this chapter and participants' information are confidential, except for the name and years of service of a retirement plan participant.

SEC. 4-7. Similar amendments in Title 33, Courts & Court Officers.

SEC. 8. Similar amendment to IC 36-8-8-5, re 1977 police and fire pensions.

The point? The state employees' PERF and teachers' PERF law already contains the confidentiality provision, at IC 5-10.2-2-17. It was inserted in 2001. Good idea or bad, HEA 1285 brings the legislative retirement law and other remaining laws in line with Sec. 17, which provides:
Fund records of individual members and membership information are confidential, except for the name and years of service of a fund member. * * *
As added by P.L.246-2001, SEC.3.
The Munster NWI Times has it right in its article today (and shows why restricting access to this information is not a good thing); and it appears the Indianapolis Star got it partially wrong in its editorial last week.

PL 246-2001, passed as SEA 107 in the 2001 session, added the confidentiality provision as part of a 21-page pension bill authored by Senators Harrison and Craycraft. (An interesting side-note is that SEC. 2 of the bill, now found at IC 5-10.2-2-16, appears to permit members of the PERF Board to participate in the board's meetings via conference call or computer.)

[I'm going to try to track down the Public Access Counselor (PAC) opinion that, according to the Star editorial, states that the law does not stand in the way of a review of PERF records. As noted in the earlier post, PAC opinions since September of last year have not been made available online, in contrast to the earlier practice.]

[Update] Two more stories from the NWI Times today add background to the convicted pensioneers' story quoted above. Some quotes from this story, headlined "Law extends veil of secrecy over state pension system:"

The state is resisting efforts to shine a light on its public pension system. And Gov. Joseph Kernan may soon further restrict access to such information if he signs legislation adopted last months by the Indiana General Assembly. Numerous media and public access groups last week urged Kernan to ensure more public access into the scandal-ridden Public Employees Retirement Fund and veto a bill that would further extend the veil of secrecy over an agency with $10 billion in public assets.

The Times entered that fray 10 weeks ago with requests under the Freedom of Information Act and the Access to Public Records Act to disclose whether the fund is paying pensions to former Lake County officials convicted of using their public offices to line their pockets dating back to the 1980s and '90s. Leisa Julian, general counsel for the fund, replied last month that state law exempted those records from public disclosure. "We must deny your request," she wrote The Times. The Times made a second request under the Freedom of Information Act last month to divulge whether any of 19 convicted former officials were even fund members and, if so, their years of service.

Julian failed to comply within seven days as the law requires, despite being informed by Michael Hurst, Indiana's public-access counselor, that names and years of service are public documents. She provided the information only last week after The Times threatened to sue and demand the award of attorney's fees. The governor was unwilling to intervene or meet with The Times to discuss the matter. [emphasis added]

This story also answers the question of why HEA 1285 would be retroactive to last September: "The law would be retroactive to last September, thwarting an effort by Indianapolis television station WTHR, which requested a copy of the state pension fund's computerized database to investigate purported inequalities." [Or does it? Remember, HEA 1285 applies to legislators, excise policy and judges. State employees' and teachers records' have had the same safeguards as proposed in HEA 1285 since 2001.]

The final NWI Times PERF story today recounts PERF's recent history of scandals alongside the legislative moves for further protection of PERF records from public scrutiny.

Posted by Marcia Oddi on March 14, 2004 02:13 PM
Posted to Indiana Law