We have to apply the weasel phrase “in the neighborhood of” because, unlike public employee salaries, the pensions records of state workers (and legislators) are strictly guarded secrets. Therefore, we can only use the basic formula in calculating Sherman’s pension, which is “years of service X average salary X service credit rating (a % factor).”
If Sherman bought years of “air time” — which means exactly like it sounds, pulling years of service out of the air, up to five years — that would add about $20,000 each year to his pension draw; and if he served in the military, he could count those years, too.
All of this highlights once again, the serious need for transparency in all of Kentucky’s six state-administered public employee retirement systems. There is no federal law that says the pension records must be closed. Kentucky’s records are kept secret under a law enacted in 1972 under Gov. Wendell Ford, when governors totally dominated the legislative branch. Four states have opened their government employee pension records to the public: New Jersey, Ohio, Oregon and Pennsylvania.
The three factors explained
1. Years of Service
Sherman began work at LRC in 1978 and left the institution in 1995 — giving him 17 years of service. He then worked maybe two years in the Kentucky Department of Education, increasing his years of service to 19. He was then hired as LRC director in 1999, serving 14 years in that capacity —giving him a career total of 33 years for pension purposes.
Sherman’ salary when he resigned was $195,000 a year. He apparently had not received any raises since 2008, when his salary was spiked from $132,000 to $195,000, by mainly then-Senate President David Williams, because Sherman threatened to retire through a narrow window of a temporary law that offered an incentive for public employees to retire early — under the incentive, early retirees were allowed to calculate their pension using a “Hi-3” instead of a “Hi-5” on the salary.
Negotiating a 47 percent salary hike was a brilliant move by Sherman, and a display of disrespect for the state treasury by Williams and the LRC leadership who went along with it — but then that’s an honored custom of legislators, disregarding the cost of pensions while bestowing super-rich pensions on themselves. To read more about this, click here.
By staying on an additional five years, with the higher salary, Sherman increased his pension an estimated $54,000 a year for the rest for the rest of his life
3. Serve credit rating
The percentage factor we used in calculating Sherman’s pension is 2 percent. That’s an approximation.
It is appropriate here to say that SB 2, the pension reform bill enacted in 2013, did not solve the pension crises, contrary to proponents' claims; state employees haven’t had a raise in years; and education funding is in decline — and a big reason for the latter two is, the pension cost is crowding out pay raises, and it’s also crowding out essential government services.
Bobby Sherman could be a “Poster Boy” for the Frankfort culture of milking the pension systems like a big chocolate milk cow.