Can Sheila Dixon take her pension in a lump sum?
Mayor Dixon has enormous legal bills after two years of being investigated, indicted and tried. So her lawyers had just as much motive as she did to ensure that she settled the case without giving up her pension. Presumably that's how she'll at least start to settle her debts. She's entitled to a life annuity of $83,000 immediately after she resigns, and that'll add up to at least $2 million and even more with cost-of-living adjustments if she survives to a typical age.
But many pension plans allow you to withdraw what's owed in an immediate, lump sum, discounted to adjust for the time value of money. Under such a scenario she could take out more than $1 million right now -- plus whatever value actuaries might assign to cost-of-living adjustments tied to future mayor's salaries. It sure would help pay her lawyers' bills, which must run well into six figures at least.
So I asked Roselyn Spencer, executive director of the city's employees and elected officials retirement systems, if this would be possible. There is no provision for lump-sum distributions in the system, she said. Mayor Dixon's pension will be paid through the city payroll system, in monthly checks, she said. Neither had she been approached by Dixon or her people to suggest a lump-sum arrangement, she said.
$83,000 a year is a nice pension, but it'll take a long, long time at that rate to make much of a dent in the bill. Maybe Dixon lawyer Arnold Weiner has put her on an installment plan, although he ought to give her a big discount for all the publicity he got.
UPDATE: WBAL's Jayne Miller reminds us that Dixon can also draw a pension from her time working for the state.
Comments
How about in Gift Cards?
Posted by: Wacbozo | January 8, 2010 9:50 AM
WHAT!! I can't believe it! She's entitled to a pension, at taxpayer's expense?
This is ludicrous; she should be taken out and hanged in the public view, as a fitting reminder to all, "This is what happens when you steal"
Posted by: Cliff | January 8, 2010 9:58 AM
Will she be receiving pension checks while on probation?
Posted by: Dan Higdon | January 8, 2010 10:07 AM
This is ridiculous. She gets convicted of stealing gift cards intended for the poor and now she gets a big pension. I think if you get convicted while in public office she should have to forfeit at least half her pension. When I was forced to leave my job, I got a pension for the amount of time I worked for this company. Dixon was not in office that long so how can she get a pension this huge. Tax payers should be running rampant around City Hall demanding that their hard earned money be spent more wisely instead of on some crook.
Posted by: Dave | January 8, 2010 10:19 AM
One of Dan Rodrick's guests yesterday explained that her pension is no guarantee and it will be up to the city. Essentially, the deal does not bind the city to anything, and it only absolves the city from being required to revoke her pension, but doesn't require them to pay either.
I'm not sure who will ultimately be the decision maker, but someone needs to find out so the public and media can shine a light and start applying pressure where it is needed. Even if she hadn't been convicted, pensions are a lavish benefit over 80% of the private sector does without, yet provides for the government sector. The city spends 15% of the general fund on pensions, and all but city employees would benefit from ending this.
Anyone up for joining an angry mob in front of City Hall sometime after work this coming week? I think even a couple dozen people would get the media's attention for something like this.
Posted by: Josh Dowlut | January 8, 2010 10:34 AM
A pension? For what? Being a criminal, I guess. M's. Dixon is a rather well turned-out personage. She is always coiffed, groomed and out-fitted to the nines. Anyone knows that takes $$$. Let her cut back on personal expeneses just like the rest of us slobs do when we're in a financial spot. A final thought - followed this ordeal from the beginning to its' conclusion the other day. The defining moment of the whole thing for me was the city worker (read criminal) running out of the Courthouse and down the street after testifying. Kind of summed the whole, stinky thing up. Don't you think?.....
Posted by: ruth | January 8, 2010 2:14 PM
Jay Hancock, you are only another polarizing item that needs to make more sence out of this situation, our mayor is a hard working civil servant that is only a victim of hate, this could have been handle differently, and you know it would have been handled differently, if.........
Posted by: Frank Miller | January 8, 2010 2:15 PM
http://www.facebook.com/group.php?v=wall&ref=mf&gid=240867444279
Join a Facebook group organizing a peaceful protest at the steps of City Hall this coming week, after work, on a day to be determined by how fast we hit a critical mass.
Posted by: No Dixon pension | January 8, 2010 3:38 PM
Frank Miller,
It could have been handled differently if.... she wasn't guilty beyond a reasonable doubt. End of story.
Posted by: James C | January 8, 2010 3:52 PM
Is she also entitled to Social Security? I don't know if city/state employees have been a part of the SSA system.
Posted by: Joe White | January 8, 2010 6:09 PM
Normally a Plan can only pay out under the listed options. Besides, if the plan is not 100% funded, it would be inappropriate for it to allow the lump sum payout as doing so will exacerbate the underfunding for remaining Plan participants.
Additionally, to avoid having the Lump Sum funds from being taxable income, they must be rolled directly into an IRA. And any funds withdrawn from the IRA (e.g., to pay lawyer's fees) are taxable income. E.g., she would have to withdraw $150K to pay a $100K legal bill.
From a purely financial standpoint (but not particularly ethical) if no non-qualified fund exist, she could roll the lump sum into a qualified IRA, (out of the reach of creditors) then declare bankruptcy, and (barring disallowance from the courts under the new bankruptcy laws) screw he lawyer out of his fee.
Interesting ...
Posted by: Nonsense | January 8, 2010 8:56 PM
Just can't believe this racist, retaliatory, vindictive woman gets a nickel. It is just so ridiculous for her to have pouted to keep her pension.
The State's Attorney should have allowed her to have another one of her hysterical temper tantrums in court and then locked her up and melted the key!!!
What a piece of trash ... and to think this is the best Baltimore city has to pick from ....
Posted by: AroundtheCurve | January 9, 2010 1:18 AM
There is no doubt that what Sheila Dixon did was wrong, and yes she should be held accountable. In Colorado Springs Colorado Mayor Lionel Rivera has eliminated evening and weekend public transportation and has given the money that could have been used to keep public transportation services for evenings and weekends to the United States Olympic Committee. There is suspicion that he has had dealings with a development firm known as landco,he has been investigated but not indicted.
I believe that he is getting away with it because he is a Republican.
Please watch this you tube video, I have made a comparison between Mayor Lionel Rivera of Colorado Springs, and Sheila Dixon.
http://www.youtube.com/watch?v=OES5CEE3PSk (click here to watch video)
Posted by: Ed Billings | January 9, 2010 1:51 AM
Why are public officials subjected to a different law standard regarding retirement benefits than US Military personnel who might and do put their lives on line? Note that those who serve in the Military are subjected to; loss of all veterans' benefits, regardless of any past honorable service. Additionally, US federal law prohibits ownership of firearms by those who have been dishonorably discharged. In most cases, a person who receives a dishonorable discharge forfeits the privilege to vote and the privilege of receiving governmental assistance of any kind. They cannot obtain a bank loan and they are unable to find work at the state or government level.
More details at; http://en.wikipedia.org/wiki/Military_discharge
Posted by: Chris | January 10, 2010 7:51 AM
Tuesday 4:30pm at City Hall. Has already attracted the attention of WJZ TV, WBAL Radio, at least one city delegate, and the Facebook group got almost 600 people in just 3 days.
You can take from some of the people all of the time, and all of the people some of the time, but you cannot take from all of the people all of the time.-slightly modified Lincoln first used to describe Wall St banksters
Posted by: Live Pension Protest | January 10, 2010 3:17 PM