OT: Tyler Summitt will continue to collect Pat's pension ... until he dies

[Plebe]

http://www.tennessean.com/story/spo...ves-personal-property-tyler-summitt/89317990/

I'm not that familiar with standard operating procedures for publicly funded state retirement systems, but can someone tell me if this is normal for a state's taxpayers to be on the hook for supporting a retiree's child for so many decades beyond the retiree's death?

The relevant excerpt from the article:

Tyler Summitt also was designated by his mother to be a non-spouse beneficiary of her state pension. When she retired, Pat Summitt opted to collect a monthly benefit of $14,460, or $173,520 annually in 2012. That benefit, with an annual cost-of-living adjustment, is now collected by Tyler Summitt for the rest of his life. Pat Summitt could have opted instead to collect $21,141 per month, or $253,632 annually, without choosing a beneficiary, and the payments would have ended upon her death.​

 

[willtalk]

Pension benefits like this are the reason that California is in financial difficulty. They are at the point were they pay more in retirement benefits than in actual salaries.

But since they gave her the choice Tenn is on the hook for those payments. Then of course those morons that offered such options never reap the negative consequences of their actions. That will be felt by the rest of the people in the state via program cuts to those that really need it. Another example of the growing economic class devide reinforced by government.

 

[DaddyChoc]

seems that option to take less while alive contributed to Tyler getting something... almost like a savings acct for him until her death which we're pretty sure wasn't expected to happen so soon/unexpectedly.

great thinking of her/and the team that put that package together

 

[JS]

But since they gave her the choice Tenn is on the hook for those payments. Then of course those morons that offered such options never reap the negative consequences of their actions.

That choice is perfectly common in private sector as well as government pension plans. It's not a special deal and is offered to all pension plan participants.

The lifetime benefit is reduced so that the overall combination of lifetime and survivor benefits costs the state the same, based on actuarial tables, as would the larger single-life annuity with no survivor benefit.

Assuming this is under the Tennessee Consolidated Retirement System, it looks like she selected Joint and Survivor Plan Option 1 - i.e. a 100% joint and survivor annuity.

If you think pensions to public sector employees are too high, that's an arguable position. But it's not because of the options offered under the plan, which theoretically are all of the same value.

Note that the health of the individual pensioner is not taken into account. The monthly lifetime benefits are based strictly on age. Therefore, knowing what Ms. Summitt knew when she retired in 2012, the 100% survivor option was the best she could do for her son.

 

[msf22b]

That choice is perfectly common in private sector as well as government pension plans. It's not a special deal and is offered to all pension plan participants.

The lifetime benefit is reduced so that the overall combination of lifetime and survivor benefits costs the state the same, based on actuarial tables, as would the larger single-life annuity with no survivor benefit.

Assuming this is under the Tennessee Consolidated Retirement System, it looks like she selected Joint and Survivor Plan Option 1 - i.e. a 100% joint and survivor annuity.

If you think pensions to public sector employees are too high, that's an arguable position. But it's not because of the options offered under the plan, which theoretically are all of the same value.

Note that the health of the individual pensioner is not taken into account. The monthly lifetime benefits are based strictly on age. Therefore, knowing what Ms. Summitt knew when she retired in 2012, the 100% survivor option was the best she could do for her son.

Is true:
Even pensions I am involved with; AFM (America Federation of Music), going broke by the way, offers a similar arraingement which I accepted and the New York City teachers pension, offers a myriad of choices along these lines.

 

[kibblesnbits]

I always thought the option to designate a survivor was to cover a spouse. Otherwise the calculations don''t look right. Ignoring for the moment the time value of money (and at today's low interest rates that doesn't throw the calculations off nearly as much as it would otherwise), her election is predicated on the actuarial assumption that the survivor may have a 50% longer lifespan (21K/14K). That seems plausible for a spouse. It seems less plausible when the survivor for a 64 year old retiree is a 25 year old son. One would think if they permit designation of the next generation as the survivor that the reduction in payout would be more severe.

 

[pinotbear]

Actuarial details aside, that's one nice pension!

 

[JS]

I always thought the option to designate a survivor was to cover a spouse. Otherwise the calculations don''t look right.

Non-spouse pension survivor beneficiaries are OK. My sister is to this day receiving a survivor pension based on our mother's election under the New Jersey teachers' retirement system.

But plans generally have rules to guard against the possible prohibitive expense of allowing the plan participant to name a much younger non-spouse beneficiary for a lifetime survivor benefit. They do this in various ways, some more exacting, some seeking a rough justice.

I don't know the ins and outs of the Tennessee system, but, speaking of New Jersey, here's how it's handled there:

A PUBLICATION OF THE NEW JERSEY DIVISION OF PENSIONS AND BENEFITS
Fact Sheet #5
August 2016 — Page 4

Age Limits on Nonspouse Beneficiaries
For all options, you can name your spouse as your beneficiary regardless of your spouse's age.

For Options C, D, 1, or 3, you can name someone other than your spouse as beneficiary regardless of age.
For Options 2, A, or B, if you are naming a beneficiary who is not your spouse, Internal Revenue Service regulations restrict the age of your beneficiary.
For Options 2 and A
(100% to beneficiary):
• If you are age 70 or older at retirement your nonspouse beneficiary can be no more than 10 years younger than you.
• If you are under age 70 at retirement, determine 1.) the number of years difference between your age at retirement and age 70; and 2.) the number of years difference between your age at retirement and the age of your nonspouse beneficiary. Subtract the age 70 difference from the difference in age between yourself and your beneficiary. The resulting age difference can be no more than 10 years (younger than you).
​

 

[BroadwayVa]

That choice is perfectly common in private sector as well as government pension plans. It's not a special deal and is offered to all pension plan participants.

The lifetime benefit is reduced so that the overall combination of lifetime and survivor benefits costs the state the same, based on actuarial tables, as would the larger single-life annuity with no survivor benefit.

Assuming this is under the Tennessee Consolidated Retirement System, it looks like she selected Joint and Survivor Plan Option 1 - i.e. a 100% joint and survivor annuity.

If you think pensions to public sector employees are too high, that's an arguable position. But it's not because of the options offered under the plan, which theoretically are all of the same value.

Note that the health of the individual pensioner is not taken into account. The monthly lifetime benefits are based strictly on age. Therefore, knowing what Ms. Summitt knew when she retired in 2012, the 100% survivor option was the best she could do for her son.

All that you write is pretty much as I know the systems. To put healthy, non spouse, working age persons as a continuation (however partial) of her pension is abusive of the taxpayers. I would have thought the lawyers (I assume) who wrote the benefits sections of the Retirement Plan would have been smart enough to understand the continuing impact of non-spouse recipients.

 

[BroadwayVa]

Non-spouse pension survivor beneficiaries are OK. My sister is to this day receiving a survivor pension based on our mother's election under the New Jersey teachers' retirement system.

But plans generally have rules to guard against the possible prohibitive expense of allowing the plan participant to name a much younger non-spouse beneficiary for a lifetime survivor benefit. They do this in various ways, some more exacting, some seeking a rough justice.

I don't know the ins and outs of the Tennessee system, but, speaking of New Jersey, here's how it's handled there:

A PUBLICATION OF THE NEW JERSEY DIVISION OF PENSIONS AND BENEFITS
Fact Sheet #5
August 2016 — Page 4

Age Limits on Nonspouse Beneficiaries
For all options, you can name your spouse as your beneficiary regardless of your spouse's age.

For Options C, D, 1, or 3, you can name someone other than your spouse as beneficiary regardless of age.
For Options 2, A, or B, if you are naming a beneficiary who is not your spouse, Internal Revenue Service regulations restrict the age of your beneficiary.
For Options 2 and A
(100% to beneficiary):
• If you are age 70 or older at retirement your nonspouse beneficiary can be no more than 10 years younger than you.
• If you are under age 70 at retirement, determine 1.) the number of years difference between your age at retirement and age 70; and 2.) the number of years difference between your age at retirement and the age of your nonspouse beneficiary. Subtract the age 70 difference from the difference in age between yourself and your beneficiary. The resulting age difference can be no more than 10 years (younger than you).
​

It would appear the Jersey Devil was smarter than the Tenn Vols lawyers in that the Devil
specified age restrictions for non spouse benefits.

 

[pinotbear]

It would appear the Jersey Devil was smarter than the Tenn Vols lawyers in that the Devil
specified age restrictions for non spouse benefits.

http://orig12.deviantart.net/1d18/f/2013/032/f/3/jerseydevil2013wtmk_by_thedragonofdoom-d5thx4i.jpg


Dem Jersey Devils are pretty shrewd!

 

[Vowelguy]

Whatever the circumstance, it's money that Tyler is definitely going to need, given his diminished employment prospects, possible lawsuit from his mistress, possible divorce from his wife, and child support to his several kids.

 

[RockyMTblue2]

Takes a load off my mind. Been worried about the Boy King.

 

[DaddyChoc]

All that you write is pretty much as I know the systems. To put healthy, non spouse, working age persons as a continuation (however partial) of her pension is abusive of the taxpayers. I would have thought the lawyers (I assume) who wrote the benefits sections of the Retirement Plan would have been smart enough to understand the continuing impact of non-spouse recipients.

really? You act there's been a violation. Let's remember Coach Summit was a millionaire... and the numbers fall within the rules. Tyler, enjoy the fruits of your mama's labor!

 

[Beemer]

Whatever the circumstance, it's money that Tyler is definitely going to need, given his diminished employment prospects, possible lawsuit from his mistress, possible divorce from his wife, and child support to his several kids.

He has more children than just his former player's expected baby???????

Coach Summitt was a wealthy woman and I'm sure she left plenty for her son besides the pension. But yeah, he might just end up having to spend all of it on legal fees & child support and it would serve him right.

 

[Bayareahusky]

Yes, without looking like a gossip monger, did Ms Pumroy have her baby? and did Tyler's marriage survive the whole thing? I know his wife was not at the memorial service....

Hope he lives a good life.... a bad mistake he made..... but I have degree of sympathy losing his mother.....

 

[BigBird]

As a state of Illinois retiree, this rumbling comes as nothing new. People here don't seem to understand that my retirement came after 4o years of mandatory payments (by me) into my annuity. It isn't a gift; it isn't welfare; it isn't some sort of fiscal slight-of-hand. It is an annuity. On my first day of work in Illinois, it was carefully explained to me that I would earn, for the many years to come, less than my work's real market value, but that I would instead have a good annuity that should allow me to retire somewhat comfortably. But because politicians here failed to fund the state's share (the employers share) of the annuity for about 20 years, the retirement system is now underfunded by hundreds of millions. The legislature instead used the retirement fund appropriations to build one pork project after another, including a new baseball stadium for the Chicago White Sox. As bad, the current flock of pols now argue that the pensioners should bear the cost of the legislature's stupidity. They have raised the retirement age, cut insurance benefits, and every other breach of contract they could get away with. Fortunately, some who well knew the nature of Illinois politics installed a clause in the state constitution that prohibits the state from diminishing my pension and its associated benefits. The state Supreme Court has upheld that clause. That one sentence is all that separates me from having little or nothing to show for all the money I paid in over those 40 years.

Now, a group of Chicago millionaires is working to repeal that portion of the constitution, after many of them benefitted from the graft created by the diversion of funds that caused the problem in the first place.

Pat Summit left her annuity to her son. This should not be an issue for anyone. If we want to discuss her salary while alive and working or coaches salaries in general, that is entirely another topic.

 

[Beemer]

Yes, without looking like a gossip monger, did Ms Pumroy have her baby? and did Tyler's marriage survive the whole thing? I know his wife was not at the memorial service....

Hope he lives a good life.... a bad mistake he made..... but I have degree of sympathy losing his mother.....

What he did was completely wrong but I can't help wondering if knowing his mother's life was slipping away didn't make temptation too much for him to handle. Knowing that your parent is slowly dying and there is absolutely nothing you can do about it is a very heavy load to bear. Plus I always had the impression that Tyler Summitt was much much closer to his mom than to his dad which would make it an even heavier burden. I'm not excusing him for what he did just trying to find a possible explanation for it.

 

[HoopsFan21]

They should phase out pensions and social security and force people to have their own private retirement accounts. Putting your faith in the government or trusting them with your money is foolish. By the time I retire in 50 years or so, I'll bet there won't be any social security for me which is why I'm saving as much as I can on my own for retirement.

 

[BroadwayVa]

really? You act there's been a violation. Let's remember Coach Summit was a millionaire... and the numbers fall within the rules. Tyler, enjoy the fruits of your mama's labor!

Abuse of taxpayers --has no legal status, no violation assumed or inferred. Your point that Tyler shall inherit his mama's millions et al to me --to provide a pension that should have ended with Mama since there was no PaPa in it --for his apparently long life time--is taxpayer abuse. But since it was given, it shall be taken.

Pensions do not consider: Divorces, Mistresses, and a long list of possible legal actions no matter who or how they are diminished.

 

[CajunHusky]

It is legal and that is all that can be said at this point. And let's remember PS was paying over 7,000 a month to buy into the survivor plan ..... but the reason this non-spousal benefit is so ludicrous is because the rules are written by those who most benefit and not from any over whelming fiscal responsibility on the part of the legislators.

First, as in Social Security there should be a maximum benefit for the annuitant at about low middle class bracket, and the survivor annuity should be something along the line of 50%. The benefit for the annuitant and spouse should be for as long as either lives. If the individual is making all that much more money than that they should save/invest their money or live at the quality of life all the rest of us have to live.

Second, the non-spousal survivor annuity should be age and or time limited. For example the survivor could be limited to drawing the annuity only after they reach a certain age, 50 or so, and the non-spousal survivor should receive a restricted amount for a set period of time such as 20 years. I believe New Jersey does this.

 

[Vowelguy]

He has more children than just his former player's expected baby???????

I thought he had kids with his wife. He would be paying child support for them if he gets divorced.

 

[Bayareahusky]

What he did was completely wrong but I can't help wondering if knowing his mother's life was slipping away didn't make temptation too much for him to handle. Knowing that your parent is slowly dying and there is absolutely nothing you can do about it is a very heavy load to bear. Plus I always had the impression that Tyler Summitt was much much closer to his mom than to his dad which would make it an even heavier burden. I'm not excusing him for what he did just trying to find a possible explanation for it.

Yeah I agree .... just sad all around..... and I think you are right about mother vs father..... he and his mom had the basketball thing which trumped all else in life

 

[Beemer]

I thought he had kids with his wife. He would be paying child support for them if he gets divorced.

To the best of my knowledge they haven't any children of their own. I don't think they've been married all that long either.

 

[BroadwayVa]

Pension benefits like this are the reason that California is in financial difficulty. They are at the point were they pay more in retirement benefits than in actual salaries.

But since they gave her the choice Tenn is on the hook for those payments. Then of course those morons that offered such options never reap the negative consequences of their actions. That will be felt by the rest of the people in the state via program cuts to those that really need it. Another example of the growing economic class devide reinforced by government.

Just think of Pension plans that are solely paid for by the Taxpayer --as opposed to investment type plans or a combination of both: Many Government Retirement plans (some utility companies) allow retirement at age 50-55. For every person who retires (typically) someone is hired to do the job of the retiree. It is theoretically possible to be paying for 2 or even 3 people for the same job for 20 or more years. Along with benefits. Can you wonder why retirement systems (some) are no doing well??
Retirement systems only came along in the later half of the 20th century--that's why FDR initiated Social Security
to keep workers out of poor houses or the ever present (then) town farms after they were discharged for being too old.