For Immediate Release
Thursday, Feb. 26, 2015
Contact:
Anne Schieber
Senior Investigative Analyst
989-430-6131

MIDLAND — Information discovered by Michigan Capitol Confidential shows that Michigan Education Association President Steve Cook is earning taxpayer-funded pension benefits while employed by a private organization. Cook has been earning these benefits for at least four years.

The deal relies on the Lansing School District employing Cook on paper and then “loaning” him to the MEA. Under the arrangement, Lansing schools makes contributions on his behalf into the Michigan Public School Employees Retirement System. Although the district claims it is reimbursed by the MEA for these costs, Cook still receives MPSERS service credits as if he were an active employee of a public school district. This boosts Cook’s pension, since the size of his pension is determined by how many service credits he accumulates.

The size of the pension contributions are made based on Cook’s salary, which the district lists as $201,613. This makes Cook one of the highest paid “employees” in the district, even though he does not appear to provide any services to the district. Cook’s salary will boost his pension even higher, since it is also based on his final average salary.

As president of the MEA, Cook’s salary is determined by that private organization. How the Lansing district could make pension contributions on his behalf based on his privately determined salary is unclear.

“Steve Cook is president of a private organization, the Michigan Education Association, yet it appears he is personally benefiting from money going into a public teacher pension fund,” said Patrick Wright, vice president of legal affairs for the Mackinac Center for Public Policy. “This arrangement raises many questions whether the MPSERS program, already underfunded at a crisis level, is being bilked.”

The district said it did not know the job responsibilities of Mr. Cook and declined to go into any more details regarding who approved this arrangement.

By using the pension system in such a way, it is likely that Cook could double or even triple the amount of his public pension. Cook may also be simultaneously earning retirement benefits in the MEA’s pension system. The MEA pension fund is underfunded by about $190 million.

“If what appears to be a private employee like Steve Cook is allowed to benefit from the public school pension system, what would stop anyone from setting up a similar arrangement?” Wright asks. “It appears as if all you’d need to do is find a school district willing to list you on the payroll, make pension contributions on your behalf, and then reimburse the district for the costs. With personal retirement accounts, nothing like this could happen.”

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