As the article points out, the constraints of the still fully-funded pension system come from Wall Street's 2008 meltdown, and not the benefits due public sector workers.
To avoid a fifth straight year of reduced benefits in Wisconsin, the fund needs an unusally high investment return of 27 percent to 31 percent in 2012, said Jon Kranz, employee trust department budget and finance director.The same thing happened in the City of Milwaukee, where a fully-funded pension system has now required City taxpayers to kick in funds since 2010 to keep that pension fund over 100% funded. But these contributions do not allow pensioners to exactly live high on the hog. The State Journal story quotes the Legislative Fiscal Bureau's information on the public employee benefits from the WRS, and I'd hardly call them Cadillac-level.
Other options to cope with an investment return below 27 percent include increasing contributions from the taxpayers and employees or eroding the fund's base.
Over the last 20 years, fund investments have met or exceeded its 7 percent return goal on average. But it suffered a 24 percent loss in 2008, which has meant an unprecedented series of benefits cuts in 2009 and each succeeding year. Next in line for reductions are those who retired in 2002 or earlier.
Wisconsin retirement system at a glanceBut these relatively menial figures still get jealous derision from other workers who have had their pensions stolen by the Mitt Romneys and Bain Capitals of the world, and for some reason want the public sector workers to be dragged down to the same unacceptable level they are. It's a process 1670AM's Sly rightfully calls "Scott-holm Syndrome", where Walker and his supporters get low-wage, screwed-over private-sector workers to get on the same side as the corporate slime who put them in this mess, and have them blame public sector workers who did nothing but show up at their jobs every day.
Individual pension benefits are calculated to reflect an employee's length of service, salary, age and investment gains earned by the pension fund.
•Average annual benefit: $23,000
•Average retirement age: 60
•Average retiree age: 70
Two-thirds of current retirees had from 10 to 35 years on the job.
Years of service/ Average final pay/ Average annual benefit
10-15 $32,443 $9,384
15-20 $39,179 $14,112
20-25 $44,732 $20,448
25-30 $50,220 $29,256
30-35 $54,579 $37,572
Maybe if these Scottholm Sundrome cases would read the Department of Employee Trust Funds FAQ's on the WRS, they'd realize it isn't costing them much at all, and in fact should be a model they should shoot for instead of trying to shoot down. If they flip to Page 8, the answer is right there:
14) There has been a lot of media coverage about the financial health of pension systems across the nation. Is the WRS fully funded and able to pay benefits?And the Pew Center on the States report from last year backs this up, as Page 3 shows Wisconsin as 1 of 2 states with a 100% funded pension system and a taxpayer contribution of about $123 a Wisconsinite. Compare that to places like Minnesota, who had required taxpayer contributions nearly double Wisconsin's (with a lower population) and were only 78% funded in 2009, or the boogeyman of Illinois, with its 51% funding and needs of $4.1 billion a year just to keep up.
• Yes. The WRS is fully funded and able to pay benefits to current and future WRS members.
But you can bet Scotty and company will try to make the comparisons to Illinois and Minnesota and other places like California, and will try to use the recent recall election as evidence of some kind of mandate. Well sorry guys, but just because voters didn't decide to kick you to the curb, it doesn't mean they see things your way. In fact, when the exit poll shows 60% of the voters thinking recalls should be for official misconduct only and 18% of Walker voters would support Obama in November, it tells me that a sizable number of voters went for Walker only because they disagreed with the concept of a recall election. In fact, if those people are more than 4% of the voting population, it means Walker would have lost a "regular" election.
With that in mind, I got a feeling the WisGOPs are going to find out the hard way that people don't want to see pensioners get screwed over by turning the WRS into a casino-style 401(k), but it's just the type of overreach I'm counting on them to do. It's up to us to get the truth that Wisconsin's fully-funded pension system works, keeps salary and other compensation costs down (which it does), and stabilizes Wisconsin's economy. Otherwise, you know the right-wing propaganda machine will try to lump Wisconsin's responsible system with the wasteful giveaways that have plagued places like our neighbors to the South and West, and these comparisons just don't hold water with what we have here in Dairyland.
So no, we are not California, we are not Illinois, and we are not remotely close to those places when it comes to the health of our pension fund. So when Sykes and Belling and Icki rant about how employee benefit costs are "killing" budgets, it's simply not true in Wisconsin. The only thing that is putting these pension funds under stress is the Wall Street casino that brought this country's economy to its knees, with virtually the only groups getting long-term relief being the banksters who screwed things up in the first place. And we certainly shouldn't put our futures in the hands of Wall Street by turning over a stable WRS system that more than 10% of Wisconsinites rely on for income security to those wolves.
Post a Comment