Capitol Report – Whatever you do, don’t fix it!
By State Representative, Leon D. Young
Fact: The state of Wisconsin has the strongest state pension fund in the nation. Moreover, according to the Pew Center on the States, Wisconsin is the only state in the country that has enough money set aside to meet its current obligations to pay the pensions that have been promised to its public employees. With this being the case, why is there any talk of proposing options to the defined-benefit pension system for public employees?
The genesis for this concern by public employees stems from Scott Walker’s original “budget-repair” legislation in 2010 that contained an obscure budget provision to “study” the possibility of establishing a defined contribution system as an alternative to the long-standing and very successful public pension system. Interestingly enough, Walker made a similar proposal for Milwaukee County employees when he was county executive.
Republicans finally passed a budget measure requiring a detailed study of the Wisconsin Retirement System (WRS) that was due to be reported to the Legislature by June 30, 2012. That measure was widely seen as a precursor to a Republican attempt, as evident in other states, to move away from the current defined benefit system toward a defined contribution system.
For those unfamiliar with the terminology, that kind of move would begin an eventual total change of WRS from a pension program to the equivalent of a 401(k). Instead of promising employees a certain level of retirement benefit based on years of service, the benefit would be totally defined by how much of your own money you’d put into the program and how well the program performed.
Wisconsin’s pension system includes 169,000 retirees receiving payments, 261,000 workers in state and local government and 148,000 people who are no longer working for a government employer but who are not yet receiving benefits – well over a half-million people in all. Pensioners in the system retire on average at just under 61 years of age and receive median payments of $20,900 a year.
The defined-benefit pension system for public employees is completely solvent and not broken. But, unfortunately, it makes a very inviting target to the GOP: $77 billion in total assets and a potential windfall for GOP operatives who work as private fund managers.
It should be noted that Scott Walker and members of his cabinet have sent out e-mails to public employees in the past trying to reassure them that there isn’t a plan to scale back, transform or gut the WRS. However, these attempts at reassurance have pretty must fallen on deaf ears. This is due in large measure to the fact that Scott Walker suffers from a credibility gap: he distorts the truth a lot.
Tell Scott Walker, in no uncertain terms, to leave the WRS alone.