Our Wisconsin Retirement System is #1 in the nation
Our retirement system works! It is well-funded and able to meet payments for its 572,000 employees and retirees.
Our WRS “defined benefit” system. The benefit for retirees is known and defined in advance. Both employers and employees pay into the pension fund. The funds are well-managed by public employees, who work for public salaries. They do not receive commissions for managing our retirement funds. There is no gender discrimination in the WRS. Women receive the same amount of pension as men. Retirees under WRS can count on receiving their benefit when they retire, unlike those retirees under “defined contribution” plans.
A “defined contribution” plan, such as individual 401(k) accounts, has become attractive to private sector employers, but no so attractive to employees. Under these plans there is no guaranteed employee retirement benefit. The employer contributes an amount each pay period into individual employee investment accounts. Individual employees manage their own accounts. Returns for “defined contribution” plans are 1 to 2% lower than plans like the WRS. Over time, these lower returns deliver pensions 30% lower than our WRS pensions. This is due to:
• High account maintenance fee collected by the investment agents.
• Individual employees lack the expertise and benefits of scale of the WRS.
• Women receive a lower pension because studies show they live longer and their individual accounts are stretched out over a longer period of time.
• The benefits depend on the “market” and the investment skills of the individual.
What impact would a “defined contribution” plan have on WRS retirees in central Wisconsin?
Our current WRS pension plan pays about $210 million a year to retirees in Lincoln, Marathon, Portage and Wood Counties. This $210 million supports over 1700 jobs and generates $27 million in state/local taxes.
A change to a “defined contribution” retirement system would reduce the current $210 million to $147million. That’s $63 million less in retirement benefits to be spent at the local level. Retirees could find themselves needing the taxpayer funded, social support systems because a “defined contribution” system does not provide a guaranteed retirement benefit. “Defined contribution” plans create a risk for Taxpayers as well as employees.
“A rising tide lifts all boats.” Instead of cutting pensions for public employees, let us offer the WRS public-style pensions for all people in Wisconsin.
What can we do?
• Learn more and tell your friends.
• Go to the Wisconsin Coalition for Retirement Security. (on Facebook)
• Read the Study of the Wisconsin Retirement System .June 30, 2012)
http://etf.wi.gov/publications/wrs-study.pdf
Learn more and support SB 611 by Wisconsin State Senator Dave Hansen. This bill would offer Public-style Pensions for all employees in Wisconsin. https://docs.legis.wisconsin.gov/2013/related/proposals/sb611
• State Representative Genrich has authored a companion bill AB 838, opening up a public pension for all employees of Wisconsin.
https://docs.legis.wisconsin.gov/2013/related/proposals/ab838
• Read Phil Anderson’s article on this MWCN website: “Retirement for All Legislation Introduced”
March 15, 2014 http://www.middlewisconsin.org/retirement-for-all-legislation-introduced/
• Talk with your Representatives: Mandy Wright AD85 -(608) 266-0654 rep.wright@legis.wisconsin.gov, John Spiros (608) 266-1182 rep.spiros@legis.wisconsin.gov and Senator Jerry Petrowski (608) 266-2502 sen.petrowski@legis.wisconsin.gov.
Let them know you support our current “defined benefit” WRS plan and you think it would be a good idea to expand the WRS plan to all of Wisconsin’s workers.