Wisconsin: Walker's attack on the Wisconsin Retirement System is now underway
from my email...
Sorry to be the bearer of such bad news on a lovely Wisconsin weekend, but assaults on the Wisconsin Retirement System by conservative groups are really heating up. Those of us who have been working hard to preserve the WRS have been curious as to what logic Governor Walker would use to attack our world class pension system. Now we know. In an op-ed piece printed in the Milwaukee Journal Sentinel on May 31, the conservative Heritage Foundation makes Walker’s case using two principal reasons to justify dismantling WRS while conveniently omitting crucial facts which completely refute their arguments.
Many thanks to WRS annuitant and online contact Patrick Murphy for the following information he included in a rebuttal letter to the MJS (which may never be printed). Patrick writes:
In their op-ed piece, the Heritage Foundation incorrectly claims:
1. Taxpayers pay for the WRS.
2. Investment projections are too high, leading to higher future liabilities than what plan administrators report.
Their conclusion is that public employee pension expenses will fall back on taxpayers.
What is correct:
1. When public employees receive pay for their service, it ceases to be their employer’s (taxpayer’s) money. Public employees actually divert some of their pay to the WRS for, of all things, retirement.
2. The “proper” financial methods which the Heritage Foundation claims should be used serve only theirs, and Walker’s, conservative ideology.
Articles in the Government Financial Review, National Association of State Retirement Administrators as well as Governing all state that the assumption of a return of 8% is valid for pension plans, which are expected to be long-term investments. Furthermore, using a risk-free estimate (suggested by Heritage and other conservative groups) will result in OVER-FUNDING of pension plans.
What the Heritage Foundation omitted:
Wisconsin, historically, has built into the WRS self-correcting measures for when investment times are bad:
1. Actual retirement payments TO RETIREES can be reduced, and currently are being reduced.
2. Employee contributions can be increased, and currently are being increased, even beyond Act10 requirements.
My conclusion is that it is very likely that NO pension expense in Wisconsin will fall back to the taxpayer unless there is a COMPLETE collapse of the US economy, in which case ALL bets are off for anything.
The Heritage op-ed offers a self-serving and misleading report for Walker to dismantle our national model public employee retirement system. It uses misinformation and omits relevant data that refutes their desired result.
Patrick Murphy, WRS Annuitant
= new reply since forum marked as read
