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Pension Article Takedown

Pension Article Takedown

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Published by vicki_mckenna
written by my actuarial insider in WI government
written by my actuarial insider in WI government

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Published by: vicki_mckenna on Jun 25, 2012
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06/25/2012

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 The Milwaukee Journal-Sentinel continues to lead on its home page with this"State's Pension Strongest in Nation" article(http://www.jsonline.com/news/statepolitics/states-pension-is-strongest-in-nation-study-finds-bc5s0t0-160191165.html), but going through it paragraph byparagraph, I'm not exaggerating, it may be the most dishonest, most deceptivearticle about the WRS out there, even worse than the Cap Times! This is LewisCarroll "Alice in Wonderland"faux-journalism...PARAGRAPH BY PARAGRAPH THROUGH THIS AMAZING ARTICLE:"
More impressively, Wisconsin got those high marks for its pension funding forfiscal year 2010 - before Gov. Scott Walker and Republican lawmakers requiredpublic employees to contribute more for their pension and work longer hours andmore years to qualify for one
."(
Automatically extracting what ever is needed to fund the system from taxpayersis not "impressive."
 
It's simply automatic funding regardless of circumstances.and the funding would still "fully-funded" regardless of new service requirementfor part-time, and vesting requirement by Gov. Walker
.)
"Really in every metric, you're doing better than other states. .
 
.
 
.
It means you can tell taxpayers and businesses you're going to be paying for theservices you're getting, not the services that past generations have beengetting," said David Draine, a senior researcher at the Pew Center on the States.(
Factually wrong,
ignores the fact that majority of retirees are at-or-approaching Core Fund base amounts, and
if we have a simple global recessionsometime over next couple of years, the taxpayers WILL dig deep to pay forprevious retirees, as those guaranteed pensions have to be paid
.)
"But compared to the rest of the country, Wisconsin has more reason to celebratethan to panic."
(What???!!! The WRS refuses to address a formula calculation that guaranteesmonthly amounts that don't fit today's financial results
; the WRS continues toinsist on using 7.2% as the assumed rate, because if they don't they have to telltaxpayers they have to kick in even more;
the WRS refuses to address "pensionspiking" which is out of control with UW/teachers/city workers, etc.; the "totalnormal cost" is going to have its FIFTH increase in 2013, and taxpayers WILL haveto kick in substantially more in 2013 than 2012; system has an open-endedtaxpayer liability, which one more global financial crisis can send the systemdown; the WRS uses the public-pension accounting rules, which even Time magazinesays should be illegal., etc. etc. etc.)
 
 "To make up the gap, the other 49 states will have to set aside more tax dollars,cut future benefits or raise contribution rates for current employees, or resortto legally questionable strategies to siphon away cost of living adjustments forcurrent retirees."(
The outright lie, the smoking gun in the whole dishonest article -- "the other49 states will have to set aside more tax dollars"??? We just had the WRS admitlast week that the total normal cost is going to leap next year, because offunding needs, and taxpayers will be paying 6.6% match or more of general/teacherpay in 2013, compared to 5.9% in 2012.
What the hell are they talking about?Local governments and school districts are going to have to raise taxes or cutservices to meet this obligation of paying more to the WRS!!)
"It's pretty clear that the Wisconsin retirement system is a model for the nationin terms of its long-term health," said Jim Palmer
, who serves as both thechairman of the Wisconsin Coalition of Annuitants, a group representing retireesand workers in the state pension system, and as the executive director of theWisconsin Professional Police Association.(Blah, blah, blah. Vicki, this is the same clown who had a union thug from "WeAre One -Ilinois" give a presentation at the WPPA convention recently about theKoch Brothers taking away worker rights, etc.""Since 2009, investment returns in the state funds have been more favorable, butthe state has yet to catch up with the losses from 2008, when the state's CoreFund lost 26%. Next year, retirees could be in for another significant reductionin their payments." (This and the previous paragraphs fail to state the fact thatALL retirees have a floor amount on the pension amount, and that most are alreadyat their floor or approaching it. The article implies that all retirees will seea decrease if necessary, but just the opposite is true - TAXPAYERS will kick inmore to fund the guaranteed floor amounts ifnecessary.)
"Pensioners in the system retire on average at just under 61 years of age andreceive median payments of $20,900 a year."
(
Truly deceptive, as "pensioners" in the system includes many, many people whowork only a few years. We have people at UW or management in various publicemployers and get a monthly pension with only 3 to 5 years of work. These peoplewho get those smaller monthly amounts are still considered "pensioners"
in thesystem and bring down the median payment amount. Plus, taxpayers don't know thatthe WRS pension is IN ADDITTION to social security, not offsetting it in any way.A lot of people think the WRS is instead of social security.)
 
 
"The Pew report relied on states' own assumptions about what it would take tofund their systems, including how much they will earn in investment returns. Overtime, Wisconsin expects to earn 7.2% a year in investment returns, compared tothe 8% that is typical
for most state pension systems, Draine said."(Is Mr. Draine a clueless dope?Or is he getting paid under-the-table by the WRS? The 8% number may have beencommon 5 years ago, but all systems are under pressure to lower it, and manyhave. But the implication is that 7.2% is a healthy number to use, which we allknow is nonsense and is a major problem in the structure of the system. AskMayor Bloomberg, or any national financial publication.)
Not only is the Wisconsin system not a ticking financial bomb, the state alsopays less into its system than most states.
(
Umm, the ticking financial bomb actually went off in 2008, that is why the totalnormal cost continues to rise and rise, and the WRS is in a funding problem ifall retirees get to that floor amount.
Apparently open-ended cost to fund thesystem is of no concern to these people.Then article goes on to claim that the cost to fund the system is less than otherstates. The metric used is "percent of government spending" instead of astraight percent of employee pay. What this means is that the more a statespends wildly on other programs, and employee benefits, well, the percent of whatthe pension directly cost, as a percent of total spending goes down. So, themore the state and local governments spend on various projects and goofyprograms, the percent spent on pension is smaller, so the pension amount must begood... "look how it is a small percent of public spending."
Just plainnonsense.)
 "But Todd Berry, president of the Wisconsin Taxpayers Alliance, said that themost pressing retirement issue in Wisconsin is health care, not pensions."(Oh, great so now the WTA buys into all of this, which is demonstrativelyhogwash, and leave the pension alone, lets look at health care.)(For state employees (health care benefits), Marchant said the state'sobligations are essentially funded, which puts Wisconsin far ahead of manystates. However, at the local level, Berry said some school districts and otheremployers have made promises to pay all or part of the health care for theirretirees and haven't necessarily set aside any money to pay for those substantialcosts."(Oh, marvelous, here we go again, health insurance benefit for state workers isfully-funded,so leave it alone. Well, it was fully-funded when taxpayersflippedfor 100% of it as well, before ACT 10. This "fully-funded" diversion is nowgoing to be used for state worker health care benefits??That's not the issue, the issue is the cost to taxpayers, just as it is with thepension!!!!!!!!!!!!!")

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