PARAGRAPH BY PARAGRAPH THROUGH THIS AMAZING ARTICLE: "More impressively, Wisconsin got those high marks for its

pension funding for fiscal year 2010 - before Gov. Scott Walker and Republican lawmakers required public employees to contribute more for their pension and work longer hours and more years to qualify for one." (Automatically extracting whatever is needed to fund the system from taxpayers is not "impressive." It's simply automatic funding regardless of circumstances. And the funding would still "fully-funded" regardless of new service requirement for 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 the services you're getting, not the services that past generations have been getting," 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 recession sometime over next couple of years, the taxpayers WILL dig deep to pay for previous retirees, as those guaranteed pensions have to be paid, it's the law.) "But compared to the rest of the country, Wisconsin has more reason to celebrate than to panic." (What???!!! The WRS refuses to address a formula calculation that guarantees monthly amounts that don't fit today's financial world; the WRS continues to insist on using 7.2% as the assumed rate, because if they don't they have to tell taxpayers they have to kick in even more; the WRS refuses to address "pension spiking" which is out of control with UW/teachers/city workers, etc.; the "total normal cost" is going to have its FIFTH increase in 2013, and taxpayers WILL have to kick in substantially more in 2013 than 2012; system has an open-ended taxpayer liability, which one more global financial crisis can send the system down; the WRS uses the public-pension accounting rules, which even Time magazine says 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 resort to legally questionable strategies to siphon away cost of living adjustments for current retirees." (The most glaring lie, the smoking gun in the whole dishonest article -- "the other 49 states will have to set aside more tax dollars" What??? We just had the WRS admit in a Madison newspaper last week that the total normal cost is going t oleap next year, because of funding needs, and taxpayers will be paying 6.5% match or more of general/teacher pay 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 be left with decisions to raise taxes or cut services to meet this obligation of paying ever more to the WRS!!) "It's pretty clear that the Wisconsin retirement system is a model for the nation in terms of its long-term health," said Jim Palmer, who serves as both the chairman of the Wisconsin Coalition of Annuitants,

a group representing retirees and workers in the state pension system, and as the executive director of the Wisconsin Professional Police Association. (Blah, blah, blah. Even democrat governors in New York and California, both acceptably funded pension plans, by Pew's own definition, are battling to try and convince state legislatures to move AWAY from WRS-style defined-benefit plans and evolve into defined-contribution plans that limit future taxpayer liabilities, and don't overburden taxpayers. Both governors were lauded for these efforts recently in Barron's, the business weekly.) "Since 2009, investment returns in the state funds have been more favorable, but the state has yet to catch up with the losses from 2008, when the state's Core Fund lost 26%. Next year, retirees could be in for another significant reduction in their payments." (This and the previous paragraphs fail to state the fact that ALL retirees have a floor amount on the Core Fund portion of their pension amount, and that most are already at their floor or approaching it. The article

implies that all retirees will see a decrease if necessary, but just the opposite is true TAXPAYERS will kick in more to fund the guaranteed floor amounts if necessary. Why no explaination of this floor amount of the pensions in the article?) "Pensioners in the system retire on average at just under 61 years of age and receive median payments of $20,900 a year." (Truely deceptive, as "pensioners" in the system includes many, many people who work only a few years. There are plenty of workers at UW or management in various public employers who qualify for a monthly pension with only 3 to 5 years of work, through the generosity of what is referreed to as the formula calculation. These people who get those smaller monthly amounts are still considered "pensioners" in the system and bring down the median payment amount. The $20,900 a year total is simply not representative of the average public employee retiring with say a 35-year career at age 60, but most readers of the article wouldn't realize that the WRS offers monthly pensions to people who sometimes

work less than a half-dozen years, and they are included in the median annual payout provided. That median also includes part-time employees, who also often qualify for a monthy pension. Plus, taxpayers simply wouldn't conclude that the WRS pension is IN ADDITTION to social security, not offsetting it in any way. A lot of people surely think the WRS is instead of social security.) "The Pew report relied on states' own assumptions about what it would take to fund their systems, including how much they will earn in investment returns. Over time, Wisconsin expects to earn 7.2% a year in investment returns, compared to the 8% that is typical for most state pension systems, Draine said." (Is Mr. Draine's intention to be taken seriously? The 8% number may have been common 5 years ago, but all systems are under pressure to lower it, and many have. But the implication is that 7.2% is a healthy number to use, which we all know is nonsense and is a major problem in the structure of the system. It has also, per the Madison newspaper article, resulted in the WRS chasing

returns by slowly shifting to somewhat riskier investments over the recent years. The 7.2% expectation as a average investment return is simply unrealistic today. Ask Mayor Bloomberg of NYC, or any national financial publication, or even the recent New York Times piece on the subject.) Not only is the Wisconsin system not a ticking financial bomb, the state also pays less into its system than most states. (Umm, the ticking financial bomb actually went off in 2008, that is why the total normal cost continues to rise and rise, and the WRS is in a funding problem if all retirees get to that floor amount. Apparently openended cost to fund the system is of no concern to these people, the taxpayers will simply cover it.. Then article goes on to claim that the cost to fund the system is less then other states. The metric used is "percent of government spending" instead of a straight percent of emplolyee pay. What this means is that the more a state spends wildly on other programs, and emloyee benefits, well, the percent of what the pension directly cost,

as a percent of total spending, goes down. So, the more the state and local governments spend on various projects and goofy programs, the percent spent on pension is smaller, so the pension amount must be good... "look how it is a small percent of public spending." Just a silly measurement to use for this. How about this- Simply compare the cost of what the WRS employer/taxpayer contribution is, to what any private-industry employee would be leaping for joy over as a 401(k) match, say dollar-for-dollar up to 4% of pay, and it is clear that the WRS taxpayer contributions are more generous than most of us believed possible.) "But Todd Berry, president of the Wisconsin Taxpayers Alliance, said that the most pressing retirement issue in Wisconsin is health care, not pensions." (Oh, great so now the WTA buys into all of this, which is demonstratively hogwash, and leave the pension alone, lets look at health care.) For state employees (health care benefits), Marchant said the state's obligations are essentially funded, which puts

Wisconsin far ahead of many states. However, at the local level, Berry said some school districts and other employers have made promises to pay all or part of the health care for their retirees and haven't necessarily set aside any money to pay for those substantial costs." (Oh, marvelous, here we go again, health insurance benefit for state workers is fully-funded, so leave it alone. Well, it was fully-funded when taxpayers flipped for 100% of it as well, before ACT 10. This "fully-funded" diversion is now going to be used for state worker health care benefits?? That's not the issue, the issue is the cost to us taxpayers, just as it is with the pension!) Oh, and one observation about the Journal-Sentinel article: Nowhere is there a comparison of the cost of the retirement benefits to that of private-industry workers, ONLY to the plans of other states and local governments around the country, which are out of control and are going to reined in substantially. An easy comparison benchmark for the WRS to use to justify its current benefits. But not the right

one. The overwhelming majority of those other state plans are awful in cost to taxpayers and ridiculous in level of benefits to public workers... and that is what the WRS is comparing itself to. Why didn't the Journal-Sentinel do this comparison - Per a Madison newspaper article last week, the WRS admitted that the actuarial cost is jumping in 2012, leavingthe employer (taxpayer) portion at somewhere north of a match of 6.5% of pay for general workers. Do any of us in a private-industry company in Wisconsin get a contribution from our competition-pressured private-employer of a 401(k) match of dollar-for-dollar on 6.5% of pay? Of course not. And then get a guaranteed monthly amount from it when we retire, and if the aggressive investment scheme fails, the employer steps in to create a floor amount, regardless of investments? You can stop laughing now. One more observation: The fact-box that is attached to the left of the article mentions that New York state is in the top five as far as being "fully-funded" too. But in New York, they

are apparently smart enough to know that "fully-funded" doesn't mean its costs are appropriate for taxpayers. Democrat Gov Cumo is trying to reform the system, by raising retirement age, make employees pay more, put new employees in defined-contribution plan, etc. It's a battle. New York understands the problem. Apparently the Milwaukee JournalSentinel does not.

Sign up to vote on this title
UsefulNot useful