Skip to comments.In Wisconsin, a model for pensions?
Posted on 03/03/2013 9:19:01 AM PST by TurboZamboni
But Minnesota's approach resulted in a deficit exceeding $5.7 billion, prompting legislators to scrap it four years ago. Wisconsin has reduced its unfunded liability, and the plan has been touted by at least two national studies as the most successful large public pension fund in the nation.
Many factors likely played a role in why one state's approach worked and the other's didn't. But one key difference stands out: Wisconsin retirees are promised a minimum annuity, but the total they receive can go up when investments exceed expectation. That extra "dividend" also can be cut when times are bad. Under Minnesota's former approach, the benefit could go up but never could be cut back.
(Excerpt) Read more at twincities.com ...
Some Wis retirees are looking at a 9 percent cut this year
Wisconsin retiree info
FReep Mail me if you want on, or off, this Wisconsin interest ping list.
And just what do you think we mere mortals with self-funded retirement have been looking at for the last FIVE years? Mostly eating into the foundations of our failing nest egg is what we have been looking at.
I don’t care much about keeping public promises when I can’t afford to keep promises to my spouse or myself when it comes to retirement. I always told her that we would sacrifice and save while we were working so we could have a nice retirement.... fat damn chance.
The retirees have been taking cuts for the last few years. this is just the lastest.
“The retirees have been taking cuts for the last few years. this is just the lastest.”
That doesn’t matter to folks like sequoyah, or most of the people on FR for that matter. Villifying public sector employees and retirees is the important thing. Those public workers shouldn’t have a pension, shouldn’t have even drawn a paycheck. If they think otherwise, they’re suffering from entitlement syndrome. They should have just volunteered or considered themselves fortunate if given a dish of gruel in exchange for 40 hours and for the privilege of serving the taxpayer. Oh, and maybe they should be made to wear a patch of some sort on their sleeves...
/do I really need a sarc tag?
So have most of the rest of us.
I also notice that the maximum contribution they make is about 10%. The state puts in 6 or 7%
It takes 25% minimum from day one to have any hope of a solvent retirement fund.
Pensions in particular are a sore point with private sector employees because they were taken away for the vast majority. I'm vested with five years of contribution to a defined benefit pension that was ended, just as nearly everyone elses’ was in the nineties. It might pay a couple hundred a month assuming it still exists when (if) I'm even able to retire.
That's where the venom is coming from, your stable pay and your nice pension are being paid for by people for whom such things no longer exist. And, for some reason, public sector employees think they can protest, *itch and complain their way into changing the outcome, a very leftist thought process. If it's onerous to you, change jobs. Or, go to community college, learn a trade. That's what we've been told for over two decades.
It's high time public sector employees finally feel the effects of this. Oh, and making hysterical, veiled Nazi references do not help your case at all, just FYI.
With regard to pensions, the great shame is that the public sector was not covered by ERISA back in 1974. ERISA was controversial at the time. It was indeed an unfunded federal mandate that imposed new burdens on business, and it probably crippled many businesses and drove some into bankruptcy. All true. Perhaps there were smarter ways of phasing it in, or perhaps it should have been forward looking only. But that's all now ancient history.
The underlying principle was solid: pensions should be fully funded. In the private sector, ERISA led to the great shift from defined benefit to defined contribution plans, which IMHO is highly desirable. In general, private sector pensions today are in relatively good shape (yes, there are scattered exceptions) while public sector pensions are a series of disasters waiting to happen. The reason is simple: in the public sector, with no obligation to fully fund, the unions continue to have an incentive to extract pie in the sky promises from managers who will be long gone when the bills come due. But we are now reaching the end of that road.
The long term solution is simple: public pensions should be fully funded. Easy enough to say; much harder to do. There are probably many public sector systems that are so underfunded that they can't be salvaged without deep cuts. Too bad. That problem has been hiding in the weeds for decades, and I'm sorry those who will get hammered because politicians and unions have chosen for many years to lie instead of dealing with the issue.
I relish having this discussion with liberals. I say "pensions should be fully funded," and they gleefully agree, thinking that I'm referring to corporate pension plans. But then I mention that the principle should apply to the public sector and Social Security, and it's usually deer in the headlights time. Too dumb for words.
Pensions should be fully funded. Public pensions aren't because we've operated on the theory that government is special, uniquely smart, of unmatched wisdom and foresight, and so should be immune from normal disciplines. The reality based community understands the fallacy of the government exceptionalism theory. Liberals are slow learners.
That's the big issue. When public-sector pension funds are in bad shape because of bad political decisions, they're supposed to be made whole by whatever means necessary. When private-sector employees have their retirement accounts hammered because of reverses in the stock market (caused by bad political decisions), we're told to suck it up. Likewise when we're told the social-security fund is insolvent.
Some recently approved GASB standards will help here. The problem will show up in financial statements and then auditors can hickey those governmental entities that don’t do something about it.
“I always told her that we would sacrifice and save while we were working so we could have a nice retirement.... fat damn chance.”
Yeah, we were sailing along living off the investments in our 401K’s and not even being able to spend the gains the investments produced. Then 2007 happened and 30% of our capital “disappeared.” Now we have to scrimp just to make sure we don’t eat into the capital that’s left, and the income that is less than one third of what it was on a percentage basis before the crash. So I am just heartbroken to read that the bloodsuckers in Wisconsin have to take a 9% haircut. That’s a lot better than 30%!
I haven’t expected that I will have any soc. sec. or retirement available by the time I get to that point of my life for quite some time, and as such, don’t anticipate I will ever retire. I have friends and family who are public sector employees and who have been hardworking and genuinely care about the jobs they do. I have never heard one ever begrudge another individual for his or her success.
Stable pay? Yes, so stable that no increases, and paycuts due to furloughs for the last 5-6 years. Before that they were lucky to get a raise of 5 cents an hour over a two year period. They didn’t have much choice with what the Unions did/didn’t bargain for, but one of the things they were repeatedly told was essentially that they were trading lower wages for maintaining decent benefits.
I still don’t understand the venom and vitriol. It’s as if folks are rejoicing because others are having a hard time. I’ve read over and over on this forum the idea that it’s about time “they got theirs.” Kind of like where you write, “it’s high time public sector employees finally feel the effects of this.”
Have I been guilty at times at rejoicing at another’s misfortune? I have to say that I have been, such as when some embarrassing gaffe occurs at the VP or above level. But I hope I am growing better in that regard, and that I would never lose my compassion for someone going through misfortune, nor be glad someone else is going through a trial just because I went through the same trial, and now “it’s about time” everyone experienced the same misfortune as I.
Business is business, nothing personal. The money is not there, hasn’t been for quite some time. Cuts are inevitable. At least you still have a job with benefits. Learn to be grateful for what you do have, rather than screeching about what you don’t.
And again, if it’s that onerous to you, go find another job. Or, go to community college, learn a trade.
Government edict created this situation therefore government is not immune. Sauce for the goose is sauce for the gander.
Welcome to the real world. Fun, ain’t it? Nobody gives a rat’s patoot about my pay or benefits. Nobody gives one about yours.
Please point out what you read of mine that led you to write, “Learn to be grateful for what you do have instead of screeching about what you don’t.” I don’t believe I ever expressed an attitude of ungratefulness for what I have or “screeched” about what I don’t. So it would be helpful to know what I wrote that supports your viewpoint.
Been in the real world all of my life.. I’m not home yet.
Return to your reply, #6 on this thread, hysterical and sarcastic as it is, and perhaps your memory will be refreshed. Or, perhaps not.
I re-read and perhaps you missed where I self-identified sarcasm:
“/do I really need a sarc tag?”
I don’t see it as an expression of ungratefulness nor of screeching. I never indicated I am a public sector worker, I never indicated I was ungrateful for what I have. Nor did I “screech” about what I don’t.
Yes, my post at #6 was sarcastic. I identified it as such and stand by it as sarcasm. Where did I say I was ungrateful for what I have? Where did I “screech” about what I don’t?
It’s not to be found, because that did not happen.
Take care and have a nice life. I prefer to hope that people’s situations improve, rather than envy those whose circumstances may be better than mine.