MOBILE USERS: m.isthmus.com
Connect with Isthmus on Twitter · Facebook · Flickr · Newsletters 
Sunday, July 13, 2014 |  Madison, WI: 82.0° F  Partly Cloudy
Collapse Photo Bar

Changes in Wisconsin Retirement System

Please limit discussion in this area to local and state politics.

Changes in Wisconsin Retirement System

Postby Henry Vilas » Mon Jun 18, 2012 11:05 am

Although this was brought up as a tangent to another discussion, this issue should have a thread of its own.

What would potential changes to pension system mean for current and future retirees?

Dropping out of the Wisconsin state pension system could be tempting to some government employees, but experts say it would cloud their future financial well-being while potentially undermining a pension fund — now one of the country's strongest — by reducing participation.
...

Those actions could mean greater contributions for taxpayers and employees to keep the system fully funded.

"If you limit the number of people coming into the system, that puts more pressure on the people who remain in the system, and by pressure I mean upward pressure on contribution rates," Matt Stohr, the system's retirement services administrator.

About 25 percent of the Wisconsin system is funded by employer and employee contributions. The rest is investment income.
...

Compared to other states, Wisconsin's benefits are modest and flexible, and the system is one of very few that is fully funded...

Looks like the Walker Administration is trying to fix what is not broken. Another attempt to privatize a government function.
Henry Vilas
Forum God/Goddess
 
Posts: 19529
Joined: Wed Sep 04, 2002 8:57 pm
Location: Name sez it all

Re: Changes in Wisconsin Retirement System

Postby jman111 » Mon Jun 18, 2012 11:18 am

and I'll repost this from the tangential discusssion:
jman111 wrote:
snoqueen wrote:I can see the little wheels turning: "Hmm... how can we siphon some of that off for my buddies?"

jman111, on Fri Dec 30, 2011 at 1:41 pm wrote:I'm surprised there wasn't more discussion of this when the so-called Budget Repair Bill passed. This article discusses the possibility of terminating the current plan by paying out the accrued benefits so the state could move the remaining "excess" assets to the state's balance sheet- a move utilized by corporations to grab retirement funds from employees while increasing the risks to future pension payments.

It's coming....

oh crap....link is busted
try here
jman111
Forum God/Goddess
 
Posts: 2904
Joined: Wed Aug 12, 2009 12:43 pm
Location: Dane County

Re: Changes in Wisconsin Retirement System

Postby jman111 » Mon Jun 18, 2012 12:13 pm

Expect arguments like this to crop up in future discussions on changing WRS.
Notice the creative math used to justify pension "reform".
...nearly all financial economists argue that the discount rate should be based on a virtually risk-free rate of return, such as the yield on U.S. Treasury bonds, which is currently around 3 percent.

So here is the claim is that, despite actual fund performance history, the numbers are ALL WRONG for WRS because the estimated rate of return is too high (7.2%). Therefore, we should all be in favor of privatizing pension fund maintenance or converting to 401(k)'s to save tax dollars. Meanwhile we are led to believe that we, as individuals or in conjunction with mutual fund managers, will somehow get better returns from the market than the pros who have been managing WRS.

And notice, also, the oversimplification with regard to payments:
Additional cost comes from the guarantee that benefits will be paid even if the plan’s investments do not generate the predicted returns.
Funny, no mention of decreased payments to compensate for less-than-optimal returns (as Hank can likely attest to to in recent years).


An entire article attacking pensions, with special attention given to WI's well-managed and nearly fully-funded plan, in a blog from a little county in Texas (population just over 100,000). Come to think of it, I keep coming across links to this parkercountyblog (as in Parker County, TX).

Seems odd, until you notice the author info for the article that may explain the trend:
Jason Richwine, PhD, is Senior Policy Analyst in Domestic Policy Studies at The Heritage Foundation.
jman111
Forum God/Goddess
 
Posts: 2904
Joined: Wed Aug 12, 2009 12:43 pm
Location: Dane County

Re: Changes in Wisconsin Retirement System

Postby Henry Vilas » Mon Jun 18, 2012 12:20 pm

Petition to save the Wisconsin Retirement System.

Don't know if signing it will do any good, but it can't hurt.
Henry Vilas
Forum God/Goddess
 
Posts: 19529
Joined: Wed Sep 04, 2002 8:57 pm
Location: Name sez it all

Re: Changes in Wisconsin Retirement System

Postby Cornbread » Mon Jun 18, 2012 8:00 pm

Missing from the copied link:

opponents of government spending say the state system is too costly because it collects $1.5 billion in tax-funded employer and employee contributions annually.

Read more: http://host.madison.com/wsj/news/local/ ... z1yCDlK464


$1,500,000,000 per year for state employees is a lot of clams.

Lot's of problems with this, but the major one is the fixed benefit payouts first, cadillac health care package second.

Fixed annuities (fixed benefit payments) can easily be financially valued and the last time I did it for a govt worker, to give him his monthly check for the rest of his life the money put in would have to have a 30% annual rate of return. That's right up there with hillary clinton's pork futures, but not everyone can get those. I don't know very many people/institutions that do, so it's up to the taxpayers to continually pay not only into the present workers salaries, but a large part of the retired ones monthly paychecks. And these don't even count health care packages.

IL did just the opposite of what WI did and let the government thugs/unions keep running the show. They increased taxes and brought in something like 7 billion bucks in one year. About 2/3 of the increased tax monies were immediately eaten up by the payment requirements of the retired government union workers.

So what's IL going to do this year, hit up the workers/businesses/homeowners with only a 50% increase in taxes?
Cornbread
Forum God/Goddess
 
Posts: 688
Joined: Sun May 20, 2012 5:48 pm
Location: Various places

Re: Changes in Wisconsin Retirement System

Postby peripat » Thu Jun 21, 2012 8:12 am

Apparently Wi Senator Mark Miller has proposed allowing farmers and employees of small Wisconsin businesses to buy into the Wisconsin Retirement System. (someone sent me a copy of a change.org petition to that effect) I expect that adding retirement accounts would require more state employees, but wouldn't it also encourage responsible employers to move their businesses here? What kind of costs would the state incur if they actually did that?
peripat
Forum God/Goddess
 
Posts: 962
Joined: Sun Jul 24, 2005 1:59 am

Re: Changes in Wisconsin Retirement System

Postby snoqueen » Thu Jun 21, 2012 8:47 am

Miller made a good suggestion both politically and with regard to helping future retirees, but as we know it'll go noplace.

The R's would rather let Wisconsin retirees run out of money and then refuse to help them by paying for their medical care, assisted living, and nursing care. That's what makes us stronger, you know.

What they don't remember is retirees vote (at least when they can get ID).

I believe this short-sighted so-called "planning" is political suicide for the R's in the long run, but it'll take time for the effects of their poor decisions to hit home, same as it will regarding school unfunding.

I keep wondering if they actually believe by time the effects of what they do are seen, they'll have so much power it won't matter and the people will just have to put up with it or move away.
snoqueen
Forum God/Goddess
 
Posts: 11269
Joined: Fri Feb 14, 2003 11:42 pm

Re: Changes in Wisconsin Retirement System

Postby Cornbread » Thu Jun 21, 2012 6:41 pm

Henry Vilas wrote:Looks like the Walker Administration is trying to fix what is not broken.

Yup, government pensions are indeed prosperous to every state.
One need just look at it to know that.
So then I guess the avowed socialist obama then was correct when he said the private sector is OK, the government sector needs more people.

So why not use this logic and hire 10,000 more government union workers in WI? Heck, the economy may need a bit more of a bump, so let's hire 100,000.

Well, anyone with me? Let's get this economy growing....
Cornbread
Forum God/Goddess
 
Posts: 688
Joined: Sun May 20, 2012 5:48 pm
Location: Various places

Re: Changes in Wisconsin Retirement System

Postby peripat » Thu Jun 21, 2012 6:52 pm

You have no idea what you're talking about do you? By the way, please post your documentation of President Obama asserting he is a socialist.
peripat
Forum God/Goddess
 
Posts: 962
Joined: Sun Jul 24, 2005 1:59 am

Re: Changes in Wisconsin Retirement System

Postby Henry Vilas » Thu Jun 21, 2012 7:41 pm

Corn, please read prior posts before replying, as you latest makes you look even more foolish than you usually are.

From my opening post:
Compared to other states, Wisconsin's benefits are modest and flexible, and the system is one of very few that is fully funded.

Emphasis added for the slow on the uptake.
Henry Vilas
Forum God/Goddess
 
Posts: 19529
Joined: Wed Sep 04, 2002 8:57 pm
Location: Name sez it all

Re: Changes in Wisconsin Retirement System

Postby peripat » Fri Jun 22, 2012 8:37 am

Still, Miller's proposal to allow farmers and small business employees to buy in to the system is a good one, and has some potential considering that the legislators who will vote on any changes are also covered by that system. After all, if it is such a wonderful benefit how can you deny it to other citizens of Wisconsin if it isn't going to cost the rich taxpayers anything?
peripat
Forum God/Goddess
 
Posts: 962
Joined: Sun Jul 24, 2005 1:59 am

Re: Changes in Wisconsin Retirement System

Postby Henry Vilas » Fri Jun 22, 2012 9:14 am

Henry Vilas
Forum God/Goddess
 
Posts: 19529
Joined: Wed Sep 04, 2002 8:57 pm
Location: Name sez it all

Re: Changes in Wisconsin Retirement System

Postby peripat » Fri Jun 22, 2012 10:54 am

And that, of course, is because the republicans wrote and passed a law they thought would 'get' state employees without listening to anyone who knew anything about the fund and the consequences of their actions. Adding additional workers to the fund who are not state employees would not cause additional problems of this nature though. If anyone could join the fund and their eventual payouts were all determined on 'money purchase' (meaning as a percentage of the amount paid in to their accounts based on the age as determined by the actuarial tables) their participation should not cause the fund to incur further expenses.
peripat
Forum God/Goddess
 
Posts: 962
Joined: Sun Jul 24, 2005 1:59 am

Re: Changes in Wisconsin Retirement System

Postby Cornbread » Fri Jun 22, 2012 7:12 pm

jman111 wrote:Expect arguments like this to crop up in future discussions on changing WRS.

Kewl! But why on earth go to a county in Texas for your strawman?
And how in heck did you find that?
Don't leftists hate all things 'southern' anyway? Did I just answer my last question? lol.

Notice the creative math used to justify pension "reform".

Very boring use of italics. Might I also suggest you use bold, underline and of course, end your schpiel with the infamous exclamation points (!!!!). Ya'll seem way to edumacated to just use ALL CAPS. Them be for them rednecks. :D

...nearly all financial economists argue that the discount rate should be based on a virtually risk-free rate of return, such as the yield on U.S. Treasury bonds, which is currently around 3 percent.


So, are you in favor of the fixed payout? (defined benefit for wonks).

You clearly know nothing about finance, so I'll try to help another leftist out here by personalizing it (they are into nothing but themselves anyway).

If you give me 100/month to invest for you in ya'lls proclaimed evil wall street for your retirement, can I tell you that I can't guarantee a monthly payout for you after 65?
Will you be mad?
Will you be confused?

If the stock market (union investments) goes up and down in their "evil profit" returns to investors (unions), you want the defined benefit (fixed payout) at your retirement?

OK, I can do that for ya brah and here's how:
1. I'll overcharge you six ways to china, but in a free market of investing (the "rich), your retirement fund managers ("institutional investors) will ditch me in 1 minute.
so.....
2. I'll just tell you your retirement returns cannot be guaranteed (fixed payouts) and you'll have to figure out some other suckers to fill in that gap.

And that's where ya'll organized to rape the taxpayers to fund ya'll lavish defined benefit payout retirement. Oh, and we haven't even included the other taxpayer rape that will fund your cadillace/benz health care plan for life.

Maybe enlarging your font will help with the validity of your cut and paste leftist points?

Seems odd, until you notice the author info for the article that may explain the trend:
Jason Richwine, PhD, is Senior Policy Analyst in Domestic Policy Studies at The Heritage Foundation.


OMG! There's the cue for the pavlovian leftists....BARK! BARK!
Run and hide!!!!
Cornbread
Forum God/Goddess
 
Posts: 688
Joined: Sun May 20, 2012 5:48 pm
Location: Various places

Re: Changes in Wisconsin Retirement System

Postby peripat » Fri Jun 22, 2012 7:54 pm

You still don't have any idea what you are talking about, but let me guess..... You don't believe anyone should be able to invest their money in a safe fund that is operated by a government agency as long as it could be invested in a risky manner that would make a lot of money for a crooked- but private- investment firm.
peripat
Forum God/Goddess
 
Posts: 962
Joined: Sun Jul 24, 2005 1:59 am

Next

Return to Local Politics & Government

Who is online

Users browsing this forum: No registered users and 1 guest

moviesmusiceats
Select a Movie
Select a Theater


FacebookcommentsViewedForum
  ISTHMUS FLICKR

Promotions Contact us Privacy Policy Jobs Newsletters RSS
Collapse Photo Bar