Report recommends no changes to pensions
Report released Monday by Dept. of Administration
MADISON, Wis. — A highly anticipated report ordered by Gov. Scott Walker and the Republican-controlled Legislature is recommending no changes to Wisconsin’s $77 billion pension system.
The report, released Monday, was written jointly by Walker’s Department of Administration, the Department of Employee Trust Funds and the Office of State Employment Relations.
The report said that given the state pension’s strong financial health and its unique risk-sharing features, the state should not move to an optional defined contribution plan or allow employees to opt out of the system all together.
“There are pros and cons to both, and now we have a plan that we think makes the most sense for taxpayers and the people that participate in it,” said Chris Schoenherr, deputy secretary of the Department of Administration.
Schoenherr said the report recommended neither option in part because of their risks to the system but also because the state system currently works well and was recently called the strongest plan in the nation. But he’s didn’t guarantee the plan will never change.
“This should keep us in good stead for a while, but I don’t want to give the impression that we’re going to put the head in the sand and say this is good for the next 30 years,” Schoenherr said. “We’ll need to continue to look at it. It may be good for 30 years, but we want to make sure we’re always looking at it to make sure we’re doing the right thing.”
The report includes a number of areas to look at for future study.
For 25-year state employees like Debra Stapleton, who may retire in a few years, it is good news.
“I don’t know if it will ever be reassuring enough, and I think a lot of employees are going to be watching closely,” Stapleton said. “I find it very reassuring to hear that.”
Schoenherr specifically said the portability that 401k plans allow employees could be a reason the state might want to change things down the road to stay competitive and attract a younger generation of workers that doesn’t want to stay in one job for a long period of time. Schoenherr wouldn’t say when this recommendation could be revisited or how long this plan will hold.
For his part, Walker said he will be taking this advice, releasing a statement Monday emphasizing he is not planning to make any substantial changes to the retirement system, but he would continue to make sure it is fiscally sustainable.
Walker said last week that he was open to making changes with the pension system, but he wasn’t proposing anything now.