Recent discussions in disparate parts of Wisconsin illustrate well how widespread the problems concerning public pension funding and benefits are.
Menomonie and Milwaukee, Wis., are night and day. They are on opposite ends of the state. Milwaukee, the state’s largest city, has 37 times the population of rural Menomonie. But they do share at least one thing — grappling with public pension funding issues, as well as a commitment to provide for those to whom they made promises.
In Milwaukee, recent controversy centers around payments to 217 current and future retirees. According to Milwaukee’s Journal Sentinel, they had been allowed to purchase extra pension credits, which made some eligible for early retirement, free health care as retirees and a 25% pension bonus. The future payments to these 217 is projected to amount to $10.3 million. In 2007, the administrators of the retirement system and the Pension Board determined that the policy had been a mistake; pension credits no longer can be purchased.
The Finance Committee of the Milwaukee County Board on Jan. 29 voted unanimously to approve a Pension Board proposal that county ordinances be retroactively changed to allow high pension payments to 217 current and future retirees to continue. Not only that, the committee also rejected County Executive Chris Abele’s proposal that future overpayments to those retirees be reduced. The committee sought to protect the retirees from any possible hardship, as well as avoid lawsuits and the administrative complications recalculations would have occasioned if payments were reduced.
Almost 300 miles away from Milwaukee, the Menomonie School Board on Jan. 26 discussed retired teachers’ pension benefits. The Dunn County News reports that these were the first such discussions since 2012.
The district pays 100% of qualified retirees’ health insurance premiums. The longest-tenured employees also have 100% health insurance coverage for their families until they are eligible for Medicare; the percentage of the coverage the district pays for is scaled down for those with less tenure. The school district has an unfunded retirement liability estimated to be at least $20 million.
The board is afraid that the cost of the pension benefits may force it to lay off employees or cut funding for school programs. Adding to the pressure is the strong possibility that the state will not provide additional funding in the next school year.
Nonetheless, the board seeks to balance the need to address this situation with other considerations. For instance, it is concerned that dropping early retirement benefits would hurt morale and cause mass retirements before the option of early retirement ended. The board is considering capping insurance premiums and increasing the retirement age to 57. At the very least, it has said that it plans to allow teachers who retire this year to receive pension benefits as currently offered.
Menomonie and Milwaukee, Wis., are night and day. They are on opposite ends of the state. Milwaukee, the state’s largest city, has 37 times the population of rural Menomonie. But they do share at least one thing — grappling with public pension funding issues, as well as a commitment to provide for those to whom they made promises.
In Milwaukee, recent controversy centers around payments to 217 current and future retirees. According to Milwaukee’s Journal Sentinel, they had been allowed to purchase extra pension credits, which made some eligible for early retirement, free health care as retirees and a 25% pension bonus. The future payments to these 217 is projected to amount to $10.3 million. In 2007, the administrators of the retirement system and the Pension Board determined that the policy had been a mistake; pension credits no longer can be purchased.
The Finance Committee of the Milwaukee County Board on Jan. 29 voted unanimously to approve a Pension Board proposal that county ordinances be retroactively changed to allow high pension payments to 217 current and future retirees to continue. Not only that, the committee also rejected County Executive Chris Abele’s proposal that future overpayments to those retirees be reduced. The committee sought to protect the retirees from any possible hardship, as well as avoid lawsuits and the administrative complications recalculations would have occasioned if payments were reduced.
Almost 300 miles away from Milwaukee, the Menomonie School Board on Jan. 26 discussed retired teachers’ pension benefits. The Dunn County News reports that these were the first such discussions since 2012.
The district pays 100% of qualified retirees’ health insurance premiums. The longest-tenured employees also have 100% health insurance coverage for their families until they are eligible for Medicare; the percentage of the coverage the district pays for is scaled down for those with less tenure. The school district has an unfunded retirement liability estimated to be at least $20 million.
The board is afraid that the cost of the pension benefits may force it to lay off employees or cut funding for school programs. Adding to the pressure is the strong possibility that the state will not provide additional funding in the next school year.
Nonetheless, the board seeks to balance the need to address this situation with other considerations. For instance, it is concerned that dropping early retirement benefits would hurt morale and cause mass retirements before the option of early retirement ended. The board is considering capping insurance premiums and increasing the retirement age to 57. At the very least, it has said that it plans to allow teachers who retire this year to receive pension benefits as currently offered.
- Log in to post comments