Forum warns of need to secure retirement system
JANESVILLE The Wisconsin Retirement System is sound and stable.
But Betsy Kippers believes plans might be under way to destabilize it.
At a forum Monday, Kippers, vice president of the Wisconsin Education Association Council, told an audience of about 40 people to be ready for an "call to action" to protect the system.
"We're talking about big changes here," Kippers said. "We're talking about allowing people to opt out, allowing people to make defined contributions."
Defined contributions are the same as private employers' 401K plans, where all the risk is on the employees' side.
The forum was sponsored by the Wisconsin Coalition for Retirement Security, a nonpartisan alliance created to advocate for retirement security for Wisconsin residents.
A recent study of the Wisconsin Retirement System came to the conclusion that the system—unlike those in California and New Jersey—was sound and stable.
"It's probably one of the best darn systems in the country," said Doug Leuck, a retired educator.
The study didn't suggest making any changes.
"The governor did say that he wasn't going to change anything, ‘at that time,'" Leuck said.
Another official suggested that public employees might like to have more options and that legislators should "continue to monitor the system and look for opportunities for reform."
All of those comments rang alarm bells for retirees and others.
Kathleen Marsh, a retired state employee, started an online petition asking that the retirement system remain the way it is. The petition has garnered more than 38,000 signatures.
At Monday's meeting, Kippers predicted that after the next election, the Legislature would start chipping away at the retirement system, probably in a budget bill.
Changes might include increasing the retirement age to 59 or altering the accounting system so that future pension liabilities are treated as though they are due now.
One of the most dangerous changes would allow employees to opt out of the system or make defined contributions, Kipper said.
Retirees' benefits are based on the success of the pension system's investments. The smaller the pool of money is, the less successful it will be.
The same rule is applied to defined contributions. Employees removing their money from the system will make the investment pool smaller.