A public forum hosted by an organization of the Faculty Senate Tuesday addressed the future of the Wisconsin Retirement System and answered questions about possible changes to the system and its financial state.
The Public Representation Organization of the Faculty Senate held the forum in light of the 2011-13 biennial budget. A provision of the budget calls for three state agencies to examine the establishment of a defined contribution plan as an option for participating employees as opposed to the current pension-style defined benefit plan. The study is due June 30.
PROFS president Bill Tracy moderated the forum, which consisted of three panelists who each spoke for 10 minutes before the room was opened up to questions.
Panelists included David Stella, who currently serves as trustee on the State of Wisconsin Investment Board and president of the National Counsel of Teacher Retirement, professor Karen Holden, who teaches at the LaFollete School of Public Affairs and served on the National Academy of Social Insurance Task Force, and attorney Keith Johnson, who served for 21 years as legal counsel to the State of Wisconsin Investment Board.
Stella said the funding status of Wisconsin’s retirement system today is in the top five in the country. He spoke to the work the Wisconsin Department of Employee Trust Funds has done in the study required by budget provision.
He said it is dangerous to politicize the study, as ETF will look at it in a nonpartisan way. He said those looking at the study should not read anything into it other than that it is a fact-gathering study.
Holden spoke to the comparison of defined benefit systems with defined contribution systems. She said the essential difference is in the administrative panel. The defined benefit plan, she said, has great effects on women as survivors of workers because of its spouse and survivor benefits to married workers.
“All Wisconsin state employees are covered by Wisconsin Retirement Program, which is a tremendous benefit to women who move in and out of work, especially in different fields,” Holden said.
Johnson spoke about the Wisconsin Retirement program in terms of the Legislature and 1990 court cases, and also as compared to those plans of other states.
He said Wisconsin’s retirement plan design is unique.
“We fall kind of in the middle. Wisconsin does have a very special design, kind of a hybrid design, that involves shared risk that makes cases in other states somewhat irrelevant,” Johnson said.
Jeanne Hendricks, personnel administrator at the UW College of Engineering, attended the meeting and said she had a positive reaction to the forum. She said it confirmed the impression she has always had of the value of the retirement system and that it should not be changed.
At the end of the presentations, questions were directed to the members of the panel mainly on clarifying and following up on their earlier statements and about their professional history.
“The main message I want to convey is, you should feel good if you are a WRS participant.” Johnson said.