Milwaukee’s pension spike is coming fast. Here’s how the mayoral candidates would deal with it.

Link:https://www.jsonline.com/story/news/local/milwaukee/2022/02/04/how-milwaukees-mayoral-candidates-would-deal-pension-crisis/6608853001/

Excerpt:

The spike in Milwaukee’s annual pension contribution will be one of the top challenges facing the next mayor — and he or she won’t have much time in office before big decisions must be made.

Next year, current estimates predict the city’s annual pension contribution will increase from about $71 million to about $130 million, according to the city budget office. It is expected to remain elevated for years to come.

The projected increase is driven by factors including a drop in the anticipated future earnings on the city’s pension fund, from 8.24% to 7.5%.

With no solution, a quarter of the city’s workforce could be let go between 2023 and 2025, affecting services the city provides to residents, according to a report from the city’s Pension Task Force. 

Author(s): Alison Dirr

Publication Date: 4 Feb 2022

Publication Site: Milwaukee Journal Sentinel

Milwaukee pension debt clouds Wisconsin’s otherwise positive retirement system picture

Link:https://reason.org/commentary/milwaukee-pension-debt-clouds-wisconsins-otherwise-positive-retirement-system-picture/

Excerpt:

According to its most recent actuarial report, the Milwaukee County Employees’ Retirement System (ERS) had a funded ratio of 75.3% and unfunded liabilities of $569 million. The county also has separate retirement plans for mass transit employees and temporary employees, but these plans have relatively small unfunded liabilities.

Milwaukee County ERS’ liabilities grew, in part, because the county did not make its full actuarially determined contributions between 2012 and 2016, according to its most recent Annual Comprehensive Financial Report. During that five-year period, the county’s contributions fell $12 million short of recommended levels.

Since 2015, Milwaukee County’s contributions to ERS have tripled from $19 million to $57 million, as it began to meet and then exceed actuarial recommendations. These contributions exclude debt service the county pays on pension obligation bonds it issued in 2009 and 2013.

Author(s):Marc Joffe

Publication Date:13 Jan 2022

Publication Site: Reason

Wisconsin Teamsters happy with pension funds in virus bill

Excerpt:

Thousands of Wisconsin Teamsters are celebrating after President Joe Biden signed the coronavirus relief bill into law.

That’s because the move ensures that the workers no longer have to worry about their pensions being cut in half.

The American Rescue Plan includes the Butch Lewis Emergency Pension Plan Relief Act of 2021. The act directs the Pension Guaranty Benefit Corp. to allocate billions of dollars to avoid the drastic cuts.

Author(s): Associated Press

Publication Date: 14 March 2021

Publication Site: KBJR6

Wisconsin Treasurer Recommends Creating State-Run Retirement Plan

Link: https://www.ai-cio.com/news/wisconsin-treasurer-recommends-creating-state-run-retirement-plan/

Excerpt:

A task force headed by Wisconsin’s state treasurer has recommended that Wisconsin establish a state-run program that provides a retirement benefit plan for employers that don’t offer one.

The task force, which was created by Wisconsin Gov. Tony Evers in 2019, issued a report outlining the causes of the state’s “retirement security crisis” and provided several recommendations it said would strengthen the financial security of Wisconsin’s retirees.

“Wisconsin is in trouble when it comes to retirement security,” the task force’s report began ominously. “Even before the COVID-19 pandemic, our retirement system was not working for a significant number of Wisconsin workers.”

Author(s): Michael Katz

Publication Date: 24 February 2021

Publication Site: ai-CIO

States push ahead on private-sector initiatives

Link: https://www.pionline.com/retirement-plans/states-push-ahead-private-sector-initiatives

Excerpt:

To date, 12 states and Seattle have enacted retirement savings programs for private-sector workers. They include OregonSaves with more than 90,000 funded accounts and $92 million in assets, the Illinois Secure Choice retirement savings program with $52.6 million and 82,852 funded accounts, and the $38 million CalSavers Retirement Savings Program that as of February had enrolled 274,024 participants, with another enrollment phase coming up.

The predominant model is an auto IRA, in which employer participation is required if no plan is already offered. Other options are a voluntary payroll deduction Roth IRA, a multiple employer plan, and a service provider marketplace, or a hybrid.

Author(s): Hazel Bradford

Publication Date: 22 February 2021

Publication Site: Pensions & Investments

Tony Evers’ budget takes nearly $2 billion chunk out of state’s improving financial situation

Link: https://madison.com/wsj/news/local/govt-and-politics/tony-evers-budget-takes-nearly-2-billion-chunk-out-of-states-improving-financial-situation/article_8afbb2a3-a23e-5708-ac8f-cba55bf50081.html

Excerpt:

Gov. Tony Evers’ biennial budget proposal fulfills many Democratic priorities with big spending increases, but Republicans have raised concern that the $91 billion proposal would almost entirely drain the state’s coffers — by close to $2 billion — and leave Wisconsin in a more precarious financial position down the road.

The state is projected to have a nearly $2 billion surplus in its general fund by the end of the year, but Evers’ projected budget, which includes $1.6 billion in new tax revenue from marijuana, big manufacturers and the wealthy, still reduces that to around $143 million by mid-2023.

“It’s not necessarily inappropriate to draw down a big chunk of your reserves when you’re facing a once-in-100-years pandemic,” Wisconsin Policy Forum research director Jason Stein said. “You don’t have the reserves just to put them on a wall and admire them, but at the same time … you have to think about what’s going to be sustainable for the state budget because some of these challenges are not just going to evaporate either.”

Author(s): Mitchell Schmidt | Wisconsin State Journal , Riley Vetterkind | Wisconsin State Journal

Publication Date: 21 February 2021

Publication Site: Wisconsin State Journal

Wisconsin Task Force Recommends State-run Retirement Plan

Link: https://www.asppa-net.org/news/wisconsin-task-force-recommends-state-run-retirement-plan

Excerpt:

If the recommendations of the Wisconsin Retirement Security Task Force are followed, the Dairy State could join others that have implemented a state-run plan to provide coverage for workers whose employers do not offer a retirement plan.

The task force, headed by Wisconsin State Treasurer Sarah Godlewski, issued its report on Feb. 10. The task force makes a variety of recommendations, including establishing a state-run program dubbed “WisconsinSaves.” Gov. Tony Evers (D) had signed Executive Order 45 on Sept. 16, 2019, creating the task force to address retirement security in the state.

The Situation

“Wisconsin is in trouble when it comes to retirement security,” says the report, adding that “even before the COVID-19 pandemic, our retirement system was not working for a significant number of Wisconsin workers.” It notes that in 1983, traditional pension plans covered 62% of employees in Wisconsin, but that by 2016, that had shrunk to 17% of them. In addition, the task force says, AARP found that:

Author(s): JOHN IEKEL

Publication Date: 16 February 2021

Publication Site: ASPPA