Tuesday, May 10, 2011

Public employees kept their promises,politicians are breaking theirs

Public employee pensions, deferred compensation promised to firefighters, teachers. nurses and others after years of service, are being threatened in states across the country.

Wisconsin's pension system is fully funded. According to a new report by the Pew Center on the States, the Wisconsin Retirement System (WRS) is among the best in the nation.

Yet, in his budget repair bill Governor Scott Walker proposed that a study group be organized with the task of  transforming  the WRS from a defined benefit pension system to a defined contribution plan. The former guarantees retirees an income based on their contributions, earnings and years of service. The later would undermine retirees' economic security by tying pensions to the performance of the stock market. But a defined contribution system would enrich the financial managers, presumably Walker campaign contributors, hired to manage the pension fund whether it makes or loses money.

The commercial that follows this post is sponsored by the Chicago Federation of Labor. It provides some valuable context for understanding the emerging debate over public employee pensions.

No comments: