[frankthetank]

MADISON, Wis. (AP) — Retired state government workers are expected to see a decrease in their monthly pension checks.
Wisconsin's multibillion dollar public employee pension fund is preparing to reduce payments to about 150,000 retirees for the first time in its 26-year history.
The Department of Employee Trust Funds also is warning municipalities, counties, school boards and the state they will have to increase contributions to the pension fund.

The entities on average contribute about 10.4 percent of their payroll to the Wisconsin Retirement System, a figure that will likely hit 10.9 percent in 2010 if the market value of the pension fund falls by 20 percent this year.
The fund covers about 540,000 current employees and retirees.

I know quite a few people that draw a check, i'll have to find out what how big of a cut it was.

[vision-master]

Minnesota PERA can't reduce benefits by State Law. We are getting a 2.5% increase.....

Minnesota Public Retirement System Benefits Secure (October 13, 2008)

The events on Wall Street the past few weeks have raised questions about the financial impact of the volatile markets on Minnesota's public pension systems. The pension systems and the State Board of Investment (SBI), which invests Minnesota's pension assets, are monitoring the situation closely, however, the retirees and active members of Minnesota's statewide pension systems should feel secure that their benefits and pensions are safe and will be paid. Retiree benefits are not adjusted downward because of investment losses.

[frankthetank]

A retired police officer in the city actually makes MORE then a working cop when you figure in taxes/etc. The city guys also keep their insurance until Medicare kicks in. Most of them retire around 52, although some can go as early as 50.

[vision-master]

A retired police officer in the city actually makes MORE then a working cop when you figure in taxes/etc. The city guys also keep their insurance until Medicare kicks in. Most of them retire around 52, although some can go as early as 50.

The only public servants that get better pensions than police & fire are the JUDGES! Go figure......

FYI: It looks like Wis has a annuity retirement system.

[frankthetank]

Vision-

I have no idea what the MN/WI are going to do about their budgets. I don't know how bad MN is, but Doyle says Wisconsin could be in the hole by $3 billion. We already are one of the highest taxed states in the country. God only knows where all this money is going.

I should live across the river in La Crescent. Gas is always about 15 cents a gallon cheaper plus they pay MN property taxes (a heck of a lot cheaper then over here).

[vision-master]

Vision-

I have no idea what the MN/WI are going to do about their budgets. I don't know how bad MN is, but Doyle says Wisconsin could be in the hole by $3 billion. We already are one of the highest taxed states in the country. God only knows where all this money is going.

I should live across the river in La Crescent. Gas is always about 15 cents a gallon cheaper plus they pay MN property taxes (a heck of a lot cheaper then over here).

But your booze is cheaper over there!

[frankthetank]

Funny you say that. I was talking with someone not long ago and they were saying we should raise the booze tax because it hasn't been raised since the 80's or something like that. Cig smokers are hammered pretty good in this state, however.

I think they should start adding taxes onto soda, snacks, and other garbage foods in this state. Have you seen the size of some of these people? I was looking at, of all things, wax paper at WalMart the other day. A 400 pounder about killed me when i had to lunge out of her way as she drove down the aisle(in a motorized cart, which shoudl also be taxed!), oblivious to my presence!

[RonMN]

Outta money = outta money...broke...finished...nada.

Some people call it insolvent or bankrupt...

Frank wrote:
A retired police officer in the city actually makes MORE then a working cop

If taxes are involved, this will eventually lead to a war between the young & the old...an "Age War" if you will...

I hope NOT to see that!

[WisJim]

As I understand the Wisconsin retirement annuity system, the money used to pay the retiree's annuity ("pension") is a fund paid into by the workers with additional contributions from employers (all determined by union or other negotiations and considered part of the wage/salary package of the employees.) Since this fund, which I hear totals billions of dollars, is being hit hard by the vagaries of the stock market, it will mean less money to pay out to the retirees. However, the base annuity that they receive can't be reduced (by state law), but the increases that they have received over the years since retirement can be reduced, down to the base or original annuity. And, if they have been participating in a variable fund, which has more of its investments in volatile stocks, it can decrease further. But it shouldn't be able to go away entirely.

It will be interesting to see the details of the situation, and how much they expect the annuities to go down. I think that changes go into affect in May, determined by the market on December 30 of the previous year.

[retiredguy]

WisJim,

That's exactly how the WRS works.

I am one of the annuitants.

We received notice last week from SWIB/WRS that we could have our annuities reduced. Those who opted to invest in the variable plan are potentially going to take a real bath.

I tried to forewarn some of my colleagues who retired with me that this could happen, but they thought I was totally nuts.

WRS is the 17th largest public pension fund in the world. If the WRS is in trouble, imagine what is happening to other, less well-funded pension funds.

[IslandCrow]

The entities on average contribute about 10.4 percent of their payroll to the Wisconsin Retirement System, a figure that will likely hit 10.9 percent in 2010....

This seems to be woefully underfunded. For the salaries that I am responsible for paying out 20,94% of the payroll amount goes to pensions, with the employee paying either 4,10% or 5,20%.

[vision-master]

As I understand the Wisconsin retirement annuity system, the money used to pay the retiree's annuity ("pension") is a fund paid into by the workers with additional contributions from employers (all determined by union or other negotiations and considered part of the wage/salary package of the employees.) Since this fund, which I hear totals billions of dollars, is being hit hard by the vagaries of the stock market, it will mean less money to pay out to the retirees. However, the base annuity that they receive can't be reduced (by state law), but the increases that they have received over the years since retirement can be reduced, down to the base or original annuity. And, if they have been participating in a variable fund, which has more of its investments in volatile stocks, it can decrease further. But it shouldn't be able to go away entirely.

It will be interesting to see the details of the situation, and how much they expect the annuities to go down. I think that changes go into affect in May, determined by the market on December 30 of the previous year.

If MN PERA gets underfunded (some fomula) for like two years. Benefit increases will be fixed at 2.5% per year. Taht's a heck of a lot better than those "fixed flat rate" pension plans. In the 90's retirees could expect up to 10% increases each year!

[vision-master]

WisJim,

That's exactly how the WRS works.

I am one of the annuitants.

We received notice last week from SWIB/WRS that we could have our annuities reduced. Those who opted to invest in the variable plan are potentially going to take a real bath.

I tried to forewarn some of my colleagues who retired with me that this could happen, but they thought I was totally nuts.

WRS is the 17th largest public pension fund in the world. If the WRS is in trouble, imagine what is happening to other, less well-funded pension funds.

Ex IT guy for the Gov, eh?

[retiredguy]

I did work for the Dept. of Administration for a year-and-a-half, but I spent the bulk of my IT career at the University of Wisconsin (also part of the WRS).

I also worked for IT service bureaus during the early stage of my career. Learned some interesting things working as a consultant for firms like Arthur Andersen.

[VMarcHart]

Minnesota PERA can't reduce benefits by State Law. We are getting a 2.5% increase.....

Don't count your blessings yet. I don't want for you to lose your soft landing, but there's still more to come.

[Serial_Worrier]

Ah yes along with Peak Oil, Peak Pensions. It will all burst, as we are flat broke and ALL entitlements are on the table!

[Ainan]

You won't be getting any pensions when I invade Wisconsin... At least they still let you retire, I have another 46 years to go.

[vision-master]

Minnesota PERA can't reduce benefits by State Law. We are getting a 2.5% increase.....

Don't count your blessings yet. I don't want for you to lose your soft landing, but there's still more to come.

Taxpayer bailout.

[frankthetank]

UPDATE... Just another $10 billion down the tubes...

The state pension fund lost another $10 billion in October, further increasing the likelihood that retirees will receive smaller pension checks next year and that taxpayers will have to kick more cash into the retirement system.

For the year, the State of Wisconsin Investment Board's Core Fund is down 26% and its more aggressive Variable Fund has lost 36.2% of its value. In October alone, the Core Fund lost 12.9% while the Variable Fund declined by 18.7%.

Combined, SWIB had assets of $62.5 billion Oct. 31, down more than $25 billion from the beginning the year. The board's portfolio has shrunk to $62.5 billion, making it virtually the same size as it was at the end of 2000.

"The prospects of turning in a positive number for this year are not good," said Keith Bozarth, the board's executive director. "There is just a lot of uncertainty in the market."

SWIB manages money on behalf of the Wisconsin Retirement System, which covers about 540,000 retiree and employees of schools districts and state and local governments, with the exception of the city and county of Milwaukee.

This week, the Journal Sentinel reported that state officials were telling approximately 150,000 government retirees to prepare for a likely decline in the pension checks effective May 1.

Vision-
Just wait until the Wall Street guys figure how to crack these pensions open.

540000 are drawing from this one fund? If each person is drawing $2000/month, the fund would run dry in 5 years or so. That is without any injections. I'm guessing it will be insolvent in 10 years. By then the last thing you'll worry about is your monthly check. Too busy fending off zombies and vampires.

[vision-master]

MNPERA

System Funding and Contribution Levels. The Minnesota State Legislature annually reviews reports of the actuarial funding status of the retirement systems. The Legislature has authority to set contribution rates to ensure that the retirement systems are adequately funded over the long term. In the past, the Legislature has both increased and decreased contribution rates, depending upon each system’s financial status and experience.