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Governor signs 1999 pension law

Governor Thompson signs the 1999 pension improvement bill. He is joined by (left to right) WEAC legislative program coordinator Bob Burke, WEAC President Terry Craney, former WEAC Executive Director Don Krahn, WEAC Secretary-Treasurer Margaret Guertler, and WEAC Executive Director Michael Butera.

Governor Thompson Thursday (December 16, 1999) signed into law the biggest public employee pension improvement law in state history.

Thompson was joined at the signing ceremony by WEAC President Terry Craney, Executive Director Michael Butera, Secretary-Treasurer Margaret Guertler, Government Relations Director John Stocks, WEAC legislative program coordinator Bob Burke and former Executive Director Don Krahn, who was instrumental in negotiating the legislation. The ceremony took place at the Madison offices of the AFSCME.

"The new law will increase benefits for current and future retirees," Craney said. "This is a long-overdue improvement in pensions for WEAC members who have dedicated their lives to creating great schools for all children in Wisconsin."

The law provides a 10% increase in pensions for past service and makes various other improvements in the Wisconsin Retirement System.

“This legislation was the product of months of negotiations and cooperation between labor and governmental groups,” Craney said. “Hundreds of WEAC members contacted the governor’s office by e-mail, letter and telephone, urging him to sign the measure after it passed the Legislature.”

Major provisions of the law include:

An increase in one of the factors in the formula that determines pension amounts. Current retirees will benefit through increased dividends.
Removal of the 5% earnings cap for money purchase calculations that have penalized all participants hired since January 1, 1982.
Changes to the death benefit to treat all participants and their chosen beneficiaries equally.
A mechanism to reduce past unfunded liabilities, improving the fund’s financial health.
Restoration of the variable investment option which provides the opportunity to be more fully invested in equities.

The new law will officially take effect January 1, but Thompson said he expects the Department of Employe Trust Funds to challenge the law in court. Once legal action is filed, Thompson said he would expect the State Supreme Court to take original jurisdiction and hopefully make a ruling by spring. It is possible that once a suit is filed, a court may place on stay on implementation of the law pending a ruling on its constitutionality.

Thompson said he believes the law will ultimately be declared constitutional, or he would not have signed it. He suggested that people who are thinking about retiring based on the improved benefits in the law should wait until the Supreme Court rules.

For more background on the law, go to the Resource Page on the 1999 pension law.

Posted December 16, 1999; Updated December 17, 1999