WEAC Says Pension Increase is Lawful & 'Good Public Policy'

The biggest public employee improvement law in state history is "lawful in every respect" and represents good public policy, WEAC Legal Counsel Anthony Sheehan told the State Supreme Court Wednesday (October 4, 2000).

The court is hearing a challenge to the legislation, which was signed into law as 1999 Wis. Act 11 last December but immediately challenged in court. On Wednesday, the court heard oral arguments from both sides.

Sheehan said a court injunction delaying implementation of the law – imposed as a result of the lawsuit – should be dissolved so the new law "can be implemented as swiftly as possible."

The law, which was the bipartisan product of months of negotiations and cooperation between labor and governmental groups, provides a 10% increase in pensions for past service and makes various other improvements in the Wisconsin Retirement System.

Initially, it was challenged by the Department of Employe Trust Funds and the Employee Trust Funds Board but the high court ruled the department had no legal standing to sue. Justices replaced DETF with the Wisconsin Professional Police Association and the State Engineers Association as the petitioners, and made WEAC one of the defendants

On Wednesday, Sheehan told the high court WEAC members have "a keen interest in protecting their property and in the overall integrity and security of the Wisconsin Retirement System because their future economic survival depends upon it."

"But the protection of the legitimate property interests does not preclude flexibility to make changes that affect the funding mechanisms to improve the system or make it more responsive," he said.

WRS needs a defined structure to function properly, he said, but it must not be too rigid.

"The specific function is to provide maximum benefits at lowest cost," he said. "Like skyscrapers and suspension bridges, WRS must be solid, safe and predictable, but also flexible to withstand environmental changes."

Sheehan cited a number of examples of other provisions that provide flexibility in the WRS. They include the ability of participants to have additional contributions made to their accounts or to buy back prior service.

Those challenging the lawsuit, Sheehan said, "fail to recognize that flexibility in the system is one of its greatest strengths. It ensures protection of interests of all participants over time; it ensures the system's responsiveness to economic conditions in the 'real world' and it protects the state."

The law's challengers, he said, seem to demand a static system, with no changes, ever.

"WEAC believes it is good public policy to allow prospective changes provided the accrued benefits or rights are not reduced," Sheehan said. "This allows the state to attract and retain better quality employees, it provides incentives for employees to remain, and it allows employees the opportunity to share in economic good times while protecting both employees and the state from fiscal irresponsibility."

Sheehan also said:

• The law is justified in making a distinction between law enforcement personnel and certain other WRS participants. Because their jobs require physical conditioning and involve high exposure to danger, the law already treats law enforcement personnel differently. It provides them with an earlier normal retirement age and larger formula multipliers. "This long-standing policy would be undercut by an increase in the initial formula cap for protective employees because it would encourage law enforcement personnel to work more years," he said.
• Provisions of the new law are severable so the court could find some constitutional and some not, although WEAC believes all provisions are constitutional.