The Wisconsin Retirement System is not broken and doesn't need to be 'fixed,' WEAC's Kippers says
Posted: 6/14/2012 3:07:39 PM
Governor Walker's state budget has authorized a study of the Wisconsin Retirement System, and many believe this is the first step toward efforts to undermine the system.
The Wisconsin Retirement System is financially strong, working well and does not need to be "fixed," WEAC Vice President Betsy Kippers said Thursday on a Wisconsin Public Radio program.
“The Wisconsin Retirement System is very strong and healthy because it’s very flexible, it’s complex and it has many checks and balances,” Kippers said.
Kippers was one of two guests on the Joy Cardin morning program, countering arguments made by Jason Richwine of the conservative Heritage Foundation, who argued in favor of coverting the WRS from a pension system to a 401(k) system. Defined benefit pension plans provide delayed compensation with benefits paid out in the form of monthly retirement benefits, or annuities, for life. A defined contribution plan such as a 401(k) shifts the responsibility for investment decisions to the individual, essentially privatizing the system and eliminating guaranteed benefits.
Kippers noted that few people are qualified to successfully manage those 401(k) investments. She said the state retirement system is successful because it is professionally managed and has built-in protections for both annuitants and taxpayers. If the fund does not meet its investment targets, the loss is shared among the 570,000 annuitants, not taxpayers, she said. Also, she said, state and local employees have sacrificed salary increases for many years in exchange for contributions to the WRS.
Kippers said efforts to change the system are part of a national conservative agenda. However, she said, the Wisconsin Retirement System is very strong unlike systems in some other states.
“It’s not broken. It doesn’t need fixing,” she said.
You can listen to the entire program below. Richwine is interviewed in the first half of the show; the Kippers interview begins around the 22 minute mark: