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Wis. public workers might pay more for retirement

  • June 19, 2013 - 11:50 AM

MADISON, Wis. — Public employees in Wisconsin could see another increase in the contribution rates they pay into the Wisconsin Retirement System under a plan the system board is scheduled to consider Thursday.

The proposal is for rates to be 14 percent of payroll for teachers and general employees, with workers and their employers each paying half, the Wisconsin State Journal reported (http://bit.ly/12b48KN ). The employers are state and local governments, meaning taxpayers would foot that share of the bill.

The retirement system gets 80 percent of its income from investments. But large market losses in 2008 and 2011 forced a series of rate increases and cuts in retiree benefits.

Benefits to retirees have dropped for five years, including a cut of nearly 10 percent on May 1 that trimmed payments for nearly 100,000 retirees.

Next year would be the fifth straight year that the contribution rate increased. It was 13.3 percent of payroll last year and 11.6 percent the year before that.

Lagging investment income was responsible for about half of this year's contribution-rate increase. The other half was the result of the 2011 law that ended collective bargaining and required employees to pay exactly 50 percent of required contributions. The law also increased benefit levels for future retirees, so total contribution had to rise in anticipation of the future costs.

There are more than 570,000 current and former public employees invested in the retirement system. About 167,000 are retirees and their beneficiaries, who received an average pension of $25,000 in 2011.

The $85 billion fund is considered one of the most stable in the nation because state law requires adjustments to rates and benefits when investment income falters.

Local governments can have difficulty covering the contribution rate increases because the state imposed tougher limits on local taxes in 2011, said Curt Witynski, assistant director of the Wisconsin League of Municipalities.

"It is a big part of municipal budgets because payroll and benefits are big parts of our budgets," Witynski said.

Rob Marchant, the deputy secretary of the state Department of Employee Trust Funds, said not all public workers will end up paying more. The 8.5 percent of retirement system participants who are police, firefighters or prison workers will have some or all of the increase offset by decreased contributions to a disability fund.

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