Walker Won't Touch Pension System....Not Yet Anyway.

The long awaited study on the Wisconsin Retirement System has finally been released. And to no one's great surprise, it found that the current system is strong and the best that there is, even though Scott Walker and his Republican henchmen in the state legislature were hoping for different results.

So that means that Walker won't touch the pension system, right? Well, yes, if you're the kind to believe the pap that comes out of squawk radio and Faux News or if you're angling to be David Koch's cabana boy.

In order to test that hypothesis, the best place to start is with what Walker had to say about the study (emphasis mine):

The report released today confirms that both taxpayers and pensioners are getting a great deal with the WRS. Compared to other states, Wisconsin consistently rates among the best performing public pension systems in the country.

Both the State of Wisconsin and WRS must be fiscally sustainable moving forward to ensure that we can meet our outstanding benefit obligations, which I am confident we can do. The long term structural changes we made last year will help ensure that the state is able to fulfill the commitment it has made to pensioners.

I want to be very clear: I am currently not planning to make any substantial changes to the WRS. However, I will continue to work to ensure that the WRS is fiscally sustainable for both taxpayers and retirees.

Well, he certainly leaves himself a lot of wiggle room in between all those code words. But it is not conclusive in itself one way or the other as to what his true intentions are.

Ah, but we have an assist by Walker's right hand man, Department of Administration Secretary Mike Huebsch. His statement regarding the study and the retirement system is a lot more ominous (again, emphasis mine):

DOA Secretary Mike Huebsch stated, “Wisconsin will continue to monitor the health of the current system. It is our duty to make sure Wisconsin taxpayers know their tax dollars are being invested efficiently and state employees know their retirement plans are being well managed.”

The study also evaluated the potential effects of establishing an optional Defined Contribution plan. The findings show a Defined Contribution plan would provide zero risk to taxpayers and provide the portability necessary for a highly qualified and robust 21st century workforce. The Defined Contribution plan would also place an emphasis on individual employee investment choices. However, the study notes the professional management of all pooled assets boosts the current Defined Benefit plan.

“The state will continue to look at potential options for reforming the current system because the workforce of the future may not look like our current workforce,” Secretary Huebsch continued. “Taxpayers deserve to have the best and hardest working employees and a 21st century workforce may prefer portability of benefits and freedom offered by other retirement options.”

In addition, the study reviewed an option for employees to opt-out of required contributions and receive the money purchase annuity. The study raised concerns about the impact of this option on the current Defined Benefit plan, since it would reduce overall contributions to the current system’s cash flow position, which may negatively affect contribution rates for those in the current Defined Benefit plan. This option could also raise qualification issues with the IRS for the current plan.

Given the current financial health of the current system, at this time, the study recommends against implementing either the Defined Contribution or the opt-out option for employees.

I need to point out that there is no way in Fitzwalkerstan that Walker would not have let this release be issued, much less stand pat, unless he approved of it first.

It clearly indicates that the Walker administration will not be satisfied to leave it alone for long.

Indeed, history shows that Walker has an infinity to mucking up pension systems and that he has telegraphed his intention to do the same with the state's system.

As Milwaukee County Executive, he repeatedly and willfully failed to properly fund the pension system (which is separate from the state's system). This quickly led to a debt to the pension fund which was becoming untenable.

To resolve this self-created crisis, Walker proposed a ponzi-like scheme of selling pension obligation bonds. The chosen company to do this was Bearns-Sterns of Chicago. Just because his friend and campaign donor Nick Hurtgen was Vice-President of the company had nothing to do with it.

This proposal, to Walker's chagrin, was shot down in a referendum put to the voters in Milwaukee County. Not to be deterred, Walker still did a pay for play by doing some bid rigging and giving a $300,000 contract for debt restructuring to Hurtgen's company, just about the same time Hurtgen held a fundraiser for Walker which netted $25,000.

Unsurpringly, Hurtgen was later indicted for another pay for play scheme.

But this still left the mess that Walker created in the pension by underfunding it. This was only made worse when the markets crashed at the beginning of the Bush/Cheney recession.

Ha ha! Made you think your
pension is safe with me!

Walker again tried the pension obligation bond scheme. This time he was successful even though the whole thing seemed, and still seems, to be rather sketchy on how well it would work.

Leading up to the 2010 elections, there was a lot of fear that Walker would want to dip into the pension fund. After all, there is a helluva lot of money in there that could be going to benefit and even further enrich his filthy rich campaign donors, instead of being used as the deferred compensation for the workers, who have paid for it in full.

This fear wasn't necessarily misplaced or overblown when one considered what the Bradley Foundation-funded staff at WPRI had to say about it:

Candidate Walker is not the only one taking aim at worker pensions. Earlier this year, former state DOA Secretary George Lightbourn, who now heads the corporate-funded conservative Wisconsin Public Research Institute, described the Wisconsin Retirement System (WRS) as having “overstayed its welcome” and “far out of the mainstream”. He said Wisconsin’s next governor should “make it a priority to eliminate the insularity that has defined the WRS.” WPRI’s agenda is to privatize the WRS and shift it to a defined contribution plan, transferring billions in Wisconsin investment earnings to the Wall Street banks and investment houses that destroyed our economy and the retirement security of the millions of American workers whowere shifted to defined contribution plans over the last 20 years.

Lightbourn’s group published the study showing that the average worker earning $48,000 may be eligible to receive a monthly pension of $1,712. The same study showed that, in contrast, a private sector worker who earned $70,000 would getapproximately $1,300 a month in retirement. Lightbourn noted that the economic downturn has reduced private sector pensions and that public employee pensions are somehow unfairly insulated from the recession. Like Walker, Lightbourn argues that all public sector workers ought to pay more of pension costs, and that state and local governments should use the savings to offset budget deficits.

The observations of the WPRI called attention to a crisis in the lack of retirement security for many, if not most, American workers. Attacking the WRS misses the point. ETF Secretary Stella noted that there is a retirement crisis in this country,“but it’s not a crisis of having too much income…it’s so disappointing to see the WPRI advocate for slashing benefits for the men and women who protect our communities, teach our children, and serve the public in so many different ways rather than offering solutions to make sure retirement security is achievable by all. We ought to be talking about improving retirement security for everyone in Wisconsin rather than reducing it for some.” We could not agree more. AFSCME,along with other unions, supports enhancing retirement security for all workers.

Indeed, a similar reason not to take Walker's words at face value is the simple fact that the whole idea of attacking public pension systems was one of the evils let loose by the Pandora Box known as ALEC.

And even as Walker is saying he won't touch the pension system - for now - well, even that is a lie.

Due to "an oversight" in Act 10, there is suddenly a need to contribute another $87.5 million to the fund. And that money is going to come from the workers who already took a massive pay cut.

I'm sure that all this sounds real good to the Kool Aid drinkers who listen to squawk radio, watch Fox News or work for the Kochs.

But the sad fact is that it's not only the public sector workers' money that would go to feed the monsters of Wall Street, but the taxpayers' money as well. After all, defined benefits plans like the one the state has right now is almost twice as cost effective as the defined contribution plans they want to force on us.

Then again, there has been an abundance of evidence that Walker's agenda is not one to protect the workers and the taxpayers, but how the best to get every last cent from them and give it to the ones he really cares about - the ones that bought him the governorship and who will, he hopes, by him the presidency some day.