FoxPolitics.net - Appleton, WI News - What's really going on in the Fox Cities

FoxPolitics.net Blogs

FoxPolitics News

Local/State Govt Links

Salaries

• Appleton School District, 2007-08
• City of Appleton
• Town of Grand Chute
• City of Menasha
• City of Neenah

Candidates

City of Appleton

• Elected Officials
• Salary Watch
• Directory
• Mtg. Agendas/Minutes

Advisory Board

Blogroll

Selected News Sources:
Business Jrnl of Milw
Christian Science Monitor
Daily Caller
Drudge Report
La Crosse Tribune
Milw Journal Sentinel
National Journal
New York Times
Public Policy Forum
Real Clear Politics
Stateline
The Hill
TPM
Washington Examiner
Washington Post
Washington Times
WI State Journal
Selected Blogs - from the Right:
American Mind
Blaska's Blog
Boots & Sabers
Charlie Sykes
Dad29
Freedom Eden
Heritage Foundation
Jerry Bader Blog
Life Voice
Marketplace of Ideas
Marquette Warrior
Natl Review Online
No Runny Eggs
Patrick McIlheran
Real Debate Wisconson
RedState
Rhymes with Clown
Shark and Shepherd
The Lote Tree
Vox Populi
Wall Street Jrnl, Opinions
WI State Jrnl, Opinion
Wigderson Library & Pub
Wisconsin Family Voice
WPRI
Selected Blogs - from the Left:
Big Money Blog
Blogging Blue
Brenda Konkel
Caffeinated Politics
Capital Times
FightingBob
Folkbum's rambles
Griper Blade
Huffington Post
Lost Albatross
MAL Contends
Mid coast views
Moneyed Politicians
One Wisconsin Now
Open Left
Playground Politics
Political Environment
Rock Netroots
Talk to Tony
Uppity Wisconsin
Waxing America

Send this Issue: Frank Lasee: Oil pensions for WI retirees to a friend.

To Name:
To Email:
From Name:
From Email:
Subject:
Message:

6/18/2008
Frank Lasee: Oil pensions for WI retirees

Virtually all government employees in Wisconsin, state, university, school, county, and local governments (except Milwaukee county and Milwaukee School district) are in the Wisconsin Retirement System (WRS). Our pension system for government employees is one of the best in the nation.

Currently the assets of WRS are more than $87 Billion. The State of Wisconsin Investment Board (SWIB) has invested these funds on behalf of the 263,000 employees in it and 132,000 retired employees receiving monthly retirement checks averaging $2,000. These employees and retirees also receive social security benefits.

For the year ending June 30, 2007, the SWIB reported a return of 18% on investments—quite good, the target or benchmark was 17.2% that year. SWIB has had an excellent record of exceeding the market on behalf of government retirees, employees and the state taxpayers. (What a difference a year makes…The twelve-month return for the period ending 4/30/2008 was 1.5% compared to a benchmark of 2.5 %. They don’t always beat the benchmark, but SWIB’s 10-year return is still above the benchmark.

The WRS is one of the bright spots of government in Wisconsin. In comparison, the unfunded shortfall in Illinois is $40 Billion, a 40% shortfall on a $100 Billion fund needed to pay Illinois government workers their pensions. Wisconsin has $87 Billion and is 99% funded.

The Wisconsin Retirement System is funded by payroll contributions, mainly paid by government employers for their employees. Originally, the employee and employer each paid half. Over the years the government units have mostly ended up paying the employee half as part of the employees’ benefit package.

When there are not enough investment gains in the Wisconsin Retirement System to draw on for current and future retirement benefits, the required contributions for each employee go up. This year the employee contribution is 10.8%. (Remember the employer pays the whole amount for most employees.) This is down from a historic combined contribution high of 12.3% in 1996.

The performance of SWIB and fully funding our pension system is a bright spot in Wisconsin’s fiscal management. Wisconsin has done a good job of covering other long-term employee benefits costs as well, such as accrued vacation and sick leave (state employees enjoy 16.25 sick days per year that employees can bank until converting into money for health insurance upon retirement.)

Right now, of the $90 Billion invested by SWIB for the State of Wisconsin, roughly 40% is invested in domestic stocks, 25% in international stocks, 30% in fixed income and 5% in cash and real estate. What is interesting, with all the talk about obscene excess profit of Big Oil (9 to 12% profit, I wonder when profit became a dirty word?) there is little talk about our pension fund and the return it has been making on oil stocks. SWIB holds, for the future pensioners of Wisconsin more than $750 million in five major oil companies. The cash earnings on these shares were more than $250 million in a four-year period. As of April 2, 2007, the value of the stocks had increased over purchase price by more than $130 million.

Many 401k accounts, IRA accounts, mutual funds, and private pensions are invested in oil companies’ stocks. Forgotten men and women of this nation are benefiting from the increase in value and the profits from the companies that deliver oil and gas to all of us. Many current and future retirees are benefiting from big oil profitability.

If only Social Security had been set up like the WRS system—there would be trillions ready to be paid and the benefits could be larger than now. Citizens would own a benefit that they don’t have now. Then there would be real value in that lock box Al Gore kept telling us about. Instead, Social Security is a pay-as-you-go system. So today’s workers are paying for our mothers’, fathers’, grandmothers’ and grandfathers’ benefits.

There has been no lock box—no accrued funds—for future payouts. Excess tax money paid into the pay-as-you-go system aren’t saved, they are spent on other federal government priorities and it is still not enough.

I applaud SWIB and wish them well in the great and very important work they have been doing. If only the federal government had followed the state of Wisconsin’s lead. Our nation would be enjoying a very large fully funded lock box.

Frank Lasee is a Republican and represents the 2nd Assembly District.