Thursday, December 6, 2012

Best State Pension System: Wisconsin

21 States' Pension Systems Not Fiscally Sound

Pundits, talking-heads, politicos, and other supposed experts warning about an impending Wisconsin pension crisis are merely using false information and scare tactics in an attempt to eviscerate the pension system. Plain and simple. This is another one of those "entitlements" (anything having to do with a fair society, the social contract, or shared prosperity - all of which, Republicans hate) the anti-government zealots complain about with the hope that some of the smears stick.

This situation is very similar to the debt ceiling theater (here, here, and here). Money has already been earmarked for a certain purpose - budgetary items/programs or employee compensation. Creating some phantom ceiling doesn't mean the liability goes away. Because varies entities may have taken pension money and spent it on other purposes, this does not absolve their responsibility to pay previously contracted pension obligations.

As David Cay Johnston explains, "The fact is that all of the money going into these plans belongs to the workers because it is part of the compensation of the state workers. The fact is that the state workers negotiate their total compensation, which they then divvy up between cash wages, paid vacations, health insurance and, yes, pensions. Since the Wisconsin government workers collectively bargained for their compensation, all of the compensation they have bargained for is part of their pay and thus only the workers contribute to the pension plan. This is an indisputable fact."

Some of these pundits and politicos don't want you to have a stable retirement. Well, that's implicating them too much. They really just want that money - in the form of tax cuts, subsidies, and giveaways - for themselves. As far as your retirement is concerned, they really don't care.

Pensions (public & private) are in trouble because slippery mayors, duplicitous governors, gluttonous politicians, and greedy business owners have diverted funds (compensation) away from pension accounts and into other uses - plugging budget holes, subsidizing business parks and sporting arenas, constructing more and more roadways, and even for new vacation homes.

You're going to see more articles and more pundits bloviating about this "we must transform the pension system to save it" talking-point in the near future, feel free to laugh at them, but make sure you're not swept up into their misguided rhetoric.

For Further Reading:
Deferred Wages
More Bad Pension Reporting
Pension Petulance
Politicking With Pensions
Recoiling Retirement
Retirement Revisionists
Scott Walker Is Coming For Your Pension

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