Who pays for the pensions of Wisconsin’s public employees? Not Wisconsin’s taxpayers!

Read as Pulitzer Prize winner David Cay Johnston sets the record straight about who actually contributes to public employee pensions.

How can that be? Because the “contributions” consist of money that employees chose to take as deferred wages – as pensions when they retire – rather than take immediately in cash. The same is true with the health care plan. If this were not so a serious crime would be taking place, the gift of public funds rather than payment for services.

Thus, state workers are not being asked to simply “contribute more” to Wisconsin’ s retirement system (or as the argument goes, “pay their fair share” of retirement costs as do employees in Wisconsin’ s private sector who still have pensions and health insurance). They are being asked to accept a cut in their salaries so that the state of Wisconsin can use the money to fill the hole left by tax cuts and reduced audits of corporations in Wisconsin.

The labor agreements show that the pension plan money is part of the total negotiated compensation. The key phrase, in those agreements I read (emphasis added), is: “The Employer shall contribute on behalf of the employee.” This shows that this is just divvying up the total compensation package, so much for cash wages, so much for paid vacations, so much for retirement, etc.

It’s also worth noting that multiple studies of public employee pension systems agree that Wisconsin’s public employee pension system is fully funded, so Gov. Scott Walker’s rhetoric about how public employees really really needed to pay more into their pension in order to keep things solvent was just that – rhetoric, not reality.


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8 thoughts on “Who pays for the pensions of Wisconsin’s public employees? Not Wisconsin’s taxpayers!

  1. This is the biggest load of crap I’ve read so far this year. How, enlightening! Their pension was included in their total compensation package, really? imagine that, compensation being noted as compensation. I suppose you’ll tell us that their vacation time should not be called vacation, but now compensation, another great enlightenment. The bottom line is that the taxpayer pays for all of a government worker’s compensation whether that be salary, pension, vacation or sick time. This does not change no matter how you want to spin it.
    If you want to provide a real accounting, report on what the entire “compensation” package is worth, then we can compare it to the private sector and get a true picture of just how “poor” these government employees are.

  2. The state has reneged on it’s deal. It offered workers pension and health payments instead of wage and cost of living increases. THis saved the state money (they could by health care in bulk). Now state workers have neither.
    Don’t expect state workers to fall for this ever again. They should get the wages they gave up for health and pension contributions now.

      1. State workers bargained for a compensation package that includes pension, health benefits, vacation and a cash wage. A pension contribution is a benefit received in the future instead of receiving a cash benefit today. Pension plan money is part of a negotiated compensation that the employer contributes on behalf of the employee. This is not a gift from taxpayers. Pension contributions are just one part of a compensation package. State workers fund their pension plan, not taxpayers. They chose a deferred wage instead of an immediate cash wage.

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