Terms: Pension plans, such as the WRS, are technically called “Defined Benefit” plans.
401(k) plans are technically called “Defined Contribution” plans.

WRS Size: $80 Billion

Performance: 8.9% average rate of return over past 20 years (1992-2011).
Pension plans achieve higher rates of return than 401(k) plans.
Pension plan financial experts take care of investing for the participant vs. 401(k) plans which have participants invest on their own and they typically lack investment savvy.

Stability: Ranked first in the U.S. *1
The WRS is nearly 100% (fully) funded since 2004, because the annual payouts to retirees are cautiously decreased or increased, depending on investment earnings.

Participants: 1,500 Wisconsin public employers.
27% participants are state/UWS employees and 73% are local government employees.

169,229 retired members
260,711 active employees
148,048 inactive members

Annuity Payouts: $23,800 average annual annuity payout to retirees (2009 figure)
Wisconsin has one of the lowest annuity payouts to retirees in the U.S. This means other states have higher annuity payouts.

Administrative Cost: Pension plans have lower administrative costs than 401(k) plans because Pension plans pool large amounts of money, which leads to an “economy of scale”.
The WRS is managed locally to avoid the higher cost of Wall Street managers. Another benefit of local management is administrative fees stay in Wisconsin.

Cost to Taxpayer: 1.26% of state and local budgets goes to the WRS (vs. 2.9% national average)
5% of contributions come from taxpayers
15% of contributions come from government employees
80% of contributions come from investment earnings

Risk to Taxpayer: 20% of risk is borne by taxpayers (this is lower than most other states).
80% of risk is borne by government employees.

Economic Impact: 86% of WRS retirees have a Wisconsin address, thereby recycling the payouts.
Pension payouts are fully taxable which means Wisconsin local governments get some of their previous contributions back. And, because payouts are typically spent in the local community, those payouts helped support 35,000 Wisconsin jobs in 2010. This also means private sector taxpayers are getting some of their contributions back.
The WRS is a great recruiting tool, especially for the University of Wisconsin System.

Other States: West Virginia and Nebraska are cancelling their 401(k) plans and returning to the lower costing pension plan.

*1 Most other public sector and private sector pension plans are partially or inadequately funded because their management 1) did not decrease payouts when investments decreased, and 2) allowed “contribution holidays” when no money was put into the plan.

The Wisconsin Retirement System, aka the state pension plan – is a smashing success and a role model for all pension plans nationwide. It is the one invention that can promise a better life for hundreds of thousands of Wisconsin citizens.

In contrast, 401(k) plans are a Wall Street skim operation. The majority of 401(k) plans are distributed amongst millions of small businesses, which means there is no economy of scale. In addition, most individuals do not have the financial savvy to avoid the inherent investment risks. As a result, individual 401(k) plans buy stocks and bonds at retail prices and their 401(k) balances at retirement are woefully small. In contrast, Pension Plans pool large amounts of money – which enables them to buy stocks and bonds at wholesale prices and mitigate investment risk with highly skilled financial specialists.

Many pension plans were mismanaged which is why they became a burden on private and public employers. The solution is to modify those pension plans and copy the state of Wisconsin Retirement System (WRS). Bringing the WRS success to more Americans can be achieved through everyone’s representative trade organization. For example, for food workers, the National Restaurant Association has over 12 million members. The American Truckers Association has 37,000 members. That provides an economy of scale. The Newspaper Association of American could be a viable entity to organize a pension plan for you.

Tragically, for most Americans, a 401(k) plan will never give them the retirement security that is provided by the Wisconsin Retirement System.

I hope you can stop being gullible to pro Wall Street propaganda.

NOTE: There is no secrecy to the Wisconsin Retirement System. A simple way to calculate the approximate annuity of everyone who participates in the Wisconsin Retirement System (WRS):
“Average final salary” x number of years in the WRS x .0162 = approximate annuity at retirement.

You must have me confused with someone else, Mr. Donkey. But you seem to have a good head on your shoulders and you’re welcome to join our little web of truth. Anyone who speaks the truth is my pal. Most people despise those who speak the truth and want them eliminated. Yet from the other sides of their mouths they applaud ‘free speech’. HAH! Nothing makes a human madder than the truth. So pals are far and few inbetween. You seem to be a good person. Welcome.

Will like you always said, “the math will eventually take care of the problem,” of these obscene pensions.

What I find so amazing is the fact that all these educated idiots that work in government fail to admit that they have stolen more than can be paid out and work at bringing pensions, pay, benefits and perks back to a logical reality instead of continuing to live the RAGWUS fantasy of government life where the laws of physics cease to exsit.

My feeling is that we must cut out all waste, fraud and corruption. Pensions alone do not have a corner on that market. Pensions are only one part of the problem, albeit a large one. Illegal immigration and welfare fraud is also a huge problem that must be addressed. Illegals are stealing our jobs while ransacking our CA public treasure of $20B each year. That’s a HUGE problem. And, as I pointed out, illegals are gaming our tax system by using their ITIN’s to collect $4B or more each year in child tax credits for relative minors LIVING IN MEXICO!!!

We cannot just watch one bouncing ball, Tough Love. The problems are multi-fold. Unlimited corporate and public union contributions to pols is also a HUGE problem. It has turned the Nation and State Capitals into big whorehouses!