Reality Check: Email Claims Changes Coming To State Pension System

Opponents of Gov. Scott Walker are circulating what they think will be the next attack on public workers, but are the rumored changes to pensions propaganda or a possibility?

Those who feel like they were surprised and wronged in last year’s budget repair bill are looking for the next blow, and an email that’s circulating says it may be to the pension system.

The email, which has gone rather viral throughout the state, claims that if Walker wins the anticipated recall election, he will push through legislation that will abolish the state retirement system and convert everyone to a 401(k) plan.

WISC-TV found that this needs clarification. At this point, there isn’t legislation planned to do this, but there is a study of the Wisconsin Retirement System is being conducted.

That study has two parts, looking at creating a defined contribution system, or 401(k) plan, as an option for state employees, and giving employees the option of not contributing to their pension.

The study is being done by three state agencies and a report is due to the Legislature’s budget writing committee June 30.

The email claims that these “changes” would reduce pensions by a third and would apply to those who are already retired. WISC-TV found both of these claims are misleading.

The study doesn’t outline what any possible defined contribution would be by the state, so it is unknown if or how much it could reduce pensions. Secondly, state law says any money already contributed by an employee can’t be touched, so this wouldn’t directly affect retirees.

Then there’s the matter of what the governor will actually do. WISC-TV asked him about it at a year-end interview in December.

“What we’re going to do here is really look at what other options we have in the future, whether we continue on the traditional path or whether there is some alternative,” Walker said. “But anything we are going to do is going to be about a balance of protecting hardworking taxpayers and providing whatever we might provide in a respectful and responsible way. But despite all the hype and rumors out there, for people in the pension system right now, I can’t anticipate anything in the future that wouldn’t allow them to continue in that pension system if that’s what they prefer to do.”

As to whether any changes happen before or after a recall election, that depends on when or if that election is called. The governor said he will see what the study results are in June.

The study is being done by the Department of Employee Trust Funds, the Department of Administration and the Office of State Employee Relations, rather than an outside firm. A spokeswoman said the state’s contracted actuary would be helping to look at possible costs and benefits.