Pension Protection
The Issue
Pensions are a crucial source of retirement income for many individuals in Wisconsin. However, the financial stability of pension funds has been threatened in recent years due to various factors, including underfunding, market volatility, and changing demographics. Ensuring that pension plans remain stable and well-funded is crucial to providing retirees with the financial security they need to enjoy their retirement years.
Pensions are a crucial source of retirement income for many individuals in Wisconsin. However, the financial stability of pension funds has been threatened in recent years due to various factors, including underfunding, market volatility, and changing demographics. Ensuring that pension plans remain stable and well-funded is crucial to providing retirees with the financial security they need to enjoy their retirement years.
The majority of working households have insufficient retirement savings, with the average working household having very little saved. Including households without retirement accounts, the median retirement account balance for all working-age households is $3,000, and $12,000 for households near retirement age. For households aged 55-64 with at least one earner, two-thirds have retirement savings that are less than one times their annual income, which is significantly below what is needed to maintain their standard of living during retirement.
While Social Security is often viewed as a solution to the retirement income problem, it alone is typically not sufficient to meet retirees' needs. Furthermore, certain segments of the workforce, including undocumented workers who pay into the system but do not qualify for benefits, may not have access to Social Security. Given these challenges, it is essential to prioritize the financial stability of pension plans and other retirement savings vehicles to ensure that retirees can enjoy financial security in their golden years. |
Wisconsin has a robust pension system for public employees, with the Wisconsin Retirement System (WRS) covering over 600,000 active and retired members. The WRS has been well-funded, with a funded ratio of 103.2% as of December 31, 2020. However, private sector employees in Wisconsin may not have access to the same level of retirement security, as many employers do not offer pension plans or have underfunded plans.
What we can do:
How others can help:
By protecting existing pension plans, expanding access to pensions, and strengthening pension protections, Wisconsin can ensure that retirees have the financial security they need to enjoy their retirement years. By advocating for pension security and supporting pension-friendly employers, individuals can help promote a more secure retirement for all.
Sources
Wisconsin Retirement System: https://www.wisconsin.edu/ohrwd/benefits/retirement/wrs/
https://etf.wi.gov/publications/et7100/direct
https://www.nirsonline.org/reports/the-retirement-savings-crisis-is-it-worse-than-we-think/
https://www.marketplace.org/2019/01/28/undocumented-immigrants-quietly-pay-billions-social-security-and-receive-no/
https://ilga.gov/legislation/ilcs/ilcs5.asp?ActID=638&ChapterID=9
https://www.treasurer.ca.gov/calsavers/
What we can do:
- Protect Existing Pension Plans:
- Wisconsin can protect existing pension plans by ensuring employers fulfill their obligations to fund them properly. Additionally, the state can provide more support and oversight to pension funds to ensure they are well-managed and invested responsibly.
- Expand Access to Pensions:
- Wisconsin can encourage more employers to offer pension plans to their employees. The state can incentivize employers to offer pension plans, such as tax credits or matching contributions. The state can also work with private sector employers to establish multi-employer pension plans, allowing smaller employers to offer pension plans at a lower cost.
- Strengthen Pension Protections:
- Wisconsin can strengthen pension protections by enacting laws that protect pensions from being reduced or eliminated by employers. The state can also establish a pension guaranty fund to protect pensioners if their employer cannot meet its pension obligations.
- Wisconsin can look to other states for examples of legislation that strengthens pension protections. For example, Illinois has implemented a law that provides for the automatic transfer of employer contributions to a defined contribution plan in the event that an employer fails to make contributions to a defined benefit plan. This law helps to protect employees' retirement savings in the event of an employer's financial difficulties.
- Another example is California's Secure Choice Retirement Savings Program, which requires employers to offer a retirement savings plan to their employees or participate in a state-run program. This program helps to ensure that all workers have access to a retirement savings plan, regardless of their employer's financial situation.
How others can help:
- Advocate for Pension Protection:
- Individuals can advocate for pension protection by contacting their legislators and urging them to support laws and policies that promote pension security.
- Support Pension-Friendly Employers:
- Individuals can support pension-friendly employers by patronizing businesses that offer pension plans and by advocating for the inclusion of pension plans in labor negotiations.
- To find out if a business offers a pension plan, individuals can visit the business's website and look for information on employee benefits. They can also inquire with the business directly by contacting their human resources department or speaking with a manager. Additionally, websites such as Glassdoor and Indeed can provide information on employee benefits offered by specific companies, including pension plans. Another resource is the Pension Benefit Guaranty Corporation's website, which provides information on companies that have terminated their pension plans and how to contact them for more information. In general, it is important for individuals to do their research and ask questions to ensure that they are choosing to patronize businesses that prioritize their employees' retirement security.
By protecting existing pension plans, expanding access to pensions, and strengthening pension protections, Wisconsin can ensure that retirees have the financial security they need to enjoy their retirement years. By advocating for pension security and supporting pension-friendly employers, individuals can help promote a more secure retirement for all.
Sources
Wisconsin Retirement System: https://www.wisconsin.edu/ohrwd/benefits/retirement/wrs/
https://etf.wi.gov/publications/et7100/direct
https://www.nirsonline.org/reports/the-retirement-savings-crisis-is-it-worse-than-we-think/
https://www.marketplace.org/2019/01/28/undocumented-immigrants-quietly-pay-billions-social-security-and-receive-no/
https://ilga.gov/legislation/ilcs/ilcs5.asp?ActID=638&ChapterID=9
https://www.treasurer.ca.gov/calsavers/