Tag Archives: University of Wisconsin System

Governor Walker’s designs on the Union Employees Retirement Plans

Found a great document on the Wisconsin State Legislature Website.  It has been hard to obtain information on Governor Scott Walker‘s proposals, and requires a bit of research.  My first post on this issue was about my theory that Governor Walker planned to raid the retirement plans for the union employees.

On the Wisconsin State Legislature Website, I found the Fiscal Estimate for the Budget Repair Bill, also known As Wisconsin Bill AB 11.  Under this bill, the employees contribution to their Pension Plan are increased, to 50% of the actuarial contribution as approved by The Employee Trust Funds Board. Here is the exact language from the Governor Walker’s Bill:

Currently, employer and employee required contributions, and the earnings on these contributions, fund the cost of providing retirement annuities to all public employees who are covered under the Wisconsin Retirement System (WRS).Employer required and employee required contribution rates are set on an annual basis. This bill provides that the employee required contribution rate for general participating employees and for elected and executive participating employees must equal one−half of all actuarially required contributions, as determined by the Employee Trust Funds Board. For protective occupation employees, the bill provides that the employee required contribution rate must equal the percentage of earnings paid by general participating employees.

So, the contribution cost is to be shared 50-50 between the employer and the employees.  The employee cost is supposed to be 5.0%.  The 8 page Fiscal Estimate Narrative states the following regarding the employer contribution to the Pension Plans:

The bill increases the employee’s share of costs for pension and health insurance benefits, brings the retirement benefit calculations for elected officials, executives and appointed employees in line with general employees and teachers.  It also limits collective bargaining for certain public employees to base wages, requires union certification annually, prohibits employer collection of union dues, limits contracts to one year periods,and eliminates collective bargaining for the University of Wisconsin Hospitals and Clinics Authority. The Bill repeals collective bargaining for University of Wisconsin System faculty & academic staff,  childcare and home health care workers.

The bill repeals the University of Wisconsin Hospitals and Clinics Board and eliminates the estimated 2,600 FTE state positions in the clerical, blue collar, trades, security and public safety and technical collective bargaining units. Incumbents in those positions are transferred to the authority of University of Wisconsin Hospitals and Clinic. Estimates of state agency employee compensation savings for fiscal year 2010-11 are based on data from DOA central payroll and UW System payroll. Health insurance premiums are paid two months in advance for central payroll agencies and one month in advance for UW System payroll; the increase in employee contributions will be effective  one month after passage (two months for UW System payroll). The bill directs the Department of Administration to lapse $27,891.400 from GPR and PR appropriations to the general fund related to these savings. The bill also requires that $1,908,600 be lapsed from appropriations to the Courts, Legislature and Governor related to these savings. See attached technical memo for furtherinformation.Estimates of municipal, county and school district compensation savings are based on data from the Department of Employee Trust Funds (ETF) Comprehensive Annual Financial Report (CAFR) for 2009. The proposed 50% employee share of annual Wisconsin retirement system costs (estimated at 11.6% of payroll in calendar year 2011) was applied against covered payroll provided in the ETF 2009 CAFA. For Milwaukee County, savings from employee contributions are based on data from the Milwaukee County CAFR for 2009.For the City of Milwaukee, savings from employee contributions is based on the City of Milwaukee CAFR for 2009. Estimates for municipalities and counties were adjusted to exclude local law enforcement and fire personnel costs. Estimates for state government were adjusted to remove State Patrol troopers and inspectors (see attached technical memo for further information).The bill requires the group insurance board to implement measures, including health risk assessments,wellness programs and employee co-pays, to reduce state employee health insurance cost inflation by 5%,beginning in 2012. Reserves in the health insurance and pharmacy purchasing programs that are in excess of industry standards must be used to reduce premium costs during 2011.

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