Amid budget cuts and threats to public employee pensions, a Pew report has found that Wisconsin's pension system is actually one of the healthiest in the nation.
Only two states, Wisconsin and New York, were able to fully fund its public employee pension in 2009, according to the report released Tuesday.
Wisconsin Gov. Scott Walker has angered many union groups and public employees with his budget-balancing proposal which would strip public employees of many of their collective bargaining rights and require them to contribute more of their income toward their retirement benefits.
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But with a nationwide $1.26 trillion gap in 2009 between what states have promised in to public employees and what they have put aside, Wisconsin is somewhat of a leader in managing its pension and health benefits. Thirty-one states did not meet the recommended 80 percent funding level in 2009, and 22 states were below that level in 2008.
The gap, according to Pew researchers, has been caused by poor decision-making by retirement benefits fund officials and also the hit pension fund investments took during the recession. Susan Urahn, managing director for the Pew Center on the States, said state policymakers are now looking long and hard ways they have managed, or not managed, costs for public employee pensions.
Eli Lehrer, vice president of the Heartland Institute, said Tuesday at a Capitol Hill forum sponsored by the conservative think tank American Action Forum that given the shape of Wisconsin's pension fund, Walker should focus on other areas to balance the budget.
"The pension system in Wisconsin is fully funded," Lehrer said. "As a budget focus, I think he's better off expending his political capital somewhere else."
Others don't agree. Andrew Biggs, a pension expert at the American Enterprise Institute, said that though the pension system may be funded, it doesn't mean it should be off-limits, as it could still be a "drain on the budget."
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