MJS: Public workers retire in droves

July 16, 2011
Steven Walters

One out of about every 14 public employees in the Wisconsin Retirement System asked for "the numbers" - estimates of what their pensions would be if they retired - in the first half of this year.

A new report from the Department of Employee Trust Funds, which runs the pension system, says the 18,759 state and local government workers who asked what their pension would be was 75% more than those who made the same request in the same period last year.

And, 12,948 - or 92% more than the same period last year - took the final step and formally applied for retirement, ETF added. That included 529 employees of the University of Wisconsin-Madison - four times the number that retired in the same six-month period last year.

ETF said those numbers made history: "Staff processed a record-setting 5,083 'new annuities' in June 2011, smashing the previous record of 2,624 set in June 2007."

There were 266,629 public employees in the WRS at the end of last year, with about two out of every three working for school districts or other local governments and the rest working for state government. Those numbers do not include the city and county of Milwaukee, which have their own pension systems.

Public workers, including the oldest baby boomers leaving careers they started in the 1970s and 1980s, rushed to retire by July 1 for many reasons.

But it's no accident that ETF said 58% of public workers who asked for pension numbers in the first half of the year did so in February and March - weeks that saw large Capitol protests over Republican Gov. Scott Walker's controversial plan to dismantle collective bargaining by most public employees.

Then, Walker and Republican lawmakers rewrote state law to limit public-employee bargaining to cost-of-living raises, to require annual recertification votes for unions and to make the payment of union dues optional.

The new spotlight on public employees - and their fringe benefits - made some public workers squirm and conclude, "It's not worth it anymore."

The new Republican governor put it in simple terms: Public workers had become the "haves" whose generous benefits were being paid by recession-ravaged "have nots" struggling to keep their jobs, pay bills without pay raises or who are out of work.

Some public employees may have also opted to retire to avoid paying more for health insurance and pensions.

Most state employees, who had gone without raises and been furloughed for several days in each of the past two years, will be paying $300 million more for those health insurance and pensions over the next two years. The changes Walker pushed through the Legislature also require most local government employees to pay 5.8% of their salaries toward their pensions and 12.6% of the cost of their health care premiums.

And although Walker and lawmakers didn't try to repeal another sweet benefit for state workers - the ability to convert unused sick leave to buy health insurance in retirement - there is widespread fear that it will be the next thing to go.

Besides making most current state and local government workers pay more for pensions and health care, Walker and GOP lawmakers limited the pensions of future public workers in two ways:

 No longer will future state and government workers with one-third jobs - defined as 600 hours per year for most workers and 440 hours for school district workers - be entitled to public pensions. Instead, only future workers with two-thirds jobs will qualify for public pensions.

 A five-year waiting period before new state and local government workers can be part of the pension system.

Under the old system, a public worker built up credit toward a pension on his or her first day at work. Under the change, future public employees who don't stay around for five years are only entitled to what they paid into the pension system when they leave.

A few retired public employees will get their old jobs back, though.

In the first six months of this year, 841 public employees who had retired applied to be a "rehired annuitant" - a common practice in public employee pension systems nationally, an ETF official says.

Don't chip in too much cash for that gift for a retiring public employee. They might be back.