Came across a blog post that tries to look forward a bit to see why WI Governor Scott Walker might be so adamant about killing bargaining rights for unions.
If Governor Walker’s bill passes, and collective bargaining of retirement benefits is eliminated, then next year when Governor Walker decides it is in Wisconsin’s best interests to get rid of the existing plan and replace it with something less valuable for the employees. And the employees would have no say and no one can keep Walker from raiding your retirement savings. And I think this is what is going on in other states.
Here’s the gist of it:
If the bargaining rights are taken away, Walker can then terminate the existing retirement plans for those unions without the unions being able to fight. But why would he want to do that?
It appears that a recent audit of the Wisconsin Retirement System is close to 100% funded for current and future retirement benefits. If the retirement plan is terminated, employees in the system will have to be paid off at their current – not future – value. Which means there will likely be money left over. If the system is like most other systems, the excess cannot be disbursed back to the employees. So where does it go? Back to the state. Meanwhile, the employees get an inferior retirement plan as a replacement.
If this theory is correct, then the reason for Walker’s insistence on removing bargaining rights becomes crystal clear: It removes the main roadblock to reclaiming funds and using them for the state. The unions would be powerless to stop him.
So, the question to ask Gov. Walker is – What are your plans for the Wisconsin Retirement System?