Nearly 150K Retired Public Employees Get Core Payments Cut

MADISON, Wis. (WTAQ) - About 150,000 of Wisconsin’s retired public employees will again have their monthly core payments cut. Last spring, those in the State Retirement System’s Core Fund had their payments cut for the first time ever, at just over 2 percent. And for the year starting May 1st, those payments will be cut another 1.3 percent. State employee trust funds’ secretary David Stella said it reflects the severity of the investment declines from 2008.

The Core Fund is the more conservative of 2 funds operated by the state. It had a 22 percent total return on its investments in 2009. It was the 3rd highest gain in history, but it did not offset a 26 percent drop in ’08. And Stella says benefits are based on a 5 year average of returns so there’s not as much viability in the retirees’ checks.

All retirement fund members must have at least half the pensions from the Core Fund. The other account is the Variable Fund, and that got a return of almost 23 percent last year – the highest in history. The State Retirement System covers state and local government and school employees outside of the Milwaukee city and county, which have their own systems.