Wisconsin's statewide pension system for public employees may not be as well-funded as the state reports, with a new study estimating it could be as much as $10.9 billion short in meeting its obligations just to teachers.
While the state estimates that the Wisconsin Retirement System is nearly 100% funded, the report by the conservative Manhattan Institute and Foundation for Educational Choice warns that the amount could be far less.
By using asset growth projection rates similar to what are required for private pension plans, the study found that Wisconsin's retirement system would be considered only 78% funded. In addition, an analysis that takes into account recent stock market activity drops it to 72% funding, according to the report.
"We think this is more accurate than the stated market value of assets," said Josh Barro, a senior fellow at the Manhattan Institute and co-author of the report, which was released Tuesday.
Pension plans that are not adequately funded could lead to higher property taxes or take resources away from the classrooms, Barro said. "Pension obligations are not some big ethereal thing," he said.
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