Last Thursday I appeared on Wisconsin Public Radio to discuss the cost of the state's pension system and the need for reform. I was interviewed for the first half hour, and then Betsy Kippers, a representative of the Wisconsin Education Association Council (WEAC), was the guest for the second half hour.
I had hoped we could both be on at the same time. Frankly, I did not think Ms. Kippers had any serious arguments to make, and I wanted listeners to realize that.
(If that characterization sounds unfair, please give my op-ed in the Milwaukee Journal-Sentinel a quick read, then read Ms. Kipper's response that appeared the following week. I do not see any attempt in there to deal with the points I made.)
So after I finished my half of the show, I listened to the rest over the internet. In her opening remarks, Ms. Kippers said, referring to me: "When he talks about the rate of return of 7.2 percent may be too high, he has to remember that any investment risks are only shared by participants in the system."
This is false, of course. Pension benefits are guaranteed, and investment risk is borne by taxpayers. A caller eventually corrected her. A charitable interpretation of Ms. Kippers' claim is that she was confusing the COLA (which does vary with investment returns) with the base pension (which does not vary). Still, to be so imprecise about such a fundamental aspect of the pension system does not reflect well on WEAC.
The full interview can be heard here.
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