Some days I think the ideal of dependability is declining in our society. For example, you replace your dishwasher, which lasted 30 years, with one that will last 10. You wait at home for a service call, and no one shows up, or is late. We all probably have an aggravating air travel story.
I find it frustrating because dependability is so important. I am reminded of a quote from Woodrow Wilson who said, “Without dependability one’s ability may be a liability instead of an asset.” My view is likely skewed by the fact that I am in a position in which more than 663,000 individuals are counting on me to safeguard their retirement money. As a result, dependability is often the first thing I think about in the morning and the last thing I think about before bed. I can sleep at night knowing the Wisconsin Retirement System can be depended upon. Throughout its history the shared risk plan design has successfully weathered some of the worst economic conditions, including the stock market crash of 1987 and the great recession of 2008. It will weather today’s volatile economic conditions as well.
Dependability in the pension business is two-prong. First and foremost, you must continually have enough money to pay current and future obligations to the participants. If the accountants and actuaries attest to that fact, you can claim to be fully funded. It sounds so simple: Make sure you have enough money to pay the bills when they come due. So why is it the WRS is one of only a few state pensions that is fully funded? It is because we have all played our part. Employers and employees contributed the necessary funding.
The State of Wisconsin Investment Board prudently invested the money. Policy makers identified a reasonable and effective level of benefits. Retirees sacrificed part of their pension during the Great Recession of 2008 to ensure the system stayed fully funded. It isn’t so simple. It is a shared responsibility. The fulfillment of those shared responsibilities by everyone results in dependability.
The second prong is reliable service. That means your benefits are calculated accurately. You get paid the right amount. Your payments arrive at the bank on the first of the month. Your health insurance benefits and payments are handled effectively. You get expert guidance when you need it. Your personal information remains safe. ETF staff take great pride in meeting those responsibilities and I am proud of the way they reliably perform day in and day out. However, delivering on these responsibilities has become increasingly more difficult. The number of retirees has increased 40 percent over the past 10 years and our IT systems are outdated and require upgrading. Since ensuring reliable service is necessary, our recent biennial budget submission asks for additional resources to address these challenges. These resources are essential for us to meet our dependability obligation going forward.
We are fortunate to have the WRS. It is a vital part of recruiting and retaining a quality public workforce. It contributes to financially secure retirements. It supports communities across the state by distributing more than $6 billion in annuity payments each year to retirees. Thankfully it is also a system in which the ideal of dependability continues to be valued.