The Wisconsin Retirement System (WRS) was created 40 years ago to help protect public employees and their beneficiaries against the financial hardships of old age and disability, to attract and retain a qualified public workforce, establish modest benefits, and achieve administrative savings.
There is no doubt that the WRS has done that and more over the last four decades. But, the WRS, as one of the only fully funded public pension systems in the country, is more than just a retirement benefit for state and local government employees. It also provides a strong, steady economic pillar for the entire state.
Economic gains attributable to defined benefit pensions like the WRS are substantial. Benefits paid by state and local pension plans support a significant amount of economic activity that ripples through the economy, creating a multiplier effect as one person’s spending becomes another person’s income. In Wisconsin, more than 85% of WRS pensions go to retirees living in Wisconsin who purchase goods and services and pay taxes.
In this episode, we talk to Dan Doonan, executive director of the National Institute on Retirement Security, a non-profit research and education organization established to contribute to informed policymaking by fostering a deep understanding of the value of retirement security to employees, employers, and the economy as a whole.
Dan shares some insights about what he calls "Pensionomics," and some recent studies his organization has conducted that show just how crucial the WRS and other defined benefit plans like it are to their local economic ecosystems.