Retaining Effective Teachers Policy
The state should ensure that excessive resources are not committed to funding teachers' pension systems.
As of December 31, 2010, the most recent date for which an actuarial valuation is available, Wisconsin's teacher pension system is 99.8 percent funded and has a 19-year amortization period. This means that if the plan earns its assumed rate of return and maintains current contribution rates, it would take the state 19 years to pay off its unfunded liabilities. Both levels are better than regulatory recommendations, and Wisconsin's system is financially sustainable, according to actuarial benchmarks.
Wisconsin does not commit excessive resources toward its teachers' retirement system. The mandatory employee contribution rate to the defined benefit plan is 6.2 percent, and the current employer contribution rate is 4.8 percent. Both of these rates are reasonable considering the fact that districts and teachers are also contributing to Social Security. Employer contribution rates are actuarially determined.
State of Wisconsin, Department of Employee Trust Funds, Comprehensive Annual Financial Report, 2010 http://etf.wi.gov/about/2010_cafr.pdf
Wisconsin recognized the factual accuracy of this analysis and was helpful in providing NCTQ with facts that enhanced it.