Wauwatosa Retirement Benefits
City and School District Retirement Benefits Provided by Property Taxpayers
City and School District employees are provided extraordinary early retirement benefits, teachers and protective services employees in particular.
Teachers at age 55 with twenty years of service and the City’s protective services employees at age 50 are able to retire with partial pensions and health insurance coverage. Teachers receive full pensions at age 57 with thirty years of service and protective service employees receive full pensions at age 53 with 25 years of service.Only 13% of private industry employees with defined benefits have similar early retirement benefits to those provided to Wauwatosa teachers and protective service employees.
The School District limits the cost of their early retirement benefits through its contractual provision that limits early retirements to no more than twenty-five at any given time. Beginning in 2008, the City limited the cost of their early retirement benefits by reducing the City’s share for health insurance costs to 50% with the conversion of unused sick leave to cash to help cover the employees’ portion of the insurance cost.
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TTA Report on Wauwatosa Teacher and Protective Service Employees Retirement Benefits
In an earlier report TTA reviewed compared retirement benefits for State and municipal government employees with those for private industry employees. This report reviews Wauwatosa property taxpayer supported retirement benefits.
Early Retirement Benefit
The retirement pension benefit for employees of the School District and the City is handled through the Wisconsin Retirement System (WRS). Annual contributions based on a percentage of each employee’s salary are made by the District and the City to finance the retirement benefit. For the purpose of this report, the eligibility requirements for retirement and retiree insurance benefits will be reviewed for teachers and protective services employees (police and firefighters).
The most common understanding of retirement eligibility is the age at which a person is eligible for Social Security and Medicare. Employers and labor-management agreements can establish early retirement, before eligibility for Social Security and Medicare. In the case of teachers and protective service employees the Legislature enacts the early retirement standards for their WRS retirement payment.
Under the Wisconsin Retirement System teachers’ can retire at age 57 with 30 years of service and receive their full WRS retirement benefit. Protective service employees receive the full amount of their WRS retirement benefit at age 53 with 25 years of service. The WRS retirement benefit is based on a formula consisting of years of service, the average of the highest three years of earnings, and a formula factor for amount of the benefit. A reduced retirement benefit is available beginning at age 55 for teachers and at age 50 for protective service employees.
The City and School District, through their labor agreements provide early retirement medical, dental and/or life benefits in addition to the WRS benefit.
Teacher Early Retirement Benefits
The early retirement age for teachers is age 55 with twenty years of continuous service for medical, dental and/or life benefits in addition to the WRS benefit. Teachers are eligible for the health insurance paid for by the School District: teachers with twenty years of experience receive three years paid by the District and an additional five years at the rate for the third year (retiree pays the balance of premium); teachers with 25 years receive premiums paid for eight years; and those with 30 years receive premiums paid until they reach Medicare age. In addition to health insurance, retirees also receive life insurance paid for by the District.
The School District has avoided taxpayers having to pay for exorbitant early retirement costs by capping the number of teachers who can take early retirement. No more than twenty-five teachers can be on early retirement at any given time.
Protective Services Employees Early Retirement Benefits
The early retirement age for the City’s protective services employees is age 50. Protective service retirees receive health insurance paid by the City as follows: retirees hired before 2008 receive health insurance paid for by the City up to 110% of the policy cost for the previous year; for those hired after 2008, the City pays 50% with the balance of the health insurance cost covered by retirees.
In 2008 the City began making contributions into the newly established Retirement Health Care Savings Plan. The Savings Plan enables protective service employees to bank one-quarter of their annual unused sick leave converted to cash using the employees’ current salaries. Employees are also able to convert their sick leave balances upon retirement into the Savings Plan. The funds contributed into the Savings Plans must be used for eligible health expenses such as health insurance premiums.
Retirees pay all deductibles and co-pays or co-insurances called for in the insurance plan. Protective service retirees can continue in the life, and dental insurance plans with the premiums paid by the retirees.
(The contract for Firefighters is going to arbitration; benefits stated in this review are what the City has offered.)
Comparison with Private Sector and State and Local Government National Surveys on Retirement Benefits
Only 12% of private industry workers with defined benefits and 13% of State and local government employees have similar early retirement opportunities to what is provided for Wauwatosa teachers and protective service employees.Sources: Wisconsin Retirement System Fact Sheet 2008: Employee Trust Fund Retirement Benefits Agreement Between the Wauwatosa Educational Association and the Wauwatosa School District for 2005-07 Agreement Between the City of Wauwatosa and Wauwatosa Peace Officers’ Association Bargaining
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