CHICAGO — Wisconsin Gov. Scott Walker said Monday that he would be willing to consider changes in the state's $82 billion pension system, with a report expected this week on how the system could be improved.
"What I've said is I'm not proposing any changes at this time," he told reporters after a speech at the Commercial Club of Chicago. "That doesn't mean I won't be open to them."
Walker's comments came a week after the Pew Center on the States determined that in 2010 Wisconsin was the only state in the nation with enough money to meet its current obligations and to pay pensions that have been promised to public employees.
Pew has rated the system as one of the nation's most solid since 2006. Meanwhile, other states have lost ground in terms of long-term stability.
A June 17 State Journal report found that without a major rebound in investments, however, the Wisconsin Retirement System might need more taxpayer money, further reductions in retiree benefits or both to maintain its long-term stability.
In Chicago, Walker touted his efforts to restrain government spending since his election in 2011. "We're turning things around, we're moving the state forward," Walker said.
Walker suggested that some of what was done in Wisconsin could work elsewhere — a contention that helps explain his invitation as speaker at a private luncheon of the Commercial Club, which has warned that companies will leave the state if Illinois does not reform its pension system.
Walker, who won a recall election June 5, also did his best to sound like a good neighbor to Illinois. Last year, he greeted the news that Illinois was raising personal income taxes and corporate tax rates with a call for disgruntled Illinois businesses to "Escape to Wisconsin."
"I'm not here to poach businesses," Walker said. "We're interested not in taking companies, but rather with working with companies looking to grow," he said.
Walker said he did not know what the report on Wisconsin's pension system, due June 30 to him and the Legislature's finance committee, might say, and would not speculate. He said he would not attempt to touch the pensions of current retirees, which would be illegal.
Walker has repeatedly said he has no plans to alter the system, despite calling for the report to look at moving to defined contribution plans like a 401(k) or no longer requiring participation in the state system.
Some public workers and union leaders fear the changes could weaken the pension fund by siphoning off participants. Others are concerned that Walker wants to change the system from a plan where minimum benefits are guaranteed to a plan like those commonly offered to private businesses that have no such guarantee.
A number of Wisconsin unions, including those representing teachers and state workers that pushed unsuccessfully to recall Walker, have already joined together to fight any changes.
Both the Legislature and Walker would have to approve any changes to the system before they would take effect. Lawmakers aren't scheduled to be in session again until January, after the November elections determine whether Republicans who called for the report will have majority control.
A unique feature of Wisconsin's pension system adjusts payouts to state workers based on how well the investments are doing. When times are good, retirees benefits can go up, but when the markets are down benefits can be reduced.
Benefits had been steadily increasing, but after the 2008 recession they dropped for the first time in 26 years. Three straight years of gains have yet to offset the losses.
A so-called smoothing strategy helps Wisconsin's pension system spread losses out among its beneficiaries rather than looking only to tax dollars or other means to make up the difference. The average payout currently is about $23,000 a year.
About 169,000 retirees in Wisconsin's system are receiving payments. An additional 261,000 workers in state and local government and 148,000 who are no longer working for a government employer but who are not yet receiving benefits are also a part of the system.
Almost all public workers in the state are covered under the system that was established in 1951.
Part of Walker's proposal last year that helped spur the effort to recall him from office required public workers to contribute half of their pension contributions, which was about 5.9 percent of their salary.
— State Journal reporter Steven Verburg contributed to this report.