After more than two decades in city government, Bill Averill has a pretty impressive mental inventory of Milwaukee real estate. He started in the city assessor's office when he was 34, after leaving a private sector job that paid better but had no retirement benefits.

"That was one of the main reasons I went to work for the City of Milwaukee," he says. "And so I knew the pension at some time, way out in the future, would be a benefit to me."

Well, that future is now. At 62, Bill Averill is retired — and grateful to be collecting on the pension that lured him to civil service all those years ago.

Across the country, cities with pension plans for their workers are struggling to pay out the promised funds. Some municipalities have raided retiree savings to pay for other services during the downturn, while others have simply underfunded them.

But despite a 30 percent poverty rate, declining tax base and huge foreclosure crisis, Milwaukee has a model pension program and has managed to keep its promises to retirees.

'No Magic In Pension Funding'

To be clear, no one's getting rich off their pension here in Milwaukee — the average payout is just $23,000. But based on the city's record of exceptional funding levels, Averill and the city's 12,000 other retirees have good reason to believe the money will be there when they need it.

"There is no magic in pension funding," says Jerry Allen, executive director of the city's pension system. "You simply have to put money in the fund."

A recent report from Wilshire Consulting found city and county pension funds in the U.S. have assets to cover only 69 percent of liabilities. Allen says Milwaukee's funding level has hovered near or well above 100 percent for decades. The city's system consistently ranks as one of the strongest in the country.

"We wanted to maintain a good pension plan in the city of Milwaukee, so that after a whole working lifetime we would provide our people with a decent retirement with dignity," Allen says. "Rather than, you know, just turn them loose and say, 'You're on your own.' "

So how did Milwaukee do it, when other big cities have dug huge pension holes?

It's not rocket science, says Elizabeth Kellar, president and CEO of the Center for State and Local Government Excellence. She says Milwaukee outperforms nearly everywhere else because it makes retirees a priority.

"They pay their annual required contribution very consistently," Kellar says. "So that means in good years or bad, they're maintaining a very good discipline."

Some Scaling Back Ahead

Even when the pension had surplus funds and Milwaukee wasn't required to make a contribution, officials here did so anyway. In contrast, Kellar says, other cities couldn't resist raiding pension money when the economy blew up and they needed it for other expenses.

"Certainly you can understand if, on an occasional basis, you can't make your contribution," Kellar says. "But if that's your normal practice, you're not going to have the money there when people need it to retire."

But there have been sacrifices in Milwaukee, including the elimination of 400 positions. And those recent cuts won't be enough to keep the pension fund solvent.

Mayor Tom Barrett now says the city has to scale back its pension program. Starting Jan. 1, new workers will have to wait longer to retire and they'll get smaller pension checks. But the mayor says that's needed to ensure that Milwaukee continues to be a national model for pension prudence.

He promised, however, that he wouldn't kick the can down the road.

"I have four children and I want my children to live here," Barrett says. "And I don't want this to be a city like other units of government, where things should have been paid for and they weren't paid for."

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