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RENEE MONTAGNE, HOST:

It's MORNING EDITION, from NPR News. I'm Renee Montagne.

STEVE INSKEEP, HOST:

And I'm Steve Inskeep.

Across this country, cities with pension plans for employees are struggling to keep those plans funded. Some cities have raided retiree savings to pay for other services during the economic downtown of recent years. Other cities just under-funded their plans. But one Midwestern city has a model pension program, and has managed to keep its promises to retirees, even during hard times.

Erin Toner of member station WUWM in Milwaukee has more.

ERIN TONER, BYLINE: After more than two decades in city government, Bill Averill has a pretty impressive mental inventory of Milwaukee real estate.

BILL AVERILL: I worked in the city of Milwaukee assessor's office for 25 years, most of that time doing the major commercial properties in the city.

TONER: And that's why we've come here to this little park that overlooks Lake Bluff Condominiums, right on the bluff, overlooking Lake Michigan. And this is an area that you used to work in.

AVERILL: So, this corner property is a John Crichton property. And this...

TONER: Averill started in the city assessor's office when he was 34 years old, having left a private sector job that paid better, but had no retirement benefit.

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

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

Now, here in Milwaukee, no one's getting rich off their pension. The average payout is just $23,000 a year. But Averill and the city's 12,000 other retirees can be darn sure the money will be there when they need it.

JERRY ALLEN: There is no magic in pension funding. You simply have to put money in the fund.

TONER: That's Jerry Allen, who heads Milwaukee's pension system. It consistently ranks as one of the strongest in the country. A recent report 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.

ALLEN: 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, rather than, you know, just turn them loose and say you're on your own.

TONER: So how did Milwaukee do it, when other big cities have dug huge pension holes? Elizabeth Kellar says it's not rocket science. Keller runs the Center for State and Local Government Excellence, and says Milwaukee out-performs nearly everyone else because it makes retirees a priority.

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

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

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

TONER: There have been sacrifices here, including the elimination of 400 positions. But the recent cuts won't be enough to keep the pension fund solvent. So Mayor Tom Barrett says now Milwaukee has to scale back its pension program, though he promises he won't kick the can down the road.

MAYOR TOM BARETT: I have four children, and I want my children to live here. 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.

TONER: Starting next year, 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.

For NPR News, I'm Erin Toner, in Milwaukee.

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