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Employers

Employer Bulletin

All WRS Employers
Vol. 18, No. 9
June 26, 2001

2002 WRS Contribution Rates Announced

SPECIAL NOTE

Proposed legislation would set the Employee Required Contribution rate at 5% for all employment categories and eliminate the Benefit Adjustment Contribution (BAC). Your total contribution rate for 2002 would not change, though the Employer Required Contribution rate would also be adjusted. As always, all or part of the Employee Required Contribution may be paid by the employer on behalf of the employee. An Employer Bulletin, with the necessary adjustments between the employer, employee and/or benefit adjustment contributions (within your total 2002 contribution rate) will be sent to you if the proposed changes are enacted.

Employee Trust Funds Board Announces Contribution Rates For 2002

At its June 22, 2001 meeting, the Employee Trust Funds Board approved Wisconsin Retirement System (WRS) contribution rates for the year 2002, including rates for the §40.65 protective occupation duty disability and the state's Accumulated Sick Leave Conversion Credit programs. These rates are based on recommendations of the consulting actuary and benefit levels prior to implementation of 1999 Wisconsin Act 11.

1999 Wisconsin Act 11 was ruled constitutional by the Wisconsin Supreme Court. The impact of the law on the benefit and funding changes in this Act will be recognized in contribution rates beginning in 2003.

Each contribution category is valued separately. Contribution rate changes, whether up or down, are considered to be normal for systems that pre-fund retirement benefits. Annuity benefits are not affected by these rate changes.

Under section 40.05 of Wisconsin Statutes, WRS contribution rate changes are split evenly between the employer and employee. Employers who have elected to increase prior service coverage or pay off their unfunded liability balances may also experience a change in their prior service rates.

You will receive a separate Employer Bulletin explaining the Employer Credit Accounts provided for in 1999 Wisconsin Act 11.

Enclosed are your contribution rates effective for salaries and wages paid beginning January 1, 2002.

Contribution rate changes by WRS employment category are summarized as follows:

  • General (including Teachers and Educational Support Personnel)

No Change

  • Executive, Elected and Judges

Decrease 1.6%

  • Protective with Social Security

Increase 0.4%

  • Protective without Social Security

Decrease 0.6%

Please reference the following for the effect on your total rate. In January 2002 you will receive your Monthly Retirement Remittance Report form (ET-1515) reflecting these contribution rates for use in reporting earnings for the year 2002. For more information regarding the 2002 contribution rates, please contact Nancy Kittleson at (608) 267-9034.

Description of Contribution Rates for Year 2002

Employee Required Contribution (may be paid by employer)

5.0% General, including Teachers and Educational Support Personnel (no change)

3.1% Judges, Elected Officials and State Executive Positions Designated in §20.923 (4), (8), or (9) (decreased 0.8%)

4.0% Protective with Social Security (increased 0.2%)

3.0% Protective without Social Security (decreased 0.3%)

Employee Benefit Adjustment Contribution (may be paid by employer)

0.2% General, including Teachers and Educational Support Personnel (no change)

0.0% Judges, Elected Officials and State Executive Positions Designated in §20.923 (4), (8), or (9) (no change)

0.0% Protective with Social Security (no change)

0.0% Protective without Social Security (no change)

Employer Required Contributions - Current Service (must be paid by employer)

3.8% General, including Teachers and Educational Support Personnel (no change)

8.6% Judges, Elected Officials and State Executive Positions Designated in §20.923 (4), (8), or (9) (decreased 0.8%)

7.1% Protective with Social Security (increased 0.2%)

10.4% Protective without Social Security (decreased 0.3%)

Employer Required Contributions - Unfunded Actuarial Liability (must be paid by employer)

Same rate as 2001 unless employer elected to provide increased prior service coverage or paid off liability at an accelerated rate. Notification of any change for individual employers will be sent at a later date.

Employer Duty Disability Contribution (must be paid by employer)

Effective January 1, 2002, the experience-rated duty disability contribution rate schedule will remain the same as 2001 and will be determined as listed below:

1.9% Groups with claims pay out of less than or equal to 0.5% of payroll.

2.4% Groups with one claim in which the pay out is more than 0.5%, and groups with two or more claims in which the pay out is more than 0.5%, but less than 1.0% of payroll.

3.6% Groups with two or more claims in which the pay out is more than 1.0%, but less than 2.0% of payroll.

5.4% Groups with two or more claims in which the pay out is more than 2.0%, but less than 3.0% of payroll.

6.6% Groups with two or more claims in which the pay out exceeds 3.0% of payroll.

Over 6.6% Groups with two or more claims in which new claims added in 1997 and later make pay out exceed 6.6% of payroll. Rate will be 6.6% plus one-half of new claims over 6.6%.

Employer Accumulated Sick Leave Conversion Credit Contributions (must be paid by employer)

This rate applies to state agencies only. The rate will remain the same as 2001. Therefore effective January 1, 2002, the contribution rate for pre-funded sick leave conversion to fund health insurance premiums after retirement is 1.7%. The pre-funded supplemental sick leave credits rate is 1.0%, bringing the total contribution rate to 2.7%.

For more information, please contact Nancy Kittleson in the ETF Controller's Office at (608) 267-9034.

 

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