Vol. 17, Local E
May 12, 2000
2000 Financial Disclosure Footnote is Provided to Help
Employers Complete Annual Statements and Reports
Each year, the Department of Employe Trust Funds (ETF) provides
Wisconsin Retirement System (WRS) employers with model language
to use for required WRS footnotes in annual financial statements
Governmental Accounting Standards Board (GASB) Statement #27,
"Accounting for Pensions by State and Local Governmental Employers"
replaced Statement #5 effective for periods beginning after June
GASB Statement #27 adds a requirement to disclose contribution
amounts for two prior years.
GASB Statement #27 eliminates the requirement to disclose the
Pension Benefit Obligation (PBO).
For employers in a cost-sharing multiple-employer pension plan,
GASB Statement #27 eliminates the requirement to disclose actuarial
information concerning the WRS.
GASB Statement #27 requires employers to report a liability
for pension-related debt. WRS employers' unfunded actuarial
accrued liability (prior service costs) meets the definition
of pension-related debt. For employers making pension contributions
from a government fund, this liability should be reported in
the general long-term debt account group. If your pension contributions
are made from a non-government fund, the liability should be
reported in that fund.
The footnote shows where to insert information specific to each
employer. We also enclose a data sheet for each employer, containing
the specific information you should insert into the footnote. The
only information you will need to develop using your own records
is total employer payroll, including non-participating employes.
The unfunded actuarial accrued liability is disclosed as of December
31, 1999. We have included 2000 prior service contribution rates
if you wish to calculate prior service contributions made during
2000 in order to update this liability.
The footnotes are intended as a model for use by all WRS
employers. You or your auditors may wish to modify the language
for your own purposes.
If you have questions, please contact Nancy Kittleson of the ETF
Office of the Controller at (608) 267-9034.
Included in this Bulletin are:
Model Footnote - Defined Benefit Pension Plan
All eligible (insert employer name) employes
participate in the Wisconsin Retirement System (System), a cost-sharing
multiple-employer defined benefit public employe retirement system
(PERS). All permanent employes expected to work over 600 hours a
year (440 hours for teachers) are eligible to participate in the
System. Covered employes in the General/Teacher/Educational Support
Personnel category are required by statute to contribute 5.8% of
their salary (4.3% for Executives and Elected Officials, 4.9% for
Protective Occupations with Social Security, and 5.4% for Protective
Occupations without Social Security) to the plan. Employers may
make these contributions to the plan on behalf of employes. Employers
are required to contribute an actuarially determined amount necessary
to fund the remaining projected cost of future benefits.
The payroll for (insert employer name)
employes covered by the System for the year ended December 31, 1999
was (insert employer covered earnings);
the employer's total payroll was (insert total employer
payroll). The total required contribution for the
year ended Decem-
ber 31, 1999 was (insert total contribution),
which consisted of (insert employer required contribution),
or (insert employer percent of covered payroll)
of payroll from the employer and (insert employe required
contribution), or (insert employe percent
of payroll) of payroll from employes. Total contributions
for the years ending December 31, 1998 and 1997 were
(insert 1998 total contributions) and (insert
1997 total contributions), respectively, equal to
the required contributions for each year.
Employes who retire at or after age 65 (62 for elected officials
and 55 for protective occupation employes) are entitled to receive
a retirement benefit. Employes may retire at age 55 (50 for protective
occupation employes) and receive actuarially reduced benefits. Retirement
benefits are calculated as 1.6% (2.0% for Executives, Elected Officials,
and Protective Occupations with Social Security and 2.5% for Protective
Occupations without Social Security) of final average earnings for
each year of creditable service. Final average earnings is the average
of the employe's three highest years earnings. Employes terminating
covered employment before becoming eligible for a retirement benefit
may withdraw their contributions and, by doing so, forfeit all rights
to any subsequent benefit. For employes beginning participation
on or after January 1, 1990 and no longer actively employed on or
after April 24, 1998, creditable service in each of five years is
required for eligibility for a retirement annuity. Participants
employed prior to 1990 and on or after April 24, 1998 are immediately
The System also provides death and disability benefits for employes.
Eligibility for and the amount of all benefits are determined under
Chapter 40 of Wisconsin Statutes. The System issues an annual financial
report that may be obtained by writing to the Department of Employe
Trust Funds, P.O. Box 7931, Madison, WI 53707-7931.