Vol. 18, Local C
May 11, 2001
Bulletin Provides 2001 Financial
Disclosure Footnote to Help Employers Complete Annual Statements
The Department of Employee Trust Funds (ETF) annually provides
Wisconsin Retirement System (WRS) employers with model language
to use for required WRS footnotes in annual financial statements
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 employees.
The unfunded actuarial accrued liability is a preliminary figure
as of December 31, 2000. Due to the Wisconsin Supreme Court injunction
preventing implementation of 1999 Wisconsin Act 11, we have been
unable to invoice employers for prior year adjustments (late reported
earnings) received in 2000. If an employer has prior year adjustments
pending, the unfunded liability balance may change when the adjustments
are invoiced. We have included 2001 prior service contribution rates
if you wish to calculate prior service contributions made during
2001 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 in the ETF
Controller's Office, at (608) 267-9034.
Included in this Bulletin are:
- Model footnote language for Defined Benefit Pension Plans
- WRS employer earnings and contribution data sheet
Model Footnote - Defined Benefit Pension Plan
All eligible (insert employer name) employees
participate in the Wisconsin Retirement System (System), a cost-sharing
multiple-employer defined benefit public employee retirement system
(PERS). All permanent employees expected to work over 600 hours
a year (440 hours for teachers) are eligible to participate in the
System. Covered employees in the General/Teacher/Educational Support
Personnel category are required by statute to contribute 5.5% of
their salary (4.1% for Executives and Elected Officials, 4.1% for
Protective Occupations with Social Security, and 4.4% for Protective
Occupations without Social Security) to the plan. Employers may
make these contributions to the plan on behalf of employees. 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)
employees covered by the System for the year ended December 31,
2000 was (insert employer covered earnings);
the employer's total payroll was (insert total employer
payroll). The total required contribution for the
year ended December 31, 2000 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 employee required
contribution), or (insert employee percent
of payroll) of payroll from employees. Total contributions
for the years ending December 31, 1999 and 1998 were (insert
1999 total contributions) and (insert
1998 total contributions), respectively, equal to
the required contributions for each year.
Employees who retire at or after age 65 (62 for elected officials
and 55 for protective occupation employees) are entitled to receive
a retirement benefit. Employees may retire at age 55 (50 for protective
occupation employees) 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 employee's three highest
years earnings. Employees 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 employees 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 vested.
The System also provides death and disability benefits for employees.
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:
Department of Employee Trust Funds
P.O. Box 7931
Madison, WI 53707-7931.