Local WRS Employers
Vol. 21, Local E
April 28, 2004
Bulletin Provides 2004 Financial Disclosure Footnote To
Help Employers Complete Annual Financial Statements and Reports
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 balance appearing on the
data sheet is as of December 31, 2003. We have included 2004 prior
service contribution rates should you wish to calculate prior service
contributions made during 2004 and update your liability balance.
The footnote is intended to serve 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, ETF Office
of Trust Finance & Data Analysis, at (608) 267-9034.
Model Footnote - Defined Benefit Pension Plan
All eligible (insert employer name) employees participate
in the Wisconsin Retirement System (WRS), 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 WRS. Covered employees
in the General/Teacher/Educational Support Personnel category are
required by statute to contribute 5.4% of their salary (2.6% for
Executives and Elected Officials, 4.0% for Protective Occupations
with Social Security, and 2.4% 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 WRS for the year ended December 31, 2003 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, 2003 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, 2002 and 2001 were (insert
2002 total contributions) and (insert 2001 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.
The factors influencing the benefit are: (1) final average earnings,
(2) years of creditable service, and (3) a formula factor. 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 WRS also provides death and disability benefits for employees.
Eligibility and the amount of all benefits are determined under
Chapter 40 of Wisconsin Statutes. The WRS issues an annual financial
report that may be obtained by writing to the Department of Employee
Trust Funds, P.O. Box 7931, Madison, WI 53707-7931.