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Employers

Employer Bulletin

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 and reports.

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.

 

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