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WRS News Online Vol.1, No.1 - January 2015

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Welcome to WRS News Online!

We are pleased to present WRS News Online for non-retired members of the WRS. Whether you are newly hired, at the mid-point of your career, or closing in on retirement, WRS News Online will provide WRS benefits-related news and information relevant to your interests and circumstances – and in an exciting new format.

You’ll find full-color graphics and direct links to online resources. You can view articles on your computer or mobile device, and share articles of interest with others via social media.

This is a joint publication of the Department of Employee Trust Funds and the State of Wisconsin Investment Board. We’ll publish WRS News Online at least four times a year: January, May, September and November, with special editions as needed. We plan to continue co-publishing the flagship newsletter, WRS News. However, content for this 33-year-old, paper-based newsletter will be solely oriented to WRS retirees.

Watch for subsequent editions of WRS News Online to come to you via your employer.

Like what you see or have a suggestion for content? Send the editors an email!

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Message From Leadership

Essential Elements of a Successful Pension System
by Robert Conlin, ETF Secretary

Robert Conlin
Robert Conlin

As 2015 begins, I am pleased to report that your Wisconsin Retirement System remains very strong, stable, and able to play a key role in helping to meet your financial needs in retirement.

Due to SWIB’s investment performance over the last several years, and the unique, gain/loss-sharing benefit structure of the WRS, overall employee and employer contribution rates will be lower this year, active employee accounts will be credited with a healthy effective rate, and retirees will see another solid increase in their annuities this spring.

But the WRS didn’t become one of the top state pension systems in the country by accident. Far from it. The policymakers who launched the WRS set out to create a retirement system that could withstand the test of time. They sought to create a system to help protect public employees and their families against the financial hardships of old age, disability and death, while also helping to attract and retain quality employees for state and local governments and school districts throughout Wisconsin.

Two key elements underpin the success of the WRS: the unique gain/loss-sharing benefit structure in which benefits are affected by investment performance; and funding discipline that ensures the cost of the benefits being earned is appropriately funded. Add to that mix the investment flexibility that allows SWIB to invest prudently to meet the needs of the system, and you have a recipe for a successful public pension system. This newsletter routinely discusses these key ingredients.

However, another key element exists that doesn’t get the attention it properly deserves: The WRS is fortunate to have an informed and engaged membership that cares deeply about the long-term health of the system. Almost 600,000 of you from all corners of the state can claim an interest in the well-being of the WRS. That number grows significantly when you include your spouses, partners and family members who also have a vested interest.

You watch how ETF administers the benefits and how SWIB invests the assets of the WRS. You stay informed about the system and you voice concerns when necessary. You are actively engaged in the governance of the system by running for board seats or voting in board elections. In short, you support the WRS in a variety of ways.

When I talk with groups of active employees and retirees, it’s clear to me that you don’t take the success of our system for granted. Your engagement, I believe, makes a really good WRS great. Thank you for continuing to do your part and for your trust in us.

Looking Back at a Successful 2014 and Forward to 2015
by Michael Williamson, SWIB Executive Director

Michael Williamson
Michael Williamson

As I talk with members across the state, the question I am most asked this time of year is, “How did we do?” Those of us in the Wisconsin Retirement System are interested in knowing how the State of Wisconsin Investment Board did in meeting its primary goal of making money. Of course, that question is almost always followed by, “What does the coming year look like?” I would like to address both of those questions in this column.

How did we do?
When I am asked this question, I am reminded of the importance of the job we do at SWIB in managing over $96 billion in retirement funds. As many of you know, almost 80% of the income of the WRS comes from investment earnings.

I am pleased to report that both the Core Fund and the Variable Fund again this year finished with positive returns. The Core Fund’s preliminary return as of December 31, 2014, was 5.7%. The Core Fund has had a positive return in each year since the market downturn in 2008. The Variable Fund had a preliminary return as of December 31, 2014, of 7.3%. The Variable Fund has had positive returns in five of the last six years.

More important, I am pleased that investment experience will result in decreased contribution rates for active employees and their employers in the coming year and are projected to result in positive annuity adjustments for retirees for the second consecutive year. While other pension systems are struggling with underfunding, the WRS continues to meet its obligations to participants and remains among the top funded systems in the country.

What does the coming year look like?
SWIB continues to make money for the trust funds while helping to protect against market downturns that can be caused by social, political or even natural causes around the world. During the past year, we have seen crises in Ukraine and Gaza and even Ebola developments lead to market disruptions. Other examples include Japan, the world’s third-biggest economy, which saw inflation reach 24-year highs. China, which data indicate is now the world’s biggest economy after passing the United States, is struggling with financial and credit concerns that have become critical, when looking at risks to the global economy. Western Europe continues to struggle with high unemployment and a stalled economy. Closer to home, the news was a little more positive with the U.S. economy continuing to expand and consumer spending increasing as gasoline prices fell toward the end of the year. The nation’s labor market strengthened, although wage growth remained slow.

These examples show that in today’s market the job of making money is not an easy one. However, it is one we take seriously and are more than willing to accept because we know the results of our work have a direct impact on the retirees, employees and employers who are part of the WRS.

As we look forward to 2015, we will need to continue to monitor many of the issues we watched closely in 2014 to determine what affect a weakening global economy and a strengthening U.S. economy will have on our investments.

To balance the economic forces at home and internally, we continue to diversify our investments. While SWIB staff monitors these issues daily and adjusts our investment strategies, participants in the WRS can be assured that we are working to protect the system and its members by implementing new investment strategies when appropriate and diversification of the funds. There are no guarantees in the investment world, but we will continue to work hard in the coming year with hopes of celebrating a positive 2015.

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ETF Board Election: Educational Support Personnel

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Attention, all educational support personnel employees: It’s time to vote for the  Educational Support Personnel Member of the ETF Board! Cast your vote during the upcoming election period, February 2-27, 2015. The thirteen-member ETF Board has oversight and fiduciary responsibility for the trust funds.

New this year – no paper
Elections are going paperless! This change makes it more convenient for you to cast a ballot, speeds up the voting process and eliminates ballot printing and distribution expenses.

Review the candidates’ statements below, then vote online or via telephone – the choice is yours! Both methods are secure and user friendly.
Follow these two easy steps to cast your vote:

  1. Obtain your unique, six-digit voter registration number online or call toll-free 1-888-492-4763.
  2. Cast your ballot online or dial toll-free 1-888-879-9641 during the election period, February 2-27, 2015.

Questions? Email the election services vendor or call toll free at 1-888-492-4763 during these hours:
January 15 - January 30, 2015        8:00 a.m. to 5:00 p.m., CST, Monday - Friday
February 2 - February 27, 2015     24 hours a day, 7 days a week

Only active employees who are employed as educational support personnel in school districts and Wisconsin technical college districts are eligible to vote in this election.

Candidates
ETF Board – Educational Support Personnel Member
(three candidates vying for one seat; vote for the candidate of your choice)

Kimberly Hall
Kimberly Hall

Kimberly Hall
Personal Statement:
I am currently the Director of Human Resources for the D.C. Everest Area School District. I hold a certification as a Senior Professional in Human Resources (SPHR) through the Human Resource Certification Institute (HRCI). I am responsible for administering and coordinating employee benefits including WRS, Deferred Compensation (457), and Tax Sheltered Annuities (403b).

I have 17 years of vested service in the Wisconsin Retirement System. I was elected to the ETF Board and have served since June 2011. As part of my term on the ETF Board, I participated in Retirement Plan and Investments Series Training and received a recognition certificate of completion.  As an incumbent, I will provide consistency on the ETF Board, which I believe is fundamental to ETF and WRS.

Leilani Paul
Leilani Paul

Leilani Paul
Personal Statement:
I have been an employee of Fox Valley Technical College in Appleton, Wis. for the past 34+ years, working in various educational support positions. For about 18 of those years I worked in the payroll department and my duties included working on anything related to the Wisconsin Retirement System. I processed the day-to-day WRS transactions and also completed the WRS Annual Report each January. My current role is a Student Financials Analyst. I have a B.A. in Accounting and Business Administration. I have always had an interest in the happenings of WRS. I believe I could give good representation to the Educational Support group members of the WRS.

Kay Hansen
Kay Hansen

Kay Hansen
Personal Statement:
I am employed by the Denmark School District as a paraprofessional in our special education department. Within my 33 years with the district I have also worked as a paraprofessional in our elementary media center, with food service, indoor and outdoor student supervision, and as a summer custodian.

I have been a part of the Wisconsin Retirement System since 1989. I had the opportunity to speak before the Joint Finance Committee in favor of the WRS treating ESPs with the same respect as teachers, regarding hours worked, under the WRS. The Fairness for Education Support Professionals (Act 28) became effective on June 30, 2009.

I believe my diverse work background helps me to understand the needs of all educational support personnel. All ESPs deserve to have a secure retirement. Please support me, Kay Hansen, as your representative on the WRS ETF board. Thank you!

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Ten Facts About Women and Retirement

Women and retirementAre you one of the 83% of Americans concerned about their ability to retire? The National Institute on Retirement Security reports that more women than men are afraid they will not have retirement security. And, when you look at the facts, that shouldn’t be a surprise. But you may be surprised by what you learn here:

  1. Women are almost twice as likely as men to live below the poverty line during retirement. This is especially true for single and minority women.1 The poverty rate for single black women older than age 65 is 38.5%, and for single Hispanic women is 41.1% – over twice the rate of white women, 16.7%.
     
  2. Women make less money during their working years. For the last decade, median earnings for women working full time, year-round have averaged about 78% of men’s earnings.2 Furthermore, women are far more likely to work part-time jobs, in order to care for children and other family members. This leaves women with less disposable income, which often leaves less for retirement savings.
     
  3. Women receive significantly lower retirement benefits than men. Nationally, the median annual income for women older than age 65 is approximately $15,000, compared to same-age men, who had a median income of more than $25,000. Most of the sources Americans rely on for income during retirement are based on a worker’s lifetime earnings, including Social Security benefits and a pension (such as that provided by the WRS). Simply put, lower wages equals lower retirement benefits.
     
    Closer to home: In a random sample of 14,000 WRS annuities, women in 2013 had a monthly annuity averaging $1,965 compared to men, whose annuity averaged $2,613 per month.
     
  4. Women’s traditional roles as caregivers can negatively affect their retirement security. Women are more likely than men to move in and out of the workforce – experiencing breaks in their work histories – often to care for family members.3 Caregiving responsibilities are challenging and time-consuming. It is important to understand that caregiving can also have serious financial consequences. Women continue to be the primary caregivers and are therefore at even greater risk of experiencing financial setbacks.
     
    According to the Social Security Administration, only 59% of women received retired worker benefits, as opposed to 79% of men. In addition, Social Security is calculated on the basis of one’s best 35 years of employment; if a person has fewer than 35 years in the paid workforce, a zero is entered for each missed year. Each zero lowers benefits. Moving in and out of the workforce reduces earnings, making saving for retirement difficult.
     
  5. Women are living longer than men. In the United States today, there are approximately 149.1 million women and 144.5 million men.4 While men outnumber women in the 35 to 39 age group, women outnumber men in the 40 to 44 age group and at all succeeding age cohorts. By age 85, there are twice as many women as men.
     
  6. Women who are single, divorced, and widowed face a higher risk of poverty in retirement.5 A woman’s marital status is a significant factor in determining economic security in retirement. Nearly retired, unmarried women are three times more likely to be poor and have lower household income and net worth than similarly aged married couples. Even when compared to unmarried men in the same age group, unmarried women are financially worse off. Unmarried women from minority groups have even fewer economic resources: Nearly 30% of unmarried African American and Latino women are living in poverty and have between 10-25% the net worth of unmarried white women.
     
  7. Women save less. Due in part to shorter work careers and lower earnings, women as a group save less money for retirement than men. And saving for retirement among minorities – men and women – is also concerning: A 2007 Employee Benefits Research Institute survey found that 48% of African American and 41% of Hispanic workers have saved money for retirement, compared to 66% of American workers overall.
     
    Closer to home: Among women contributing to the Wisconsin Deferred Compensation Program (WDC), a supplementary savings program administered by ETF, women’s average account balances trail that of men by more than $15,000. In fact at all ages, women save less via their WDC accounts than men. Combined with expected longer life spans and growing rates of divorce after long marriages, lower savings leave women vulnerable to experiencing poverty due to inadequate incomes during retirement.
     
  8. More women than men are engaged in financial wellness education.  Women are closing the financial literacy gap in several key areas, including managing debt, saving for emergencies, and feeling like they are on track for retirement. 6,7
     
  9. Defined benefit plans, like the WRS, provide stable, supplemental retirement income.
    Research shows that women who depend on their spouses’ retirement plans are better protected under a defined benefit system, and women who have their own workplace retirement plan fare better under the defined benefit system due to economic efficiencies and plan characteristics.8
     
    Closer to home: When a WRS member retires and receives his or her pension, they will receive that core amount for the rest of their lives. Spouses or domestic partners who are listed as joint survivors will continue to receive pension benefits after the member’s death.
     
  10. Social Security and a pension are not enough.
    Social Security was designed to provide a minimum level of support (subsistence level). Like defined benefit pensions, Social Security also offers a secure income that cannot be outlived. Many fear changes are looming for Social Security and the retirement benefits the system will provide for younger generations. This makes the so-called “retirement stool” (employer pension, Social Security and individual savings) even more important for working age women.
     
    Closer to home: In addition to traditional savings accounts like individual retirement accounts (IRAs), there are a number of voluntary retirement savings programs which allow eligible employees to supplement anticipated retirement benefits by saving and investing through voluntary paycheck contributions. Public employees in Wisconsin can use the Wisconsin Deferred Compensation Program (WDC). With the WDC, employees design a retirement savings plan that is right for them.

Footnotes
1 Minority Women and Retirement Income, Women’s Institute for a Secure Retirement, 2008
2 The Wage Gap by State for Women Overall 2013, The National Women’s Law Center
3 Financial Steps for Caregivers: What You Need to Know About Protecting Your Money and Retirement, Women’s Institute for a Secure Retirement, 2014
4 Facts, National Education and Resource Center on Women and Retirement Planning
5 Minority Women and Retirement Income, Women’s Institute for a Secure Retirement, 2008
6 Women in the Labor Force: A Databook, U.S. Bureau of Labor Statistics, 2013
7 Gender Gap in Financial Literacy , Financial Finesse Reports, 2014
8 Shattering the Retirement Glass Ceiling, National Institute on Retirement Security, 2009

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Investment Returns:
How Will This Affect My WRS Account?

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The State of Wisconsin Investment Board has announced preliminary 2014 investment returns of 5.7% for the Core Trust Fund and 7.3% for the Variable Trust Fund. You may be wondering how this will affect your WRS retirement account. In general, positive investment returns mean a higher effective rate of interest for your Core and Variable (if applicable) account balance(s). Based on preliminary investment returns, the Department of Employee Trust Funds projects modest effective rate increases (see below) this year.

Core Fund Projections

Preliminary 2014 Net Investment Return

5.7%

Projected Effective Rate
(applied to employees’ account balances as of January 1, 2015)

Between 8.6% and 9.0%

Projected Annuity Adjustment
(applied to retirees’ monthly payments beginning May 1, 2015)

Between 2.8% and 3.2%


Variable Fund Projections

Preliminary 2014 Net Investment Return

7.3%

Projected Effective Rate
(applied to employees’ account balances as of January 1, 2015, if applicable)

Between 7.0% and 8.0%

Projected Annuity Adjustment
(applied to retirees’ monthly payments beginning May 1, 2015, if applicable)

Between 0.0% and 3.0%
By state law, Variable annuity adjustments will be paid if the adjustment rate is at least 2%. If it is less than 2% no adjustment is made.

Watch for the actual Core and Variable effective rate announcement on our website in mid-February – after final investment returns have been determined and an actuarial analysis is completed. This information will be shown on your annual Statement of Benefits, which you will receive in April.

For immediate notification about WRS effective rates and other benefit-related news, sign up for ETF E-mail Updates.

To learn more about how effective rates and annuity adjustments are calculated, watch for a webinar opportunity in March and April.

Check out Core and Variable investment returns, effective rates and annuity adjustments since 1986.

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SWIB Remains a Low-Cost Pension Fund Manager

The State of Wisconsin Investment Board’s decisions to increase internal and passive management, negotiate lower fees for external managers and invest in a mix of low-cost assets that produce favorable returns have added $171.5 million above market returns, after costs are subtracted, over the past year and $1.8 billion over the past five years to the Wisconsin Retirement System. These decisions also resulted in SWIB’s costs being $175 million less than its peers.

EVA Chart
SWIB's internal management of assets has added almost $1.8 billion above market returns to the WRS over the past five years.That is more than external management and private markets combined have added to the WRS.

Independent reports from Callan Associates, Inc., and CEM Benchmarking, Inc., found that SWIB, when compared to its peers, continues to be a low-cost pension fund manager that produces favorable results. SWIB’s management of the WRS provides a significant financial benefit to the retirement system and that its mix of investments, diversification and long-term investment strategy allow for favorable returns, according to the reports.

“At SWIB, we focus on three things – making money, managing risk and controlling cost,” SWIB Executive Director Michael Williamson said. “Every dollar we save in the cost of managing the WRS is just as important as a dollar we make in returns and these two firms report that we are doing well in both areas.”

CEM, an independent provider of objective and actionable benchmarking information for pension plans, found SWIB’s cost of management to be lower than its peers given a similar mix of assets. The lower costs are a result of decisions made by SWIB’s Board of Trustees to, when possible, use less expensive internal and passive management, and to allocate investments to less expensive asset classes.

At A Glance Graphic
SWIB manages more assets internally and passively than peers.

SWIB uses more internal and passive management and a lower-cost mix of assets than other large public pension funds, according to CEM. SWIB manages 54% of assets internally, compared to the peer average of 30%, and 38% of assets are managed passively, compared to the peer average of 23%. By using qualified staff to manage the assets of the WRS, SWIB lowers costs substantially while maintaining strong performance. Without qualified staff to manage the assets, SWIB would have to contract with expensive external managers to manage the retirement funds. In addition to savings from managing more assets internally, CEM found that SWIB pays less than its peers for the external management it does use. Taken together, these efforts resulted in SWIB paying $175 million less than comparable public pension systems in the United States in 2013.

In addition to being a low cost investor, SWIB’s mix of assets has performed well. Callan Associates, Inc., a firm that provides research, education, decision support and advice to institutional investors, found that SWIB’s investment strategy, when compared to its peers, has performed well and exceeded its benchmarks for the last five years.

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Investing in Wisconsin’s Brightest Businesses

Investing In Wisconsin Report Cover

When it comes to investing the funds of the Wisconsin Retirement System, the State of Wisconsin Investment Board takes a global approach, from investing in real estate in the United States to international stocks. But sometimes, the investment opportunities are right here at home, in Wisconsin.

SWIB has partnered with many Wisconsin businesses, from small, family-owned companies that have been passed on from one generation to the next, to billion-dollar global operations.

SWIB’s commitment to Wisconsin has been significant. SWIB has invested more than $17 billion in companies with some level of employment and operations in Wisconsin. In the last five years, new investments in state companies totaled more than $1 billion, with projections for new investments over the next five years to reach as much as $1.8 billion.

“SWIB continues to invest in Wisconsin businesses,” Chris Prestigiacomo, Wisconsin Private Debt Portfolio manager, says. “These investments have generated solid returns with acceptable levels of risk and that, in addition to supporting the state’s economy by helping businesses create jobs and thrive in Wisconsin, has benefitted the trust funds we manage, including the WRS.”

The economic impact goes beyond SWIB’s state-targeted investments. Approximately 75% of the more than $4.2 billion in annuities paid out in 2013 to WRS participants came from investment returns. With 86% of retirees remaining in Wisconsin, the economic impact is statewide.

SWIB’s impact goes beyond investing capital. Investments staff is active in Wisconsin venture capital and small business development. SWIB actively markets its debt financing portfolio to state companies, sponsors venture capital events, such as the Wisconsin Early Stage Symposium, and acts as a conduit for small businesses on financing options and available business support services.

Last year, SWIB helped the Wisconsin Legislature draft legislation that created Wisconsin’s first state-funded venture capital initiative, the Badger Fund of Funds. SWIB also helped to select the fund manager for the program.

Recognizing additional opportunities in the state, SWIB partnered with the Wisconsin Alumni Research Foundation on the creation of 4490 Ventures, a technology-focused, early stage venture capital fund helping startups in the region realize their full potential to become successful companies.

Every two years, SWIB publishes its Goals for Investing in Wisconsin report. This report to the governor and Legislature gives an overview of SWIB’s past Wisconsin investments and provides a five-year plan for making investments in the state.

To learn more about SWIB’s investments in Wisconsin and how those investments are making a positive impact, read the Goals for Investing in Wisconsin report on SWIB’s website.

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4490 Ventures Announces First Investments

4490 Ventures

4490 Ventures has made its first two investments. 4490 Ventures is the $30 million venture fund, created by the State of Wisconsin Investment Board and the Wisconsin Alumni Research Foundation focusing on seed and early stage investments primarily in Wisconsin information technology companies.

Last July, 4490 Ventures announced it had invested in Abodo, a Madison-based apartment rental website. The company was founded in 2012 by three University of Wisconsin-Madison graduates who wanted to make searching for an apartment easy. In addition to Madison, Abodo has apartment listings in 17 markets including Milwaukee, Minneapolis, Atlanta and St. Louis.

4490 Ventures’ second investment was made in another Madison-based company, EatStreet, an online and mobile food ordering service in more than 1,100 cities nationwide. SWIB also made a direct investment in EatStreet.

SWIB and WARF are working closely overseeing the development of 4490 Ventures. The partnership is providing support for the state’s emerging and established information technology businesses as well as attracting interest from venture capital investors from outside Wisconsin.

Last March, 4490 Ventures named Greg Robinson general partner. Robinson brings more than two decades of operating and venture capital experience to a fund that is in a unique position to not only access research and development opportunities out of the University of Wisconsin, but also access opportunities throughout the state by leveraging the strong network of relationships of entrepreneurs, key business leaders and investors.

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At A Glance

WRS Average Monthy Annuity by Years of Service

Will you have enough money to retire? This chart, a version of which appears on Page 99 of ETF’s 2013 Comprehensive Annual Financial Report, presents food for thought: It shows the average monthly pension for current WRS retirees, by years of service.

Let’s look at three sample groups:

  • For retirees who retired with 15-20 years of service, the average annuity is $1,116 per month.
  • For those with 25-30 years of service, the average is $2,264 per month.
  • And for those who with 30-35 years of service, the average is $2,872 per month.

Based on this information, will you need to supplement your pension with other sources of income? The Wisconsin Deferred Compensation Program is one way to grow your savings for retirement. Check out our video, WDC-Retirement Planning: An Action Plan.

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What's My Account Balance?

What is my WRS account balance? It’s a question that we hear often. Our first response: Do you have your most recent annual Statement of Benefits? Each year in April, the Department of Employee Trust Funds sends statements to all active employees. The statement provides individual information about your account as of the end of the prior calendar year. The information includes years of service, balances, interest applied, your beneficiary designation, etc. Your estimated future retirement benefit is also shown using a Money Purchase and a Formula retirement benefit calculation. We distribute your statement to you either via your employer or we mail it directly to your home address on file.

Don’t forget: Be sure your employer has your current home address on file. This will ensure your statement gets to you in a timely fashion.

At this time, ETF does not provide online access to individual account or benefits information. We’re working on a new online benefits administration system for members, but the project will take a couple of years to complete.

If you have questions about your account, send a secure email or call us toll-free at 1-877-533-5020 (in Madison dial 608-266-3285).

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Going Back to Work After Retirement

Are you thinking of going back to work for a Wisconsin Retirement System employer after retirement? Be sure to understand the laws involving your break-in-service period so that you don’t jeopardize your monthly annuity. When you can take a position covered by the WRS depends on when you last terminated WRS employment. Your “break-in-service” requirement begins the day you terminate employment or the day the Department of Employee Trust Funds receives your retirement application, whichever is later.

If you last terminated WRS employment on or after July 2, 2013, the earliest day you may return to WRS employment is the latest of the following dates:

  • The day after the effective date of your annuity.
  • The 76th day after you terminated your WRS participating employment.
  • The 76th day after ETF received your benefit application.

If you last terminated WRS employment before July 2, 2013, you have a different break in service requirement. It is as follows, whichever is latest:

  • The day after the effective date of your annuity.
  • The 31st day after you terminated your WRS-participating employment.
  • The 31st day after ETF received your benefit application.

However, do not focus only on the last day you will work. If you wait to submit your retirement application until after your last day of work, your break-in-service requirement begins the day after ETF receives your retirement application – not on the last day you work. If you return to work more than 75 days after your last day, but fewer than 75 days after ETF received your application, you will not have met your break-in-service – and you will have to pay back the annuity payments you received. 

Here are a few more key things to keep in mind:

  1. A new state law requires the termination of your monthly annuity if you are expected to work at least two-thirds of full-time. This law will only affect you if you last terminated WRS employment on or after July 1, 2013.
     
  2. If you expect to work less than two-thirds time but more than one-third time, you can chose between terminating your monthly annuity and electing coverage with the WRS, or continuing to receive your monthly annuity and electing to not be covered under the WRS.
     
  3. Once the break in service is established, you must complete the Rehired Annuitant Form (ET-2319) regardless of your decision to participate (or not participate) in the WRS.  Obtain the form from your employer.

To learn more about returning to work after retirement:

  • Sign up for one of our webinars on this topic.
  • Review our brochure, Information for Retirees (ET-4116); see the section titled, “Work After Retirement”.
  • Talk with a customer service representative toll free at 1-877-533-5020 or send us a secure email.

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ETF Seeks Individuals With Abandoned Accounts

In January of each year, the Department of Employee Trust Funds publishes a notice of individuals age 70 or older who have abandoned Wisconsin Retirement System accounts. Members or their heirs have 10 years after published notification to apply for the benefit.

In 2014 ETF located more than 45 individuals who had abandoned accounts. Find the current list of individuals with abandoned WRS accounts and their benefit application deadlines on our website.

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Know Your Benefits: ETF Webinars, Presentations and Group Appointments

Want to know more about your Wisconsin Retirement System benefits? If you are within five years of retirement, take in one of our benefit presentations. Or, no matter where you are on your retirement timeline, sign up for one of our live, interactive webinars.

Benefit Presentations
The Department of Employee Trust Funds offers two-hour, evening presentations designed for all WRS members – especially those who are within five years of retirement. Topics covered at each presentation include WRS annuity options, return-to-work rules, post-retirement annuity adjustments, the Core and Variable Trust Funds, the importance of keeping a beneficiary form up to date, purchasing service before retirement, the difference between a joint survivor and a beneficiary, and how “life event” changes affect WRS retirement benefits. Reservations are not needed. We just updated the Spring 2015 WRS presentation schedule; use our interactive map to find “face-to-face” presentations by region.

Group Retirement Appointments
Do you know about our group retirement appointments? If you are thinking about attending a WRS public presentation, you may also want to keep in mind that we offer group appointments throughout the state. Group appointments are designed for members within a year of retirement and have a retirement application/estimate. An ETF benefits specialist provides an explanation of the estimate, annuity options, application process and answers questions. Use our interactive map to find a group appointment scheduled in your area.

Webinars
Each 30-minute webinar is conducted online by an ETF benefits specialist and focuses on a single topic of interest. Monitor our webinar schedule on the Member Education web page. Better yet, sign up for ETF E-mail Updates to receive immediate notification of registration opportunities. Registration is free and fast – sign up with an email address.

ETF webinars over the next several months will cover these important topics:

  • WRS employer and employee contribution rates
  • Returning to work after retirement
  • Steps to retire
  • WRS benefits – a presentation specifically for new and mid-career employees (note: webinar runs 1 hour)
  • An overview of the WRS
  • Beneficiary designations
  • How to read and understand your WRS annual Statement of Benefits
  • WRS effective rates and annuity adjustments
  • Annuity options
  • Retirement benefit calculation methods
  • Life insurance after retirement
  • How to use our online calculator to estimate a retirement benefit

What participants are saying about ETF webinars:

"My participation in the webinar was a first for me, and I just want to compliment you on how easy it was to connect, follow along, and provide questions or requests. Excellent job!"

"Thanks for having these valuable webinars.  The professional but conversational style helped me to understand the presentation as easily as an "in office" meeting. Really appreciate that the presenter fully understands the subject. Wonderful job."

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Same-Sex Marriages Recognized

Women on balcony

On October 6, 2014, the U.S. Supreme Court denied review of the Wolf v. Walker case, in which the U.S. District Court for the Western District of Wisconsin and the Seventh Circuit Court of Appeals had ruled unconstitutional the provision in the Wisconsin Constitution (art. XIII, § 13) that recognizes only opposite-sex couples’ marriages. As a result, same-sex marriage is now legal and recognized in Wisconsin.

For Wisconsin Retirement System purposes, as of October 6, 2014, a same-sex spouse is treated the same as an opposite-sex spouse. This includes changes to health insurance eligibility, retirement options and death benefits.

The Department of Employee Trust Funds has developed a set of frequently asked questions about the effect on ETF-administered benefit programs to assist members.

Important note: Marriage and other life changes do not automatically affect or replace your beneficiary designation on file with ETF. After any life change, you should review and, if necessary, update your WRS Beneficiary Designation form (ET-2320). See your annual Statement of Benefits for the beneficiary on file with ETF.

If you need assistance with your beneficiary designation or have other questions, please contact us at 1-877-533-5020.

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What's My Minimum Retirement Age?

Deciding when to retire is a personal choice based on your individual finances, risk tolerance and other factors. It’s important to consider how your age at retirement may or may not affect your benefit.

For most Wisconsin Retirement System members, the earliest retirement age is 55. For those in protective occupations (e.g., police officer, firefighter), it’s 50. Among current WRS retirees, their average age at retirement was 59.6

First of all, it’s very important you know the difference between a Money Purchase and a Formula retirement benefit calculation. Your WRS benefit is automatically based on the higher of the two calculations.

A money purchase benefit is determined by your age and the amount of money in your account. A formula benefit is determined by four things: your final average earnings, years of service, a formula factor based on your employment category(ies) and any applicable age reduction factor if you are retiring before Normal Retirement Age.

Minimum Retirement Age (MRA):
Your MRA is the earliest age at which you can begin receiving a retirement annuity, providing you meet all other eligibility criteria. Keep in mind that your annuity could be reduced, based on your years of service and your age at retirement.

Normal Retirement Age (NRA):
Your NRA is the age when no age reduction factor will be applied to your formula benefit.

The MRAs and NRAs for each WRS employment category are as follows*:

Employment Category

Minimum Retirement Age

Normal Retirement Age

General employees and teachers

55

65

Elected officials and state executive retirement plan employees

55

62

Protective occupation employees

50

54

*Note:  There are exceptions. For example, Protective employees with 25 years or more of creditable service have a Normal Retirement Age of 53 instead of 54.

Here are some items for your to-do list:

  1. Learn about retirement benefit calculations
    a. Review brochure, Calculating Your Retirement Benefits (ET-4107).
    b. Attend a webinar or watch a video on this topic.
     
  2. Review your WRS annual Statement of Benefits, which includes a Money Purchase and a Formula retirement benefit calculation.
     
  3. Use the WRS Retirement Benefits Calculator.

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Board Meeting Schedules 2015

2015 WRS Governing Board Meetings
Did you know there are five boards associated with the Wisconsin Retirement System? The issues discussed and decisions made by these boards affect the benefit programs administered by the Department of Employee Trust Funds. The 2015 meeting schedule for these boards has been set, as indicated below. Meetings are open to the public. Agenda items are posted one week prior to each meeting. Review meeting dates, agendas, materials and learn more about the WRS governing boards.

ETF Board, Teachers Retirement Board, Wisconsin Retirement Board
April 2, June 25, September 24, December 10
Meetings held at the State Revenue Building, 2135 Rimrock Road, Madison

Group Insurance Board
March 25, May 19, August 25, November 17
Meetings held at the Lussier Family Heritage Center, 3101 Lake Farm Road, Madison

Deferred Compensation Board
March 12, June 16, November 3
Meetings held at the Department of Employee Trust Funds, 801 W. Badger Road, Madison

2015 SWIB Board of Trustee Meetings
State of Wisconsin Investment Board of Trustee meetings are set for 2015, as indicated below. All meetings are held in the Board Room at SWIB, 121 E. Wilson Street, Madison, unless otherwise stated. Agendas are posted the Monday before each meeting on SWIB’s website.

2015 SWIB Trustee meeting dates are as follows:

January 14
February 11
March 10-11
April 8
May – No Meeting
June 10
July – No Meeting
August 12
September 9
October 14-15
November 11
December 9

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Annual Report to be Published at Year-End

The State of Wisconsin Investment Board is transitioning from a fiscal year-end reporting period of June 30 to a calendar year-end reporting period for the Core and Variable Trust Funds.

The change in reporting date was determined in collaboration with the Department of Administration and the Department of Employee Trust Funds, due to standards issued by the Governmental Accounting Standards Board that relate to the accounting and financial reporting of pensions.

In order to transition to a calendar year-end reporting date, SWIB’s annual report as of and for the year ended December 31, 2014, will cover the 18-month period from July 1, 2013 to December 31, 2014. The report will be available in the summer of 2015.

SWIB’s report for the fiscal year ending June 30, 2013, along with an archive of past reports, is available on its website.  

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Last Revised: Friday, January 22, 2015
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