WRS News Online Vol. 5, No. 2 - May 2019
Upcoming Wellness Events in Madison
State participants in the Group Health Insurance Program: Get your free health screening on May 2, from 7:30 a.m. to 4:30 p.m., at Clarion Suites at the Alliant Energy Center or June 4, from 8:00 a.m. to 5:00 p.m., at the Monona Terrace Convention Center. For event details and to register, go to Staywell.com or call 1-800-821-6591.
Want to find out how to earn your $150 Well Wisconsin incentive? Attend the “Well Wisconsin 101” session on May 22, from 11:00 a.m. to 12:00 p.m., at the Hill Farms State Office Building. No registration required. Be sure to bring your smartphone, tablet or laptop for step-by-step support in creating an account and completing activities. Unable to make the May 22 event? Call the StayWell HelpLine for support at 1-800-821-6591.
Well Wisconsin Incentive
Complete the health screening, StayWell’s health assessment and a well-being activity with StayWell to earn your $150 Well Wisconsin incentive by October 11, 2019.
Please note: All incentives are considered taxable income. Your personal information is protected by law and will never be shared with any entity, including the Department of Employee Trust Funds and the Group Insurance Board.
Group Retirement Appointments Held Statewide
Did you know the Department of Employee Trust Funds offers group retirement appointments? These appointments are held statewide once a month and twice weekly in Madison, year-round.
In a group retirement appointment, an ETF benefits specialist presents the same topics covered in an individual appointment:
Overview of Wisconsin Retirement System benefits and benefit calculations
Step-by-step explanation of the retirement estimate
Review of annuity payment options and the retirement process
You’ll come away with the information you need to make informed decisions about retirement – and the bonus of learning from other members’ questions. Be sure to bring your retirement estimate to reference during the presentation. No individual or personal information is shared with the group.
Since ETF can accommodate more members in a group appointment, you can usually attend one within 1-3 weeks. (Note: For an individual appointment in Madison, it may take up to 6 weeks.)
It’s easy to schedule a group appointment. See the group appointments schedule in your area and contact us to reserve a seat.
Here’s what some members have told us about the experience:
“Everything was very specifically covered and additional questions provided answers to whatever individuals wanted to know. Very thorough, detailed presentation.”
“Everything was fantastic! I was in the dark on a lot of this stuff and now feel more comfortable.”
“I learned things I didn't pick up when reading all of the information.”
“Great presentation with an easily understood speaker. Good pace. Very understanding of any type of question.”
“All desired topics covered. Excellent presenter and extremely knowledgeable.”
Put Medical Bills on a Payment Plan
Unexpected medical bill?
No need to stress. Just like a regular monthly car payment, break up large, unexpected medical bills with a commonly used health payment plan, interest free! Setting up a payment plan is easy; you can even use your Health Savings Account to make monthly payments.
View this informational video to learn more.
Know Your Benefits: Annual Statement of Benefits
Take a few minutes to review your Wisconsin Retirement System annual Statement of Benefits. This important document is a summary of your year-end retirement account information. Keep your statement with your important paperwork.
Here are some essential things to know and do:
Check your 2018 earnings and years of creditable service for accuracy. Contact your employer if you have concerns about reporting errors. Contact ETF for other questions.
See how much your employee required and employer required balances have grown, with contributions and the effective rate of interest, Core and Variable (if you participate). These rates, which are based on investment performance of the WRS trust funds, have been applied to your retirement account.
Check Section 4 for additional contributions you may have made. If you add money to your WRS retirement account, these deposits receive the effective rate of interest. Additional contributions are a great way to supplement your retirement income.
See Section 5 and confirm that your beneficiary designation is accurate. Life events like divorce, marriage, and birth of a child do not automatically change your beneficiary on file with ETF. Do you need to update your beneficiary designation? Complete the Beneficiary Designation form (ET-2320) and send to ETF.
Check your contact information. Is it current? To ensure that you continue to receive important, time-sensitive notifications about your WRS account, keep your mailing address, email and telephone number up to date with your employer. Inactive employees and alternate payees: complete and send to ETF an Address/Name Change (ET-2815).
This is a good time to assess your financial plan. How can you supplement your future retirement income?
For More Information
Sign up for a webinar in May:
Understanding Your Annual WRS Statement of Benefits
WRS Annuity Adjustments and Effective Rates
By Tarna Hunter, ETF Government Relations Director
In February Gov. Evers released the 2019-2021 executive state budget, a proposal for how the state should manage expenses for the next two years. The budget is introduced as separate—yet identical—legislation (bills) in the Senate and the Assembly. 2019 Assembly Bill 56 and 2019 Senate Bill 59 are currently before the Joint Committee on Finance. The JCF has spent the last few months reviewing the proposed budget and will continue to review and make changes over the next few weeks.
After JCF makes its recommended changes, the budget goes to the assembly and the senate for further review and, ultimately, back to the governor for signature. The governor can also veto the bill in whole or in part.
The proposed budget currently contains a few changes that affect the benefit programs administered by the Department of Employee Trust Funds. The budget:
Modifies Wisconsin Retirement System return to work laws for teachers, providing that school districts may rehire an annuitant teacher if: (a) at least 30 days have passed since the teacher left employment with a district; (b) at the time of retirement, the teacher does not have an agreement with any school district to return to employment; and (c) upon returning to work, the teacher elects to not become a participating employee and to continue receiving his or her annuity.
Allows state employees that declined coverage under the group health insurance program during the 2015 plan year to receive the $2,000 annual incentive, if they elected coverage under the program in a subsequent plan year and meet all other eligibility criteria.
In addition to the above provisions, the budget mandates a few reports relating to health insurance and retirement benefits.
Other Legislative Proposals
2019 Senate Bill 5 and 2019 Assembly Bill 5 classify county jailers as Protective category participants under the WRS without a requirement that their principal duties involve active law enforcement. The bills would require county jailers who are currently employed by a county that does not classify county jailers as Protective participants and who become Protective participants under this bill to pay the employer share on the higher WRS contribution, as well as the duty disability premium, which is currently an employer cost. The proposed legislation also provides that county employers who currently classify their jailers as Protective category participants can continue to pay the employer cost for current and future employees.
2019 Senate Bill 149 allows an annuitant who was a law enforcement officer or firefighter to return to work with a WRS employer and elect to not participate in the WRS and instead continue to receive his or her annuity.
2019 Senate Bill 154 allows WRS participants, who worked at the Department of Corrections for at least five years and who terminate on or after the effective date of the bill to receive military service credits for any military service. Current law requires that the service must have been performed prior to 1974.
For More Information
Simplify Your Savings with the WDC
Wisconsin Deferred Compensation Program participants: Did you know you can “roll in” (consolidate) non-WRS retirement savings from other qualified plans into your WDC account? Doing so now may make a lot of sense for your future retired self. Besides the potential for lower fees, consolidating funds into the WDC can help reduce paperwork and provide you with a more complete view of your retirement savings and projected retirement income.
But perhaps you already knew all of this – that’s because last fall the WDC sent personalized emails to newly-enrolled WDC participants, touting the benefits of rolling retirement savings into the WDC. ETF is pleased to announce that this educational campaign was so successful that it garnered a special marketing award from Pension & Investments Magazine.
If you’re interested in rolling over your other assets to the WDC, you can:
Call the WDC’s record keeper at 888-737-3380 and say “yes” when asked about consolidation*, or
Log in to your WDC account and select My Accounts. Next, select an account from the list, then scroll down to Plan Information and click on Consolidate accounts.
* Process will take about 30 minutes to complete over the telephone.
Next up: Watch for an opportunity to try the My Total Retirement program free for 90 days. With My Total Retirement, experienced investment professionals create a personalized retirement strategy and monitor and manage your account.
For More Information
- WDC Money Talks participant newsletter
Tips for Easiest Access to ETF Customer Services
The Department of Employee Trust Funds strives to ensure that you have access to the information you need to make informed decisions about your Wisconsin Retirement System benefits. We highly recommend starting with all of the convenient and easily-accessible information and resources on our website, including forms and brochures, frequently asked questions, eLearnings and webinars.
We also recognize there are times when you need to speak with a benefits specialist in our Customer Service Call Center. Due to a high volume of calls, our phone lines have been very busy. Here are some tips that may help you obtain the service you need:
Plan your calls. We experience peak call volumes on Mondays; on the first two business days of each month; and after 4:00 p.m. each day. We suggest calling on other days or at other times, if possible.
Be prepared to wait on hold. This is a peak time of year for phone calls to ETF; therefore, wait times on the phone may be lengthy.
Send us a secure email via the “Contact ETF” page. We monitor this inbox daily and can respond to your inquiry quickly.
Contact us as early as possible if you need to request a form. Go to the Publications page, which has a list of our top downloaded forms, and forms in alphabetical order/by topic.
Investing for the Long Term
We live in a world where we expect instant results. Smart phones and watches buzz with the latest news headlines, sports scores and text messages from family and friends. Information is available at our fingertips any time of the day. Even when it comes to personal investments, it can be as easy as a couple of clicks on the computer to make an investment. The focus always seems to be on the short term. For an institutional investor like the State of Wisconsin Investment Board, however, there is a balance between short-term and long-term investment results.
Short-term results are important because of the unique shared risk-reward design of the Wisconsin Retirement System. Yearly investment returns have a direct impact on contribution rates for active participants and annuity adjustments for retirees. SWIB must also take a long-term approach to investments to grow and protect the WRS so that it is able to meet its promised obligations both now and in the future.
To balance the short-term and long-term needs of the WRS, SWIB has implemented a robust and sophisticated investment strategy. That strategy includes a diverse asset allocation for the Core Trust Fund that is designed to meet the challenges of the current financial market while also helping keep the WRS among the only fully funded public pension plans in the country.
“It really is a balancing act,” David Villa, SWIB executive director/chief investment officer, said. “Our plan design and our funding status drive our asset allocation for the WRS. That is why our strategy differs from a plan that is underfunded and whose participants are guaranteed annuity increases.”
Funds that are underfunded typically have greater allocations to U.S. stocks and private equity, which perform well during a bull market but are riskier assets to hold during bear markets. In addition to stocks and private equity, the Core Fund holds diversified investments in public fixed income, inflation sensitive, real estate and multi-asset portfolios.
“The asset allocation targets for the Core Fund strive to produce returns that keep contribution rates stable and affordable, keep annuity adjustments stable, and maintain a fully funded system,” Villa said.
How does SWIB’s investment staff determine the best asset allocation to meet the goals of the Core Fund? Every year, as part of the process in developing the Core Fund’s asset allocation, SWIB and its asset allocation consultant discuss what is referred to as a “Goldilocks Zone”. This is an allocation that is neither “too hot” nor “too cold” in terms of risk and expected returns, but appropriate for the Core Fund. SWIB and the WRS consulting actuaries stress test the system against numerous return assumptions. Together, they take an in-depth look at the plan’s liabilities and the range of risk and returns that is appropriate for SWIB’s asset allocation.
Maintaining a disciplined long-term asset allocation also allows SWIB to take advantage of market swings by purchasing assets after a large decline, as was the case with equities last December. Short term, SWIB’s investment performance over the past five years has contributed to continued stable contribution rates for both employers and active employees and provided four years of positive Core Fund annuity adjustments for retirees. Long term, SWIB’s 10-year return (gross of fees) was 8.8% as of December 31, 2018 and well in excess of the plan’s assumed rate, which was recently lowered from 7.2% to 7.0%.
In this same five-year period, the investment earnings, combined with SWIB’s cost optimization strategies and internal asset management, have generated $224.5 million in added value above benchmark returns after all costs for the Core Fund.
Why Are You in Public Service?
Public Service Recognition Week May 5-11. We have been celebrating since 1985, honoring public employees who serve our nation in federal, state, county and local government capacities. Check out ETF’s Twitter profile to see how we’re recognizing your fellow WRS public employees. #PRSW2019
Wellness Webinars Set
Well Wisconsin is offering two practical webinars to help you take steps to improve your health and wellness this spring and summer.
May 8: Practicing Self-Compassion. Review what it means to be self-compassionate and how it can help you obtain your goals. 12:00 – 12:30 p.m. Register for this webinar.
August 14: Understanding Diabetes. What is this chronic disease that affects 30 million people in the U.S.? 12:00 – 12:30 p.m. Register for this webinar.
All wellness webinars are recorded and available in the archived section of your StayWell wellness portal.
SWIB Investment Report is Available
The 2019 Goals, Strategies & Performance is a statutory report that provides the legislature with information about investment strategies employed during the previous calendar year, how well investments performed, and the goals and strategies for the coming year.
You can access current and archived SWIB publications and materials online. Along with open meeting materials for Board of Trustee meetings, other publications include the 2017 Retirement Funds Annual Report, the Schedule of Investments, and statutory reports like Goals for Investing in Wisconsin.
Video Explains WRS Annuity Options
Choosing which WRS annuity option to pick is not easy. There are “for annuitant’s life only” options to consider and several that provide for joint survivors and beneficiaries. Not to mention accelerated payments options and choices to make about how to take your additional contributions. Take a few minutes to watch the WRS Annuity Payment Options video — it will help you decide which option is best for you.
Before You Retire: Update Your WAMS Account
Most employees set up their WAMS account using work email addresses. When you retire, your work email becomes invalid; therefore, you won’t be able to access benefits associated with your WAMS account, such as health insurance.
Portfolio Manager Celebrates 20 Years of Giving Back
Educators can have a big impact on a person’s life. From an early age they teach and guide their students, putting them on a path to success. For Dean Martin, it was the impact educators had on his life that led him to SWIB 20 years ago.
“Over the years, many teachers, principals and guidance counselors helped me to get to where I am today,” said Martin, equities portfolio manager for SWIB’s Consumer Discretionary Team. “I wanted to give back to people who dedicated their careers to serving others.”
Because of the impact those educators had on him, helping others and a commitment to public service have always been a large part of Martin’s life. After a five-year career in the military, Martin was looking to apply his background in business to give back to the community. He joined SWIB as a quantitative analyst, helping calculate performance and asset and risk allocation. A year later, he was given the opportunity to join the Public Equities Division.
“I am fortunate to be in the position I am, which is to be able to work every day with really talented people at SWIB to help provide an important benefit not only for teachers, but all public employees,” Martin said.
Martin has seen a lot of changes over the past 20 years. When he joined SWIB, there was roughly $35 billion in assets under management and a total of 65 staff. Today, SWIB manages $110 billion in assets and has more than 175 employees.
New strategies and technology have also influenced the way investments are made and SWIB does business. Despite all the changes over the past two decades, one thing that has always been a constant is his commitment to SWIB’s mission.
“Change is constant and part of this industry,” Martin said. “But despite all the change, SWIB remains focused on doing the best we can to help protect and grow the Wisconsin Retirement System.”
Martin says he is looking forward to continuing to work on behalf of the more than 632,000 members of the WRS who have served the people of Wisconsin.
Valentine Named Chief Technology And Operations Officer
Julia Valentine has been chosen as SWIB’s new chief technology and operations officer. Valentine, who will report to Executive Director/Chief Investment Officer David Villa, started in her new role at SWIB in April. As CTOO, Valentine is responsible for overseeing SWIB’s operational processes and technology infrastructure.
Valentine will also be part of SWIB’s Management Council, which advises Villa in connection with leading SWIB. The council consists of Rochelle Klaskin, deputy executive director/chief administrative officer; Mike Jacobs, agency business director; and one person representing investments for a rotating six-month term, which is currently Todd Ludgate, who is managing director of fixed income.
“I am excited to join the talented group of people at SWIB who work every day on behalf of the participants of the WRS,” said Valentine. “I look forward to being able to contribute my skills and experience to a mission-driven agency.”
Valentine is a technology services leader and business operations executive with more than 20 years of experience at top-tier financial firms including JP Morgan Investment Services, Investment Management Office of Chanel, Inc., Newport Coast Consulting, and D.E. Shaw & Co. She has a broad base of experience in technology and finance including the areas of governance, strategy, information technology and operations, and change management. Valentine also has experience with investments across all types of asset classes.
“Julia brings valuable skills and expertise to SWIB and its leadership team,” Villa said. “She has diverse and deep investment management industry experience that will help SWIB continue to move forward and build its internal infrastructure to support our investment strategy.”
Valentine earned her MBA from Columbia University and her bachelor’s degree in economics and finance from New York University Stern School of Business. While at NYU she received the Jacob Marschak Memorial Award for Excellence in Quantitative Analysis/Econometrics.
Two New Trustees Join Board; Conlin Reappointed
Joel Brennan, secretary of the Department of Administration, Department of Employee Trust Funds Secretary Robert Conlin, and David Schalow have been appointed to serve on the SWIB Board of Trustees. Secretary Brennan replaces former DOA Secretary Ellen Nowak on the Board. Secretary Conlin was re-appointed by the Wisconsin Retirement Board and will serve his second term. Schalow was appointed by the Teachers Retirement Board. Schalow replaces Sandra Claflin-Chalton, whose term had expired.
The DOA secretary and a representative of the Teachers Retirement Board and the Wisconsin Retirement Board are three of nine members of SWIB’s Board of Trustees. The remaining seats on SWIB’s board consist of six public members who are appointed by the governor, five of which require 10 years of financial or investment experience.
Brennan brings 25 years of experience in and around public policy in Wisconsin. Before becoming DOA secretary, Brennan served as president and chief executive officer of Discovery World, Wisconsin’s premier science and technology center, and served as the head of Milwaukee’s Redevelopment Authority, where he directed real estate development and large impact economic development projects. Brennan also served as vice president of development and government affairs for the Greater Milwaukee Convention & Visitors Bureau (now Visit Milwaukee), working to attract businesses and visitors to greater Milwaukee and mobilizing the tourism community, industry partners, and area residents. Early in his career he also worked in government relations at Miller Brewing Company.
Brennan earned a bachelor’s degree in English from Marquette University. He was selected as a Harris Fellow at the University of Chicago and earned a master’s degree in public policy from the University of Chicago’s Harris School of Public Policy.
Conlin, with more than 25 years of public service, has been ETF Secretary since 2012. Prior to joining ETF, Conlin was senior staff attorney with the Wisconsin Legislative Council. Conlin has a law degree from the University of Wisconsin-Madison and a bachelor’s degree from St. John’s University.
Schalow is a professor of business at the University of Wisconsin-Stevens Point. He has more than 30 years of university-level teaching, including 15 years in the University of Wisconsin System. Prior to his current position, he was an emeritus professor of finance in the California State University System; he also taught at the University of Wisconsin-Green Bay, St. Cloud State University, and Pittsburg State University. He is a former real estate broker and owned his own real estate and mortgage brokerage in California.
Schalow has had work published in numerous professional journals, including the Journal of Portfolio Management, and is the author of a real estate text book. He earned his bachelor’s degree in marketing and finance, and his MBA in risk management and insurance from the University of Wisconsin-Madison. He earned his PhD in finance with minors in economics and management from the University of Arkansas. In addition, Schalow has earned his Chartered Life Underwriter, Chartered Financial Consultant, Chartered Financial Analyst, Certified Financial Planner, Certified Residential Specialist, and Graduate Real Estate Institute professional designations.
For more information about SWIB’s Board of Trustees, visit http://www.swib.state.wi.us.
Governing Board Updates
Last fall the Department of Employee Trust Funds announced nominations were open to run for active employee seats on the Employee Trust Funds Board and the Teachers Retirement Board. The following individuals were recently appointed to the boards:
ETF Board – Educational Support Personnel Member
Leilani Paul, Fox Valley Technical College
Teachers Retirement Board – Active Teacher Member
Adam T. Balz, Tomah Area School District
Brent M. Grochowski, Burlington Area School District
Allison C. Pratt, School Districct of Onalaska
Teachers Retirement Board – Milwaukee Public School District Teacher Member
Upcoming Board Meetings
WRS Governing Boards
The next Group Insurance Board meeting is scheduled for May 15. The ETF Board, Teachers Retirement Board and Wisconsin Retirement Board will next meet on June 20. Find the board meeting agendas and materials here.
The SWIB Board of Trustees will next meet on June 11-12 at SWIB’s office building at 121 E. Wilson Street, Madison. Find the meeting agendas and materials here.
Impact of Former Variable Fund Participation on Your WRS Account
Were you previously in the Variable Trust Fund? If so, your Wisconsin Retirement System account has either a “residual Variable excess” or a “residual Variable deficiency”. This is the difference between your current account balance and what your balance would be if you had never participated in the Variable Fund.
Review Section 8 of your WRS Annual Statement of Benefits. Although you are no longer in the Variable Fund, your residual excess or residual deficiency is credited each year with the Core effective rate of interest until you take a WRS benefit.
Important note: Your variable excess or deficiency is only used to increase or decrease your Formula benefit calculation. The excess or deficiency doesn’t apply to your Money Purchase benefit calculation because past Variable investment returns are already reflected in your account balances.
Therefore, while you are working:
The more years until you retire, the more your Variable excess or deficiency will change (due to interest crediting being applied).
If you have a residual Variable excess, it will increase each year by the Core effective rate of interest. Likewise, if you have a residual Variable deficiency, this deficiency will grow to a larger negative number each time the Core effective rate of interest is applied.
The only way a residual Variable excess or deficiency can decrease is if there were a negative Core effective interest rate. This has never happened, but it is possible if there are significant Core Trust Fund investment losses.
For More Information: