WRS News Online

Effective Rates of Interest Applied to Retirement Accounts

The Department of Employee Trust Funds announced the Wisconsin Retirement System effective rates and annuity adjustments in March. The effective (interest) rates are applied to active employees’ retirement account balances as of December 31 and the annuity adjustments affect retirees’ monthly payments, beginning May 1. The rates are based on WRS Core and Variable Trust Funds investment performance and are shown in the accompanying table.

 

Core Fund

Variable Fund

2014 Calendar Year Investment Return

5.7%

7.3%

Effective Rate
(applied to employees’ account balances)

8.7%

7.0%

Annuity Adjustment (applied to retirees’ monthly payments)

2.9%

2.0%

How do the effective rates affect me? All employees participate in the Core Trust Fund. Therefore, the Core portion of your WRS retirement account was credited with 8.7% interest. If you participate in the Variable Trust Fund, which is optional, that portion of your account was credited with 7.0% interest.

Your WRS annual Statement of Benefits shows exactly how interest and contributions affected your account balances(s) this year. For example:

  • Section 3 shows the interest earned on your employee required contributions;
  • If your account has additional contributions, Section 4 shows how much your balance has grown with interest;
  • Section 9 show the effects of interest on your Money Purchase balance(s).

How are the Core and Variable effective rates determined? The rates vary from year to year, depending on investment performance of the Core and Variable Trust Funds. After final investment returns for the previous calendar year are determined, ETF calculates the rates. After the ETF Secretary reviews and ultimately approves the rates, they are announced – typically in mid-February – and the work begins to update member accounts.

For More Information

  • Review our article, Review Your Statement of Benefits
  • Sign up for our webinar, WRS Effective Rates and Annuity Adjustments.
  • Review this table, which shows the relationship between trust fund investment returns and effective rates and annuity adjustments since 1986.