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WRS News Online Vol.1, No. 2 - May 2015

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Review Your Statement of Benefits

Generic image of Statement of BenefitsThe Wisconsin Retirement System annual Statement of Benefits was recently distributed to members. Your statement provides a summary of year-end retirement account information, including balances.

Most state employees receive statements at their home addresses, but many members still receive their statements directly from their employers. University of Wisconsin employees can access their statements through their UW online accounts.

This is a good time to think about your retirement dreams and to talk with your financial advisor about strategies for building a secure retirement. As an active WRS employee, you can grow your WRS retirement benefit by making additional contributions. You also may be eligible to participate in the Wisconsin Deferred Compensation Program or a similar program offered by your employer, or you may be eligible to buy creditable service.

Here are some tips for reviewing your statement:

  1. Review your 2014 earnings and years of creditable service in the first two sections. Are these numbers correct? Contact your employer with concerns about information that may have been reported incorrectly. Contact ETF for other questions.
  2. Section 3 shows your employee required contributions.
    • Note how much you contributed and how much your account balances change with the effective rate of interest. These rates vary from year to year, depending on investment returns.
    • Did you know your employee required contributions balance is matched by your employer? Contributions paid by you and your employer (plus applicable effective rate interest) constitute your Money Purchase Balance. (See Section 9)
    • When you retire, we will calculate your benefit estimate using both the formula calculation and the money purchase calculation. Your retirement benefit will be the higher of these two calculations, as explained in Section 10.
  3. Confirm your beneficiary designation is accurate. Remember, life events like divorce, marriage, and birth of a child do not automatically change your beneficiary on file with ETF. Find the WRS Beneficiary Designation form (ET-2320) on our website; we offer a fillable Word document and a pdf document. Print the form and submit it to ETF.

To learn more about how to read and understand your WRS annual Statement of Benefits, visit our Member Education webpage for webinars and an e-learning presentation on this topic.

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Proposed Health Insurance Program Changes

The Department of Employee Trust Funds and the Group Insurance Board have been working with a consultant to identify ways to improve health outcomes and increase the efficient delivery of quality health care for members and their families in the state' group health insurance program. Final recommendations for program changes for 2016 will be presented to the board for approval on May 19. Meeting agenda and materials will be available online about a week prior to the meeting.

Background
After the state legislature expanded the GIB’s authority in 2013 to provide additional oversight and strategic direction for the health insurance program, the board hired a benefits consultant to conduct research and analysis.
  
In a presentation to the GIB in March, the consultant offered initial observations for program changes. Here are some of the proposed changes for 2016:

  • Change office visits from coinsurance to a copay arrangement
  • Keep generic drugs affordable ($5 copay) and shift to coinsurance for brand drugs:
      • Level 2—20% copay ($50 maximum)
      • Level 3—40% copay ($150 maximum)
      • Level 4 Preferred—$50 copay
      • Level 4 Non-Preferred—40% copay ($200 maximum)
  • Introduce a deductible and increase the maximum out of pocket for Uniform Benefits
  • Increase the deductible and maximum out of pocket for the Standard Plan
  • Continue to self-insure the Standard Plan and State Maintenance Plan, as well as pharmacy and dental benefits
  • Consider switching from single and family only to a 4-tier structure
  • Increase the health savings account contribution for the high deductible health plan
  • Investigate premium-based incentives for participation in the Well Wisconsin Program
  • Establish uniform metrics to measure health plan performance

The full report is also available.

To stay current on health insurance and other Wisconsin Retirement System benefit news, sign up for our free e-mail notification service, ETF E-mail Updates.

For more information about the 2015-2017 executive budget proposals affecting the group health insurance program, see legislative update.

And now: Follow ETF on Twitter!

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WRS Among the Best: SWIB Works to Reduce Risk, Protect Against Market Downturns

Michael Williamson
Michael Williamson

by Michael Williamson, SWIB Executive Director

Across the country, headlines scream of looming public pension problems for many cities and states. From plans to reduce retiree benefits to significant increases in employee contributions, many public pension funds are struggling to meet their obligations, leaving lawmakers scrambling to find money in state budgets to fix the problem and money managers making risky investments in hopes of big returns.

In Wisconsin, things are a bit different. We can celebrate that the Wisconsin Retirement System is one of the best-funded public pension plans in the U.S., thanks to the contributions made by employees and employers, and solid investment returns.

Did you know that over the last 20 years the Core Fund has a return of 8.6% and the Variable Fund has a return of 8.8%? Those are significant numbers — not only because they are well above the system’s 7.2% assumed rate of return, but also because approximately 80% of the WRS’s income comes from investment returns. Just as significant as the consistent long-term performance is that we are able to generate those returns while reducing risk and protecting the system from market downturns.

Because only about 50% of the Core Fund is invested in stocks — with 25% of that amount in U.S. stocks — some might argue that we are missing an opportunity to generate even higher returns. While our returns did not mirror the U.S. stock markets in 2014, we were still able to generate a solid return because other assets performed well. We saw strong performance from our real estate, private equity and multi-asset investments. Real estate returned 14%, private equity returned 15.5% and our multi-asset portfolio returned 7%. All of those portfolios were well above their benchmarks.

The Core Fund is a fully-diversified fund, meaning it includes investments in more than just U.S. stocks. Because 85% of our investment risk comes from the stock market, over the past several years we have implemented an investment strategy designed to reduce the risk of investing in stocks and increase allocation to lower-risk assets. In other words, we have designed an investment strategy that allows us to achieve solid returns and help keep the WRS fully funded, while helping to reduce market downturns that could have a negative effect on you in terms of a reduction in annuity payments or higher contribution rates for employees and employers.

How does having a diversified fund help protect all members of the WRS? Many members compare SWIB’s Core Fund to market indexes such as the S&P 500. Since 2000, there have been four years where the Core Fund has produced negative returns, due in large part to severe market downturns. However, during these times when stocks were struggling, the Core Fund’s diversification has helped it generate higher returns than the S&P 500. Although we will not see the “highest of the highs” when the markets are performing well, we can all appreciate the diversification and protection that comes with our investment strategy when the markets are struggling.

And — maybe most important — SWIB’s investment of WRS assets directly affects the bottom line of the WRS trust funds. Over the past five years, reducing costs, increasing internal money management, negotiating lower fees and investing in low-cost assets — combined with the performance of investment strategies — have resulted in more than $1.4 billion in extra value added to the WRS above market returns, after costs.

Our work to keep the WRS among the best public pension systems in the country is never done. Our staff will continue to work to implement strategies that keep us agile, integrated and innovative in the way we effectively manage risk, control costs and achieve target returns over the long-term. And you can take that to the bank.

Year

Core Fund Return

S&P 500 Return

2000

-0.8%

-9.1%

2001

-2.3%

-11.9%

2002

-8.8%

-22.1%

2008

-26.2%

-37.0%

Diversification allows for solid investment returns and protection during downturns in U.S. stocks. This chart shows the Core Fund has performed better than the S&P 500 during the last four market downturns.

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A Woman’s Road to Retirement: Why It’s Different

Empower Logo The EMPOWER campaign launched in April with a keynote presentation by Lara Hinz, executive director of the Women’s Institute for a Secure Retirement. “The biggest risk for women is that they will outlive their savings and they will not know that until it’s too late,” Hinz told the capacity crowd.

Sponsored by the Department of Employee Trust Funds, the Wisconsin Deferred Compensation Program, and state agency Affirmative Action Committees, EMPOWER is a year-long, statewide educational campaign to inspire and encourage women to save for their retirement.

You’re invited: “A Woman’s Road to Retirement: Why It’s Different”
Hinz will repeat her presentation in a free forum on Wednesday, May 6, 2015 from 11:00 a.m. to 12 noon at Department of Health Services, Conference Room 751, 1 West Wilson Street, in Madison. You can participate via live webcast or attend in person. This link to the webcast will go live at the time of the event. Webcast technical viewing information here.

Why is EMPOWER important?
Women are at the epicenter of the nation's retirement crisis. Recent studies, such as the U.S. Department of Labor analysis, Disparities for Women and Minorities in Retirement Savings, and the MetLife Mature Market Institute study of Women, Retirement, and the Extra-Long Life, show that women are considerably less prepared for retirement than men.

Why do women fare so much worse in retirement? Anna Rappaport, an internationally- recognized expert on the effect of change on retirement systems and workforce issues, cites the following differences between men and women as contributing factors:

  • Longer life spans. At age 65, women are expected to live an average of 20 more years and men an average of 18 more years. Women are also expected to have longer periods of disability in old age.
  • Shorter work histories. Women work an average of 12 years less over their lifetimes, largely due to caregiving responsibilities.
  • Women are likely to spend their last years alone. After age 85, only 13% of women are married with a spouse present.
  • Women earn less. Their earnings are 77% of men’s earnings on average.
  • When men lose spouses they are likely to remarry, but women are much less likely to remarry. Men often marry younger spouses, leading to long periods of widowhood for women.
  • Rates of divorce have increased and are expected to increase.

Participating in a defined benefit plan that can provide a lifetime benefit, as does the Wisconsin Retirement System, reduces the likelihood that a woman will end up in poverty after retirement. However, your WRS annuity is intended to be just one component of your retirement savings plan.

“Get to know your sources of income – Social Security, other savings and investment accounts, etc.,” Hinz urges. “Ask yourself, ‘what do I AND my spouse or partner have and where are these resources located?”

Visit ETF’s EMPOWER website now and throughout the year. You’ll find resources to learn more about saving for retirement, including videos, brochures, calculators, checklists, worksheets and research articles from state and national organizations.

And now: Follow ETF on Twitter!

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Outreach and Education: Pep Rallies Optional!

by Janet StutzCleven and Steve Norris, ETF Benefit Specialists

Janet Stutz Cleven
Janet StutzCleven

In 2014, Department of Employee Trust Funds benefit specialists travelled more than 38,000 miles across the state. Our travels take us from Ashland to Kenosha, and everywhere in between. To put that into perspective:

  • President Obama logged 38,000 miles on Air Force One in 2014.
  • If you were to travel around the world, that would be just 24,901 miles.
  • With nine benefit specialists on the road, that works out to an average of 4,222 miles per individual each year.

We deliver Wisconsin Retirement System benefits-related information through presentations, informational booths at benefit fairs and via small group retirement appointments. Members can also take in live webinars.

In 2014, specialists conducted 87 presentations, staffed booths at 44 benefit fairs, and conducted185 small group appointments. All told, we met with more than 14,000 WRS members in 46 different cities!

We also began presenting live webinars on a full-time basis last year, providing even more opportunities to interact with members. In 2014, we conducted 156 webinars covering 17 topics ranging from how additional contributions can enhance your WRS retirement benefit to WRS annuity options. Nearly 7,000 people participated and we hope to reach even more members in 2015.

Steve Norris
Steve Norris

What, no treats?
Members often tell us how much they appreciate our presentations and services, although we do get chided for not providing coffee or donuts. We are happy to fulfill our mission – to provide accurate information about your WRS benefits, regardless of where you live or work. We also know to expect the unexpected. No two events are ever the same. Here are some examples:

  • When locations changed at the last minute and there was a scramble to get attendees to the right spot.
  • When we are in front of an audience of hundreds of people, the microphone is malfunctioning and the technology staff person isn't immediately available.
  • When one of us walked into the presentation room and realized it was a science lab, complete with hard metal stools and a cadaver.
  • When one of us walked into a large auditorium and realized there was a pep rally happening at the same time on the other side of the curtain.

In the end, we are all about providing information so you make well-informed decisions. Our treat. Use our interactive map to find out when one of us will be in your area.

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Protecting Investment Data

Man on Computer Image SWIB Works to Fend Off Cyber Attacks
The Home Depot, JPMorgan Chase, and Target are just a few companies that have been hit by cyber attacks in the past year. By infiltrating some of the largest companies in the world, cyber attackers have been able to access highly-confidential information such as passwords, Social Security numbers and individual account information.

Dealing with the fallout from a successful cyber attack can cost a company millions of dollars and individuals years of worry that their personal information may still be in the hands of criminals. Improved technology in the hands of cyber criminals and the increase of business conducted online have forced many companies and organizations, like the State of Wisconsin Investment Board, to work hard to fend off possible attacks.

“We use industry-leading tactics to secure our networks and data, engage external security experts to test our defenses and regularly review our activities to ensure that we do not have any risks that haven’t been dealt with,” Erich Huemoeller, SWIB’s information technology director, said.

The business of managing more than $104 billion in assets creates sensitive data that is shared not only internally between SWIB staff, but also externally with portfolio managers and other financial institutions. In addition, SWIB has personal data for its employees that must be protected. Huemoeller said building a strong line of defense against would be cyber attackers has always been a top concern for SWIB. He added that SWIB’s information technology team not only needs to be on the lookout for possible cyber attacks today, but must also be flexible to adapt to changing technologies that could be used in future attacks.

“We regularly monitor industry and internet security bodies for threats and, if necessary, adjust our practices, security tools or other methods to meet emerging threats,” Huemoeller said.

SWIB also keeps close watch on how the companies it invests in are dealing with cyber security. SWIB’s corporate governance team actively tracks potential regulations on cyber security to evaluate a firms’ security breach risk mitigation procedures – both current and future.

SWIB Corporate Governance Director TerriJo Saarela says SWIB is proactive in ensuring its investments are protected by working directly with companies. “SWIB’s corporate governance team engages companies regarding their approach to managing oversight of cyber security,” Saarela said. “We have also partnered with other funds to address cyber security concerns with companies that have breached rules put in place by the Securities and Exchange Commission and the federal government.”

Because it anticipates an increased number of shareholder cyber security proposals in the coming years, SWIB’s corporate governance team has developed a new proxy voting guideline that ensures WRS investments are protected. The guideline says SWIB may support cyber security proposals that request greater disclosure of a company’s policies, potential risks and oversight.
 
“It is important to fully understand how these companies are dealing with the possible threats,” Saarela said.

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Ready to Retire: What Do I Do Next?

Woman in blue sweaterCongratulations! Deciding to retire may be the hardest part of the entire process. ETF can help you master the next steps so that you make decisions that are right for you.

Here are 4 things for your to-do list:

  1. If you are 6-12 months from retirement and want an official estimate of your Wisconsin Retirement System retirement benefit, complete our online estimate request or contact ETF.
  2. For an unofficial estimate, use our WRS Retirement Benefits Calculator to run a projection. This is a great way to compare a variety of retirement dates. If you participate in the Variable Fund, first use the Variable Excess/Deficiency Calculator to project your benefit. Helpful hint: Have your last annual Statement of Benefits in hand so you can mirror your own WRS account information.
  3. Learn as much as you can about WRS annuity options, annuity adjustments, what to expect in your first year after retirement, protecting beneficiaries, sick leave conversion credits and much more by reviewing our forms and brochures, taking in a webinar, or finding an ETF-hosted benefits presentation in your area.
  4. Retirement is a process, not a single event. Do you want to know more about the process and develop a plan for retirement? This recorded ETF webinar will help you think through many key issues and topics.

If you have your official estimate and feel you need to talk to someone at ETF in order to better understand it, consider attending one of our group retirement appointments. To find a group appointment in your area, use the interactive map or contact ETF.

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Legislative Update

Tarna Hunter
Tarna Hunter

by Tarna Hunter, ETF Legislative Liaison

In February, Gov. Walker released the 2015-2017 executive budget, a proposal of how the state should manage expenses for the next two years. The budget bills, called 2015 Assembly Bill 21 and 2015 Senate Bill 21, are currently before the Joint Committee on Finance. The budget is to be effective July 1, 2015.

The JCF has spent the last few months reviewing the budget and will continue to review and make changes over the next few weeks. After JCF makes its recommended changes, the bill 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.

As proposed, the budget currently contains a small number of provisions that affect the benefit programs administered by the Department of Employee Trust Funds. Some of these provisions include:

  • Providing a $2,000 annual incentive for employees who opt out of the State of Wisconsin Group Health Insurance Program.
  • Currently, the Department of Children and Families may assign child support obligations to Wisconsin Retirement System benefits. The budget includes a provision extending that authority to ETF’s Income Continuation Insurance program and the Duty Disability program.
  • Increasing the terms of appointed members of the Group Insurance Board from two years to four years. The bill also staggers the terms to ensure continuity in the experience of the board.

In addition to the above provisions, the Budget in Brief directs the GIB to work with ETF’s recently-contracted benefits consultant to make appropriate changes in order to realize $25 million GPR ($54 million all funds) in efficiencies and savings over the biennium. For more detail, see Proposed Health Insurance Program Changes.

As with any legislative proposal, provisions are subject to change. We will continue to monitor developments and provide updates as they occur. Watch ETF’s website for the latest information.

If you are interested in monitoring legislative developments more closely, you may want to subscribe to the legislature’s e-mail notification service.

For More Information

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Participate in Well Wisconsin

Women in Exercise Class

Members covered under the state’s group health insurance program: Have you participated in the Well Wisconsin Program? This is your opportunity to increase awareness of your current health and future risk factors – and earn a $150 incentive payment! Here are the steps to participate:

Step 1: Complete a biometric screening to measure your blood pressure, cholesterol level, glucose level, and body mass index. This can be completed by your doctor or at a biometric screening offered by the Well Wisconsin Program’s biometric screening vendor, Optum. Visit the Well Wisconsin calendar to find a screening near you.

Step 2: Complete the health risk assessment provided by your health plan. This questionnaire asks about your current health habits and helps you identify risk factors. Upon completion of the assessment, you’ll receive a summary about your current health and tips for maintaining or improving your health.

Once both steps are completed and all information is received by your health plan, follow the steps provided by your health plan to receive your incentive. Every eligible adult enrolled under your group health insurance coverage can participate each year in this program. Plans may limit the total dollar amount that can be issued for incentive programs, so check with your health plan if you are taking advantage of multiple incentive programs.

Please note: Health plan incentives are considered taxable income. ETF will issue a W-2 form for incentives paid to members and their family members enrolled in the State of Wisconsin Group Health Insurance Program. Health information, including responses to the Health Risk Assessment, are protected by federal law and will not be shared with ETF. 

Special Event: Well Wisconsin Expo
If you are in the Madison area, be sure to attend the 2015 Well Wisconsin Expo, set for Wednesday, May 13, from 10:00 a.m. to 2:00 p.m. at the Monona Terrace Community and Convention Center. Hosted by the Department of Employee Trust Funds, this event will feature more than 20 organizations with information on health plan resources, financial wellness, nutrition, health awareness and more. Presentations by nutrition and financial wellness experts begin at noon. Optum, the Well Wisconsin biometric screening vendor, also will be available to conduct screenings (pre-registration is required).

For more information about the Well Wisconsin Expo, the $150 incentive offer, a link to your health plan’s Health Risk Assessment or the forms needed for physician-obtained biometrics, visit the Well Wisconsin Program website.

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Know Your Benefits: ETF Webinars and Group Appointments

Want to know more about your Wisconsin Retirement System benefits? Whether you are planning to retire in the distant future, within the year or somewhere in between - we have a live, interactive webinar or other e-learning that is right for you. Or, perhaps you would rather attend a group appointment.

Webinars
Webinars are conducted online by an ETF benefit specialist and focus on a single topic of interest. ETF webinars over the next several months will cover these important topics:

  • Annuity options
  • The Variable Trust Fund
  • 5 steps to retirement
  • Returning to work after retirement
  • Top 10 things to know about your Statement of Benefits
  • Additional contributions
  • An overview of the WRS
  • Buying service
  • WRS employer and employee contribution rates
  • Beneficiary designations
  • How to use our online retirement benefit estimate calculator
  • Choosing a retirement date (December vs. January)

Monitor our webinar schedule on the Member Education web page. Better yet, sign up for ETF E-mail Updates to receive immediate notification of new registration opportunities. Registration is free and fast – sign up with an email address.

And now: Follow ETF on Twitter!

What participants are saying about ETF webinars:

“This was the best webinar I've been to related to the WRS.  Great speaker, easy to understand and explained things very well. Very easy to follow, excellent presenter…good pace and easy to understand.  Excellent job!”

“I wanted to say that this presenter did an excellent job of presenting clear/understandable information to anyone with a 'beginner's knowledge' of retirement information. GREAT JOB!!  The material that was presented was easy to understand and gave a good idea as to where to start if thinking of retirement.”

Group Retirement Appointments
Do you already have your official WRS benefit estimate and feel you need to talk to someone at ETF to understand it better? Consider attending one of our group retirement appointments. We design these sessions specifically for members who are within a year of retirement and already have a retirement estimate from ETF. An ETF benefits specialist provides an explanation of the estimate, WRS annuity options, the application process and answers questions.

Use our interactive map to find a group appointment scheduled in your area.

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SWIB Staff Receive National Honors

Institutional Investor-Investor Intelligence Network has announced nominations for the second annual Investor Intelligence Awards, recognizing the most outstanding and innovative public plan sponsors in North America. SWIB has three nominees:

  • Todd Ludgate, head of fixed income:  Investor Intelligence Award in Debt (fixed income/credit)
  • Dominic Garcia, senior fund-of-funds manager: Investor Intelligence Award in Alpha Generation
  • David Villa, chief investment officer: Investor Intelligence Award in Good Governance

The awards are based on leadership skills, including an innovative and forward-thinking approach to strategy execution. The goal is to recognize those individuals considered by peers and industry members to be true innovators, leaders and cutting-edge thinkers. Nearly 800 peers and industry members submitted nominations. Investor Intelligence Network is a part of Institutional Investor magazine, an international finance publisher.

In addition, SWIB’s Managing Analyst Derek Drummond is a nominee for Chief Investment Officer magazine’s “Forty Under Forty for 2015” feature. The magazine annually profiles 40 influential institutional investors under the age of 40. Drummond is part of Garcia’s investment team. Garcia has appeared on the list twice, in 2012 at the age of 34, and again in 2013. Last year he was among the “Young + Established” – the first time the magazine moved persistent members into a separate category.

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Disability Benefits Available to Active Employees

Did you know there are disability benefits available through the Wisconsin Retirement System? If you are a participating WRS employee and you become disabled and unable to work until normal retirement age due to a physical or mental disability, then you may qualify for WRS disability benefits.

Eligibility
To be eligible for a WRS disability benefit:

  • you must be totally disabled from any occupation (not just your current WRS position) by a mental or physical impairment that is likely to be of a long, continued and indefinite duration; and
  • you must not have reached the normal retirement age for your employment category (there are some exceptions for protective occupation employees and under the Long-Term Care Insurance Plan).

There is also a service requirement, which is waived if your disability is work-related.

If you believe you meet these criteria, contact the Department of Employee Trust Funds as soon as possible to request a personalized disability benefit estimate, an application form and additional instructions and information. Timing is important: Applying more than 90 days after your last day paid affects your earliest possible benefit effective date and the start of your benefit payments.

Contact your employer regarding any other disability-related programs under which you may be covered. For instance, some WRS members have coverage under the Income Continuation Insurance Program. If you have ICI coverage, contact your employer for information about applying for benefits.

Special Eligibility for Protective Occupation Employees
If you are a Protective category employee and become disabled to the extent that you can no longer safely and efficiently perform the duties of your protective position, you may qualify for disability benefits even though you might still be able to engage in some other type of work. Your employer may also offer temporary or other long-term disability benefits.

Please note: The information presented here is a basic overview of the disability benefits that are available to you. For more detailed information and instructions, including how and when to apply for benefits, disability benefit types, effect on life and health insurance, etc., review the following ETF resources:

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ETF Wins Award for Pension Plan Administration

The Department of Employee Trust Funds has received the Public Plans Standards Award for 2014. The award recognizes ETF for its funding and administration of the Wisconsin Retirement System. The Public Pension Coordinating Council, which grants the award, is a confederation of three major organizations composed of public employee retirement systems nationwide: the National Association of State Retirement Administrators, the National Conference on Public Employee Retirement Systems and the National Council on Teacher Retirement

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Election Results for ETF Board and Teachers Retirement Boards

Leilani Paul
Leilani Paul

ETF Board: Paul Elected by Educational Support Personnel
Wisconsin Retirement System Educational Support Personnel employees elected Leilani Paul to serve on the Employee Trust Funds Board, as the educational support personnel employee member of the board. Paul, a 34-year employee worked at Fox Valley Technical College, has spent the last 18 years in the college’s payroll department. The other candidates were Kimberly Hall, D.C. Everest School District; and Kay Hansen, Denmark School District. Voting took place February 2-27. Employees cast ballots online and via telephone.

 

William Ford
William Ford

ETF Board: Ford Re-elected by WRS Annuitants
WRS annuitants re-elected William Ford to serve on the ETF Board, as the annuitant member of the board. Ford, of Prairie du Sac, retired in 2009 as a senior attorney with the Wisconsin Legislative Council. Ford was first elected by WRS annuitants in 2011.

 

Kim Schroeder
Kim Schroeder

Teachers Retirement Board: Schroeder Appointed to Milwaukee Public School District Teacher Member Seat
Kim Schroeder, a 20-year teacher in the Milwaukee Public School District, will serve on the Teachers Retirement Board as the district’s teacher member. Schroeder replaced Michael Langyel, who was appointed to serve as the district’s teacher member on the board in 2009.

Next: 2016 Board Elections – Two Teacher Member Seats Open on TR Board
Watch the September edition of WRS News Online for information regarding upcoming Teachers Retirement Board elections. If you are interested in running for a seat on the TR Board, nomination packets will be available after September 15. Here is the current roster. The terms of the following members expire in May 2016:
• Robin Starck (Active Teacher Member Seat)
• Patrick Phair (Active Teacher Member Seat)

About the WRS Governing Boards
There are five Boards of Trustees associated with the Wisconsin Department of Employee Trust Funds and the Wisconsin Retirement System. The boards set policy and review the overall administration of the benefit programs provided for state and local government employees. The five boards are:
• Employee Trust Funds Board
• Teachers Retirement Board
• Wisconsin Retirement Board
• Group Insurance Board
• Deferred Compensation Board

Find out more about the boards, including members, duties and responsibilities.
View individual board meeting schedules and agendas.

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Neitzel Joins SWIB Board of Trustees

Scott Neitzel
Scott Neitzel

In March Scott Neitzel was appointed to serve as the Department of Administration Secretary. Therefore, Neitzel will replace former DOA Secretary Mike Huebsch on SWIB’s Board of Trustees.
  
Along with his recent 18 years of private sector experience, Neitzel brings extensive federal, state and local public sector experience to the board. Neitzel served as a commissioner of the Wisconsin Public Service Commission. Prior to his work at the PSC he was a special assistant at the U.S. Department of Energy and a special assistant at the Federal Energy Regulatory Commission in Washington, D.C.

Beyond these roles, he served as register of deeds for Sauk County and as the deputy secretary of the Wisconsin Department of Development, which preceded the Wisconsin Economic Development Corporation and the Wisconsin Department of Commerce. Neitzel was also a DOA division administrator in the mid-1980s.

Neitzel has held various roles at Madison Gas & Electric, including senior vice president, where he led customer service operations, gas operations, energy supply and energy planning. He has a bachelor’s degree from the University of Wisconsin-Oshkosh and an MBA from the University of Chicago’s Executive Program.

About the Board of Trustees
The SWIB Board of Trustees consists of nine members meeting specific requirements. These include:

  • The secretary of the Department of Administration or a designee;
  • One member appointed for a six-year term representing a local government that participates in the Local Government Investment Fund;
  • Five public members appointed for staggered six-year terms and four having at least 10 years of investment experience; and
  • Two participants in the Wisconsin Retirement System selected for six-year terms, one a teacher participant appointed by the Teacher Retirement Board and one a participant other than a teacher appointed by the Wisconsin Retirement Board.

Trustees have a fiduciary responsibility to act solely in the interest of the WRS trust funds. They also appoint the executive director and internal auditor. Trustee responsibilities include establishing asset allocation, investment guidelines and performance benchmarks. Staff is responsible for making the day-to-day decisions about investments and operations following the policies set by the trustees.

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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.

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Last Revised: Thursday, April 30, 2015
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