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Projections for Effective Rates and Annuity Adjustments

Every year the Department of Employee Trust Funds credits active employee retirement accounts with the Core and Variable (if applicable) rate of interest. How the rates affect your account can be found on your most recent Statement of Benefits, which was distributed in April.

What can employees expect in terms of effective rates next year? Keep in mind that actual rates won't be announced until February, after finalized net returns for 2018 are in and an actuarial analysis conducted. Watch for news on this topic in January.

In the meantime, ETF's projections using four different investment return scenarios are shown in the accompanying table.

 

2018 Core Fund Finalized Net Investment Return

Projected Core
Effective Rate
(applied in 2019 to employees' account balances)

Projected 2018 Core Annuity Adjustment

Scenario 1

7.2%

7.3% to 7.7%

1.6% to 2.0%

Scenario 2

5.0%

6.8% to 7.2%

1.2% to 1.6%

Scenario 3

0%

5.7% to 6.1%

0%
(no increase)

Scenario 4

-5.0%

4.7% to 5.1%

-0.5% to -0.8% (a reduction)

Note: As of July 31, preliminary returns for the Core Trust Fund were 2.2%. If this figure were the finalized net return for the year, it would, when combined with investment gains and losses already in the books (due to smoothing), likely produce an effective rate of 6.1% to 6.5%. However, the year is far from over. Bookmark this WRS Trust Funds Investment Performance page and check it monthly for preliminary, year-to-date investment results or follow ETF on Twitter.

For More Information

  • ETF presents Core effective rate and annuity adjustment projections annually. Review the March 2018 presentation.
  • Review Wisconsin Retirement System returns, rates and since 1986 here.
  • Sign up to receive email notification via ETF E-mail Updates.