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Projections for Effective Rates and Annuity Adjustments

Your Wisconsin Retirement System account is credited annually with the effective rates of interest — Core and Variable (if applicable). These rates are announced in February, after final calendar year investment returns have been determined and an actuarial analysis conducted. What can you expect in terms of the rates next spring?

For the Core Trust Fund, returns as of July 31 were 9.6%. If this figure were the finalized net return for the year, it would, when combined with investment gains and losses already in the books (smoothing), likely produce an effective rate of 7.0% to 7.4%.

However, the year is far from over and the solid market performance we've seen to date could stall or reverse itself. As a reminder, earlier this year ETF ran Core effective rate and Core annuity adjustment (for retirees) projections using investment return scenarios of 7.2%, 5% and 0% and presented this information to the ETF Board. The projections are shown below:

ETF Projections
Core Effective Rates & Annuity Adjustments



 

2017 Core Trust Fund Finalized Net Investment Return

Projected Core
Effective Rate
(applied to employees' account balances as of January 1, 2017)

Projected Core
Annuity Adjustment
(applied to retirees' monthly payments)

Scenario 1

7.2%

6.6% to 7.0%

0.5% to 0.9%

Scenario 2

5.0%

6.2% to 6.6%

0.0%

Scenario 3

0.0%

5.2% to 5.6%

0.0% to -.80%

 

 

 

 

 

 

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