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WRS News Online Vol.1, No. 4 - November 2015

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Are You Financially Fit? Get a Checkup and Find Out!

Financial Fitness photoPerhaps you are using a movement tracker or a step counter to get fit and monitor progress toward fitness goals. But what about your finances? Have you ever wondered if you are financially fit? Here’s a free way to find out right now: Get a Financial Fitness Checkup.

Through November 25 ETF is offering a unique Financial Fitness Checkup to all Wisconsin Retirement System covered employees and their friends and families. It’s a confidential, 10-minute online survey designed to provide you with important information about your levels of financial wellness, stress, knowledge and behaviors. Complete the checkup and you’ll receive instant feedback on:

  • Your personal financial wellness (stress levels, stress management, savings habits, etc.).
  • Your level of financial knowledge (topics include credit, taxes, Medicare, etc.).
  • Links to free online resources that will help you improve your financial well-being.

Your personal results are confidential and will be kept private.

The Financial Fitness Checkup is offered by ETF, as part of the EMPOWER campaign and in partnership with the Department of Financial Institutions, the Department of Administration, the Governor’s Council on Financial Literacy and the state’s Employee Assistance Program (LifeMatters).

Why are we doing this? According to the American Psychological Association, the No. 1 cause of stress is money. When you are financially stressed, health, job performance, and overall happiness can suffer. A regular check of your financial health can make you aware of problems, identify steps to achieve your goals and chart your progress along the way.

The Financial Fitness Checkup can be easily completed 24/7 using a computer or mobile device. Get your Financial Fitness Checkup now – the survey closes on November 25!


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EMPOWER Earns National, State Recognition

Empower Award
Shelly Shueller (left) and Tarna Hunter

The EMPOWER campaign has garnered state and national attention for its creative, educational approach to engaging and inspiring women to save for retirement.

  • EMPOWER founders Tarna Hunter and Shelly Schueller received a 2015 Innovator Award presented by Pensions & Investments Magazine and the Defined Contribution Institutional Investment Association. Hunter is ETF’s legislative liaison and Schueller is director of the Wisconsin Deferred Compensation Program.
  • Closer to home, the campaign garnered the State Council on Affirmative Action 2015 Diversity Award. This award is given annually by the Wisconsin Department of Administration and Division of Personnel Management to recognize state agencies, including the University of Wisconsin System campuses, for their work in support of the state’s affirmative action goals. The EMPOWER campaign’s motto is, “Guiding women of all cultures toward a strong financial future”.

EMPOWER is sponsored by the Department of Employee Trust Funds, the Wisconsin Deferred Compensation Program, and Affirmative Action Committees within more than a dozen Wisconsin state agencies.

With report after report concluding Americans overall have little to no retirement savings, why focus on women? Hunter says it’s because “women are at the epicenter of the crisis. A woman’s road to retirement is less financially secure and her post-retirement sources of income are lower – these include Social Security, private and public pensions, and personal retirement savings.”

Hunter cites a number of retirement issues unique to women, including:

  • Women earn less – 77% of men’s earnings, on average;
  • Women have shorter work histories, primarily due to part-time work and/or caregiving responsibilities – more time away from work means less in savings and pensions;
  • Women in general are living longer – therefore they spend more years living alone in retirement and are at a higher risk for living in poverty.

“Our primary goal is to get all working women to stay aware of these issues and take charge of their own retirement financial planning and security,” Schueller adds. “We have to do something now. Poor, elderly women are the largest growing segment of our population.”


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Pay Attention to Year-end Deadlines

Push pins on a calendarAs the end of the year approaches, many members begin contemplating retirement or making decisions that will affect their benefits. If you are considering making any of the following decisions, please be aware of the important end-of-year deadlines associated with each:

  • Making additional contributions
  • Purchasing service
  • Withdrawing a health insurance application/change submitted during the It’s Your Choice open enrollment period
  • Electing to participate (or cancel participation in) the Variable Fund

Additional Contributions
If you want to supplement your Wisconsin Retirement System retirement benefit, consider making after-tax additional contributions into your account – you can do so at any time throughout the year. However, interest does not begin to accrue until the January 1 after ETF receives the contributions. So, if you want your additional contributions to begin accruing interest on January 1, 2016, ETF must receive the money by the last working day of this year (December 30, 2015). It may work best for you to budget for this purpose throughout the course of the year. Therefore, it may be beneficial to deposit funds into a separate, interest-bearing account (at your financial institution) throughout the year and make additional contributions to the WRS at the end of the year.

Purchasing Service
If you are eligible to purchase creditable service, it may be to your advantage to do so. Benefits to buying such service: a higher benefit if your annuity is calculated as a formula benefit; and a higher special death benefit for your beneficiaries (if you die as an active employee).
Your application to purchase service (including payment) must be received prior to WRS employment termination (once you terminate employment you are no longer eligible to purchase service).
The best time to purchase creditable service varies, based on individual circumstances. However, in order to buy service based on 2015 calendar year earnings at the current cost, your application and payment must be received by January 4, 2016. If your earnings are based on fiscal year earnings, changes in contribution rates will affect how much you pay. Contribution rates change each year – review the 2015 and 2016 rates for your WRS employment category here.

Withdrawing A Health Insurance Application/Change
If you want to withdraw your recently-submitted health insurance application/change submitted during the It’s Your Choice open enrollment period, you must notify your benefits-payroll office in writing by December 30, 2015.

Variable Elections and Cancellations
If you wish to elect to participate in the Variable Fund or cancel your Variable Fund participation, ETF must receive your election/cancellation prior to the close of business on January 4, 2016 in order for it to be effective on January 1, 2016. Note: Here are preliminary, calendar year investment returns for the Core and Variable Trust Funds as of October 31, 2015.

To learn more, review the following ETF publications:
Buying Creditable Service (ET-4121)
Additional Contributions (ET-2123)
How Participation in the Variable Trust Fund Affects Your WRS Benefits (ET-4930)

Watch for ETF webinars on these topics:

  • Additional Contributions
  • Buying Service
  • Variable Trust Fund
  • WRS Benefits: For New and Mid-Career Employees


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When Should I Retire?

Couple on deckShould you retire before the end of the year, or wait until just after the start of the new year? There is no one-size-fits-all answer to this question. Picking a date that provides the optimal retirement annuity amount depends on your individual Wisconsin Retirement System account history.

A few things to consider in your decision-making process:

  • Is your projected annuity amount higher under the Formula or Money Purchase benefit calculation?
  • What are the effective rates projected to be for the current year? (for both the Core Fund and, if applicable, the Variable Fund)
  • Do you currently participate in the Variable Fund or have you participated in the past?
  • If you currently participate in the Variable Fund, what is your Core Fund account balance?

How do I find out which benefit calculation would produce a higher annuity amount? If you are within a year of retirement, request an official WRS retirement benefit estimate; this information is included on your estimate. Or, see section 10 of your most recent annual Statement of Benefits. Use any of these tools to calculate your own benefit projection:

Effect of Interest Crediting
Individual circumstances vary, but interest crediting may play a role in providing a higher benefit, depending on the effective date of the annuity. This scenario illustrates how interest crediting works:

WRS member Joe is thinking about retiring soon. According to Joe’s account:

  • He participates in the Core Fund only;
  • He has never participated in the Variable Fund; and
  • He has a Money Purchase calculation that would pay a higher annuity amount than the Formula calculation.

If Joe decides to make his annuity effective date on or before December 31, 2015, his WRS account balance will be credited with prorated 5% interest for the 11 months he worked in 2015 (which comes out to 4.583%).

  • If Joe decides to make his annuity effective date on or after January 1, 2016, his account balance will receive the actual effective rate of interest for 2015. This rate is announced in late February/early March, after SWIB reports the net investment return for the calendar year and the effective rate is calculated by ETF.

The point: In any year in which the actual Core effective rate is less than 4.583%, 11 months of prorated 5% interest would be higher -- how much higher would depend on the actual Core effective interest rate.

You’ll find other interest crediting scenarios and information in our helpful online document, When Should I Retire? These include the effect of interest crediting on Variable participation, WRS formula benefits and more.

We also suggest you participate in our webinar, Choosing When to Retire. Topics include the “December versus January” decision, and how retirement timing at any point during the year can affect your retirement annuity amount and other employee retirement benefits.


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Legislative Update

Tarna Hunter
Tarna Hunter

by Tarna Hunter, ETF Legislative Liaison
Several bills affecting the Wisconsin Retirement System were introduced in the 2015-2016 session. The bills that have had recent activity are briefly described below, along with links to the proposal’s status. Note: the scheduled floor period ended November 5, 2015 and the next floor period is set for January 12, 2016. Therefore, no action will be taken on these bills during the remainder of calendar year 2015, unless it is done in an extraordinary session..

2015 AB 156 and 2015 SB 134 provide municipalities interested in participating in the WRS the option to join and only bring in newly hired employees while allowing current employees to finish their careers under their existing retirement plan.

Status: The Assembly Committee on Urban and Local Affairs passed 2015 AB 156, as amended, on a unanimous vote. The Joint Survey Committee on Retirement Systems (JSCRS) held an executive session on November 4 and concluded that AB 156, SB 134, and amendments were good public policy. Learn more: status, amendments, actions, links, history on AB156 and SB 134.

2015 SB 312 and 2015 AB 394 require the Group Insurance Board to submit all proposed changes to public employee group health insurance programs to the Joint Committee on Finance (JCF). The GIB may not implement any changes in the group health insurance programs unless approved by JCF through a 21-day passive review process.

Status: The JCF held a public hearing and executive session on the bills in October and subsequently passed both bills. The Assembly passed the bill 90-2 and on November 6 the Seante passed an ammendment to this bill.The bill now goes to the Assembly. Learn more: status, actions, links, history on SB 312 and AB 394.

2015 AB 397 and 2015 SB 329 increase the minimum retirement age for all employees by two years. This change would only apply to WRS participants who are under age 40 on the effective date of the bill.

Status: 2015 AB 397 was referred to both the Assembly Committee on State Affairs and Government Operations and the JSCRS. 2015 SB 329 was referred to the Senate Committee on Labor and Government Reform. Learn more: status, actions, links, history on AB 397 and SB 329.

2015 AB 398 and 2015 SB 328 change the formula method for calculating a WRS retirement benefit from three to five years. Under current law, a formula benefit is based on the average of the three highest years of earnings. Under the bill, a formula benefit would be based on the average of the five highest years of earnings. This change would take effect five years after the effective date of the bill.

Status: 2015 AB 398 was referred to both the Assembly Committee on State Affairs and Government Operations and the JSCRS. 2015 SB 328 was referred to the Senate Committee on Labor and Government Reform. Learn more: status, actions, links, history on AB 398 and SB 328.

2015 AB 233 and 2015 SB 183 eliminates sick leave for state representatives and state senators. Under the bill, the current accumulated sick leave balances of legislators would not be affected. The bill would not make any changes to the state’s sick leave conversion credit programs.

Status: In September, the Senate Committee on Government Operations and Consumer Protection held a public hearing and executive session and recommended passage 4-1. Learn more: status, actions, links, history on AB 233 and SB 183.

2015 AB 361 and 2015 SB 278 would require the GIB, beginning on January 1, 2018, to make the optional insurance plans available to local government employers. The local government employers that participate in the program must establish payroll deductions for the employees to pay the premiums.

Status: In October, the Assembly Committee on Urban and Local Affairs held a public hearing and an executive session, recommending passage 9-0. Learn more: status, actions, links, history on AB 361 and SB 278.

For More Information


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Webinar: Investing for Retirement

Bob Schulz More than 250 individuals participated in the Investing for Retirement presentation, offered by the EMPOWER campaign. Now is your chance to view the webinar and learn how to “live to 95 and not run out of money”. Keynote speaker Bob Schulz (a.k.a., The Retirement Guy) shares tips on how to become an educated investor, avoid making common mistakes, learn some simple rules on personal finance, and more.


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Board Corner

Teachers Retirement Board Election Set
ETF has scheduled a Teachers Retirement Board election for February 2016. Four candidates have filed nomination papers for three available Teachers Retirement Board seats. The candidates are Chris Heller, Appleton; Brent Mansky, Kenosha; Allison Pratt, Onalaska; Robin Starck, Sheboygan.

Active teacher members of the Wisconsin Retirement System (excluding those employed by the Milwaukee Public School District) should watch for candidate information and voting instructions in January.

New: Elections are going paperless! You will be able to vote online or via telephone. This change makes it more convenient to cast a ballot, speeds up the voting process and eliminates ballot printing and distribution expenses.

Important: You must have your Member ID to cast a ballot. Find your Member ID on your most recent WRS annual Statement of Benefits or your Navitus ID card (if you are covered under the Wisconsin Public Employers Group Health Insurance Program).


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Rates and Adjustments: Watch for Announcements

At this time of year members often ask about upcoming effective rates and annuity adjustments. The Department of Employee Trust Funds calculates actual rates based on final trust fund investment returns for the calendar year and the results of an actuarial analysis. Watch for announcements in January and February.

The table below indicates ETF’s projections for the Core effective rates and Core annuity adjustments could be, based on three different scenarios. Keep in mind these figures are not actual results. Projections may help members anticipate the magnitude – but not exact amount – of future rates and adjustments.

Preliminary Effective Rate, Annuity Adjustment Projections

If the Core Fund Net Investment Return, for 2015 is...




Effective Rate (active employee WRS account)

7.9% to 8.3%

6.4% to 6.8%

4.8% to 5.2%

Annuity Adjustment (retiree)

2.2% to 2.6%

0.8% to 1.2%


* 7.2% is the actuarially-determined, assumed long-term rate of return for the Core Trust Fund.

For More Information

  • Monitor preliminary investment returns for the Core Trust Fund and Variable Trust Fund – we update this page on our website monthly.
  • Sign up for ETF E-mail Updates and follow us on Twitter at @WI_ETF to receive immediate notification of preliminary investment returns.
  • Take in an ETF webinar on these topics:
    • Overview of the Wisconsin Retirement System
    • Variable Fund
    • WRS Effective Rates and Annuity Adjustments


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Stay Current: Follow ETF on Twitter

Twitter Icon

Follow ETF on Twitter at @WI_ETF. You’ll receive immediate notification of important WRS-related benefit news and information including legislation, investment returns, end-of-year deadlines, webinars, meeting notices, presentations, EMPOWER campaign updates, and much more.


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Upcoming Board Meetings

Group Insurance Board The GIB is set to meet from 8:00 a.m. to 12:55 p.m. on Tuesday, November 17 at Lussier Family Heritage Center, 3101 Lake Farm Road, Madison. Agenda and meeting memos here.

Joint Retirement Board Meeting – The Employee Trust Funds Board, Teachers Retirement Board and Wisconsin Retirement Board are set to meet on Thursday, December 10 at the State Revenue Building, 2135 Rimrock Road, Madison. Agenda and meeting memos here.

There are five Boards of Trustees associated with the Department of Employee Trust Funds:

  • ETF Board
  • Teachers Retirement Board
  • Wisconsin Retirement Board
  • Group Insurance Board
  • Deferred Compensation Board

To learn more about these boards and review membership rosters, meeting schedules, agendas and past meeting minutes, visit our Governing Boards webpage.

To receive immediate notification of meeting notices and agendas for all meetings, Follow ETF on Twitter at @WI_ETF or sign up to receive ETF E-mail Updates and select topic choices under “Board Agendas and Materials”.



Last Revised: November 9, 2015
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