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News

Department of Employee Trust Funds
January 21, 2014

 

Projected Rates and Adjustments

On January 13, 2014 the State of Wisconsin Investment Board (SWIB) announced 2013 preliminary investment returns for the Core and Variable Trust Funds. The Core Fund ended the year with a preliminary return of 13.5% and the Variable Fund returned a preliminary 29.0%.

In late February and early March the Department of Employee Trust Funds (ETF) will announce corresponding effective rates and annuity adjustments--after final investment returns are determined and an actuarial analysis is conducted.

Based on the preliminary figures noted above, we anticipate a return to a positive Core annuity adjustment. The following projections are based on SWIB’s preliminary investment returns for 2013:

Core Fund Variable Fund
Preliminary 2013
Investment Return
13.5% 29.0%
Projected Effective Rate
(applied to employees’ account balances)
11.1% to 11.5% 29% to 31%
Projected Annuity Adjustment (applied to retirees’ monthly payments May 1)
4.4% to 4.8% 23% to 25%

Note:

  • Core Fund gains or losses for each year are “smoothed” (recognized) in equal increments over five years to cushion the effect of market volatility. Members in the optional Variable Fund experience the full effect of market gains or losses—returns are not smoothed.
  • The Core Fund effective rate and annuity adjustment will be based on investment experience from 2009 to 2013. The effects of 2008 stock market losses are no longer part of the calculations.
  • The Core Fund has exceeded its investment earnings goal in four of the last five years.
  • Monitor our website for news – even better, sign up for ETF E-Mail Updates to receive instant notification via e-mail. Look for the red envelope icon on our website to get started.
  • For more information, please visit the many resources found on the Core/Variable menu of our website.
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