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News

Department of Employee Trust Funds
November 19, 2013

 

Employer and Employee Contributions to Increase

Contribution rates for most Wisconsin Retirement System (WRS) employers and employees will increase in 2014. The following rate increases were recommended by the WRS consulting actuary and approved by the Employee Trust Funds Board:

  • 0.7% of payroll for general category employees (including teachers)
  • 1.5% of payroll for executive/elected official/judge category employees
  • 0.7% of payroll for protective category employees covered by Social Security
  • 1.7% of payroll for protective category employees not covered by Social Security

The total contribution rates are shown in the table below. In general, the total rate is split equally between the employee and the employer. This means general category employees will contribute .35% more of their salaries in 2014.

Why are contribution rates increasing?

While many complex factors affect WRS contribution rates, the increase is primarily due to the lingering effects of 2008’s global economic meltdown. 2014 is the last year that the investment declines will affect WRS contribution rates. Contribution rate changes, whether increases or decreases, are considered normal for retirement systems that have defined, or pre-funded, benefits.

Core Trust Fund investment results are distributed (“smoothed”) over five years to soften the impact of year-to-year volatility of investments. This also helps to keep WRS contribution rates stable. For example, over the past 25 years the rate for General category employees has deviated by just 2%.

The new rates (shown below) go into effect January 1, 2014. Rates may be different for employees who have collective bargaining agreements. Other mandatory employer contributions for duty disability, the state's Accumulated Sick Leave Conversion Credit Program, or unfunded liabilities are not included and vary by employer.

Employee Category Total Rate
2013
Total
Rate
2014
Employee
Contribution
for 2014
Employer
Contribution
for 2014
General/Teacher 13.3% 14.0% 7.0% 7.0%
Elected Official/
Executive/Judge
14.0% 15.5% 7.75% 7.75%
Protective with Social Security 16.4% 17.1% 7.0% 10.10%
Protective without Social Security 19.0% 20.7% 7.0% 13.7%

For additional information:

How are WRS Contribution Rates Determined?
(WRS News, January 2012)

Online Video: Employee Contributions and WRS Investments

ETF Webinars




 

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