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Department of Employee Trust Funds
October 31, 2012

Reminder: Contribution Rates Going Up

This is a reminder that Wisconsin Retirement System (WRS) contribution rates for most active employees will increase next year. As a result, the cost of buying forfeited service will increase as well. The new rates go into effect January 1, 2013. (See table below.)

All employees in the “General” employee category will pay one-half of the total required 2013 WRS contribution rate of 13.3%. Therefore, they will pay 6.65% of their earnings. Employees in the Elected Official/Executive/Judge category will pay one-half of the total required 2013 WRS contribution rate of 14.0%. Therefore, they will pay 7.0% of their earnings. In general, employees in both “Protective” categories will pay 6.65% of their earnings, depending on collective bargaining agreements.

Employee Category Total Rate
Change in Total
for 2013
for 2013
General/Teacher 11.8% 13.3% 1.5% 6.65% 6.65%
Elected Official/Executive/Judge 14.1% 14.0% -0.1% 7.0% 7.0%
Protective with Social Security 14.9% 16.4% 1.5% 6.65% 9.75%
Protective without Social Security 17.2% 19.0% 1.8% 6.65% 12.35%

The rates shown do not include other mandatory employer contributions for duty disability, the state's Accumulated Sick Leave Conversion Credit program, or unfunded liabilities—all of which vary by employer.

The primary reason for the contribution rate increase is the unprecedented investment declines in 2008 due to the global economic crisis. Investments are smoothed over five years to reduce large swings in rates from year to year. The impact of 2008 will be felt until the end of 2014.

The WRS is a defined benefit pension plan, which offers employees a pension benefit that is based on a fixed formula, therefore "defined." A WRS retirement benefit provides a predictable, guaranteed income after retirement, providing high levels of financial stability. It is an extremely important source of retirement income, complementing an individual's other personal savings and Social Security.

Contributions and retiree annuity payments fluctuate each year, based on trust fund investment performance. This unique "risk-sharing" feature helps to keep the WRS one of the most sustainably-funded public pension systems in the United States and capable of paying guaranteed retirement income.

Other information:


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