|
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
2012 |
Total
Rate
2013 |
Change in Total
Rate |
Employee
Contribution
for 2013 |
Employer
Contribution
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:
|
