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News

Department of Employee Trust Funds
July 5, 2016

WRS Contribution Rates to Increase in 2017

Contributions paid by Wisconsin Retirement System employees and employers into the system will increase slightly next year. The rate changes, effective January 1, 2017, were recommended by the WRS consulting actuary and recently approved by the Employee Trust Funds Board. Total WRS contribution rates, along with employee and employer shares, are indicated in the table below.

Employee Category Total Rate
2016*
Total
Rate
2017*
Employee Share of Total Rate 2017 Employer Share of Total Rate 2017 % Change
General 13.2% 13.6% 6.8% 6.8% Increase 0.4%
Elected Official/Executive/Judge 13.2% 13.6% 6.8% 6.8% Increase 0.4%
Protective with Social Security 16.0% 17.4% 6.8% 10.6% Increase 1.4%
Protective without Social Security 19.8% 21.7% 6.8% 14.9% Increase 1.9%

Note: Other mandatory employer-paid contributions for duty disability, the state's Accumulated Sick Leave Conversion Credit Program or unfunded liabilities are not included and vary by employer.

The 2017 rate increases are primarily due to higher life expectancies and lower-than-expected trust fund investment performance. This is a part of the unique “shared risk” design of the WRS, which includes 1) employee contributions, 2) employer contributions and 3) investment earnings. Together these funds must be sufficient to meet the present and long-term retirement benefit commitments of the system. Investment income contributes approximately 75% of WRS funding requirements.

In general, when investment earnings are greater than expected, contribution rates may decrease the following year. When earnings are lower than expected, rates may increase to make up for the shortfall.

Changes in WRS contribution rates have been very stable over the years because investment returns for the Core Fund are smoothed over a five-year period. Smoothing works to control year-to-year volatility in the stock market.

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