calculators
Member Education
forms and publications
news
about etf
frequently asked questions
contact etf
site map
related links
home
top of page
home
members retirees employers governing boards careers at etf
 
News

Department of Employee Trust Funds
March 8, 2019

ETF Announces WRS Annuity Adjustments
Core: 0% (no change) Variable: -10% (decrease)

ETF today announced annuity adjustments for Wisconsin Retirement System retirees, effective May 1. There will be no change for most retirees, as the Core annuity adjustment is 0%. Retirees who also participate in the more volatile Variable Fund will see a 10% reduction in that portion of their monthly annuities.

The adjustments were approved by ETF Secretary Robert Conlin and ETF Board Chair Wayne Koessl, following recommendations by the Board’s consulting actuary.

Both the Core and the Variable adjustments were within ranges projected by ETF in January, based on preliminary investment returns announced by the State of Wisconsin Investment Board.

In January the State of Wisconsin Investment Board reported preliminary 2018 year-end investment returns (gross of fees) of -3.3% for the Core Fund and -7.9% for the Variable Fund. Approximately 75% of WRS benefits paid come from investment earnings generated by SWIB, which manages WRS trust fund assets.

By design, the WRS does not provide guaranteed cost of living adjustments, or COLAs. Rather, annual annuity adjustments are based on Core and Variable trust fund investment performance and the funding needs of the WRS.

To limit wide swings in retiree pensions from year to year, gains and losses in the Core Trust Fund are spread ("smoothed") over a five-year period. This year's Core annuity adjustment reflects the impact of gains and losses from 2014-2018. Smoothing also helps keep annual changes in WRS employer and employee contribution rates stable

These risk-sharing design features contribute to the strong financial position of the WRS, which is nearly 100% funded.

Average WRS Annuity Adjustments
(Annualized as of December 31, 2018)

 

5-Year

10-Year

20-Year

35-Year

Core

1.6%

0.3%

2.0%

3.7%

Variable

1.2%

6.2%

0.4%

3.8%

Change in CPI*

1.5%

1.8%

2.2%

2.6%

*Consumer Price Index

WRS Facts:

  • There are approximately 211,000 retirees in the WRS and all participate in the Core Fund.
  • In addition, some 41,000 retirees also participate in the optional Variable Fund.
  • The WRS paid nearly $5.4 billion in retirement benefits in 2018.
  • The median annual WRS pension is $20,758.
  • Core annuities will be increased if there is an annuity reserve surplus of at least 0.5%; reduced if there is an annuity reserve shortfall of at least 0.5%.
  • More than 85% of WRS retirees live in Wisconsin, pay taxes and buy goods and services.
  • The WRS is the 8th largest U.S. public pension fund and the 25th largest public or private pension fund in the world.

Additional Resources:

supporting excellence in Wisconsin public service