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Press Release

For Immediate Release
June 21, 2002

Contact: Pam Henning, (608) 267-2929

Employee Trust Funds Board Sets 2003 Retirement System Contribution Rates

MADISON -- Eric Stanchfield, Secretary of the Wisconsin Department of Employee Trust Funds, (ETF) announced that required contribution rates for more than 238,000 Wisconsin Retirement System (WRS) employees – participants in the "general" employee category -- will increase by .4% for 2003. Contribution rates for protective category employees with Social Security will remain the same as 2002 ; rates for executives & elected officials and protective category employees without Social Security will decrease 1.0% and 1.2%, respectively.

The rate increase for general category employees, which includes state and local government employees and public school teachers, is due in part to the accounting and financial impact of 1999 Wisconsin Act 11 as well as 2001 market investment experience. "The consulting actuary projected last year that Act 11 would have this much of an impact on the rates, so this is not at all unanticipated," said Julie Reneau, ETF Division of Retirement Services Administrator.

The contribution rates are based on the recommendations of the ETF Board's consulting actuary and were approved by the Board today. They go into effect for salaries and wages beginning January 1, 2003. This is the first year the contribution rates reflect the financing and benefit changes of 1999 Wisconsin Act 11, the pension and benefits improvement law ruled constitutional by the Wisconsin Supreme Court one year ago.

Last year the ETF Board delayed recognition of the law's impact on contribution rates because the actuary could not incorporate the changes in time to finalize 2002 contribution rates. The ETF Board annually determines contribution rates for each WRS employment category. Rate changes, whether up or down, are considered normal for retirement systems such as the WRS that pre-fund retirement benefits.

Total contribution rates as a percentage of salary* by WRS employment category for 2003 are summarized as follows:

Employee Category 2003 Contribution Rate % Change Over 2002
General/Teacher 9.4% .4% increase
Executives & Elected Officials 10.7% 1.0% decrease
Protectives with Social Security 11.1% no change
Protectives without Social Security 12.2% 1.2% decrease

* rates shown do not include other mandatory employer contributions for duty disabilities, the state's Accumulated Sick Leave Conversion Credit program, or unfunded liabilities – all of which vary by employer)

Additional Information

  • By law, the WRS receives funding from three separate sources: employee contributions, employer contributions, and investment earnings. Together, these must be sufficient to meet all of both the present and future pension and benefit commitments of the system. Every June the ETF Board determines the rate at which employers and employees contribute to the WRS for the following year. The Board's decision is based on recommendations made by a consulting actuary.
  • Contribution rates do not affect retirement annuity benefits under the WRS.
  • General employees make up 92% of all actively working WRS participants, so rate increases or decreases in this category have the most impact on employers and employees.
  • Part or all of the required employee contribution may be paid by the employer on behalf of the employee.
  • The total general employee covered payroll in 2001 was $8.7 billion.

WRS employee categories and counts are as follows:

Category Number of Active Employees
General Participants and Teachers 238,944
Executive & Elected Participants 1,486
Protectives with Social Security 17,981
Protectives without Social Security 2,715


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