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Press Release

For Immediate Release
June 20, 2003

Contact: Pam Henning, (608) 267-2929

Employee Trust Funds Board Sets 2004 Retirement System Contribution Rates

MADISON -- Eric Stanchfield, Secretary of the Wisconsin Department of Employee Trust Funds, (ETF) announced that required contribution rates for 2004 will increase for nearly all Wisconsin Retirement System (WRS) employee groups, primarily due to lower than expected investment returns over the last three years and the effects of 1999 Wisconsin Act 11. The 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, 2004.

Specifically, required contribution rates for "general" category employees will increase by .4% of payroll next year, while rates for protective category employees without Social Security will increase by 1.6%. Rates for protective category employees with Social Security will rise 1%, while those for executives and elected officials remain the same as 2003.

General category employees comprise approximately 91% of the total WRS covered employee population. The group includes state and local government employees, excluding Milwaukee County and City of Milwaukee employees.

ETF officials expected higher employer and employee contribution rates for 2004 and believe the rates will increase again in 2005. "Raising contribution rates alone will not offset the investment losses we've experienced over the last couple of years," says Stanchfield, "but increased employer and employee costs are a direct consequence. The system is designed so that over the long term, contribution rates remain fairly stable. We expect the investment markets to return to historical norms."

Total contribution rates as a percentage of salary* by WRS employment category for 2004 are summarized as follows:

Employee Category



Change over 2003




.4% of payroll increase

Elected Officials




No change

Protectives with Social Security



1% of payroll increase

Protectives without Social Security



1.6% of payroll increase

* 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 approves 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. Rate changes, whether higher or lower, are considered normal for retirement systems such as the WRS that pre-fund retirement benefits.
  • Contribution rates do not affect retirement annuity benefits under the WRS.
  • General employees make up 91% 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 2002 was $9.0 billion.
  • Despite the increases for 2004, required contribution rates have actually decreased over the past ten years, as shown below:
Category approx. decline as % of payroll*
General Participants and Teachers 1.5%
Executive & Elected 6.1%
Protectives with Social Security 4.6%
Protectives without Social Security 8.2%

* includes 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.

WRS employee categories and counts are as follows:

Category Number of Active Employees
General Participants and Teachers 240,990
Executive & Elected 1,476
Protectives with Social Security 18,325
Protectives without Social Security 2,709


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