For Immediate Release
June 24, 2005
Vicki Poole, Director
Legislation, Communications, Strategic Planning
Employee Trust Funds Board Sets 2006 Wisconsin Retirement System Contribution Rates
MADISON -- Eric Stanchfield, Secretary of the Wisconsin Department of Employee Trust Funds (ETF), announced that required contribution rates to fund Wisconsin Retirement System (WRS) benefits will increase slightly for all employee groups except protective category employees not covered by Social Security.
Rates for employees in the general/teacher, executive/elected, and protective covered by Social Security categories will increase by 0.2% of payroll; rates for protective category employees not covered by Social Security will remain unchanged from last year.
The rate increases are based on the recommendation of the ETF Board's consulting actuary and will go into effect for salaries and wages beginning January 1, 2006. The actuary stated that the WRS "continues to be in excellent financial condition."
"The WRS is in remarkably stable financial health," Stanchfield noted. "This is due to
sound funding policies and excellent investment performance. The State of Wisconsin Investment Board achieved stronger than expected investment returns, which helped reduce the size of the projected contribution rate increases for 2006."
Stanchfield said he anticipates continued upward pressure on contribution rates for the next several years, in order for the system to meet its long-term funding requirements.
Normal Cost contribution rates as a percentage of salary* by WRS employment category for 2006 are summarized as follows:
* 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.
|Protectives with Social Security
|Protectives without Social Security
|| No changes
- By law, the WRS receives funding from
three separate sources: employee contributions, employer contributions,
and investment earnings. Together, these must be sufficient to meet
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
- Contribution rates do not affect formula retirement annuity benefits
under the WRS.
- 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.