The Department of Employee Trust Funds published its Comprehensive Annual Financial Report for 2018. This report provides information about the Wisconsin Retirement System and other benefit programs administered by ETF, including the related financial statements and independent auditor’s report.
The WRS continues to be one of the best-funded public employee retirement systems in the country. The financial strength of the WRS is attributable to its unique plan design, funding discipline, strong governance, and the effective investment strategies of the State of Wisconsin Investment Board.
For public pension plans, there are two common funding measurements: funding value and fair value. The funding value-based ratio of the WRS, which smooths investment gains and losses over a five-year period, remains approximately 100% as of December 31, 2018. The fair value-based ratio of the WRS, calculated in accordance with standards issued by the Governmental Accounting Standards Board, is 96.5%. This is a decrease from 102.9% and was primarily the result of lower market returns in 2018 compared to 2017. Because GASB requires plan assets to be valued at fair value, this ratio will fluctuate from year to year, depending upon investment performance.