Were you previously in the Variable Trust Fund? If so, your Wisconsin Retirement System account has either a “residual Variable excess” or a “residual Variable deficiency”. This is the difference between your current account balance and what your balance would be if you had never participated in the Variable Fund.
Review Section 8 of your WRS Annual Statement of Benefits. Although you are no longer in the Variable Fund, your residual excess or residual deficiency is credited each year with the Core effective rate of interest until you take a WRS benefit.
Important note: Your variable excess or deficiency is only used to increase or decrease your Formula benefit calculation. The excess or deficiency doesn’t apply to your Money Purchase benefit calculation because past Variable investment returns are already reflected in your account balances.
Therefore, while you are working:
- The more years until you retire, the more your Variable excess or deficiency will change (due to interest crediting being applied).
- If you have a residual Variable excess, it will increase each year by the Core effective rate of interest. Likewise, if you have a residual Variable deficiency, this deficiency will grow to a larger negative number each time the Core effective rate of interest is applied.
The only way a residual Variable excess or deficiency can decrease is if there were a negative Core effective interest rate. This has never happened, but it is possible if there are significant Core Trust Fund investment losses.
For More Information:
How Participation in the Variable Affects Your WRS Benefits (ET-4930)