2023 Fee Changes
The Wisconsin Deferred Compensation Program is a self-supporting supplemental retirement savings plan and, as required by Wisconsin law, all costs for the plan are borne by participants. Every December the Deferred Compensation Board reviews participant fees and anticipated expenses. The Board uses the negotiating leverage of WDC participants to keep fees as low as possible and highly competitive with other retirement savings plans. Fees pay for important WDC features such as account recordkeeping services; a secure, user-friendly platform and maintenance of the WDC website; the call center; and planning and education resources available to all participants.
The Board recently approved increasing the administrative fees paid by WDC participants in order to counter the effects of decreased revenue caused by poor market performance in 2022. Fees paid by WDC participants are based on account balances. When overall account balances decline due to poor market performance, less is collected from participants to pay for plan expenses. Because revenue from fees collected in 2022 was down, the Board needed to raise participant fees to help keep the plan’s reserve balance within established policy standards.
WDC participant fees effective January 1, 2023, are as follows:
| Participant Account Balance | 2022 Monthly Fee | 2023 Monthly Fee | 2023 Annual Fee |
|---|---|---|---|
| $1 - $5,000 | $0.00 | $0.00 | $0.00 |
| $5,001 - $25,000 | $0.75 | $1.25 | $15.00 |
| $25,001 - $50,000 | $2.00 | $3.00 | $36.00 |
| $50,001 - $100,000 | $4.25 | $6.50 | $78.00 |
| $100,001 - $150,000 | $5.50 | $8.25 | $99.00 |
| $150,001 - $250,000 | $7.75 | $11.75 | $141.00 |
| Over $250,000 | $11.50 | $17.25 | $207.00 |
For more information, visit WDC Program Fees and Management.
WDC Investment Changes
The Vanguard Target Retirement Trust Plus options were expanded to include both the “10” series of funds (2020-2060) and the 2065 fund. The additional target date funds have a gross expense ratio of 0.055%, similar to the current target date funds. The additional target date funds now available via the WDC are as follows:
- Vanguard Target Retire Trust Plus 2020
- Vanguard Target Retire Trust Plus 2030
- Vanguard Target Retire Trust Plus 2040
- Vanguard Target Retire Trust Plus 2050
- Vanguard Target Retire Trust Plus 2060
- Vanguard Target Retire Trust Plus 2065
What is a target date fund? These funds are designed for the investor who may not have the time—or the desire—to closely watch and manage their account. Target date funds are designed to adjust your exposure to risk over time, as your risk tolerance changes. For example, as you near retirement, your assets invested in target date retirement funds will be moved to a more conservative allocation. This is done because in general, you would have less time to make up for any market losses that could happen near the time you expect to retire. Read more about the WDC’s target date funds.
If you would like to change future contribution allocations or move your existing account balance to a different investment option, you can do so anytime by logging on to your account or calling the WDC at 1-877-457-9327 weekdays from 7 a.m. to 9 p.m. or Saturdays, from 8 a.m. to 4:30 p.m., CST. The TTY number for those with a hearing impairment is 1-800-345-1833.
Taking your retirement contributions to the limit in 2023
The IRS recently announced annual contribution limits for 2023. The WDC’s 2023 contribution limits are $22,500 or 100% of your includible compensation (as defined by the WDC and the Internal Revenue Code), whichever is less.
The WDC age 50+ catch-up contribution will increase to $7,500 in 2023. Using this would result in a maximum possible contribution of $30,000 if you are age 50 or older during the 2023 calendar year.
The special catch-up contribution amount also increased for 2023, which means you can contribute up to a maximum of $45,000 to the WDC if you are within three years of normal retirement age. The additional amount you may be able to contribute under the special catch-up contribution will depend on the amount that you were able to contribute in previous years but did not.
If you would like help with the catch-up provision, call the WDC at 1-877-457-9327 and say “yes” at the prompt.
Log on to your account today to review your current contribution level and consider increasing the amount you put toward your retirement. Remember, if you have questions on how the WDC can help you reach your retirement goals, you can schedule a free Retirement Readiness appointment. Review available appointments and book online your appointment online or call 1-877-457-9327.
Note: If you are eligible for both the age 50+ catch-up and special 457 catch-up, you may not take advantage of both in the same calendar year.