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Retirees of the Wisconsin Retirement System (WRS) will receive an increase in their pension benefits this year.

The Core annuity will increase by 3.6%, while the Variable annuity will rise by 15%. 

Both adjustments will be reflected on retirees’ May 1, 2024, annuity payments.

ETF Secretary John Voelker and ETF Board Chair William Ford recently approved the annuity adjustments based on calculations performed by the WRS consulting actuaries.

Sharing Benefit Risks

Risk-sharing is a fundamental component to the WRS being one of the few U.S. public employee pension systems to be consistently fully funded. For retirees, this is represented by the fact that the WRS does not guarantee payment of annual annuity adjustments.

Any adjustments are based on the level of assets within the trust funds. In determining the adjustments for the Core and Variable annuities, investment returns of more than 5% can produce an increase in a retiree’s annuity. Investment returns below 5% may result in a decrease.

In 2023, the Core and Variable funds returned 11.4% and 22.2%, respectively.

The Core fund is invested in a fully diversified portfolio, with its returns recognized over a period of five years to smooth market volatility effects. Meanwhile, the Variable fund is an all-stocks fund with investment returns recognized annually.

Based on assets generated by positive investment performance in 2023, the WRS consulting actuaries recommended the 3.6% and 15% adjustments for the Core and Variable annuities, respectively. Notably, both increases are higher than the 3.4% inflation registered in 2023.

Comparison of WRS Annuity Adjustments and Inflation Changes
(Annualized as of December 31, 2023)

Core Fund Adjustment3.6%3.9%2.7%1.6%
Variable Fund Adjustment15.0%7.4%4.2%3.1%
Change in Consumer Price Index3.4%4.1%2.8%2.6%

WRS Fast Facts

  • As of December 31, 2023, there were 238,111 WRS retirees who received Core annuities, of whom 43,560 opted to participate in the Variable fund.
  • The WRS paid approximately $7.1 billion in retirement benefits in 2023.
  • As of December 31, 2023, the median annual Core and Variable benefits were approximately $23,400 and $6,400, respectively, with a median combined benefit of $25,500.
  • By law, Core annuities will be increased if the annuity reserve surplus provides at least a 0.5% increase. Annuities will be reduced if a shortfall in this reserve would require at least a -0.5% adjustment.
  • For the Variable Fund, annuities will be reduced if a shortfall in this reserve would require at least a -2.0% adjustment and increased based on a 2% threshold.
  • The financial impact of the WRS on Wisconsin is widespread, as more than 85% of WRS retirees live, pay taxes, and buy goods and services in Wisconsin.
  • As of 2023, the WRS is the 9th largest U.S. public pension fund.