- A defined contribution plan means there is a set amount of money (that may change each year) paid into a member’s retirement account. Half of this amount is deducted from the employee’s paycheck and half is paid (matched) by the employer.
- A defined benefit plan means that the amount paid to you in retirement is based on a formula that is fixed, and therefore “defined”.
The WRS refers to these plan types as Money Purchase (defined contribution) and Formula (defined benefit). ETF calculates your retirement benefit using both methods and you will automatically be paid the highest amount.
The Retirement Calculations
Your money purchase benefit is calculated by multiplying your money purchase account balance by a factor based on your age. This money purchase balance is shown on your annual Statement of Benefits.
Your formula benefit is based on your three highest years of earnings ("final average earnings"), a formula multiplier (based on your employment category), your years of creditable service (including any creditable military service) and an actuarial reduction if you retire before your normal retirement age.
Participating members will receive a Statement of Benefits every year. It shows your account balances, earnings, years of service, and much more. Keep this document with your important papers. See the Statement of Benefits page for more information.
In most cases a retirement benefit is paid as a monthly annuity payable for your lifetime.
Who is Eligible to Participate in the WRS?
The Wisconsin Retirement System covers state and local public employees, including faculty and staff of the University of Wisconsin System, local police and firefighters, and all publicly-employed teachers in the state.
Your employer is required to cover you as a participating employee if your job position meets WRS Participation Requirements:
If you first became a WRS employee on or after July 1, 2011:
- You must be expected to work at least 2/3 of full-time.
- 880 hours for teachers and educational support employees of school districts and
- 1,200 hours for all other non-teaching employees.
- You are expected to be employed for at least one year.
If you first became a WRS employee before July 1, 2011:
- You must be expected to work at least 1/3 of full-time.
- 440 hours for teachers and educational support employees of school districts and
- 600 hours for all other non-teaching employees.
- You are expected to be employed for at least one year.
If your position is not expected to meet both requirements when you are first hired, you will not be enrolled in the WRS. If your position meets the eligibility criteria at a later date, you may become eligible and be enrolled in the WRS at that time.
Returning to WRS Employment
If you left employment under the WRS and closed your account by taking a lump sum benefit, you must meet the 75-day minimum break in service requirement. Your participation requirement when returning to a WRS-employer will be the rules under on or after July 1, 2011 employment.
If you previously worked in a WRS-covered position (before July 1, 2011) and did not take a WRS lump sum (separation) or annuity benefit, you retain your earlier rights under the WRS and your employer is required to evaluate you under the one-third of full-time WRS eligibility criteria.
If you previously worked in a WRS-covered position and started an annuity benefit, your benefits may be affected if you return to work for a WRS employer. See the Returning to Work page for more information.
Working part-time will affect your WRS benefits, including retirement, health insurance, disability, and more.
For more information see the How Part-Time Employment Affects Your WRS Benefits (ET-2121) brochure.
Contributions to Your WRS Account
The money to pay WRS benefits come from employee- and employer-required contributions and investment (interest) earnings. The largest amount comes from investment earnings. All the monies are managed by The State of Wisconsin Investment Board (SWIB). The amount that you and your employer pay are (by law) based on a percentage of your annual salary. You can see this percentage and how it changes over the years on our WRS Contribution Rates page. Employers pay 50% of the total amount required and employees pay the other 50%.
This money is put into the Core Trust Fund. You may also choose to put ½ of the contributions into the higher-risk investment fund called the Variable Trust Fund. Each fund is credited with a separate effective rate of interest each December. The effective rates are on based on how the funds perform each year. Go to the Core and Variable Funds page to learn more.
Vested members are eligible to receive a retirement benefit at age 55 (age 50 for protective category members) once they terminate all WRS employment. Members who are not vested may only receive a separation benefit.
You may have to meet 1 of 2 vesting laws depending on when you first began WRS employment:
- If you first began WRS employment after 1989 and terminated employment before April 24, 1998, then you must have some WRS creditable service in 5 calendar years.
- If you first began WRS employment on or after July 1, 2011, then you must have 5 years of WRS creditable service.
- 1 year of creditable service is based on the hours you work. To earn 1 year of service, teachers need to work 1,320 hours and all other employees need to work 1,904 hours.
If neither of the vesting laws above apply to you, then you were vested when you first began WRS employment.
If You are Vested and Have Reached Minimum Retirement Age:
When you stop working a WRS job, you may apply for a retirement benefit. The minimum retirement age is 55 for most employees and age 50 for protective category employees. See the When Can I Retire page for more information.
For more information about vesting, see the WRS Guide to Retirement (ET-4133) brochure.