You can choose to deposit 50% of your contributions, including additional contributions, into the Variable Trust Fund. The Variable Fund is an all-stocks fund. Participants in this fund are exposed to a higher degree of risk (because of possible losses from unfavorable stock market performance), in exchange for the possibility of greater returns over the life of the investment in the fund. The Variable Fund is not smoothed like the Core Fund; therefore, the full rate of return is applied each year.
Before you join, take the time to understand how participation affects your benefits, both before and during retirement. See the Variable Trust Fund (ET-4930) brochure for a detailed explanation of how the Variable Fund works and is calculated in your money purchase and formula calculations. Also, understand how Variable excess or deficiency (below) affect your account before you decide.
Variable Excess or Deficiency
When you take part in the Variable fund, your account has either a variable “excess” or a “deficiency." This is the difference between your actual account value, and what it would be if you never took part in the Variable fund.
- A Variable “Excess” is the amount you are ahead.
- A Variable “Deficiency” is the amount you are behind.
The amount changes each year when Core and Variable interest is credited to your account. By keeping track of these amounts, you can figure out how well the Variable fund is performing since you entered the fund and when and if you might want to cancel the fund. Use the Variable Excess or Deficiency Update Calculator to update your balance and how much it would increase or decrease your formula calculation. See the Variable Trust Fund (ET-4930) brochure for more information.
Join the Variable Fund
If you would like to take part in the Variable Fund, complete an Election to Participate in the Variable Trust Fund (ET-2356) form.
When would your participation start?
- If you sign up within 30 days of becoming WRS eligible, your Variable Fund participation starts the day of eligibility.
- If you sign up any time after that, your participation will take effect on the January 1 after the date you turned in the form. The Variable Fund will only apply to contributions made on and after the day it takes effect.
Cancel the Variable Fund
If you cancel your Variable participation, your account has a “residual” excess or deficiency balance. That balance is credited with Core interest each year. This means your residual excess or deficiency will continue to change (usually grow) until you begin a retirement benefit. It is best to cancel when you are in an excess. You will see your excess or deficiency information on your Statement of Benefits each year.
Cancel your Variable Fund participation by filling out a Canceling Variable Participation (ET-2313) form. The cancellation takes effect on the January 1 after the date you turned in the form. Once you cancel, you may not rejoin unless you quit WRS employment and later return to work for a WRS employer.
For more information:
- Take part in free webinars on these topics. Sessions are offered at convenient times over the lunch hour and early evening.