ETF Board Sets 2014 WRS Contribution Rates

 Department of Employee Trust Funds 

 ETF Board Sets 2014 WRS Contribution Rates

Contribution rates for Wisconsin Retirement System (WRS) employers and employees will increase in 2014, the Employee Trust Funds Board (Board) announced. The following rate increases were recommended by the WRS consulting actuary and approved by the Board on June 20:

• 0.7% of payroll for general category employees (including teachers)
• 1.5% of payroll for executive/elected official/judge category employees
• 0.7% of payroll for protective category employees covered by Social Security
• 1.7% of payroll for protective category employees not covered by Social Security

In general, the total contribution rate is split equally between the employee and the employer. This means general category employees will contribute .35% more in 2014. Executive/elected official/judge category employees will see an increase of .75%.

Why are contribution rates increasing?

While many complex factors affect WRS contribution rates, the increase is primarily due to the lingering effects of 2008’s global economic meltdown. 2014 is the last year that the investment declines will affect WRS contribution rates. Contribution rate changes, whether increases or decreases, are considered normal for retirement systems that have defined, or pre-funded, benefits.

Core Trust Fund investment results are distributed (“smoothed”) over five years to soften the impact of year-to-year volatility of investments. This also helps to keep WRS contribution rates stable. For example, over the past 25 years the rate for general category employees has deviated by just 2%.

The new rates (shown below) go into effect January 1, 2014. Rates may be different for employees who have collective bargaining agreements. Other mandatory employer contributions for duty disability, the state's Accumulated Sick Leave Conversion Credit Program, or unfunded liabilities are not included and vary by employer.

Employee Category	Total Rate 2013	Total Rate 2014	Employee Contr. 2013	Employee Contr. 2014
General/Teacher	13.3%	14.0%	7.0%	7.0%
Elected Official/Exec/Judge	14.0%	15.5%	7.75%	7.75%
Protective with Social Security	16.4%	17.1%	7.0%	10.10%
Protective without Social Security	19.0%	20.7%	7.0%	13.7%

Created with the HTML Table Generator

Employee Category

Total Rate
2013

Total 
Rate
2014

Employee 
Contribution 
for 2014

Employer 
Contribution
for 2014

General/Teacher

13.3%

14.0%

7.0%

7.0%

Elected Official/Executive/Judge

14.0%

15.5%

7.75%

7.75%

Protective with Social Security

16.4%

17.1%

7.0%

10.10%

Protective without Social Security

19.0%

20.7%

7.0%

13.7%

For additional information:  How are WRS Contribution Rates Determined?