Employee Benefits
Wisconsin Retirement System
| WRS Benefits: | Retirement | Disability | Separation | Survivor Benefits |
| Your WRS beneficiary | Eligibility for WRS coverage |
The Wisconsin Retirement System (WRS) provides retirement benefits for employees of the State of Wisconsin and most local units of government in Wisconsin. At the end of 2006, the WRS had 542,558 members including:
- 262,856 active employees
- 137,117 annuitants (retirees, disabilitants, and beneficiaries)
- 142,585 inactive employees with deferred benefit payable
WRS assets totaled $73.7 billion (actuarial value) as of December 31, 2006. For more information consult the WRS Fact Sheet.
You may find the Retirement information in the Life Events section helpful. Also see Retiring Early.
Administration
The WRS is governed by chapter 40 of the Wisconsin Statutes and the ETF section of the Wisconsin Administrative Code.
WRS assets are invested by the State of Wisconsin Investment Board.
Historical investment results
The Department of Employee Trust Funds (ETF) keeps retirement account records for each employer and member and administers benefit payments. ETF also administers a number of insurance programs for state and local government employees.
Retirement Benefits
In the WRS, money is set aside and invested with the goal of replacing a portion of your pre-retirement income when you retire. The WRS is a "hybrid" pension plan, with features of both defined contribution and defined benefit plans.
Eligibility for WRS coverage is defined by state statute.
As a covered employee, you have an individual account to which "employee-required" retirement contributions — 5% of salary for most employees — and investment earnings are credited. Despite the name "employee-required," this is paid for in almost all cases by the University.
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When you retire,
you will receive the higher of two pensions:
- a formula benefit based on your years of service and highest three years of earnings; or
- a money-purchase benefit based on the accumulation in your employee-required retirement account plus a 100% match from the WRS employer reserve.
- WRS retirement benefits are usually not payable in a lump sum. You select a monthly annuity payable for your life only, or for your life and that of a joint survivor, or for your life with a guaranteed number of payments.
- You can estimate your WRS retirement benefits using the ETF Retirement Calculator
- Vesting requirements: none
- 2007 Contribution rates (adjusted annually after actuarial review):
| For most employees the University pays the entire contribution. | Employee-Required Contribution (Deposited in your WRS account) |
Employer-Required Contribution (Deposited in the WRS employer reserve) |
| General Employees and Teachers |
5% of salary |
5.6%
(includes 1% |
| Executives |
3% |
8.5% |
| Protectives |
5.1% |
14.8%
(includes 6.6% |
Please note that this is the cost to the University to fund the WRS retirement benefits for its employees.
For most employees, the University pays the ENTIRE contribution.
-
Investment options:
- You may invest your entire account in the WRS CORE Trust, a balanced fund consisting of about 60% equities and 40% bonds and other fixed income investments, or
-
You may invest
half of your future contributions in the WRS Variable Trust, a fund
consisting of about 98% equities and 2% cash. The remaining half
will be invested in the WRS Core Trust.
View a power-point presentation on investing in the Variable Trust
- Investment earnings rate: based on actual earnings of the trust funds. In the Core Fund, recognition of investment gains and losses is spread over five years. Prior to 1999, employees hired after 1981 received a guaranteed 5% per year. In 1999 and later, all employees receive the ETF effective rate.
- Formula multiplier:
| Employment Category |
Formula Factor for service in years before 2000 |
Formula Factor for service in years after 1999 |
| Teachers and General Employees |
1.765% |
1.6% |
| Executive Employees |
2.165% |
2.0% |
| Protective Occupation Employees |
2.165% |
2.0% |
- Post-retirement benefit increases: annuity dividends may be paid, based on actual investment performance of the trusts
- Benefit improvements: read about changes enacted in 1999 Wisconsin Act 11.
For more information, visit the Department of Employee Trust Funds web-site.
Additional Contributions
You can contribute extra money to your WRS account. These contributions grow tax-deferred at the Core or Variable Fund rate until you withdraw them. Federal law limits the amount you can contribute each year. Additional contributions cannot be withdrawn until you terminate employment.
Additional contributions are either post-tax or pre-tax. You can submit after-tax additional contributions simply by mailing a check to the Department of Employee Trust Funds, or you can arrange for payroll deductions. Pre-tax additional contributions must be made by payroll deduction through the UW 403(b) Tax-Sheltered Annuity Program.
More information (ETF's web site)
Disability Benefits
If you become permanently and totally disabled while you are employed in a WRS-covered position, you may qualify for disability benefits administered by ETF. Long-term Disability Insurance (LTDI) pays a monthly benefit until you reach normal retirement age. You can then begin drawing your regular retirement annuity. Employees hired before October 16, 1992 may choose between LTDI and a disability annuity, payable for life, based on years of service and the three highest years of earnings.
More information (ETF's web site)
Separation Benefits
If you terminate employment before your minimum retirement age (55, or 50 for protective occupation employees), you may withdraw your WRS employee-required account in a lump sum. You forfeit the 100% match from the WRS employer reserve that would otherwise become part of your retirement benefit. Income taxes and a 10% federal tax penalty for early withdrawal apply unless you roll your account over to another retirement plan.
Even if you terminate employment before minimum retirement age, If you wait until you are minimum retirement age to withdraw your benefits, you will receive your full retirement benefit.
More information (ETF's web site)
Survivor Benefits
If you die as an active WRS-covered employee, your beneficiary receives your employee-required retirement account plus a 100% match from the WRS employer reserve. There is no restriction based on your age or the identity of your beneficiary.
If you are at minimum retirement age (55, or 50 for protective occupation employees) and your beneficiary is a natural person (not a charity or your estate), a "special death benefit" may be payable instead. The special death benefit is the annuity that would have been paid to your beneficiary if you had retired on the day before death and designated your beneficiary as your joint survivor. Depending on the beneficiary's age, your years of service, and other factors, the special death benefit may or may not be higher than the regular death benefit. The beneficiary chooses the mode of payment (a monthly annuity or a lump sum).
If you die as an inactive employee, your beneficiary is only eligible to receive your employee-required account.
If you die after beginning a monthly annuity, death benefits depend on the annuity pay-out option you selected.
More information (ETF's web site)
Your WRS beneficiary
Your will or trust document generally does not control how your WRS benefits are paid at your death.
Your WRS death benefits (other than joint survivor annuities) are paid either to the people you name in a beneficiary designation that you file with the Department of Employee Trust Funds or, if you do not file a beneficiary designation, according to "standard sequence."
If you do not want standard sequence to apply, you may file a beneficiary designation with the Department of Employee Trust Funds. You must use the Department's official form.
You may name any person(s), trust(s), or other entity(ies) you wish.
You may change your beneficiary designation at any time, but your designation must be on file with the Department prior to your death in order to be effective.
If you have already filed a beneficiary designation and now want to use standard sequence, you must file a beneficiary designation form showing "standard sequence" as your beneficiary.
If you use a beneficiary designation, it is extremely important to keep it up to date to reflect marriage and divorce, birth of children, or other changes that affect how you want your WRS benefits to be paid.
The Department of Employee Trust Funds is required by law to pay benefits according to the last beneficiary designation it received, even if the designation appears to be out of date.
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This document was last revised on September 17, 2007
