Employee Benefits
Wisconsin Retirement System
For information about how current market conditions may affect future retirement benefits, visit UW System Administration's Understanding How Current Market Conditions Impact Your WRS Account and Future Retirement Benefits website. Review the State of Wisconsin Investment Board (SWIB) brochure, Wisconsin Retirement System - Investing for Your Retirement, for information about how your money is invested in the WRS.
WRS Benefits:
Administration
Retirement Benefits & Eligibility
Vesting
Disability
Separation
Survivor
Benefits
Your
WRS beneficiary
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 2011, the WRS had more than 570,000 participants. WRS assets totaled $77.22 billion (actuarial value). For more information consult the WRS Fact Sheet.
You may find the Retirement information in the Life Events section helpful. Also see Retiring Early.
Review the summary guide Retirement Savings Options Available to UW System Employees for a brief overview of the Wisconsin Retirement System, as well as the Tax-Sheltered Annuity and Wisconsin Deferred Compensation programs. You can also review past issues of the WRS News for more information about the WRS.
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.
2011 Wisconsin Act 10 (2009-11 Budget Repair Bill) changed the employee's WRS contribution rate effective in August 2011. As a covered employee, you have an individual account to which "employee-required" retirement contributions — 5.9% of salary for most employees in 2012 — and investment earnings are credited. In most cases, the University matches this amount.
-
When you retire,
you will receive a pension based on the higher of the two following calculation methods:
- 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: 5 years of creditable WRS service for employees initially hired by a WRS-participating employer on or after July 1, 2011. See vesting section for additional information.
- 2012 & 2013 Contribution rates (as a percentage of salary):
WRS Category |
2012 Employee Contribution |
2012 Employer Contribution |
2013 Employee Contribution |
2013 Employer Contribution |
| General Employees and Teachers |
5.9% |
5.9% |
6.65% | 6.65% |
| Executives |
7.05% |
7.05% |
7% | 7% |
| Protectives |
5.9% |
14.4%
(includes 5.4% |
6.65% | 15.15% (includes 5.4% Duty Disability contribution) |
-
Investment options:
- You may invest your entire account in the WRS Core Fund, 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 Fund, a fund
consisting of about 98% equities and 2% cash. The remaining half
will be invested in the WRS Core Fund. See the ETF brochure How Participation in the Variable Trust Fund Affects Your WRS Benefits for details.
- 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 |
Formula Factor for Service Earned After June 29, 2011 |
| Teachers and General Employees |
1.765% |
1.6% |
1.6% |
| Executive Employees |
2.165% |
2.0% |
1.6% |
| Protective Occupation Employees |
2.165% |
2.0% |
2.0% |
- Post-retirement benefit increases: annuity dividends may be paid, based on actual investment performance of the trusts
- View the ETF Brochure, Information for Retirees, for additional information.
- Benefit improvements: read about changes enacted in 1999 Wisconsin Act 11.
For more information, visit the Department of Employee Trust Funds website.
Vesting
Employees who initially become covered by the Wisconsin Retirement System on or after July 1, 2011 must accrue five years of creditable service to be vested in the WRS. (Note: for part-time employees, accruing five years of creditable service may take longer than five years.)
Employees who initially become covered by the Wisconsin Retirement System on or after July 1, 2011 who do not accrue five years of creditable service before terminating WRS employment will not be eligible to receive the employer contributions of their WRS account. They will only be eligible for a separation benefit, which includes any employee contributions and related investment earnings. The employer contributions and years of creditable service would be forfeited and their WRS account closed.
If a member were to work in a WRS-covered position for less than five years, leave that position, and subsequently return to a WRS-covered position without having taken a separation benefit, that person’s WRS employee and employer contributions would be unaffected by the termination (meaning their account would remain whole). They would also receive creditable service toward the five-year vesting requirement for years worked in the previous WRS-covered position.
Employees who were covered by the WRS prior to July 1, 2011 are immediately vested in the WRS.
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 post-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. Effective January 1, 2009, employees can no longer make pre-tax contributions through the UW 403(b) Tax-Sheltered Annuity Program.
View the ETF Brochure, Additional Contributions, for more information.
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.
View the ETF Brochure, Disability Benefits, for more information.
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.
View the ETF Brochure, Separation Benefits, for more information.
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 December 11, 2012
