2009 Wisconsin Retirement System Contribution Rates Announced

MADISON, (Wis.) – On June 27th, the Department of Employee Trust Funds (ETF) Secretary David Stella announced that required Wisconsin Retirement System (WRS) employer and employee contribution rates that fund WRS benefits will slightly decrease next year for most employee categories. The 2009 rate changes, recommended by the WRS consulting actuary and approved by the ETF Board, will:

  • decrease 0.4% for protective category employees not covered by Social Security;
  • decrease 0.2% for general workers (including teachers) and protective category employees covered by Social Security; and
  • remain unchanged for executive/elected official/judge category employees.

The rates will go into effect for salaries and wages paid from January 1 to December 31, 2009.

Contribution rate changes, whether higher or lower, are considered normal for retirement systems like the WRS that pre-fund retirement benefits for its members. Overall, WRS contribution rates have been very stable for many years. Stella said that is due to the compounding effect of consecutive years of trust fund investment gains and the fundamentally sound funding structure of the WRS, as established by the legislature.

“The WRS is consistently one of the most financially-sound public employee retirement systems in the country,” said Stella. “The trust funds are responsibly-managed and the benefit design is appropriate and reasonable. As a result, the system is well positioned to meet its obligations to provide a modest, stable retirement for future retired public employees.”
Normal cost contribution rates as a percentage of salary* by Wisconsin Retirement System (WRS) employment categories for 2009 are summarized as follows:

Employee Category 2008 2009 Percent of Payroll Change

General/Teacher 10.6% 10.4% (0.2%)
Elected Official/Executive/Judge 11.5% 11.5% No Change
Protective covered by Social Security 13.3% 13.1% (0.2%)
Protective not covered by Social Security 14.2% 13.8% (0.4%)

*The rates shown above do not include other mandatory employer contributions for duty disability, the state’s Accumulated Sick Leave Conversion Credit Program, or unfunded liabilities, all of which vary by employer.

In other action, the ETF Board approved the actuary’s recommendation to reduce the contribution rates for the state’s Accumulated Sick Leave Conversion Credit Program

The cost of this program has declined steadily over the past three years and will now be 0.8% of payroll.

Additional information:

  • The WRS has approximately 263,000 active employees, including state workers, teachers, University of Wisconsin System employees, and most local government workers, with a total annual payroll of approximately $11.7 billion.
  • General category employees comprise approximately 91% of the total WRS employee population. The group includes state and local government employees, except employees of Milwaukee County and the City of Milwaukee, which have separate retirement systems.
  • By law, the WRS receives funding from three separate sources: employee contributions, employer contributions, and investment earnings. Together, these must be sufficient to meet the present and future pension and benefit commitments of the system.
  • The market value of the WRS trust funds as of December 31, 2007 was $87.8 billion.


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