Reminder: WRS Contribution Rates Will Increase on January 1

Boards finalizing their 2016-17 proposed budgets should keep in mind that contributions paid by Wisconsin Retirement System (WRS) employees (e.g., teachers, administrators and other covered school staff) and employers (e.g., school districts) into the system will increase, effective January 1, 2017.

The total rate for general employees (e.g., teachers, administrators and other covered staff)  will increase to 13.6 percent, an increase of 0.4 percent of payroll. In most instances, this means both the school district employer and employee contributions will increase to 6.8 percent on January 1, 2017.  (Unfunded WRS liabilities are not included in this figure and, if those exist, they will vary by employer).

Employee Category Total Rate 2016 Total Rate 2017 Employee Share of Total Rate 2017 Employer Share of Total Rate 2017 % Change
General 13.2% 13.6% 6.8% 6.8% Increase 0.4%

According to the DETF, the 2017 rate increases are primarily due to higher life expectancies and lower-than-expected trust fund investment performance.

Investment income contributes approximately 75 percent of WRS funding requirements. The remainder comes from employer and employee contributions. Together, these three funding sources must be sufficient to meet the present and long-term retirement benefit commitments of the system. When investment earnings are greater than expected, contribution rates may decrease the following year. When earnings are lower than expected, rates may increase to make up for the shortfall.

The rate changes were recommended by the WRS consulting actuary and approved by the Employee Trust Funds Board.