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Employers

Employer Bulletin

All WRS Employers
Vol. 22, No. 13
June 28, 2005

2006 WRS Contribution Rates Announced Employee Trust Funds Board Announces Contribution Rates For 2006

At its June 24, 2005 meeting, the Employee Trust Funds Board (Board) approved Wisconsin Retirement System (WRS) contribution rates for 2006, including rates for the § 40.65, Wis. Stat., protective occupation duty disability and the state’s Accumulated Sick Leave Conversion Credit programs. These rates are based on recommendations from the Board’s consulting actuary and current benefit levels.

The annual actuarial valuation incorporates current economic and demographic data into the existing financial condition of the WRS in setting new contribution rates for the system. It is normal for contribution rates to fluctuate somewhat from year to year based on investment earnings, wage inflation and emerging demographic trends. The changes in contribution rates may vary between employment categories based on different demographic trends within those groups. Benefits being paid to current annuitants are not affected by these rate changes.

Under Wis. Stat. § 40.05, WRS contribution rate changes are split evenly between the employer and employee. Employers who have either elected to increase prior service coverage or pay off unfunded liability balances may also experience a change in their prior service rates.

Enclosed are your contribution rates effective for salaries and wages paid beginning January 1, 2006.

Contribution rate changes by WRS employment category are summarized as follows:

  • General (including Teachers and Educational Support Personnel)
    Increase 0.2%
  • Executive, Elected and Judges
    Increase 0.2%
  • Protective with Social Security
    Increase 0.2%
  • Protective without Social Security
    No Change

Please reference the enclosed page for the effect on your total rate. In early February 2006 you will receive your Monthly Retirement Remittance Report forms (ET-1515) reflecting these contribution rates for use in reporting earnings paid in 2006. For more information regarding the 2006 contribution rates, please contact Nancy Kittleson at (608) 267-9034.

Employee Required Contribution (may be paid by employer)

5.0% General, including Teachers and Educational Support Personnel (no change)

2.9% Judges, Elected Officials and State Executive Positions Designated in § 20.923 (4), (8), or (9) (increased 0.1%)

5.0% Protective with Social Security (increased .1%)

3.3% Protective without Social Security (No Change)

Employee Benefit Adjustment Contribution (may be paid by employer)

0.9% General, including Teachers and Educational Support Personnel (increased 0.1%)

0.0% Judges, Elected Officials and State Executive Positions Designated in § 20.923 (4), (8), or (9) (no change)

0.0% Protective with Social Security (no change)

0.0% Protective without Social Security (no change)

Employer Required Contributions - Current Service (must be paid by employer)

4.5% General, including Teachers and Educational Support Personnel (increased 0.1%)

8.4% Judges, Elected Officials and State Executive Positions Designated in § 20.923 (4), (8), or (9) (increased 0.1%)

8.1% Protective with Social Security (increased 0.1%)

10.7% Protective without Social Security (No change)

Employer Required Contributions - Unfunded Actuarial Liability (must be paid by employer)

Same rate as 2005 unless employer elected to provide increased prior service coverage or paid off liability at an accelerated rate.

Employer Duty Disability Contribution (must be paid by employer)

Effective January 1, 2006, the experience-rated duty disability contribution rate schedule will remain the same as 2005 and will be determined as listed below:

  • 1.9% Groups with claims payout of less than or equal to 0.5% of payroll.
  • 2.4% Groups with one claim in which the pay out is more than 0.5%, and groups with two or more claims in which the pay out is more than 0.5%, but less than 1.0% of payroll.
  • 3.6% Groups with two or more claims in which the pay out is more than 1.0%, but less than 2.0% of payroll.
  • 5.4% Groups with two or more claims in which the pay out is more than 2.0%, but less than 3.0% of payroll.
  • 6.6% Groups with two or more claims in which the pay out exceeds 3.0% of payroll.
  • Over 6.6% Groups with two or more claims in which the payout exceeded 6.6% during the prior year. Rate will be 6.6% plus 50% of new claims over 6.6%. The 50% experience factor is based on claims incurred in the last 4-1/2 years (2001).

Employer Accumulated Sick Leave Conversion Credit Contributions (must be paid by employer)

This rate applies to state agencies only. Please see your individual rate page for the sick leave rate.

For more information, please contact Nancy Kittleson in ETF’s Office of Trust Finance & Data Analysis at (608) 267-9034.