Press Release

For Immediate Release
June 27, 2006

Contact:

Bob Conlin, Director,
ETF Office of Legislation, Communications and Planning
(608) 261-7940

ETF Board Sets 2007 WRS Contribution Rates

MADISON -- The Department of Employee Trust Funds (ETF) announced today that public employers participating in the Wisconsin Retirement System (WRS) will see very slight increases in contribution rates for 2007. Rates will increase by 0.2% of payroll for all employment categories: general/ teacher, executive/elected, protective with social security, and protective without social security.

The rate adjustments are based on the recommendations of the ETF Board’s consulting actuary, and will go into effect on salaries and wages beginning January 1, 2007. According to the actuary, “The WRS continues to be in excellent financial condition.”

ETF Secretary Eric Stanchfield said that the modest adjustments reflect the continued carry-over of investment losses from the bear market years of 2000, 2001, and 2002. Said Stanchfield, “The funding design and performance of the WRS is solid and has allowed us to keep our contribution rates relatively stable from year to year. This benefits our participating employers, their employees, and taxpayers.”

Stanchfield noted that the 10.6% general category contribution rate for next year is still considerably lower than the rate in effect ten years ago. In 1996, the rate was 11.6% of payroll. “Next year’s rate is a full 1% lower than the 1996 rate and it illustrates the stable funding design and financial health of the WRS,” he said.

Normal Cost contribution rates as a percentage of salary* by WRS employment category for 2007 are summarized as follows:

The rates shown above do not include other mandatory employer contributions for duty disabilities, the state's Accumulated Sick Leave Conversion Credit program, or unfunded liabilities -- all of which vary by employer.

Additional information:

• The WRS has approximately 263,122 active employees and 1,412 employers. Total annual payroll is approximately $11 billion.*
• General category employees comprise approximately 91% of the total WRS covered employee population. The group includes state and local government employees, except employees of Milwaukee County and the City of Milwaukee, which have their own 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.
• Contribution rate changes, whether higher or lower, are considered normal for retirement systems, like the WRS, that pre-fund retirement benefits.
• Contribution rates do not affect formula retirement annuity benefits under the WRS.

*As of December 31, 2005 actuarial valuation.