The Wisconsin Re,rement System and ETF: An Update. Presented by Bob Conlin, ETF Secretary to UW- Madison Re,rement Associa,on April 15, 2014

Transcription

1 The Wisconsin Re,rement System and ETF: An Update Presented by Bob Conlin, ETF Secretary to UW- Madison Re,rement Associa,on April 15, 2014

2 Annuity Adjustments 2013 Core Fund Variable Fund SWIB Return 13.6% 29% Adjustment (4/1/14) +4.7% +25% 2

3 Agenda Demographic & Other Trivia Annuity Adjustments Legisla,on Rela,ng to the WRS Moderniza,on Update Ques,ons 3

4 Demographic & Other Trivia 4

5 Average Re,rement Age Average Retirement Age Source: GRS 5

6 As of 12/31/2013. Average Annual WRS pension: $22,104 (Down $906, or 3.94% from 2012) Median Annual WRS pension: $19,395 (Down $869, or 4.29% from 2012) 6

7 Number of WRS Annui,es by Amount in % 35.00% 34.73% 30.00% 27.58% 25.00% 24.34% 20.00% 15.00% 10.00% 9.72% 5.00% 2.92% 0.54% 0.15% 0.03% 0.00% Under $10,000 $10,000 to $24,999 $25,000 to $39,999 $40,000 to $54,999 $55,000 to $74,999 $75,000 to $99,999 $100,000 to $149,999 More than $150,000 7

8 Number of WRS Annui,es by Amount in 2013 Annual Amount Number of Annui8es Percentage % Change on Previous Year Under $10,000 51, % 1.03% $10,000 to $24,999 64, % 1.37% $25,000 to $39,999 45, % % $40,000 to $54,999 17, % % $55,000 to $74,999 5, % % $75,000 to $99, % % $100,000 to $149, % % More than $150, % 0.00% 2013 TOTAL 185, TOTAL 178, % 8

9 As of 12/31/2013. Monthly Final Average Earnings and Annual Average Annuity by Employment Category $60,000 $53,478 $50,000 $40,000 $31,690 $30,000 $27,002 $20,000 $20,088 $10,000 $4,532 $5,507 $6,329 $6,776 $0 GENERAL AND TEACHERS PROTECTIVE WITH SOC SEC (POLICE) ELECTEDS AND EXECUTIVES PROTECTIVE WITHOUT SOC SEC Average FAE Average Annuity 9

10 EMPLOYMENT CATEGORY AVERAGE YEARS OF SERVICE AVERAGE AGE AT RETIREMENT FINAL AVERAGE EARNINGS at Re8rement (MONTHLY) AVERAGE ANNUITY (Annual) ELECTED OFFICIALS AND EXECUTIVES $6, $31, GENERAL AND TEACHERS $4,531.8 $20, PROTECTIVE WITH SOCIAL SECURITY $5,507.3 $27, PROTECTIVE WITHOUT SOCIAL SECURITY $6, $53,

11 Annuity Adjustments 11

12 Annuity Adjustments 2013 Core Fund Variable Fund SWIB Return 13.6% 29% Adjustment (4/1/14) +4.7% +25% 12

13 Summary of Results December 31, 2013 ($ in Millions) Source: GRS, Inc. 13

14 Current Value of Annui,es* If You Re8red in A $1,000 Core Annuity is Receiving The Annual Rate of Increase is A $1,000 Variable Annuity is Receiving The Annual Rate of Increase is The Annual Change in CPI is 2009 $1, % $1, % 2.1% 2004 $1, % $1, % 2.4% 1999 $1, % $1, % 2.4% 1994 $1, % $1, % 2.4% 1989 $2, % $2, % 2.8% * Including annuity adjustments to be made effec,ve April 1, 2014

15 Change in Value of 1989 Annuity (3,257 annuitants) $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $11,093 $0 Ini,al Annuity Accumulated Dividends CPI

16 Change in Value of 1994 Annuity (3,908 annuitants) $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $12,531 $0 Ini,al Annuity Accumulated Dividends CPI

17 Change in Value of 1999 Annuity (6,032 annuitants) $25,000 $20,000 $15,000 $10,000 $5,000 $15,181 $0 Ini,al Annuity Accumulated Dividends CPI

18 Change in Value of 2004 Annuity (7,337 annuitants) $30,000 $25,000 $20,000 $15,000 $10,000 $18,984 $5,000 $0 Ini,al Annuity Accumulated Dividends CPI

19 Change in Value of 2009 Annuity (7,990 annuitants) $30,000 $25,000 $20,000 $15,000 $10,000 $25,091 $5,000 $0 Ini,al Annuity Accumulated Dividends CPI

20 Core Fund Dividend Liability (in $ billions ) /31/ /31/ /31/ /31/ /31/ /31/ /31/2014(est) Valua,on Date Source: GRS 20

21 Legisla,on Rela,ng to the WRS 21

22 Biennial Budget (2013 Wis. Act 20) Return to Work Increased the required break in service from 30 days to 75 days. If rehired at 2/3 rds of full-,me, must re- establish WRS account (stop annuity and become ac,ve employee again). First applies to those who re,re on or amer the effec,ve date of bill. 22

23 2013 Wis. Act 191 Purchase of Creditable Military Service Allows par,cipa,ng employees in the WRS to, with certain restric,ons, purchase creditable service for ac,ve service in the US armed forces Effec,ve April 6,

24 Other Proposals Early re,rement (2013 Assembly Bill 470): Increases the minimum re,rement age by 2 years (55 to 57 for generals/teachers; 50 to 52 for protec,ves) [First applies to those not yet 40 on the effec,ve date] Final Average Earnings (2013 Assembly Bill 471): Increases the,me period over which a par,cipant s highest earnings are averaged from 3 years to 5 years [First applies to those who re,re 5 years amer the effec,ve date] 24

25 Other Proposals Wisconsin Private Re,rement Security (2013 Senate Bill 611): Creates a Board which must establish a private re,rement security plan for re,rement benefits for residents of Wis. who choose to par,cipate Changes to Duty Disability (2013 Senate Bill 657): Makes various changes to the duty disability program and requires audit of the program by the Legisla,ve Audit Bureau 25

26 Moderniza,on Ini,a,ve 26

27 Benefits Administra,on System (BAS) Goal: An integrated Benefits Administra,on System that will enhance efficiencies, improve processing,mes, and allow for increased service Issued RFP for Vendor in June 2013 Received 6 proposals in August 2013 Intensive review of proposers over 3 months Issued intent to award no,ce to Vitech Systems Group, Inc in December 2013 Signed Contract February 28,

28 BAS: Status Phases 1-3 (March July) Training, onboarding, prep Development of detailed project workplan Hardware and somware install Implementa,on Phases Late

29 Contact ETF Call Center (Hours 7:00 a.m. to 5:00 p.m.) Internet etf.wi.gov Office 801 West Badger Road, Madison Office Hours (7:45 a.m. - 4:30 p.m.) Sign up for updates on our website 29

30 Ques,ons? 30