RETIREMENT
PLANNING
2016
Mary Kay Sankey
Staff Benefits Manager
UW-Stout Human Resources
_______________________________________________________________
University of Wisconsin-Stout
OBJECTIVES
 WRS Information/Tools & Resources
 WRS Annual Statement of Benefits
 WRS Calculation Methods
 WRS Estimate Calculator Demo
 WRS Annuity Options
 Sick Leave Conversion
 Post-Retirement Insurance
 TSA/DC
 Retirement Process Timelines
 Answer Questions
ETF WEBSITE/RESOURCES
• http://etf.wi.gov
• Road to Retirement Online Video Appointment (same info members seek
from an in-person explanation of retirement materials)
• Applying for Your Retirement Benefit
• Calculating Your Retirement Benefits
• Choosing an Annuity Option
• How to Retire
• Information for Retirees
• How Variable Participation in the Variable Trust Affects your WRS Benefits
• Buying Creditable Service
• How Part-Time Employment Affects your WRS Benefits
• Tax Liability on WRS Benefits
• Additional Contributions
• Military Service
WRS BENEFITS
 Retirement Benefit (Vesting Requirement after
7/1/2011)
 Separation Benefit (prior to age 55, 50 if Protective
category)
 Disability Benefits
 Death Benefit
 Active
 In-Active HUGE difference
BENEFICIARY DESIGNATION
 Not paid according to will
 WRS and State Group Life Death Benefits are always paid
according to the most recent Beneficiary Designation on file
with ETF
 There are separate beneficiary forms for each UW Life
Insurance plan, your TSA & WDC
 If no designation is on file there is a Statutory Standard
Sequence that applies
 Beneficiary forms available online
 MAKE SURE YOUR BENEFICIARY DESIGNATIONS ARE
ALWAYS UP-TO-DATE
FURLOUGH
WRS Benefits were NOT impacted by Furlough!
2009 Wisconsin Act 28 required employers to
report your salary, retirement contributions and
creditable service as if the furlough did not occur
WRS ANNUAL
STATEMENT OF BENEFITS
 Dated January 1 of each year, normally
available in UW Portal (Benefit Information
Section, Statements tab) mid-late April
 Verify account information:
 Service
 Salary
 WRS Beneficiary(ies)/Death Benefit Info
 Report Discrepancies to Employer/AskHR
 Use information for calculating WRS estimates
WHEN CAN I RETIRE?
A retirement benefit is available to vested * WRS
employees after you terminate employment and have
reached age 55 (50 for participants with some protective
category service). Retirement benefits are based on
both employee and employer contributions, and are
usually paid as a monthly annuity payable to you for
LIFE.
 Participants who first began WRS employment after 1989 and terminated employment before
April 24, 1998 must have some WRS creditable service in five calendar years.
 Participants who first began WRS employment on or after July 1, 2011 must have five years of
WRS creditable service
 Participants who are not vested may only receive a separation benefit
WHAT IS AN ANNUITY?
 An annuity is a Wisconsin Retirement System (WRS)
benefit paid monthly
• A person who receives a monthly benefit is called an
Annuitant
• WRS annuities are paid to participants for LIFE*
*except for an Additional Contribution annuity certain
ANNUITY THRESHOLDS
• Lump Sum Payment: Less than $190 per month
• Lump Sum or Annuity: $190 - $387 per month
• Annuity Only: $388 and over per month
( 2016 Amounts - indexed annually)
Note: If you select a lump sum payment, any Additional
Contributions will be included in your payment.
TWO CALCULATION
METHODS
 Formula Calculation
 Money Purchase Calculation
 Interest Crediting has MAJOR Impact
You are automatically paid under the
calculation method that provides the largest monthly
annuity
FORMULA CALCULATION
Final Average Salary (monthly average of 3 highest years -- calendar year for
University Staff, fiscal year for FASLI employees)
X Formula Factor(s):
Pre-2000 Service
Post-1999 Service
General:
.01765
.016
Protective:
.02165
.020
X WRS Creditable Service
X Age Reduction Factor, if applicable
= Monthly “Annuitant’s Life Only” Amount
(Max = 70% of FAS, general/65% FAS, protective)
Amount then Adjusted for Variable Participation
NO AGE REDUCTION/
FULL RETIREMENT BENEFIT
Age 57 (or older) with 30 years of WRS
creditable service
OR
Age 65
Applies to formula calculation only!
AGE REDUCTION FACTOR
BASED ON AGE AND WRS CREDITABLE SERVICE
• Age 55 with 10 years of
service…….64.8%
• Age 57 with 10 years of
service……..74.4%
• Age 55 with 25 years of
service……84.0%
• Age 57 with 25 years of
service……..95.2%
• Age 55 with 30 years of
service…….90.4%
• Age 57 with 30 years of
service……..100%
WAYS TO INCREASE
CREDITABLE SERVICE
 Military Service Credit -- need DD-214
(one year of WRS service for each 5
years of active military prior to 1974/max = 4 yrs)
 Purchase Forfeited Service (termed and withdrew $)
 Forfeited Service Calculator Available on ETF
website
 Purchase Qualifying Service: University Staff
employees who began WRS employment prior to 1973,
first six months was not under WRS
 Purchase other government service – very costly
 Work longer
MONEY PURCHASE
CALCULATION
Total WRS Account Value
X
Money Purchase Factor (Actuarial Factor based on Age)
No Limits on Monthly Amount - Interest Crediting Major Impact
2015 Effective Interest Rates:
6.4% Core, 0% Variable
CHOOSING AN ANNUITY
OPTION
 Seven options available (and Accelerated if under
age 62)
 All options are payable for your LIFETIME
 The option you select determines the death benefit
available, if any
 The different options are designed to accommodate
individual needs/situations
ANNUITY OPTIONS
 Annuitants Life Only
 Life Annuity – 60 Payments Guaranteed
 Life Annuity – 180 Payments Guaranteed
 Joint Survivor Annuity Continued at 75% (pop-up)
 Joint Survivor Annuity Continued at 100% (pop-up)
 Joint Survivor Annuity Payments Reduced 25%
 Joint Survivor Annuity 100%, Combined with 180
Payments Guaranteed
 Important to know the Difference between
Beneficiary and Named Survivor
ACCELERATED
PAYMENTS
 Available if under age 62
 WRS pays a higher amount prior to age 62
 WRS reduces at age 62 automatically
 Social Security available at age 62 -- MUST APPLY
 Allows more level retirement income
 Accelerated Payment Calculator on ETF Website
CONSIDERTIONS WHEN
CHOOSING ANNUITY OPTION
 Do you need to provide for a beneficiary(ies) or survivor?
 Names Survivor’s Age
 Life Expectancy – yours and your Named Survivor or
beneficiary(ies)
 Retirement Income
 Investments, other pensions
 Other Work
 Social Security
 Taxes
 Life Insurance
 Your Assets/Liabilities
TIMING OF RETIREMENT
 You can retire anytime
 Consider which Calculation method is higher and what is
projected interest crediting?
 Most FASLI Retire end of May (AY) or July (Annual). Most
University Staff in January. If formula calculation is higher
 Last fiscal year is usually highest earnings period
 Paid holiday(s) – July 4, Annual AS/LI
 Dec/Jan Holidays University Staff
 Personal Holidays not Pro-Rated
 Paid leave (other than sick leave) can extend retirement
date, be paid out as lump-sum, or combination
 Vacation is given up front but prorated based on retire date
 State Adjusted Continuous Service Date/Max SL Match
 Benefits paid through month of last day on payroll
PAID LEAVE
 Personal Holidays are not pro-rated
 Vacation is given up front in assuming you will work the
entire calendar or fiscal year. If you retire prior to the
end of the calendar year (University Staff) or fiscal year
(Annual AS/LI) vacation is pro-rated
 FASLI: Jen Schermitzler, schermitzlerj@uwstout.edu
 All FASLI leave reports must be in to certify sick leave
and payout any used leave
 University Staff: Annette Koleno, kolenoa@uwstout.edu
TAXES/NET MONTHLY
ANNUITY
 Taxable Benefit -- almost entire Annuity Amount
 Investment In Contract = Part You Paid - Section 3 Annual Statement is the
Non-taxable portion
 Indicate Withholding on Retirement Application
 State Taxes based on State of Residency
 Not subject to Social Security/Medicare Taxes
 State Group Life Premium EE coverage, if 65 or under
 Health Insurance Premium – No ER Contribution, sick
leave or directly from annuity check, if large enough
WILL MY RETIREMENT BENEFIT
AMOUNT CHANGE?
CORE
VARIABLE
 Core dividend applied on
each year on May 1stpro-rated first year
 Variable adjustment is applied
to the variable portion each
year on May 1st
 Can increase or decrease
but will not decrease less
than original CORE
benefit amount
 Can increase or decrease –
more volatile – no
guarantee on variable
ANNUITY ADJUSTMENTS
2009-2015
YEAR
CORE
VARIABLE
2015
2014
2013
.5%
2.9%
4.7%
-5.0% (Loss)
2.0%
25.0%
2012
2011
2010
2009
-9.6% (Loss)
-7.0% (Loss)
-1.2% (Loss)
-1.3% (Loss)
9.0%
-7.0% (Loss)
11.0%
22.0%
2008
-2.1% (Loss)
-42.0% (Loss)
CAN I ENROLL IN
VARIABLE ?
• Complete an Election to Participate in the Variable
Trust Fund form (ET-2356)
• Form available in Human Resources or on web
• Effective January 1, following ETF’s receipt of form
• Participants in variable have 50% of future WRS
contributions deposited in the Variable Fund
• 50% of contributions will continue to be deposited in
the Core Fund
CAN I CANCEL VARIABLE
PARTICIPATION?
 Complete an Election to Cancel Variable
Participation form (ET-2313)
 Form available in HR or ETF website
 Choose how you would like to opt out
 Conditionally
 Unconditionally
 Never allowed to opt back in to Variable
CALCULATE YOUR
RETIREMENT BENEFIT
Calculate your WRS Benefit on the ETF website:
http://eft.wi.gov
Click on the “Calculators” button on the toolbar on the left
(WRS, Variable Excess/Deficiency, Forfeited Service,
Accelerated Payment, Link to SSA)
WRS Calculator Demonstration
DISABILITY BENEFITS
 Two different types of disability plans available
based on WRS begin date
 Must meet creditable service requirements
 Must be totally and permanently disabled
 Must not have reached normal retirement age
 Must not be gainfully employed
 2 Physicians must certify total disability
 Contact HR or ETF with Questions
BENEFITS UPON
RETIREMENT
• Insurance benefits through active employment end the
end of the month in which retirement occurs
• Retirees receive a letter from HR advising of options for
continuation/conversion along with the appropriate
paperwork for the continuation/conversion
• HR completes Accumulated Leave Certification
• FASLI employees make sure all leave reports have been
completed
HEALTH INSURANCE
 Retiree pays full premium cost
 Converted Sick Leave Credits pay premiums until
exhausted available to spouse/DP/dependent
child(ren) upon death of annuitant if family plan is in
effect
 Can be escrowed if you have comparable coverage
 After credits are exhausted, premium taken from
annuity check if large enough, otherwise health plan
bills retiree –CANCEL coverage if you don’t want it to
continue
 Annual It’s Your Choice Open Enrollment Opportunity
 Premium reduces when retiree/spouse/DP are eligible
for Medicare, age 65 or disability. Must apply for
Medicare B when first eligible if retired
 Change Plans - move from area 3 or more months
SICK LEAVE CONVERSION
Highest Rate
X
Hours of Sick Leave
including supplemental hours, if eligible
UW System Sick Leave Calculator:
https://www.wisconsin.edu/ohrwd/benefits/sle/
SUPPLEMENTAL SICK
LEAVE
Must have 15 years of State Adjusted Continuous Service
Will match up to 52 hours for each year, 1– 24
Will match up to 104 hours for each year 25 +
 500 hours restored for catastrophic illness
 If 500 hours are used within 3 years of retirement for
one catastrophic illness
 Restored hours are not matched
Sick Leave Conversion Credit Program Brochure:
http://etf.wi.gov/publications/et4132.pdf
SUPPLEMENTAL SL MAX
MATCH
Full Years of STATE
Adjusted Continuous
Service
Maximum Match
15 years
780 hours
20 years
1040 hours
24 years
1248 hours
25 years
1352 hours
30 years
1872 hours
STATE GROUP LIFE INSURANCE
(WI PUBLIC EMPLOYERS GROUP LIFE, SECURIAN)
 Will automatically continue upon retirement if retiree was covered
under WRS prior to 1/1/1990 or were covered by SGL in at least 5
calendar years after 1989 and are eligible for an immediate annuity,
premium taken from retirement check
 No premium after age 65 if retired
 Death benefit decreases

75% of Basic Coverage while age 65

50% of Basic Coverage age 66 and older
 Possible to convert to pay health insurance premiums and long-term
care premiums after age 66, if sick leave credits are exhausted.
Accelerated Death Benefit.
OTHER BENEFITS
SGL Spouse and Dependent
Income Continuation Ins
Can be converted - substantial premium
increase
Coverage ends on retirement date
Flexible Spending Accounts
Make arrangements for year of retirement.
Cannot be taken from annuity checks.
Individual & Family Life Ins
Can convert to individual policy – substantial
premium increase
AD& D
Continue at group rates, coverage decreases
on sliding scale at 70
UW Employees Inc.
Can convert to individual policy - substantial
premium increase
UIA Life Ins – FASLI Only
Can continue at group rate, plus $2
administrative service fee
Dental Wisconsin
Can continue at group rates
EPIC Benefits+
Can continue at retiree group rate
VSP Vision Insurance
Can continue at group rates
BENEFICIARY
DESIGNATION(S)
ALWAYS KEEP BENEFICIARY
DESIGNATIONS UP-TO-DATE
Wisconsin Retirement System
Life Insurance Plans (different forms
for each plan)
TSA/DC
EMPLOYMENT AFTER
RETIREMENT
 Must be a good faith termination
 WI Act 20 effective for employees with termination date July 1, 2013 and
after:
 May return to employment after a 75-day break in Service
 Automatic Suspension of annuity upon returning to work for a WRS
participating employer in which the participant is expected to work at
least two-thirds of full-time
 UW-Stout has Annuitant Administrative Procedure 037 – Post Retirement
Employment
 May work for another employer
 Will not affect your WRS annuity
 May affect your social security
TSA/DC
 If retired, disbursements may begin at age 55
 Disbursements may be delayed, but no later than
age 70-1/2
 Tax-Deferred Disbursements are fully taxable
 Contact your TSA Company or DC for more
information and options
 Can enroll anytime while actively employed
2016 TSA/DC LIMITS
(SEPARATE LIMITS)
ANNUAL
MAXIMUM
$18,000
AGE 50 AND
OVER
MAXIMUM
$24,000
TRUE
CATCH UP
(based on UW
service/contributions)
$3,000 more
WHAT NEXT?
 Plan for Retirement
 Ask questions, keep informed
 Sources of additional information:
 Human Resources
 Department of Employee Trust Funds
 Social Security Administration
 Financial Advisor/Accountant/Attorney
 All inquires are CONFIDENTIAL
WHAT NEXT, (CONTINUED)
 Order WRS estimates 6-12 months before
expected retirement date, under no obligation to
retire (Form on HR website or contact ETF)
 Retirement Paperwork can be mailed back to ETF
90 days prior to actual retirement date
 Formal resignation letter must be turned
 Two week notice is required, department would
like as much notice as possible
 Check with Social Security
 Always keep Beneficiary(ies) Designations Upto-Date
RETIREMENT PAYMENTS
 Paid on 1st of Month for prior month (paid June 1
for May)
 Receive payment mailer showing earnings
 Last Month, This Month, Next Month
 Once amounts are the same you will not
receive mailer until there is a change
 Paid on Estimated basis for 6-12 Months, will
receive notification of Final Calculation (retro
adjustment)
 Direct Deposit Required
HELP
UW-Stout, Human Resources
Mary Kay Sankey, Staff Benefits Manager
sankeym@uwstout.edu
(715) 232-2439
Department of Employee Trust Funds
Toll free: (877)533-5020
website: http://etf.wi.gov
Social Security Administration
Toll-Free: (800)772-1213
website: www.ssa.gov
INFORMATIONAL
BROCHURES



Additional Contributions
http://etf.wi.gov/publications/et2123.pdf
Applying for Your Retirement Benefit
http://etf.wi.gov/publications/et4106.pdf
Buying Creditable Service
http://etf.wi.gov/publications/et4121.pdf
 Calculating Your Retirement Benefit
http://etf.wi.gov/publications/et4107.pdf
INFORMATIONAL
BROCHURES, CONT
 Choosing an Annuity Option
http://etf.wi.gov/publications/et4117.pdf
 How Divorce Can Affect your WRS Benefits
http://etf.wi.gov/publications/et4925.pdf
 How Participation in the Variable Trust Fund Affects
Your WRS Benefits
http://etf.wi.gov/publications/et4930.pdf
INFORMATIONAL
BROCHURES CONT
 Information for Retirees
http://etf.wi.gov/publications/et4116.pdf
 Military Service Credit
http://etf.wi.gov/publications/et4122.htm
 Sick Leave Conversion Credit Program
http://etf.wi.gov/publications/et4132.pdf
 Tax Liability on WRS Benefits
http://etf.wi.gov/publications/et4125.pdf
INFORMATIONAL
BROCHURES CONT
 1985-2014 WRS Credited Effective Rates &
Corresponding Dividends/Adjustments
http://www.swib.state.wi.us/returns_history.pdf
 Tax Sheltered Annuity 403(b) Program
http://www.uwsa.edu/ohrwd/benefits/ret/tsa/
 Wisconsin Deferred Compensation
http://www.uwsa.edu/ohrwd/benefits/ret/wdc/
BENEFICIARY FORMS
 WRS & State Group Life (WI Public Employers Group Life)
http://etf.wi.gov/publications/et2320.pdf
 WRS Alternate Beneficiary Form
http://etf.wi.gov/publications/et2320.pdf
 Accidental Death & Dismemberment
http://www.uwsa.edu/ohrwd/benefits/life/add/bendes.pdf
 EPIC
http://www.uwsa.edu/ohrwd/benefits/med/epic/
 Individual & Family Group Life
http://www.uwsa.edu/ohrwd/benefits/life/if/bendes.pdf
 UW Employee’s Inc
http://www.uwsa.edu/ohrwd/benefits/life/uwei/
• University Insurance Association (UIA) FASLI Only
http://www.uwsa.edu/ohrwd/benefits/life/uia/bendes.pdf
 TSA/Deferred Comp
Contact Vendor
?? QUESTIONS ??
THANK YOU!
As we slowly move through retirement, we need to keep ourselves
occupied with small projects.........Like this guy
I know, I saw it right away too....
No safety glasses or hearing protection.
And I caught something else that is really important:
he has no gloves on.