Wisconsin

Overview

The Wisconsin Retirement System, the sole state retirement system in Wisconsin, is administered by the state Department of Employee Trust Funds (ETF) and provides retirement benefits for employees of the state and its political subdivisions, including public school teachers and employees of cities, counties, and other public entities that have elected to participate, except the City and County of Milwaukee, which maintain their own retirement systems, and the Milwaukee County Transit System. The ETF administers a single plan covering its entire membership; system assets are managed by the State of Wisconsin Investment Board.

Plan Design

Defined benefit plans serve as the primary retirement benefit for substantially all public employees in Wisconsin.

According to the US Government Accountability Office, 96 percent of employees of state and local government in Wisconsin participate in Social Security.

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Authorizing Statutes and Board Structure

Chapter 15, Section 16 of Wisconsin Statutes and Annotations authorizes and describes the Department of Employee Trust Funds.
The ETF board is made up of 11 members.

Details regarding the composition of these and other retirement boards is accessible via the Retirement and Investment Board Characteristics search tool located at the bottom of this page.

Fiduciary Duty/Prudence Standard

Wisconsin Statutes and Annotations 25-15 describes the State of Wisconsin Investment Board’s investment “standard of responsibility” as follows:

The standard of responsibility applied to the board when it manages money and property shall be all of the following: (a) To manage the money and property with the care, skill, prudence and diligence under the circumstances then prevailing that a prudent person acting in a similar capacity, with the same resources, and familiar with like matters exercises in the conduct of an enterprise of a like character with like aims. (b) To diversify investments in order to minimize the risk of large losses, unless under the circumstances it is clearly prudent not to do so, considering each trust's or fund's portfolio as a whole at any point in time. (c) To administer assets of each trust or fund solely for the purpose of ensuring the fulfillment of the purpose of each trust or fund at a reasonable cost and not for any other purpose.
 

Legal Protections of Retirement Benefits

No explicit constitutional protection for public pension benefits, but statutory protection is set forth in Section 40.19, WI Stat., which provides that "[R]ights exercised and benefits accrued to an employee under this chapter for service rendered shall be due as a contractual right and shall not be abrogated by any subsequent legislative act." Courts also protect pension rights against impairment of contracts and on due process grounds. Wisconsin Professional Police Ass'n., Inc. v. Lightbourn, 627 N.W.2d 807 (Wis. 2001)(recognizing that all participants in the Wisconsin State Retirement System are protected by §40.19(1) from the abrogation of accrued benefits unless the benefits are replaced by benefits of equal or greater value); Association of State Prosecutors v. Milwaukee County, 544 N.W.2d 888 (Wis. 1996)(recognizing that vested employees and retirees had protectable property interest in retirement assets and thus statute permitting non-vested employees to transfer employer contributions resulted in taking of property without due process); Welter v. City of Milwaukee, 571 N.W.2d 459 (Wis. App. 1997) (holding that retirement benefits in effect when a Milwaukee police officer becomes a member of the retirement system are vested as to that officer unless the officer agrees to a change); but see Bilda v. County of Milwaukee, 713 N.W.2d 661, 668, 292 Wis.2d 212, 224, 2006 WI App 57, 57 (Wis. App. Mar 23, 2006) (ordinance that directed payment of administrative expenses from system earnings rather than dedicated expense fund did not violate takings clause). (Section 40.19, WI Stat., WI CONST., Article 1, §12) Source: Robert Klausner, Esq., State Constitutional Protections for Public Sector Retirement Benefits
 

See also the following search tools:

More Data

• Public Fund Survey Summary of Findings
• Roll Call (NASRA members-only)