Retirement Saving Plan
Wisconsin Retirement System (WRS) Pension
WRS is a retirement pension benefit for most State, Local and School District employees in Wisconsin. WRS requires that participants contribute a mandated percentage of their income to the plan pre-tax (50% contributed by the employee and 50% would be contributed by MMSD). As of January 1, 2020, the participation percentage is 13.50% (6.75% by the employee and 6.75% by MMSD).
There are a few ways to be enrolled into WRS:
- At the start of your employment the FTE and/or combined FTE’s must be 2/3 or greater (1/3 or greater for those contributing before 7/1/11)
- Become re-hired within 12 months of a separation with MMSD, when you contributed
- Work 365 days and have worked 880 hours or more (440 hours or more for those contributing before 7/1/11)
Once enrolled, you must have five years of credible service to be vested in the plan. For more information about the Wisconsin Retirement System, go to the Wisconsin Department of Employee Trust Funds website or you can view the WRS Benefit Handbook.
Vesting
WRS requires an employee to be vested to receive the employer contribution at retirement. To be vested, you must have five years of creditable service. Teachers, Substitute Teachers and Administrators receive 1 year of creditable service with at least 1,320 hours worked per year; all other employees receive 1 year of creditable service with at least 1,904 hours worked per year.
Variable Fund
WRS consists of two fund options, the Core Fund (which is the default fund) and the Variable Fund. Your contributions will go into the Core Fund, unless you elect to participate in the variable fund then 50% of your future WRS contributions will be deposited into the Variable Fund and 50% will be deposited into the Core Fund. You are able to cancel your Variable Fund participation effective 12/31 of the year the cancellation form is referred.
How Participation in the Variable Trust Fund Affects Your WRS Benefits
Election to Participate in the Variable Fund
Additional Contributions
You may make additional contributions to WRS annually. You must submit the payment directly to WRS by 12/31 of every calendar year and include the form Additional Contributions Remittance. This type of contribution is not pre-tax. To read more about it, visit ETF's site for Additional Contributions.
Understanding the Annual Statements of Benefits
ETF sends out one paper statement a year, which is usually in mid-April that is current through 12/31 of the prior calendar year. At this time the member's WRS balance is not available on-line.
To help understand the Annual Statement of Benefits, ETF has provided the following tools:
Explanation of Annual Statement of Benefits
Interactive Statement of Benefits (walks you through each part of the statement)
Rehired Annuitants
For rehired annuitant information and explanations, visit our Re-Hired Annuitant site.
Questions about WRS?
If you have specific questions, please contact Hannah Shafer at (608) 663-5380 or at hshafer@madison.k12.wi.us. You can also contact WRS directly at 877-533-5020.
403(b) Tax Sheltered Annuity
You have the opportunity to save for retirement by participating in MMSD's 403(b) plan at any time. You may participate by making pre-tax contributions or post-tax Roth contributions through one of a number of vendors available to you. All employees are eligible to participate with the exception of non-resident aliens, or those who do not have sufficient earnings to contribute a minimum of $200 per year.
Why contribute to a 403(b)?
Participating in your plan can provide a number of benefits, including the following:
- Lower taxes today: Your contribution is before income taxes are calculated which means you are currently taxed on a smaller amount. This can reduce your current income tax bill. For example: If your federal marginal income tax rate is 25% and you contribute $100 a month to a pre-tax 403(b), you’ve reduced your federal income taxes by roughly $25. In effect, your $100 contribution costs you $75.
- Lower taxes later: You can also contribute on an after-tax basis with a Roth 403(b). This allows you to contribute with taxable income now, but you will not pay taxes when you withdraw the money in retirement. Not all vendors with the Madison Metropolitan School District Employee Savings Plan-403(b) Plan allow Roth 403(b) contributions.
- Tax-Deferred growth and compounding interest: In a 403(b) plan, your interest and earnings accrue tax deferred. That means interest on your interest also grows tax deferred.
- You take the initiative: Contributing to a 403(b) retirement plan can help you take control of your future. Other sources of retirement income, including state pension plans, and if applicable, Social Security, rarely replace a person’s final salary upon retirement. That is why it is up to you to make sure you will have enough money for your retirement.
How much can I contribute?
As little as $200 per year, or up to the federal maximum of $23,000 for 2024. You can contribute an additional $7,500 more starting in the year you turn 50 years old. Some employees may be eligible for a special catch-up contribution option as well, but please contact your financial planner to determine your eligibility.
How can I start contributing?
- You can start contributing at any time. To start your contributions, you must open an account with one the approved District vendors.
- After opening an account, complete the District Salary Reduction Agreement form and submit it to the Payroll Division.
- You can change your contributions or stop contributing at any time.
- Loans are limited to one outstanding loan at any time and subject to requirements within the plan. Hardship withdrawals are not available.
How do I learn more about 403(b)s?
You can visit 403(b)wise, a resource website about tax-sheltered annuities.
US Savings Bonds
The U.S. Savings Bond Payroll Savings Plan is an easy way to save. Bonds offer competitive, marked based rates, complete safety, federal income tax deferral and freedom from state and local income taxes. The plan works much like Direct Deposit. You may have money automatically deducted from your paycheck to go toward purchasing U.S. Savings Bonds.
How can I start saving?
You can visit TreasuryDirect.gov to sign up for a Treasury Direct account. Nex, fill out the U.S. Savings Bonds Sign-Up Form and submit to the Payroll Division.
Have Questions?
For 403(b) Questions: Contact HR at
hrcommunications@madison.k12.wi.us or at (608) 663-1693
For General Retirement Questions: Contact Retirement Specialist at retirement@madison.k12.wi.us or at (608) 663-5235
