The state Employee Trust Funds raised the contribution rates for most worker pensions by four-tenths of a percentage point – which works out to tens of millions of dollars for public employers, according to the Wisconsin State Journal.
The contribution increases, which be will be levied on a payroll that was $10.3 billion in 2003, will kick off on January 1, 2005, according to the newspaper:
- Four-tenths of a percentage point- from 9.8% to 10.2%- for the pensions of elected officials and general employees, which includes teachers and 90% of the workers covered by the state pension fund.
- Two-tenths of a percentage point – from 13.8% to 14% – for the category including firefighters.
- Eight-tenths of a percentage point – from 12.1% to 12.9% – for a category including police officers.
The pensions of some 260,000 state and local workers will be affected by the change, though in about 90% of the cases it’s employers who make all of the contributions and who will have to bear the increase, said Pam Henning, a spokeswoman for the state Department of Employee Trust Funds.
Henning said three years of stock market declines ending in 2002, longer life expectancies and a slight decline in expected investment returns made the increase necessary. But strong market returns last year helped mitigate the hike, she told the newspaper. “Because of the significant rebound, the positive is it wasn’t as high of an increase as we anticipated,” Henning said.