Here’s some exciting news for employees: your retirement savings could be getting a significant boost this year. The Employee Trust Funds (ETF) is forecasting higher effective rates for both the Core and Variable Fund contributions in the Wisconsin Retirement System (WRS), which means your account balances are likely to grow more than expected. But here's where it gets interesting—while these projections are promising, they’re based on preliminary 2025 investment performance data, and the final numbers could still shift. So, what does this mean for you? Let’s break it down in a way that’s easy to understand, even if you’re new to retirement planning.
The projected effective rates for the Core Fund are expected to fall between 7.4% and 7.8%, while the Variable Fund could see rates as high as 20% to 24%. These figures are not set in stone, though, and this is the part most people miss: the Core Fund’s effective rate uses a five-year smoothing method, which averages investment performance over the past five years to reduce volatility. In contrast, the Variable Fund’s rate reflects the full impact of the previous year’s performance, without any smoothing. This difference in calculation can lead to varying outcomes, depending on market conditions.
It’s important to note that the effective rate of interest is applied to your account balances just once a year. While these projections are encouraging, they’re based on early data from the State of Wisconsin Investment Board (SWIB). The actual effective rates won’t be finalized until February 2026, and you’ll see them reflected in your annual WRS Statement of Benefits in April 2026. And this is where it gets controversial: should employees rely heavily on these projections for their financial planning, or is it wiser to take a more conservative approach?
For those who prefer a deeper dive, the preliminary 2025 investment performance data is available on the SWIB website (https://www.swib.state.wi.us/single-post/swib-announces-2025-wrs-preliminary-returns). Once the final rates are announced, you can review them in detail on the ETF website (https://etf.wi.gov/news/wrs-annual-statement-benefits-available-april).
So, what’s your take? Are you optimistic about these projections, or do you think it’s better to plan with more caution? Let us know in the comments—we’d love to hear your thoughts and spark a thoughtful discussion!
