The WRS Board continues to affirm that a defined benefit plan supplemented by the 457 Plan is the best way to provide retirement benefits for the public employees of Wyoming. WRS partners with State policymakers to prudently manage WRS pension plans. WRS pension plans provide a good value to the state and to members.
Defined benefit plans are a cost-effective way to deliver retirement benefits.
A properly funded defined benefit plan delivers at least the same benefit as a defined contribution plan at half the cost. State contributions to the WRS RetirementFund are about 2% of the State budget.
Pre-funding retirement with adequate contributions from the state and employees is economically advantageous, allowing the Retirement Fund to grow through compounding. Prudent management of the fund allows about 70% of retirees’ annuities to be paid from investment earnings.
Overall, the administrative costs amount to about 0.5% of the fund’s total value. WRS manages the investment portfolio by aggressively negotiating contracts with external managers. WRS pays its experienced investment team competitive salaries that are offset by savings on external consulting fees.
Changing to a defined contribution or other plan design would not erase the current unfunded liabilities.
Better Bang for the Buck
The National Institute on Retirement Security published a report entitled "Still a Better Bang for the Buck: An Update on the Economic Efficiencies of Defined Benefit Pensions" which outlines the inherent cost-efficiencies of defined benefit plans.
The report highlights how responsibly run pension plans are able to provide equivalent benefits to a typical deferred compensation plan at half the cost, and equivalent benefits to even an "ideal" deferred compensation plan at 29% less cost. WRS encourages all our members and stakeholders to read the report and inform themselves on this issue.
Read "Still a Better Bang for the Buck"
Retirees’ annuities are earned benefits that support the Wyoming economy.
WRS retirees’ modest pension benefits – averaging $1650 per month, with no guaranteed cost of living increase – often make up for compensation and benefits that differ from the private sector.
WRS members contribute to the WRS Retirement Fund throughout their careers. Most WRS members also contribute to Social Security. And many members also personally save in the WRS 457 Plan or other retirement savings vehicles.
About 78% of retiree payments remain in Wyoming, providing economic support to communities. Sharing responsibility for adequately funding retirement benefits results in retirees who can remain independent and avoid reliance on social services.