New employees at the University of Wyoming and community colleges in Wyoming must make a one-time decision whether to participate in a WRS pension plan or another plan. Once an election is made, an employee cannot change their election for the duration of the employee's tenure with that employer. This is to prevent the circumstance in which an employee might transfer back and forth between WRS and another plan believing that one retirement plan would benefit them more than the other at any given time.
If an employee terminates employment from UW or the Colleges, however, and is subsequently hired into a new position by the same or another higher education employer, the employee must again elect to participate in either WRS or another plan. The employee is not bound by a previous election when initially beginning new employment. However, contributions on deposit with one plan cannot be transferred to the other plan except as specifically allowed by the Wyoming Retirement Act.
Background and Rationale
TIAA-CREF was established in 1969 to provide university and college employees more portability of their retirement funds. Prior to June 30, 1985, employees ofUW and the Colleges paid contributions as required by the Wyoming Retirement Act into WRS based on the first $6,600 in salary, with contributions paid to TIAA-CREF for any salary over $6,600. As such, employees were permitted to participate in both plans simultaneously. In 1985, the Legislature amended the Act to require employees initially employed after June 30, 1985 to elect participation in one plan or the other, but not both. Those employees initially employed prior to June 30, 1985 were permitted to continue participating in both plans. The Legislature amended the Act again in 1993 to require all employees to elect, prior to January 1, 1994, to participate in one plan or the other. The Act was also amended at that time to include a provision that allowed employees that had been participating in one plan to switch to the other plan. Therefore, effective January 1, 1994, all employees who had previously participated in both WRS and TIAA-CREF, and all new employees, were required to make an election to participate in one plan only.
Prior to June of 2016, WRS interpreted W.S. § 21-19-102(d) of the Act to require that the initial election by an employee of UW or the Colleges to participate in either WRS or TIAA-CREF, regardless of their initial hire date and subsequent employment in the higher education system, was irrevocable during the remainder of the employee's working career as a public employee, even if the employee was subsequently employed, or re-employed, by the same or another higher education employer.
WRS now interprets the use of the term "irrevocable" in W.S. § 21-19-102(d) to be limited to the specific election made by applicable employees prior to January 1, 1994 to choose one plan or the other. In other words, while the election to participate in one plan or the other made by an applicable employee prior to January 1, 1994 is irrevocable, employees are not precluded under the Act from choosing a different plan if subsequently hired or rehired into new employment with a higher education employer.
Due to its past interpretation of the Act, WRS has advised members and employers that any new hire that had previously made an election as part of other employment to participate in one plan or the other was bound by that initial election, even in subsequent employment. For instance, a new employee of UW who had elected TIAA-CREF as part of previous and unrelated employment at a community college would have been bound by that previous election and told that they were ineligible to join WRS. While this policy indicates a different interpretation of the statutes moving forward, WRS will not retroactively apply the new policy.