Strong returns for the Wisconsin Retirement System trust funds mean retired public employees will finally get an increase in their pensions, for the first time in six years for many.
The State of Wisconsin Investment Board (SWIB) released preliminary returns on Monday. The Core Fund had returns of 13.5 percent and the Variable Fund, 29 percent, according to initial calculations.
The Core Fund is the bigger of the two, with diversified holdings. Its preliminary market value was $86.5 billion, as of Dec. 31, 2013. The all-stock, optional Variable Fund had a preliminary market value of $7.2 billion.
Both funds benefited from U.S. stock investments, which saw a return of 35.4 percent, SWIB said.
“As a result of strong internal investment management and the careful selection of outside managers, SWIB added more than $2.4 billion in added value over the past five years,” SWIB executive director Michael Williamson said.
SWIB has earned positive returns in the Core Fund every year since 2009 and in the Variable Fund for four of the last five years. But because of the severity of the economic downturn in 2008 and the smoothing of those losses over a five-year period, members of the retirement system have not seen those improvements. The smoothing concluded last year.
The preliminary returns are “great news for WRS members and all of Wisconsin,” said Robert Conlin, secretary of the Department of Employee Trust Funds.
Conlin said they “should mean a pay increase for annuitants in the spring of 2014. That’s money that will be spent in nearly every community in this state.”
The Wisconsin Retirement System provides benefits to more than 579,000 current or former employees of the state, University of Wisconsin system, school districts and most local governments. It is the ninth-largest U.S. public pension fund, with about $101 billion under management.