Retired public employees in Wisconsin, covered by the Wisconsin Retirement System, will see their pension checks go up at least 2 percent this spring, the Department of Employee Trust Funds said Tuesday.

Retired public employees across the state who participate in the Wisconsin Retirement System will get bigger pension checks, starting May 1.

All 203,000 retirees in the Wisconsin Retirement System (WRS) are due for a 2.4 percent increase in payments from the Core Trust Fund, the main fund, the state Department of Employee Trust Funds said Tuesday. That translates into an extra $560.66 a year for the average retiree, agency spokesman Mark Lamkins said.

About 41,000 retirees who have part of their money in the Variable Trust Fund will receive a 17 percent jump in that portion of their annuities, or an average of $1,538.39 a year.

“That’s wonderful news,” said Diane Wilcenski, executive director of the Wisconsin Retired Educators’ Association. “Any time we see an adjustment that’s more than what people currently have, it’s great.”

The dividends result from gains earned on the WRS assets, managed by the State of Wisconsin Investment Board. The Core Fund covers all participants in the WRS and has a diversified portfolio of stocks, bonds, real estate and private equity. The Core Fund had investment returns of 16.2 percent for 2017.

This is the fifth consecutive year that pensions from the Core Fund have risen after five years of recession-related reductions, and the increase is larger than last year’s 2 percent growth.

Lamkins said there are several reasons why the Core Fund’s 2.4 percent annuity growth is so much lower than its 16.2 percent returns.

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Primarily, the Core Fund’s results are smoothed over a five-year period to avoid sharp ups and downs. Shortfalls in 2014 and 2015 — when returns for the Core Fund were lower than the actuarial projections of 7.2 percent — held down the size of pension hikes in higher-earning years like this one, Lamkins said.

“We’re also feeling the effects of mortality and other actuarial factors on the annuity reserve,” he said.

The Variable Fund — a smaller, riskier, voluntary account that consists entirely of domestic and international stocks — produced a 23.2 percent return in 2017. Adjustments involving that fund relate only to the previous calendar year’s results so they can be volatile. Last year, payments from the Variable Fund went up 4 percent, but in 2016, they fell 5 percent.

Wilcenski — whose association represents more than 10,000 retired educational employees statewide, ranging from school custodians to university professors — said a pension increase of more than $500 a year is meaningful. “(It) is going to make an impact, yeah. I think that’s a substantial amount for people,” she said. “We’d all like more, but that’s not reality.”

Over the past five years, the Core Fund annuity adjustments have averaged 2.5 percent a year— higher than the U.S. Consumer Price Index which has risen, on average, 1.4 percent a year over the same time period.

The Wisconsin Retirement System is the ninth largest U.S. public pension fund, with about $108 billion in assets. Last year, the WRS paid nearly $5.2 billion in retirement benefits.

More than 85 percent of WRS retirees live in Wisconsin and continue to contribute to the state’s economy, the Department of Employee Trust Funds said.

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