Acceptable Salary for Retirement Contributions

The WRS Board has defined what constitutes eligible compensation for retirement benefits. WRS will review the contributions and will limit the increases in an employee’s highest average salary if it is found, after consideration of all circumstances, that the contribution is not eligible compensation.

Eligible compensation includes:

  • Pay for current services rendered, including pay for extra duties
  • Longevity pay (paid monthly)
  • On-call pay
  • Pay for used administrative, sabbatical, annual, sick, vacation, or personal leave
  • Any pay for compensatory time, provided any such pay for compensatory time is earned within the last twelve months
  • Any retroactive compensation payments pursuant to court orders, arbitration awards, or litigation and grievance settlements
  • Pay to teachers for National Board Certification

Unacceptable Compensation for Retirement Contributions

WRS is not able to accept retirement contributions on non-recurring payments to employees. Non-recurring payments are considered by WRS to be equivalent to bonuses paid in addition to base salary because they have the potential to "spike" retirement benefits without providing to WRS the consistent funding necessary to accumulate the assets needed to pay future benefits.

Additional examples of compensation that are not pension eligible:

  • Fringe benefits, including payments for unused annual, sick, vacation, or personal leave
  • Housing allowances
  • Transportation expenses, including stipends and vehicle expenses
  • Cell phone reimbursements
  • Early retirement incentive pay
  • Severance pay
  • Bonuses
  • Medical insurance paid by the employer
  • Workers compensation benefits
  • Disability insurance premiums or benefits
  • Payments received by a member in lieu of previously employer-provided fringe benefits under an agreement between the employee and participating employer entered into within sixty months before retirement, or any other payment which may reasonably be construed to be a fringe benefit
  • Any payment made during any three-year period of employment which is deemed to increase highest average salary for the primary purpose of increasing a retirement benefit
Some employers have sought to compensate employees who are "red lined" (reached the highest level of pay in their pay grade) with non-recurring lump-sum payments. In these cases, the compensation is not retirement eligible.