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Wyoming Retirement System

Wyoming Retirement System

The Wyoming Retirement System (WRS) encompasses seven pension plans with about 82,000 active members, according to the system’s 2022 annual summary report. Like all defined benefit plans, active members contribute throughout their careers and then receive monthly payments for life in retirement.

A financial advisor can help you plan your retirement so you have a clear understanding of your expected resources and your expected expenses. 

Types of Retirement Systems in Wyoming

The WRS has seven different pension plans, and they range in scope from fairly broad to very targeted. Membership in the plans is required, and the contribution amounts are set by state law. The plans for the most part are similar in structure. More specific things like retirement age and how benefits are calculated is where they vary. All plans specify in their guidebooks that the pensions aren’t designed to constitute your entire income in retirement, so plan members also have access to a 457 defined contribution plan.

Members of all plans have the option to make a one-time purchase of service credit up to five years, essentially paying to increase their monthly pension benefit by artificially increasing their years of service.

Wyoming Retirement Systems

Plan TitleEligible Employees
Public Employee Pension– Employees of state agencies, school districts, counties, cities and towns and other government organizations
Law Enforcement Pension– Employees of law enforcement organizations, including sheriffs, municipal police officers, corrections officers and campus police officers
Warden, Patrol DCI Pension– Employees of the Wyoming State Highway Patrol, Wyoming Game & Fish, and Wyoming Attorney General’s Office Division of Criminal Investigation
Paid Firefighter B Pension– Wyoming Firefighters hired on or after July 1, 1981
Judicial Pension– All Wyoming circuit court, district court judges and supreme court justices appointed on or after July 1, 1998
Guard Firefighter Pension– Members of the Wyoming Air National Guard Fire Crash and Rescue unit
Volunteer Firefighter & EMT Pension– Volunteer firefighters who attend at least half of scheduled meetings and licensed volunteer EMTs

Overview of Wyoming’s Retirement Systems

Wyoming Retirement System

Public Employee Pension
This is the largest pension plan in the system, with around 450 different employers participating. Like most pension plans, your monthly benefit in retirement is determined using your years of service, an average of your highest compensation, and the age at which you retire.

Members of this defined benefit plan are divided into two tiers, and benefit calculations differ between Tier 1 and Tier 2. In Tier 1, your 36 highest consecutive salary months are used to calculate your benefit, and you’re eligible to begin receiving full benefits at age 60. In Tier 2, your 60 highest months are used, you’re eligible to receive full benefits at age 65. In both tiers, you can also use the rule of 85 (if the sum of your age and years of service is at least 85) to begin receiving payments.

Tiers are as follows:

  • Tier 1: Employees who made a contribution prior to Sept. 1, 2012
  • Tier 2: Employees who made their first contribution on or after Sept. 1, 2012

Law Enforcement Pension
The law enforcement pension plan is set up for a range of law enforcement officers, from sheriffs to campus police officers. Your benefit will depend on years of service and highest average salary, which is calculated by averaging your highest 60 months of continuous salary. You are eligible for full retirement benefits once you reach either 60 years of age or 20 years of service. To obtain any benefit, you must have 48 months of service, but they need not be consecutive.

Warden, Patrol, DCI Pension
This pension is significantly more niche than the above two. It provides for employees of the Wyoming State Highway Patrol, Wyoming Game & Fish, and Wyoming Attorney General’s Office Division of Criminal Investigation. Your highest average salary is calculated by averaging your highest 36 consecutive salary months. You’re eligible to begin retirement once you reach age 50 and you have at least 72 nonconsecutive service months, and you’re required to begin receiving payments before you turn 65. The plan defines service month as a month in which you’re compensated for at least 86 hours of work.

Paid Firefighter B Pension
As the name of this plan suggests, there used to be a Paid Firefighter A Pension plan, but it’s closed to new enrollment. In total, 16 cities and counties participate in this pension plan, which allows for retirement at age 50 provided you have at least 48 months of service under your belt. Like the above plan, one service month is a month in which you’re paid for 86 or more hours of work, and the highest average salary used to compute your monthly benefit is an average of your highest 36 consecutive months of salary.

Judicial Pension
This pension plan covers judges and justices in district and appeals courts, as well as the Supreme Court of Wyoming. In this plan, your highest 36 consecutive salary months are used to calculate your average highest salary. To receive full retirement benefits, you’ll need either 1) 65 years of age and 48 months of service 2) 60 years of age and 20 years of service or 3) 70 years of age and continuous service since your appointment date.

Guard Firefighter Pension
Arguably the most niche pension plan in the system, the Guard Firefighter Pension plan covers firefighters in the Wyoming Air National Guard. It’s similar to the Firefighter B plan, with the only difference being retirement age. In order to receive full benefits, you must be either 1) 60 with 48 months of service 2) 50 with 25 years of service or 3) able to fulfill the Rule of 55, meaning you’re between 55 and 60 and the sum of your age and years of service is 75 or above.

Volunteer Firefighter & EMT Pension
This is the only plan that specifically covers non-full-time employees, so what plan defines a volunteer firefighter or EMT is important. According to the handbook for this pension plan, a volunteer firefighter or EMT is defined as “an individual who is carried on the rolls of, but devotes less than his entire time of employment to activities of a volunteer fire department or emergency medical service, of which all or a portion of the members are volunteers.”

Retirement Taxes in Wyoming

Wyoming doesn’t have any state income tax, so you won’t have to worry about paying more taxes on your retirement contributions. Paying Washington is a different story.

Federal income tax will always find you eventually, but there are several ways you can put off having to pay. Pension plans are one such strategy. When you contribute to your pension, you’ll be doing so with pre-tax dollars. This will allow you to contribute more, which means more interest. However, your money will be taxed once you start to receive payments in retirement. If you want to keep the tax man at bay for longer, you can roll your pension over into a different retirement account like a 401(k) plan. If you do that, you’ll pay the taxes once you begin to make withdrawals from that account instead.

If you’d prefer to pay your taxes as an employee instead of as a retiree, you have two options. You can have the taxes withheld from your paycheck or you make what are called estimated tax payments. Estimated tax payments are payments you make quarterly that you calculate to be roughly what you would owe in taxes. While this route requires a little math on your part, the withholding option involves little to no work for you (although you may need to fill out a W-4P form). You may also get a refund or a charge after tax season if it’s determined that too much or too little was withheld.

Current Financial Health of the Wyoming Retirement System

Wyoming Retirement System

The Wyoming Retirement System is strong financially: “In general, 30-year projections as of January 1, 2022, indicate all plans are on track to reaching 100 percent funding or more within 30 years, except for Law Enforcement. That plan hovers around a 91% projection, indicating an eventual need for increased contributions and/or benefit modifications.” As of Jan. 1, 2022, the funded ratio, which is the ratio of the actuarial value of assets to the actuarial accrued liability, is 86.23%, an above-average figure in the U.S., according to the WRS.

The Bottom Line

The retirement of state government employees in Wyoming are managed in seven plans. The amounts participants receive has not increased since 2008, during which annual inflation has climbed more than 40%. What pensioners get may soon rise, however, based on bills before the legislature.

Tips for a Less Stressful Retirement

  • Navigating the complexities of retirement can be a lot to keep straight. That’s where the insights and guidance of a financial advisor can be valuable. If you don’t have a financial advisor yet, finding one doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
  •  Finding a financial advisor who can explain the ins and outs of each option of the Wyoming Retirement System can reduce a lot of the headache of planning for retirement. With SmartAsset’s Smartadvisor tool, you can answers a series of questions about your financial needs and preferences, then the tool will pair you with three financial advisors in your area.
  • Check out our free retirement calculator to get a quick estimate of what your resources will be in retirement.
  • Check our free Wyoming Retirement Tax Friendliness calculator to get a quick estimate of how much of your income you should pay to the government.

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