The Wyoming Retirement System (WRS) is a collection of seven different pension plans with around 35,000 active members and 27,000 people receiving benefits. Like all defined benefit plans, active members contribute throughout their careers and then receive monthly payments for life in retirement. If you’d like to speak to an expert about how your pension can fit into your retirement strategy, SmartAsset’s SmartAdvisor tool can match you with up to three financial advisors in your area.
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 Title||Eligible 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
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 September 1, 2012
- Tier 2: Employees who made their first contribution on or after September 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.
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 75, 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.”
If you are unsure of whether or not this describes you, you should consult with your employer, as they are likely to know. As a member, you’ll contribute a flat $15 a month to the fund. You’ll become eligible to receive benefits once you reach age 60 and have at least five years of service. Once you retire, you’ll receive $16 per month per year of service for the first 10 years of service and $19 per month per year of service for each year above ten years of service. So if you retired with 12 years of service, you’d receive $198 per month (16 x 10 + 19 x 2).
Retirement Taxes in Wyoming
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.
Wyoming doesn’t have any state income tax, so you won’t have to worry about paying more taxes on your retirement contributions.
Current Financial Health of the Wyoming Retirement System
The Wyoming Retirement System is in good financial standing, especially when compared to its fellow state retirement systems. One thing in its favor is that there are currently more active members contributing to the pension fund than there are retirees draining it. Accrued liabilities (money owed to current members and retirees) is currently about $2.5 billion larger than total assets, which of course isn’t ideal. However, virtually all states face a deficit like this of some magnitude, and since Wyoming will pay off the accrued liabilities over time, such a deficit is less problematic. As of January 1, 2018, the funded ratio (calculated by dividing the market value of assets by accrued liabilities) is 76.74%, an above-average figure in the U.S.
Tips for a Less Stressful Retirement
- Navigating the complexities of retirement accounts and what you’ll need to supplement your pension can be a lot to keep straight. 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.
- As your pension will likely need supplementing in order to maintain your lifestyle in retirement. Having a concrete set of financial goals will help you to determine what you need to save and the steps you can take to get there.
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