There is no benefit formula used to calculate the value of your defined contributions. The value of your account will be based entirely on the amount you contribute and the performance of the investments. As in any investment, there is an element of risk.
The WSIB Investment Program is composed of a variety of investment vehicles. Its value is measured by the composite worth of the fund’s entire portfolio as determined by the current market value of each investment. Your contributions are converted to shares in the fund. The cost of a share is based on the composite value of the fund at the time the share is purchased. Share values increase or decrease at the same rate as the TAP. The WSIB values the TAP once each month.
There are a variety of investments available through the Self-Directed Investment Program. Each investment is valued separately based on its current selling price in the market. Within the Self-Directed Investment Program, member portfolios are valued daily.
Your employer transmits your contributions and member data to DRS on a monthly basis. Under state law, employers are required to provide DRS with member contributions and data by the 15th of the month following the month in which the contributions were deducted from your paycheck.
Both investment programs incorporate a Short-Term Investment Fund (STIF) where contributions are placed and begin earning interest. Individual member contributions (reported by your employer) are reconciled with the cash DRS receives from them. At this point, the process of moving your contributions into your investment program begins.
Depending on your employer’s reporting schedule and your choice of investment program, there will be some variation in the time it takes for contributions to move between the STIF and your investment allocation. For more information about how your investments are processed, refer to your Plan 3 Investment Guide.
WSIB Investment Program account statements are issued 45 days after the end of the quarter. Self-Directed Investment Program account statements are issued 10 business days after the end of the quarter.
When earnings for the state retirement fund average more than 10 percent over a four-year period, the amount in excess of 10 percent is declared “extraordinary gains.” Part of the extraordinary gains are paid to qualified TRS Plan 3 members. This is called gain sharing. Gain sharing payments are made in January of even-numbered years.
Gain sharing is based on fiscal years (July 1 - June 30). Measures are taken in August of odd-numbered years. If the retirement fund does not earn in excess of 10 percent, there is no payment.
A gain sharing payment is credited to the same investment program in which your monthly contributions are invested. Gain sharing payments appear on your 1st Quarter Statement in even-numbered years.
You qualify for gain sharing if:
Effective July 1, 2007, newly hired members will have 90 days to choose between TRS Plan 2 and TRS Plan 3. If a plan choice is not made within 90 days, a member will be mandated into Plan 3.
The last gain sharing event for TRS Plan 3 will be in January 2008, if any.
On September 1, 2008, TRS Plan 3 members who have completed 30 service credit years, and who are at least age 55, will be subject to the following early retirement provisions:
| Reduction Factors* | ||
|---|---|---|
| Age at retirement | 30+ years of service credit ** | Years of Reduction |
| 55 | .80 | 10 |
| 56 | .83 | 9 |
| 57 | .86 | 8 |
| 58 | .89 | 7 |
| 59 | .92 | 6 |
| 60 | .95 | 5 |
| 61 | .98 | 4 |
| 62 | 1.0 | 3 |
| 63 | 1.0 | 2 |
| 64 | 1.0 | 1 |
* Effective September 1, 2008
** Alternate Early Retirement
Any member who retires under these provisions will be ineligible for the post-retirement employment provisions until they have reached age 65.
If the repeal of gain sharing is found to be invalid, a member who qualifies for early retirement under the new provisions, but has not yet received his or her first payment will be subject to the prior early retirement provisions. In addition, a member hired after the court action would no longer have a plan choice, and would be mandated into Plan 3.