The ERS will be changing its operating bank from Wells Fargo to US Bank effective January 1, 2024. The December 2023 pension payment will be the last one issued from Wells Fargo. Starting with the January 2024 payroll, payments will be drawn on the new US Bank account. Your pension payments will not be impacted by this change and you will continue to be paid using the regular processes. Please note that if you have any checks that you have not deposited, you should deposit them no later than June 30, 2024. Checks that you deposit after June 30, 2024 that are drawn on our old Wells Fargo bank account will no longer be honored and will need to be reissued by ERS.
The City of Milwaukee Pension Fund reported a return of 10.0%, net of fees, in 2023. This return underperformed the Fund’s blended benchmark by -2.4%. Markets were volatile to start the year, but by the fourth quarter, falling inflation rates led to expectations the Fed would soon start to cut interest rates, leading to a strong rally in stocks and bonds. The Fund’s public equity allocation had a return of 21.0%, net of fees, for the full year. Fixed income was up 6.7%, net of fees. Absolute return was up 6.3%, net of fees. Private equity and real assets, which both report returns on a 1-quarter lag, had returns of 2.9% net of fees, and -7.2% net of fees, respectively. Within real assets, the higher level of interest rates, as well as vacancies in the office sector, both had negative impacts on valuations during the year. The value of the Fund on December 31, 2023, totaled approximately $5.71 billion.
2023 CPI COLA Factor is 3.0% (This only affects certain Police and Fire Retirees)
Every December, the ERS calculates the rate to be used to determine COLA factors granted to most protective service members based on the Consumer Price Index – All Urban Consumers (CPI-U). In November of 2023, the index was 307.051 as compared with 297.711 in November of 2022, an increase of 3.1373%; however, increases are capped at 3%.
Accordingly, COLA increases granted in calendar year 2024 to those protective service members whose COLA is determined by the CPI-U will be 3.0%.
The CPI COLA is calculated using the Consumer Price Index – All Urban Consumers data. The CPI statistics can be found on the U.S. Department of Labor Statistics website: http://data.bls.gov/cgi-bin/surveymost?cu
1099-Rs for 2023
Forms 1099-R (tax reporting for your pension payments, similar to the W-2 you received as an active employee) for the tax year 2023 will be mailed no later than January 31, 2024. (All 1099R’s will be mailed on the same date, but they may arrive at your address at different times. The post office will be delivering millions of these forms at about the same time, so there is a possibility your form might be delayed in the mail.)
If you have not received your form by February 15, 2024, please call the ERS office to request a replacement. Please note that these forms are produced and mailed offsite; therefore, they will not be available on a walk-in basis. Requests will be processed in the order received.
1099-R forms may be returned to our office if we do not have your current mailing address – including seasonal moves. ERS cannot take address changes over the phone. A change of address form is available on our website or you may change your address through Member Self Service. In addition, you may call our office and request a change of address form or simply take a standard-sized sheet of paper and provide the new information by mailing it in. Be sure to include your printed name and signature.
If you are a recent retiree and you received a GPS lump-sum bonus during 2023 and elected to rollover all or part of your GPS lump sum bonus, you will receive a separate 1099-R for your GPS lump sum bonus rollover. If you elected to receive all or part of the GPS lump sum bonus in cash, the payment you received in cash will be included with the 1099-R containing your monthly annuity payments.
If you receive multiple benefits from the ERS (e.g., your own benefit as well as a survivorship benefit from the account of your deceased spouse), you will receive a separate 1099-R for each benefit you received in 2023.
If you receive a Duty Disability benefit from the ERS, you will not receive a 1099-R because this benefit is not taxable or reportable to the IRS.
If you owe additional income tax this year or are getting a large refund, you might want to adjust the amount of your tax withholdings. You may download the tax withholding form by clicking HERE. If you do not have internet access, you may contact the ERS office, and we will mail you the required form.
The ERS staff is not allowed to give tax advice or answer tax questions. We cannot recommend how much you should have withheld or tell you if you need to file a tax return. Please consult the applicable IRS instructions or a tax professional. There are taxpayer assistance programs, often at no cost, through organizations such as AARP and Volunteer Income Tax Assistance (VITA).
Note for Retirees with the City’s Health Insurance
As a health plan sponsor, The Affordable Care Act (ACA) requires the City of Milwaukee to send out Form 1095-B to retirees who have health insurance coverage through the City. Please note that you DO NOT need this form to file your taxes; however, you should keep Form 1095-B with all your tax records as supporting documentation. This form is only used to verify medical coverage to the IRS that you (and your covered tax dependents on your federal income tax filing) had health insurance coverage during the year—no amounts are listed on this form. If you need to reference year-to-date deductions that occurred during 2023, please refer to your December 2023 payment stub. Receiving Form 1095-B does not mean you owe income taxes on the value of the health care benefits you receive. Please note that additional benefits such as dental plans, life insurance or disability (through the ERS) do not need to be reported to the federal government and will not be included on Form 1095-B. If you have not received this form by February 15, 2024, please contact our office.
Attention All Members – Especially Those Receiving Duty Disability Benefits
Please be sure to retain all of your pay stubs, especially your December check stub or direct deposit advice. This statement summarizes your monthly annuity pay and deduction amounts for the calendar year. For example, you will see that all of your health insurance premiums paid for the year are found under the “Year-To-Date” column on your stub/advice. You may need this information when completing your tax return since health insurance deduction totals are not included on your 1099-R form.
IMPORTANT: If you receive a benefit, which is not taxable and, therefore, not reportable on a form 1099-R, such as a duty disability or accidental death annuity, this year-end statement will be the only record you will have of your payments. You will not receive a 1099-R form; please refer to your final pay stub for this information.