Investment Update
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.
1099-Rs for 2023
If you have not received your 1099R for 2023, please contact the pension office so we can mail you a new form. You will need this form for filing your income tax return for 2023. Do not wait until the last minute! Replacement forms will be issued free-of-charge through April 15, 2024. Any request for a replacement after that date will be filled only upon receipt of a $15.00 processing fee. If you receive a Duty Disability benefit from the ERS, you will not receive a 1099R, because this benefit is not taxable or reportable to the IRS.
If you are a recent retiree and you received a GPS lump-sum bonus during 2023 and elected to roll over all or part of your GPS lump sum bonus, you should have received a separate 1099R 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 was included with the 1099R 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 should have received a separate 1099R for each benefit you received in 2023.
The ERS staff is not allowed to give tax advice or answer specific 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.
If you would like to change your tax withholding for federal or WI taxes, you may download the tax withholding form from our website at: www.cmers.com under “Benefits” “Pension Payment Information” “Tax withholding”. If you do not have internet access, you may contact the ERS office and we will mail you the required form.
Retired members can view their current 1099R data as well as past 1099R data on our Member Self Service Site. Instructions for creating a secure login can be found on our website under “ERS Member Self Service.”
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.