The payroll cycle change does not affect WRS earnings for fiscal year 2021 (July 1, 2020 – June 30, 2021).
The payroll cycle change will affect WRS earnings for fiscal year 2022 (July 1, 2021 – June 30, 2022). Under a monthly payroll, earnings for work performed during the second half of June 2022 would have been paid June 30, 2022 and included as part of fiscal year 2022 WRS earnings. Under a bi-weekly payroll, these earnings will instead be paid in July as part of fiscal year 2023 (July 1, 2022 – June 30, 2023). This will cause fiscal year 2022 WRS eligible earnings to be slightly lower.
It is important to note that you are not losing earnings. Earnings are being shifted to the new fiscal year because of the payroll cycle change.
WRS eligible earnings are reported on a “when paid” basis. This is required by statutory definition of “earnings,” which states that earnings are considered received as of the date when they would normally be payable by the employer. For reference see Wisconsin Statute 40.02(22).
Under the WRS formula benefit calculation, final average earnings are determined by using your three highest earning fiscal years. If you are retirement age (age 55) or near retirement age, fiscal year 2022 may not be one of your three highest earning fiscal years due to the shift in earnings from fiscal year 2022 to fiscal year 2023. Note that for the final average earnings calculation the three highest fiscal years do not need to be consecutive or the last three prior to terminating.
See additional information: https://uwservice.wisconsin.edu/single-payroll