SWIB Reports 5-Year Performance Adds $3.8 Billion Above Benchmarks, Awards Incentive Compensation

State of Wisconsin Investment Board (SWIB) Trustees awarded incentive compensation based on approximately $3.8 billion of net outperformance generated by SWIB staff over the last five years for the fully funded Wisconsin Retirement System (WRS). Due to SWIB’s strong investment performance, WRS retirees will see a Core Trust Fund annuity adjustment of 2.1% and Variable Trust Fund annuity adjustment of 18%.

In recognition of staff outperformance, the Trustees awarded incentive compensation payments totaling approximately $32 million. Cost-effective management that generated strong investment returns has helped the WRS remain among the best-funded public pension plans in the country. Over the last 20 years, SWIB’s active management and its diversified holdings generated $10 billion for the Core Trust Fund above what it would have earned by simply investing in a passive portfolio consisting of 60% global equities and 40% domestic bonds.

In 2025, the Core Fund, the larger of the two WRS trust funds with more than $141 billion in assets, ended the year with a one-year net return of 14.4% and a five-year net return of 7.1%. Thirteen of seventeen active investment strategies outperformed their benchmarks contributing to a 1-year excess return of 0.76% and a 5-year excess return of 0.65%.  The Core Fund’s 10-year and 20-year returns, net of external manager fees, continue to exceed its target return of 6.8% with SWIB outperforming the Core Fund benchmark for these periods as well.

The returns generated by SWIB also help provide continued stability in employer and employee contribution rates. WRS retirees have seen positive annuity adjustments in nine of the last 10 years, and contribution rates have remained stable over that same period. This highlights not only the thoughtful design of the WRS, but also the efforts of SWIB staff to protect participants from large swings in annuities and contributions.

“In a year shaped by shifting interest rate expectations, geopolitical tensions, and evolving global economic conditions, our disciplined, long-term approach enabled us to manage risk and capitalize on opportunities across public and private markets,” SWIB Executive Director/Chief Investment Officer Edwin Denson said.

“I am incredibly proud of the work SWIB staff does on behalf of over 703,000 WRS participants. The strong returns for the WRS do not happen by chance,” SWIB Board of Trustees Chair Clyde Tinnen said. “Our pay-for-performance approach has allowed us to build strong internal expertise in a staff that has worked to expand our global reach, navigate market cycles, and protect and grow the assets entrusted to us.”

Incentive compensation, the pay-for-performance part of employee compensation, was awarded to 257 employees and is based on an employee’s contributions to the overall success of the organization and trust fund performance after deduction of all costs. After all costs, the WRS has retained over 95% of excess value added over the last five years. Incentives are based on delivering value above industry benchmarks set by the Trustees with the advice of an outside independent consultant, a practice used throughout the industry. The plan sets total compensation targets using peer group data and primarily focuses on five-year returns, a longer-term measure that aligns with SWIB’s long-term investment strategy and the period used to calculate annuity adjustments. Compensation to SWIB employees provides a considerable cost savings advantage for the WRS over the fees charged by external investment managers.

SWIB Trustees also granted long-term incentive units to senior employees, who constitute less than one-third of staff, that will be eligible for payment in 2029. Long-term incentives are a common component of industry compensation that promote the recruitment and retention of critical staff and further align employees with the interests of WRS beneficiaries, as the value of the units is determined upon vesting based on the long-term performance of the Core Fund.

About SWIB

The State of Wisconsin Investment Board (SWIB), created in 1951, is an independent state agency responsible for managing the assets of the Wisconsin Retirement System (WRS), the State Investment Fund (SIF), and other state trust funds.  As of December 31, 2025, SWIB managed more than $178 billion of total assets, approximately 87% representing WRS assets. SWIB’s management of the WRS trust funds aims to provide a fully funded public pension for over 703,000 current and former employees of state agencies, the university system, school districts and most local governments. The WRS consistently ranks among the 10 largest public pension funds in the U.S. SWIB, a steady economic pillar for the state of Wisconsin, focuses on growing the trust funds, managing risk, and optimizing costs over the long term.