SB418: Bill Text

SB418, s. 24 Section 24. 40.08 (4) of the statutes is repealed and recreated to read:

SB418,15,6 40.08 (4) Reimbursements of moneys paid as a result of misrepresentation, fraud, or error. (a) If the department has paid any money to a person or estate as a result of misrepresentation, fraud, or error, the department shall determine the amount of such payment and shall require that the person or estate reimburse the department for this amount, plus interest at the rate established by the department by rule.

SB418,15,15 (b) If the department determines that any money has been paid to a person or estate as a result of misrepresentation, fraud, or error, the department shall notify the person or the personal representative or special administrator of the person's estate by certified mail of this determination. The department shall send the notice to the last-known address of the person or the personal representative or special administrator of the person's estate. The notice shall inform the person of his or her right to a timely appeal. The notice must be sent within 7 years from the date that the department first acquires actual notice of the alleged misrepresentation, fraud, or error.

SB418,15,23 (c) The sending of the notice by the department under par. (b) shall constitute a lien against the person's separate account under s. 40.04 (4) (a) and any annuity, benefit, or obligation of the employee trust fund that is payable or will become payable to the person or the person's beneficiaries. This lien takes precedence over all other withholdings, liens, or encumbrances, whenever perfected, against the person's separate account under s. 40.04 (4) (a) and any annuity, benefit, or obligation of the employee trust fund that is payable or will become payable to the person or the person's beneficiaries.

SB418,15,25 (d) Subject to sub. (10), the department may do any of the following to provide for reimbursement of the amount or any portion of the amount due under par. (a):

SB418,16,2 1. Obtain voluntary repayment from the person or estate within a reasonable period, as determined by the department.

SB418,16,12 2. Foreclose on the lien against the person's separate account under s. 40.04 (4) (a) or any annuity, benefit, or obligation of the employee trust fund that is payable or will become payable to the person or the person's beneficiaries. In foreclosing on this lien, the department may retain the amount or portion of the amount out of any annuity, benefit, or obligation of the employee trust fund that is payable or will become payable to the person or the person's beneficiaries or may permanently reduce the person's annuity by the actuarial present value of the amount or portion of the amount that is due under par. (a). If the department forecloses on the lien, the department shall notify, by regular mail, the person or personal representative or special administrator of the person's estate of the foreclosure as soon as practical.

SB418,16,16 3. Request that an employer withhold the amount or any portion of the amount from any sum payable by the employer to any person or estate. If an employer receives such a request, the employer shall withhold and remit the amount to the department.

SB418,16,18 4. Bring a civil action against the person or estate for the amount or any portion of the amount that is not otherwise recovered by the department.

SB418,16,20 (e) Any amount that is reimbursed to the department under par. (d) shall be credited to the appropriate benefit plan accounts.

SB418, s. 25 Section 25. 40.08 (6) (e) of the statutes is repealed and recreated to read:

SB418,16,24 40.08 (6) (e) In accordance with rules promulgated by the department, and at a rate of interest established by rule, the department may credit interest on moneys refunded or credited under this subsection.

SB418, s. 26 Section 26. 40.08 (7) (a) of the statutes is amended to read:

SB418,17,10 40.08 (7) (a) Any overpayment or underpayment of a lump-sum payment under s. 40.25 or a death benefit which is less than 60% of the amount specified in s. 40.25 (1) (a) rounded to the next highest dollar amount, and any annuity payment error which is less than $2 per month may not be corrected but shall be credited or debited to the employer accumulation reserve or the appropriate insurance account. However, if the amount of unapplied additional contributions or tax-deferred additional contributions would increase an annuity payment by less than $2 but is more than 60% of the amount specified in s. 40.25 (1) (a) rounded to the next highest dollar amount, the unapplied additional contributions or tax-deferred additional contributions shall be paid to the annuitant as a lump sum.

SB418, s. 27 Section 27. 40.08 (7) (c) of the statutes is amended to read:

SB418,17,18 40.08 (7) (c) If In accordance with rules promulgated by the department, and at a rate of interest established by rule, if an annuity underpayment exceeding exceeds the limits in par. (a) has not been corrected for at least 12 months, the payment to the annuitant to correct the underpayment shall include 0.4% interest on the amount of the underpayment for each full month during the period beginning on the date on which the underpayment occurred and ending on the date on which the underpayment is corrected.

SB418, s. 28 Section 28. 40.08 (8) (a) 1. of the statutes is amended to read:

SB418,18,5 40.08 (8) (a) 1. Any potential primary beneficiary under s. 40.02 (8), other than an estate, who has not applied for any benefit payable under this chapter as a result of the death of the participant and whom the department cannot locate by reasonable efforts, as determined by the department by rule, within one year after the department learns of the death of the participant shall be presumed to have predeceased the participant and all other potential beneficiaries. Thereafter, if the department is unable to locate any resulting subsequent beneficiary within 6 months, all beneficiaries under s. 40.02 (8) (a) 1. and 2. shall be presumed to have predeceased the participant, and the department shall pay all benefits payable under this chapter as a result of the death of the participant to the participant's estate in a lump sum.

SB418, s. 29 Section 29. 40.08 (8) (a) 2. of the statutes is amended to read:

SB418,18,13 40.08 (8) (a) 2. If an estate that is determined by the department to be a beneficiary is closed prior to the payment of benefits payable under this chapter as a result of the death of the participant, and the estate is not reopened within 6 months after the department notifies the estate that a benefit is payable, the benefit shall be considered irrevocably abandoned and shall be transferred to the employer accumulation reserve, unless the estate was the designated beneficiary under s. 40.02 (8) (a) 1.

SB418, s. 30 Section 30. 40.08 (8) (a) 2m. of the statutes is amended to read:

SB418,18,23 40.08 (8) (a) 2m. If the estate was the designated beneficiary under s. 40.02 (8) (a) 1., and the estate is closed prior to the payment of benefits payable under this chapter as a result of death of the participant, and the estate is not reopened within 6 months after the department notifies the estate that a benefit is payable, the department shall pay the benefit to a beneficiary as determined under s. 40.02 (8) (a) 2. If the department is unable to locate any such beneficiary within 6 months, all such beneficiaries shall be presumed to have predeceased the participant , and the benefit shall be considered irrevocably abandoned and shall be transferred to the employer accumulation reserve.

SB418, s. 31 Section 31. 40.08 (8) (a) 3. of the statutes is amended to read:

SB418,19,10 40.08 (8) (a) 3. A participant, other than a participating employee or annuitant, whom the department cannot locate by reasonable efforts, with such efforts beginning by the end of the month in which the participant attains, or would have attained, the age of 65, shall be considered to have abandoned all benefits under the Wisconsin retirement system on the date on which the participant attains, or would have attained, the age of 70. The department shall close the participant's account and shall transfer the moneys in the account to the employer accumulation reserve. The department shall restore the participant's account and shall debit the employer accumulation reserve accordingly if the participant subsequently applies for retirement benefits under this chapter before attaining the age of 80.

SB418, s. 32 Section 32. 40.08 (8) (a) 4. of the statutes is amended to read:

SB418,19,22 40.08 (8) (a) 4. The former spouse of a participant who is an alternate payee and whom the department cannot locate by reasonable efforts, with such efforts beginning by the end of the month in which the participant attains, or would have attained, the age of 65, shall be considered to have abandoned all benefits under the Wisconsin retirement system on the date on which the participant attains, or would have attained, the age of 70. The department shall close the alternate payee's account and shall transfer the moneys in the account to the employer accumulation reserve. The department shall restore the alternate payee's account and shall debit the employer accumulation reserve accordingly if the alternate payee subsequently applies for retirement benefits under this chapter before the participant attains or would have attained the age of 80.

SB418, s. 33 Section 33. 40.08 (8) (b) of the statutes is amended to read:

SB418,20,3 40.08 (8) (b) All moneys or credits in an account for a person presumed to have died intestate, without heirs or beneficiary, or to be abandoned by the person under par. (a) shall be applied, at the end of the 5th calendar year in which notice is published under par. (c), to the employer accumulation reserve to reduce future funding requirements.

SB418, s. 34 Section 34. 40.08 (8) (c) of the statutes is amended to read:

SB418,20,12 40.08 (8) (c) The department shall publish a class 1 notice, under ch. 985, in the official state paper stating the names of persons presumed to have died intestate, without heirs or beneficiary, or whose accounts are presumed to be abandoned under par. (a), and the fact that a benefit will be paid, if applied for within the time limits under par. (a) (d) and if the participant, alternate payee or other person offers proof satisfactory to the department that the participant, alternate payee or other person is entitled to the benefit. Such proof shall include, but is not limited to, evidence that the participant died and that the person is the beneficiary under s. 40.02 (8).

SB418, s. 35 Section 35. 40.08 (8) (e) of the statutes is amended to read:

SB418,20,20 40.08 (8) (e) Notwithstanding any other provision of the statutes s. 40.02 (8), any account subject to this subsection may, at the discretion of the department, be settled by any heirs of a deceased participant or beneficiary making application, on a form approved by the department, certifying the names of any other persons not known by the applicants to be deceased and known by the applicants to have an equal or superior claim to the account and certifying that the applicants have no knowledge of the whereabouts of any of the persons so named.

SB418, s. 36 Section 36. 40.08 (10) of the statutes is renumbered 40.08 (10) (a) and amended to read:

SB418,21,6 40.08 (10) (a) Service credits granted and contribution, premium and benefit payments made under this chapter are not Except as provided in par. (b), the factors that are used to calculate a participant's retirement benefits are subject to correction unless correction is requested or made prior to the end of 7 full calendar for 7 years after the date of the alleged error or January 1, 1987, whichever is later that the department calculates the benefits, unless the alleged error is the result of fraud or unless another limitation is specifically provided by statute. This subsection does not prohibit correction of purely clerical errors in reporting or recording contributions, service and earnings law.

SB418, s. 37 Section 37. 40.08 (10) (b) of the statutes is created to read:

SB418,21,9 40.08 (10) (b) Contribution payments are subject to correction as provided in a decision under s. 40.06 (1) (e).

SB418, s. 38 Section 38. 40.08 (10) (c) of the statutes is created to read:

SB418,21,14 40.08 (10) (c) Individual premium and benefit payments are subject to correction for 7 years after the premium is due or after the benefit is paid, whichever is applicable, unless the alleged error is the result of fraud or unless another limitation is specifically provided by law.

SB418, s. 39 Section 39. 40.08 (10) (d) of the statutes is created to read:

SB418,21,17 40.08 (10) (d) This subsection does not prohibit correction of purely clerical errors in reporting or recording contributions, service, and earnings.

SB418, s. 40 Section 40. 40.08 (13) of the statutes is amended to read:

SB418,21,22 40.08 (13) Beneficiary designation. The department may not be required by a court order, or by any other action or proceeding, to enforce or otherwise monitor the any beneficiary designation specified in a qualified domestic relations order filed with the department.

SB418, s. 41 Section 41. 40.22 (2) (h) of the statutes is repealed.

SB418, s. 42 Section 42. 40.23 (1) (b) of the statutes is amended to read:

SB418,22,12 40.23 (1) (b) Except as provided in par. (bm), all retirement annuities shall be effective on the day following, or on the first day of a month following, the date of separation from the last participating employer by which the participant was employed, as specified by the participant in the written application for the annuity. However, the date shall not be more than 90 days prior to the date of receipt of the application by the department. The participant may specify that additional and tax-deferred additional contribution accumulations shall not be applied to provide an annuity until a subsequent application is filed for an annuity to be paid from the additional and tax-deferred additional contribution accumulations. The subsequent application shall be made as specified under sub. (4) or the department shall automatically distribute the accumulated additional and tax-deferred additional contribution accumulations as a lump sum.

SB418, s. 43 Section 43. 40.23 (3) of the statutes is amended to read:

SB418,22,20 40.23 (3) The initial monthly amount of any retirement annuity in the normal form shall not be less than the money purchase annuity which can be provided by applying the sum of the participant's accumulated additional and required contributions plus an amount from the employer accumulation reserve equal to the participant's accumulated required contributions, less the amount of any lump sum payment under s. 40.25 (7) (a) 5. and any interest thereon, to fund the annuity in accordance with the actuarial tables in effect on the annuity effective date.

SB418, s. 44 Section 44. 40.23 (4) (a) of the statutes is amended to read:

SB418,23,4 40.23 (4) (a) Subject to all requirements under the internal revenue code Internal Revenue Code, the department shall distribute to the participant the entire benefit attributable to the amount that is credited to the account of a participant under the Wisconsin retirement system no later than the required beginning date, unless the department distributes this amount benefit as an annuity or in more than one payment. If the department distributes this amount benefit as an annuity or in more than one payment, the department shall begin the distribution no later than the required beginning date.

SB418, s. 45 Section 45. 40.23 (4) (b) of the statutes is amended to read:

SB418,23,12 40.23 (4) (b) In the calendar year immediately preceding the calendar year of a participant's required beginning date, if the department distributes the benefit attributable to the amount that is credited to the account of a participant under the Wisconsin retirement system in a form other than as a lump sum payment, the department, subject to all requirements under the internal revenue code Internal Revenue Code, shall calculate the distribution to the participant according to one of the following:

SB418,23,15 1. The life expectancy of a participant or, if the annuity is in the form of a joint and survivor annuity, the joint lives life expectancies of the participant and the named survivor.

SB418,23,19 2. For an annuity authorized under s. 40.24 (1) (f), a term certain not to exceed the life expectancy of the participant or, if the annuity is in the form of a joint and survivor annuity, the joint life expectancies of the participant and the named survivor.

SB418, s. 46 Section 46. 40.23 (4) (c) of the statutes is amended to read:

SB418,24,11 40.23 (4) (c) If a participant during the calendar year in which he or she attains 69.5 years or in which he or she terminates employment with a participating employer, whichever is later, or the alternate payee during the calendar year in which the participant attains or would have attained 69.5 years, does not apply before December 31 in that year for a distribution of the benefit attributable to the amount that is credited to the account of a participant under the Wisconsin retirement system, the department shall begin, effective the following January 1, an automatic distribution to the participant or alternate payee in the form of an annuity specified under s. 40.24 (1) (c) or as determined by the department by rule. If the department makes an automatic distribution under this paragraph, the beneficiary designation filed with the department before the date on which the department begins the automatic distribution is no longer applicable under ss. 40.71 and 40.73. Unless the participant or alternate payee files a subsequent beneficiary designation with the department after the date on which the department begins the automatic distribution, the department shall pay any death benefit as provided under s. 40.02 (8) (a) 2.

SB418, s. 47 Section 47. 40.23 (4) (d) of the statutes is amended to read:

SB418,24,20 40.23 (4) (d) If a participant dies after the department begins to distribute the benefit attributable to the amount that is credited to the account of a participant under the Wisconsin retirement system, but before the entire amount in the account benefit has been distributed, the department shall distribute the remaining portion of the account benefit at least as rapidly as is provided in the manner of distribution selected by the participant. If the beneficiary does not apply to the department to continue the distribution, within a period specified by rule, the department shall pay the remaining distribution to the beneficiary as a lump sum.

SB418, s. 48 Section 48. 40.23 (4) (e) 1. of the statutes is amended to read:

SB418,25,2 40.23 (4) (e) 1. Subject to subds. 2. to 4., if a participant dies before the distribution of benefits has commenced and the participant's beneficiary is the spouse, the department shall begin the distribution within 5 years after the date no later than December 31 of the 5th calendar year that occurs after the year of the participant's death.

SB418, s. 49 Section 49. 40.23 (4) (e) 3. of the statutes is amended to read:

SB418,25,7 40.23 (4) (e) 3. If the spouse does not apply for a distribution, the distribution shall begin as an automatic distribution department shall distribute the entire benefit as provided under subd. 1. or under par. (c) 2., whichever distribution date is earlier later.

SB418, s. 50 Section 50. 40.23 (4) (f) of the statutes is repealed and recreated to read:

SB418,25,14 40.23 (4) (f) If a participant dies before the distribution of benefits has commenced and the participant's beneficiary is not the spouse, the department shall distribute the entire benefit in a lump sum no later than December 31 of the calendar year that occurs after the year of the participant's death, unless the beneficiary begins an annuity benefit not to exceed his or her life expectancy no later than December 31 of the calendar year that occurs after the year of the participant's death.

SB418, s. 51 Section 51. 40.23 (4) (g) of the statutes is amended to read:

SB418,25,18 40.23 (4) (g) Nothing in this subsection shall be construed to create any benefit, lump sum payment option or form of annuity not otherwise expressly provided for in this subchapter chapter.

SB418, s. 52 Section 52 . 40.24 (1) (f) of the statutes is amended to read:

SB418,26,10 40.24 (1) (f) From accumulated additional contributions made under s. 40.05 (1) (a) 5. and tax-deferred additional contribution accumulations made under s. 40.05 (1) (a) 5m. only, an annuity certain payable for and terminating after the number of months specified by the applicant, regardless of whether the applicant dies before or after the number of months specified, provided that the monthly amount of the annuity certain is at least equal to the minimum amount established under s. 40.25 (1) (a). Subject to the period of distribution required under s. 40.23 (4) (b) 2., the number of months specified shall not exceed 180 and shall not be less than 24. At any time before the expiration of the certain period, the annuitant may elect to receive a lump-sum payment equal to the present value of the remaining monthly payments. If the death of the annuitant occurs prior to the expiration of the certain period, the remaining payments shall be made in accordance with s. 40.73 (2) without regard to any other annuity payments payable to the beneficiary. An annuity under this paragraph may be initiated prior to any other annuity amount provided under this subchapter and prior to age 55 if all other qualifications for receiving an annuity payment are met.

SB418, s. 53 Section 53. 40.24 (3) of the statutes is amended to read:

SB418,26,14 40.24 (3) Any participant specified under sub. (1) (intro.) may elect to receive the amount provided by accumulated additional contributions and tax-deferred additional contributions in a different optional form than the balance of the annuity.

SB418, s. 54 Section 54 . 40.24 (7) (a) 4. of the statutes is amended to read:

SB418,26,17 40.24 (7) (a) 4. Benefits paid from accumulated additional contributions and tax-deferred additional contributions.

SB418, s. 55 Section 55 . 40.25 (1) (a) of the statutes is amended to read:

SB418,27,5 40.25 (1) (a) If all other requirements for payment of a retirement annuity are met and if the retirement annuity in the normal form which could be provided under s. 40.23 is equal to or less than $100 monthly for a benefit with an effective date that is on or after April 23, 1994, but before the end of the calendar year of 1993 or, for a benefit with an effective date in a subsequent calendar year, the monthly amount applied under this paragraph for the previous calendar year increased by the salary index and ignoring fractions of the dollar, the then present value, including additional contributions and tax-deferred additional contributions, of the annuity shall be paid in a single sum instead of as an annuity. The additional contribution accumulations and tax-deferred additional contribution accumulations shall not be included in determining whether a single sum should be paid if the optional form provided by s. 40.24 (1) (f) or a lump sum under sub. (4) is selected.

SB418, s. 56 Section 56. 40.25 (1) (b) of the statutes is amended to read:

SB418,27,17 40.25 (1) (b) If all other requirements for payment of a retirement annuity are met and if the retirement annuity in the normal form which could be provided under s. 40.23 from all available accumulations and credits, other than accumulations from additional contributions and tax-deferred additional contributions, is more than $100 and less than $200 monthly for a benefit with an effective date that is on or after April 23, 1994, but before the end of the calendar year of 1993 or, for a benefit with an effective date in a subsequent calendar year, the monthly amounts applied under this paragraph for the previous calendar year increased by the salary index and ignoring fractions of the dollar, then any participant may elect to receive, in lieu of the annuity, the then present value, including additional contributions and tax-deferred additional contributions, of the annuity in a single sum.

SB418, s. 57 Section 57 . 40.25 (3m) of the statutes is amended to read:

SB418,28,2 40.25 (3m) A participant's application for a lump sum payment under sub. (1) (b) or (2), filed after May 7, 1994, shall be signed by both the participant and the participant's spouse, if the participant has been married to that spouse for at least one year immediately preceding the date the application is filed. The department may promulgate rules that allow for the waiver of the requirements of this subsection for a situation in which, by reason of absence or incompetency, the spouse's signature may not be obtained. This subsection does not apply to any benefits paid from accumulated additional contributions and tax-deferred additional contributions.

SB418, s. 58 Section 58 . 40.25 (4) of the statutes is amended to read:

SB418,28,9 40.25 (4) If all the requirements for payment of a retirement annuity or a separation benefit are met, except filing of an application, a participant may elect that the accumulation from the participant's additional contributions made under s. 40.05 (1) (a) 5. and tax-deferred additional contributions made under s. 40.05 (1) (a) 5m. be paid as a lump sum in lieu of an annuity from those additional contributions.

SB418, s. 59 Section 59 . 40.25 (6) (a) 1. of the statutes is amended to read:

SB418,28,13 40.25 (6) (a) 1. The participating employee must have at least 3 continuous years of creditable current service under the fund at the time of application for reestablishment of creditable service under this subsection.

SB418, s. 60 Section 60. 40.25 (6) (a) 2. of the statutes is amended to read:

SB418,28,23 40.25 (6) (a) 2. Applications for reestablishment of creditable service must include all creditable service that has been forfeited except that the Subject to the rules promulgated by the department, a participating employee may apply for all or part of the creditable service that he or she has forfeited. The total number of years which may be reestablished under this subsection may not be greater than the creditable service of the participating employee at the date of application, or 10 years, whichever is smaller. Creditable service previously purchased under this chapter may not be used to determine the maximum amount of service that may be purchased under this subsection.

SB418, s. 61 Section 61. 40.25 (7) (a) 2. of the statutes is amended to read:

SB418,29,2 40.25 (7) (a) 2. The participant has at least 3 continuous years of creditable current service under the fund at the time of application under subd. 1.

SB418, s. 62 Section 62. 40.25 (7) (a) 3. of the statutes is amended to read:

SB418,29,8 40.25 (7) (a) 3. The number of years of creditable service applied for under this paragraph does not exceed the number of years of creditable service that the participant has at the date of application or 10 years, whichever is less. Creditable service previously purchased under this chapter may not be used to determine the maximum amount of service that may be purchased under this subsection.

SB418, s. 63 Section 63. 40.25 (7) (d) of the statutes is amended to read:

SB418,29,12 40.25 (7) (d) The lump sum payment under par. (a) 5. shall be credited and treated as an employee required contribution for all purposes of the retirement system, except for purposes of s. as provided in ss. 40.23 (3) and 40.73 (1) (am).