SB260,6,158 40.03 (1) (n) May allow any separate retirement system for employees of one
9or more employers to deliver or send funds representing assets of that system to the
10department. If the department accepts delivery or transmission, the department
11shall purchase shares of the fixed retirement investment trust or, variable
12retirement investment trust, or venture capital investment trust or both any
13combination of the 3 trusts
with those funds, subject to rules under sub. (2) (q). Each
14retirement system shall pay as provided in s. 40.04 (2) for the costs of investing and
15administering any of its funds sent or delivered to the department.
SB260, s. 12 16Section 12. 40.04 (3) (intro.) of the statutes is amended to read:
SB260,7,417 40.04 (3) (intro.) A fixed retirement investment trust , a venture capital
18investment trust,
and a variable retirement investment trust shall be maintained
19within the fund under the jurisdiction and management of the investment board for
20the purpose of managing the investments of the retirement reserve accounts and of
21any other accounts of the fund as determined by the board, including the accounts
22of separate retirement systems. Within the fixed retirement investment trust there
23shall be maintained a transaction amortization account and a market recognition
24account, and any other accounts as are established by the board or the investment
25board. A current income account shall be maintained in the venture capital

1investment trust and
variable retirement investment trust. All costs of owning,
2operating, protecting and acquiring property in which either trust any of the 3 trusts
3has an interest shall be charged to the current income or market recognition account
4of the trust having the interest in the property.
SB260, s. 13 5Section 13. 40.04 (3) (a) of the statutes is amended to read:
SB260,7,156 40.04 (3) (a) The net gain or loss of the venture capital investment trust and
7the
variable retirement investment trust shall be distributed annually on December
831 to each participating account in the same ratio as each account's average daily
9balance within the respective trust bears to the total average daily balance of all
10participating accounts in the trust. The amount to be distributed shall be the excess
11of the increase within the period in the value of the assets of the trust resulting from
12income from the investments of the trust and from the sale or appreciation in value
13of any investment of the trust, over the decrease within the period in the value of the
14assets resulting from the sale or the depreciation in value of any investments of the
15trust.
SB260, s. 14 16Section 14. 40.04 (3) (b) of the statutes is amended to read:
SB260,8,217 40.04 (3) (b) The assets of the fixed retirement investment trust shall be
18commingled and, the assets of the variable retirement investment trust shall be
19commingled, and the assets of the venture capital investment trust shall be
20commingled
. No particular contributing benefit plan shall have any right in any
21specific item of cash, investment or other property in either trust other than an
22undivided interest in the whole as provided in this paragraph. The department of
23administration shall maintain any records as may be required to account for each
24contributing account's share in the corresponding trust except that the employee

1accumulation reserve, the employer accumulation reserve and the annuity reserve
2shall be treated as a single account, except as provided in sub. (7).
SB260, s. 15 3Section 15. 40.04 (3) (d) of the statutes is amended to read:
SB260,8,104 40.04 (3) (d) Notwithstanding par. (a), assets of the fixed retirement
5investment trust which are authorized to be invested in common or preferred stock
6may, if authorized by rule, be invested as a part of the variable retirement investment
7trust or the venture capital investment trust with that portion of the annual
8distributions of net gains or losses to the fixed retirement investment trust from the
9variable retirement investment trust and the venture capital investment trust being
10credited to the market recognition account.
SB260, s. 16 11Section 16. 40.04 (4) (a) 2. of the statutes is amended to read:
SB260,8,2312 40.04 (4) (a) 2. Credited as of each December 31 with interest on the prior year's
13closing balance at the effective rate on all employee required contribution
14accumulations in the venture capital annuity division and the variable annuity
15division, on all employee required contributions in the fixed annuity division on
16December 31, 1984, on all employee required contributions in the fixed annuity
17division of participants who are not participating employees after
18December 31, 1984, and on all employee and employer additional contribution
19accumulations and with interest on the prior year's closing balance at the assumed
20benefit rate on all employee required contribution accumulations in the fixed
21annuity division for participants who are participating employees after
22December 31, 1984, but who terminated covered employment before December 30,
231999.
SB260, s. 17 24Section 17. 40.04 (7) (intro.) of the statutes is amended to read:
SB260,9,5
140.04 (7) (intro.) The reserves established under subs. (4), (5), and (6) shall be
2divided both individually and for the purposes of sub. (3) between among a fixed
3annuity division, a venture capital annuity division, and a variable annuity division.
4All required and additional contributions shall be credited to the fixed annuity
5division except:
SB260, s. 18 6Section 18. 40.04 (7) (a) (intro.) of the statutes is amended to read:
SB260,9,257 40.04 (7) (a) (intro.) As otherwise elected by a participant prior to
8April 30, 1980, or on or after January 1, 2001. Any participant who was a
9participant prior to April 30, 1980, and whose accounts on January 1, 1982, include
10credits segregated for a variable annuity shall have his or her required and
11additional contributions made on or after January 1, 1982, credited to the variable
12annuity division in a manner consistent with the participant's election prior to
13April 30, 1980, unless prior to January 1, 1982, the participant terminated such
14election under s. 40.85, 1979 stats. Any participant who elects or has elected to have
15any of his or her credits segregated for a variable annuity on or after
16January 1, 2001, shall have 50% of his or her required and additional contributions
17made on or after the date of election credited to the variable annuity division, except
18that if the participant has made an election under par. (d) the participant may only
19have 40% of the contributions credited to the variable annuity division
. The
20department shall by rule provide that any participant who elects or has elected
21variable participation prior to April 30, 1980, or on or after January 1, 2001, may
22elect to cancel that variable participation as to future contributions. The
23department's rules shall permit a participant who elects or has elected to cancel
24variable participation as to future contributions, or an annuitant, to elect to transfer
25previous variable contribution accumulations to the fixed annuity division. A

1transfer of variable contribution accumulations under this paragraph shall result in
2the participant receiving the accrued gain or loss from the participant's variable
3participation. A participant may specify that election to cancel participation in the
4variable annuity division is conditional. If the participant so specifies the election
5is effective on the first date on which it may take effect on which the participant:
SB260, s. 19 6Section 19. 40.04 (7) (c) of the statutes is renumbered 40.04 (7) (c) 1.
SB260, s. 20 7Section 20. 40.04 (7) (c) 2. of the statutes is created to read:
SB260,10,138 40.04 (7) (c) 2. Any participant whose required contributions are segregated in
9any portion to provide for a venture capital annuity may direct that any part or all
10of subsequent additional contributions credited to the participant's account be
11segregated to provide for a venture capital annuity and may at any time by filing a
12form prescribed by the department change the portion being segregated for any
13future additional contributions.
SB260, s. 21 14Section 21. 40.04 (7) (d) of the statutes is created to read:
SB260,11,315 40.04 (7) (d) Beginning on January 1, 2004, a participant may elect to have 10%
16of his or her required and additional contributions made on or after the date of
17election credited to the venture capital annuity division. The department shall by
18rule provide that any participant may elect to cancel that venture capital
19participation as to future contributions. The department's rules shall permit a
20participant who elects or has elected venture capital participation to cancel venture
21capital participation as to future contributions or an annuitant to elect to transfer
22previous venture capital annuity contribution accumulations to the fixed annuity
23division. A transfer of venture capital contribution accumulations under this
24paragraph shall result in the participant receiving the accrued gain or loss from the
25participant's venture capital participation. A participant may specify that election

1to cancel participation in the venture capital annuity division is conditional. If the
2participant so specifies the election is effective on the first date on which it may take
3effect on which the participant is either:
SB260,11,74 1. An annuitant and the amount of the annuity the participant or member will
5receive if the election is made effective is greater than or equal to the amount of the
6annuity the participant or member would have received if the participant or member
7had not elected venture capital participation.
SB260,11,118 2. Not an annuitant and the accumulated amount which is to be transferred
9to the fixed annuity division is equal to or greater than the amount which would have
10accumulated if the segregated contributions had been originally credited to the fixed
11annuity division.
SB260, s. 22 12Section 22. 40.23 (2m) (b) of the statutes is amended to read:
SB260,12,213 40.23 (2m) (b) Except as provided in s. 40.26, subject to the limitations under
14section 415 of the Internal Revenue Code, the initial amount of the normal form
15annuity shall be an amount equal to 70%, or 65% for participants whose formula rate
16is determined under par. (e) 3. or 85% for participants whose formula rate is
17determined under par. (e) 4., of the participant's final average earnings plus the
18amount which can be provided under pars. (c) and to (d) or, if less, shall be in the
19monthly amount equal to the sum of the amounts determined under pars. (c), (d) and
20to (e) as modified by par. (f) and in accordance with the actuarial tables in effect on
21the annuity effective date. If the participant has creditable service under both par.
22(e) 4. and another category under par. (e), the percent applied under this paragraph
23shall be determined by multiplying the percent that each type of creditable service
24is of the participant's total creditable service by 85% and 65% or 70%, respectively,
25and adding the results, except that the resulting benefit may not be less than the

1amount of the normal form annuity that could be paid based solely on the creditable
2service under par. (e) 4.
SB260, s. 23 3Section 23. 40.23 (2m) (cm) of the statutes is created to read:
SB260,12,124 40.23 (2m) (cm) The annuity which can be provided from a sum equal to 200%
5of the excess of the participant's required contribution accumulation reserved for a
6venture capital annuity over the amount to which the contributions would have
7accumulated at the fixed annuity division effective rate if not so reserved. If the
8participant's required contribution accumulation reserved for a venture capital
9annuity is less than the amount to which the contributions would have accumulated
10at the fixed annuity division effective rate if not reserved, the annuity shall be
11reduced by the amount which could be provided by a sum equal to 200% of the
12deficiency.
SB260, s. 24 13Section 24. 40.28 (1) (intro.) of the statutes is amended to read:
SB260,12,1714 40.28 (1) (intro.) Any annuity provided to a participant whose accounts include
15credits segregated for a variable annuity shall consist of a fixed annuity and, a
16variable annuity, and, if the participant has made an election under s. 40.04 (7) (d),
17a venture capital annuity
.
SB260, s. 25 18Section 25. 40.285 of the statutes is created to read:
SB260,12,22 1940.285 Venture capital benefits. (1) Any annuity provided to a participant
20whose accounts include credits segregated for a venture capital annuity shall consist
21of a fixed annuity, a venture capital annuity, and, if the participant has made an
22election under s. 40.04 (7) (a), a variable annuity.
SB260,12,2523 (a) The initial amount of the venture capital annuity shall be the amount which
24can be provided on the basis of the actuarial tables in effect on the effective date of
25the annuity by all of the following amounts, if otherwise available:
SB260,13,2
11. The amount of the additional contribution accumulations reserved for a
2venture capital annuity as of the date the annuity begins.
SB260,13,43 2. The amount equal to 200% of employee required contribution accumulations
4reserved for a venture capital annuity as of the date the annuity begins.
SB260,13,85 3. The amount equal, as of the date the annuity begins, to the accumulated
6prior service credits reserved for the participant for a venture capital annuity within
7the employer accumulation account, together with the net gain or loss credited to the
8accumulations.
SB260,13,119 (b) The initial amount of the fixed annuity shall be the excess of the total
10annuity payable, as determined under s. 40.23 (2m), over the amount of the venture
11capital annuity.
SB260,13,20 12(2) Whenever the balance in the venture capital annuity reserve, as of
13December 31 of any year, exceeds or is less than the then present value of all venture
14capital annuities in force, determined in accordance with the rate of interest and
15approved actuarial tables then in effect, by at least 2% of the present value of all
16venture capital annuities in force, the amount of each venture capital annuity
17payment shall be proportionately increased or decreased, disregarding fractional
18percentages, and effective on a date determined by rule, so as to reduce the variance
19between the balance of the venture capital annuity reserve and the present value of
20venture capital annuities to less than one percent.
SB260,13,24 21(3) Except as otherwise specifically provided, benefits based on venture capital
22accumulations shall be determined on the same basis and paid in the same manner
23and at the same time as benefits based on accumulations not so segregated insofar
24as practicable considering the nature of venture capital annuities.
SB260,13,2525 (End)
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