SB490: Bill Text

SB490,9,20 40.04 (3) (am) 1. Beginning on January 1, 2000, there shall be maintained within the fixed core retirement investment trust a market recognition account. The department shall establish and administer the market recognition account as recommended by the actuary or actuarial firm retained under s. 40.03 (1) (d) and as approved by the board.

SB490, s. 23 Section 23. 40.04 (3) (am) 2. of the statutes is amended to read:

SB490,9,24 40.04 (3) (am) 2. Annually, the total market value investment return earned by the fixed core retirement investment trust during the year shall be credited to the market recognition account.

SB490, s. 24 Section 24. 40.04 (3) (am) 3. (intro.) of the statutes is amended to read:

SB490,10,5 40.04 (3) (am) 3. (intro.) Annually, on December 31, the sum of all of the following shall be distributed from the market recognition account to each participating account in the fixed core retirement investment trust in the same ratio as each account's average daily balance bears to the total average daily balance of all participating accounts in the trust:

SB490, s. 25 Section 25. 40.04 (3) (am) 3. a. of the statutes is amended to read:

SB490,10,8 40.04 (3) (am) 3. a. The expected amount of investment return in the fixed core retirement investment trust during the year based on the assumed rate.

SB490, s. 26 Section 26. 40.04 (3) (am) 3. b. of the statutes is amended to read:

SB490,10,14 40.04 (3) (am) 3. b. An amount equal to 20% 20 percent of the difference between the total market value investment return earned by the fixed core retirement investment trust and the expected amount of investment return of the fixed core retirement investment trust during the year ending on December 31 based on the assumed rate.

SB490, s. 27 Section 27. 40.04 (3) (am) 3. c. of the statutes is amended to read:

SB490,10,22 40.04 (3) (am) 3. c. An amount equal to 20% 20 percent of the sum of the differences between the total market value investment return earned by the fixed core retirement investment trust and the expected amount of investment return of the fixed core retirement investment trust at the end of the 4 preceding years. For the purpose of making this calculation, the amount in the market recognition account at the end of each year that occurs before the year 2000 shall be assumed to be zero.

SB490, s. 28 Section 28. 40.04 (3) (b) of the statutes is amended to read:

SB490,11,7 40.04 (3) (b) The assets of the fixed core retirement investment trust shall be commingled and the assets of the variable retirement investment trust shall be commingled. No particular contributing benefit plan shall have any right in any specific item of cash, investment, or other property in either trust other than an undivided interest in the whole as provided in this paragraph. The department of administration shall maintain any records as may be required to account for each contributing account's share in the corresponding trust except that the employee accumulation reserve, the employer accumulation reserve and the annuity reserve shall be treated as a single account, except as provided in sub. (7).

SB490, s. 29 Section 29. 40.04 (3) (d) of the statutes is amended to read:

SB490,11,14 40.04 (3) (d) Notwithstanding par. (a), assets of the fixed core retirement investment trust which are authorized to be invested in common or preferred stock may, if authorized by rule, be invested as a part of the variable retirement investment trust with that portion of the annual distributions of net gains or losses to the fixed core retirement investment trust from the variable retirement investment trust being credited to the market recognition account.

SB490, s. 30 Section 30. 40.04 (4) (a) 2. of the statutes is amended to read:

SB490,12,2 40.04 (4) (a) 2. Credited as of each December 31 with interest on the prior year's closing balance at the effective rate on all employee required contribution accumulations in the variable annuity division, on all employee required contributions in the fixed core annuity division on December 31, 1984, on all employee required contributions in the fixed core annuity division of participants who are not participating employees after December 31, 1984, and on all employee and employer additional contribution accumulations and with interest on the prior year's closing balance at the assumed benefit rate on all employee required contribution accumulations in the fixed core annuity division for participants who are participating employees after December 31, 1984, but who terminated covered employment before December 30, 1999.

SB490, s. 31 Section 31. 40.04 (4) (a) 2g. of the statutes is amended to read:

SB490,12,7 40.04 (4) (a) 2g. Credited as of each December 31, with interest on the prior year's closing balance at the effective rate on all employee required contribution accumulations in the fixed core annuity division for participants who are participating employees on or after December 30, 1999.

SB490, s. 32 Section 32. 40.04 (4) (a) 2m. of the statutes is amended to read:

SB490,12,14 40.04 (4) (a) 2m. Debited, if a participant terminates covered employment on or after January 1, 1990, but before December 30, 1999, and applies for a benefit under s. 40.25 (2), with an amount equal to the amount by which the fixed core annuity division interest credited on or after January 1, 1990, but before December 30, 1999, to employee required contributions, exceeds the interest crediting at an annual rate of 3% 3 percent on each prior year's closing balance.

SB490, s. 33 Section 33. 40.04 (5) (b) of the statutes is amended to read:

SB490,12,17 40.04 (5) (b) Credited, as of each December 31, all fixed core annuity division interest not credited to other accounts and reserves under this section.

SB490, s. 34 Section 34. 40.04 (7) (intro.) of the statutes is amended to read:

SB490,12,22 40.04 (7) (intro.) The reserves established under subs. (4), (5), and (6) shall be divided both individually and for the purposes of sub. (3) between a fixed core annuity division and a variable annuity division. All required and additional contributions shall be credited to the fixed core annuity division except:

SB490, s. 35 Section 35. 40.04 (7) (a) (intro.) of the statutes is amended to read:

SB490,13,20 40.04 (7) (a) (intro.) As otherwise elected by a participant prior to April 30, 1980, or on or after January 1, 2001. Any participant who was a participant prior to April 30, 1980, and whose accounts on January 1, 1982, include credits segregated for a variable annuity shall have his or her required and additional contributions made on or after January 1, 1982, credited to the variable annuity division in a manner consistent with the participant's election prior to April 30, 1980, unless prior to January 1, 1982, the participant terminated such election under s. 40.85, 1979 stats. Any participant who elects or has elected to have any of his or her credits segregated for a variable annuity on or after January 1, 2001, shall have 50% 50 percent of his or her required and additional contributions made on or after the date of election credited to the variable annuity division. The department shall by rule provide that any participant who elects or has elected variable participation prior to April 30, 1980, or on or after January 1, 2001, may elect to cancel that variable participation as to future contributions. The department's rules shall permit a participant who elects or has elected to cancel variable participation as to future contributions, or an annuitant, to elect to transfer previous variable contribution accumulations to the fixed core annuity division. A transfer of variable contribution accumulations under this paragraph shall result in the participant receiving the accrued gain or loss from the participant's variable participation. A participant may specify that election to cancel participation in the variable annuity division is conditional. If the participant so specifies the election is effective on the first date on which it may take effect on which the participant:

SB490, s. 36 Section 36. 40.04 (7) (a) 2. of the statutes is amended to read:

SB490,13,25 40.04 (7) (a) 2. Is not an annuitant and the accumulated amount which is to be transferred to the fixed core annuity division is equal to or greater than the amount which would have accumulated if the segregated contributions had been originally credited to the fixed core annuity division.

SB490, s. 37 Section 37. 40.05 (1) (a) 6. of the statutes is amended to read:

SB490,14,10 40.05 (1) (a) 6. Under the rules promulgated under s. 40.03 (2) (r), additional contributions, other than the first $5,000 of contributions, or a beneficiary's prorated share thereof, that are attributable to a death benefit paid under s. 40.73, may be made to the fixed core annuity division by any participant by rollover contribution of a payment or distribution from a pension or annuity qualified under section 401 of the internal revenue code Internal Revenue Code, subject to any limitations imposed on contributions by the internal revenue code Internal Revenue Code, applicable regulations adopted under the internal revenue code Internal Revenue Code, and rules of the department.

SB490, s. 38 Section 38. 40.05 (2) (g) 2. of the statutes is amended to read:

SB490,14,23 40.05 (2) (g) 2. Under the rules promulgated under s. 40.03 (2) (r), a participant may, as a payout option for the deferred compensation plan established under subch. VII, elect to have the entire balance in the participant's account under subch. VII treated as an additional contribution to the fixed core annuity division, subject to any limitations imposed on contributions by the internal revenue code Internal Revenue Code, applicable regulations adopted under the internal revenue code Internal Revenue Code, and rules of the department. Additional contributions under this subdivision shall be available for all benefit purposes and shall be administered and invested on the same basis as employee additional contributions, except that ss. 40.24 (1) (f) and 40.25 (4) do not apply to additional contributions under this subdivision and s. 40.26 does not apply to an annuity received from additional contributions under this subdivision.

SB490, s. 39 Section 39. 40.06 (5) of the statutes is amended to read:

SB490,15,11 40.06 (5) Whenever it is determined that contributions and premiums were not paid in the year when due, the amount to be paid shall be determined at the employee and employer contribution or premium rates in effect when the payment should have been made and increased by interest at the effective rate which would have been credited if the amount had been paid and deposited in the accumulation reserves of the fixed core annuity division under s. 40.04 (4) and (5) at the time the contributions or premiums were due. The employer shall collect from the employee the amount which the employee would have paid if the amounts had been paid when due, plus the corresponding interest, and shall transmit the amount collected to the department together with the balance of the amount to be paid, or the employer may elect to pay part or all of the employee amounts.

SB490, s. 40 Section 40. 40.08 (4) of the statutes is amended to read:

SB490,15,25 40.08 (4) Retention of payments. Unless voluntarily repaid and except as limited by sub. (10), the department may retain out of any annuity or benefit an amount as the department in its discretion may determine, for the purpose of reimbursing the appropriate benefit plan accounts for a balance due under s. 40.25 (5) or for any money paid, plus interest at the effective rate of the fixed core annuity division, to any person or estate, through misrepresentation, fraud , or error. Upon the request of the department any employer shall withhold from any sum payable by the employer to any person or estate and remit to the department any amount, plus interest at the effective rate of the fixed core annuity division, which the department paid to the person or estate through misrepresentation, fraud, or error. Any amount, plus interest at the effective rate, not recovered by the department from the employer may be procured by the department by action brought against the person or estate.

SB490, s. 41 Section 41. 40.23 (2m) (c) of the statutes is amended to read:

SB490,16,11 40.23 (2m) (c) The annuity which can be provided from a sum equal to 200% 200 percent of the excess accruing after June 30, 1966, for teacher participants, or December 31, 1965, for all other participants, of the participant's required contribution accumulation reserved for a variable annuity over the amount to which the contributions would have accumulated at the fixed core annuity division effective rate if not so reserved. If the participant's required contribution accumulation reserved for a variable annuity is less than the amount to which the contributions would have accumulated at the fixed core annuity division effective rate if not reserved, the annuity shall be reduced by the amount which could be provided by a sum equal to 200% 200 percent of the deficiency.

SB490, s. 42 Section 42. 40.27 (2) (intro.) of the statutes is amended to read:

SB490,16,17 40.27 (2) Fixed Core annuity reserve surplus distributions. (intro.) Surpluses in the fixed core annuity reserve established under s. 40.04 (6) and (7) shall be distributed by the board if the distribution will result in at least a 0.5 percent increase in the amount of annuities in force, except as otherwise provided by the department by rule, on recommendation of the actuary, as follows:

SB490, s. 43 Section 43. 40.27 (2) (a) of the statutes is amended to read:

SB490,16,24 40.27 (2) (a) The distributions shall be expressed as percentage increases in the amount of the monthly annuity in force, including prior distributions of surpluses but not including any amount paid from funds other than the fixed core annuity reserve fund, preceding the effective date of the distribution. For purposes of this subsection, annuities in force include any disability annuity suspended because the earnings limitation had been exceeded by that annuitant in that year.

SB490, s. 44 Section 44. 40.27 (2) (b) of the statutes is amended to read:

SB490,17,5 40.27 (2) (b) Prorated percentages based on the annuity effective date may be applied to annuities with effective dates during the calendar year preceding the effective date of the distribution, as provided by rule, but no other distinction may be made among the various types of annuities payable from the fixed core annuity reserve.

SB490, s. 45 Section 45. 40.27 (2) (c) of the statutes is amended to read:

SB490,17,14 40.27 (2) (c) The distributions shall not be offset against any other benefit being received but shall be paid in full, nor shall any other benefit being received be reduced by the distributions. The annuity reserve surplus distributions authorized under this subsection may be revoked by the board in part or in total as to future payments upon recommendation of the actuary if a deficit occurs in the fixed core annuity reserves and such deficit would result in a 0.5 percent or greater decrease in the amount of annuities in force, except as otherwise provided by the department by rule.

SB490, s. 46 Section 46. 40.28 (1) (intro.) of the statutes is amended to read:

SB490,17,18 40.28 (1) (intro.) Any annuity provided to a participant whose accounts include credits segregated for a variable annuity shall consist of a fixed core annuity and a variable annuity.

SB490, s. 47 Section 47. 40.28 (1) (b) of the statutes is amended to read:

SB490,17,22 40.28 (1) (b) The initial amount of the fixed core annuity shall be the excess of the total annuity payable, as determined under s. 40.23, over the amount of the variable annuity.

SB490,17,23 (End)