AB126: Bill Text

LRB-2192/1

RAC:jld:rs

2009 - 2010 LEGISLATURE

2009 Assembly BILL 126

March 9, 2009 - Introduced by Representatives Petersen, Bies, Gunderson, Kerkman, Kestell, LeMahieu, Lothian, A. Ott, Spanbauer, Suder and Molepske Jr., cosponsored by Senators Leibham, Hopper, Plale, Darling, Harsdorf and Olsen. Referred to Committee on Veterans and Military Affairs.

AB126,1,3 An Act to amend 40.02 (17) (intro.); and to create 40.285 (2) (g) of the statutes; relating to: purchase of creditable service under the Wisconsin Retirement System for active service in the U.S. armed forces.

Analysis by the Legislative Reference Bureau

This bill establishes a program under which participating employees in the Wisconsin Retirement System (WRS) may purchase years of creditable service under the WRS for all years of active service in the U.S. armed forces. A number of conditions must be satisfied to receive creditable service under the program, the most important of which include the following:

1. The employee pays to the Department of Employee Trust Funds (DETF) for each year of creditable service to be purchased the employee required contribution on earnings for general employees — currently, 5 percent of earnings — based on the employee's final average earnings, determined as if the employee had retired on the first day of the annual earnings period during which DETF received the application.

2. The employee may not purchase more than four years of creditable service under the program.

3. The employee must have been discharged from the U.S. armed forces under conditions other than dishonorable.

4. The employee may not receive creditable service under the program for any active service in the U.S. armed forces that is also used to qualify for the current law creditable military service program.

Because this bill relates to public employee retirement or pensions, it may be referred to the Joint Survey Committee on Retirement Systems for a report to be printed as an appendix to the bill.

For further information see the state and local fiscal estimate, which will be printed as an appendix to this bill.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

AB126, s. 1 Section 1. 40.02 (17) (intro.) of the statutes is amended to read:

AB126,2,16 40.02 (17) (intro.) "Creditable service" means the creditable current and prior service, expressed in years and fractions of a year to the nearest one-hundredth, for which a participating employee receives or is considered to receive earnings under sub. (22) (e) or (em) and for which contributions have been made as required by s. 40.05 (1) and (2) and creditable military service, service credited under s. 40.285 (2) (b) and (g) and service credited under s. 40.29, expressed in years and fractions of years to the nearest one-hundredth. How much service in any annual earnings period is the full-time equivalent of one year of creditable service shall be determined by rule by the department and the rules may provide for differing equivalents for different types of employment. Except as provided under s. 40.285 (2) (e) and (f), the amount of creditable service for periods prior to January 1, 1982, shall be the amount for which the participant was eligible under the applicable laws and rules in effect prior to January 1, 1982. No more than one year of creditable service shall be granted for any annual earnings period. Creditable service is determined in the following manner for the following persons:

AB126, s. 2 Section 2. 40.285 (2) (g) of the statutes is created to read:

AB126,3,3 40.285 (2) (g) Military service. Beginning on the effective date of this paragraph .... [LRB inserts date], a participating employee may receive creditable service for all years of active service in the U.S. armed forces, subject to all of the following:

AB126,3,10 1. If the participating employee is eligible to receive creditable military service under s. 40.02 (15), he or she may not receive creditable service under this paragraph for any service in the U.S. armed forces that is used to receive creditable military service under s. 40.02 (15). The department shall refund to the participating employee any amount paid to receive any creditable service under this paragraph if the participating employee subsequently receives creditable military service under s. 40.02 (15) based on those years of creditable service.

AB126,3,16 2. The active service in the U.S. armed forces is not used for the purpose of establishing entitlement to, or the amount of, any benefit, other than a disability benefit to be paid by any federal retirement program, except OASDHI and the retired pay for nonregular military service program under 10 USC 12731 to 12740, or if the participant makes an election under s. 40.30 (2) by any retirement system specified in s. 40.30 (2) other than the Wisconsin Retirement System.

AB126,3,18 3. The participating employee has at least 3 continuous years of creditable service at the time of application to purchase the creditable service.

AB126,3,21 4. The number of years that may be purchased is not greater than the accumulated current creditable service of the participating employee at the date of application.

AB126,3,25 5. A participating employee may apply to receive part or all of the creditable service that he or she is eligible to receive under this paragraph, except that no participating employee may receive more than 4 years of creditable service under this paragraph.

AB126,4,2 6. At the time of application, the participating employee furnishes evidence of active service in the U.S. armed forces that is acceptable to the department.

AB126,4,4 7. The participating employee was discharged from the U.S. armed forces under conditions other than dishonorable.

AB126,4,11 8. The participating employee pays to the fund an amount equal to the employee's statutory contribution on earnings under s. 40.05 (1) (a) 1. for each year of service to be purchased, based upon the participating employee's final average earnings, determined as if the employee had retired on the first day of the annual earnings period during which the department receives the application. The amount payable shall be paid in a lump sum payment, except as provided in sub. (4) (b), and no employer may pay any amount payable on behalf of a participating employee.

AB126,4,15 9. Upon receipt by the fund of the total payment required under this subdivision, the creditable service meeting the conditions and requirements of this paragraph shall be credited to the account of the participating employee making the payment.

AB126,4,18 10. The creditable service granted under this paragraph shall be the same type of creditable service as the type that is granted to participants who are not executive participating employees, elected officials, or protective occupation participants.

AB126,4,21 11. Unless otherwise provided by the department by rule, a participating employee may not purchase creditable service under this paragraph more than 2 times in any calendar year.

AB126,4,22 (End)