SB260: Bill Text

SB260,6,15 40.03 (1) (n) May allow any separate retirement system for employees of one or more employers to deliver or send funds representing assets of that system to the department. If the department accepts delivery or transmission, the department shall purchase shares of the fixed retirement investment trust or, variable retirement investment trust, or venture capital investment trust or both any combination of the 3 trusts with those funds, subject to rules under sub. (2) (q). Each retirement system shall pay as provided in s. 40.04 (2) for the costs of investing and administering any of its funds sent or delivered to the department.

SB260, s. 12 Section 12. 40.04 (3) (intro.) of the statutes is amended to read:

SB260,7,4 40.04 (3) (intro.) A fixed retirement investment trust , a venture capital investment trust, and a variable retirement investment trust shall be maintained within the fund under the jurisdiction and management of the investment board for the purpose of managing the investments of the retirement reserve accounts and of any other accounts of the fund as determined by the board, including the accounts of separate retirement systems. Within the fixed retirement investment trust there shall be maintained a transaction amortization account and a market recognition account, and any other accounts as are established by the board or the investment board. A current income account shall be maintained in the venture capital investment trust and variable retirement investment trust. All costs of owning, operating, protecting and acquiring property in which either trust any of the 3 trusts has an interest shall be charged to the current income or market recognition account of the trust having the interest in the property.

SB260, s. 13 Section 13. 40.04 (3) (a) of the statutes is amended to read:

SB260,7,15 40.04 (3) (a) The net gain or loss of the venture capital investment trust and the variable retirement investment trust shall be distributed annually on December 31 to each participating account in the same ratio as each account's average daily balance within the respective trust bears to the total average daily balance of all participating accounts in the trust. The amount to be distributed shall be the excess of the increase within the period in the value of the assets of the trust resulting from income from the investments of the trust and from the sale or appreciation in value of any investment of the trust, over the decrease within the period in the value of the assets resulting from the sale or the depreciation in value of any investments of the trust.

SB260, s. 14 Section 14. 40.04 (3) (b) of the statutes is amended to read:

SB260,8,2 40.04 (3) (b) The assets of the fixed retirement investment trust shall be commingled and, the assets of the variable retirement investment trust shall be commingled, and the assets of the venture capital 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).

SB260, s. 15 Section 15. 40.04 (3) (d) of the statutes is amended to read:

SB260,8,10 40.04 (3) (d) Notwithstanding par. (a), assets of the fixed 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 or the venture capital investment trust with that portion of the annual distributions of net gains or losses to the fixed retirement investment trust from the variable retirement investment trust and the venture capital investment trust being credited to the market recognition account.

SB260, s. 16 Section 16. 40.04 (4) (a) 2. of the statutes is amended to read:

SB260,8,23 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 venture capital annuity division and the variable annuity division, on all employee required contributions in the fixed annuity division on December 31, 1984, on all employee required contributions in the fixed 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 annuity division for participants who are participating employees after December 31, 1984, but who terminated covered employment before December 30, 1999.

SB260, s. 17 Section 17. 40.04 (7) (intro.) of the statutes is amended to read:

SB260,9,5 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 among a fixed annuity division, a venture capital annuity division, and a variable annuity division. All required and additional contributions shall be credited to the fixed annuity division except:

SB260, s. 18 Section 18. 40.04 (7) (a) (intro.) of the statutes is amended to read:

SB260,9,25 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% of his or her required and additional contributions made on or after the date of election credited to the variable annuity division, except that if the participant has made an election under par. (d) the participant may only have 40% of the contributions 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 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:

SB260, s. 19 Section 19. 40.04 (7) (c) of the statutes is renumbered 40.04 (7) (c) 1.

SB260, s. 20 Section 20. 40.04 (7) (c) 2. of the statutes is created to read:

SB260,10,13 40.04 (7) (c) 2. Any participant whose required contributions are segregated in any portion to provide for a venture capital annuity may direct that any part or all of subsequent additional contributions credited to the participant's account be segregated to provide for a venture capital annuity and may at any time by filing a form prescribed by the department change the portion being segregated for any future additional contributions.

SB260, s. 21 Section 21. 40.04 (7) (d) of the statutes is created to read:

SB260,11,3 40.04 (7) (d) Beginning on January 1, 2004, a participant may elect to have 10% of his or her required and additional contributions made on or after the date of election credited to the venture capital annuity division. The department shall by rule provide that any participant may elect to cancel that venture capital participation as to future contributions. The department's rules shall permit a participant who elects or has elected venture capital participation to cancel venture capital participation as to future contributions or an annuitant to elect to transfer previous venture capital annuity contribution accumulations to the fixed annuity division. A transfer of venture capital contribution accumulations under this paragraph shall result in the participant receiving the accrued gain or loss from the participant's venture capital participation. A participant may specify that election to cancel participation in the venture capital 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 is either:

SB260,11,7 1. An annuitant and the amount of the annuity the participant or member will receive if the election is made effective is greater than or equal to the amount of the annuity the participant or member would have received if the participant or member had not elected venture capital participation.

SB260,11,11 2. Not an annuitant and the accumulated amount which is to be transferred to the fixed 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 annuity division.

SB260, s. 22 Section 22. 40.23 (2m) (b) of the statutes is amended to read:

SB260,12,2 40.23 (2m) (b) Except as provided in s. 40.26, subject to the limitations under section 415 of the Internal Revenue Code, the initial amount of the normal form annuity shall be an amount equal to 70%, or 65% for participants whose formula rate is determined under par. (e) 3. or 85% for participants whose formula rate is determined under par. (e) 4., of the participant's final average earnings plus the amount which can be provided under pars. (c) and to (d) or, if less, shall be in the monthly amount equal to the sum of the amounts determined under pars. (c), (d) and to (e) as modified by par. (f) and in accordance with the actuarial tables in effect on the annuity effective date. If the participant has creditable service under both par. (e) 4. and another category under par. (e), the percent applied under this paragraph shall be determined by multiplying the percent that each type of creditable service is of the participant's total creditable service by 85% and 65% or 70%, respectively, and adding the results, except that the resulting benefit may not be less than the amount of the normal form annuity that could be paid based solely on the creditable service under par. (e) 4.

SB260, s. 23 Section 23. 40.23 (2m) (cm) of the statutes is created to read:

SB260,12,12 40.23 (2m) (cm) The annuity which can be provided from a sum equal to 200% of the excess of the participant's required contribution accumulation reserved for a venture capital annuity over the amount to which the contributions would have accumulated at the fixed annuity division effective rate if not so reserved. If the participant's required contribution accumulation reserved for a venture capital annuity is less than the amount to which the contributions would have accumulated at the fixed 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% of the deficiency.

SB260, s. 24 Section 24. 40.28 (1) (intro.) of the statutes is amended to read:

SB260,12,17 40.28 (1) (intro.) Any annuity provided to a participant whose accounts include credits segregated for a variable annuity shall consist of a fixed annuity and, a variable annuity, and, if the participant has made an election under s. 40.04 (7) (d), a venture capital annuity.

SB260, s. 25 Section 25. 40.285 of the statutes is created to read:

SB260,12,22 40.285 Venture capital benefits. (1) Any annuity provided to a participant whose accounts include credits segregated for a venture capital annuity shall consist of a fixed annuity, a venture capital annuity, and, if the participant has made an election under s. 40.04 (7) (a), a variable annuity.

SB260,12,25 (a) The initial amount of the venture capital annuity shall be the amount which can be provided on the basis of the actuarial tables in effect on the effective date of the annuity by all of the following amounts, if otherwise available:

SB260,13,2 1. The amount of the additional contribution accumulations reserved for a venture capital annuity as of the date the annuity begins.

SB260,13,4 2. The amount equal to 200% of employee required contribution accumulations reserved for a venture capital annuity as of the date the annuity begins.

SB260,13,8 3. The amount equal, as of the date the annuity begins, to the accumulated prior service credits reserved for the participant for a venture capital annuity within the employer accumulation account, together with the net gain or loss credited to the accumulations.

SB260,13,11 (b) The initial amount of the fixed annuity shall be the excess of the total annuity payable, as determined under s. 40.23 (2m), over the amount of the venture capital annuity.

SB260,13,20 (2) Whenever the balance in the venture capital annuity reserve, as of December 31 of any year, exceeds or is less than the then present value of all venture capital annuities in force, determined in accordance with the rate of interest and approved actuarial tables then in effect, by at least 2% of the present value of all venture capital annuities in force, the amount of each venture capital annuity payment shall be proportionately increased or decreased, disregarding fractional percentages, and effective on a date determined by rule, so as to reduce the variance between the balance of the venture capital annuity reserve and the present value of venture capital annuities to less than one percent.

SB260,13,24 (3) Except as otherwise specifically provided, benefits based on venture capital accumulations shall be determined on the same basis and paid in the same manner and at the same time as benefits based on accumulations not so segregated insofar as practicable considering the nature of venture capital annuities.

SB260,13,25 (End)