SB490,5,5
125.17
(14) (intro.) As of December 31 of each year, make and file with the
2department of employee trust funds a report of the value of the assets of the
fixed core 3retirement investment trust and of the variable retirement investment trust,
4determined as of that date at market value for the variable retirement investment
5trust and on the following basis for the
fixed core retirement investment trust:
SB490, s. 8
6Section
8. 25.17 (14) (g) of the statutes is amended to read:
SB490,5,97
25.17
(14) (g) With respect to all securities under pars. (a) to (e), the amount
8of any income or any adjustment in income shall be transferred to the current income
9account of the
fixed core retirement investment trust under s. 40.04 (3).
SB490, s. 9
10Section
9. 25.17 (15) of the statutes is amended to read:
SB490,5,1411
25.17
(15) For purposes of the power and authority of the board to make
12investments, the "admitted assets" of the
fixed
core retirement investment trust or
13the variable retirement investment trust shall be the total valuation of the assets of
14such trust as set forth in the last report made under sub. (14).
SB490, s. 10
15Section
10. 25.18 (1) (o) of the statutes is amended to read:
SB490,5,1916
25.18
(1) (o) Invest any of the assets of the permanent endowment fund in any
17investment that is an authorized investment for assets in the
fixed core retirement
18investment trust under s. 25.17 (4) or assets in the variable retirement investment
19trust under s. 25.17 (5).
SB490,6,822
25.18
(2) (e) 1. Contract with and delegate to investment advisers the
23management and control over assets from any fund or trust delivered to such
24investment advisers for investment in real estate, mortgages, equities, and debt and
25pay such advisers fees from the current income of the fund or trust being invested.
1Subject to subd. 2., no more than 20 percent of the total assets of the
fixed core 2retirement investment trust or 20 percent of the total assets of the variable
3retirement investment trust may be delivered to investment advisers to manage in
4accounts in which the board directly holds title to all securities purchased for the
5accounts. The board shall set performance standards for such investment advisers,
6monitor such investments to determine if performance standards are being met and
7if an investment adviser does not consistently meet the performance standards then
8terminate the contract with such investment adviser.
SB490, s. 12
9Section
12. 25.187 (2) (c) 3. a. of the statutes is amended to read:
SB490,6,1210
25.187
(2) (c) 3. a. Determine the total market value of the assets of the funds
11according to the methodology used to determine the market value of the
fixed core 12retirement investment trust under s. 25.17 (14).
SB490, s. 13
13Section
13. 40.02 (7) of the statutes is amended to read:
SB490,6,2414
40.02
(7) "Assumed rate" means the probable average effective rate expected
15to be earned for the
fixed core annuity division on a long-term basis. The assumed
16rate shall be a rate of
8% 8 percent and the actuarial assumption for
17across-the-board salary increases for the purpose of valuing the liabilities of the
18Wisconsin
retirement system Retirement System shall be
3.4% 3.4 percent less than
19the assumed rate unless due to changed economic circumstances the actuary
20recommends and the board approves a different rate. The assumed rate for a
21calendar year shall be used for all calculations of required contributions and reserves
22for participants, except as provided in s. 40.04 (4) (a) 2., 2g.
, and 2m., and the amount
23of any lump sum benefit paid instead of an annuity, except it shall not be used for any
24purpose for which the assumed benefit rate is to be used under sub. (6).
SB490, s. 14
25Section
14. 40.02 (23) (a) of the statutes is amended to read:
SB490,7,8
140.02
(23) (a) For the
fixed
core annuity division, the rate, disregarding
2fractions of less than one-tenth of one percent, determined by dividing the remaining
3fixed core annuity division investment earnings for the calendar year or part of the
4calendar year, after making provision for any necessary reserves and after deducting
5prorated interest and the administrative costs of the
fixed core annuity division for
6the year, by the
fixed core annuity division balance at the beginning of the calendar
7year as adjusted for benefit payments and refunds paid during the year excluding
8prorated interest.
SB490, s. 15
9Section
15. 40.02 (23) (b) of the statutes is amended to read:
SB490,7,1310
40.02
(23) (b) For the variable annuity division, the rate, disregarding fractions
11less than one percent, which will distribute the net gain or loss of the variable
12annuity division to the respective variable annuity balances and reserves using the
13same procedure as provided in par. (a) for the
fixed
core annuity division.
SB490, s. 16
14Section
16. 40.02 (34) of the statutes is renumbered 40.02 (12r) and amended
15to read:
SB490,7,1716
40.02
(12r) "
Fixed Core annuity" means any annuity other than a variable
17annuity.
SB490, s. 17
18Section
17. 40.02 (58) of the statutes is amended to read:
SB490,7,2419
40.02
(58) "Variable annuity" means any annuity provided by the
20accumulations in the variable annuity division established under s. 40.04 (7)
21providing for the dollar amount of benefits or other contractual payments or values
22to vary so as to reflect differences which may arise between the total value of the
23annuity reserve for variable annuities and the reserve that would be required if the
24annuities were
fixed core annuities.
SB490, s. 18
25Section
18. 40.03 (1) (h) of the statutes is amended to read:
SB490,8,8
140.03
(1) (h) May accept any gift, grant
, or bequest of any money or property
2of any kind, for the purposes designated by the grantor if the purpose is specified as
3providing cash benefits to some or all of the participants, insured employees
, or
4annuitants of this fund or for reducing employer or employee costs; or, if no purposes
5are designated, then for the purpose of distribution to the several accounts and
6reserves of the Wisconsin
retirement system Retirement System at the end of the
7year as if the money or property were investment earnings of the
fixed core annuity
8division.
SB490, s. 19
9Section
19. 40.03 (1) (n) of the statutes is amended to read:
SB490,8,1610
40.03
(1) (n) May allow any separate retirement system for employees of one
11or more employers to deliver or send funds representing assets of that system to the
12department. If the department accepts delivery or transmission, the department
13shall purchase shares of the
fixed core retirement investment trust or variable
14retirement investment trust or both with those funds, subject to rules under sub. (2)
15(q). Each retirement system shall pay as provided in s. 40.04 (2) for the costs of
16investing and administering any of its funds sent or delivered to the department.
SB490, s. 20
17Section
20. 40.04 (3) (intro.) of the statutes is amended to read:
SB490,9,418
40.04
(3) (intro.) A
fixed core retirement investment trust and a variable
19retirement investment trust shall be maintained within the fund under the
20jurisdiction and management of the investment board for the purpose of managing
21the investments of the retirement reserve accounts and of any other accounts of the
22fund as determined by the board, including the accounts of separate retirement
23systems. Within the
fixed core retirement investment trust there shall be
24maintained a transaction amortization account and a market recognition account,
25and any other accounts as are established by the board or the investment board. A
1current income account shall be maintained in the variable retirement investment
2trust. All costs of owning, operating, protecting
, and acquiring property in which
3either trust has an interest shall be charged to the current income or market
4recognition account of the trust having the interest in the property.
SB490, s. 21
5Section
21. 40.04 (3) (ab) of the statutes is amended to read:
SB490,9,146
40.04
(3) (ab) Beginning on December 31, 2000, the balance of the transaction
7amortization account shall be determined and
20%
20 percent of the balance
8established on December 31, 2000, shall be distributed annually on December 31 to
9each participating account in the same ratio as each account's average daily balance
10within the
fixed core retirement investment trust bears to the total average daily
11balance of all participating accounts in the trust until the balance of the transaction
12amortization account is entirely distributed. Notwithstanding sub. (3) (intro.), after
13the entire balance of the transaction amortization account has been distributed, the
14department shall close the account.
SB490, s. 22
15Section
22. 40.04 (3) (am) 1. of the statutes is amended to read:
SB490,9,2016
40.04
(3) (am) 1. Beginning on January 1, 2000, there shall be maintained
17within the
fixed core retirement investment trust a market recognition account. The
18department shall establish and administer the market recognition account as
19recommended by the actuary or actuarial firm retained under s. 40.03 (1) (d) and as
20approved by the board.
SB490, s. 23
21Section
23. 40.04 (3) (am) 2. of the statutes is amended to read:
SB490,9,2422
40.04
(3) (am) 2. Annually, the total market value investment return earned
23by the
fixed core retirement investment trust during the year shall be credited to the
24market recognition account.
SB490, s. 24
25Section
24. 40.04 (3) (am) 3. (intro.) of the statutes is amended to read:
SB490,10,5
140.04
(3) (am) 3. (intro.) Annually, on December 31, the sum of all of the
2following shall be distributed from the market recognition account to each
3participating account in the
fixed core retirement investment trust in the same ratio
4as each account's average daily balance bears to the total average daily balance of
5all participating accounts in the trust:
SB490, s. 25
6Section
25. 40.04 (3) (am) 3. a. of the statutes is amended to read:
SB490,10,87
40.04
(3) (am) 3. a. The expected amount of investment return in the
fixed core 8retirement investment trust during the year based on the assumed rate.
SB490, s. 26
9Section
26. 40.04 (3) (am) 3. b. of the statutes is amended to read:
SB490,10,1410
40.04
(3) (am) 3. b. An amount equal to
20% 20 percent of the difference
11between the total market value investment return earned by the
fixed core 12retirement investment trust and the expected amount of investment return of the
13fixed core retirement investment trust during the year ending on December 31 based
14on the assumed rate.
SB490, s. 27
15Section
27. 40.04 (3) (am) 3. c. of the statutes is amended to read:
SB490,10,2216
40.04
(3) (am) 3. c. An amount equal to
20% 20 percent of the sum of the
17differences between the total market value investment return earned by the
fixed 18core retirement investment trust and the expected amount of investment return of
19the
fixed core retirement investment trust at the end of the 4 preceding years. For
20the purpose of making this calculation, the amount in the market recognition
21account at the end of each year that occurs before the year 2000 shall be assumed to
22be zero.
SB490, s. 28
23Section
28. 40.04 (3) (b) of the statutes is amended to read:
SB490,11,724
40.04
(3) (b) The assets of the
fixed
core retirement investment trust shall be
25commingled and the assets of the variable retirement investment trust shall be
1commingled. No particular contributing benefit plan shall have any right in any
2specific item of cash, investment
, or other property in either trust other than an
3undivided interest in the whole as provided in this paragraph. The department of
4administration shall maintain any records as may be required to account for each
5contributing account's share in the corresponding trust except that the employee
6accumulation reserve, the employer accumulation reserve and the annuity reserve
7shall be treated as a single account, except as provided in sub. (7).
SB490, s. 29
8Section
29. 40.04 (3) (d) of the statutes is amended to read:
SB490,11,149
40.04
(3) (d) Notwithstanding par. (a), assets of the
fixed core retirement
10investment trust which are authorized to be invested in common or preferred stock
11may, if authorized by rule, be invested as a part of the variable retirement investment
12trust with that portion of the annual distributions of net gains or losses to the
fixed 13core retirement investment trust from the variable retirement investment trust
14being credited to the market recognition account.
SB490, s. 30
15Section
30. 40.04 (4) (a) 2. of the statutes is amended to read:
SB490,12,216
40.04
(4) (a) 2. Credited as of each December 31 with interest on the prior year's
17closing balance at the effective rate on all employee required contribution
18accumulations in the variable annuity division, on all employee required
19contributions in the
fixed core annuity division on December 31, 1984, on all
20employee required contributions in the
fixed core annuity division of participants
21who are not participating employees after December 31, 1984, and on all employee
22and employer additional contribution accumulations and with interest on the prior
23year's closing balance at the assumed benefit rate on all employee required
24contribution accumulations in the
fixed core annuity division for participants who
1are participating employees after December 31, 1984, but who terminated covered
2employment before December 30, 1999.
SB490, s. 31
3Section
31. 40.04 (4) (a) 2g. of the statutes is amended to read:
SB490,12,74
40.04
(4) (a) 2g. Credited as of each December 31, with interest on the prior
5year's closing balance at the effective rate on all employee required contribution
6accumulations in the
fixed core annuity division for participants who are
7participating employees on or after December 30, 1999.
SB490, s. 32
8Section
32. 40.04 (4) (a) 2m. of the statutes is amended to read:
SB490,12,149
40.04
(4) (a) 2m. Debited, if a participant terminates covered employment on
10or after January 1, 1990, but before December 30, 1999, and applies for a benefit
11under s. 40.25 (2), with an amount equal to the amount by which the
fixed core 12annuity division interest credited on or after January 1, 1990, but before December
1330, 1999, to employee required contributions, exceeds the interest crediting at an
14annual rate of
3% 3 percent on each prior year's closing balance.
SB490, s. 33
15Section
33. 40.04 (5) (b) of the statutes is amended to read:
SB490,12,1716
40.04
(5) (b) Credited, as of each December 31, all
fixed core annuity division
17interest not credited to other accounts and reserves under this section.
SB490, s. 34
18Section
34. 40.04 (7) (intro.) of the statutes is amended to read:
SB490,12,2219
40.04
(7) (intro.) The reserves established under subs. (4), (5)
, and (6) shall be
20divided both individually and for the purposes of sub. (3) between a
fixed core 21annuity division and a variable annuity division. All required and additional
22contributions shall be credited to the
fixed core annuity division except:
SB490, s. 35
23Section
35. 40.04 (7) (a) (intro.) of the statutes is amended to read:
SB490,13,2024
40.04
(7) (a) (intro.) As otherwise elected by a participant prior to April 30,
251980, or on or after January 1, 2001. Any participant who was a participant prior
1to April 30, 1980, and whose accounts on January 1, 1982, include credits segregated
2for a variable annuity shall have his or her required and additional contributions
3made on or after January 1, 1982, credited to the variable annuity division in a
4manner consistent with the participant's election prior to April 30, 1980, unless prior
5to January 1, 1982, the participant terminated such election under s. 40.85, 1979
6stats. Any participant who elects or has elected to have any of his or her credits
7segregated for a variable annuity on or after January 1, 2001, shall have
50% 50
8percent of his or her required and additional contributions made on or after the date
9of election credited to the variable annuity division. The department shall by rule
10provide that any participant who elects or has elected variable participation prior to
11April 30, 1980, or on or after January 1, 2001, may elect to cancel that variable
12participation as to future contributions. The department's rules shall permit a
13participant who elects or has elected to cancel variable participation as to future
14contributions, or an annuitant, to elect to transfer previous variable contribution
15accumulations to the
fixed core annuity division. A transfer of variable contribution
16accumulations under this paragraph shall result in the participant receiving the
17accrued gain or loss from the participant's variable participation. A participant may
18specify that election to cancel participation in the variable annuity division is
19conditional. If the participant so specifies the election is effective on the first date
20on which it may take effect on which the participant:
SB490, s. 36
21Section
36. 40.04 (7) (a) 2. of the statutes is amended to read:
SB490,13,2522
40.04
(7) (a) 2. Is not an annuitant and the accumulated amount which is to
23be transferred to the
fixed core annuity division is equal to or greater than the
24amount which would have accumulated if the segregated contributions had been
25originally credited to the
fixed core annuity division.
SB490, s. 37
1Section
37. 40.05 (1) (a) 6. of the statutes is amended to read:
SB490,14,102
40.05
(1) (a) 6. Under the rules promulgated under s. 40.03 (2) (r), additional
3contributions, other than the first $5,000 of contributions, or a beneficiary's prorated
4share thereof, that are attributable to a death benefit paid under s. 40.73, may be
5made to the
fixed core annuity division by any participant by rollover contribution
6of a payment or distribution from a pension or annuity qualified under section
401 7of the
internal revenue code Internal Revenue Code, subject to any limitations
8imposed on contributions by the
internal revenue code
Internal Revenue Code,
9applicable regulations adopted under the
internal revenue code Internal Revenue
10Code, and rules of the department.
SB490, s. 38
11Section
38. 40.05 (2) (g) 2. of the statutes is amended to read:
SB490,14,2312
40.05
(2) (g) 2. Under the rules promulgated under s. 40.03 (2) (r), a participant
13may, as a payout option for the deferred compensation plan established under subch.
14VII, elect to have the entire balance in the participant's account under subch. VII
15treated as an additional contribution to the
fixed
core annuity division, subject to any
16limitations imposed on contributions by the
internal revenue code Internal Revenue
17Code, applicable regulations adopted under the
internal revenue code Internal
18Revenue Code, and rules of the department. Additional contributions under this
19subdivision shall be available for all benefit purposes and shall be administered and
20invested on the same basis as employee additional contributions, except that ss.
2140.24 (1) (f) and 40.25 (4) do not apply to additional contributions under this
22subdivision and s. 40.26 does not apply to an annuity received from additional
23contributions under this subdivision.
SB490, s. 39
24Section
39. 40.06 (5) of the statutes is amended to read:
SB490,15,11
140.06
(5) Whenever it is determined that contributions and premiums were not
2paid in the year when due, the amount to be paid shall be determined at the employee
3and employer contribution or premium rates in effect when the payment should have
4been made and increased by interest at the effective rate which would have been
5credited if the amount had been paid and deposited in the accumulation reserves of
6the
fixed core annuity division under s. 40.04 (4) and (5) at the time the contributions
7or premiums were due. The employer shall collect from the employee the amount
8which the employee would have paid if the amounts had been paid when due, plus
9the corresponding interest, and shall transmit the amount collected to the
10department together with the balance of the amount to be paid, or the employer may
11elect to pay part or all of the employee amounts.
SB490, s. 40
12Section
40. 40.08 (4) of the statutes is amended to read:
SB490,15,2513
40.08
(4) Retention of payments. Unless voluntarily repaid and except as
14limited by sub. (10), the department may retain out of any annuity or benefit an
15amount as the department in its discretion may determine, for the purpose of
16reimbursing the appropriate benefit plan accounts for a balance due under s. 40.25
17(5) or for any money paid, plus interest at the effective rate of the
fixed core annuity
18division, to any person or estate, through misrepresentation, fraud
, or error. Upon
19the request of the department any employer shall withhold from any sum payable
20by the employer to any person or estate and remit to the department any amount,
21plus interest at the effective rate of the
fixed
core annuity division, which the
22department paid to the person or estate through misrepresentation, fraud
, or error.
23Any amount, plus interest at the effective rate, not recovered by the department from
24the employer may be procured by the department by action brought against the
25person or estate.
SB490, s. 41
1Section
41. 40.23 (2m) (c) of the statutes is amended to read:
SB490,16,112
40.23
(2m) (c) The annuity which can be provided from a sum equal to
200% 3200 percent of the excess accruing after June 30, 1966, for teacher participants, or
4December 31, 1965, for all other participants, of the participant's required
5contribution accumulation reserved for a variable annuity over the amount to which
6the contributions would have accumulated at the
fixed
core annuity division effective
7rate if not so reserved. If the participant's required contribution accumulation
8reserved for a variable annuity is less than the amount to which the contributions
9would have accumulated at the
fixed core annuity division effective rate if not
10reserved, the annuity shall be reduced by the amount which could be provided by a
11sum equal to
200% 200 percent of the deficiency.
SB490, s. 42
12Section
42. 40.27 (2) (intro.) of the statutes is amended to read:
SB490,16,1713
40.27
(2) Fixed Core annuity reserve surplus distributions. (intro.)
14Surpluses in the
fixed core annuity reserve established under s. 40.04 (6) and (7)
15shall be distributed by the board if the distribution will result in at least a 0.5 percent
16increase in the amount of annuities in force, except as otherwise provided by the
17department by rule, on recommendation of the actuary, as follows:
SB490, s. 43
18Section
43. 40.27 (2) (a) of the statutes is amended to read:
SB490,16,2419
40.27
(2) (a) The distributions shall be expressed as percentage increases in the
20amount of the monthly annuity in force, including prior distributions of surpluses
21but not including any amount paid from funds other than the
fixed core annuity
22reserve fund, preceding the effective date of the distribution. For purposes of this
23subsection, annuities in force include any disability annuity suspended because the
24earnings limitation had been exceeded by that annuitant in that year.
SB490, s. 44
25Section
44. 40.27 (2) (b) of the statutes is amended to read:
SB490,17,5
140.27
(2) (b) Prorated percentages based on the annuity effective date may be
2applied to annuities with effective dates during the calendar year preceding the
3effective date of the distribution, as provided by rule, but no other distinction may
4be made among the various types of annuities payable from the
fixed core annuity
5reserve.
SB490, s. 45
6Section
45. 40.27 (2) (c) of the statutes is amended to read:
SB490,17,147
40.27
(2) (c) The distributions shall not be offset against any other benefit being
8received but shall be paid in full, nor shall any other benefit being received be
9reduced by the distributions. The annuity reserve surplus distributions authorized
10under this subsection may be revoked by the board in part or in total as to future
11payments upon recommendation of the actuary if a deficit occurs in the
fixed core 12annuity reserves and such deficit would result in a 0.5 percent or greater decrease
13in the amount of annuities in force, except as otherwise provided by the department
14by rule.
SB490, s. 46
15Section
46. 40.28 (1) (intro.) of the statutes is amended to read:
SB490,17,1816
40.28
(1) (intro.) Any annuity provided to a participant whose accounts include
17credits segregated for a variable annuity shall consist of a
fixed core annuity and a
18variable annuity.
SB490, s. 47
19Section
47. 40.28 (1) (b) of the statutes is amended to read:
SB490,17,2220
40.28
(1) (b) The initial amount of the
fixed core annuity shall be the excess of
21the total annuity payable, as determined under s. 40.23, over the amount of the
22variable annuity.