AB40: Bill Text

AB40,721 Section 721. 40.05 (1) (a) 5. of the statutes is amended to read:

AB40,453,22 40.05 (1) (a) 5. Additional contributions may be made by any participant by deduction from earnings or otherwise or may be provided on behalf of any participant in any calendar year in which the participant has earnings, 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.

AB40,722 Section 722. 40.05 (1) (a) 6. of the statutes is amended to read:

AB40,454,6 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 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, subject to any limitations imposed on contributions by the Internal Revenue Code, applicable regulations adopted under the Internal Revenue Code, and rules of the department.

AB40,723 Section 723. 40.05 (2) (intro.) of the statutes is amended to read:

AB40,454,11 40.05 (2) Employer retirement contributions. (intro.) For Wisconsin retirement system purposes and subject to the federal annual compensation limits under 26 USC 401 (a) (17) for a participating employee who first becomes a participating employee on or after January 1, 1996:

AB40,724 Section 724. 40.05 (2r) (a) of the statutes is amended to read:

AB40,454,14 40.05 (2r) (a) Contributions made under this section are subject to the limitations under s. 40.32 and the internal revenue code Internal Revenue Code.

AB40,725 Section 725. 40.05 (2r) (b) (intro.) of the statutes is amended to read:

AB40,454,23 40.05 (2r) (b) (intro.) If a participant in the Wisconsin retirement system also participates in a different retirement plan offered by an employer that is subject to section 401 of the internal revenue code Internal Revenue Code and the internal revenue service seeks to disqualify one or more of the plans because the aggregate contributions to the plans exceed the contribution limits under section 415 of the internal revenue code Internal Revenue Code, the internal revenue service, if it permits state law to determine the order of disqualification of such retirement plans, shall disqualify the retirement plans in the following order:

AB40,726 Section 726. 40.05 (4) (ag) 2. of the statutes is amended to read:

AB40,455,5 40.05 (4) (ag) 2. For eligible employees not specified in subd. 1. and s. 40.02 (25) (b) 2., an amount not more than 88 percent of the average premium cost of plans offered in the each tier with the lowest employee premium cost under s. 40.51 (6), as determined annually by the director of the office of state employment relations under par. (ah).

AB40,727 Section 727. 40.05 (4) (ah) of the statutes is renumbered 40.05 (4) (ah) 1.

AB40,728 Section 728. 40.05 (4) (ah) 2. of the statutes is created to read:

AB40,455,14 40.05 (4) (ah) 2. For purposes of establishing the amount that employees are required to pay for health insurance premiums, if a tier under s. 40.51 (6) contains no health insurance plans, but that tier is used to establish the premium amounts for employees who work and reside outside of the state, the amount these employees are required to pay shall be based on the premium contribution amount for that tier in the prior year, adjusted by the average percentage change of the premium contribution amount of the other tiers from the prior year.

AB40,729 Section 729. 40.05 (4) (ah) 3. of the statutes is created to read:

AB40,455,17 40.05 (4) (ah) 3. A craft employee shall pay 100 percent of health insurance premiums, unless otherwise determined by the director.

AB40,730 Section 730. 40.05 (4) (ah) 4. of the statutes is created to read:

AB40,455,22 40.05 (4) (ah) 4. Annually, the director shall determine the amount of contributions, if any, that the state must contribute into an employee's health savings account under s. 40.515 and the amount that employees are required to pay for health insurance premiums for a high-deductible health plan under s. 40.515.

AB40,731 Section 731. 40.05 (4) (ah) 5. of the statutes is created to read:

AB40,456,2 40.05 (4) (ah) 5. For purposes of establishing the amount that employees are required to pay for health insurance premiums, the director shall consider the amount of premium surcharges that employees are required to pay under s. 40.03 (6) (cm) 1.

AB40,732 Section 732. 40.05 (4r) of the statutes is amended to read:

AB40,456,15 40.05 (4r) Payment of certain insurance premiums. If an annuitant is a an eligible retired public safety officer and receives health care coverage or long-term care coverage under a plan other than one offered under subch. IV, and if the annuitant so elects by providing written notice to the department, the premium shall be paid as a deduction under s. 40.06 (1) (a) from the annuitant's annuity. If the annuitant receives an annuity that is not sufficient to cover premium payments, the annuitant shall make premium payments directly to the insurer. The department shall establish procedures to permit an annuitant who is a an eligible retired public safety officer to elect to have his or her premium paid as a deduction under s. 40.06 (1) (a) from his or her annuity. The annuitant shall provide the department with all necessary information to permit the department to make the payment in a timely manner.

AB40,733 Section 733. 40.07 (1r) of the statutes is created to read:

AB40,456,19 40.07 (1r) Upon request of the department of revenue, the department may disclose information, including social security numbers, to the department of revenue concerning an annuity only for the following purposes:

AB40,456,20 (a) To administer the payment of state taxes.

AB40,456,21 (am) To aid in collecting debts owed to the department of revenue.

AB40,456,23 (b) To locate participants, or the assets of participants, who have failed to file tax returns, underreported their taxable income, or who are delinquent debtors.

AB40,456,24 (c) To identify fraudulent tax returns and credit claims.

AB40,456,25 (d) To provide information for tax-related prosecutions.

AB40,734 Section 734. 40.08 (2) (b) of the statutes is amended to read:

AB40,457,6 40.08 (2) (b) If permitted under a deferred compensation plan established under subch. VII, insurance premiums for health or long-term care insurance coverage for a an eligible retired public safety officer may be deducted from an amount distributed under a deferred compensation plan and paid directly to an insurer.

AB40,735 Section 735. 40.08 (14) of the statutes is amended to read:

AB40,457,21 40.08 (14) Rollovers to other retirement plans. If a participant who is entitled to receive a lump sum payment or a monthly annuity certain under s. 40.24 (1) (f) for which the participant has specified a term of less than 120 months or an annuity certain of less than 10 years in duration from the Wisconsin retirement system and who has an account established under any other retirement plan located in the United States so directs in writing, on a form prescribed by the department, the department shall pay the lump sum payment or the monthly annuity directly to the participant's account under that other retirement plan for credit under that other retirement plan. The department shall cease payment of the monthly annuity payments to the annuitant's account under the other retirement plan within 30 days of the written request of the annuitant or written notice of the annuitant's death. This subsection shall be applied in compliance with section 401 (a) (31) of the Internal Revenue Code pursuant to any applicable federal regulations or guidance adopted under the Internal Revenue Code.

AB40,736 Section 736. 40.19 (5) of the statutes is created to read:

AB40,458,9 40.19 (5) For the purpose of complying with section 401 (a) (7) of the Internal Revenue Code, a participant shall be 100 percent vested in, and have a nonforfeitable right to, his or her retirement benefits upon attaining eligibility for the retirement benefits. A participant shall also be 100 percent vested in, and have a nonforfeitable right to, his or her accumulated employee contributions at all times. In the event of a termination of, or a complete discontinuance of employer contributions to the Wisconsin retirement system, a participant shall be 100 percent vested in, and have a nonforfeitable right to, his or her accrued retirement benefits. All such benefits are nonforfeitable to the extent funded. For the purpose of complying with section 401 (a) (8) of the Internal Revenue Code, any forfeitures of benefits by participants or former participants of the Wisconsin retirement system may not be used to pay benefit increases.

AB40,737 Section 737. 40.22 (2) (a) of the statutes is amended to read:

AB40,458,14 40.22 (2) (a) Except as provided in sub. (2m), the employee was initially employed by a participating employer a participating employee before July 1, 2011, and is not expected to work at least one-third of what is considered full-time employment by the department, as determined by rule.

AB40,738 Section 738. 40.22 (2m) (intro.) of the statutes is amended to read:

AB40,458,22 40.22 (2m) (intro.) An employee who was initially employed by a participating employer a participating employee before July 1, 2011, who is not expected to work at least one-third of what is considered full-time employment by the department, as determined by rule, and who is not otherwise excluded under sub. (2) from becoming a participating employee shall become a participating employee if he or she is subsequently employed by the state agency or other participating employer for either of the following periods:

AB40,739 Section 739. 40.23 (4) (a) of the statutes is amended to read:

AB40,459,7 40.23 (4) (a) Subject to all requirements under the internal revenue code section 401 (a) (9) of the Internal Revenue Code and federal regulations applicable to that section, which relate to a governmental plan, as defined in section 414 (d) of the Internal Revenue Code, the department shall distribute to the participant the entire amount that is credited to the account of a participant under the Wisconsin retirement system no later than the required beginning date, unless the department distributes this amount as an annuity or in more than one payment. If the department distributes this amount as an annuity or in more than one payment, the department shall begin the distribution no later than the required beginning date.

AB40,740 Section 740. 40.23 (4) (b) (intro.) of the statutes is amended to read:

AB40,459,14 40.23 (4) (b) (intro.) In the calendar year immediately preceding the calendar year of a participant's required beginning date, if the department distributes the amount that is credited to the account of a participant under the Wisconsin retirement system in a form other than as a lump sum payment, the department, subject to all requirements under the internal revenue code Internal Revenue Code, shall calculate the distribution to the participant according to one of the following:

AB40,741 Section 741. 40.23 (4) (e) of the statutes is amended to read:

AB40,459,19 40.23 (4) (e) 1. Subject to subds. 2. to 4. and section 401 (a) (9) of the Internal Revenue Code, if a participant dies before the distribution of benefits has commenced and the participant's beneficiary is the spouse or domestic partner, the department shall begin the distribution within 5 years after the date of the participant's death.

AB40,459,23 2. If Subject to section 401 (a) (9) of the Internal Revenue Code, if the spouse or domestic partner files a subsequent beneficiary designation with the department, the payment of the distribution may be deferred until the January 1 of the year in which the participant would have attained the age of 70.5 years.

AB40,460,2 3. If Subject to section 401 (a) (9) of the Internal Revenue Code, if the spouse or domestic partner does not apply for a distribution, the distribution shall begin as an automatic distribution as provided under subd. 1. or under par. (c), whichever distribution date is earlier.

AB40,460,6 4. If Subject to section 401 (a) (9) of the Internal Revenue Code, if the spouse or domestic partner dies, but has designated a new beneficiary, the birth date of the spouse or domestic partner shall be used for the purposes of determining the required beginning date.

AB40,460,9 5. The department shall specify by rule all procedures relating to an automatic distribution to the spouse or domestic partner. These rules shall comply with the internal revenue code Internal Revenue Code.

AB40,742 Section 742. 40.23 (4) (f) (intro.) of the statutes is amended to read:

AB40,460,14 40.23 (4) (f) (intro.) If a participant dies before the distribution of benefits has commenced and the participant's beneficiary is not the spouse or domestic partner beneficiary cannot delay the automatic payment of benefits under section 401 (a) (9) of the Internal Revenue Code, the beneficiary shall do one of the following:

AB40,743 Section 743. 40.23 (4) (h) of the statutes is created to read:

AB40,460,19 40.23 (4) (h) Death and disability benefits provided under this chapter are limited by the incidental benefit rule under section 401 (a) (9) (G) of the Internal Revenue Code and applicable federal regulations and guidance adopted under the Internal Revenue Code.

AB40,744 Section 744. 40.23 (4) (i) of the statutes is created to read:

AB40,460,22 40.23 (4) (i) Distributions of benefits shall conform to a reasonable and good faith interpretation of section 401 (a) (9) of the Internal Revenue Code.

AB40,745 Section 745. 40.23 (4) (j) of the statutes is created to read:

AB40,460,25 40.23 (4) (j) Pursuant to a qualified domestic relations order, the department may establish separate benefits for a participant and an alternate payee.

AB40,746 Section 746. 40.26 (1) of the statutes is amended to read:

AB40,461,9 40.26 (1) Except as provided in sub. (1m) and ss. 40.05 (2) (g) 2. and 40.23 (1) (am), if a participant receiving a retirement annuity, or a disability annuitant who has attained his or her normal retirement date, receives earnings that are subject to s. 40.05 (1) or that would be subject to s. 40.05 (1) except for the exclusion specified in s. 40.22 (2) (L), the annuity shall be terminated and no annuity payment shall be payable after the month in which the participant files with the department a written election to be included within the provisions of the Wisconsin retirement system as a participating employee.

AB40,747 Section 747. 40.26 (1m) of the statutes is created to read:

AB40,461,17 40.26 (1m) If a participant receiving a retirement annuity, or a disability annuitant who has attained his or her normal retirement date, is employed in a position in covered employment in which he or she is expected to work at least two-thirds of what is considered full-time employment by the department, as determined under s. 40.22 (2r), the participant's annuity shall be terminated and no annuity payment shall be payable until after the participant terminates covered employment.

AB40,748 Section 748. 40.26 (2) (intro.) of the statutes is amended to read:

AB40,461,21 40.26 (2) (intro.) Upon termination of an annuity under sub. (1) or (1m), the retirement account of the participant whose annuity is so terminated shall be reestablished on the following basis:

AB40,749 Section 749. 40.26 (5) (intro.) of the statutes is amended to read:

AB40,462,2 40.26 (5) (intro.) If a participant applies for an annuity or lump sum payment during the period in which less than 30 75 days have elapsed between the termination of employment with a participating employer and becoming a participating employee with any participating employer, all of the following shall apply:

AB40,750 Section 750. 40.30 (4) (b) of the statutes is amended to read:

AB40,462,16 40.30 (4) (b) Subject to the federal annual compensation limits under 26 USC 401 (a) (17) for a participating employee who first becomes a participating employee on or after January 1, 1996, the final average salary or final average earnings used in the benefit formula computation for each retirement system under par. (a) shall be the individual's final average salary or final average earnings under the respective retirement system, determined in accordance with the provisions of that retirement system based on the earnings covered by that retirement system and on all service permitted under that retirement system to be used in determining the final average salary or final average earnings, increased by the percentage increase in the average of the total wages, as determined under 42 USC 415 (b) (3) (A), between the date on which the individual terminated all employment covered by that retirement system and the date on which the individual terminated all employment covered by any of those retirement systems.

AB40,751 Section 751. 40.31 (1) of the statutes is amended to read:

AB40,463,2 40.31 (1) General limitation. The maximum retirement benefits payable to a participant in a calendar year, excluding benefits attributable to contributions subject to any limitations under s. 40.23 (2) (a), (2m) (c) and (3) the limit under s. 40.32, may not exceed the maximum benefit limitation established under section 415 (b) of the Internal Revenue Code, as adjusted under section 415 (d) of the Internal Revenue Code and any applicable regulations or guidance adopted under the Internal Revenue Code, except that the limit for an individual who first became a participant before January 1, 1990, may not be less than the accrued benefits of the participant, as determined without regard to any changes to the retirement system after October 14, 1987.

AB40,752 Section 752. 40.32 (1) of the statutes is amended to read:

AB40,463,12 40.32 (1) The sum of all employee post-tax contributions allocated to a participant's account under each defined contribution plan sponsored by the employer, including all employer contributions and picked-up contributions credited with interest at the effective rate under ss. 40.04 (4) (a) and (5) (b) and 40.05 (2) (g) and all employee contributions made under ss. 40.02 (17) and 40.05 (1), may not in any calendar year exceed the maximum contribution limitation established under section 415 (c) of the Internal Revenue Code, as adjusted under section 415 (d) of the Internal Revenue Code and any applicable regulations adopted by the federal department of the treasury.

AB40,753 Section 753. 40.515 of the statutes is created to read:

AB40,463,23 40.515 Health savings accounts; high-deductible health plan. (1) In addition to the health care coverage plans offered under s. 40.51 (6), beginning on January 1, 2015, the group insurance board shall offer to all state employees the option of receiving health care coverage through a high-deductible health plan and the establishment of a health savings account. Under this option, each employee shall receive health care coverage through a high-deductible health plan. The state shall make contributions into each employee's health savings account in an amount specified by the director of the office of state employment relations under s. 40.05 (4) (ah) 4. In designing a high-deductible health plan, the group insurance board shall ensure that the plan may be used in conjunction with a health savings account.

AB40,464,3 (2) The group insurance board may contract with any person to provide administrative and other services relating to health savings accounts established under this section.

AB40,464,9 (3) The group insurance board may collect fees from state agencies to pay all administrative costs relating to the establishment and operation of health savings accounts established under this section. The group insurance board shall develop a methodology for determining each state agency's share of the administrative costs. Moneys collected under this subsection shall be credited to the appropriation account under s. 20.515 (1) (tm).

AB40,464,13 (4) Beginning on January 1, 2015, to the extent practicable, any agreement with any insurer or provider to provide health care coverage to state employees under s. 40.51 (6) shall require the insurer or provider to also offer a high-deductible health plan that may be used in conjunction with a health savings account.

AB40,754 Section 754. 40.72 (4r) of the statutes is amended to read:

AB40,464,21 40.72 (4r) At any time after an insured employee's amount of life insurance is reduced under subs. (2) and (3) and life insurance premiums are no longer required under s. 40.05 (6) (b), the employee may convert the present value of the life insurance to pay the premiums for health or long-term care insurance provided under subch. IV, but only if the department determines that the value of the conversion is exempt from taxation under the internal revenue code Internal Revenue Code.

AB40,755 Section 755. 40.80 (2) (g) of the statutes is amended to read:

AB40,465,3 40.80 (2) (g) Serve as trustee of any deferred compensation plan established under this section, hold the assets and income of the plan in trust for the exclusive benefit of the employees who participate in the plan and their beneficiaries, and maintain the plan as an eligible deferred compensation plan, as defined in 26 USC section 457 (b) of the Internal Revenue Code, and as a governmental plan for eligible employers, as defined in 26 USC section 457 (e) (1) (A) of the Internal Revenue Code.

AB40,756 Section 756. 40.80 (2t) of the statutes is amended to read:

AB40,465,9 40.80 (2t) The deferred compensation board may require a deferred compensation plan under this subchapter, upon election by a participant who is a an eligible retired public safety officer, to allow for the deduction of insurance premiums for health or long-term care insurance coverage from an amount distributed from a participant's account and for the payment of the premiums directly to an insurer.

AB40,757 Section 757. 40.81 (2) of the statutes is amended to read:

AB40,465,17 40.81 (2) Any local government employer, or 2 or more employers acting jointly, may also elect under procedures established by the employer or employers to contract directly with a deferred compensation plan provider to administer a deferred compensation plan or to manage any compensation deferred under the plan and may also provide a plan under section 403 (b) of the internal revenue code Internal Revenue Code under procedures established by the local government employer or employers.

AB40,758 Section 758. 40.86 (intro.) of the statutes is amended to read:

AB40,465,23 40.86 Covered expenses. (intro.) An employee-funded reimbursement account plan may provide reimbursement to an employee for only the following expenses that are actually incurred and paid by an employee and that the board determines are consistent with the applicable requirements of the internal revenue code Internal Revenue Code:

AB40,759 Section 759. 41.23 of the statutes is amended to read:

AB40,466,8 41.23 Sale of excess or surplus property. The department may acquire excess or surplus property from the department of administration under ss. 16.72 (4) (b) and 16.98 (1) or from the department of transportation under s. 84.09 (5s) and, subject to any prior action under s. 13.48 (14) (am) or 16.848 (1), the department may sell the property acquired under this section to any person at a price determined by the department of tourism. All proceeds received by the department of tourism from the sale of property under this section shall be credited to the appropriation account under s. 20.380 (1) (h).