Rule-Making Notices (Hearing Notices)

P.O. Box 8911

Madison, WI 53708-8911

Telephone [phone]

E-Mail: [e-mail]

Notice of Hearing

Employee Trust Funds

rulemaking_notices CR 11-042 CR 11-042

NOTICE IS HEREBY GIVEN that the Wisconsin Department of Employee Trust Funds (ETF) proposes an order pursuant to s. 227.14, Stats., to amend administrative rule ETF 10.08 (1) (a), (2) (a) and (b) (intro), (b) (2), (b) (3), (b) (5), (c), and (d), to amend sections ETF 20.02 (1), (2), and (3); and to create section ETF 20.02 (4), relating to governing rehired annuitants and separation from employment.

Hearing Information

Date:   Friday, October 21, 2011

Time:   1:00 P.M.

Location:   801 W. Badger Road
  Conference Room GB
  Madison, WI 53713

Persons wishing to attend should come to the reception desk located up the stairs and directly to the left (or by elevator) from the main entrance to the building.

Copies of Proposed Rule

Copies of the proposed rule are available without cost from the Office of the Secretary, Department of Employee Trust Funds, P.O. Box 7931, Madison, WI 53707-7931. The telephone number is: [phone].

Submittal of Written Comments

Comments may be submitted to Lucas Strelow, Policy Analyst, Department of Employee Trust Funds, 801 W Badger Rd, Madison, WI 53713-7931, P.O. Box 7931 (use ZIP Code 53707 for PO Box); Phone: [phone]; E-mail: [e-mail] no later than 4:30 p.m., Central Standard Time, on October 24, 2011.

Analysis Prepared by Department of Employee Trust Funds

Statutes interpreted

Sections 40.23 (1) (a), 40.22, Stats.; IRC 401 (a).

Statutory authority

Sections 40.03 (2) (i), (ig), (ir), (t), and 227.11 (2) (a) (intro), 1. to 3., Stats.

Explanation of statutory authority

By statute, the ETF Secretary is expressly authorized, with appropriate board approval, to promulgate rules required for the efficient administration of any benefit plan established in ch. 40 of the Wisconsin statutes. Also, each state agency may promulgate rules interpreting the provisions of any statute enforced or administered by the agency if the agency considers it necessary to effectuate the purpose of the statute.

This rule is not subject to s. 227.135 (2), as affected by 2011 Wis. Act 21. The statement of scope for this rule, submitted to the Legislative Reference Bureau on January 20, 2011 and published in the Administrative Register on February 14, 2011, was received by the Legislative Reference Bureau prior to the effective date of 2011 Wis. Act 21.

Related rules or statutes

1)   Section 40.23 (1) (a), Stats., governs minimum break in service requirements as referenced in both ss. ETF 20.02 and 10.08 for proper termination from employment.

2)   Section 40.22, Stats., sets forth the eligibility criteria for inclusion under the Wisconsin retirement system. Plan eligibility is relevant to both proper termination as well as becoming a rehired annuitant, and is referenced in both regulations.

Plain language analysis

The rule changes result from a need for general language clarification, stronger linkage between regulations, and better compliance with the IRC. These changes include the following:

•   Sections ETF 20.02 and 10.08 are related regulations: s. ETF 20.02 governs the requirements for rehired annuitants while s. 10.08 provides the terms for an initial separation from employment. By definition, rehired annuitants must first have a valid separation from employment as set forth under s. ETF 10.08. Language has been added to both sections to clarify the interconnected nature of the sections through direct cross-reference. In addition, the change includes an amendment to the definition of rehired annuitant to specifically require a valid termination of employment as defined in s. ETF 10.08. The language has been added to improve understanding of the sections, as well as to ensure compliance with the IRC which requires a valid separation of service before an annuitant returns to employment.

•   An additional section, s. ETF 20.02 (4), was added to require employers to report to the Department all rehired employees, regardless of whether they meet the requirements in s. 40.22, Stats., as a WRS participating employee. Employer reporting of all rehired employees will allow ETF to more accurately monitor whether rehires have had a proper separation from employment under s. ETF 10.08 so they qualify as a rehired annuitant under s. ETF 20.02. This will allow ETF to maintain compliance with the IRS break-in-service requirements under IRC s. 401 (a).

•   A note following s. ETF 10.08 (2) (b) 3. was removed for risk of IRC noncompliance. Prior to retirement, discussion with one's employer regarding re-employment of any kind is impermissible for IRS purposes. Doing so provides evidence against the intent to completely sever the employee-employer relationship. The note in this section could be construed to suggest that such agreements or discussions are acceptable.

•   Language was added to an example provided under s. ETF 10.08 (2) (b) 5. to clarify that emeritus professors, as provided in the example, can only return to service if there is no compensation of any kind, including employer contributions to 403 (b) accounts. Contributions to 403 (b) accounts have been an issue in the past for emeritus-type programs.

Summary of, and comparison with, existing or proposed federal regulations

IRC 401 (a), governing the qualified status of the pension plan, requires that there be a valid severance from employment before one can become a rehired annuitant. The changes and clarifications made to sections ETF 10.08 and 20.02 are intended in part to clarify language to strengthen understanding and to maintain compliance with this federal regulation. Under IRS guidelines, the IRS has made it clear that there must be a complete separation of the employee-employer relationship for a “bona fide" separation of service. The IRS has focused greatly on the intent of the employee to completely retire, with no prior arrangements to return to work for the employer. It was necessary to remove sections in the current regulation to clarify that such agreements are not permissible.

Comparison with rules in adjacent states

•   Illinois – The relevant code for the State Retirement System of Illinois (SRS) is 40 ILCS 5/14-111, Re-entry After Retirement. The Illinois statute indicates that, with some exceptions, an annuitant who reenters service after retirement shall receive no payments from the retirement annuity during the time of employment. Only if the annuitant accepts temporary employment for a period not exceeding 75 working days in any calendar year can the employee continue to receive annuity payments.

  Unlike WRS, SRS statutes do not set forth conditions for a valid separation of service as a requirement for an annuitant's reemployment under the system. Therefore the proposed changes to ss. ETF 10.08 and 20.02 do not bear relationship to regulations governing SRS due to an absence of analogous regulatory standards. As such the SRS administrative code also does not include language for full reporting of all rehired annuitants to the agency, as created under the proposed changes to s. ETF 20.02 (4).

•   Iowa – The relevant codes governing the Iowa Public Employees' Retirement System (IPERS) includes: Iowa Admin. Code 495-12.8, Reemployment of retired members; and Iowa Admin. Code 495-11.5, Bona fide retirement and bona fide refund. The relationship between these administrative codes does in fact bear a similar resemblance to the relationship being emphasized between ss. ETF 10.08 and 20.02 in the current rule change.

  One code is devoted to proper termination from employment (bona fide retirement in Iowa's case) and the other to rehired annuitants (reemployment of retired members). However, there is less direct reference in the Iowa language between the regulations, in part because Iowa's rehired annuitant code is devoted instead to a type of benefit payments that does not apply to WRS.

  Some of the amendments currently proposed in the ETF rule changes are, however, reflected in the Iowa code. There is a section under Iowa Admin. Code 495-11.5, for example, indicating that a school employee will not be considered to have a bona fide termination in service unless all of the employee's compensated duties for their current employer cease. Similarly, in the ETF rule change, language was added to s. ETF 10.08 (2) (b) 5. regarding “emeritus" professors to clarify that contributions to 403 (b) accounts are included in impermissible compensation. The Iowa code also indicates that a member will fail to have a bona fide separation of service if a contract for reemployment (of any nature) is made prior to the expiration of that state's minimum separation of service. A note following s. ETF 10.08 (2) (b) 3. was removed to make certain the no-contract requirement is properly reflected in the ETF code.

  The Iowa administrative code does not, however, include language for full reporting of all rehired annuitants to the agency, as created under the proposed changes to s. ETF 20.02 (4).

•   Michigan – Mich. Admin. Code R. 38.38 states that a “retirement allowance" shall be suspended during any time period that the “retirant" returns to work in a covered position, unless there was a bona fide termination of employment. The statutes and regulations, however, do not set forth a definition of a bona fide termination of employment, nor do they lay out conditions for proper termination. Therefore the proposed changes to ss. ETF 10.08 and 20.02 do not bear relationship to regulations governing SRS due to an absence of analogous regulatory standards.

•   Minnesota – The relevant code for the Minnesota State Retirement System (MSRS) is M.S.A. s. 352.115 Subd. 10, Reemployment of annuitant. The statute only indicates the maximum earnings allowable. Unlike WRS, MSRS does not have a regulation that sets forth conditions for a valid separation of service as requirement for rehired annuitants. Therefore the proposed changes to ss. ETF 10.08 and 20.02 do not bear relationship to regulations governing SRS due to an absence of analogous regulatory standards.

Summary of data and analytical methodologies

The proposed rule amendment is intended to make ETF's regulations governing rehired annuitants and proper separation from employment clearer and more flexible, as well as to bring it into closer harmony with federal statutes. Factual data was collected from ETF departments as to the current procedures and requirements for reporting of rehired annuitants from the employer. Data was also collected from the procedures and regulations of nearby states and comparable government pension systems. Analytical methodologies included discussion with legal counsel as to using the amendments to achieve the goal of the strengthening compliance with IRS requirements for a bona fide separation of service and proper re-employment of annuitants. ETF also utilized comparative analysis to draw from other pensions' methods and regulations, as well as position ETF's proposed amendments within the statutes and regulations that present the greatest compliance with the IRC.

Analysis and supporting documentation used to determine effect on small business

The rule does not have an effect on small businesses because private employers and their employees do not participate in, and are not covered by, the Wisconsin Retirement System.

Small Business Impact

There is no effect on small business.

Fiscal Estimate

The rule will not have any fiscal effect on the administration of the Wisconsin Retirement System, nor will it have any fiscal effect on the private sector, the state or on any county, city, village, town, school district, technical college district, or sewerage districts.

Agency Contact Person

Lucas Strelow, Policy Analyst, Department of Employee Trust Funds, 801 W Badger Rd, Madison, WI 53713-7931, P.O. Box 7931 (use ZIP Code 53707 for PO Box); Phone: [phone]; E-mail: [e-mail].

ADMINISTRATIVE RULES FISCAL ESTIMATE AND ECONOMIC IMPACT ANALYSIS
Type of Estimate and Analysis
X Original Updated Corrected
Administrative Rule Chapter, Title and Number
S. ETF 20.02 Rehired annuitants and s. ETF 10.08 Separation from employment.
Subject
Rehired Annuitants
Fund Sources Affected			Chapter 20 , Stats. Appropriations Affected
GPR FED PRO PRS SEG SEG-S
Fiscal Effect of Implementing the Rule
X No Fiscal Effect Indeterminate	Increase Existing Revenues Decrease Existing Revenues		Increase Costs Could Absorb Within Agency's Budget Decrease Costs
The Rule Will Impact the Following (Check All That Apply)
State's Economy Local Government Units		Specific Businesses/Sectors Public Utility Rate Payers
Would Implementation and Compliance Costs Be Greater Than $20 million? Yes X No
Policy Problem Addressed by the Rule
This rule-making is needed to create a stronger and clearer relationship between ss. ETF 20.02 and 10.08, to clarify rule language for general readability, and to make amendments needed to ensure compliance with the Internal Revenue Code (IRC).
Summary of Rule's Economic and Fiscal Impact on Specific Businesses, Business Sectors, Public Utility Rate Payers, Local Governmental Units and the State's Economy as a Whole (Include Implementation and Compliance Costs Expected to be Incurred)
There is no economic and fiscal impact on small business, business sectors, public utility rate payers, local governmental units and the state's economy as a whole.
Benefits of Implementing the Rule and Alternative(s) to Implementing the Rule
The rule language more brings ETF more clearly into compliance with the IRC, and clarifies the interrelationship between ss. ETF 20.03 and 10.08. The agency does not see alternatives to achieving the policy goal of the rule amendments.
Long Range Implications of Implementing the Rule
There are no long range economic or fiscal impacts of the rule.
Compare With Approaches Being Used by Federal Government
IRC 401 (a), governing the qualified status of the pension plan, requires that there be a valid severance from employment before one can become a rehired annuitant. The changes and clarifications made to ss. ETF 10.08 and 20.02 are intended in part to clarify language to strengthen understanding and to maintain compliance with this federal regulation. Under IRS guidelines, the IRS has made it clear that there must be a complete separation of the employee-employer relationship for a “bona fide" separation of service. The IRS has focused greatly on the intent of the employee to completely retire, with no prior arrangements to return to work for the employer. It was necessary to remove sections in the current regulation to clarify that such agreements are not permissible.
Compare With Approaches Being Used by Neighboring States (Illinois, Iowa, Michigan and Minnesota)
Illinois – The relevant code for the State Retirement System of Illinois (SRS) is 40 ILCS 5/14-111, Re-entry After Retirement. The Illinois statute indicates that, with some exceptions, an annuitant who reenters service after retirement shall receive no payments from the retirement annuity during the time of employment. Only if the annuitant accepts temporary employment for a period not exceeding 75 working days in any calendar year can the employee continue to receive annuity payments. Unlike WRS, SRS statutes do not set forth conditions for a valid separation of service as a requirement for an annuitant's reemployment under the system. Therefore the proposed changes to ss. ETF 10.08 and 20.02 do not bear relationship to regulations governing SRS due to an absence of analogous regulatory standards. As such the SRS administrative code also does not include language for full reporting of all rehired annuitants to the agency, as created under the proposed changes to s. ETF 20.02 (4). Iowa –The relevant codes governing the Iowa Public Employees' Retirement System (IPERS) includes: Iowa Admin. Code 495-12.8, Reemployment of retired members; and Iowa Admin. Code 495-11.5, Bona fide retirement and bona fide refund. The relationship between these administrative codes does in fact bear a similar resemblance to the relationship being emphasized between ss. ETF 10.08 and 20.02 in the current rule change. One code is devoted to proper termination from employment (bona fide retirement in Iowa's case) and the other to rehired annuitants (reemployment of retired members). However, there is less direct reference in the Iowa language between the regulations, in part because Iowa's rehired annuitant code is devoted instead to a type of benefit payments that does not apply to WRS. Some of the amendments currently proposed in the ETF rule changes are, however, reflected in the Iowa code. There is a section under Iowa Admin. Code 495-11.5, for example, indicating that a school employee will not be considered to have a bona fide termination in service unless all of the employee's compensated duties for their current employer cease. Similarly, in the ETF rule change, language was added to s. ETF 10.08 (2) (b) 5. regarding “emeritus" professors to clarify that contributions to 403 (b) accounts are included in impermissible compensation. The Iowa code also indicates that a member will fail to have a bona fide separation of service if a contract for reemployment (of any nature) is made prior to the expiration of that state's minimum separation of service. A note following s. ETF 10.08 (2) (b) 3. was removed to make certain the no-contract requirement is properly reflected in the ETF code. The Iowa administrative code does not, however, include language for full reporting of all rehired annuitants to the agency, as created under the proposed changes to s. ETF 20.02 (4). Michigan – Mich. Admin. Code R. 38.38 states that a “retirement allowance" shall be suspended during any time period that the “retirant" returns to work in a covered position, unless there was a bona fide termination of employment. The statutes and regulations, however, do not set forth a definition of a bona fide termination of employment, nor do they lay out conditions for proper termination. Therefore the proposed changes to ss. ETF 10.08 and 20.02 do not bear relationship to regulations governing SRS due to an absence of analogous regulatory standards. Minnesota – The relevant code for the Minnesota State Retirement System (MSRS) is M.S.A. s. 352.115 Subd. 10, Reemployment of annuitant. The statute only indicates the maximum earnings allowable. Unlike WRS, MSRS does not have a regulation that sets forth conditions for a valid separation of service as requirement for rehired annuitants. Therefore the proposed changes to ss. ETF 10.08 and 20.02 do not bear relationship to regulations governing SRS due to an absence of analogous regulatory standards.

Notice of Hearing

Natural Resources

Fish, Game, etc., Chs. NR 1—

rulemaking_notices EmR1111 EmR1111

(DNR # WM-12-11(E))

NOTICE IS HEREBY GIVEN that pursuant to sections 29.014, 29.041 and 227.11 (2) (a), and 227.24 (4) Stats., interpreting sections 29.014, 29.041 and 29.192, Stats., the Department of Natural Resources will hold public hearings on revisions to Chapter NR 10, Wis. Adm. Code, relating to the 2011 migratory game bird seasons and waterfowl hunting zones. This emergency order takes effect upon publication in the official state newspaper on September 3, 2011.

Hearing Information

The hearing will be held on:

Date:   Monday, October 3, 2011

Time:   1:00 P.M.

Location:   Natural Resources State Office Building       (GEF 2)
  101 South Webster Street
  Room 608
  Madison, WI 53703

Pursuant to the Americans with Disabilities Act, reasonable accommodations, including the provision of informational material in an alternative format, will be provided for qualified individuals with disabilities upon request. Please call Scott Loomans at [phone] with specific information on your request at least 10 days before the date of the scheduled hearing.

Submittal of Written Comments

Comments may be submitted until October 4, 2011. Written comments whether submitted electronically or by U.S. mail will have the same weight and effect as oral statements presented at the public hearings. A personal copy of the proposed rule and fiscal estimate may be obtained from Mr. Van Horn.

Copies of Proposed Rule

The emergency rule and fiscal estimate may be reviewed and comments electronically submitted at the following Internet site: http://adminrules.wisconsin.gov. Written comments on the proposed rule may be submitted via U.S. mail to Mr. Kent Van Horn, Bureau of Wildlife Management, P.O. Box 7921, Madison, WI 53707 or by email to [e-mail].

Analysis Prepared by Department of Natural Resources

Statutory interpreted

Sections 29.014, 29.041 and 29.192, Stats.

Statutory authority

Sections 29.014, 29.041 and 227.11 (2) (a), and 227.24 (4) Stats.

Plain language analysis

Section 1 of this rule order establishes the season length and bag limits for the 2011 Wisconsin migratory game bird seasons. For ducks, the state is divided into three zones, each with 60-day seasons. The season begins at 9:00 a.m. September 24 and continues for 60 consecutive days in the north, closing on November 22. In the South the season begins at 9:00 a.m. on October 1 and continues through October 9, followed by a 5-day split, and then reopens on October 15 and continues through December 4. In the new Mississippi River zone the season begins at 9:00 am on September 24 and continues through October 2, followed by a 12 day split, reopening on October 15 for a 60 day season. The split in the Mississippi River zone is seven days longer than in previous years.

The daily bag limit is 6 ducks including no more than: 4 mallards, of which only 1 may be a hen, 1 black duck, 1 canvasback, 3 wood ducks, 2 scaup, 2 pintails and 2 redheads.

For Canada geese, the state is apportioned into 2 goose hunting zones, Horicon and Exterior. Other special goose management subzones within the Exterior Zone include Brown County and the Mississippi River. Season lengths are: Horicon Zone - 92 days (2 hunting periods, first period beginning September 16 and the second on October 31); Exterior Zone in the northern duck zone - 85 days (Sept. 16 – Dec. 9); Exterior Zone in the southern duck zone – 85 days (Sept. 16 – Oct. 9 and Oct. 15 – Dec. 14) and Mississippi River subzone - 85 days (Sept. 24 – Oct. 2 and Oct. 15 – Dec. 29). The statewide daily bag limit for Canada geese in all zones is 2 birds per day during the open seasons within the zones.

Section 2 establishes that the youth waterfowl hunting season will be held on September 17 and 18.

Section 3 establishes a new duck hunting zone that consists of the Wisconsin portions of the Mississippi River west of the Burlington Northern Railroad tracks.

Summary of, and comparison with, existing or proposed federal regulations

Under international treaty and Federal law, migratory game bird seasons are closed unless opened annually via the U.S. Fish and Wildlife Service (USFWS) regulations process. As part of the Federal rule process, the USFWS proposes a duck harvest-management objective that balances hunting opportunities with the desire to achieve waterfowl population goals identified in the North American Waterfowl Management Plan (NAWMP). Under this harvest-management objective, the relative importance of hunting opportunity increases as duck populations approach the goals in the NAWMP. Thus, hunting opportunity would be maximized when the population is at or above goals. Additionally, while USFWS believes that the NAWMP's population goals would tend to exert a conservative influence on overall duck harvest-management. Other factors, such as habitat, are to be considered.

In the past, the regular Canada goose season was based on the allowable Mississippi Valley Population (MVP) harvest which was determined based on the spring breeding population estimate obtained from an aerial survey of the MVP breeding range as prescribed by the Mississippi Flyway MVP management plan. However, because locally produced giant Canada geese now constitute a considerable portion of the harvest in all states that also harvest Mississippi Valley Population birds, the Mississippi Flyway Council is testing the use of a standard season framework for 5 years. Beginning in the fall of 2007 and continuing through 2011, season lengths and bag limits for each MVP harvest state have remained unchanged. Each state retains the flexibility to schedule the timing of their Canada goose season. In addition, if the MVP spring population numbers dropped to a predetermined low level during the 5-year period, the stable season framework would be adjusted.

In 2011 the USFWS has given our state the option of reconfiguring duck hunting zones through their concurrent revisions of 50 CFR 20. Section 3 of this board order creates a third duck hunting zone along the Mississippi River.

The proposed modifications included in this rule order are consistent with these parameters and guidelines which are annually established by the USFWS in 50 CFR 20.

Comparison with rules in adjacent states

Since migratory bird species are managed under international treaty, each region of the country is organized in a specific geographic flyway which represents an individual migratory population of migratory game birds. Wisconsin along with Minnesota, Michigan, Illinois and Iowa are members of the Mississippi Flyway. Each year the states included in the flyways meet to discuss regulations and guidelines offered to the flyways by the USFWS. The FWS regulations and guidelines apply to all states within the Flyway and therefore the regulations in the adjoining states closely resemble the rules established in this rule order, and only differ slightly based on hunter desires, habitat and population management goals. However, these variations fall within guidelines and sideboards established by the USFWS.