40.05(1)
(1)
Employe retirement contributions. For Wisconsin retirement system purposes employe contributions on earnings for service credited as creditable service shall be subject to the annual compensation limits under
26 USC 401 (a) (17) for a participating employe who first becomes a participating employe on or after January 1, 1996, and shall be made as follows:
40.05(1)(a)1.
1. For each participating employe not otherwise specified, 5% of each payment of earnings.
40.05(1)(a)5.
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, applicable regulations adopted under the internal revenue code and rules of the department.
40.05(1)(a)6.
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 fixed 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.
40.05(1)(a)7.
7. Subject to any applicable limitations under the internal revenue code, a participating employe may elect to use part or all of his or her accumulated after-tax additional contributions, including interest, made under
subd. 5., other than contributions treated by the department as contributions to a tax sheltered annuity under section
403 (b) of the internal revenue code, to purchase creditable service under this chapter.
40.05(1)(b)
(b) In lieu of employe payment, the employer may pay all or part of the contributions required by
par. (a), but all the payments shall be available for benefit purposes to the same extent as required contributions deducted from earnings of the participating employes. Action to assume employe contributions as provided under this paragraph shall be taken at the time and in the form determined by the governing body of the participating employer. The state shall pay under this paragraph for employes who are covered by a collective bargaining agreement under
subch. V of ch. 111 and for employes whose fringe benefits are determined under
s. 230.12 an amount equal to 4% of the earnings paid by the state unless otherwise provided in a collective bargaining agreement under
subch. V of ch. 111 or unless otherwise determined under
s. 230.12. The University of Wisconsin Hospitals and Clinics Authority shall pay under this paragraph for employes who are covered by a collective bargaining agreement under
subch. I of ch. 111 and for employes whose fringe benefits are determined under
s. 233.10 an amount equal to 4% of the earnings paid by the authority unless otherwise provided in a collective bargaining agreement under
subch. I of ch. 111 or unless otherwise determined under
s. 233.10. The state shall pay under this paragraph for employes who are not covered by a collective bargaining agreement under
subch. V of ch. 111 and for employes whose fringe benefits are not determined under
s. 230.12 an amount equal to 4% of the earnings paid by the state unless a different amount is recommended by the secretary of employment relations and approved by the joint committee on employment relations in the manner provided for approval of changes in the compensation plan under
s. 230.12 (3). The University of Wisconsin Hospitals and Clinics Authority shall pay under this paragraph for its employes who are not covered by a collective bargaining agreement under
subch. I of ch. 111 an amount equal to 4% of the earnings paid by the authority unless a different amount is established by the board of directors of the authority under
s. 233.10.
40.05(2)
(2) Employer retirement contributions. For Wisconsin retirement system purposes and subject to the annual compensation limits under
26 USC 401 (a) (17) for a participating employe who first becomes a participating employe on or after January 1, 1996:
40.05(2)(a)
(a) Each participating employer shall make contributions for current service determined as a percentage of the earnings of each participating employe, determined as though all employes of all participating employers were employes of a single employer, but with a separate percentage rate determined for the employe occupational categories specified under
s. 40.23 (2m). A separate percentage shall also be determined for subcategories within each category determined by the department to be necessary for equity among employers.
40.05(2)(am)
(am) The percentage of earnings under
par. (a) shall be determined on the basis of the information available at the time the determinations are made and on the assumptions the actuary recommends and the board approves by dividing the amount determined by subtracting from the then present value of all future benefits to be paid or purchased from the employer accumulation reserve on behalf of the then participants the amount then credited to the reserve for the benefit of the members and the present value of future unfunded prior service liability contributions of the employers under
par. (b) by the present value of the prospective future compensation of all participants.
40.05(2)(ar)
(ar) Participating employers of employes subject to
s. 40.65 shall contribute an additional percentage or percentages of those employes' earnings based on the experience rates determined to be appropriate by the board with the advice of the actuary.
40.05(2)(b)
(b) Contributions shall be made by each participating employer for unfunded prior service liability in a percentage of the earnings of each participating employe. A separate percentage rate shall be determined for the employe occupational categories under
s. 40.23 (2m) as of the employer's effective date of participation. The rates shall be sufficient to amortize as a level percent of payroll over a period of 40 years from the later of that date or January 1, 1986, the unfunded prior service liability for the categories of employes of each employer determined under s.
40.05 (2) (b), 1981 stats., increased to reflect any creditable prior service granted on or after January 1, 1986, increased to reflect the effect of
1983 Wisconsin Act 141, increased at the end of each calendar year after January 1, 1986, by interest at the assumed rate on the unpaid balance at the end of the year and adjusted under
pars. (bu),
(bv) and
(bw).
40.05(2)(bg)
(bg) Contributions of amounts under
par. (b) may be made in advance to reduce an employer's existing unfunded prior service liability.
40.05(2)(bm)
(bm) Contributions under
par. (b) for each category of employe shall be made until full payment of that employer's unfunded prior service liability for all categories is made.
40.05(2)(br)
(br) The contribution under
par. (b) by an employer in any calendar year before full payment of the unfunded prior service liability determined under
par. (bm) may not be less than the dollar amount determined to be necessary in the first calendar year of the amortization schedule established by
par. (b).
40.05(2)(bt)
(bt) The department may reallocate prior service liability from one employer to another and adjust as necessary the contribution rates established under
par. (b) to reflect transfers of responsibilities and employes among different employers.
40.05(2)(bu)
(bu) The employer contribution rate determined under
par. (b) for each employer shall be adjusted, if necessary, to reflect the added prior service liability of paying additional joint and survivor death benefits to beneficiaries of participating employes as a result of
1997 Wisconsin Act 58 and that rate shall be sufficient to amortize the unfunded prior service liability of the employers over the remainder of the 40-year amortization period under
par. (b).
40.05(2)(bv)
(bv) The employer contribution rate determined under
par. (b) for participating employes who served in the U.S. maritime service shall be adjusted to reflect the cost of granting creditable service under
s. 40.02 (15) (a) 7. and that rate shall be sufficient to amortize the unfunded prior service liability of the employers over the remainder of the 40-year amortization period under
par. (b).
40.05(2)(bw)
(bw) The employer contribution rate determined under
par. (b) for the university of Wisconsin system shall be adjusted to reflect the cost of granting creditable service under
s. 40.02 (17) (i) and that rate shall be sufficient to amortize the unfunded prior service liability of the employers over the remainder of the 40-year amortization period under
par. (b).
40.05(2)(c)
(c) The percentage rates determined under this subsection shall become effective as of the beginning of the calendar year to which they are applicable and shall remain in effect during the calendar year, except that the secretary, upon the written certification of the actuary, may change any percentage determined under
par. (b) during any calendar year for the purpose of reflecting any reduced obligation which results from any payment of advance contributions.
40.05(2)(d)
(d) The amount of each employer's monthly contribution shall be the sum of the amounts determined by applying the proper percentage rates as determined in accordance with
pars. (a) and
(b) to the total of all earnings paid to participating employes on each payday.
40.05(2)(f)
(f) Whenever the existence of any participating employer is terminated because of consolidation or for any other reason, the employer who thereafter has responsibility for the governmental functions of the previous employer shall be liable for all contributions payable by the previous employer in the following manner:
40.05(2)(f)1.
1. If the territory of the previous employer is attached to 2 or more employers, the total liability of the previous employer shall be allocated to the new employers in proportion to the equalized valuation of each area so attached.
40.05(2)(f)2.
2. Whenever the existence of any participating employer, who was an instrumentality of 2 or more employers, is terminated for any reason and there is no territory to be divided, the liability for contributions of the previous employer shall be divided between the sponsoring employers in the same proportion as the net assets of the terminating employer are divided.
40.05(2)(f)3.
3. If the department determines that it is not feasible to allocate the liability as provided in
subd. 1. or
2., then the liability shall be allocated in proportion to the equalized valuation of the remaining employers.
40.05(2)(f)4.
4. The amount of the allocations to the respective employers shall be certified by the department to each employer.