SB996: Bill Text

SB996,5,20 40.08 (8) (a) 2. If an estate that is determined by the department to be a beneficiary is never opened or is closed prior to the payment of benefits payable under this chapter as a result of the death of the participant and the estate is not opened or reopened within 6 months after the department notifies the estate that a benefit is payable, the benefit shall be considered irrevocably abandoned and shall be transferred to the employer accumulation reserve, unless the estate was the designated beneficiary under s. 40.02 (8) (a) 1.

Note: Sections 7 and 8 clarify how the Department of Employee Trust Funds must treat abandoned benefits from the account of a deceased individual if a probate estate is never opened for that individual.

SB996,8 Section 8 . 40.08 (8) (a) 2m. of the statutes is amended to read:

SB996,6,10 40.08 (8) (a) 2m. If the estate was the designated beneficiary under s. 40.02 (8) (a) 1. and the estate is never opened or is closed prior to the payment of benefits payable under this chapter as a result of death of the participant and the estate is not opened or reopened within 6 months after the department notifies the estate that a benefit is payable, the department shall pay the benefit to a beneficiary as determined under s. 40.02 (8) (a) 2. If the department is unable to locate any such beneficiary within 6 months, all such beneficiaries shall be presumed to have predeceased the participant and the benefit shall be considered irrevocably abandoned and shall be transferred to the employer accumulation reserve.

SB996,9 Section 9 . 40.23 (4) (c) of the statutes is amended to read:

SB996,7,2 40.23 (4) (c) If a participant during the calendar year in which before the year he or she attains 69.5 years the age set under section 401 (a) (9) of the Internal Revenue Code, or the alternate payee during the calendar year before the year in which the participant attains 69.5 years the age set under section 401 (a) (9) of the Internal Revenue Code, does not apply before December 31 in that year for a distribution of the amount that is credited to the account of a participant under the Wisconsin retirement system, the department shall begin, effective the following January 1, an automatic distribution to the participant or alternate payee in the form of an annuity specified under s. 40.24 (1) (c) or as determined by the department by rule. If the department makes an automatic distribution under this paragraph, the beneficiary designation filed with the department before the date on which the department begins the automatic distribution is no longer applicable under ss. 40.71 and 40.73. Unless the participant or alternate payee files a subsequent beneficiary designation with the department after the date on which the department begins the automatic distribution, the department shall pay any death benefit as provided under s. 40.02 (8) (a) 2.

SB996,10 Section 10 . 40.23 (4) (e) 2. of the statutes is amended to read:

SB996,7,8 40.23 (4) (e) 2. 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 set under section 401 (a) (9) of the Internal Revenue Code.

SB996,11 Section 11 . 40.24 (7) (a) (intro.) of the statutes is amended to read:

SB996,7,24 40.24 (7) (a) (intro.) Any participant who has been married to the same spouse, or in a domestic partnership with the same domestic partner, for at least one year immediately preceding the participant's annuity effective date shall elect the annuity option under sub. (1) (d), the annuity option under sub. (1) (e), if the reduced annuity under sub. (1) (e) is payable in an optional life form provided under sub. (1) (d), or an annuity option in a form provided by rule, if the annuity is payable for life with monthly payments of at least 75 percent of the amount of the annuity to be continued to the beneficiary named survivor, for life, upon the death of the participant, and the participant shall designate the spouse or domestic partner as the beneficiary named survivor, unless the participant's application for a retirement annuity in a different optional annuity form is signed by both the participant and the participant's spouse or domestic partner or unless the participant establishes to the satisfaction of the department that, by reason of absence or other inability, the spouse's or domestic partner's signature may not be obtained. This subsection does not apply to any of the following:

SB996,12 Section 12 . 40.24 (7) (b) of the statutes is amended to read:

SB996,8,12 40.24 (7) (b) In administering this subsection, the secretary may require the participant to provide the department with a certification of the participant's marital or domestic partnership status and of the validity of the spouse's or domestic partner's signature. If a participant is exempted from the requirements under par. (a) on the basis of a certification which the department or a court subsequently determines to be invalid, the liability of the fund and the department shall be limited to a conversion of annuity options at the time the certification is determined to be invalid. The conversion shall be from the present value of the annuity in the optional form originally elected by the participant to an annuity with the same present value but in the optional form under sub. (1) (d) and with monthly payments of 100 percent of the amount of the annuity paid to the annuitant to be continued to the spouse or domestic partner beneficiary named survivor.

Note: Sections 11 and 12 replace the term “beneficiary” with “named survivor” in statutes relating to annuity options for the Wisconsin Retirement System.

SB996,13 Section 13 . 40.285 (2) (b) 1. a. to d. of the statutes are amended to read:

SB996,8,15 40.285 (2) (b) 1. a. The participant participating employee has at least 3 continuous years of creditable service at the time of application.

SB996,9,3 b. The number of years of creditable service applied for under this paragraph does not exceed the number of years of creditable service that the participant participating employee has at the date of application, excluding all creditable service purchased under this section or s. 40.02 (17) (b), 1981, 1983, 1985, 1987, 1989, 1991, 1993, 1995, 1997, 1999, and 2001 stats., s. 40.02 (17) (e), 1987, 1989, 1991, 1993, 1995, 1997, 1999, and 2001 stats., s. 40.02 (17) (i), 1989, 1991, 1993, 1995, 1997, 1999, and 2001 stats., s. 40.02 (17) (k), 1989, 1991, 1993, 1995, 1997, 1999, and 2001 stats., s. 40.25 (6), 1981, 1983, 1985, 1987, 1989, 1991, 1993, 1995, 1997, 1999, and 2001 stats., or s. 40.25 (7), 1991, 1993, 1995, 1997, 1999, and 2001 stats., less the number of years of creditable service previously purchased under this paragraph or s. 40.25 (7), 1991, 1993, 1995, 1997, 1999, and 2001 stats.

SB996,9,5 c. At the time of application, the participant participating employee furnishes evidence of such service that is acceptable to the department.

SB996,9,12 d. Except as provided in sub. (4) (b), at the time of application, the participant participating employee pays to the department a lump sum equal to the present value of the creditable service applied for under this paragraph, in accordance with rates actuarially determined to be sufficient to fund the cost of the increased benefits that will result from granting the creditable service under this paragraph. The department shall by rule establish different rates for different categories of participants participating employees, based on factors recommended by the actuary.

SB996,14 Section 14 . 40.285 (2) (b) 4. (intro.) of the statutes is amended to read:

SB996,9,17 40.285 (2) (b) 4. (intro.) A participant participating employee may not receive creditable service under this paragraph for service that is used for the purpose of establishing entitlement to, or the amount of, any other benefit to be paid by any federal, state, or local government entity, except for the following:

Note: Sections 13 and 14 replace the term “participant” with “participating employee” in statutes relating to purchasing creditable service for purposes of the Wisconsin Retirement System.

SB996,15 Section 15 . 40.63 (10) of the statutes is amended to read:

SB996,9,23 40.63 (10) Upon termination of an annuity in accordance with sub. (9), each participant whose annuity is so terminated shall, as of the beginning of the calendar month following termination, be credited with additional contributions equal to the then present value of the portion of the terminated annuity which was originally provided by the corresponding type of additional contributions. Except for additional contributions, the retirement account of the participant shall be reestablished as if the terminated annuity had never been effective, including crediting of interest and of any contributions and creditable service earned during the period the annuity was in force.

Note: Section 15 clarifies that, under the Wisconsin Retirement System, an annuitant may not earn contributions and creditable service during a period in which the annuitant receives an annuity from the Wisconsin Retirement System based on the annuitant's own service as a participating employee.

SB996,16 Section 16 . 40.86 (1) (intro.) of the statutes is created to read:

SB996,10,7 40.86 (1) (intro.) Expenses authorized under section 125 of the Internal Revenue Code, which may include any of the following:

SB996,17 Section 17 . 40.86 (1) of the statutes is renumbered 40.86 (1) (a).

SB996,18 Section 18 . 40.86 (2) of the statutes is renumbered 40.86 (1) (b).

SB996,19 Section 19 . 40.86 (3) of the statutes is renumbered 40.86 (1) (c).

SB996,20 Section 20 . 40.86 (4) of the statutes is renumbered 40.86 (2m).

Note: Sections 16 and 20 align statutory language with the Internal Revenue Code by distinguishing between expenses reimbursable under two different plan types. Sections 16 to 19 address expenses authorized under section 125 plans, and Section 20 addresses expenses authorized under section 132 plans.

SB996,10,12 (End)