AB880,1,6 1An Act to repeal 40.08 (1m) (f) 3.; to renumber 40.86 (1), 40.86 (2), 40.86 (3) and
240.86 (4); to amend 40.04 (3) (a), 40.04 (3) (am) 3. (intro.), 40.08 (1m) (f) 1., 40.08
3(1m) (f) 2., 40.24 (7) (a) (intro.), 40.24 (7) (b), 40.285 (2) (b) 1. a. to d. and 40.63
4(10); and to create 40.86 (1) (intro.) of the statutes; relating to: named various
5changes to the Wisconsin Retirement System (suggested as remedial
6legislation by the Department of Employee Trust Funds).

Under current law, investment gains and losses of the core and variable
retirement investment trust funds are distributed in a ratio of each participating
account's average daily balance to the total average daily balance of all participating
accounts. The State of Wisconsin Investment Board invests assets of the core and
variable investment trust funds, which are commingled under current law, and all
activity is not recorded on a daily basis for the separate participating accounts.
SWIB provides certified annual earnings reports for the core and variable trust
funds.

This bill provides that the Department of Employee Trust Funds may distribute
the earnings to each participating account by calculating a simple average balance,
which uses beginning and end-of-year balances for each participating account, and
comparing that average balance to the total average balance of all participating
accounts.

The bill clarifies that only an employee who is currently employed with an
participating employer under the Wisconsin Retirement System may purchase other
governmental service. As currently written, the statute uses the term “participant”
and “participating employee.” The term “participant” includes a person who
previously worked for a participating employer but has not yet taken a WRS benefit.

Under current law, the Employee Trust Funds Board contracts with
employee-funded reimbursement account plan providers to provide accounts to be
used by state agencies. Employee-funded reimbursement accounts are governed by
provisions of the Internal Revenue Code. The bill aligns the statutory language with
the language in the IRC.

Under the bill, references to beneficiaries and named survivors in statutes
regarding annuity options under the WRS are amended to distinguish between a
named survivor who will receive a benefit and a beneficiary.

The bill eliminates an expired provision regarding the execution of domestic
relations orders (DRO) that divide a WRS account. Under current law, a DRO must
be provided to DETF within 20 years after the judgment of divorce is entered. Under
the original DRO law, DETF could not accept a DRO for a judgment of divorce entered
before April 28, 1990. The law was amended by 1997 Wisconsin Act 125 to cover
DROs for a judgment of divorce entered between January 1, 1982, and April 27, 1990.