AB 58

Public Sector Retirement systems

Currently, employer and employee required contributions, and the earnings on

these contributions, fund the cost of providing retirement annuities to all public

employees who are covered under the Wisconsin Retirement System (WRS).

Employer required and employee required contribution rates are set on an annual

basis. This bill provides that the employee required contribution rate for general

participating employees and for elected and executive participating employees must

equal one-half of all actuarially required contributions, as determined by the

Employee Trust Funds Board. For protective occupation employees, the bill provides

that the employee required contribution rate must equal the percentage of earnings

paid by general participating employees.

Current law also requires the employer to pay all of the employer required

contributions, but permits the employer to also pay all or part of the employee

required contributions. This bill provides that an employer may not pay any of the

employee required contributions under the WRS or under an employee retirement

system of a first class city or a county having a population of 500,000 or more.

Currently, when a WRS participant terminates employment and becomes

eligible for a retirement annuity, assuming the participant does not receive a money

purchase annuity, the amount of the annuity is determined by multiplying the

participant's final average earnings by the participant's years of creditable service

and by a percentage multiplier. For a protective occupation participant, the

multiplier is either 2 percent or 2.5 percent, depending on whether the person is

covered by social security. For elected officials and executive participating

employees, the multiplier is 2 percent. For all other participants in the WRS, the

multiplier is 1.6 percent. This bill decreases the multiplier for elected officials and

executive participating employees from 2 percent to 1.6 percent for creditable service

that is performed on or after the bill's effective date.

Public sector group insurance

Currently, state employees, as well as employees of public authorities created

by the state, receive health care coverage under plans offered by the Group Insurance

Board (GIB), which plans are assigned to one of three tiers depending on the

employee's premium costs. The employer share of premium costs for employees who

work more than 1,565 hours a year is an amount not less than 80 percent of the

average premium costs under the various health care coverage plans. The amount

for represented employees is subject to collective bargaining and the amount for

nonrepresented employees is established in various compensation plans.

This bill provides that the employer may not pay more than 88 percent of the

average premium cost of plans offered in the tier with the lowest employee premium

cost. For employees who work less than 1,566 hours a year, with exceptions, the

employer must pay an amount determined by the director of the Office of State