SB 328

Under current law, when a participant in the Wisconsin Retirement System

(WRS) terminates covered employment and becomes eligible for an annuity, the

annuity is calculated in one of two ways. The first way is based on the participant's

final average earnings, the participant's number of years of creditable service, and

a percentage multiplier. The final average earnings is a monthly rate of earnings

that is calculated based on the three annual earnings periods in which the

participant's earnings were highest. The second way is to calculate the amount of

a money purchase annuity, which is determined based on the sum of a participant's

accumulated required and additional contributions plus an amount that equals the

participant's accumulated required contributions. The Department of Employee

Trust Funds must pay an annuity based on the method that generates the higher

annuity amount.

This bill revises the methodology of the first way in which a WRS annuity is

calculated by providing that the final average earnings must be based on the

five

highest annual earnings periods instead of the

three

highest annual earnings

periods. Under the bill, this change takes effect on the first day of the 60th month

beginning after publication and applies to participants who terminate WRS covered

employment on or after the first day of the 60th month beginning after publication.

Because this bill relates to public employee retirement or pensions, it may be

referred to the Joint Survey Committee on Retirement Systems for a report to be

printed as an appendix to the bill.