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Department of Employee Trust Funds
Updated on February 17, 2011
State Budget Bill
The Department of Employee Trust Funds (ETF) has received numerous
inquiries about the state 2009-2011 Budget Repair Bill (2011
Special Session Senate Bill 11) and the impact of the bill on
the public employee benefit programs administered by ETF.
We are currently experiencing high service demands. As a result,
the wait times for our services have increased. Your time is valuable;
therefore, please review the following answers to frequently asked
questions about the bill before contacting ETF.
Question
Who determines the benefit levels of the Wisconsin Retirement System
(WRS) and other fringe benefit programs for public employees?
Answer
ETF does not determine the benefit levels for the WRS and other
fringe benefit programs administered by ETF. ETF’s role is
to administer the benefits as determined by the Governor and Legislature.
Question
Who determines how much public employees pay for their WRS contributions
and health insurance premiums?
Answer
ETF does not play a role in determining who pays the employee portion
of the contributions
to the WRS. In addition, ETF does not determine how much employees
contribute toward health insurance premiums. Under current law,
those decisions are determined through the bargaining process for
represented employees and compensation plans for non-represented
employees.
ETF does not have a role in the laws that govern the collective
bargaining process.
Question
Does the bill change the retirement benefits of retired members
of the WRS?
Answer
No.
Question
Are employee contributions to the Wisconsin Retirement System considered
“pre-tax” or “post-tax” contributions?
Answer
“Post-tax”. Under federal tax law (Section 414(h)(2)
of the Internal Revenue Code), employer contributions to
public retirement funds are not subject to FICA and federal income
taxation (therefore, they are considered pre-tax). Employee
contributions, on the other hand, are generally taxed normally
(therefore, they are considered post-tax).
Question
Can public employees who work for a WRS employer opt out of the
WRS?
Answer
No. Current law prohibits participating employees from opting out
of the WRS. Allowing WRS members to opt-out of the WRS would be
difficult to administer, would have a detrimental impact on the
sustainability of the WRS, would increase contribution rates for
employees and employers in the WRS, and employees who opt-out would
not be taking advantage of investment returns that end up paying
over 66% of the retirement benefit.
Question
What is the status of the Accumulated Sick Leave Conversion Credit
Program (ASLCC) and the Supplemental Health Insurance Conversion
Credit Program (SHICC)?
Answer
If you are a state employee who has questions about the Accumulated
Sick Leave Conversion Credit Program (ASLCC) and the Supplemental
Health Insurance Conversion Credit Program (SHICC), please read
the information below before contacting ETF.
- Although ETF administers the ASLCC and SHICC programs, ETF does
not play a role in determining the amount of sick leave that employees
receive, or whether and how much of it may be accrued. Those matters
are defined in state law, the compensation plan for non-represented
state employees and the labor agreements for represented state
employees.
- Section 9143 of the budget repair bill states that “upon
termination of any collective bargaining agreement between the
state and a labor organization representing employees in a collective
bargaining unit under section 111.825 (1) or (2) of the statutes,
as affected by this act, the director of the office of state employment
relations (OSER) may continue to administer those provisions of
the collective bargaining agreements that the director determines
necessary for the orderly administration of the state civil services
system until the compensation plan under section 230.12 of the
statutes is established for the 2011-13 fiscal biennium.”
- OSER issued the following statement on February 16, 2011:
- The two most frequently asked questions from employees
concerned about the impact of the Budget Repair Bill on their
benefits relate to continuation of their eligibility for Supplemental
Health Insurance Conversion Credits (SHICC) and professional
development time (PDT).
- Assuming that the Budget Repair Bill passes as initially
proposed, eligibility for SHICC and PDT will continue for
at least the remainder of the 2009-2011 biennium under the
OSER Director’s discretion to continue certain provisions
of the former collective bargaining agreements. Thereafter,
all provisions for represented employees, other than base
pay rates which continue to be negotiable, will be governed
by the Compensation Plan covering represented employees, applicable
statutes, or administrative code.
- Note: The last day of the 2009-2011 biennium
is June 30, 2011.
- In addition, section 9143 of the bill requires ETF, OSER and
the Department of Administration to study the program and submit
the findings by June 30, 2012 to the Governor.
For the bill language and the analysis on the bill, visit:
To stay abreast on changes to the bill and supporting documents
about the bill, visit the www.thewheelerreport.com.
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