State Supreme Court rules Act 11 is constitutional


State Supreme Court rules Act 11 is constitutional In a long-anticipated decision, the State Supreme Court Tuesday (June 12, 2001) ruled that the 1999 Wisconsin public employee pension improvement law is constitutional. The ruling was a victory on all counts. WEAC members and staff worked hard to win passage of the law and have fought through the court system to argue its legal merits. Key points: For most general employees (almost all WEAC members) the formula factor will increase from 1.6% to 1.765% for all service prior to January 1, 2000. This will result in an increase in initial pension calculation for that service of approximately 10%. For service on or after January 1, 2000, the formula factor reverts to 1.6%. The 5% earnings cap for money purchase accounts is removed. That cap had applied to all participants hired since January 1, 1982. The Variable Fund will now reopen for all participants. The Variable Fund has been closed to new participants since April 30, 1980. All participants will have the opportunity to allocate up to 50% of future contributions to the Variable Fund. Elections made by individuals to designate future contributions to the Variable Fund become effective the following calendar year. Individuals should contact the Department of Employee Trust Funds for information about signing up for the Variable Fund option. The death benefit is changed to treat all participants and their chosen beneficiaries equally. The law eliminates the requirement that a beneficiary must be a spouse or dependent child in order to receive a full death benefit. A mechanism to reduce past unfunded liabilities is implemented, improving the fund's financial health. Also, the fund will now move to a market recognition system, allowing a more frequent distribution of benefits. WEAC Executive Director Michael A. Butera congratulated WEAC Staff Counsel Tony Sheehan, lead attorney in the case, and the entire WEAC legal staff for their exceptional work. Sheehan said other WEAC legal staff who deserve special credit include Lucy Brown, Mike Van Sistine, Deb Meylor and Bruce Meredith. OnWEAC, at www.weac.org, has a special resource page devoted to this law. You will find a link from the Home Page. The resource page includes links to: The Employee Trust Funds Board's Web site, which provides services to help you calculate your benefits. The State of Wisconsin Investment Board's Web site, which includes information about Variable Fund investments. The Wisconsin Supreme Court ruling. Posted June 12, 2001

State Supreme Court rules Act 11 is constitutional

In a long-anticipated decision, the State Supreme Court Tuesday (June 12, 2001) ruled that the 1999 Wisconsin public employee pension improvement law is constitutional. The ruling was a victory on all counts. WEAC members and staff worked hard to win passage of the law and have fought through the court system to argue its legal merits.

Key points:

For most general employees (almost all WEAC members) the formula factor will increase from 1.6% to 1.765% for all service prior to January 1, 2000. This will result in an increase in initial pension calculation for that service of approximately 10%. For service on or after January 1, 2000, the formula factor reverts to 1.6%.
The 5% earnings cap for money purchase accounts is removed. That cap had applied to all participants hired since January 1, 1982.
The Variable Fund will now reopen for all participants. The Variable Fund has been closed to new participants since April 30, 1980. All participants will have the opportunity to allocate up to 50% of future contributions to the Variable Fund. Elections made by individuals to designate future contributions to the Variable Fund become effective the following calendar year. Individuals should contact the Department of Employee Trust Funds for information about signing up for the Variable Fund option.
The death benefit is changed to treat all participants and their chosen beneficiaries equally. The law eliminates the requirement that a beneficiary must be a spouse or dependent child in order to receive a full death benefit.
A mechanism to reduce past unfunded liabilities is implemented, improving the fund's financial health. Also, the fund will now move to a market recognition system, allowing a more frequent distribution of benefits.

WEAC Executive Director Michael A. Butera congratulated WEAC Staff Counsel Tony Sheehan, lead attorney in the case, and the entire WEAC legal staff for their exceptional work. Sheehan said other WEAC legal staff who deserve special credit include Lucy Brown, Mike Van Sistine, Deb Meylor and Bruce Meredith.

OnWEAC, at www.weac.org, has a special resource page devoted to this law. You will find a link from the Home Page. The resource page includes links to:

The Employee Trust Funds Board's Web site, which provides services to help you calculate your benefits.
The State of Wisconsin Investment Board's Web site, which includes information about Variable Fund investments.
The Wisconsin Supreme Court ruling.

Posted June 12, 2001