Number
091068
Version
SUBSTITUTE 2
Reference
Sponsor
THE CHAIR
Title
A substitute charter ordinance relating to retirement benefits for certain city employes.
Sections
36-04-1-c am
36-04-1-f am
36-05-1-h-5-b am
36-05-6-a rn
36-05-6-a-1-0 am
36-05-6-a-2 cr
36-08-7-a-2 am
36-08-7-m am
36-08-7-o cr
36-10-2 am
Analysis
The Common Council has approved labor contracts with various city unions which require new employes represented by those unions and beginning city employment on or after January 1, 2010, to contribute 5.5% of their earnable compensation as a contribution to the city retirement system; this requirement has also been imposed on nonrepresented/nonmanagement employes and management employes beginning city employment on or after January 1, 2010. In conjunction with this requirement, this charter ordinance provides for the implementation of section 414(h)(2) of the Internal Revenue Code to make city employe-paid member retirement contributions a pre-tax payroll contribution under that section, and permits members who separate from service prior to vesting to withdraw their member-paid contributions with interest.
This charter ordinance also changes retirement benefits for employes represented by SEIU Healthcare District 1199 Wisconsin/Staff Nurses Council, Local 195, IBEW, AFL-CIO, and Local 75, Journeyman Plumbers and Gasfitters Union, AFL-CIO as follows:
1. The sunset clause relating to creditable service for military service is eliminated.
2. A bonus year is added to the pension payment formulary thus qualifying an employe to retire earlier or add pension-eligible service time, or both. Employes who retire in 2010 are eligible.
3. Employes retiring in 2010 and 2011 shall receive an earlier cost-of-living increase of 2% effective the first anniversary of their retirement.
4. Employes hired on or after January 1, 2010, shall contribute 5.5% of their earnable compensation as a contribution to the retirement system.
Body
The Mayor and Common Council of the City of Milwaukee do ordain as follows:
Part 1. The note appended to s. 36-04-1-c of the city charter, as affected by Common Council file number 090951, passed December 1, 2009, is amended to read:
36-04. Creditable Service.
1. SERVICE CREDITED. c.
NOTE: The foregoing amendment to s. 36-04-1-c shall apply only to policemen represented by the MPA and firemen represented by Local 215, IAFF, who participate in the combined fund and who retire on a service retirement allowance between January 1, 1998 and December 31, 2002; policemen represented by the MPSO, and general city employes, who participate in the combined fund and who retire on a service retirement allowance between January 1, 1999 and December 31, 2002; non-represented firemen or policemen who participate in the combined fund and who retire on a service retirement allowance between January 1, 2000 and December 31, 2002; policemen represented by the MPA, firemen represented by Local 215, IAFF, nonrepresented firemen, and general city management and nonrepresented employes, who participate in the combined fund and who retire on a service retirement allowance on or after January 1, 2003; city of Milwaukee employes who participate in the combined fund and who retire on a service retirement allowance between January 1, 2003 and December 31, 2006, and who are represented by the Public Employees' Union 61, LIUNA, AFL-CIO; [[the Staff Nurses Council; Local 195, IBEW, AFL-CIO,]] Joint Bargaining Unit Local 139, IUOE, AFL-CIO/Milwaukee District Council 48, AFSCME, AFL-CIO; Local 494, IBEW, AFL-CIO, Machine Shop; the Association of Law Enforcement Allied Services Personnel; or Local #218, I.U.P.A., AFL-CIO (Police Support Service Personnel); Local 494, IBEW, AFL-CIO, Fire Equipment Dispatchers; city of Milwaukee employes who participate in the combined fund and who retire on a service retirement allowance on or after January 1, 2003, and who are represented by Milwaukee District Council 48, AFSCME, AFL-CIO; city of Milwaukee employes represented by the Milwaukee Building and Construction Trades Council who participate in the combined fund and who retire on a service retirement allowance on or after August 1, 2007; city of Milwaukee employes represented by the Technicians, Engineers and Architects of Milwaukee, the Association of Scientific Personnel, [[and]] the Association of Municipal Attorneys >>, SEIU Healthcare District 1199 Wisconsin/Staff Nurses Council, Local 195, IBEW, AFL-CIO, and Local 75, Journeyman Plumbers and Gasfitters Union, AFL-CIO <<who participate in the combined fund and who retire on a service retirement or allowance on or after January 1, 2007; city of Milwaukee employes represented by [[Local 75, Journeyman Plumbers and Gasfitters Union, AFL-CIO, and]] the International Association of Machinists and Aerospace Workers who participate in the combined fund and who retire on a service retirement allowance between January 1, 2003 and December 31, 2006; and city of Milwaukee employes represented by Local 494, IBEW, AFL-CIO, Electrical Group, who participate in the combined fund and who retire on a service retirement allowance on or after June 1, 2007; and members represented by the Administrators and Supervisors Council who participate in the combined fund and retire on a service retirement allowance between January 1, 2003 and June 30, 2007; and Milwaukee public schools employes represented by Local 150, FSA/SNA/HCA; Local 150, BSH; Local 950, International Union of Operating Engineers; Local 1616, District Council 48 and Milwaukee Building and Construction Trades Council who participate in the combined fund and who retire on a service retirement between January 1, 2004 and June 30, 2007.
Part 2. Section 36-04-1-f of the city charter is amended to read:
f. City employes represented by Milwaukee District Court 48, AFSCME, AFL-CIO, the Technicians, Engineers and Architects of Milwaukee, the Association of Scientific Personnel, and the Association of Municipal Attorneys, >> SEIU Healthcare District 1199 Wisconsin/Staff Nurses Council, Local 195, IBEW, AFL-CIO, and Local 75, Journeyman Plumbers and Gasfitters Union, AFL-CIO << and nonmanagement/nonrepresented employes who during the calendar year 2010 retire from active service on a normal service retirement allowance, including allowances under s. 36-05-1-d-3, or on an immediate retirement allowance under s. 36-05-6-c, shall be eligible for a bonus year. At the member’s discretion, the bonus year may be added either to the member’s age for purposes of retirement eligibility, or to creditable service. The bonus year may be divided into one month increments and used for a combination of additions to age and creditable service, not to exceed a total of 12 months. All or part of the bonus year cannot be applied to earn more than 35 years of creditable service or to exceed the 70% of final average salary limitation stated in s. 36-06-10-f. In order to be eligible for the bonus year provided in this paragraph, a nonrepresented/nonmanagement employe must provide notice of his or her intent to retire to his or her department head or designee by August 31, 2010.
Part 3. Section 36-05-1-h-5-b of the city charter is amended to read:
36-05. Benefits.
1. SERVICE RETIREMENT ALLOWANCE.
h-5-b. City employes represented by Milwaukee District Council 48, AFSCME, AFL-CIO, the Technicians, Engineers and Architects of Milwaukee, the Association of Scientific Personnel, and the Association of Municipal Attorneys >>, SEIU Healthcare District 1199 Wisconsin/Staff Nurses Council, Local 195, IBEW, AFL-CIO, and Local 75, Journeyman Plumbers and Gasfitters Union, AFL-CIO << and nonmanagement/nonrepresented employes who during the calendar years 2010 and 2011 retire from active service on a normal service retirement allowance, including allowances under par. d-3, or on an immediate retirement allowance under par. 6-c, shall receive a 2% pension escalator effective with the installment next following the first anniversary of their retirement.
Part 4. Section 36-05-6-a of the city charter is renumbered 36-05-6-a-1.
Part 5. Section 36-05-6-a-1-0 of the city charter is amended to read:
6. SEPARATION OF BENEFITS.
a-1. Return of >>Accumulated<< Contribution.
Part 6. Section 36-05-6-a-2 of the city charter is created to read:
a-2. Return of Member-Paid Accumulated Contribution. The retirement system shall return to members who separate from service prior to vesting the contributions made by the members under s. 36-08-7-a-2. A member may elect to withdraw his or her contribution either after separation or upon termination of membership under s. 36-03-5. Upon filing with the board a request for return of member-paid contribution, on a form provided by the board, the member shall be paid his or her contribution and the regular interest credited on the contribution as it was at the date of separation and ½ the regular interest credited to the account thereafter. A member who withdraws his or her contribution shall not be eligible for any benefits under this chapter and his or her membership shall be terminated. In the event the member dies after separation, the contribution, if not previously paid, shall be paid with the credited interest to the member’s estate or designated beneficiary.
Part 7. Section 36-08-7-a-2 of the city charter is amended to read:
36-08. Method of Financing.
7. MEMBER CONTRIBUTIONS
a-2. City employes hired on or after January 1, 2010, who are represented by Milwaukee District Council 48, AFSCME, AFL-CIO, the Technicians, Engineers and Architects of Milwaukee, the Association of Scientific Personnel, and the Association of Municipal Attorneys, >> SEIU Healthcare District 1199 Wisconsin/Staff Nurses Council, Local 195, IBEW, AFL-CIO, and Local 75, Journeyman Plumbers and Gasfitters Union, AFL-CIO << and management and nonmanagement/nonrepresented employes shall contribute 5.5% of their earnable compensation.
Part 8. Section 36-08-7-m of the city charter is amended to read:
m. During the 8-year period immediately following their enrollment, general city employes who are enrolled as members on or after January 1, 2000 shall contribute to the combined fund a sum expressed as 1.60% of the member’s pensionable earnings if they participate in the combined fund. If a member who makes contributions under this par. separates from service without a vested pension or withdraws his or her accumulated contributions, amounts contributed under this par. shall be returned to the contributor without interest. This subsection shall not apply to city employes hired on or after January 1, 2010 who are represented by Milwaukee District Council 48, AFSCME, AFL-CIO, the Technicians, Engineers and Architects of Milwaukee, the Association of Scientific Personnel, [[and]] the Association of Municipal Attorneys, >> SEIU Healthcare District 1199 Wisconsin/Staff Nurses Council, Local 195, IBEW, AFL-CIO, and Local 75, Journeyman Plumbers and Gasfitters Union, AFL-CIO << and management and nonmanagement/nonrepresented employes.
Part 9. Section 36-08-7-o of the city charter is created to read:
o. Pre-Tax Deduction. All member contributions made under pars. a, b, and c, except the policemen’s $1 contribution, shall be implemented pursuant to the provisions of Internal Revenue Code Section 414(h) (2) by means of direct payment by the city to the combined fund. The city shall fund the cost of member contributions under par. a-2 by means of a pre-tax salary deductions from the salary of employes on whose behalf such payments are made. Members shall not have the option of choosing to receive the contributed amounts directly instead of having them paid to the combined fund.
Part 10. Section 36-10-2 of the city charter is amended to read:
36-10. Exemption from Taxation, Execution and Assignment.
2. Notwithstanding sub. 1., a beneficiary who was a member may elect to have a taxable distribution except: annuities paid over life or life expectancy; installments for a period spanning 10 years or more; and minimum distributions under s. 401(a)(9) of the Internal Revenue Code; paid directly to an individual retirement account or bona fide defined contribution account that accepts contributions (Internal Revenue Code s. 401(a) and (31) and Internal Revenue Code s. 404(a)(2), including an eligible plan under s. 457(b) of the Internal Revenue Code which is maintained by a state, political subdivision of a state or any agency or instrumentality of a state or political subdivision of a state and which agrees to separately account for amounts transferred into such plan, or a tax sheltered annuity that accepts rollovers (Internal Revenue Code s. 403(b)(10). For distributions made on or after January 18, 2006, in the event of a mandatory distribution greater than $1,000 in accordance with the provisions of [[[s.]] >>ss.<< 36-05-1-a, 36-05-6-d-2, 36-05-6-e, 36-05-11-a or b, >> or 36-08-7-a-2,<< if the beneficiary does not elect to have such distribution paid directly to an eligible retirement plan specified by the beneficiary in a direct rollover or to receive the distribution directly in accordance with this section, then the board will pay the distribution in a direct rollover to an individual retirement plan designated by the board.
Part 11. This is a charter ordinance and shall take effect 60 days after its passage and publication, unless within such 60 days a referendum petition is filed as provided in s. 66.0101(5), Wis. Stats., in which event this ordinance shall not take effect until submitted to a referendum and approved by a majority of the electors voting thereon.
LRB
APPROVED AS TO FORM
____________________________
Legislative Reference Bureau
Date: ______________________
Attorney
IT IS OUR OPINION THAT THE ORDINANCE
IS LEGAL AND ENFORCEABLE
____________________________
Office of the City Attorney
Date: ______________________
Requestor
Drafter
Department - Employe Relations
LRB09464-3
BJZ:lp
12/11/2009