Public Act 96-0961 (HB 4644) allows members of the state employees’ retirement system to establish up to 24 days’ service credit for voluntary or involuntary furloughs taken during FY 2010 and FY 2011. Employees are required to pub employee contributions plus the employer’s normal cost plus interest to establish the credit.
House File 414 of 2009 (signed by governor), § 51, allows a furloughed employee to make up employee and employer contributions to keep IPERS-reported wages at an unreduced level. The legislation applies only to employees for whom the year in which the furlough occurs is one of the three used to determine the employee's final average salary for the benefit calculation.
Act 301 of 2009 (House Bill 673) provides a mechanism for institutions of higher education to continue employer and employee contributions for a worker who has been furloughed for no more than 30 days a year. This legislation addresses anticipated cost cutting at the state’s public colleges and universities.
Chapter 26, Laws of 2009 (HB 917 and SB 1093) provides that any public employees whose pay is reduced because of a furlough will not suffer any diminution of retirement average final compensation; provides that the reduction in pay and flexible leave does not apply to justices, judges, and officers whose salaries are protected from reduction; provides that employees of the legislative branch, the judicial branch, and local boards of education are subject to reductions.
Chapter 451, Laws of 2009 (SB 202, the budget bill) §26.14E.(b), provides that no member of a state-sponsored retirement plan will suffer diminution of benefits because of a furlough and that the employer will pay employer and employee contributions during a furlough.
Chapter 142, Laws of 2009 (SB 1359), provides that if the regularly scheduled hours of work for any full-time state officer or employee are temporarily reduced by 30 percent or less, then the amount of service and salary credit under the retirement system that the officer or employee would have received had the scheduled hours not been reduced would continue to be included for purposes of computing retirement, death, and disability benefits. The director of the division of retirement must prescribe procedures for the reporting of the additional service and salary, and for the payment and remittance of the contributions to the retirement system by the employer of the employee or officer. These provisions would have retroactive application to January 1, 2009.
Any employer participating in the retirement system as a local government unit that reduces on a non-permanent basis the regularly scheduled hours of work by no more than 30 percent per month for its full-time officers, employees or teachers pursuant to a resolution or ordinance of its chief governing body, which was enacted by reason of shortage of funds, may authorize the above provisions for all its affected full-time officers, employees and teachers upon the adoption of a resolution by its chief governing body authorizing and accepting the liability thereof. The effective date of these provisions may be made retroactive to January 1, 2009, or on the first day of any month thereafter.
HB 441, § E135.3, of 2009, provides that a permanent state employee who is laid off between May 1, 2009 and January 1, 2011 and who is within one year of eligibility for normal retirement may retire without any actuarial reduction in benefits as if the employee met the eligibility requirements of his or her retirement plan.
Chapter 430, Laws of 2009 (SB 6157) requires the Department of Retirement Systems, in calculating average final compensation for a member of plan 1, 2, or 3, to include any compensation forgone by the member during the 2009 11 fiscal biennium as a result of reduced work hours, voluntary leave without pay, or temporary furloughs if the reduced compensation is an integral part of the employer's expenditure reduction efforts, as certified by the employer.
Act 29 of 2009 (Assembly Bill 75, the budget bill) requires that Wisconsin public employers, including the University of Wisconsin, make contributions for retirement benefits for employees furloughed in the period July 1, 2009, through June 30, 2011 as if they had not been furloughed. Furlough time will be included in the definition of creditable service as though the participant had not been furloughed.
Executive Order #285, issued by the Governor on June 23, 2009, requires employees of state agencies and the University of Wisconsin System, including faculty and academic staff, to take eight days or their equivalent (64 hours) of unpaid leave (furlough days) during each fiscal year of the 2009−2011 fiscal biennium, for a total of sixteen furlough days (128 hours) over the two-year period.
Laws 2005, Chapter 156, Article 3, Section 3 (The Omnibus State Government Finance Bill) created a Voluntary Hour Reduction Program. This provision is a voluntary hour reduction program for “state employees,” although that term is not defined in the provision beyond indicating that to be eligible the individual must be covered by an Minnesota State Retirement Systems plan. The uncoded provision, applicable through June 30, 2007, allows individuals to make contributions to the retirement plan as though they had not reduced employment. A state employee who currently works at least half time in an MSRS-covered position, who enters into an agreement with an appointing authority to reduce hours to half time or less, will be authorized to make employee contributions to the applicable retirement plan or fund as though hours had not been reduced. The employer will make the applicable employer contribution. The work hours and work schedule must be agreed to be the employee and employer. The appointing authority has discretion to decide whether this program will be available to any given employee. All pension contributions are to be made in a time and manner prescribed by the MSRS Executive Director.
Section 4. Voluntary Unpaid Leave of Absence. This uncoded provision is a voluntary unpaid leave of absence provision, applicable to employees of “appointing authorities in state government,” at the discretion of the employer. Individuals are able to obtain service credit for the leave period, which must occur between July 1, 2005, and June 30, 2007. The scope of the plans involved is unspecified. Appointing authorities in state government may allow employees to take leaves up to 1,040 hours (the equivalent of one-half year) between July 1, 2005, and June 30, 2007 While on leave, the employee retains health coverage and accrues sick and vacation leave as though the individual were not on leave. The individual may make contributions to the applicable pension plan or fund as though not on leave, and receive full service credit. If employee contributions are made, the employer must make applicable employer contributions. If the individual is covered by a defined contribution plan, the appointing authority, at its discretion, may make the employee contribution to the pension fund on behalf of the employee. All pension contributions are to be made in a time and manner prescribed by the pension plan executive director.
The 2004 budget bill included provisions allowing school districts, institutions of higher education and state agencies to furlough employees under certain fiscal conditions. The length of the furloughs is limited, variously by type of employer. For state agencies, the furlough may be as long as 90 days a year, but is to be voluntary. Furloughed employees are to receive all benefits except salary while furloughed, and during the furlough employers are responsible for both employee and employer contributions for the benefits, except that for benefits that require only an employee contribution, the employee remains responsible. Constitutional officers may take 45 days furlough, while retaining their authority, and may expend the savings as they see fit. Same benefit provisions apply to them.