We are providing an update from the Wisconsin Employee Trust Fund on the impact of the expiration of the "Normal Retirement Age" excemption from the IRS.
In short, the ETF’s position is that the “…the current regulation DOES NOT affect the normal retirement age levels for any WRS participants.” As outlined in the memo, a number of legislators sent letters to the IRS. Those letters were a direct response to our visits (Kevin Sherry, Mark Villalpando, Steve Wilding, Mahlon Mitchell and Myself) to those legislators during the most recent IAFF Legislative Conference in Washington DC. Lobbying does work.
Update: April 18, 2012:
Attached is the document from the IRS and Department of Treasury with regard to the “Normal Retirement Age” issue. The new date of compliance is January 1, 2015 as outlined in the below text:
The IRS and Treasury intend to amend the 2007 NRA regulations to change the effective date for governmental plans to annuity starting dates that occur in plan years beginning on or after the later of (1) January 1, 2015 or (2) the close of the first regular legislative session of the legislative body with the authority to amend the plan that begins on or after the date that is 3 months after the final regulations are published in the Federal Register. Governmental plan sponsors may rely on this notice with respect to the extension until such time as the 2007 NRA regulations are so amended.
Additionally, as I reported earlier, plans such as Wisconsin’s, that do not have “in service distributions”, will not be affected by any changes. (Still looking as to any potential impact on Milwaukee County’s plan).
Joseph M. Conway, Jr.
Department of Employee Trust Funds
The Department of Employee Trust Funds (ETF), which administers the Wisconsin Retirement System (WRS), continues to track an Internal Revenue Service (IRS) regulation regarding the definition of “normal retirement age” (the age at which one can retire with an unreduced benefit) for governmental plans. The regulation is effective January 1, 2013. There has been widespread concern that this rule would raise the normal retirement age for police officers, firefighters, and other protective-class employees in the WRS. Currently, the normal retirement age requirements for these protective-class employees are 54 years with less than 25 years of service, or 53 with 25 years or more of service. Read the entire story by clicking here.