MADISON – The University of Wisconsin System Board of Regents will consider legislative drafting instructions creating an Optional Retirement System (ORS) to be sent to the legislature at its May 6-7 meeting at UW-Parkside.
The Board action is the final step in meeting a legislative mandate that requires the Board to submit legislation creating an ORS to the legislature by June 1, 1999.
The proposal would allow newly hired UW faculty and academic staff joining the System in academic year 2001-02 to choose between the current Wisconsin Retirement System (WRS) and individually directed retirement accounts.
“Creation of an ORS along with enhancements to the WRS and first day pick up of health insurance with an ability to offer competitive salaries as outlined in the Governors budget is important to making the UW System competitive as we recruit faculty and academic staff,” said UW System Senior Vice President for Administration David W. Olien.
“An ORS will allow the UW System to compete in todays market for highly mobile educators by allowing them to bring their retirement accounts to Wisconsin,” said UW System Associate Vice President George Brooks.
The UW System Administration recommends that the state Employe Trust Funds Board serve as the Plan Sponsor to establish the ORS. The Department of Employe Trust Funds (ETF) currently manages a large and sophisticated retirement plan for public employees as well as a major supplemental retirement plan, the Wisconsin Deferred Compensation Program.
“ETF is highly respected with the UW community and nationally. The UW System has complete faith in their ability to run a fair and competitive ORS,” said Brooks.
He added, “We feel that with the ETF serving as the plan sponsor, not only will the necessary expertise be provided, but substantial administrative costs will be saved compared to what it would cost the UW System to administer the program starting from scratch.”
Other provisions of the drafting instructions include:
Authorizing ETF to determine retirement contribution rates to ensure equity among all employee groups.
Continuing full state funding of retirement plans.
New employees will be given a one-time choice to select a retirement plan and will be solely responsible for any of the consequences of their choice.
The UW System President will name a nine member advisory board to ETF on implementation and administration of ORS.
ORS participants will remain eligible for all other UW fringe benefits.
David W. Olien