Employee Trust Funds - Employee Trust Funds Secured ...
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July 30, 2008
MARK BUIS
GABRIEL ROEDER SMITH & CO
ONE TOWNE SQUARE SUITE 800
SOUTHFIELD MI 48076-3723
Dear Mark:
I am writing in regard to the new Other Governmental Service (OGS) cost calculator. As the Department has now received assurances that GRS will be able to incorporate participants’ accrued service by employment category into a new OGS cost calculation methodology, we wish to proceed with developing a new calculator.
Since you have advised us that you cannot meet the technical requirements specified in my February 11, 2008, letter for developing the actual calculation program, we would like GRS to provide the methodology and factor tables for the new OGS calculations but not develop the actual calculator. It is our understanding from your letter of August 2, 2007, that the fee for providing the formulas and table of factors to calculate the cost of OGS would be about $10,000 to $15,000. We are now requesting a specific cost for providing the methodology for calculating the cost of OGS. A list of the data to be used in the calculation is enclosed.
There is one additional consideration; as noted in my February 11, 2008, letter, the Employee Trust Funds Board has expressed interest in a statutory change that would expand OGS to include certain non-covered employment with a WRS employer that currently cannot be purchased. Under this proposed change, that employment could be purchased in whatever employment category the service would have been credited if it had been covered under the WRS. Because of this potential change, the OGS methodology may need to be expanded in the future to allow calculating the cost of OGS in different employment categories.
Please let me know if you have questions or would like any further information.
Sincerely,
Linda Owen, Benefit Plan Policy Analyst
Division of Retirement Services
(608) 261-8164
linda.owen@etf.state.wi.us
Participant Data to Be Used in Cost Calculation
• Participant’s date of birth;
• Current employment category;
• January 1 fixed employee required contribution balance, and variable employee required contribution balance if applicable; (deleted)
• Variable excess/deficiency balance, if applicable; (deleted)
• Final average annual earnings (based on 3 high years) as of last completed annual earnings period;
• Earnings for last completed annual earnings period;
• Years of pre-2000 and post-1999 years of OGS to be purchased;
• Years of current (as of January 1) pre-2000 and post-1999 creditable service by employment category.
• Purchase date. As with the existing OGS program, the purchase date is January 1 of the year in which the service will be purchased (or has been purchased if we are auditing the cost calculation in a calendar year after the service purchase).
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801 W Badger Road
PO Box 7931
Madison WI 53707-7931
1-877-533-5020 (toll free)
Fax (608) 267-4549
STATE OF WISCONSIN
Department of Employee Trust Funds
David A. Stella
SECRETARY
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