LRB-4980/1
MIM:kjf&ahe
2019 - 2020 LEGISLATURE
December 6, 2019 - Introduced by Senators Stroebel and Petrowski, cosponsored
by Representatives Felzkowski, Katsma, Dittrich, Edming, Krug, L. Myers,
Quinn, Rohrkaste, Snyder and Wichgers. Referred to Committee on
Government Operations, Technology and Consumer Protection.
SB612,1,8 1An Act to amend 40.22 (1), 40.22 (2m) (intro.), 40.22 (2r) (intro.), 40.22 (3)
2(intro.), 40.23 (1) (a) (intro.), 40.23 (1) (am) 2., 40.23 (1) (bm), 40.24 (1) (f), 40.25
3(2), 40.26 (1m) (a), 40.26 (1m) (b), 40.26 (5) (intro.) and 40.63 (7); and to create
440.26 (6), 40.26 (7) and 40.26 (8) of the statutes; relating to: increasing the
5minimum retirement age under the Wisconsin Retirement System; decreasing
6the minimum break in service for annuitants in the Wisconsin Retirement
7System who are rehired by a participating employer; and allowing rehired
8annuitants to elect to not participate in the Wisconsin Retirement System.
Analysis by the Legislative Reference Bureau
This bill makes a number of changes to the Wisconsin Retirement System
(WRS). Currently, under the WRS, participants who are not protective occupation
participants may retire as early as age 55 and qualify for an immediate annuity from
the WRS. This bill increases the minimum retirement age to the greater of age 59.5
or the age at which the Internal Revenue Service does not penalize a person for
taking a distribution from a 401 (k) plan. This change in the minimum retirement
age first applies to individuals who are under the age of 40 on the bill's effective date
and who terminate WRS-covered employment on or after the bill's effective date.
This bill also allows an annuitant who is hired by a WRS employer as an
employee or to provide employee services to elect to not suspend his or her annuity

for not more than a total of 36 months. The bill also requires the Department of
Employee Trust Funds to submit an annual report to the governor and the
legislature that provides information about annuitants who are hired to positions
and who elect to not suspend their annuities. Under current law, if a WRS annuitant,
or a disability annuitant who has attained his or her normal retirement date, is
appointed to a position with a WRS-participating employer, or provides employee
services to a WRS-participating employer in which he or she is expected to work at
least two-thirds of what is considered full-time employment by DETF, the annuity
must be suspended and no annuity payment is payable until after the participant
again terminates covered employment.
Finally, under current law, a WRS participant who has applied to receive a
retirement annuity must wait at least 75 days between terminating covered
employment with a WRS employer and returning to covered employment again as
a participating employee. This bill reduces that period to 45 days.
Because this bill relates to public employee retirement or pensions, it may be
referred to the Joint Survey Committee on Retirement Systems for a report to be
printed as an appendix to the bill.
For further information see the state and local fiscal estimate, which will be
printed as an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
SB612,1 1Section 1. 40.22 (1) of the statutes is amended to read:
SB612,2,62 40.22 (1) Except as otherwise provided in sub. (2) and s. 40.26 (6), each
3employee currently in the service of, and receiving earnings from, a state agency or
4other participating employer shall be included within the provisions of the Wisconsin
5retirement system as a participating employee of that state agency or participating
6employer.
SB612,2 7Section 2. 40.22 (2m) (intro.) of the statutes is amended to read:
SB612,3,28 40.22 (2m) (intro.) An Except as otherwise provided in s. 40.26 (6), an employee
9who was a participating employee before July 1, 2011, who is not expected to work
10at least one-third of what is considered full-time employment by the department,
11as determined by rule, and who is not otherwise excluded under sub. (2) from
12becoming a participating employee shall become a participating employee if he or she

1is subsequently employed by the state agency or other participating employer for
2either of the following periods:
SB612,3 3Section 3. 40.22 (2r) (intro.) of the statutes is amended to read:
SB612,3,104 40.22 (2r) (intro.) An Except as otherwise provided in s. 40.26 (6), an employee
5who was not a participating employee before July 1, 2011, who is not expected to work
6at least two-thirds of what is considered full-time employment by the department,
7as determined by rule, and who is not otherwise excluded under sub. (2) from
8becoming a participating employee shall become a participating employee if he or she
9is subsequently employed by the state agency or other participating employer for
10either of the following periods:
SB612,4 11Section 4. 40.22 (3) (intro.) of the statutes is amended to read:
SB612,3,1412 40.22 (3) (intro.) A Except as otherwise provided in s. 40.26 (6), a person who
13qualifies as a participating employee shall be included within, and shall be subject
14to, the Wisconsin retirement system effective on one of the following dates:
SB612,5 15Section 5. 40.23 (1) (a) (intro.) of the statutes is amended to read:
SB612,3,2216 40.23 (1) (a) (intro.) Except as provided in par. (am), any participant who has
17attained age 55 59.5 or the age under 26 USC 401 (k) (2) (B) (III), whichever is
18greater
, and any protective occupation participant who has attained age 50, on or
19before the annuity effective date shall be entitled to a retirement annuity in
20accordance with the actuarial tables in effect on the effective date of the annuity if
21the participant submits an application for a retirement annuity on a form furnished
22by the department and all of the following apply:
SB612,6 23Section 6. 40.23 (1) (am) 2. of the statutes is amended to read:
SB612,4,1324 40.23 (1) (am) 2. Any participant who has attained age 55 59.5 or the age under
2526 USC 401 (k) (2) (B) (III), whichever is greater,
and who is a participant because

1of employment other than part-time service as an elected official and who is also a
2participating employee because of part-time service as an elected official and any
3protective occupation participant who has attained age 50 and who is also a
4participating employee because of part-time service as an elected official may, after
5termination of all covered employment other than service as a part-time elected
6official, waive further participation under the fund for his or her current, and any
7future, part-time service as an elected official. Any election under this paragraph
8is irrevocable and is effective beginning the day after the date of election.
9Notwithstanding par. (a), any participant who elects under this paragraph may
10receive a retirement annuity for all service under the fund credited to the participant
11to the date he or she elects. The date a participant elects under this paragraph is
12deemed to be the date of separation from the last participating employer by which
13that participant was employed.
SB612,7 14Section 7. 40.23 (1) (bm) of the statutes is amended to read:
SB612,4,2115 40.23 (1) (bm) If an application by a participant age 55 59.5 or the age under
1626 USC 401 (k) (2) (B) (III), whichever is greater,
or over, or by a protective occupation
17participant age 50 or over, for long-term disability insurance benefits is disapproved
18under rules promulgated by the department, the date which would have been the
19effective date for the insurance benefits shall be the retirement annuity effective
20date if requested by the applicant within 60 days of the disapproval or, if the
21disapproval is appealed, within 60 days of the final disposition of the appeal.
SB612,8 22Section 8. 40.24 (1) (f) of the statutes is amended to read:
SB612,5,1123 40.24 (1) (f) From accumulated additional contributions made under s. 40.05
24(1) (a) 5. only, an annuity certain payable for and terminating after the number of
25months specified by the applicant, regardless of whether the applicant dies before or

1after the number of months specified, provided that the monthly amount of the
2annuity certain is at least equal to the minimum amount established under s. 40.25
3(1) (a). Subject to the period of distribution required under s. 40.23 (4) (b) 2., the
4number of months specified shall not exceed 180 and shall not be less than 24. If the
5death of the annuitant occurs prior to the expiration of the certain period, the
6remaining payments shall be made in accordance with s. 40.73 (2) without regard to
7any other annuity payments payable to the beneficiary. An annuity under this
8paragraph may be initiated prior to any other annuity amount provided under this
9subchapter and prior to age 55 59.5 or the age under 26 USC 401 (k) (2) (B) (III),
10whichever is greater,
if all other qualifications for receiving an annuity payment are
11met.
SB612,9 12Section 9. 40.25 (2) of the statutes is amended to read:
SB612,5,2213 40.25 (2) Subject to sub. (2t), if all requirements for payment of a retirement
14annuity are met except attainment of age 55 59.5 or the age under 26 USC 401 (k)
15(2) (B) (III), whichever is greater,
or age 50 for protective occupation participants, a
16separation benefit may be paid, if the participant's written application for a
17separation benefit is received by the department prior to the participant's 55th
18birthday
date the participant would be 59.5 years old, or the age under 26 USC 401
19(k) (2) (B) (III), whichever is greater,
or the participant's 50th birthday for protective
20occupation participants, in an amount equal to the additional and employee required
21contribution accumulations of the participant on the date the application for a
22separation benefit is approved.
SB612,10 23Section 10. 40.26 (1m) (a) of the statutes is amended to read:
SB612,6,524 40.26 (1m) (a) If Except as otherwise provided in sub. (6), a participant
25receiving a retirement annuity, or a disability annuitant who has attained his or her

1normal retirement date, is employed in a position in covered employment in which
2he or she is expected to work at least two-thirds of what is considered full-time
3employment by the department, as determined under s. 40.22 (2r), the participant's
4annuity shall be suspended and no annuity payment shall be payable until after the
5participant terminates covered employment.
SB612,11 6Section 11. 40.26 (1m) (b) of the statutes is amended to read:
SB612,6,147 40.26 (1m) (b) If Except as otherwise provided in sub. (6), a participant
8receiving a retirement annuity, or a disability annuitant who has attained his or her
9normal retirement date, enters into a contract to provide employee services with a
10participating employer and he or she is expected to work at least two-thirds of what
11is considered full-time employment by the department, as determined under s. 40.22
12(2r), the participant's annuity shall be suspended and no annuity payment shall be
13payable until after the participant no longer provides employee services under the
14contract.
SB612,12 15Section 12. 40.26 (5) (intro.) of the statutes is amended to read:
SB612,6,2016 40.26 (5) (intro.) If a participant applies for an annuity or lump sum payment
17during the period in which less than 75 45 days have elapsed between the
18termination of employment with a participating employer and becoming a
19participating employee with any participating employer, all of the following shall
20apply:
SB612,13 21Section 13. 40.26 (6) of the statutes is created to read:
SB612,6,2422 40.26 (6) A participant may elect to not suspend his or her retirement annuity
23or disability annuity under sub. (1m) for not more than a total of 36 months if all of
24the following conditions are met:
SB612,7,4
1(a) At the time the participant terminates his or her employment with a
2participating employer, the participant does not have an agreement with any
3participating employer to return to employment or enter into a contract to provide
4employee services for the employer.
SB612,7,75 (b) The participating employer who employs the participant or enters into a
6contract to receive employee services from the participant indicates all of the
7following on a form provided by the department:
SB612,7,88 1. How the vacancy that the participant is filling was created.
SB612,7,99 2. Where notice of the vacancy that the participant is filling was posted.
SB612,7,1110 3. Whether the participant will earn a higher salary than he or she did in his
11or her previous position with a participating employer.
SB612,7,1312 4. If the participant will earn a higher salary than he or she did in his or her
13previous position with a participating employer, the reason for the increase in salary.
SB612,7,1514 5. The employment category of the participant in his or her previous position,
15and the employment category of the position the participant is filling.
SB612,14 16Section 14. 40.26 (7) of the statutes is created to read:
SB612,7,1817 40.26 (7) The department shall maintain a list of participants who make an
18election under sub. (6), which shall include all of the following:
SB612,7,1919 (a) The information required under sub. (6) (b) 1.
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