Amendment ASA1-AB196

2025 - 2026 LEGISLATURE

LRBs0327/1

MIM:ajk

ASSEMBLY SUBSTITUTE AMENDMENT 1, TO ASSEMBLY BILL 196

February 3, 2026 - Offered by Representative Wittke.

AB196-ASA1,1,4 An Act to repeal 40.26 (5m), 40.26 (6) and 323.19 (3); to amend 40.22 (1), 40.22 (2m) (intro.), 40.22 (2r) (intro.), 40.22 (3) (intro.), 40.26 (1m) and 40.26 (5) (intro.); to create 40.04 (5) (am) and 40.26 (7), (8) and (9) of the statutes; relating to: rehired annuitants in the Wisconsin Retirement System.

Analysis by the Legislative Reference Bureau

Under current law, certain individuals who receive a retirement or disability annuity from the Wisconsin Retirement System (WRS) and who are hired by an employer that participates in the WRS must suspend that annuity and may not receive a WRS annuity payment until they are no longer in a WRS-covered position. This suspension applies to an annuitant who 1) has reached his or her normal retirement date; 2) is appointed to a position with a WRS-participating employer; and 3) is expected to work at least two-thirds of what is considered full-time employment by the Department of Employee Trust Funds.

This bill allows such an annuitant who is hired by a WRS-participating employer as an employee or to provide employee services to not suspend his or her annuity for up to 60 months. Under the bill, participants who retired as jailers or protective occupation participants are not subject to the 60-month limitation.

The bill requires WRS-participating employers that hire such annuitants to first attempt for 90 days to hire individuals who are not WRS annuitants to fill the positions. The bill also requires such employers that hire WRS annuitants to make payments to ETF equal to what they would have paid as required contributions for each rehired annuitant if the rehired annuitant had suspended his or her annuity. Under the bill, these payments are deposited into the employer reserve account.

If the annuitant does not suspend the annuity and does not become an active WRS-participating employee, in the case of state employment, the annuitant is not eligible for group insurance benefits provided to active WRS-participating employees and may not use any of his or her service in the new position for any WRS purposes. If the annuitant opts to again become an active WRS-participating employee, the annuitant is eligible for all group insurance benefits provided to other participating employees and may accumulate additional years of creditable service under the WRS for the new period of WRS-covered employment.

Under current law, a WRS participant who applies for a retirement annuity must wait at least 75 days between the termination of employment with his or her WRS-participating employer and returning to covered employment with any WRS-participating employer. The bill increases this required break in service from 75 to 180 days.

Finally, the bill also repeals two obsolete provisions related to WRS annuitants returning to WRS-covered employment during the public health emergency declared on March 12, 2020, by executive order 72, which ended on May 13, 2020.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

AB196-ASA1,1 Section 1. 40.04 (5) (am) of the statutes is created to read:

AB196-ASA1,2,2 40.04 (5) (am) Credited all employer payments made under s. 40.26 (9).

AB196-ASA1,2 Section 2. 40.22 (1) of the statutes is amended to read:

AB196-ASA1,2,8 40.22 (1) Except as otherwise provided in sub. (2) and s. 40.26 (6) (7), each employee currently in the service of, and receiving earnings from, a state agency or other participating employer shall be included within the provisions of the Wisconsin retirement system as a participating employee of that state agency or participating employer.

AB196-ASA1,3 Section 3. 40.22 (2m) (intro.) of the statutes is amended to read:

AB196-ASA1,3,7 40.22 (2m) (intro.) Except as otherwise provided in s. 40.26 (6) (7), an employee who was a participating employee before July 1, 2011, who is not expected to work at least one-third of what is considered full-time employment by the department, as determined by rule, and who is not otherwise excluded under sub. (2) from becoming a participating employee shall become a participating employee if he or she is subsequently employed by the state agency or other participating employer for either of the following periods:

AB196-ASA1,4 Section 4. 40.22 (2r) (intro.) of the statutes is amended to read:

AB196-ASA1,3,15 40.22 (2r) (intro.) Except as otherwise provided in s. 40.26 (6) (7), an employee who was not a participating employee before July 1, 2011, who is not expected to work at least two-thirds of what is considered full-time employment by the department, as determined by rule, and who is not otherwise excluded under sub. (2) from becoming a participating employee shall become a participating employee if he or she is subsequently employed by the state agency or other participating employer for either of the following periods:

AB196-ASA1,5 Section 5. 40.22 (3) (intro.) of the statutes is amended to read:

AB196-ASA1,3,19 40.22 (3) (intro.) Except as otherwise provided in s. 40.26 (6) (7), a person who qualifies as a participating employee shall be included within, and shall be subject to, the Wisconsin retirement system effective on one of the following dates:

AB196-ASA1,6 Section 6. 40.26 (1m) of the statutes is amended to read:

AB196-ASA1,4,4 40.26 (1m) (a) Except as otherwise provided in sub. (6) (7), if a participant receiving a retirement annuity, or a disability annuitant who has attained his or her normal retirement date, is employed in a position in covered employment in which he or she is expected to work at least two-thirds of what is considered full- time employment by the department, as determined under s. 40.22 (2r), the participant’s annuity shall be suspended and no annuity payment shall be payable until after the participant terminates covered employment.

AB196-ASA1,4,12 (b) Except as otherwise provided in sub. (6) (7), if a participant receiving a retirement annuity, or a disability annuitant who has attained his or her normal retirement date, enters into a contract to provide employee services with a participating employer and he or she is expected to work at least two-thirds of what is considered full-time employment by the department, as determined under s. 40.22 (2r), the participant’s annuity shall be suspended and no annuity payment shall be payable until after the participant no longer provides employee services under the contract.

AB196-ASA1,7 Section 7. 40.26 (5) (intro.) of the statutes is amended to read:

AB196-ASA1,4,18 40.26 (5) (intro.) Except as otherwise provided in sub. (5m), if If a participant applies for an annuity or lump sum payment during the period in which less than 75 180 days have elapsed between the termination of employment with a participating employer and becoming a participating employee with any participating employer, all of the following shall apply:

AB196-ASA1,8 Section 8. 40.26 (5m) of the statutes is repealed.

AB196-ASA1,9 Section 9. 40.26 (6) of the statutes is repealed.

AB196-ASA1,10 Section 10. 40.26 (7), (8) and (9) of the statutes are created to read:

AB196-ASA1,5,5 40.26 (7) Except as provided in sub. (8), beginning on the effective date of this subsection .... [LRB inserts date], a participant may elect to not suspend his or her retirement annuity or disability annuity under sub. (1m) for up to 60 months, which need not be consecutive, if the participant applies for an annuity or lump sum payment after at least 180 days have elapsed since the participant’s termination of employment with a participating employer and prior to becoming an employee with a participating employer if all of the following conditions are met:

AB196-ASA1,5,7 (a) The participant terminates his or her employment with a participating employer after July 2, 2013.

AB196-ASA1,5,13 (b) At the time the participant terminates his or her employment with a participating employer, the participant does not have an agreement with any participating employer to return to employment or enter into a contract to provide employee services for a participating employer and complies with 26 CFR 1.401-1 (a) (2) (i) and requirements set by the federal department of the treasury for bona fide separation from service.

AB196-ASA1,5,18 (c) Notwithstanding any provision of ch. 63 or 230, any local ordinance or law, or any collective bargaining agreement, the participating employer actively sought for at least 90 days an applicant who is not a participant receiving a retirement annuity, or a disability annuitant who has attained his or her normal retirement date, for the position and has been unable to fill the position with such an applicant.

AB196-ASA1,5,20 (d) The participant elects on a form provided by the department to not become a participating employee.

AB196-ASA1,5,22 (8) The 60-month limitation under sub. (7) does not apply to any of the following:

AB196-ASA1,5,24 (a) A participant who retired from service as a county jailer and who was not a protective occupation participant.

AB196-ASA1,6,2 (b) A protective occupation participant who retired from a protective occupation under the Wisconsin Retirement System.

AB196-ASA1,6,7 (9) Each participating employer that hires a participant who has elected to not suspend his or her annuity under sub. (7) shall make payments to the department that are equal to the amount of contributions that would have been required to be paid for that employee under s. 40.05 (2) (a). All payments under this subsection shall be credited to the account under s. 40.04 (5) (am).

AB196-ASA1,11 Section 11. 323.19 (3) of the statutes is repealed.

AB196-ASA1,12 Section 12. Initial applicability.

AB196-ASA1,6,13 (1) This act first applies to positions affected by a collective bargaining agreement containing provisions inconsistent with this act upon the renewal, modification, or extension of the agreement occurring on or after the effective date of this subsection.

AB196-ASA1,6,14 (end)