Please direct any questions about the final rule to Daniel Hayes, Attorney, Department of Employee Trust Funds, P.O. Box 7931, Madison WI 53707. Telephone: (608) 266‑0222. E-mail address: daniel.hayes@etf.wi.gov. Statement Explaining Need for Rule
This rulemaking is needed to make technical updates to ETF rules by removing obsolete language, adjusting language to account for changes in Federal and Wisconsin law, and correcting references to repealed or renumbered statutes.
Analysis Prepared by the Department of Employee Trust Funds
1. Statutes interpreted:
2. Statutory authority:
3. Explanation of agency authority:
By statute, the ETF Secretary is expressly authorized, with approval by the Employee Trust Funds Board, Teachers Retirement Board and Wisconsin Retirement Board to promulgate rules that are required for the efficient administration of the fund or of any of the benefit plans established by ch. 40 of the Wisconsin Statutes. In addition, each state agency may promulgate rules interpreting the provisions of any statute enforced or administered by the agency if the agency considers it necessary to effectuate the purpose of the statute.
4. Related statutes or rules:
There are no other related statutes or administrative rules directly related to this rule.
5. Brief summary of the final rule:
The objective of this rule is to make technical updates to existing ETF rules, delete obsolete language in ETF rules, and make other minor substantive changes. ETF rules are modified by:
Updating the code to be consistent with required minimum distribution provisions of the federal Setting Every Community Up for Retirement Enhancement (SECURE) Act, SECURE 2.0 Act and 2021 Wisconsin Act 245.
Updating the definition of “guardian” to be consistent with changes in the child guardianship law.
Removing obsolete sections related to Social Security wage reporting requirements because the Social Security Administration no longer has authority to collect those reports.
Adding a reference to the Chapter 244 definition of “incapacity” to power of attorney requirements.
Clarifying that sick leave must be earned during participating employment to be used in the calculation of accumulated sick leave credits. Examples of situations where clarity is needed include when a rehired annuitant comes back to non-participating employment in which they earn sick leave and certain employees who earn sick leave for non-participating employment but eventually move to participating employment. When such employees terminate, only the sick leave earned in participating employment should be certified for the sick leave programs in order to ensure those programs are adequately funded.
Amending the code to round an annuity applicant’s age to the nearest month, rather than the nearest quarter year for annuity option conversion purposes.
Deleting a reference to the private employer health care coverage program and board because that program and board do not currently exist.
Providing for the termination of a disability annuity for fraud, misrepresentation, error, or mistake; this language is consistent with the text in ETF 50.56 (2), which relates to Long Term Disability Insurance (LTDI) benefits.
Clarifying the effective date of the suspension of LTDI benefits when a recipient exceeds the earnings limit.
Clarifying that an employee who did not meet any qualifying criteria prior to retirement, and who never returned to work after their date of injury, qualifies for duty disability benefits under the “reduction in position” eligibility provision.
Deleting obsolete, minor provisions related to duty disability applications filed prior to May 3, 1988, and January 1, 1995; and
Making the code consistent with statutory language regarding duty disability appeals being filed with the division of hearings and appeals in the department of administration. 6. Summary of, and comparison with, existing or proposed federal statutes and regulations:
The required minimum distribution (RMD) provisions of the of the federal SECURE Act are codified at 26 U.S.C. § 401 (a) (9). Recent amendments change the required beginning date for RMDs. The Wisconsin Retirement System is a qualified plan under the federal Internal Revenue Code and must comply with 26 U.S.C. § 401 (a) (9).
7. Comparison with rules in adjacent states:
As the changes are technical updates to correct obsolete language and make ETF rules consistent with recent changes in Wisconsin law, there is no directly applicable comparison to adjacent states. Periodically, similar agencies in adjacent states promulgate technical rules to update existing administrative rules.
8. Summary of factual data and analytical methodologies:
Due to changes in Federal and Wisconsin law, the ETF rules contain obsolete regulatory provisions, terms, and cross-references. The technical changes would allow ETF rules to be consistent with recent changes in Federal and Wisconsin law, rather than continuing with outdated language in the code. Additionally, correction of obsolete terms will make the ETF rules more accurate and prevent confusion by those subject to the rules.
9. Analysis and supporting documents used to determine effect on small business or in preparation of economic impact analysis:
This rule does not have an effect on small businesses because private employers and their employees do not participate in, and are not covered by, the Wisconsin Retirement System. Please see attached economic impact analysis.
10. Effect on small business:
The rule has no effect on small businesses.
Regulatory Flexibility Analysis:
The final rule has no effect on small businesses because only governmental employers and their employees may participate in the benefit programs under ch. 40 of the statutes administered by the Department of Employee Trust Funds. Fiscal Estimate and Economic Impact Statement:
Please see the attached fiscal estimate.
Text of Final Rule
SECTION 1. ETF 10.01 (3d) is amended to read:
ETF 10.01 (3d) “Guardian" has the meaning given in s. 54.01 (10), Stats., and includes conservators appointed pursuant to s. 54.76, Stats. For minor children, “Guardian” also has the meaning given in s. 48.02 (8), Stats., and includes the authority provided in s. 48.023, Stats. SECTION 2. ETF 10.50 is renumbered ETF 10.50 (1).
SECTION 3. ETF 10.50 (2) is created to read:
ETF 10.50 (2) Only participating employment and sick leave earned during participating employment can be used in the calculation of credits under ss. 40.05 (4) and 40.95, Stats. SECTION 4. ETF 10.61 and 10.62 are repealed.
SECTION 5. ETF 10.64 (1) is amended to read:
ETF 10.64 (1) Except as provided in s. ETF 10.63 (2) and (3) and this subsection, any report or remittance not received within the period specified in this chapter, ch. 40, Stats., or an insurance contract between the group insurance board and an insurance carrier shall be subject to the charges and interest calculated in accordance with the provisions of s. 40.06, Stats. Reports and remittances required under ss. ETF 10.61, 10.62 and s. 10.63 (1) (f) are not subject to the interest charges under s. 40.06 (5), Stats. SECTION 6. ETF 10.75 (2) (e) is amended to read:
ETF 10.75 (2) (e) If the power of attorney is conditioned on the incapacitation of the principal, upon request of the department or the Wisconsin deferred compensation program administrator the agent provides evidence satisfactory to the department or the Wisconsin deferred compensation program administrator that the principal has become incapacitated. “Incapacity” has the meaning given in s. 244.02 (7), Stats. SECTION 7. ETF 10.82 (2) (f) 1. is renumbered ETF 10.82 (2) (f).
SECTION 8. ETF 10.82 (2) (f) 3. is repealed.
SECTION 9. ETF 20.03 (1) is amended to read:
ETF 20.03 (1) For purposes of annuity computations, other than option conversion, an applicant's age shall be determined to the nearest month. For option conversion purposes, an applicant's age shall be determined to the quarter year.
SECTION 10. ETF 20.07 (3), (5), and (5) (Note) are amended to read:
