Chapter ETF 70

ETF 70.08(2) (2) Investment providers shall not be allowed to assess any direct or indirect costs to members.

ETF 70.08(3) (3) Based on the board’s review required under s. ETF 70.03 (10), the board may determine that an investment product offered by the primary plan or an alternate plan is no longer acceptable for inclusion in the program. If the board decides to remove an investment product from the plan as a result of the product’s failure to meet the criteria as established under s. ETF 70.03 (9), the product shall be phased out of the primary or alternate plan in a 2-step process over a 90-day period that shall commence on the first business day of the 3rd month following the board’s decision, as follows:

ETF 70.08(3)(a) (a) Phase 1 of the investment product termination process shall last for 45 days during which time current members and employees newly enrolling in the primary or alternate plan shall be informed in writing that the terminating investment product does not meet board’s evaluation criteria and that this investment product is not open to new enrollments, and all of the following shall occur:

ETF 70.08(3)(a)1. 1. Any members already deferring to the terminating investment product shall be informed in writing that they need to redirect future deferrals from this product to an alternative investment product offered by the primary or alternate plan by notifying the administrator of their new investment choice.

ETF 70.08(3)(a)2. 2. At the end of the 45-day period, the board shall instruct the administrator to automatically redirect any member’s deferrals that have not been redirected to an alternative investment product from the terminated product into a board designated alternative investment product offered by the primary or alternate plan.

ETF 70.08(3)(a)3. 3. Existing member account balances shall be allowed to remain in the terminating investment product during this period.

ETF 70.08(3)(b) (b) Phase 2 of the investment product termination process immediately follows the first 45-day period and provides an additional 45-day period during which time members shall transfer existing balances from the terminating product to another investment product offered by the primary or alternate plan, and all of the following shall occur:

ETF 70.08(3)(b)1. 1. If at the end of the additional 45-day period, any member has failed to move a remaining account balance from the terminated fund, the board shall instruct the administrator to automatically move that member’s account balance into a board designated alternative investment product offered by the primary or alternate plan.

ETF 70.08(3)(b)2. 2. During the phase out process and at any time prior to the end of the second phase, the board may re-examine the performance of the terminating investment product to determine if continued plan participation is justified.

ETF 70.08 History History: Cr. Register, June, 1992, No. 438, eff. 7-1-92; CR 08-016: am. (3) (intro.) Register August 2008 No. 632, eff. 9-1-08; correction in (1), (3), made under s. 13.92 (4) (b) 7., Stats., Register July 2012 No. 679, eff. 8-1-12; CR 19-126: am. (3) (intro.), (a) (intro.), 2., (b) (intro.), 1. Register May 2021 No. 785, eff. 6-1-21; correction in (3) (intro.) made under s. 35.17, Stats., Register May 2021 No. 785.

ETF 70.09 ETF 70.09 Member responsibilities.

ETF 70.09(1) (1) Employees electing to become a member of the primary or an alternate plan shall sign a memorandum of understanding prior to enrolling to certify that all program requirements and regulations have been clearly explained.

ETF 70.09(2) (2) A member shall select one administrator for his or her deferrals. A member may not simultaneously defer earnings to the primary plan and an alternate plan.

ETF 70.09(3) (3) Each member shall review information provided by the administrator and the department about the investment type and performance of the investment products offered to determine which investment products best meet the member’s individual needs and financial objectives.

ETF 70.09(4) (4) Each member shall monitor his or her own annual deferral amounts to ensure the amount does not exceed the maximum deferral amount allowed under internal revenue code section 457.

ETF 70.09 History History: Cr. Register, June, 1992, No. 438, eff. 7-1-92; CR 14-055: r. (5) Register May 2015 No. 713, eff. 6-1-15.

ETF 70.10 ETF 70.10 Emergency withdrawals.

ETF 70.10(1) (1) A participant or beneficiary may make emergency withdrawals in the event of an unforeseeable emergency under the following conditions and limitations:

ETF 70.10(1)(a) (a) As defined in 26 USC 457 (b) (5) and 26 CFR 1.457-2 (h) (4), an unforeseeable emergency is one which causes severe financial hardship to the participant or beneficiary as a result of a sudden and unexpected illness or accident of the participant or beneficiary or of a dependent of the participant or beneficiary, loss of the participant’s or beneficiary’s property due to casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the participant or beneficiary.

ETF 70.10 Note Note: “A dependent of the participant” as used here is defined by the secretary of the treasury as one specified in 26 USC 152 (a).

ETF 70.10(1)(b) (b) The need to send a participant’s or beneficiary’s child to college or the desire to purchase a home are examples of what are not unforeseeable emergencies.

ETF 70.10(1)(c) (c) The facts of each case shall be ascertained to determine if the circumstances constitute an unforeseeable emergency.

ETF 70.10(1)(d) (d) Withdrawal payment may not be made to the extent that the hardship is or may be relieved:

ETF 70.10(1)(d)1. 1. Through reimbursement or compensation by insurance or otherwise,

ETF 70.10(1)(d)2. 2. By liquidation of the participant’s or beneficiary’s assets to the extent the liquidation of these assets would not itself cause severe financial hardship, or

ETF 70.10(1)(d)3. 3. By cessation of deferrals under the plan.

ETF 70.10(1)(e) (e) The withdrawal, because of an unforeseeable emergency, shall be limited to an amount reasonably needed to satisfy the emergency need.

ETF 70.10(2) (2) The administrator shall:

ETF 70.10(2)(a) (a) Receive requests from participants or beneficiaries for unforeseeable emergency withdrawals,

ETF 70.10(2)(b) (b) Investigate and document the facts on a form prescribed by the department, and

ETF 70.10(2)(d) (d) Within 5 working days after the receipt of the information requested from the employer or other parties, either render a decision or make a recommendation to the department on a form prescribed by the department.

ETF 70.10(6) (6) The department shall prepare a report on unforeseeable emergency withdrawal activity since the last meeting of the board for presentation at the following meeting of the board.

ETF 70.10 History History: Cr. Register, June, 1985, No. 354, eff. 7-1-85; renum. from ETF 10.01, Register, June, 1992, No. 438, eff. 7-1-92; CR 08-016: am. (intro.), (1) (a), (b), (d) 2. and (2) (a) Register August 2008 No. 632, eff. 9-1-08; CR 14-055: am. (2) (intro.), r. (2) (c), am. (2) (d), r. (3) to (5) Register May 2015 No. 713, eff. 6-1-15; correction in (2) (b) made under s. 35.17, Stats., Register May 2015 No. 713.

subch. II of ch. ETF 70 Subchapter II — State Deferred Compensation Plan for Local Employees

ETF 70.11 ETF 70.11 Participation in the deferred compensation plan. The governing body of any employer as defined under s. 40.02 (28), Stats., other than the state, may provide the state’s deferred compensation plan for its employees by the adoption of a resolution in the form approved by the department. The employer shall forward a certified copy of the resolution to the department and the then current administrative plan provider as defined in s. 40.02 (18s), Stats.

ETF 70.11 History History: Cr. Register, June, 1985, No. 354, eff. 7-1-85; renum. from ETF 70.10, Register, June, 1992, no. 438, eff. 7-1-92.

ETF 70.12 ETF 70.12 Effective date. Local implementation of the deferred compensation plan and enrollment of eligible employees may begin immediately upon acceptance, by the department, of the resolution under s. ETF 70.11.

ETF 70.12 History History: Cr. Register, June, 1985, No. 354, eff. 7-1-85; CR 14-055: am. Register May 2015 No. 713, eff. 6-1-15.

ETF 70.15 ETF 70.15 Terminating participation in the deferred compensation plan. The governing body of an employer, other than the state, may terminate participation in the state deferred compensation plan after a minimum of one year from the date the certified copy of the resolution required under s. ETF 70.11 was accepted by the department, by adopting a resolution in the form approved by the department and forwarding a copy of the resolution to the department and the then current administrative plan provider as defined in s. 40.02 (18s), Stats. Enrollment and payroll deferral activities shall cease 90 days after receipt by the department of the certified copy of a resolution to terminate participation in the state’s deferred compensation plan. Treatment of previous individual deferral investment specifications, accounts and benefits shall continue to be governed by the plan and investment plan provider contracts, unless the employer exercises its right of ownership under 26 CFR 1.457-2 (j) to provide for different treatment.

ETF 70.15 Note Note: Chapter ETF 70 requires several forms which are available at no charge by contacting either the department of employee trust funds or the current administrative plan provider. The forms may be obtained at no charge by writing to: department of employee trust funds, P.O. Box 7931, Madison, WI 53707-7931, or by calling: [phone] or toll free at [phone]. The forms also are available on the department’s website: etf.wi.gov or on the Wisconsin deferred compensation program’s website: www.wdc457.org.

ETF 70.15 History History: Cr. Register, June, 1985, No. 354, eff. 7-1-85; CR 14-055: am. Register May 2015 No. 713, eff. 6-1-15.