40.26(3)(bm)2.
2. For creditable service earned before the effective date of the original annuity, the annuity shall be recomputed based on the laws in effect as of that original effective date, except that the portion of creditable service earned under this subdivision which is in an amount equal to the amount of creditable service earned under
subd. 1. shall be recomputed as provided under
par. (a).
40.26(3)(c)
(c) The amount of the recomputed annuity shall be reduced by the amount of annuity which could be provided, under the actuarial tables in effect on the annuity effective date, by the balance in the memorandum account established under
sub. (2) (b) and that account shall be closed out.
40.26(4)
(4) Upon subsequent termination of all participating employment of an annuitant who receives compensation subject to
s. 40.05 (1), but whose compensation did not exceed the level specified in
sub. (1) which would have required termination of the original annuity, any contributions made under
s. 40.05 (1) or
(2) (g) 1. based on the additional employment shall upon application be paid the annuitant on the basis specified in
s. 40.25 (2) and
(3) without regard to the age requirement and without any change in the original annuity.
40.26(5)
(5) If a participant applies for an annuity or lump sum payment during the period in which less than 30 days have elapsed between the termination of employment with a participating employer and becoming a participating employe with any participating employer, all of the following shall apply:
40.26(5)(b)
(b) The participant may not receive any benefit under this chapter on which the receipt of an annuity is a condition.
40.26(5)(c)
(c) Any annuity or lump sum payment made to the participant shall be considered to have been made in error and is subject to
s. 40.08 (4). The sum of the payments made in error shall be credited to a memorandum account. The memorandum account is subject to
s. 40.04 (4) (a) 2. and
2m. and
(c). If the annuity was recomputed under
s. 40.08 (1m), the memorandum account established under this paragraph shall be adjusted pursuant to
s. 40.08 (1m) (f) 2. The retirement account of a participant paid in error, and whose annuity was terminated, shall be reestablished as if the terminated annuity had never been effective, including the crediting of interest.
40.27
40.27
Post-retirement adjustments. 40.27(2)
(2)
Fixed annuity reserve surplus distributions. Surpluses in the fixed annuity reserve established under
s. 40.04 (6) and
(7) shall be distributed by the board if the distribution will result in at least a 2% increase in the amount of annuities in force, on recommendation of the actuary, as follows:
40.27(2)(a)
(a) The distributions shall be expressed as percentage increases in the amount of the monthly annuity in force, including prior distributions of surpluses but not including any amount paid from funds other than the fixed annuity reserve fund, preceding the effective date of the distribution. For purposes of this subsection, annuities in force include any disability annuity suspended because the earnings limitation had been exceeded by that annuitant in that year.
40.27(2)(b)
(b) Prorated percentages based on the annuity effective date may be applied to annuities with effective dates during the calendar year preceding the effective date of the distribution, as provided by rule, but no other distinction may be made among the various types of annuities payable from the fixed annuity reserve.
40.27(2)(c)
(c) The distributions shall not be offset against any other benefit being received but shall be paid in full, nor shall any other benefit being received be reduced by the distributions. The annuity reserve surplus distributions authorized under this subsection may be revoked by the board in part or in total as to future payments upon recommendation of the actuary if a deficit occurs in the fixed annuity reserves.
40.27 Annotation
The implementation of the amendment of s. 20.515 (1) (a), the creation of s. 40.04 (3) (e) and the repeal of s. 40.27 (1) and (1m) by
1987 Wisconsin Act 27 unconstitutionally takes the property of retirement system annuitants. Retired Teachers Ass'n v. Employe Trust Funds Board, 195 W (2d) 1001, 537 NW (2d) 400 (Ct. App. 1995).
40.28
40.28
Variable benefits. 40.28(1)(1) Any annuity provided to a participant whose accounts include credits segregated for a variable annuity shall consist of a fixed annuity and a variable annuity.
40.28(1)(a)
(a) The initial amount of the variable annuity shall be the amount which can be provided on the basis of the actuarial tables in effect on the effective date of the annuity by the following amounts, if otherwise available:
40.28(1)(a)1.
1. The amount of the additional contribution accumulations reserved for a variable annuity as of the date the annuity begins;
40.28(1)(a)2.
2. The amount equal to 200% of employe required contribution accumulations reserved for a variable annuity as of the date the annuity begins; and
40.28(1)(a)3.
3. The amount equal, as of the date the annuity begins, to the accumulated prior service credits reserved for the participant for a variable annuity within the employer accumulation account, together with the net gain or loss credited to the accumulations.
40.28(1)(b)
(b) The initial amount of the fixed annuity shall be the excess of the total annuity payable, as determined under
s. 40.23, over the amount of the variable annuity.
40.28(2)
(2) Whenever the balance in the variable annuity reserve, as of December 31 of any year, exceeds or is less than the then present value of all variable annuities in force, determined in accordance with the rate of interest and approved actuarial tables then in effect, by at least 2% of the present value of all variable annuities in force, the amount of each variable annuity payment shall be proportionately increased or decreased, disregarding fractional percentages, and effective on a date determined by rule, so as to reduce the variance between the balance of the variable annuity reserve and the present value of variable annuities to less than one percent.
40.28(3)
(3) Except as otherwise specifically provided, benefits based on variable accumulations shall be determined on the same basis and paid in the same manner and at the same time as benefits based on accumulations not so segregated insofar as practicable considering the nature of variable annuities.
40.28 History
History: 1981 c. 96.
40.29
40.29
Temporary disability; creditable service. 40.29(1)
(1) If a participating employe receives temporary disability compensation under
s. 102.43 for any period prior to termination of employment with the participating employer which commences on or after April 30, 1980, the employe shall be:
40.29(1)(a)
(a) Credited with creditable service during that period on the same basis as the employe was credited with creditable service immediately prior to the commencement of the period; and
40.29(1)(b)
(b) Treated for all purposes of the Wisconsin retirement system, including, but not limited to, contributions and benefits, as having received the amount and rate of earnings the employe would have received if the disability had not occurred, including adjustments in the rate of earnings of the employe made during that period in good faith.
40.29(2)
(2) Earnings and creditable service determined under
sub. (1) shall be reported by the employer to the department. The employer shall pay all employer and required employe contributions payable under this section with respect to the earnings and current service except the employer may recover from the employe's earnings paid after the employe returns to employment with the employer the amount which the employer paid on behalf of the employe which is customarily actually paid by the employe under
s. 40.05 (1). The employer may not deduct the amount recoverable under this subsection from the employe's earnings at a rate greater than 5% of each payment of earnings.
40.29 History
History: 1981 c. 96;
1983 a. 290.
40.30
40.30
Intrastate retirement reciprocity. 40.30(1)
(1) This section shall be construed as an enactment of statewide concern to encourage career public service by employes of the state, 1st class cities and counties having a population of 500,000 or more but shall not be construed to affect the authority of any 1st class city to exercise its power granted under
article XI, section 3, of the constitution and
chapter 441, laws of 1947, section 31 over any other provisions of any of the retirement systems established by
chapter 589, laws of 1921,
chapter 423, laws of 1923 or
chapter 396, laws of 1937, or to affect the authority of any county having a population of 500,000 or more to exercise its power granted under
chapter 405, laws of 1965, over any other provisions of the retirement system established by
chapter 201, laws of 1937.
40.30(2)
(2) Except as provided in
sub. (7), any individual who has vested annuity benefit rights under the Wisconsin retirement system or under one of the retirement systems established by
chapter 589, laws of 1921,
chapter 423, laws of 1923,
chapter 201, laws of 1937 or
chapter 396, laws of 1937, who subsequently becomes covered by one or more of those other retirement systems, who, on or after May 11, 1990, terminates all employment covered by any of those retirement systems and who applies to have benefits begin within a 60-day period under all of those retirement systems from which the individual is entitled to receive benefits may, on a form provided by and filed with the department, elect to have retirement benefit computations and eligibility under each of those retirement systems determined as provided in this section.
40.30(3)
(3) The sum of all service credited to the individual under each retirement system specified in
sub. (2) shall be used in determining whether the individual has met any vesting period required for retirement benefit eligibility during any subsequent employment covered by any retirement system specified in
sub. (2), but shall not be used in determining the amount of the benefit nor in determining credit for military service.
40.30(4)
(4) The individual's retirement benefits under each retirement system specified in
sub. (2) shall be determined as follows:
40.30(4)(a)
(a) The benefit formula used for each type of service credited to the individual shall be the benefit formula in effect for that type of service under the respective retirement system on the date on which the individual terminated all employment covered by any retirement system specified in
sub. (2).
40.30(4)(b)
(b) Subject to the annual compensation limits under
26 USC 401 (a) (17) for a participating employe who first becomes a participating employe on or after January 1, 1996, the final average salary or final average earnings used in the benefit formula computation for each retirement system under
par. (a) shall be the individual's final average salary or final average earnings under the respective retirement system, determined in accordance with the provisions of that retirement system based on the earnings covered by that retirement system and on all service permitted under that retirement system to be used in determining the final average salary or final average earnings, increased by the percentage increase in the average of the total wages, as determined under
42 USC 415 (b) (3) (A), between the date on which the individual terminated all employment covered by that retirement system and the date on which the individual terminated all employment covered by any of those retirement systems.
40.30(5)
(5) The benefits computed under this section for each retirement system shall be in lieu of any other benefit payable by that retirement system and may not begin before the individual terminates all employment covered by any retirement system specified in
sub. (2).
40.30(6)
(6) The secretary may promulgate rules affecting any retirement system specified in
sub. (2) to carry out the purposes of this section.
40.30(7)(a)(a) Retirement benefit computations or eligibility may not be determined as provided in this section with respect to service performed by an individual under any retirement system established by
chapter 589, laws of 1921,
chapter 423, laws of 1923, or
chapter 396, laws of 1937, or to service performed by that individual under the Wisconsin retirement system, before the date on which the governing body of the city that established the retirement system under
chapter 589, laws of 1921,
chapter 423, laws of 1923, or
chapter 396, laws of 1937, adopts a resolution approving the application of this section to the retirement benefit computations and eligibility determinations under all of those retirement systems that it has established.
40.30(7)(b)
(b) Retirement benefit computations or eligibility may not be determined as provided in this section with respect to service performed by an individual under a retirement system established by
chapter 201, laws of 1937, or to service performed by that individual under the Wisconsin retirement system, before the date on which the governing body of the county that established the retirement system under
chapter 201, laws of 1937, adopts a resolution approving the application of this section to the retirement benefit computations and eligibility determinations under that retirement system.
40.30(7)(c)
(c) A resolution adopted under
par. (a) or
(b) is irrevocable. Any governing body that adopts a resolution under
par. (a) or
(b) shall provide the department with a copy of the resolution.
40.30 History
History: 1989 a. 323;
1995 a. 81.
40.31
40.31
Maximum benefit limitations. 40.31(1)(a)(a)
Limitation amounts. Except as otherwise expressly provided in this section, the maximum retirement benefits payable to a participant in a calendar year, excluding benefits attributable to contributions subject to any limitations under
s. 40.23 (2) (a),
(2m) (c) and
(3), may not exceed the lesser of the following:
40.31(1)(a)1.
1. For a straight-life annuity terminating at the death of the annuitant, $120,000. If the annuity is in a form other than a straight-life annuity, the limitation is the reduced actuarial equivalent of a straight-life annuity terminating at the death of the annuitant and paying $120,000 per year.
40.31(1)(a)2.
2. One hundred percent of the participant's average annual compensation for the period of up to 3 consecutive calendar years during which the person was a participating employe and which yield the highest average annual compensation. In this subdivision, "compensation" has the meaning of "compensation" under section
415 (c) (3) of the internal revenue code.
40.31(1)(b)
(b)
Early commencement. If the participant's benefit commencement date occurs before the date on which the participant attains the age of 62, the dollar limitation under
par. (a) shall be the actuarial equivalent of the dollar limitation of an annual straight life annuity beginning at the age of 62 and terminating at the death of the annuitant. For the purposes of this paragraph, the interest rate assumption that is used to determine the actuarial equivalency may not exceed 5%. Under this subsection, the dollar limitation shall be:
40.31(1)(b)1.
1. Not less than $75,000 if the benefit commences at or after the age of 55.
40.31(1)(b)2.
2. Equal to $75,000 if the benefit commences before the age of 55.
40.31(1)(b)3.
3. Not less than $50,000 for participants who have at least 15 years of service as a full-time employe of any police or fire department which is organized and operated by the employer to provide police protection, fire fighting services or emergency medical services for any geographic area within the jurisdiction of the employer.
40.31(1)(c)
(c)
Deferred commencement. If the participant's benefit commencement date occurs after the date on which the participant attains the age of 65, the dollar limitation under
par. (a) shall be the actuarial equivalent of the dollar limitation of an annual straight life annuity beginning at the age of 65 and terminating at the death of the annuitant. For the purposes of this paragraph, the interest rate assumption that is used to determine the actuarial equivalency may not exceed 5%.
40.31(1)(d)
(d)
Limitation adjustments. The dollar limitations under
pars. (a) 1. and
(b) and the compensation limit under
par. (a) 2. may be adjusted by the department by rule to conform with any applicable U.S. treasury regulations concerning cost-of-living adjustments.
40.31(2)
(2) Exceptions to general limitation. Benefits payable to a participant shall be considered not to exceed any limitation under this section if one of the following applies:
40.31(2)(a)
(a) The amount of the benefit does not exceed the total benefits of the participant under all of the qualified defined benefit plans maintained or previously maintained by all of a participant's employers, as determined by the department without regard to any amendment to any of the benefit plans made after October 14, 1987.
40.31(2)(b)
(b) The amount of the benefit does not exceed $10,000 for the plan year and none of the participant's employers have at any time maintained a defined contribution plan in which the participant participated.
40.31(3)
(3) Treatment of defined benefit and defined contribution plans. For the purpose of determining whether a participant's retirement benefits exceed the maximum retirement limitations under this section, all defined benefit plans of the employer, including defined benefit plans that are terminated, shall be treated as a single defined benefit plan and all defined contribution plans of the employer, including defined contribution plans that are terminated, shall be treated as a single defined contribution plan. The department may provide by rule additional limitations for participants who are participating in more than one retirement system.
40.31(4)
(4) Division of benefits. For the purpose of determining whether a participant's retirement benefits exceed the maximum retirement limitations under this section for a participant whose retirement benefits have been divided under
s. 40.08 (1m), the participant's retirement benefits shall be measured as if no division had occurred.
40.31 History
History: 1995 a. 302.
40.32
40.32
Limitations on contributions. 40.32(1)
(1) The sum of all contributions allocated to a participant's account under each defined contribution plan sponsored by the employer, including all employer contributions and picked-up contributions credited with interest at the effective rate under
s. 40.04 (4) (a) and
(5) (b) and all employe contributions made under
ss. 40.02 (17),
40.05 (1) and
(2m) and
40.25 (6) (a) and
(7) (a), may not in any calendar year exceed the lesser of the following:
40.32(1)(b)
(b) Twenty-five percent of the participant's compensation, as defined in the internal revenue code, for the calendar year.
40.32(2)
(2) The department may provide by rule additional limitations for participants who are participating in more than one retirement system.
40.32(3)
(3) Any contribution that the department receives, which is allocated to the account of a participant and which exceeds the contributions limitation under this section, may be refunded or credited as provided in
s. 40.08 (6). If the department refunds any contributions that exceed the limitation under this section, the department shall first refund amounts voluntarily contributed by a participating employe, either as an additional contribution under
s. 40.05 (1) (a) 5. or a purchase of forfeited or creditable service under
s. 40.02 (17) or
40.25 (6) (a) or
(7) (a).
40.32 History
History: 1995 a. 302.
SOCIAL SECURITY FOR PUBLIC EMPLOYES
40.40
40.40
State-federal agreement. The secretary may, upon receipt of a certified copy of a resolution adopted by the governing body of any employer in accordance with
s. 40.41 execute on behalf of the state a modification of the state-federal agreement with the secretary of the federal department of health and human services for the inclusion of a coverage group of the employes of the employer under the OASDHI system in conformity with federal regulations. The state and each employer included under the agreement or modification of the agreement shall thereafter be bound by federal regulations.
40.40 History
History: 1981 c. 96.
40.41(1)(1) Except as provided in
sub. (6), all the employes of any employer shall be included under OASDHI through adoption of a resolution by the governing body of the employer providing for the coverage and stating the effective date of coverage. All groups covered by OASDHI, under s.
40.41, 1979 stats., prior to January 1, 1982, shall continue to be covered by OASDHI. Whenever any employer is created, the territory of which includes more than one-half of the last assessed valuation of an employer which prior to creation of the new employer had adopted a resolution under this subsection, and the employer so created assumes the functions and responsibilities of the previous employer with respect to the territory, then the employes of the employer so created shall be covered from the inception of the created employer as if a resolution had been adopted under this subsection.
40.41(2)
(2) The resolution provided for in
sub. (1) may specify a coverage group comprised of persons under a retirement system which is eligible under federal regulations for inclusion under the state-federal OASDHI agreement, in which case a referendum in conformity with section 218 (d) (3) of the federal social security act shall be conducted. The governor may take any and all actions which may be required in connection with such a referendum. The agreement with the secretary of health and human services may be modified to cover the coverage group.
40.41(3)
(3) No agreement with the federal department of health and human services may be executed for the purpose of permitting one or more individuals to transfer by individual choice from that part of a retirement system which is composed of positions of employes who do not desire coverage under OASDHI to that part of a retirement system which is composed of positions of employes who desire OASDHI coverage.
40.41(4)
(4) Except as provided in
sub. (6), all state employes, all teachers, the participating employes of all participating employers under the Wisconsin retirement system and all employes who would have become a participating employe of a participating employer except for the requirement of
s. 40.22 (6) shall be included under OASDHI, notwithstanding
sub. (1).
40.41(5)
(5) Except as provided in
sub. (6), employes under any retirement system included in whole or in part under OASDHI, prior to January 1, 1982, under a referendum or a choice held in conformity with section 218 (d) (3) or 218 (d) (6) of the federal social security act, shall continue to be included under OASDHI in accordance with the results of the referendum or choice, notwithstanding
sub. (1).
40.41(6)
(6) The following services shall be excluded from OASDHI coverage, and subsequent modifications of the state-federal agreement shall continue to provide for their exclusion:
40.41(6)(a)
(a) Services performed by persons or in positions not eligible for inclusion under federal regulations. Any exclusion under this paragraph shall not continue if federal regulations are subsequently modified to include the services.
40.41(6)(b)
(b) Services performed by a student or a member of a board or commission, except members of governing bodies, in a position or office which does not normally require actual performance of duty for at least 600 hours in each calendar year. For purposes of this paragraph, a "board" or "commission" is a body referred to in the statutes as a board or commission.
40.41(6)(d)
(d) Services of an employe whose participating employment in a position covered by a specific retirement system is not covered by OASDHI by reason of eligibility for a choice provided by statute prior to January 1, 1982, but only with respect to services in a position covered by that retirement system.
40.41(6)(e)
(e) Services in police and fire fighter positions under a retirement system except:
40.41(6)(e)1.
1. If the services were covered under the federal OASDHI system under this section prior to the effective date of the retirement system coverage.
40.41(6)(e)2.
2. If the services have been covered under the federal OASDHI system under section 218 (m) of the federal social security act.
40.41(6)(f)
(f) Services in a position eligible for participation in the Wisconsin retirement system only by virtue of
s. 40.22 (2m). This exclusion does not apply to any employe who is a teacher, who is a participating employe in the Wisconsin retirement system or whose employer has adopted a resolution under
sub. (1).
