40.23(4)(e)1.1. Subject to subds.
2. to
4. and section 401
(a) (9) of the Internal Revenue Code, if a participant dies before the distribution of benefits has commenced and the participant's beneficiary is the spouse or domestic partner, the department shall begin the distribution within 5 years after the date of the participant's death.
40.23(4)(e)2.
2. Subject to section
401 (a) (9) of the Internal Revenue Code, if the spouse or domestic partner files a subsequent beneficiary designation with the department, the payment of the distribution may be deferred until the January 1 of the year in which the participant would have attained the age of 70.5 years.
40.23(4)(e)3.
3. Subject to section
401 (a) (9) of the Internal Revenue Code, if the spouse or domestic partner does not apply for a distribution, the distribution shall begin as an automatic distribution as provided under subd.
1. or under par.
(c), whichever distribution date is earlier.
40.23(4)(e)4.
4. Subject to section
401 (a) (9) of the Internal Revenue Code, if the spouse or domestic partner dies, but has designated a new beneficiary, the birth date of the spouse or domestic partner shall be used for the purposes of determining the required beginning date.
40.23(4)(e)5.
5. The department shall specify by rule all procedures relating to an automatic distribution to the spouse or domestic partner. These rules shall comply with the Internal Revenue Code.
40.23(4)(f)
(f) If a participant dies before the distribution of benefits has commenced and the beneficiary cannot delay the automatic payment of benefits under section
401 (a) (9) of the Internal Revenue Code, the beneficiary shall do one of the following:
40.23(4)(f)1.
1. Elect a lump sum payment by December 31 of the 5th calendar year after the date of the participant's death.
40.23(4)(f)2.
2. Elect an annuity benefit, not to exceed his or her life expectancy, by December 31 of the calendar year after the date of the participant's death.
40.23(4)(g)
(g) Nothing in this subsection shall be construed to create any benefit, lump sum payment option or form of annuity not otherwise expressly provided for in this subchapter.
40.23(4)(h)
(h) Death and disability benefits provided under this chapter are limited by the incidental benefit rule under section
401 (a) (9) (G) of the Internal Revenue Code and applicable federal regulations and guidance adopted under the Internal Revenue Code.
40.23(4)(i)
(i) Distributions of benefits shall conform to a reasonable and good faith interpretation of section
401 (a) (9) of the Internal Revenue Code.
40.23(4)(j)
(j) Pursuant to a qualified domestic relations order, the department may establish separate benefits for a participant and an alternate payee.
40.23 Cross-reference
Cross-reference: See also ch.
ETF 20, Wis. adm. code.
40.24
40.24
Annuity options. 40.24(1)(1)
Except as provided in subs.
(2) to
(4) and
(7), any participant who is eligible to receive a retirement annuity in the normal form may elect to receive the actuarial equivalent of the normal form annuity in any of the following optional annuity forms:
40.24(1)(a)
(a) A straight-life annuity terminating at the death of the annuitant.
40.24(1)(b)
(b) A straight life annuity with a guarantee of 60 monthly payments.
40.24(1)(c)
(c) An annuity payable for the life of the annuitant with a guarantee of 180 monthly payments.
40.24(1)(d)
(d) An annuity payable for the life of the annuitant, and after the death of the annuitant, monthly payments as elected by the participant of either 100 percent or 75 percent of the amount of the annuity paid to the annuitant to be continued to the named survivor, for life, who was designated by the participant in the original application for an annuity. If the participant's annuity effective date is on or after January 1, 1992, or, if the department specifies an earlier date that is not earlier than April 23, 1992, on or after the date specified by the department, and if the death of the named survivor occurs before the death of the annuitant and before the first day of the 61st month beginning after the annuity effective date, the annuity option under this paragraph shall be converted to the annuity option under par.
(a) and, beginning with the annuity payment for the first month beginning after the death of the named survivor, the annuity amount shall be the amount that the annuitant would be receiving on that date if the participant had elected the annuity option under par.
(a) in the original application for an annuity.
40.24(1)(e)
(e) A reduced annuity payable in the normal form or any of the optional life forms provided under this section, plus a temporary annuity payable monthly but terminating with the payment payable in the month following the month in which the annuitant attains age 62. If the annuitant dies before the end of the final payment, the remaining payments of the temporary annuity certain shall be made to the named survivor or, if there is no living named survivor, in accordance with s.
40.73 (2) to the annuitant's beneficiary. It is the intent of this option that so far as is practicable the amounts of the life annuity and temporary annuity shall be determined so that the annuitant's total anticipated benefits from the fund and from his or her primary OASDHI benefit will be the same each month both before and after attainment of age 62.
40.24(1)(f)
(f) From accumulated additional contributions made under s.
40.05 (1) (a) 5. only, an annuity certain payable for and terminating after the number of months specified by the applicant, regardless of whether the applicant dies before or after the number of months specified, provided that the monthly amount of the annuity certain is at least equal to the minimum amount established under s.
40.25 (1) (a). Subject to the period of distribution required under s.
40.23 (4) (b) 2., the number of months specified shall not exceed 180 and shall not be less than 24. If the death of the annuitant occurs prior to the expiration of the certain period, the remaining payments shall be made in accordance with s.
40.73 (2) without regard to any other annuity payments payable to the beneficiary. An annuity under this paragraph may be initiated prior to any other annuity amount provided under this subchapter and prior to age 55 if all other qualifications for receiving an annuity payment are met.
40.24(1)(g)
(g) Any one optional life annuity form provided by rule.
40.24(2)
(2) The department may modify any optional annuity form prescribed in sub.
(1) (a) to
(f) by rule as necessary to conform to federal regulations.
40.24(3)
(3) Any participant specified under sub.
(1) (intro.) may elect to receive the amount provided by accumulated additional contributions in a different optional form than the balance of the annuity.
40.24(4)
(4) Any optional annuity form under this section shall be based on actuarial equivalent values with due regard to selection against the fund, shall not provide a greater monthly amount payable to others upon the death of the participant than the amount which would have been payable to the participant if the participant had continued to live and shall not be changed after the effective date of the annuity unless the participant's request for the change is received by the department within 60 days after the date on which the first annuity check, share draft or other draft is issued or funds are otherwise transferred.
40.24(5)
(5) An annuity in a form other than the normal form shall be the actuarial equivalent of the annuity in the normal form if, on the effective date of the annuity, the annuity has the same single-sum present value as the annuity in the normal form, as calculated by the department according to methods and assumptions specified by the actuary.
40.24(6)
(6) If a participant's annuity is not effective until after the earlier of the participant's normal retirement date under s.
40.02 (42) (a) to
(d) or the date on which the participant attains the age of 62 years and the participant elects an optional annuity form, the monthly amount of annuity provided by conversion of the benefit computed under s.
40.23 (2m) (e) to the optional form elected shall not be less than the monthly amount of annuity which would have been paid had the participant retired on the earlier of the participant's normal retirement date under s.
40.02 (42) (a) to
(d) or the date on which the participant attains the age of 62 years and elected the same optional form of annuity and the same beneficiary. It shall be assumed for purposes of calculating the amount of an annuity under this subsection that all of the participant's earned annuity was earned prior to the participant's normal retirement date, but the department shall use the beneficiary's actual age on the effective date of the annuity.
40.24(7)(a)(a) Any participant who has been married to the same spouse, or in a domestic partnership with the same domestic partner, for at least one year immediately preceding the participant's annuity effective date shall elect the annuity option under sub.
(1) (d), the annuity option under sub.
(1) (e), if the reduced annuity under sub.
(1) (e) is payable in an optional life form provided under sub.
(1) (d), or an annuity option in a form provided by rule, if the annuity is payable for life with monthly payments of at least 75 percent of the amount of the annuity to be continued to the beneficiary, for life, upon the death of the participant, and the participant shall designate the spouse or domestic partner as the beneficiary, unless the participant's application for a retirement annuity in a different optional annuity form is signed by both the participant and the participant's spouse or domestic partner or unless the participant establishes to the satisfaction of the department that, by reason of absence or other inability, the spouse's or domestic partner's signature may not be obtained. This subsection does not apply to any of the following:
40.24(7)(a)1.
1. Participants whose applications for a retirement annuity specify an annuity effective date before August 1, 1986.
40.24(7)(a)2.
2. That portion of a disability annuity which, under s.
40.63 (8) (d), is not eligible for election of an annuity option by the participant.
40.24(7)(a)4.
4. Benefits paid from accumulated additional contributions.
40.24(7)(a)5.
5. Benefits payable to a beneficiary from a deceased participant's account.
40.24(7)(b)
(b) In administering this subsection, the secretary may require the participant to provide the department with a certification of the participant's marital or domestic partnership status and of the validity of the spouse's or domestic partner's signature. If a participant is exempted from the requirements under par.
(a) on the basis of a certification which the department or a court subsequently determines to be invalid, the liability of the fund and the department shall be limited to a conversion of annuity options at the time the certification is determined to be invalid. The conversion shall be from the present value of the annuity in the optional form originally elected by the participant to an annuity with the same present value but in the optional form under sub.
(1) (d) and with monthly payments of 100 percent of the amount of the annuity paid to the annuitant to be continued to the spouse or domestic partner beneficiary.
40.24 Cross-reference
Cross-reference: See also s.
ETF 20.07, Wis. adm. code.
40.25
40.25
Lump sum payments. 40.25(1)(a)
(a) If all other requirements for payment of a retirement annuity are met and if the retirement annuity in the normal form which could be provided under s.
40.23 is equal to or less than $100 monthly for a benefit with an effective date that is on or after April 23, 1994, but before the end of the calendar year of 1993 or, for a benefit with an effective date in a subsequent calendar year, the monthly amount applied under this paragraph for the previous calendar year increased by the salary index and ignoring fractions of the dollar, the then present value, including additional contributions, of the annuity shall be paid in a single sum instead of as an annuity. The additional contribution accumulations shall not be included in determining whether a single sum should be paid if the optional form provided by s.
40.24 (1) (f) or a lump sum under sub.
(4) is selected.
40.25(1)(b)
(b) If all other requirements for payment of a retirement annuity are met and if the retirement annuity in the normal form which could be provided under s.
40.23 from all available accumulations and credits, other than accumulations from additional contributions, is more than $100 and less than $200 monthly for a benefit with an effective date that is on or after April 23, 1994, but before the end of the calendar year of 1993 or, for a benefit with an effective date in a subsequent calendar year, the monthly amounts applied under this paragraph for the previous calendar year increased by the salary index and ignoring fractions of the dollar, then any participant may elect to receive, in lieu of the annuity, the then present value, including additional contributions, of the annuity in a single sum.
40.25(2)
(2) Subject to sub.
(2t), if all requirements for payment of a retirement annuity are met except attainment of age 55 or age 50 for protective occupation participants, a separation benefit may be paid, if the participant's written application for a separation benefit is received by the department prior to the participant's 55th birthday or 50th birthday for protective occupation participants, in an amount equal to the additional and employee required contribution accumulations of the participant on the date the application for a separation benefit is approved.
40.25(2t)
(2t) A protective occupation participant who is covered by the presumption under s.
891.455 and who applied for a duty disability benefit under s.
40.65 on or after May 12, 1998, may not be paid a separation benefit under sub.
(2) during the period in which he or she is receiving the duty disability benefit.
40.25(3)
(3) Upon administrative approval of payment of an amount under either sub.
(1) or
(2), the participant's account shall be closed and there shall be no further right, interest or claim on the part of the former participant to any benefit from the Wisconsin retirement system except as provided by sub.
(5) and s.
40.285 (2) (a). Any former participant who is subsequently employed by any participating employer shall be treated as a new participating employee for all purposes of this chapter. New accumulations of contributions and credits and the computation of any future benefits shall bear no relationship to any accumulations and credits paid as single sums under sub.
(1) or
(2).
40.25(3m)
(3m) A participant's application for a lump sum payment under sub.
(1) (b) or
(2), filed after May 7, 1994, shall be signed by both the participant and the participant's spouse or domestic partner, if the participant has been married to that spouse, or in a domestic partnership with that domestic partner, for at least one year immediately preceding the date the application is filed. The department may promulgate rules that allow for the waiver of the requirements of this subsection for a situation in which, by reason of absence or incompetency, the spouse's or domestic partner's signature may not be obtained. This subsection does not apply to any benefits paid from accumulated additional contributions.
40.25(4)
(4) If all the requirements for payment of a retirement annuity or a separation benefit are met, except filing of an application, a participant may elect that the accumulation from the participant's additional contributions made under s.
40.05 (1) (a) 5. be paid as a lump sum in lieu of an annuity from those additional contributions.
40.25(5)(a)(a) Rights and creditable service forfeited under sub.
(3) or s.
40.04 (4) (a) 3. shall be reestablished if the participant receives the benefit resulting in the forfeiture after being discharged and is subsequently reinstated to a position with the participating employer by court order, arbitration award or compromise settlement as a result of an appeal of the discharge.
40.25(5)(b)
(b) The full amount of the benefit paid, plus interest at the assumed rate, unless the department sets a different rate by rule, shall be repaid to the Wisconsin retirement system by the employer of an employee whose rights and creditable service are reestablished under par.
(a) within 60 days after the effective date of the employee's reinstatement. The amount repaid by the employer under this paragraph shall be deducted by the employer from any payment due the employee as a result of the resolution of the appeal or, if that amount is insufficient, the balance shall be deducted from the employee's earnings except the amount deducted from each earnings payment shall be not less than 10 percent nor more than 25 percent of the earnings payment. If the employee terminates employment the employer shall notify the department of the amount not yet repaid, including any interest due, at the same time it notifies the department of the termination of employment, and the department shall repay to the employer the balance of the amount due from retentions made under s.
40.08 (4). The employer may charge interest at a rate not in excess of the current year's assumed rate on any amount unpaid at the end of any calendar year after the year of reinstatement.
40.26
40.26
Reentry into service. 40.26(1)(1)
Except as provided in sub.
(1m) and ss.
40.05 (2) (g) 2. and
40.23 (1) (am), if a participant receiving a retirement annuity, or a disability annuitant who has attained his or her normal retirement date, receives earnings that are subject to s.
40.05 (1) or that would be subject to s.
40.05 (1) except for the exclusion specified in s.
40.22 (2) (L), the annuity shall be suspended, including any amount provided by additional contributions, and no annuity payment shall be payable after the month in which the participant files with the department a written election to be included within the provisions of the Wisconsin retirement system as a participating employee.
40.26(1m)(a)(a) Except as otherwise provided in sub.
(6), 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.
40.26(1m)(b)
(b) Except as otherwise provided in sub.
(6), 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.
40.26(2)
(2) Upon suspension of an annuity under sub.
(1) or
(1m), the retirement account of the participant whose annuity is so suspended shall be established on the following basis:
40.26(2)(b)
(b)
Crediting of amounts under suspended annuity. The amount of the annuity payments which would have been paid under the suspended annuity, from the original annuity suspension date to the subsequent retirement date, shall be credited to a memorandum account.
40.26(2)(c)
(c)
Establishment of subsequent retirement account. Upon becoming a participating employee, a subsequent retirement account shall be established, which includes crediting of interest and any contributions made and creditable service earned during the subsequent participating employment.
40.26(3)
(3) Upon subsequent retirement, the suspended annuity shall be reinstated, including any amounts in a memorandum account under sub.
(2) (b). Upon application, the subsequent annuity shall be computed as an original annuity, based upon the participant's attained age on the effective date of the subsequent annuity, in an optional form as elected by the participant under s.
40.24.
40.26(5)
(5) Except as otherwise provided in sub.
(5m), if a participant applies for an annuity or lump sum payment during the period in which less than 75 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:
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.,
2g. 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.
40.26(5m)
(5m) During the public health emergency declared on March 12, 2020, by executive order 72, sub.
(5) does not apply if at least 15 days have elapsed between the termination of employment with a participating employer and becoming a participating employee if the position for which the participant is hired is a critical position, as determined by the secretary of health services under s.
323.19 (3).
40.26(6)
(6) A participant who is hired during the public health emergency declared on March 12, 2020, by executive order 72, may elect to not suspend his or her retirement annuity or disability annuity under sub.
(1m) for the duration of the state of emergency if all of the following conditions are met:
40.26(6)(a)
(a) 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 the employer.
40.26(6)(b)
(b) The position for which the participant has been hired is a critical position, as determined under s.
323.19 (3).
40.27
40.27
Post-retirement adjustments. 40.27(1)(1)
Supplemental benefits. Any person who received a supplemental benefit under s.
41.23, 1979 stats., s.
42.49 (10), 1979 stats., or s.
42.82, 1979 stats., is eligible to continue receiving a supplemental benefit in the amounts determined under s.
41.23, 1979 stats., s.
42.49 (10), 1979 stats., or s.
42.82, 1979 stats. Any portion of a benefit payable under s.
40.19 (4) (f) which was not granted in accordance with the law in effect at the time of the granting shall not be subject to this subsection and shall not be eligible for a supplemental benefit.
40.27(1)(a)
(a) Any benefit payable by virtue of this subsection in excess of the amounts payable under other provisions of this chapter shall be paid from and shall be subject to the continuation of the appropriation made by s.
20.515 (1) (a).
40.27(1)(b)
(b) Determinations of eligibility and the amount of any payment to be made under this subsection or sub.
(1m) or
(3) shall be made by the department, and shall be certified by the department for payment in the same manner as for payments from the Wisconsin retirement system.
40.27(1)(c)
(c) No payment shall be made under this subsection or sub.
(1m) or
(3), nor shall any right accrue under this subsection or sub.
(1m) or
(3), for or after any month following termination of the annuity on which the supplement was based.
40.27(1)(d)
(d) Benefits under this subsection and subs.
(1m) and
(3) shall be payable to the surviving beneficiary, who receives an annuity, of eligible persons.
40.27(1m)
(1m) Additional supplemental benefits. Any person who received an annuity for September 1974 from the Wisconsin retirement system shall be eligible to receive all of the following:
40.27(1m)(a)
(a) The monthly annuities for which that person was eligible and which that person received for September 1974.
40.27(1m)(b)
(b) An amount to be paid from the appropriation account under s.
20.515 (1) (a), subject to the continuation of that appropriation, equal to 4 percent times 5 years times either $200 or the initial monthly annuity, excluding amounts provided from additional deposits, whichever is smaller.
40.27(2)
(2) Core annuity reserve surplus distributions. Surpluses in the core 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 0.5 percent increase in the amount of annuities in force, except as otherwise provided by the department by rule, 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 core 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 core 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 core annuity reserves and such deficit would result in a 0.5 percent or greater decrease in the amount of annuities in force, except as otherwise provided by the department by rule.
40.27(2)(d)
(d) Notwithstanding s.
40.03 (2) (i),
(7) (d), and
(8) (d), the department may promulgate rules under this subsection without the approval of the teachers retirement board and the Wisconsin retirement board.
40.27(3)
(3) Additional supplemental benefit adjustment. Beginning on November 1, 1997, any person who is eligible to receive supplemental benefits under subs.
(1) and
(1m) shall be eligible to receive an additional supplemental benefit, to be paid from the appropriation account under s.
20.515 (1) (a), in an amount equal to the amount by which the supplemental benefits paid under subs.
(1) and
(1m) are exceeded by the supplemental benefit that the person was eligible to receive on October 1, 1997, from the distribution paid under s.
40.04 (3) (e) 1. c., 1995 stats., as affected by adjustments under sub.
(2) made after 1987, less any increase to the person's base annuity under this chapter that results from any equitable distribution made by the board under the judgment in Wisconsin Retired Teachers Ass'n v. Employee Trust Funds Bd.,
207 Wis. 2d 1 (1997), without regard to adjustments to sub.
(2).
40.27 Cross-reference
Cross-reference: See also s.
ETF 20.25, Wis. adm. code.
40.28
40.28
Variable benefits.
