40.23(2)(b)1.
1. For each participant for creditable service of a type not otherwise specified in this paragraph, 1.3 percent.
40.23(2)(b)2.
2. For each participant for creditable service as an elected official and for executive service, as defined under s.
40.02 (31), 1985 stats., 1.8 percent.
40.23(2)(b)3.
3. For each participant, subject to Titles II and XVIII of the federal social security act, for service as a protective occupation participant, 1.8 percent.
40.23(2)(b)4.
4. For each participant not subject to Titles II and XVIII of the federal social security act, for service as a protective occupation participant, 2.3 percent.
40.23(2)(c)
(c) The amount, if any, which can be provided by accumulated employee and employer additional contributions credited to the participant's account.
40.23(2)(d)
(d) If the annuity effective date is prior to the normal retirement date of the participant, the annuity amount computed under par.
(b) shall be reduced, as recommended by the actuary and approved by the board, by a percentage or percentages of the amount of the annuity for each month and any major portion of a month between the effective date of the annuity and the participant's normal retirement date.
40.23(2m)
(2m) The following provisions apply only to participants who are participating employees after March 9, 1984:
40.23(2m)(a)
(a) The retirement annuity in the normal form is a straight life annuity payable for the life of the annuitant.
40.23(2m)(b)
(b) Except as provided in s.
40.26, subject to the limitations under section
415 of the Internal Revenue Code, the initial amount of the normal form annuity shall be an amount equal to 70 percent, or 65 percent for participants whose formula rate is determined under par.
(e) 3. or 85 percent for participants whose formula rate is determined under par.
(e) 4., of the participant's final average earnings plus the amount which can be provided under pars.
(c) and
(d) or, if less, shall be in the monthly amount equal to the sum of the amounts determined under pars.
(c),
(d) and
(e) as modified by par.
(f) and in accordance with the actuarial tables in effect on the annuity effective date. If the participant has creditable service under both par.
(e) 4. and another category under par.
(e), the percent applied under this paragraph shall be determined by multiplying the percent that each type of creditable service is of the participant's total creditable service by 85 percent and 65 percent or 70 percent, respectively, and adding the results, except that the resulting benefit may not be less than the amount of the normal form annuity that could be paid based solely on the creditable service under par.
(e) 4. 40.23(2m)(c)
(c) The annuity which can be provided from a sum equal to 200 percent of the excess accruing after June 30, 1966, for teacher participants, or December 31, 1965, for all other participants, of the participant's required contribution accumulation reserved for a variable annuity over the amount to which the contributions would have accumulated at the core annuity division effective rate if not so reserved. If the participant's required contribution accumulation reserved for a variable annuity is less than the amount to which the contributions would have accumulated at the core annuity division effective rate if not reserved, the annuity shall be reduced by the amount which could be provided by a sum equal to 200 percent of the deficiency.
40.23(2m)(d)
(d) The amount, if any, which can be provided by accumulated employee and employer additional contributions credited to the participant's account.
40.23(2m)(e)
(e) A monthly annuity in the normal form computed on the basis of the participant's final average earnings and creditable service, if the annuity becomes effective on or after the normal retirement date of the participant, determined by multiplying the participant's final average earnings by the participant's creditable service and the following applicable percentage:
40.23(2m)(e)1.
1. For each participant for creditable service of a type not otherwise specified in this paragraph that is performed before January 1, 2000, 1.765 percent; for such creditable service that is performed on or after January 1, 2000, 1.6 percent.
40.23(2m)(e)2.
2. For each participant for creditable service as an elected official or as an executive participating employee that is performed before January 1, 2000, 2.165 percent; for such creditable service that is performed on or after January 1, 2000, but before June 29, 2011, 2 percent; and for such creditable service that is performed on or after June 29, 2011, 1.6 percent.
40.23(2m)(e)3.
3. For each participant subject to titles II and XVIII of the federal Social Security Act, for service as a protective occupation participant that is performed before January 1, 2000, 2.165 percent; for such creditable service that is performed on or after January 1, 2000, 2 percent.
40.23(2m)(e)4.
4. For each participant not subject to titles II and XVIII of the federal Social Security Act, for service as a protective occupation participant that is performed before January 1, 2000, 2.665 percent; for such creditable service that is performed on or after January 1, 2000, 2.5 percent.
40.23(2m)(em)1.1. For the purpose of determining the applicable percentage rate under par.
(e), all of the following shall apply:
40.23(2m)(em)1.a.
a. Any creditable service forfeited by a participating employee before January 1, 2000, and which is subsequently reestablished by the participating employee under s.
40.285 (2) (a), shall be considered to have been performed before January 1, 2000.
40.23(2m)(em)1.b.
b. Any creditable service received under s.
40.285 (2) (b), which is based on service performed before January 1, 2000, shall be considered to have been performed before January 1, 2000.
40.23(2m)(em)1.c.
c. Any creditable military service received under s.
40.02 (15) (c), which is based on creditable service performed before January 1, 2000, shall be considered to have been performed before January 1, 2000.
40.23(2m)(em)2.
2. This paragraph shall only apply to participants who are participating employees on or after January 1, 2000.
40.23(2m)(er)
(er) For a participant who initially becomes a participating employee on or after July 1, 2011, if the participant has less than 5 years of creditable service, the annuity amount under par.
(e) shall be 0.
40.23(2m)(f)1.1. If the annuity effective date is before the normal retirement date of the participant, the annuity amount computed under par.
(e) shall be reduced by 0.4 percent for each full month, and for each partial month including at least 15 days, before the participant's normal retirement date, except as provided in subds.
2. to
4. 40.23(2m)(f)2.
2. For a participant who terminates covered employment on or after July 1, 1990, and whose annuity is computed under par.
(e) 1. or
2., the 0.4 percent reduction of the annuity amount under subd.
1. shall be reduced by subtracting from the 0.4 percent an amount equal to 0.001111 percent for each month of creditable service, except as provided in subds.
3. and
4. 40.23(2m)(f)3.
3. Subdivision
2. shall not apply to those months specified in subd.
1. that precede the date on which the participant attains the age of 57.
40.23(2m)(f)4.
4. The resulting percentage by which the annuity amount is reduced under subd.
2. may not be less than zero.
40.23(2m)(fm)
(fm) Notwithstanding s.
40.02 (17) (intro.), for purposes of determining creditable service under par.
(f) 2., a participant's amount of creditable service in any annual earnings period shall be treated as the amount of creditable service that a teacher would earn for that annual earnings period. To be eligible for the treatment provided by this paragraph, the participant must have earned only a partial year of creditable service in at least 5 of the 10 annual earnings periods immediately preceding the annual earnings period in which the participant terminated covered employment. This paragraph does not apply to service credited under s.
40.02 (15).
40.23(2m)(g)
(g) The employer may pay to the department part or all of the costs of the actuarial reduction applicable to a participating employee under par.
(f), and the actuarial reduction for the amount paid may not be applied under par.
(f), if all of the following conditions are met:
40.23(2m)(g)1.
1. The employer has elected to pay part or all of the costs of the required actuarial reduction, the action is effective after June 30, 1990, and the employer has not taken any action to rescind the election.
40.23(2m)(g)2.
2. The participant voluntarily terminates employment with the employer after June 30, 1990, and after the employer elects under subd.
1. 40.23(2m)(g)3.
3. The employer pays to the department the difference, as determined by the department, between the actuarial cost of the annuity which would have been paid if the employer had not elected under subd.
1. and the actuarial cost of the annuity payable. The amount so paid shall be credited as employer current service contributions under s.
40.05 (2) (a), and shall be included with the first payment made under s.
40.05 (2) after the department notifies the employer of the amount due.
40.23(3)(a)(a) Except as provided in par.
(b), the initial monthly amount of any retirement annuity in the normal form shall not be less than the money purchase annuity which can be provided by applying the sum of the participant's accumulated additional and required contributions, including interest credited to the accumulations, plus an amount from the employer accumulation reserve equal to the participant's accumulated required contributions, less any accumulated contributions to purchase other governmental service under s.
40.25 (7), 2001 stats., or s.
40.285 (2) (b) to fund the annuity in accordance with the actuarial tables in effect on the annuity effective date.
40.23(3)(b)
(b) For a participant who initially becomes a participating employee on or after July 1, 2011, for purposes of calculating a money purchase annuity under par.
(a), if the participant has less than 5 years of creditable service, the amount from the employer accumulation reserve shall equal 0.
40.23(4)(a)(a) Subject to all requirements under section
401 (a) (9) of the Internal Revenue Code and federal regulations applicable to that section, which relate to a governmental plan, as defined in section
414 (d) of the Internal Revenue Code, the department shall distribute to the participant the entire amount that is credited to the account of a participant under the Wisconsin retirement system no later than the required beginning date, unless the department distributes this amount as an annuity or in more than one payment. If the department distributes this amount as an annuity or in more than one payment, the department shall begin the distribution no later than the required beginning date.
40.23(4)(b)
(b) In the calendar year immediately preceding the calendar year of a participant's required beginning date, if the department distributes the amount that is credited to the account of a participant under the Wisconsin retirement system in a form other than as a lump sum payment, the department, subject to all requirements under the Internal Revenue Code, shall calculate the distribution to the participant according to one of the following:
40.23(4)(b)1.
1. The life of a participant or, if the annuity is in the form of a joint and survivor annuity, the joint lives of the participant and the named survivor.
40.23(4)(b)2.
2. For an annuity authorized under s.
40.24 (1) (f), a term certain not to exceed the life expectancy of the participant or, if the annuity is in the form of a joint and survivor annuity, the joint life expectancies of the participant and the named survivor.
40.23(4)(c)
(c) If a participant during the calendar year before the year he or she attains the age set under section
401 (a) (9) of the Internal Revenue Code, or the alternate payee during the calendar year before the year in which the participant attains the age set under section
401 (a) (9) of the Internal Revenue Code, does not apply before December 31 in that year for a distribution of the amount that is credited to the account of a participant under the Wisconsin retirement system, the department shall begin, effective the following January 1, an automatic distribution to the participant or alternate payee in the form of an annuity specified under s.
40.24 (1) (c) or as determined by the department by rule. If the department makes an automatic distribution under this paragraph, the beneficiary designation filed with the department before the date on which the department begins the automatic distribution is no longer applicable under ss.
40.71 and
40.73. Unless the participant or alternate payee files a subsequent beneficiary designation with the department after the date on which the department begins the automatic distribution, the department shall pay any death benefit as provided under s.
40.02 (8) (a) 2. 40.23(4)(d)
(d) If a participant dies after the department begins to distribute the amount that is credited to the account of a participant under the Wisconsin retirement system, but before the entire amount in the account has been distributed, the department shall distribute the remaining portion of the account at least as rapidly as is provided in the manner of distribution selected by the participant. If the beneficiary does not apply to the department to continue the distribution, within a period specified by rule, the department shall pay the remaining distribution to the beneficiary as a lump sum.
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 set under section
401 (a) (9) of the Internal Revenue Code.
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 History
History: 1981 c. 96,
386;
1983 a. 141,
267,
391;
1987 a. 309,
372;
1987 a. 403 s.
256;
1989 a. 13;
1989 a. 56 s.
259;
1991 a. 152;
1995 a. 225,
302,
414;
1997 a. 35,
69;
1999 a. 11;
2003 a. 33;
2005 a. 153,
154;
2007 a. 96;
2009 a. 28;
2011 a. 10,
32;
2013 a. 20;
2015 a. 187;
2017 a. 362;
2021 a. 238 ss.
44,
45;
2021 a. 245.
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 named survivor, for life, upon the death of the participant, and the participant shall designate the spouse or domestic partner as the named survivor, 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 named survivor.
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.
