ETF 20.04
ETF 20.04 Optional forms of annuity. Pursuant to s.
40.24, Stats., a participant may elect one of the optional annuity forms prescribed in this section in lieu of an option prescribed under s.
40.24, Stats.:
ETF 20.04(1)
(1) A joint and survivor annuity with payments reduced 25% effective either with the payment for the month in which the participant dies, or effective with the payment for the month after the month in which the named survivor who was designated by the participant in the original application for an annuity dies.
ETF 20.04(2)(a)(a) A joint and survivor annuity payable for the life of the annuitant, with a guarantee period of at least 180 monthly payments, and after the death of the annuitant continued at 100% for the life of the named survivor who was designated by the participant as the named survivor in the original application for the annuity.
ETF 20.04(2)(b)
(b) The participant may designate a beneficiary or beneficiaries as provided in s.
40.02 (8) (a) 1., Stats., to receive the balance of payments due in the event of the death of both the participant and named survivor before 180 monthly payments have been made. The participant may change the designation of the beneficiary.
ETF 20.04(2)(c)
(c) A named survivor or beneficiary receiving a deceased participant's annuity payments under this subsection, may designate a beneficiary or beneficiaries as provided in s.
40.02 (8) (a) 1., Stats., and thereafter change his or her designation of the beneficiary of any remaining guaranteed monthly payments.
ETF 20.04(2)(d)
(d) In the event of the death of the named survivor who is receiving continued benefits after the death of the participant, but prior to payment of 180 monthly benefits, the remainder of the 180 monthly payments shall continue to the named survivor's designated beneficiary, or in the absence of a designated beneficiary or the death of all the named survivor's designated beneficiaries prior to the death of the named survivor, payment shall be made under the named survivor's standard sequence as set forth in s.
40.02 (8) (a) 2., Stats.
ETF 20.04(2)(e)
(e) In the event of the death of the named survivor prior to the death of the participant, the remainder of the 180 monthly payments shall continue to the participant's designated beneficiary, or in the absence of a beneficiary designation or the death of all the designated beneficiaries prior to the death of the participant, payment shall be made under the participant's standard sequence as set forth in s.
40.02 (8) (a) 2., Stats.
ETF 20.04(2)(f)
(f) In the event of the death of the beneficiary after becoming entitled to receive monthly payments but before receipt of the remainder of the guaranteed 180 monthly payments, the then present value of the annuity shall be paid, in lieu of the continuation of monthly payments, pursuant to s.
40.73 (2) (b) 3., Stats., as a death benefit to the beneficiary's designated beneficiary, or in the absence of a beneficiary designation or the death of all the beneficiary's designated beneficiaries prior to the death of the beneficiary, the then present value of the annuity shall be paid under the beneficiary's standard sequence as set forth in s.
40.02 (8) (a) 2., Stats.
ETF 20.04(2)(g)
(g) In the event of the death of both the named survivor and all the participant's designated beneficiaries prior to being entitled to receive benefits, the remaining monthly payments shall continue pursuant to the participant's standard sequence as set forth under s.
40.02 (8) (a) 2., Stats., if the participant's death occurs before 180 monthly payments have been made.
ETF 20.04 Note
Note: The definition of “beneficiary" was affected by
2007 Wis. Act 131. The term “named survivor" was first used and defined by
1997 Act 110, and replaced the term “beneficiary" in some cases. In reviewing the existing administrative rules using the term, to make sure the usage remained logical, correct and consistent with the new definition, the department found three provisions that needed amendment, ss.
ETF 10.70 (4),
10.70 (5) (b) 1. and
20.04 (2). This rule (
CR 09-057) amends the current rule describing the joint-and-surviving annuity option with 180-payment guarantee to use the term “beneficiary" correctly.
ETF 20.04(4)
(4) A life annuity with a number of guaranteed payments equal to the number of full calendar months in the life expectancy of the annuitant as determined under the tables at
26 CFR 1.401 (a) (9) - 9 as in effect on the date when the annuity begins.
ETF 20.04 Note
Note: This rule (
CR 09-057) concerns the optional forms of an annuity and updates the existing rule to better reflect ongoing changes in federal regulations and to more clearly state that the number of guaranteed payments is to equal the number of full calendar months in the annuitant's life expectancy.
ETF 20.04 History
History: Cr.
Register, November, 1982, No. 323, eff. 12-1-82; am. (intro.), renum. (2) to be (3) and am., cr. (2),
Register, May, 1987, No. 377, eff. 11-1-87; cr. (4),
Register, December, 1996, No. 492, eff. 1-1-97;
CR 01-096: am. (1), (2) (a) to (e) and (g) and (3),
Register December 2001 No. 552, eff. 1-1-02;
CR 09-057: am. (2) (b) to (g) and (4)
Register May 2010 No. 653, eff. 6-1-10; correction in (2) (c) made under s.
13.92 (4) (b) 7., Stats.,
Register May 2010 No. 653;
CR 19-126: am. (4)
Register May 2021 No. 785, eff. 6-1-21.
ETF 20.045
ETF 20.045 Changes to optional form of payment. ETF 20.045(2)(a)(a) If a participant, alternate payee or beneficiary has made a timely request under sub.
(1) to change from a lump sum payment to a monthly annuity, the effective date of the annuity shall be determined based on the original date on which the department received the original application for benefits.
ETF 20.045(2)(b)
(b) If the department receives a timely payment option change request after the lump sum payment has already been issued, or receives it too late to prevent the payment from being issued, the applicant must return the payment in full within 30 calendar days after the date on which the department received the option change request. If the lump sum payment is not returned within the 30-day period, the option change request is null and void.
ETF 20.045(2)(c)
(c) The department shall not commence making annuity payments before the department has received the returned lump sum payment.
ETF 20.045(3)
(3) If a participant, alternate payee or beneficiary has made a timely request under sub.
(1) to change from a monthly annuity to a lump sum payment after one or more monthly payments have been issued, or if the department receives the option change request too late to prevent a monthly payment from being issued, the amount of the annuity payments that would have been paid under the terminated annuity if the annuity had been a straight life annuity shall be deducted from the lump sum payment that would otherwise have been payable.
ETF 20.045 Note
Note: This rule (
CR 09-057) codifies the department interpretation that the deadline for making a change to an optional form of payment is 60 days after the date on which the first annuity check is issued or funds are otherwise transferred. If the request for a payment option change is received by the department too late to prevent the lump sum payment, the applicant has 30 calendar days from the date of the request to return the payment in full.
ETF 20.045 Note
If the request is received too late to prevent issuance of one or more monthly payments, the value of the payments issued shall be deducted from the lump sum payment.
ETF 20.045(4)
(4) Subject to the restrictions in s.
40.24 (7) (a), Stats., a participant's request to change the designation of a named survivor to a different named survivor shall be subject to the deadline specified in s.
40.24 (4), Stats., for changing the optional form of payment selected.
ETF 20.045 History
History: CR 09-057: cr.
Register May 2010 No. 653, eff. 6-1-10;
CR 11-040: cr. (4)
Register July 2012 No. 679, eff. 8-1-12.
ETF 20.05
ETF 20.05 Accelerated payment annuity options. ETF 20.05(1)(1)
A participant, alternate payee or beneficiary shall not be eligible for the accelerated payment annuity if the reduced annuity payable for life in the normal form under s.
40.24 (1) (e), Stats., would be equal to or less than $129 per month for a benefit with an effective date in calendar year 2001 or, for a benefit with an effective date in a subsequent calendar year, the monthly amount applied under this section for the previous calendar year increased by the salary index, as defined in s.
40.02 (52), Stats., ignoring fractions of the dollar.
ETF 20.05(2)
(2) Pursuant to s.
40.03 (2) (k), Stats., the department will assume that the primary OASDHI benefit, as defined in s.
40.02 (44), Stats., for a person eligible to receive a beneficiary annuity and selecting an option payable under s.
40.24 (1) (e), Stats., will be based on the work record of the participant from whose account the benefit is being paid.
ETF 20.05 History
History: Cr.
Register, June, 1979, No. 282, eff. 1-1-80; cr. (2), (1) renum. from ETF 7.02 (1) and am.,
Register, November, 1982, No. 323, eff. 12-1-82; am. (1),
Register, December, 1987, No. 384, eff. 1-1-88;
CR 01-096: am. (1) and (2),
Register December 2001 No. 552, eff. 1-1-02.
ETF 20.055
ETF 20.055 Spouse's or domestic partner's signature on a benefit application. Documentation of inability to obtain a spouse's or domestic partner's signature on an annuity application as required under s.
40.24 (7) (a) or s.
40.25 (3m), Stats., or on a separation benefit application as provided in s.
40.25 (3m), Stats., shall be accepted for any of the following reasons:
ETF 20.055(1)(a)(a) The spouse or domestic partner is incompetent as defined under s.
54.10 (3), Stats., and a copy of the court order appointing the spouse's or domestic partner's guardian is submitted to the department.
ETF 20.055(1)(b)
(b) The guardian's signature shall be required on the annuity application in lieu of the spouse's or domestic partner's signature if the participant chooses an annuity option other than an option specified under s.
40.24 (7) (a) or
40.25 (1) (a), Stats.
ETF 20.055(1)(c)
(c) The spouse's, domestic partner's or guardian's signature is not required when the participant is only eligible for a single sum benefit payable under s.
40.25 (1) (a), Stats.
ETF 20.055(2)
(2) The participant certifies, on a form provided by the department, that the participant does not now know and has not known the whereabouts of the spouse or domestic partner for at least the 90 days immediately prior to the date the application is signed, or the participant provides evidence to the department's satisfaction that the spouse's or domestic partner's signature is otherwise not obtainable.
ETF 20.055 Note
Note: Section
ETF 20.055 (2) requires a form which can be obtained at no charge by writing to: department of employee trust funds, P.O. Box 7931, Madison, WI 53707-7931, or by calling: (608) 266-3285 or toll free at (877) 533-5020.
ETF 20.055(3)
(3) The requirements in s.
40.24 (7) (a) (intro.) and
(b), Stats., and in s.
40.25 (3m), Stats., as it applies to s.
40.25 (1) (b), Stats., related to the requirement for the domestic partner's signature on benefit applications, shall not apply if the participant is prohibited under the internal revenue code from selecting a joint and survivor annuity with the domestic partner as the named survivor, based on the participant's and domestic partner's respective ages.
ETF 20.055 History
History: Cr.
Register, September, 1986, No. 369, eff. 10-1-86;
EmR0938: emerg. am. eff. 1-1-10;
CR 10-004: am.
Register July 2010 No. 655, eff. 8-1-10;
CR 10-137: am.
Register August 2011 No. 668, eff. 9-1-11.
ETF 20.06
ETF 20.06 Early retirement reduction factors. Pursuant to s.
40.23 (2), Stats., this section applies only to participants who are not participating employees after March 9, 1984. In computing a formula annuity in the normal form beginning prior to the normal retirement date of a participant, there shall be a .5% reduction for each month the participant's age is under 65 but at least 60 and a .4% reduction for each month the participant's age is under 60.
ETF 20.06 History
History: Cr.
Register, June, 1979, No. 282, eff. 1-1-80; renum. from ETF 7.02 (2),
Register, November, 1982, No. 323, eff. 12-1-82; am.
Register, March, 1986, No. 363, eff. 4-1-86.
ETF 20.07
ETF 20.07 Annuity options — automatic distributions. ETF 20.07(1)(1)
When the department begins to distribute an account under the provisions of s.
40.23 (4) (c), Stats., the benefit shall include the amount, if any, which can be provided by accumulated employer and employee required and additional contributions credited to the account. The department may not distribute a participating employee's account under this section.
ETF 20.07(2)
(2) The benefit shall be paid in the first of the following forms that applies:
ETF 20.07(2)(a)
(a) For benefits payable solely from the participant's additional contribution accumulations under s.
40.05 (1) (a) 5., Stats., or if the amount of the annuity in the normal form based on all undistributed balances in the account is less than the amount determined under s.
40.25 (1) (a), Stats., a lump sum payment.
ETF 20.07(2)(b)
(b) If the participant's or alternate payee's age on the birthday which occurs during the year that the distribution begins is less than 72, the option specified in s.
40.24 (1) (c), Stats.
ETF 20.07(2)(c)
(c) If the participant's or alternate payee's age on the birthday which occurs during the year that the distribution begins is 72 or more, except as provided in par.
(d), the option specified in s.
ETF 20.04 (4).
ETF 20.07(2)(d)
(d) If the number of guaranteed payments determined under s.
ETF 20.04 (4) is less than 60, a lump sum payment equal to the present value of the annuity.
ETF 20.07(3)
(3) The effective date of the automatic distribution paid under sub.
(2) shall be January 1 of the year in which the participant attains or would have attained the age provided in section
401 (a) (9) of the Internal Revenue Code, or January 1 of the year following the year in which the participant retires, if later. Standard sequence under s.
40.02 (8) (a) 2., Stats., shall become effective with regard to beneficiaries of death benefits under ss.
40.71 and
40.73, Stats., on the effective date of the automatic distribution.
ETF 20.07(4)
(4) The participant or alternate payee may not cancel distributions under this section, except as provided in sub.
(5). Subject to the requirements of the internal revenue code, the participant or alternate payee may change the optional form of payment as provided under s.
40.24 (4), Stats.
ETF 20.07(5)
(5) The department shall distribute the account as specified in this section unless the department receives the participant's or alternate payee's application for the benefit on a form provided by the department. The application may specify a deferred effective date which may not be later than March 1 of the calendar year after the year in which participant attains the age provided in section
401 (a) (9) of the Internal Revenue Code, or March 1 of the calendar year following the year in which the participant retires, if later. For alternate payees of deceased participants, the deferred effective date may not be later than March 1 of the calendar year after the participant would have attained the age provided in section
401 (a) (9) of the Internal Revenue Code. The department must receive the application specifying a deferred benefit effective date on or after January 1 of the year before the year in which the participant attains (or, for alternate payees of deceased participants, would have attained) the age provided in section
401 (a) (9) of the Internal Revenue Code, but no later than the deadline to request cancellation provided under s.
ETF 20.20 (3) or
(4) with respect to the benefit which is being automatically distributed.
ETF 20.07 Note
Note: Federal regulations require that a distribution from a qualified retirement plan begin no later than April 1 of the year following the year in which the participant would have attained the age provided in section
401 (a) (9) of the Internal Revenue Code or retires, whichever is later. A form specifying a requested annuity effective date, form ET-4934, is available from the department of employee trust funds at no charge.
ETF 20.07(6)
(6) If the participant or alternate payee submits a waiver of a lump sum benefit under s.
40.08 (3), Stats., and the department receives it on or before the deadline specified in s.
ETF 20.20 (3) or
(4), the department shall defer the automatic distribution during the waiting period before the waiver effective date. The department shall not defer automatic distribution of monthly annuity benefits if a waiver is filed, but shall continue to make monthly payments until the waiver takes effect.
ETF 20.07 History
History: Cr.
Register, December, 1996, No. 492, eff. 1-1-97; correction in (2) (a) made under s. 13.93 (2m) (b) 4. and 7., Stats.,
Register, July, 1999, No. 523;
CR 09-057: am. (6)
Register May 2010 No. 653, eff. 6-1-10;
CR 23-023: am. (3), (5) Register May 2024 No. 821, eff. 6-1-24.
ETF 20.08
ETF 20.08 Termination of marriage or domestic partnership for determination of beneficiary. For purposes of determining a beneficiary under s.
40.02 (8) (a) 2., Stats., a judgment, order or decree of divorce, legal separation or an annulment of the marriage terminates the marital relationship. A domestic partnership terminates as specified in s.
ETF 20.10 (3) for the purposes of determining a beneficiary under s.
40.02 (8) (a) 2., Stats.
ETF 20.08 History
History: EmR0938: emerg. cr. eff. 1-1-10;
CR 10-004: cr.
Register July 2010 No. 655, eff. 8-1-10; title created under s.
13.92 (4) (b) 2., Stats.,
Register July 2010 No. 655.
ETF 20.10
ETF 20.10 Domestic partner benefits. ETF 20.10(1)(1)
For the purposes of this section, “member" means any of the following persons:
ETF 20.10(2)(a)(a) For the purposes of the benefits authorized under ch.
40, Stats., a domestic partnership as defined in s.
40.02 (21d), Stats., becomes effective on the date that the department receives a completed and notarized
Affidavit of Domestic Partnership form (ET-2371), except that a domestic partnership cannot become effective before January 1, 2010.
ETF 20.10(2)(c)
(c) Registering as domestic partners under the provisions of ch.
770, Stats., does not establish a domestic partnership for the purposes of the benefits authorized in ch.
40, Stats.
ETF 20.10(2)(d)
(d) Establishing a domestic partnership in another state does not establish a domestic partnership for the purposes of the benefits authorized in ch.
40, Stats.
ETF 20.10(3)
(3) Once a domestic partnership becomes effective it remains in force until the earlier of the following dates:
ETF 20.10(3)(a)
(a) The date on which the department receives a notarized
Affidavit of Termination of Domestic Partnership form (ET-2372) signed by either the member or the domestic partner.
ETF 20.10(3)(b)
(b) Based on evidence provided to the department, the date established to the department's satisfaction that the domestic partnership no longer met all of the conditions in s.
40.02 (21d), Stats. Examples of no longer meeting the conditions include one of the domestic partners marrying another person or establishing a new domestic partnership with a different partner under sub.
(2), or no longer sharing a common residence.
ETF 20.10(3)(c)
(c) The date on which neither domestic partner is a member as defined in sub.
(1).
ETF 20.10(3)(d)
(d) The date determined by the court that a domestic partnership terminated.
ETF 20.10(3)(e)
(e) The department may reject any
Affidavit of Termination of Domestic Partnership (ET-2372) that is illegible or missing information necessary for benefit administration purposes. Any affidavit terminating a domestic partnership that is missing the name of either domestic partner, the signature of the domestic partner who is terminating the domestic partnership, or is not notarized shall be rejected, and shall have no force or effect. Except as provided in pars.
(b),
(c), and
(d), for the purposes of the benefits authorized in ch.
40, Stats., the effective date of the termination of the domestic partnership shall be based on the date the department receives a completed, signed and notarized
Affidavit of Termination of Domestic Partnership form (ET- 2372).
ETF 20.10(3)(f)
(f) Terminating a domestic partnership created under the provisions of ch.
770, Stats., does not terminate a domestic partnership established under sub.
(2) for the purposes the benefits authorized in ch.
40, Stats.
ETF 20.10(4)
(4) Affidavits certifying or terminating a domestic partnership that are received after the date of death of either domestic partner are invalid, and shall have no force or effect.
ETF 20.10(5)
(5) The domestic partner provisions in ss.
40.08 (8) (a) 4. and
40.23 (4) (e) 1. and
(f), Stats., shall not apply if such provisions are inconsistent with any internal revenue code provisions that authorize and regulate the benefit plan.
ETF 20.10 Note
Note: The Affidavit of Termination of Domestic Partnership form, ET-2372, can be obtained at no charge by writing to: department of employee trust funds, P.O. Box 7931, Madison, WI 53707-7931, or by calling: (608) 266-3285 or toll free at (877) 533-5020. The forms also are available on the department's website: etf.wi.gov.
ETF 20.10 History
History: EmR0938: emerg. cr. eff. 1-1-10;
CR 10-004: cr.
Register July 2010 No. 655, eff. 8-1-10; correction in (3) (e) made under s.
13.92 (4) (b) 7., Stats.,
Register July 2010 No. 655;
CR 19-126: r. (2) (b), am. (2) (d)
Register May 2021 No. 785, eff. 6-1-21.
ETF 20.12
ETF 20.12 Payments considered Wisconsin retirement system earnings. ETF 20.12(1)(a)
(a) The purpose of this section is to establish the circumstances under which some or all payments made as a remedy for an employment dispute may be treated as earnings for Wisconsin retirement system purposes and to state the elements required for such treatment.
ETF 20.12(1)(b)
(b) This section applies to court orders and compromise settlements having an effective date which is on or after May 16, 1996.
ETF 20.12(1)(c)
(c) This section does not apply to retroactive or other wage payments made to all eligible employees in a bargaining unit under a collective bargaining contract.
ETF 20.12(2)(a)(a) “Compromise settlement," for purposes of this section, means a written, binding agreement between a participating employer and a current or former participating employee of that employer, to settle a wage claim or a dispute involving an involuntary suspension or termination of participating employment. For purposes of this section only, the department shall treat a final order issued by the Wisconsin employment relations commission or an arbitration award under a collective bargaining agreement, for which all appeal opportunities have expired without an appeal being filed, as a compromise settlement.
ETF 20.12(2)(b)
(b) “Effective date" of the court order or compromise settlement, for purposes of this section, means the date an order of the court, the Wisconsin employment relations commission, or an arbitrator is issued or, when the matter is resolved by a compromise settlement signed by the parties rather than a final order, the date on which the compromise settlement in its final form is first signed by all of the parties.
ETF 20.12(3)
(3) Except as provided in this section, no payment resulting from a court order or compromise settlement may be considered as earnings for Wisconsin retirement system purposes. The department may decline to act on a court order or compromise settlement which does not contain all of the information required under this section or is otherwise defective.
