ETF 20.17(4)(c)7.a.a. The service was not performed as an independent contractor or subject to a contract under which the employee furnished more than his or her personal services. ETF 20.17(4)(c)7.b.b. That the services were not performed as a student assistant, or as an employee-in-training or for a school or other educational institution where the employee was a student attending classes and performing services incidental to the course of study. ETF 20.17(4)(c)7.c.c. The services were not performed on or after April 23, 1992, while the person was a full-time student who had not attained age 20. ETF 20.17(4)(c)7.d.d. The services were not performed after the person had already become an annuitant, excluding annuities received in the capacity of another person’s beneficiary, named survivor or alternate payee. ETF 20.17(4)(c)7.e.e. The services were not performed for a hospital, home or institution while the person was a patient or inmate. ETF 20.17(4)(c)7.f.f. The employer was not a private or non-profit entity under a contract to provide services to or on behalf of a governmental entity. ETF 20.17(4)(c)8.8. If the participating employee is applying to receive creditable service for service in the U.S. armed forces or national guard, evidence that the employee was discharged from the U.S. armed forces or national guard under honorable or general conditions. ETF 20.17(4)(d)1.1. The cost to purchase other governmental service is intended to fully fund the anticipated benefit increase provided by the purchased service credit, based on the laws then in effect. ETF 20.17(4)(d)2.2. The actuary shall devise the method for calculating the cost to purchase other governmental service. The actuary’s calculation shall use the same economic and actuarial assumptions used in the actuary’s valuations of the Wisconsin retirement system. The actuary shall establish the factors necessary to determine the actuarial value to each applicant of the purchased service credit. Those factors may include, without limitation: ETF 20.17(4)(d)2.a.a. The participant’s current employment category as determined under s. 40.23 (2m) (e), Stats. If the participant is employed in 2 or more categories on the date of application, the computation shall be based on the current employment category in which the participant has accrued the most creditable service. ETF 20.17(4)(d)2.b.b. The participant’s earnings for the last completed annual earnings period, as of January 1 preceding the date of application. ETF 20.17(4)(d)2.c.c. The number of years, in hundredths of a year, of service credit the participant requests to purchase. ETF 20.17(4)(d)2.e.e. The participant’s accumulated employee required contributions, including interest, as of the January 1 preceding the date of application. ETF 20.17(4)(d)2.f.f. Twelve times the participant’s final average earnings determined as of January 1 preceding the date of application. ETF 20.17(4)(d)2.g.g. The participant’s years of creditable service, including all previously purchased service credit, by employment category and by pre-2000 and post-1999 service. ETF 20.17 NoteNote: This amendment (CR 09-057) to the existing rule provides clarification that the actuary may include the eight factors specified in the rule when determining the actuarial value of the purchased service credit along with other relevant factors. In addition, the rule corrects a typo by adding the word “service” to the applicable section. ETF 20.17(4)(d)3.3. The actuary may, at any time, change the method of calculating the cost of other governmental service credits if warranted by changes in the benefit laws or valuation assumptions of the Wisconsin retirement system or by other factors the actuary determines to be actuarially significant. The actuary’s new method of calculation shall be applied as soon as possible unless a delayed effective date is recommended by the actuary. The department may complete pending transactions and honor cost estimates produced before the new method of calculation went into effect. ETF 20.17(4)(e)(e) Creditable service based on purchase of other governmental service; limitations. ETF 20.17(4)(e)1.1. The amount of other governmental service purchased through all purchases made under this section may not exceed the amount of the participant’s creditable service earned under the Wisconsin retirement system and credited as of the date of the last application to purchase other governmental service, excluding any service previously purchased by the participant. ETF 20.17(4)(e)2.2. Other governmental service shall be credited in the general employment category regardless of the employee’s current employment category or the nature of the service, and benefits based on the purchased service shall be calculated under s. 40.23 (2m) (e) 1., Stats. ETF 20.17(4)(e)3.3. Service, including teaching service, shall be granted in hundredths of a year, at the rate of one year for 1,904 hours or more worked in one calendar year. If the participant worked less than 1,904 hours in a calendar year, the partial year of other governmental service shall be calculated by dividing the number of hours worked by 1,904. ETF 20.17(4)(e)4.4. A participant’s total creditable service in any annual earnings period from all sources may not exceed one year. ETF 20.17(4)(e)5.5. Creditable service purchased under this section shall be used solely to calculate a formula annuity benefit amount based upon years of creditable service, as under ss. 40.23 (2) (b) or (2m) (e), 40.25 (1), 40.63 (8), and 40.73 (1) (c), Stats. The department may not consider purchased other governmental service for any other purpose, including but not limited to determining: ETF 20.17(4)(e)5.d.d. The amount of creditable service which the participant is eligible to reestablish under s. 40.285 (2) (a), Stats., or to purchase under this subsection. ETF 20.17(4)(e)5.f.f. Notwithstanding sub. (1) (g) 1., if any service for a Wisconsin employer which has been credited under this section is subsequently recognized as creditable prior service under s. 40.21 (6), Stats., the participant’s creditable service for other governmental service shall be reduced accordingly and the associated contributions plus the interest credited to those contributions shall be transferred to the employee’s additional account and shall be available to the employee in the same manner as other contributions under s. 40.05 (1) (a) 5., Stats. No other refund to the employee may be made. ETF 20.17(4)(f)(f) Payments received to purchase other governmental service; limitations on benefits. The department shall account for amounts received to purchase other governmental service, and the interest credited to such in a manner that permits identifying and subtracting such funds from amounts to be increased by a matching amount from the employer reserve when computing a money purchase annuity or a death benefit, as provided by ss. 40.23 (3) and 40.73 (1) (am), Stats., and for purposes of calculating the hypothetical annuity under s. 40.73 (1) (c), Stats. ETF 20.17(4)(g)(g) Payment shortfall. If the participant does not withdraw the application or pay the balance due on a payment shortfall within 30 days after notice is sent to the participant, the department shall complete the purchase, either by deducting the amount due from the participant’s annuity, if any, as provided in sub. (1) (h) or by reducing the amount of service credit purchased to the credit that can be purchased by the payment actually received. ETF 20.17(5)(5) Credit for service during qualifying period. ETF 20.17(5)(b)(b) Calculation of amount due. The department’s estimate to purchase service shall be calculated based on the fraction of a year of qualifying service that is available for purchase under s. 40.285 (2) (d), Stats., and this subsection. The payment to purchase qualifying service as provided in s. 40.285 (2) (d), Stats., shall be based on the applicant’s highest earnings in a single annual earnings period as of the date of application. The earnings shall be annualized prior to calculating the amount due from an applicant who earned less than a full year of service in the highest annual earnings period as defined in s. 40.02 (3), Stats. ETF 20.17 NoteExample 1. Calendar year 2005 was the applicant’s highest annual earnings period on the date her application to purchase service is received. During 2005, the applicant had 0.75 years of creditable service and $27,000 in earnings. The earnings will be “annualized” to $36,000 (i.e., $27,000 divided by 0.75) and that amount will be used for purposes of calculating the payment due.
ETF 20.17 NoteExample 2. An applicant whose annual earnings periods are calendar years had $34,000 in earnings and 1.0 years of creditable service in 2004, the highest earnings reported for any calendar year as of the date of application. The applicant also had $27,000 in earnings but only 0.75 years of creditable service in 2005. For purposes of calculating the payment due, the actual earnings for 2004 will be used because that is the highest earnings year, and the department will not annualize the lower 2005 earnings to $36,000.
ETF 20.17(5)(c)(c) Requirement to first purchase forfeited service. If a participating employee has previously received a separation benefit or withdrawal of member contributions after serving a qualifying period, the participant may purchase credit for a qualifying period only if the participant has first reestablished the maximum possible years of forfeited creditable service under s. 40.285 (2), Stats., that the participant is eligible to buy as of the date that the department receives the application to buy qualifying service. ETF 20.17(5)(d)(d) Employment category to be credited. The qualifying period of service shall be credited to the employment category in which the service would be credited if the qualifying service had been creditable at the time it was performed. ETF 20.17(6)(6) Purchase of service for teacher improvement leave. ETF 20.17(6)(b)(b) Eligibility; Board of Regents certification. In addition to the other requirements of sub. (1) for applying, the applicant is responsible for first applying to the Board of Regents as required by s. 40.285 (2) (e) 1., Stats., and obtaining the certification of the period of compensated teacher improvement leave occurring between January 1, 1964, and August 31, 1967. The Board of Regents certification must be submitted to the department in order to obtain the application form to apply to purchase credit for the service. ETF 20.17 NoteNote: The form “Uncredited Teaching Service Purchase Estimate/Application,” form ET-4323 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 20.17(6)(c)(c) Calculation of amount due. The department’s estimate to purchase service shall be calculated based on all the years and fractions of a year of teacher improvement leave that are identified in the Board of Regents’ certification and are available for purchase under s. 40.285 (2) (e), Stats., and this subsection. ETF 20.17(7)(7) Purchase of previously uncredited service as a junior teacher. ETF 20.17(7)(b)(b) Eligibility. Purchase of service under this subsection is available only to participating employees who were both: ETF 20.17(7)(b)1.1. Engaged as a principal occupation in teaching in the public schools, state colleges or university of the state or any political subdivision of the state, excluding the city of Milwaukee. ETF 20.17(7)(b)2.2. So employed during any part of a school year prior to the 1957-58 school year, when the teacher’s 25th birthday had not occurred by the July 1 immediately preceding the beginning of the school year. ETF 20.17(7)(c)(c) Calculation of amount due. The department’s estimate to purchase service shall be calculated based on all the years and fractions of a year of junior teaching service that are available for purchase under s. 40.285 (2) (f), Stats., and this subsection. ETF 20.17(8)(8) Purchase of previously uncredited service as an executive official. ETF 20.17(8)(a)(a) Scope. This subsection applies to purchases of previously uncredited service as an executive official under s. 40.285 (2) (c), Stats. ETF 20.17(8)(b)(b) Eligibility. Except as provided in par. (c), any current participating employee who, on or after May 3, 1988, was an executive participating employee as defined by s. 40.02 (30), Stats., may purchase credit under s. 40.285 (2) (c), Stats., for service previously uncredited due to any statutory age restriction for persons over age 62, provided the participating employee also meets the criteria of subd. 1. or 2. or both. ETF 20.17(8)(b)1.1. Was born before January 1, 1920, and who at any time from July 1, 1974 through September 30, 1981, held a position listed in s. 20.923 (4), (8) or (9), Stats., during the time of employment. ETF 20.17 NoteNote: Section 20.926 (1) (a), Stats., as in effect from July 1, 1974, through December 31, 1981, excluded credit for service in such position rendered after the end of the calendar quarter in which the person attained age 62.
ETF 20.17(8)(b)2.2. Was born before February 1, 1926, and who at any time from October 1, 1981, through January 31, 1988, held a position listed in s. 20.923 (4), (8) or (9), Stats., during the time of employment. ETF 20.17 NoteNote 1: Section 40.02 (17) (c), Stats., as in effect from January 1, 1982, until May 3, 1988, barred creditable service for persons in such positions after the first day of the fourth month commencing after attaining the age of 62.
ETF 20.17 NoteNote 2: The referenced positions listed in s. 20.923 (4), (8) and (9), Stats., include the president of the university of Wisconsin system, which was so listed in s. 20.923 (4) (j) 1., Stats., effective from August 4, 1973, and at all times material to s. 40.285 (2) (c), Stats. ETF 20.17(8)(c)(c) Exclusion from eligibility. No person who purchased creditable service under s. 40.02 (17) (e), Stats., as in effect from May 3, 1988, until July 26, 2003, is eligible to purchase creditable service under s. 40.285 (2) (c), Stats. ETF 20.17(8)(d)(d) Calculation of amount due. The department’s estimate shall be calculated based on all the years and fractions of a year of previously uncredited service that are available for purchase under s. 40.285 (2) (c), Stats., and this subsection. All participating employees purchasing service under s. 40.285 (2) (c), Stats., shall pay the same rate for such service, as prescribed by that statute, regardless of whether the participating employee is a present or former elected official or an appointee of such an official. ETF 20.17(8)(e)(e) No retroactive effect on prior payment. No present or former elected official, or an appointee of such an official, who purchased service under former s. 40.02 (17) (e), Stats., as in effect from May 3, 1988 through August 14, 1991, shall be entitled to any refund or additional benefit based upon the amendment of s. 40.02 (17) (e), 1989 stats., by 1991 Wisconsin act 39 or the renumbering and subsequent amendment of s. 40.02 (17) (e), Stats., by 2003 Wisconsin act 33. ETF 20.17 HistoryHistory: CR 07-062: cr. Register June 2008 No. 630, eff. 7-1-08; CR 09-057: am. (4) (d) 2. (intro.) and g. Register May 2010 No. 653, eff. 6-1-10; correction in (1) (c) 3. a. made under s. 13.92 (4) (b) 7., Stats., Register August 2013 No. 692, eff. 9-1-13; correction in (3) (b) made under s. 13.92 (4) (b) 7., Stats., Register October 2013 No. 694, eff. 11-1-13; CR 14-055: r. (2) (d), am. (2) (f) 1. (intro.), (4) (b) 3. b., r. and recr. (4) (c) 6., am. (4) (c) 7. (intro.), a., e., cr. (4) (c) 8. Register May 2015 No. 713, eff. 6-1-15; 2015 Wis. Act 330 s. 20: am. (6) (b), (c) Register April 2016 No. 724, eff. 5-1-16; CR 19-126: am. (1) (b) 2., (d) 4., (4) (b) 3. b., (e) 5. b. Register May 2021 No. 785, eff. 6-1-21. ETF 20.19ETF 20.19 Treatment of purchased and other creditable service for percentage rates used to calculate retirement, disability and certain death benefits. ETF 20.19(1)(1) Purpose. 1999 Wisconsin Act 11 provides a higher percentage rate under s. 40.23 (2m) (e), Stats., for creditable service performed before January 1, 2000. The purpose of this section is to further clarify what percentage rate will apply to creditable service added to a participant’s account through service purchases, creditable military service, creditable prior service, and any other service added to the participant’s account as a result of a court decision, legislation, or any other means, and assumed creditable service used to calculate a disability benefit as provided in s. 40.63 (8), Stats. ETF 20.19(2)(2) Purchased and other creditable service. For purposes of s. 40.23 (2m) (e), Stats., all of the following shall apply: ETF 20.19(2)(b)(b) Purchased service credit under s. 40.285 (2) (a), Stats., for service forfeited after January 1, 2000 shall be treated as post-1999 service, regardless of when the services were actually rendered. This same treatment applies to purchased service credit for service that was originally forfeited before January 1, 2000, then purchased under s. 40.285 (2) (a), Stats., or s. 40.25 (6), 1981-2001 stats., was subsequently forfeited after January 1, 2000, through a separation benefit paid under s. 40.25 (2), Stats., then later purchased under s. 40.285 (2) (a), Stats., or s. 40.25 (6), 1999-2001 stats. ETF 20.19 NoteNote: Section 40.25 (6), Stats., was repealed by 2003 Wis. Act 33. ETF 20.19(2)(c)(c) Purchased service credit under s. 40.285 (2) (a), Stats., for creditable service forfeited before January 1, 2000, will be treated as pre-2000 service if the creditable service in question was forfeited before January 1, 2000, regardless of when the service credit is purchased. ETF 20.19(2)(d)(d) If for any reason a participant who is eligible to purchase service credit for both service that was forfeited before January 1, 2000 and service that was forfeited after January 1, 2000, purchases less than all of the available service credit, then the payment received shall first be applied to purchase credit for service treated as pre-2000 service. ETF 20.19(2)(dm)(dm) Purchased service credits under s. 40.285 (2) (b), Stats., for other governmental service will be treated as pre-2000 or post-1999 service depending on when the actual services for which credit is purchased were rendered to the governmental entity described in s. ETF 20.17 (1) (f). ETF 20.19(2)(e)(e) A qualifying period of service purchased under s. 40.285 (2) (d), Stats., shall be considered to be performed before January 1, 2000. ETF 20.19(2)(g)(g) Creditable service granted under s. 40.02 (17) (gm), Stats., for services performed as an assistant district attorney shall be considered to be performed before January 1, 2000. ETF 20.19(2)(h)(h) Teacher improvement leave purchased under s. 40.285 (2) (e), Stats., shall be considered to be performed before January 1, 2000. ETF 20.19(2)(j)(j) Service performed as a member or employee of the legislature or employee of a legislative service agency that is purchased under 1999 Wis. Act 11, section 27 (2), shall be considered to be performed before January 1, 2000. ETF 20.19(2)(k)(k) Creditable prior service credited under s. 40.02 (16), Stats., that was actually performed before January 1, 2000 shall be considered to be performed before January 1, 2000. Creditable prior service that was actually performed after December 31, 1999 shall be considered to be performed after that date. ETF 20.19(2)(L)(L) Any other service actually performed before January 1, 2000 that is credited to the participant’s account as a result of a court decision, legislation, or any other means shall be considered to be performed before January 1, 2000 for the purpose of determining the applicable percentage rate under s. 40.23 (2m) (e), Stats. ETF 20.19(3)(3) Creditable military service. For purposes of s. 40.23 (2m) (em) 1. c., Stats.,the amount of creditable military service that is considered to be performed before January 1, 2000, is granted in proportion to the final amount of the participant’s total creditable service, other than creditable military service, credited to the participant’s account. ETF 20.19(4)(a)(a) The assumed creditable service under s. 40.63 (8), Stats., that is calculated through December 31, 1999 shall be considered to be performed before January 1, 2000, and the assumed creditable service calculated for any period after December 31, 1999 shall be considered to be performed after that date. ETF 20.19(4)(b)(b) Any assumed creditable military service for which a participant is eligible based on actual and assumed creditable service that is calculated through December 31, 1999 shall be considered to be performed before January 1, 2000. Any assumed creditable military service for which a participant is eligible based on actual and assumed creditable service that is calculated for any period after December 31, 1999 shall be considered to be performed after that date. ETF 20.19(5)(5) Creditable service for periods of temporary disability. Creditable service granted for any period of temporary disability through December 31, 1999 under s. 40.29, Stats., shall be considered to be performed before January 1, 2000. The creditable service granted for any period of temporary disability after December 31, 1999 shall be considered to be performed after that date. ETF 20.19(6)(6) Treatment of creditable service after a retirement annuity is terminated and the account reestablished. When a participant’s account is reestablished under s. 40.26 (2), Stats., if the participant was not a participating employee after December 31, 1999 but before the effective date of the participant’s retirement annuity that was terminated under s. 40.26 (1), Stats., the percentage rates under s. 40.23 (2m) (e), Stats., shall not apply to the creditable service considered to be performed before January 1, 2000 that was performed before the annuity effective date. ETF 20.19(7)(7) Treatment of creditable service after a disability annuity is terminated and the account reestablished. ETF 20.19(7)(a)(a) When a participant’s account is reestablished under s. 40.63 (10), Stats., if the participant is a participating employee after December 31, 1999, all creditable service that is considered to be performed before January 1, 2000 under this section and under s. 40.23 (2m) (em), Stats., shall be considered to be performed before January 1, 2000, for any subsequent benefit calculations.
