SECTION 13. ETF 11.08 (2) (b) 3. is amended to read:
ETF 11.08 (2) (b) 3. The appeal concerns a request to correct an alleged error with respect to service credits or contribution, premium or benefit payments and the request was made more than 7 full calendar years after the date of the alleged error or beyond another applicable limitation specifically provided by statute. If the alleged error is the result of fraud the applicable limitation is instead 6 3 years from the date the aggrieved person discovered the facts constituting the fraud. Any portion of the appeal not time-barred may proceed.
SECTION 14. ETF 11.09 (5) is amended to read:
ETF 11.09 (5) Agenda. Board staff shall place the appeal on the agenda for the regular board meeting next following the expiration of the time limit for filing objections. Board staff The appeals coordinator shall provide each board member with a copy of the record, including the proposed decision and the timely filed objections to the proposed decision. If board members would have less than 7 calendar days to review the record, proposed decision and timely objections, or the board's agenda is already full, the appeal may instead be added to the agenda of the subsequent regular board meeting. Nothing in this subsection shall prevent the board from electing to hear an appeal case at a special meeting of the board.
SECTION 15. ETF 11.12 (1) (d) 3. and (7) are amended to read:
ETF 11.12 (1) (d) 3. ‘Overpayment refund.’ If the final decision concludes that the appellant has overpaid the Wisconsin retirement system and a refund is due, the final decision shall include an order to the board staff appeals coordinator to compute the amount of the refund, as provided in this chapter. That computation shall be incorporated by reference into the final decision and order to the department to pay the refund.
(7) Notice. Board staff The appeals coordinator shall mail a copy of the final decision to each party or that party's attorney of record by first class mail. Each party, or that party's attorney of record shall also be mailed notice of the right to petition the board for a rehearing, the right to judicial review of an adverse decision, the time limits for filing a petition for rehearing or judicial review and the name of the board to be named as respondent.
SECTION 16. ETF 11.13 (1) (intro.) and (3) are amended to read:
ETF 11.13 (1) (intro.) The hearing examiner and board staff appeals coordinator shall create a record of each appeal which shall include all of the following:
(3) The board staff appeals coordinator shall arrange for a stenographic, electronic or other record of the hearing proceedings to be made. A written transcript of the hearing shall be prepared upon request of a party, the hearing examiner, the board or the department. If a written transcript is prepared, the stenographic, electronic or other record need not be retained.
SECTION 17. ETF 11.14 (4) (a) is amended to read:
ETF 11.14 (4) (a) The board staff appeals coordinator shall immediately forward the petition for rehearing and the record to the hearing examiner, who shall consider and grant or deny the petition within 20 days.
SECTION 18. ETF 11.16 (2) (intro.) is amended to read:
ETF 11.16 (2) (intro.) Computing refund of overpayment. If the final decision of an appeal determines that a participant overpaid the department and is entitled to a refund, the board shall direct board staff the appeals coordinator to calculate the refund due under s. 40.08 (6), Stats. No interest shall be paid upon a refund except as expressly authorized in ch. 40, Stats. A refund from a Wisconsin retirement system account shall not include interest but shall include investment earnings as provided in s. 40.08 (6), Stats. The board staff's appeals coordinator’s calculation shall be appended to and become part of the board's final decision. Board staff The appeals coordinator shall do all of the following: SECTION 19. ETF 20.02 (2) (c) is repealed.
SECTION 20. ETF 20.04 (4) is amended to read:
ETF 20.04 (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 Table V of 26 CFR 1.72-9 the tables at 26 CFR 1.401 (a) (9) - 9 as in effect on the date when the annuity begins. SECTION 21. ETF 20.07 (5) (Note) is amended to read:
ETF 20.07 (5) 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 turns age 70.5 or retires, whichever is later. Under s. 40.23 (1) (c), Stats., an inactive participant who wishes to receive an annuity payment on April 1 must elect a benefit effective date which is no later than March 1. A form specifying a requested annuity effective date, form ET-4934, is available from the department of employee trust funds at no charge. SECTION 22. ETF 20.10 (2) (b) is repealed.
SECTION 23. ETF 20.10 (2) (d) and (5) (Note) are amended to read:
ETF 20.10 (2) (d) Establishing a domestic partnership or a same-sex marriage in another state does not establish a domestic partnership for the purposes of the benefits authorized in ch. 40, Stats. (5) Note: The Affidavit of Domestic Partnership form, ET-2371, and 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.
SECTION 24. ETF 20.17 (1) (b) 2. and (d) 4. and (4) (b) 3. b. and (e) 5. b. are amended to read:
ETF 20.17 (1) (b) 2. Except as provided in subd. 3. the application to purchase creditable service, on the form approved by the department, must be actually received at the department on or before the date the applicant terminated terminates all participating employment covered by the Wisconsin retirement system.
(d) 4. Except as provided in s. ETF 50.50 (2) (b), buying Buying creditable service does not establish creditable service in or for any particular annual earnings period or calendar year, or prior to any past date, or for purposes of measuring continuous years of creditable service. (4) (b) 3. b. A written certification by the employer for which the service was rendered that the service will not be used to establish entitlement to, or the amount of, any other pension or retirement benefit from a plan for federal, state or local government employees which is subject to sections 401 or 403 of the internal revenue code, except for a disability or OASDHI benefit or a benefit paid for service in the national guard and the reserves. If the participant is unable to obtain the employer's certification through reasonable efforts, the department may accept the employee's affidavit written statement in lieu of the employer's certification, or contact the employer directly. If the employer does not have the information necessary to make this certification, the department may accept the employee's affidavit written statement in lieu of the employer's certification. SECTION 25. ETF 20.19 (6) (a) is renumbered ETF 20.19 (6) and amended to read:
ETF 20.19 (6) Treatment of creditable service after a retirement annuity is terminated and the account reestablished. Except as provided under par. (b), when 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.
SECTION 26. ETF 20.19 (6) (b) and (Note) are repealed.
SECTION 27. ETF 20.35 is repealed and recreated to read:
ETF 20.35 Qualified domestic relations orders; division of WRS accounts and annuities
(1) Scope and purpose.
(a) This section applies to any order to divide any benefit of the Wisconsin retirement system which is received by the department.
(b) The purpose of this section is to specify how the department shall apply a QDRO to the participant's account or annuity or respond to an order which is not a QDRO.
(c) For purposes of ss. 40.02 (48m) and 40.08 (1m), Stats., and this section, a marriage is terminated upon entry of a judgment, decree or order of divorce, annulment or legal separation. A domestic partnership as defined in s. 40.02 (21d), Stats., is terminated as provided in s. ETF 20.10 (3). A domestic partnership, as defined in s. 770.01 (2), Stats., is terminated as provided in s. 770.12, Stats.
(d) The department must receive the DRO from either the participant or the alternate payee within 20 years after the marriage was terminated by a final judgment or decree, or the otherwise valid DRO shall have no effect on the participant’s account or annuity.
Note: See s. ETF 10.82 concerning receipt by the department.
(2) All QDRO Divisions. Upon receipt of a QDRO, the department shall divide WRS accounts and annuities in accordance with the percentage awarded to the alternate payee in the QDRO, based on the date on which the marriage was terminated by a court judgment, decree or order or the domestic relationship was terminated as provided in s. ETF 20.10 (3) or s. 770.12, Stats., as follows:
(a) Percentages. The percentage of the participant's account or annuity that is awarded to the alternate payee by a QDRO is limited to a percentage between zero percent (0%) and fifty percent (50%) expressed to no more than 2 decimal places. A QDRO with a percentage awarded to the alternate payee expressed to more than 2 decimal places may not be rejected for that reason alone, but the department shall round the percentage to 2 decimal places.
(b) Debts of the participant. Any debt, memorandum account or account receivable balance reflecting amounts owed by the participant to the department, the fund or any benefit plan, accrued as of the decree date and still outstanding at the time the account or annuity is divided, shall be divided between the participant and alternate payee in the same proportion as the participant's account or annuity.
(3) Dividing account when participant was not an annuitant on decree date. If the participant was not an annuitant on the decree date, the department shall divide the participant's account as provided in s. 40.08 (1m) (b) 1., (c), (d) and (f) 1., Stats., and as follows:
(a) Creditable service which the participant has been granted as of the decree date is a part of the Wisconsin retirement system account of a participant and shall be divided in the same ratio as other account balances. The creditable service and amounts awarded to the alternate payee shall be in a separate account in the fund for the benefit of the alternate payee. After the division under this section, the alternate payee may apply for a separation benefit under s. 40.25 (2), Stats., provided the application is received by the department prior to the date on which the participant would have met the minimum age requirement for a retirement annuity under s. 40.23, Stats., or after the date on which the participant has met the minimum age requirement but is not vested, and payment of a separation benefit would comply with all provisions of the internal revenue code. After the date the participant reaches or would have reached the minimum retirement age, and is vested, the alternate payee may only apply for retirement benefits under s. 40.23, 40.24, or 40.25 (1), Stats.
(b) The participant shall retain the remainder in his or her separate account under s. 40.40 (4) (a), Stats., unless the participant is an annuitant at the time of the division. If the participant is an annuitant when the division occurs, the participant's creditable service and account as of the decree date shall be reduced by the percentage awarded to the alternate payee. The balances shall then be brought forward to the effective date of the current annuity, including any contributions and service for periods after the decree date, and the annuity option chosen by the participant shall be recalculated. The amount by which the monthly annuity payments previously made to the participant exceed the participant's recalculated monthly entitlement for the same period shall be a balance due from the participant. This balance due shall be due from the participant and may be collected as provided in s. 40.08 (4), Stats., including by a reduction of the present value of the participant's annuity as reduced by the division, resulting in a recalculation and reduction of the participant's monthly annuity.
(c) Purchased service credits. Previously purchased service shall be divided in the same proportion as the other portions of the participant's account and creditable service. If an application to purchase creditable service is received prior to the decree date, as defined by s. 40.02 (18f), Stats., then service for which payment is made shall be included in the division. The department shall pay any refund due only to the participant and shall bill only the participant for any supplemental payment due for such purchased service. No refund shall be due to the participant from the department for the portion of any excess payment withdrawn from the public employee trust fund by the alternate payee. Credit for service purchased by an application received after the decree date shall not be divided by the qualified domestic relations order regardless of the source of the funds for the purchase or when the services were actually rendered.
(d) Creditable military service. If the participant has active military service, the alternate payee shall be granted the percentage specified in the QDRO of the military service for which the participant would be eligible as of the decree date, based on the participant's total creditable service as of the decree date, regardless of when the participant requests the crediting or provides satisfactory documentation. If a participant does not provide to the department proof of active military service and the certification of active military service on the form prescribed by the department, the department shall nevertheless divide the participant's account without the military service provided the court order is otherwise a QDRO.
(e) Actuarial adjustment for early retirement.
1. The actuarial reduction applied to the participant's and alternate payee's annuities as provided in s. 40.23 (2m) (f) and (fm), Stats., shall be calculated based on the participant's and alternate payee's actual ages on his or her respective annuity effective dates, using the creditable service that would otherwise have been credited to the participant's account on the respective annuity effective dates if the participant's creditable service had not been reduced per a QDRO.
2. For the purposes of determining the amount of service used to calculate the alternate payee's actuarial reduction for early retirement under the provisions of s. 40.23 (2m) (fm), Stats., if the participant has part-time service in at least five of the ten annual earnings periods immediately preceding the annual earnings period in which the alternate payee's retirement benefit becomes effective or the date on which the participant terminated covered employment, whichever is earlier, the provisions of s. 40.23 (2m) (fm), Stats., shall apply. If the decree date is prior to July 1, 2009, the provisions of s. 40.23 (2m) (fm), Stats., in effect prior to that date shall apply.
(4) Dividing account when participant was an annuitant on decree date.
(a) Except as provided in par. (b), if the participant was an annuitant on the decree date, the department shall divide the present value of the annuity as provided in s. 40.08 (1m) (b) 2., (c), (d) and (f) 2., Stats., and sub. (3) (e), and as follows, and pay separate annuities to the participant and alternate payee, respectively. An annuity shall be divided so that the actuarial present value of the undivided annuity is equal to the aggregate actuarial present values of the 2 separate annuities resulting from the division as of the effective date of the division.
(b) If the participant's annuity is a joint and survivor annuity with the alternate payee as the named survivor, and the percentage awarded to the alternate payee in the QDRO is zero percent (0%), then the alternate payee may not receive any Wisconsin retirement system annuity based on the QDRO and the participant's annuity shall be recalculated as a straight life annuity payable to the participant, with no change in the remaining guarantee period, if any.
(c) Division of accelerated annuity option. If the participant selected an accelerated payment option as provided in s. 40.24 (1) (e), Stats., or s. ETF 20.04 (3), and the participant's temporary annuity is still in force as of the effective date of the annuity division, then the department shall calculate the present value of both the temporary and life annuities using the actuarial tables in effect on the effective date of the annuity division. The department shall then divide the total present value based on the percentages specified in the QDRO and calculate separate annuities for the participant and alternate payee as specified in s. 40.08 (1m) (f) 2., Stats. If the participant or alternate payee provides a projection of his or her social security benefits at age 62 from the social security administration, the department shall use that projected social security amount to calculate the amount of the temporary annuity for that person. If no projection is supplied, then notwithstanding s. ETF 20.03 (2), the department shall assume that person's projected social security benefits at age 62 equals that person's prorated portion of the participant's temporary annuity amount as of the effective date of the annuity division, calculated based on the respective percentages of the annuity being awarded to the participant and alternate payee. If the reduced annuity payable for life to the alternate payee or participant is below the threshold specified by s. ETF 20.05 (1), then that person shall receive an annuity in the same optional form originally selected by the participant, except that the temporary annuity option provided in s. 40.24 (1) (e), Stats., or s. ETF 20.04 (3) is not available. (d) Disability annuities. Upon division of a disability annuity calculated under the provisions of s. 40.63 (1) or (4), Stats., the alternate payee's annuity shall consist of a portion based on the participant's actual service and a portion based on the assumed service used to calculate the participant's disability annuity. The portion of the alternate payee's annuity based on the participant's assumed service and age shall cease upon the death of the alternate payee. Benefits payable upon the death of the alternate payee shall be based on the guaranteed portion of the alternate payee's annuity only. Once the participant's disability annuity has been divided, the termination or suspension of the participant's disability annuity or the death of the participant has no effect on the alternate payee's annuity. If the participant's disability annuity is subsequently terminated and the participant's account restored under the provisions of s. 40.63 (9) and (10), Stats., the contributions and service credited to the restored account shall be reduced by the same percentage awarded to the alternate payee by the QDRO.
(e) Rehired annuitant with suspended account. The suspended payments in the participant’s memorandum account are converted into a monthly annuity as of the decree date. This monthly amount consists of the increase that is attributable to the suspended payments from the participant’s original annuity. This increase is added to the monthly annuity as of the decree date, and the annuity division is based on this amount.
(5) Rejection of DRO.
