Chapter 40

40.63(7) (7) If an application, by a participant age 55 or over, or by a protective occupation participant age 50 or over, for any disability annuity is disapproved, the date which would have been the disability annuity effective date, or the day after the date of separation from the last participating employer, whichever is later, shall be the retirement annuity effective date if so requested by the applicant within 60 days of the disapproval or, if the disapproval is appealed, within 60 days of final disposition of the appeal.

40.63(8) (8) Disability annuity effective dates and amounts shall be determined in the same manner and shall be subject to the same limitations and options as retirement annuities except that separate actuarial tables may be applied and except that:

40.63(8)(a) (a) The creditable service shall include assumed service between the date the disability occurred, or the last day for which creditable service was earned, if later, and the date on which the participant will reach the participant’s normal retirement date. The assumed service shall be prorated if the participant’s employment was less than full time.

40.63(8)(b) (b) For purposes of s. 40.23 (2m) (e) and (f) only, the participant is deemed to have attained the participant’s normal retirement date on the effective date of the annuity.

40.63(8)(d) (d) If an annuity option other than the normal form is elected, the amount of the normal form disability annuity which is greater than the normal form retirement annuity to which the participant would be entitled under s. 40.23, notwithstanding the minimum age requirement for receiving an annuity, shall be a straight life annuity terminating at the death of the annuitant. The balance of the present value of the disability annuity, after providing for the straight life annuity, shall be applied to provide an annuity in the optional form elected.

40.63(8)(e) (e) The annuity option provided by s. 40.24 (1) (e) may not be elected.

40.63(8)(f) (f) If an employer certifies that an employee’s date of termination of employment is being extended past the last day worked due to any payment for accumulated sick leave, vacation or compensatory time, a participating employee may file an application for a disability annuity as if the last day worked were the last day paid. Regardless of the application date for a disability annuity, the date of termination of employment for effective date purposes shall be deemed to be the last day for which the participant was paid, including any payment for accumulated leave, but if a disability annuity applicant whose application has been approved dies before the last day paid, but after the last day worked, the effective date is the date of death.

40.63(8)(g) (g) If processing of an application is delayed more than 12 months beyond the date the application is received by the department because of failure to receive some or all of the evidence required under subs. (1) to (4), the application shall be canceled but the applicant may reapply for a disability benefit if otherwise still eligible.

40.63(8)(h) (h) If an applicant dies prior to the date a decision regarding the approval or disapproval of an application for a disability benefit becomes final under sub. (5), the application is deemed to have been approved prior to the applicant’s death if:

40.63(8)(h)1. 1. The applicant was eligible for the disability benefit;

40.63(8)(h)2. 2. The department received an application for the disability benefit in the form approved by the department and at least one written qualifying medical certification required under sub. (1) (d); and

40.63(8)(h)3. 3. The applicant dies on or after the date which would have been the effective date of the disability benefit.

40.63(8)(i) (i) For the purpose of par. (h) an applicant is conclusively presumed not eligible for a disability benefit if the application is based on an alleged disability which was the basis for a previous application which the department denied.

40.63(9) (9) 

40.63(9)(a) (a) The board may require that any disability annuitant shall be examined by at least one licensed and practicing physician, designated or approved by the board, during any calendar year the annuitant is receiving the annuity. A written report of the examination in a form approved by the department which shall indicate whether or not the annuitant is still disabled as specified in sub. (1) (b), shall be filed with the department. This paragraph and par. (c) shall not apply to any annuitant who has attained the normal retirement date for the annuitant’s former participant classification.

40.63(9)(b) (b) If a disability annuitant, prior to attaining the normal retirement date for the annuitant’s former participant classification, receives earnings or other earned income from any source whatsoever for personal services, including services performed on a contractual basis, the annuity shall be suspended, except for any amount provided by additional contributions, and no payment shall be payable after the first of the month in which the earnings or earned income received during any calendar year exceed the amount established under sub. (11), except that if payment was being made under sub. (4) the annuity may only be suspended if the annuitant is employed in a law enforcement or fire fighting capacity and then the suspension shall be effective immediately. The suspended amount shall be reinstated on January 1 following the date of suspension, or, if earlier, on the first day of the 2nd month following the termination of personal services. An amount, which is reinstated in any calendar year, other than on January 1 of the calendar year, shall again be suspended for any subsequent month in the calendar year following a month in which the disability annuitant receives any amount of earnings or earned income for personal services. The department may request any earnings or compensation information as it deems necessary to implement the provisions of this paragraph and par. (c).

40.63(9)(c) (c) The disability annuity shall be terminated and no payment shall be payable after the first of the month in which a determination is made by the department that:

40.63(9)(c)1. 1. The written physician’s report required in par. (a) indicates that the annuitant has recovered from the disability so the annuitant is no longer disabled to the extent required under sub. (1) (b);

40.63(9)(c)2. 2. The annuitant refuses to submit to an examination under par. (a); or

40.63(9)(c)3. 3. The annuitant refuses to submit information regarding earnings or compensation as requested by the department.

40.63(9)(d) (d) If the department terminates a disability annuity under this subsection, the department shall make a report which shall include the department’s determination and the reasons for the determination. The department shall submit the report to the teachers retirement board for teacher participants and to the Wisconsin retirement board for participants other than teachers. A copy of the report and notice of the date that the report was presented, or will be presented to the appropriate board, and the board’s name, shall be mailed to the affected annuitant. An annuitant may request a hearing under s. 227.44 to contest the department’s determination by filing a timely appeal with the appropriate board. If a request for a hearing is not timely filed, and the appropriate board does not disapprove the department’s determination or request additional information within the time allowed for filing appeals, the report shall be final. If the board requests additional information, the report shall be final 30 days after the board’s receipt of the requested information unless the board disapproves the department’s determination.

40.63(10) (10) Upon termination of an annuity in accordance with sub. (9), each participant whose annuity is so terminated shall, as of the beginning of the calendar month following termination, be credited with additional contributions equal to the then present value of the portion of the terminated annuity which was originally provided by the corresponding type of additional contributions. Except for additional contributions, the retirement account of the participant shall be reestablished as if the terminated annuity had never been effective, including crediting of interest.

40.63(11) (11) In this section “substantial gainful activity” means employment for which the annual compensation exceeds, for determinations made in the calendar year commencing on January 1, 1982, $3,600 or, for determinations made in subsequent calendar years, the amount applied under this section in the previous calendar year increased by the salary index and ignoring fractions of the dollar.

40.63 History History: 1981 c. 96, 386; 1983 a. 141 s. 20; 1983 a. 191 s. 6; 1983 a. 290; 1985 a. 11; 1985 a. 182 s. 57; 1987 a. 309, 372; 1989 a. 13, 166; 1991 a. 39, 152; 1995 a. 27 s. 9130 (4); 1997 a. 3, 69; 1999 a. 9; 2021 a. 245; 2023 a. 257.

40.63 Annotation Under sub. (1) (c), the employer’s failure to certify that it terminated the employee because of a disability was fatal to an application for disability benefits. State ex. rel Bliss v. Wisconsin Retirement Board, 216 Wis. 2d 223, 576 N.W.2d 76 (Ct. App. 1998), 97-1639.

40.65 40.65 Duty disability and death benefits; protective occupation participants.

40.65(2) (2) 

40.65(2)(a) (a) This paragraph applies to participants who first apply for benefits before May 3, 1988. Any person desiring a benefit under this section must apply to the department of workforce development, which department shall determine whether the applicant is eligible to receive the benefit and the participant’s monthly salary. Appeals from the eligibility decision shall follow the procedures under ss. 102.16 to 102.26. If it is determined that an applicant is eligible, the department of workforce development shall notify the department of employee trust funds and shall certify the applicant’s monthly salary. If at the time of application for benefits an applicant is still employed in any capacity by the employer in whose employ the disabling injury occurred or disease was contracted, that continued employment shall not affect that applicant’s right to have his or her eligibility to receive those benefits determined in proceedings before the division of hearings and appeals in the department of administration or the labor and industry review commission or in proceedings in the courts. The department of workforce development may promulgate rules needed to administer this paragraph.

40.65(2)(b) (b)

40.65(2)(b)1. 1. This paragraph applies to participants who first apply for benefits under this section on or after May 3, 1988.

40.65(2)(b)2. 2. An applicant for benefits under this section shall submit or have submitted to the department an application that includes written certification of the applicant’s disability under sub. (4) by at least 2 physicians, as defined in s. 448.01 (5), who practice in this state and one of whom is approved or appointed by the department, and a statement from the applicant’s employer that the injury or disease leading to the disability was duty-related.

40.65(2)(b)3. 3. The department shall determine whether or not the applicant is eligible for benefits under this section on the basis of the evidence in subd. 2. An applicant may appeal a determination under this subdivision to the division of hearings and appeals in the department of administration.

40.65(2)(b)4. 4. In hearing an appeal under subd. 3., the division of hearings and appeals in the department of administration shall follow the procedures under ss. 102.16 to 102.26.

40.65(2)(b)5. 5. The department shall be an interested party in an appeal under subd. 3., and the department shall receive legal assistance from the department of justice, as provided under s. 165.25 (4).

40.65(3) (3) The Wisconsin retirement board shall determine the amount of each monthly benefit payable under this section and its effective date. The board shall periodically review the dollar amount of each monthly benefit and adjust it to conform with the provisions of this section. The board may request any income or benefit information, or any information concerning a person’s marital status, which it considers to be necessary to implement this subsection and may require a participant to authorize the board to obtain a copy of his or her most recent state or federal income tax return. The board may terminate the monthly benefit of any person who refuses to submit information requested by the board, who refuses to authorize the board to obtain a copy of his or her most recent state or federal income tax return, or who submits false information to the board.

40.65(4) (4) A protective occupation participant is entitled to a duty disability benefit as provided in this section if:

40.65(4)(a) (a) The employee is injured while performing his or her duty or contracts a disease due to his or her occupation;

40.65(4)(b) (b) The disability is likely to be permanent; and

40.65(4)(c) (c)

40.65(4)(c)1. 1. The disability causes the employee to retire from his or her job;

40.65(4)(c)2. 2. The employee’s pay or position is reduced or he or she is assigned to light duty; or

40.65(4)(c)3. 3. The employee’s promotional opportunities within the service are adversely affected if state or local employer rules, ordinances, policies or written agreements specifically prohibit promotion because of the disability.

40.65(4m) (4m) A protective occupation participant who is a state motor vehicle inspector hired on or after January 1, 1968, is not entitled to a duty disability benefit under this section for an injury or disease occurring before May 1, 1990.

40.65(4r) (4r) A protective occupation participant who is an emergency medical services practitioner, as defined in s. 256.01 (5), is not entitled to a duty disability benefit under this section for an injury or disease occurring before the date on which the department receives notification of the participant’s name as provided in s. 40.06 (1) (d) and (dm).

40.65(4v) (4v) A state probation and parole officer who becomes a protective occupation participant on or after January 1, 1999, is not entitled to a duty disability benefit under this section for an injury or disease occurring before January 1, 1999.

40.65(4w) (4w) A county jailer who becomes a protective occupation participant on or after January 1, 2024, is not entitled to a duty disability benefit under this section for an injury or disease occurring before January 1, 2024.

40.65(5) (5) 

40.65(5)(a) (a) The monthly benefit payable to participants who qualify for benefits under s. 40.63 or disability benefits under OASDHI is 80 percent of the participant’s monthly salary adjusted under par. (b) and sub. (6), except that the 80 percent shall be reduced by 0.5 percent for each month of creditable service over 30 years or over 25 years for persons who are eligible for benefits under subch. II at the date of application, but not to less than 50 percent of the participant’s monthly salary. For participants who do not qualify for benefits under s. 40.63 or disability benefits under OASDHI, the monthly benefit under this section is 75 percent of the participant’s monthly salary adjusted under par. (b) and sub. (6), except that the 75 percent shall be reduced by 0.5 percent for each month of creditable service over 30 years or over 25 years for persons who are eligible for benefits under subch. II on the date of application.

40.65(5)(b) (b) The Wisconsin retirement board shall reduce the amount of a participant’s monthly benefit under this section by the amounts under subds. 1. to 6., except that the board may determine not to reduce a participant’s benefit because of income related to therapy or rehabilitation. The Wisconsin retirement board may assume that any benefit or amount listed under subds. 1. to 6. is payable to a participant until it is determined to the board’s satisfaction that the participant is ineligible to receive the benefit or amount, except that the department shall withhold an amount equal to 5 percent of the monthly benefit under this section until the amount payable under subd. 3. is determined.

40.65(5)(b)1. 1. Any OASDHI benefit payable to the participant or the participant’s spouse, domestic partner, or a dependent because of the participant’s work record.

40.65(5)(b)2. 2. Any unemployment insurance benefit payable to the participant because of his or her work record.

40.65(5)(b)3. 3. Any worker’s compensation benefit payable to the participant, including payments made pursuant to a compromise settlement under s. 102.16 (1). A lump sum worker’s compensation payment or compromise settlement shall reduce the participant’s benefit under this section in monthly amounts equal to 4.3 times the maximum benefit which would otherwise be payable under ch. 102 for the participant’s disability until the lump sum amount is exhausted.

40.65(5)(b)4. 4. Any disability and retirement benefit payable to the participant under this chapter, or under any other retirement system, that is based upon the participant’s earnings record and years of service. A reduction under this subdivision may not be greater in amount than the amount of disability or retirement benefit received by the participant. If the participant is not eligible for a retirement benefit because he or she received a lump sum payment or withdrew his or her contributions on or after the date the participant became eligible to receive a benefit under this section, the amount received or withdrawn shall reduce the participant’s benefit under this section in the amount of benefit that would be payable if, on the date the amount was received or withdrawn, the full amount received or withdrawn was applied under s. 40.23 (2m) (d) as additional employee contributions credited to the participant’s account.

40.65(5)(b)5. 5. All earnings payable to the participant from the employer under whom the duty disability occurred.

40.65(5)(b)6. 6. All earnings payable to the participant from an employer, other than the employer under whom the duty disability occurred, and all income from self-employment, the total of such earnings and income shall reduce the participant’s benefit as follows:

40.65(5)(b)6.a. a. For the amount of the total that is less than 40 percent of the participant’s monthly salary, one-third of such amount;

40.65(5)(b)6.b. b. For the amount of the total that is from 40 percent to 80 percent of the participant’s monthly salary, one-half of such amount; and

40.65(5)(b)6.c. c. For the amount of the total that is more than 80 percent of the participant’s monthly salary, two-thirds of such amount.

40.65(5)(c) (c) The Wisconsin retirement board may not reduce a participant’s benefit because of income or benefits that are attributable to the earnings or work record of the participant’s spouse, domestic partner, or other member of the participant’s family, or because of income or benefits attributable to an insurance contract, including income continuation programs.

40.65(6) (6) The Wisconsin retirement board shall adjust the monthly salary of every participant receiving a benefit under this section using the salary index for the previous calendar year as follows:

40.65(6)(a) (a) For the purposes of sub. (5) (b) 6., annually on January 1 until the participant’s death;

40.65(6)(b) (b) For the purposes of sub. (5) (a), if the participant is receiving an annuity under s. 40.63 (1), annually on January 1 until the participant’s death; and

40.65(6)(c) (c) For the purposes of sub. (5) (a), if the participant is not receiving an annuity under s. 40.63 (1), annually on January 1 until the first January 1 after the participant’s 60th birthday. Beginning on the January 1 after the participant’s 60th birthday the participant’s monthly salary shall be increased annually in a percentage amount equal to the percentage amount of dividend awarded under s. 40.27 (2) until the participant’s death. Notwithstanding s. 40.27 (2), any benefits payable under this section are not subject to distribution of annuity reserve surpluses.

40.65(7) (7) 

40.65(7)(a) (a) This paragraph applies to benefits based on applications filed before May 3, 1988. If a protective occupation participant dies as a result of an injury or a disease for which a benefit is paid or would be payable under sub. (4), and the participant is survived by a spouse or an unmarried child under age 18, a monthly benefit shall be paid as follows:

40.65(7)(a)1. 1. To the surviving spouse, if the spouse was married to the participant on the date the participant was disabled within the meaning of sub. (4), one-third of the participant’s monthly salary as reflected at the time of death until the surviving spouse marries again.

40.65(7)(a)2. 2. To the guardian of a surviving unmarried child under age 18, $15 per child until the child marries, dies or reaches 18 years of age.

40.65(7)(a)3. 3. The total monthly amount paid under subds. 1. and 2. may not exceed 65 percent of the participant’s monthly salary as reflected at the time of death. Any reduction of benefits caused by such limitation shall be done on a proportional basis.

40.65(7)(am) (am) This paragraph applies to benefits based on applications filed on or after May 3, 1988. If a protective occupation participant dies as a result of an injury or a disease for which a benefit is paid or would be payable under sub. (4), and the participant is survived by a spouse, domestic partner, or an unmarried child under the age of 18, a monthly benefit shall be paid as follows:

40.65(7)(am)1. 1. To the surviving spouse until the surviving spouse remarries, if the spouse was married to the participant on the date that the participant was disabled under sub. (4), 50 percent of the participant’s monthly salary at the time of death, but reduced by any amount payable under sub. (5) (b) 1. to 6.

40.65(7)(am)1g. 1g. To the surviving spouse until the surviving spouse remarries, if the spouse was in a domestic partnership with the participant on the date that the participant was disabled under sub. (4) and the disability under sub. (4) occurred before January 1, 2018, 50 percent of the participant’s monthly salary at the time of death, but reduced by any amount payable under sub. (5) (b) 1. to 6.

40.65(7)(am)1m. 1m. To the surviving domestic partner until the surviving domestic partner marries, if the domestic partner was in a domestic partnership with the participant on the date that the participant was disabled under sub. (4) and the disability under sub. (4) occurred before January 1, 2018, 50 percent of the participant’s monthly salary at the time of death, but reduced by any amount payable under sub. (5) (b) 1. to 6.

40.65(7)(am)2. 2. To a guardian for each of that guardian’s wards who is an unmarried surviving child under the age of 18, 10 percent of the participant’s monthly salary at the time of death, payable until the child marries, dies or reaches the age of 18, whichever occurs first. The marital or domestic partnership status of the surviving spouse or domestic partner shall have no effect on the payments under this subdivision.

40.65(7)(am)3. 3. The total monthly amount paid under subds. 1., 1g., 1m., and 2. may not exceed 70 percent of the participant’s monthly salary at the time of death reduced by any amounts under sub. (5) (b) 1. to 6. that relate to the participant’s work record.

40.65(7)(am)4. 4. Benefits payable under this paragraph shall be increased each January 1 by the salary index determined for the prior year.

40.65(7)(ar) (ar)

40.65(7)(ar)1. 1. This paragraph applies to benefits based on applications filed on or after May 12, 1998. If a protective occupation participant, who is covered by the presumption under s. 891.455, dies as a result of an injury or a disease for which a benefit is paid or would be payable under sub. (4), and the participant is survived by a spouse, domestic partner, or an unmarried child under the age of 18, a monthly benefit shall be paid as follows:

40.65(7)(ar)1.a. a. To the surviving spouse until the surviving spouse remarries, if the surviving spouse was married to the participant on the date that the participant was disabled under sub. (4), 70 percent of the participant’s monthly salary at the time of death, but reduced by any amount payable under sub. (5) (b) 1. to 6.

40.65(7)(ar)1.ag. ag. To the surviving spouse until the surviving spouse remarries, if the spouse was in a domestic partnership with the participant on the date that the participant was disabled under sub. (4) and the disability under sub. (4) occurred before January 1, 2018, 70 percent of the participant’s monthly salary at the time of death, but reduced by any amount payable under sub. (5) (b) 1. to 6.

40.65(7)(ar)1.am. am. To the surviving domestic partner until the surviving domestic partner marries, if the domestic partner was in a domestic partnership with the participant on the date that the participant was disabled under sub. (4) and the disability under sub. (4) occurred before January 1, 2018, 70 percent of the participant’s monthly salary at the time of death, but reduced by any amount payable under sub. (5) (b) 1. to 6.

40.65(7)(ar)1.b. b. If there is no surviving spouse or domestic partner or the surviving spouse or domestic partner subsequently dies, to a guardian for each of that guardian’s wards who is an unmarried surviving child under the age of 18, 10 percent of the participant’s monthly salary at the time of death, payable until the child marries, dies or reaches the age of 18, whichever occurs first.

40.65(7)(ar)2. 2. Benefits payable under this paragraph shall be increased each January 1 by the salary index determined for the prior year.

40.65(7)(b) (b) Any person entitled to a benefit under both this subsection and ch. 102 because of the death of the same participant, shall have his or her benefit under this subsection reduced in an amount equal to the death benefit payable under ch. 102.

40.65(9) (9) This section is applicable to protective occupation participants who apply for a benefit under this section on or after July 1, 1982. A participant may not apply for a benefit under this section if he or she is receiving a benefit under s. 66.191, 1981 stats., on July 1, 1982.

40.65 History History: 1981 c. 278; 1983 a. 9; 1983 a. 141 s. 20; 1983 a. 191 s. 6; 1983 a. 255; 1985 a. 332 s. 251 (1); 1987 a. 363; 1989 a. 240, 357; 1995 a. 27 s. 9130 (4); 1997 a. 3, 39, 173, 237; 2007 a. 131; 2009 a. 28; 2015 a. 55; 2017 a. 12, 59; 2023 a. 4.

40.65 Cross-reference Cross-reference: See s. 891.45 for provision as to presumption of employment-connected disease for certain municipal fire fighters.

40.65 Cross-reference Cross-reference: See also LIRC and ss. ETF 52.01 and HA 4.16, Wis. adm. code.

40.65 Annotation The Wisconsin Retirement Board may not reduce duty disability benefits under sub. (5) (b) 3. for worker’s compensation benefits that are paid to a participant before the duty disability payments commence, and may do so only for worker’s compensation not yet paid. Coutts v. Wisconsin Retirement Board, 209 Wis. 2d 655, 563 N.W.2d 917 (1997), 95-1905.

40.65 Annotation The Retirement Board is authorized to promulgate administrative rules interpreting sub. (3). Kuester v. Wisconsin Retirement Board, 2004 WI App 10, 269 Wis. 2d 462, 674 N.W.2d 877, 03-0056.