Chapter ETF 50

ETF 50.42 History History: Emerg. cr. eff. 10-15-92; cr. Register, May, 1993, No. 449, eff. 6-1-93; CR 19-097: am. (1), r. (3m), (4) Register May 2021 No. 785, eff. 6-1-21; correction in (3) (b) (intro.) made under s. 35.17, Stats., Register May 2021 No. 785.

ETF 50.44 ETF 50.44 Scope and application. This subchapter applies to any person who is receiving benefits under this subchapter or has filed a claim for benefits with the department before January 1, 2018.

ETF 50.44 History History: Emerg. cr. eff. 10-15-92; cr. Register, May, 1993, No. 449, eff. 6-1-93; CR 17-031: am. (1), (2) (a) Register December 2017 No. 744, eff. 1-1-18; CR 19-097: renum. (1) to ETF 50.44 and am., r. (2) Register May 2021 No. 785, eff. 6-1-21.

ETF 50.52 ETF 50.52 LTDI benefits.

ETF 50.52(1) (1) Basic benefit.

ETF 50.52(1)(a) (a) Benefit amount. The basic LTDI benefit payable to recipients shall be a monthly payment of 40% of the recipient’s final average salary or 50% of FAS for a recipient not personally covered under OASDHI. The basic benefit amount, once determined, shall subsequently be adjusted at the same time and by the same percentages as applicable to post-retirement annuity adjustments under s. 40.27, Stats.

ETF 50.52(1)(b) (b) Reductions and offsets.

ETF 50.52(1)(b)1. 1. The department shall reduce the amount of a recipient’s monthly LTDI benefits under par. (a) by the amounts in subds. 2. and 3. The amount by which any lump sum benefit or separation benefit under subd. 2. exceeds the basic monthly LTDI benefit otherwise payable shall be carried over to reduce basic LTDI benefits payable in future months until the amount of the lump sum or separation benefit has been completely offset.

ETF 50.52(1)(b)2. 2. LTDI benefits shall be offset by an amount equal to the portion of any retirement annuity or lump sum benefit or separation benefit under s. 40.23, 40.24 or 40.25, Stats., on which the recipient is subject to federal income tax. This subdivision applies to any retirement annuity or lump sum benefit or separation benefit which is paid to the recipient as a result of the recipient’s application for the annuity or benefit, excluding any benefit funded by employee additional contributions. This subdivision does not apply to an annuity or lump sum benefit for which the recipient is eligible solely as a beneficiary, alternate payee or joint survivor of another participant.

ETF 50.52(1)(b)3. 3. LTDI benefits shall be offset by the amount of any normal form retirement annuity or lump sum retirement benefit under s. 40.23 or 40.25, Stats., for which the recipient is eligible, including a separation benefit that the recipient is eligible to receive under s. 40.23 (2m) (er) or 40.23 (3) (b), Stats., excluding the portion of any annuity or lump sum benefit or separation benefit on which the recipient would not be subject to federal income tax, or a benefit funded by employee additional contributions. Except for a protective occupation recipient, this offset shall be computed as of the recipient’s normal retirement age. This subdivision applies only after a recipient’s normal retirement date as defined by s. 40.02 (42), Stats. For a protective occupation recipient, the offset shall be computed as of the recipient’s 62nd birthday. This subdivision does not apply to an annuity for which the recipient is eligible solely as a beneficiary, alternate payee or joint survivor of another participant.

ETF 50.52(1)(c) (c) Proration. Initial monthly LTDI benefits beginning on other than the first day of a month and final LTDI benefits ending on other than the last day of a month are prorated based on effective date and termination date as provided in s. ETF 50.62.

ETF 50.52(2) (2) LTDI retirement supplemental benefit.

ETF 50.52(2)(a) (a) In addition to the basic LTDI benefit payable to a recipient, the LTDI program shall pay a retirement supplemental benefit in the form of an employer additional contribution to the Wisconsin retirement system for recipients qualifying under this subsection.

ETF 50.52(2)(b) (b) The LTDI retirement supplemental benefit due shall be 7% of the recipient’s FAS for each month a recipient qualifies under par. (d). Except as provided in sub. (1) (c), the LTDI retirement supplemental benefit is not prorated. If a recipient is not qualified for the LTDI supplemental benefit on any day during a month, no LTDI supplemental benefits are payable for that month. The supplemental LTDI benefit amount, once determined, shall subsequently be adjusted at the same time and by the same percentages as applicable to post-retirement annuity adjustments under s. 40.27, Stats.

ETF 50.52(2)(c) (c) As of December 31 each year, the supplemental LTDI benefit due for each of the preceding 12 months during which the recipient qualified under par. (d) to receive the retirement supplemental LTDI benefit shall be credited to the recipient’s WRS employer additional contributions account.

ETF 50.52(2)(d) (d) A recipient qualifies for retirement supplemental LTDI benefits if all of the following apply:

ETF 50.52(2)(d)1. 1. LTDI benefits have not been terminated or suspended under s. ETF 50.56.

ETF 50.52(2)(d)2. 2. The recipient does not earn any creditable service.

ETF 50.52(2)(d)3. 3. Payment of the LTDI retirement supplemental benefit would not exceed any limitation on additional contributions or cause the Wisconsin retirement system to fail to meet requirements for a qualified plan under the U.S. internal revenue code, applicable regulations adopted under the U.S. internal revenue code, including proposed regulations in force pending adoption, or rules of the department.

ETF 50.52(2)(d)4. 4. The recipient has not applied for any retirement annuity or lump sum retirement or separation benefit from the Wisconsin retirement system, other than a benefit funded by employee additional contributions or from a Wisconsin retirement system account held as an alternate payee. Qualification ceases on the effective date of a retirement annuity or other benefit or the approval date of a separation benefit. This subdivision shall not apply if the application is withdrawn, void, canceled or not granted.

ETF 50.52(2)(d)5. 5. The recipient is not qualified to receive duty disability benefits under s. 40.65, Stats., regardless of the amount of duty disability benefits actually received.

ETF 50.52(2)(e) (e) Monthly LTDI retirement supplemental benefits due are prorated based on the effective beginning date and termination date as provided in s. ETF 50.62.

ETF 50.52(3) (3) Continuation of group health insurance coverage for state employees. Pursuant to s. 40.51 (3), Stats., a recipient of LTDI benefits under this subchapter who is an insured employee under any group health insurance plan for state employees insured directly by the public employee trust fund shall also be entitled to continuation of that group health insurance in the same manner and to the same extent as is a disability annuitant under s. 40.63, Stats. Effective no later than January 1, 1993, contracts between the group insurance board and other insurers of group health insurance plans covering state employees shall provide the same continuation rights for recipients insured under those plans.

ETF 50.52 History History: Emerg. cr. eff. 10-15-92; cr. Register, May, 1993, No. 449, eff. 6-1-93; CR 11-040: am. (2) (a) Register July 2012 No. 679, eff. 8-1-12; CR 14-055: am. (1) (b) 3. Register May 2015 No. 713, eff. 6-1-15.

ETF 50.54 ETF 50.54 Administration.

ETF 50.54(1) (1) Plan administrator. The department shall administer the plan established by this subchapter on behalf of the employee trust funds board unless otherwise expressly provided in an administrative services contract between the employee trust funds board and an outside administrator.

ETF 50.54(3) (3) Periodic medical review. The department may require that any recipient shall be examined by at least one licensed and practicing physician, designated or approved by the department, during any calendar year the recipient receives benefits under this subchapter. The examining physician shall file with the department a written report of the examination which shall be in a form approved by the department and indicate whether the recipient is still totally and permanently disabled or, for a recipient qualifying under s. ETF 50.58 only, whether the recipient recovered to the extent that the recipient can efficiently and safely perform the duties required by the recipient’s former position as a protective occupation participant and whether the recipient recovered to the extent that the impaired condition is not likely to be permanent.

ETF 50.54 Note Note: Form ET-5909, “Recertification Medical Report,” is sent to the claimant by the department as necessary.

ETF 50.54(4) (4) Requests for information. The department may request any information on earnings, salary, wages, earned income, compensation or OASDHI benefits or entitlements as it deems necessary to implement the provisions of s. ETF 50.52 (1), including but not limited to copies of state and federal income tax returns.

ETF 50.54(5) (5) Application of anti-fraud statute. This subchapter is an employee benefit program created under ch. 40, Stats., through rule-making authority expressly granted in that chapter, for purposes of enforcement of the prohibitions of s. 943.395 (1) (c), Stats. Prohibited acts include presenting or causing to be presented false or fraudulent information, including a claim or benefit application, proof in support of a claim or benefit application, or information which would affect a future claim or application.

ETF 50.54(6) (6) Overpayment. Section 40.08 (4), Stats., shall apply to obtain repayment of any overpayment of LTDI benefits.

ETF 50.54 History History: Emerg. cr. eff. 10-15-92; cr. Register, May, 1993, No. 449, eff. 6-1-93; CR 17-031: am. (1) Register December 2017 No. 744, eff. 1-1-18; CR 19-097: r. (2), am. (3), (4) Register May 2021 No. 785, eff. 6-1-21.

ETF 50.56 ETF 50.56 Termination or suspension of benefits.

ETF 50.56(1) (1) Duration of benefits. Except as otherwise provided in this section:

ETF 50.56(1)(a) (a) For a recipient whose LTDI benefit effective date is prior to the date the recipient attains age 61, all LTDI benefits terminate at the end of the month in which the recipient attains age 65.

ETF 50.56(1)(b) (b) For a recipient whose LTDI benefit effective date is on or after the date the recipient attains age 61 and prior to the date the recipient attains age 63, all LTDI benefits terminate at the end of the month in which the recipient attains age 66.

ETF 50.56(1)(c) (c) For a recipient whose LTDI benefit effective date is on or after the date the recipient attains age 63 and prior to the date the recipient attains age 65, all LTDI benefits terminate at the end of the month in which the recipient attains age 67.

ETF 50.56(1)(d) (d) For a recipient whose LTDI benefit effective date is on or after the date the recipient attains age 65 and prior to the date the recipient attains age 67, all LTDI benefits terminate at the end of the month in which the recipient attains age 68.

ETF 50.56(1)(e) (e) For a recipient whose LTDI benefit effective date is on or after the date the recipient attains age 67 and prior to the date the recipient attains age 68, all LTDI benefits terminate at the end of the month in which the recipient attains age 69.

ETF 50.56(1)(f) (f) For a recipient whose LTDI benefit effective date is on or after the date the recipient attains age 68 and prior to the date the recipient attains age 69, all LTDI benefits terminate at the end of the month in which the recipient attains age 70.

ETF 50.56(1)(g) (g) For a recipient whose LTDI benefit effective date is on or after the date the recipient attains age 69, all LTDI benefits terminate 12 months after the LTDI benefit effective date.

ETF 50.56(1)(h) (h) Notwithstanding pars. (a) to (g), no LTDI benefits shall be payable for any date after the recipient’s death.

ETF 50.56(1)(i) (i) The effective date used to determine the duration of LTDI benefits is the effective date of the benefits being paid, not the effective date of terminated LTDI benefits paid under a previous application.

ETF 50.56(1)(j) (j) The duration of LTDI benefits for recipients whose LTDI benefit effective date is on or after the date the recipient attains age 61 shall be periodically reviewed and may be revised based on the actuary’s determinations, as approved by the employee trust funds board, so as to provide LTDI benefits meeting equal cost standards under federal age discrimination law. As part of the regular 3-year general investigation under s. 40.03 (5) (b), Stats., beginning with the investigation based on data through 1996, the actuary shall determine the appropriate duration for LTDI benefits beginning at and after age 61. The employee trust funds board shall be responsible for approving any change to the duration of LTDI benefits. If the duration of LTDI benefits is changed, the duration of LTDI benefits being paid as the result of an application received by the department prior to the effective date of the change shall not be affected. Any such revision shall be effective upon promulgation as an amendment to this rule by the employee trust funds board.

ETF 50.56(2) (2) Termination for fraud, misrepresentation, error or mistake.

ETF 50.56(2)(a) (a) Payment of LTDI benefits may be terminated immediately and overpayment recovered upon a department determination of either of the following:

ETF 50.56(2)(a)1. 1. LTDI benefits were granted as the result of fraud or misrepresentation in the application or in required evidence of eligibility.

ETF 50.56(2)(a)2. 2. LTDI benefits were granted due to an error or mistake by the department or due to an error or mistake in the information supplied by the employer used for determining eligibility, effective date or amount of LTDI benefits.

ETF 50.56(2)(c) (c) The amount of monthly LTDI benefits may be altered upon a determination that the amount of LTDI benefits was computed in error.

ETF 50.56(2)(d) (d) LTDI benefits may be terminated effective upon a determination by the department that the recipient has made misrepresentations or submitted false or fraudulent information regarding continued disability, earnings, wages, salary or other earned income.

ETF 50.56(2)(e) (e) If the department alters the amount of monthly LTDI benefits under par. (c) or terminates payment of LTDI benefits under par. (d), the department shall send notice of the action to the recipient. The notice shall be in the form of a written determination stating the reasons for the termination. The recipient may file a timely appeal of the alteration or termination with the employee trust funds board as provided in ch. ETF 11. If no timely appeal is filed, the alteration or termination of LTDI benefits is final.

ETF 50.56(3) (3) Termination upon recovery or for failure to furnish information.

ETF 50.56(3)(a) (a) The payment of LTDI benefits shall be terminated based on a determination by the department of any of the following:

ETF 50.56(3)(a)1. 1. The written physician’s report required in s. ETF 50.54 (3) indicates that the recipient has recovered from the medically determinable impairment so that the recipient is no longer totally and permanently disabled, or, for a recipient who qualified under s. ETF 50.58, recovered to the extent that the recipient can efficiently and safely perform the duties required by the recipient’s former position as a protective occupation participant or that the recipient’s impaired condition is not likely to be permanent. LTDI benefits are payable up to the date of recovery.

ETF 50.56(3)(a)2. 2. The recipient refuses to submit to an examination under s. ETF 50.54 (3) or refuses to submit information regarding earnings, wages, salary or other earned income as requested by the department. LTDI benefits shall not be payable for any month following the deadline for the recipient’s compliance set by the department.

ETF 50.56(3)(b) (b) If the department terminates payment of LTDI benefits under this subsection, the department shall send notice of the termination to the recipient. The notice shall be in the form of a written determination stating the reasons for the termination. The recipient may file a timely appeal of the termination with the employee trust funds board, as provided in ch. ETF 11. If no timely appeal is filed, the termination of LTDI benefits is final.

ETF 50.56(4) (4) Termination or suspension based on earnings.

ETF 50.56(4)(a) (a) Except as provided in par. (b) and s. ETF 50.58 (2), the payment of LTDI benefits shall be terminated and no LTDI benefits shall be payable after the first of the month in which a determination is made by the department that the recipient has received during the calendar year earnings or other earned income exceeding the earnings limit.

ETF 50.56(4)(b) (b) On the first occasion that the department determines that the recipient has exceeded the earnings limitation as described in par. (a), the payment of LTDI benefits shall be suspended rather than terminated. Payment of LTDI benefits suspended under this paragraph shall resume on the earlier of the first day of the next calendar year or the first day of the second month following the termination of personal services due to recurrence of the medically determinable impairment which was the basis for payment of LTDI benefits. A recipient’s LTDI benefits may only be suspended once and must be terminated if par. (a) subsequently applies.

ETF 50.56(5) (5) Termination upon certain reemployment. LTDI benefits for a recipient under s. ETF 50.58 (1) shall be terminated upon reemployment as provided in s. ETF 50.58 (3).

ETF 50.56 History History: Emerg. cr. eff. 10-15-92; cr. Register, May, 1993, No. 449, eff. 6-1-93; CR 17-031: am. (1) (j), (2) (e), (3) (b) Register December 2017 No. 744, eff. 1-1-18; CR 19-097: am. (title), r. (2) (b), am. (3) (a) 1., (4) (a), (5) Register May 2021 No. 785, eff. 6-1-21.

ETF 50.58 ETF 50.58 Special provisions applicable to protective occupation participants.

ETF 50.58(1) (1) Not totally and permanently disabled. An LTDI recipient who is a protective occupation participant is not disqualified from receiving LTDI benefits although not totally and permanently disabled, provided the recipient’s LTDI benefit was approved based on all of the following:

ETF 50.58(1)(a) (a) The recipient had accumulated 15 or more years of creditable service and earned at least 0.33 years of creditable current service or prior service, or both, in each of at least 5 calendar years not including any calendar year preceding by more than 7 calendar years the year in which the claim for LTDI benefits was received by the department.

ETF 50.58 Note Note:  The accumulated creditable service need not be in the protective employment category and may include military service.

ETF 50.58(1)(b) (b) The recipient would have attained age 55 in 60 months or less after the occurrence of disability.

ETF 50.58(1)(c) (c) The medical evidence established a disability to the extent that the participant could no longer efficiently and safely perform the duties required by the participant’s position, and that the condition was likely to be permanent. In this paragraph, “medical evidence” means written certifications received by the department from at least 2 licensed and practicing physicians who have been approved or appointed by the department.

ETF 50.58(2) (2) Exceeding earnings limit. Notwithstanding s. ETF 50.56 (4) (a), LTDI benefits for a recipient under this section may not be terminated for exceeding the earnings limit. The payment of LTDI benefits shall be suspended and no LTDI benefits shall be payable after the first of the month in which the recipient has received during the calendar year earnings or other earned income exceeding the earnings limit. Payment of LTDI benefits suspended under this paragraph shall resume on the first day of the next calendar year.

ETF 50.58(3) (3) Reemployment in law enforcement or fire fighting. Payment of LTDI benefits shall be immediately terminated upon employment of a recipient in a law enforcement or fire fighting capacity.

ETF 50.58 History History: Emerg. cr. eff. 10-15-92; cr. Register, May, 1993, No. 449, eff. 6-1-93; CR 11-040: am. (1) (b) Register July 2012 No. 679, eff. 8-1-12; CR 19-097: r. and recr. Register May 2021 No. 785, eff. 6-1-21; CR 23-023: am. (2) Register May 2024 No. 821, eff. 6-1-24.

ETF 50.60 ETF 50.60 Plan funding. The actuary shall determine liabilities for the LTDI program annually and include those liability determinations in the calculation of contribution rates as determined under s. 40.05, Stats., for the Wisconsin retirement system, based on the information available at the time the determination is made and on the assumptions the actuary recommends and the employee trust fund board approves.

ETF 50.60 History History: Emerg. cr. eff. 10-15-92; cr. Register, May, 1993, No. 449, eff. 6-1-93; CR 17-031: am. (2) (b) Register December 2017 No. 744, eff. 1-1-18; CR 19-097: r. and recr. Register May 2021 No. 785, eff. 6-1-21.

ETF 50.62 ETF 50.62 Proration of adjustment percentages and monthly benefits.

ETF 50.62(1) (1) Annual adjustments to benefits. The percentage of the annual adjustment to a recipient’s LTDI basic benefits or retirement supplemental benefits under s. ETF 50.52 (1) (a) or (2) (b) shall be prorated in the first calendar year after the effective date of the benefits. The applicable adjustment percentage shall be determined by multiplying the percentages as applicable to post-retirement annuity adjustments under s. 40.27, Stats., by the proration factor from Table 1 according to the effective date the benefits began. If the resulting prorated adjustment percentage is less than 0.1%, no increase shall result.

EXAMPLE 1: A recipient begins to receive LTDI benefits effective August 10. The annual adjustment for the following year is an increase of 1%. The recipient would instead receive an increase of 0.33% (1% x 0.333 = 0.33%). The following year the annual adjustment is an increase of 6%. The recipient receives the entire 6% increase.

EXAMPLE 2: A recipient begins to receive LTDI benefits effective November 30. The annual adjustment for the following year is an increase of 1%. The recipient would receive no increase. Although 1% x 0.083 = 0.083%, this is less than 0.1% and therefore no increase results. The following year the annual adjustment is an increase of 6%. The recipient receives the entire 6% increase.

ETF 50.62(2) (2) Proration of monthly benefits.

ETF 50.62(2)(a) (a) The amount of the initial and final monthly LTDI basic benefits and LTDI retirement supplemental benefits paid shall be prorated based on the date in the month on which LTDI benefits begin or end.

ETF 50.62(2)(b) (b) The first payment of LTDI benefits shall be prorated based on the first date in the month for which benefits are paid and based on the number of days in the month, according to Table 2.

ETF 50.62(2)(c) (c) The last payment of LTDI benefits due to termination or suspension of benefits or ceasing to qualify for benefits shall be prorated based on the effective date of the action and based on the number of days in the month, according to table 3.

ETF 50.62 History History: Emerg. cr. eff. 10-15-92; cr. Register, May, 1993, No. 449, eff. 6-1-93; reprinted to restore dropped copy in Table 3, Register, December, 1999, No. 528; CR 19-097: am. (1), Example 1, Example 2 Register May 2021 No. 785, eff. 6-1-21.