ETF 20.17(1) (1) General provisions.

ETF 20.17(1)(a) (a) Scope. This section applies to service purchases under s. 40.285, Stats.

ETF 20.17(1)(b) (b) Preparation of estimates; deadline for application.

ETF 20.17(1)(b)1. 1. Upon request, the department shall prepare a written estimate of the cost of purchasing service under s. 40.285 (2), Stats., on an application form to be used for the purpose and send the application form to the participating employee. Anytime after the department receives a completed application and at least the minimum payment or authorization to transfer additional contributions required to accompany that application, the department may update and correct the calculation of the amount due as necessary, before finalizing the purchase of service credit.

ETF 20.17(1)(b)2. 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 terminates all participating employment covered by the Wisconsin retirement system.

ETF 20.17(1)(b)3. 3. The deadline for a part-time elected official whose date of separation from the last participating employer is determined under s. 40.23 (1) (am) 2., Stats., is the date the applicant terminated participating employment other than as a part-time elected official, or the date on which the applicant elected to waive further Wisconsin retirement system participation under s. 40.23 (1) (am) 2., Stats., whichever date is later.

ETF 20.17 Note Note: The “Waiver of Part-Time Elected Service,” form ET-4303, becomes effective on the day after its receipt by the department or, if more than one ET-4303 is being submitted, on the first day after the first waiver is received by the department.

ETF 20.17(1)(c) (c) Rejection of application.

ETF 20.17(1)(c)1. 1. An application received after the deadline in par. (b) shall be rejected.

ETF 20.17(1)(c)2. 2. If the department determines that the participant is ineligible to purchase service for which the participant has applied, the application shall be rejected and any payment previously received by the department shall be refunded as provided in par. (f).

ETF 20.17(1)(c)3. 3. The department shall reject an application which is not accompanied by a payment in one of the following forms:

ETF 20.17(1)(c)3.a. a. Payment in full of the department’s estimated cost of the service credit if the purchase is for a qualifying period, teacher improvement leave or previously uncredited service as a junior teacher or executive official under s. 40.285 (2) (c) to (f), Stats. Such payment may include authority to transfer 403(b) funds or additional contributions under s. 40.05 (1) (a) 5., Stats., already held by the department in order to make the purchase. A transfer of 403(b) funds must be authorized by the school district or other educational institution employer operating the plan under section 403(b) of the internal revenue code.

ETF 20.17(1)(c)3.b. b. In lieu of payment in full, the applicant may include at least 10% of the department’s estimated cost of the creditable service with the application and arrange for the balance to be paid by a plan-to-plan transfer under s. 40.285 (5), Stats. Such transfer funds must be received within 90 days after receipt of the application or the application or the purchase will be treated under the payment shortfall provisions of s. 40.285 (5) (c), Stats., and par. (h).

ETF 20.17(1)(c)3.c. c. Partial payment of the department’s estimated cost of the service credit, but only if the purchase is for forfeited service or other governmental service, under s. 40.285 (2) (a) or (b), Stats.

ETF 20.17(1)(c)4. 4. The department may reject any application which 90 days after the date of application remains incomplete in any respect other than receipt of payment. If an application is rejected under this subdivision then the department shall refund any associated payment as provided by par. (f).

ETF 20.17(1)(c)5. 5. An application to purchase creditable service for forfeited service or other governmental service under s. 40.285 (2) (a) or (b), Stats., shall be rejected if the applicant does not have at least three continuous years of creditable service immediately preceding the date the completed application form is received by the department, with no break in service between the three continuous years and the application date.

ETF 20.17(1)(d) (d) Effect of purchasing service. Buying creditable service under this section adds the amount of service purchased to the person’s total creditable service for the purpose of calculating a formula annuity benefit under s. 40.23 (2) (b) or (2m) (e), Stats., or making a formula annuity calculation in the same manner, including under s. 40.25 (1), 40.63 (8) or 40.73 (1) (c), Stats. Buying creditable service has no retroactive effect, including but not limited to the following:

ETF 20.17(1)(d)1. 1. Buying creditable service does not undo any effects of the requirement that a person who takes a separation benefit must thereafter be treated as a new employee upon subsequent employment by a participating employer.

ETF 20.17 Note Note: See s. 40.25 (3), Stats.

ETF 20.17(1)(d)2. 2. Buying creditable service does not establish an earlier date of participation nor restore an account as though it had never been closed.

ETF 20.17(1)(d)3. 3. Buying creditable service does not restore or entitle the purchaser to any benefits or rights associated with being a participant in the Wisconsin retirement system, or a member of any predecessor retirement system, at the time the services for which credit is being purchased were actually performed.

ETF 20.17(1)(d)4. 4. 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.

ETF 20.17 Note Note 1: As a consequence of purchased service credits not establishing creditable service in or for any particular annual earnings period or calendar year, purchased service does not affect the denominator for the calculation of final average earnings in s. 40.02 (33) (a) 2., Stats., nor the amount of a person’s creditable service in a particular annual earnings period for purposes of s. 40.23 (2m) (fm) or 40.63 (1) (a), Stats., for example.

ETF 20.17 Note Note 2: Purchased service credit is included in the “creditable service” used to determine the normal retirement age and the maximum formula benefit for a protective occupation participant under ss. 40.02 (42) (a) and 40.23 (2m) (b), Stats., respectively, as well as months of creditable service for reducing the actuarial adjustment under s. 40.23 (2m) (f) 2., Stats., and the reduction of duty disability benefits for service over 25 years under s. 40.65 (5) (a), Stats. Credit purchased under s. 40.285, Stats., except under s. 40.285 (2) (b), Stats., also applies to the “creditable service” used to determine eligibility for creditable military service, group health, and post-retirement life insurance, under ss. 40.02 (15) (c), 40.02 (25) (b) 6. a., 6e., 6m. b. and 6r. and 40.72 (4) (b), Stats. Limitations on the use of purchased credit for other governmental service in particular are listed in sub. (4) (e) 5.

ETF 20.17 Note Note 3: Service purchased under s. 40.285, Stats., shall be included with all other creditable service in the participant’s account divided by a qualified domestic relations order pursuant to s. 40.08 (1m) (b), Stats., provided the application for the purchase was actually received by the department prior to the decree date, as that term is defined by s. 40.02 (18f), Stats. See s. ETF 20.35 (3) (c).

ETF 20.17 Note Example 1. A person became a participating employee covered by the Wisconsin retirement system in 1995. The participant terminated employment in 1999 and took a separation benefit in 2000 thereby closing her Wisconsin retirement system account. She again became a participating employee on January 1, 2002, and later purchased all the service forfeited by taking the separation benefit in 2000. The years of service purchased are added to the participant’s current service balance and are included in the creditable service used to calculate a formula annuity benefit under s. 40.23 (2) (e), Stats. However, for all Wisconsin retirement system purposes she is treated as a new participant as of January 1, 2002. Her account and benefit rights are not restored as though her account had never been closed.

ETF 20.17 Note Example 2. A former member of the state teacher retirement system took a separation benefit in 1971. Subsequently buying creditable service for teaching services rendered in 1970 does not confer any present right to the minimum retirement age of 50 for teachers that was in effect in 1970.

ETF 20.17 Note Example 3. A former member of either the state or Milwaukee teacher retirement system before 1964 whose account was later closed by withdrawing member contributions as a member of either the combined or formula group, or by withdrawing both member and state deposits as a member of the separate group, does not reestablish that account by subsequently purchasing credit for the forfeited service. The former teacher is treated for all WRS purposes as a new employee upon returning to participating employment. Consequently, any benefits now paid to the participant are not being paid on the account of a December 31, 1963, member. However, nothing in this section shall be construed to prevent the Wisconsin department of revenue from interpreting s. 71.05 (1) (a), Stats., as it sees fit for its purposes.

ETF 20.17(1)(d)5. 5. Buying credit for service does not affect or restore earnings for any annual earnings period or for purposes of calculating a benefit or final average earnings.