2021 - 2022 LEGISLATURE
2021 Senate BILL 996
February 17, 2022 - Introduced by Law Revision Committee. Referred to
Committee on Senate Organization.
SB996,2,2 1An Act to repeal 40.08 (1m) (f) 3.; to renumber 40.86 (1), 40.86 (2), 40.86 (3) and
240.86 (4); to amend 40.02 (48r), 40.05 (4) (ah) 3., 40.05 (4) (ah) 4., 40.08 (1m)
3(f) 1., 40.08 (1m) (f) 2., 40.08 (8) (a) 2., 40.08 (8) (a) 2m., 40.23 (4) (c), 40.23 (4)
4(e) 2., 40.24 (7) (a) (intro.), 40.24 (7) (b), 40.285 (2) (b) 1. a. to d., 40.285 (2) (b)
54. (intro.) and 40.63 (10); and to create 40.86 (1) (intro.) of the statutes;
6relating to: changes required by the federal SECURE Act; named survivors
7under the Wisconsin Retirement System; domestic relations orders executed by
8the Department of Employee Trust Funds; the purchase of other governmental
9service under the Wisconsin Retirement System; disability annuities under the
10Wisconsin Retirement System; employee-funded reimbursement accounts;
11references to the administrator of the Division of Personnel Management; and

1abandoned accounts (suggested as remedial legislation by the Department of
2Employee Trust Funds).
Analysis by the Legislative Reference Bureau
This bill makes various changes to certain programs administered by the
Department of Employee Trust Funds.
Under federal law, a qualified governmental retirement plan is required to
begin minimum distributions to participants in the plan upon the participants
reaching a specific age. The federal Setting Every Community Up for Retirement
Enhancement (SECURE) Act of 2019 changed the age of the required minimum
distribution (RMD) age. The Wisconsin Retirement System is a qualified
governmental retirement plan and is required to comply with this change in federal
law. The bill changes the RMD references in Wisconsin law.
The bill clarifies that only an employee who is currently employed with a
participating employer under the WRS may purchase other governmental service.
As currently written, the statute uses the terms “participant” and “participating
employee.” The term “participant” includes a person who previously worked for a
participating employer but has not yet taken a WRS benefit.
Under the bill, references to beneficiaries and named survivors in statutes
regarding annuity options under the WRS are amended to distinguish between a
named survivor who will receive a benefit and a beneficiary.
Under current law, when a disability annuity under the WRS is terminated, the
person's WRS account is reestablished and credited with interest. While a person
is receiving an annuity from the WRS, the person cannot also be credited with
contributions and service. The bill removes obsolete language from the statute.
Under current law, the Employee Trust Funds Board contracts with
employee-funded reimbursement account plan providers to provide accounts to be
used by state agencies. Employee-funded reimbursement accounts are governed by
provisions of the Internal Revenue Code. The bill aligns the statutory language with
the language in the IRC.
The bill amends how DETF must treat a retirement account as abandoned if
an estate is never opened. The bill allows DETF to consider a benefit abandoned if
an estate is never opened within a specific period, the same as if an estate is closed
and not reopened.
The bill eliminates an expired provision regarding the execution of domestic
relations orders (DROs) that divide a WRS account. Under current law, a DRO must
be provided to DETF within 20 years after the judgment of divorce is entered. Under
the original DRO law, DETF could not accept a DRO for a judgment of divorce entered
before April 28, 1990. The law was amended by 1997 Wisconsin Act 125 to cover
DROs for a judgment of divorce entered between January 1, 1982, and April 27, 1990.
The Wisconsin Supreme Court held in Johnson v. Masters, 2013 WI 43, 347 Wis.
2d 238, 830 N.W. 2d 647 (2013), that the 20-year limit for execution of DROs issued
under the amended law did not begin until the date DETF was able to divide a WRS

account. The 20-year period did not begin to toll until May 2, 1998. DETF has not
been authorized to accept a DRO to divide an account under 1997 Wisconsin Act 125
since May 2, 2018.
2015 Wisconsin Act 55 eliminated the Office of State Employment Relations in
the Department of Administration, headed by a director, and replaced it with the
Division of Personnel Management in DOA, headed by an administrator. The bill
corrects a reference to the director of OSER by substituting the administrator of
DPM.
For further information, see the Notes provided by the Law Revision
Committee of the Joint Legislative Council.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
Law Revision Committee prefatory note: This bill is a remedial legislation
proposal, requested by the Department of Employee Trust Funds and introduced by the
Law Revision Committee under s. 13.83 (1) (c) 4. and 5., stats. After careful consideration
of the various provisions of the bill, the Law Revision Committee has determined that this
bill makes changes to statutes or session laws that the Law Revision Committee
determined to be in need of revision.
SB996,1 1Section 1 . 40.02 (48r) of the statutes is amended to read:
SB996,3,52 40.02 (48r) “Required beginning date" means the later of April 1 of the calendar
3year following the calendar year in which a participant attains the age of 70.5 years
4set under section 401 (a) (9) of the Internal Revenue Code or April 1 of the calendar
5year following the calendar year in which a participating employee retires.
Note: Sections 1, 9 , and 10 bring state law into compliance with federal law
changes to the required minimum distributions beginning age made by the Setting Every
Community Up for Retirement Enhancement (SECURE) Act of 2019. These Sections
replace specified ages with a reference to the ages set under the relevant Internal
Revenue Code section, so that future federal changes will be automatically reflected in
state law.