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40.26   Reentry into service.
40.27   Post-retirement adjustments.
40.28   Variable benefits.
40.285   Purchase of creditable service.
40.29   Temporary disability; creditable service.
40.30   Intrastate retirement reciprocity.
40.31   Maximum benefit limitations.
40.32   Limitations on contributions.
40.40   State-federal agreement.
40.41   Coverage.
40.51   Health care coverage.
40.513   Payment of stipend in lieu of health care coverage for state employees.
40.515   Health savings accounts; high-deductible health plan.
40.52   Health care benefits.
40.55   Long-term care coverage.
40.56   Abortion coverage prohibited.
40.61   Income continuation coverage.
40.62   Income continuation insurance benefits.
40.63   Disability annuities.
40.65   Duty disability and death benefits; protective occupation participants.
40.70   Life insurance coverage.
40.71   Death benefit eligibility.
40.72   Life insurance benefits.
40.73   Death benefits.
40.74   Beneficiaries.
40.80   State deferred compensation plan.
40.81   Deferred compensation plan authorization.
40.82   General provisions.
40.85   Employee-funded reimbursement account plan.
40.86   Covered expenses.
40.87   Treatment of compensation.
40.875   Administrative and contract costs.
40.95   Health insurance premium credits.
subch. I of ch. 40 SUBCHAPTER I
40.01 40.01 Creation and purpose.
40.01(1)(1)Creation. A “public employee trust fund" is created to aid public employees in protecting themselves and their beneficiaries against the financial hardships of old age, disability, death, illness and accident, thereby promoting economy and efficiency in public service by facilitating the attraction and retention of competent employees, by enhancing employee morale, by providing for the orderly and humane departure from service of employees no longer able to perform their duties effectively, by establishing equitable benefit standards throughout public employment, by achieving administrative expense savings and by facilitating transfer of personnel between public employers.
40.01(2) (2) Purpose. The public employee trust fund is a public trust and shall be managed, administered, invested and otherwise dealt with solely for the purpose of ensuring the fulfillment at the lowest possible cost of the benefit commitments to participants, as set forth in this chapter, and shall not be used for any other purpose. Revenues collected for and balances in the accounts of a specific benefit plan shall be used only for the purposes of that benefit plan, including amounts allocated under s. 40.04 (2), and shall not be used for the purposes of any other benefit plan. Each member of the employee trust funds board shall be a trustee of the fund and the fund shall be administered by the department of employee trust funds. All statutes relating to the fund shall be construed liberally in furtherance of the purposes set forth in this section.
40.01(3) (3) Compatibility of trustee responsibilities. Membership on the employee trust funds board, group insurance board, deferred compensation board, Wisconsin retirement board and the teachers retirement board shall not be incompatible with any other public office. The board members and the employees of the department shall not be deemed to have a conflict of interest in carrying out their responsibilities and duties in administering this chapter, or taking other appropriate actions necessary to achieve the purposes of this chapter, solely by reason of their being eligible for benefits under the benefit plans provided under this chapter. However, any board member or employee of the department is expressly prohibited from participating in decisions directly related to a specific benefit, credit, claim or application of the person and from participating in negotiations or decisions on the selection of actuarial, medical, legal, insurance or other independent contractors if the board member or employee of the department has a direct or indirect financial interest in or is an officer or employee or is otherwise associated with the independent contractor.
40.01 History History: 1981 c. 96; 1989 a. 31; 1991 a. 269; 2019 a. 9.
40.01 Annotation Monies appropriated to the Public Employee Trust Fund are not “state funds"; therefore the legislature may not restrict the use of those funds by a statute governing the use of “state or local funds." OAG 1-95.
40.015 40.015 Compliance with federal tax laws.
40.015(1)(1)The Wisconsin retirement system is established as a governmental plan and as a qualified plan for federal income tax purposes under the Internal Revenue Code and shall be so maintained and administered.
40.015(2) (2)No benefit plan authorized under this chapter may be administered in a manner which violates an Internal Revenue Code provision that authorizes or regulates that benefit plan or which would cause an otherwise tax exempt benefit to become taxable under the Internal Revenue Code.
40.015(3) (3)For the purposes of compliance with the Internal Revenue Code, the plan year is January 1 through December 31.
40.015 History History: 1995 a. 302; 2013 a. 20.
40.02 40.02 Definitions. In this chapter, unless the context requires otherwise:
40.02(1d) (1d)“Abortion" has the meaning given in s. 253.10 (2) (a).
40.02(1m) (1m)“Accumulation" means the total employee required contributions or employer required contributions or additional contributions as increased or decreased by application of investment earnings.
40.02(2) (2)“Additional contribution" means any contribution made by or on behalf of a participant to the retirement system other than employee and employer required contributions.
40.02(2m) (2m)“Alternate payee" means a former spouse or domestic partner of a participant who is named in a qualified domestic relations order as having a right to receive a portion of the benefits of the participant.
40.02(3) (3)“Annual earnings period" means the calendar year except as follows:
40.02(3)(a) (a) For a teacher, it means the period beginning on the first day of a school year and ending on the day prior to the beginning of the next school year, as determined by the employer in accordance with rules of the department.
40.02(3)(b) (b) For a supreme court justice, court of appeals judge or circuit judge who terminates all creditable service on or after May 1, 1992, it means the period beginning on July 1 and ending on the following June 30. This paragraph applies to periods beginning after June 30, 1988.
40.02(3)(c) (c) For an educational support personnel employee who terminates participating employment on or after July 1, 1997, it means the period beginning on July 1 and ending on the following June 30. This paragraph applies to periods beginning after June 30, 1997.
40.02(3)(d) (d) For a technical college educational support personnel employee who terminates participating employment on or after July 1, 1998, it means the period beginning on July 1 and ending on the following June 30. This paragraph applies to periods beginning after June 30, 1998.
40.02(3)(e) (e) For a cooperative educational service agency support personnel employee who terminates participating employment on or after July 1, 1998, it means the period beginning on July 1 and ending on the following June 30. This paragraph applies to periods beginning after June 30, 1998.
40.02(4) (4)“Annuitant" means a person receiving a retirement annuity, beneficiary annuity or a disability annuity from the Wisconsin retirement system, including a person whose disability annuity has been suspended. For group life insurance purposes, “annuitant" also means annuitants of retirement systems other than the Wisconsin retirement system as determined by the group insurance board for any employer.
40.02(5) (5)“Annuity" means a series of monthly payments payable during the life of the annuitant or during a specific period. The first installment of each annuity from the Wisconsin retirement system shall be payable on the first day of the calendar month following the annuity effective date as specified in this chapter and shall be the full monthly amount or, if less, the full monthly amount multiplied by a percentage equal to 3.6 percent times the number of days from the effective date of the annuity to the end of the month in which the annuity is effective, counting both the effective date and the last day of the month. Succeeding installments shall be payable as of the first day of each succeeding calendar month. The last payment shall be the payment payable in the calendar month in which the annuitant dies, except as otherwise specifically provided in this chapter. In the case of the death of an annuitant prior to the expiration of any guaranteed number of payments, if the first installment was less than the full monthly amount, an additional payment shall be paid to the beneficiary, in the month after the end of the guarantee period, equal to the then monthly amount payable times the difference between 100 percent and the percent applied in determining the first monthly installment.
40.02(6) (6)“Assumed benefit rate" means a rate of 5 percent. The assumed benefit rate shall be used for calculating reserve transfers at the time of retirement, making actuarial valuations of annuities in force, determining the amount of lump-sum death benefits payable from the portion of an annuity based on additional deposits and crediting interest to employee required contribution accumulations under s. 40.04 (4) (a) 2.
40.02(7) (7)“Assumed rate" means the probable average effective rate expected to be earned for the core annuity division on a long-term basis. The assumed rate shall be a rate of 8 percent and the actuarial assumption for across-the-board salary increases for the purpose of valuing the liabilities of the Wisconsin Retirement System shall be 3.4 percent less than the assumed rate unless due to changed economic circumstances the actuary recommends and the board approves a different rate. The assumed rate for a calendar year shall be used for all calculations of required contributions and reserves for participants, except as provided in s. 40.04 (4) (a) 2., 2g., and 2m., and the amount of any lump sum benefit paid instead of an annuity, except it shall not be used for any purpose for which the assumed benefit rate is to be used under sub. (6).
40.02(8) (8)
40.02(8)(a)(a) “Beneficiary" means:
40.02(8)(a)1. 1. The person, or a trust in which the person has a beneficial interest, so designated by a participant or insured employee or annuitant in the last written designation of beneficiary on file with, and in the form approved by, the department at the time of death, except as provided in s. 40.23 (4) (c). A written designation of beneficiary for a specified benefit plan applies only for determining beneficiaries under that specified benefit plan.
40.02(8)(a)2. 2. In the absence of a written designation of beneficiary, or if all designated beneficiaries who survive the decedent die before filing with the department a beneficiary designation applicable to that death benefit or an application for any death benefit payable, the person determined in the following sequence: group 1, surviving spouse or surviving domestic partner; group 2, children of the deceased participant, employee or annuitant, in equal shares, with the share of any deceased child payable to the issue of the child or, if there is no surviving issue of a deceased child, to the other eligible children in this group or, if deceased, their issue; group 3, parent, in equal shares if both survive; group 4, brother and sister in equal shares and the issue of any deceased brother or sister. The shares payable to the issue of a person shall be determined per stirpes. No payment may be made to a person included in any group if there is a living person in any preceding group, and s. 854.04 (6) shall not apply to a determination under this subsection.
40.02(8)(a)3. 3. The estate of the participant, employee or annuitant, if there is no written designation of beneficiary and no beneficiary determined under subd. 2. or par. (b) or if so specified in the last written designation of beneficiary filed prior to time of death.
40.02(8)(b) (b) “Beneficiary" does not include any of the following:
40.02(8)(b)1. 1. A person who dies before filing with the department either a beneficiary designation applicable to that death benefit or an application for any death benefit payable to the person except as otherwise provided under group 2, under par. (a) 2. If a person dies after filing a beneficiary application but before the date on which the benefit check, share draft or other draft is issued or funds are otherwise transferred, any benefit payable shall be paid in accord with the written designation of beneficiary, if any, filed with the department in connection with the application or, if none, in accord with the last designation previously filed by the person, or otherwise to the person's estate.
40.02(8)(b)2. 2. For purposes of a group life insurance benefit plan under this chapter, and at the discretion of the department, an individual who is notified by the department or insurer that a benefit is payable to the individual because of the death of an insured person, who is provided with any necessary application form, and who does not then apply for the benefit within 12 months of the date of notification by the department that the benefit is payable to the individual.
40.02(8)(b)3. 3. For the purpose of determining a beneficiary of a deferred compensation plan under par. (a) 2., a surviving domestic partner.
40.02(9) (9)“Beneficiary annuity" means any death benefit which is paid as an annuity.
40.02(10) (10)“Benefit plan" includes the Wisconsin retirement system, employee-funded reimbursement account plan, deferred compensation plan, OASDHI, group health insurance, group income continuation insurance, group life insurance or any other insurance plan established under this chapter, regardless of whether each type of insurance is provided through one or multiple contracts or provides different levels of benefits to different employees.
40.02(11) (11)“Board" means the employee trust funds board.
40.02(12) (12)“Child" means natural children and legally adopted children.
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