How to Retire by yurtgc548


									                       How to Retire

ET-4133 (REV 6/2011)

How Retirement Benefits Are Calculated ........................... Page 1

How to Complete Your Retirement Application ................... Page 2

What to Expect After ETF Receives Your Application......... Page 6

Eligibility for Other Benefits ................................................ Page 6

Commonly Asked Questions .............................................. Page 9

Glossary ........................................................................... Page 11

Contact Information ..................................................... Back Cover
                                        How to Retire
                                        The following information will walk you through completing a retire-
                                        ment application, cover general topics and provide answers to com-
                                        monly asked questions. This material will answer the same questions
                                        that would be asked if you met with a benefits specialist in person.
                                        This brochure references a number of publications that contain more
                                        specific information. Visit
                                        for more information and links to these forms and brochures. We also
                                        suggest you view ETF’s Road to Retirement: Online Video Appoint-
                                        ment, follow the Members link of the ETF Video Library at http://etf.

How Retirement Benefits Are Calculated
The Department of Employee Trust Funds calculates          age with less than the required years of service. If you
retirement benefits using two methods: the Formula         elected to participate in the Variable Fund and your ac-
calculation method and the Money Purchase calcula-         count has an excess or a deficiency, this information is
tion method. Benefits are paid based on whichever          also factored into this calculation method.
results in a higher benefit. The higher paying method is
shown on Page 1 of your Retirement Benefit Estimates       The Money Purchase calculation is based on the
and Application (ET-4301).                                 current total contributions (employee and employer
                                                           required, plus interest accrued), the actuarial factor
The Formula calculation is based on the total years of     based on age at the date of retirement and assumed
service in your employment category(ies), the formula      interest based on the termination date (.416% inter-
multiplier for your employment category(ies), military     est for each full month the money stays on deposit at
service credit (if applicable), the three high years of    ETF).
earnings to determine the final average monthly earn-
ings and the age reduction factor (if applicable based     For more information about these calculation methods,
on age at the date of retirement.) An age reduction        see Calculating Your Retirement Benefits (ET-4107)
factor is applied if you retire before normal retirement

ET-4133 (REV 06/2011)                                  Page 1                                   
How to Complete Your Retirement Application
                            You may apply for your           information, see Federal Withholding Requirements
                            benefit up to 90 days before     and Direct Rollover Option (ET-7289)
                            your termination date. It        publications/et7289.pdf and the Authorization for Direct
                            takes ETF approximately 60       Rollover (ET-7355) available from ETF. These two
                            days to process your ap-         forms only apply if you are eligible for a lump sum and
                            plication and establish your     a direct rollover.
                            estimated payments. You
                            can apply for your benefit       If you are only eligible for a lump sum payment, you
                            up to 90 days after your         may move to Step 6. Steps 3 through 5 of this docu-
                            termination date without los-    ment do not apply.
                            ing benefits. An application
                            received more than 90 days
                            after termination may result     Monthly Payments
                            in the loss of some benefits.    Everyone who is eligible for monthly payments has
You will receive any late payments retroactively after       three Life Annuity Options. They are:
the account has been set up on estimated payroll.
                                                                  „ For Annuitant’s Life only;
For more information on the application process, see              „ Life with 60 Payments Guaranteed; and,
Applying for Your Retirement Benefit (ET-4106) http://
                                                                  „ Life with 180 Payments Guaranteed.
                                                             If you provided ETF with information regarding a quali-
                                                             fied joint survivor, you are provided Joint and Survivor
Step 1: Confirm Personal Information                         Annuity Options. They are:
Confirm your name, date of birth, Social Security num-
ber and address (and the joint survivor’s name and                „ 75% Continued to Named Survivor;
date of birth if listed). If you see an error, please cor-        „ 100% Continued to Named Survivor;
rect the information on the retirement estimate. If your
date of birth or Social Security number are wrong, you            „ Reduced 25% on Death of Annuitant or Death of
may be required to submit legal documentation with                  Named Survivor; and,
correct information. A date of birth error could affect           „ 100% Continued to Named Survivor with 180
your monthly annuity benefit.                                       Payments Guaranteed.
                                                             For a full explanation of these choices, please see
Step 2: Benefit Payment Options                              Choosing an Annuity Option (ET-4117)
This is perhaps the most challenging decision of the         publications/et4117.pdf.
retirement process. There are pros and cons to weigh
among the various options.                                   All options provide you with payments for the rest of
                                                             your life. The options differ in what happens after you
Lump Sum                                                     pass away. There are three possible outcomes after
                                                             you pass away:
Eligibility for a lump sum versus monthly payment
options of regular retirement benefits depends on the             A. Nothing more is payable;
size of your annuity. If your monthly annuity figure for          B. Annuities payable for a guarantee period are still
the “For Annuitant’s Life Only” option is less than $168             in effect, and payment will be made to a benefi-
(for 2011), you are restricted to a lump sum payment.                ciary;
If your annuity is at least $168 (for 2011) but less than
$342, you may choose between a lump sum payment                   C. A joint and survivor annuity option was selected
or a monthly option. If your monthly annuity is $342                 and, as long as the named survivor is living,
(for 2011) or more, a lump sum payment is not avail-                 they will receive benefits.
                                                                     Beneficiary Versus Named Survivor
If you are eligible for a lump sum, you may choose           A beneficiary will receive remaining payments from an
to roll the benefit over to a qualified plan. For more       annuity with a guarantee period. A named survivor will

ET-4133 (REV 06/2011)                                    Page 2                                    
receive payments for the remainder of their life upon        You may cancel your application for monthly payments
your death. A beneficiary can be changed at any time,        if ETF receives your written request no later than the
while a named survivor cannot be changed. You may            last working day before the 21st of the month in which
name multiple beneficiaries. A beneficiary can be a          your first check is dated. This is 19 to 20 days after
person, a trust, an estate or an organization(s). You        your first payment. If you chose a lump sum payment,
can have only one named survivor. A named survivor           ETF must receive your written request no later than
can be anyone, but federal restrictions on the differ-       the last working day before the date of your check.
ence in age between you and your survivor may limit
the options. By law, your spouse or domestic partner         For more information on annuity options, see Choosing
has a right to be a named survivor and must waive that       an Annuity Option (ET-4117)
right if a survivor option is not selected.                  tions/et4117.pdf.

Accelerated Payments                                         Step 3: Joint and Survivor
If you are eligible for accelerated payments, dollar         Information (if applicable)
figures will appear in two columns next to the regular       If you selected a joint and survivor annuity option,
monthly retirement benefit column. Choosing an ac-           complete all of the fields in this section.
celerated payment means you will get more money
while you are younger; then, after you turn age 62,
your benefit will decrease. That decrease in benefits        Step 4: Direct Deposit Authorization
at age 62 is permanent, and it is assumed you will           Direct deposit is the only payment method available
initiate benefits from Social Security at that point. This   for ETF monthly benefits. Please provide all the infor-
means the longer you live after age 62, the more it will     mation requested in this section and staple a voided
“cost” you for the temporary acceleration. Essentially,      check to your application if you selected a direct de-
you buy the temporary benefit from your after-age-62         posit into a checking account.
lifetime benefit.
                                                             You may change the direct deposit location at any
If you are an alternate payee or firefighter interested in   time. Simply complete a new Direct Deposit Authoriza-
receiving accelerated payments, see Special Concerns         tion (ET-7282)
Related to Accelerated Payment Options (ET-4932)             and mail it to ETF. Leave your old account open until                   at least one deposit is received in your new account.
                                                             Otherwise, your payment will be returned to ETF and
                                                             may not be paid until the following month.
Additional Contributions
If additional contributions were made to your account,       Step 5: Taxability
you have additional flexibility in your choice of pay-
ment. You will see monthly dollar figures in the column      This section tells you how much of your monthly ben-
titled “Employee Additional Contributions Benefit.”          efit payment will not be taxable for federal purposes.
You will also see dollar figures printed for annuity         Members who have made post-tax contributions will
certain periods (defaulted to pay for 24 months, 60          see a monthly tax exclusion in this section. The re-
months and 120 months), as well as a lump sum dollar         mainder of your monthly benefit will be taxable. The
amount. You also may choose to delay payment(s)              tax treatment of WRS benefits is generally similar for
until a minimum distribution based on your age is            federal and Wisconsin income tax purposes. Other
required. For more information see Am I Subject to a         states may treat WRS benefits differently. For more
Minimum Distribution? on Page 10 of this brochure.           information about taxation of annuities you should:

                                                                  „ Contact your tax advisor;
Changing Your Option                                              „ See IRS Publication 575;
You may change your option within 60 days of the                  „ Contact the Wisconsin Department of Revenue
date of your first check. You must submit this change               or your state’s tax agency.
in writing. Either submit a Retirement Annuity Option
Change Application form (ET-4319)
                                                             For more information, see Tax Liability on WRS Bene-
publications/et4319.pdf or write a letter expressing
                                                             fits (ET-4125)
your request to ETF.

ET-4133 (REV 06/2011)                                    Page 3                                    
Step 6: Income Tax Withholding Election
                                                                For more information, see Tax Liability on WRS Ben-
Most retirement benefits are subject to federal and             efits (ET-4125)
state tax (if applicable in your state of residence). You       pdf and Federal Withholding Requirements and Direct
may elect whether or not to have federal tax and Wis-           Rollover Option (ET-7289)
consin state tax withheld from your benefit. If you do          tions/et7289.pdf.
not have tax withheld, you are responsible for making
any necessary estimated tax payments directly to the
taxing authority. Failing to make estimated tax pay-            Step 7: Applicant Information
ments may result in tax penalties.

Federal Tax: Select a filing status (married or single)
                                                                Termination Date of All
and a number of exemptions. Selecting single status             WRS Employment
will cause a higher amount to be withheld. Select-              Enter your anticipated termination date. If you do not
ing a higher number of exemptions will cause a lower            recall your termination date, you may leave this blank.
amount to be withheld. You may also specify an ad-
ditional amount to be withheld.                                 You may use vacation time, personal holiday, Satur-
                                                                day holiday or sabbatical leave to extend your time
State Tax: Select a filing status (married or single) and       on payroll, or you may receive it as a one-time payout
a number of exemptions. You may also specify an ad-             from your employer. If you receive a payout from your
ditional amount to be withheld.                                 employer, they will withhold taxes from the payment. If
                          OR                                    you participate in the Wisconsin Deferred Compensa-
Wisconsin tax law also allows you to set a specific dol-        tion (WDC) program, you may roll that payment over to
lar amount for withholding.                                     the WDC (up to the maximum WDC allows) and avoid
                                                                withholding until you receive a distribution from WDC.
ETF cannot advise you what the proper withholding               Please contact your employer for more information.
amount is for you. It is best to contact your tax advisor
or the IRS for advice regarding proper withholding.                            Benefit Effective Date
                                                                Select the begin date for your annuity (benefit effective
You may change your withholding at any time using
                                                                date) by choosing either the earliest possible date or
one of the following methods: (Note: Changes will
                                                                by specifying a later date.
take effect approximately 60 days after the receipt of
your request.)                                                  Earliest possible date: If you are terminating and
                                                                intend to begin benefits immediately, check this box.
  „ Call ETF’s 24-hour, automated phone line toll
                                                                Benefits will begin the day after termination. If you
    free at 1-877-383-1888 or local 608-266-2323;
                                                                terminated in the last 90 days, ETF can back-date an
  „ Call ETF at 1-877-533-5020 during normal busi-              annuity effective date up to 90 days.
    ness hours and speak with a benefits specialist;
                                                                Specify a later date: When a member wishes to
  „ Send an e-mail to;                   select an effective date that is something other than
  „ Complete and mail ETF an Income Tax Withhold-               the day after they terminated employment, the annuity
    ing Election form (ET-4310)          must begin on the first of a month. The “Specify Later
    lications/et4310.pdf.                                       Date” box is used for this purpose.

                                                                Caution: In many cases it is important for benefits to
                Lump Sum Payment                                be effective within 30 days of termination. For exam-
If you are eligible for a lump sum payment, it can              ple, a person may lose eligibility for group life or health
either be paid directly to you or rolled over to another        insurance administered by ETF if their annuity is not
qualified plan. Lump sum payments not rolled over               effective within 30 days of termination. An annuity ap-
to a qualified plan will have 20% withheld for federal          plication received within 90 days of termination can still
income tax and may be subject to other taxation, such           become effective in time to preserve rights to benefits
as early withdrawal penalties. Direct rollovers are not         such as health insurance.
subject to withholding. Please check the box indicating
your choice. If you choose a direct rollover, complete
the Authorization for Direct Rollover (ET-7355) avail-
able from ETF.

ET-4133 (REV 06/2011)                                       Page 4                                     
Step 8: Marital Status                                         Step 9: Application Certification
                                                               You must date and sign the application. A guardian or
Check the appropriate box indicating your marital sta-
                                                               conservator of your estate may sign the application. In
tus and provide the information about your spouse or
                                                               this case, a copy of the order of guardianship must also
domestic partner if relevant. Even if you provided this
                                                               be submitted. A power of attorney may be eligible to
information earlier in the joint survivor section, please
                                                               sign an application on your behalf depending upon the
provide it again. A spouse or domestic partner must
                                                               power of attorney type. For more information on this,
be considered as a named survivor if the couple has
                                                               see Chapters 243 and 155, Wis. Stats.
been married or in a domestic partnership longer than
12 months. A person can still select an annuity which          If you are married or in a domestic partnership and do
does not provide a lifetime annuity for their spouse or        not select a joint survivor option, your spouse or do-
domestic partner, but their spouse or domestic partner         mestic partner must also sign the application, waiving
will need to waive their right to this benefit in the appli-   their right to the lifetime benefit that would be provided
cation certification section (see Step 9).                     by a joint and survivor benefit.

                Domestic Partnership
Under state law, same-sex and opposite-sex domestic
                                                               Step 10: Copy and Submit
partners are treated similarly to spouses for benefits         Make a copy of both sides of your completed applica-
administered by ETF, including the Wisconsin Retire-           tion and mail the original to ETF.
ment System (WRS), group health insurance, deferred
compensation, life insurance and other programs. An
Affidavit of Domestic Partnership form (ET-2371) must
be received and approved by ETF to establish a Chap-
ter 40 domestic partnership. Please see the domestic
partnership information on ETF’s Internet site at http:// or call
ETF to request the packet. When “domestic partner” is
used in this brochure, it means a Chapter 40 domestic
partnership is in effect at ETF.

For more information see Domestic Partner Benefits

ET-4133 (REV 06/2011)                                      Page 5                                     
What to Expect After ETF Receives Your Application
Acknowledgement                                             Final Calculation
After ETF processes your application, we will send you      Annuity payments begin based on an estimated pay-
an acknowledgement letter titled Notice to Retirement       ment amount. The amount is estimated because ETF
Applicant (ET-4414). This form confirms the selections      does not always have final information about earnings,
made on your application. Contact ETF if you find any       service and contributions when a retirement benefit be-
discrepancies.                                              gins. Between 6 and 12 months after retirement, ETF
                                                            will send you a Notice of Final Calculation (ET-4820).
                                                            This is a recalculation of your annuity benefit based on
Annuity Payment Statement (Mailer)                          the final information submitted to ETF by your employ-
The week before you get paid for the first time, ETF will   er. At that time, if your annuity was underestimated,
send an Annuity Payment Statement. The statement            you will receive a lump sum adjustment for the differ-
shows your first payment amount and a break-down            ence. If your annuity was overestimated, your annuity
of any lump sum adjustments for back-pay. After this        will be permanently reduced by an amount that results
first statement, ETF only sends a statement if there is a   in recovering the overpayment during the life of your
change to your payment (e.g. tax withholding changes,       annuity (this is a present value offset). If you wish to
annuity adjustments, etc.).                                 avoid the permanent reduction, you may send a check
                                                            to ETF for the overpayment.

Payments are made for the previous month. For exam-
                                                            Tax Statement (1099-R)
ple, if you retire on June 1, the first payment is made     By the end of January each year, ETF will send you a
July 1 for the month of June. If you retire in the middle   1099-R noting the previous year’s benefits. Occasion-
of the month, your first payment will be prorated based     ally, there may be slight delays. You will need this to
on your termination date. Annuities are direct deposited    complete your state and federal tax forms.
on the first business day of each month.

Eligibility for Other Benefits

                          Health Insurance                  during retirement. Even if you do not intend to continue
                                                            coverage after retirement, coverage upon termination
                           If you are a WRS-covered
                                                            may be required to preserve future eligibility, as well
                           state employee and insured
                                                            as eligibility for related benefits like state employee’s
                           under our group health insur-
                                                            conversion of sick leave credits. See your employer’s
                           ance program, you are enti-
                                                            benefits representative for further information.
                           tled to continue the insurance
                           for life upon your retirement.   If you do continue your WRS covered group health
                           If you are an insured local      insurance, shortly before you or your spouse turn age
                           government employee when         65 you will receive a reminder to enroll in Medicare
                           you begin a retirement ben-      Parts A and B. Complete Medicare Eligibility Statement
                           efit, you may continue cover-    (ET-4307) and
                           age as long as your former       return it with a copy of your Medicare card. Your health
employer participates in the program. Whether you are       insurance premiums will decrease when you or your
a state or local employee, it is important to be enrolled   spouse are enrolled in Medicare.
in an ETF-administered group health plan at the time
of your termination if you intend to continue coverage

ET-4133 (REV 06/2011)                                  Page 6                                    
                  Local Employees                           payment, the health insurance company will bill you
Employer participates in the Wisconsin Public Em-           directly. Premiums change on a yearly basis.
ployer (WPE) Group Health Insurance Program:
                                                            For more information, see Group Health Insurance
Employees whose local employer participates in the          (ET-4112)
WPE Group Health Insurance Program have the right
to continue coverage, but continuation is not automat-
ic. You must have your employer complete the Local          Sick Leave
Employer Verification of Health Insurance Coverage          State employees may have the right to have accumu-
(ET-4814) and return the form to ETF with your retire-      lated sick leave converted to credits for the payment
ment application. This form only applies if your local      of health insurance premiums (ASLCC). In general, to
employer participates in the WPE program. After any         be eligible, your annuity must begin within 30 days of
employer paid premiums are exhausted, premiums will         termination and you must be enrolled in the State of
automatically be deducted from your annuity. These          Wisconsin Group Health Insurance Program. Premi-
premiums change on a yearly basis.                          ums are automatically deducted from sick leave cred-
                                                            its. You may also enroll in comparable coverage and
Employer does not participate in the Wisconsin
                                                            escrow your sick leave credits. Some state employees
Public Employer Group Health Insurance Program
                                                            who meet certain eligibility requirements may retain
                                                            sick leave credits under other conditions.
Retiring employees whose local employer does not
participate in the WPE Group Health Insurance Pro-          For more health insurance related information see:
gram usually have rights to other types of continuation
coverage through their employer. Contact your em-           Group Health Insurance (ET-4112)
ployer directly for more information.                       publications/et4112.pdf.

Employees may also be eligible to enroll in the Local       For information on premiums see: Retirees (State)
Annuitant Health Program (LAHP). LAHP was estab-            Monthly Health Insurance Premiums (ET-4701) http://
lished to provide group health insurance for retirees
from local public employers whose group health insur-
ance with their former employer does not meet their         Local Health Premium Rates (ET-1730) http://etf.
needs or is not permanently available after retirement.
There are two windows of opportunity to sign up for
                                                            Sick Leave Conversion Credit Program (ET-4132)
this plan without providing evidence of insurability: one
upon retirement, one when you turn age 65 (at which
time it becomes a supplemental policy).                     Sick Leave Escrow Application (ET-4305) http://etf.
For more information on this plan, see the Local An-
nuitant Health Program (ET-9019)     Life Insurance
                                                            All state and some local employers participate in the
                                                            life insurance program through the WRS. If you are
                  State Employees                           enrolled when your annuity begins and you have been
For state employees to continue coverage, your retire-      covered for five calendar years, your coverage con-
ment benefit effective date must be within 30 days          tinues automatically. The value of your life insurance
after you terminate employment. If it is, the coverage in   is based on the highest calendar year earnings period
effect on your termination date will automatically con-     reported to ETF. Premiums are required until you turn
tinue. If you do not want coverage to continue during       age 65 and will automatically be deducted from your
retirement, you must submit a Health Insurance Ap-          annuity payment. The premium amount may increase
plication/Change Form (ET-2301)      during retirement. Upon turning age 65, any additional
lications/et2301.pdf or a letter to ETF to cancel your      or supplemental coverage ends and the basic cover-
health insurance. Former state employees who do not         age diminishes to 75% of its maximum. At age 66, the
take an immediate annuity may enroll in the program,        basic coverage diminishes to 50% of its maximum. For
but the effective date of their coverage will be delayed.   some local employees, at age 67, the basic coverage
Premiums are deducted either from your Accumulated          diminishes to 25% of its maximum. If you retire after
Sick Leave Conversion Credits (ASLCC) or from your          age 65, any supplemental and additional coverage
annuity. If your annuity is not large enough to make the    ends and your basic life insurance will be based upon

ET-4133 (REV 06/2011)                                   Page 7                                   
your current age. After your annuity begins, ETF will
send a Certification of Group Life Insurance (ET-4802)       For more information, see Buying Creditable Service
that shows the amount of your coverage and how it            (ET-4121) If
changes as you age.                                          eligible, contact ETF to request an estimate to purchase
Spouse and Dependent Coverage ceases at termina-
tion, as well as for those who have not had coverage in
five calendar years, but it can be converted to a regular    Military Service
policy. If you are interested in this, request information   In some instances, active U.S. military service before
by completing Conversion Information (ET-2306) http://       1974 may be counted as WRS creditable service. This and return it to Min-     can increase a Formula benefit. Eligible members may
nesota Life Insurance.                                       receive one year of military service credit for each five
                                                             years of creditable service, up to a maximum of four
If you wish to terminate your life insurance during          years. A member who was called to active duty and
retirement, complete Life Insurance Cancellation/Appli-      later returned to employment with the same employer
cation/Refusal form (ET-2304)     may also be eligible for credit for service and earnings
tions/et2304.pdf.                                            under the Uniformed Services Employment and Reem-
                                                             ployment Rights Act (USERRA).
Upon reaching its final diminished amount, you may be
eligible to convert your life insurance to pay for health
insurance or long-term care insurance premiums. For          For more information, see Military Service Credit (ET-
more information, see Converting Your Group Life             4122)
Insurance to Pay Health or Long-Term Care Insurance
Premiums (ET-2325)
et2325.pdf. For an estimate of the conversion value of       Reciprocity
your life insurance, contact ETF.                            Limited benefit reciprocity is available between the
                                                             WRS, the City of Milwaukee Employes’ Retirement Sys-
For more information, see Group Life Insurance After         tem and the Milwaukee County Employees’ Retirement
You Terminate Employment (ET-4104)        System. You may benefit from this if you are not yet
publications/et4104.pdf.                                     retired and you have a retirement account with at least
                                                             two of these retirement systems.

Creditable Service                                           For more information, see Reciprocity (ET-7364) http://
Buying creditable service can increase an annuity ben-
efit. You must purchase the creditable service before
your termination date. See below for the three service
purchase types.

                 Qualifying Service
Non-teaching employees who began employment prior
to January 1, 1973 did not “qualify” for participation
in the Wisconsin Retirement System for the first six
months of employment. This qualifying period may be

                  Forfeited Service
If you ever took a WRS separation benefit (a lump sum
withdrawal of employee contributions), you forfeited
creditable service and employer contributions and may
purchase them.

           Other Governmental Service
If a you worked for a non-WRS government employer,
you may be eligible to purchase WRS creditable ser-
vice for that employment.

ET-4133 (REV 06/2011)                                   Page 8                                     
Commonly Asked Questions
Is there a Better Time of the Year                         How Does Variable Participation
to Retire?                                                 Affect My Benefits?
                                                           If you elected to participate in the Variable Trust Fund,
            Money Purchase Annuities
                                                           you took on additional investment risk for the potential
A Money Purchase annuity is based on the actual            of greater gains, and losses. Deciding whether to re-
money in your retirement account. A Money Purchase         main in the Variable Fund is a personal decision, and it
balance changes as a result of contributions and           should be based on factors such as: how much of your
interest. For long-term employees, interest usually af-    account is in the Variable Fund and your overall risk
fects the account balance the most. Annual interest is     tolerance. ETF cannot advise you on the best course
credited to accounts when money is on deposit for the      of action because we do not know your personal
entire year.                                               situation and, like you, we cannot predict future stock
                                                           market performance.
If you have not yet terminated employment, you should
determine whether the guaranteed prorated interest
based on your termination date is more advantageous        For more detailed information about the affects of Vari-
(5.0% prorated based on the month of termination) or       able Fund participation, including canceling participa-
whether you would rather receive the full effective rate   tion, see How Participation in the Variable Trust Fund
by staying actively employed for the full calendar year.   Affects Your WRS Participation (ET-4930) http://etf.
For more information, see WRS Interest Crediting
(ET-7373)       Also see the online video WRS Trust Funds - Core and
                 Formula Annuities
A Formula annuity is calculated using the following        Will the Amount of my Annuity
formula:                                                   Ever Change?
 Final Average Earnings (FAE) x Formula Multiplier x       Each year, annuities are adjusted based on the market
     Creditable Service x Age Reduction Factor             results of the prior calendar year. These adjustments
                                                           are reflected on the May 1 payment and apply until the
In most cases, the last years of earnings are the high-    next adjustment is made the following year. Annuity
est years, so it may be beneficial to complete an ad-      adjustments can be positive or negative. Some years
ditional annual earnings period before retirement. For     an annuity will receive positive adjustments. Those
teachers, educational support and judges the annual        gains can be taken away by market losses at a later
earnings period is the fiscal year (July 1 – June 30).     time; however, the Core portion of an annuity cannot
All other employee’s annual earnings are reportable        be reduced below the final calculated Core amount of
based on the calendar year.                                the annuity when it first began. For those who partici-
                                                           pate solely in the Core Fund, your annuity will never
                                                           drop below your final calculation. There is no limit to
Should I Update My                                         the amount the Variable portion of an annuity can be
Beneficiary Designation?                                   reduced.
You may file a beneficiary designation for any WRS
annuity which has guaranteed payments (Life Annuity        For more information, view Annual Annuity Adjust-
with 60/180 Payments Guaranteed or 100% Continued          ments in the ETF Video Library or see How Participa-
to Joint Survivor with 180 Payments Guaranteed). You       tion in the Variable Trust Affects Your WRS Benefits
may also file one if you have life insurance under the     (ET-4930) and
WRS. Filing a beneficiary designation informs ETF          Canceling Variable Participation (ET-2313) http://etf.
who would receive your benefit upon your death.  

See Beneficiary Designation (ET-2320) http://etf. or Beneficiary Designa-
tion-Alternate (ET-2321)

ET-4133 (REV 06/2011)                                  Page 9                                    
What Happens If I Return to Work?                            In the Event of Divorce, Can
Work not covered under the WRS (private employ-              My Annuity be Affected?
ment) has no impact on your benefit.                         Upon receipt of a Qualified Domestic Relations Order
                                                             (QDRO), ETF can divide your WRS account or annuity
If you return to work for a WRS employer, you can
                                                             for marriages legally terminated after 1981 by divorce,
either remain an annuitant or elect coverage under
                                                             annulment or legal separation. A QDRO divides an
the WRS (i.e., re-establish your account). If you elect
                                                             account or annuity by awarding a percentage to the
coverage, your annuity will stop and WRS coverage
                                                             alternate payee (not to exceed 50% of the total value
will begin after ETF receives the completed Rehired
                                                             of the account or annuity as of the decree date).
Annuitant Election form (ET-2319)
publications/et2319.pdf. After you re-terminate em-
ployment, ETF will determine what you are eligible to        For more information, see How Divorce Can Affect
receive, based on your previous annuity and any new          Your WRS Benefits (ET-4925)
service and earnings.                                        tions/et4925.pdf.

You must make a good faith break in service after ter-
mination and remain terminated from all WRS employ-
ment until the latest of:

  „ the day after your annuity effective date;
  „ the 31st day after your WRS employment termi-
    nation date;
  „ or the 31st day after the date ETF receives your
    retirement benefit application.
Part-time elected officials age 55 or older may irrevo-
cably waive coverage under the WRS if terminating all
other covered WRS employment. Complete and send
ETF a Waiver of Part-Time Elected Service form (ET-
4303) if this
applies to you and you wish to file this waiver.

For more information, see Information for Retirees (ET-

Am I Subject to Minimum Distribution?
If you are 69 ½ or older as of your termination date,
ETF will send you a special letter which explains the
requirements for minimum distribution. You may wait to
begin your annuity until as late as age 71 ½. If you do
not voluntarily begin an annuity by age 71 ½, by law,
ETF must force an automatic distribution.

For more information, see Tax Liability on WRS Bene-
fits (ET-4125)

ET-4133 (REV 06/2011)                                   Page 10                                  
                        Accelerated Payment                  Creditable Service
                        A WRS annuity option that            The years of service for which a WRS member has re-
                        provides a higher monthly            ceived credit under the WRS. This includes all service
                        payment until the annuitant          for which contributions have been made, purchased
                        reaches age 62. At age 62 the        service and any retirement service credit granted by
                        WRS payments decrease ap-            the employer prior to the date the employer joined the
                        proximately by the amount of         WRS.
                        the annuitant’s projected age-
                        62 Social Security benefits.
                                                             Estimated Payments
                                                             The amount of a new retiree’s first several monthly
                        Age Reduction Factor                 payments. Once the employer reports the member’s
                        A reduction in a WRS For-            final earnings, contributions and service, ETF does a
mula retirement benefit when an individual receives a        final annuity calculation and adjusts the annuity retro-
retirement benefit before normal retirement age. The         active to the annuity effective date.
percentage that the benefit is reduced is based on the
individual’s age and the statutory normal retirement
age for his/her employment category.                         Final Average Earnings (FAE)
                                                             The average monthly earnings component used in a
                                                             Formula retirement benefit calculation. The average
Alternate Payee                                              is calculated by adding the highest earnings for three
The former spouse of a WRS member to whom the                calendar years (fiscal years for teachers, judges and
court has awarded a percentage of a member’s WRS             educational support personnel) and dividing this total
account or annuity through a Qualified Domestic Rela-        by the creditable service earned during these years,
tions Order.                                                 then dividing by 12. The three years used are those in
                                                             which reported earnings were the highest; they do not
                                                             need to be consecutive, nor the last years reported.
A series of monthly payments payable during the life of
the annuitant or during a specific period.                   Forfeited Service
                                                             If a member takes a separation benefit (a lump sum
                                                             withdrawal of the employee’s contributions), the mem-
Annuity Certain                                              ber’s account is closed. All service and employer
A monthly annuity paid for a specific number of months       contributions credited to the account are forfeited. If
only, rather than for the annuitant’s lifetime. A WRS an-    the member returns to WRS employment, the forfeited
nuity certain can only be paid from voluntary employee       service can be purchased if the member meets certain
additional contributions and is available for a period of    eligibility criteria.
24 to 180 months.
                                                             Formula Multiplier
Beneficiary                                                  A percentage factor used to calculate a Formula
A person, entity, trust or estate designated by a WRS        benefit. There are different formula factors for different
member to receive a member’s benefits upon the               WRS employment categories.
member’s death.
                                                             Formula Benefit
Core Fund                                                    One of the two methods for calculating WRS benefits.
The Core Fund is one of two funds into which the as-         A Formula benefit is calculated based on a member’s
sets of the WRS are placed and managed by the State          final average earnings, years of service, a formula fac-
of Wisconsin Investment Board (SWIB). The Core               tor based on the member’s employment category(ies),
Fund is a fully diversified, balanced fund containing        and any applicable age reduction factor for early retire-
a mixture of holdings such as stocks and bonds. All          ment.
WRS members participate in the Core Fund.

ET-4133 (REV 06/2011)                                   Page 11                                     
Guarantee Period                                            Other Governmental Service
The minimum number of months for which a life annu-         Employment with a non-WRS public employer other
ity will be paid. If the annuitant dies before the guar-    than military at the federal, state or local level. Mem-
antee period ends, the beneficiary(ies) will receive the    bers may purchase this service.
remainder of the payments.
                                                            Qualifying Service
Joint or Named Survivor                                     Non-teaching members hired prior to January 1, 1973
A member may select one of several joint and survivor       were required to serve a qualifying period, usually
monthly annuity options which provide a lifetime annu-      the first six months, which was not covered under the
ity for the member and one joint survivor, who is most      Wisconsin Retirement Fund (now part of the Wisconsin
often a spouse. The joint survivor must be named on         Retirement System).
the annuity application form. Once the annuity option
change deadline has passed, that named joint survi-
vor can never be changed or eliminated. Certain age         Separation Benefit
restrictions apply to named survivors who are not the       A separation benefit is a lump sum payment of the
member’s spouse.                                            employee contributions and voluntary additional con-
                                                            tributions in your retirement account plus accumulated
                                                            interest. All service and employer contributions cred-
Life Annuity                                                ited to the account are forfeited through a separation
An annuity paid for the lifetime of the annuitant.          benefit.

Lump Sum Payment                                            Variable Fund
A WRS benefit paid to a member, beneficiary or alter-       The Variable Retirement Investment Trust is one of
nate payee in one lump sum.                                 two trust funds into which the assets of the WRS are
                                                            placed and managed by the State of Wisconsin Invest-
                                                            ment Board (SWIB).The variable fund is primarily a
Military Service                                            stock fund, which results in a greater degree of risk
Active service earned in the U.S. armed forces which        due to the volatility of the stock market.
is then credited toward retirement for members of the

Minimum Distribution
The minimum amount that federal law requires a quali-
fied retirement plan (such as the WRS) to distribute
from a member’s account by certain deadlines.

Money Purchase Benefit
One of the two methods for calculating WRS benefits.
A Money Purchase benefit is calculated based only on
the applicant’s age when the benefit is paid and the
amount of money in the account available to fund the

ET-4133 (REV 06/2011)                                  Page 12                                     
                                  Visit ETF’s Video Library
  ETF videos offer easy access to benefit information in an uncomplicated format. Browse our Video
  Library at Follow the Members link for videos on topics such as:

                         „ Road to Retirement ̶ Online Retirement Appointment
                                         „ WRS Payment Options
                                 „ WRS Trust Funds ̶ Core and Variable
                                „ Annual Retirement Annuity Adjustments
                                           „ Your WRS Benefits
                                    „ Buying WRS Creditable Service
                                   „ Wisconsin Deferred Compensation
                                        „ Social Security Benefits
                          „ Medicare and Your WRS Health Insurance Benefits
                                  „ Returning to Work After Retirement

   The Department of Employee Trust Funds (ETF) does not discriminate on the basis of disability
   in the provision of programs, services or employment. If you are speech, hearing or visually
   impaired and need assistance, call toll free at 1-877-533-5020 or (608) 266-3285 (local Madison).
   We will try to find another way to get the information to you in a usable form.

   ETF has made every effort to ensure that this brochure is current and accurate. However,
   changes in the law or processes since the last revision to this brochure may mean that some
   details are not current. Please contact ETF if you have any questions about a particular topic in
   this brochure.

ET-4133 (REV 06/2011)                           Page 13                                 
Contact the Department of Employee Trust Funds
                                  Internet Site
           Find Wisconsin Retirement System and related benefit program
            information, as well as several ways to contact ETF by e-mail.
                              Self-Service Lines
                             1-877-383-1888 (toll free)
                          (608) 266-2323 (local Madison)
       Request forms or brochures through the ETF self-service lines, available
       24 hours a day, seven days a week. Annuitants may also call to change
                        address or tax withholding elections.
                           Main Telephone Lines
                              1-877-533-5020 (toll free)
                          (608) 266-3285 (local Madison)
         Employees and employers can speak with an ETF benefit specialist
                   during office hours from 7:45 a.m. to 4:30 p.m.
                     Monday through Friday (except holidays)
         Wisconsin Relay Service (for hearing and speech impaired) 7-1-1 or
                              1-800-947-3529 (English)
                              1-800-833-7813 (Spanish)
                       Telephone Message Center
                               1-800-991-5540 (toll free)
                            (608) 264-6633 (local Madison)
       Hear detailed messages covering a variety of WRS topics. Please note
         that these are all recorded messages. You can speak with an ETF
        benefit specialist by calling the local or toll-free main telephone line.
                                Mailing Address
                        Department of Employee Trust Funds
                                 P. O. Box 7931
                             Madison, WI 53707-7931
                        Schedule an appointment by calling:
                        1-877-533-5020 ext. 65717 (toll free)
                           (608) 266-5717 (local Madison)
                         For appointments in your district, visit

                              Wisconsin Department
                             of Employee Trust Funds
                                801 W. Badger Road
                             Madison, Wisconsin 53713

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