State Codes and Statutes

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40.02

40.02 Definitions. In this chapter, unless the context requires otherwise:

40.02(1)

(1) "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% 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% and the percent applied in determining the first monthly installment.

40.02(6)

(6) "Assumed benefit rate" means a rate of 5%. 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(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.

40.02(12m)

(12m) "Cooperative educational service agency support personnel employee" means a person who is a cooperative educational service agency employee, but who is not a teacher.

40.02(12r)

(12r) " Core annuity" means any annuity other than a variable annuity.

40.02(13)

(13) "Coverage group" has the meaning given that term by federal regulations.

40.02(14)

(14) "Creditable current service" means the creditable service granted for service performed for a participating employer and for which a participating employee receives earnings after the effective date of participation for that employer.

40.02(15)

(15)

40.02(15)(a)

(a) "Creditable military service" means active service in the U.S. armed forces, based on the total period of service in the U.S. armed forces, provided:

40.02(15)(a)1.

1. The participant enlisted or was ordered or inducted into active service in the U.S. armed forces;

40.02(15)(a)2.

2. The participant left the employment of a participating employer to enter the U.S. armed forces;

40.02(15)(a)3.

3. The participant returns to the employment of the employer whose employment the participant left to enter the U.S. armed forces within 180 days of release or discharge from the armed forces, or within 180 days of release from hospitalization because of injury or sickness resulting from service in the armed forces;

40.02(15)(a)4.

4. The period of service in the U.S. armed forces is not more than 4 years, unless involuntarily extended for a longer period;

40.02(15)(a)5.

5. The participant was discharged from the U.S. armed forces under conditions other than dishonorable;

40.02(15)(a)6.

6. The participant upon return from service in the U.S. armed forces furnishes evidence required to establish the participant's rights under this chapter; and

40.02(15)(a)7.

7. The service in the U.S. maritime service, including the merchant marine, was aboard an oceangoing vessel during the period beginning on December 7, 1941, and ending on August 15, 1945, and the participant submits to the department a copy of a release or discharge certificate or honorable service certificate issued by the U.S. department of defense that verifies the applicant's creditable maritime service.

40.02(15)(b)

(b) The creditable military service under par. (a) shall be the same type, as set forth in s. 40.23 (2m) (e), as the participant was receiving prior to entry into the U.S. armed forces.

40.02(15)(c)

(c) Notwithstanding sub. (17) (intro.) and any other law, any person who is credited with 5, 10, 15 or 20 or more years of creditable service, not counting any previously granted creditable military service, may receive creditable military service at the time of retirement for not more than 1, 2, 3 or 4 years, respectively, of active service which meets the standards under par. (a) 5., provided:

40.02(15)(c)1.

1. This paragraph applies only to active military service served prior to January 1, 1974.

40.02(15)(c)2.

2. Any creditable military service otherwise granted shall be included in determining the maximum years to be granted under this paragraph.

40.02(15)(c)3.

3. Creditable military service under this paragraph shall be allocated at the time of retirement in proportion to the amount of the participant's creditable service for each of the types of creditable service set forth in s. 40.23 (2m) (e) on the date the participant attains 5, 10, 15 or 20 years of creditable service.

40.02(15)(c)4.

4. This paragraph does not apply to any active service used for the purpose of establishing entitlement to, or the amount of, any benefit, other than a disability benefit, to be paid by any federal retirement program except OASDHI and the retired pay for nonregular military service program under 10 USC 1331 to 1337 or, if the participant makes an election under s. 40.30 (2), by any retirement system specified in s. 40.30 (2) other than the Wisconsin retirement system.

40.02(15)(c)5.

5. The participant's creditable service terminates on or after January 1, 1982.

40.02(16)

(16) "Creditable prior service" means all previous service for a participating employer of a person who became a participating employee on the effective date of participation for that employer if the service or employment conformed to the requirements for granting creditable current service, but no credit shall be granted for any period of service which was previously covered by a retirement system.

40.02(17)

(17) "Creditable service" means the creditable current and prior service, expressed in years and fractions of a year to the nearest one-hundredth, for which a participating employee receives or is considered to receive earnings under sub. (22) (e), (ef), or (em) and for which contributions have been made as required by s. 40.05 (1) and (2) and creditable military service, service credited under s. 40.285 (2) (b) and service credited under s. 40.29, expressed in years and fractions of years to the nearest one-hundredth. How much service in any annual earnings period is the full-time equivalent of one year of creditable service shall be determined by rule by the department and the rules may provide for differing equivalents for different types of employment. Except as provided under s. 40.285 (2) (e) and (f), the amount of creditable service for periods prior to January 1, 1982, shall be the amount for which the participant was eligible under the applicable laws and rules in effect prior to January 1, 1982. No more than one year of creditable service shall be granted for any annual earnings period. Creditable service is determined in the following manner for the following persons:

40.02(17)(a)

(a) Each person holding the offices of governor, lieutenant governor, secretary of state, state treasurer, representative to the assembly, senator, chief clerk and sergeant at arms of the assembly and chief clerk and sergeant at arms of the senate shall receive creditable service on a full-time basis for the period during which the office is held.

40.02(17)(d)

(d)

40.02(17)(d)1.

1. Notwithstanding s. 40.19 (3), upon application to the department each participant who has been a protective occupation participant after July 1, 1969, if the participant has been employed as a protective occupation participant for the 12 months immediately preceding retirement, shall be granted creditable service as a protective occupation participant for all service prior to July 1, 1969, which was performed in a position designated under sub. (48) as a position in which an individual would be a protective occupation participant.

40.02(17)(d)2.

2. Any benefits authorized under subd. 1. for any person who terminated as a participating employee prior to April 27, 1982, which are in excess of the amounts otherwise payable to the person under other provisions of this chapter, shall be paid from the appropriation under s. 20.515 (1) (a).

40.02(17)(f)

(f) Notwithstanding any other law or rule, any participating employee whose service includes Wisconsin teaching service performed before July 1, 1966, for which required contributions were made under the applicable statutes and rules of the former state teachers retirement system and for which the number of days of teaching service in a fiscal year was fewer than 120, shall receive creditable service for that service in an amount equal to the total number of teaching days credited during the fiscal year divided by 165 days.

40.02(17)(gm)

(gm) Any assistant district attorney in a county having a population of 500,000 or more who did not have vested benefit rights under the retirement system established under chapter 201, laws of 1937, who became a participating employee on January 1, 1990, and who is a participating employee on October 29, 1999, shall receive creditable service for the total period of his or her service under the retirement system established under chapter 201, laws of 1937.

40.02(17)(h)

(h) Notwithstanding par. (d), each participant who is a state motor vehicle inspector hired before January 1, 1968, shall be granted creditable service as a protective occupation participant for all covered service as a state motor vehicle inspector that was earned before, on or after May 1, 1990. Notwithstanding par. (d), each participant who is a state motor vehicle inspector hired on or after January 1, 1968, shall be granted creditable service as a protective occupation participant for all covered service as a state motor vehicle inspector that was earned on or after May 1, 1990, but may not be granted creditable service as a protective occupation participant for any covered service as a state motor vehicle inspector that was earned before May 1, 1990.

40.02(17)(m)

(m) Notwithstanding par. (d), each participant who is a state probation and parole officer on or after January 1, 1999, shall be granted creditable service as a protective occupation participant for all covered service as a state probation and parole officer that was earned on or after January 1, 1999, but may not be granted creditable service as a protective occupation participant for any covered service as a state probation and parole officer that was earned before January 1, 1999, unless that service was earned while the participant was classified under sub. (48) (a) and s. 40.06 (1) (d) as a protective occupation participant.

40.02(18)

(18) "Death benefit" means any amount payable to a beneficiary under s. 40.73.

40.02(18f)

(18f) "Decree date" means the first day of the month in which a participant's marriage is terminated by a court under a final judgment, decree or order.

40.02(18g)

(18g) "Deferred compensation plan" means a plan which is in accordance with section 457 of the internal revenue code, under which an employer executes an agreement by which an employee voluntarily agrees to defer a part of gross compensation for payment at a later date. Deferred compensation plan does not include annuity plans specified under section 403 (b) of the internal revenue code.

40.02(18s)

(18s) "Deferred compensation plan provider" means a person who provides administrative or investment services related to deferred compensation plans.

40.02(19)

(19) "Department" means the department of employee trust funds.

40.02(20)

(20) "Dependent" means the spouse, domestic partner, minor child, including stepchildren of the current marriage or domestic partnership dependent on the employee for support and maintenance, or child of any age, including stepchildren of the current marriage or domestic partnership, if handicapped to an extent requiring continued dependence. For group insurance purposes only, the department may promulgate rules with a different definition of "dependent" than the one otherwise provided in this subsection for each group insurance plan.

40.02(21)

(21) "Disability annuity" means any annuity payable under s. 66.191, 1981 stats., or s. 40.63.

40.02(21c)

(21c) "Domestic partner" means an individual in a domestic partnership.

40.02(21d)

(21d) "Domestic partnership" means a relationship between 2 individuals that satisfies all of the following:

40.02(21d)(a)

(a) Each individual is at least 18 years old and otherwise competent to enter into a contract.

40.02(21d)(b)

(b) Neither individual is married to, or in a domestic partnership with, another individual.

40.02(21d)(c)

(c) The 2 individuals are not related by blood in any way that would prohibit marriage under s. 765.03.

40.02(21d)(d)

(d) The 2 individuals consider themselves to be members of each other's immediate family.

40.02(21d)(e)

(e) The 2 individuals agree to be responsible for each other's basic living expenses.

40.02(21d)(f)

(f) The 2 individuals share a common residence. Two individuals may share a common residence even if any of the following applies:

40.02(21d)(f)1.

1. Only one of the individuals has legal ownership of the residence.

40.02(21d)(f)2.

2. One or both of the individuals have one or more additional residences not shared with the other individual.

40.02(21d)(f)3.

3. One of the individuals leaves the common residence with the intent to return.

40.02(22)

(22) "Earnings":

40.02(22)(a)

(a) Except as provided in pars. (b) to (f) and s. 40.63 (1) (c), means the gross amount paid to an employee by a participating employer as salary or wages, including amounts provided through deferred compensation or tax shelter agreements, for personal services rendered to or for an employer, or which would have been available for payment to the employee except for the employee's election that part or all of the amount be used for other purposes and also includes the money value, as determined by the employer, of any board, lodging, fuel, laundry and other allowances provided for the employee in lieu of money. For purposes of this paragraph, the gross amount shall be determined prior to deductions for taxes, insurance premiums, retirement contributions or deposits, charitable contributions or similar amounts and shall be considered received as of the date when the earnings would normally be payable by the employer. For reporting and computation purposes, fractions of a dollar shall be disregarded in determining annual earnings.

40.02(22)(b)

(b) Does not mean payments made for reasons other than for personal services rendered to or for an employer, including, but not limited to:

40.02(22)(b)1.

1. Uniforms purchased directly by the employer.

40.02(22)(b)2.

2. Employer contributions for insurance and retirement.

40.02(22)(b)3.

3. Unemployment insurance benefits.

40.02(22)(b)4.

4. Payments contingent on the employee providing the employer with or assisting the employer in acquiring tangible or intangible property of the employee.

40.02(22)(b)5.

5. Payments contingent on the employee having attained an age which, if increased by 5 years, is greater than what the employee's age would be on the employee's normal retirement date.

40.02(22)(b)6.

6. Lump sum payments at termination for accumulated vacation, sick leave or compensatory time, except that for disability purposes any lump sum payments shall be treated as a continuation of the employee's earnings and service at the employee's then current rate of pay. This subdivision does not exclude payments which are broadly applicable to the employees of the employer regardless of age, length of service or likelihood of employment termination.

40.02(22)(b)7.

7. Payments contingent on the employee having terminated covered employment or having died.

40.02(22)(b)8.

8. Payments contingent on the employee terminating employment at a specified time in the future including payments to secure voluntary release of an unexpired contract of employment.

40.02(22)(b)9.

9. Payments for damages, attorney fees, interest or penalties paid under court judgment or by compromise settlement to satisfy a grievance or wage claim even though the amount of damages or penalties might be based on previous salary levels. However, the department may by rule provide that a payment of additional wages to a continuously participating employee, or the payment of salary to a participant for any period of improper termination of participating employment, is earnings, if the payment is treated by the employer and employee as taxable income and is consistent with previous payment for hours of service rendered by the employee.

40.02(22)(b)10.

10. Payments made in the last 5 years of employment which are the result of a change in the method of computing the base compensation of an employee, unless the change in method for computing the base compensation is a permanent change and is broadly applicable to the employees of that employer or unless the change is the result of a significant change in the nature of the duties and activities expected of the employee.

40.02(22)(b)11.

11. Payment in lieu of fringe benefits normally paid for or provided by the employer but which can be paid to the employee at the employee's option.

40.02(22)(b)12.

12. For any employer, earnings paid to an employee directly by any other unit of government except county supplements to judges under s. 20.923 (3m), 1977 stats., s. 753.016, 1977 stats., s. 753.071, 1977 stats., and s. 753.075, 1977 stats., are earnings if the supplemental payments were subject to subch. I of ch. 41, 1977 stats.

40.02(22)(b)14.

14. Any other type of payment determined by the department by rule to be a distortion of the normal progression patterns on which an individual's benefits should be based.

40.02(22)(c)

(c) For OASDHI purposes, has the meaning specified for wages under federal regulations.

40.02(22)(d)

(d)

40.02(22)(d)1.

1. For Wisconsin retirement system purposes only, for a state elected official who is prohibited by law from receiving an increase in compensation during the official's term of office, means the compensation which would have been payable to the participant if the participant had not been prohibited by law from receiving an increase in compensation during his or her term of office.

40.02(22)(d)2.

2. For Wisconsin retirement system purposes only, for a state senator, means the compensation which would have been payable to the participant if the participant had not been prohibited by law from receiving an increase in compensation during part of his or her term of office.

40.02(22)(e)

(e) For an employee serving in a position covered under and meeting the requirements of 38 USC 4301, et. seq., except for OASDHI purposes, means compensation determined as required under 38 USC 4318 (b) (3) and regulations adopted thereunder, provided contributions and premiums on the compensation are paid as required under s. 40.05.

40.02(22)(ef)

(ef) For Wisconsin retirement system purposes only, for a state employee, means compensation that would have been payable to the participant, at the participant's rate of pay immediately prior to the beginning of any mandatory temporary reduction of work hours or days during the period from July 1, 2009, to June 30, 2011, for service that would have been rendered by the participant during that period if the mandatory temporary reduction of work hours or days had not been in effect. Contributions and premiums on earnings considered to be received under this paragraph shall be paid as required under s. 40.05.

40.02(22)(em)

(em) For Wisconsin retirement system purposes only, for a member of the faculty, as defined in s. 36.05 (8), of a university who is on sabbatical leave under s. 36.11 (17), means the compensation that would have been payable to the participant, at the participant's rate of pay immediately prior to beginning the sabbatical leave, for service that would have been rendered at the university during the period of the sabbatical leave if the participant had continued to render services for the participant's employer during that period. Contributions and premiums on earnings considered to be received under this paragraph shall be paid as required under s. 40.05.

40.02(22)(f)

(f) Does not mean credits for payment of health insurance premiums converted from accumulated unused sick leave for a participating employee who qualifies for a disability benefit under s. 40.63 or 40.65, and who qualifies for the conversion of accumulated unused sick leave under s. 40.05 (4) (b), (bc) or (bf) or as provided by a participating employer's compensation plan or contract.

40.02(22)(g)

(g) Does not include credits for the payment of health insurance premiums provided under s. 40.05 (4) (bw) or subch. IX or any sabbatical or vacation leave converted into such credits.

40.02(22m)

(22m) "Educational support personnel employee" means a person who is a school district employee, but who is not a teacher.

40.02(23)

(23) "Effective rate" means:

40.02(23)(a)

(a) For the core annuity division, the rate, disregarding fractions of less than one-tenth of one percent, determined by dividing the remaining core annuity division investment earnings for the calendar year or part of the calendar year, after making provision for any necessary reserves and after deducting prorated interest and the administrative costs of the core annuity division for the year, by the core annuity division balance at the beginning of the calendar year as adjusted for benefit payments and refunds paid during the year excluding prorated interest.

40.02(23)(b)

(b) For the variable annuity division, the rate, disregarding fractions less than one percent, which will distribute the net gain or loss of the variable annuity division to the respective variable annuity balances and reserves using the same procedure as provided in par. (a) for the core annuity division.

40.02(24)

(24) "Elected official", except as otherwise provided in sub. (48), means a participating employee who is:

40.02(24)(a)

(a) A supreme court justice, court of appeals judge, circuit judge or state, county or municipal official elected by vote of the people.

40.02(24)(b)

(b) Appointed as provided by statute to fill a vacancy in a position specified in par. (a).

40.02(24)(c)

(c) The chief clerk and sergeant at arms of the senate and assembly.

40.02(25)

(25) "Eligible employee" means:

40.02(25)(a)

(a) For the purpose of any group insurance:

40.02(25)(a)1.

1. Any participating state employee who has been participating under the Wisconsin retirement system for a period of at least 6 months prior to attainment of age 70 not including any period of leave of absence without pay.

40.02(25)(a)2.

2. Any state employee who is a member or employee of the legislature, a state constitutional officer, a district attorney who did not elect under s. 978.12 (6) to continue insurance coverage with a county, or who did elect such coverage but has terminated that election under s. 978.12 (6), a justice of the supreme court, a court of appeals judge, a circuit judge or the chief clerk or sergeant at arms of the senate or assembly.

40.02(25)(a)3.

3. The blind employees of the Wisconsin workshop for the blind authorized under s. 47.03 (1) (b), 1989 stats., or of the nonprofit corporation with which the department of workforce development contracts under s. 47.03 (1m) (a), 1989 stats., as of the beginning of the calendar month following completion of 1,000 hours of service. Persons employed by an employer who are blind when hired shall not be eligible for life insurance premium waiver because of any disability that is directly or indirectly attributed to blindness and may convert life insurance coverage only once under the contract.

40.02(25)(a)4.

4. Only a person who has not attained age 70 at the time of becoming initially eligible for the group insurance coverage provided under this chapter; but this subdivision does not exclude any participant from participation in the group health insurance plan nor does it exclude from participation in the group life insurance plan any employee who is initially eligible on the employer's effective date of participation.

40.02(25)(a)5.

5. Any state employee who has been participating under the Wisconsin retirement system for a period of at least 6 months prior to attaining age 70 not including any period of leave of absence without pay and who is on union service leave except the cost for premium payments shall be entirely the responsibility of the state employee on union service leave.

40.02(25)(a)6.

6. Any state employee of the office of district attorney, other than the district attorney, in a county having a population of 500,000 or more who did not elect under s. 978.12 (6) to continue insurance coverage with that county, or who did elect such coverage but has terminated that election under s. 978.12 (6), and who has participated under the retirement system established under chapter 201, laws of 1937, and under the Wisconsin retirement system for a combined and consecutive period, of at least 6 months prior to attainment of age 70, not including any period of leave of absence without pay.

40.02(25)(b)

(b) For the purpose of group health insurance coverage:

40.02(25)(b)1.

1. Any teacher who is employed by the university for an expected duration of not less than 6 months on at least a one-third full-time employment basis and who is not described in subd. 1m.

40.02(25)(b)1m.

1m. Any teacher who is a participating employee and who is employed by the university for an expected duration of not less than 6 months on at least a one-third full-time employment basis.

40.02(25)(b)2.

2. Any person employed as a graduate assistant and other employees-in-training as are designated by the board of regents of the university, who are employed on at least a one-third full-time basis.

40.02(25)(b)2c.

2c. A state employee described in s. 49.825 (4) or 49.826 (4).

40.02(25)(b)2g.

2g. Any person employed as a graduate assistant and other employees-in-training as are designated by the board of directors of the University of Wisconsin Hospitals and Clinics Authority, who are employed on at least a one-third full-time basis with an expected duration of employment of at least 6 months.

40.02(25)(b)3.

3. The surviving spouse or domestic partner of an employee, or of a retired employee, who is currently covered by health insurance at the time of death of the employee or retired employee. The spouse or domestic partner shall have the same right to health insurance coverage as the deceased employee or retired employee, but without state contribution, under rules promulgated by the secretary.

40.02(25)(b)4.

4. Any insured employee who is retired on an immediate or disability annuity, or who receives a lump sum payment under s. 40.25 (1) that would have been an immediate annuity if paid as an annuity, if the employee meets all of the requirements for an immediate annuity including filing of application whether or not final administrative action has been taken.

40.02(25)(b)5.

5. Any participating state employee under the Wisconsin retirement system, notwithstanding par. (a) 1.

40.02(25)(b)6.

6. A participating state employee who terminates creditable service:

40.02(25)(b)6.a.

a. After attaining 20 years of creditable service; and

40.02(25)(b)6.b.

b. Who is eligible for an immediate annuity but defers application.

40.02(25)(b)6e.

6e. A state employee who terminates creditable service after attaining 20 years of creditable service, remains a participant, and is not eligible for an immediate annuity.

40.02(25)(b)6g.

6g. Any state constitutional officer, member or officer of the legislature, head of a state department or state agency who is appointed by the governor with senate confirmation, or head of a legislative service agency, as defined in s. 13.90 (1m) (a), who terminates all creditable service on or after January 1, 1992, who is eligible for and has applied for a retirement annuity or a lump sum payment under s. 40.25 (1), who, if eligible, is receiving medicare coverage under both part A and part B of Title XVIII of the federal social security act, 42 USC 1395 to 1395zz, and who has acted under s. 40.51 (10m) to elect group health insurance coverage.

40.02(25)(b)6m.

6m. Beginning on the date specified by the department, but not earlier than March 20, 1992, and not later than July 1, 1992, any of the following persons who, if eligible, is receiving medicare coverage under both part A and part B of Title XVIII of the federal social security act, 42 USC 1395 to 1395zz, and who has acted under s. 40.51 (16) to elect group health insurance coverage:

40.02(25)(b)6m.a.

a. A retired employee of the state who is receiving a retirement annuity or has received a lump sum payment under s. 40.25 (1).

40.02(25)(b)6m.b.

b. An employee of the state who terminates creditable service after attaining 20 years of creditable service, remains a participant and is not eligible for an immediate annuity.

40.02(25)(b)6r.

6r. Any insured employee of the state who terminates creditable service on or after April 23, 1992, after attaining at least 20 years of creditable service, remains a participant and is not eligible for an immediate annuity or is not receiving a retirement or disability annuity, and who, if eligible, is receiving medicare coverage under both part A and part B of Title XVIII of the federal social security act, 42 USC 1395 to 1395zz.

40.02(25)(b)7.

7. Any employee whose health insurance premiums are being paid under s. 40.05 (4) (bm).

40.02(25)(b)8.

8. Any other state employee for whom coverage is authorized under a collective bargaining agreement pursuant to subch. I, V, or VI of ch. 111 or under s. 230.12 or 233.10.

40.02(25)(b)9.

9. Except as provided under s. 40.51 (7), any other employee of any employer, other than the state, that has acted under s. 40.51 to make such coverage available to its employees.

40.02(25)(b)10.

10. Any participating employee who is an employee of this state and who qualifies for a disability benefit under s. 40.63 or 40.65.

40.02(25)(b)11.

11. Beginning on July 1, 1988, any retired public employee, other than a retired employee of the state, who is receiving an annuity under the Wisconsin retirement system, or any dependent of such an employee, as provided in the health insurance contract, who is receiving a continuation of the employee's annuity, and, if eligible, is receiving medicare coverage under both part A and part B of Title XVIII of the federal social security act, 42 USC 1395 to 1395zz, and who has acted under s. 40.51 (10) to elect group health insurance coverage.

40.02(25)(bm)

(bm) For the purpose of long-term care insurance, in addition to any state annuitant under s. 40.02 (54m), any employee of the state who received a salary or wages in the previous calendar year, and any participant who was at one time employed by the state who receives a lump sum payment under s. 40.25 (1) which would have been an immediate annuity if paid as an annuity, if the employee is a resident of this state and meets all of the requirements for an immediate annuity including filing of an application, whether or not final administrative action has been taken.

40.02(25)(c)

(c) For the purpose of group life insurance coverage, for participating employees and employees subject to s. 40.19 (4) of any employer, other than the state, which has acted under s. 40.70 (1) (a) to make group life insurance available to its employees the same as provided under par. (a) 1. and 3.

40.02(25)(d)

(d) For the purpose of income continuation insurance coverage, and except as provided under s. 40.61 (3), for participating employees of any employer under sub. (28), other than the state, which has acted under s. 40.61 to make such coverage available to its employees.

40.02(26)

(26) "Employee" means any person who receives earnings as payment for personal services rendered for the benefit of any employer including officers of the employer. An employee is deemed to have separated from the service of an employer at the end of the day on which the employee last performed services for the employer, or, if later, the day on which the employee-employer relationship is terminated because of the expiration or termination of leave without pay, sick leave, vacation or other leave of absence. A person shall not be considered an employee if a person:

40.02(26)(a)

(a) Is employed under a contract involving the furnishing of more than personal services.

40.02(26)(b)

(b) Is customarily engaged in an independently established trade, business or profession providing the same type of services to private individuals and organizations as is provided to the employer and whose services to a participating employer are not compensated for on a payroll of that employer, except that persons holding offices provided for by statute shall be considered employees.

40.02(26)(c)

(c) Is a patient or inmate of a hospital, home or institution and performs services in the hospital, home or institution.

40.02(26g)

(26g) "Employee-funded reimbursement account plan" means any of the following:

40.02(26g)(a)

(a) A plan in accordance with section 125 of the Internal Revenue Code under which an employee may direct an employer to place part of the employee's gross compensation in an account to pay for certain future expenses of the employee under section 125 of the Internal Revenue Code.

40.02(26g)(b)

(b) A plan in accordance with section 132 of the Internal Revenue Code under which an employee may direct an employer to place part of the employee's gross compensation in an account to pay for certain future expenses of the employee under section 132 of the Internal Revenue Code.

40.02(26r)

(26r) "Employee-funded reimbursement account plan provider" means a person who provides administrative services related to employee-funded reimbursement account plans.

40.02(27)

(27) "Employee required contribution" means the contribution made by an employee under s. 40.05 (1) (a) 1. to 4. or for an employee under s. 40.05 (1) (b).

40.02(28)

(28) "Employer" means the state, including each state agency, any county, city, village, town, school district, other governmental unit or instrumentality of 2 or more units of government now existing or hereafter created within the state, any federated public library system established under s. 43.19 whose territory lies within a single county with a population of 500,000 or more, a local exposition district created under subch. II of ch. 229, a transit authority created under s. 66.1039, and a long-term care district created under s. 46.2895, except as provided under ss. 40.51 (7) and 40.61 (3). "Employer" does not include a local cultural arts district created under subch. V of ch. 229. Each employer shall be a separate legal jurisdiction for OASDHI purposes.

40.02(29)

(29) "Employer required contribution" means the contribution made by an employer under s. 40.05 (2) (a) to (f).

40.02(30)

(30) "Executive participating employee" means a participating employee in a position designated under s. 19.42 (10) (L) or 20.923 (4), (4g), (7), (8), or (9) or authorized under s. 230.08 (2) (e) during the time of employment. All service credited prior to May 17, 1988, as executive service as defined under s. 40.02 (31), 1985 stats., shall continue to be treated as executive service as defined under s. 40.02 (31), 1985 stats., but no other service rendered prior to May 17, 1988, may be changed to executive service as defined under s. 40.02 (31), 1985 stats.

40.02(32)

(32) "Federal regulations" means the provisions of section 218 of Title II of the federal social security act and applicable regulations adopted under the federal social security act.

40.02(33)

(33) "Final average earnings" means:

40.02(33)(a)

(a) The monthly rate of earnings, ignoring any fractions of a dollar, obtained by dividing:

40.02(33)(a)1.

1. The participant's total earnings received or considered to be received under sub. (22) (e), (ef), or (em) and for which contributions are made under s. 40.05 (1) and (2) during the 3 annual earnings periods (excluding any period more than 3 years prior to the effective date for any participating employer) in which the earnings were the highest, subject to the annual compensation limits under 26 USC 401 (a) (17) for a participating employee who first becomes a participating employee on or after January 1, 1996; by

40.02(33)(a)2.

2. Twelve times the total amount of creditable service for the 3 periods.

40.02(33)(b)

(b)

40.02(33)(b)1.

1. For a state elected official who is prohibited by law from receiving an increase in compensation during the official's term of office and who so elects, one-twelfth of the annual salary, subject to the annual compensation limits under 26 USC 401 (a) (17) for a participating employee who first becomes a participating employee on or after January 1, 1996, which would have been payable to the participant during the last completed month in which the participant was a participating employee in such a position if the participant had not been prohibited by law from receiving an increase in salary during his or her term of office, but only with respect to service as a state elected official.

40.02(33)(b)2.

2. For a state senator who so elects, one-twelfth of the annual salary which would have been payable to the participant during the last completed month in which the participant was a participating employee in such a position if the participant had not been prohibited by law from receiving an increase in salary during part of his or her term of office, but only with respect to service as a state senator.

40.02(33)(c)

(c) For a participant who makes an election under s. 40.30 (2), the monthly rate of earnings applicable under par. (a) or (b), increased as provided under s. 40.30 (4) (b) but subject to the annual compensation limits under 26 USC 401 (a) (17) for a participating employee who first becomes a participating employee on or after January 1, 1996.

40.02(35)

(35) "Fund" means the public employee trust fund.

40.02(36)

(36) "Governing body" means the legislature or the head of each state agency with respect to employees of that agency for the state, the common council in cities, the village board in villages, the town board in towns, the county board in counties, the school board in school districts, or the board, commission or other governing body having the final authority for any other unit of government, for any agency or instrumentality of 2 or more units of government, for any federated public library system established under s. 43.19 whose territory lies within a single county with a population of 500,000 or more, for a local exposition district created under subch. II of ch. 229 or for a long-term care district created under s. 46.2895, but does not include a local cultural arts district created under subch. V of ch. 229.

40.02(37)

(37) "Health insurance" means contractual arrangements which may include, but are not limited to, indemnity or service benefits, or prepaid comprehensive health care plans, which will provide full or partial payment of the financial expense incurred by employees and dependents as the result of injury, illness or preventive medical procedures. The plans may include hospitalization, surgical and medical care, as well as ancillary items or services as determined by the group insurance board. The plans may include the type of coverage normally referred to as "major medical" insurance.

40.02(38)

(38) "Immediate annuity" means an annuity, not including an annuity from additional contributions, which begins to accrue not later than 30 days after termination of employment.

40.02(39)

(39) "Insured employee" means, for purposes of each insurance benefit plan, any eligible employee who is properly enrolled in the benefit plan.

40.02(39m)

(39m) "Internal revenue code" means the federal internal revenue code under Title 26, USC, as amended, and applicable federal regulations adopted by the federal department of the treasury, including temporary regulations.

40.02(39r)

(39r) "Joint and survivor annuity" means an optional annuity form, described under s. 40.24 (1) (d) or a rule promulgated under s. 40.24 (1) (g), that is payable for the life of the participant and, after the death of the participant, a continuing percentage of which is payable in monthly installments to the named survivor.

40.02(40)

(40) "Leave of absence" means any period during which an employee has ceased to render services for a participating employer and receive earnings and there has been no formal termination of the employer-employee relationship. For purposes of the fund every leave of absence, except a military leave or union service leave, shall terminate 3 years after it begins or, if earlier, upon the date specified by the employer in a notification to the department that the employer-employee relationship has terminated. A leave of absence is not deemed ended or interrupted by reason of resumption of active duty until the employee has resumed active performance of duty for 30 consecutive calendar days for at least 50% of what is considered that employee's normal work time with that employer. For the purpose of group health insurance coverage, every leave of absence due to employee layoff which has not been terminated before 3 years have elapsed shall continue for affected insured employees until an additional 2 years elapse or until sick leave credits used to pay health insurance premiums are exhausted, whichever occurs first.

40.02(40m)

(40m) "Long-term care insurance" means insurance that primarily provides coverage for care that is provided in institutional and community-based settings and that is convalescent or custodial care or care for a chronic condition or terminal illness. The term does not include a medicare supplement policy, as defined in s. 600.03 (28r), a medicare replacement policy, as defined in s. 600.03 (28p), or a continuing care contract, as defined in s. 647.01 (2).

40.02(41)

(41) "Milwaukee teacher" means any teacher employed by the board of school directors of the city of Milwaukee.

40.02(41m)

(41m) "Monthly salary" means the gross amount paid to a participant making a claim under s. 40.65, at the time he or she becomes disabled within the meaning of s. 40.65 (4), by the employer in whose employ the injury occurred or the disease was contracted. Overtime pay may not be considered part of an employee's monthly salary unless the employee received it on a regular and dependable basis.

40.02(41r)

(41r) "Named survivor" means the natural person designated by a participant on an application for a joint and survivor annuity or pursuant to a request under s. 40.24 (4) to receive, after the death of the participant, a continuing percentage of the annuity payable in monthly installments. A participant may not designate more than one natural person as the named survivor for a joint and survivor annuity. A participant's designation of a named survivor on an application for a joint and survivor annuity is irrevocable after the deadline specified under s. 40.24 (4). Pursuant to rules promulgated by the department, a named survivor may designate one or more beneficiaries to receive any remaining guaranteed monthly installments that are unpaid at the time of the named survivor's death.

40.02(42)

(42) "Normal retirement date" means:

40.02(42)(a)

(a) The date on which a participant attains the age of 55 years for a protective occupation participant who terminates covered employment before July 1, 1990, or, for a protective occupation participant who terminates covered employment on or after July 1, 1990, the date on which the participant attains the age of 54 years if the participant has accumulated less than 25 years of creditable service or the age of 53 years if the participant has accumulated at least 25 years of creditable service, except as provided in par. (g).

40.02(42)(b)

(b) The date on which a participant attains the age of 62 years for an elected official or an executive participating employee, except as provided in par. (g).

40.02(42)(d)

(d) The date on which a participant attains the age of 65 years for any participant not subject to par. (a) or (b), except as provided in par. (g).

40.02(42)(g)

(g) The date applicable to the participant under pars. (a) to (d) at the earlier of either the date it is necessary to make any determination or to take any action relative to the participant for purposes of the retirement system or the date of termination of employment of the participant, notwithstanding the fact that a participant may have been in one or more different employment categories at any previous time except for the purpose of calculating an annuity. For the purpose of calculating an annuity, the normal retirement date for each category provided by pars. (a) to (d) applies to service which is subject to that category. For the purpose of calculating a retirement benefit for an executive participating employee qualifying only under s. 40.02 (30) (b), 1985 stats., a normal retirement date of the date the executive participating employee attains the age of 62 years shall be applied to creditable service of the executive participating employee for which par. (d) would otherwise apply except the number of creditable service years to which that normal retirement date shall be applied under this paragraph may not exceed the number of executive service years of the executive participating employee.

40.02(43)

(43) "OASDHI" means federal old-age, survivors, disability and health insurance under Titles II and XVIII of the federal social security act.

40.02(44)

(44) "OASDHI benefit" means the primary or disability insurance monthly benefit amount for which a person is eligible, or for which a participant will be eligible upon attaining the lowest age at which old-age benefits are payable under the OASDHI program.

40.02(45)

(45) "Participant" means any person included within the provisions of the Wisconsin retirement system by virtue of being or having been a participating employee whose account has not been closed under s. 40.25 (1) or (2).

40.02(46)

(46) "Participating employee" means an employee who is currently in the service of, or an employee who is on a leave of absence from, a participating employer under the Wisconsin retirement system and who has met the requirements for inclusion within the provisions of the Wisconsin retirement system under s. 40.22.

40.02(47)

(47) "Participating employer" means, for purposes of each of the respective benefit plans, any employer subject to the provisions of that plan under this chapter.

40.02(48)

(48)

40.02(48)(a)

(a) "Protective occupation participant" means any participant whose principal duties are determined by the participating employer, or, subject to s. 40.06 (1) (dm), by the department head in the case of a state employee, to involve active law enforcement or active fire suppression or prevention, provided the duties require frequent exposure to a high degree of danger or peril and also require a high degree of physical conditioning.

40.02(48)(am)

(am) "Protective occupation participant" includes any participant whose name is certified to the fund as provided in s. 40.06 (1) (d) and (dm) and who is any of the following:

40.02(48)(am)1.

1. A conservation warden.

40.02(48)(am)2.

2. A conservation patrol boat captain.

40.02(48)(am)3.

3. A conservation patrol boat engineer.

40.02(48)(am)4.

4. A conservation pilot.

40.02(48)(am)5.

5. A conservation patrol officer.

40.02(48)(am)6.

6. A forest fire control assistant.

40.02(48)(am)7.

7. A member of the state traffic patrol.

40.02(48)(am)8.

8. A state motor vehicle inspector.

40.02(48)(am)9.

9. A police officer.

40.02(48)(am)10.

10. A fire fighter.

40.02(48)(am)11.

11. A sheriff.

40.02(48)(am)12.

12. An undersheriff.

40.02(48)(am)13.

13. A deputy sheriff.

40.02(48)(am)14.

14. A state probation and parole officer.

40.02(48)(am)15.

15. A county traffic police officer.

40.02(48)(am)16.

16. A state forest ranger.

40.02(48)(am)17.

17. A fire watcher employed at Wisconsin veterans facilities.

40.02(48)(am)18.

18. A state correctional-psychiatric officer.

40.02(48)(am)19.

19. An excise tax investigator employed by the department of revenue.

40.02(48)(am)20.

20. A special criminal investigation agent in the department of justice.

40.02(48)(am)21.

21. An assistant or deputy fire marshal.

40.02(48)(am)22.

22. A person employed under s. 61.66 (1).

40.02(48)(b)

(b) Each determination of the status of a participant under this subsection shall include consideration, where applicable, of the following factors:

40.02(48)(b)1.

1. A "police officer" is any officer, including the chief, or employee of a police department, except one whose principal duties are those of a telephone operator, clerk, stenographer, machinist or mechanic and whose functions do not clearly fall within the scope of active law enforcement even though such an employee is subject to occasional call, or is occasionally called upon, to perform duties within the scope of active law enforcement. Police officer includes any person regularly employed and qualifying as a patrol officer or a person of equal or higher rank, even if temporarily assigned to other duties.

40.02(48)(b)2.

2. A "fire fighter" is any officer, including the chief, or employee of a fire department, except one whose principal duties are those of a telephone operator, clerk, stenographer, machinist or mechanic and whose functions do not clearly fall within the scope of active fire suppression or prevention even though such an employee is subject to occasional call, or is occasionally called upon, to perform duties within the scope of active fire suppression or prevention. Fire fighter includes any person regularly employed and qualifying as a fire fighter, hose handler or a person of equal or higher rank, even if temporarily assigned to other duties.

40.02(48)(b)3.

3. A "deputy sheriff" or a "county traffic police officer" is any officer or employee of a sheriff's office or county traffic department, except one whose principal duties are those of a telephone operator, clerk, stenographer, machinist or mechanic and whose functions do not clearly fall within the scope of active law enforcement even though such an employee is subject to occasional call, or is occasionally called upon, to perform duties within the scope of active law enforcement. Deputy sheriff or county traffic police officer includes any person regularly employed and qualifying as a deputy sheriff or county traffic police officer, even if temporarily assigned to other duties.

40.02(48)(b)4.

4. A "member of the state traffic patrol" includes one division administrator in the department of transportation who is counted under s. 230.08 (2) (e) 12. and whose duties include supervising the state traffic patrol, if the division administrator is certified by the law enforcement standards board under s. 165.85 (4) (b) 1. as being qualified to be a law enforcement officer.

40.02(48)(bm)

(bm) "Protective occupation participant" includes any participant who is an emergency medical technician if the participant's employer classifies the participant as a protective occupation participant and the department receives notification of the participant's name as provided in s. 40.06 (1) (d) and (dm). Notwithstanding par. (a), an employer may classify a participant who is an emergency medical technician as a protective occupation participant without making a determination that the principal duties of the participant involve active law enforcement or active fire suppression or prevention. A determination under this paragraph may not be appealed under s. 40.06 (1) (e) or (em), but a determination under this paragraph regarding the classification of a state employee is subject to review under s. 40.06 (1) (dm). Notw

State Codes and Statutes

Statutes > Wisconsin > 40 > 40.02

40.02

40.02 Definitions. In this chapter, unless the context requires otherwise:

40.02(1)

(1) "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% 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% and the percent applied in determining the first monthly installment.

40.02(6)

(6) "Assumed benefit rate" means a rate of 5%. 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(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.

40.02(12m)

(12m) "Cooperative educational service agency support personnel employee" means a person who is a cooperative educational service agency employee, but who is not a teacher.

40.02(12r)

(12r) " Core annuity" means any annuity other than a variable annuity.

40.02(13)

(13) "Coverage group" has the meaning given that term by federal regulations.

40.02(14)

(14) "Creditable current service" means the creditable service granted for service performed for a participating employer and for which a participating employee receives earnings after the effective date of participation for that employer.

40.02(15)

(15)

40.02(15)(a)

(a) "Creditable military service" means active service in the U.S. armed forces, based on the total period of service in the U.S. armed forces, provided:

40.02(15)(a)1.

1. The participant enlisted or was ordered or inducted into active service in the U.S. armed forces;

40.02(15)(a)2.

2. The participant left the employment of a participating employer to enter the U.S. armed forces;

40.02(15)(a)3.

3. The participant returns to the employment of the employer whose employment the participant left to enter the U.S. armed forces within 180 days of release or discharge from the armed forces, or within 180 days of release from hospitalization because of injury or sickness resulting from service in the armed forces;

40.02(15)(a)4.

4. The period of service in the U.S. armed forces is not more than 4 years, unless involuntarily extended for a longer period;

40.02(15)(a)5.

5. The participant was discharged from the U.S. armed forces under conditions other than dishonorable;

40.02(15)(a)6.

6. The participant upon return from service in the U.S. armed forces furnishes evidence required to establish the participant's rights under this chapter; and

40.02(15)(a)7.

7. The service in the U.S. maritime service, including the merchant marine, was aboard an oceangoing vessel during the period beginning on December 7, 1941, and ending on August 15, 1945, and the participant submits to the department a copy of a release or discharge certificate or honorable service certificate issued by the U.S. department of defense that verifies the applicant's creditable maritime service.

40.02(15)(b)

(b) The creditable military service under par. (a) shall be the same type, as set forth in s. 40.23 (2m) (e), as the participant was receiving prior to entry into the U.S. armed forces.

40.02(15)(c)

(c) Notwithstanding sub. (17) (intro.) and any other law, any person who is credited with 5, 10, 15 or 20 or more years of creditable service, not counting any previously granted creditable military service, may receive creditable military service at the time of retirement for not more than 1, 2, 3 or 4 years, respectively, of active service which meets the standards under par. (a) 5., provided:

40.02(15)(c)1.

1. This paragraph applies only to active military service served prior to January 1, 1974.

40.02(15)(c)2.

2. Any creditable military service otherwise granted shall be included in determining the maximum years to be granted under this paragraph.

40.02(15)(c)3.

3. Creditable military service under this paragraph shall be allocated at the time of retirement in proportion to the amount of the participant's creditable service for each of the types of creditable service set forth in s. 40.23 (2m) (e) on the date the participant attains 5, 10, 15 or 20 years of creditable service.

40.02(15)(c)4.

4. This paragraph does not apply to any active service used for the purpose of establishing entitlement to, or the amount of, any benefit, other than a disability benefit, to be paid by any federal retirement program except OASDHI and the retired pay for nonregular military service program under 10 USC 1331 to 1337 or, if the participant makes an election under s. 40.30 (2), by any retirement system specified in s. 40.30 (2) other than the Wisconsin retirement system.

40.02(15)(c)5.

5. The participant's creditable service terminates on or after January 1, 1982.

40.02(16)

(16) "Creditable prior service" means all previous service for a participating employer of a person who became a participating employee on the effective date of participation for that employer if the service or employment conformed to the requirements for granting creditable current service, but no credit shall be granted for any period of service which was previously covered by a retirement system.

40.02(17)

(17) "Creditable service" means the creditable current and prior service, expressed in years and fractions of a year to the nearest one-hundredth, for which a participating employee receives or is considered to receive earnings under sub. (22) (e), (ef), or (em) and for which contributions have been made as required by s. 40.05 (1) and (2) and creditable military service, service credited under s. 40.285 (2) (b) and service credited under s. 40.29, expressed in years and fractions of years to the nearest one-hundredth. How much service in any annual earnings period is the full-time equivalent of one year of creditable service shall be determined by rule by the department and the rules may provide for differing equivalents for different types of employment. Except as provided under s. 40.285 (2) (e) and (f), the amount of creditable service for periods prior to January 1, 1982, shall be the amount for which the participant was eligible under the applicable laws and rules in effect prior to January 1, 1982. No more than one year of creditable service shall be granted for any annual earnings period. Creditable service is determined in the following manner for the following persons:

40.02(17)(a)

(a) Each person holding the offices of governor, lieutenant governor, secretary of state, state treasurer, representative to the assembly, senator, chief clerk and sergeant at arms of the assembly and chief clerk and sergeant at arms of the senate shall receive creditable service on a full-time basis for the period during which the office is held.

40.02(17)(d)

(d)

40.02(17)(d)1.

1. Notwithstanding s. 40.19 (3), upon application to the department each participant who has been a protective occupation participant after July 1, 1969, if the participant has been employed as a protective occupation participant for the 12 months immediately preceding retirement, shall be granted creditable service as a protective occupation participant for all service prior to July 1, 1969, which was performed in a position designated under sub. (48) as a position in which an individual would be a protective occupation participant.

40.02(17)(d)2.

2. Any benefits authorized under subd. 1. for any person who terminated as a participating employee prior to April 27, 1982, which are in excess of the amounts otherwise payable to the person under other provisions of this chapter, shall be paid from the appropriation under s. 20.515 (1) (a).

40.02(17)(f)

(f) Notwithstanding any other law or rule, any participating employee whose service includes Wisconsin teaching service performed before July 1, 1966, for which required contributions were made under the applicable statutes and rules of the former state teachers retirement system and for which the number of days of teaching service in a fiscal year was fewer than 120, shall receive creditable service for that service in an amount equal to the total number of teaching days credited during the fiscal year divided by 165 days.

40.02(17)(gm)

(gm) Any assistant district attorney in a county having a population of 500,000 or more who did not have vested benefit rights under the retirement system established under chapter 201, laws of 1937, who became a participating employee on January 1, 1990, and who is a participating employee on October 29, 1999, shall receive creditable service for the total period of his or her service under the retirement system established under chapter 201, laws of 1937.

40.02(17)(h)

(h) Notwithstanding par. (d), each participant who is a state motor vehicle inspector hired before January 1, 1968, shall be granted creditable service as a protective occupation participant for all covered service as a state motor vehicle inspector that was earned before, on or after May 1, 1990. Notwithstanding par. (d), each participant who is a state motor vehicle inspector hired on or after January 1, 1968, shall be granted creditable service as a protective occupation participant for all covered service as a state motor vehicle inspector that was earned on or after May 1, 1990, but may not be granted creditable service as a protective occupation participant for any covered service as a state motor vehicle inspector that was earned before May 1, 1990.

40.02(17)(m)

(m) Notwithstanding par. (d), each participant who is a state probation and parole officer on or after January 1, 1999, shall be granted creditable service as a protective occupation participant for all covered service as a state probation and parole officer that was earned on or after January 1, 1999, but may not be granted creditable service as a protective occupation participant for any covered service as a state probation and parole officer that was earned before January 1, 1999, unless that service was earned while the participant was classified under sub. (48) (a) and s. 40.06 (1) (d) as a protective occupation participant.

40.02(18)

(18) "Death benefit" means any amount payable to a beneficiary under s. 40.73.

40.02(18f)

(18f) "Decree date" means the first day of the month in which a participant's marriage is terminated by a court under a final judgment, decree or order.

40.02(18g)

(18g) "Deferred compensation plan" means a plan which is in accordance with section 457 of the internal revenue code, under which an employer executes an agreement by which an employee voluntarily agrees to defer a part of gross compensation for payment at a later date. Deferred compensation plan does not include annuity plans specified under section 403 (b) of the internal revenue code.

40.02(18s)

(18s) "Deferred compensation plan provider" means a person who provides administrative or investment services related to deferred compensation plans.

40.02(19)

(19) "Department" means the department of employee trust funds.

40.02(20)

(20) "Dependent" means the spouse, domestic partner, minor child, including stepchildren of the current marriage or domestic partnership dependent on the employee for support and maintenance, or child of any age, including stepchildren of the current marriage or domestic partnership, if handicapped to an extent requiring continued dependence. For group insurance purposes only, the department may promulgate rules with a different definition of "dependent" than the one otherwise provided in this subsection for each group insurance plan.

40.02(21)

(21) "Disability annuity" means any annuity payable under s. 66.191, 1981 stats., or s. 40.63.

40.02(21c)

(21c) "Domestic partner" means an individual in a domestic partnership.

40.02(21d)

(21d) "Domestic partnership" means a relationship between 2 individuals that satisfies all of the following:

40.02(21d)(a)

(a) Each individual is at least 18 years old and otherwise competent to enter into a contract.

40.02(21d)(b)

(b) Neither individual is married to, or in a domestic partnership with, another individual.

40.02(21d)(c)

(c) The 2 individuals are not related by blood in any way that would prohibit marriage under s. 765.03.

40.02(21d)(d)

(d) The 2 individuals consider themselves to be members of each other's immediate family.

40.02(21d)(e)

(e) The 2 individuals agree to be responsible for each other's basic living expenses.

40.02(21d)(f)

(f) The 2 individuals share a common residence. Two individuals may share a common residence even if any of the following applies:

40.02(21d)(f)1.

1. Only one of the individuals has legal ownership of the residence.

40.02(21d)(f)2.

2. One or both of the individuals have one or more additional residences not shared with the other individual.

40.02(21d)(f)3.

3. One of the individuals leaves the common residence with the intent to return.

40.02(22)

(22) "Earnings":

40.02(22)(a)

(a) Except as provided in pars. (b) to (f) and s. 40.63 (1) (c), means the gross amount paid to an employee by a participating employer as salary or wages, including amounts provided through deferred compensation or tax shelter agreements, for personal services rendered to or for an employer, or which would have been available for payment to the employee except for the employee's election that part or all of the amount be used for other purposes and also includes the money value, as determined by the employer, of any board, lodging, fuel, laundry and other allowances provided for the employee in lieu of money. For purposes of this paragraph, the gross amount shall be determined prior to deductions for taxes, insurance premiums, retirement contributions or deposits, charitable contributions or similar amounts and shall be considered received as of the date when the earnings would normally be payable by the employer. For reporting and computation purposes, fractions of a dollar shall be disregarded in determining annual earnings.

40.02(22)(b)

(b) Does not mean payments made for reasons other than for personal services rendered to or for an employer, including, but not limited to:

40.02(22)(b)1.

1. Uniforms purchased directly by the employer.

40.02(22)(b)2.

2. Employer contributions for insurance and retirement.

40.02(22)(b)3.

3. Unemployment insurance benefits.

40.02(22)(b)4.

4. Payments contingent on the employee providing the employer with or assisting the employer in acquiring tangible or intangible property of the employee.

40.02(22)(b)5.

5. Payments contingent on the employee having attained an age which, if increased by 5 years, is greater than what the employee's age would be on the employee's normal retirement date.

40.02(22)(b)6.

6. Lump sum payments at termination for accumulated vacation, sick leave or compensatory time, except that for disability purposes any lump sum payments shall be treated as a continuation of the employee's earnings and service at the employee's then current rate of pay. This subdivision does not exclude payments which are broadly applicable to the employees of the employer regardless of age, length of service or likelihood of employment termination.

40.02(22)(b)7.

7. Payments contingent on the employee having terminated covered employment or having died.

40.02(22)(b)8.

8. Payments contingent on the employee terminating employment at a specified time in the future including payments to secure voluntary release of an unexpired contract of employment.

40.02(22)(b)9.

9. Payments for damages, attorney fees, interest or penalties paid under court judgment or by compromise settlement to satisfy a grievance or wage claim even though the amount of damages or penalties might be based on previous salary levels. However, the department may by rule provide that a payment of additional wages to a continuously participating employee, or the payment of salary to a participant for any period of improper termination of participating employment, is earnings, if the payment is treated by the employer and employee as taxable income and is consistent with previous payment for hours of service rendered by the employee.

40.02(22)(b)10.

10. Payments made in the last 5 years of employment which are the result of a change in the method of computing the base compensation of an employee, unless the change in method for computing the base compensation is a permanent change and is broadly applicable to the employees of that employer or unless the change is the result of a significant change in the nature of the duties and activities expected of the employee.

40.02(22)(b)11.

11. Payment in lieu of fringe benefits normally paid for or provided by the employer but which can be paid to the employee at the employee's option.

40.02(22)(b)12.

12. For any employer, earnings paid to an employee directly by any other unit of government except county supplements to judges under s. 20.923 (3m), 1977 stats., s. 753.016, 1977 stats., s. 753.071, 1977 stats., and s. 753.075, 1977 stats., are earnings if the supplemental payments were subject to subch. I of ch. 41, 1977 stats.

40.02(22)(b)14.

14. Any other type of payment determined by the department by rule to be a distortion of the normal progression patterns on which an individual's benefits should be based.

40.02(22)(c)

(c) For OASDHI purposes, has the meaning specified for wages under federal regulations.

40.02(22)(d)

(d)

40.02(22)(d)1.

1. For Wisconsin retirement system purposes only, for a state elected official who is prohibited by law from receiving an increase in compensation during the official's term of office, means the compensation which would have been payable to the participant if the participant had not been prohibited by law from receiving an increase in compensation during his or her term of office.

40.02(22)(d)2.

2. For Wisconsin retirement system purposes only, for a state senator, means the compensation which would have been payable to the participant if the participant had not been prohibited by law from receiving an increase in compensation during part of his or her term of office.

40.02(22)(e)

(e) For an employee serving in a position covered under and meeting the requirements of 38 USC 4301, et. seq., except for OASDHI purposes, means compensation determined as required under 38 USC 4318 (b) (3) and regulations adopted thereunder, provided contributions and premiums on the compensation are paid as required under s. 40.05.

40.02(22)(ef)

(ef) For Wisconsin retirement system purposes only, for a state employee, means compensation that would have been payable to the participant, at the participant's rate of pay immediately prior to the beginning of any mandatory temporary reduction of work hours or days during the period from July 1, 2009, to June 30, 2011, for service that would have been rendered by the participant during that period if the mandatory temporary reduction of work hours or days had not been in effect. Contributions and premiums on earnings considered to be received under this paragraph shall be paid as required under s. 40.05.

40.02(22)(em)

(em) For Wisconsin retirement system purposes only, for a member of the faculty, as defined in s. 36.05 (8), of a university who is on sabbatical leave under s. 36.11 (17), means the compensation that would have been payable to the participant, at the participant's rate of pay immediately prior to beginning the sabbatical leave, for service that would have been rendered at the university during the period of the sabbatical leave if the participant had continued to render services for the participant's employer during that period. Contributions and premiums on earnings considered to be received under this paragraph shall be paid as required under s. 40.05.

40.02(22)(f)

(f) Does not mean credits for payment of health insurance premiums converted from accumulated unused sick leave for a participating employee who qualifies for a disability benefit under s. 40.63 or 40.65, and who qualifies for the conversion of accumulated unused sick leave under s. 40.05 (4) (b), (bc) or (bf) or as provided by a participating employer's compensation plan or contract.

40.02(22)(g)

(g) Does not include credits for the payment of health insurance premiums provided under s. 40.05 (4) (bw) or subch. IX or any sabbatical or vacation leave converted into such credits.

40.02(22m)

(22m) "Educational support personnel employee" means a person who is a school district employee, but who is not a teacher.

40.02(23)

(23) "Effective rate" means:

40.02(23)(a)

(a) For the core annuity division, the rate, disregarding fractions of less than one-tenth of one percent, determined by dividing the remaining core annuity division investment earnings for the calendar year or part of the calendar year, after making provision for any necessary reserves and after deducting prorated interest and the administrative costs of the core annuity division for the year, by the core annuity division balance at the beginning of the calendar year as adjusted for benefit payments and refunds paid during the year excluding prorated interest.

40.02(23)(b)

(b) For the variable annuity division, the rate, disregarding fractions less than one percent, which will distribute the net gain or loss of the variable annuity division to the respective variable annuity balances and reserves using the same procedure as provided in par. (a) for the core annuity division.

40.02(24)

(24) "Elected official", except as otherwise provided in sub. (48), means a participating employee who is:

40.02(24)(a)

(a) A supreme court justice, court of appeals judge, circuit judge or state, county or municipal official elected by vote of the people.

40.02(24)(b)

(b) Appointed as provided by statute to fill a vacancy in a position specified in par. (a).

40.02(24)(c)

(c) The chief clerk and sergeant at arms of the senate and assembly.

40.02(25)

(25) "Eligible employee" means:

40.02(25)(a)

(a) For the purpose of any group insurance:

40.02(25)(a)1.

1. Any participating state employee who has been participating under the Wisconsin retirement system for a period of at least 6 months prior to attainment of age 70 not including any period of leave of absence without pay.

40.02(25)(a)2.

2. Any state employee who is a member or employee of the legislature, a state constitutional officer, a district attorney who did not elect under s. 978.12 (6) to continue insurance coverage with a county, or who did elect such coverage but has terminated that election under s. 978.12 (6), a justice of the supreme court, a court of appeals judge, a circuit judge or the chief clerk or sergeant at arms of the senate or assembly.

40.02(25)(a)3.

3. The blind employees of the Wisconsin workshop for the blind authorized under s. 47.03 (1) (b), 1989 stats., or of the nonprofit corporation with which the department of workforce development contracts under s. 47.03 (1m) (a), 1989 stats., as of the beginning of the calendar month following completion of 1,000 hours of service. Persons employed by an employer who are blind when hired shall not be eligible for life insurance premium waiver because of any disability that is directly or indirectly attributed to blindness and may convert life insurance coverage only once under the contract.

40.02(25)(a)4.

4. Only a person who has not attained age 70 at the time of becoming initially eligible for the group insurance coverage provided under this chapter; but this subdivision does not exclude any participant from participation in the group health insurance plan nor does it exclude from participation in the group life insurance plan any employee who is initially eligible on the employer's effective date of participation.

40.02(25)(a)5.

5. Any state employee who has been participating under the Wisconsin retirement system for a period of at least 6 months prior to attaining age 70 not including any period of leave of absence without pay and who is on union service leave except the cost for premium payments shall be entirely the responsibility of the state employee on union service leave.

40.02(25)(a)6.

6. Any state employee of the office of district attorney, other than the district attorney, in a county having a population of 500,000 or more who did not elect under s. 978.12 (6) to continue insurance coverage with that county, or who did elect such coverage but has terminated that election under s. 978.12 (6), and who has participated under the retirement system established under chapter 201, laws of 1937, and under the Wisconsin retirement system for a combined and consecutive period, of at least 6 months prior to attainment of age 70, not including any period of leave of absence without pay.

40.02(25)(b)

(b) For the purpose of group health insurance coverage:

40.02(25)(b)1.

1. Any teacher who is employed by the university for an expected duration of not less than 6 months on at least a one-third full-time employment basis and who is not described in subd. 1m.

40.02(25)(b)1m.

1m. Any teacher who is a participating employee and who is employed by the university for an expected duration of not less than 6 months on at least a one-third full-time employment basis.

40.02(25)(b)2.

2. Any person employed as a graduate assistant and other employees-in-training as are designated by the board of regents of the university, who are employed on at least a one-third full-time basis.

40.02(25)(b)2c.

2c. A state employee described in s. 49.825 (4) or 49.826 (4).

40.02(25)(b)2g.

2g. Any person employed as a graduate assistant and other employees-in-training as are designated by the board of directors of the University of Wisconsin Hospitals and Clinics Authority, who are employed on at least a one-third full-time basis with an expected duration of employment of at least 6 months.

40.02(25)(b)3.

3. The surviving spouse or domestic partner of an employee, or of a retired employee, who is currently covered by health insurance at the time of death of the employee or retired employee. The spouse or domestic partner shall have the same right to health insurance coverage as the deceased employee or retired employee, but without state contribution, under rules promulgated by the secretary.

40.02(25)(b)4.

4. Any insured employee who is retired on an immediate or disability annuity, or who receives a lump sum payment under s. 40.25 (1) that would have been an immediate annuity if paid as an annuity, if the employee meets all of the requirements for an immediate annuity including filing of application whether or not final administrative action has been taken.

40.02(25)(b)5.

5. Any participating state employee under the Wisconsin retirement system, notwithstanding par. (a) 1.

40.02(25)(b)6.

6. A participating state employee who terminates creditable service:

40.02(25)(b)6.a.

a. After attaining 20 years of creditable service; and

40.02(25)(b)6.b.

b. Who is eligible for an immediate annuity but defers application.

40.02(25)(b)6e.

6e. A state employee who terminates creditable service after attaining 20 years of creditable service, remains a participant, and is not eligible for an immediate annuity.

40.02(25)(b)6g.

6g. Any state constitutional officer, member or officer of the legislature, head of a state department or state agency who is appointed by the governor with senate confirmation, or head of a legislative service agency, as defined in s. 13.90 (1m) (a), who terminates all creditable service on or after January 1, 1992, who is eligible for and has applied for a retirement annuity or a lump sum payment under s. 40.25 (1), who, if eligible, is receiving medicare coverage under both part A and part B of Title XVIII of the federal social security act, 42 USC 1395 to 1395zz, and who has acted under s. 40.51 (10m) to elect group health insurance coverage.

40.02(25)(b)6m.

6m. Beginning on the date specified by the department, but not earlier than March 20, 1992, and not later than July 1, 1992, any of the following persons who, if eligible, is receiving medicare coverage under both part A and part B of Title XVIII of the federal social security act, 42 USC 1395 to 1395zz, and who has acted under s. 40.51 (16) to elect group health insurance coverage:

40.02(25)(b)6m.a.

a. A retired employee of the state who is receiving a retirement annuity or has received a lump sum payment under s. 40.25 (1).

40.02(25)(b)6m.b.

b. An employee of the state who terminates creditable service after attaining 20 years of creditable service, remains a participant and is not eligible for an immediate annuity.

40.02(25)(b)6r.

6r. Any insured employee of the state who terminates creditable service on or after April 23, 1992, after attaining at least 20 years of creditable service, remains a participant and is not eligible for an immediate annuity or is not receiving a retirement or disability annuity, and who, if eligible, is receiving medicare coverage under both part A and part B of Title XVIII of the federal social security act, 42 USC 1395 to 1395zz.

40.02(25)(b)7.

7. Any employee whose health insurance premiums are being paid under s. 40.05 (4) (bm).

40.02(25)(b)8.

8. Any other state employee for whom coverage is authorized under a collective bargaining agreement pursuant to subch. I, V, or VI of ch. 111 or under s. 230.12 or 233.10.

40.02(25)(b)9.

9. Except as provided under s. 40.51 (7), any other employee of any employer, other than the state, that has acted under s. 40.51 to make such coverage available to its employees.

40.02(25)(b)10.

10. Any participating employee who is an employee of this state and who qualifies for a disability benefit under s. 40.63 or 40.65.

40.02(25)(b)11.

11. Beginning on July 1, 1988, any retired public employee, other than a retired employee of the state, who is receiving an annuity under the Wisconsin retirement system, or any dependent of such an employee, as provided in the health insurance contract, who is receiving a continuation of the employee's annuity, and, if eligible, is receiving medicare coverage under both part A and part B of Title XVIII of the federal social security act, 42 USC 1395 to 1395zz, and who has acted under s. 40.51 (10) to elect group health insurance coverage.

40.02(25)(bm)

(bm) For the purpose of long-term care insurance, in addition to any state annuitant under s. 40.02 (54m), any employee of the state who received a salary or wages in the previous calendar year, and any participant who was at one time employed by the state who receives a lump sum payment under s. 40.25 (1) which would have been an immediate annuity if paid as an annuity, if the employee is a resident of this state and meets all of the requirements for an immediate annuity including filing of an application, whether or not final administrative action has been taken.

40.02(25)(c)

(c) For the purpose of group life insurance coverage, for participating employees and employees subject to s. 40.19 (4) of any employer, other than the state, which has acted under s. 40.70 (1) (a) to make group life insurance available to its employees the same as provided under par. (a) 1. and 3.

40.02(25)(d)

(d) For the purpose of income continuation insurance coverage, and except as provided under s. 40.61 (3), for participating employees of any employer under sub. (28), other than the state, which has acted under s. 40.61 to make such coverage available to its employees.

40.02(26)

(26) "Employee" means any person who receives earnings as payment for personal services rendered for the benefit of any employer including officers of the employer. An employee is deemed to have separated from the service of an employer at the end of the day on which the employee last performed services for the employer, or, if later, the day on which the employee-employer relationship is terminated because of the expiration or termination of leave without pay, sick leave, vacation or other leave of absence. A person shall not be considered an employee if a person:

40.02(26)(a)

(a) Is employed under a contract involving the furnishing of more than personal services.

40.02(26)(b)

(b) Is customarily engaged in an independently established trade, business or profession providing the same type of services to private individuals and organizations as is provided to the employer and whose services to a participating employer are not compensated for on a payroll of that employer, except that persons holding offices provided for by statute shall be considered employees.

40.02(26)(c)

(c) Is a patient or inmate of a hospital, home or institution and performs services in the hospital, home or institution.

40.02(26g)

(26g) "Employee-funded reimbursement account plan" means any of the following:

40.02(26g)(a)

(a) A plan in accordance with section 125 of the Internal Revenue Code under which an employee may direct an employer to place part of the employee's gross compensation in an account to pay for certain future expenses of the employee under section 125 of the Internal Revenue Code.

40.02(26g)(b)

(b) A plan in accordance with section 132 of the Internal Revenue Code under which an employee may direct an employer to place part of the employee's gross compensation in an account to pay for certain future expenses of the employee under section 132 of the Internal Revenue Code.

40.02(26r)

(26r) "Employee-funded reimbursement account plan provider" means a person who provides administrative services related to employee-funded reimbursement account plans.

40.02(27)

(27) "Employee required contribution" means the contribution made by an employee under s. 40.05 (1) (a) 1. to 4. or for an employee under s. 40.05 (1) (b).

40.02(28)

(28) "Employer" means the state, including each state agency, any county, city, village, town, school district, other governmental unit or instrumentality of 2 or more units of government now existing or hereafter created within the state, any federated public library system established under s. 43.19 whose territory lies within a single county with a population of 500,000 or more, a local exposition district created under subch. II of ch. 229, a transit authority created under s. 66.1039, and a long-term care district created under s. 46.2895, except as provided under ss. 40.51 (7) and 40.61 (3). "Employer" does not include a local cultural arts district created under subch. V of ch. 229. Each employer shall be a separate legal jurisdiction for OASDHI purposes.

40.02(29)

(29) "Employer required contribution" means the contribution made by an employer under s. 40.05 (2) (a) to (f).

40.02(30)

(30) "Executive participating employee" means a participating employee in a position designated under s. 19.42 (10) (L) or 20.923 (4), (4g), (7), (8), or (9) or authorized under s. 230.08 (2) (e) during the time of employment. All service credited prior to May 17, 1988, as executive service as defined under s. 40.02 (31), 1985 stats., shall continue to be treated as executive service as defined under s. 40.02 (31), 1985 stats., but no other service rendered prior to May 17, 1988, may be changed to executive service as defined under s. 40.02 (31), 1985 stats.

40.02(32)

(32) "Federal regulations" means the provisions of section 218 of Title II of the federal social security act and applicable regulations adopted under the federal social security act.

40.02(33)

(33) "Final average earnings" means:

40.02(33)(a)

(a) The monthly rate of earnings, ignoring any fractions of a dollar, obtained by dividing:

40.02(33)(a)1.

1. The participant's total earnings received or considered to be received under sub. (22) (e), (ef), or (em) and for which contributions are made under s. 40.05 (1) and (2) during the 3 annual earnings periods (excluding any period more than 3 years prior to the effective date for any participating employer) in which the earnings were the highest, subject to the annual compensation limits under 26 USC 401 (a) (17) for a participating employee who first becomes a participating employee on or after January 1, 1996; by

40.02(33)(a)2.

2. Twelve times the total amount of creditable service for the 3 periods.

40.02(33)(b)

(b)

40.02(33)(b)1.

1. For a state elected official who is prohibited by law from receiving an increase in compensation during the official's term of office and who so elects, one-twelfth of the annual salary, subject to the annual compensation limits under 26 USC 401 (a) (17) for a participating employee who first becomes a participating employee on or after January 1, 1996, which would have been payable to the participant during the last completed month in which the participant was a participating employee in such a position if the participant had not been prohibited by law from receiving an increase in salary during his or her term of office, but only with respect to service as a state elected official.

40.02(33)(b)2.

2. For a state senator who so elects, one-twelfth of the annual salary which would have been payable to the participant during the last completed month in which the participant was a participating employee in such a position if the participant had not been prohibited by law from receiving an increase in salary during part of his or her term of office, but only with respect to service as a state senator.

40.02(33)(c)

(c) For a participant who makes an election under s. 40.30 (2), the monthly rate of earnings applicable under par. (a) or (b), increased as provided under s. 40.30 (4) (b) but subject to the annual compensation limits under 26 USC 401 (a) (17) for a participating employee who first becomes a participating employee on or after January 1, 1996.

40.02(35)

(35) "Fund" means the public employee trust fund.

40.02(36)

(36) "Governing body" means the legislature or the head of each state agency with respect to employees of that agency for the state, the common council in cities, the village board in villages, the town board in towns, the county board in counties, the school board in school districts, or the board, commission or other governing body having the final authority for any other unit of government, for any agency or instrumentality of 2 or more units of government, for any federated public library system established under s. 43.19 whose territory lies within a single county with a population of 500,000 or more, for a local exposition district created under subch. II of ch. 229 or for a long-term care district created under s. 46.2895, but does not include a local cultural arts district created under subch. V of ch. 229.

40.02(37)

(37) "Health insurance" means contractual arrangements which may include, but are not limited to, indemnity or service benefits, or prepaid comprehensive health care plans, which will provide full or partial payment of the financial expense incurred by employees and dependents as the result of injury, illness or preventive medical procedures. The plans may include hospitalization, surgical and medical care, as well as ancillary items or services as determined by the group insurance board. The plans may include the type of coverage normally referred to as "major medical" insurance.

40.02(38)

(38) "Immediate annuity" means an annuity, not including an annuity from additional contributions, which begins to accrue not later than 30 days after termination of employment.

40.02(39)

(39) "Insured employee" means, for purposes of each insurance benefit plan, any eligible employee who is properly enrolled in the benefit plan.

40.02(39m)

(39m) "Internal revenue code" means the federal internal revenue code under Title 26, USC, as amended, and applicable federal regulations adopted by the federal department of the treasury, including temporary regulations.

40.02(39r)

(39r) "Joint and survivor annuity" means an optional annuity form, described under s. 40.24 (1) (d) or a rule promulgated under s. 40.24 (1) (g), that is payable for the life of the participant and, after the death of the participant, a continuing percentage of which is payable in monthly installments to the named survivor.

40.02(40)

(40) "Leave of absence" means any period during which an employee has ceased to render services for a participating employer and receive earnings and there has been no formal termination of the employer-employee relationship. For purposes of the fund every leave of absence, except a military leave or union service leave, shall terminate 3 years after it begins or, if earlier, upon the date specified by the employer in a notification to the department that the employer-employee relationship has terminated. A leave of absence is not deemed ended or interrupted by reason of resumption of active duty until the employee has resumed active performance of duty for 30 consecutive calendar days for at least 50% of what is considered that employee's normal work time with that employer. For the purpose of group health insurance coverage, every leave of absence due to employee layoff which has not been terminated before 3 years have elapsed shall continue for affected insured employees until an additional 2 years elapse or until sick leave credits used to pay health insurance premiums are exhausted, whichever occurs first.

40.02(40m)

(40m) "Long-term care insurance" means insurance that primarily provides coverage for care that is provided in institutional and community-based settings and that is convalescent or custodial care or care for a chronic condition or terminal illness. The term does not include a medicare supplement policy, as defined in s. 600.03 (28r), a medicare replacement policy, as defined in s. 600.03 (28p), or a continuing care contract, as defined in s. 647.01 (2).

40.02(41)

(41) "Milwaukee teacher" means any teacher employed by the board of school directors of the city of Milwaukee.

40.02(41m)

(41m) "Monthly salary" means the gross amount paid to a participant making a claim under s. 40.65, at the time he or she becomes disabled within the meaning of s. 40.65 (4), by the employer in whose employ the injury occurred or the disease was contracted. Overtime pay may not be considered part of an employee's monthly salary unless the employee received it on a regular and dependable basis.

40.02(41r)

(41r) "Named survivor" means the natural person designated by a participant on an application for a joint and survivor annuity or pursuant to a request under s. 40.24 (4) to receive, after the death of the participant, a continuing percentage of the annuity payable in monthly installments. A participant may not designate more than one natural person as the named survivor for a joint and survivor annuity. A participant's designation of a named survivor on an application for a joint and survivor annuity is irrevocable after the deadline specified under s. 40.24 (4). Pursuant to rules promulgated by the department, a named survivor may designate one or more beneficiaries to receive any remaining guaranteed monthly installments that are unpaid at the time of the named survivor's death.

40.02(42)

(42) "Normal retirement date" means:

40.02(42)(a)

(a) The date on which a participant attains the age of 55 years for a protective occupation participant who terminates covered employment before July 1, 1990, or, for a protective occupation participant who terminates covered employment on or after July 1, 1990, the date on which the participant attains the age of 54 years if the participant has accumulated less than 25 years of creditable service or the age of 53 years if the participant has accumulated at least 25 years of creditable service, except as provided in par. (g).

40.02(42)(b)

(b) The date on which a participant attains the age of 62 years for an elected official or an executive participating employee, except as provided in par. (g).

40.02(42)(d)

(d) The date on which a participant attains the age of 65 years for any participant not subject to par. (a) or (b), except as provided in par. (g).

40.02(42)(g)

(g) The date applicable to the participant under pars. (a) to (d) at the earlier of either the date it is necessary to make any determination or to take any action relative to the participant for purposes of the retirement system or the date of termination of employment of the participant, notwithstanding the fact that a participant may have been in one or more different employment categories at any previous time except for the purpose of calculating an annuity. For the purpose of calculating an annuity, the normal retirement date for each category provided by pars. (a) to (d) applies to service which is subject to that category. For the purpose of calculating a retirement benefit for an executive participating employee qualifying only under s. 40.02 (30) (b), 1985 stats., a normal retirement date of the date the executive participating employee attains the age of 62 years shall be applied to creditable service of the executive participating employee for which par. (d) would otherwise apply except the number of creditable service years to which that normal retirement date shall be applied under this paragraph may not exceed the number of executive service years of the executive participating employee.

40.02(43)

(43) "OASDHI" means federal old-age, survivors, disability and health insurance under Titles II and XVIII of the federal social security act.

40.02(44)

(44) "OASDHI benefit" means the primary or disability insurance monthly benefit amount for which a person is eligible, or for which a participant will be eligible upon attaining the lowest age at which old-age benefits are payable under the OASDHI program.

40.02(45)

(45) "Participant" means any person included within the provisions of the Wisconsin retirement system by virtue of being or having been a participating employee whose account has not been closed under s. 40.25 (1) or (2).

40.02(46)

(46) "Participating employee" means an employee who is currently in the service of, or an employee who is on a leave of absence from, a participating employer under the Wisconsin retirement system and who has met the requirements for inclusion within the provisions of the Wisconsin retirement system under s. 40.22.

40.02(47)

(47) "Participating employer" means, for purposes of each of the respective benefit plans, any employer subject to the provisions of that plan under this chapter.

40.02(48)

(48)

40.02(48)(a)

(a) "Protective occupation participant" means any participant whose principal duties are determined by the participating employer, or, subject to s. 40.06 (1) (dm), by the department head in the case of a state employee, to involve active law enforcement or active fire suppression or prevention, provided the duties require frequent exposure to a high degree of danger or peril and also require a high degree of physical conditioning.

40.02(48)(am)

(am) "Protective occupation participant" includes any participant whose name is certified to the fund as provided in s. 40.06 (1) (d) and (dm) and who is any of the following:

40.02(48)(am)1.

1. A conservation warden.

40.02(48)(am)2.

2. A conservation patrol boat captain.

40.02(48)(am)3.

3. A conservation patrol boat engineer.

40.02(48)(am)4.

4. A conservation pilot.

40.02(48)(am)5.

5. A conservation patrol officer.

40.02(48)(am)6.

6. A forest fire control assistant.

40.02(48)(am)7.

7. A member of the state traffic patrol.

40.02(48)(am)8.

8. A state motor vehicle inspector.

40.02(48)(am)9.

9. A police officer.

40.02(48)(am)10.

10. A fire fighter.

40.02(48)(am)11.

11. A sheriff.

40.02(48)(am)12.

12. An undersheriff.

40.02(48)(am)13.

13. A deputy sheriff.

40.02(48)(am)14.

14. A state probation and parole officer.

40.02(48)(am)15.

15. A county traffic police officer.

40.02(48)(am)16.

16. A state forest ranger.

40.02(48)(am)17.

17. A fire watcher employed at Wisconsin veterans facilities.

40.02(48)(am)18.

18. A state correctional-psychiatric officer.

40.02(48)(am)19.

19. An excise tax investigator employed by the department of revenue.

40.02(48)(am)20.

20. A special criminal investigation agent in the department of justice.

40.02(48)(am)21.

21. An assistant or deputy fire marshal.

40.02(48)(am)22.

22. A person employed under s. 61.66 (1).

40.02(48)(b)

(b) Each determination of the status of a participant under this subsection shall include consideration, where applicable, of the following factors:

40.02(48)(b)1.

1. A "police officer" is any officer, including the chief, or employee of a police department, except one whose principal duties are those of a telephone operator, clerk, stenographer, machinist or mechanic and whose functions do not clearly fall within the scope of active law enforcement even though such an employee is subject to occasional call, or is occasionally called upon, to perform duties within the scope of active law enforcement. Police officer includes any person regularly employed and qualifying as a patrol officer or a person of equal or higher rank, even if temporarily assigned to other duties.

40.02(48)(b)2.

2. A "fire fighter" is any officer, including the chief, or employee of a fire department, except one whose principal duties are those of a telephone operator, clerk, stenographer, machinist or mechanic and whose functions do not clearly fall within the scope of active fire suppression or prevention even though such an employee is subject to occasional call, or is occasionally called upon, to perform duties within the scope of active fire suppression or prevention. Fire fighter includes any person regularly employed and qualifying as a fire fighter, hose handler or a person of equal or higher rank, even if temporarily assigned to other duties.

40.02(48)(b)3.

3. A "deputy sheriff" or a "county traffic police officer" is any officer or employee of a sheriff's office or county traffic department, except one whose principal duties are those of a telephone operator, clerk, stenographer, machinist or mechanic and whose functions do not clearly fall within the scope of active law enforcement even though such an employee is subject to occasional call, or is occasionally called upon, to perform duties within the scope of active law enforcement. Deputy sheriff or county traffic police officer includes any person regularly employed and qualifying as a deputy sheriff or county traffic police officer, even if temporarily assigned to other duties.

40.02(48)(b)4.

4. A "member of the state traffic patrol" includes one division administrator in the department of transportation who is counted under s. 230.08 (2) (e) 12. and whose duties include supervising the state traffic patrol, if the division administrator is certified by the law enforcement standards board under s. 165.85 (4) (b) 1. as being qualified to be a law enforcement officer.

40.02(48)(bm)

(bm) "Protective occupation participant" includes any participant who is an emergency medical technician if the participant's employer classifies the participant as a protective occupation participant and the department receives notification of the participant's name as provided in s. 40.06 (1) (d) and (dm). Notwithstanding par. (a), an employer may classify a participant who is an emergency medical technician as a protective occupation participant without making a determination that the principal duties of the participant involve active law enforcement or active fire suppression or prevention. A determination under this paragraph may not be appealed under s. 40.06 (1) (e) or (em), but a determination under this paragraph regarding the classification of a state employee is subject to review under s. 40.06 (1) (dm). Notw

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State Codes and Statutes

Statutes > Wisconsin > 40 > 40.02

40.02

40.02 Definitions. In this chapter, unless the context requires otherwise:

40.02(1)

(1) "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% 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% and the percent applied in determining the first monthly installment.

40.02(6)

(6) "Assumed benefit rate" means a rate of 5%. 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(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.

40.02(12m)

(12m) "Cooperative educational service agency support personnel employee" means a person who is a cooperative educational service agency employee, but who is not a teacher.

40.02(12r)

(12r) " Core annuity" means any annuity other than a variable annuity.

40.02(13)

(13) "Coverage group" has the meaning given that term by federal regulations.

40.02(14)

(14) "Creditable current service" means the creditable service granted for service performed for a participating employer and for which a participating employee receives earnings after the effective date of participation for that employer.

40.02(15)

(15)

40.02(15)(a)

(a) "Creditable military service" means active service in the U.S. armed forces, based on the total period of service in the U.S. armed forces, provided:

40.02(15)(a)1.

1. The participant enlisted or was ordered or inducted into active service in the U.S. armed forces;

40.02(15)(a)2.

2. The participant left the employment of a participating employer to enter the U.S. armed forces;

40.02(15)(a)3.

3. The participant returns to the employment of the employer whose employment the participant left to enter the U.S. armed forces within 180 days of release or discharge from the armed forces, or within 180 days of release from hospitalization because of injury or sickness resulting from service in the armed forces;

40.02(15)(a)4.

4. The period of service in the U.S. armed forces is not more than 4 years, unless involuntarily extended for a longer period;

40.02(15)(a)5.

5. The participant was discharged from the U.S. armed forces under conditions other than dishonorable;

40.02(15)(a)6.

6. The participant upon return from service in the U.S. armed forces furnishes evidence required to establish the participant's rights under this chapter; and

40.02(15)(a)7.

7. The service in the U.S. maritime service, including the merchant marine, was aboard an oceangoing vessel during the period beginning on December 7, 1941, and ending on August 15, 1945, and the participant submits to the department a copy of a release or discharge certificate or honorable service certificate issued by the U.S. department of defense that verifies the applicant's creditable maritime service.

40.02(15)(b)

(b) The creditable military service under par. (a) shall be the same type, as set forth in s. 40.23 (2m) (e), as the participant was receiving prior to entry into the U.S. armed forces.

40.02(15)(c)

(c) Notwithstanding sub. (17) (intro.) and any other law, any person who is credited with 5, 10, 15 or 20 or more years of creditable service, not counting any previously granted creditable military service, may receive creditable military service at the time of retirement for not more than 1, 2, 3 or 4 years, respectively, of active service which meets the standards under par. (a) 5., provided:

40.02(15)(c)1.

1. This paragraph applies only to active military service served prior to January 1, 1974.

40.02(15)(c)2.

2. Any creditable military service otherwise granted shall be included in determining the maximum years to be granted under this paragraph.

40.02(15)(c)3.

3. Creditable military service under this paragraph shall be allocated at the time of retirement in proportion to the amount of the participant's creditable service for each of the types of creditable service set forth in s. 40.23 (2m) (e) on the date the participant attains 5, 10, 15 or 20 years of creditable service.

40.02(15)(c)4.

4. This paragraph does not apply to any active service used for the purpose of establishing entitlement to, or the amount of, any benefit, other than a disability benefit, to be paid by any federal retirement program except OASDHI and the retired pay for nonregular military service program under 10 USC 1331 to 1337 or, if the participant makes an election under s. 40.30 (2), by any retirement system specified in s. 40.30 (2) other than the Wisconsin retirement system.

40.02(15)(c)5.

5. The participant's creditable service terminates on or after January 1, 1982.

40.02(16)

(16) "Creditable prior service" means all previous service for a participating employer of a person who became a participating employee on the effective date of participation for that employer if the service or employment conformed to the requirements for granting creditable current service, but no credit shall be granted for any period of service which was previously covered by a retirement system.

40.02(17)

(17) "Creditable service" means the creditable current and prior service, expressed in years and fractions of a year to the nearest one-hundredth, for which a participating employee receives or is considered to receive earnings under sub. (22) (e), (ef), or (em) and for which contributions have been made as required by s. 40.05 (1) and (2) and creditable military service, service credited under s. 40.285 (2) (b) and service credited under s. 40.29, expressed in years and fractions of years to the nearest one-hundredth. How much service in any annual earnings period is the full-time equivalent of one year of creditable service shall be determined by rule by the department and the rules may provide for differing equivalents for different types of employment. Except as provided under s. 40.285 (2) (e) and (f), the amount of creditable service for periods prior to January 1, 1982, shall be the amount for which the participant was eligible under the applicable laws and rules in effect prior to January 1, 1982. No more than one year of creditable service shall be granted for any annual earnings period. Creditable service is determined in the following manner for the following persons:

40.02(17)(a)

(a) Each person holding the offices of governor, lieutenant governor, secretary of state, state treasurer, representative to the assembly, senator, chief clerk and sergeant at arms of the assembly and chief clerk and sergeant at arms of the senate shall receive creditable service on a full-time basis for the period during which the office is held.

40.02(17)(d)

(d)

40.02(17)(d)1.

1. Notwithstanding s. 40.19 (3), upon application to the department each participant who has been a protective occupation participant after July 1, 1969, if the participant has been employed as a protective occupation participant for the 12 months immediately preceding retirement, shall be granted creditable service as a protective occupation participant for all service prior to July 1, 1969, which was performed in a position designated under sub. (48) as a position in which an individual would be a protective occupation participant.

40.02(17)(d)2.

2. Any benefits authorized under subd. 1. for any person who terminated as a participating employee prior to April 27, 1982, which are in excess of the amounts otherwise payable to the person under other provisions of this chapter, shall be paid from the appropriation under s. 20.515 (1) (a).

40.02(17)(f)

(f) Notwithstanding any other law or rule, any participating employee whose service includes Wisconsin teaching service performed before July 1, 1966, for which required contributions were made under the applicable statutes and rules of the former state teachers retirement system and for which the number of days of teaching service in a fiscal year was fewer than 120, shall receive creditable service for that service in an amount equal to the total number of teaching days credited during the fiscal year divided by 165 days.

40.02(17)(gm)

(gm) Any assistant district attorney in a county having a population of 500,000 or more who did not have vested benefit rights under the retirement system established under chapter 201, laws of 1937, who became a participating employee on January 1, 1990, and who is a participating employee on October 29, 1999, shall receive creditable service for the total period of his or her service under the retirement system established under chapter 201, laws of 1937.

40.02(17)(h)

(h) Notwithstanding par. (d), each participant who is a state motor vehicle inspector hired before January 1, 1968, shall be granted creditable service as a protective occupation participant for all covered service as a state motor vehicle inspector that was earned before, on or after May 1, 1990. Notwithstanding par. (d), each participant who is a state motor vehicle inspector hired on or after January 1, 1968, shall be granted creditable service as a protective occupation participant for all covered service as a state motor vehicle inspector that was earned on or after May 1, 1990, but may not be granted creditable service as a protective occupation participant for any covered service as a state motor vehicle inspector that was earned before May 1, 1990.

40.02(17)(m)

(m) Notwithstanding par. (d), each participant who is a state probation and parole officer on or after January 1, 1999, shall be granted creditable service as a protective occupation participant for all covered service as a state probation and parole officer that was earned on or after January 1, 1999, but may not be granted creditable service as a protective occupation participant for any covered service as a state probation and parole officer that was earned before January 1, 1999, unless that service was earned while the participant was classified under sub. (48) (a) and s. 40.06 (1) (d) as a protective occupation participant.

40.02(18)

(18) "Death benefit" means any amount payable to a beneficiary under s. 40.73.

40.02(18f)

(18f) "Decree date" means the first day of the month in which a participant's marriage is terminated by a court under a final judgment, decree or order.

40.02(18g)

(18g) "Deferred compensation plan" means a plan which is in accordance with section 457 of the internal revenue code, under which an employer executes an agreement by which an employee voluntarily agrees to defer a part of gross compensation for payment at a later date. Deferred compensation plan does not include annuity plans specified under section 403 (b) of the internal revenue code.

40.02(18s)

(18s) "Deferred compensation plan provider" means a person who provides administrative or investment services related to deferred compensation plans.

40.02(19)

(19) "Department" means the department of employee trust funds.

40.02(20)

(20) "Dependent" means the spouse, domestic partner, minor child, including stepchildren of the current marriage or domestic partnership dependent on the employee for support and maintenance, or child of any age, including stepchildren of the current marriage or domestic partnership, if handicapped to an extent requiring continued dependence. For group insurance purposes only, the department may promulgate rules with a different definition of "dependent" than the one otherwise provided in this subsection for each group insurance plan.

40.02(21)

(21) "Disability annuity" means any annuity payable under s. 66.191, 1981 stats., or s. 40.63.

40.02(21c)

(21c) "Domestic partner" means an individual in a domestic partnership.

40.02(21d)

(21d) "Domestic partnership" means a relationship between 2 individuals that satisfies all of the following:

40.02(21d)(a)

(a) Each individual is at least 18 years old and otherwise competent to enter into a contract.

40.02(21d)(b)

(b) Neither individual is married to, or in a domestic partnership with, another individual.

40.02(21d)(c)

(c) The 2 individuals are not related by blood in any way that would prohibit marriage under s. 765.03.

40.02(21d)(d)

(d) The 2 individuals consider themselves to be members of each other's immediate family.

40.02(21d)(e)

(e) The 2 individuals agree to be responsible for each other's basic living expenses.

40.02(21d)(f)

(f) The 2 individuals share a common residence. Two individuals may share a common residence even if any of the following applies:

40.02(21d)(f)1.

1. Only one of the individuals has legal ownership of the residence.

40.02(21d)(f)2.

2. One or both of the individuals have one or more additional residences not shared with the other individual.

40.02(21d)(f)3.

3. One of the individuals leaves the common residence with the intent to return.

40.02(22)

(22) "Earnings":

40.02(22)(a)

(a) Except as provided in pars. (b) to (f) and s. 40.63 (1) (c), means the gross amount paid to an employee by a participating employer as salary or wages, including amounts provided through deferred compensation or tax shelter agreements, for personal services rendered to or for an employer, or which would have been available for payment to the employee except for the employee's election that part or all of the amount be used for other purposes and also includes the money value, as determined by the employer, of any board, lodging, fuel, laundry and other allowances provided for the employee in lieu of money. For purposes of this paragraph, the gross amount shall be determined prior to deductions for taxes, insurance premiums, retirement contributions or deposits, charitable contributions or similar amounts and shall be considered received as of the date when the earnings would normally be payable by the employer. For reporting and computation purposes, fractions of a dollar shall be disregarded in determining annual earnings.

40.02(22)(b)

(b) Does not mean payments made for reasons other than for personal services rendered to or for an employer, including, but not limited to:

40.02(22)(b)1.

1. Uniforms purchased directly by the employer.

40.02(22)(b)2.

2. Employer contributions for insurance and retirement.

40.02(22)(b)3.

3. Unemployment insurance benefits.

40.02(22)(b)4.

4. Payments contingent on the employee providing the employer with or assisting the employer in acquiring tangible or intangible property of the employee.

40.02(22)(b)5.

5. Payments contingent on the employee having attained an age which, if increased by 5 years, is greater than what the employee's age would be on the employee's normal retirement date.

40.02(22)(b)6.

6. Lump sum payments at termination for accumulated vacation, sick leave or compensatory time, except that for disability purposes any lump sum payments shall be treated as a continuation of the employee's earnings and service at the employee's then current rate of pay. This subdivision does not exclude payments which are broadly applicable to the employees of the employer regardless of age, length of service or likelihood of employment termination.

40.02(22)(b)7.

7. Payments contingent on the employee having terminated covered employment or having died.

40.02(22)(b)8.

8. Payments contingent on the employee terminating employment at a specified time in the future including payments to secure voluntary release of an unexpired contract of employment.

40.02(22)(b)9.

9. Payments for damages, attorney fees, interest or penalties paid under court judgment or by compromise settlement to satisfy a grievance or wage claim even though the amount of damages or penalties might be based on previous salary levels. However, the department may by rule provide that a payment of additional wages to a continuously participating employee, or the payment of salary to a participant for any period of improper termination of participating employment, is earnings, if the payment is treated by the employer and employee as taxable income and is consistent with previous payment for hours of service rendered by the employee.

40.02(22)(b)10.

10. Payments made in the last 5 years of employment which are the result of a change in the method of computing the base compensation of an employee, unless the change in method for computing the base compensation is a permanent change and is broadly applicable to the employees of that employer or unless the change is the result of a significant change in the nature of the duties and activities expected of the employee.

40.02(22)(b)11.

11. Payment in lieu of fringe benefits normally paid for or provided by the employer but which can be paid to the employee at the employee's option.

40.02(22)(b)12.

12. For any employer, earnings paid to an employee directly by any other unit of government except county supplements to judges under s. 20.923 (3m), 1977 stats., s. 753.016, 1977 stats., s. 753.071, 1977 stats., and s. 753.075, 1977 stats., are earnings if the supplemental payments were subject to subch. I of ch. 41, 1977 stats.

40.02(22)(b)14.

14. Any other type of payment determined by the department by rule to be a distortion of the normal progression patterns on which an individual's benefits should be based.

40.02(22)(c)

(c) For OASDHI purposes, has the meaning specified for wages under federal regulations.

40.02(22)(d)

(d)

40.02(22)(d)1.

1. For Wisconsin retirement system purposes only, for a state elected official who is prohibited by law from receiving an increase in compensation during the official's term of office, means the compensation which would have been payable to the participant if the participant had not been prohibited by law from receiving an increase in compensation during his or her term of office.

40.02(22)(d)2.

2. For Wisconsin retirement system purposes only, for a state senator, means the compensation which would have been payable to the participant if the participant had not been prohibited by law from receiving an increase in compensation during part of his or her term of office.

40.02(22)(e)

(e) For an employee serving in a position covered under and meeting the requirements of 38 USC 4301, et. seq., except for OASDHI purposes, means compensation determined as required under 38 USC 4318 (b) (3) and regulations adopted thereunder, provided contributions and premiums on the compensation are paid as required under s. 40.05.

40.02(22)(ef)

(ef) For Wisconsin retirement system purposes only, for a state employee, means compensation that would have been payable to the participant, at the participant's rate of pay immediately prior to the beginning of any mandatory temporary reduction of work hours or days during the period from July 1, 2009, to June 30, 2011, for service that would have been rendered by the participant during that period if the mandatory temporary reduction of work hours or days had not been in effect. Contributions and premiums on earnings considered to be received under this paragraph shall be paid as required under s. 40.05.

40.02(22)(em)

(em) For Wisconsin retirement system purposes only, for a member of the faculty, as defined in s. 36.05 (8), of a university who is on sabbatical leave under s. 36.11 (17), means the compensation that would have been payable to the participant, at the participant's rate of pay immediately prior to beginning the sabbatical leave, for service that would have been rendered at the university during the period of the sabbatical leave if the participant had continued to render services for the participant's employer during that period. Contributions and premiums on earnings considered to be received under this paragraph shall be paid as required under s. 40.05.

40.02(22)(f)

(f) Does not mean credits for payment of health insurance premiums converted from accumulated unused sick leave for a participating employee who qualifies for a disability benefit under s. 40.63 or 40.65, and who qualifies for the conversion of accumulated unused sick leave under s. 40.05 (4) (b), (bc) or (bf) or as provided by a participating employer's compensation plan or contract.

40.02(22)(g)

(g) Does not include credits for the payment of health insurance premiums provided under s. 40.05 (4) (bw) or subch. IX or any sabbatical or vacation leave converted into such credits.

40.02(22m)

(22m) "Educational support personnel employee" means a person who is a school district employee, but who is not a teacher.

40.02(23)

(23) "Effective rate" means:

40.02(23)(a)

(a) For the core annuity division, the rate, disregarding fractions of less than one-tenth of one percent, determined by dividing the remaining core annuity division investment earnings for the calendar year or part of the calendar year, after making provision for any necessary reserves and after deducting prorated interest and the administrative costs of the core annuity division for the year, by the core annuity division balance at the beginning of the calendar year as adjusted for benefit payments and refunds paid during the year excluding prorated interest.

40.02(23)(b)

(b) For the variable annuity division, the rate, disregarding fractions less than one percent, which will distribute the net gain or loss of the variable annuity division to the respective variable annuity balances and reserves using the same procedure as provided in par. (a) for the core annuity division.

40.02(24)

(24) "Elected official", except as otherwise provided in sub. (48), means a participating employee who is:

40.02(24)(a)

(a) A supreme court justice, court of appeals judge, circuit judge or state, county or municipal official elected by vote of the people.

40.02(24)(b)

(b) Appointed as provided by statute to fill a vacancy in a position specified in par. (a).

40.02(24)(c)

(c) The chief clerk and sergeant at arms of the senate and assembly.

40.02(25)

(25) "Eligible employee" means:

40.02(25)(a)

(a) For the purpose of any group insurance:

40.02(25)(a)1.

1. Any participating state employee who has been participating under the Wisconsin retirement system for a period of at least 6 months prior to attainment of age 70 not including any period of leave of absence without pay.

40.02(25)(a)2.

2. Any state employee who is a member or employee of the legislature, a state constitutional officer, a district attorney who did not elect under s. 978.12 (6) to continue insurance coverage with a county, or who did elect such coverage but has terminated that election under s. 978.12 (6), a justice of the supreme court, a court of appeals judge, a circuit judge or the chief clerk or sergeant at arms of the senate or assembly.

40.02(25)(a)3.

3. The blind employees of the Wisconsin workshop for the blind authorized under s. 47.03 (1) (b), 1989 stats., or of the nonprofit corporation with which the department of workforce development contracts under s. 47.03 (1m) (a), 1989 stats., as of the beginning of the calendar month following completion of 1,000 hours of service. Persons employed by an employer who are blind when hired shall not be eligible for life insurance premium waiver because of any disability that is directly or indirectly attributed to blindness and may convert life insurance coverage only once under the contract.

40.02(25)(a)4.

4. Only a person who has not attained age 70 at the time of becoming initially eligible for the group insurance coverage provided under this chapter; but this subdivision does not exclude any participant from participation in the group health insurance plan nor does it exclude from participation in the group life insurance plan any employee who is initially eligible on the employer's effective date of participation.

40.02(25)(a)5.

5. Any state employee who has been participating under the Wisconsin retirement system for a period of at least 6 months prior to attaining age 70 not including any period of leave of absence without pay and who is on union service leave except the cost for premium payments shall be entirely the responsibility of the state employee on union service leave.

40.02(25)(a)6.

6. Any state employee of the office of district attorney, other than the district attorney, in a county having a population of 500,000 or more who did not elect under s. 978.12 (6) to continue insurance coverage with that county, or who did elect such coverage but has terminated that election under s. 978.12 (6), and who has participated under the retirement system established under chapter 201, laws of 1937, and under the Wisconsin retirement system for a combined and consecutive period, of at least 6 months prior to attainment of age 70, not including any period of leave of absence without pay.

40.02(25)(b)

(b) For the purpose of group health insurance coverage:

40.02(25)(b)1.

1. Any teacher who is employed by the university for an expected duration of not less than 6 months on at least a one-third full-time employment basis and who is not described in subd. 1m.

40.02(25)(b)1m.

1m. Any teacher who is a participating employee and who is employed by the university for an expected duration of not less than 6 months on at least a one-third full-time employment basis.

40.02(25)(b)2.

2. Any person employed as a graduate assistant and other employees-in-training as are designated by the board of regents of the university, who are employed on at least a one-third full-time basis.

40.02(25)(b)2c.

2c. A state employee described in s. 49.825 (4) or 49.826 (4).

40.02(25)(b)2g.

2g. Any person employed as a graduate assistant and other employees-in-training as are designated by the board of directors of the University of Wisconsin Hospitals and Clinics Authority, who are employed on at least a one-third full-time basis with an expected duration of employment of at least 6 months.

40.02(25)(b)3.

3. The surviving spouse or domestic partner of an employee, or of a retired employee, who is currently covered by health insurance at the time of death of the employee or retired employee. The spouse or domestic partner shall have the same right to health insurance coverage as the deceased employee or retired employee, but without state contribution, under rules promulgated by the secretary.

40.02(25)(b)4.

4. Any insured employee who is retired on an immediate or disability annuity, or who receives a lump sum payment under s. 40.25 (1) that would have been an immediate annuity if paid as an annuity, if the employee meets all of the requirements for an immediate annuity including filing of application whether or not final administrative action has been taken.

40.02(25)(b)5.

5. Any participating state employee under the Wisconsin retirement system, notwithstanding par. (a) 1.

40.02(25)(b)6.

6. A participating state employee who terminates creditable service:

40.02(25)(b)6.a.

a. After attaining 20 years of creditable service; and

40.02(25)(b)6.b.

b. Who is eligible for an immediate annuity but defers application.

40.02(25)(b)6e.

6e. A state employee who terminates creditable service after attaining 20 years of creditable service, remains a participant, and is not eligible for an immediate annuity.

40.02(25)(b)6g.

6g. Any state constitutional officer, member or officer of the legislature, head of a state department or state agency who is appointed by the governor with senate confirmation, or head of a legislative service agency, as defined in s. 13.90 (1m) (a), who terminates all creditable service on or after January 1, 1992, who is eligible for and has applied for a retirement annuity or a lump sum payment under s. 40.25 (1), who, if eligible, is receiving medicare coverage under both part A and part B of Title XVIII of the federal social security act, 42 USC 1395 to 1395zz, and who has acted under s. 40.51 (10m) to elect group health insurance coverage.

40.02(25)(b)6m.

6m. Beginning on the date specified by the department, but not earlier than March 20, 1992, and not later than July 1, 1992, any of the following persons who, if eligible, is receiving medicare coverage under both part A and part B of Title XVIII of the federal social security act, 42 USC 1395 to 1395zz, and who has acted under s. 40.51 (16) to elect group health insurance coverage:

40.02(25)(b)6m.a.

a. A retired employee of the state who is receiving a retirement annuity or has received a lump sum payment under s. 40.25 (1).

40.02(25)(b)6m.b.

b. An employee of the state who terminates creditable service after attaining 20 years of creditable service, remains a participant and is not eligible for an immediate annuity.

40.02(25)(b)6r.

6r. Any insured employee of the state who terminates creditable service on or after April 23, 1992, after attaining at least 20 years of creditable service, remains a participant and is not eligible for an immediate annuity or is not receiving a retirement or disability annuity, and who, if eligible, is receiving medicare coverage under both part A and part B of Title XVIII of the federal social security act, 42 USC 1395 to 1395zz.

40.02(25)(b)7.

7. Any employee whose health insurance premiums are being paid under s. 40.05 (4) (bm).

40.02(25)(b)8.

8. Any other state employee for whom coverage is authorized under a collective bargaining agreement pursuant to subch. I, V, or VI of ch. 111 or under s. 230.12 or 233.10.

40.02(25)(b)9.

9. Except as provided under s. 40.51 (7), any other employee of any employer, other than the state, that has acted under s. 40.51 to make such coverage available to its employees.

40.02(25)(b)10.

10. Any participating employee who is an employee of this state and who qualifies for a disability benefit under s. 40.63 or 40.65.

40.02(25)(b)11.

11. Beginning on July 1, 1988, any retired public employee, other than a retired employee of the state, who is receiving an annuity under the Wisconsin retirement system, or any dependent of such an employee, as provided in the health insurance contract, who is receiving a continuation of the employee's annuity, and, if eligible, is receiving medicare coverage under both part A and part B of Title XVIII of the federal social security act, 42 USC 1395 to 1395zz, and who has acted under s. 40.51 (10) to elect group health insurance coverage.

40.02(25)(bm)

(bm) For the purpose of long-term care insurance, in addition to any state annuitant under s. 40.02 (54m), any employee of the state who received a salary or wages in the previous calendar year, and any participant who was at one time employed by the state who receives a lump sum payment under s. 40.25 (1) which would have been an immediate annuity if paid as an annuity, if the employee is a resident of this state and meets all of the requirements for an immediate annuity including filing of an application, whether or not final administrative action has been taken.

40.02(25)(c)

(c) For the purpose of group life insurance coverage, for participating employees and employees subject to s. 40.19 (4) of any employer, other than the state, which has acted under s. 40.70 (1) (a) to make group life insurance available to its employees the same as provided under par. (a) 1. and 3.

40.02(25)(d)

(d) For the purpose of income continuation insurance coverage, and except as provided under s. 40.61 (3), for participating employees of any employer under sub. (28), other than the state, which has acted under s. 40.61 to make such coverage available to its employees.

40.02(26)

(26) "Employee" means any person who receives earnings as payment for personal services rendered for the benefit of any employer including officers of the employer. An employee is deemed to have separated from the service of an employer at the end of the day on which the employee last performed services for the employer, or, if later, the day on which the employee-employer relationship is terminated because of the expiration or termination of leave without pay, sick leave, vacation or other leave of absence. A person shall not be considered an employee if a person:

40.02(26)(a)

(a) Is employed under a contract involving the furnishing of more than personal services.

40.02(26)(b)

(b) Is customarily engaged in an independently established trade, business or profession providing the same type of services to private individuals and organizations as is provided to the employer and whose services to a participating employer are not compensated for on a payroll of that employer, except that persons holding offices provided for by statute shall be considered employees.

40.02(26)(c)

(c) Is a patient or inmate of a hospital, home or institution and performs services in the hospital, home or institution.

40.02(26g)

(26g) "Employee-funded reimbursement account plan" means any of the following:

40.02(26g)(a)

(a) A plan in accordance with section 125 of the Internal Revenue Code under which an employee may direct an employer to place part of the employee's gross compensation in an account to pay for certain future expenses of the employee under section 125 of the Internal Revenue Code.

40.02(26g)(b)

(b) A plan in accordance with section 132 of the Internal Revenue Code under which an employee may direct an employer to place part of the employee's gross compensation in an account to pay for certain future expenses of the employee under section 132 of the Internal Revenue Code.

40.02(26r)

(26r) "Employee-funded reimbursement account plan provider" means a person who provides administrative services related to employee-funded reimbursement account plans.

40.02(27)

(27) "Employee required contribution" means the contribution made by an employee under s. 40.05 (1) (a) 1. to 4. or for an employee under s. 40.05 (1) (b).

40.02(28)

(28) "Employer" means the state, including each state agency, any county, city, village, town, school district, other governmental unit or instrumentality of 2 or more units of government now existing or hereafter created within the state, any federated public library system established under s. 43.19 whose territory lies within a single county with a population of 500,000 or more, a local exposition district created under subch. II of ch. 229, a transit authority created under s. 66.1039, and a long-term care district created under s. 46.2895, except as provided under ss. 40.51 (7) and 40.61 (3). "Employer" does not include a local cultural arts district created under subch. V of ch. 229. Each employer shall be a separate legal jurisdiction for OASDHI purposes.

40.02(29)

(29) "Employer required contribution" means the contribution made by an employer under s. 40.05 (2) (a) to (f).

40.02(30)

(30) "Executive participating employee" means a participating employee in a position designated under s. 19.42 (10) (L) or 20.923 (4), (4g), (7), (8), or (9) or authorized under s. 230.08 (2) (e) during the time of employment. All service credited prior to May 17, 1988, as executive service as defined under s. 40.02 (31), 1985 stats., shall continue to be treated as executive service as defined under s. 40.02 (31), 1985 stats., but no other service rendered prior to May 17, 1988, may be changed to executive service as defined under s. 40.02 (31), 1985 stats.

40.02(32)

(32) "Federal regulations" means the provisions of section 218 of Title II of the federal social security act and applicable regulations adopted under the federal social security act.

40.02(33)

(33) "Final average earnings" means:

40.02(33)(a)

(a) The monthly rate of earnings, ignoring any fractions of a dollar, obtained by dividing:

40.02(33)(a)1.

1. The participant's total earnings received or considered to be received under sub. (22) (e), (ef), or (em) and for which contributions are made under s. 40.05 (1) and (2) during the 3 annual earnings periods (excluding any period more than 3 years prior to the effective date for any participating employer) in which the earnings were the highest, subject to the annual compensation limits under 26 USC 401 (a) (17) for a participating employee who first becomes a participating employee on or after January 1, 1996; by

40.02(33)(a)2.

2. Twelve times the total amount of creditable service for the 3 periods.

40.02(33)(b)

(b)

40.02(33)(b)1.

1. For a state elected official who is prohibited by law from receiving an increase in compensation during the official's term of office and who so elects, one-twelfth of the annual salary, subject to the annual compensation limits under 26 USC 401 (a) (17) for a participating employee who first becomes a participating employee on or after January 1, 1996, which would have been payable to the participant during the last completed month in which the participant was a participating employee in such a position if the participant had not been prohibited by law from receiving an increase in salary during his or her term of office, but only with respect to service as a state elected official.

40.02(33)(b)2.

2. For a state senator who so elects, one-twelfth of the annual salary which would have been payable to the participant during the last completed month in which the participant was a participating employee in such a position if the participant had not been prohibited by law from receiving an increase in salary during part of his or her term of office, but only with respect to service as a state senator.

40.02(33)(c)

(c) For a participant who makes an election under s. 40.30 (2), the monthly rate of earnings applicable under par. (a) or (b), increased as provided under s. 40.30 (4) (b) but subject to the annual compensation limits under 26 USC 401 (a) (17) for a participating employee who first becomes a participating employee on or after January 1, 1996.

40.02(35)

(35) "Fund" means the public employee trust fund.

40.02(36)

(36) "Governing body" means the legislature or the head of each state agency with respect to employees of that agency for the state, the common council in cities, the village board in villages, the town board in towns, the county board in counties, the school board in school districts, or the board, commission or other governing body having the final authority for any other unit of government, for any agency or instrumentality of 2 or more units of government, for any federated public library system established under s. 43.19 whose territory lies within a single county with a population of 500,000 or more, for a local exposition district created under subch. II of ch. 229 or for a long-term care district created under s. 46.2895, but does not include a local cultural arts district created under subch. V of ch. 229.

40.02(37)

(37) "Health insurance" means contractual arrangements which may include, but are not limited to, indemnity or service benefits, or prepaid comprehensive health care plans, which will provide full or partial payment of the financial expense incurred by employees and dependents as the result of injury, illness or preventive medical procedures. The plans may include hospitalization, surgical and medical care, as well as ancillary items or services as determined by the group insurance board. The plans may include the type of coverage normally referred to as "major medical" insurance.

40.02(38)

(38) "Immediate annuity" means an annuity, not including an annuity from additional contributions, which begins to accrue not later than 30 days after termination of employment.

40.02(39)

(39) "Insured employee" means, for purposes of each insurance benefit plan, any eligible employee who is properly enrolled in the benefit plan.

40.02(39m)

(39m) "Internal revenue code" means the federal internal revenue code under Title 26, USC, as amended, and applicable federal regulations adopted by the federal department of the treasury, including temporary regulations.

40.02(39r)

(39r) "Joint and survivor annuity" means an optional annuity form, described under s. 40.24 (1) (d) or a rule promulgated under s. 40.24 (1) (g), that is payable for the life of the participant and, after the death of the participant, a continuing percentage of which is payable in monthly installments to the named survivor.

40.02(40)

(40) "Leave of absence" means any period during which an employee has ceased to render services for a participating employer and receive earnings and there has been no formal termination of the employer-employee relationship. For purposes of the fund every leave of absence, except a military leave or union service leave, shall terminate 3 years after it begins or, if earlier, upon the date specified by the employer in a notification to the department that the employer-employee relationship has terminated. A leave of absence is not deemed ended or interrupted by reason of resumption of active duty until the employee has resumed active performance of duty for 30 consecutive calendar days for at least 50% of what is considered that employee's normal work time with that employer. For the purpose of group health insurance coverage, every leave of absence due to employee layoff which has not been terminated before 3 years have elapsed shall continue for affected insured employees until an additional 2 years elapse or until sick leave credits used to pay health insurance premiums are exhausted, whichever occurs first.

40.02(40m)

(40m) "Long-term care insurance" means insurance that primarily provides coverage for care that is provided in institutional and community-based settings and that is convalescent or custodial care or care for a chronic condition or terminal illness. The term does not include a medicare supplement policy, as defined in s. 600.03 (28r), a medicare replacement policy, as defined in s. 600.03 (28p), or a continuing care contract, as defined in s. 647.01 (2).

40.02(41)

(41) "Milwaukee teacher" means any teacher employed by the board of school directors of the city of Milwaukee.

40.02(41m)

(41m) "Monthly salary" means the gross amount paid to a participant making a claim under s. 40.65, at the time he or she becomes disabled within the meaning of s. 40.65 (4), by the employer in whose employ the injury occurred or the disease was contracted. Overtime pay may not be considered part of an employee's monthly salary unless the employee received it on a regular and dependable basis.

40.02(41r)

(41r) "Named survivor" means the natural person designated by a participant on an application for a joint and survivor annuity or pursuant to a request under s. 40.24 (4) to receive, after the death of the participant, a continuing percentage of the annuity payable in monthly installments. A participant may not designate more than one natural person as the named survivor for a joint and survivor annuity. A participant's designation of a named survivor on an application for a joint and survivor annuity is irrevocable after the deadline specified under s. 40.24 (4). Pursuant to rules promulgated by the department, a named survivor may designate one or more beneficiaries to receive any remaining guaranteed monthly installments that are unpaid at the time of the named survivor's death.

40.02(42)

(42) "Normal retirement date" means:

40.02(42)(a)

(a) The date on which a participant attains the age of 55 years for a protective occupation participant who terminates covered employment before July 1, 1990, or, for a protective occupation participant who terminates covered employment on or after July 1, 1990, the date on which the participant attains the age of 54 years if the participant has accumulated less than 25 years of creditable service or the age of 53 years if the participant has accumulated at least 25 years of creditable service, except as provided in par. (g).

40.02(42)(b)

(b) The date on which a participant attains the age of 62 years for an elected official or an executive participating employee, except as provided in par. (g).

40.02(42)(d)

(d) The date on which a participant attains the age of 65 years for any participant not subject to par. (a) or (b), except as provided in par. (g).

40.02(42)(g)

(g) The date applicable to the participant under pars. (a) to (d) at the earlier of either the date it is necessary to make any determination or to take any action relative to the participant for purposes of the retirement system or the date of termination of employment of the participant, notwithstanding the fact that a participant may have been in one or more different employment categories at any previous time except for the purpose of calculating an annuity. For the purpose of calculating an annuity, the normal retirement date for each category provided by pars. (a) to (d) applies to service which is subject to that category. For the purpose of calculating a retirement benefit for an executive participating employee qualifying only under s. 40.02 (30) (b), 1985 stats., a normal retirement date of the date the executive participating employee attains the age of 62 years shall be applied to creditable service of the executive participating employee for which par. (d) would otherwise apply except the number of creditable service years to which that normal retirement date shall be applied under this paragraph may not exceed the number of executive service years of the executive participating employee.

40.02(43)

(43) "OASDHI" means federal old-age, survivors, disability and health insurance under Titles II and XVIII of the federal social security act.

40.02(44)

(44) "OASDHI benefit" means the primary or disability insurance monthly benefit amount for which a person is eligible, or for which a participant will be eligible upon attaining the lowest age at which old-age benefits are payable under the OASDHI program.

40.02(45)

(45) "Participant" means any person included within the provisions of the Wisconsin retirement system by virtue of being or having been a participating employee whose account has not been closed under s. 40.25 (1) or (2).

40.02(46)

(46) "Participating employee" means an employee who is currently in the service of, or an employee who is on a leave of absence from, a participating employer under the Wisconsin retirement system and who has met the requirements for inclusion within the provisions of the Wisconsin retirement system under s. 40.22.

40.02(47)

(47) "Participating employer" means, for purposes of each of the respective benefit plans, any employer subject to the provisions of that plan under this chapter.

40.02(48)

(48)

40.02(48)(a)

(a) "Protective occupation participant" means any participant whose principal duties are determined by the participating employer, or, subject to s. 40.06 (1) (dm), by the department head in the case of a state employee, to involve active law enforcement or active fire suppression or prevention, provided the duties require frequent exposure to a high degree of danger or peril and also require a high degree of physical conditioning.

40.02(48)(am)

(am) "Protective occupation participant" includes any participant whose name is certified to the fund as provided in s. 40.06 (1) (d) and (dm) and who is any of the following:

40.02(48)(am)1.

1. A conservation warden.

40.02(48)(am)2.

2. A conservation patrol boat captain.

40.02(48)(am)3.

3. A conservation patrol boat engineer.

40.02(48)(am)4.

4. A conservation pilot.

40.02(48)(am)5.

5. A conservation patrol officer.

40.02(48)(am)6.

6. A forest fire control assistant.

40.02(48)(am)7.

7. A member of the state traffic patrol.

40.02(48)(am)8.

8. A state motor vehicle inspector.

40.02(48)(am)9.

9. A police officer.

40.02(48)(am)10.

10. A fire fighter.

40.02(48)(am)11.

11. A sheriff.

40.02(48)(am)12.

12. An undersheriff.

40.02(48)(am)13.

13. A deputy sheriff.

40.02(48)(am)14.

14. A state probation and parole officer.

40.02(48)(am)15.

15. A county traffic police officer.

40.02(48)(am)16.

16. A state forest ranger.

40.02(48)(am)17.

17. A fire watcher employed at Wisconsin veterans facilities.

40.02(48)(am)18.

18. A state correctional-psychiatric officer.

40.02(48)(am)19.

19. An excise tax investigator employed by the department of revenue.

40.02(48)(am)20.

20. A special criminal investigation agent in the department of justice.

40.02(48)(am)21.

21. An assistant or deputy fire marshal.

40.02(48)(am)22.

22. A person employed under s. 61.66 (1).

40.02(48)(b)

(b) Each determination of the status of a participant under this subsection shall include consideration, where applicable, of the following factors:

40.02(48)(b)1.

1. A "police officer" is any officer, including the chief, or employee of a police department, except one whose principal duties are those of a telephone operator, clerk, stenographer, machinist or mechanic and whose functions do not clearly fall within the scope of active law enforcement even though such an employee is subject to occasional call, or is occasionally called upon, to perform duties within the scope of active law enforcement. Police officer includes any person regularly employed and qualifying as a patrol officer or a person of equal or higher rank, even if temporarily assigned to other duties.

40.02(48)(b)2.

2. A "fire fighter" is any officer, including the chief, or employee of a fire department, except one whose principal duties are those of a telephone operator, clerk, stenographer, machinist or mechanic and whose functions do not clearly fall within the scope of active fire suppression or prevention even though such an employee is subject to occasional call, or is occasionally called upon, to perform duties within the scope of active fire suppression or prevention. Fire fighter includes any person regularly employed and qualifying as a fire fighter, hose handler or a person of equal or higher rank, even if temporarily assigned to other duties.

40.02(48)(b)3.

3. A "deputy sheriff" or a "county traffic police officer" is any officer or employee of a sheriff's office or county traffic department, except one whose principal duties are those of a telephone operator, clerk, stenographer, machinist or mechanic and whose functions do not clearly fall within the scope of active law enforcement even though such an employee is subject to occasional call, or is occasionally called upon, to perform duties within the scope of active law enforcement. Deputy sheriff or county traffic police officer includes any person regularly employed and qualifying as a deputy sheriff or county traffic police officer, even if temporarily assigned to other duties.

40.02(48)(b)4.

4. A "member of the state traffic patrol" includes one division administrator in the department of transportation who is counted under s. 230.08 (2) (e) 12. and whose duties include supervising the state traffic patrol, if the division administrator is certified by the law enforcement standards board under s. 165.85 (4) (b) 1. as being qualified to be a law enforcement officer.

40.02(48)(bm)

(bm) "Protective occupation participant" includes any participant who is an emergency medical technician if the participant's employer classifies the participant as a protective occupation participant and the department receives notification of the participant's name as provided in s. 40.06 (1) (d) and (dm). Notwithstanding par. (a), an employer may classify a participant who is an emergency medical technician as a protective occupation participant without making a determination that the principal duties of the participant involve active law enforcement or active fire suppression or prevention. A determination under this paragraph may not be appealed under s. 40.06 (1) (e) or (em), but a determination under this paragraph regarding the classification of a state employee is subject to review under s. 40.06 (1) (dm). Notw

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