40.02(11)

(11) “Board” means the employee trust funds board.

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)(c)1.

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

40.02(21d)(b)

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

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(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(25)(a)

(a) For the purpose of any group insurance:

40.02(48)(am)4.

4. A conservation pilot.

40.02(48)(am)9.

9. A police officer.

40.02(48)(am)14.

14. A state probation and parole officer.

40.02(48)(am)20.

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

40.02(48m)(c)

(c) The decree date is specified as the date to be used for valuing and dividing the participant’s account.

40.02(54)(c)

(c) The Wisconsin Health and Educational Facilities Authority.

40.02(54)(g)

(g) The World Dairy Center Authority.

40.02(54)(L)

(L) The Health Insurance Risk-Sharing Plan Authority.

40.02(22)

(22) “Earnings”:

40.02(54)(m)

(m) The Wisconsin Economic Development Corporation.

40.02(54t)

(54t) “State employee” means an employee of a state agency.

40.02(12)

(12) “Child” means natural children and legally adopted children.

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(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 § 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, and a long-term care district created under § 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(15)

(15)

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)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(54)(f)

(f) The nonprofit corporation with which the department of workforce development contracts under s. 47.03 (1m) (a), 1989 stats.

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)5.

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

40.02(17)(d)

(d)

40.02(21d)(a)

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

40.02(21d)(d)

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

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

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(8)

(8)

40.02(8)(a)

(a) “Beneficiary” means:

40.02(8)(b)

(b) “Beneficiary” does not include any of the following:

40.02(9)

(9) “Beneficiary annuity” means any death benefit which is paid as an annuity.

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(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 § 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 § 854.04 (6) shall not apply to a determination under this subsection.

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)(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 para. (b) or if so specified in the last written designation of beneficiary filed prior to time of death.

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(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(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(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(21d)(e)

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

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(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)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 para. (a) shall be the same type, as set forth in § 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)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 § 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 § 40.30 (2), by any retirement system specified in § 40.30 (2) other than the Wisconsin retirement system.

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(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)7.

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

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. (e), (ef), or (em) and for which contributions have been made as required by § 40.05 (1) and (2) and creditable military service, service credited under § 40.285 (2)(b) and service credited under § 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 § 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)1.

1. Notwithstanding § 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 § 20.515 (1)(a).

40.02(25)

(25) “Eligible employee” means:

40.02(25)(b)

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

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 para. (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 para. (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 para. (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. (a) and § 40.06 (1)(d) as a protective occupation participant.

40.02(18)

(18) “Death benefit” means any amount payable to a beneficiary under § 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(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(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 § 40.63.

40.02(21d)(c)

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

40.02(22)(a)

(a) Except as provided in pars. (b) to (f) and § 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)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)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(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(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 § 40.05.

40.02(22)(ec)

(ec) Includes contributions made by a reduction in salary as provided in § 40.05 (1)(b).

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 § 40.05.

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(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)(c)

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

40.02(22)(em)

(em) For Wisconsin retirement system purposes only, for a member of the facul