By D&K’s Labor & Employment Team
The 2013-2015 Biennial Budget Bill (Budget Bill), enacted as 2013 Wisconsin Act 20, made substantial revisions to the statutes governing Wisconsin Retirement System (WRS) annuitants who return to work for WRS participating employers after retirement. The Budget Bill was signed into law by the Governor on June 30, 2013, and published on July 1, 2013.
The WRS was created, in part, to provide post-employment annuity benefits to participants who meet the requirements of Wis. Stat. § 40.23, including retirement from employment with a WRS participating employer. The statutes permit any Wisconsin public agency to participate in the WRS, but certain entities are required to participate, including state agencies and all counties, with the exception of Milwaukee County. Most municipalities in Wisconsin participate in the WRS. The WRS is administered by the Wisconsin Department of Employee Trust Funds (ETF).
The Budget Bill results in two major changes to the statutes governing rehiring of WRS annuitants. First, the Budget Bill amended Wis. Stat. § 40.26(5) to lengthen the break in service requirement before an annuitant can be rehired from 30 days to 75 days. Before Act 20, a WRS participant who applied for a retirement annuity was required to wait at least 30 days between termination of covered employment with a WRS employer and returning to WRS eligible employment, which is defined as employment expected to last at least one year and that consists of at least one-third of full-time service (i.e., 440 hours for teachers and educational support staff and 600 hours for any other employees).
Second, the Budget Bill created Wis. Stat. § 40.26(1m), which provides that rehired WRS annuitants, who are expected to work at least two-thirds of what is considered full-time employment, or who enter into a contract to work at least two-thirds of what is considered full-time employment, are not eligible to receive annuity payments and must return to WRS participating employee status. Two-thirds of full-time service is defined as 880 hours for teachers and educational support staff and 1,200 hours for any other employees.
The new laws governing rehired WRS annuitants are much different than the old laws. Under the old laws, a rehired WRS annuitant was able to return to work with a WRS-participating employer on a full-time or a part-time basis and have the option of either (1) terminating the annuity and returning to WRS participating employee status, or (2) continuing to receive the WRS annuity in addition to wages. The only caveat was that the rehired WRS annuitant could not receive the annuity and return to WRS participating employee status.
It is clear from the language of the Budget Bill that the 75-day break-in-service requirement applies to a WRS annuitant who terminates his or her employment on or after July 2, 2013. However, the effective date of the new laws governing the employment of rehired annuitants is less clear. ETF has opined that WRS annuitants who terminated employment with a WRS participating employer before July 2, 2013, would continue to operate under the old laws, and for WRS annuitants who terminate employment on or after July 2, 2013, the new two-thirds of full-time employment provision will apply.
The Budget Bill also modified other provisions of the statutes governing the WRS. If you have any questions regarding the provisions applicable to WRS annuitants, or any other changes to the provisions governing the WRS, please contact your Davis & Kuelthau attorney or the Labor & Employment Chair, James M. Kalny, at 920.431.2223 / firstname.lastname@example.org.