Section ETF 20.07 - Annuity options - automatic distributions(1) When the department begins to distribute an account under the provisions of s. 40.23 (4) (c), Stats., the benefit shall include the amount, if any, which can be provided by accumulated employer and employee required and additional contributions credited to the account. The department may not distribute a participating employee's account under this section.(2) The benefit shall be paid in the first of the following forms that applies:(a) For benefits payable solely from the participant's additional contribution accumulations under s. 40.05 (1) (a) 5, Stats., or if the amount of the annuity in the normal form based on all undistributed balances in the account is less than the amount determined under s. 40.25 (1) (a), Stats., a lump sum payment.(b) If the participant's or alternate payee's age on the birthday which occurs during the year that the distribution begins is less than 72, the option specified in s. 40.24 (1) (c), Stats.(c) If the participant's or alternate payee's age on the birthday which occurs during the year that the distribution begins is 72 or more, except as provided in par. (d), the option specified in s. ETF 20.04 (4).(d) If the number of guaranteed payments determined under s. ETF 20.04 (4) is less than 60, a lump sum payment equal to the present value of the annuity.(3) The effective date of the automatic distribution paid under sub. (2) shall be January 1 of the year in which the participant attains or would have attained the age provided in section 401 (a) (9) of the Internal Revenue Code, or January 1 of the year following the year in which the participant retires, if later. Standard sequence under s. 40.02 (8) (a) 2, Stats., shall become effective with regard to beneficiaries of death benefits under ss. 40.71 and 40.73, Stats., on the effective date of the automatic distribution.(4) The participant or alternate payee may not cancel distributions under this section, except as provided in sub. (5). Subject to the requirements of the internal revenue code, the participant or alternate payee may change the optional form of payment as provided under s. 40.24 (4), Stats.(5) The department shall distribute the account as specified in this section unless the department receives the participant's or alternate payee's application for the benefit on a form provided by the department. The application may specify a deferred effective date which may not be later than March 1 of the calendar year after the year in which participant attains the age provided in section 401 (a) (9) of the Internal Revenue Code, or March 1 of the calendar year following the year in which the participant retires, if later. For alternate payees of deceased participants, the deferred effective date may not be later than March 1 of the calendar year after the participant would have attained the age provided in section 401 (a) (9) of the Internal Revenue Code. The department must receive the application specifying a deferred benefit effective date on or after January 1 of the year before the year in which the participant attains (or, for alternate payees of deceased participants, would have attained) the age provided in section 401 (a) (9) of the Internal Revenue Code, but no later than the deadline to request cancellation provided under s. ETF 20.20 (3) or (4) with respect to the benefit which is being automatically distributed. Note: Federal regulations require that a distribution from a qualified retirement plan begin no later than April 1 of the year following the year in which the participant would have attained the age provided in section 401 (a) (9) of the Internal Revenue Code or retires, whichever is later. A form specifying a requested annuity effective date, form ET-4934, is available from the department of employee trust funds at no charge.
(6) If the participant or alternate payee submits a waiver of a lump sum benefit under s. 40.08 (3), Stats., and the department receives it on or before the deadline specified in s. ETF 20.20 (3) or (4), the department shall defer the automatic distribution during the waiting period before the waiver effective date. The department shall not defer automatic distribution of monthly annuity benefits if a waiver is filed, but shall continue to make monthly payments until the waiver takes effect.Wis. Admin. Code Department of Employee Trust Funds ETF 20.07
Cr. Register, December, 1996, No. 492, eff. 1-1-97; correction in (2) (a) made under s. 13.93(2m) (b) 4 and 7., Stats., Register, July, 1999, No. 523; CR 09-057: am. (6) Register May 2010 No. 653, eff. 6-1-10.Amended by, correction in (5) (Note) made under s. 13.92(4) (b) 7, Stats., Register May 2021 No. 785, eff.6/1/2021Amended by, CR 23-023: am. (3), (5) Register May 28 No. 821, eff. 6/1/2024This rule (CR 09-057) amends ss. ETF 20.07 (6) and 60.53 (1) (c) to conform to the new effective date for waivers in s. 40.08 (3), Stats., as affected by 2007 Wis. Act 131.