All WRS Employers
Vol. 19, No. 6
March 15, 2002
Active Employee Death Benefits Increased with 1999 Wisconsin
New Summary of Survivor Benefits Form and Process
1999 Wisconsin Act 11 increased the death benefits for a participant
who dies as an active Wisconsin Retirement System (WRS) employee
on or after December 30, 1999. In situations where an active
employee is terminally ill, this change could potentially affect
whether or not the employee needs to apply for a WRS annuity to
maximize the death benefit payable.
The active death benefit now includes the employee required contributions,
a matching amount of employer contributions, and any voluntary additional
contributions. There are no restrictions on who can be named as
beneficiary for this active death benefit. Act 11 did not change
the death benefits for inactive participants (those not employed
in a WRS covered position at the time of death).
Prior to Act 11, the active death benefit normally did not include
any matching employer contributions. The exception was when an active
employee died after reaching minimum retirement age; a special death
benefit was payable if the beneficiary was a spouse and/or a dependent
child(ren). This special death benefit was calculated as though
the participant had retired on the date of death, and had selected
a joint and survivor annuity continued at 100% with the spouse or
dependent child as the named survivor. Act 11 did not change how
the special death benefit is calculated. However, Act 11 eliminated
the restriction that the beneficiary be a spouse and/or dependent
child(ren); the beneficiary can now be any living person(s), or
a trust in which a living person has a beneficial interest. The
deceased employee's beneficiary(ies) would be eligible for
the higher of either the special death benefit or the new active
death benefit under Act 11.
Prior to Act 11, active employees with a terminal illness were
often encouraged to apply for a WRS disability benefit because the
death benefit would be higher from the disability annuity. However,
since matching employer contributions are now included if the participant
dies as an active employee, in many cases the "active" death benefit
will be higher than the death benefit from a retirement or disability
annuity. Whether the active or annuitant death benefit is higher
will depend on many factors, including the participant's age,
the beneficiary's age, years of creditable service, WRS account
balance, employment category, etc.
For more information about death benefits refer to ETF Internet
site at etf.wi.gov. On the homepage, either click in the window
on "Benefit Programs," "WRS Benefits," and "Survivor;"
or click on "Publications," "WRS Benefits,"
and the "Death Benefits (ET-101)" brochure.
Summary of Survivor Benefits (ET-6518) Form and Process
The Department of Employee Trust Funds (ETF) has developed a Summary
of Survivor Benefits (ET-6518) form that will be used to provide
critically ill participants and/or their representatives with estimated
death benefit information. For a participant to receive a completed
Summary, ETF must be informed of the critical state of the participant's
illness at the time the disability benefit estimates are requested.
It is also important that these participants contact their employers
to learn how other employee benefits will be affected by their employment
status at the time of death.
For death benefit questions or to request disability benefit estimates
and a Summary of Survivor Benefits (ET-6518), the participant
or the employer may contact ETF toll-free at 1-877-533-5020 or (608)
266-3285 (local Madison). ETF requires the following participant
information to prepare disability benefit estimates:
Social Security Number
Home address & telephone number
Date of Birth
Last day worked
Last day paid
Current or most recently completed annual (12 month) earnings
Projected final annual earnings
Years of active military service
Spouse's name and date of birth (if married)