Employer Bulletin

All WRS Employers
Vol. 19, No. 6
March 15, 2002

Active Employee Death Benefits Increased with 1999 Wisconsin Act 11

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:

Full Name
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)