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Employer Bulletin

WRS Employers Allowed to Offer Tax-Deferred Payroll Deductions
Vol. 20, No. 10
July 3, 2003

WRS Employers Can Authorize Plan-to-Plan Transfers to Buy WRS Creditable Service

Federal law changed in 2002 to allow retirement system participants to use certain tax-deferred monies to buy permissive service credits. However, Wisconsin state law still prohibits using tax-deferred monies to buy service credits, and the Department of Employee Trust Funds (DETF) cannot accept direct transfer of monies from other retirement plans to pay for service.

The 2003-05 budget bill awaiting Governor Doyle's review and signature includes a provision that would allow the Wisconsin Retirement System (WRS) to accept direct plan-to-plan transfers of funds from other systems for participants to buy creditable service. The provision will also allow employees to use tax-deferred WRS contributions to purchase any WRS creditable service that they are otherwise eligible to buy.

As a WRS employer whose employees are eligible to make tax-deferred contributions to the WRS under Section 403 (b) of the Internal Revenue Code, you are considered the Plan Administrator of the tax-deferred contribution plan. As Administrator of the plan, your authorization is required before your employees (or former employees) can use their tax-deferred contributions to the WRS to buy WRS creditable service.

The WRS Agent should sign the attached form and return it to the DETF at the address below, whether or not you currently have employees participating in the WRS tax-deferred plan. Your signed authorization form will be considered a valid approval for all of your former, current, and future employees. This form merely authorizes the DETF to transfer monies internally, upon a participant's request, from the participant's tax-deferred account to the required contribution account for the purchase of WRS creditable service. No further action will be required on your part.

Please read and sign the enclosed form, and return the original to the DETF at the address below. You may also wish to keep a copy for your records.

Dale Ferron
Department of Employee Trust Funds
P.O. Box 7931
Madison, WI 53707-7931

If you have any questions regarding this Bulletin, contact Dale Ferron at (608) 266-0728.


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