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
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
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.
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.