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News

Department of Employee Trust Funds
April 4, 2008

Accelerated Payment Options Will Be Changing Soon

Note: The Wisconsin Retirement System (WRS) offers members who retire before the age of 62 “accelerated” benefit payment options. The intent is to provide a higher WRS annuity until the member reaches age 62 (at which time they can apply for Social Security benefits) and a reduced WRS annuity after age 62. A recent law change has made a small but positive change in the structure of WRS accelerated payment options.

Under the current law, accelerated payment annuities have two parts: a lifetime annuity payable for the life of the annuitant, and a temporary annuity payable until the retiree reaches age 62 or dies, whichever comes first. This means if you chose an accelerated payment option and you die before reaching age 62, any death benefit payable from your WRS annuity is based only on your after-age-62 life annuity amount.

A recent law change removes the requirement that the temporary annuity payment stop if the death occurs before the retiree turns 62. The law change is effective July 1, 2008 and is not retroactive. It does not apply to accelerated payment annuities already being paid or to annuities that become effective before July 1, 2008.

If your annuity will begin on or after July 1, 2008, and you select an accelerated payment option:

  • Your temporary annuity is payable until you reach age 62.
  • If you die before reaching age 62, the temporary annuity will be paid to your named survivor or beneficiary(ies) through the month in which you would have reached age 62, even if there are no death benefits payable from the lifetime portion of the annuity option that you selected when you retired.

If you have already received retirement estimates from the Department of Employee Trust Funds (ETF), please note that this change will result in a very small reduction in the amount of your life annuity in order to fund the cost of the improved death benefit protection.

If your annuity effective date will be on or after July 1 and you have already submitted your retirement application, and now wish to change your annuity option to an accelerated payment option, please contact ETF immediately for an option change application. We must receive your application to change your annuity option no later than 60 calendar days after the date that your first annuity payment is issued. After the 60-day deadline expires you are no longer eligible to change your annuity option.

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