Wisconsin’s Section 218 Agreement is a voluntary agreement between the State and the Social Security Administration (SSA) to provide Social Security coverage for state and local government employees. Employers must be covered by the 218 Agreement to join the Wisconsin Retirement System.
The Social Security Act and a state’s Section 218 Agreement aim to:
- Support the material needs of individuals and families.
- Protect aged and disabled persons against the expenses of illnesses that may otherwise use up their savings.
- Keep families together.
- Give children the chance to grow up healthy and secure.
To join the 218 Agreement, an employer must be a governmental entity and pass Wisconsin’s three-part test must:
- Be created by an entity or entities with the power to do so under Wisconsin statutes.
- Be an independent legal entity, this includes powers to:
- Levy taxes.
- Borrow money and to issue bonds.
- Hold and to convey real and personal property.
- Sue and to be sued in its own name.
- Enter into contracts.
- Hire, supervise, and fire its own employees.
- Perform a governmental function. For example:
- Police and fire protection.
- Flood control.
Employers are not eligible to join the 218 Agreement or the WRS if employees are exempt from paying for Social Security (i.e. FICA) because they pay into the alternative/replacement plan for retirement purposes. This is called a FICA alternative or Social Security replacement plan.