If a marriage is legally terminated, the court can award a certain percentage of your Wisconsin Retirement System account to an alternate payee (your former spouse). The court order that awards a portion of the account to the alternate payee is called a Qualified Domestic Relations Order. The QDRO must award a percentage of the account to the alternate payee — not a dollar amount — and it can be up to 50%. This percentage applies to all parts of the account, including employee and employer contributions, additional contributions and creditable service (including military service).
If you have not yet taken a benefit from your account, your contributions and years of service as of the decree date are divided and a portion is transferred to a separate account in the alternate payee's name. Each separate account earns interest on the balances in that account. All new contributions and years of service that you earn after the decree date are credited to your account alone.
Whatever the alternate payee does with the account has no effect on your account or benefits. He or she can take a benefit from this account right away, even if you are still working. However, until you reach minimum retirement age and/or are vested, the alternate payee is only eligible for a separation benefit (employee contributions only). Once you reach minimum retirement age and are vested, the alternate payee is eligible to apply for a retirement benefit based on both employee and employer contributions.
For More Information
How Divorce Can Affect Your WRS Benefits (ET-4925). Topics covered include most common reasons ETF rejects a domestic relations order; effects of divorce on service and purchased service, insurance benefits, and monthly annuity payments; FAQs.