Once you stop working for a Wisconsin Retirement System employer, federal law requires you to begin receiving your benefit payment(s) by a certain date, depending on your age. This is called a required minimum distribution (RMD). The SECURE Act of 2019 changed the age at which RMDs must begin. If you were born on July 1, 1949 or later, your RMD will be made in the year you turn age 72. If you were born before July 1, 1949 the age remains 70 1/2. 

If you stop working for a WRS employer and do not apply for your benefit payments by the required date: 

  • You may be required to pay a federal tax of 50% of the amount that you should have received from the WRS in that tax year. 
  • ETF must make an automatic distribution to you by starting your WRS benefit payment(s). This could result in a tax consequence, effective date, or a type of payment that you do not want. 

Active Members

You are Covered by the New RMD Law if You Were Born July 1, 1949 or Later  

If you are still working under the WRS but plan to stop working during the year you turn age 71 or before, you must apply by the end of that calendar year

  • If you stop working, and apply for WRS benefits, you may defer your benefit effective date until March 1 of the calendar year you reach age 73. 
  • If you stop working but do not apply for WRS benefits, ETF must begin your WRS payment(s) in the calendar year you turn age 72. 
  • If you will continue working under the WRS after you reach age 72, your WRS benefit payment must begin on or before March 1 of the year after you retire. This means you must apply for your WRS payment(s) by December 31 of the year you retire. 

You are Covered by the Old RMD Law if You Were Born Before July 1, 1949 

If your birth date is before July 1, 1949, and you are still working for a WRS employer: 

  • When you stop working, your WRS benefit must become effective on or before March 1 of the following year. To do this, you must apply for your WRS payment(s) by December 31 of the year you retire. 

If you stop working but do not apply for WRS benefits, ETF must begin your WRS payment(s) the next calendar year. If you do not apply by the deadline, you will be subject to an automatic one-time (lump-sum) payment. This payment may be subject to tax penalties.

For more information about RMDs, visit the IRS website to see:

  • Publication 590: Individual Retirement Arrangements (IRAs). See the “When Must You Withdraw Assets (Required Minimum Distributions)” section.
  • Publication 575: Pension and Annuity Income. See the “Tax on Excess Accumulation” section.

Inactive Members

If your birth date is July 1, 1949, or later, and you are no longer working for a WRS employer (you are inactive), you must apply for a benefit by the end of the calendar year in which you turn age 71:

  • If you apply by this deadline, you can defer your benefit effective date until March 1 of the calendar year you reach age 73.
  • If you do not apply by this deadline, ETF must begin your WRS payment(s) in the calendar year you turn age 72. You will be subject to an automatic one-time (lump-sum) payment. This payment may be subject to tax penalties.

Alternate Payee

If you have a former spouse or domestic partner who was the original WRS member, and their birth date is July 1, 1949 or later, you must apply for your court-awarded benefit by the end of the calendar year that they reach age 71.

  • If you apply by the deadline, you can defer your benefit effective date until March 1 of the calendar year that the original member turns age 73.
  • If you do not apply by the deadline, ETF must begin your WRS payment(s) in the calendar year that the original member turns age 72. You will be subject to an automatic one-time (lump-sum) payment. This payment may be subject to tax penalties.

Beneficiary

If a WRS member (the original member) died and you are identified as a beneficiary of their account, your payment options depend on:

  1. If you are a spouse or non-spouse beneficiary.
  2. If the WRS member died before or after they began receiving a WRS benefit.
  3. If a beneficiary dies before applying for the death benefit or filing their beneficiary designation form.