HOW DIVORCE CAN - WI ETF

1 HOW DIVORCE CAN. Contact ETF AFFECT YOUR WRS BENEFITS. Find ETF-administered benefits information, forms, ET-4925 (7/6/2018) Scan to read online. brochures, benefit calculators, educational offerings and other online resources. Stay connected with: ETF E-Mail Updates @wi_etf 1-877-533-5020. 608-266-3285 (local Madison). 7:00 to 5:00 (CST), Monday-Friday Benefit specialists are available to answer questions. Wisconsin Relay: 711. PO Box 7931. Madison, WI 53707-7931. Write ETF or return forms. Table of Contents What is a DRO and a qdro ?.. 2. The Most Common Reasons ETF Rejects a 2. General 3. Information Required on a Valid 4. What Happens When ETF Receives a DRO?.. 5. Beneficiary 6. Effects on Purchased 7. Effects on Insurance 7. Active and Inactive 8. Monthly Annuity 10.

2 For All QDROs Applied to 10. Annuity Options and Associated Death 10. Accelerated Payment 11. Annuity Certain 11. Important Information for the Alternate 12. General 12. Applying for a 12. A Special Caution to Alternate Payees Who Are Eligible for an Accelerated 13. Calculating a Retirement 13. Additional 14. Federal Tax Withholding on Lump-Sum 14. Frequently Asked Questions: 15 The Department of Employee Trust Funds does not discriminate on the basis of disability in the provision of programs, services or employment. If you are speech, hearing or visually impaired and need assistance, call toll free at 1-877-533-5020 or 608-266-3285 (local Madison). We will try to find another way to get the information to you in a usable form. ETF has made every effort to ensure that this brochure is current and accurate.

3 However, changes in the law or processes since the last revision to this brochure may mean that some details are not current. The most current version of this form can be found at Please contact ETF if you have any questions about a particular topic in this brochure. 1. What is a DRO and a qdro ? A Domestic Relations Order (DRO) is a legal The parties are responsible for submitting a DRO to document that must comply with Wisconsin law. ETF after it is issued by a court. Delayed submission For Wisconsin Retirement System purposes, a may impact benefits. DRO is a court order that awards a percentage of a WRS account or annuity to the member's former spouse or domestic partner ( alternate payee ) when a marriage or domestic partnership is terminated through DIVORCE , annulment or a legal separation.

4 A DRO is considered a Qualified Domestic Relations Order ( qdro ) once the Department of Employee Trust Funds has verified that the DRO meets all applicable statutory requirements. The Most Common Reasons ETF Rejects a DRO. The most common reasons that ETF may reject a It is the responsibility of the parties to submit the DRO include: DRO to ETF as soon as possible. Any delay in filing 1. Required information is missing or is incorrect. this document may have an impact on the benefits Verify that all requested information is available. ETF cannot accept a DRO that is more provided and is accurate. than 20 years old. 2. The DRO attempts to award more than 50%. of a WRS account to an alternate payee. The To be sure that the DRO meets all WRS legal maximum amount of a member's account (as requirements, use one of ETF's forms: of the decree date) that can be awarded to an DRO to Divide WRS Benefits (ET-4926), used alternate payee is 50%.

5 By Wisconsin courts. Foreign Jurisdiction DRO to Divide WRS. 3. The DRO attempts to use something other than Benefits (ET-4935), for courts outside a single percentage (with no more than two of Wisconsin. decimal places) to divide the WRS account: Do not use a dollar amount. Both of these forms are available online at Do not use a decimal equivalent ( the DRO cannot list instead of 50%). 4. The DRO attempts to limit the award by specifying the date of the marriage. Since the entire WRS account must be divided by the DRO, the courts can consider reducing the percentage of the award instead. 5. The DRO has been altered in any way. 2. General Information ETF is governed by Chapter 40 of the Wisconsin As an Internal Revenue Code Section 401(a). Statutes. Chapter 40 does not require the division governmentally defined benefit, the WRS is not of WRS benefits at the time of a DIVORCE , annulment, subject to the federal Employee Retirement Income legal separation, or the termination of a domestic Security Act (ERISA) or the Retirement Equity Act.

6 Partnership. However, in some situations, parties to one of these proceedings may choose to divide The effects of a qdro on a member's WRS account a WRS member's account. The only way to divide and the WRS benefits payable to an alternate payee a WRS account or annuity is through a DRO that differ based on whether the member has an: is issued by a court and accepted by ETF as a Active Account The member is currently qdro . Consult with your attorney regarding your employed in a position covered under the WRS. legal rights. Inactive Account The member has terminated from all WRS-covered employment For marriages terminated by DIVORCE , annulment or but has not taken a retirement benefit. legal separation, ETF can divide a WRS account or annuity between the member and an alternate payee Annuity The member is receiving a monthly upon acceptance of a valid qdro .

7 Retirement or a disability retirement payment. The Wis. Stat. duty disability and Once a court has issued a DRO, it is the Long-Term Disability Insurance (LTDI) monthly responsibility of the parties to submit it to ETF as payments are the only exceptions. Those soon as possible. Any delay may have an impact on benefits will not be divided by a qdro . the benefits available. A qdro applies only to the member's account For information regarding the termination of a based on the service, earnings and contributions registered Chapter 40 domestic partnership, see from his or her own WRS employment. If the member the Domestic Partner Benefits (ET-2166) brochure, is also entitled to benefits as a beneficiary or available at or by contacting ETF. alternate payee of another WRS member's account, the qdro does not apply to that account or annuity.

8 A qdro must divide the entire WRS account or annuity by awarding a percentage to the alternate If the member is enrolled in the Variable Trust Fund payee, not a specific dollar amount. The portion on the decree date, a portion of the alternate payee's of the account or annuity awarded to the alternate account and/or annuity will automatically be included payee cannot exceed 50% of the total value as of the in the Variable Fund. The alternate payee may cancel decree date. The decree date is defined by statute the variable participation by completing and returning as the first day of the month in which the marriage is a Canceling Variable Participation (ET-2313) form legally terminated. The parties may not choose, and to ETF. If the member is not enrolled in the Variable the court may not order, a different decree date.

9 Trust Fund as of the decree date, both accounts and/. or annuities will be in the Core Trust Fund. 3. Information Required on a Valid qdro . A qdro must include: A qdro may not include a requirement that: The member's correct name, birth date, Social The WRS pay a benefit exceeding the value Security number and current address. to which the member was entitled on the The alternate payee's correct name, birth date, decree date. Social Security number and current address. Benefits be paid to an alternate payee when The Wisconsin Retirement System must be those benefits are required to be paid to specifically named. another alternate payee under a qdro . previously accepted by ETF. The decree date must be specified as the date to be used for valuing and dividing the entire Benefits be paid to an alternate payee when account or annuity.

10 Those benefits are also required to be paid to the federal Internal Revenue Service under a The DRO must award the alternate payee lien under 26 Sec. 64. a percentage, not to exceed 50%, of all parts of the member's account as of the Has any form of joint ownership of the decree date. The percentage of the account member's account. may be specified up to two decimal places; The member's account be divided in a manner for example, 33%, or are all that is contrary to Wis. Stat. Sec. (1m). acceptable. If a DRO specifies a percentage ETF monitor benefit payments once a WRS. more than two decimal places, ETF will round account has been divided. the percentage to two decimals. Requirement that the member certify all active military service or provide an affidavit of no military service on a form supplied by ETF.