40.73 Death benefits.
(1) The amount of the Wisconsin retirement system death benefit shall be:
(a) Upon the death of a participant, other than an annuitant or a participating employee, the sum of the additional and employee required contribution accumulations credited to the participant's account on the beneficiary annuity effective date or, in the case of a lump sum payment, the first day of the month in which the death benefit is approved. In addition:
1. For teacher participants who were members of the state teachers retirement system or the Milwaukee teachers retirement fund on June 30, 1966, the amount shall be increased by the employer contribution accumulation credited to the participant's account on or prior to June 30, 1973, plus interest at the effective rate subsequently credited to the accumulations.
2. For participants who were participants of the Wisconsin retirement fund on or prior to December 31, 1965, the amount shall be increased by the employer contribution accumulation credited to the participant's account on December 31, 1965, plus interest at the effective rate subsequently credited to the accumulations.
(am) Upon the death of a participating employee, except as otherwise provided by par. (c), the sum of all of the following accumulations, including any interest credited to the accumulations, that are credited to the participant's account on the beneficiary annuity effective date or, in the case of a lump sum payment, the first day of the month in which the death benefit is approved:
1. Additional contributions.
2. Accumulated contributions to purchase other governmental service under s. 40.25 (7), 2001 stats., or s. 40.285 (2) (b).
3. Twice the employee required contributions, after first subtracting the accumulations under subd. 2., including interest on the accumulations.
(b) Upon the death of an annuitant, in addition to any amounts payable by virtue of the annuity option elected by an annuitant, the amount determined under par. (a) for contributions made under s. 40.05 (1) subsequent to the effective date of the annuity, or additional contributions not applied to provide an annuity, provided the amounts have not been previously paid out as a lump sum under s. 40.25.
(c) Upon the death of a participating employee who, prior to death, met the applicable minimum age under s. 40.23 (1) (a) (intro.), if the beneficiary to whom a death benefit is payable is a natural person, or a trust in which the natural person has a beneficial interest, the present value on the day following the date of death of the life annuity to the beneficiary which would have been payable if the participating employee had been eligible to receive a retirement annuity, computed under s. 40.23 or 40.26, beginning on the date of death and had elected to receive the annuity in the form of a joint and survivor annuity providing the same amount of annuity to the surviving beneficiary as the reduced amount payable during the participant's lifetime. If there is more than one beneficiary the amount of the annuity and its present value will be determined as if the oldest of the beneficiaries were the sole beneficiary. If the death benefit payable to the beneficiary under this paragraph would be less than the amount determined under par. (am) the death benefit shall be payable under par. (am) and this paragraph shall not be applicable to the beneficiary. An annuitant receiving an annuity only under s. 40.24 (1) (f), which annuity was an immediate annuity, shall be deemed a participating employee for purposes of this paragraph only, but the amount payable under s. 40.24 (1) (f) shall not be changed.
(d) Increased, upon the death of a participant who had elected the additional benefit provided by s. 42.81 (14), 1979 stats., and continued making the contributions provided for in s. 42.81 (14), 1979 stats., and was eligible for the benefit on December 15, 1988, by an amount and for a period determined by the actuary and approved by the board as being appropriate to the level of contributions provided for in s. 42.81 (14), 1979 stats., or any lower level of contributions, as determined by the actuary and approved by the board. The board may require that the payment of benefits under an insurance contract be paid in lieu of any benefits provided under this paragraph, but only if the benefits under the insurance contract are at least equal to the benefits that would otherwise have been paid under this paragraph on the date on which the insurance contract went into effect.
(2)
(a) Upon the death, prior to the expiration of the guarantee period, of an annuitant receiving an annuity which provides a guaranteed number of monthly payments, monthly payments shall be continued until payments have been made for the guaranteed number of months. Any beneficiary under this paragraph may elect at any time to receive the then present value of the annuity, including monthly interest at the assumed benefit rate for each full month between the termination of annuity payments and the month in which the single sum payment is approved, in a single sum.
(b) In lieu of the continuation of monthly payments under par. (a), the then present value of the annuity shall be paid as a death benefit under sub. (1) if:
1. The estate of the annuitant is the beneficiary;
2. No beneficiary of the annuitant survives;
3. The death of the beneficiary occurs after having become entitled to receive payments under par. (a), but prior to the end of the period guaranteed;
4. The amount of the monthly payments to the beneficiary, including any amount payable under s. 40.27, is less than the amount determined under s. 40.25 (1) (a); or
5. At the death of the annuitant the remainder of the period for which payments are guaranteed is less than 12 months.
(3)
(a) A death benefit may be paid as an annuity for the life of the beneficiary, if the amount of the death benefit is sufficient to provide a beneficiary annuity in the normal form at least equal to the amount determined under s. 40.25 (1) (a) and the beneficiary or the participant has elected to have the death benefit paid as a beneficiary annuity.
(c) Whenever any death benefit is payable in the form of an annuity, the annuity may begin on the day following the date of death of the participant or annuitant if the department has received a copy of the death certificate of the participant or annuitant, and a written application of the beneficiary for the benefit, subject to the same restrictions on effective dates as set forth for retirement annuities.
(d) The amount of any beneficiary annuity shall be that which can be provided from the death benefit, determined in accordance with the actuarial tables in effect on the effective date of the annuity.
(e) Any beneficiary who is eligible to receive a beneficiary annuity may elect to receive the annuity in any of the optional annuity forms provided for retirement annuities, other than as an annuity payable over the joint life expectancies of the beneficiary and another person. The number of guaranteed monthly payments available to a beneficiary may not exceed the life expectancy of the beneficiary.
(f) Any beneficiary between ages 18 and 21 or the legal or natural guardian of a minor beneficiary may, in lieu of a life annuity, elect that the death benefit be paid in the form of a temporary life annuity, beginning on the day following the date of death of the participant or annuitant and ending with the monthly payment immediately prior to the beneficiary's 21st birthday, and a final payment, payable one month after the termination of the temporary annuity, in the amounts specified in the application, provided the amounts can be provided from the death benefit, on the basis of the actuarial tables in effect on the date of initial approval of the annuity. A beneficiary, prior to the final payment, may, if the amount of the final payment is sufficient to provide an immediate beneficiary annuity in the normal form of at least an amount equal to the amount determined under s. 40.25 (1) (a) monthly, elect to receive in lieu of the final payment an annuity commencing on the day following the date of termination of the temporary annuity, determined on the basis of the actuarial tables in effect on the date of initial approval of the annuity.
History: 1981 c. 96; 1983 a. 141, 290; 1987 a. 309; 1989 a. 110, 166; 1995 a. 302, 414; 1997 a. 58; 1999 a. 11, 12; 2005 a. 154; 2007 a. 96, 131; 2013 a. 20.
Whatever effect the Marital Property Act, ch. 766, may have with respect to property rights between spouses, it has no effect on the Board's determination of a beneficiary under ch. 40. Jackson v. Employee Trust Funds Board, 230 Wis. 2d 677, 602 N.W.2d 543 (Ct. App. 1999), 98-3063.
The board's consistent interpretation of “Mr. & Mrs." beneficiary designations as relating to the identity of the beneficiaries on the date of the designation. was reasonable. Jackson v. Employee Trust Funds Board, 230 Wis. 2d 677, 602 N.W.2d 543 (Ct. App. 1999), 98-3063.
Nothing in s. 40.73 creates an entitlement in the beneficiary to the annuity-value single cash sum benefit as of the date of death even though the value of the single cash sum benefit is calculated as of the date of death. A beneficiary does not acquire a property interest in a single cash sum death benefit under sub. (1) (c) until the beneficiary applies for a death benefit as required by s. 40.71 (3). Fazio v. Department of Employee Trust Funds, 2006 WI 7, 287 Wis. 2d 106, 708 N.W.2d 326, 04-0064.