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Employee Matters

April 19, 2006

This column is prepared by staff of the Employee Compensation and Benefits Services office. E-mail the office at employee@bussvc.wisc.edu, or call 263-7556 or 262-5650. For information, visit http://www.bussvc.wisc.edu/ecbs/ecbs.html.

Disability Benefits

This article focuses on the disability benefits provided by the Wisconsin Retirement System (WRS): WRS disability and Long-term Disability Insurance (LTDI).

Eligibility for Benefits

LTDI is available if you began WRS participation on or after Oct. 16, 1992. If you were covered under WRS before that date and have been continuously employed until becoming disabled you may apply for WRS disability benefits or elect coverage with LTDI. To be eligible for either benefit, you:

  • must be totally disabled by a mental or physical impairment which is likely to be permanent;
  • must not have reached normal retirement age (65 for most employees);
  • must be a participating WRS employee;
  • must have at least .33 years of creditable service in at least five of the last seven calendar years at the time you apply;
  • must remain totally off work while your claim is being determined;
  • must have two physicians certify your disability; and
  • your employer must certify that you are not expected to return to work

  • Calculation of Benefits

    LTDI: The benefit is 40 percent of your final average salary (your three highest annual earnings periods, divided by 36 months). In addition, a supplemental contribution is paid into your WRS account for each month that you are eligible for LTDI benefits, until you apply for a retirement benefit.

    WRS Disability: The benefit is calculated as a retirement benefit using a formula factor, final average earnings and creditable service. Years of actual creditable service at the time the disability begins plus years of “assumed service” to age 65 are combined for the total years of creditable service. Example: You become disabled at age 50, and you have 20 years of creditable service. Fifteen additional years of assumed service will be added from ages 50-65. This would give you 35 years of creditable service.

    Return to Work

    LTDI: After a benefit is approved, you may return to employment with an earnings limitation of $11,128. This amount changes annually. If you return to work for a WRS employer and are eligible to be covered under WRS again, you will be covered as an active, participating employee. You will not be eligible for the retirement supplemental contributions for any month in which you earn creditable WRS service.

    WRS Disability: After a benefit is approved, you may return to employment with an earnings limitation of $11,128. This amount changes annually.

    Survivor Benefits

    LTDI: If you are on a leave of absence, you are treated as an active employee for WRS death benefit purposes, and your beneficiary would receive the full amount of your WRS account. If you have terminated employment, you are considered inactive, and your survivor would receive half of the money in your WRS account.

    WRS Disability: Any death benefits payable will be based on the annuity option selected at the time you apply.

    For more information on WRS disability, visit http://etf.wi.gov/publications/et5102.htm. For more information on LTDI, visit http://etf.wi.gov/publications/et5314.htm.