Milwaukee ERS Retirement Options: Survivor Choice Is Permanent

Updated October 7, 2026. Quick answer: A City of Milwaukee General City employee retiring from the Employes’ Retirement System chooses between a full allowance with no survivor and survivorship Options 2, 3 and 4, which cut the allowance to continue 100%, 50% or a chosen share to a survivor. After retirement the selection and the named survivor cannot change. A refund of contributions after at least four years waives future pension rights, and for members enrolled before 2014 one handbook says eight years. The documents read describe no DROP and no service credit purchase.

What this page covers and what it does not

This page works from documents published by the system itself, the “Employes’ Retirement System (ERS) of the City of Milwaukee”, whose benefits are set under “Chapter 36 of the City Charter”. The documents are two member handbooks (members enrolled on or after January 1, 2014, and earlier members), two brochures and three pages of the system’s website. The official spelling is Employes, without the second e.

The two member groups run on different rules, and every figure below belongs to the group named with it. For unreduced retirement the 2014 handbook lists “Minimum service retirement eligibility age of age 65” or “Age 60 with 30 years of creditable service”. The earlier handbook lists “Minimum service retirement eligibility age of age 60” or “Age 55 with 30 years of creditable service”. This page covers General City employees; the Fire and Police sections were not worked through. ERS is also separate from the state plan: the handbook says “You cannot be enrolled in both the State of Wisconsin pension system and the ERS for the same job”. State plan questions are on Wisconsin WRS retirement decisions.

What the formula pays

The 2014 handbook uses “Percentage multiplier: 1.6% times years of creditable service”, with final average salary defined as “generally, the sum of your three highest years of pensionable earnings, divided by three”. The earlier handbook uses “Percentage multiplier: 2.0% times years of creditable service”, counting “your total period of City employment, up to 35 years”.

A computed example from the handbooks’ own inputs (30 years of service and a $40,000 final average salary): under the 2014 handbook, 30 years times 1.6% times $40,000, divided by 12, is a computed $1,600 a month, matching the printed “$19,200 / 12 = $1,600 Monthly Service Retirement Allowance”. Under the earlier handbook, 30 years times 2.0% times $40,000, divided by 12, is a computed $2,000 a month, matching the printed “$24,000 / 12 = $2,000 Monthly Service Retirement Allowance”. A very small benefit is paid differently: “If your calculated monthly allowance is less than $100, your total benefit will be paid in a single lump sum payment”.

The election: four payment options

At retirement a member picks one of four options. Under Option 1, “you will receive for your lifetime your full monthly retirement allowance, as calculated under the appropriate formula”, and “After your death, these monthly payments will stop”. Under the survivorship options, “your maximum retirement allowance will be reduced in order to guarantee that, after you die, a monthly allowance continues to your named survivor”.

Option 2 carries an IRS limit: “Under IRS regulations, you cannot elect this option if your named survivor is not your spouse and that person is more than 10 years younger than you”. Option 4 lets a member “choose a different percentage of your reduced monthly allowance to be paid to a single survivor or multiple survivors”, but “your request under Option 4 is subject to Board approval”. No option factors are published in the handbooks, so the reduction comes from the ERS estimate. See also single-life versus joint-and-survivor pension.

What each option does for a survivor, with computed examples

The only reduction ceiling the handbook states is for a spouse under Option 3: “If your named survivor is your spouse, the election of Option 3 cannot reduce your Maximum Retirement Allowance by more than 5%”. A computed example from an assumed $2,000 maximum monthly allowance, not an ERS figure: a spouse survivor under Option 3 means a member allowance of at least 95% of $2,000, a computed $1,900, and the survivor’s half of that is at least a computed $950 a month.

Age enters through the option factor, which the handbook says is “based on your (and your youngest survivor’s) age as of the birthday closest to your retirement date”. Where no survivor option is in force, or the survivor dies first, the handbook says “your named beneficiary or your estate will receive the difference between the total allowance already paid and your accumulated contributions, or a final prorated benefit, whichever is greater”.

What is irrevocable, and the protective option

The window closes at retirement. The 2014 handbook says that if a member elects a survivorship at the counseling session, “you can change your selection up to the day before your actual retirement date”, but that “you cannot change your selection or your named survivor(s) after you actually retire, even if your named survivor(s) predecease you”. On timing, the handbook says “you must elect your payment option at least 30 days prior to your retirement date”.

Before retirement there is a limited protective choice, the Protective Survivorship Option (PSO). If a member dies after becoming eligible but before retiring, “your named survivor will receive the same benefit he or she would have received if you had elected a survivorship option, retired and later died”, and the election window is narrow: “Generally, you can elect a PSO only during the six-month period prior to the date you first become eligible for retirement”.

The two handbooks disagree on whether a PSO can be revisited. The 2014 handbook says “If you elect a PSO, the retirement option can be changed only in the event of marriage, divorce, or retirement”, while the earlier handbook says “If you elect a PSO, the retirement option selected is irrevocable”. The pages read do not reconcile the two, so confirm the rule with the ERS before electing a PSO.

Deadlines and early retirement

On the application, the 2014 handbook says “You must complete your retirement application at least 30 days, and no more than 90 days, prior to your planned retirement effective date”. The retirement process brochure says “You should call the ERS office about six months before you plan to retire”. Because the selection is fixed at retirement, the estimate for each option is the document to compare beforehand.

Early retirement is a reduced pension starting at 55 with 15 years of service. The earlier handbook says “The closer you are to age 60 when you take early retirement, the smaller the reduction will be”, and prints factors of 0.61 at age 55, 0.67 at 56, 0.74 at 57, 0.82 at 58 and 0.90 at 59. The 2015 separation brochure prints 60%, 66%, 73%, 81% and 90% for the same ages. The earlier handbook’s example text says “The General City early retirement factor for age 55 is 0.6081” while its arithmetic uses 0.60.

A computed example from the handbook’s inputs (20 years of service, a $30,000 final average salary, age 55): 20 years times 2.0% times $30,000 is a $12,000 annual allowance, times 0.60, divided by 12, is a computed $600 a month, matching the printed “$12,000 x 0.60 Reduction Factor = $7,200.00 Annual Early Retirement Allowance”. The brochure prints the same example but writes “Your unreduced age 60 benefit is $12,000 a year (30 years x 2% x $30,000 average pensionable salary)” for a 20-year member, so its text and its arithmetic disagree.

The GPS lump sum bonus (members enrolled before 2014)

The earlier handbook describes one lump sum tied to retirement. “If you were an ERS member on January 1, 2000 who consented to the Global Pension Settlement, you are entitled to receive the GPS 5% Lump Sum Bonus”. The formula is “5% x Maximum Retirement Allowance x Factor”. Eligibility depends on enrollment and consent: “Members hired on or after June 28, 2000 are automatically enrolled as consenting members to the GPS”.

A computed example from the handbook’s own inputs: 5% times a $21,000 maximum annual allowance times 9.8147 (the handbook’s factor for age 60) is a computed $10,305.44, matching the printed “5% x $21,000 x 9.8147 = $10,305.44 Lump Sum Bonus”.

The handbook says “At retirement, you can elect to receive your 5% Lump Sum Bonus through either a cash payment (minus mandatory federal income tax withholding), a direct rollover to an eligible tax-deferred investment vehicle (such as a 457 plan, individual retirement account IRA or other qualified employer plan), or a combination of these two options”. The retirement process brochure sets a “thirty (30) days” return window for the election form. Tax treatment of a rollover is on 20% withholding on a pension lump sum.

Pension Advance and other lump sums

For retirement before Social Security, the earlier handbook describes a Pension Advance: “Under the Pension Advance, your ERS monthly retirement allowance will be temporarily increased until you reach age 62”, but “At age 62, your allowance will be permanently reduced to repay the ERS the total amount of your Pension Advance, plus interest”.

A rollover is limited to a lump sum: “The option to rollover your benefit is only available if you receive your benefit as a one-time lump sum amount, and not a monthly annuity”. The pages read describe no DROP and no partial lump sum retirement option. The general trade is on pension lump sum versus monthly annuity break-even.

Leaving before retirement: vesting and deferral

Vesting comes at four years: the earlier handbook says “you earn vesting rights after you complete four years of creditable service”. A member who leaves with four years can defer: in the 2014 handbook, “If you have at least four years of service when you leave, you can receive a deferred monthly pension beginning at age 65”. Under the 2015 brochure for earlier members, a member with four years or more who returns to work finds that “you may continue your prior membership regardless of when you return”.

For a member who left involuntarily and is appealing the dismissal, the 2015 brochure warns: “do not attempt to withdraw your contributions as you will be required to relinquish all current rights and benefits in the plan by doing so”.

Refund or withdrawal of contributions

For the 2014 group, “member contributions are made to the ERS in an amount equal to 4% of your pensionable earnings”. For earlier members, “contributions are made to the Employes’ Retirement System in an amount equal to 5.5% of your pensionable earnings”.

Who can withdraw is where the documents conflict. The website’s withdrawal page says “General City employees need at least 4 years, Police and Firefighters need at least 10 years”, and the 2014 handbook (for its own group) and the 2015 brochure (for earlier members) also use four years. The earlier handbook says a member who separates with at least eight years of creditable service is told: “you may be eligible to withdraw your accumulated contributions plus any interest credited to your account”. Its benefits summary lists the same eight-year threshold. The pages read do not reconcile these for members enrolled before 2014, so confirm the threshold with the ERS.

The 2014 handbook offers a “one-time withdrawal of either your accumulated contributions or an actuarial lump sum”, noting “whichever is bigger”. It also says that “any interest credited after your year of separation is reduced by one half”. The 2015 brochure for earlier members says a withdrawing member will receive “only one half of the interest credited to your account after the date of separation”, worded by date where the 2014 handbook says year. For a member with under four years, “your 4% contributions will be refunded to you (with interest) after five years of separation, or by request if you waive your right to all future benefits associated with that enrollment period”.

What a withdrawal gives up is stated consistently. The 2014 handbook says “If you withdraw these contributions, you forfeit your right to a monthly pension benefit”, and the website says “withdrawing your accumulated contributions means that you are waiving all rights to future pension benefits, including Global Pension Settlement (GPS) Benefits”. The earlier handbook adds “If you withdraw these contributions, you forfeit your right to a monthly pension benefit, as well as your right to GPS benefits”. The alternative is to leave the money, in which case the handbook says “you can be reinstated in the ERS until you reach retirement age”. On a later return to work after a withdrawal, it says “you may become eligible to start accumulating contributions and service towards a second benefit”. The framework for the choice is on pension refund versus leaving it.

How a refund is requested and paid

The website’s refund page lists the choices: “You can request a cash refund, you can request that your funds be rolled over to an IRA or other eligible employer plan”, “or a combination of both”. It adds that “The refund application consists of a Refund Application form and a Waiver of Membership Rights form”, and that “The refund process may take up to 90 days to complete”. The earlier handbook says “The cash withdrawal process may take up to 90 days”. The page also cautions: “Cash refunds may have tax implications”.

A computed example from an assumed $10,000 taxable refund paid as a check, not an ERS figure: the 20% federal withholding rate the IRS describes below is a computed $2,000, leaving a computed $8,000 before any later tax. Spousal consent for a refund is not addressed in the pages read.

Service credit and cost-of-living adjustments

The handbooks describe service credit granted for military service. For military service in the 2014 handbook, “You can receive one year of creditable service for every three years of active duty service (up to three years of additional creditable service)”. The pages read describe no purchase of service credit, so the pension buyback calculator has no ERS price to take from these documents.

For the 2014 group, “you are guaranteed to receive an increase of 2% on the fifth anniversary of your retirement and on each anniversary that follows”. A computed example from the handbook’s assumed $1,500 initial monthly allowance: a 2% increase gives a computed $1,530.00 a month, matching the handbook’s table.

The earlier handbook starts earlier for eligible members: “you are guaranteed to receive an increase of 1.5% on the second, third and fourth anniversaries of your retirement”, and then “you will receive a 2% increase”.

Tax on the pension itself

The 2014 handbook states that “The ERS staff does not provide tax advice”. Wisconsin’s treatment of public pensions is on Wisconsin retirement taxes and does Wisconsin tax pensions.

What the IRS adds on tax

A refund or lump sum from a public pension is a distribution, so the IRS rules apply on top of Milwaukee ERS’s own. On withholding, the IRS says that a taxable eligible rollover distribution paid to you “is subject to mandatory income tax withholding (generally at a rate of 20%), even if you intend to roll it over later”, and that if you roll it over yourself “you’ll have to add funds from other sources equal to the amount withheld”. The ERS refund page notes that a refund can be paid in cash, rolled over, or both. The rollover clock, if the money is paid to you: “you have 60 days from the date you receive it to roll it over to another eligible retirement plan”.

On early distributions the IRS says “the law imposes a 10% additional tax on certain early distributions from certain retirement plans”. Its list of exceptions includes “Distributions made to you after you separated from service with your employer after attainment of age 55” and “Distributions made to a qualified public safety employee from a governmental plan” if the employee separated from service during or after the year they attained age 50 or 25 years of service under the plan, whichever is earlier. Whether an exception fits a particular refund depends on your own plan and facts, so confirm it with a tax preparer before you take one.

What this page could not settle

• The 2014 handbook prints no early retirement reduction factors in the text read, and the pages read give no option factors, so the reduction for Options 2 and 4 cannot be computed from the documents; the ERS estimate is the source.
• The pages read conflict on the service needed to withdraw contributions for members enrolled before 2014: eight years in the 2017 handbook, four years in the 2015 brochure and on the website.
• The pages read conflict on whether a PSO election can be changed: irrevocable in the earlier handbook, changeable on marriage, divorce or retirement in the 2014 handbook.
• The early retirement factors for age 55 appear as 0.61, 0.6081, 0.60 and 60% across the documents, and the brochure’s example text says 30 years for a 20-year member.
• The pages read do not describe a DROP, a partial lump sum retirement option, or a purchase of service credit.
• The pages read do not address spousal consent for a refund or for a survivor option.
• The Fire and Police sections, the city ordinance text and the retirement estimate calculators were not worked through.
• The website pages and the retirement process brochure carry no edition date.

Common mistakes

• Treating a survivorship option as changeable after retirement; the handbooks say neither the option nor the named survivor can change once retired.
• Withdrawing contributions without weighing the pension; the documents say a withdrawal waives all rights to future benefits.
• Assuming the four-year withdrawal rule applies to every member; the earlier handbook says eight years.
• Expecting a full-amount refund check; a taxable refund paid to the member is subject to 20% mandatory federal withholding.
• Missing the 30 to 90 day application window or the 30 day option election rule.

Related on this site: Wisconsin retirement taxes, does Wisconsin tax pensions, Wisconsin WRS retirement decisions, pension refund versus leaving it, single-life versus joint-and-survivor pension, 20% withholding on a pension lump sum, pension lump sum versus monthly annuity break-even, survivor benefit with a government pension and public pension retirement decisions by system.

Sources

• Employes’ Retirement System of the City of Milwaukee, ERS Member Handbook, Enrolled On or After January 1, 2014 (revised April 2021): https://www.cmers.com/CMERS/Handbook–Brochures/ERSHandbook-Post2014-v5-ForWeb.pdf
• Employes’ Retirement System of the City of Milwaukee, ERS Member Handbook, members enrolled before 2014 (revised April 2010, minor revision 2017): https://www.cmers.com/CMERS/Handbook–Brochures/10MemberHandbook2017a.pdf
• Employes’ Retirement System of the City of Milwaukee, Brochure #12 Separation Retirement Benefits for General City Members Enrolled on or before 12/31/2013 (revised 3/4/2015): https://www.cmers.com/CMERS/Brochures/12SeperationRetirementBenefitsforGeneralCityMembers.pdf
• Employes’ Retirement System of the City of Milwaukee, Brochure #1 The Retirement Process for City of Milwaukee Employees (undated): https://www.cmers.com/CMERS/Brochures/1RetirementProcessforMKEEmploy.pdf
• Employes’ Retirement System of the City of Milwaukee, Refund Application Process web page (undated, read 2026-10-07): https://www.cmers.com/CMERS_RD/Employee-Participants/Active-Members/Retirement-Process/Refund-Application-Process.htm
• Employes’ Retirement System of the City of Milwaukee, Withdrawal Rights web page (undated, read 2026-10-07): https://www.cmers.com/CMERS_RD/Employee-Participants/Active-Members/Retirement-Process/Withdrawal-Rights.htm
• Employes’ Retirement System of the City of Milwaukee, Survivor web page (undated, read 2026-10-07): https://www.cmers.com/CMERS_RD/Employee-Participants/Active-Members/Retirement-Process/Survivor.htm
• IRS, Topic no. 413, Rollovers from retirement plans (irs.gov): https://www.irs.gov/taxtopics/tc413
• IRS, Topic no. 558, Additional tax on early distributions from retirement plans other than IRAs (irs.gov): https://www.irs.gov/taxtopics/tc558

Sources: the primary documents linked above, read on October 7, 2026. General information from each system’s own published materials, not legal, tax or financial advice. Your own member statement and the system’s current rules decide your benefit, and a pension counsellor at the system or a fee-only adviser is the right place to confirm anything consequential.