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STATEEMPLOYEES’RETIREMENT
SYSTEMOF ILLINOIS
SEPTEMBER 1, 2001
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Your Rights&Responsibilities
H A N D B O O K
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94-9
255
ST
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This handbook, providedby the State Employees’Retirement System (SERS),presents you with a gen-eral outline of your ben-efits. It explains SERSeligibility requirements,service & contributions,and benefits.
This informationapplies to all active stateemployees. If you termi-nate employment with theState, your benefits will bedetermined by the law ineffect on your last day ofemployment.
Since each stateemployee has a personalinterest in the financesand benefits of SERS, youshould become familiarwith your benefits. Readthis booklet carefully andkeep it for reference.
This handbook is intendedto serve as a supplement tothe Annual Benefit State-ment, which includes per-sonal benefit informationabout you.
If you have questionsabout your Annual BenefitStatement or this hand-book, call us at any of thephone numbers listed onpage 2.
TABLE OF CONTENTS
1. General Information ................. 1
Addresses & Phone Numbers ....... 2
Benefit Claims ............................... 5
Social Security............................... 5
Group Insurance ........................... 5
Seminars/Workshops .................... 6
2. SERS Membership...................... 7
Eligibility ....................................... 8
Contributions ................................ 8
Credited Service .......................... 10
3. SERS Benefits ............................ 15
Retirement Benefits(Regular Formula) ....................... 16
Retirement Benefits(Alternative Formula) ................. 21
Disability Benefits ....................... 24
Death Benefits ............................. 32
Leaving SERS ............................... 36
Taxes ............................................ 37
4. Appendix ..................................39Glossary ....................................... 41
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GENERALINFORMATION1.
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IMPORTANT ADDRESSES& PHONE NUMBERS
SPRINGFIELD2101 S. Veterans Parkway, P. O. Box 19255Springfield, IL 62794-9255217-785-7444 – Fax: 217-785-7019Deaths: 217-785-7366Disabilities: 217-785-7318Pensions: 217-785-7343Service: 217-785-7167Refunds: 217-785-7188Accounting: 217-785-7191
CHICAGOState of Illinois Building160 North LaSalle Street, Suite N725Chicago, Illinois 60601312-814-5853 Fax: 312-814-5805
TDDA Telecommunications Device for the Deaf(TDD) is available for members and annu-itants who are hearing or speech-impaired.You may access this service at 217-785-7218.
INTERNETSERS is on the Internet. We maintain a homepage which has a bulletin board to keepmembers informed of legislation, workshopschedules, and other information affectingyou.
You cancontact usMondaythru Fridayfrom 8 a.m.until 4:30 p.m.
The SERS web site also contains a sum-mary of our annual financial report, and asummary of the Illinois State Board of Invest-ment annual financial report.
A link to other state agencies is alsoprovided. You can view our Internet web siteat: http://www.state.il.us/srs. Be sure toinclude your Social Security number on allinquiries.
RECIPROCAL SYSTEMSIn addition to SERS, the following systemsparticipate in the Retirement Systems’Reciprocal Act:
County Employees' Annuity & BenefitFund of Cook County33 North Dearborn Street, Room 1100Chicago, IL 60602-3103312-603-1200 Fax 312-603-9760
Forest Preserve District Employees'Annuity & Benefit Fund of Cook County33 North Dearborn Street, Room 1100Chicago, IL 60602-3103312-603-1200 Fax 312-603-9760
General Assembly Retirement System2101 South Veterans ParkwayP. O. Box 19255Springfield, IL 62794-9255217-782-8500 Fax 217-785-7019
Illinois Municipal Retirement Fund2211 S. York Road, Suite 500Oak Brook, IL 60523-23741-800-275-4673 or 630-368-1010Fax 630-368-5399
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You may e-mailus with anyquestions and/orcomments at:[email protected]
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Judges' Retirement System2101 South Veterans ParkwayP. O. Box 19255Springfield, IL 62794-9255217-782-8500 Fax 217-785-7019
Laborers' Annuity & BenefitFund of Chicago221 North LaSalle StreetRoom 748Chicago, IL 60601312-236-2065 Fax 312-236-0574
Metropolitan Water ReclamationDistrict Retirement Fund111 East Erie, Suite 330Chicago, IL 60611-2898312-751-3222 Fax 312-751-5699
Municipal Employees' Annuity& Benefit Fund of Chicago221 North LaSalle StreetRoom 500Chicago, IL 60601312-236-4700 Fax 312-236-2383
Park Employees' Annuity &Benefit Fund of Chicago55 East Monroe, Suite 2880Chicago, IL 60603312-553-9265 Fax 312-553-9114
Public School Teachers' Pension& Retirement Fund of Chicago55 West Wacker Drive, Suite 1300Chicago, IL 60601312-641-4464 Fax 312-641-7184
State Teachers' RetirementSystem2815 West Washington StreetP. O. Box 19253Springfield, IL 62794-9253800-877-7896 Fax 217-787-2269Lisle Office: 630-505-0071Fax 630-505-9607
State Universities RetirementSystem1901 Fox Drive, P. O. Box 2710Champaign, IL 61825-27101-800-275-7877 Fax 217-378-9800
ANNUAL BENEFIT STATEMENTIn August, you will receive your annualbenefit statement. This statement includesinformation regarding your beneficiary(ies),credited service, contributions, retirement,disability, and death benefits.
BENEFIT CLAIMSIn order to receive any benefit, you mustapply for it and provide proof of age. Allbenefit claims should be made to the ClaimsDivision. Your agency’s Retirement Coordina-tor can assist you in filing a benefit claim.
After you begin receiving benefits, youshould notify SERS if you change your name,address, or if you wish to change yourbeneficiary(ies) for the lump sum deathbenefit.
All SERS records are maintained accordingto your Social Security number. Make sureyour Social Security number is correct whenfiling a claim.
SOCIAL SECURITYAll Social Security benefit claims must bemade directly to the Social Security Adminis-tration. You will need to provide your SocialSecurity number and proof of age.
GROUP INSURANCEUpon approval of a SERS benefit claim,participation in the State Employees' GroupInsurance Program continues as described inyour CMS group insurance booklet.
BENEFITS
All benefit claimsand appeals arereviewed by theSERS ExecutiveCommittee of theBoard of Trustees.
If your claim isdenied, or youquestion thepayment of anybenefit, you oryour represent-ative may file awritten appeal orrequest a hearingbefore theExecutiveCommittee.
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SEMINARSBenefit seminars are conducted throughoutthe state by request. The benefit seminarsexplain SERS benefits in detail. If you wishto attend a benefit seminar, contact youragency’s Retirement Coordinator, or call SERSat 217-785-6979.
PRE-RETIREMENT WORKSHOPSPre-retirement workshops for all state employ-ees and their spouses are offered throughoutthe state.
Introduction to Your Future (IYF) is gearedto employees under age 45. The main empha-sis of this workshop is money management,consumer debt, and investing for the future.
Education for Tomorrow's Choices (ETC) isa two-day workshop for employees 5-15 yearsfrom retirement. ETC stresses long-rangepreretirement planning.
Countdown to Retirement (CDR) reviewsfinancial planning for retirement and explainsthe transition to retirement. CDR is foremployees within 3 years of retirement.
SEMINARS/WORKSHOPS
Topics covered inall workshopsinclude:
• FinancialPlanning
• DeferredCompensation
• Entitlements
• Social Security
• GroupInsurance
• Estate Planning
• Health & Fitness
• Leisure Time
To enroll in aworkshop, contactyour agency’sRetirement Coor-dinator. If youhave questionsabout any of theworkshops, call usat 217-785-6979.
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SERSMEMBERSHIP2.
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ELIGIBILITYAfter serving a six-month qualifying period,you become a member of SERS and manda-tory contributions are automatically creditedto your account. If your position is notcovered by Social Security, membershipbegins immediately.
CONTRIBUTIONSContributions are based on a percentage oftotal compensation, including overtime pay.
EMPLOYER PICK-UPMost state employees have all or a portion oftheir contributions "picked-up" or paid, bythe State of Illinois.
Generally, if a member is covered bySocial Security, there are no employee payrolldeductions for contributions to SERS. Insome cases, employees have a portion of theircontributions picked-up, and contribute alesser amount through payroll deductions.
The maximum employee contributionshould be 4% of gross wages in agencies thatparticipate in the employer pick-up pro-gram. All contributions are credited to theindividual member's account, regardless ofthe source.
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COORDINATIONWITH SOCIALSECURITYWith certainexceptions, allmembers whojoin SERS mustcontribute toSocial Security.
ELIGIBILITY & CONTRIBUTIONS Regular formula employees contributing8% of their gross salaries have 4% picked-up.For alternative formula employees contribut-ing at 9.5% of their gross salaries, the pick-uprate is 5.5%.
When a member receives a lump sumrefund, the employer pick-up contributionsare included. The employer pick-up is alsoincluded in the calculation of any deathbenefit involving member contributions.
EMPLOYEE CONTRIBUTIONS
REGULAR RETIREMENT FORMULASurvivors’
Pension Benefit* TotalMembers with Social Security 3.5% + .5% = 4.0%Members without Social Security 7.0% + 1.0% = 8.0%
* If you have no eligible survivors when you retire, you will receive a refundof the survivors' portion of your contributions.
ALTERNATIVE RETIREMENT FORMULA** Total***With Social Security 5.0% + .5% = 5.5%Without Social Security 8.5% + 1.0% = 9.5%
** If you do not qualify for the alternative formula when you retire, youwill receive a refund of the alternative formula contributions in excess of theregular formula contributions.
*** Starting January 1, 2002, all alternative formula employees willcontribute an additional 1% of their salary to pay for enhanced retirementbenefits. The additional employee contribution will increase by another 1%on January 1, 2003, and by another 1% on January 1, 2004.
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CREDITED SERVICECredited service includes membershipservice and military service.
Membership service includes full and partialmonths of state employment after January 1,1944, when contributions were credited toyour account.
Military service includes active duty in theUnited States Army, Navy, Air Force, Marines,or Coast Guard, or any of the women'sauxiliaries.
SERS grants two types of military servicecredit:
1. Free credit with no contributions if ALLof the following conditions are met:
• The member was a state employee within6 months immediately before entering mili-tary service.• The member returns as a state employeewithin 15 months after honorable discharge.• The member establishes creditable stateservice immediately before and after militaryservice.
2. Paid credit, with contributions.If an employee does not qualify for freemilitary service credit, (s)he may purchase upto two years of military credit by paying therequired employee and employer contribu-tions, plus interest, provided:• The employee was not dishonorablydischarged
SERVICE
If the memberreturned to stateemployment afterJuly 1, 1963, thetotal militaryservice credit maynot exceed 5years.
• The service credit purchased does notexceed 5 years, when added to the militaryservice granted under Item 1.
Interest is calculated from the date theemployee last became a member of SERSor November 19, 1991, whichever is later.
LEAVES OF ABSENCEMembers may establish service credit forperiods of less than one year spent on anauthorized leave of absence, provided theperiod of leave began on or after January 1,1982.
A member may also establish servicecredit for more than one authorized leave ofabsence. The total period of service estab-lished can then exceed one year.
MAKING PAYMENTS FOR PERIODS INWHICH YOU DID NOT CONTRIBUTEIf you wish to establish credited service forperiods of employment when you did notcontribute, you may make a retroactivepayment of the contributions and interest,either in a lump sum or installment pay-ments.
These periods of employment wouldinclude:
• Qualifying periods are the 12 months ofemployment before becoming a memberprior to January 1, 1972 or 6 months for aperson entering state service on or afterJanuary 1, 1984.
• Short periods are intermittent periods ofservice not exceeding a qualifying periodwhen no retirement deductions were taken.
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Before anymilitary credit canbe granted, or anycost determined,SERS must receivea copy of formDD-214, or theappropriateseparation ordischarge papersverifying activeduty.
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Contact theService andRefundsDivision ofSERS todetermine ifyou areeligible toestablishadditional
service credit. You will be notified in writingof any amount due, and the credit that maybe established.
TAX-DEFERRING OPTIONALSERVICE PURCHASESSERS allows members to tax-defer optionalservice credit purchases through payrolldeduction. This lets members defer taxationuntil they retire.
The tax-deferred withholding is madethrough an irrevocable payroll agreement forthe total service credit purchase amount.
Starting January 1, 2002, SERS membersmay transfer funds from their DeferredCompensation account to purchase permis-sive service credit or repay a refund.
Service credit is granted only after arefund or service purchase is paid in full. Ifthe member dies, a partial service credit maybe granted based on contributions and inter-est paid on the date of death.
In the case of retirement, termination orabsences of more than one year, the membercan choose to make an after-tax lump sum
payment for the balance due, or the contrib-uted amount can be refunded with taxeswithheld and reported as income in thatcalender year.
Any after-tax lump sum payment must bemade no later than 30 days after the memberhas been notified by SERS of the amount due.
LUMP SUM SALARY PAYMENTSMost employees will receive a lump sumpayment at retirement for unused vacationand sick days earned between January 1, 1984and December 31, 1997.
This lump sum payment can be used topurchase any tax-deferred optional servicecredit. This election must be completedbefore the member leaves state service.
ROLLOVERSYou may rollover money from another quali-fied pension plan, or an Individual RetirementAccount (IRA) containing money from aqualified total distribution to purchaseoptional service credit. But you cannotrollover money from a regular IRA, 403b or457 until January 1, 2002.
Also starting January 1, 2002, membersmay transfer money while still employedfrom their Deferred Compensation account(457b) or tax-sheltered annuity (403b) topurchase permissive service credit or repay arefund. To do so, you must obtain andcomplete a Rollover Certification from theService & Refunds Division.
HOW CREDITED SERVICE IS COMPUTED
Monthly & Daily Hourly MonthlyEmployees Employees Credit
15 or more days 75 hours or more 18 - 14 days 38 - 74 hours ½less than 8 days less than 38 hours ¼
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SERSBENEFITS3.
IF YOUR CONTRIBUTIONSWERE REFUNDEDIf you terminated state employment, receiveda refund of your contributions and were laterrehired, you may reestablish your creditedservice by repaying the refund with interestafter completing at least two additional yearsof credited service with SERS, or any of theIllinois Public Retirement Systems that par-ticipates in the Retirement Systems’ Recipro-cal Act. Contributions must be repaid beforeretirement in order for your service to becredited.
SERVICE UNDER OTHER ILLINOISPUBLIC RETIREMENT SYSTEMSIf you have established at least one year ofcredited service under an Illinois PublicRetirement System, your service under thatsystem may be used when determining youreligibility for a benefit from SERS.
The benefit amount is based on the ben-efit formula and service credit in each system,and is paid to the retiree by each system.Annual pension benefit increases are made inaccordance with each system’s statutes.
Under the Reciprocal Act, the highest finalaverage compensation is used for computingbenefits under all systems. However, totalbenefits cannot be higher than it would havebeen if all service were in one system.
If benefits are being paid under reciproc-ity, and the member has been granted servicecredit by more than one system for the sameperiod of time, each system will reduce itscredit proportionately.
In general, therules of eachretirement systemapply in deter-mining eligibilityfor a benefit.
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REGULAR RETIREMENTFORMULA
The regular retirement formula applies to allmembers not covered by the alternativeformula (see page 13 for alternative formulapositions).
ELIGIBILITYYou may retire at:
• Age 60, with 8 years of credited service.
• Any age, when your age (years & wholemonths) plus years of service credit(years & whole months) equal 85 years(1020 months) (Rule of 85).
• Between ages 55-60 with 25-30 years ofcredited service (reduced 1/2 of 1% foreach month under age 60).
You must apply for benefits in order toreceive them. Contact your agency's Retire-ment Coordinator approximately 30 daysbefore retiring so they can begin the separa-tion process. Your pension will start on thefirst day of the month following withdrawalfrom service.
YOUR RETIREMENT BENEFITYour retirement benefit is based on finalaverage compensation and credited service.Examples for both covered and non-coveredmembers is on the next page. The benefitmaximum is 75% of final average compensa-tion.
PAID SICK & VACATION TIMEIf you receive a lump-sum payment for sickleave, vacation, or personal days when youretire, you may establish credit for this timeto meet service eligibility requirements and
RETIREMENT BENEFITS
Final averagecompensation is anaverage of the 48highest consecutivemonths of earningswithin the last 10years of service.
REGULAR RETIREMENT FORMULA
Covered: 1.67% for each year of serviceNon-Covered: 2.2% for each year of service
Covered Example:The member is covered under Social Security, is 60 years old, has 30years of credited service, and a final average compensation of $3,600per month.
30 years x 1.67% = 50.1% • 50.1% x $3,600 FAC = $1803.60 per month,or $21,643.20 annually.
Non-Covered Example:The employee is not covered by Social Security, is 60 years old, has 30years of credited service, and a final average compensation of $3,800per month.
30 years x 2.2% = 66% • 66% x $3,800 FAC = $2,508.00 per month, or$30,096.00 annually.
REDUCED RETIREMENT BENEFITA regular formula member can retire betweenthe ages of 55-60 with 25-30 years of servicewith a pension reduced 1/2 of 1% for eachmonth under age 60.
UNUSED SICK LEAVEUnused and unpaid sick leave can be used tomeet service eligibility requirements andincrease your retirement benefit. This addi-tional service credit does not affect finalaverage compensation.
21 days of sick &vacation leaveequals one monthof service credit.
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increase your retirement benefit by makingthe required contributions on a pre or post-tax basis.
ANNUAL PENSION INCREASESIf you retire under the Rule of 85, you areeligible for your first 3% increase on January1 following your first full year of retirement,even if you are not age 60.
If you retire at age 60 or older, you willreceive a 3% pension increase every year onJanuary 1, following your first full year ofretirement.
If you retire before age 60 with a reducedretirement benefit, you will receive a 3%pension increase every January 1 after youturn age 60 and have been retired at least onefull year. These pension increases are notlimited by the 75% maximum.
TYPES OF BENEFIT PAYMENT
NORMAL FORM OF PAYMENTYour retirement benefit is paid monthly foryour lifetime, but you can choose one of twooptional forms of payment.
OPTIONAL FORMS OF PAYMENT
Level Income: This option allows memberswho have paid into SERS and Social Securityto receive their benefits at a level amountthroughout their retirement years by combin-ing their Social Security and SERS benefit.
The level income option can be helpfulwhen a member retires before the age when(s)he qualifies for a Social Security benefit.
Reversionary Annu-ity: This optionreduces yourmonthly retirementbenefit to provide alifetime income foryour designateddependent after yourdeath.
The monthlyamount paid to yourdependent after yourdeath, may not beless than $10, andmay not exceed theamount of yourreduced benefit.This benefit is inaddition to thesurvivors’ benefit.
UNDER THE LEVEL INCOME OPTION
A member retires at age 60 with a monthlypension of $1,800 from SERS. The member isalso eligible for a monthly Social Securitybenefit of $1,000 at age 66.
At Age 60The member’s monthly SERS benefit would be$2,323.50, and increase 3% each year to$2,774.38 per month by age 66.
At Age 66The member’s monthly SERS benefit would bereduced to $1,774.38, because the Social Secu-rity benefit of $1,000 per month would begin.The member’s combined monthly benefitwould still total $2,774.38.
RETURNING TO EMPLOYMENTAFTER RETIRING
If you return to state employment on acontractual basis, or for the private sector,your SERS benefit will not be affected.
If you return to state employment afterretirement, you should notify the SERSClaims Division immediately.
Nonpermanent ReemploymentIf your employment with the state will lastless than 75 working days during a calendaryear (any part of a day is counted as a fullday), you will continue to receive yourpension payment.
During your employment, you make nocontributions to SERS, but you must contrib-ute to Social Security.
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If you work more than 75 working days,your pension benefit will end on the 76thday, and you will resume contributing toSERS.
Permanent ReemploymentIf you are reemployed by the state on apermanent basis, you will not be eligible forpension benefits while working. You willmake contributions to both SERS and SocialSecurity during your employment, and earnadditional credited service.
After you again retire fromstate employment, you mustreapply for a pension. Your newpension amount will be thetotal amount before reemploy-ment, plus the amount earnedduring your reemployment.
If you re-enter state servicewithin three years after the dateyou retired, you may qualify tohave your new retirementbenefit computed as thoughyou never retired. To qualify,you must repay all of the moneyyou received, plus interest.
This repayment may be madein a lump sum, by installmentspaid within five years after your
reemployment, or before your next retire-ment date, whichever is first.
If you choose not to complete installmentpayments before retirement or the end of thefive-year period, your installment paymentswill be refunded and your pension will not berecomputed.
ALTERNATIVE RETIREMENTFORMULAThe Alternative Formula applies to membersin certain positions with 20 years of alterna-tive service. Members eligible for the alterna-tive formula may retire at age 50 with 25years of service, or at age 55 with 20 years ofservice.
FINAL AVERAGE COMPENSATIONFor an alternative formula employee, finalaverage compensation is the rate of pay on thelast day of employ-ment, or the last48 months ofaverage compensa-tion, whichever isgreater. Thebenefit maximumis 80% of finalaverage compensa-tion.
ANNUALPENSIONINCREASESAlternative For-mula retireesreceive their first3% pensionincrease on Janu-ary 1 following thefirst full year of
ALTERNATIVE RETIREMENT FORMULA
Covered: 2.5% for each year of service.Non-Covered: 3.0% for each year of service
Alternative Formula Example #1: The employeeis not covered by Social Security, is 50 years old,has 26 years, 8 months (320 months) of creditedservice, and a final average compensation of$5,000 per month.
26 Years, 8 months x 3% = 80%
80% x $5,000 = $4,000 per month, or $48,000annually
Example #2: The employee is covered by SocialSecurity, is 50 years old, has 32 years (384 months)of credited service, and a final average compensa-tion of $4,000 per month.
32 Years x 2.5% = 80%
80% x $4,000 = $3,200 per month, or $38,400annually
RETIREMENT BENEFITS
QUALIFIED ILLINOIS DOMESTICRELATIONS ORDER (QILDRO)
A QILDRO allows for the division ofa retirement benefit or a refund ofcontributions due to divorce.It does not establish a new benefit,nor does it create a new member orbeneficiary.
Generally, the QILDRO ordersthe payment of a benefit to thespouse as the alternate payee. Itmay also be payable to a child orother dependent as the alternatepayee. The QILDRO does not applyto lump sum death benefits, survi-vor annuities, or disability benefits.
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retirement after age 55. These increases arenot limited by the 80% maximum.
UNUSED SICK LEAVE, PAID SICK &VACATION TIME, AND RETURN TOSTATE EMPLOYMENTThe information for the regular retirementformula employees (pages 17-18) also appliesto alternative formula employees.
POSITIONS ELIGIBLE FOR BENEFITSUNDER THE ALTERNATIVE FORMULA• State Policeman• Fire Fighter• Air Pilot• Special Agent• Secretary of State Investigator• Conservation Police Officer• Revenue Investigator• Department of Human Services
Security Employee (includes Mental Healthpolice)
• Central Management Services Police Officer• Department of Corrections' Security
Employee (includes Prisoner Review Board)• Dangerous Drug Investigator• State Police Investigator• Attorney General Investigator• Controlled Substance Inspector• State's Attorneys Appellate Prosecutor
Investigator• Commerce Commission Police Officer• State Fire Marshal Arson Investigator• State Highway Maintenance Worker
SECURITY EMPLOYEESWho Do Not Meet AlternativeFormula RequirementsA security employee with either the Depart-ment of Corrections or the Department ofHuman Services is not eligible for the alterna-tive formula until they have 20 years ofalternative service in the previouslymentioned positions.
However, these employees are eligible forthe security formula (below) with 20 years ofservice, which may include regular formulaand reciprocal service. Final average compen-sation is based on the four highest of the lastten years.
A security employeewill receive the secu-rity formula foralternative formulaservice only.
The age and service requirements for theseemployees are:
• Any age, when your age (years & wholemonths) plus years of service credit(years & whole months) equal 85 years(1020 months) (Rule of 85).
• Age 60 with 20 years of credited service.
• Between ages 55-60 with 25-30 years ofcredited service (reduced 1/2 of 1% foreach month under age 60).
SECURITY RETIREMENT FORMULA
Covered: 2.5% for each year of service.
Non-Covered: 3.0% for each year of service
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benefit into account when determining yourdisability payment. A SERS representative willassist you with the Social Security applicationprocess.
WHEN PAYMENTS BEGIN & ENDOnce SERS determines your eligibility,benefits begin on the latest of:
• The 31st day of absence from work be-cause of disability(including periods when sick pay was received).
• The last day you received wages (includingperiods when sick pay was received).
• If your application is not received within90 days after your removal from the payroll,your benefit will begin on the date the appli-cation is received.
Non-occupational disability benefits arepayable for one-half of credited service notearned while on disability, until death,or one of the following events occurs:
• Your disability ends.
• You resume employment.
• You reach age 65. (If your disability beginsafter age 60, benefits are payable for 5 years.)
If your disability ends and you becomedisabled from the same cause within 60 daysafter you resume state employment, the 30day waiting period is waived. The benefitamount for the second period of disability isthe same as the first.
DISABILITY BENEFITS
NON-OCCUPATIONALDISABILITY BENEFITS
If you become ill or injured from causes notwork-related, you would be eligible for non-occupational disability benefits if:
• You have at least 18 months of creditedservice with SERS, Teachers’, or the StateUniversities Retirement Systems.
• You have used all your accumulated sickleave.
• You are granted a medical leave of absence.
• You have submitted the required forms toSERS.
APPLYING FOR BENEFITSYou must apply in order to receive benefits.It is important to file an application for adisability benefit with SERS when it appearsyour disability will continue beyond 30 daysafter your removal from the payroll.
Your application must be received within90 days from the date you were removedfrom the payroll to prevent a possible loss ofbenefits.
The application process requires you toobtain a physician’s report certifying you areunable to perform in your position. Youmust also sign a release form giving SERSaccess to your medical records.
If you contribute to Social Security, SERStakes the amount of your Social Security
If a SERS memberbecomes disabled,and is unable toperform the dutiesof their positionwhile activelyemployed, theymay receivedisability benefitswhich partiallyreplace theirworking income.
For disabilitybenefits, finalaverage compen-sation is the rateof pay at the dateof the disability, orthe 48 highestconsecutivemonths of servicewithin the last 10years, whichever isgreater.
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BENEFIT AMOUNTYour disability benefit equals 50% of youraverage final compensation on the date youwere removed from the payroll.
If you pay into Social Security and areunder 65, your benefit will be reduced by theamount payable from Social Security.
If you are over 65, your benefit will bereduced by the amount of pension you areeligible for from Social Security.
TERMINATION OF DISABILITYIf your benefit is terminated because youreceived disability benefits for one-half ofyour credited service, and you are still dis-abled, you become eligible for a retirementpension provided:
• You are age 60 and have at least 8 years ofcredited service.
• You are age 55 and have at least 15 years ofcredited service.
• You are age 50 and have at least 20 yearsof credited service.
Your pension benefit will be based on yourtotal years of credited service and your finalaverage compensation.
BENEFIT INCREASEEach non-occupational disability benefit paidby SERS is increased 7% on January 1 afterfour years of being granted the benefit. Oneach January 1 following the date of the 7%increase, there is a 3% benefit increase.
OCCUPATIONALDISABILITY BENEFITS
Occupational disability benefits are paid ifyou are unable to work due to a work-relatedillness or injury. In order to receive occupa-tional disability benefits from SERS youmust:
• File a claim with the Illinois IndustrialCommission, the Risk Management Divisionof your agency, or the Department of CentralManagement Services to determine if yourdisability is work-related.
• File the required forms with the ClaimsDivision of SERS either within:
• 12 months after your removal from thepayroll.
• 12 months after becoming eligible forbenefits under Workers’ Compensation.
• 12 months after the Illinois IndustrialCommission approvesyour Workers’Compensation benefit.
WHEN PAYMENTS BEGIN & END
Occupational Disability Benefits BeginWhen:
• SERS determines you are disabled.
• You receive benefits under the Workers’Compensation or Occupational Diseases Act.
• You are removed from your agencypayroll.
A member whomeets all require-ments is eligiblefor payments of50% of theirfinal averagecompensation.
While you receivedisability benefits,your SERS accountwill continue tobe credited withservice andcontributions as ifyou were working.
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Occupational Disability Benefits End When:
• Your disability ends.
• You resume employment.
• You reach age 65. (If your disabilitybegins after age 60, benefits are payable for 5years).
If your disability benefit is terminated be-cause of age, or the five-year limit, you areeligible for a retirement benefit.
BENEFIT AMOUNTThe disability benefit is 75% of final averagecompensation on the date you were removedfrom the payroll. This amount is reduced byany payments made under the Workers’Compensation Act, or the Workers' Occupa-tional Diseases Act.
SERVICE CREDITWhile you receive disability benefits, yourSERS account will continue to be creditedwith service and contributions as if you wereworking.
BENEFIT INCREASESEach occupational disability benefit paid bySERS is increased 7% on January 1 after fouryears of being granted the benefit. On eachJanuary 1 following the date of the 7% in-crease, there is a 3% benefit increase.
TEMPORARY DISABILITYBENEFITS
This benefit is available in disputed Workers’Compensation cases when your agency hasformally denied all benefits, and an appealhas been filed with the Illinois IndustrialCommission.
You may be eligible for the temporarydisability benefit if:
• You have at least 18 months of creditedservice with SERS, Teachers’, or the StateUniversities Retirement Systems.
• You file an application within 12 monthsof the date a disability results in the loss ofpay.
• You have filed an appeal with the IllinoisIndustrial Commission.
• You have submitted the required forms toSERS.
• You have not received, or had a right toreceive, any compensation for at least 30days.
If the Workers’ Compensation benefit you arereceiving is terminated, you may be eligiblefor temporary disability benefits if:
• You have at least 18 months of creditedservice with SERS, Teachers’, or the StateUniversities Retirement Systems.
• You have submitted the required forms toSERS.
• You have filed an appeal with the IllinoisIndustrial Commission, and requested anemergency hearing.28 29
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• You have served a 150 day waiting period,or received a decision from the IllinoisIndustrial Commission on your emergencyhearing.
APPLYING FOR BENEFITSYou must apply in order to receive benefits.It is important to file an application for adisability benefit with SERS after it appearsyour disability will continue beyond 30 daysafter your removal from the payroll, or whenyour Workers’ Compensation benefit isterminated.
Your application must be received within12 months from the date you were removedfrom the payroll, or within 12 months fromthe denial of Workers’ Compensation benefits.
The application process requires you toobtain a physician’s report certifying you areunable to perform in your position. Youmust also sign a release form giving SERSaccess to your medical records.
If you contribute to Social Security, SERStakes the amount of your Social Securitybenefit into account when determining yourdisability payment. A SERS representativewill assist you with the Social Security appli-cation process.
WHEN PAYMENTS BEGIN & ENDThe benefit will begin on the 31st day fromthe date you last received, or had a right toreceive, any compensation if your claim wasdenied by the Workers’ Compensation Act.
After your Workers’ Compensation benefitis terminated, the temporary disability ben-efit will begin the day following termination.
Disability benefits for all periods ofdisability are payable for a total period of
time equal to one-half of credited service notearned while on disability, until death, or oneof the following events occurs:
• Your disability ends.
• You resume gainful employment.
• You reach age 65. (If your disabilitybegan after age 60, benefits are payable forfive years, subject to the one-half servicecredit limitation).
• A payment is made after determining thestate's liability under the Workers' Compen-sation Act or the Workers’ OccupationalDiseases Act.
• A final determination is made on themember’s claim by the Illinois IndustrialCommission.
BENEFIT AMOUNTYour disability benefit equals 50% of youraverage final compensation on the date youwere removed from the payroll.
If you pay into Social Security and areunder 65, your benefit will be reduced by theamount payable from Social Security.
If you are over 65, your benefit will bereduced by the amount of pension you areeligible for from Social Security.
SERS RECOVERY RIGHTSOnce the Illinois Industrial Commissionmakes its final determination on a disputedclaim, SERS will calculate your benefit todetermine if temporary benefits must berepaid. Any member who accepts a tempo-rary benefit acknowledges and authorizes therecovery rights of SERS.
While you receivedisability benefits,your SERS accountwill be creditedwith service andcontributions as ifyou were working.
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NON-OCCUPATIONAL DEATHIf your death results from a non-work relatedcause, your eligible survivors and beneficia-ries may qualify for benefits.
DEATH BEFORE RETIREMENTIf you die while actively employed and haveat least 18 months of service, your qualifiedsurvivors will be eligible for benefits(see next page).
If you contribute to Social Security, allmonthly benefits payable on your behalf arereduced by one-half of the amount yoursurvivors are eligible for under Social Secu-rity, regardless of whether the Social Securitybenefit is accepted.
The Social Security offset will not reducethe survivor's benefit to less than 50% of thefull monthly benefit amount. In addition tosurvivor benefits, your pension contributionsand interest, will be paid to your namedbeneficiary(ies).
If you die with no qualified survivors whileactively employed, your named beneficiary-(ies) will receive your contributions, plusinterest, and one month’s salary for each yearof service, up to a maximum of six months’salary.
DEATH BENEFITS
The survivorbenefit isincreased3% on eachJanuary 1,followingthe firstanniversaryof thebenefit.
SURVIVOR BENEFITS
Your Spouse: If you are survived by your spouse age50 or over, and you were married at least one yearprior to your death, (s)he will receive $1,000, plus amonthly annuity up to a maximum of $400.
(S)he will receive this benefit until death. If 50%of your earned pension provides a greater monthlybenefit than the amounts stated above, the higheramount is payable to your spouse.
Your Spouse and Children: If your spouse supportsyour children under age 18 (22 if full-time student),or a disabled child over 18, (s)he can receive benefitsbefore age 50. (S)he will receive $1,000, plus amonthly annuity up to a maximum of $600.
This benefit is payable until your the last childreaches age 18 (22 if full-time student), marries, dies,or is no longer disabled. If 50% of your earnedpension provides a greater monthly benefit than theamounts stated above, the higher amount is payableto your family.
Your Children: If you are not survived by a spouse,but have children under age 18 (22 if full-timestudent), or over 18 and disabled, they can receive$1,000 plus a monthly annuity up to a maximum of$600.
This benefit is payable until the last child reachesage 18 (22 if full-time student), marries, dies, or is nolonger disabled. If 50% of your earned pensionprovides a greater monthly benefit than the amountsstated above, the higher amount is payable to yourchildren.
Your Dependent Parents: If your spouse or childrendo not survive you, your dependent parents may beeligible for benefits.32 33
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Your Spouse:If you are survived by yourspouse, (s)he will receive amonthly annuity equal to 50%of your salary. This benefit ispayable until death.
Your Spouse and Children:If your spouse has your childrenunder his/her care who are underage 18 (22 if full-time student), ora disabled child over age 18, theycan receive benefits up to amaximum of 75% of your salary.
This benefit is payable untilyour spouse dies, or your lastchild reaches age 18 (22 if full-time student), marries, dies, or isno longer disabled.
Your Children:If you are not survived by aspouse, but have children underage 18 (22 if full-time student), orover age 18 and disabled, they canreceive a monthly annuity, up to50% of your salary.
This benefit is payable untilthe last child reaches age 18(22 if full-time student), marries,dies, or is no longer disabled.
Your Dependent Parents:If your spouse or children do notsurvive you, your dependentparents may be eligible forbenefits.
OCCUPATIONALDEATH BENEFITS
ELIGIBILITYIf you die from a work-relatedinjury or illness, as determinedby the Illinois Industrial Com-mission, your survivors areeligible for an occupationaldeath benefit.
If you have no qualifiedsurvivors, your nominatedbeneficiary(ies) will receive yourcontributions and interest, andone month’s salary for each yearof service, up to a maximumof six months salary.
Benefits are paid to qualifiedsurvivors as described at right.These amounts are reduced byany payments awarded under theWorkers’ Compensation Act, orthe Workers’ OccupationalDiseases Act.
ANNUAL INCREASEThe occupational death benefitis increased 3% each January 1,following the first anniversary ofthe annuity.
DEATH AFTER RETIREMENTIf you die after retiring, survivor benefits aresubject to the same maximum’s as thosepayable during active employment, or 80% ofthe pension you were receiving when youdied, whichever is less.
If 50% of your pension provides a greatermonthly benefit than the amounts statedabove, it is payable to your survivors.
If you have no survivors, yourbeneficiary(ies) will receive any remainingcontributions and interest, or $500, which-ever is greater.
DEATH AFTER TERMINATIONIf your death occurs after termination ofstate employment, but before retirementbenefits begin, you must have eight years ofservice for your survivors to qualify forsurvivor benefits.
The survivor benefits payable are subjectto the same maximum’s as those payableduring active employment, or 80% of thepension amount you were eligible to receivewhen you died, whichever is less.
If 50% of your earned pension provides agreater monthly benefit than the amountsstated above, it is payable to your survivors.
If you die after termination with nosurvivors, or with less than eight years ofservice, your named beneficiary(ies) willreceive your contributions and interest.
WIDOW’S ANNUITYIf you were a member of SERS before July 19,1961, and die leaving a surviving widow, shemay have the option of taking a widow’sannuity rather than a survivors’ benefit.
In the unlikelyevent that you,your survivors, andyour beneficiaries,die before the fullvalue of youraccount (yourcontributions andinterest) has beendepleted, thebalance will bepaid to yourestate.
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If you resign, are discharged, dismissed, orlaid-off from state employment, you maychoose to withdraw your contributions orleave them in SERS. You must be off thepayroll for 14 days to be eligible for a refundof your contributions.
If you choose to leave your contributionsin SERS:
• You must have eight years of service underSERS to qualify for a pension.
• You may use less than eight years ofservice to qualify for a pension under theRetirement Systems’ Reciprocal Act.
If you choose to have your contributionsrefunded:
• You will receive no interest on yourcontributions.
• You will forfeit all rights to benefits foryourself and your beneficiaries.
If you withdraw your contributions andlater return to state employment:
• You will be eligible to repay your re-funded contributions and have your previouscredited service restored after you havecompleted two additional years of creditedservice.
Credited service under the RetirementSystems’ Reciprocal Act (listed on pages 3–4)can be used to meet this requirement.
LEAVING SERS TAXES
WHEN BENEFITS OR REFUNDSARE PAID TO YOU
• You pay no Illinois state income tax.
• You will pay federal tax on most benefits.Specific information will be furnished whenbenefits are payable.
• All benefits and refunds must be declaredas income in the year in which they arereceived.
• Occupational disability and occupationaldeath benefits are exempt from federal in-come taxes.
• You may postpone taxation of refunds by‘rolling-over’ the taxable portion of thepayment to another employer plan thataccepts it, or to an Individual RetirementAccount (IRA).
The best tax treatment for you depends onyour individual financial situation. There-fore, SERS advises all members to check witha qualified tax consultant before receivingbenefits or refunds.
SERS is a qualifiedretirement planunder Section401(a) of theInternal RevenueCode. Therefore,you will not betaxed on yourcontributions untilyou receive them.
You may restoreany previousservice by repayingyour refundedcontributions, plusinterest. Paymentsmay be made in alump sum, or byinstallments on apre-tax or post-taxbasis.
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APPENDIX4.
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PLAN DOCUMENTThis handbook attempts to describe SERSbenefits in nontechnical language.
The official document describing SERSbenefits is the Illinois Compiled Statutes, 40ILCS 5/14, which legally governs the opera-tion of the plan. If there is any variancebetween this handbook and the plan docu-ment, the plan document will rule.
BOARD OF TRUSTEESThe Board of Trustees is responsible for theoperation of SERS. The board includes bothemployees and representatives of the state.
They are as of July 1, 2001:
Mark W. Gallagher, Chairman, appointedby the Governor.
John Stevens representing Stephen Schnorf,Director, Bureau of the Budget.
Loren Iglarsh representing Daniel Hynes,State Comptroller.
Sharmin Doering, state employee, appointedby the Governor.
Doris M. Clark, elected annuitant.
Caryl Wadley-Foy, elected state employee.
Joseph T. Pisano, annuitant, appointed bythe Governor.
ADMINISTRATIONSERS is administered by the board-appointedExecutive Secretary, Michael L. Mory.
FUNDINGContributions are made by the state and itsmembers. All contributions not required forcurrent operations are invested by the IllinoisState Board of Investment for the exclusivebenefit of members and their beneficiaries.
EMPLOYER IDENTIFICATION NUMBERThe Employer Identification Number of SERSis 37-1026227.
PLAN YEARFor record-keeping purposes, the plan year isJuly 1 through June 30.
LEGAL PROCESSLegal process may be served on SERS'Executive Secretary, Michael L. Mory.
EMPLOYMENT RIGHTSMembership in SERS does not guaranteecontinued state employment, nor does itguarantee a right or claim to any benefit notaccrued under the terms of the plan document.
GLOSSARY OF RETIREMENT TERMS
Agency Retirement Coordinator: Person ineach state agency who interacts with theemployees of their agency and SERS.
Alternative Retirement Formula: The retire-ment formula for state employees in high-riskjobs.
Beneficiary for Lump-Sum Death Benefit:The beneficiary chosen by the member toreceive SERS benefits. A beneficiary form iskept on file with SERS.40 41
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This should not be confused with theGroup Life Insurance beneficiary, or theDeferred Compensation beneficiary.
Coordinated/Covered: A SERS member whocontributes to Social Security.
Credited Service: The total service certifiedto a member’s record.
Defined Benefit Plan: Provides a predeter-mined benefit amount using a formulacombining service credit and salary.
Final Average Compensation (FAC):For Retirement and Survivor Benefits – FinalAverage Compensation is the 48 highestconsecutive months of service within the last120 months of service. For alternative for-mula employees, FAC is the final rate of payor final 48 months, whichever is higher.
For Death and Disability benefits – FinalAverage Compensation is the rate of pay at thedate of death or disability, or the 48 highestconsecutive months of service within the last120 months, whichever is greater.
Level Income Option: An option for coordi-nated/covered members when their SERSbenefit is increased for the period beforereceiving Social Security benefits.
Their SERS benefit is reduced when SocialSecurity benefits begin. This option providesan income leveling effect throughout anindividual's retirement years.
Medical Leave of Absence: An excusedabsence without pay, granted to an employeefor an illness or injury not job-related.
Member: An active SERS employee, anyformer employee who has contributionscredited to their account but has not receiveda refund, or is not receiving a retirementannuity.
Military Service: Service in the United StatesArmy, Navy, Air Force, Marines, Coast Guard,or any women's auxiliary allowed as creditby SERS.
Non-Occupational Disability: A benefit paidto an individual for an injury or illness notwork-related.
Non-Coordinated/Non-Covered: A SERSmember who does not contribute to SocialSecurity.
Occupational Disability: A benefit paid to amember for an injury or illness sustainedwhile performing their duties as a stateemployee.
Pension: Retirement annuity paid for amember's lifetime.
Qualified Plan: A retirement plan qualifiedunder the Internal Revenue Code allowingSERS and its members certain tax advantages.
Qualifying Period: A period of state employ-ment prior to becoming a SERS member.
Regular Retirement Formula: The retire-ment formula for state employees in positionsnot designated as high-risk.
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Retirement Systems’ Reciprocal Act:Provides continuity of pension credits forindividuals who have participated in morethan one Illinois public employee retirementsystem.
There are currently thirteen retirementsystems participating in the RetirementSystems’ Reciprocal Act.
Rollover: Postponing taxation of distribu-tions by "rolling-over" the payment toanother plan, or to an Individual RetirementAccount (IRA).
State Employee: Any person who performsservices for the State of Illinois.
Survivor Annuity Beneficiary: A beneficiary(spouse, child, dependent parent) designatedby statute to receive a monthly annuity uponthe death of the member.
Tax-Sheltered/Tax-Deferred: Contributionsmade by a member that are not taxed until abenefit is paid.
Temporary Disability: A benefit payableduring a period when an injury or illness isbeing contested. A temporary benefit eventu-ally becomes a nonoccupational or occupa-tional disability.
Printed by the Authority of the State of Illinois9/01 – 115M44
