40 ILCS 5/15-154

Current through Public Act 103-1052

Section 40 ILCS 5/15-154 - Refunds

(a) A participant whose status as an employee is terminated, regardless of cause, or who has been on lay off status for more than 120 days, and who is not on leave of absence, is entitled to a refund of contributions upon application; except that not more than one such refund application may be made during any academic year.

Except as set forth in subsections (a-1) and (a-2), the refund shall be the sum of the accumulated normal, additional, and survivors insurance contributions, plus the entire contribution made by the participant under Section 15-113.3, less the amount of interest credited on these contributions each year in excess of 4 1/2% of the amount on which interest was calculated.

(a-1) A person who elects, in accordance with the requirements of Section 15-134.5, to participate in the portable benefit package and who becomes a participating employee under that retirement program upon the conclusion of the one-year waiting period applicable to the portable benefit package election shall have his or her refund calculated in accordance with the provisions of subsection (a-2).

(a-2) The refund payable to a participant described in subsection (a-1) shall be the sum of the participant's accumulated normal and additional contributions, as defined in Sections 15-116 and 15-117, plus the entire contribution made by the participant under Section 15-113.3. If the participant terminates with 5 or more years of service for employment as defined in Section 15-113.1, he or she shall also be entitled to a distribution of employer contributions in an amount equal to the sum of the accumulated normal and additional contributions, as defined in Sections 15-116 and 15-117.

(b) Upon acceptance of a refund, the participant forfeits all accrued rights and credits in the System, and if subsequently reemployed, the participant shall be considered a new employee subject to all the qualifying conditions for participation and eligibility for benefits applicable to new employees. If such person again becomes a participating employee and continues as such for 2 years, or is employed by an employer and participates for at least 2 years in the Federal Civil Service Retirement System, all such rights, credits, and previous status as a participant shall be restored upon repayment of the amount of the refund, together with compound interest thereon from the date the refund was issued to the date of repayment at the rate of 6% per annum through August 31, 1982, and at the effective rates after that date. When a participant in the portable benefit package who received a refund which included a distribution of employer contributions repays a refund pursuant to this Section, one-half of the amount repaid shall be deemed the member's reinstated accumulated normal and additional contributions and the other half shall be allocated as an employer contribution to the System, except that any amount repaid for previously purchased military service credit under Section 15-113.3 shall be accounted for as such.

(c) Except as otherwise provided under subsection (c-5), if a participant covered under the traditional benefit package has made survivors insurance contributions, but has no survivors insurance beneficiary upon retirement, he or she shall be entitled to elect a refund of the accumulated survivors insurance contributions, or to elect an additional annuity the value of which is equal to the accumulated survivors insurance contributions. This election must be made prior to the date the person's retirement annuity is approved by the System.

(c-5) Notwithstanding subsection (c), an annuitant who retired prior to June 1, 2011 and made the election under subsection (c), and who thereafter became, and remains, either:

(1) a party to a civil union or a party to a legal relationship that is recognized as a civil union or marriage under the Illinois Religious Freedom Protection and Civil Union Act on or after June 1, 2011; or

(2) a party to a marriage under the Illinois Marriage and Dissolution of Marriage Act on or after February 26, 2014; or

(3) a party to a marriage, civil union or other legal relationship that, at the time it was formed, was not legally recognized in Illinois but was subsequently recognized as a civil union or marriage under the Illinois Religious Freedom Protection and Civil Union Act on or after June 1, 2011, a marriage under the Illinois Marriage and Dissolution of Marriage Act on or after February 26, 2014, or both;

may make a one-time, irrevocable election to repay the refund or additional annuity payments received under subsection (c), together with compound interest thereon at the actuarially assumed rate of return from the date the refund was issued or the date each additional annuity payment was issued to the date of repayment. The annuitant shall submit proof of party status for item (1), (2), or (3) in the form of a valid marriage certificate or a civil union certificate with any additional requirements the Board prescribes by rulemaking. The election must be received by the System (i) within a period of one year beginning 5 months after the effective date of this amendatory Act of the 99th General Assembly and (ii) prior to the date of death of the annuitant.

To the extent permitted under the Internal Revenue Code of 1986, as amended, the full repayment shall be made within a period beginning on the date of the election and ending on the earlier of the 24th month thereafter or the date of the annuitant's death. If an annuitant fails to make the repayment within the required period, any payments made shall be returned, without interest, to the annuitant (or to the annuitant's estate if the payments ceased due to death), and survivors insurance benefits under Section 15-145 shall not be payable upon the annuitant's death.

Upon such repayment, all forfeited survivors insurance benefit rights and credits under Section 15-145 shall be restored. This repayment right shall not alter or modify any eligibility requirement for survivors insurance beneficiaries under this Article applicable upon the annuitant's death. The repayment shall be irrevocable. No person shall have a claim or right to the repaid amounts in a manner not otherwise provided for under this Article in the event that: the marriage, civil union, or other legal relationship described in this subsection is dissolved, annulled, or declared invalid by a court of competent jurisdiction; or the other party to the marriage, civil union, or other legal relationship predeceases the annuitant or otherwise fails to qualify as a survivors insurance beneficiary upon the annuitant's death.

For purposes of this subsection (c-5), the term "annuitant" shall include an annuitant who resumed his or her status as a participating employee under Section 15-139(c).

(d) A participant, upon application, is entitled to a refund of his or her accumulated additional contributions attributable to the additional contributions described in the last sentence of subsection (c) of Section 15-157. Upon the acceptance of such a refund of accumulated additional contributions, the participant forfeits all rights and credits which may have accrued because of such contributions.

(e) A participant who terminates his or her employee status and elects to waive service credit under Section 15-154.2, is entitled to a refund of the accumulated normal, additional and survivors insurance contributions, if any, which were credited the participant for this service, or to an additional annuity the value of which is equal to the accumulated normal, additional and survivors insurance contributions, if any; except that not more than one such refund application may be made during any academic year. Upon acceptance of this refund, the participant forfeits all rights and credits accrued because of this service.

(f) If a police officer or firefighter receives a retirement annuity under Rule 1 or 3 of Section 15-136, he or she shall be entitled at retirement to a refund of the difference between his or her accumulated normal contributions and the normal contributions which would have accumulated had such person filed a waiver of the retirement formula provided by Rule 4 of Section 15-136.

(g) If, at the time of retirement, a participant would be entitled to a retirement annuity under Rule 1, 2, 3, 4, or 5 of Section 15-136, or under Section 15-136.4, that exceeds the maximum specified in clause (1) of subsection (c) of Section 15-136, he or she shall be entitled to a refund of the employee contributions, if any, paid under Section 15-157 after the date upon which continuance of such contributions would have otherwise caused the retirement annuity to exceed this maximum, plus compound interest at the effective rates.

40 ILCS 5/15-154

Amended by P.A. 099-0682,§ 5, eff. 7/29/2016.

Amended by P.A. 099-0450,§ 5, eff. 8/24/2015.

Amended by P.A. 093-0347, § 5, eff. 7/24/2003.

P.A. 90-448, eff. 8-16-97; 90-576, eff. 3-31-98; 90-766, eff. 8-14-98; 91-887 (Section 10), eff. 7-6-00.