ADMINISTRATIVE CODE

Section 1540.5 Introduction (Repealed)

Section 1540.10 Appointment of Retirement System Coordinator

Section 1540.20 Member's Contribution and Service Credit

Section 1540.30 Determination of Rate of Compensation

Section 1540.40 Prior Service Credit

Section 1540.50 Credit for Service for Which Contributions are Permitted

Section 1540.60 Severance of Employment – A Condition to the Payment of a Refund or Retirement Annuity

Section 1540.70 Death Benefits and Survivor's Annuities

Section 1540.80 Disability Claims

Section 1540.81 Occupational Death Benefits

Section 1540.85 Benefit Suspension and Termination for Gainful Employment or Activity

Section 1540.90 Benefit Offset

Section 1540.100 Birth Date Verification

Section 1540.110 Marriage Verification

Section 1540.120 Level Income Option

Section 1540.125 Reversionary Annuity

Section 1540.130 Pension Credit for Unused Sick Leave

Section 1540.140 Removal of Children from Care of Surviving Spouse

Section 1540.150 Proof of Dependency

Section 1540.160 Investigations of Benefit Recipients

Section 1540.170 Interest on Member Contributions

Section 1540.180 Date of Application – Retirement Annuity, Occupational and Nonoccupational and Temporary Disability Benefits, and Resignation Refund Payments

Section 1540.190 Lump Sum Salary Payments

Section 1540.195 Mandatory Distributions Pursuant to Section 401(a)(9) of the Internal Revenue Code

Section 1540.200 Removal From the Payroll

Section 1540.210 Latest Date of Membership

Section 1540.220 Period for Payment and Amount of Payment of Contributions

Section 1540.230 Contributions By the State (Repealed)

Section 1540.240 Actuarially Funded Basis (Repealed)

Section 1540.250 Payments to Establish Credit for Service for Which Contributions are Permitted

Section 1540.255 Pick-up Option for Optional Service Contributions

Section 1540.260 Contributions and Service Credit During Nonwork Periods

Section 1540.265 Contributions Due for Service Subject to the Uniformed Services and Reemployment Rights Act

Section 1540.266 Unconditional Discharge other than by Dishonorable Discharge

Section 1540.270 Written Appeals and Hearings

Section 1540.280 Availability for Public Inspection (Recodified)

Section 1540.290 Procedure for Submission, Consideration and Disposition of Petitions Seeking the Promulgation, Amendment or Repeal of these Rules and Regulations (Recodified)

Section 1540.300 Organization of the State Employees' Retirement System (Recodified)

Section 1540.310 Amendments

Section 1540.320 Optional Forms of Benefits - Basis of Computation

Section 1540.330 Board Elections

Section 1540.331 Board Vacancies

Section 1540.340 Excess Benefit Arrangement

Section 1540.350 Qualified Illinois Domestic Relations Orders (QILDRO)

Section 1540.360 Election to be an Employee under Section 14-103.05(b)(3) of the Illinois Pension Code

Section 1540.370 Americans With Disabilities Act

Section 1540.380 Correction of Mistakes in Benefit Payments

Section 1540.385 Suspension of Benefits from Uncashed Warrants

Section 1540.390 Freedom of Information Act

Section 1540.395 Accelerated Pension Benefit Payment Program

Section 1540.399 Minimum Total Survivors' Annuity Benefit Payments to Multiple Eligible Survivors of a Tier 1 Member

Section 1540.400 Multiple Survivors of a Tier 2 Member

Section 1540.405 Tier 2 Member Final Average Compensation

Section 1540.406 Retirement Eligibility Criteria For Tier 2 Members Who Are Vested With Police Powers

Section 1540.410 Final Average Compensation for Certain Alternative Retirement Annuity Recipients

Section 1540.415 Prohibited Transactions

Section 1540.APPENDIX A Grievance Form

Section 1540.TABLE A Optional Forms of Benefits - Basis of Computation

ADMINISTRATIVE CODE

Section 1540.5 Introduction (Repealed)

(Source: Repealed at 41 Ill. Reg. 4217, effective March 22, 2017)

TITLE 80: PUBLIC OFFICIALS AND EMPLOYEES
SUBTITLE D: RETIREMENT SYSTEMS
CHAPTER I: STATE EMPLOYEES' RETIREMENT SYSTEM OF ILLINOIS
PART 1540 THE ADMINISTRATION AND OPERATION OF THE STATE EMPLOYEES' RETIREMENT SYSTEM OF ILLINOIS
SECTION 1540.10 APPOINTMENT OF RETIREMENT SYSTEM COORDINATOR

Section 1540.10 Appointment of Retirement System Coordinator

a) The head of every department, as defined in the Retirement System Act, shall appoint an individual(s) employed by or assigned to the department to act as "Retirement System Coordinator" for the agency.

b) All Department Certifications required by law or this Part shall be submitted in writing to the Springfield Office of the System on the form prescribed by the Board and shall include the signature of the duly appointed "Retirement System Coordinator" in each agency or his authorized designee as filed in writing with the System.

Section 1540.20 Member's Contribution and Service Credit

a) The percentage of salary prescribed by the Act governing the System as the rate of member contributions shall be applied against the actual amount of compensation earned and accruing to the member, subject to any statutory limitation on compensation.

b) For the purpose of computing creditable service for members compensated on an hourly or per diem basis the following conversion to calendar days shall be used:

1) Hourly basis

A) For service prior to September 1, 1956, 94 hours shall equal 15 calendar days; 47 hours to 94 hours shall equal 8 calendar days to 15 calendar days; and less than 47 hours shall equal less than 8 calendar days.

B) For service from September 1, 1956 through June 30, 1981, 87 hours shall equal 15 calendar days; 44 hours to 87 hours shall equal 8 calendar days to 15 calendar days; and less than 44 hours shall equal less than 8 calendar days.

C) For service after June 30, 1981, 75 hours shall equal 15 calendar days; 38 hours to 75 hours shall equal 8 calendar days to 15 calendar days; and less than 38 hours shall equal less than 8 calendar days.

2) Per diem basis

A) For service prior to September 1, 1956, unless inconsistent with a member's earnings records, 13 work days shall equal 15 calendar days, 6 work days to 13 work days shall equal 8 to 15 calendar days and less than 6 work days shall equal less than 8 calendar days.

B) For service from September 1, 1956 through June 30, 1981, unless inconsistent with a member's earnings records, 11 work days shall equal 15 calendar days, 6 work days to 11 work days shall equal 8 to 15 calendar days, and less than 6 work days shall equal less than 8 calendar days.

C) For service after June 30, 1981, unless inconsistent with a member's earnings records, 10 work days shall equal 15 calendar days, 5 work days to 10 work days shall equal 8 to 15 calendar days, and less than 5 work days shall equal less than 8 calendar days.

c) For purposes of qualifying for membership only, any part of a month of service shall equal one month.

A qualifying period interrupted by a Leave of Absence for military service, other than reserve training which requires a guarantee of regular pay, may be completed upon the employee's return to State service within 6 months after discharge. Payment of the contributions required for the qualifying period will establish eligibility of the employee to receive credit for the military service subject to the conditions as set forth in the Retirement Act. Any member reentering service shall not be required to serve the qualifying period.

(Source: Amended at 8 Ill. Reg. 4144, effective March 26, 1984)

Section 1540.30 Determination of Rate of Compensation

The following schedule is to be used in establishing monthly rate of compensation for employees receiving salary payments on an hourly, per diem, monthly or part-time basis:

a) For all Service Prior to January 1, 1978

1) Full-Time Hourly Employees:

Prior to September 1, 1956, 187 hours per month shall constitute the normal work period for an hourly employee. On and after September 1, 1956, 174 hours per month shall constitute the normal work period. Should time worked as shown on the payroll indicate that the hours required for a position is greater or less than 187 hours per month prior to September 1, 1956 or 174 hours per month after September 1, 1956, the normal work period shall be the number of hours shown for the majority of the months used for calculating earnable compensation (25 months) subject to a minimum of 152 hours per month. If the number of hours required for the position changes during the period used for calculating earnable compensation the full-time rate will be adjusted to the number of hours required. Should a majority of the months used for calculating earnable compensation (25 months) reflect less than 152 hours worked per month, the member shall be considered a part-time employee and earnable compensation will be computed in accordance with subparagraph a) 4) of this Section. Variable hours worked over and above the normal work period shall be considered as salary adjustments, and such earnings shall be used when calculating earnable compensation.

2) Full-Time Per Diem Employees:

A) Prior to September 1, 1956, 25 days per month shall constitute the normal work period for a full-time per diem employee. On or after September 1, 1956, 22 days per month shall constitute the normal work period.

B) Unless inconsistent with a member's earnings records, a per diem employee shall be considered full-time and all earnings used in the computation of earnable compensation shall be converted to a full-time rate if a majority of the months used for calculating earnable compensation (25 months), as shown on payroll records, evidence time worked of 25 days prior to September 1, 1956, or 22 days after September 1, 1956.

3) Full-Time Salaried Employees:

The actual monthly base rate of pay, excluding overtime, will be used.

4) Part-Time Employees:

When it is established that the employee's normal work period is less than the period necessary to constitute a full month, actual earnings will be used.

b) For all service on and after January 1, 1978 it shall be computed as provided for in the Retirement System Act.

(Source: Amended at 8 Ill. Reg. 4144, effective March 26, 1984)

Section 1540.40 Prior Service Credit

a) Prior Service Form

Any member claiming prior service credit shall file at the Springfield Office of the System a written statement on a form prescribed by the Board setting forth in detail all service for which he claims credit rendered prior to the date of establishment of the Retirement System.

b) Verification of Prior Service

Statement of prior service for which credit is claimed shall be confirmed in writing to the Springfield Office of the System, on a form prescribed by the Board, by the Retirement System Coordinator appointed in the Department in which such service was rendered or by some other person employed in such Department and who is duly authorized by such Retirement System Coordinator to make such confirmation. The confirmation shall be made from the records of the Department or other State Agency. If no such records are available, confirmation of such prior service may be made by affidavit of two competent persons not a relative of the member who have actual knowledge of the service claimed to have been rendered by the member.

Section 1540.50 Credit for Service for Which Contributions are Permitted

a) Exercise of Option

1) For purposes of purchasing certain service credit provided for in the Act, any member of the System as defined in such Act who meets the requirements shall be eligible to exercise any of the service credit options provided for therein.

2) This privilege shall not apply to service representing previous employment periods which had not been credited at the time of acceptance of a refund until repayment of such refund.

b) Credit and Contribution Basis

Credit for such periods shall be the amount of credit earned during the period of employment for which contributions are made. Contributions for such periods together with the required interest shall be made as provided for in the Act and this Part before any credit is granted.

ADMINISTRATIVE CODE

Section 1540.60 Severance of Employment – A Condition to the Payment of a Refund or Retirement Annuity

a) Application for Refund or Retirement Annuity

Any member who is eligible to receive a refund of contributions or a retirement annuity may elect to apply for that refund or retirement annuity by making a written request in the form and manner prescribed by the Board.

b) Verification of Withdrawal From Service

A request for a refund of contributions or a retirement annuity shall not be considered until the Board has received a written notice from the Department in which the member was last employed certifying to the member's withdrawal from service and the effective date thereof, except that the written notice described in this subsection shall not be required for a member who retires while on inactive or disabled status and has been off the Department's payroll for a period of at least 5 years.

c) Withdrawal From Service – Period of Separation

A member who terminates employment and then returns to State employment shall be eligible for a refund of contributions only if there is at least a 14- day break in State employment as reflected on a payroll and if the refund application is executed by the member prior to the date of reemployment. A member who is placed on "Temporary Layoff" as that term is used in the rules of the Department of Central Management Services (see 80 Ill. Adm. Code 302.510) shall not be considered to have completed "Withdrawal" as that term is defined in the Illinois Pension Code (Code) [40 ILCS 5].

d) Effect of Legal Action

1) If a refund of contributions is paid by the System to a member and legal action results in the member being reinstated to their position with full restoration of all rights and privileges, then the reinstated member shall be permitted to reestablish service credit with the System for the reinstated period by repaying to the System the amount of refunded contributions in a lump sum or installment payments in accordance with Section 1540.250 of this Part, except that:

A) the two-year minimum service requirement shall be waived for purposes of determining the period within which the member may commence repayment of the refund; and

B) no interest shall be due if the member makes the required lump-sum payment to the System within 30 days after the System's written notice of the opportunity to reestablish the service credit or executes within the same period an installment agreement with the System to make the required payment.

2) If a retirement annuity is paid by the System to an annuitant and legal action results in the annuitant being reinstated to their position with full restoration of all rights and privileges, then upon making a re-entry to service after retirement, the annuitant's retirement annuity shall be discontinued immediately and they may repay to the System in a lump sum or installment payments the total amount of all retirement annuity payments received on or after retirement. No interest shall be due on the amount of the repayment if the member makes the required lump-sum payment to the System within 30 days after the System's written notice of the opportunity to make the repayment or executes within the same period an installment agreement with the System to make the repayment. The retirement annuity of a member who has completed the repayment described in this subsection (d)(2) and subsequently retires shall be computed as though the member had not previously retired.

e) An election for a refund that is submitted by a member that received disability benefits and has a pending claim for either Social Security disability benefits or benefits payable under the Workers' Compensation Act [820 ILCS 305] or Workers' Occupational Diseases Act [820 ILCS 310] shall not be processed until that claim has been determined.

f) For purposes of Section 14-130(a) of the Code, the phrase "ceased to be an employee" means the date the member separates from service, or the date the member's refund application is received by the System, whichever is later.

(Source: Amended at 49 Ill. Reg. 12173, effective September 9, 2025)

Section 1540.70 Death Benefits and Survivor's Annuities

a) Benefit Application

Any person claiming a death benefit or survivor's annuity shall file at the Springfield Office of the System a written application for such benefit on a form prescribed by the Board.

b) Proof of Death

An application for a death benefit or survivor's annuity shall be accompanied by a certified copy of the Certificate of Death for the deceased member or annuitant.

c) Identification of Claimant

Any person or persons applying for a survivor's annuity or death benefits of any kind shall, when requested by the Board, file at the Springfield Office of the System an affidavit alleging at least the name of the claimant and his or her relationship to the deceased member.

d) Suspension and Termination of Benefit for Gainful Activity

The occupational death benefits and survivors' annuities payable to the unmarried adult disabled children of deceased members and annuitants under Article 14 of the Illinois Pension Code are subject to suspension and termination for gainful activity in accordance with Section 1540.85.

(Source: Amended at 45 Ill. Reg. 9547, effective July 19, 2021)

Section 1540.80 Disability Claims

a) Nonoccupational Disability and Temporary Disability

1) Any member of the State Employees' Retirement System (SERS) claiming benefits for nonoccupational disability or temporary disability shall file at the Springfield Office of SERS a written application on forms prescribed by the Board.

2) If a member makes a payment of contributions to SERS in order to establish sufficient credit to qualify for a nonoccupational disability benefit, payment of the benefit shall accrue as of the latter of the 31^st day of absence from work (including any periods of the absence for which sick pay was received), the day after the member is last entitled to receive compensation (including any sick pay), or the date of payment to SERS. The date of payment of the required contributions shall be determined in accordance with the provisions of Section 1540.220(a) (Period for Payment). If a member is receiving a nonoccupational disability benefit, and incurs a concurrent sickness or condition that is severe enough to disable the member past the period in which the member is disabled from the original sickness or condition, the nonoccupational benefit would continue uninterrupted and the member would not be required to obtain a new leave of absence or incur a new 30 day waiting period. A benefit will continue uninterrupted in the manner described only if the member is otherwise eligible for the benefit and a licensed healthcare professional's report is provided and supports the disabling sickness or condition.

3) If a member makes a payment of contributions to SERS in order to establish sufficient credit to qualify for a temporary disability benefit, payment of the benefit shall accrue as of the latter of the 31^st day after the member is last entitled to receive compensation or the date of payment to SERS. The date of payment of the required contributions shall be determined in accordance with the provisions of Section 1540.220(a) (Period for Payment).

4) If a member who is receiving a nonoccupational or temporary disability benefit wishes to make a payment of contributions to extend the period of eligibility for receipt of the benefit, the request to make the payment must be received at the Springfield Office of SERS before the period of eligibility terminates and the date of payment of the required contributions shall be determined in accordance with the provisions of Section 1540.220(a) (Period for Payment).

5) If a member requests to have service credits under the State Universities Retirement System (SURS) or the Teachers' Retirement System of the State of Illinois (TRS) considered for the purposes of determining nonoccupational or temporary disability benefit eligibility under Section 14-124 or 14-123.1 of the Illinois Pension Code, or for purposes of calculating the total period of time for which benefit will be paid, SERS shall not include in its calculations any credits accrued under Article 15 or 16 of the Code that have been forfeited by acceptance of a refund or applied toward a retirement annuity and that have not been restored or otherwise reestablished in accordance with the requirements of those Articles of the Code. Credits accrued under Article 15 or 16 of the Code that have been forfeited by acceptance of a refund or applied toward a retirement annuity, and that have not been restored or otherwise reestablished in accordance with the requirements of those Articles of the Code, shall not be considered for purposes of determining eligibility for a nonoccupational or temporary disability benefit under Section 14-124 or 14-123.1 of the Illinois Pension Code (Code) [40 ILCS 5] or in determining the total period of time for which such a benefit is payable.

6) The System may deem the requirement of Section 14-124(4) of the Code to be satisfied with respect to a member if the member who is applying for a nonoccupational disability benefit is eligible to be granted a leave of absence for disability but, before the leave could be granted, upon medical examination, the member is found to be permanently and totally incapacitated to perform the duties of the member's position.

b) Occupational Disability

Any member of SERS claiming benefits for occupational disability shall file at the Springfield Office of SERS a written application on forms prescribed by the Board.

c) Licensed Healthcare Professionals

Before an occupational, nonoccupational or temporary disability benefit can be approved, one statement must be received from a licensed healthcare professional attesting to the disability. An additional statement from a second licensed healthcare professional may be required by the disability examiner assigned to the case, depending on the nature of the disabling condition.

d) Report of Licensed Healthcare Professionals

1) All reports provided to the System by a licensed healthcare professional shall contain, among other things, the date and place of the first examination by the licensed healthcare professional, the cause and nature of the member's disability, information regarding surgical work or laboratory tests performed for the member, the date of last examination by the licensed healthcare professional, prognosis regarding the member's disability, an estimate of the probable length of the member's disability, and the licensed healthcare professional's license number.

2) All licensed healthcare professional's reports shall be signed by a licensed healthcare professional or by medical records personnel employed by or acting pursuant to the direction of the licensed healthcare professional.

e) Suspension and Termination for Gainful Employment

The occupational, non-occupational, and temporary disability benefits that are payable to members under Article 14 of the Illinois Pension Code are subject to suspension and termination for gainful employment in accordance with Section 1540.85.

f) Investigation of Claims

1) The SERS Board of Trustees recognizes its obligation to provide a systematic program for the continued investigation, control and supervision of disability claims.

2) Each disability benefit recipient is required to provide a current medical examination report every 6 months to substantiate continued disability. In order to substantiate the member's continued eligibility for disability benefits, the Disability Claims Examiner may require that the member submit to independent medical examinations and may request additional medical statements; hospital records; activity inspection reports; Department of Employment Security Earning Statements; Social Security benefit payment information; income tax records; or other pertinent information, all as deemed reasonable and necessary by the Examiner. SERS may waive the medical examination report requirement for cases in which the evidence supports that a member is permanently disabled and that the member will never be able to return to their former position.

3) Failure of a disability benefit recipient to submit to an independent medical examination, to cooperate with an activity inspection, or to provide the information required shall result in suspension of benefit payments.

4) Any benefit suspended as a result of a medical examination will be suspended on the last day of the month in which the claim is reviewed by the Executive Committee.

5) The System may direct a covered employee who is receiving a nonoccupational or temporary disability benefit from the System and who is eligible under the federal Social Security Act (42 U.S.C. 7) for a disability benefit before attaining the Social Security full retirement age to file a claim for benefits under the federal Social Security Act so that the amount of the Social Security offset to the System-provided disability benefit can be calculated as provided in Sections 14-123.1 and 14-125 of the Code. If an employee does not file a claim for Social Security benefits within 30 days after receiving written direction from the System to do so, then the payment of the System-provided disability benefit shall be suspended until the member files such a claim.

6) Any person who applies for or who is receiving disability benefits and knowingly makes to SERS any false statement, falsifies or permits to be falsified any record submitted to SERS, or omits pertinent information in an attempt to defraud SERS, shall have the benefit suspended until the correct information has been provided to SERS.

A) If the correct information that is provided does not substantiate eligibility for the disability benefit payments, then the benefit shall be terminated.

B) If it is determined that the person omitted pertinent information and the correct information that is provided supports that the individual is gainfully employed, then the process prescribed in subsection (e) shall determine if the benefit payments shall resume.

C) If it is determined that the person knowingly made to SERS a false statement, or falsified or permitted to be falsified any record submitted to SERS, in an attempt to defraud SERS and the correct information that is provided supports that the individual is gainfully employed, then the benefit shall be terminated.

g) A disability benefit claim will be processed after the date that the final payroll payment received by the member has been posted to SERS' accounting database.

h) When calculating the amount of a nonoccupational, occupational, or temporary disability benefit under Section 14-123, 14-123.1, or 14-125 of the Code, the "date of disability" or "time disability occurred" is the date the member is removed from payroll by virtue of being placed on disability leave.

i) When calculating the final average compensation of a disability benefit claim, the calculation shall include the actual compensation received during the month in which the member left the regular payroll.

j) Any individual receiving an occupational disability benefit under Section 14-123 of the Code who remains disabled at the end of the month in which that benefit ceases under paragraph (3) or (4) of Section 14-123 shall become entitled to a retirement annuity and have the minimum period of service prescribed for the receipt of such annuity waived as described in that Section. The disability benefit described in this subsection (j) applies regardless of whether the member first became a member on or after January 1, 2011.

k) In accordance with Section 14-125.1 of the Code, occupational and nonoccupational disability benefits will be increased by 7% or 3% of the original fixed amount on January 1 following the fourth anniversary of the granting of the benefit. For purposes of section 14-125.1 of the Code and this subsection (k), "the fourth anniversary of the granting of the benefit" means that a member receives disability benefit payments for 48 consecutive months without an interruption due to suspension.

l) Definitions

As used in this Section:

"Code" means the Illinois Pension Code [40 ILCS 5].

"Full retirement age" means the age at which an individual is eligible to receive full Social Security retirement benefits.

"The duties of the member's position" means the duties of the member's position as of the date the member's name is removed from the payroll without regard to subsequent changes in the duties of the position, availability of the position, or the member's right to return to the position.

"Licensed healthcare professional" means any individual who is licensed by the Department of Financial and Professional Regulation as a physician under the Medical Practice Act of 1987 [225 ILCS 60], as a physician assistant under the Physician Assistant Practice Act of 1987 [225 ILCS 95], as a psychologist under the Clinical Psychologist Licensing Act [225 ILCS 15], or as an advanced practice registered nurse under the Nurse Practice Act [225 ILCS 65] or who is licensed or otherwise credentialed by the licensing body of another state as a physician, physician assistant, clinical psychologist, or advanced practice registered nurse under the laws of that state.

"Licensed healthcare professional's license number" means the unique license number, registration number, or other identifier issued by the federal Centers for Medicare and Medicaid Services, the Department of Financial and Professional Regulation, or the licensing body of another state to an individual who is licensed or otherwise credentialed by the Department of Financial and Professional Regulation or the licensing body of another state, as a licensed healthcare professional.

"Member", for purposes of Sections 14‑123, 14‑123.1, and 14‑124 of the Code, means an employee in active service at the time of incurring a disabling condition.

(Source: Amended at 48 Ill. Reg. 7844, effective May 7, 2024)

Section 1540.81 Occupational Death Benefits

For the purpose of determining a survivor's eligibility for occupational death benefits, a member's death shall be deemed as the proximate result of bodily injuries sustained or a hazard undergone while in the performance and within the scope of the member's duties only when death benefits under either the Workers' Compensation Act [820 ILCS 305] or Workers' Occupational Diseases Act [820 ILCS 130] are awarded to the member's survivor.

(Source: Added at 46 Ill. Reg. 19224, effective November 18, 2022)

Section 1540.85 Benefit Suspension and Termination for Gainful Employment or Activity

a) Suspension of Benefit for Gainful Employment or Activity

If the System becomes aware that a member who is receiving an occupational, nonoccupational, or temporary disability benefit under Article 14 of the Illinois Pension Code has engaged in gainful employment or if the System becomes aware that the unmarried adult disabled child of a deceased member or annuitant is receiving a survivor's annuity or occupational death benefit under Article 14 of the Illinois Pension Code and has engaged in substantial gainful activity, then it shall immediately suspend the respective Article 14 benefit and provide the affected individual with written notice of the benefit suspension and of the individual's right to appeal the benefit suspension under subsection (e).

b) Gainful Employment or Activity

For purposes of this Section and Article 14 of the Illinois Pension Code, an individual engages in gainful employment and substantial gainful activity when the individual:

1) returns to active employment or becomes employed with the State of Illinois in any capacity;

2) violates the Calendar Quarter Remuneration Limit in subsection (c) for the first time and fails within the period specified by the System:

A) to execute an agreement with the System to repay the System all amounts earned in excess of the Calendar Quarter Remuneration Limit; and

B) to repay the System the amount described in the agreement; or

3) violates the Calendar Quarter Remuneration Limit in subsection (c) for a second or subsequent time.

c) Calendar Quarter Remuneration Limit

No member who is receiving an occupational, nonoccupational, or temporary disability benefit under Article 14 of the Illinois Pension Code and no adult disabled child who is receiving a survivor's annuity or occupational death benefit under Article 14 of the Illinois Pension Code may receive more in remuneration than the substantial gainful activity amount that is determined annually by the Commissioner of the Social Security Administration in accordance with 42 C.F.R. 423(d)(4) and found at https://www.ssa.gov/oact/cola/sga.html in any calendar quarter.

d) Remuneration

1) As used in this Section, "remuneration" means any compensation for personal services, including fees, wages, salary, commissions, and similar items, as well as any income derived from active participation in a business activity or through the performance of physical or mental activities generally performed for the production of income, regardless of whether the compensation or income is earned through self-employment or employment by others.

2) "Remuneration" includes the fair market value of non-monetary goods or services received as remuneration.

3) "Remuneration" does not include:

A) income from income-producing opportunities or activities created by the member or individual before the onset of disability except to the extent that the level of income produced by the opportunity or activity has increased through the member or individual's performance of physical or mental activities after the onset of the disability;

B) earnings that are derived from financial instruments, real estate, a limited partnership, or any other enterprise in which any individual is not involved in active participation; or

C) income generated from the sale of the member or individual's personal residence.

4) Remuneration shall be computed based on the date earned (rather than the date received) and on a gross rather than net basis. No deductions of any kind, including, but not limited to, deductions for losses, expenses, taxes, or withholding shall be considered in the computation of remuneration under this Section.

5) Remuneration representing gain from the sale, exchange or other disposition of goods or other property shall be equal to the sum received on the sale, exchange, or disposition, less the amount representing the cost to the seller in acquiring the goods or other property that is sold, exchanged, or disposed of.

e) Administrative Appeal Rights

An adversely affected individual may appeal the suspension of the individual survivor's annuity, occupational death benefit, or disability benefit under this Section to the Executive Committee in the same manner as a member may appeal the disposition of a claim to the Executive Committee under Section 1540.270, except that all Petitions for Hearings and Petitions for Written Appeals must be received by the Executive Secretary of the System within 30 days after the date of the written notice described in subsection (a). If the Executive Committee determines on appeal that an individual has not engaged in gainful employment and substantial gainful activity, as described in subsection (b), while receiving a survivor's annuity, occupational death benefit, or disability benefit under Article 14 of the Illinois Pension Code, then the Executive Committee shall direct the System to reinstate the suspended benefit. If the Executive Committee determines on appeal that an individual has engaged in gainful employment or substantial gainful activity, as described in subsection (b), while receiving a survivor's annuity, occupational death benefit, or disability benefit under Article 14 of the Illinois Pension Code, then the Executive Committee shall issue a recommendation to the Board of Trustees that it terminate payment to the individual of any survivor's annuity, occupational death benefit, or disability benefit under Article 14 of the Illinois Pension Code.

f) Benefit Termination or Reinstatement

If the Board of Trustees ratifies the Executive Committee's recommendation under subsection (e), that decision becomes the final administrative decision and then the System shall terminate the affected individual's survivor's annuity, occupational death benefit, or disability benefit under Article 14 of the Illinois Pension Code retroactively to the date of its initial suspension under this Section. If the Board of Trustees objects to ratification of the Executive Committee's recommendation under subsection (e), then the individual's survivor's annuity, occupational death benefit, or disability benefit under Article 14 of the Illinois Pension Code shall be reinstated retroactively to the date of benefit suspension under this Section.

(Source: Amended at 48 Ill. Reg. 7844, effective May 7, 2024)

Section 1540.90 Benefit Offset

a) Occupational Disability, Occupational Death, and Survivor’s annuity

Any amounts received under the Workers' Compensation Act [820 ILCS 305] or the Workers' Occupational Diseases Act [820 ILCS 310] as compensation for the disability or death of a member shall be applied, for the period of time prescribed by those Acts for payments, as an offset against any occupational disability benefit, occupational death benefit, or survivor’s annuity provided under Article 14 of the Illinois Pension Code [40 ILCS 5] for that disability or death, as follows:

1) If the amount of compensation received under the Workers' Compensation Act or the Workers' Occupational Diseases Act for a month is less than the occupational disability, occupational death benefit, or survivor’s annuity provided under Article 14 of the Illinois Pension Code for that month , then only the amount of the monthly occupational disability, occupational death benefit, or survivor’s annuity that exceeds the monthly compensation received under the Workers' Compensation Act or the Workers' Occupational Diseases Act shall be payable by the Retirement System, subject, in the case of occupational death, to any minimum benefit provided by Sections 14-103.18 and 14-121(h) of the Pension Code. If the amount of compensation received under the Workers' Compensation Act or the Workers' Occupational Diseases Act for a month equals or exceeds the monthly occupational disability or death benefit provided under Article 14 of the Pension Code, then no benefit shall be payable by the Retirement System for that month.

2) If the compensation for disability or death is received in a lump sum, or partly in a lump sum and partly in monthly or weekly sums, and if a period of time is not prescribed for payment of that compensation by the Workers' Compensation Act or the Workers' Occupational Diseases Act, then the Retirement System shall, for offset purposes, consider the compensation as if it had been paid using the average weekly wage as prescribed under those Acts. Salary or wages paid on or after the date of the member's disability shall not be included in the amount to be offset under this subsection against benefits payable under Article 14 of the Illinois Pension Code on account of the member's service.

3) In the event the whole or any part of the benefits received under the Workers' Compensation Act or Workers' Occupational Diseases Act is commuted into one sum, the aggregate sum of the benefits so commuted and not the commuted value thereof shall be used for purposes of ascertaining the amount of the offset under this subsection.

4) No offset shall be applied under this subsection against the member's retirement annuity.

5) The offset described in this subsection shall be reduced by any legal expenses granted in the award.

6) The offset described in this subsection shall be reduced by amounts received or paid under the Workers' Compensation Act or Workers' Occupational Diseases Act for medical, hospital, or burial expenses, provided that, in the case of medical and hospital expenses, the expenses are incurred before either a final determination is made on the member's claim by the Illinois Workers' Compensation Commission or the member’s claim is otherwise settled.

7) That portion of the occupational death benefit consisting of accumulated contributions of a member shall not be subject to any offset mentioned in this Section.

8) The termination of death benefits under the Workers' Compensation Act or Workers' Occupational Diseases Act due to remarriage of the benefit recipient shall cause the offset to the Occupational Death Benefit applicable to the remarried benefit recipient to terminate effective with the last month of eligibility represented in the final benefit payment under the Workers' Compensation Act or Workers' Occupational Diseases Act.

9) In those cases in which the injury or death, for which an occupational disability, occupational death benefit, or survivor’s annuity is payable, creates a legal liability for damages on the part of some person other than the employer to pay damages, the Workers' Compensation offset shall be applied as follows:

A) Any amounts paid under the Workers' Compensation Act or Workers' Occupational Diseases Act are subject to the offset provisions of Article 14 of the Pension Code and this Part, even though those amounts are recoverable under Section 5(b) of the Workers' Compensation Act (subrogation).

B) In the event that benefits due under the Workers' Compensation Act or Workers' Occupational Diseases Act are commuted into one sum or waived in lieu of the member seeking recovery against a third party, the System shall use the amount of any judgment, settlement or payment for the injury by the third party as a credit against any benefits paid or payable by the System.

10) Any periods of disability for which payment under the Workers' Compensation Act is denied, due to the failure of the individual to comply with that Act, that result in a period of noncompensability under the Workers' Compensation Act will not be considered for Occupational Disability until the entire Workers' Compensation case has been finalized through the Illinois Workers' Compensation Commission.

b) Nonoccupational Disability and Temporary Disability

As used in this Section, "full retirement age" means the age at which an individual is eligible to receive full Social Security retirement benefits.

1) The nonoccupational and temporary disability benefit payable to a covered member shall be offset before the full retirement age by the amount of Social Security disability benefit payable prior to the member attaining the full retirement age and after the full retirement age by the amount of the Social Security retirement benefit for which the individual is first eligible on or after attaining the full retirement age less legal expenses paid by the member to obtain the award up to the maximum allowed by the Social Security Administration.

2) The Social Security retirement benefit offset will be applied as follows, at the full retirement age. For a disability benefit recipient who received Social Security disability benefits before attaining the full retirement age, the Social Security disability benefit payment applied as the offset prior to attaining the full retirement age will remain in effect as the Social Security retirement benefit offset on or after attaining the full retirement age.

3) Disability benefits payable from the System commencing after the full retirement age will be offset by Social Security retirement benefits for which the individual is eligible on the commencement of disability.

c) Social Security Benefit Offset to Widow's and Survivor's Annuities

1) Beginning July 1, 2009, the Social Security survivor benefit offset (offset) shall not apply to any widow's or survivor's annuity of any person who began receiving a retirement annuity or a survivor's or widow's annuity prior to January 1, 1998.

2) Beginning July 1, 2009, the offset shall not apply to the widow's or survivor's annuity of any person who began receiving a widow's or survivor's annuity on or after January 1, 1998 and prior to July 1, 2009.

3) If the widow's or survivor's annuity is payable based on a coordinated employee's death in service, the offset shall not be applied to the widow's or survivor's annuity.

4) Any person who began receiving a retirement annuity after January 1, 1998 and before July 1, 2009 may make a one-time election before July 1, 2009 to reduce the monthly retirement annuity payable by 3.825% in exchange for not having the offset applied to any survivor's annuity payable.

5) Any employee with a retirement annuity effective date on or later than July 1, 2009 may, at the time of retirement, elect to reduce the monthly retirement annuity payable by 3.825% in exchange for not having the offset applied to any survivor's annuity payable.

6) For a person on the level income option under Section 14-112 of the Illinois Pension Code who makes an election under subsection (c)(4) or (c)(5) of this Section, the reduction shall be computed based on the reduced amount of the retirement annuity to be paid after the person has become eligible for old age payments under the federal Social Security Act plus any automatic annual increases received as of the date of the election.

7) For a member whose accrued benefits are payable, in whole or in part, to an alternate payee pursuant to a QILDRO, as established by Section 1-119 of the Pension Code, any reduction due to an election made by the member under subsection (c)(4) or (c)(5) of this Section shall be computed based on the total amount of the member's retirement annuity prior to and without giving effect to any QILDRO reduction for amounts payable to an alternate payee. However, the actual reduction under subsection (c)(4) or (c)(5) shall be applied exclusively to the member's retirement annuity and not to any payment to an alternate payee.

8) If a coordinated employee does not elect to reduce the retirement annuity in exchange for not applying the offset to the SERS survivor's annuity, the survivor's annuity shall be reduced by one-half of any Social Security survivor's benefits for which all beneficiaries included in the widow's or survivor's annuity are eligible. The offset shall not reduce any survivor's or widow's benefit by more than 50%. If a coordinated employee does not elect to reduce the retirement annuity in exchange for not applying the offset to the SERS survivor's annuity, the offset will commence on the date the beneficiaries first become eligible to receive any portion of the Social Security benefit, regardless of whether the beneficiaries elect to accept the Social Security benefit on that date or if the beneficiaries' own earnings preclude payment of Social Security survivor's benefits.

9) If an annuitant who elected to have the retirement annuity reduced 3.825% to prevent an offset from taking place to any survivor benefits payable has a change in marital status due to death or divorce, that annuitant may make an irrevocable election to prospectively discontinue the reduction. However, no reimbursement of prior reductions will be made.

10) If, at the time the offset is to be commenced, the survivor is eligible to receive a monthly benefit amount from the Social Security Administration based on his/her own Primary Insurance Amount, that amount shall be deducted from the amount of survivor's benefit payable by Social Security and the offset computed on the difference. If the survivor is eligible to receive a monthly benefit amount based on his/her own Primary Insurance Amount and a governmental pension offset would have been applied to the Social Security survivor's benefit, that amount shall be deducted from the amount of the survivor's benefit payable by Social Security and the offset computed on the difference.

11) The Social Security reduction amount once established shall remain constant except for the following conditions:

A) If a survivor under age 50 previously receiving the survivor's benefit because of minor children becomes a deferred annuitant, the offset amount will be recomputed when he or she first becomes eligible for Social Security survivor's benefits. The offset amount will be based on the original widow's or widower's Social Security survivor's amount, ignoring subsequent increases to the deceased's Primary Insurance Amount. The recomputed offset amount shall be the balance of the Social Security survivor's benefit minus the governmental pension offset, if any.

B) The offset amount will be adjusted when a child is removed from consideration for the System's annuity.

C) The offset amount will be adjusted when any benefit recipients become ineligible for Social Security benefits.

D) Beginning July 1, 2009, if a survivor under age 62 receiving a survivor's benefit subject to the Social Security offset becomes eligible to receive a monthly benefit amount based on a Primary Insurance Amount on his or her own record, the offset will be recomputed when he or she first becomes eligible to receive his or her own Primary Insurance Amount. The offset amount will be based on the estimated widow's or widower's Social Security survivor's amount determined at the date of death of the member less the estimated monthly benefit amount based on the Primary Insurance Amount of the survivor determined at the date of death of member, and the government pension offset, if any, ignoring any subsequent increases to the deceased Primary Insurance Amount or the survivor's Primary Insurance Amount. The monthly benefit amount based on the primary insurance amount of the survivor shall be determined from the Social Security Administration's Personal Earnings and Benefit Estimate Statement, including any adjustment due to the application of the Windfall Elimination Provision.

d) Retirement Annuity

Pursuant to Section 14-108(f) of the Pension Code, for members under age 65, the primary insurance benefit payable to the member upon attainment of age 65 shall, at the date of acceptance of a retirement annuity, be determined from the Social Security Administration's Personal Earnings and Benefit Estimate Statement, including any adjustments due to the application of the Windfall Elimination Provision. For members over age 65, the primary insurance benefit shall be the amount of Social Security benefits payable at the date of retirement with the State Employees' Retirement System.

(Source: Amended at 46 Ill. Reg. 14779, effective August 22, 2022)

Section 1540.100 Birth Date Verification

a) Any person or persons making application for a retirement annuity, survivors or widows annuity, nonoccupational, occupational or temporary disability benefit shall submit as proof of birth date, a legal copy of their birth certificate or birth record.

b) Upon the submission by the member of documentation from an official employed by the state or county where the birth occurred that states that no birth record exists, the following documents may be submitted for consideration:

1) Military records

2) Marriage record showing date of birth

3) Evidence of Social Security payments that require attainment of specific age

4) Church records of birth or baptism

5) Passport or immigration and naturalization record

6) Two or more documents showing birth dates, such as insurance policies, school records, and medical records

c) If none of the above documents are available, an affidavit from parents, older brother or sister, or relative having knowledge of the date of birth may be considered.

(Source: Amended at 47 Ill. Reg. 3530, effective February 22, 2023)

Section 1540.110 Marriage Verification

a) Proof of Marriage

1) Applicants claiming benefits as a surviving spouse must submit proof of marriage. Documents acceptable as proof of marriage are:

A) A copy of the public record of marriage.

B) A copy of the religious record of the marriage.

C) In the case of a common-law marriage if none of the above documents are available, other relevant evidence may be submitted.

2) If no records under subsection (a)(1) exist, the following may be submitted for consideration:

A) A notarized statement from the individual who performed the marriage.

B) Notarized statements from at least two individuals in attendance of the marriage.

C) Certification from the Social Security Administration of acceptance of the marriage and date.

3) Verification that spouse qualifies for survivor's benefits, widow's benefits, or occupational death benefits:

A) For purposes of ensuring that a surviving spouse qualifies as either a survivor annuity beneficiary, a widow's annuity beneficiary, or an occupational death beneficiary, applicants claiming benefits as a surviving spouse must also provide a joint income tax return document that contains the names of the deceased member and the surviving spouse. An acceptable document must not be dated more than 24 months prior to the member's death.

B) If the surviving spouse did not file taxes jointly with the member prior to the member's death, then the surviving spouse shall provide documentation that demonstrates that either the member and surviving spouse had filed separate tax returns for the preceding tax years, or that the surviving spouse had no reportable income for the preceding tax years.

C) In addition to providing the information contained in subsection (a)(3)(B), a surviving spouse shall also provide that necessary documentation under any of the following items:

i) Two billing statements from a service provider that contain the names of the deceased member and the surviving spouse. Acceptable statements must not be dated more than 6 months prior to the member's death.

ii) A financial account statement that identifies such account was co-owned by the deceased member and surviving spouse. An acceptable statement must not be dated more than 6 months prior to the member's death.

iii) Acceptable documentation that supports that the surviving spouse and deceased member co-owned their residential home. An acceptable document must not be dated more than 6 months prior to the member's death.

b) Proof of Dissolution or Invalidity of Marriage.

The only document acceptable as proof of dissolution or invalidity of marriage is a certified copy of the declaration of decree from a court of law.

(Source: Amended at 46 Ill. Reg. 19224, effective November 18, 2022)

Section 1540.120 Level Income Option

a) Basis of Computation.

The Level Income Option shall be based on an estimate of a member's primary Social Security benefit, as provided by the Social Security Administration. The calculation shall be based on standard actuarial tables maintained by the System.

b) Effect on Automatic Increase Annuity.

Should an annuitant subsequently become eligible for the automatic increase annuity benefit, such increases shall be based on the amount of retirement annuity received at the date of eligibility for the increases.

c) Effect on Widows and Survivors Annuities.

Upon death of an annuitant, any widow or survivors benefits which become payable shall be based on the amount of the member's retirement annuity received at the date of death.

(Source: Amended at 11 Ill. Reg. 11155, effective June 15, 1987)

Section 1540.125 Reversionary Annuity

a) The reversionary annuity of a member who elects a reversionary annuity, who accepts the provisions of Article 20 of the Code, and who cashes or deposits the payment of a proportional annuity from another participating system prior to the date in which he or she is eligible to begin receiving retirement annuity payments from Article 14 of the Code, shall begin on the first day of the month following the member's death.

b) Definitions

"Participating System" means a retirement system defined as a "participating system" by Section 20-108 of the Code.

"Proportional Annuity" means a retirement annuity paid in accordance with Section 20-121 of the Code.

(Source: Added at 44 Ill. Reg. 7888, effective April 27, 2020)

Section 1540.130 Pension Credit for Unused Sick Leave

a) Credit for sick leave shall be determined on the basis of a 260-day work year.

b) All unused sick days for which the employee receives credit shall be certified by the last employer responsible for maintaining a sick leave record for the employee.

(Source: Amended at 16 Ill. Reg. 14407, effective September 4, 1992)

Section 1540.140 Removal of Children from Care of Surviving Spouse

a) Children Under Age 18

If a spouse is receiving a widow's or survivors' annuity prior to age 50 because minor children of the member are under the care of the spouse and the children are legally removed by order of a court from the spouse's care, then the widow's annuity or survivors' annuity payable to the spouse shall be suspended until the spouse attains age 50; however, the children eligible to receive a survivors' annuity, if under the care of the legal guardian, may continue to receive their portion of the survivors' benefit, based on their individual eligibility. Widow's or survivors' annuity payments accepted by the spouse after the children have legally been removed by order of a court from the spouse's care will be considered benefit overpayments due to the System.

b) Children Over Age 18 and Under Age 22 and a Full-Time Student

1) If under the care of the surviving spouse at attainment of age 18, children over age 18 and under age 22 and a full-time student will be presumed under the care of a surviving spouse during their period of eligibility, based upon a self-certification signed by the surviving spouse. However, the surviving spouse will not be considered as the natural guardian of the child.

2) Application for benefits by or on behalf of a child over age 18 and under age 22 and a full-time student must be accompanied by a student certification. The certification must have the signature of the student and a representative of the school to be valid. A new certification must be obtained and submitted to the System semi-annually after initial approval of the benefit unless the System is able to determine, based on records in its possession or vendor-supplied data, that the child is a full-time student for that semi-annual period.

3) Survivor benefits shall be payable during the period between regular school years, such as winter breaks or summer terms, if the benefit recipient carried a full-time workload in the preceding semester.

c) Definitions of Full-Time Student and Regular School Year

1) For purposes of this Section, a full-time student shall be one who is enrolled in a course of study in an educational institution and who is carrying a full-time workload as determined by the educational institution during the regular school year for the course of study the student is pursuing.

2) A regular school year is the 8 to 9 months that includes two semester terms or three trimester (quarter) terms, excluding the summer term.

(Source: Amended at 46 Ill. Reg. 4100, effective February 23, 2022)

Section 1540.150 Proof of Dependency

In consideration of the payment of an occupational death benefit, survivors annuity or reversionary annuity, person or persons claiming such benefits as a dependent shall submit acceptable proof to the Board that the member was contributing at least one-half of the dependent's support at the time of the member's death, or in the case of a reversionary annuity, at the time of retirement. A copy of the deceased member's income tax filing for the year of event claiming the person as a dependent shall be accepted as proof of dependency. For the reversionary annuity, a spouse will be deemed to be a dependent of the member.

(Source: Amended at 26 Ill. Reg. 16575, effective October 22, 2002)

Section 1540.160 Investigations of Benefit Recipients

a) The Board of Trustees of the State Employee's Retirement System recognizes its obligation to provide a systematic and ongoing program for the review and investigation of all benefits payable by the System to assure continued eligibility of all recipients.

b) The failure of any benefit recipient to cooperate in providing reasonable information required shall result in suspension of benefit payments until such time as continued eligibility is confirmed.

(Source: Amended at 4 Ill. Reg. 12, p. 530, effective March 11, 1980)

ADMINISTRATIVE CODE

Section 1540.170 Interest on Member Contributions

a) Credited

1) Interest credited on the member's individual account on and after July 1, 1981 shall be computed once a year at the rate of 6.5% per annum compounded annually on the balance at the beginning of each fiscal year and no consideration shall be given to the current fiscal year's contributions in such computation.

2) The amount of any benefit payable by the System shall, if interest credited to member's account is a part of the benefit, include interest credited to the member's account through the end of the fiscal year immediately preceding the date in which the benefit becomes payable.

b) Charged Interest

Interest charged to a member establishing periods of service on and after January 1, 1984 shall be at the rate of 6.5% per annum compounded annually, except that the rate of 5% per annum compounded annually will be charged for:

1) The repayment of refunded contributions paid to the member prior to January 1, 1984, or

2) Members establishing service credit on an installment basis provided the signed installment agreement is received prior to January 1, 1984.

(Source: Amended at 49 Ill. Reg. 12173, effective September 9, 2025)

Section 1540.180 Date of Application – Retirement Annuity, Occupational and Nonoccupational and Temporary Disability Benefits, and Resignation Refund Payments

A member's written request applying for benefit or resignation refund payment provided for in the Retirement System Act shall be accepted as the formal application form for purposes of meeting any application deadlines or time frames contained therein, provided the formal application form prescribed by the Board is subsequently received at the Springfield Office of the System the later of the deadline or time frame provided by law or 30 days from the date the formal application form is mailed to the member. Should the completed formal application be received after the later of either of these periods the date of application will be the date the form is received.

(Source: Amended at 10 Ill. Reg. 8889, effective May 14, 1986)

Section 1540.190 Lump Sum Salary Payments

a) Employee retirement contributions are not to be assessed against certain lump sum salary payments as provided in the Act.

b) Compensation received for unused compensatory time shall be applied to the pay period in which it was earned, rather than when it was received.

c) Compensation received for back wages shall be applied to the pay period in which it was earned, rather than when it was received.

(Source: Amended at 44 Ill. Reg. 11172, effective June 19, 2020)

Section 1540.195 Mandatory Distributions Pursuant to Section 401(a)(9) of the Internal Revenue Code

The System shall pay all benefits in accordance with a reasonable good faith interpretation of the requirements of section 401(a)(9) of the Internal Revenue Code. When the System is required to make a mandatory distribution pursuant to that section and the member is eligible to receive either a retirement annuity or a refund, but fails to make the required election within 60 days after the System sends out the election form, the member shall be deemed to have elected a refund.

(Source: Added at 41 Ill. Reg. 4217, effective March 22, 2017)

Section 1540.200 Removal From the Payroll

Written applications for nonoccupational disability benefits must be received in the Springfield Office of the System within the statutory time frame after the member's name has been removed from the payroll. The term "removal from the payroll" as it pertains to the payment of nonoccupational disability benefit is the last day of the pay period during which a member received compensation for services as a State employee.

(Source: Amended at 11 Ill. Reg. 11155, effective June 15, 1987)

Section 1540.210 Latest Date of Membership

a) The term "date he last became a member of the System" as it pertains to the purchase of service credits is the first day of the latest or current period of membership and is not affected by the payment of contributions for any periods of service prior to or following this first day or the repayment of a refund.

b) A member who accepts a retirement annuity and subsequently re-enters membership establishes a new date of membership as of that date, unless he or she repays all annuity payments received as provided for in the statute, in which case his or her previous date of membership is re-established.

c) For a person who, under the provisions of the Retirement Systems Reciprocal Act [40 ILCS 5/Art. 20], repays a refund and pays for any period of service prior to or after the service period of membership for the period of service prior to or after the service period covered by the refund, the latest date of membership shall be the first day of membership for the period covered by the refund. If more than one refund is paid, it shall be the first day of the period of membership covered by the latest of the membership periods involved.

(Source: Amended at 41 Ill. Reg. 4217, effective March 22, 2017)

Section 1540.220 Period for Payment and Amount of Payment of Contributions

a) Period for Payment

An eligible member shall exercise an option or options to pay contributions to establish credit for service within the deadline or time frame provided by law and shall make the required payment(s) by the later of any deadline or time frame provided by law or 30 days from the date written notification of the amount due is mailed to the member.

b) Amount of Payment

Any member making a payment to the System which includes interest as a part of such payment shall pay the required amount 30 days from the date formal notification of the amount payable is sent to the member or the end of the month to which interest was computed in the required amount. If payment is made after the later of these dates additional interest will be charged to the end of the month in which payment is received in the Springfield Office of the System.

(Source: Amended at 4 Ill. Reg. 12, p. 530, effective March 11, 1980)

Section 1540.230 Contributions By the State (Repealed)

(Source: Repealed at 8 Ill. Reg. 4144, effective March 26, 1984)

Section 1540.240 Actuarially Funded Basis (Repealed)

(Source: Repealed at 11 Ill. Reg. 11155, effective June 15, 1987)

Section 1540.250 Payments to Establish Credit for Service for Which Contributions are Permitted

a) If a member receives one or more contribution refunds from the System, past service credits previously refunded will be reinstated only after the two-year minimum service requirement is satisfied and the member repays the amount of refunds previously received together with interest due before retirement either in a lump sum or installment payments by direct payment or payroll deduction. No payment will be applied to any period of service prior to a refund until that refund is paid in full. Service credit will be granted only when a stipulated refund, qualifying, short period or other type of permissive service credit as set forth in the Act is paid in full; except, in the event of death of the member partial service credit will be granted. Such partial service credit will be based on contributions and interest paid as of date of death.

b) Under the installment option, interest will be calculated on the total amount of contributions for the stipulated period of service through the month of the date the member elects to complete payment. No installment option will be approved for payments of less than $20.00 per payment or $10.00 per pay period for payroll deduction. For picked-up contributions as described in Section 1540.255, if payment is made in full prior to the final due date stipulated in the option, interest will be recalculated and a refund of interest paid to the member, provided such payment is received at least 2 months prior to the due date and is in excess of $5.00.

c) If a member pays the contributions and interest due in full under an installment option payment plan and if that plan does not account for interest earned on contributions made during the installment option payment plan, then an interest rebate will be paid to reflect interest earned during the installment period. The rebate will be calculated based on regular interest as defined in the Retirement Savings Act [30 ILCS 430]. The amount of rebate will be determined as of each June 30 preceding the date of payment in full, based on the total of the payments accumulated in the account at the beginning of each fiscal year. At the time the account is paid in full, the total interest accumulated in the rebate account will be paid to the member. The interest rebate will not be paid if the accumulation is less than $5.00.

d) Except in the case of contributions made through the pick-up option described in Section 1540.255, if a member elects to receive a retirement annuity, completes a revocation card or for some other reason elects not to complete the member's installment payment option, all monies paid by the member on such option will be refunded to the member and no service credit granted.

e) If a member receives a widow/survivor contribution refund upon retirement, and subsequently a beneficiary becomes eligible for the widow/survivor annuity, the member may repay the widow/survivor contribution refund in a lump sum or installment payments. The repayment shall consist of the amount of the widow/survivor contribution refund, together with interest, from the date of refund to the date of repayment. If the member requests to repay the refund, or is in the process of repaying the refund, and dies before the completion of the repayment, then the balance of the repayment due may be paid in a lump sum, within 30 days after the estate or eligible survivor receives the notice amount due from the System.

f) All installment payment plans which pertain to optional service purchases (see Section 1540.255), offered by the System and agreed to by the member, shall be in annual increments and shall not exceed 5 years in length.

g) Funds may be issued from another account to the System for purposes of establishing or upgrading service credit of a member who entered an installment plan only when:

1) the member separates from service;

2) the System receives the payment within 30 days after the member’s separation from service; and

3) the payment completes the transaction.

h) A member who issues funds from another account that is not part of a qualified plan as regulated under Section 401(a) of the Internal Revenue Code (26 U.S.C. 401) to the System for purposes of establishing or upgrading service credit may not issue any further payments to the System regarding that transaction.

i) A member who issues funds from another account that is part of a qualified plan as regulated under Section 401(a) of the Internal Revenue Code to the System for purposes of establishing or upgrading service credit may issue one additional payment to complete the transaction.

j) A member who issues funds from another account for purposes of establishing or upgrading service credit may not subsequently elect to enroll in an installment plan or issue any other payment to the System regarding that transaction.

(Source: Amended at 47 Ill. Reg. 13138, effective August 22, 2023)

Section 1540.255 Pick-up Option for Optional Service Contributions

a) "Member" as used in this Section means any person who is entitled to reinstate past service credits previously refunded or purchase permissive service credits under the Act creating the State Employees' Retirement System of Illinois.

b) A member choosing to make contributions for the reinstatement (purchase) of past service credits previously refunded or the purchase of permissive service credits shall have the option to have those contributions treated as either after-tax or before-tax (picked up) contributions. In order for contributions for the reinstatement of past service credits or purchase of permissive service credits to be considered as picked up (before-tax) contributions under Section 414(h)(2) of the Internal Revenue Code (Code), the member must make an irrevocable election to have the contributions made by payroll deduction through the Comptroller's office by providing a copy of the election to the member's payroll officer. Any contributions for the purchase of past service credits or permissive service credits which are made directly by the member or when the payroll deduction election is not irrevocable will be considered as after-tax contributions (not picked up).

c) The member wishing to make contributions for the purchase of past service credits previously refunded or permissive service credits shall have the following contribution options:

1) The contributions may be made directly by the member in installments or by a lump sum payment and the contributions may be terminated by the member at any time;

2) If the member is receiving compensation for personal services rendered, on a warrant issued pursuant to a payroll voucher and which is drawn by the State Comptroller upon the State Treasurer, the contributions may be made by voluntary payroll deduction and the payroll deduction may be terminated by the member at any time; or

3) If the member is receiving compensation for personal services rendered, on a warrant issued pursuant to a payroll voucher drawn by the State Comptroller upon the State Treasurer, the contribution may be made by an irrevocable payroll deduction by which the member chooses to have the contributions picked up by the employer under the Code.

Only the contribution method described in subsection (c)(3) will qualify the contributions as contributions picked up by the employer for Code purposes. Those members electing to make such contributions pursuant to subsection (c)(3) shall complete and sign an irrevocable payroll authorization form provided by the State Employees' Retirement System (System). That form must be provided to both the System and the member's payroll officer.

d) The irrevocable payroll deduction form must indicate:

1) the total amount to be deducted;

2) the amount per pay period to be deducted; and

3) the total number of pay periods (one or more) over which the designated amount is to be deducted.

All payroll deduction payments must be completed no later than the final payroll payment made to the member in conjunction with the member's retirement or termination from employment. The payroll deduction form when executed must be on such terms as would result in the payment, by the member's anticipated retirement date, of the necessary amounts to purchase the permissive service credit or the service credits previously refunded. During the period of the irrevocable payroll deduction no voluntary payments will be accepted by the System from the member towards the purchase of past service credits or for the purchase of permissive service credits for which an irrevocable payroll deduction is in place. The amount to be withheld per pay period need not be the same amount for each pay period.

e) The irrevocable payroll deduction election of the member shall remain in effect until the earlier of:

1) the payroll deductions or the purchase of the service credits as indicated in the form are completed;

2) the death of the member;

3) the member is disabled from performing his/her services as an employee for more than one year;

4) the member is absent from employment due to layoff or strike for more than one year;

5) employment is terminated either voluntarily or involuntarily; or

6) the payroll deduction is 120 days delinquent, either in whole or in part.

f) If an irrevocable payroll deduction becomes delinquent, then the member shall bring the payments current, by payroll deduction, within 120 days after the original delinquency. Absence from employment due to layoff, strike or disability will not be construed as a delinquency in the payroll deduction. Failure to bring a delinquent payment current within 120 days after the original delinquency will result in termination of the member's irrevocable election with all contributions made by the member under the irrevocable payroll deduction being refunded to the member less the appropriate tax withholding. The right to make up a delinquency cannot be used for the purpose of amending or modifying the terms of the original irrevocable payroll deduction election.

g) In the case of the death of a member, the irrevocable payroll deduction will terminate and the member's account will be granted partial service credit based upon contributions made to the date of death as described in Section 1540.250.

h) In the case of retirement, termination of employment of the employee or absence from employment in excess of one year due to layoff, strike, or disability, the member will have the choice of:

1) Making an after-tax lump-sum payment in the amount of the balance due to complete the purchase of the service credits originally intended;

2) Electing to make an eligible trustee-to-trustee transfer or other eligible rollover in the amount of the balance due to complete the purchase of the service credits originally intended; or

3) The amounts contributed to date under the irrevocable payroll authorization will be refunded, less appropriate tax withholding.

i) A member shall be considered as being "disabled from performing his/her services as an employee" when the member has been granted a leave by the employer because the member is physically or mentally unable to perform the duties of the job.

j) A member who is changing job positions but will still be employed by the State of Illinois may substitute an irrevocable payroll deduction in the new position for the irrevocable payroll deduction effective in the former position so long as the terms of the new payroll deduction are not changed, except to make up any delinquency resulting from a break in service between positions. In such a case the irrevocable payroll deduction election will not terminate as provided for in subsection (e)(4) of this Section unless the provisions of subsection (e)(5) of this Section would require termination of the election.

(Source: Amended at 26 Ill. Reg. 16575, effective October 22, 2002)

Section 1540.260 Contributions and Service Credit During Nonwork Periods

When State law requires that service credit be granted to a member during nonwork periods, such credit shall be granted based on the member's normal work schedule. Employee and employer contributions shall be payable during such non-work periods based on the member's full rate of compensation. A nonwork period is any pay period during which an employment relationship exists and throughout which the employee does no work for the employer. If such a nonwork period falls within a qualifying period, it should be considered part of that period, and the employee may make contributions at the required rate to establish service credit. Such contributions may be made without interest if paid within 6 months of the employee's return to work, or within 6 months of completing the qualifying period, whichever is later.

(Source: Amended at 8 Ill. Reg. 4144, effective March 26, 1984)

Section 1540.265 Contributions Due for Service Subject to the Uniformed Services and Reemployment Rights Act

A member who receives compensation from a department under the Uniformed Services and Reemployment Rights Act (P.L. 103-353) shall, for the period they receive such compensation, contribute employee contributions based on the amount of compensation that is credited to their retirement account for that period.

(Source: Added at 46 Ill. Reg. 19224, effective November 18, 2022)

Section 1540.266 Unconditional Discharge other than by Dishonorable Discharge

a) For purposes of Section 14-105(b)(2) of the Pension Code, “unconditional discharge other than by dishonorable discharge”, means:

1) the member has not been discharged dishonorably from active-duty military service; and

2) has either voluntarily separated from the military by completing their service obligation; or

3) has been discharged due to their acceptance of a reserve commission enlistment; or

4) has involuntarily separated from the military.

b) In the case of a service member’s discharge due to acceptance of a reserve commission enlistment, the date of discharge is the date such service member would have otherwise qualified to voluntarily separate from the military due to completing their regular service commission enlistment obligation.

c) This term shall not include discharges from service in a reserve commission enlistment.

(Source: Added at 47 Ill. Reg. 8026, effective May 24, 2023)

Section 1540.270 Written Appeals and Hearings

a) Definition of Terms

"Authorized Representative" – a person representing a Petitioner in a written appeal or hearing.

"Executive Committee" – a committee consisting of one member of the Board of Trustees, the Chairperson of the Board or the Chairperson's designee, and the Executive Secretary of SERS or the Secretary's designee, which shall meet periodically for the purpose of hearing all administrative contested matters and making recommendations to the Board of Trustees who shall make the final decision. At any time, the Chairperson of the Board or the Executive Secretary of SERS may appoint an alternate designee to serve on the committee in place of the designee that the Chairperson or Secretary has previously appointed.

"Executive Secretary" – the person designated as the official custodian of all papers and documents filed in proceedings before the Executive Committee.

"Hearing" – the reconsideration by the Executive Committee of the initial disposition of a claim, at which the Petitioner appears in person or by an Authorized Representative, either at the hearing or by video or audio conference.

"Hearing Officer" − a member of the Executive Committee or an attorney retained by the Executive Committee for the purpose of conducting hearings and communicating the Executive Committee's findings of fact, conclusions of law, and recommendation to the Board of Trustees.

"Legal Action" − any action, following the final denial by the Board of Trustees, in which a member is seeking relief in State or federal court for a disputed claim.

"Petition" – a written request made by a Petitioner or Authorized Representative for a hearing, a written appeal, a rehearing, or a written reappeal before the Executive Committee.

"Petitioner" – an individual who requests by Petition:

a hearing or a written appeal before the Executive Committee for reconsideration of the initial disposition of a claim; or

a rehearing or written reappeal before the Executive Committee for reconsideration of the disposition of a hearing or written appeal.

"Rehearing" – the reconsideration by the Executive Committee of the disposition of a hearing or written appeal, at which the Petitioner appears in person or by an Authorized Representative, either at the hearing or by video or audio conference.

"System" – the State Employees' Retirement System of Illinois.

"Video or Audio Conference" − hearing or rehearing before the Executive Committee for which the Petitioner or Authorized Representative is not physically present and the proceeding before the Executive Committee is conducted through video and audio technology.

"Written Appeal" – the reconsideration by the Executive Committee, based upon written evidence, of the initial disposition of a Petitioner's claim, at which the Petitioner does not appear either in person or by an Authorized Representative.

"Written Reappeal" – the reconsideration by the Executive Committee, based upon written evidence, of the disposition of a hearing or written appeal, at which the Petitioner does not appear either in person or by an Authorized Representative.

b) Administrative Determination

The administrative staff of the System shall be responsible for the daily functioning of the System, including the processing of all claims for benefits payable by the System, all claims for service credits granted by the System, and all claims against or relating to the System.

c) Right of Appeal

Any member, annuitant or beneficiary adversely affected by the initial disposition of a claim by the System's staff may have the disposition of the claim reconsidered either at a hearing before the Executive Committee or by filing a Written Appeal with the Executive Committee.

d) Written Appeals to Executive Committee

1) Communication to Executive Committee

All Petitions for Written Appeal shall be directed to the Executive Secretary of SERS at its Springfield Office and must be received within 30 days following the notification of the initial disposition of the claim.

2) Form of Written Appeal

A Petition for a Written Appeal shall set forth the name and address of the Petitioner, the name and address of the Petitioner's Authorized Representative if applicable, a brief statement of the facts forming the basis of the written appeal, which must include any new or additional evidence, and the relief sought.

3) Disposition of Written Appeal

A) The Executive Committee shall consider a Petition for Written Appeal at the next regular meeting of the Executive Committee more than 15 days after the receipt of the Petition.

B) Following the written appeal and the receipt of all supplemental material requested, the recommendation of the Executive Committee shall be communicated in writing to the Petitioner and Authorized Representative, if applicable, and the appropriate action shall be implemented by the Executive Committee subject to the approval of the Board of Trustees.

4) Continuances and Extensions of Time

Continuances and extensions of time shall be granted by the Executive Committee when it is demonstrated that obtaining and presenting additional evidence is necessary to render a fair and equitable decision on the written appeal before the Committee.

5) Minutes and Records of Written Appeals

A) Minutes of every meeting of the Executive Committee and a record of all written appeals before the Executive Committee shall be kept by the Executive Secretary of SERS at its Springfield Office.

B) The Executive Secretary of SERS shall be the official custodian of all papers and documents filed in proceedings before the Executive Committee.

e) Hearings Before the Executive Committee

1) Communication to the Executive Committee

All Petitions for Hearings shall be made to the Executive Secretary of SERS at its Springfield Office and must be received within 30 days following the notification of the initial disposition of the claim.

2) Appearance

Any Petitioner or Authorized Representative may appear at a hearing before the Executive Committee, either in person or by video or audio conference.

3) Form of Petition

Petitions may be informal or formal and shall be presented by letter or other writing. A petition shall set forth the name and address of the Petitioner, the name and address of the Authorized Representative, if applicable, a brief statement of the facts forming the basis of the petition, which must include any new or additional evidence and the relief sought.

4) Notice of Hearing

Upon scheduling of a hearing before the Executive Committee, a Petitioner shall be provided with written notice of: the date, time and place of the hearing; the subject matter of the hearing; and relevant procedural and substantive statutory and regulatory provisions. Notice of the hearing shall also inform the Petitioner that the Petitioner will be afforded the opportunity to provide a statement of the Petitioner's position, present oral evidence, and conduct examination and cross-examination of witnesses as necessary for full and true disclosure of the facts. In the absence of the Petitioner, the Executive Committee will consider the Petitioner's Petition and such other matters as may be properly brought before it at the hearing.

5) Prehearing Conferences

A) Upon written request by the Executive Committee or a Petitioner or Authorized Representative, a conference shall be conducted for the purpose of formulating issues and considering:

i) The simplification of issues;

ii) The amendment of pleadings;

iii) The making of admissions of facts or stipulations for the purpose of avoiding the unnecessary introduction of evidence;

iv) The procedure at the hearing;

v) The limitation of the number of witnesses; and

vi) Such other matters as may aid in the simplification of the evidence and disposition of the proceeding.

B) The persons attending the prehearing conference may enter into a written stipulation as to matters decided in the prehearing conference.

C) No minutes shall be kept of the prehearing conference. Facts disclosed in the course of the prehearing conferences are privileged and, except by agreement, shall not be used against the Petitioner or any other party attending the prehearing conference either before the Executive Committee or elsewhere unless fully substantiated by other evidence.

6) Conduct of Hearings

A) Hearings shall be conducted before the Executive Committee by the Hearing Officer and shall be of an informal nature.

B) The Hearing Officer shall direct all parties to enter their appearances on the record. The Hearing Officer shall conduct a full and fair hearing, receive testimony of the claimant and admit exhibits into evidence, avoid delay, maintain order and make a sufficient record for a full and true disclosure of the facts and issues. To accomplish these ends, the Hearing Officer shall make all procedural and evidentiary rulings necessary for the conduct of the hearing.

C) Parties may, by written stipulation, agree upon any facts involved in the proceeding. The facts stipulated shall be considered as evidence in the proceeding.

D) Irrelevant material or unduly repetitious evidence shall be excluded.

7) Documentary Evidence

Whenever possible, documents and exhibits shall be introduced by stipulation of the parties. Originals of documents shall be introduced into evidence with leave of the Hearing Officer to substitute the originals with copies. Whenever possible, the parties shall interchange copies of exhibits or other pertinent material before the hearing at which they are to be offered.

8) Briefs and Oral Arguments

Written briefs and oral arguments shall be allowed at the request of the Petitioner. The time limitations upon the oral argument shall be determined by the Hearing Officer having regard to the magnitude and complexity of the issues involved and the other business of the Executive Committee. All testimony shall be taken under oath before an officer authorized to administer oaths by the laws of this State or of the United States or of the place where the testimony is to be given.

9) Disposition of Hearing

Following the hearing and receipt of all supplemental material requested, the Executive Committee, following its next scheduled meeting, shall communicate its recommendation in writing to the Petitioner and Authorized Representative, if applicable. The recommendation shall contain a sufficient statement of the facts, all necessary findings of fact and conclusions of law, and a suggested decision or decisions of the Board of Trustees. The appropriate action shall be implemented by the Executive Committee subject to the approval of the Board of Trustees.

10) Continuances and Extensions of Time

Continuances and extensions of time shall be granted by the Executive Committee or the Hearing Officer when it is demonstrated that obtaining and presenting additional evidence or witnesses is necessary to render a fair and equitable decision on the hearing before the Executive Committee.

11) Minutes and Record of Hearing

A) Minutes of every meeting of the Executive Committee and a record of all hearings before the Executive Committee shall be kept by the Executive Secretary of SERS at its Springfield Office.

B) Two records of proceedings shall be kept that shall be in the form of a non-verbatim bystander's record of the proceedings and either a stenographic transcription or a tape recording. The record shall be available to the Petitioner or Authorized Representative prior to the Executive Committee making its recommendations.

C) The Executive Secretary of SERS shall be the official custodian of all papers and documents filed in proceedings before the Executive Committee.

12) Disqualification; Ex Parte Communications

A) Disqualification

i) A Hearing Officer or other member of the Executive Committee may be disqualified on grounds of bias or conflict of interest. A motion to disqualify a Hearing Officer or other member of the Executive Committee for bias or conflict of interest should be made to the Hearing Officer by any party to the hearing at least one week prior to the commencement of the hearing. The motion shall be heard, considered, and ruled upon by the Hearing Officer or, when necessary, by the Executive Committee at or prior to the commencement of the hearing. The movant shall have the burden of proof with respect to the motion to disqualify. Either an adverse ruling or the fact that a Hearing Officer or other member of the Executive Committee is an employee of the System or has a contract with the System, standing alone, shall not constitute bias or conflict of interest.

ii) The Executive Director may not be called as a witness unless it is demonstrated that the Executive Director has relevant noncumulative personal knowledge of facts bearing upon the claim. The Executive Director may not be disqualified as a member of the Executive Committee on the basis that the Executive Director is responsible for the overall administration of the System.

iii) In the event that the Executive Committee is reduced to fewer than two members, the Board President may appoint another person to the Executive Committee.

B) Ex Parte Communications Prohibited. Except in the disposition of matters that the System is authorized by law to entertain or dispose of on an ex parte basis, employees of the System and the members of the Executive Committee shall not, after receiving notice of a hearing in a contested matter, communicate, directly or indirectly, in connection with any issue of fact, with any party, or in connection with any other issue with any party, or the representative of any party, except upon notice and opportunity for all parties to participate. However, an employee of the System may communicate with other employees of the System and an employee of the System or member of the Executive Committee may have the aid and advice of one or more assistants. An ex parte communication received by any employee of the System and member of the Executive Committee shall be made a part of the record of the pending matter, including all written communications, all written responses to the communications, and a memorandum stating the substance of all oral communications and all responses made and the identity of each person from whom the ex parte communication was received. Communications regarding matters of procedure and practice, such as the format of pleadings, number of copies required, manner of service, and status of proceedings, are not considered ex parte communications. [5 ILCS 100/10-60]

f) Rehearings and Written Reappeals

1) Purpose of Rehearing and Written Reappeal

The Executive Committee will grant a rehearing or written reappeal by majority approval only for the purpose of considering new or additional evidence not previously available.

2) Procedures for Rehearing

The procedures set forth in subsection (e) (Hearings Before the Executive Committee) shall apply to rehearings, except that a Petition for a Rehearing must be received within 90 days following the notification of the final decision of the Board of Trustees with respect to the recommendation of the Executive Committee.

3) Procedures for Written Reappeal

The procedures set forth in subsection (d) (Written Appeals to Executive Committee) shall apply to written reappeals, except that a Petition for a Written Reappeal must be received within 90 days following the notification of the final decision of the Board of Trustees with respect to the recommendation of the Executive Committee.

g) Decisions of Board of Trustees

1) Decisions of the Board of Trustees shall be final administrative decisions subject to the provisions of the Administrative Review Law [735 ILCS 5/Art. III].

2) Communication to Petitioner

The decision of the Board of Trustees shall be communicated in writing to the Petitioner and Authorized Representative, if applicable.

h) A request for a retirement annuity or a refund of contributions shall be granted when legal action is pending on a disputed disability claim. Should the member receive a favorable decision on the legal action against the System and request additional disability benefits with regard to the disputed claim for a period beyond the effective date the retirement annuity or refund of contributions, the member must repay all retirement benefits or refund of contributions within 30 days after notification by the System of the amount due.

(Source: Amended at 47 Ill. Reg. 16043, effective October 26, 2023)

Section 1540.280 Availability for Public Inspection (Recodified)

(Source: Recodified to 2 Ill. Adm. Code 2375.10 at 8 Ill. Reg. 15902)

Section 1540.290 Procedure for Submission, Consideration and Disposition of Petitions Seeking the Promulgation, Amendment or Repeal of these Rules and Regulations (Recodified)

(Source: Recodified to 2 Ill. Adm. Code 2375.110 at 8 Ill. Reg. 15902)

Section 1540.300 Organization of the State Employees' Retirement System (Recodified)

(Source: Recodified to 2 Ill. Adm. Code 2375.210 at 8 Ill. Reg. 15902)

Section 1540.310 Amendments

This Part may be changed or amended at any regular or special meeting of the Board by a majority vote of the membership of the Board.

Section 1540.320 Optional Forms of Benefits - Basis of Computation

For purposes of computing optional forms of benefit provided in the Retirement Act, the interest used shall be 8.50% per annum and the mortality rate shall be 52% of the rate in Table A, column A plus 48% of the rate in Table A, column B for members and 48% of the rate in Table A, column A plus 52% of the rate in Table A, column B for surviving beneficiaries of members.

(Source: Amended at 23 Ill. Reg. 3824, effective March 9, 1999)

Section 1540.330 Board Elections

In accordance with the Illinois Pension Code, an election for 2 trustees, one contributing member with at least 8 years of creditable service and one annuitant who has been an annuitant for at least one full year, will be held every 5 years beginning in 1986 and an election for 4 trustees, three contributing members with at least 8 years of creditable service and one annuitant who has been an annuitant for at least one full year, will be held every 5 years beginning in 2009.

a) Definitions of Terms

For purposes of this Section, the following definitions shall apply:

"Annuitant" − Any annuitant, as defined in Section 14-103.07 of the Code.

"Annuitant who has been an annuitant for at least one full year" means an annuitant who has received at least 12 monthly installments of their retirement annuity on or before the date upon which the annuitant is sworn into office as a trustee.

"Code" means the Illinois Pension Code [40 ILCS 5].

"Contributing member " − Any member of the System, as defined in Section 14-103.06 of the Code who is currently contributing to the System.

"Contributing member with at least 8 years of creditable service" – Any contributing member who, on or before the date upon which they are sworn into office as a trustee, has obtained at least 8 years of creditable service, as defined in Section 14-103.15 of the Code.

b) Nominations

Qualified persons for the position of Contributing Member Trustee or Annuitant Trustee shall file a Statement of Candidacy and a trustee petition on a form prescribed by the Board, in accordance with the Code. Petitions shall be signed by not fewer than 400 contributing members for a Contributing Member Trustee candidate and by not fewer than 100 annuitants for an Annuitant Trustee candidate and indicate the addresses of the signators opposite their names. Nominating petitions shall be circulated and certified only by contributing members or annuitants for each respective trustee candidate. Forms shall be secured from the Executive Secretary and filed in accordance with the Calendar (see subsections (f) and (i)). Trustee petitions and the Statement of Candidacy must be filed at the System's Springfield office, 2101 South Veterans Parkway, Springfield, Illinois, in person or by mail during the office hours of 8:00 a.m. to 4:30 p.m.

c) Lottery for Ballot Position

All petitions filed on or before the first day for filing shall be deemed filed as of 8:00 a.m. on the first day. All petitions received thereafter shall be deemed as filed in the order of actual receipt. Where 2 or more petitions are received simultaneously for the same office, the State Employees' Retirement Board, with whom petitions are filed, shall break ties and determine the order of filing, by means of a lottery.

d) Procedures on Objections

The Board of Trustees of the System shall review and rule on all written petitions filed objecting to any candidate's qualifications as outlined in Section 14-134 of the Code. Petitions objecting shall be made in accordance with 80 Ill. Adm. Code 1540.270(d)(3). Nomination papers shall be deemed valid unless objections are received by the System in writing within 5 days after the last day for filing nomination papers. Not later than 12:00 noon on the next business day, after receipt of the objector's petition, the Executive Secretary shall deliver or transmit the nomination papers and original objector's petition to the Chairman of the Board and a copy of the objector's petition to the candidate whose nomination papers are the subject of the objection. Not later than 12:00 noon on the second business day after receipt of the objector's petition, the Chairman of the Board shall call for a meeting to consider the petition by giving notice to each of the members of the Board, the objector and candidate. The meeting of the Board shall not be less than 3 nor more than 5 days after receipt of objector's petition by the Chairman of the Board.

e) Elections

After the Executive Secretary has certified the candidates, separate ballots shall be prepared for the Contributing Member Trustee and for the Annuitant Trustee. Candidate position shall be in the order that the petitions are filed, or as determined by the lottery. Ballots will be mailed on election day to all qualified Contributing Members and Annuitants. All ballots must be returned, sealed in the envelope provided, so as to be received by May 30 of the election year. In order to be eligible to vote, a contributing member must make contributions during the first payroll period in March of the election year. In order to be eligible to vote, an annuitant must receive a retirement annuity for March of each election year.

f) Calendar of Events

1) Beginning in 1986 and every 5 years thereafter, and in 2014 and every 5 years thereafter, the following timelines shall apply:

A) JANUARY 2 − Forms available from the Executive Secretary for Statement of Candidacy and petitions.

B) JANUARY 15 − Last day Executive Secretary shall publish in a newsletter the dates and times when candidates may receive petitions. The pre-filing notice must also include the time and location of the filing period for nominating petitions.

C) FEBRUARY 11 − First day for candidates to file nomination papers for trustee offices in the office of the Executive Secretary.

D) FEBRUARY 19 − Last day for candidates to file nomination papers for trustee offices in the office of the Executive Secretary.

E) FEBRUARY 24 −

i) Last day for filing objections to the nomination papers of candidates for the office of trustees in the office of the Executive Secretary.

ii) Notice shall be given by telephone, facsimile or electronically of the time and place for conducting a lottery when 2 or more petitions are received simultaneously for the same office. Notice shall be given by the Executive Secretary to all candidates involved in the lottery.

F) FEBRUARY 28 − Lottery shall be conducted by the Executive Secretary when 2 or more petitions are received simultaneously for the same office.

G) MARCH 1 − Last day for candidates to withdraw their candidacy in the office of the Executive Secretary.

H) MAY 1 − or, if Sunday, then May 2 − Election

I) MAY 30 − Last day all voted ballots shall be received by the Board or its designate.

J) JUNE 6 − Last day for canvassing of election results by the Board or its designated agent.

K) JUNE 18 − Last day for the Board to proclaim the results of the election and to issue the certificates of election to the winners.

2) If any of these dates falls on a Saturday, Sunday or holiday, the next succeeding business day for the System shall be the effective date.

g) Ballot Security

Upon receiving the official voted ballots, they shall be secured in a locked location until the canvassing begins.

h) Board Notification

1) The Board or its designated agent shall canvass the ballots and certify the results. Each candidate may have two observers present during the ballot canvassing.

2) The candidate or candidates receiving the most votes for the office of Contributing Member Trustee will be declared the winner. The candidate receiving the most votes for the office of the Annuitant Trustee will be declared the winner.

3) If a candidate should become ineligible for office after the submission of the Statement of Candidacy and petitions, but before the election, the Board shall notify the candidate of the ineligibility and remove the candidate's name from the ballot. If a candidate should become ineligible for office after the mailing of ballots, the candidate's votes will not be counted and the eligible candidate receiving the most votes shall be declared the winner.

4) Ballots will be retained for 60 days following the certification. The ballots can then be destroyed, unless litigation is pending.

5) In case of a tie vote between 2 or more candidates, the Board shall determine the winner by means of a lottery to break the tie.

6) The Board will proclaim the results of the election and issue Certificates of Election to the winners.

i) Special Election Calendar of Events

The special election to be held in 2009 to fill the 4 new elected trustee positions shall be subject to the same procedures outlined in this Section, except as may need to be modified to comply with the following calendar for the special election:

1) APRIL 16 − First day for candidates to file nomination papers for trustees offices in the office of the Executive Secretary.

2) MAY 11 − Last day for candidates to file nomination papers for trustees offices in the office of the Executive Secretary.

3) MAY 15 − Lottery shall be conducted by the Executive Secretary when 2 or more petitions are received simultaneously for the same office.

4) JUNE 1 − Election

5) JUNE 26 − Last day all voted ballots shall be received by the Board or its designate.

6) JULY 2 − Last day for canvassing of election results by the Board or its designated agent and for the Board to proclaim the results of the election and to issue the certificates of election to the winners.

(Source: Amended at 45 Ill. Reg. 6848, effective May 24, 2021)

Section 1540.331 Board Vacancies

When a vacancy occurs for an active or retired elected trustee position, the Board shall appoint a qualifying member to fill the vacancy for the remainder of that term. The announcement of the vacancy and the process to fill such vacancy shall be published on the System's website no less than 45 days before the vacancy will be filled.

a) If the vacancy is an active member trustee position, an email shall be sent to each active member's email address on file notifying such members of the vacancy as prescribed under Section 14-134 of the Illinois Pension Code, the eligibility criteria to fill such vacancy, as described in the Act and this Section, and a summary of the process to fill such vacancy. An active member is eligible to fill a vacancy to the position of an active contributing member trustee provided that the member has at least eight years of creditable service, supplies a resume and statement that summarizes their interest in filling the vacancy, and provides a petition of no less than 250 signatures of active contributing members in support of their candidacy.

b) If the vacancy is a retired member trustee position, an email shall be sent to each retired member's email address on file notifying each retried member of the vacancy, the eligibility criteria to fill such vacancy as described in the Act and this Section, and a summary of the process to fill such vacancy. A retired member is eligible to fill such vacancy if the member supplies a resume and statement that summarizes their interest in filling the vacancy, and provides a petition of no less than 100 signatures of retired members in support of their candidacy.

c) A candidate must deliver the documentation and petition requirements of this Section to the System's primary office at least 10 days before the Board meeting in which such vacancy is to be filled.

d) At the next scheduled meeting of the Board, eligible members who submit the required documents will be considered by the Board for appointment. The affirmative votes of seven trustees are required to appoint a candidate. The Board appointment will be valid for the remainder of that term.

(Source: Added at 48 Ill. Reg. 13838, effective August 27, 2024)

Section 1540.340 Excess Benefit Arrangement

a) Adoption and Nature of the Arrangement.

1) The Arrangement. The State Employees' Retirement System of Illinois, pursuant to the authority granted to it by 40 ILCS 5/1-116, hereby adopts the State Employees' Retirement System of Illinois Excess Benefit Arrangement effective January 1, 1997.

2) Nature of the Arrangement. This Arrangement is a portion of a governmental plan (as that term is defined in section 414(d) of the Internal Revenue code of 1986, as amended, and section 3(32) of the Employee Retirement Income Security Act of 1974, as amended) and is administered as a qualified governmental excess benefit arrangement pursuant to the provisions of Code section 415(m).

3) Limitation Year. The System adopts the calendar year as the limitation year for the purpose of this Arrangement and Code Section 415.

b) Definitions. Each word or phrase defined in this subsection (b) shall have the following meaning whenever such word or phrase is capitalized and used herein unless a different meaning is clearly required by the context of the Arrangement. The definition of any term in the singular may also include the plural.

1) "Arrangement" shall mean the State Employees' Retirement System of Illinois Excess Benefit Arrangement as from time to time amended or restated.

2) "Code" shall mean the Internal Revenue Code of 1986, as amended.

3) "Effective Date" shall mean January 1, 1997.

4) "Limitation Year" shall mean that period for which all calculations and determinations of benefits and contribution limits will be made under Code Section 415 and this Arrangement.

5) "Maximum Benefit" shall mean the monthly equivalent of the maximum benefit permitted by Code section 415 to be paid a Participant under the Retirement Plan.

6) "Participant" shall mean a person who is an "annuitant" as that term is defined in [40 ILCS 5/14-103.07] or a "beneficiary" as that term is defined in [40 ILCS 5/14-103.08].

7) "Retirement Plan" shall mean the retirement plan administered by the State Employees' Retirement System of Illinois pursuant to [40 ILCS 5/14-101].

8) "System" shall mean the State Employees' Retirement System of Illinois.

9) "Unrestricted Benefit" shall mean the maximum monthly Normal or Early Retirement Benefit or Disability Benefit payable under Article 14 of the Illinois Pension Code [40 ILCS 5/14] determined without regard to the limitation imposed under section 415 of the Code.

c) Benefits.

1) Retirement Benefit. Upon the Normal retirement date of a Participant, as provided under the Retirement Plan, such Participant shall be entitled to a monthly benefit equal in amount to his or her Unrestricted Benefit less the Maximum Benefit.

2) Early Retirement Benefit. Upon the early retirement of a Participant, as provided under the Retirement Plan, such Participant shall be entitled to a monthly benefit equal in amount to his or her Unrestricted Benefit less the Maximum Benefit.

3) Disability Benefit. If a Participant is unable to work because of an illness or injury with an employer that participates in the Retirement Plan and as a result is entitled to a disability benefit provided under the Retirement Plan, such a Participant shall be entitled to a monthly benefit equal to his or her Unrestricted Benefit less the Maximum Benefit.

4) Spouse's Pension Benefit. Subject to subsection (c)(5) of this Section, upon the death of a Participant whose spouse is eligible for a pre- or post- retirement surviving spouse benefit under the Retirement Plan, the Participant's surviving spouse shall be entitled to a monthly benefit equal to the surviving spouse benefit determined in accordance with the provisions of the Retirement Plan without regard to the limitations under Code section 415 less the Maximum Benefit.

5) Benefit Payment. A retirement benefit payable under this subsection shall be paid at such time or times and in such form to the Participant as the benefit under the Retirement Plan would be paid.

d) Administration of the Arrangement.

1) Administrator. The Arrangement shall be administered by the System which shall have the authority to interpret the Arrangement and issue such policies as it deems appropriate. All provisions set forth in the Retirement Plan with respect to the Administrative powers and duties of the System, expenses of administration, and procedures for filing claims shall also be applicable with respect to the Arrangement. The System shall have the duty and responsibility to maintain records making the requisite calculations and disbursing the payments hereunder through the Comptroller of the State of Illinois. The System's interpretations, determinations, regulations, and calculations shall be final and binding on all persons and parties concerned.

2) Amendment and Termination. The System may amend or terminate the Arrangement at any time, provided, however, that no such amendment or termination shall adversely affect a benefit to which a terminated or retired Participant or his or her beneficiary is entitled under subsection (c) of this Section prior to the date of such amendment or termination unless the Participant becomes entitled to an amount equal to such benefit under another arrangement plan or practice adopted by the System.

3) Funding. The System will pay all benefits arising under this Arrangement and all costs, charges and expenses relating thereto through appropriations received from the State of Illinois, and miscellaneous income of the System, except those costs normally borne by other agencies or offices of the State of Illinois. No provision shall at any time be made with respect to segregating any assets of the System, or of any employer for payment of any benefits hereunder. No Participant, or any other person, shall have any interest in any assets or miscellaneous income of the System, the State, or of any employer by reason of the right to receive a benefit under the Arrangement.

4) Non-assignability of Benefits. The benefits payable hereunder or the right to receive future benefits under the Arrangement shall not be subject to judgment, execution, garnishment, attachment or other seizure by process, in bankruptcy or otherwise, nor to sale, pledge, mortgage or other alienation, and shall not be assignable to the same extent as provided for in [40 ILCS 5/14-147].

5) Terms of Arrangement. Nothing contained herein shall be construed as providing for assets to be held in trust or escrow or any other form of asset segregation for the Participant or for any other person or persons to whom benefits are to be paid pursuant to the terms of this Arrangement, the Participant's only interest hereunder being the right to receive the benefits set forth herein. To the extent the Participant or any other person acquires a right to receive benefits under this Arrangement, such right shall be no greater than the right of any unsecured, general creditor of the State of Illinois.

6) Applicable Law. All questions pertaining to the construction, validity, and effect of this Arrangement shall be determined in accordance with the laws of the State of Illinois and, unless inconsistent, with the laws of the United States.

7) Forfeiture Provisions. All rights to any benefits payable under this Arrangement, including the payment of any benefit installments, shall be immediately forfeited if the Participant's right to receive an annuity benefit under the Retirement Plan is terminated in accordance with [40 ILCS 5/14-149].

(Source: Added at 21 Ill. Reg. 4992, effective April 1, 1997)

ADMINISTRATIVE CODE

Section 1540.350 Qualified Illinois Domestic Relations Orders (QILDRO)

a) Definitions

1) The definitions in Section 1-119(a) of the Illinois Pension Code (Code) [40 ILCS 5] shall apply to this Section.

2) "Death Benefit" in Section 1-119(a)(2) of the Code includes a lump sum payment described in Sections 14-116, 14-117 and 14-128 of the Code.

3) "Member's Refund" in Section 1-119(a)(5) of the Code does not include an error refund as defined in subsection (a)(4) of this Section.

4) "Error Refund" as used in this Section includes:

A) a refund paid to a member as the result of an error in a payment to the System;

B) an interest rebate; or

C) a refund paid to a member as the result of the member's failing to complete the required contributions necessary to purchase or reinstate service credit.

5) "Disability Benefit" in Section 1-119(a)(3) of the Code includes:

A) an occupational disability benefit under Section 14-123 of the Code;

B) a temporary disability benefit under Section 14-123.1 of the Code; or

C) a nonoccupational disability benefit under Section 14-124 of the Code.

6) "Member's Retirement Benefit" as used in this Section means the total amount of the retirement benefit as defined in Section 1-119(a)(8) of the Code that would be payable to the member in the absence of a QILDRO.

7) "Partial Member's Refund" as used in this Section includes:

A) a refund of widow/survivor benefit contributions;

B) a refund of alternative formula contributions as a result of the member not completing sufficient service to qualify for the alternative formula retirement benefit; or

C) a refund of early retirement contributions.

8) "Permissive Service" in Section 1-119(a)(5.5) of the Code includes credit purchased by the member for military service, leaves of absence, early retirement incentives, contractual service, federal or out-of-state service, visually handicapped service, legislative staff intern service and unused sick and vacation time.

9) "Regular Service" in Section 1-119(a)(7.5) of the Code includes service for which compensation was paid on a State payroll and purchased by the member for a qualifying period, short periods of employment, full or partial refund, emergency or temporary employment, and service credit where the member previously opted not to participate in the System and subsequently opted to purchase the service credit for the participation.

10) "Accelerated Retirement Benefit" means an accelerated pension benefit payment under Sections 14-147.5 and 14-147.6 of the Code.

b) Requirements for a Valid Qualified Illinois Domestic Relations Order

The System will accept a court order as a valid Qualified Illinois Domestic Relations Order, or QILDRO, that meets all of the following requirements:

1) The order must be accompanied by a $50 non-refundable processing fee, by check payable to the State Employees' Retirement System.

2) If the order applies to a person who became a member of the System before July 1, 1999, the order must be accompanied by the original Consent to Issuance of QILDRO signed by the member.

3) The order must be a certified copy of an original order dated on or after July 1, 1999.

4) The order must have been issued by an Illinois court of competent jurisdiction in a proceeding for declaration of invalidity of marriage, legal separation, or dissolution of marriage that provides for the distribution of property, or any proceeding to amend or enforce such a property distribution, prior to the death of the member.

5) The order must contain the name, residence address, and Social Security number of the member.

6) The order must contain the name, residence address, and Social Security number of the alternate payee.

7) The order must identify the State Employees' Retirement System as the retirement system to which it is directed.

8) The order must express any amount to be paid to the alternate payee from a member's retirement benefit as a dollar amount per month or as a percentage per month.

9) The order must express any amount to be paid to the alternate payee from a member's refund or partial refund as a dollar amount or as a percentage of the refund.

10) The order must express any amount to be paid to the alternate payee from a member's death benefit as a dollar amount or as a percentage of the death benefit.

11) The order must apply only to benefits that are statutorily subject to QILDROs as provided in Section 1-119(b)(1) of the Code.

12) The order and, if applicable, the Consent to Issuance of QILDRO must be in the form adopted by the System.

13) No language may be added to, or omitted from, the QILDRO form or the consent form adopted by the System.

c) Requirement for a Valid QILDRO Calculation Court Order

The System will accept a court order as a valid QILDRO Calculation Court Order or as a QILDRO Calculation Court Order that meets all of the following requirements:

1) The order must be accompanied by a $50 non-refundable processing fee, with the check made payable to the State Employees' Retirement System.

2) The order must be a certified copy of an original order dated on or after July 1, 2006.

3) The order must have been issued by an Illinois court of competent jurisdiction in a proceeding for declaration of invalidity of marriage, legal separation, or dissolution of marriage that provides for the distribution of property, or any proceeding to amend or enforce such a property distribution.

4) The order must contain the name, residence address, and Social Security number of the member.

5) The order must contain the name, residence address, and Social Security number of the alternate payee.

6) The order must identify the State Employees' Retirement System as the retirement system to which it is directed.

7) The order must apply only to benefits that are statutorily subject to QILDRO Calculation Court Orders as provided in Section 1-119(b)(1) of the Code.

8) The order must be in the form directed by Section 1-119 of the Code.

9) No language may be added to, or omitted from, the QILDRO Calculation Court Order form adopted by the System.

10) The QILDRO Calculation Court Order must not be completed in a manner that changes the intent of the QILDRO to which it relates.

d) Required Form

1) A QILDRO/QILDRO Calculation Court Order must be in the form directed by Section 1-119 of the Code. The required QILDRO/QILDRO Calculation Court Order form is available from the System upon request or in PDF at www.state.il.us/srs.

2) A QILDRO/QILDRO Calculation Court Order that is not in the form adopted by the System is invalid.

3) A Consent to Issuance of QILDRO must be in the form adopted by the System as of the date that the QILDRO is received. The required consent form is available from the System upon request or in PDF at www.state.il.us/srs.

4) A consent form that is not in the form adopted by the System is invalid.

e) Filing a QILDRO with the System

1) A QILDRO should be sent to the System's Springfield Office, accompanied by the consent form, if applicable, and a $50 non-refundable processing fee.

2) A QILDRO will be deemed received by the System on the date that it is received in the System's Springfield Office.

3) Within 45 calendar days after receipt of a QILDRO, the System will review the order and notify the member and each alternate payee by first class mail that it has received the order, and whether the order is a valid QILDRO. If the System determines that the order is not a valid QILDRO, the notice will specify the reason or reasons.

4) A QILDRO that has been modified by the issuing court should be submitted in the same manner as the original QILDRO. A separate $50 non-refundable processing fee is required for each modified QILDRO.

f) Filing a QILDRO Calculation Court Order with the System

1) A QILDRO Calculation Court Order should be sent to the System's Springfield Office, accompanied by a $50 non-refundable processing fee.

2) A QILDRO Calculation Court Order will be deemed received by the System on the date that it is received in the System's Springfield Office.

3) Within 45 calendar days after receipt of a QILDRO Calculation Court Order, the System will review the order and notify the member and each alternate payee by first class mail that it has received the order, and whether the order is a valid QILDRO Calculation Court Order. If the System determines that the order is not a valid QILDRO Calculation Court Order, the notice will specify the reason or reasons.

4) A QILDRO Calculation Court Order that has been modified by the issuing court should be submitted in the same manner as the original QILDRO Calculation Court Order. A separate $50 non-refundable processing fee is required for each modified QILDRO Calculation Court Order. A modified QILDRO Calculation Court Order will not affect the priority of the QILDROs on file.

g) Benefits Affected by a QILDRO

1) A QILDRO may apply only to the following benefits administered by the System:

A) a monthly retirement benefit;

B) a member's termination refund;

C) a member's partial refund;

D) a member's death benefit; and

E) a member's accelerated retirement benefit.

2) If a QILDRO specifies a dollar amount or percentage payable to an alternate payee from any partial member's refund that becomes payable, the aggregate amount paid to the alternate payee from all partial member's refunds shall not exceed the dollar amount or percentage specified in the QILDRO.

3) A QILDRO shall not apply to any of the following:

A) a reversionary annuity that becomes payable following the death of the member;

B) a survivor benefit;

C) any disability benefit;

D) an error refund; and

E) any other benefit paid under Article 14 of the Code not specifically listed in subsection (g)(1) of this Section.

4) If the space provided on the QILDRO form for the dollar amount or percentage the alternate payee is to receive from the member's retirement benefit, member's refund, partial member's refund or death benefit is left blank, then the alternate payee will receive no portion of the benefit or refund for which the space is left blank.

h) Effect of a Valid QILDRO

1) Retirement Benefit

A) After the System has determined that a QILDRO applying to a retirement benefit on a dollar basis is valid, one of the following will occur:

i) If the member has not yet started receiving benefits, the QILDRO will be placed in the member's file and will be implemented when the first affected benefit payment commences; or

ii) If the member is already receiving benefits subject to the QILDRO, payment to the alternate payee will begin with the first payment to the member occurring at least 30 days after the QILDRO is received.

B) After the System has determined that a QILDRO applying to a retirement benefit on a percentage basis is valid, that the member has not retired, and that a QILDRO Calculation Court Order will be needed, the following will occur:

i) Within 45 days, the System will provide the information required in Section 1-119(h)(1.5)(B) of the Code;

ii) When the member requests a retirement benefit, within 45 days after the System receives all information necessary to determine the actual benefit payable, the System will provide the information required in Section 1-119(h)(1.5)(C) of the Code; and

iii) When the member requests a retirement benefit and there is no QILDRO Calculation Court Order on file, the System will advise the member and alternate payee of the need for a QILDRO Calculation Court Order. The System will determine an anticipated payment to the alternate payee based on information in the QILDRO, if it is possible to do so. The System will hold the alternate payee's anticipated payment and pay the member's monthly retirement benefit, less the amount held for the alternate payee, pending receipt of the QILDRO Calculation Court Order. Once the QILDRO Calculation Court Order is received, the System will adjust the amounts payable in accordance with the QILDRO Calculation Court Order and begin paying the alternate payee. However, if it is not possible for the System to determine an anticipated payment based only on the QILDRO, then neither the member nor the alternate payee will be paid until the QILDRO Calculation Court Order is received. If the System holds an anticipated payment for the alternate payee, then such payment will be issued to the alternate payee upon receipt of a valid QILDRO Calculation Court Order. The System shall not adjust the anticipated payment for the alternate payee unless expressly directed by a valid Court order.

C) After the System has determined that a QILDRO applying to a retirement benefit on a percentage basis is valid, and that the member is receiving a retirement benefit, the following will occur:

i) Within 45 days, the System will provide the information required in Section 1-119 (h)(1.5)(C) of the Code; and

ii) If there is no QILDRO Calculation Court Order on file, the System will advise the member and alternate payee of the need for a QILDRO Calculation Court Order. The System will determine an anticipated payment to the alternate payee based on information in the QILDRO, if it is possible to do so. The System will hold the alternate payee's anticipated payment and pay the member's monthly retirement benefit, less the amount held for the alternate payee, pending receipt of the QILDRO Calculation Court Order. Once the QILDRO Calculation Court Order is received, the System will adjust the amounts payable in accordance with the QILDRO Calculation Court Order and begin paying the alternate payee. However, if it is not possible for the System to determine an anticipated payment based only on the QILDRO, then neither the member nor the alternate payee will be paid until the QILDRO Calculation Court Order is received. If the System holds an anticipated payment for the alternate payee, then such payment will be issued to the alternate payee upon receipt of a valid QILDRO Calculation Court Order. The System shall not adjust the anticipated payment for the alternate payee unless expressly directed by a valid Court order.

2) Refund or Partial Refund

A) After the System has determined that a QILDRO applicable to a member's refund or partial member's refund is valid, one of the following will occur:

i) If the QILDRO provides that the refund or partial refund will be allocated on a dollar amount basis and the member has not applied for a refund or partial refund, the QILDRO will be placed in the member's file and will be implemented when payment of the affected refund or partial refund is made;

ii) If the QILDRO provides that the refund or partial refund will be allocated on a percentage basis and a QILDRO Calculation Court Order is not on file when the member requests a refund or partial refund, the System will provide the refund or partial refund amount to the member and alternate payee and will advise of the need for a QILDRO Calculation Court Order. The System will hold the refund or partial refund until the QILDRO Calculation Court Order is received;

iii) If a refund application is pending when the System receives a QILDRO that purports to apply to the refund but the refund payment has not yet been vouchered, the System will hold the portion of the refund that would be payable to the alternate payee until it receives clarification from the court as to whether the QILDRO is effective against that pending refund. It is the member's or alternate payee's responsibility to obtain clarification from the court and to notify the System of the court's clarification; or

iv) If a refund payment has already been vouchered when the System receives a QILDRO that purports to apply to the refund, the QILDRO shall not be effective against that refund.

B) "Vouchered", as used in subsection (h)(2)(A), means that the voucher has been signed and dated, even though the warrant has not been issued by the Office of the State Comptroller.

3) Death Benefit

A) After the System has determined that a QILDRO applicable to a member's death benefit is valid, one of the following will occur:

i) If the QILDRO provides that the death benefit will be allocated on a dollar amount basis and if the System has not received notice of the member's death, the QILDRO will be placed in the member's file and will be implemented when payment of the affected death benefit is made;

ii) If the QILDRO provides that the death benefit will be allocated on a percentage basis and a QILDRO Calculation Court Order is not on file when the System is notified of the death of the member, the System will provide the death benefit amount to the beneficiary on file and the alternate payee and will advise of the need for a QILDRO Calculation Court Order. The System will hold the death benefit until the QILDRO Calculation Court Order is received.

• If a death benefit application is pending when the System receives a QILDRO that purports to apply to the death benefit but the death benefit payment has not yet been vouchered, the System will hold the portion of the death benefit that would be payable to the alternate payee until it receives clarification from the court as to whether the QILDRO is effective against that pending death benefit. It is the alternate payee's responsibility to obtain clarification from the court and to notify the System of the court's clarification;

• If a death benefit payment has already been vouchered when the System receives a QILDRO that purports to apply to the death benefit, the QILDRO shall not be effective against that death benefit;

B) "Vouchered", as used in subsection (h)(3)(A), means that the voucher has been signed and dated, even though the warrant has not been issued by the Office of the State Comptroller.

4) Accelerated Retirement Benefit

A) For cases in which a valid QILDRO filed with the System grants prospective automatic annual increases to benefits of an alternate payee and the member subject to that QILDRO elects the accelerated retirement benefit under Section 14-147.6 of the Code, a supplemental order clarifying how the payment option is to be divided must be accepted before any of the retirement benefits payable to the member and alternative payee are vouchered. If no supplemental order was provided by or on behalf of the member subject to the QILDRO at the time he or she applies for the accelerated retirement benefit under Section 14-147.6, the System will advise of the need for a supplemental order. It is the member's or alternate payee's responsibility to obtain the supplemental order.

B) If a member subject to a valid QILDRO elects the accelerated retirement benefit under Section 14-147.5 of the Illinois Pension Code, a supplemental order clarifying how the accelerated retirement benefit is to be divided must be accepted by the System before any benefits payable to the member or the alternate payee may be vouchered. If no supplemental order was provided by or on behalf of the member subject to the QILDRO at the time he or she applies for the accelerated retirement benefit under Section 14-147.5, the System will advise of the need for a supplemental order. It is the member's or alternate payee's responsibility to obtain a supplemental order.

C) "Vouchered", as used in this subsection (h)(4), means that the voucher has been signed and dated, even though the warrant has not been issued by the Office of the State Comptroller.

i) Termination of QILDRO

The System will consider a QILDRO as having been terminated in any of the following situations:

1) Upon receipt of a certified copy of a court order terminating the QILDRO;

2) Upon payment of all amounts provided for in the QILDRO; or

3) When the person to whom the QILDRO applies ceases to be a member or annuitant of the System.

j) QILDROs Against Persons Who Became Members Prior to July 1, 1999

1) A QILDRO that applies to a person who became a member of the System prior to July 1, 1999, must be accompanied by the original Consent to Issuance of QILDRO signed by the member. If the original is unavailable, a certified copy of the consent form filed with the court that issued the QILDRO is acceptable in lieu of the original.

2) The Consent to Issuance of QILDRO must be in the form adopted by the System (including judicial district and county, case number and caption, member's name and SSN, alternate payee's name and SSN, member's signature and date) as of the date the QILDRO is received. A consent form that is not in the form adopted by the System is invalid.

3) In accordance with Section 1-119(m)(1) of the Code, a consent form must be signed by the member to whom the QILDRO applies. A consent form signed by a judge in lieu of the member is invalid.

k) Alternate Payee's Address

1) An alternate payee is responsible to report to the System in writing and in the form and manner prescribed by the System each change in their name and mailing address.

2) When a member's retirement benefit, refund or death benefit subject to a QILDRO becomes payable, the System will send notice to the last address of the alternate payee reported to the System that the benefit, refund or death benefit is payable. Other than sending such notice, the System shall have no duty to take any other action to locate an alternate payee.

3) The 180-day period during which the System will hold the retirement benefit, refund, or death benefit as provided in Section 1-119(e)(2) of the Code begins on the date that the notice described in subsection (j)(2) of this Section is sent to the last address of the alternate payee reported to the System, or on the date that the retirement benefit, refund, or death benefit becomes payable, whichever is later.

4) If the System does not receive written confirmation of the alternate payee’s current mailing address in the form and manner prescribed by the System within the 180-day period, then the System will pay the amounts held under Section 1-119(e)(2) of the Code to the regular payee.

5) If the System receives written confirmation of the alternate payee's current mailing address in the form and manner prescribed by the System after the 180-day period, then the System will begin issuing applicable recurring benefit payments to the alternate payee in accordance with the QILDRO and QILDRO Calculation Court Orders on file with the System, but the alternate payee will have no right to any amounts already paid to the member.

l) Electing Form of Payment

1) A member's election either to receive or forego a proportional annuity under the Retirement Systems Reciprocal Act [40 ILCS 5/20] is not a prohibited election under Section 1-119(j)(1) of the Code.

2) A member's election to take a refund is not a prohibited election under Section 1-119(j)(1) of the Code.

3) A member's election of a form of payment of annuity that reduces the member's total benefit, while still allowing full payment to the alternate payee under a QILDRO at the date of the election, is not a prohibited election under Section 1-119(j)(1) of the Code.

m) Automatic Annual Increases

1) The alternate payee will or will not receive a proportionate share of any automatic annual increase in the member's retirement benefit under Section 14-114 or 14-115 of the Code, according to the designation in the QILDRO. If the QILDRO fails to designate whether the alternate payee is intended to receive a proportionate share of the automatic annual increase, then the System will presume that the alternate payee is not entitled to a proportionate share of the automatic annual increase in the member's share.

2) The initial increase in the amount due the alternate payee under the QILDRO is payable with the next succeeding increase due the member after the date the QILDRO first took effect.

3) The System will calculate the amount of any increase payable to the alternate payee under the QILDRO.

4) The amount of any increase payable to the alternate payee is the percentage of increase due the member under Sections 14-114 or 14-115 of the Code, multiplied by the alternate payee's monthly benefit as of the date of the increase.

n) Providing Benefit Information for Divorce Purposes

1) Within 45 days after receiving a subpoena or request from a member, the System will provide the information required in Section 1-119(h)(1) of the Code.

2) Information provided by the System for divorce purposes does not include the amount of a member's retirement benefit for which no information is yet on file with the System. The System will not provide a retirement benefit amount if the member is not vested. The System will not project earnings or future service. The System will not assume future eligibility for special formula employees or elections by members.

3) Information provided by the System for divorce purposes does not reflect an actuarial opinion as to the present value of a member's retirement benefit, refund, death benefits or other interests.

4) Except as otherwise indicated by the System in a statement regarding a member's benefits, information provided by the System for divorce purposes reflects the member's total service career for which service credit in the System has accrued, and is not isolated as to the marital period only. The System will not provide benefit information for the marital period or specific years.

5) The System does not calculate the amount of a member's retirement benefit, refund or death benefit that would be payable to a former spouse pursuant to a divorce decree or dissolution judgment.

6) While the System makes every effort to provide accurate information for divorce purposes, benefit estimates are by their nature approximate and subject to revision due to errors, omissions, erroneous assumptions, or future changes in the rules and laws governing the System.

7) The System does not disclose information for divorce purposes to spouses, former spouses, relatives, or other third parties including the member's attorney, except in response to the member's written authorization to release such information, or in response to a subpoena.

o) Member’s Death before Entry of QILDRO Calculation Court Order

1) If the System has on file a valid QILDRO that allocates a System-provided benefit on a percentage basis and if the member named in the QILDRO dies before the associated QILDRO Calculation Court Order has been entered, then the System shall send a written notice to the alternate payee's last known address to advise the alternate payee that a valid QILDRO Calculation Court Order is needed and that it is the alternate payee's responsibility to have the required calculations performed and to file that order with the System.

2) If the alternate payee does not respond to the System's written notice by filing a valid QILDRO Calculation Court Order for the underlying QILDRO within 180 days after the System sends the written notice and, as a result, the alternate payee to whom benefits are to be directed under the QILDRO Calculation Court Order has not been located, then the System shall pay the System-provided benefits that would otherwise be distributed under the QILDRO to the regular payee’s beneficiaries or estate as is provided in Article 14 of the Code.

3) The System has no duty or obligation to assist in performing calculations required for the entry of a QILDRO Calculation Court Order or in completing the QILDRO Calculation Court Order form.

p) Nontaxable Funds

1) Unless otherwise specified in a supplemental order, the nontaxable portion of a payment divided under Section 1-119 of the Code shall be paid solely to the member, or, when applicable, the member's named beneficiaries or estate.

2) Notwithstanding subsection (p)(1), nontaxable funds may be payable to an alternate payee if those funds are needed to fulfill the amount due to that alternate payee as ordered by a court in accordance with Section 1-119 of the Code.

(Source: Amended at 49 Ill. Reg. 12173, effective September 9, 2025)

Section 1540.360 Election to be an Employee under Section 14-103.05(b)(3) of the Illinois Pension Code

An election to be considered an "employee" under Section 14-103.05(b)(3) of the Illinois Pension Code is an irrevocable election for all periods during which the person is serving at the appointment of the Governor with the advice and consent of the Senate. The election is valid and irrevocable for the entire period spent in a position, even upon reappointment to the same position. Appointment to a different position under Section 14-103.05(b)(3) requires the employee to complete a new election form.

(Source: Added at 34 Ill. Reg. 285, effective December 15, 2009)

Section 1540.370 Americans With Disabilities Act

a) Purpose

1) This grievance procedure is established pursuant to the Americans With Disabilities Act of 1990 (ADA) (42 USC 12101 et seq.) and specifically Section 35.107 of the Title II regulations (28 CFR 35.107), requiring the adoption of a procedure to resolve grievances asserted by qualified individuals with disabilities. Interested parties may contact the ADA Coordinator to review the ADA or its regulations to understand the rights, privileges and remedies afforded by them.

2) In general, the ADA requires that each program, service and activity offered by the State Employees' Retirement System (System), when viewed in its entirety, be readily accessible to and usable by qualified individuals with disabilities.

3) It is the intention of the System to foster open communication with all individuals requesting readily accessible programs, services and activities. The System encourages supervisors of programs, services and activities to respond to requests for modifications before they become grievances.

b) Definitions

"ADA" means the Americans With Disabilities Act of 1990 (42 USC 12101 et seq.).

"ADA Coordinator" means the person appointed by the Executive Secretary of the System to coordinate the System's efforts to comply with and carry out its responsibilities under Title II of the ADA, including any investigation and prompt equitable resolution of grievances filed by complainants. The ADA Coordinator may be contacted at State Employees' Retirement System, ADA Coordinator, 2101 S. Veterans Parkway, Springfield IL 62704. (See 28 CFR 35.107.)

"Complainant" means a qualified individual with a disability who files a Grievance Form provided by the System.

"Disability" shall have the same meaning as set forth in the ADA.

"Executive Secretary" means the Executive Secretary of the System or a duly authorized designee.

"Grievance" means any written complaint under the ADA by an individual with a disability who meets the eligibility requirements for participation in, or receipt of, the benefits of a program, activity or service offered by the System and who believes he or she has been excluded from participation in, or denied the benefits of, any program, service or activity of the System, or who has been subject to discrimination by the System.

"Grievance Form" means the form prescribed for the purpose of filing a grievance under this Part and includes information such as name, address, telephone number, and nature of the grievance, with specificity, including date of incident, time, place and witnesses if applicable.

"Major Life Activities" means functions such as caring for one's self, performing manual tasks, walking, seeing, hearing, speaking, breathing, learning or working.

"Qualified Individual with a Disability" means an individual with a disability who, with or without reasonable modifications to rules, policies or practices, the removal of architectural, communication or transportation barriers, or the provision of auxiliary aids and services, meets the essential eligibility requirements for the receipt of services or the participation in programs or activities provided by the System.

"Reasonable Modification" means modifications or adjustments to services, programs or activities that enable a qualified individual with a disability to participate in, or enjoy the benefits of the service, program or activity.

"System" means the State Employees' Retirement System of Illinois.

c) Procedures

1) The ADA Coordinator will endeavor to respond to and resolve grievances without the need to resort to the formal grievance procedure established by this Part. A person who wishes to avail himself or herself of the formal procedure, however, may do so only by filing a grievance within 180 calendar days after the alleged discrimination in the form and manner prescribed in this Section.

2) The ADA Coordinator shall provide a copy of the grievance procedure and the required complaint form to anyone who requests it or expresses a desire to file a formal grievance.

3) Grievances must be submitted in accordance with procedures established in this Section. It is mutually desirable and beneficial that grievances be satisfactorily resolved in a prompt manner. Time limits established in this procedure are in calendar days, unless otherwise stated, and may be extended by mutual agreement, in writing, by the complainant and the reviewer, at the reviews described in subsections (d) and (e).

4) A complainant's failure to submit a Grievance Form, or to submit or appeal it to the next level of review within the specified time limits, shall mean that the complainant has withdrawn the grievance or has accepted the System's last response as given in the grievance procedure.

5) A complainant must exhaust the remedies provided under this Part as a prerequisite for filing any action before a court or other administrative body.

6) The System shall, upon being informed of an individual's desire to file a formal grievance, instruct the individual how to receive a copy of this procedure and the Grievance Form.

d) ADA Coordinator Review

1) If an individual desires to file a grievance, the individual shall promptly, but no later than 180 days after the date of the alleged discrimination, submit a grievance to the ADA Coordinator on the Grievance Form prescribed for that purpose. The Grievance Form must be completed in full in order to receive proper consideration by the ADA Coordinator.

2) Upon request, the System shall assist an individual in completing the Grievance Form.

3) The grievance shall contain the following information:

A) The complainant's name, address and telephone number.

B) Information as to the best time and means for contacting the complainant.

C) The program, activity or service that was denied the complainant, or in which alleged discrimination occurred.

D) The date and nature of the denial or alleged discrimination.

E) An explanation of why the complainant believes he or she is a qualified individual with a disability.

F) The signature or execution of or on behalf of the complainant.

4) The complainant shall attach copies of any documents received from or submitted to the System that pertain to the program, activity or service referred to in the grievance.

5) The ADA Coordinator, or his/her representative, shall investigate the grievance and, if the grievance is found to be valid, shall make reasonable efforts to resolve it. The ADA Coordinator shall provide a written response to the complainant and Executive Secretary within 15 business days after receipt of the Grievance Form.

e) Final Review

1) If the grievance is not resolved pursuant to this Section to the satisfaction of the complainant, the complainant may submit a copy of the Grievance Form and ADA coordinator's response to the Executive Secretary for final review. The complainant shall submit these documents to the Executive Secretary, together with a short written statement explaining the reasons for dissatisfaction with the ADA Coordinator's written response, within 10 business days after service of the ADA Coordinator's response. Service is deemed complete five business days after mailing.

2) Within 15 business days after receipt of the complainant's request to the Executive Secretary for final review, the Executive Secretary shall appoint a three-member panel to evaluate the grievance. The Executive Secretary shall designate one panel member as chairman. The panel shall schedule a review of the grievance, which shall commence no later than 15 business days after the last panel member is appointed.

3) Complainant shall be afforded an opportunity to appear before the panel. Complainant shall have the right to appoint a representative to appear on his or her behalf. The panel shall review the complainant's Grievance Form and the ADA Coordinator's written response and may conduct interviews and seek advice as it deems appropriate.

4) Upon agreement of at least two of the panel members, but not later than 15 business days after the review described in subsection (b), the panel shall make written recommendations to the Executive Secretary regarding the proper resolution of the grievance. All recommendations shall include reasons for the recommendation and shall bear the signatures of the concurring panel members. A dissenting member of the panel may make a recommendation to the Executive Secretary in writing and shall sign his or her recommendation.

5) Within 15 business days after receipt of the panel's recommendations, the Executive Secretary shall approve, disapprove or modify the panel recommendations; shall render a decision on those recommendations in writing; shall state the basis for his or her decision; and shall cause a copy of the decision to be served on the parties. The Executive Secretary's decision shall be final. If the Executive Secretary disapproves or modifies the panel's recommendations, the Executive Secretary shall include written reasons for the disapproval or modification.

6) The Grievance Form, the ADA Coordinator's response, the complainant's statement of the reasons for dissatisfaction, the panel's recommendations, and the Executive Secretary's decision shall be maintained in accordance with the State Records Act [5 ILCS 160] or as otherwise required by law.

f) Accessibility

The System shall ensure that all stages of the grievance procedure are readily accessible and usable by individuals with disabilities.

g) Case-By-Case Resolution

Each grievance involves a unique set of factors that includes but is not limited to: the specific nature of the disability; the essential eligibility requirements, the benefits to be derived, and the nature of the service, program or activity at issue; the health and safety of others; and whether an accommodation would constitute a fundamental alteration to the program, service or activity, or cause undue hardship for the System. Accordingly, termination of a grievance at any level, whether through the granting of relief or otherwise, shall not constitute a precedent on which any other Complainants should rely.

(Source: Added at 34 Ill. Reg. 8313, effective June 10, 2010)

Section 1540.380 Correction of Mistakes in Benefit Payments

a) If SERS mistakenly sets any benefit at an incorrect amount, it will recalculate the benefit as soon as may be practicable after the mistake is discovered.

b) If the recalculation results in a determination by SERS that it has overpaid a benefit and, if that benefit overpayment either was undiscovered for less than 3 years or resulted from incorrect information supplied by the affected member or beneficiary, then SERS will adjust the benefit to the correct level and notify the benefit recipient in writing. The written notice will indicate the correct amount of the benefit, the amount of the overpayment that must be recovered by the System, and the procedure for appealing the determination. If the affected member or beneficiary does not appeal the determination within 30 days after the postmark date of the written notice or, if, upon appeal, the Executive Committee affirms the System's determination, then SERS will make arrangements for collection of the amount of the overpayment. The overpayment can be repaid by:

1) reductions in any subsequent benefit payment due to the recipient or their survivors and beneficiaries;

2) repayment of the overpayment by the recipient to SERS;

3) other arrangement SERS makes with the recipient; or

4) any other means legally available to the System.

c) If the recalculation results in a determination by SERS that it has overpaid a benefit and, if that benefit overpayment was undiscovered for 3 or more years and did not result from incorrect information supplied by the affected member or beneficiary, then SERS will adjust the benefit to the correct level and notify the benefit recipient in writing. The written notice will indicate the correct amount of the benefit, describe the procedure for appealing the determination, and inform the benefit recipient that they are not required to repay SERS for the excess amounts received in error.

d) If the recalculation results in a determination by SERS that it has underpaid a benefit, then SERS will notify the benefit recipient, adjust the benefit to the correct level, and pay a lump sum amount to the recipient in the amount necessary to make the recipient whole as to the amounts that should have been paid to the recipient by SERS under the Code. The amount payable under this subsection (d) on account of an underpayment of an accelerated pension benefit payment shall be distributed from the State Pension Obligation Acceleration Bond Fund.

e) A benefit underpayment that arises from a back pay award may be acted upon under subsection (d) and is not required to be passed upon by the Board under Section 14-135.04 of the Code. However, if a member believes that the System has incorrectly adjusted the benefit or incorrectly calculated the amount of the underpayment, the member may appeal those calculations in the same manner as the appeal of an initial claim under Section 1540.270.

f) Amounts collected under subsection (b) on account of the overpayment of accelerated pension benefit payments shall be remitted to the State Pension Obligation Acceleration Bond Fund.

g) Nothing in this Section prevents SERS from referring any debt due SERS to the Attorney General, the Debt Collection Board, the Comptroller's Offset System, or private collection agencies at any time it deems appropriate.

h) Definitions

As used in this Section:

"Accelerated Pension Benefit Payment" means any accelerated pension benefit payment provided under Section 14-147.5 or 14-147.6 of the Code.

"Benefit" means any retirement annuity, widow's annuity, survivor's annuity, occupational disability benefit, temporary disability benefit, nonoccupational disability benefit, death benefit, accelerated pension benefit payment, or other benefit payable under Article 14 of the Code or any portion of any proportional annuity or survivor's annuity that is payable by SERS under Article 20 of the Code.

"Code" means the Illinois Pension Code [40 ILCS 5].

"State Pension Obligation Acceleration Bond Fund" means the bond fund created by Section 7.7(d) of the General Obligation Bond Act [30 ILCS 330].

"SERS" means the State Employees' Retirement System of Illinois.

(Source: Amended at 45 Ill. Reg. 6848, effective May 24, 2021)

Section 1540.385 Suspension of Benefits from Uncashed Warrants

a) Monthly benefit payments to annuitants may be suspended when four monthly warrants remain uncashed. The System shall inquire as to the cause for the uncashed warrants. These and subsequent payments shall be made upon learning the circumstances or whereabouts of the warrants, or upon prompt compliance in cashing the warrants.

b) Any member that has his or her benefit suspended under this Section shall be required to register for direct deposit as a condition for resuming benefit payments.

(Source: Added at 41 Ill. Reg. 4217, effective March 22, 2017)

Section 1540.390 Freedom of Information Act

a) Purpose. This Section establishes policies and procedures specific to SERS concerning requests for information made under FOIA [5 ILCS 140].

b) Freedom of Information Officer. The Freedom of Information Officer is the staff member at SERS responsible for responding to all requests for information on behalf of SERS as the "public body" under FOIA and is also responsible for maintaining all records required to be kept under FOIA and this Section. The Freedom of Information Officer shall be the SERS Executive Secretary or a designee of the SERS Executive Secretary. Denials issued by the Freedom of Information Officer shall inform the requester of the right of review by the Public Access Counselor under Section 9.5 of FOIA or by a court under Section 11 of FOIA.

c) Time and Place for Requests or Inspection. Records subject to FOIA shall be made available for inspection and copying at SERS principal office on weekdays between the hours of 8:00 a.m. and 4:30 p.m., excluding days during which the office is closed to the public. Written requests shall be mailed to the Freedom of Information Officer or a designee in the SERS Executive Department at 2101 S. Veterans Pkwy., P.O. Box 19255, Springfield IL 62794-9255. FOIA requests may also be submitted by facsimile (217-557-3943) or by email (SERS@srs.illinois.gov). Oral requests for inspection or copying may be made in person or by phone at 217-785-7016.

d) Fees. Unless a fee is waived or reduced under Section 6 of FOIA, fees may be imposed on the requester to recover costs of document production or reproduction according to the following schedule:

1) Photostatic copying of paper documents:

A) Black and white copies shall be charged after the first 50 pages at $0.05 per page;

B) Color copies shall be charged at $0.13 per page.

2) Printing of electronic documents or microfilmed/microfiched documents shall be charged at $0.05 per page.

3) Physical storage on electronic, tape or other media, shipping and facsimile transmission costs shall be charged to the extent those costs are incurred. Electronic transmission via e-mail shall be provided at no charge.

e) Exemptions. Records exempted under Section 7 or 7.5 of FOIA shall be exempt from inspection and copying.

(Source: Added at 41 Ill. Reg. 4217, effective March 22, 2017)

Section 1540.395 Accelerated Pension Benefit Payment Program

a) Purpose. This Section establishes policies specific to SERS concerning the Accelerated Pension Benefit Payment Options authorized by Sections 14‑147.5 and 14‑147.6 of the Illinois Pension Code (Code) [40 ILCS 5].

b) Payment Option Limitations

1) A member needs to be an eligible person on or before June 1, 2026 in order to elect an accelerated pension benefit payment.

2) A member who elects the Level Income Option is ineligible to elect an accelerated pension benefit payment.

3) A member who elects the Social Security Offset Removal is ineligible to elect an accelerated pension benefit payment.

4) A member who elects a reversionary annuity is ineligible to elect an accelerated pension benefit payment.

5) A member subject to a mandatory distribution pursuant to section 401(a)(9) of the Internal Revenue Code (26 CFR 1) is ineligible to elect an accelerated pension benefit payment at least 30 days prior to the date the mandatory distribution must be paid. The election form of such a member must be received by SERS at least 30 days prior to the date the mandatory distribution must be paid.

6) A member who is indebted to SERS because of an overpayment is ineligible to elect the accelerated pension benefit payment under Section 14‑147.5 of the Code. That member may qualify for an accelerated pension benefit payment upon repaying the debt in full.

7) An election for an accelerated pension benefit payment under Section 14-147.5 of the Code that is submitted by a member that received disability benefits and has a pending claim for either Social Security disability benefits or benefits payable under the Workers' Compensation Act [820 ILCS 305] or Workers' Occupational Diseases Act [820 ILCS 310], shall not be processed until a determination has been made on that claim.

8) A member who cashed or deposited the payment of a proportional annuity from another participating system prior to December 1, 2018, when creditable service or earnings credit established under Article 14 of the Code was used to calculate a proportional annuity or to qualify the member for a proportional annuity, is ineligible to elect an accelerated pension benefit payment.

9) A member who cashed or deposited the payment of a proportional annuity from another participating system prior to December 1, 2018, when creditable service or earnings credit established under another participating system was used to calculate the proportional annuity payable by SERS established under Article 14 of the Code or to qualify the member for the proportional annuity payable by SERS established under Article 14 of the Code is ineligible to elect an accelerated pension benefit payment.

c) The present value of pension benefits calculation, as determined by Section 14‑147.5(b) of the Code, shall not include any earnings credits under another participating system.

d) For a member who elects the accelerated pension benefit payment prescribed under Section 14‑147.5 of the Code, the effective date of that accelerated pension benefit payment shall not be before April 1, 2019. Furthermore, the effective date of the payment shall not be before the first of the month immediately following the date in which a valid application is received by SERS.

e) The effective date for accelerated pension benefit payment prescribed under Section 14‑147.6 of the Code:

1) shall not be before December 1, 2018; and

2) shall not be before the effective date of the member's retirement annuity.

f) The accelerated pension benefit payment shall not be transferred to the member's eligible account prior to the effective date of the member's retirement annuity.

g) A valid application for an accelerated pension benefit must be received by SERS before June 1, 2026 in order to qualify a member for an accelerated pension benefit.

h) The election to receive an accelerated pension benefit payment under Section 14‑147.6 of the Code becomes irrevocable on either the date the member cashes or deposits the first retirement annuity payment, or the date on which the accelerated pension benefit payment is vouchered, whichever occurs earlier.

i) The election to receive an accelerated pension benefit payment under Section 14‑147.5 of the Code becomes irrevocable on the date the accelerated pension benefit payment is vouchered.

j) Accelerated pension benefit payments shall be paid solely from the amounts transferred to SERS from the State Pension Obligation Acceleration Bond Fund. Under no circumstance will other SERS assets be used to pay accelerated pension benefit payments. All elections for an accelerated pension benefit payment that will not be paid from amounts transferred to SERS from the State Pension Obligation Acceleration Bond Fund shall be null and void.

k) For cases in which a member is charged with a felony related to, arising out of, or in connection with his or her service as an employee and elects an accelerated pension benefit payment, the adjudication process related to the charges must be completed before the accelerated pension benefit payment is vouchered. If the member is convicted and sentenced of a felony related to, arising out of, or in connection with his or her service as an employee, the payment shall not be vouchered.

l) A member who elects the accelerated pension benefit payment under Section 14‑147.5 of the Code is ineligible to receive a refund under Section 14‑130(c) of the Code.

m) A member with post-tax contributions on file with SERS, and who elects the accelerated pension benefit payment under Section 14‑147.5 of the Code, may not elect to transfer the payment into the pre-tax plan offered under the State Employees Deferred Compensation Plan.

n) On or after the date that a member's accelerated pension benefit payment is vouchered, that member is ineligible to establish creditable service associated with employment before the date that the accelerated pension benefit payment is vouchered.

o) If a member who elected the Early Retirement Incentive under Section 14-108.3 of the Code elects the accelerated pension benefit payment under Section 14‑147.5 of the Code, then the calculation of that payment shall exclude the creditable service and age enhancement components of the Early Retirement Incentive program unless the member has paid the necessary costs under Section 14-108.3(c) prior to the election of the accelerated pension benefit payment.

p) If a member has irrevocably elected to receive an Accelerated Pension Benefit Payment and if the member's spouse dies after the date of that election but before the System has paid the Accelerated Pension Benefit Payment, then the amount to be paid as an Accelerated Pension Benefit Payment shall not be recalculated, reduced, or otherwise adjusted on account of the death of the member's spouse.

q) Definitions

"Accelerated Pension Benefit Payment" means an accelerated pension benefit payment under Sections 14‑147.5 and 14‑147.6 of the Code.

"Accrued Sufficient Service Credit to be Eligible to Receive a Retirement Annuity Under this Article" means, for the purposes of Section 14‑147.5(a)(2) of the Code, that a member must have established sufficient creditable service to qualify for a retirement annuity under Article 14 of the Code. Service credit on file with another participating system at the time of the member's election for an accelerated pension benefit payment under Section 14‑147.5 shall be excluded for those purposes.

"Code" means the Illinois Pension Code [40 ILCS 5].

"Creditable Service" means service defined as "creditable service" under Section 14‑103.15 of the Code.

"Eligible Account" means a "tax qualified retirement plan or account" required by Sections 14‑147.5(e) and 14‑147.6(d) of the Code.

"Level Income Option" means a benefit payment option prescribed by Section 14‑112 of the Code.

"Participating System" means a retirement system defined as a "participating system" by Section 20‑108 of the Code.

"Proportional Annuity" means a retirement annuity paid in accordance with Section 20‑121 of the Code.

"Reversionary Annuity" means a reversionary annuity authorized by Section 14‑113 of the Code.

"Social Security Offset Removal" means the 3.825% reduction to a member's retirement annuity established by Sections 14‑119(d) and 14‑121(g) of the Code.

"State Employees Deferred Compensation Plan" means the plan described by Section 24‑104 of the Code.

"State Pension Obligation Acceleration Bond Fund" means the bond fund created by Section 7.7(d) of the General Obligation Bond Act [30 ILCS 330].

"Vouchered" means that the voucher has been signed and dated, even though the warrant has not been issued by the Office of the State Comptroller.

(Source: Amended at 46 Ill. Reg. 19224, effective November 18, 2022)

Section 1540.399 Minimum Total Survivors' Annuity Benefit Payments to Multiple Eligible Survivors of a Tier 1 Member

a) If the minimum total survivor's annuity benefit prescribed under Section 14-121(i) of the Code is payable on behalf of a deceased Tier 1 member, and an eligible spouse and eligible children survive, then the total survivor's annuity benefit shall be divided in the following manner:

1) If an eligible spouse and one eligible child survives, then the eligible spouse's portion shall total 50% of the total survivor's annuity benefit and the eligible child's portion shall total 50% of the total survivor's annuity benefit.

2) If an eligible spouse and two eligible children survive, then the eligible spouse's portion shall total 37.5% of the total survivor's annuity benefit and each eligible child's portion shall total 31.25% of the total survivor's annuity benefit.

3) If an eligible spouse and three eligible children survive, then the eligible spouse's portion shall total 30% of the total survivor's annuity benefit and each eligible child's portion shall total 23.33% of the total survivor's annuity benefit.

4) If an eligible spouse and four eligible children survive, then the eligible spouse's portion shall total 25% of the total survivor’s annuity benefit and each eligible child's portion shall total 18.75% of the total survivor's annuity benefit.

5) If an eligible spouse and five eligible children survive, then the eligible spouse's portion shall total 21.43% of the total survivor's annuity benefit and each eligible child's portion shall total 15.71% of the total survivor's annuity benefit.

6) If an eligible spouse and more than five eligible children survive:

A) each child's portion as a percentage of the total survivor's annuity benefit shall be determined by dividing the numerator as determined by subsection (a)(6)(A)(i) by the denominator as determined by subsection (a)(6)(A)(ii).

i) The numerator equals the number of eligible children multiplied by 20, plus 10, and that amount is divided by the number of eligible children.

ii) The denominator equals the number of eligible children, multiplied by 20, plus 40.

B) the eligible spouse's portion of the total survivor's annuity benefit shall equal, as a percentage, 100% less the total survivor's annuity benefit percentage payable to the eligible children as provided under subsection (a)(6)(A).

b) In accordance with Section 14-121 of the Code, the survivor's annuity benefit of a minor child under the care of an eligible surviving spouse shall be payable to the surviving spouse until the minor child turns age 18.

c) For purposes of this Section, "Tier 1 member" means a member who first became a member or a participant before January 1, 2011 under any reciprocal retirement system or pension fund established under the Code, other than a retirement system or pension fund established under Article 2, 3, 4, 5, 6, or 18 of the Code. (Section 14-103.41 of the Code)

(Source: Added at 49 Ill. Reg. 2543, effective February 20, 2025)

Section 1540.400 Multiple Survivors of a Tier 2 Member

a) If 2 or more persons are eligible to receive survivor's annuities, as provided under either Section 1-160(f) or 1-161(i) of the Code, based on the same deceased Tier 2 member, then the calculation of the survivors' annuities shall be based on the total amount of the survivors' annuity divided by the number of persons eligible to receive the benefit.

b) For purposes of this Section, "Tier 2 Member" means a member of the System who is subject to the provisions of Sections 1-160 and 1-161 of the Illinois Pension Code.

(Source: Added at 44 Ill. Reg. 534, effective December 27, 2019)

Section 1540.405 Tier 2 Member Final Average Compensation

a) For purposes of calculating a retirement annuity of a Tier 2 member, the average compensation for the last 12 months of the 48-month period shall not exceed the final average compensation by more than 25%. (See Section 14-103.12(a) of the Illinois Pension Code (Code) [40 ILCS 5].)

b) For purposes of this Section, "Tier 2 Member" means a member of the System who is subject to the provisions of Section 1-160 of the Code.

(Source: Added at 46 Ill. Reg. 6945, effective April 21, 2022)

Section 1540.406 Retirement Eligibility Criteria For Tier 2 Members Who Are Vested With Police Powers

a) A Tier 2 member qualifies for a retirement annuity payable at age 55 provided that the member has attained at least 20 years of eligible creditable service for service as any of the following: a State policeman, investigator for the Secretary of State, conservation police officer, investigator for the Department of Revenue or the Illinois Gaming Board, investigator for the Office of the Attorney General, Commerce Commission police officer, or arson investigator, as defined in subsection (b) and subsection (c) of Section 14-110 of the Illinois Pension Code [40 ILCS 5].

b) For purposes of this Section, "Tier 2 Member" means a member of the System who is subject to the provisions of Section 1-160 of the Illinois Pension Code.

(Source: Added at 48 Ill. Reg. 13838, effective August 27, 2024)

Section 1540.410 Final Average Compensation for Certain Alternative Retirement Annuity Recipients

For purposes of retirement and survivor annuities, in the case of a member who first became a member of the System prior to January 1, 1998 and who is eligible to receive an alternative retirement annuity under Section 14-110 of the Code on or after that date, "final average compensation" means final average compensation as defined by Section 14-103.12(a), (c) or (d) of the Code, whichever is greater.

(Source: Added at 45 Ill. Reg. 3023, effective February 26, 2021)

Section 1540.415 Prohibited Transactions

The payment of any type of refund or any type of accelerated pension benefit payment provided under Article 14 of the Pension Code shall not be transferred to a Roth IRA or any other type of account in which a person can receive distributions on a tax-free basis.

(Source: Added at 46 Ill. Reg. 14779, effective August 22, 2022)

Section 1540.APPENDIX A Grievance Form

Section 1540.APPENDIX A Grievance Form

Grievance

Discrimination Based on Disability

It is the policy of the State Employees' Retirement System to provide assistance in filling out this form. If assistance is needed, please ask:

State Employees' Retirement System, ADA Coordinator

2101 S. Veterans Parkway, P. O. Box 19255

Springfield IL 62704

217-785-7444, 217-785-7218 (TDD)

Name:
Address:
City, State and Zip Code:
Telephone No.:
Program, Service or Activity to which Access was Denied or in which Alleged Discrimination
Occurred:
Date of Alleged Discrimination:
Nature of Alleged Discrimination:

(Attach additional sheets, if necessary, and copies of any documents received or submitted to the System that pertain to the program, activity or service referred to in this grievance. If the grievance is based on a denial of requested reasonable modification, please fill out the back of this form.)

I certify that I am qualified or otherwise eligible to participate in the program, service or activity and the above statements are true to the best of my knowledge and belief.


Signature		Date

Please give to the ADA Coordinator at the address listed above.

(Source: Added at 34 Ill. Reg. 8313, effective June 10, 2010)

Section 1540.TABLE A Optional Forms of Benefits - Basis of Computation

AGE		A		B

1	0.000342		0.000171
2	0.000342		0.000171
3	0.000342		0.000171
4	0.000342		0.000171
5	0.000342		0.000171
6	0.000342		0.000140
7	0.000318		0.000118
8	0.000302		0.000104
9	0.000294		0.000097
10	0.000292		0.000096
11	0.000293		0.000104
12	0.000298		0.000113
13	0.000304		0.000121
14	0.000310		0.000131
15	0.000317		0.000140
16	0.000325		0.000149
17	0.000333		0.000159
18	0.000343		0.000168
19	0.000353		0.000179
20	0.000365		0.000189
21	0.000377		0.000201
22	0.000392		0.000212
23	0.000408		0.000225
24	0.000424		0.000239
25	0.000444		0.000253
26	0.000464		0.000268
27	0.000488		0.000284
28	0.000513		0.000302
29	0.000542		0.000320
30	0.000572		0.000342
31	0.000607		0.000364
32	0.000645		0.000388
33	0.000687		0.000414
34	0.000734		0.000443
35	0.000785		0.000476
36	0.000860		0.000502
37	0.000907		0.000536
38	0.000966		0.000573
39	0.001039		0.000617
40	0.001128		0.000665
41	0.001238		0.000716
AGE		A		B

42	0.001370		0.000775
43	0.001527		0.000842
44	0.001715		0.000919
45	0.001932		0.001010
46	0.002183		0.001117
47	0.002471		0.001237
48	0.002790		0.001366
49	0.003138		0.001505
50	0.003513		0.001647
51	0.003909		0.001793
52	0.004324		0.001949
53	0.004755		0.002120
54	0.005200		0.002315
55	0.005660		0.002541
56	0.006131		0.002803
57	0.006618		0.003103
58	0.007139		0.003443
59	0.007719		0.003821
60	0.008384		0.004241
61	0.009158		0.004703
62	0.010064		0.005210
63	0.011133		0.005769
64	0.012391		0.006386
65	0.013868		0.007064
66	0.015592		0.007817
67	0.017579		0.008681
68	0.019804		0.009702
69	0.022229		0.010922
70	0.024817		0.012385
71	0.027530		0.014128
72	0.030354		0.016160
73	0.033370		0.018481
74	0.036680		0.021092
75	0.040388		0.023992
76	0.044597		0.027185
77	0.049388		0.030672
78	0.054758		0.034459
79	0.060678		0.038549
80	0.067125		0.042945
81	0.074070		0.047655
82	0.081484		0.052691
83	0.089320		0.058071
84	0.097525		0.063807
85	0.106047		0.069918
AGE		A		B

86	0.114836		0.076570
87	0.124170		0.083870
88	0.133870		0.091935
89	0.144073		0.101354
90	0.154859		0.111750
91	0.166307		0.123076
92	0.178214		0.135630
93	0.190460		0.149577
94	0.203007		0.165103
95	0.217904		0.182419
96	0.234086		0.201757
97	0.248436		0.222044
98	0.263954		0.243899
99	0.280803		0.268185
100	0.299154		0.295187
101	0.319185		0.325225
102	0.341086		0.358897
103	0.365052		0.395843
104	0.393102		0.438360
105	0.427255		0.487816
106	0.469531		0.545886
107	0.521945		0.614309
108	0.586518		0.694885
109	0.665268		0.789474
110	1.000000		1.000000

(Source: Amended at 23 Ill. Reg. 3824, effective March 9, 1999)