Illinois Compiled Statutes 40 ILCS 5/15-185.6 – Accelerated pension benefit payment for a reduction in an annual …
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Accelerated pension benefit payment for a reduction in an annual increase to a retirement annuity and an annuity benefit payable as a result of death.
(a) As used in this Section:
“Accelerated pension benefit payment” means a lump sum payment equal to 70% of the difference of: (i) the present value of the automatic annual increases to a Tier 1 member’s retirement annuity, including any increases to any annuity benefit payable as a result of his or her death, using the formula applicable to the Tier 1 member; and (ii) the present value of the automatic annual increases to the Tier 1 member’s retirement annuity, including any increases to any annuity benefit payable as a result of his or her death, using the formula provided under subsection (b-5).
“Eligible person” means a person who:
(1) is a Tier 1 member;
(2) has submitted an application for a retirement
(a) As used in this Section:
Terms Used In Illinois Compiled Statutes 40 ILCS 5/15-185.6
- Annuity: A periodic (usually annual) payment of a fixed sum of money for either the life of the recipient or for a fixed number of years. A series of payments under a contract from an insurance company, a trust company, or an individual. Annuity payments are made at regular intervals over a period of more than one full year.
- Fiscal year: The fiscal year is the accounting period for the government. For the federal government, this begins on October 1 and ends on September 30. The fiscal year is designated by the calendar year in which it ends; for example, fiscal year 2006 begins on October 1, 2005 and ends on September 30, 2006.
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- State: when applied to different parts of the United States, may be construed to include the District of Columbia and the several territories, and the words "United States" may be construed to include the said district and territories. See Illinois Compiled Statutes 5 ILCS 70/1.14
“Accelerated pension benefit payment” means a lump sum payment equal to 70% of the difference of: (i) the present value of the automatic annual increases to a Tier 1 member’s retirement annuity, including any increases to any annuity benefit payable as a result of his or her death, using the formula applicable to the Tier 1 member; and (ii) the present value of the automatic annual increases to the Tier 1 member’s retirement annuity, including any increases to any annuity benefit payable as a result of his or her death, using the formula provided under subsection (b-5).
“Eligible person” means a person who:
(1) is a Tier 1 member;
(2) has submitted an application for a retirement
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annuity under this Article;
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(3) meets the age and service requirements for
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receiving a retirement annuity under this Article;
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(4) has not received any retirement annuity under
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this Article;
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(5) has not made the election under Section 15-185.5;
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and
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(6) is not a participant in the self-managed plan
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under Section 15-158.2.
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“Implementation date” means the earliest date upon which the Board authorizes eligible persons to begin irrevocably electing the accelerated pension benefit payment option under this Section. The Board shall endeavor to make such participation available as soon as possible after June 4, 2018 (the effective date of Public Act 100-587) and shall establish an implementation date by Board resolution.
(b) Beginning on the implementation date and until June 30, 2026, the System shall implement an accelerated pension benefit payment option for eligible persons. The System shall calculate, using actuarial tables and other assumptions adopted by the Board, an accelerated pension benefit payment amount for an eligible person upon his or her request in writing to the System and shall offer that eligible person the opportunity to irrevocably elect to have his or her automatic annual increases in retirement annuity and any annuity benefit payable as a result of his or her death calculated in accordance with the formula provided in subsection (b-5) in exchange for the accelerated pension benefit payment. The System shall not perform more than one calculation under this Section per eligible person in a State fiscal year. The election under this subsection must be made before any retirement annuity is paid to the eligible person, and the eligible survivor, spouse, or contingent annuitant, as applicable, must consent to the election under this subsection.
(b-5) Notwithstanding any other provision of law, the retirement annuity of a person who made the election under subsection (b) shall be increased annually beginning on the January 1 occurring either on or after the attainment of age 67 or the first anniversary of the annuity start date, whichever is later, and any annuity benefit payable as a result of his or her death shall be increased annually beginning on: (1) the January 1 occurring on or after the commencement of the annuity if the deceased Tier 1 member died while receiving a retirement annuity; or (2) the January 1 occurring after the first anniversary of the commencement of the benefit. Each annual increase shall be calculated at 1.5% of the originally granted retirement annuity or annuity benefit payable as a result of the Tier 1 member’s death.
(c) If an annuitant who has received an accelerated pension benefit payment returns to participation under this Article, the calculation of any future automatic annual increase in retirement annuity under subsection (c) of Section 15-139 shall be calculated in accordance with the formula provided in subsection (b-5).
(c-5) The accelerated pension benefit payment may not be repaid to the System.
(d) As a condition of receiving an accelerated pension benefit payment, the accelerated pension benefit payment must be deposited into a tax qualified retirement plan or account identified by the eligible person at the time of election. The accelerated pension benefit payment under this Section may be subject to withholding or payment of applicable taxes, but to the extent permitted by federal law, a person who receives an accelerated pension benefit payment under this Section must direct the System to pay all of that payment as a rollover into another retirement plan or account qualified under the Internal Revenue Code of 1986, as amended.
(d-5) The System shall submit vouchers to the State Comptroller for the payment of accelerated pension benefit payments under this Section. The State Comptroller shall pay the amounts of the vouchers from the State Pension Obligation Acceleration Bond Fund to the System, and the System shall deposit the amounts into the applicable tax qualified plans or accounts.
(e) The Board shall adopt any rules, including emergency rules, necessary to implement this Section.
(f) No provision of this Section shall be interpreted in a way that would cause the System to cease to be a qualified plan under the Internal Revenue Code of 1986.
(b) Beginning on the implementation date and until June 30, 2026, the System shall implement an accelerated pension benefit payment option for eligible persons. The System shall calculate, using actuarial tables and other assumptions adopted by the Board, an accelerated pension benefit payment amount for an eligible person upon his or her request in writing to the System and shall offer that eligible person the opportunity to irrevocably elect to have his or her automatic annual increases in retirement annuity and any annuity benefit payable as a result of his or her death calculated in accordance with the formula provided in subsection (b-5) in exchange for the accelerated pension benefit payment. The System shall not perform more than one calculation under this Section per eligible person in a State fiscal year. The election under this subsection must be made before any retirement annuity is paid to the eligible person, and the eligible survivor, spouse, or contingent annuitant, as applicable, must consent to the election under this subsection.
(b-5) Notwithstanding any other provision of law, the retirement annuity of a person who made the election under subsection (b) shall be increased annually beginning on the January 1 occurring either on or after the attainment of age 67 or the first anniversary of the annuity start date, whichever is later, and any annuity benefit payable as a result of his or her death shall be increased annually beginning on: (1) the January 1 occurring on or after the commencement of the annuity if the deceased Tier 1 member died while receiving a retirement annuity; or (2) the January 1 occurring after the first anniversary of the commencement of the benefit. Each annual increase shall be calculated at 1.5% of the originally granted retirement annuity or annuity benefit payable as a result of the Tier 1 member’s death.
(c) If an annuitant who has received an accelerated pension benefit payment returns to participation under this Article, the calculation of any future automatic annual increase in retirement annuity under subsection (c) of Section 15-139 shall be calculated in accordance with the formula provided in subsection (b-5).
(c-5) The accelerated pension benefit payment may not be repaid to the System.
(d) As a condition of receiving an accelerated pension benefit payment, the accelerated pension benefit payment must be deposited into a tax qualified retirement plan or account identified by the eligible person at the time of election. The accelerated pension benefit payment under this Section may be subject to withholding or payment of applicable taxes, but to the extent permitted by federal law, a person who receives an accelerated pension benefit payment under this Section must direct the System to pay all of that payment as a rollover into another retirement plan or account qualified under the Internal Revenue Code of 1986, as amended.
(d-5) The System shall submit vouchers to the State Comptroller for the payment of accelerated pension benefit payments under this Section. The State Comptroller shall pay the amounts of the vouchers from the State Pension Obligation Acceleration Bond Fund to the System, and the System shall deposit the amounts into the applicable tax qualified plans or accounts.
(e) The Board shall adopt any rules, including emergency rules, necessary to implement this Section.
(f) No provision of this Section shall be interpreted in a way that would cause the System to cease to be a qualified plan under the Internal Revenue Code of 1986.