(40 ILCS 5/16-143.2)
(from Ch. 108 1/2, par. 16-143.2)
Refund of contributions for survivor benefits at retirement.
(a) If at the time of applying for a retirement annuity under Section
16-132, or while in receipt of such a retirement annuity, a member
does not have a dependent beneficiary as defined in paragraph (3) of
Section 16-140, such member may be granted, upon written request, a refund
of actual contributions for survivor benefits, without interest. Members
will be eligible for a refund of contributions for survivor benefits as
provided in the previous sentence notwithstanding the fact that they began
receiving retirement benefits prior to this amendatory Act of 1985.
Acceptance of the refund will forfeit all rights to survivor benefits under
Sections 16-140 through 16-143.
(b) Except as provided under subsection (c), an annuitant who reestablishes membership following acceptance of
refund of contributions for survivor benefits under subsection (a) of this
Section may reinstate eligibility for benefits provided under Sections 16-140
through 16-143 only through: (1) repayment of such refund together with
regular interest thereon from the date of the refund to the date of repayment,
and (2) completion of one year of creditable service following acceptance
of such refund. If membership is reestablished and the above conditions
(1) and (2) are not met, an additional refund, representing contributions
made following the previous refund will be provided upon the member's death
or retirement, whichever is applicable.
(c) Notwithstanding subsection (b), an annuitant who has received a refund under subsection (a) may, during a period of one year beginning 5 months after the effective date of this amendatory Act of the 99th General Assembly, make an election to reestablish rights to survivor benefits under Sections 16-140 through 16-143 by paying to the System:
(1) the total amount of the refund received for
actual contributions; and
(2) interest on the amount of the refund at the
actuarially assumed rate of return for the period starting on the date of receipt of the refund and ending when the annuitant has made an election under this subsection (c).
The System may allow an individual to repay this refund through: a tax-deferred lump sum payment in full; substantially equal monthly installments over a period of at least one but not more than 24 months by reducing the annuitant's monthly benefit over the established number of months by the amount of the otherwise applicable contribution; or a combination thereof. To the extent permitted under the Internal Revenue Code of 1986, as amended, for federal and State tax purposes, the monthly amount by which the annuitant's benefit is reduced shall not be treated as a contribution by the annuitant, but rather as a reduction of the annuitant's monthly benefit.
If a member makes an election under this subsection (c) and the contributions required in items (1) and (2) of this subsection (c) are not paid in full, an additional one-time lump sum refund representing contributions made following the previous refund shall be provided to the named beneficiary or beneficiaries on file with the System or, if none, to the member's estate, when the member dies.
(Source: P.A. 99-682, eff. 7-29-16.)