Section 1600.100  Definitions

Certain terms used frequently throughout this Part are defined in this Section. Unless the context requires a different meaning, other terms used in this Part shall be defined and interpreted in accordance with Article 15 of the Illinois Pension Code [40 ILCS 5/Art. 15]. The definition of a term under a specific Section or Subpart shall supersede, for the purposes of that Section or Subpart, this Section.

"Annuitant" − A person receiving a retirement, reversionary, survivors or beneficiary annuity or disability retirement annuity from the System. [40 ILCS 5/15-119]

"Annuity Payment Period" – The annuity payment period shall begin on the date specified by the participant or the recipient of a disability retirement annuity submitting a written application. For a participant, the date on which the annuity payment period begins shall not be prior to termination of employment or more than one year before the application is received by the board; however, if the participant is not an employee of an employer participating in this System or in a participating system as defined in Article 20 of the Code on April 1 of the calendar year next following the calendar year in which the participant attains the age specified under Section 401(a)(9) of the Internal Revenue Code of 1986, as amended, the annuity payment period shall begin on that date regardless of whether an application has been filed. For a recipient of a disability retirement annuity, the date on which the annuity payment period begins shall not be prior to the discontinuation of the disability retirement annuity under Section 15-153.2 of the Code.  [40 ILCS 5/15-135(b)] For purposes of this definition, the "termination of employment" shall be immediately prior to midnight on the last day the person is an employee; and the "discontinuation of the disability retirement annuity" shall be the day following the last day the disability retirement annuity is payable.

"Board" − The Board of Trustees of the State Universities Retirement System as constituted under Section 15-159 of the Code.

"Chairperson" – The chairperson of the Board.

"Claims Panel" − The quasi-adjudicative body constituted under the Board's bylaws that hears all administrative contested matters as fiduciaries pursuant to Section 1600.500.

"Code" or "Pension Code" − The Illinois Pension Code [40 ILCS 5].

"Effective Rate of Interest" − The interest rate for all or any part of a fiscal year that is determined by the Board based on factors including the System's past and expected investment experience; historical and expected fluctuations in the market value of investments; the desirability of minimizing volatility in the effective rate of interest from year to year; and the provision of reserves for anticipated losses upon sales, redemptions, or other disposition of investments and for variations in interest experience.  [40 ILCS 5/15-125(2)] See Section 15-125(2) of the Code for the effective rate of interest set by the State Comptroller for purposes of Rule 2 of Section 15-136(a) of the Code (i.e., the Money Purchase Formula).

"Employee" − A person defined as an "employee" under Section 15-107 of the Code.

"Employer" − An entity defined as an "employer" under Section 15-106 of the Code.

"Executive Director" − The chief administrative officer of SURS, appointed by the Board.

"FOIA" − Freedom of Information Act [5 ILCS 140].

"General Counsel" − In-house legal counsel for SURS.

"IRS" − Internal Revenue Service of the U.S. Department of the Treasury.

"IRC" − Internal Revenue Code of 1986, as amended (26 U.S.C. 1 et seq.).

"Member" − A SURS participant or annuitant.

"Participant" − A person participating in SURS under Section 15-134 of the Code.

"Participating Employee" − A participant who at the time is an employee under Section 15-107 of the Code.

"Prescribed Rate of Interest" − The rate of interest to be used in actuarial valuation and in development of actuarial tables. The prescribed rate of interest is determined by the Board on the basis of the probable average effective rate of interest on a long term basis. [40 ILCS 5/15-125(1)]

"Principal Office of SURS" − State Universities Retirement System, 1901 Fox Drive, Champaign IL 61820.

"SURS" or "System" − State Universities Retirement System created by Article 15 of the Code [40 ILCS 5/Art. 15].

"Tier 1 Member" – A SURS participant or annuitant defined under Section 15-108.1 of the Code.

"Tier 2 Member" – A SURS participant or annuitant defined under Section 15-108.2 of the Code.

"USERRA" – Uniformed Services Employment and Reemployment Rights Act of 1994 (38 U.S.C. 4301 et seq.).

(Source:  Amended at 49 Ill. Reg. 3321, effective February 26, 2025)

Section 1600.110  Freedom of Information Act

a)         Purpose.  This Section establishes policies and procedures specific to SURS concerning requests for information made under FOIA.

b)         Freedom of Information Officer.  The Freedom of Information Officer is the staff member at SURS responsible for responding to all requests for information on behalf of SURS 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 SURS General Counsel or a designee of the SURS Executive Director.  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 SURS principal office (see Section 1600.100) 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 directed to the Freedom of Information Officer or a designee in the SURS Legal Department by mail that is addressed to the SURS principal office by facsimile at (217)378-9801, or by email to FOIA_Officers@surs.org.  Oral requests for inspection or copying may be made in person or by phone at 217-378-8800.

d)         Fees.  Subject to a waiver or reduction of the fee if warranted 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.  Consistent with Section 7 of FOIA, the following public records shall be exempt from inspection and copying:  personal information that includes any personally identifying or identifiable information other than names or benefit amounts, including, but not necessarily limited to, Social Security numbers and addresses of participants and annuitants, and names and Social Security numbers and addresses of beneficiaries.

(Source:  Amended at 43 Ill. Reg. 8562, effective July 26, 2019)

Section 1600.120  Open Meetings Act

a)         Introduction

1)         The Illinois Open Meetings Act [5 ILCS 120] sets forth the public policy of the State of Illinois that public bodies exist to aid in the conduct of the people's business and that the people have a right to be informed as to the conduct of their business.  It is also the public policy of the State that its citizens be given advance notice of and the right to attend all meetings at which any business of a public body is discussed or acted upon in any way.

2)         It is the intent of the Open Meetings Act:

A)        to ensure that the actions of public bodies be taken openly and that their deliberations be conducted openly;

B)        to protect the citizen's right to know; and

C)        that provisions for exceptions to the open meeting requirements be strictly construed against closed meetings.  [5 ILCS 120/1]

3)         By means of this Section, SURS has established procedures to conduct its business in accordance with the Open Meetings Act.

b)         Definition

"Meeting" − Any gathering, whether in person or by video or audio conference, telephone call, electronic means (such as, without limitation, electronic mail, electronic chat, and instant messaging), or other means of contemporaneous interactive communication, of a majority of a quorum of the Board held for the purpose of discussing SURS business. [5 ILCS 120/1.02]  A quorum for a Board of Trustees meeting shall be six members of the Board. A quorum for a Board committee is the least number more than one-half of the members of the committee.  A quorum of the Board or of a Board committee must be physically present at the location of an open meeting of the Board or the committee, respectively.  If, however, an open meeting of the Board or a Board committee is held simultaneously at one of its offices and one or more other locations in a public building, which may include other of its offices, through an interactive video conference and public notice is provided as required under the Open Meetings Act for all locations, then members physically present in those locations all count towards determining a quorum.  "Public building", as used in this Section, means any building or portion of a building owned or leased by any public body.  The requirement that a quorum be physically present at the location of an open meeting shall not apply, however, to Board committees that do not have authority to make binding recommendations or determinations or to take any other substantive action.

c)         Attendance by a Means Other Than Physical Presence

1)         If a quorum of the members of the Board or a Board committee is physically present as required by subsection (b), a majority of those physically present, or at least three physically present members of a committee consisting of five members, may allow a member of that body to attend the meeting by other means(video or audio conference) if the member is prevented from physically attending because of:

A)        personal illness or disability;

B)        employment purposes or the business of the public body;

C)        a family or other emergency;

D)        unexpected childcare obligations; or

E)        any other reason allowed by Section 7 of the Open Meetings Act. [5 ILCS 120/7(a)]

2)         If a member wishes to attend a meeting by other means, the member must notify the recording secretary of the Board or the Board committee before the meeting unless advance notice is impractical. [5 ILCS 120/7(b)]

3)         A majority of the Board or a committee may allow a member to attend a meeting by other means only in accordance with and to the extent allowed by this subsection (c). [5 ILCS 120/7(c)]

4)         Except as provided in this subsection (c)(4), the limitations of this subsection (c) shall not apply to closed meetings of the Board or the Executive Committee or to open or closed meetings of any other subsidiary body, including, without limitation, any committee other than the Executive Committee, that does not have authority to make binding recommendations or determinations or to take any other substantive action.  If the limitations of this subsection (c) do not apply, any or all members of the Board or a subsidiary body may attend a meeting by audio or video conference.  An open meeting attended by audio or video conference will be broadcast at the properly noticed location of the meeting.  Neither advance notice nor permission for such means of attendance is required.  No minimum number of members need be physically present at the noticed location of the meeting. [5 ILCS 120/7(d)]

d)         Time and Place of Open Meetings

1)         All open meetings shall be held at specified times and places which are convenient and open to the public.

2)         No open meeting shall be held on a legal holiday unless the regular meeting day falls on that holiday.  [5 ILCS 120/2.01]

e)         Public Notice; Agenda; Schedule

1)         Posting.  Public notice shall be given by posting a copy of the notice at the principal office of SURS. [5 ILCS 120/2.02(a)]  Copies of the posted notice shall also be given to any news medium that has filed with the Executive Director an annual request for notice of meetings. [5 ILCS 120/2.02(b)]

2)         News Medium Request.  Any news medium may file with the Executive Director of SURS an annual request for public notice of all meetings of the Board of Trustees of SURS.  The Executive Director shall maintain an updated list of all news media that have filed annual requests and shall be responsible for seeing that the news media receive the notices mandated by the Open Meetings Act and this Section.

3)         Regular Meetings.  Public notice shall be given of the schedule of regular meetings at the beginning of each fiscal year, stating the regular dates, times, and places of each meeting.

A)        Agenda of Regular Meetings.  An agenda for each regular meeting shall be posted in accordance with subsection (e)(1) at least 48 hours in advance of the holding of the meeting.  However, this requirement shall not preclude the consideration of items not specifically set forth in the agenda.  [5 ILCS 120/2.02(a)]

B)        Schedule of Regular Meetings.  At the beginning of each fiscal year, the Executive Director of SURS shall prepare and make available a schedule of all its regular meetings for that fiscal year, listing the times and places of meetings.

C)        Change in Regular Meeting Date.  If a change is made in a regular meeting date, at least 10 days' notice of the change shall be given by publication in the official State newspaper.  Notice of the change shall also be posted at the principal office of SURS.  Notice of the change shall also be given to any news medium that has filed with the Executive Director an annual request for notice of meetings.  [5 ILCS 120/2.03]

4)         Special Meetings.  Public notice of any special meeting shall be given at least 48 hours before the meeting.

A)        Agenda of Special Meetings.  An agenda of a special meeting shall also be included with the public notice of the meeting.  However, the validity of any action taken by the Board that is germane to a subject on the agenda shall not be affected by other errors or omissions in the agenda.  [5 ILCS 120/2.02(a)]

B)        News Medium Notice.  Any news medium that has filed an annual request for notice shall be given the same notice of any special meeting in the same manner as is given to members of the Board, provided that the news medium has given the Executive Director an address or telephone number within Illinois at which notice may be given. [5 ILCS 120/2.02(b)]

5)         Rescheduled or Reconvened Meetings.  Public notice of any rescheduled or reconvened meeting shall be given at least 48 hours before the meeting.

A)        Exception to Notice Requirement.  No public notice is required to be given of any reconvened meeting when the meeting was open to the public and either:

i)          the meeting is to be reconvened within 24 hours; or

ii)         an announcement of the time and place of the reconvened meeting is made at the original meeting and there is no change in the agenda.  [5 ILCS 120/2.02(a)]

B)        Agenda of Rescheduled or Reconvened Meeting.  An agenda of a rescheduled or reconvened meeting shall also be included with the public notice of the meeting.  However, the validity of any action taken by the Board that is germane to a subject on the agenda shall not be affected by other errors or omissions in the agenda.  [5 ILCS 120/2.02(a)]

C)        News Medium Notice.  Any news medium that has filed an annual request for notice shall be given the same notice of any rescheduled or reconvened meeting in the same manner as is given to members of the Board, provided that the news medium has given the Executive Director an address or telephone number within Illinois at which notice may be given.  [5 ILCS 120/2.02(b)]

6)         Emergency Meeting.  Notice of an emergency meeting shall be given as soon as is practicable.  In any event, prior to an emergency meeting being held, notice shall be given to any news medium that has filed an annual request for notice.  [5 ILCS 120/2.02(a)]  Any news medium that has filed an annual request for notice shall be given the same notice of any emergency meeting in the same manner as is given to members of the Board, provided that the news medium has given the Executive Director an address or telephone number within Illinois at which notice may be given.  [5 ILCS 120/2.02(b)]

f)         Recording Meeting

1)         Any person may record by tape, film or other means the proceedings at any open meeting, subject to the provisions of this subsection (f).

2)         If any witness at any meeting required to be open under the Open Meetings Act refuses to testify on the grounds that he or she may not be compelled to testify if any portion of his or her testimony is to be broadcast or televised or if motion pictures are to be taken, then the authority holding the meeting shall prohibit any recording during the testimony of the witness.  Nothing in this subsection (f) shall be construed to extend the right to refuse to testify at any meeting not subject to the provisions of Section 8-701 of the Code of Civil Procedure.  [5 ILCS 120/2.05]

3)         "Recording Device" shall mean any device that records and stores, transcribes, transmits or broadcasts still images, moving images and/or sounds, regardless of format or medium, including, but not limited to, still cameras, video cameras, camcorders, computing devices (regardless of size), mobile phones, personal data assistants, voice recorders or any other similar device and any accessories or equipment used in conjunction with the device that are used to record an open meeting.

4)         A recording device shall be operated in a manner that does not disrupt or interfere with the deliberative process and the public's ability to observe or listen to the proceedings.  The Board, Board committee, or SURS staff may limit the number of recording devices being operated in the meeting room if the number of devices being operated in the aggregate causes or may cause disruption or interference.

5)         All mounted recording devices must be set up prior to the commencement of the meeting and may not be moved or removed until the proceeding has concluded, unless otherwise permitted by the Board, Board committee, or SURS staff.  If a recording device requires additional equipment that needs placement in the meeting room, such as power cords, standing lights and microphones, those items may only be placed and operated in designated areas assigned by the Board, Board committee or SURS staff, provided the areas are not limited to a location from which the recording device is not reasonably capable of making a recording.  Arrangements shall be made with SURS staff at least 48 hours prior to the meeting to ensure the availability of space for recording devices and equipment.

6)         Recording devices are not permitted to be placed or operated in any emergency exit pathways or aisles, including entrances and exits.

7)         No recording device operated by a member of the public may be used to record a closed meeting.

g)         Closed Meetings

1)         Subject.  The Board or a Board committee may hold closed meetings to consider any subject permitted under Section 2(c) of the Open Meetings Act, including the following subjects:

A)        The appointment, employment, compensation, discipline, performance, or dismissal of specific employees of SURS, including hearing testimony on a complaint lodged against an employee to determine its validity [5 ILCS 120/2(c)(1)];

B)        Collective negotiating matters between SURS and its employees or their representatives, or deliberations concerning salary schedules for one or more classes of employees [5 ILCS 120/2(c)(2)];

C)        Evidence or testimony presented in open hearing, or in closed hearing when specifically authorized by law, to a quasi-adjudicative body, provided that the body prepares and makes available for public inspection a written decision setting forth its determinative reasoning [5 ILCS 120/2(c)(4)];

D)        The purchase or lease of real property for the use of SURS [5 ILCS 120/2(c)(5)];

E)        The setting of a price for sale or lease of real property owned by SURS [5 ILCS 120/2(c)(6)];

F)         The sale or purchase of securities, investments, or investment contracts [5 ILCS 120/2(c)(7)];

G)        Emergency security procedures and the use of personnel and equipment to respond to actual danger to the safety of employees, staff, or public property, provided that a description of the actual danger shall be made a part of the motion to close the meeting [5 ILCS 120/2(c)(8)];

H)        Litigation, when an action against, affecting or on behalf of SURS has been filed and is pending before a court or administrative tribunal, or when the Board or a Board committee finds that an action is probable or imminent, in which case the basis for the finding shall be recorded and entered into the minutes of the closed meeting [5 ILCS 120/2(c)(11)];

I)         Self evaluation, practices and procedures or professional ethics, when meeting with a representative of a statewide association of which SURS is a member [5 ILCS 120/2(c)(16)];

J)         The classification and discussion of matters classified as confidential or continued confidential by the State Employees Suggestion Award Board (see 20 ILCS 405/67.28) [5 ILCS 120/2(c)(20)]; and

K)        Discussion of minutes of closed meetings, whether for purposes of approval by the Board or Board committee of the minutes, or for purposes of semiannual review of the minutes [5 ILCS 120/2(c)(21)].

2)         Procedure

A)        Vote.  Upon the majority vote of a quorum present of the Board or Board committee at an open meeting, the Board may hold a meeting closed to the public or may close a portion of a meeting to the public.  The motion to close a meeting, or a portion of the meeting, shall state a citation to the specific exemption set forth in Section 2 of the Open Meetings Act.  The vote of each member shall be taken by roll call vote, shall be publicly disclosed, and shall be recorded and entered into the minutes of the meeting.

B)        Subject.  Only topics specified in the vote to close may be considered during the closed meeting.

C)        Series of Meetings.  A single vote may be taken with respect to a series of meetings, a portion or portions of which are proposed to be closed to the public, provided each meeting in the series involves the same particular matters and is scheduled to be held within no more than 3 months after the vote.  [5 ILCS 120/2a]

h)         Minutes of Meetings

1)         Open Meetings

A)        Content.  The Board or Board committee shall keep written minutes of all open meetings.  The minutes shall include:

i)          the date, time and place of the meeting;

ii)         the members of the Board recorded as either present or absent, and whether the members were physically present or present by means of video or audio conference; and

iii)        a summary of discussion on all matters proposed, deliberated, or decided, and a record of any votes taken.

B)        Public Inspection.  The minutes of any open meeting shall be available for public inspection within seven days after the approval of the minutes by the Board or Board committee.

2)         Closed Meetings

A)        Content.  The Board or Board committee shall keep written minutes of all closed meetings.  The minutes shall include:

i)          the date, time and place of the meeting;

ii)         the members of the Board recorded as either present or absent; and

iii)        a summary of discussion on all matters proposed, deliberated, or decided, and a record of any votes taken.

B)        Public Inspection.  The minutes of any closed meeting shall be available for public inspection only after the Board determines that it is no longer necessary to protect the public interest or the privacy of an individual by keeping the minutes confidential.

C)        Semiannual Review.  The Board shall semiannually review minutes of all closed meetings.  At closed meetings, a determination shall be made, and reported in an open session, that either:

i)          the need for confidentiality still exists as to all or a part of those minutes; or

ii)         the minutes or portions of the minutes no longer require confidential treatment and are available for public inspection.  [5 ILCS 120/2.06]

i)          Address by Members of the Public

1)         Notice.  A person who wishes to address the Board or a Board committee shall provide written notice of the intent to make an address at least 24 hours prior to the scheduled commencement of the meeting of the Board or Board committee.  The notice shall provide the identity of the speaker and the topic of the address, and shall specify the Board committee or Board meeting at which the address will be made.  A copy of any written materials that the person wishes to distribute to the Board or Board committee members during the address must be attached to the notice.

2)         Time Allotment.  The person may address the Board or Board committee concerning any matter that does not concern a resolution of final action on the agenda for no longer than five minutes at the end of the meeting of the Board or Board committee specified in the notice, unless otherwise permitted by the Board or Board committee.  If the person wishes to address the Board or Board committee concerning a resolution of final action on the agenda, then the person may address the Board or Board committee for no longer than five minutes after the scheduled presentations on the resolution have concluded.

(Source:  Amended at 50 Ill. Reg. 2186, effective January 28, 2026)

Section 1600.130  Procurement

a)         Introduction.  It is the policy of SURS to obtain goods and services in the most economical manner in order to guarantee the efficient utilization of SURS resources.  Resources of SURS shall be committed only with proper approval, as detailed in this Section.

b)         Purchase Orders.  Employees requesting goods or services that cost more than $500 and that are not part of a formal written contract shall complete a SURS purchase order form and receive written approval from the person designated by the Executive Director as the Procurement Officer prior to placing the order.  Purchases of less than $500 do not require a purchase order, but must be within the authority of the employee to purchase.

c)         Contract Policy.  It is the policy of SURS to standardize the form and content of its contracts with public and private bodies in order to ensure compliance with applicable State law, to ensure fairness to all parties, and to maximize uniformity of language.

1)         Standard Addendum.  In order to simplify the contracting process, SURS has developed a standard contract addendum that includes certifications considered advisable or required by State law.  The standard addendum shall be completed and attached to (or incorporated within) all contracts and purchase orders entered into by SURS, but shall not be required for purchase orders of $25,000 or less.  Any variation from the terms of the standard addendum shall be approved by SURS' General Counsel.  The standard addendum may be revised by the General Counsel from time to time.

2)         Written Contracts 

A)        Execution Requirements.  All expenditures in excess of $25,000 that are not otherwise covered by any exemption stated in this Section shall require a written contract reviewed and approved by legal counsel to SURS. Contracts in any amount shall be executed by the Executive Director or his or her designee, unless executed by the President of the Board. No goods or services may be acquired, nor work commenced (unless the vendor specifically assumes the risk of non-payment in the event no contract is entered into), prior to the execution of a contract as provided in this Section.  A copy of each contract shall be retained by the Chief Financial Officer.  

B)        Signature Requirements 

i)          Except as provided in subsection (c)(2)(B)(ii), contracts in excess of $250,000 require the signatures of the Executive Director, the Chief Financial Officer and the General Counsel. 

ii)         In addition to the requirements of subsection (c)(2)(B)(i), all contracts with persons who are fiduciaries with respect to any investments of SURS shall also be signed by the President of the Board, or his or her designee, except that the Executive Director's signature is sufficient with respect to investment management agreements or other contracts with Board-approved investment service providers and contract amendments with existing Board-approved investment service providers. The Executive Director shall provide a report of such execution, with a description of any contract or amendment executed, to the Investment Committee of the Board at the next regularly scheduled meeting.

d)         Documentation and Bidding – Expenditures in Excess of $50,000

1)         Employees shall seek to obtain the best value for SURS.  Efforts to obtain the best value for SURS shall be documented where possible and retained by SURS.  Expenditures in excess of$50,000 require bids from at least three different sources, unless otherwise provided in this Section. Sole source procurements, or other procurements with fewer than three bids, for expenditures in excess of $50,000 shall be justified and documented.  If two or more identical bids are received, if an attempt to bribe an employee is made, or other irregularities are discovered by a SURS employee, the General Counsel and the Internal Auditor shall be notified.

2)         All procurements in excess of $50,000, unless otherwise provided in this Section, shall be advertised in the official State newspaper, in the Illinois Procurement Bulletin, in SURS procurement bulletins, in appropriate media, or through electronic means such as the Internet.  Notice shall be published on at least 3 separate dates with a minimum of 14 days between the first and the last publication date.

3)         All procurements for goods and services in excess of $50,000, unless otherwise provided in this Section, shall be awarded by competitive proposals. Each request for proposal shall set forth a description of the items or services being procured, the material contractual terms and conditions, and the criteria for evaluating proposals.  Awards made pursuant to competitive selection procedures shall be awarded to the responsible offeror whose proposal is determined to be most advantageous to SURS.  SURS may directly negotiate with any offeror as to the terms of a proposal.  Competitive proposals may be used to procure, but are not limited to, professional and artistic services, including legal, medical and related services, investment management and consulting, electronic data processing equipment, software and services, and telecommunications equipment, software and services.

4)         The following procurements do not require advertising or the use of competitive proposals:

A)        Individual contracts for goods, services or construction not exceeding $50,000;

B)        Emergency procurements, such as when there exists a threat to public health or safety, or when immediate expenditure is necessary in order to protect against loss of or damage to SURS property or interests, or to prevent or minimize disruption in SURS services, or when necessary to prepare for anticipated litigation, enforcement actions, or investigations, or to protect the integrity or confidentiality of SURS records.  A written determination must be made that an emergency exists; and

C)        Utilities and other sole-source items.

e)         Purchasing

1)         Employees are allowed to make purchases provided that the goods or services are budgeted for, and a purchase order (for purchases in excess of $500) is completed and has written approval in advance of placing the order, or a formal contract (for purchases in excess of $25,000) is executed, and the provisions of this Section are complied with.  Employees other than those designated by the Executive Director are not allowed to make purchases of office supplies, computer equipment, or software.

2)         SURS shall not pay Illinois sales tax.  Employees must direct the vendor to exclude Illinois sales tax from invoices.  Employees should also ask if discounted State rates are available for purchases.

3)         Invoices should be approved for payment within 30 days after the receipt of the invoice.  Approval should not be given for goods and services that do not conform to SURS' requirements.  The vendor shall be promptly notified in writing if SURS does not approve an invoice for payment and shall be advised of the reason for the denial.  If approval is made after 30 days, a full explanation should be attached to the invoice.

4)         Advance payment for goods and services is discouraged.  If advance payment is required, the employee shall complete a certification as specified in Section 9.05 of the State Finance Act [30 ILCS 105/9.05].  In the event that a voucher is submitted for advance payment, the voucher shall state on its face that the goods or services are being procured pursuant to a formal written contract the terms of which require advance payment.  If it is not possible to execute a written contract, the voucher shall so state.  The certification is not required for payment of conference fees, purchase of travel tickets, purchase of periodicals, and required deposits of less than $500.  The certification shall be in the following format:

"I certify that the goods or services specified on this contract or purchase order were for the use of this agency and that the expenditure for those goods or services was authorized and lawfully incurred; that the goods or services meet all the required standards set forth in the purchase order or contract to which this certification relates; and that the amount shown on this voucher is correct and is approved for payment."

Insert following sentence in certification if applicable:

"It is not possible to execute a formal written contract."

(Source:  Amended at 38 Ill. Reg. 17457, effective July 30, 2014)

Section 1600.140  Compliance with the Internal Revenue Code

a)         Purpose.  This Section is intended to implement qualification requirements under IRC section 401(a) as applicable to governmental plans within the meaning of IRC section 414(d).  The System is intended to be a qualified governmental plan under the meaning of those IRC provisions.

b)         Exclusive Benefit Rule and Nonreversion of Trust Assets.  Prior to the satisfaction of all liabilities to participants or their beneficiaries, no part of the corpus or income of the System shall be used for, or diverted to, purposes other than for the exclusive benefit of the System's participants or their beneficiaries.  No part of the System's assets may revert to the State of Illinois or any employer except in the case of a good faith mistake of fact as permitted by IRS Revenue Ruling 91-4, 1991-1 C.B. 57.

c)         Nonforfeitability.  Upon termination of the System or upon complete discontinuance of contributions to the System, the rights of each participant to benefits accrued to the date of the termination or discontinuance are nonforfeitable.

d)         USERRA.  The provisions of Code Section 1-118  (concerning veterans' rights) shall be effective with respect to the System beginning December 12, 1994.

e)         Required Minimum Distributions.  The provisions of Code Section 1-116.1 (concerning minimum required distributions) shall be effective with respect to the System beginning January 1, 1987.  The System shall pay all benefits in accordance with a reasonable good faith interpretation of the requirements of IRC section 401(a)(9).

f)         Federal Contribution and Benefit Limitations.  Pursuant to Code Section 1-116, the System shall comply with the applicable contribution and benefit limitations imposed by IRC section 415 for limitation years beginning on or after January 1, 1976.

g)         Mortality Tables and Interest Rates.  The mortality tables and interest rates adopted by the Board of Trustees of the System from time to time in accordance with Code Sections 15-124 and 15-125 shall apply to the System as though those provisions were fully set forth in Article 15 of the Code.  This subsection (g) applies beginning July 1, 1963.

h)         Direct Transfer of Eligible Rollover Distributions.  For distributions made on or after January 1, 1993, the System shall implement Code Section 1-106(b) (concerning direct rollovers) in accordance with IRC section 401(a)(31), as follows:

1)         If a distributee becomes entitled to an eligible rollover distribution, the distributee may elect to have the distribution, or any portion of the distribution, paid directly to an eligible retirement plan specified by the distributee.

2)         The election made pursuant to this Section shall be in accordance with the terms and conditions established by the Board.

3)         Upon exercise of the election by a distributee pursuant to this subsection (h), the distribution from the System of the amount designated by the distributee shall be made in the form of a direct transfer to the specified eligible retirement plan.

4)         For purpose of this subsection (h), "distributee" means a member, a surviving spouse, or a former spouse under a domestic relations order that is treated as a qualified domestic relations order to the extent provided in IRC section 414(p)(11).  For plan years beginning on or after January 1, 2010, a distributee further includes a nonspouse beneficiary who is a designated beneficiary as defined by IRC section 401(a)(9)(E).  However, a nonspouse beneficiary may only make a direct rollover to an individual retirement account or individual retirement annuity established for the purpose of receiving the distribution, and the account or annuity shall be treated as an "inherited" individual retirement account or annuity.

5)         Eligible Rollover Distribution

A)        For purposes of this subsection (h), "eligible rollover distribution" means a distribution from the retirement fund that constitutes an eligible rollover distribution within the meaning of IRC section 401(a)(31)(D), i.e., any distribution of all or any portion of the balance to the credit of the distributee, except that an eligible rollover distribution does not include:

i)          any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made:

•    for the life (or life expectancy) of the distributee or the joint lives (or joint life expectancies) of the distributee and the distributee's designated beneficiary; or

•   for a specified period of 10 years or more;

ii)         any distribution to the extent the distribution is required under IRC section 401(a)(9);

iii)        the portion of any distribution that is not includible in gross income; or

iv)        any distribution that is reasonably expected to total less than $200 during the year.  

B)        Effective January 1, 2002, a portion of a distribution shall not fail to be an eligible distribution merely because a portion consists of after-tax contributions that are not includible in gross income.  However, that portion may be transferred only:

i)          to an individual retirement account or annuity described in IRC section 408(a) or (b) or to a qualified defined contribution plan described in IRC section 401(a) that agrees to separately account for amounts so transferred (and earnings on those amounts), including separately accounting for the portion of the distribution that is includible in gross income and the portion of the distribution that is not so includible;

ii)         on or after January 1, 2007, to a qualified defined benefit plan described in IRC section 401(a) or to an annuity contract described in IRC section 403(b) that agrees to separately account for amounts transferred (and earnings on those amounts), including separately accounting for the portion of the distribution that is includible in gross income and the portion of the distribution that is not includible; or

iii)        on or after January 1, 2008, to a Roth IRA described in IRC section 408A.

6)         For purposes of this subsection (h), "eligible retirement plan" means a plan that constitutes an eligible retirement plan within the meaning of IRC section 401(a)(31)(E), the terms of which permit the acceptance of rollover distribution and is limited to the following:

A)        an individual retirement account described in IRC section 408(a);

B)        an individual retirement annuity described in IRC section 408(b);

C)        an annuity plan described in IRC section 403(a);

D)        a qualified trust described in IRC section 401(a);

E)        effective January 1, 2002, an annuity contract described in IRC section 403(b);

F)         effective January 1, 2002, an eligible deferred compensation plan described in IRC section 457(b) that is maintained by an eligible employer described in IRC section 457(e)(1)(A) that agrees to separately account for amounts transferred into that plan from the System;

G)        effective January 1, 2008, a Roth IRA described in IRC section 408A; and

H)        effective December 19, 2015, a SIMPLE IRA described in IRC section 408(p)(1), provided that the rollover contribution is made after the 2-year period described in IRC section 72(t)(6).

i)          Qualified Illinois Domestic Relations Orders.  If benefits are payable pursuant to a QILDRO that satisfies the requirements of "domestic relations order" as defined in IRC section 414(p), then the applicable requirements of IRC section 414(p) shall be followed by the System. 

(Source:  Amended at 41 Ill. Reg. 11606, effective September 1, 2017)

Section 1600.145  Compliance with Final 415 Treasury Regulations

a)         Subject to Section 1600.140(f), the limitations of this Section in compliance with IRC section 415 and the Final Treasury Regulations under IRC section 415 (26 CFR 1.415(a)-1 through (j)-1, T.D. 9319, April 5, 2007) shall apply in limitation years beginning on or after January 1, 2008, except as otherwise provided in this subsection (a).

1)         The IRC section 415(b) limit with respect to any member who, at any time has been a participant in any other defined benefit plan (defined in IRC section 414(j)) maintained by the member's same employer in the System shall apply as if the total benefits payable under all such defined benefit plans in which the member has been a participant were payable from one plan.

2)         The IRC section 415(c) limit with respect to any member who, at any time, has been a participant of any other defined contribution plan, as defined in IRC section 414(i), that was maintained by the member's same employer in the System shall apply as if the total annual additions under all such defined contribution plans in which the member has been a participant were payable to one plan.

3)         For purposes of this Section, the "limitation year" shall be the calendar year, and "plan" shall be any one or more of the SURS retirement plans, as the context requires.

b)         Basic IRC Section 415(b) Limitation

1)         Before January 1, 1995, a member may not receive an annual benefit that exceeds the limits specified in IRC section 415(b), subject to the applicable adjustments in that section.  On and after January 1, 1995, a member may not receive an annual benefit that exceeds the dollar amount specified in IRC section 415(b)(1)(A), subject to the applicable adjustments in IRC section 415(b), and subject to any additional limits that may be specified in the Code.  In no event shall a member's benefit payable under the System in any limitation year be greater than the limit applicable at the annuity starting date, as increased in subsequent years pursuant to IRC section 415(d) and 26 CFR 1.415(d)-1.

2)         For purposes of IRC section 415(b), the "annual benefit" means a benefit payable annually in the form of a straight life annuity (with no ancillary benefits) without regard to the benefit attributable to after-tax employee contributions (except pursuant to IRC section 415(n)) and to rollover contributions (as defined in IRC section 415(b)(2)(A)).  The "benefit attributable" shall be determined in accordance with 26 CFR 1.415(b)-1(b).

A)        Mandatory Employee Contributions.  In the case of mandatory employee contributions, as defined in IRC section 411(c)(2)(C) and 26 CFR 1.411(c)-1(c)(4) (or contributions that would be mandatory employee contributions if section 411 applied to the plan), the annual benefit attributable to those contributions is determined by applying the factors applicable to mandatory employee contributions, as described in IRC section 411(c)(2)(B) and (C) and Treasury Regulations under section 411 to those contributions to determine the amount of a straight life annuity commencing at the annuity starting date, regardless of whether the requirements of sections 411 and 417 apply to that plan.  For purposes of applying those factors to a plan that is not subject to the requirements of section 411, the applicable effective date of IRC section 411(a)(2) (which is used under 26 CFR 1.411(c)‑1(c)(3) to determine the beginning date from which statutorily specified interest must be credited to mandatory employee contributions) must be determined as if IRC section 411 applied to the plan, and in determining the annual benefit that is actuarially equivalent to these accumulated contributions, the plan must determine the interest rate that would have been required under IRC section 417(e)(3) as if IRC 417 applied to the plan.

B)        Voluntary Employee Contributions. If voluntary employee contributions are made to the plan (to the extent not made pursuant to IRC section 415(n)), the portion of the plan to which voluntary employee contributions are made is treated as a defined contribution plan pursuant to IRC section 414(k) and, accordingly, is a defined contribution plan pursuant to 26 CFR 1.415(c)‑1(a)(2)(i). Accordingly, the portion of a plan to which voluntary employee contributions are made is not taken into account in determining the annual benefit.

C)        Rollover Contributions.  The annual benefit attributable to rollover contributions from an eligible retirement plan, as defined in IRC section 402(c)(8)(B), is determined in the same manner as the annual benefit attributable to mandatory employee contributions.  Thus, in the case of rollover contributions from a defined contribution plan to a defined benefit plan to provide an annuity distribution, the annual benefit attributable to those rollover contributions for purposes of IRC section 415(b) is determined by applying the rules of IRC section 411(c) as described in subsection (b)(2)(A) of this Section, regardless of the assumptions used to compute the annuity distribution under the plan and regardless of whether the plan is subject to the requirements of IRC sections 411 and 417.  Accordingly, in such a case, if the plan uses more favorable factors than those specified in IRC section 411(c) to determine the amount of annuity payments arising from rollover contributions, the annual benefit under the plan would reflect the excess of those annuity payments over the amounts that would be payable using the factors specified in IRC section 411(c).

c)         Adjustments to Basic IRC Section 415(b) Limitation for Form of Benefit

1)         If the benefit under the System is other than the form specified in subsection (b)(2), the benefit shall be adjusted so that it is the equivalent of the annual benefit, using factors prescribed in 26 CFR 1.415(b).

2)         If the form of benefit, without regard to automatic annual increases, is not a straight life annuity or a qualified joint and survivor annuity, then subsection (c)(1) is applied by either reducing the IRC section 415(b) limit applicable at the annuity starting date or adjusting the form of benefit to an actuarially equivalent amount (determined using the assumptions specified in 26 CFR 1.415(b)-1(c)(2)(ii)) that takes into account the additional benefits under the form of benefit as follows:

A)        For a benefit paid in a form to which IRC section 417(e)(3) does not apply (such as a monthly benefit), the actuarially equivalent straight life annuity benefit that is the greater of:

i)          The annual amount of the straight life annuity (if any) payable to the member under the System commencing at the same annuity starting date as the form of benefit to the member; or

ii)         The annual amount of the straight life annuity commencing at the same annuity starting date that has the same actuarial present value as the form of benefit payable to the member, computed using a 5% interest assumption (or the applicable statutory interest assumption) and:

•           for limitation years prior to January 1, 2009, the applicable mortality tables described in 26 CFR 1.417(e)‑1(d)(2) (Revenue Ruling 2001-62, or any subsequent Revenue Ruling modifying the applicable provisions of that Revenue Ruling; and

•           for limitation years after December 31, 2008, the applicable mortality tables described in IRC section 417(e)(3)(B) (Notice 2008-85, or any subsequent IRS guidance implementing IRC section 417(e)(3)(B)).

B)        For a benefit paid in a form to which IRC section 417(e)(3) applies (such as a lump sum benefit), the actuarially equivalent straight life annuity benefit that is the greatest of:

i)          The annual amount of the straight life annuity commencing at the annuity starting date that has the same actuarial present value as the particular form of benefit payable, computed using the interest rate and mortality table, or tabular factor, adopted by the Board under Section 1600.140(g) for actuarial experience;

ii)         The annual amount of the straight life annuity commencing at the annuity starting date that has the same actuarial present value as the particular form of benefit payable, computed using a 5.5% interest assumption (or the applicable statutory interest assumption) and:

•           for limitation years prior to January 1, 2009, the applicable mortality tables described in 26 CFR 1.417(e)‑1(d)(2) (Revenue Ruling 2001-62, or any subsequent Revenue Ruling modifying the applicable provisions of that Revenue Ruling); and

•           for limitation years after December 31, 2008, the applicable mortality tables described in IRC section 417(e)(3)(B) (Notice 2008-85, or any subsequent IRS guidance implementing IRC section 417(e)(3)(B)); or

iii)        The annual amount of the straight life annuity commencing at the annuity starting date that has the same actuarial present value as the particular form of benefit payable (computed using the applicable interest rate for the distribution under 26 CFR 1.417(e)-1(d)(3), using the rate in effect for the third month prior to the beginning of the plan year with a one-year stabilization period) and:

•           for limitation years prior to January 1, 2009, the applicable mortality tables described in 26 CFR 1.417(e)‑1(d)(2) (Revenue Ruling 2001-62, or any subsequent that Revenue Ruling modifying the applicable provisions of that Revenue Ruling); and

•           for limitation years after December 31, 2008, the applicable mortality tables described in IRC section 417(e)(3)(B) (Notice 2008-85, or any subsequent IRS guidance implementing IRC section 417(e)(3)(B)), divided by 1.05.

C)        The System's actuary may adjust the IRC section 415(b) limit at the annuity starting date in accordance with subsection (c)(2)(A) and (B).

d)         Benefits for Which No Adjustment of IRC section 415(b) Limit Is Required.  For purposes of this Section, the following benefits shall not be taken into account in applying these limits:

1)         Any ancillary benefit that is not directly related to retirement income benefits;

2)         That portion of any joint and survivor annuity that constitutes a qualified joint and survivor annuity;

3)         Any other benefit not required under IRC section 415(b)(2) and 26 CFR 1.415(b) to be taken into account for purposes of the limitation of IRC section 415(b)(1).

e)         Other Adjustments in IRC Section 415(b) Limitation

1)         In the event the member's retirement benefits become payable before age 62, the limit prescribed by this Section shall be reduced in accordance with 26 CFR 1.415(b), pursuant to the provisions of IRC section 415(b), so that the limit (as reduced) equals an annual straight life benefit (when the retirement annuity begins) that is equivalent to a $160,000 (as adjusted) annual benefit beginning at age 62.

2)         In the event the member's benefit is based on at least 15 years of service as a full-time employee of any police department or fire department that is organized and operated by the state or political subdivision maintaining the defined benefit plan to provide police protection, firefighting services, or emergency medical services for any area within the jurisdiction of the state or political subdivision, or 15 years of service as a member of the Armed Forces of the United States, or is based on 15 years of combined service, the adjustments provided for in subsection1 (e)(1) shall not apply.

3)         The reductions provided for in subsection (e)(1) shall not apply to System benefits received as a pension, annuity or similar allowance as a result of the member becoming disabled by reason of personal injuries or sickness, or to amounts received by beneficiaries, survivors or the estate of the member as a result of the death of the member.

f)         Less than 10 Years of Participation or Service Adjustment for IRC Section 415(b) Limitations.  The maximum retirement benefits payable to any member who has completed less than 10 years of participation shall be the amount determined under subsection (b), as adjusted under subsection (c) and/or (e), multiplied by a fraction, the numerator of which is the number of the member's years of participation and the denominator of which is 10.  The limit under subsection (g) concerning the $10,000 limit shall be similarly reduced for any member who has accrued less than 10 years of service, except the fraction shall be determined with respect to years of service instead of years of participation.  The reduction provided by this subsection cannot reduce the maximum benefit below 10% of the limit determined without regard to this subsection.  The reductions provided for in this subsection shall not be applicable to income received as a pension, annuity or similar allowance as a result of the member becoming disabled by reason of personal injuries or sickness, or to amounts received by beneficiaries, survivors or the estate of the member as a result of the death of the member.

g)         $10,000 Limit.  Notwithstanding the other provisions of this Section, the retirement benefit payable with respect to a member shall be deemed not to exceed the IRC section 415(b) limit if the benefits payable, with respect to a member under this System and under all other qualified defined benefit pension plans of the member's employer, do not exceed $10,000 for the applicable limitation year, and for any prior limitation year, and the employer has not, at any time, maintained a qualified defined contribution plan in which the member participated.

h)         Effect of COLA without a Lump Sum Component on IRC Section 415(b) Testing.  Effective on and after January 1, 2008, for purposes of applying the limits under IRC section 415(b) (the "limit") to a member with no lump sum benefit, the following will apply:

1)         A member's applicable limit will be applied to the member's annual benefit in the member's first limitation year without regard to any automatic annual increases under the System;

2)         To the extent that the member's annual benefit equals or exceeds the limit, the member will no longer be eligible for automatic annual increases from the System until such time as the benefit, plus the accumulated increases, is less than the limit; and

3)         Thereafter, in any subsequent limitation year, a member's annual benefit, including any automatic annual increases under the System, shall be tested under the then applicable benefit limit, including any adjustment to the IRC section 415(b)(1)(A) dollar limit under IRC section 415(d) and 26 CFR 1.415(b).

i)          Effect of COLA with a Lump Sum Component on IRC Section 415(b) Testing.  On and after January 1, 2008, with respect to a member who receives a portion of the member's annual benefit in a lump sum, a member's applicable limit will be applied, taking into consideration cost-of-living increases as required by IRC section 415(b) and 26 CFR 1.415(b).

j)          IRC Section 415(c) Limit.  After-tax member contributions or other annual additions with respect to a member may not exceed the lesser of $40,000 (as adjusted pursuant to IRC section 415(d)) or 100% of the member's compensation.

1)         Annual additions are defined to mean the sum (for any year) of employer contributions to a defined contribution plan, member contributions, and forfeitures credited to a member's individual account.  Member contributions are determined without regard to rollover contributions and to picked-up employee contributions that are paid to a defined benefit plan.

2)         For purposes of applying the IRC Section 415(c) limits only and for no other purpose, the definition of compensation, when applicable, will be compensation actually paid or made available during a limitation year, except as noted in IRC Section 415(c) and as permitted by 26 CFR 1.415(c)-2; however, member contributions picked up under IRC section 414(h) shall not be treated as compensation.

3)         Unless another definition of compensation that is permitted by 26 CFR 1.415(c)-2 is specified by the plan, compensation will be defined as wages within the meaning of IRC section 3401(a) and all other payments of compensation to an employee by an employer for which the employer is required to furnish the employee a written statement under IRC sections 6041(d), 6051(a)(3) and 6052 and will be determined without regard to any rules under IRC section 3401(a) that limit the remuneration included in wages based on the nature or location of the employment or the services performed (such as the exception for agricultural labor in IRC section 3401(a)(2)).

A)        However, for limitation years beginning on and after January 1, 1998, compensation will also include amounts that would otherwise be included in compensation but for an election under IRC section 125(a), 402(e)(3), 402(h)(1)(B), 402(k) or 457(b).  For limitation years beginning on and after January 1, 2001, compensation will also include any elective amounts that are not includible in the gross income of the employee by reason of IRC section 132(f)(4).

B)        For limitation years beginning on and after January 1, 2008, compensation for the limitation year will also include compensation paid by the later of 2½ months after an employee's severance from employment or the end of the limitation year that includes the date of the employee's severance from employment if:

i)          the payment is regular compensation for services during the employee's regular working hours, or compensation for services outside the employee's regular working hours (such as overtime or shift differential), commissions, bonuses or other similar payments, and, absent a severance from employment, the payments would have been paid to the employee while the employee continued in employment with the employer; or

ii)         the payment is for unused accrued bona fide sick, vacation or other leave that the employee would have been able to use if employment had continued.

C)        Back pay, within the meaning of 26 CFR 1.415(c)-2(g)(8), shall be treated as compensation for the limitation year to which the back pay relates to the extent the back pay represents wages and compensation that would otherwise be included under this subsection (j)(3).

k)         Service Purchases under IRC Section 415(n)

1)         Effective for permissive service credit contributions made in limitation years beginning after December 31, 1997, if a member makes one or more contributions to purchase permissive service credit under the System, the requirements of IRC section 415(n) will be treated as met only if:

A)        The requirements of IRC section 415(b) are met, determined by treating the accrued benefit derived from all such contributions as an annual benefit for purposes of IRC section 415(b); or

B)        The requirements of IRC section 415(c) are met, determined by treating all such contributions as annual additions for purposes of IRC section 415(c).

2)         For purposes of applying this Section, the System will not fail to meet the reduced limit under IRC section 415(b)(2)(C) solely by reason of this subsection (k)(2) and will not fail to meet the percentage limitation under IRC section 415(c)(1)(B) solely by reason of this Section.

3)         Permissive Service Credit

A)        For purposes of this Section, the term "permissive service credit" means service credit:

i)          recognized by the System for purposes of calculating a member's benefit under the System;

ii)         that the member has not received under the System; and

iii)        that the member may receive only by making a voluntary additional contribution, in an amount determined under the System, that does not exceed the amount necessary to fund the benefit attributable to the service credit.

B)        Effective for permissive service credit contributions made in limitation years beginning after December 31, 1997, "permissive service credit" may include service credit for periods for which there is no performance of service and, notwithstanding subsection (k)(3)(A)(ii), may include service credited in order to provide an increased benefit for service credit a member is receiving under the System.

4)         The System will fail to meet the requirements of this Section if:

A)        more than 5 years of nonqualified service credit are taken into account for purposes of this subsection (k)(4)(A); or

B)        any nonqualified service credit is taken into account under this subsection (k)(4)(B) before the member has at least 5 years of participation under the System.

5)         For purposes of subsection (k)(4), effective for permissive service credit contributions made in limitation years beginning after December 31, 1997, the term "nonqualified service credit" means permissive service credit other than that allowed with respect to:

A)        service (including parental, medical, sabbatical and similar leave) as an employee of the Government of the United States, any state or political subdivision thereof, or any agency or instrumentality of any of the foregoing (other than military service or service for credit obtained as a result of a repayment described in IRC section 415(k)(3));

B)        service (including parental, medical, sabbatical and similar leave) as an employee (other than as an employee described in subsection (k)(5)(A) of an education organization described in IRC section 170(b)(1)(A)(ii) that is a public, private or sectarian school that provides elementary or secondary education (through grade 12), or a comparable level of education, as determined under the applicable law of the jurisdiction in which the service was performed;

C)        service as an employee of an association of employees who are described in subsection (k)(5)(A); or

D)        military service (other than qualified military service under IRC section 414(u)) recognized by the System.

6)         In the case of service described in subsection (k)(5)(A) through (C), that service will be nonqualified service if recognition of that service would cause a member to receive a retirement benefit for the same service under more than one plan.

7)         In the case of a trustee-to-trustee transfer after December 31, 2001, to which IRC section 403(b)(13)(A) or IRC section 457(e)(17)(A) applies (without regard to whether the transfer is made between plans maintained by the same employer):

A)        the limitations of subsection (k)(4) will not apply in determining whether the transfer is for the purchase of permissive service credit; and

B)        the distribution rules applicable under federal law to the System will apply to amounts transferred and any benefits attributable to those amounts.

8)         For an eligible member, the limitation of IRC section 415(c)(1) shall not be applied to reduce the amount of permissive service credit that may be purchased to an amount less than the amount allowed to be purchased under the terms of the System in effect on August 5, 1997.  For purposes of this subsection (k)(8), an eligible member is an individual who first became a member in the System before January 1, 1998.

9)         Notwithstanding any other provision of law to the contrary, the System may modify a request by a member to make a contribution for the purchase of service credit if the amount of the contribution would exceed the limits provided in IRC section 415 by using the following methods:

A)        If the law requires a lump sum payment for the purchase of service credit, the System may establish a periodic payment plan for the member to avoid a contribution in excess of the limits under IRC section 415(c) or 415(n).

B)        If payment pursuant to this subsection (k)(9) will not avoid a contribution in excess of the limits imposed by IRC section 415(c) or 415(n), a pension fund may either reduce the member's contribution to an amount within the limits of those IRC sections or refuse the member's contribution.

l)          Repayments of Refunds.  Any repayment of contributions (including interest thereon) to the System with respect to an amount previously refunded upon a forfeiture of service credit under the System, or another governmental plan maintained by an employer, shall not be taken into account for purposes of IRC section 415, in accordance with IRC section 415(k)(3).

m)        Reduction of Benefits Priority.  Reduction of benefits and/or contributions to all plans under the Illinois Pension Code that cover the same member, when required, shall be accomplished by first reducing the member's benefit under any defined benefit plans in which the member participated, with the reduction to be made first with respect to the plan in which the member most recently accrued benefits and thereafter in the priority determined by the plan and the plan administrator of the other plans and, next, by reducing or allocating excess forfeitures for defined contribution plans in which the member participated, with the reduction to be made first with respect to the plan in which the member most recently accrued benefits and thereafter in the priority established by the plan and the plan administrator for the other plans provided; however, that necessary reductions may be made in a different manner and priority pursuant to the agreement of the plan and the plan administrator of all other plans covering the member.

(Source:  Added at 39 Ill. Reg. 8317, effective June 1, 2015)

Section 1600.150  Group Trust Provisions

a)         Creation and Purpose.  A Group Trust is hereby created effective April 1, 1998, pursuant to Section 15-177 of the Illinois Pension Code [40 ILCS 5].  The purpose of the Group Trust is to hold and jointly invest the assets of the SURS defined benefit plan, the Retirement Savings Plan (formerly the "Self-Managed Plan"), and the disability benefit program for Retirement Savings Plan participants provided under Section 15-103.3 of the Code (collectively "Participating Trusts"), and make appropriate payments pursuant to directions from the respective trusts.  The Board shall be the trustee of the Group Trust.

b)         Tax Status.  The Group Trust is intended to qualify as a group trust under IRC Sections 401(a) and 501(a), and Revenue Ruling 81-100, as modified by Revenue Rulings 2004-67, 2011-1 and 2014-24, and all provisions of this Section must be so construed.  The Group Trust is established within the System and the Board shall generally assert that no taxes may be assessed on any income or interest of the Group Trust.

c)         Exclusive Benefit.  Notwithstanding anything in this Section to the contrary, no part of the Group Trust that equitably belongs to a Participating Trust, other than that portion required for reasonable fees, taxes and trust expenses applicable to the Participating Trust, may be used or diverted for any purpose other than the exclusive benefit of the Participating Trust's participants or their beneficiaries who are entitled to benefits under the Participating Trust.

d)         Nonassignment.  No Participating Trust may assign or transfer any part of its equity or interest in the Group Trust, except in accordance with this Section.

e)         Authority of the Board.  The Board's determination as to whether any investment is within the class or classes of property in which the Group Trust may be invested will be conclusive; provided, however, that all such decisions must be made in accordance with the then current investment policy adopted by the Board and consistent with any requirements under Article 1 of the Pension Code.  The Board is solely and exclusively responsible for, and has exclusive authority and discretion for, the management and control of the Group Trust.  Subject to the provisions of the preceding sentence, the Board may, at its reasonable expense, retain the services of such investment or other advisers and consultants as it may deem desirable to assist it in carrying out its responsibilities under this Section.

f)         Trust Accounting.  The Group Trust will be invested and administered as a common investment fund.  The equitable interest of each Participating Trust shall be accounted for separately in dollar amounts or proportional interest.  Consistent with the selected accounting method, the Board shall maintain books and records that value the interest of each Participating Trust at least monthly.

g)         Admission to Participation.  Participation in the Group Trust is limited to the qualified trusts administered by the Board under the SURS defined benefit plan, the Retirement Savings Plan, the disability benefit program for Retirement Savings plan participants provided under Section 15-103.3 of the Code; pension, profit-sharing and stock bonus trusts or custodial accounts qualifying under IRC section 501(a); individual retirement accounts that are exempt under IRC section 408(e); eligible governmental plan trusts or custodial accounts under IRC section 457(b) that are exempt under IRC section 457(g); custodial accounts under IRC section 403(b)(7); retirement income accounts under IRC section 403(b)(9); and IRC section 401(a)(24) governmental plans.  Each Participating Trust must adopt the terms of this Section by reference in its enabling statute, rules or plan document, as the case may be, and transfer all or any part of its assets to the Group Trust.  This Section shall serve as the adopting instrument under which the SURS defined benefit plan and the disability benefit program for Retirement Savings Plan participants provided under Section 15-103.3 of the Code shall participate in the Group Trust.

h)         Qualified Status of Participating Trusts.  Each Participating Trust must satisfy the qualification requirements as a qualified governmental pension plan under IRC sections 401(a) and 414(d) or a trust, a custodial account, or similar entity that is tax exempt under IRC section 408(e) or IRC section 501(a) (or is treated as tax exempt under IRC section 501(a)).  A Participating Trust that is an IRC section 401(a)(24) governmental plan is treated as meeting this requirement if it is not subject to federal income taxation.  A Participating Trust shall be deemed to satisfy this subsection (h) if it has a current determination letter issued by the Internal Revenue Service.

i)          Contributions.  The Board shall accept transfers of assets only from the Participating Trusts and the plan sponsors of those Participating Trusts and not from any other person except as permitted by law.  However, the Board shall also accept cash payments, rollovers, or plan-to-plan transfers for a purchase of service credit by a participant of a Participating Trust in accordance with the terms of the plan.  The Board may accept assets in its sole discretion.  The value of any non-cash asset shall be transferred on the basis of fair market value on the date of contribution and consistent with the terms of this Section.

j)          Termination of Participating Trust.  The Board may terminate the participation of a Participating Trust in the Group Trust by amending this Section and, in the case of the Retirement Savings Plan, amending the plan document.  In the event of termination of the participation of a Participating Trust, the Board shall distribute to the terminating Participating Trust its share of the Group Trust in cash, assets or otherwise determined by the Board.

k)         Termination of Group Trust.  The Board may terminate the Group Trust at any time by amending this Section.  In the event of the termination of the Group Trust, the Board shall distribute to each Participating Trust its share of the Group Trust in cash, assets or otherwise as determined by the Trustee.

l)          Valuation of Assets upon Distribution.  In all cases, at no time prior to the satisfaction of all liabilities with respect to participants and their beneficiaries under any Participating Trust shall that part of the corpus or income of the Group Trust that equitably belongs to that Participating Trust be used for, or diverted to, purposes other than for the exclusive benefit of the participants and their beneficiaries.

m)        Allocation and Apportionment of Trust Expenses.  The Board may pay reasonable trust expenses from the Group Trust if these amounts would have been chargeable to the Participating Trusts if incurred in their separate administration.  For each year, the Board shall determine and allocate to each Participating Trust the reasonable and quantifiable trust expenses from the previous fiscal year that the Board recorded as directly attributable to the Participating Trust.  Investment manager fees, custodian fees, and other investment-related fees will be allocated based on the same proportion as the allocation of net assets to each Participating Trust as of the last valuation date.  All other remaining expenses shall be allocated based on the same proportion as the number of total participants of a Participating Trust on the first day of the plan year is to the number of total participants of all Participating Trusts on the first day of the plan year.

n)         Duty of Board.  For all purposes under this Section, the Board shall discharge its duties under this Section with the care, skill, prudence and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims.

(Source:  Amended at 47 Ill. Reg. 14005, effective September 14, 2023)

Section 1600.160  Information Submission Deadlines, Penalties, and Suspensions

Purpose.  This Section implements Section 15-168 of the Code, which authorizes the System to require such information as shall be necessary for the proper operation of the system from any participant or beneficiary or annuitant or from any current or former employer of a participant or annuitant.  Such information may include, but is not limited to, employment contracts. [40 ILCS 5/15-168].

a)         Necessary Information.  Information deemed necessary for the proper operation of the System shall include the following categories of information.  Any information requested under this Section shall be treated as "submitted" only if the information is complete and accurate.

1)         Information necessary to calculate, pay, or finalize any benefit claim;

2)         Information necessary to prepare a benefit estimate;

3)         Information necessary to clarify or correct information previously received;

4)         Payroll reversal information or other accounting data concerning employee earnings and contributions; or

5)         Employment history documents, such as certification and termination reports, and other reports concerning employment status.

b)         Employer Submission Deadlines and Penalties.

1)         A "request" for necessary information is any solicitation of information or data to be provided in electronic format, letter, e-mail, fax, or other written correspondence.  Each item of information or data shall constitute a separate request for information, even if multiple items are solicited on the same form or document.

2)         An employer in receipt of a System request for necessary information shall submit the requested information to the System within 90 calendar days after the date of the initial request.

3)         Penalty Determination.  The System may decide to assess penalties at any time after the 91^st calendar day following the date of the initial request.  The determination of whether to assess penalties shall be made on a case-by-case basis and shall be based on the following considerations:

A)        whether the delay in submitting the information is due to factors that are beyond the employer's control;

B)        whether the employer has exhibited repeated patterns of noncompliance within the past three years; and

C)        whether the employer has been properly notified of the need for the requested information according to this Section.

4)         Notice of Penalties.  If the System determines that penalties are to be assessed, it shall issue a notice to the employer stating that penalties shall accrue if the necessary information is not submitted within a 30-day grace period starting from the date of the notice.  The notice shall describe the nature of the necessary information that has been requested.  If the employer submits the necessary information within the 30-day grace period, then no penalties shall be assessed. 

5)         Penalty Billing.  If the employer fails to submit the requested information within the 30-day grace period, then the System shall assess penalties at the rate of $250 per calendar day counting from the 91^st day after the initial request date until the information is submitted, with a maximum penalty of $25,000 per delinquent request.  Upon the employer's submission of the necessary information or the accrual of $25,000 in penalties per delinquent request, whichever occurs earlier, the System shall issue the final penalty bill to the employer.  The final bill shall contain a calculation of the penalty assessment and notify the employer of its rights to appeal the assessment within 35 days after the billing date pursuant to Section 1600.510.

6)         Payment of Penalty.  The employer shall pay the assessed penalties stated in the final bill within one year after the date of the bill.  All payments must be received within one calendar year after receipt of the information by the System or one calendar year of reaching the maximum penalty of $25,000, whichever occurs earlier. If the employer fails to make complete payment within the applicable timeframe, then the System may, after giving notice to the employer, certify the delinquent amount to the State Comptroller, and the Comptroller shall thereupon deduct the certified delinquent amount from State funds payable to the employer and pay them instead to the System. [40 ILCS 5/15-168(b)].  If the employer is a community college district, then the System may also recover any delinquency in assessed penalties that have not been paid for more than 120 days after the one-year deadline by certifying the amount to the county treasurer of the county in which the employer is located pursuant to Section 15-155.1(b) of the Code.

c)         Participant, Annuitant, and Beneficiary Submission Deadlines and Benefit Suspensions. 

1)         If a participant, beneficiary, or annuitant fails to provide any information that is necessary for the calculation, payment, or finalization of any benefit under Article 15 within 90 calendar days of the date of the System's request under Section 15-168(a) of the Code, then the System may immediately cease processing the benefit and may not pay any additional benefit payment to the participant, beneficiary, or annuitant until the requested information is provided.  [40 ILCS 5/15-168(c)]. 

2)         The System's determination of whether to suspend benefit processing or the payment of additional benefits due to the participant, annuitant, or beneficiary's failure to submit necessary information shall be based on the following factors:

A)        whether the delay in submitting the information is due to factors that are beyond the participant, annuitant, or beneficiary's control;

B)        whether the participant, annuitant, or beneficiary has exhibited repeated patterns of noncompliance concerning other information requests; and

C)        whether the participant, annuitant, or beneficiary has been properly notified of the need for the requested information according to this Section, such as by mail sent to the individual's last known address on file with the System, by e-mail sent to the individual's last known e-mail address on file, by secure message sent to the individual's account on the SURS member website, by telephone call, or by a combination of such notification methods.

3)         Notice of Suspension.  If the System determines that benefit processing or benefit payments are to be suspended, it shall issue a notice of suspension to the participant, annuitant, or beneficiary who failed to submit the necessary information that provides details about the nature of the information that is requested and a 30-day grace period within which information must be submitted to avoid such suspension.

4)         Upon the participant, annuitant, or beneficiary's complete and accurate submission of the necessary information, the System shall resume benefit processing and pay any suspended benefit payments without interest.

(Source:  Added at 49 Ill. Reg. 3321, effective February 26, 2025)

Section 1600.200  Definition of "Employee" for SURS Participation

Purpose and Application.  As mandated by Section 15-107(k) of the Code, this Section provides rules for determining whether an individual is an "employee," as defined under Section 15-107 of the Code, who is eligible to participate in a SURS retirement program.  This Section shall be effective for employment beginning on or after January 1, 2023.  Certifications of employee status for employment that began prior to January 1, 2023, shall be determined under a reasonable and good faith interpretation of Section 15-107 of the Code.

a)         General Definition.  "Employee" means any member of the educational, administrative, secretarial, clerical, mechanical, labor or other staff of an employer who satisfies either the "permanent and continuous standard" under subsection (a)(1) or the "minimum continuous duration standard" under subsection (a)(2) and meets the "payroll standard" under subsection (a)(3). [40 ILCS 5/15-107(a)]

1)         Permanent and Continuous Standard.  An individual satisfies this subsection (a)(1) if:

A)        as of the date of commencement of employment, the position is permanent, that is, it is intended to continue indefinitely in the absence of further action by the employer in the normal course of business or is anticipated for automatic reappointment upon expiration of the appointment term; and

B)        the position is continuous as described in subsection (a)(4).

2)         Minimum Continuous Duration Standard. 

A)        An individual satisfies the conditions of this subsection (a)(2) if:

i)          as of the date of commencement of employment, the position requires services that are expected to be rendered over a fixed duration of at least 4 months (or 16 weeks) or one academic term, whichever is less, measured from the employment commencement date; and

ii)         the position is continuous as described in subsection (a)(4).

B)        For purposes of subsection (a)(2)(A), "academic term" means a portion of the academic year during which the employer holds classes that is no shorter than 3 months (or 12 weeks) in duration.  If an employer is not an educational institution that holds classes, then the academic term shall be 4 months (or 16 weeks) for purposes of subsection (a)(2)(A).  If services commence during a period that is not an academic term (such as a summer session) and, pursuant to a contractual commitment, are expected to extend into the following academic term, the period prior to the academic term is also counted for purposes of meeting this standard. 

C)        Notwithstanding subsection (a)(2)(B), services related to accelerated courses that are taught during a portion of the academic term but carry the same contact hour and credit hour loads as the unaccelerated course taught over the full academic term shall be deemed to be rendered over an academic term.

3)         Payroll Standard.  An individual satisfies this subsection (a)(3) if the person:

A)        receives payment for personal services:

i)          on a warrant issued pursuant to a payroll voucher certified by an employer and drawn by the State Comptroller upon the State Treasurer; or

ii)         by an employer upon trust, federal or other funds; or

B)        is on a leave of absence without pay.

4)         Continuous Employment.  To be continuous, a position must not be irregular, intermittent or temporary.  A position must meet all the applicable requirements below to be continuous, depending on whether it is a faculty position or a non-faculty staff position:

A)        Continuous Faculty Position.  "Faculty" for purposes of this subsection (a)(4)(A) means an individual who has an academic appointment at an educational institution (e.g., professor, associate professor, assistant professor, adjunct faculty or professor, professor of practice, instructor, lecturer).

i)          The faculty position must customarily require services to be rendered on a regularly scheduled basis that the employer deems necessary to fulfill the educational objectives of the appointment. 

ii)         The faculty position shall be deemed to be irregular or intermittent if the appointment requires less than 10% of a full-time faculty load for the semester.  The full-time faculty load shall be defined by employer policy that is consistent with the definition of a "full-time employee" under 26 U.S.C. 4980H and regulations thereunder promulgated by the IRS.

iii)        The faculty position is not temporary.  A position is temporary if the individual is hired by the employer to help meet a short-term demand (e.g., completing a project of specified short-term duration, teaching a temporary course, teaching only during summer sessions, filling a position temporarily vacated by an employee who is sick or on a leave of absence, if funding for the position is temporary and renewal of that funding is not customarily sought from year to year).

B)        Continuous Non-Faculty Staff Positions.  "Non-faculty staff" for purposes of this subsection (a)(4)(B) means an individual who does not have an academic appointment at an educational institution (e.g., academic professionals, research scientists, technicians, clerical staff, mechanical staff, information technology staff, housekeeping/janitorial staff).

i)          The non-faculty staff position customarily requires services to be rendered on at least a 10% of full-time equivalent basis as defined by employer policy that is consistent with the definition of "full-time employee" under 26 U.S.C. 4980H and regulations thereunder promulgated by the IRS.

ii)         The non-faculty staff position is not temporary.  A position is temporary if the individual is hired by the employer to help meet a short-term demand (e.g., completing a project of specified short-term duration, filling a position temporarily vacated by an employee who is sick or on a leave of absence, if funding for the position is temporary and renewal for that funding is not customarily sought from year to year).

iii)        The non-faculty staff position has expectations of work with a particular pattern or duration.  Specifically:

•           the services in the position are not rendered solely on an "on-call" or "as-needed" basis (e.g., on-call shuttle drivers, extra-help employees, tutors, and driving instructors); and

•           the position does not fall within the scope of a "seasonal worker," which means a worker who performs labor or services on a seasonal basis or retail workers employed exclusively during holiday seasons as defined under 26 CFR 54.4980H-1(a)(39) or 29 CFR 500.20(s)(1).

b)         Specific Exclusions.

1)         Notwithstanding the foregoing and as permitted under Sections 15-107(a)(1)-(7) of the Code, an individual is not an employee under this Section if the individual:

A)        is a student enrolled in and regularly attending classes in a college or university which is an employer, and is employed on a temporary basis at less than full time;

B)        is currently receiving a retirement annuity or a disability retirement annuity under Section 15-153.2 of the Code from this System;

C)        is on a military leave of absence;

D)        is eligible to participate in the Federal Civil Service Retirement System and is currently making contributions to that system based upon earnings paid by an employer;

E)        is on leave of absence without pay for more than 60 days immediately following termination of disability benefits under Article 15 of the Code;

F)         is hired after June 30, 1979 as a public service employment program participant under the Federal Comprehensive Employment and Training Act and receives earnings in whole or in part from funds provided under that Act; or

G)        is employed on or after July 1, 1991 to perform services that are excluded by subdivision (a)(7)(f) or (a)(19) of Section 210 of the federal Social Security Act from the definition of employment given in that Section (42 U.S.C. 410). [40 ILCS 5/15-107(a)]

2)         In accordance with Section 15-107(a)(7) of the Code, an individual who is employed on or after July 1, 1991, to perform services that are excluded by subdivision (a)(7)(F) or (a)(19) (concerning non-immigrant visa holders) of Section 210 of the Social Security Act from the definition of employment given in that Section (42 U.S.C. 410) shall not be an employee under Section 15-107.  However, an individual who was excluded from employee status due to Section 210(a)(19) of the Social Security Act may become an employee under this Section effective as of the date the individual becomes a Lawful Permanent Resident, meets the Substantial Presence Test under 26 CFR 301.7701(b)-1(c), or otherwise becomes a U.S. person for federal income tax purposes.  [40 ILCS 5/15-107(a)]

c)         Certification of Employee Status.  An employer shall certify any individual who meets the applicable eligibility conditions set forth under this Section as an employee within the meaning of Section 15-107 by submitting a Report of Status to SURS.  An employer shall determine whether an individual is an employee under this Section, or remains an employee under this Section, upon the occurrence and re-occurrence of any of the following events:

1)         initial hire;

2)         transfer to a different position that is substantially different in character or duration (e.g., from a faculty to a non-faculty staff position); or

3)         rehire after termination from employment.

d)         Concurrent Employment.  If an individual is concurrently employed in more than one position with the same employer, and at least one position qualifies for employee status under Section 15-107 of the Code as interpreted under this Section, then the other position or positions shall also be deemed as qualifying for employee status during the duration of the qualifying employment.

e)         Reservation of Rights.  SURS reserves the right to determine whether an individual is an employee within the meaning of Section 15-107 of the Code and this Section, including whether a position is irregular, intermittent, or temporary under subsection (a)(4).

f)         Appeals.  An individual who is adversely affected by a determination made under this Section may file an appeal under Section 1600.500.  An employer that is adversely affected by a determination made under this Section may file an appeal under Section 1600.510.  If an individual and an employer both bring appeals concerning the same determination of employee status, then SURS may consolidate the matters to be heard before the Claims Panel under Section 1600.500.

(Source:  Added at 46 Ill. Reg. 1883, effective January 18, 2022)

Section 1600.202  Return to Employment

Purpose.  This Section defines terms used in Section 15-139 of the Code [40 ILCS 5/15-139] concerning annuitants who return to employment.

a)         "Annuitant", for purposes of Section 15-139 of the Code, means a person who is receiving a retirement annuity or who has received a lump-sum retirement benefit from SURS, or, if the retirement annuity payment or payments have not yet been paid due to SURS processing, a person whose retirement annuity payment period has commenced.  However:

1)         a person who has received a lump-sum retirement benefit is not an annuitant for purposes of Section 15-139(b) of the Code; and

2)         a person who is receiving or who has received retirement benefits under the Self-Managed Plan is not an annuitant.

b)         "Compensation", for purposes of Section 15-139(b) of the Code, means any remuneration paid by an employer that is reportable by the employer as "wages, tips, or other compensation" on Internal Revenue Service Form W-2, unless the remuneration is received for serving as a member of the Illinois Educational Labor Relations Board.

c)         "Employment", for purposes of Section 15-139(a) of the Code, means a relationship with any employer that would qualify the annuitant as an employee under common law, except for service as a member of the Illinois Educational Labor Relations Board.

d)         "Highest Annual Earnings"

1)         for purposes of Section 15-139(b) of the Code, means the greater of the following: 

A)        The highest aggregate earnings (as defined under Section 15-111 of the Code) paid in any 12 calendar month period, including and immediately preceding the month of termination, or any prior 12 calendar month period ending with the same calendar month.  The 12 calendar month period shall begin on the first day of a month and end on the last day of a month, even if earnings were paid for only a portion of the month.  For example, if an annuitant's final termination from employment occurred on May 15, 2014, the relevant period would begin on June 1 and end on May 31.

B)        The highest aggregate earnings (as defined under Section 15-111 of the Code) paid in any academic year (as defined under Section 15-126.1 of the Code) prior to retirement.

2)         In the case of an annuitant receiving reciprocal benefits under Article 20 of the Code, "highest annual earnings" shall include earnings credits accrued with any participating system, as defined by Section 20-108 of the Code.  The highest annual earnings shall not include any remuneration that is assumed as earnings for any purpose under Article 15 of the Code.

e)         "Reemployed", for purposes of Section 15-139(c) of the Code, means the annuitant has established a relationship with any employer that would otherwise qualify the annuitant as an employee under Section 15-107 of the Code, not withstanding Section 15-107(a)(2) of the Code; except, the employment must be on a permanent and continuous basis or in a position in which the annuitant is expected to serve for at least 9 months.

f)         It shall be the duty of the employer and employee to notify SURS in a timely manner of any employment that could result in the cancellation or reduction of the retirement annuity under Section 15-139 of the Code.

(Source:  Amended at 40 Ill. Reg. 8437, effective June 3, 2016)

Section 1600.203  Independent Contractors

Any individual claiming to be an independent contractor exempt from participation in SURS as an employee under Section 15-107 of the Code or from the provision governing annuitants who return to employment or receive compensation from any employer as set forth in Sections 15-139, 15-139.1 and 15-139.5 of the Code must file Form SS-8 (Determination of Employee Work Status for Purposes of Federal Employment Taxes and Income Tax Withholding) with the IRS seeking confirmation of independent contractor status.  An IRS Form SS-8 independent contractor determination must be filed with SURS before an individual can be considered to be exempt from SURS participation as an employee or reemployed employee.  The individual shall file with SURS a copy of the IRS formal determination or information letter received in response to the Form SS-8, which may then be used in further consideration of the individual's independent contractor status.

(Source:  Amended at 40 Ill. Reg. 8437, effective June 3, 2016)

Section 1600.205  Earnings Subject to Withholding and Crediting

a)         Purpose.  This Section provides guidance on which payments for compensation constitute "earnings" under Sections 15-111 and 15-111.5 of the Code.  Section 15-157 of the Code requires every participating employee to make contributions of 8% of his or her pay to fund the benefits payable under SURS.  This contribution is deducted from the participating employee's pay on a pre-tax basis and remitted to SURS via payroll deduction.  The contributions are made as a percentage of the participating employee's "earnings".

b)         Definition.  "Earnings", defined under Section 15-111 of the Code, is an amount paid for personal services equal to the sum of the basic compensation plus extra compensation for summer teaching, overtime and other extra service, subject to the following: 

1)         For periods for which an employee receives service credit under Section 15-113.1(c) or 15-113.2 of the Code, earnings are equal to the basic compensation on which contributions are paid by the employee during such periods. 

2)         Earnings shall include the basic compensation on which employee contributions required under Section 15-157 of the Code are paid by the employee for periods of furlough as provided under Section 15-113.11 of the Code.

3)         Earnings shall include the amount of a voluntary pay reduction taken in lieu of furlough on which employee contributions required under Section 15-157 of the Code are paid by the employee as provided under Section 15-113.12 of the Code.

4)         Compensation for employment which is irregular, intermittent and temporary shall not be considered earnings, unless the participant is also receiving earnings from the employer as an employee under Section 15-107 of the Code.  [40 ILCS 5/15-111(a)]

c)         Tier 2 Member Earnings Limitation 

1)         For a Tier 2 member, the annual earnings shall not exceed $106,800; however, that amount shall annually thereafter be increased by the lesser of:

A)        3% of that amount, including all previous adjustments; or

B)        one-half the annual unadjusted percentage increase (but not less than zero) in the Consumer Price Index-U (CPI-U) for the 12 months ending with the September preceding each November 1, including all previous adjustments.

2)         For the purposes of this Section, CPI-U means the index published by the Bureau of Labor Statistics of the United States Department of Labor that measures the average change in prices of goods and services purchased by all urban consumers, United States city average, all items, 1982-84 = 100. The new amount resulting from each annual adjustment shall be determined by the Public Pension Division of the Department of Insurance and made available to the boards of the retirement systems and pension funds by November 1 of each year. [40 ILCS 5/15-111(b)]

d)         Determination of the Purpose of the Payment

1)         If the payment is for services rendered, then the payment is earnings.

2)         If the payment is for a reason other than services rendered, it is not earnings. 

3)         Other Payments

The following list does not limit SURS' authority to determine whether any payment of compensation constitutes earnings on a case-by-case basis.

A)        Bonuses; Awards

i)          Bonuses received by an employee that are related to services rendered for a specific period of time, not to exceed one academic year, shall be included in earnings subject to SURS withholding.

ii)         Awards, such as longevity of service awards or outstanding employee awards, that are not associated with a particular time period are not subject to SURS withholding.

iii)        Earnings and basic compensation for an employee who first becomes a participant on or after January 1, 2017 shall not include bonuses.

B)        Severance Payments, Salary/Contract Continuation Payments, Retirement Payments or Incentives.  Payments made to facilitate termination of employment or to induce someone to retire, or not to retire, are not for services rendered, but are made in conjunction with an employee's termination of employment or retirement and are not earnings.  These payments are also not includable in the final rate of earnings under Section 15-112.

C)        Group Fringe Benefits.  Group fringe benefits provided by the employer are not earnings.  However, employer paid premiums on employer-provided group term life insurance in excess of $50,000 are earnings.

D)        Housing Allowance.  A housing allowance, whether in the form of a direct salary payment or as a residence in which the employee resides, is earnings.  Earnings and basic compensation for an employee who first becomes a participant on or after January 1, 2017 shall not include housing allowances.

E)        Automobile Allowance.  An automobile allowance in the form of a direct salary payment is earnings.  However, neither business use nor personal use of an employer-provided automobile is earnings.  Earnings and basic compensation for an employee who first becomes a participant on or after January 1, 2017 shall not include vehicle allowances.

F)         Non-Qualified Moving Expenses.  Non-qualified moving expenses (see 26 USC 217) are not earnings as they are not furnished in lieu of salary.

G)        Unused Sick Leave Paid at Termination of Employment.  These payments are not earnings, except for collectively bargained payments made in accordance with Section 15-112 of the Code. 

H)        Overtime.  Overtime is earnings. 

I)         Miscellaneous Other Benefits.  Fringe benefits that are provided in lieu of salary are earnings.  Items that are not provided in lieu of salary (such as reimbursement for out-of-pocket travel expenses, relocation expenses, etc.) are not earnings.  Items such as country club dues, tuition waivers, tickets to athletic and performing arts events for family members of employees, and other items that are reported as taxable income on the employee's Form W-2 are not earnings, unless those items are a negotiated fringe benefit in lieu of salary.  Earnings and basic compensation for an employee who first becomes a participant on or after January 1, 2017 shall not include social club dues or athletic club dues.

J)         Military Differential Wage Payments and Salary Continuation Benefits.  For payments made on or after January 1, 2009, differential wage payments, as defined under section 414(u)(12) of the IRC (26 USC 414(u)(12)), and payments to an individual who does not currently perform services for an employer by reason of qualified military service, as defined under section 414(u)(1) of the IRC (26 USC 414(u)(1)), to the extent those payments do not exceed the amounts the individual would have received if the individual had continued to perform services for the employer rather than entering qualified military service, shall be earnings and shall be compensation paid or made available during the limitation year for purposes of applying the limitations under section 415 of the IRC.

K)        Retroactive Pay Settlements, Court Settlements or Judgments, or Grievance Arbitration Settlements or Awards.  The cash amount for back pay or retroactive pay under a settlement agreement, award or order issued by a court or arbitral body for a disputed termination of employment, suspension or demotion shall be earnings if the agreement, award or order:

i)          Excludes from back pay any non-wage or non-salary items, such as health insurance reimbursements, payments for medical costs, interest awards, attorneys' fees, or damage awards;

ii)         Specifies the months to which the back pay is allocated and the amount is based on the basic compensation (or a portion thereof) the employee would have otherwise received during those months; and

iii)        The back pay amounts are paid to the employee within one year after the issuance of the agreement, award or order.

L)        Payment for Unused Vacation Days.  Pursuant to Section 15-112(h)(4)(iii) of the Code, payments for unused vacation of up to 56 work days paid upon termination of employment are earnings.  Payments for unused vacation days that are paid during employment are not earnings.

M)       Payments made under the Public Employee Disability Act [5 ILCS 345] are not earnings.

e)         Earning History.  Certain earnings may be excludable from the "final rate of earnings" determined under Section 15-112 of the Code.  Earnings are always attributable to the period when earned, not when paid.  SURS reserves the right to reallocate reported earnings to the period when earned, when this is necessary to accurately reflect the employee's earning history. 

(Source:  Amended at 44 Ill. Reg. 17714, effective October 22, 2020)

Section 1600.210  Crediting Interest on Participant Contributions and Other Reserves

a)         On the first of each month, participant contributions and all other reserves, except the reserves for undistributed interest and gains and losses on investments, shall be credited with interest at the effective rate in accordance with subsections (b) and (c) of this Section.

b)         The balance in the account at the end of the preceding fiscal year shall be credited with one-twelfth of one year of interest at the effective rate.

c)         A participant accepting a refund shall be entitled to interest to the first day of the month in which the refund is paid.

d)         The prescribed rate of interest shall be compounded annually, and the rate shall be determined periodically by the Board based upon the probable average effective rate of interest on a long-term basis.

(Source:  Amended at 32 Ill. Reg. 16515, effective September 25, 2008)

Section 1600.220  Election to Make Contributions Covering Leave of Absence at Less Than 50% Pay

a)         A participant may elect to pay contributions covering leaves of absence at less than 50% pay, except military leave and periods of disability leave in excess of 60 days, if the participant pays the contributions required by the Code in accordance with this Section upon the participant's basic compensation on the date the leave begins.  In order to pay contributions covering such leaves of absence, the participant must:

1)         return to employment covered by SURS at the expiration of the leave, or within 30 days after the termination of a disability that occurs during the leave, and continues this employment at a percentage of time equal to or greater than the percentage of time immediately preceding the leave of absence for at least 8 consecutive months or a period equal to the period of the leave, whichever is less; or

2)         be precluded from meeting the foregoing conditions because of disability or death.

b)         Immediate Payment

1)         The election must be filed by the later of 30 days after the beginning date of the leave or, in the event of late notification of the leave by the employer, 30 days after the date the participant is sent the election form.

2)         Payment of contributions must be received by 30 days after the last day of the month for which the contributions are payable.  In the event of late notification of the payment schedule by SURS, the participant must catch up the past due contribution within 30 days after the date he or she is sent the payment schedule and the remainder of the contributions must be received within the required 30 days.

c)         Subsequent Payment

If a participant fails to comply with the conditions set forth in subsection (b), he or she may purchase service and earnings credit for the leave by paying the contributions and interest on the contributions at the effective rate from the academic year-end in which the leave occurred.  Payments under this subsection may not be made earlier than the date on which the participant fulfills the return from leave requirements found in Section 15-113.2 of the Code.

d)         No payment may be made for service covering leaves of absence after the date the participant dies or begins receiving a retirement annuity or disability retirement allowance.

e)         If a participant purchases service credit covering a leave of absence but fails to meet the conditions set forth in the preceding subsections of this Section, the payment made shall be refunded without interest.

f)         Not more than 3 years of service credit for leaves of absence in any period of 10 years may be purchased.

g)         This Section is not applicable to a participant who is on special leave of absence for service with a teacher organization.

(Source:  Amended at 32 Ill. Reg. 16515, effective September 25, 2008)

Section 1600.230  Election to Pay Contributions Based upon Employment that Preceded Certification as a Participant

a)         A participant who meets the conditions of the Code may elect to pay contributions plus interest on the contribution at the rate established by the Code covering any period of employment:

1)         after August 31, 1941, at one-half time or more for an employer covered by SURS, which preceded the date that he or she became a participant; and

2)         any period of full-time employment with the United States government, the government of a state, a political subdivision of a state, or an agency or instrumentality of any of the foregoing, that preceded the date that he or she became a participant. 

b)         The participant may purchase, during the fiscal year in which employment terminates or in which retirement annuity begins, additional service credit for not less than ¼ year of the employment described in subsection (a).  If the participant elects to purchase credit described in subsection (a) prior to the fiscal year in which employment terminates, he or she must purchase at least one year of additional service credit, unless the total service credit he or she is entitled to purchase on the basis of this employment is less than one year.  No payment may be accepted for this service after the beginning of the annuity payment period described in Section 15-135(b) of the Code.

(Source:  Amended at 32 Ill. Reg. 16515, effective September 25, 2008)

Section 1600.240  Election to Make Contributions Covering Periods of Military Leave Protected under USERRA

a)         Under Section 15-157(d) of the Code, and subject to conditions and limitations as may be specified in this Section, a participant may make other additional contributions of such percentage of earnings or amounts as the participant shall elect in a written notice received by the Board.  Under Section 1-118 of the Code, SURS shall comply with the requirements imposed on it by the federal Uniformed Services Employment and Reemployment Rights Act (USERRA) (38 USC 4301 et seq.).

b)         "Military leave", as used in this Section, means periods during which a participating employee is placed on leave by an employer for active duty in the uniformed services of the United States while a participating employee under SURS and:

1)         returns to employment covered by SURS within the time periods and in the manner required under 20 CFR 1002.115 , or within 30 days after the termination of a disability that occurs during the leave; or

2)         is precluded from meeting the conditions set forth in subsection (b)(1) because of disability or death.

c)         The participating employee may elect to make contributions to SURS for any period of military leave or portion of the military leave designated by the participating employee.  The contributions must be made at the rates provided in Section 15-157(a) through (c) of the Code based upon the participant's rate of pay as determined under 20 CFR 1002.267.

d)         The participating employee may make contributions while on military leave.  No contributions may be made for military leave under this Section after the earliest of the following:

1)         the beginning of the annuity payment period;

2)         the date of receipt of a disability retirement allowance;

3)         the date of the participant's death;

4)         the date of separation from the post-military leave employment with the employer; or

5)         the expiration of a period beginning with the date of reemployment that is no longer than three times the period of military service, but not to exceed 5 years.

e)         If the participant makes a contribution under this Section, but is later found to have failed to meet the conditions set forth in this Section, the contribution made shall be refunded without interest.

f)         Military Service Prior to July 12, 2005.  If a participating employee fulfilled the applicable requirements of USERRA and subsection (b) prior to July 12, 2005, then he or she will be deemed to have returned to employment on July 12, 2005 for purposes of subsection (d)(4).

g)         Award of Service Credit.  Service credit shall be granted as required under USERRA for military leave periods purchased under this Section.

h)         Self-Managed Plan Participants.  Participating employees covered under the Self-Managed Plan may make contributions for qualifying periods of military leave for periods described under subsection (b) at rates provided under Sections 15-158.2(h) and 15-157 of the Code based upon the participating employee's rate of pay as determined under 20 CFR 1002.267 (2008, no subsequent dates or editions).  The employer contributions shall be credited to the participant's account on a pro-rated basis relative to the amount of participant contributions paid and at the rate specified under Section 15-158.2(h) of the Code.  The employer contributions shall be credited to the participant's account within the timeframes required under 20 CFR 1002.262 (2008, no subsequent dates or editions) following each contribution payment made under this Section.

(Source:  Amended at 32 Ill. Reg. 16515, effective September 25, 2008)

Section 1600.241  Survivor Benefits for Members Who Die While on Military Leave Protected under USERRA

For deaths occurring on or after January 1, 2007, in the case of a participant who dies while performing "qualified military service", as defined in section 414(u) of the IRC, any survivor or beneficiary of the participant is entitled to any additional benefits (other than benefit accruals relating to the period of qualified military service) provided under SURS had the participant resumed employee status and then terminated employment on account of death.

(Source:  Added at 36 Ill. Reg. 3938, effective February 22, 2012)

Section 1600.250  Sick Leave Accrual Schedule

a)         Under Section 15-113.4 of the Code, SURS grants service credit for unused sick leave.

b)         A participant who retires within 60 days immediately following his or her termination with an employer covered under SURS or other system subject to the Retirement Systems Reciprocal Act [40 ILCS 5/20] is entitled to credit for service for that portion of unused and unpaid sick leave earned in the course of employment.

c)         The employer must certify the number of unused and unpaid sick days consistent with subsection (e) on the member's termination report provided to SURS, or other form acceptable to SURS.

d)         Service credit is granted for unused and unpaid sick leave verified by the employer in accordance with the following schedule:

1)         0-29 full calendar days and 0-19 full work days = no service credit

2)         30-90 full calendar days and 20-59 full work days = 0.25 years of service credit

3)         91-180 full calendar days and 60-119 full work days = 0.50 years of service credit

4)         181-270 full calendar days and 120-179 full work days = 0.75 years of service credit

5)         271 or more full calendar days and 180 or more full work days = 1 year of service credit

e)         Only uncompensated, unused sick leave earned in accordance with an employer's sick leave accrual policy generally applicable to employees or a class of employees will be taken into account in calculating service credit under this Section.  Any sick leave granted by an employer to facilitate the hiring, retirement, termination, or other special circumstances of a participant will not be taken into account in calculating service credit for retirement.  Other unused benefits, such as vacation days or personal leave days, even if converted into sick leave under an employer's sick leave policy or contract, shall not be counted as unused sick leave under this Section.

f)         If a participant transfers from one employer to another, the unused sick leave credited by the previous employer will be considered in determining service to be credited under this Section, even if the participant terminated prior to August 23, 1989 (the effective date of P.A. 86-272), so long as the subsequent employer did not credit the participant with that sick leave from the previous employer.

(Source:  Amended at 38 Ill. Reg. 16375, effective July 17, 2014)

Section 1600.260  Part-time/Concurrent Service Adjustment

This Section will clarify how the percentage of time employed for each year of employment is determined for the service adjustment under Section 15-134.1(b) of the Code.  This percentage cannot exceed 100%.  The service adjustment under Section 15-134.1(b) of the Code shall not apply to a member who is a participant on or after September 1, 2024.

a)         Determine the average monthly percent time worked.

1)         Establish the monthly full-time equivalent (FTE) earnings for each employer by dividing the monthly earnings from that employer by the percent time the participant worked for that employer for that month. 

2)         Total the participant's earnings from all employers for that month and divide by the highest full-time equivalent.

3)         This results in the average monthly percent time worked.

4)         Example:

Average monthly percent time worked = 79.6% ($995 divided by $1,250)

b)         Determine the percentage of time employed for each relevant year of employment.

1)         Total the average monthly percent time worked for each month in the academic year for which the participant had earnings.

2)         Divide this number by the total number of months during the academic year for which the participant had earnings.

3)         This calculation results in the percentage of time employed for each year of employment.

4)         Example:

Percentage of time employed for the year of employment is 54.5% (436.0 divided by 8).

c)         Calculate Annuity

1)         In calculating a retirement annuity, if the participant's "percentage of time employed for each year of employment is 50% or less for 3 or more years after September 1, 1959, service is granted for employment in excess of 3 years", in the proportion that the percentage of time employed for each year of employment bears to the average annual percentage of time employed during the period on which the final rate of earnings is based.  An example calculation for this subsection (c) is:

2)         In this example, the final rate of earnings are based on years 6 through 9. The average annual percentage of time employed during the period on which the final rate of earnings is based is 57.5%.  This is the sum of years 6 through 9 percentages divided by 4.

3)         Years 1 through 6 have percentages of 50% or less and must be tested for adjustment.  The participant receives 3 of these years without adjustment.  To maximize the service that is used in the calculation of the retirement annuity, those years with the smallest percentages will be applied to the 3 years the participant receives without adjustment.  In this example, that is years 1 through 3.  Therefore, only years 4 through 6 require adjustment.  To determine the adjusted service, divide the "percentage of time employed" by the "average annual percentage of time employed during the period on which the final rate of earnings is based", then multiply by the unadjusted service.  If year 4's unadjusted service had been 0.50 year, the adjusted service would have been 30%/57.5% x 0.50 = .2609.

d)         The service credit adjustment in subsection (c) is not made in determining the participant's eligibility for a retirement annuity, disability benefits, additional death benefits, or survivors' insurance.

(Source:  Amended at 49 Ill. Reg. 3321, effective February 26, 2025)

Section 1600.270  Employer Contributions for Benefit Increases Resulting from Earnings Increases Exceeding 6%

Purpose.  This Section implements Section 15-155(g), (h), (i), (j) and (k) of the Code. This Section shall not apply to benefits from other retirement systems or pension funds payable under the Retirement Systems Reciprocal Act (Article 20 of the Code).

a)         Calculation of the Employer Cost.  This calculation is made when a monthly benefit is calculated from the participant's final rate of earnings (FRE).  The "present value of the increase in benefits" described in Section 15-155(g), called the "Employer Cost", will be calculated as follows:

1)         The earnings, as defined in Section 15-111 of the Code, for every academic year in the FRE period, as defined in Section 15-112 of the Code, are adjusted on a full-time equivalent basis.

A)        48 Month FREs and Partial Academic Years.  When the final rate of earnings for a participant is the average annual earnings during the 48 consecutive calendar month period ending with the last day of final termination of employment, any partial academic year at the beginning of the final rate of earnings period will be disregarded.

B)        Full-Time Equivalent (FTE) Basis 

i)          SURS will adjust earnings from an employer in a manner consistent with the percent time employed reported by the employer. 

ii)         The FTE earnings of an academic year shall equal the total earnings in the academic year divided by the average percent time of employment.

C)        Earnings credited during periods of service purchased under Sections 15-113.1 through 15-113.7 of the Code shall be determined on a FTE basis.

D)        For the purpose of Section 15-155(g), earnings do not include payments made under a collective bargaining agreement for unused sick leave or payments made for unused vacation.

E)        For purposes of Section 15-155(g), earnings shall include earnings, to the extent not established by a participant under Section 15-113.11 or 15-113.12, that would have been paid to the participant had the participant not taken periods of voluntary or involuntary furlough occurring on or after July 1, 2015 and on or before June 30, 2017, or periods of voluntary pay reduction in lieu of furlough occurring on or after July 1, 2015 and on or before June 30, 2017.  These earnings shall be reported by the employer in the format specified by the System for this purpose.

F)         For purposes of Section 15-155(g), earnings shall exclude any earnings increase paid in an academic year beginning on or after July 1, 2020 resulting from overload work performed in an academic year subsequent to an academic year in which the employer was unable to offer or allow to be conducted overload work due to an emergency declaration limiting such activities. [40 ILCS 5/15-155(h-5)]

2)         The FTE earnings of each academic year in the FRE period are limited to 106% of the previous academic year's FTE earnings to yield the "Capped FTE Earnings" of each academic year.

3)         The Capped FTE Earnings of each academic year are multiplied by their respective average percent times of employment to yield the "Capped Earnings" for each academic year.  The Capped Earnings shall be used to determine the "Capped FRE".

4)         The "Benefit Increase" shall equal the difference between the FRE and the Capped FRE, multiplied by the number of years of service, and further multiplied by 2.2%.

5)         The Employer Cost equals the actuarial present value of the Benefit Increase.  This actuarial present value calculation will be made by using actuarial tables provided by SURS' actuary from time to time.  The actuarial table used will correspond with the type of monthly benefit that is provided to the participant.  A single-life annuity table will be used when a traditional benefit package participant has no eligible survivor at the time of retirement.  If the participant had employment with more than one employer during the final rate of earnings period, the Employer Cost is calculated for each employer using only the earnings with that employer.  However, no Employer Cost will be assessed among multiple, concurrent employers if the increase in total earnings for the concurrent academic year in the FRE period does not exceed 6% over the total earnings of the previous academic year.

b)         Employer Billing

1)         Billing.  Whenever it determines that a payment is or may be required under Section 15-155(g) of the Code, SURS will calculate the amount of the payment and bill the employer for the amount.  The bill will specify the calculations used to determine the amount due.

2)         Request for Recalculation.  If the employer disputes the amount of the bill, it may, within 30 days after receipt of the bill, apply to SURS in writing for a recalculation.  The application must specify the grounds of the dispute and, if the employer asserts the calculation is subject to Section 15-155(h) or (i) of the Code, must include an affidavit setting forth and attesting to all facts within the employer's knowledge that are pertinent to the applicability of Section 15-155(h) or (i) of the Code.  Upon receiving a timely application for recalculation, SURS will review the application and, if appropriate, recalculate the amount due.

3)         Payment.  The employer contributions required under Section 15-155(g) of the Code may be paid in the form of a lump sum within 90 days after the receipt of the bill.  If the employer contributions are not paid within 90 days after receipt of the bill, then interest will be charged at a rate equal to SURS' prescribed rate of interest compounded annually from the 91^st day after the receipt of the bill.  Payments must be concluded within 3 years after the employer's receipt of the bill.  [40 ILCS 5/15-155(g)]

4)         Appeals of the Recalculation.  The employer may appeal a recalculation pursuant to Section 1600.510.

c)         Exclusions for Earnings Increases Paid on or after June 1, 2005, but before July 1, 2011, under Section 15-155(h) of the Code

1)         Grandfathering.  When assessing payment for any amount due under Section 15-155(g) of the Code, SURS will exclude earnings increases paid to participants required under contracts or collective bargaining agreements entered into, amended, or renewed before June 1, 2005. [40 ILCS 5/15-155(h)]  These contracts are "grandfathered".  For the purposes of Section 15-155(h) of the Code:

A)        A contract or collective bargaining agreement is "entered into, amended or renewed" on the earliest of the following:

i)          the date the governing body of the employer voted to accept the contract or collective bargaining agreement;

ii)         the date the contract or collective bargaining agreement was executed in final form by the parties; or

iii)        the date the parties to the contract or collective bargaining agreement reached a tentative agreement regarding the terms of the contract or collective bargaining agreement, provided that the tentative agreement is subsequently approved by the governing body of the employer on or after June 1, 2005, without any changes to the terms that have the effects described under subsection (c)(1)(B)(i) or (ii).

B)        A contract or collective bargaining agreement will not exclude earnings increases paid under the contract or agreement if the contract or agreement is amended or renegotiated after June 1, 2005 to have the effect of:

i)          increasing the earnings usable for the FRE (except when the increase is the result of a salary reopener provision that was part of the contract or collective bargaining agreement prior to June 1, 2005); or

ii)         extending the expiration date of the contract (in which case the earnings will be excluded only through the original expiration date of the contract). 

C)        Miscellaneous

i)          A contract exception made by an employer for an individual shall disqualify that individual's earnings increases from grandfathering but shall not invalidate the grandfathering for any other persons.

ii)         A memorandum of understanding between the employer and the collective bargaining unit to increase the credit hours available shall not invalidate the contract, but any earnings increases because of the increased credit hours shall not be excluded from the calculation under subsection (a), unless Section 15-155(h) or (i) of the Code applies.

iii)        When a member has given notice to the employer of intent to retire pursuant to the terms of a grandfathered contract or collective bargaining agreement, earnings provided under the contract or collective bargaining agreement shall be excluded so long as the earnings are provided to the member within four years after the expiration date of the contract or collective bargaining agreement.

iv)        Notwithstanding the other provisions of this subsection (c)(1), earnings paid under a grandfathered contract on or after July 1, 2011 shall not be excluded from earnings under subsection (a).

2)         Earnings 10 Years Prior to Retirement Eligibility.  When assessing payment for any amount due under Section 15-155(g) of the Code, SURS will exclude earnings increases paid to a participant at a time when the participant is 10 or more years from retirement eligibility under Section 15-135 of the Code.  [40 ILCS 5/15-155(h)] Earnings increases paid in academic years preceding and including the academic year during which the participant was 10 years from attaining earliest retirement eligibility shall be excluded.

3)         Overloads and Overtime

A)        Earnings increases resulting from overload work, including a contract for summer teaching, or overtime when the employer has certified to SURS, and SURS has approved the certification, that:

i)          in the case of overloads:

•    the overload work is for the sole purpose of academic instruction in excess of the standard number of instruction hours for a full-time employee occurring during the academic year that the overload is paid; and

•    the earnings increases are equal to or less than the rate of pay for academic instruction computed using the participant's current salary rate and work schedule; and

ii)         in the case of overtime, the overtime was necessary for the educational mission.  [40 ILCS 5/15-155(h)]

B)        The certification shall be in the form adopted by SURS and be signed by a duly authorized representative of the employer.  The certification must be accompanied by supporting documentation as required by the form.

C)        The standard number of instruction hours for a full-time employee shall be consistent with employer policy in force for the academic year in which the overload earnings were earned.

4)         Promotions

A)        When assessing payment for any amount due under Section 15-155(g) of the Code, SURS will exclude earnings increases resulting from:

i)          a promotion for which the employee moves from one classification to a higher classification under the State Universities Civil Service System;

ii)         a promotion in academic rank for a tenured or tenure-track faculty position; or

iii)        a promotion that the Illinois Community College Board has recommended in accordance with Section 15-155(k) of the Code.

B)        The earnings increases referenced in subsection (c)(4)(A) shall be excluded only if the promotion is to a position that has existed and been filled by a member for no less than one complete academic year and the earnings increase as a result of the promotion is an increase that results in an amount no greater than the average salary paid for other similar positions.  [40 ILCS 5/15-155(h)]

C)         The employer shall certify that the promotion is to a position that has existed and been filled by a member for no less than one complete academic year and the earnings increase as a result of the promotion is an increase that results in an amount no greater than the average salary paid for other similar positions.  The certification shall be in the form adopted by SURS and be signed by a duly authorized representative of the employer.  The certification must be accompanied by supporting documentation as required by the form.

D)        The phrase "an amount no greater than the average salary paid for other similar positions" shall mean the midpoint of the salary range for the position or similar positions as most recently approved by the Merit Board of the State Universities Civil Service System or the current average salary paid for tenured or tenure-track faculty positions in the same department, as the case may be.

d)         Exclusions for earnings increases described in Section 15-155(h) of the Code paid on or after July 1, 2011, but before July 1, 2014, under a contract or collective bargaining agreement entered into, amended, or renewed on or after June 1, 2005, but before July 1, 2011, under Section 15-155(i) of the Code.  For the purpose of Section 15-155(i) of the Code, a contract or collective bargaining agreement is "entered into, amended or renewed" on the earliest of the following:

1)         the date the governing body of the employer voted to accept the contract or collective bargaining agreement;

2)         the date the contract or collective bargaining agreement was executed in final form by the parties; or

3)         the date the parties to the contract or collective bargaining agreement reached a tentative agreement regarding the terms of the contract or collective bargaining agreement, provided that the tentative agreement is subsequently approved by the governing body of the employer on or after July 1, 2011 without any changes to the terms that have the effect of extending the expiration date.

e)         The exclusions under subsections (c) and (d) shall not apply to earnings increases paid after June 30, 2014.

(Source:  Amended at 49 Ill. Reg. 3321, effective February 26, 2025)

Section 1600.271  Employer Contributions for Earnings in Excess of the Governor's Salary

a)         Purpose and Applicability.  This Section implements Section 15-155(j-5) of the Code.  Section 15-155(j-5) and this Section shall not apply to any participant's earnings to the extent the employer pays the employer normal cost for those earnings.  For purposes of Section 15-155(j-5), the terms stated in subsections (b) through (i) shall have the meanings ascribed in this Section.

b)         State Fiscal Year.  The "State fiscal year" shall mean the 12-month period beginning July 1.

c)         Governor's Salary.  The "amount of the salary set by law for the Governor that is in effect on July 1 of that fiscal year" shall be the salary for the Governor set by law by the General Assembly as of July 1 of the State fiscal year or, in its absence, the most recent salary for the Governor set by law by the General Assembly.

d)         Earnings Exclusions. Earnings do not include payments made under a collective bargaining agreement for unused sick leave or payments made for unused vacation.

e)         Excess Earnings.  The "amount of earnings in excess of the amount of the salary set for the Governor" (excess earnings) shall be equal to the difference between the earnings and the Governor's salary as defined in subsection (c).

f)         Employer Normal Cost.  The "employer normal cost" shall mean the employer normal cost described in  Section 15-155, expressed as a total percentage of payroll, approved by the Board for the State fiscal year.  This amount shall be computed by the System on the basis of the actuarial assumptions and tables used in the most recent actuarial valuation of the System that is available at the time of the computation. [40 ILCS 5/15-155(j-5)]

g)         Employer Contribution Amount.  The employer contribution amount shall be equal to the excess earnings under subsection (e) multiplied by the employer normal cost percentage under subsection (f).

h)         Multiple or Concurrent Employers.  In the event that an employee has been employed by two or more employers during a State fiscal year, earnings shall be measured and the employer contribution amount shall be calculated on an employer-by-employer basis.

i)          Employer Billing 

1)         Billing.  Whenever it determines that a payment is or may be required under Section 15-155(j-5) of the Code, the System shall calculate the amount of the payment and bill the employer for that amount. The bill shall specify the calculation used to determine the amount due. [40 ILCS 5/15-155(j-5)] No bills shall be issued for de minimis employer contribution amounts that are $25 or less. The System shall issue the bill during the September immediately following the end of the State fiscal year to which the bill relates.

2)         Request for Recalculation.  If the employer disputes the amount of the bill, it may, within 30 days after issuance of the bill, apply to the System in writing for a recalculation. The application must specify in detail the grounds of the dispute. Upon receiving a timely application for recalculation, the System shall review the application and, if appropriate, recalculate the amount due.  An employer shall be deemed to have been in receipt of the bill on the date the bill is issued.

3)         Payment.  The employer contributions required under this subsection (i) may be paid in the form of a lump sum within 90 days after issuance of the bill. If the employer contributions are not paid within 90 days after issuance of the bill, then interest will be charged at a rate equal to the System's annual actuarially assumed rate of return on investment compounded annually from the 91^st day after receipt of the bill. All payments must be received within 3 years after the issuance of the bill. [40 ILCS 5/15-155(j-5)]

4)         Comptroller Intercept.  If the employer fails to make complete payment, including applicable interest, within 3 years, then the System may, after giving notice to the employer, certify the delinquent amount to the State Comptroller, and the Comptroller shall deduct the certified delinquent amount from State funds payable to the employer and pay them instead to the System. [40 ILCS 5/15-155(j-5)]  In the case of an employer that is a community college district, Section 15-155.1(b) of the Code shall also apply to delinquent amounts including interest after the 3-year period.

5)         Appeals of the Recalculation. The employer may appeal a recalculation pursuant to Section 1600.510.

(Source:  Amended at 43 Ill. Reg. 8562, effective July 26, 2019)

Section 1600.275  Employer Contributions for Employing Affected Annuitants

a)         Purpose and Applicability 

1)         This Section implements Section 15-139.5 of the Code concerning employer reporting and contribution requirements for employing or reemploying annuitants and affected annuitants, effective for academic years beginning on or after August 1, 2013. 

2)         Effective November 19, 2013, this Section shall not apply to an annuitant if the employer of that annuitant provides documentation to SURS that:

A)        the annuitant is employed in a status appointment position, as that term is defined in 80 Ill. Adm. Code 250.80; and

B)        due to obligations contained under the State Universities Civil Service Act [110 ILCS 70], the employer does not have the ability to limit the earnings or duration of employment for the annuitant while employed in the status appointment position. [40 ILCS 5/15-139.5(j)]

b)         Definitions.  For purposes of Section 15-139.5 of the Code and this Section, the following terms shall have the meanings ascribed in this subsection (b).

1)         "Academic Year" means the 12-month period beginning on September 1.  [40 ILCS 5/15-139.5(a)]

2)         "Affected Annuitant"

A)        Means an annuitant on the first day of the academic year following the academic year in which the annuitant first met the following conditions:

i)          While receiving a retirement annuity under Article 15 of the Code, the annuitant was employed on or after August 1, 2013 by one or more employers under that Article and received or became entitled to receive during an academic year compensation for that employment in excess of 40% of his or her highest annual earnings prior to retirement; except that compensation paid from federal, corporate, foundation, or trust funds or grants of State funds that identify the principal investigator by name is excluded.

ii)         For the academic year containing June 1, 2015 and academic years thereafter, the annuitant received an annualized retirement annuity under Article 15 of at least $10,000.  [40 ILCS 5/15-139.5(b)] The annualized retirement annuity of at least $10,000 shall be a gross monthly retirement annuity of at least $833.33 per month.

B)        A person who becomes an affected annuitant remains an affected annuitant, except for:

i)          any period during which the person returns to active service and does not receive a retirement annuity from SURS; or

ii)         any period on or after December 8, 2017 during which an annuitant received an annualized retirement annuity under Article 15 of the Code that is less than $10,000.  [40 ILCS 5/15-139.5(b)]

3)         "Annuitant" means a person who is receiving a retirement annuity or, if the retirement annuity payment or payments have not yet been paid due to SURS processing, a person whose retirement annuity payment period has commenced.  A person is not an annuitant if he or she:

A)        has received a lump-sum retirement benefit under the Portable Benefit Package; or

B)        is receiving or has received retirement benefits under the Self-Managed Plan.

4)         "Catastrophic Incident" means an occurrence of widespread or severe damage or loss of property resulting from any manmade or natural cause, including, but not limited to, fire (including arson), flood, earthquake, wind, storm, explosion or extended periods of severe inclement weather.

5)         "Compensation" means any remuneration paid by an employer that is reportable to the Internal Revenue Service by the employer as "wages, tips, or other compensation" on IRS Form W-2.

6)         "Critical Operations" means teaching services, medical services, student welfare services, and any other services that are critical to the mission of the employer.  [40 ILCS 5/15-139.5(i)]

7)         "Disaster" means an event that results in the Governor declaring that a disaster exists pursuant to Section 7 of the Illinois Emergency Management Agency Act [20 ILCS 3305/7] or an event that results in a municipality to declare that a state of emergency exists pursuant to 65 ILCS 5/11-1-6.

8)         "Employed or Reemployed" means the employer and annuitant have entered into an employer-employee relationship under common law and the annuitant is not an independent contractor.  For the purposes of this Section, an annuitant whose employment by an employer extends over more than one academic year shall be deemed to be reemployed by that employer in each of those academic years.[40 ILCS 5/15-139.5(a)]

9)         "Highest Annual Earnings" shall have the meaning ascribed in Section 1600.202(d).

10)        "Retirement Annuity" means an annuity payable under Section 15-136, 15-136.1, 15-136.3 or 15-136.4 of the Code, excluding any survivor annuitant portion of a joint and survivor annuity.

c)         Initial Notification for Employed Annuitants.  Within 60 days after the date of employing or reemploying an annuitant, the employer shall submit notification to the System of the following items:

1)         A summary of the contract of employment or specify the rate of compensation and the anticipated length of employment of that annuitant [40 ILCS 5/15-139.5(a)].  If an employer enters into a new contract with an annuitant during the same academic year of employment or reemployment, the employer shall submit a new summary or rate of compensation and anticipated length of employment within 60 days after the effective date of the contract.  The employer shall provide a copy of the contract upon SURS' request.

2)         A certification of whether the annuitant will be compensated from

federal, corporate, foundation, or trust funds or grants of State funds that identify the principal investigator by name [40 ILCS 5/15-139.5(a)].

3)         Critical Operations

A)        A certification of whether the annuitant has become an affected annuitant and:

i)          if the annuitant is an affected annuitant, whether the annuitant was employed in order to continue critical operations in the event of either an employee's unforeseen illness, accident, or death or a catastrophic incident or disaster; or [40 ILCS 5/15-139.5(i)]

ii)         if the annuitant is an affected annuitant, whether the employer has certified the annuitant as a participating employee under Section 15-139(c) of the Code.

B)        If the employment is for critical operations, the notice in this subsection (c) shall be submitted within 5 business days after employing or reemploying the annuitant.

d)         Annual Certification of Employed Annuitants.  For each employed annuitant, an employer shall submit to SURS the following information no later than 30 days following the conclusion of the academic year:

1)         The amount of compensation paid to the annuitant for employment in the academic year; and

2)         The amount of compensation that comes from federal, corporate, foundation, or trust funds or grants of State funds that identify the principal investigator by name that has been paid to the annuitant in the academic year.  [40 ILCS 5/15-139.5(a)]

e)         Affected Annuitants

1)         It is the obligation of the employer to determine whether an annuitant is an affected annuitant before employing the annuitant. For that purpose, the employer may require the annuitant to disclose and document his or her relevant prior employment and earnings history. Failure of the employer to make this determination correctly and in a timely manner or to include this determination with the notification required under subsection (d) does not excuse the employer from making the contribution required under subsection (g).

2)         SURS may assist the employer in determining whether a person is an affected annuitant.  SURS will inform the employer if it discovers that the employer's determination is inconsistent with the employment and earnings information in the System's records. [40 ILCS 5/15-139.5(c)]

f)         Annuitant and Employer Information Requests.  Upon written request, SURS will provide an annuitant or employer with the following information concerning the annuitant:

1)         The annuitant's status as an annuitant or participating employee;

2)         Whether an employer has determined and reported to SURS that the annuitant is an affected annuitant;

3)         The annuitant's highest annual earnings;

4)         The compensation paid for the annuitant's post-retirement employment in each academic year as reported by employers;

5)         Whether any of the annuitant's post-retirement employment or compensation has been certified to SURS as being paid from federal, corporate, foundation, or trust funds or grants of State funds that identify the principal investigator by name. [40 ILCS 5/15-139.5(d)]

g)         Payment of Employer Contributions 

1)         Certification of Contribution.  If an employer employs or reemploys an affected annuitant in an academic year, and no exception applies, the System shall notify the employer and certify the amount of the contribution, which shall be equal to 12 times the amount of the gross monthly retirement annuity payable to the annuitant for the month in which the first paid day of employment in that academic year occurs, after any reduction in that annuity that may be imposed under Section 15-139(b) of the Code.

2)         Multiple Employers.  If an affected annuitant is employed by more than one employer in an academic year, the employer contribution required under this Section shall be divided among those employers in proportion to their respective portions of the total compensation paid to the affected annuitant for that employment during that academic year.

3)         Double Contribution Penalty

A)        If SURS determines that an employer, without reasonable justification, has failed to make the determination of affected annuitant status correctly and in a timely manner, or has failed to notify SURS or to correctly document or certify to SURS any of the information required by this Section, and that failure results in a delayed determination by SURS that a contribution is payable under this Section, then the amount of that employer's contribution otherwise determined under this Section shall be doubled.

B)        SURS will deem a failure to correctly determine the annuitant's status to be justified if the employer establishes to SURS' satisfaction that the employer, after due diligence, made an erroneous determination that the annuitant was not an affected annuitant due to reasonable reliance on false or misleading information provided by the annuitant or another employer, or an error in the annuitant's official employment or earnings records. [40 ILCS 5/15-139.5(e)]

4)         Payment Deadline and Interest.  The employer may pay the required contribution without interest at any time within one year after receipt of the certification.  If the employer fails to pay within that year, then interest shall be charged at a rate equal to SURS' prescribed rate of interest, compounded annually from the 366^th day after receipt of the certification from SURS.  Payment must be concluded within 2 years after receipt of the certification by the employer.  If the employer fails to make complete payment, including applicable interest, within 2 years, then SURS may, after giving notice to the employer, certify the delinquent amount to the State Comptroller, and the Comptroller shall thereupon deduct the certified delinquent amount from State funds payable to the employer and pay them instead to SURS. [40 ILCS 5/15-139.5(f)]  The delinquent amount shall be certified to the Comptroller if the employer does not pay the delinquent amount within 90 days after the date on which SURS sent the notice of the delinquency to the employer.

5)         Reparticipating Annuitants.  If an employer is required to make a contribution to SURS as a result of employing an affected annuitant and the annuitant later elects to forgo his or her annuity in that same academic year pursuant to Section 15-139(c) of the Code, then the required contribution by the employer shall be waived, and if the contribution has already been paid, it shall be refunded to the employer without interest. [40 ILCS 5/15-139.5(g)]

6)         Employment for Critical Operations.  Notwithstanding any other provision of this Section to the contrary, if an employer employs an affected annuitant in order to continue critical operations in the event of either an employee's unforeseen illness, accident, or death or a catastrophic incident or disaster, then, for one and only one academic year, the employer is not required to pay the contribution set forth in Section 15-139.5 of the Code for that annuitant. [40 ILCS 5/15-139.5(i)]

7)         Appeals.  The employer may appeal a certification of the contribution amount pursuant to Section 1600.510.

(Source:  Amended at 44 Ill. Reg. 17714, effective October 22, 2020)

Section 1600.300  Effective Beneficiary Designations

Purpose.  Under Section 15-120 of the Code, "beneficiary" is defined as a person or persons designated by the participant or annuitant in the last written designation on file with the Board or, if no person so designated survives or if no designation is on file, the estate of the participant or annuitant.

a)         Definitions

1)         "Last written designation", for the purposes of Section 15-120 of the Code and this Section, shall mean the last valid beneficiary designation on file with SURS up to and including the date of death of the participant or annuitant.

2)         "On file", for the purposes of Section 15-120 of the Code and this Section, shall mean a beneficiary designation that has been received and date stamped by SURS.

3)         "Member", for the purposes of this Section, shall mean a participant or annuitant.

4)         "Agent", for the purposes of this Section, shall mean a participant's or annuitant's agent expressly authorized to change beneficiaries pursuant to an effective power of attorney or guardianship.

b)         Original Signature and Supporting Documentation.  A beneficiary designation shall be deemed valid only if the beneficiary designation received contains a valid original or electronic signature of the member or an agent.  An electronic signature is valid under this Section only if executed through an electronic signing process approved by SURS.  No electronic signature is valid if a notarized signature is required under the Code or this Part.  A copy of the power of attorney or a certified copy of the guardianship order expressly authorizing the change of beneficiaries must accompany a beneficiary designation executed by an agent.  No beneficiary designation that designates the attorney-in-fact or a guardian as the beneficiary shall be deemed valid unless the terms of the power of attorney or guardianship order, respectively, authorizes the attorney-in-fact or guardian to make gifts of the member's property to himself or herself.

c)         Disputed Designations.  If a dispute arises in the interpretation of the last written designation or, in the opinion of SURS, the designation is ambiguous, then the contesting beneficiaries shall seek a court determination as to the designation's interpretation.  If no beneficiary brings a court action within a reasonable time, depending on factors including, but not limited to, delays in obtaining paperwork and the extent to which the parties have attempted to resolve the dispute, SURS  may seek a court determination.

(Source:  Amended at 44 Ill. Reg. 17714, effective October 22, 2020)

Section 1600.305  Full-Time Student Survivors Insurance Beneficiaries

a)         For purposes of 40 ILCS 5/15-145(c), a full-time student shall be one who is enrolled in a course of study in an accredited educational institution (other than a program of study by correspondence), 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.  A student who is concurrently enrolled at more than one accredited educational institution during the same timeframe shall be deemed to be carrying a "full-time workload" if the combined course load equals a full-time workload as defined by either of the accredited educational institutions attended.

b)         Accredited educational institutions include schools, colleges, universities and post-secondary vocational institutions whose courses of study are approved by appropriate state or federal educational accreditation authorities.

c)         A regular school year is the 8 to 9 months that includes two semester terms or three quarter terms (or their equivalent), excluding the summer term.  Terms that begin after April 15 and end before September 16 are considered summer terms.

d)         Survivors 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 and is enrolled for a full-time workload in the following semester.

e)         To verify that an eligible child is a full-time student, SURS must receive a certification signed by an official of the educational institution confirming that the student is a full-time student as provided in subsection (a).

(Source:  Amended at 44 Ill. Reg. 17714, effective October 22, 2020)

Section 1600.310  Dependency of Beneficiaries

a)         Section 15-141 of the Code grants an additional death benefit to a beneficiary who was dependent upon the participant at the time of death.  For the purpose of this Section, a dependent is defined as one who bears toward the participant any one of the following relationships:  spouse; son, daughter, or any other child toward whom the participant stands in loco parentis and who is under 18 years of age; or any person who, at the time of the participant's death, was receiving at least one-half support from the participant.

b)         If a participant has designated two or more beneficiaries and, at the time of the participant's death, any of the beneficiaries are dependent as defined in subsection (a), the additional death benefit is payable, but only to the dependent beneficiaries.

c)         If a death benefit is payable to the estate or a trust of a participant, and one or more of the beneficiaries of the estate or trust are dependent as defined in subsection (a), it will be assumed that the estate or trust is a dependent for the purpose of determining the amount of the benefit payable.

(Source:  Amended at 32 Ill. Reg. 16515, effective September 25, 2008)

Section 1600.320  Disability Claims Procedure (Renumbered)

(Source:  Section 1600.320 renumbered to Section 1600.550 at 38 Ill. Reg. 16375, effective July 17, 2014)

Section 1600.330  Evidence of Age, Parentage, and Marital Status

a)         Whenever evidence of age is required by the System, a birth certificate shall be required unless one cannot be acquired.  If no such record can be acquired, the following documents will be accepted:

1)         military records;

2)         marriage record showing date of birth;

3)         evidence of Social Security payments that require attainment of specific age;

4)         valid passport, permanent residency card, driver's license card, or other government-issued form of identification; or

5)         two or more documents showing birth dates, such as, but not limited to naturalization papers, insurance policies, school records, medical records, or religious records that certify the date of birth, such as baptismal and bris certificates.

b)         Whenever evidence of parentage other than a birth certificate is required by the System under Section 1-104.2 or 15-129 of the Code, submission of at least one of the following documents shall be proof of parentage, unless one of the child's biological parents has admitted in writing, before a notary public, that someone other than the member is the parent, or the child has been adopted by a person other than the member:

1)         certified copy of a court order finding the member was the natural parent of the child born out of wedlock;

2)         certified copy of a settlement agreement which has been approved by a court for the support of a child born out of wedlock;

3)         written acknowledgment of paternity (e.g., pleadings filed in any proceeding pending before a court, submittals to a public agency, a document signed by the putative parent) and evidence (e.g., cancelled checks or receipts from the other parent) that the member contributed to the support of the child;

4)         certified copy of a court order entered pursuant to a declaratory judgment action establishing either a support obligation or visitation rights;

5)         copy of the public record of marriage of the parents of child born out of wedlock who marry and the putative parent acknowledges parentage in writing (e.g., pleadings filed in any proceeding pending before a court, submittals to a public agency, a document signed by the putative parent).

c)         Whenever evidence of marriage is required by the System, a copy of the public record of marriage or a copy of the religious record of the marriage shall be submitted.  If no such record exists, then two or more of the following will be considered in the determination of marital status:

1)         a copy of the jointly filed federal income tax return for the year preceding the death;

2)         a notarized statement from the individual who performed the marriage;

3)         notarized statements from at least two individuals in attendance of the marriage;

4)         written certification from the Social Security Administration of acceptance of the marriage and its date; or

5)         other documentation found by the System that supports the legal existence of the marriage.

d)         Dissolution or invalidity of marriage shall be proven only upon the submission of a certified copy of the declaration or decree entered by a court of competent jurisdiction.

(Source:  Added at 49 Ill. Reg. 3321, effective February 26, 2025)

Section 1600.400  Determination of Final Rate of Earnings Period

a)         This Section establishes a mechanism for determining the period of employment that is used to calculate a participant's final rate of earnings.  This Section is not intended to provide guidance on any other aspect of determining the amount of the final rate of earnings.

b)         Final Rate of Earnings for Tier 1 Members

1)         For all Tier 1 Members participating in the Traditional or Portable Benefit Packages, SURS will calculate the average annual earnings during the 4 consecutive academic years of service in which the participant's earnings were the highest.  The academic year for a participant begins on the first day of the fall term of his or her employer and ends on the day before the first day of the next fall term.  For example, if the first day of the employer's fall term is August 15, then the academic year begins on August 15 and ends:  on the following August 14 if the next fall term begins August 15; August 12 if the next fall term begins August 13; or the following August 17 if the next fall term begins August 18.  If the employer does not have an academic program divided into terms, the academic year begins on September 1 and ends on the following August 31.  For all such Tier 1 Members, except those identified in subsection (b)(2), the final rate of earnings will be that amount calculated under this subsection (b)(1).

2)         For a Tier 1 Member who is paid on an hourly basis or who receives an annual salary in installments during 12 months of each academic year, SURS will also calculate average annual earnings during the 48 consecutive calendar month period ending with the last day of final termination of employment.  The final rate of earnings for a participant identified under this subsection (b)(2) will be the larger of the calculation under this subsection (b)(2) or the calculation under subsection (b)(1).

c)         Final Rate of Earnings for Tier 2 Members means:

1)         For a Tier 2 Member who is paid on an hourly basis or who receives an annual salary in installments during 12 months of each academic year, the average annual earnings obtained by dividing by 8 the total earnings of the employee during the 96 consecutive months in which the total earnings were the highest within the last 120 months prior to termination.

2)         For any other Tier 2 Member, the average annual earnings during the 8 consecutive academic years within the 10 years prior to termination in which the employee's earnings were the highest.

3)         For an employee with less than 96 consecutive months or 8 consecutive academic years of service, whichever is necessary, the average earnings during his or her entire period of service. [40 ILCS 5/15-112(b)]

d)         A participant paid on an "hourly basis" is a participant who is paid per hour worked.

e)         An "annual salary" is a salary paid over 12 months for work to be performed during all 12 months of the academic year.  SURS will determine if a participant receives an annual salary by looking at the period for which services were performed, not the period over which salary payments were received, and, in determining annual salary, will not consider payment for summer teaching or any additional contracts for summer school, overloads, or any other extra services.  For example, an academic employee who receives a contract to teach 9 or 10 months of the academic year, but who chooses to be paid over 12 months, is not receiving an annual salary.  For further example, an academic employee who receives a contract to teach less than 12 months of the academic year plus a contract to teach summer school is not receiving an annual salary even though he or she may perform work for 12 months and be paid over 12 months as a result of teaching summer school.

f)         In determining a participant's "earnings", the system allocates earnings to the period in which the corresponding work was performed.  Earnings are not determined by when the payment is made.  For example, a participant has a 9-month contract to teach from September through May and will be paid $90,000.  The participant has the option of receiving payment over 9 months (September through May at $10,000 per month) or over 12 months (September through August at $7,500 per month).  The payment method chosen does not change the participant's earnings.  If the participant chooses to receive payment over 9 months or over 12 months, the earnings and the period to which they are allocated does not change.  For further example, the same participant receives a contract to teach summer school during the following June, July and August and will be paid $15,000.  The participant has earnings during each of those 3 months of $5,000.  If the participant was receiving the prior 9-month contract payments during the summer, as well as $5,000 each month for the summer contract, the payments to the participant would be $12,500 during June, July and August, but the earnings would be $5,000 in each month.  For further example, if the participant received a lump sum payment in October of $15,000 for the summer contract, that payment is not "earnings" in October, but is "earnings" allocated to the summer months.

g)         This Section is effective beginning March 1, 2005, with respect to Tier 1 Members.  However, a Tier 1 Member who, on March 1, 2005, is within his or her final rate of earnings period prior to retirement may have his or her final earnings calculated under either subsection (b)(1) or (b)(2), even if subsection (b)(2) would not otherwise be applicable to that participant.  The provisions of this Section applicable to Tier 2 Members are effective beginning January 1, 2011.

(Source:  Amended at 38 Ill. Reg. 16375, effective July 17, 2014)

Section 1600.410  Twenty Percent Limitation on Final Rate of Earnings Increases

a)         Introduction.  Public Act 90-65 added to Section 15-112 of the Code a limitation on increases in earnings for the period of time covered under the calculation of final rate of earnings.  This Section provides guidance and interpretation to the staff of SURS in implementing Section 15-112.  The 20% limitation on increases in earnings shall consider basic compensation only to the extent actually paid in exchange for services rendered.

b)         All annual increases in earnings, as defined at Section 15-111 of the Code, by a participant during the period used in determining the final rate of earnings of 20% or less shall be deemed to be includable in the calculation of the final rate of earnings.  No further inquiry shall be necessary by the staff of SURS.

c)         Except as otherwise provided in subsection (d), in the event that there is an annual increase in earnings by a participant during the period used in determining the final rate of earnings of greater than 20%, any increase in excess of 20% shall be disregarded in calculating the final rate of earnings.

d)         Regardless of subsection (c), the following shall not be subject to the 20% increase limitation:

1)         a change in the percentage of time worked by the participant (except that time worked in excess of 100% per employer shall be subject to the limitation);

2)         a change from a nine-month position to a 12-month position;

3)         overloads or extensions, so long as the overload for which payment is received took place during the period used for calculating the final rate of earnings; and

4)         supplemental contracts, so long as verifiable additional work is performed pursuant to the supplemental contract, such as the teaching of a course additional to the customary load, or performance of duties additional to, and not in replacement of, the participant's regular duties.

e)         Subsection (d)(1) shall not apply to a member who is a participant on or after September 1, 2024.  [40 ILCS 5/15-134.1(b)]

(Source:  Amended at 49 Ill. Reg. 3321, effective February 26, 2025)

Section 1600.420  Making Preliminary Estimated Payments

a)         SURS shall make a Preliminary Estimated Payment (PEP) to members who qualify for a retirement annuity and file an application for that annuity.  The purpose of a PEP is to provide members with some of their retirement income while their retirement claim is still being processed.

b)         The amount of the PEP shall be based on the highest applicable Rule described in Section 15-136 of the Code.

c)         The PEP calculation will not consider unverified current year earnings, nor unverified current year vacation payments, nor unverified additional credit for unused and unpaid sick leave, nor unverified reciprocal credits, nor early retirement option payments, nor additional service credit purchased after the application for retirement annuity has been received by SURS.  Applicable taxes and insurance premiums will be deducted from the PEP.

d)         Date of Payment

1)         If the application for retirement annuity is received at least 90 days before the member's effective retirement date, the PEP will be paid on the first working day of the month following the effective date of the annuity.  It will be paid each month until the retirement claim is finalized.

2)         If the application for retirement annuity, or the decision of the member under subsection (d)(3), is received less than 90 days before the member's effective retirement date, the PEP will be paid as soon as practicable.  It will be paid each month until the retirement claim is finalized.

3)         If the member is entitled to the election under Section 15-135.1 of the Code, the member must first make or decline that election before a PEP can be calculated.

e)         Amount of Payment. SURS shall pay a PEP amount pursuant to the following calculations applying the Rules in Section 15-136(a) of the Code:

1)         If the member has reciprocal service credit, SURS will apply Rule 2.

A)        If in a reciprocal case Rule 1 is estimated to be highest, SURS will pay 100% of the Rule 2 amount.

B)        If in a reciprocal case Rule 2 is estimated to be highest, SURS will pay 80% of the Rule 2 amount.

2)         If the member has no reciprocal credits, SURS will pay 90% of the estimated Rule 1 amount or 90% of the estimated Rule 2 amount, whichever is higher.

3)         If the member makes an election under Section 15-135.1 of the Code, SURS will pay 100% of the estimated Rule 2 amount.

4)         If the member qualifies under Section 15-136.3 of the Code, SURS will pay the higher of $75 per month or 100% of the estimated Rule 2 amount.

5)         If the member qualifies for a retirement annuity under Rule 4, SURS will pay 90% of the Rule 4 amount.

6)         If the member applies for a retirement annuity under Rule 4, but the years of service as a police officer or firefighter have not yet been verified by staff, SURS will pay 90% of the Rule 2 amount.

f)         Once the retirement claim has been finalized, the member will receive a check for the difference between the PEP payments and the actual monthly benefit amount that is due to the member, retroactive to the effective date of the member's annuity, without interest.  If the PEP payments result in an overpayment, SURS will recover the overpaid benefit from future benefits, without interest.

g)         Pursuant to Sections 15-163 and 15-168 of the Code, if a participant or annuitant fails to provide any information that is necessary for the calculation, payment, or finalization of the retirement claim within 90 calendar days after the date of the System's request, then the System may immediately cease processing the benefit and suspend the payment of any PEPs until the requested information is provided as provided under Section 1600.160 of this Part.

(Source:  Amended at 49 Ill. Reg. 3321, effective February 26, 2025)

Section 1600.430  Excess Benefit Arrangement

a)         The Excess Benefit Arrangement of the State Universities Retirement System of Illinois (Arrangement) is adopted effective January 1, 1995.  The Arrangement is established and maintained by SURS solely for the purpose of providing benefits for certain of its participants who participate in SURS and whose benefits are limited by section 415 of the Internal Revenue Code (IRC) (26 U.S.C. 415).

b)         The Arrangement is adopted pursuant to the authority granted to SURS by Section 1-116 of the Code.

c)         This Arrangement is a portion of a governmental plan (as that term is defined in IRC section 414(d) and section 3(32) of the Employee Retirement Income Security Act of 1974, as amended (29 U.S.C. 1002)) and is administered as a qualified governmental excess benefit arrangement pursuant to the provisions of IRC section 415(m).

d)         Accordingly, SURS adopts the Arrangement pursuant to the terms and provisions set forth in this subsection (d):

1)         Definitions. Wherever used in this Section, the following terms shall have the meanings set forth in this subsection (d)(1):

A)        "Retirement Date" means the beginning date of the annuity payment period set forth in Section 15-135 of the Code.

B)        "Arrangement" means the Excess Benefit Arrangement of the State Universities Retirement System of Illinois.

C)        "Qualified Plan" means the SURS plan at Sections 15-103.1 and 15-103.2 of the Code.

D)        "Qualified Plan Retirement Benefit" means the aggregate benefit payable to a participant pursuant to the Qualified Plan.

E)        "Qualified Plan Surviving Spouse Benefit" means the aggregate benefit payable to the Surviving Spouse of a participant pursuant to the Qualified Plan.

F)         "Supplemental Retirement Benefit" means the benefit payable to a participant pursuant to the Arrangement by reason of his or her termination of employment with any employer for any reason other than death.

G)        "Surviving Spouse" means a person as defined at Section 15-127 of the Code.

H)        "Supplemental Surviving Spouse Benefit" means the benefit payable to a Surviving Spouse pursuant to the Arrangement.

I)         "Limitation Year" means that period for which all calculations and determinations of benefits and contribution limits will be made under IRC section 415 and the Arrangement.  The Limitation Year shall be the calendar year.

2)         Eligibility.  A participant who is eligible to receive a Qualified Plan Retirement Benefit, the amount of which is reduced by reason of the application to the Qualified Plan of the limitations on benefits imposed by IRC section 415, as in effect on the date of commencement of the Qualified Plan Retirement Benefit, or as in effect at any time thereafter, shall be eligible to receive a Supplemental Retirement Benefit.  The Surviving Spouse of such participant shall be eligible to receive a Supplemental Surviving Spouse Benefit.  Participation in the Arrangement by a participant or Surviving Spouse shall be mandatory and automatic upon eligibility to receive a Supplemental Retirement Benefit or Supplemental Surviving Spouse Benefit, as applicable.  Participation shall end for any portion of a Limitation Year in which the Qualified Plan Retirement Benefit or the Qualified Plan Surviving Spouse Benefit is not limited by application of IRC section 415 or if all benefit obligations under the Arrangement to the participant or Surviving Spouse have been satisfied.

3)         Supplemental Retirement Benefit

A)        Amount.  The amount described in subsections (d)(3)(A)(i) and (ii) shall be computed annually, based upon a Limitation Year. The Supplemental Retirement Benefit payable to an eligible participant shall be a monthly amount equal to the difference between subsections (d)(3)(A)(i) and (ii).

i)          The monthly amount of the Qualified Plan Retirement Benefit to which the participant would have been entitled under the Qualified Plan if the benefit were computed without giving effect to the limitations on benefits imposed by IRC section 415; LESS

ii)         The monthly amount of the Qualified Plan Retirement Benefit actually payable to the participant under the Qualified Plan.

B)        Form of Benefit.  The Supplemental Retirement Benefit payable to a participant shall be paid in the same form under which the Qualified Plan Retirement Benefit is payable to the participant.  The participant's election under the Qualified Retirement Benefit as to form (with the valid consent of the Surviving Spouse when required under the Qualified Plan) shall also be applicable to the payment of a Supplemental Retirement Benefit.

C)        Commencement of Benefit.  Payment of the Supplemental Retirement Benefit to a participant shall commence on the same date as payment of the Qualified Plan Retirement Benefit to the participant commences or as soon as administratively practicable thereafter.  Any election under the Qualified Plan made by the participant with respect to the commencement of payment of a Qualified Plan Retirement Benefit shall also be applicable with respect to the commencement of payment of the Supplemental Retirement Benefit.

4)         Supplemental Surviving Spouse Benefit

A)        Amount.  If a participant dies under circumstances in which a Qualified Plan Surviving Spouse Benefit is payable to his or her Surviving Spouse, and the Qualified Plan Surviving Spouse Benefit is limited by application of IRC section 415, then a Supplemental Surviving Spouse Benefit is payable to the Surviving Spouse as provided in this subsection (d)(4)(A).  The Supplemental Surviving Spouse Benefit payable to a Surviving Spouse shall be a monthly amount equal to the difference between subsections (d)(4)(A)(i) and (ii).

i)          The monthly amount of the Qualified Plan Surviving Spouse Benefit to which the surviving spouse would have been entitled under the Qualified Plan if that benefit were computed without giving effect to the limitations on benefits imposed by application of IRC section 415; LESS

ii)         The monthly amount of the Qualified Plan Surviving Spouse Benefit actually payable to the Surviving Spouse under the Qualified Plan.

B)        Form and Commencement of Benefit.  A Supplemental Surviving Spouse Benefit shall commence and be payable in the same manner as the Qualified Plan Surviving Spouse Benefit is paid.

5)         Administration of the Arrangement

A)        Administration by SURS.  SURS shall be responsible for the general operation and administration of the Arrangement and for carrying out the provisions of the Arrangement.  SURS shall have the authority to interpret the Arrangement and to issue such policies with respect to the Arrangement as it deems appropriate.  SURS shall have the duty and responsibility to maintain records and to make calculations and determinations of benefits under the Arrangement.  SURS regulations, interpretations, determinations, and calculations shall be final and binding upon all persons and parties concerned.

B)        General Powers of Administration.  All provisions set forth in the Qualified Plan with respect to the administrative powers and duties of SURS, expenses of administration, and procedures for filing claims shall also be applicable with respect to the Arrangement, including, but not limited to, the provisions of Sections 15-185, 15-186.1, 15-187, 15-190, and 15-191 of the Code.  SURS shall be entitled to rely conclusively upon all tables, valuations, certificates, opinions, and reports furnished by any actuary, accountant, controller, counsel, or other person employed or engaged by SURS with respect to the Arrangement.

6)         Amendment or Termination

A)        Amendment or Termination.  SURS reserves the right to amend or terminate the Arrangement when, in the sole opinion of SURS, amendment or termination is advisable.  Any amendment or termination shall be made pursuant to a resolution of the Board and shall be effective as of the date set forth in the resolution.

B)        Effect of Amendment or Termination.  No amendment or termination of the Arrangement shall directly or indirectly deprive any current or former participant or Surviving Spouse of all or any portion of any Supplemental Retirement Benefit or Supplemental Surviving Spouse Benefit payment that has commenced prior to the effective date of the amendment or termination or that would be payable if the participant terminated employment for any reason, including death, on that effective date.

7)         General Provisions

A)        Funding.  A trust fund is hereby established as a valid trust under the law of the State of Illinois, as a grantor trust of which the State of Illinois is the grantor, within the meaning of subpart E, part I, subchapter J, chapter 1, subtitle A of the IRC, and will be construed accordingly. This trust fund is separate and apart from the Qualified Plan trust fund to hold contributions of the State to pay benefits under the Arrangement. No assets of the Qualified Plan trust fund shall be transferred to the Arrangement or otherwise used to pay benefits under the Arrangement, and the trust funds must be accounted for separately. All assets held in the Arrangement's trust fund, including all State contributions, all property and rights acquired or purchased with these amounts and all income attributable to such amounts, will be, and remain, the general, unpledged, unrestricted assets of the Arrangement's trust fund, and will be subject to the claims of the State's general creditors under federal and State law in the event of insolvency, to the extent of the State's undistributed contributions, if any. Nothing herein will be construed to create an irrevocable trust of any kind. Income accruing to the trust fund under the Arrangement constitutes income derived from the exercise of an essential governmental function upon which the trust fund is exempt from tax under IRC section 115, as well as IRC section 415(m)(1).  The Arrangement at all times shall be entirely unfunded and no provision shall at any time be made with respect to segregating any assets of SURS, of the State of Illinois, or of any employer for payment of any benefits under the Arrangement.  No participant, Surviving Spouse, or any other person shall have any preferred claim on, or any beneficial interest in, any assets of the Arrangement's trust fund, SURS, the State, or any employer by reason of the unsecured right to receive a benefit under the Arrangement. SURS will determine an amount necessary to pay the Supplemental Retirement Benefits and Supplemental Surviving Spouse Benefits for each Limitation Year. The State will make monthly contributions to the Arrangement's trust fund based upon SURS' determination. Under no circumstances will the State's contributions to the Arrangement's trust fund be credited to or commingled with contributions paid into and accumulated in the Qualified Plan.  No election is provided at any time to a participant or Surviving Spouse, directly or indirectly, to defer compensation or otherwise make contributions under the Arrangement.

B)        General Conditions.  Except as otherwise expressly provided in this Section, all terms and conditions of the Qualified Plan applicable to a Qualified Plan Retirement Benefit or a Qualified Plan Surviving Spouse Benefit shall also be applicable to a Supplemental Retirement Benefit or a Supplemental Surviving Spouse Benefit payable under the Arrangement.  Any Qualified Plan Retirement Benefit or Qualified Plan Surviving Spouse Benefit, or any other benefit payable under the Qualified Plan, shall be paid solely in accordance with the terms and conditions of the Qualified Plan and nothing in the Arrangement shall operate or be construed in any way to modify, amend or affect the terms and provisions of the Qualified Plan.

C)        No Guaranty of Benefits.  Nothing contained in the Arrangement shall constitute a guaranty by SURS, the State, any employer, or any other entity or person that the assets of any such entity will be sufficient to pay any benefit under the Arrangement.

D)        No Enlargement of Participant Rights.  No participant or Surviving Spouse shall have any right to a benefit under the Arrangement except in accordance with the terms of the Arrangement.  Establishment of the Arrangement shall not be construed to give any participant the right to be retained in the service of any employer.

E)        Applicable Law.  The Arrangement shall be construed and administered under the laws of the State of Illinois.

(Source:  Amended at 47 Ill. Reg. 14005, effective September 14, 2023)

Section 1600.431  Indirect Payments to Minors and Legally Disabled Persons

Purpose.  Sections 15-145(c), 15-190 and 15-191 of the Code allow SURS to make indirect payments to minors and persons under legal disability.  This Section provides clarification of terms used in the statutory provisions and sets forth the procedure for handling these indirect payments.

a)         Person Under Legal Disability.  For purposes of Section 15-190 of the Illinois Pension Code:

1)         A "person under legal disability" means a person age 18 or over who meets the definition of a "disabled person" under Section 11a-2 of the Illinois Probate Act of 1975 [755 ILCS 5/11a-2].  Any person acting or applying for benefits on behalf of the person under legal disability must provide SURS with a certified copy of a valid court order finding legal disability or an evaluation certifying legal disability signed by a licensed physician. 

2)         "Guardian" means a person who has been appointed the guardian over the property of the person under legal disability, or the guardian's successor.  Any person acting in the capacity of guardian must provide SURS with a certified copy of the letters of appointment.

b)         Minor Recipients.  For purposes of Section 15-191 of the Illinois Pension Code:

1)         "Minor" means an unmarried person under age 18.

2)         "Guardian" means a person who has been appointed the guardian over the person or property of the minor, or the guardian's successor, by a court.  Any person acting in the capacity of guardian must provide SURS with a certified copy of the letters of appointment.

(Source:  Added at 32 Ill. Reg. 16515, effective September 25, 2008)

Section 1600.432  Indirect Payments to Child Survivors Through the Surviving Spouse

Purpose.  Section 15-145(c) of the Code authorizes SURS to pay the survivors insurance benefits of a child survivor to the surviving spouse if the child is "in care of" the surviving spouse.  This Section defines the phrase "in care of".  All references to "child" or "surviving child" in this Section assume that the child has fulfilled the applicable requirements under Section 15-145(c) of the Code and this Part to become eligible for survivor insurance benefits.

a)         Surviving Child under Age 18

1)         A surviving child under age 18 is "in care of" the surviving spouse if the child has been living with the surviving spouse for at least 30 days.

2)         Except as provided in subsection (a)(3), a surviving child under age 18 who is living apart from the surviving spouse is "in care of" the surviving spouse if:

A)        The child lived apart from the surviving spouse for not more than 4 months, or the current absence is not expected to last over 4 months;

B)        The child is living apart from the surviving spouse because the child is attending school or because of the spouse's employment, but the surviving spouse makes contributions to the child's support that enable the spouse to claim the child as a dependent for federal income tax purposes or that provide at least 50% of the child's support; or

C)        The child is living apart because of the child's physical or mental disability or because of a physical disability of the surviving spouse.

3)         Notwithstanding subsection (a)(2), a surviving child who is living apart from the surviving spouse is not "in care of" a surviving spouse if:

A)        The child is living with his or her other parent;

B)        The child is removed from the surviving spouse's custody and control by court order;

C)        The surviving spouse has given the right to have custody and control of the child to someone else; or

D)        The surviving spouse has been adjudicated by a court to be under a legal disability.

b)         Surviving Child Age 18 or Older

1)         A surviving child between ages 18 and 22 who is a full-time student is "in care of" the surviving spouse if the surviving spouse makes contributions to the child's support that enable the spouse to claim the child as a dependent for federal income tax purposes or that provide at least 50% of the child's support.

2)         A surviving child of age 18 or older who was dependent upon the participant or annuitant by reason of a physical or mental disability that began prior to the date the child attained age 18 (age 22 if a full-time student) is "in care of" the surviving spouse if:

A)        The child has been living with the surviving spouse for at least 30 days; however, the child is not "in care of" the surviving spouse if:

i)          The child is 18 years old or older with a mental disability, but the surviving spouse does not actively supervise the child's activities and does not make important decisions about the child's needs; or

ii)         The child is 18 years old or older with a physical disability, but it is not necessary for the surviving spouse to perform personal services for the child.  Personal services are services such as dressing, feeding and managing money that the child cannot do alone because of a disability.

B)        The surviving spouse makes contributions to the child's support that enable the spouse to claim the child as a dependent for federal income tax purposes or that provide at least 50% of the child's support.

(Source:  Added at 32 Ill. Reg. 16515, effective September 25, 2008)

Section 1600.440  Voluntary Deductions from Annuity Payments

Purpose.  This Section implements procedures for voluntary deductions from annuities and disability benefits as authorized under Section 4 of the State Salary and Annuity Withholding Act (SSAWA) [5 ILCS 365/4] and Section 4.5 of the Voluntary Payroll Deductions Act of 1983 (VPDA) [5 ILCS 340/4.5].  The SSAWA allows a SURS annuitant receiving an annuity or disability benefit to authorize the withholding of a portion of his or her annuity or disability benefit for purposes enumerated in Section 4(1) through (13) of the SSAWA.  In furtherance of Section 4(12) of the SSAWA, the VPDA allows a SURS annuitant receiving an annuity or disability benefit under Article 15 of the Code to authorize the withholding of a portion of his or her annuity or disability benefit for contribution to a maximum of four organizations described in Section 3(b) and (c) of the VPDA.  Upon written request of the annuitant, SURS may deduct from the annuity or disability benefit of the annuitant the amount specified in the voluntary deduction authorization to the entity designated by the annuitant. 

a)         Written Authorizations.  The written request for voluntary annuity or disability benefit deductions shall be made by filling out and signing a SURS-prepared voluntary deduction authorization form, by written correspondence from the annuitant, or by a voluntary deduction authorization form prepared by an organization or entity authorized to solicit annuitants under the SSAWA and VPDA.

b)         Form of Authorization.  The voluntary deduction authorization form or correspondence shall contain the following to be an effective authorization for voluntary deductions:

1)         one or more of the following purposes authorized under the SSAWA, including the name and address of the organization or entity to receive the deduction:

A)        for purchase of United States Savings Bonds;

B)        subject to restrictions under the SSAWA, for payment of premiums on: life or accident and health insurance, as defined in Section 4 of the Illinois Insurance Code [215 ILCS 5/4]; policies of automobile insurance as defined in Section 143.13 of the Illinois Insurance Code; and personal multiperil coverages commonly known as homeowner's insurance;

C)        for payment to any labor organization designated by the employee;

D)        for payment of dues to any association the membership of which consists of State employees and former State employees;

E)        for deposit in any credit union in which State employees are within the field of membership as a result of their employment;

F)         for payment to or for the benefit of an institution of higher education by an employee of that institution;

G)        for payment of parking fees at the underground facility located south of the William G. Stratton State Office Building in Springfield, the parking ramp located at 401 South College Street, west of the William G. Stratton State Office Building in Springfield, or the parking facilities located on the Urbana-Champaign campus of the University of Illinois;

H)        for voluntary payment to the State of Illinois of amounts then due and payable to the State;

I)         for investment purchases made as a participant in College Savings Programs established pursuant to Section 30-15.8a of the School Code [105 ILCS 5/30-15.8a];

J)         for voluntary payment to the Illinois Department of Revenue of amounts due or to become due under the Illinois Income Tax Act [35 ILCS 5];

K)        for payment of optional contributions to a retirement system subject to the provisions of the Code;

L)        for contributions to organizations found qualified by the State Comptroller under the requirements set forth in the VPDA (this purpose must be accompanied by a deduction code issued by the State Comptroller);

M)       for payment of fringe benefit contributions to employee benefit trust funds; (Section 4 of the SSAWA)

2)         the amount to be withheld from the annuity or disability benefit of the annuitant for each designated entity;

3)         the expiration date of the authorization, if applicable;

4)         the annuitant's current mailing address; and

5)         the annuitant's signature.

c)         Effective Date of Authorization.  The voluntary deduction authorization shall be effective for annuities and disability benefits according to the following schedule.   An authorization is deemed submitted when it is received and date stamped by SURS.

1)         If a voluntary deduction authorization is submitted on or before the SURS monthly benefit processing date, the authorization shall be effective from the first day of the next calendar month for annuities and from the last day of the same calendar month for disability benefits.

2)         If a voluntary deduction authorization is submitted after the scheduled SURS monthly benefit processing date, the authorization shall be effective from the first day of the calendar month following the next calendar month for annuities and from the last day of the next calendar month for disability benefits.

d)         Deduction Increases.  The annuitant may authorize in writing increases in amounts withheld by voluntary deduction without filing a new deduction authorization form (e.g., on account of increases in union dues).  However, prior to an increase in withholding taking effect, written notice shall be given to SURS and to each affected annuitant by the entity to receive the increase.

e)         Termination and Reinstatement.  Effective voluntary deduction authorizations may be terminated at any time by the annuitant by written request.  Absent a written request for termination, an effective voluntary deduction authorization is automatically terminated upon reaching the date of expiration as indicated on the written request for voluntary deductions.  If no expiration date is indicated, then the voluntary deduction authorization continues to be effective for each recurring annuity or disability benefit pay period until the annuity or disability benefit ceases.  A reinstatement of a deduction subsequent to its termination as a result of a request for termination, expiration, or cessation of annuity or benefit must be authorized under a new voluntary deduction authorization as prescribed under subsection (b).  However, a temporary suspension (such as a suspension due to the lack of a valid address verification) of an annuity or disability benefit, followed by its recommencement, does not require a new voluntary deduction authorization. 

f)         Deduction Limits

1)         In addition to the requirements under the SSAWA and VPDA, any organization or entity for which a deduction authorization is submitted must have received deduction authorizations from at least 50 SURS annuitants before the monthly benefit processing date of the previous month.

2)         Once SURS has received effective deduction authorizations for withholding on behalf of four organizations or entities that may receive deductions for any of the purposes stated under subsections (b)(1)(A) through (b)(1)(K) and (b)(1)(M) of this Section, SURS shall accept no further deduction authorization forms for those organizations or entities from that annuitant, unless a previously effective deduction authorization is terminated by the annuitant (or by the expiration of the stated term of the prior authorization).

3)         Once SURS has received effective deduction authorizations for withholding on behalf of four qualified organizations described under Section 3(b) and (c) of the VPDA for the purpose stated under subsection (b)(1)(L) of this Section, SURS shall accept no further deduction authorization forms for those organizations from that annuitant, unless a previously effective deduction authorization is terminated by the annuitant (or by the expiration of the stated term of the prior authorization).

(Source:  Amended at 32 Ill. Reg. 16515, effective September 25, 2008)

Section 1600.450  Overpayment Recovery

Purpose.  Under Section 15-186.1 of the Code, SURS may recover amounts overpaid from the recipient and/or the recipient’s estate (collectively, "recipient"), plus interest at the effective rate from the date of overpayment to the date of recovery, either directly or by deducting that amount from the remaining benefits payable to the recipient at a rate determined prudent and in the best interests of the System.  This Section establishes procedures by which SURS' authority to collect overpayments under Section 15-186.1 is to be exercised.

a)         Demand and Statements.  SURS will provide the overpaid recipient with a written demand upon discovery of the overpayment.  The written demand shall specify the total amount of the overpayment, the month or months in which the overpayment occurred, a description of the nature of the overpayment, the interest rate to be assessed, and the option for installment payments or deduction from future benefits.  The written demand shall also notify the recipient of the right to appeal and receive a hearing concerning the determination of overpayment status in accordance with Section 1600.500.  SURS will send the recipient monthly statements indicating the overpayment balance and any installment balances and shall continue sending monthly statements until the total amount is fully repaid or SURS acts under subsection (c).

b)         Interest.  Interest will compound monthly at 1/12 the current effective rate of interest per month starting 35 days after the date of issuance of the written demand until collection is completed.  Notwithstanding the foregoing, interest accrual shall be suspended during the pendency of a request for review of the overpayment under Section 1600.500.  However, if the recipient does not prevail under administrative review, interest shall apply retroactively to the date 35 days after the date of issuance of the written demand until collection is completed.

c)         Actions for Recovery.  If the recipient has not begun repayment or has not filed an appeal within 35 days after the written demand, or a final non-appealable decision in favor of SURS issued subsequent to an appeal, SURS may take any, or any combination, of the following actions, as SURS deems appropriate and prudent, to collect the overpayment:

1)         Deduct from benefits, refunds and credits payable to the recipient.  Under Section 15-185 of the Code, the Board may deduct from any benefit payable to participants, annuitants, survivors and beneficiaries amounts owed to SURS due to the participant's service.  SURS may recover overpayments from any benefit payable due to the participant's service, including annuity benefits, survivor benefits, separation refunds, disability benefits and death benefits.  If anyone receiving a benefit due to the participant's service is overpaid, the overpayment may be recovered from any current or future benefits paid to the same person or any other person receiving benefits due to the participant's service;

2)         Engage a private collections agent;

3)         Initiate proceedings to obtain a civil judgment by attorneys retained by SURS or through the Attorney General;

4)         Refer the overpayment to the Debt Collection Bureau of the Illinois Department of Revenue and/or the Illinois Debt Recovery Offset Portal (IDROP) of the Illinois State Comptroller;

5)         Coordinate collection efforts with the State of Illinois Treasurer's Office; and/or

6)         By and through any other means permissible by law.

d)         Maintenance of Records.  Records of overpayments shall be maintained for at least 36 months, except as provided under subsection (e), and shall contain the following:

1)         A description of the cause for the overpayment;

2)         Correspondence concerning attempts to collect the overpayment; and

3)         Evidence of notice given for a hearing and review of the overpayment and any final outcome of the hearing and review.

e)         Uncollectible Accounts Receivable.  If SURS is unable to collect all or part of an overpayment after 36 months, SURS' staff may request the Board, or its duly authorized representative, to certify the overpayment balance as uncollectible and no longer to be maintained as an account receivable in SURS' records.  The request shall include the documentation required under subsection (d) and confirmation that the certification would be in the best economic interest of SURS.  In determining the best economic interest of SURS, staff shall determine whether the total collection cost expended or anticipated will exceed the recoupment reasonably expected.  However, the following exceptions may apply:

1)         SURS' staff may deem an overpayment balance of $100 or less to be uncollectible 6 months after the date of the demand without certification by the Board;

2)         SURS' staff may request certification for an overpayment balance of more than $100 but less than $5,000 after collection efforts have elapsed for at least 12 months.

f)         Reopening Uncollectible Accounts Receivable.  Overpayments certified by the Board as uncollectible may be reopened for collection if the SURS' staff determines that it is in the best economic interest of SURS to do so.

g)         Past Overpayments.  Overpayments incurred prior to January 1, 2008 may be certified as uncollectible under subsection (e) notwithstanding the lack of any of the documentation required under subsection (d).

h)         De Minimis Exception.  Any revision or correction of a benefit that results in a difference of $1 or less per month for monthly payments or $10 or less for lump-sum payments shall be considered de minimis and shall not be treated as an overpayment that is to be collected from the recipient under this Section.

(Source:  Amended at 49 Ill. Reg. 3321, effective February 26, 2025)

Section 1600.455  Benefit Forfeitures Relating to Felony Convictions

Purpose.  This Section implements Section 15-187 of the Code concerning the forfeiture of benefits, which provides that none of the benefits provided under Article 15 of the Code shall be paid to any person who is convicted of any felony relating to or arising out of or in connection with a person's service as an employee from which the benefit derives. [40 ILCS 5/15-187]

a)         Date of Conviction.  The benefits subject to forfeiture under this Section shall be limited to benefits that are payable on or after the date on which a sentence is imposed by a court of competent jurisdiction following a judgment or conviction of a felony.  The System shall not suspend or impair any vested right under the Code prior to the date of such sentencing.  The forfeiture under this Section shall be applied beginning on the date of the sentencing even if the criminal conviction is appealed to an appellate court.  If the conviction is overturned on appeal by a final, non-appealable judgment, then the System shall pay the member any previously forfeited benefits without interest.  If the member received a refund of contributions under subsection (b), only the forfeited benefits that were payable until the date of such refund shall be paid, without interest.

b)         Refund Rights.  Notwithstanding the forfeiture of any benefit under this Section, a participant or annuitant shall be entitled to receive a refund of any employee contributions made under Section 15-157 of the Code, but shall not be entitled to any employer contributions or any interest.  In the case of a member of the Retirement Savings Plan, the member shall be entitled to receive a refund of employee contributions (adjusted for any gains and losses up to the date of the refund), but the refund shall not include any employer contributions (including any gains or losses earned on those contributions).

c)         Employment with Different Employers. The conviction of a felony relating to or arising out of or connection with a person's service earned under a particular employer shall not be applied to service earned under a different employer that bears no relation to the felony. 

d)         Multiple Positions, Appointments, or Contracts with the Same Employer.  The conviction of a felony relating to or arising out of or in connection with service earned under a particular employer shall cause the forfeiture of all benefits derived from all service earned under that employer, even if the felony did not relate to, did not arise out of, or was not in connection with other periods of service earned under that employer.

(Source:  Added at 49 Ill. Reg. 3321, effective February 26, 2025)

Section 1600.460  Accelerated Pension Benefit Payment In Lieu of Any Pension Benefit

a)         Purpose.  This Section implements Section 15-185.5 of the Code providing for an accelerated pension benefit payment in lieu of any pension benefit, to be referred to in this Section as the "Vested Inactive Buyout" or "VIB".

b)         Definitions.  For purposes of Section 15-185.5(a) of the Code, the following terms shall have the meanings specified in this subsection (b).

1)         Eligible Person.  An eligible "person" shall mean a person who satisfies the following conditions.

A)        The person has terminated all service, meaning the person has terminated employee status under Section 15-107 of the Code of the code as of the date SURS receives the VIB application and has continuously remained in non-employee status as of the date SURS receives the election to accept the VIB offer.

B)        The person has accrued sufficient service credit to be eligible to receive a retirement annuity under Article 15 of the Code, meaning the person must meet the applicable retirement eligibility requirements under Section 15-135 of the Code solely with respect to service credit as of the date SURS receives the VIB application.  For this purpose, service credit shall include only service credited under Article 15 of the Code.  No service credited at a reciprocal retirement system or pension fund shall count under this subsection (b)(1)(B).

C)        The person has not received any retirement annuity under Article 15 of the Code, meaning the person must not have received any retirement annuity or Preliminary Estimated Payments as of the date SURS receives the VIB application.

D)        The person has not made the election under Section 15-185.6 of the Code.

E)        The person is not a participant in the Self-Managed Plan under Section 15-158.2 of the Code.

2)         Implementation Date.  "Implementation date" means the earliest date upon which the Board authorizes eligible persons to begin irrevocably electing the accelerated pension benefit payment option under Section 15-185.5 of the Code.  The Board shall endeavor to make such participation available as soon as possible after June 4, 2018 and shall establish an implementation date by Board resolution. [40 ILCS 5/15-185.5(a)]

3)         Pension Benefit.  The "pension benefit" upon which the VIB shall be calculated shall consist of one or more of the following benefits, as applicable:

A)        Traditional Benefit Package

i)          Tier 1 Members.  Retirement benefits under the applicable provisions of Section 15-136 of the Code and, if a permanent survivor (as defined under subsection (b)(4)) exists, survivors insurance benefits under Section 15-145 of the Code, subject to the minimum total survivors annuity payable under Section 15-146(b) of the Code.

ii)         Tier 2 Members.  Retirement benefits under the applicable provisions of Section 15-136 of the Code and, if a permanent survivor (as defined under subsection (b)(4) of this Section) exists, survivors insurance benefits under Section 15-145.1 of the Code.

B)        Portable Benefit Package 

i)          Tier 1 Members.  Retirement benefits based on the actuarial equivalent of a single-life annuity described under Section 15-136.4(b) of the Code with automatic annual increases under Section 15-136.4(l) of the Code.

ii)         Tier 2 Members.  Retirement benefits based on the actuarial equivalent of a single-life annuity described under Section 15-136.4(b) of the Code with automatic annual increases under Section 15-136(d-5) of the Code.

C)        Refund of Survivors Contributions.  If the eligible person has no permanent survivor as of the VIB application date, then the refund that would have been payable as of the assumed retirement date under Section 15-154(c) of the Code.

D)        Refund of Additional Contributions.  The refund that would be payable as of the assumed retirement date under Section 15-154(d) of the Code, if applicable.

E)        Refund of Excess Service Credit.  The refund that would be payable as of the assumed retirement date under Section 15-154(e) of the Code for excess or waived service credit.

F)         Refund of Police and Firefighter Contributions.  The refund that would be payable as of the assumed retirement date under Section 15-154(f) of the Code, if the eligible person elects to waive the application of Rule 4 of Section 15-136 of the Code.

4)         Permanent Survivor.  For purposes of this Section, the term "permanent survivor" shall mean a person who:

A)        is living as of the earlier of the assumed retirement date or the date on which the VIB offer is issued; and

B)        is the youngest (i.e., has the longest actuarially assumed life expectancy) from among the following:

i)          a "surviving spouse" under Section 15-127 of the Code (without regard to any one-year minimum marriage requirement) or an "eligible spouse" under Section 15-136.4(a) of the Code (without regard to any one-year minimum marriage requirement); or

ii)         a "child" under Section 15-129 of the Code who is unmarried and dependent upon the person by reason of a physical or mental disability that began prior to the date the child attained age 18. 

●              If the child is age 18 or older as of the application date, the child will be deemed to be disabled on the basis of a written certificate from one or more licensed and practicing physicians stating that the child is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or that has lasted or can be expected to last for a continuous period of not less than 12 months.  The physician's determination of disability shall be determined in accordance with 20 CFR 416.905 through 416.911.

●              If the child is under age 18 as of the application date, the child will be deemed to be disabled on the basis of a written certificate from one or more licensed and practicing physicians stating that the child has a medically determinable physical or mental impairment or combination of impairments that causes marked and severe functional limitations, and that can be expected to cause death or that has lasted or can be expected to last for a continuous period of not less than 12 months.  The physician's determination of disability shall be determined in accordance with 20 CFR 416.905 through 416.911.

c)         VIB Application.  Beginning on the implementation date, an eligible person may apply for a VIB calculation in writing in the form prescribed by SURS, subject to the following conditions: 

1)         Application Deadline.  SURS must receive the application by the date by which an irrevocable election must be made under Section 15-185.5(b) of the Code.  However, in no event shall SURS accept an application less than 12 months prior to the date on which the eligible person must begin receiving Required Minimum Distributions under Section 1-116.1 of the Code and IRC section 401(a)(9).

2)         Termination of Application 

A)        A pending application shall terminate prior to SURS' receipt of the election to receive the VIB on the earliest of the eligible person's:

i)          revocation of the application;

ii)         re-employment;

iii)        death;

iv)        required beginning date for Required Minimum Distributions under Section 1-116.1 of the Code; or

v)         election to receive an Automatic Annual Increase Buyout (AAI Buyout) under Section 15-185.6 of the Code and Section 1600.461 of this Part. 

B)        No election to accept a VIB offer shall be effective upon or after the termination of a pending application. 

C)        The eligible person may not withdraw or revoke a pending application as of the date SURS receives the completed VIB election form. 

3)         Other Benefits.  The eligible person may not apply for a refund, disability benefit, or disability retirement annuity while a VIB application is pending.

d)         VIB Offer Amount.  After receipt of a VIB application, SURS shall calculate the VIB offer amount as soon as practicable.  The VIB offer amount shall be 60% of the present value of the applicable pension benefit payable as of the assumed retirement date.  The calculation shall be subject to the following conditions:

1)         Actuarial Assumptions 

A)        All actuarial tables used to calculate the VIB offer amount shall use actuarial assumptions most recently adopted by the Board as of the time of the calculation. 

B)        The present value date shall be the first of the month on or immediately following the date that SURS receives the VIB application.

C)        The discount rate used to calculate the present value of any benefit shall be the prescribed rate of interest.

D)        The effective rate of interest for fiscal years prior to the fiscal year containing the date of the calculation shall be the historical rates set by the Board or the State Comptroller, as applicable.  The effective rate of interest for fiscal years inclusive of and after the fiscal year containing the date of the calculation shall be the last known effective rate of interest set by the Board or the State Comptroller, as applicable.

2)         Service Credit

A)        All service credit purchases must have been completed by the date SURS receives the VIB application.

B)        Service credit for unused, unpaid sick leave under Section 15-113.4 of the Code shall apply only if the eligible person was an employee within 60 days immediately preceding the assumed retirement date.

3)         Assumed Retirement Date.  The assumed retirement date shall be the retirement annuity commencement date determined as follows.

A)        If the eligible person has attained the earliest applicable retirement age under Section 15-135 of the Code as of the date SURS receives the VIB application, the VIB offer amount shall be based on a retirement annuity that commences on the first of the month on or immediately following the date that SURS receives the VIB application (subject to any applicable early age reductions under Section 15-136 of the Code).

B)        If the eligible person has not attained the earliest applicable retirement age under Section 15-135 of the Code as of the date SURS receives the VIB application, the VIB offer amount shall be based on a retirement annuity that commences on the first of the month following the birthday on which the person will have attained the earliest applicable retirement age under Section 15-135 of the Code (subject to any applicable early age reductions under Section 15-136 of the Code).

4)         Survivor Benefits.  The assumed dates of death of the eligible person and eligible permanent survivor with respect to any assumed survivor benefit shall be based on the most recent mortality assumptions adopted by the Board as of the date of the calculation.

5)         Frequency.  No more than one VIB offer amount shall be calculated in a State fiscal year.

6)         Appeals.  An eligible person may seek an appeal of the calculation of the VIB offer amount within 35 days after the issuance of the offer, in accordance with Section 1600.500.

e)         VIB Election.  The election to accept the VIB offer shall be made in the manner and form prescribed by SURS.  SURS may require additional documentation or proof to verify any fact or record necessary for the administration of the election.

1)         Election Deadline.  The eligible person shall elect to accept the VIB offer within 120 days after the date the VIB offer was issued.  If no election is submitted by the deadline, the eligible person shall be deemed to have rejected the VIB offer.

2)         Election Date.  The date of the election to accept the VIB offer shall be the date SURS receives the completed VIB election form.

3)         Survivor Consent.  The election shall be accompanied by written and notarized consent of any permanent survivor.  If a permanent survivor who was identified in the VIB application no longer qualifies as a permanent survivor, then the election shall be, instead, accompanied by documentation proving the disqualifying condition as follows:

A)        Death.  Death shall be proven by a certified copy of the death certificate.

B)        Divorce.  A dissolution of marriage shall be proven by a certified copy of the judgment of dissolution of marriage or civil union.

C)        Child's Non-Disability.  A child's non-disability shall be proven by a written certificate from one or more licensed and practicing physicians stating that the child is no longer disabled under subsection (b)(4)(B)(ii).

4)         Effect of Acceptance.  Upon SURS' receipt of the election to accept the VIB offer amount, the eligible person shall be subject to the following conditions:

A)        The election to accept the VIB offer shall be irrevocable unless:

i)          the State Comptroller fails to remit the full VIB amount to SURS within a year after SURS has submitted a voucher under Section 15-185.5(f) of the Code; or

ii)         SURS has knowledge of specific and articulable facts, taken together with rational inferences from those facts, that would lead a reasonable person to believe that the election to accept the VIB was made under fraud, duress, undue influence, illegality or incapacity.

B)        The eligible person may not elect to proceed under the Retirement Systems Reciprocal Act [40 ILCS 5/Art. 20] with respect to any service to which the VIB pertains.

C)        The eligible person may not purchase service credit under Article 15 of the Code with respect to any service credit attributable to the VIB or any accelerated pension benefit payment under Section 14-147.5, 14-147.6, 16-190.5 or 16-190.6 of the Code.

D)        The eligible person shall no longer be a participant of SURS and  forfeits all accrued rights and credits in SURS and no other benefit shall be paid under Article 15 based on those forfeited rights and credits, including any retirement, survivor or other benefit; except, to the extent that participation, benefits or premiums under the State Employees Group Insurance Act of 1971 [5 ILCS 375] are based on the amount of service credit.

E)        The VIB may not be repaid to SURS, and the forfeited rights and credits may not under any circumstances be reinstated.

F)         If the eligible person returns to participation under Article 15, any benefits under SURS earned as a result of that return to participation shall be based solely on the person's credits and creditable service arising from the return to participation. Upon return to participation, the person shall be considered a new employee subject to all the qualifying conditions for participation and eligibility for benefits applicable to new employees, except the person shall retain the same Tier status and program elections previously made under Section 15-134.5 of the Code.

G)        An election to accept the VIB offer shall be deemed to be a waiver of any appeal rights under Section 1600.500 with respect to the VIB. 

f)         VIB Voucher and Payment

1)         As soon as administratively practicable after SURS' receipt of the election to accept the VIB offer, SURS shall submit one or more vouchers to the State Comptroller for the payment of the VIB.  SURS shall pay the VIB as soon as administratively practicable after SURS' receipt of the VIB amount from the State Comptroller.  In no event shall SURS pay the VIB without having received the amounts sufficient to pay the VIB in full from the State Comptroller.

2)         The VIB shall be paid in the form of a direct rollover to an "eligible retirement plan" as defined under Section 1600.140(h)(6) (including any supplemental defined contribution plan administered by SURS) to the extent permissible under IRC section 401(a)(31), except for any amounts attributable to Required Minimum Distributions under Section 1-116.1 of the Code or amounts paid under the Excess Benefit Arrangement under Section 1600.430 of this Part.  The eligible person may not elect to receive any portion of the direct rollover as cash.

3)         If the eligible person dies after having elected to accept the VIB offer amount, but prior to payment of the VIB, the VIB shall be payable to the eligible person's estate.

(Source:  Amended at 49 Ill. Reg. 3321, effective February 26, 2025)

Section 1600.461  Accelerated Pension Benefit Payment for a Reduction and Delay in AAI

a)         Purpose.  This Section implements Section 15-185.6 of the Code providing for an accelerated pension benefit payment for a reduction and delay in an automatic annual increase (AAI) to a retirement annuity and an annuity benefit payable as a result of death, to be referred to in this Section as the "AAI Buyout".

b)         Definitions.  For purposes of Section 15-185.6(a) of the Code, the following terms shall have the meanings specified in this subsection (b).

1)         Eligible Person.  An "eligible person" shall mean a person who satisfies the following conditions:

A)        The person is a Tier 1 member.

B)        The person has submitted an application for a retirement annuity under Article 15 of the Code.

C)        The person has met the age and service requirement for receiving a retirement annuity under Article 15 of the Code, meaning the person must meet the applicable retirement eligibility requirements under Section 15-135 of the Code with respect to age and service credit accrued under Article 15 of the Code and, if the person elects to retire under the Retirement Systems Reciprocal Act, any service credit of a participating reciprocal system.

D)        The person has not received any retirement annuity under Article 15 of the Code, meaning the retirement date specified in the retirement application cannot be prior to the date SURS receives the application for a retirement annuity.

E)        The person has not made the election under Section 15-185.5 of the Code.

F)         The person is not a participant in the Self-Managed Plan under Section 15-158.2 of the Code.

2)         Implementation Date.  "Implementation date" means the earliest date upon which the Board authorizes eligible persons to begin irrevocably electing the accelerated pension benefit payment option under Section 185.6 of the Code.  The Board shall endeavor to make such participation available as soon as possible after June 4, 2018 and shall establish an implementation date by Board resolution. [40 ILCS 5/15-185.6(a)]

3)         Assumed Annuities.  The AAI Buyout shall be based on one or more of the following assumed annuities, as applicable:

A)        Traditional Benefit Package.  Retirement benefits under the applicable provisions of Section 15-136 of the Code and, if a permanent survivor (as defined under subsection (b)(4)) exists, survivors insurance benefits under Section 15-145 of the Code, subject to the minimum total survivors annuity payable under Section 15-146(b) of the Code.

B)        Portable Benefit Package.  Retirement benefits based on the actuarial equivalent of a single-life annuity described under Section 15-136.4(b) of the Code.

4)         Permanent Survivor.  For purposes of this Section, the term "permanent survivor" shall mean a person who:

A)        is living as of the earlier of the assumed retirement date or the date on which the AAI Buyout offer is issued; and

B)        is the youngest (i.e., has the longest actuarially assumed life expectancy) from among the following:

i)          a "surviving spouse" under Section 15-127 of the Code (without regard to any one-year minimum marriage requirement); or

ii)         a "child" under Section 15-129 of the Code who is unmarried and dependent upon the person by reason of a physical or mental disability which began prior to the date the child attained age 18. 

●              If the child is age 18 or older as of the application date, the child will be deemed to be disabled on the basis of a written certificate from one or more licensed and practicing physicians stating that the child is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or that has lasted or can be expected to last for a continuous period of not less than 12 months.  The physician's determination of disability shall be determined in accordance with 20 CFR 416.905 through 416.911.

●              If the child is under age 18 as of the application date, the child will be deemed to be disabled on the basis of a written certificate from one or more licensed and practicing physicians stating that the child has a medically determinable physical or mental impairment or combination of impairments that causes marked and severe functional limitations, and that can be expected to cause death or that has lasted or can be expected to last for a continuous period of not less than 12 months.  The physician's determination of disability shall be determined in accordance with 20 CFR 416.905 through 416.911.

c)         AAI Buyout Application.  Beginning on the implementation date, an eligible person may apply for an AAI Buyout calculation in writing in the form prescribed by SURS, subject to the following conditions: 

1)         Application Deadline.  SURS must receive the AAI Buyout application by the retirement date specified on the completed retirement application, which can be no later than the date until which the System is required to implement the AAI Buyout under Section 15-185.6(b) of the Code.  

2)         Termination of Application 

A)        A pending application shall terminate on the earliest of the eligible person's:

i)          revocation of the application;

ii)         cancellation or suspension of the retirement annuity under Section 15-139 of the Code;

iii)        death; or

iv)        an election to receive a Vested Inactive Buyout under Section 15-185.5 of the Code and Section 1600.460 of this Part.

B)        No election to accept an AAI Buyout offer shall be effective upon or after the termination of a pending application.

C)        The eligible person may not withdraw or revoke a pending application as of the date SURS receives the completed AAI Buyout election form. 

d)         AAI Buyout Offer Amount

1)         After receipt of an AAI Buyout application, SURS shall calculate the AAI Buyout offer amount as soon as practicable.

2)         The AAI Buyout offer amount shall be 70% of the difference of:

A)        the present value of the automatic annual increases to the assumed annuities under Sections 15-136(d), 15-136.4(l), and 15-145(j) of the Code, as applicable; and

B)        the present value of the automatic annual increases to the assumed annuities, using the formula provided under Section 15-185.6(b-5) of the Code.

3)         The calculation shall be subject to the following conditions:

A)        Actuarial Assumptions 

i)          All actuarial tables used to calculate the AAI Buyout offer amount shall use actuarial assumptions most recently adopted by the Board as of the time of the calculation.

ii)         The present value date shall be the retirement date.

iii)        The discount rate used to calculate the present value shall be the prescribed rate of interest.

B)        Survivor Benefits.  The assumed dates of death of the eligible person and eligible permanent survivor or contingent annuitant, as applicable, with respect to any assumed survivors insurance benefit or survivor portion of a joint and survivor annuity, as applicable, shall be based on the most recent mortality assumptions adopted by the Board as of the date of the calculation.  The AAI to a survivors insurance annuity or the survivor portion of a joint and survivor annuity, as applicable, calculated under Section 15-185.6(b-5) of the Code, shall commence on the January 1 occurring on or after the first anniversary of the commencement of the survivors insurance annuity or survivor portion of a joint and survivor annuity.

C)        Frequency.  No more than one AAI Buyout offer amount shall be calculated in a State fiscal year.

D)        Appeals.  An eligible person may seek an appeal of the calculation of the AAI Buyout offer amount within 35 days after the issuance of the offer in accordance with Section 1600.500.

e)         AAI Buyout Election.  The election to accept the AAI Buyout offer shall be made in the manner and form prescribed by SURS.  SURS may require additional documentation or proof to verify any fact or record necessary for administration of the election.

1)         Election Deadline.  The eligible person shall elect to accept the AAI Buyout offer within 120 days after the date the AAI Buyout offer was issued.  If no election is submitted by the deadline, the eligible person shall be deemed to have rejected the AAI Buyout offer.

2)         Election Date.  The date of the election to accept the AAI Buyout offer shall be the date SURS receives the completed AAI Buyout election form.

3)         Termination from Employment.  The eligible person must not return to work as an employee under Section 15-107 of the Code until after the date SURS receives the completed AAI Buyout election form.

4)         Survivor Consent.  The election shall be accompanied by written and notarized consent of any permanent survivor or contingent annuitant, as applicable.  If a permanent survivor who was identified in the AAI Buyout application no longer qualifies as a permanent survivor, the election shall be, instead, accompanied by documentation proving the disqualifying condition as follows:

A)        Death.  Death shall be proven by a certified copy of the death certificate.

B)        Divorce.  A dissolution of marriage shall be proven by a certified copy of the judgment of dissolution of marriage or civil union.

C)        Child's Non-Disability.  A child's non-disability shall be proven by a written certificate from one or more licensed and practicing physicians stating that the child is no longer disabled under subsection (b)(4)(B)(ii).

5)         Effect of Acceptance.  Upon SURS' receipt of the election to accept the AAI Buyout offer amount, the eligible person shall be subject to the following conditions:

A)        The election to accept the AAI Buyout offer shall be irrevocable unless:

i)          the State Comptroller fails to remit the full AAI Buyout amount to SURS within a year after SURS has submitted a voucher under Section 15-185.6(d-5) of the Code; or

ii)         SURS has knowledge of specific and articulable facts, taken together with rational inferences from those facts, that would lead a reasonable person to believe that the election to accept the AAI Buyout was made under fraud, duress, undue influence, illegality or incapacity.

B)        An eligible person who participates in the Traditional Benefit Package and who elects to accept the AAI Buyout offer may not elect to receive a survivors contribution refund under Section 15-154(c) of the Code if a survivors insurance beneficiary exists as of the retirement date.  If no survivors insurance beneficiary exists as of the retirement date, the survivors contribution refund shall be payable to the eligible person.

C)        An eligible person who elects to accept the AAI Buyout offer shall be deemed to have waived the right to any supplemental payments under Section 15-136.3 and Section 15-146(d) of the Code.

D)        An election to accept the AAI Buyout offer shall be deemed to be a waiver of any appeal rights under Section 1600.500 with respect to the AAI Buyout and all underlying calculations.

6)         Effect of Rejection.  Upon SURS' receipt of a rejection of the AAI Buyout offer amount or upon the failure to make an election within the deadline specified under subsection (e)(1), SURS shall pay automatic annual increases as provided under Sections 15-136(d), 15-136.4(l), and 15-145(j) of the Code, as applicable.

f)         AAI Buyout Voucher and Payment

1)         As soon as administratively practicable after the SURS' receipt of the election to accept the AAI Buyout offer amount, SURS shall submit one or more vouchers to the State Comptroller for the payment of the AAI Buyout.  SURS shall pay the AAI Buyout as soon as administratively practicable after the SURS' receipt of the AAI Buyout amount from the State Comptroller.  In no event shall SURS pay the AAI Buyout without having received the amounts sufficient to pay the AAI Buyout in full from the State Comptroller.

2)         The AAI Buyout shall be paid in the form of a direct rollover to an "eligible retirement plan" as defined under Section 1600.140(h)(6) (including any supplemental defined contribution plan administered by SURS) to the extent permissible under IRC section 401(a)(31), except for any amounts attributable to Required Minimum Distributions under Section 1-116.1 of the Code or amounts paid under the Excess Benefit Arrangement under Section 1600.430.  The eligible person may not elect to receive any portion of the direct rollover as cash.

3)         The AAI Buyout may not be repaid to SURS.  However, if the retirement annuity is cancelled under Section 15-139(a) of the Code after the eligible person is paid the AAI Buyout offer amount, the eligible person shall repay to SURS that amount, plus any applicable interest under Section 1600.450.

4)         If the eligible person who has received the AAI Buyout returns to participation under Article 15, the calculation of any future automatic annual increase in all retirement and survivor annuities under Section 15-139(c) shall be calculated in accordance with Section 15-185.6(b-5) of the Code.

5)         If the eligible person dies after having elected to accept the AAI Buyout offer, but prior to payment of the AAI Buyout, the AAI Buyout shall be payable to the eligible person's estate.

(Source:  Amended at 49 Ill. Reg. 3321, effective February 26, 2025)

Section 1600.500  Administrative Staff Determinations and Rules for Appeal − Nature and Requirements of Formal Hearings

a)         Administrative Determination

The Board of Trustees hereby delegates to the SURS administrative staff the responsibility for the daily claims-processing function of SURS, including making initial determinations as to all applications for annuities and benefits, service credit, or any other claims against or relating to SURS, consistent with the provisions of the Illinois Pension Code.

b)         Review by Senior Claims Management

Any participant, annuitant or beneficiary adversely affected by the disposition of a claim by the administrative staff may file a written request for review by a member of the SURS senior claims management or such other person as may be designated by the Executive Director.  A request for review by the member of senior claims management must be received within 35 days from the date of the decision from which review is sought.  The review will be based upon all materials contained in the file, as well as any additional materials the claimant attaches to the written request for review.  All filings or submissions, whether optional or required under this Section, shall be considered timely if date stamped by SURS within the time prescribed.  The decision reached by senior claims management or the Executive Director's designee shall be served on the participant, annuitant or beneficiary by delivery to a third-party commercial carrier or by registered or certified mail, return receipt requested.

c)         Review by the Claims Panel

1)         A Claims Panel shall hear all administrative contested matters. The Panel shall meet periodically as determined by the Executive Director.

2)         Request for Review.  Any participant, annuitant or beneficiary (hereinafter "claimant") adversely affected by the disposition of a claim by the member of senior claims management or the Executive Director's designee may request, in writing, a review by the Claims Panel and, at the same time, a copy of all relevant documents from the claimant's file.  A request for review must be received by the General Counsel of SURS, or the General Counsel's designee, within 35 days from the date of the decision from which review is sought.

3)         Notice of Hearing.  Upon receipt of a claimant's Request for Review, SURS shall assign the claim a docket number; schedule the claim for the first available meeting of the Claims Panel; and notify the claimant, by a Notice of Hearing, that the claimant is required to file a single Statement of Claim.  The Notice of Hearing may be accompanied by any relevant documentation from the claimant's file.

4)         Statement of Claim. The Statement of Claim must be received by the SURS General Counsel, or the General Counsel's designee, no later than 35 days from the date of the mailing of the Notice of Hearing. The Statement of Claim shall include:  a formal Appearance, containing the claimant's name, SURS identification number and address; the name and address of the claimant's authorized representative, if any; a statement of the facts forming the basis for the appeal; any documents or other materials the claimant wishes to be considered in conjunction with the appeal, in addition to those already contained in the claimant's file; whether the claimant desires a hearing or whether the claimant desires to waive a hearing and allow the Claims Panel to reach a decision based upon the Statement of Claim and the relevant documents in the claimant's file; a list of witnesses, if any, the claimant intends to present at a hearing; and an explanation of the relief sought. The Statement of Claim shall not exceed 15 pages in length, unless an exception is granted by the Claims Panel Hearing Officer. The Hearing Officer may grant a motion to Strike/Dismiss all or part of the Statement of Claim.

5)         Response to Statement of Claim. SURS staff may submit a Response to the Statement of Claim, which shall also not exceed 15 pages in length, unless an exception is granted by the Claims Panel Hearing Officer.

6)         Notification.  The Notice of Hearing shall also provide a claimant 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 [5 ILCS 100/10-25].  The Notice shall inform the claimant of an opportunity to provide a statement of the claimant's position, present oral evidence, and conduct examination and cross-examination of witnesses as necessary for full and true disclosure of the facts.  Notice shall also be given to the claimant that the claimant is required to provide written confirmation, at least 14 days prior to the scheduled date of the hearing, of the claimant's intent to appear at the hearing, whether in person or by telephone conference call.  The claimant is not required to physically appear at the hearing.  The claimant may appear at the hearing by telephone conference call.  The claimant may also choose to affirmatively waive personal appearance at the hearing. In the absence of the claimant, the Claims Panel will consider the claimant's Statement of Claim and any documentary evidence, testimony evidence, argument and any other information properly presented to the Claims Panel by SURS staff during the scheduled hearing.

7)         Pre-hearing Conference.  Upon request of the General Counsel, the claimant, or upon the decision of the Hearing Officer, a pre-hearing conference shall be held for the purpose of simplification or definition of issues or procedures at the hearing.

8)         Legal Representation and Other Assistance.  The claimant and SURS may be represented by legal counsel and/or assisted by a designated family member or spokesperson at the hearing.

9)         Burden of Proof.  It shall be the burden of the claimant to establish a right to the benefit claimed, or the right to the continuation of the benefit claimed in cases of revocation of the benefit by SURS, by establishing that right by a preponderance of the evidence.

d)         Discovery.  All discovery is at the discretion of the Hearing Officer.  Requests to take discovery must be made in writing to the Hearing Officer with notice to the other party.  Discovery may be taken with the prior permission of the Hearing Officer only upon good cause shown, that is, if the evidence sought is material and cannot be obtained in any other way.  Failure to comply with orders of the Hearing Officer may be sanctioned by the Hearing Officer, by means including, but not limited to, dismissal of a claim.

e)         Depositions

1)         The Hearing Officer may order the taking of evidence depositions of a person, specifying the subject matter to be covered, under oral examination or written questions, for use as evidence at the hearing, provided:

A)        The Hearing Officer has determined upon request that there is a need to preserve a person's testimony. The need to preserve a person's testimony shall be determined using criteria similar to that set forth under Illinois Supreme Court Rule 212(b);

B)        The request is made on motion by a party who gives notice of the motion to the other party;

C)        The Hearing Officer has determined that an evidence deposition containing oral testimony will be necessary to the Claims Panel in determining the merits of the claim; and

D)        The Hearing Officer shall not grant any request to take the evidence deposition of any SURS trustee, employee, or consultant working on behalf of SURS.  Requests for oral testimony at the hearing from these individuals must be filed with the Hearing Officer for determination.

2)         The taking of depositions shall be in accordance with the provisions for taking depositions in civil cases, and the order for the taking of a deposition may provide that any deposition exhibits, designated books, papers, documents or tangible objects that are not privileged shall be produced by the party requesting the deposition at least 7 days in advance of the scheduled deposition.

3)         Any party to the hearing shall, during any deposition process, have the right to confront and cross-examine any witness whose deposition testimony is to be presented to the Claims Panel.

4)         Depositions shall be taken in the county of residence or employment of the witness, unless the witness waives that right in writing.

5)         Depositions shall be taken at the cost of the party requesting the deposition.  All deposition-related expenses shall be paid by the party requesting the deposition.  The party requesting the deposition shall pay for and submit an original sealed transcript of the evidence deposition to SURS in advance of the Claims Panel hearing.  The non-requesting party may order and pay for its own copy of the transcript.

f)         Subpoenas

1)         The Hearing Officer may request the Secretary of the Board to issue a subpoena to compel the attendance of a witness at an evidence deposition or the production of documents when the witness has, or the documents contain, relevant evidence.  A party may also request the Hearing Officer to request the Secretary of the Board to issue a subpoena to compel the attendance of a witness at an evidence deposition or the production of documents.  The request shall either be in writing or on the record and shall:

A)        Identify the witness or document sought; and

B)        State the facts that will be proven by each witness or document sought.

2)         The Hearing Officer shall grant or deny the request, either in writing or on the record.  If the request for subpoena is granted, the Hearing Officer shall, if necessary, reschedule the hearing to a specific date.  The request for subpoena shall be denied if the Hearing Officer finds that the evidence sought is immaterial, irrelevant or cumulative.  If the request for subpoena is denied, the specific reasons for denial of the request shall be made part of the record on appeal.

3)         If a witness fails to obey a subpoena, the party seeking enforcement of the subpoena shall prepare an application to the circuit court of the county in which the subpoenaed witness resides requesting enforcement of the subpoena, and shall present the application to the Hearing Officer, at the same time serving a copy of the application upon the other party.  If satisfied that the subpoena was properly served and that the application is in proper form, the Hearing Officer shall sign a subpoena to be submitted with the application and the party seeking the subpoena may then file and prosecute the application in the circuit court, in the name of the Board.  The petitioner in the application shall be styled as "Name of Petitioner ex rel. Board of Trustees of the State Universities Retirement System" unless the petitioner is SURS, in which case the petition shall be brought in the name of the Board.  In the event of an application being filed with the circuit court, the matter shall be continued pending the outcome of the application to enforce the subpoena.

4)         The fees of witnesses for attendance and travel shall be the same as fees of witnesses before the circuit courts of this State and shall be paid by the party seeking the subpoena.

g)         Conduct of the Hearing

1)         Hearing Officer.  The hearing shall be conducted by the Hearing Officer.  The Hearing Officer shall be an attorney licensed to practice law in the State of Illinois and approved by the Board.  Other members of the Claims Panel may, but are not required to, attend the hearing. Members may attend hearings either in-person or by video or teleconference.

A)        The Hearing Officer shall have full power to conduct the hearing and the presence of any other members of the Claims Panel is not required.  The Hearing Officer shall be one of the members of the Claims Panel and shall be chosen by SURS to serve in that capacity.

B)        The Claims Panel shall consist of:

i)          the Executive Director of SURS;

ii)         the Hearing Officer; and

iii)        one other person, selected by the Chairperson of the Board of Trustees of SURS, who shall be a member of the Board.

C)        Each member of the Panel shall be reimbursed for travel or other related expenses incurred in connection with duties as a member of the Panel.  The Hearing Officer shall receive reasonable compensation and reimbursement for travel or other related expenses incurred per the terms of the contract with SURS. 

D)        At a minimum, the members of the Claims Panel shall have a general familiarity with the provisions of the Illinois Pension Code, this Part and the internal operating procedures of SURS.

2)         Procedures

A)        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.

B)        To accomplish these ends, the Hearing Officer shall make all procedural and evidentiary rulings necessary for the conduct of the hearing.

C)        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. 

D)        As a general matter, the rules of evidence as applied in civil cases in the circuit courts of the State of Illinois shall be followed; however, evidence inadmissible under those rules may be admitted (except where precluded by statute) if it is of a type commonly relied upon by reasonably prudent persons in the conduct of their affairs.  Any part of the evidence may be received in written form, provided that the interests of the parties will not be prejudiced.  Notice may be taken of generally recognized technical facts within SURS' specialized knowledge and SURS' experience, technical competence and specialized knowledge may be used in evaluation of the evidence. [5 ILCS 100/10-40]

E)        The Hearing Officer, and any member of the Claims Panel attending the hearing, may ask questions necessary for better understanding of the facts or law.

F)         The Hearing Officer shall have the authority to impose reasonable time limits for each party to present its case and shall, in general, have the power to manage and control the hearing process.

G)        The hearing shall be open to the public and conducted pursuant to the Open Meetings Act [5 ILCS 120].

3)         Record of Proceedings.  The record of proceedings shall be kept in the form of either a stenographic transcription or an audio recording.  The claimant may directly obtain a stenographic transcription of the hearing from the stenographer or request a copy of the audio recording of the hearing from SURS by making a request after the close of the hearing and paying the actual cost charged by the stenographer for the transcription.

4)         Disqualification; Ex Parte Communications

A)        Disqualification

i)          A Hearing Officer or other member of the Claims Panel may be disqualified on grounds of bias or conflict of interest.  A motion to disqualify a Hearing Officer or other member of the Claims Panel for bias or conflict of interest shall be made to the Hearing Officer by any party to the hearing within 14 days after the issuance of the notice of the hearing, with a copy of the motion to be simultaneously submitted to the SURS General Counsel.  The motion shall be heard, considered and ruled upon by the Hearing Officer at or prior to the commencement of the hearing.  The movant shall have the burden of proof with respect to the motion to disqualify.  An adverse ruling, familiarity with the facts of the case, non-dispositive involvement in the staff decision underlying the case, or the fact that a Hearing Officer or other member of the Claims Panel is a SURS trustee, an employee of SURS or has a contract with SURS, standing alone, shall not constitute bias or conflict of interest. [5 ILCS 100/10-30]

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 Claims Panel on the basis that the Executive Director is responsible for the overall administration of SURS.

iii)        In the event that any member of the Claims Panel is disqualified or is otherwise unable to serve, the Board Chairperson may appoint another qualified person to the Claims Panel.  The Board Chairperson shall appoint another person if the Claims Panel is reduced to fewer than two members.  If the Hearing Officer is disqualified or is otherwise unable to serve, SURS may retain another duly licensed attorney who may serve as the Hearing Officer.

B)        Ex Parte Communications Prohibited 

i)          Except in the disposition of matters that SURS is authorized by law to entertain or dispose of on an ex parte basis, the members of the Claims Panel 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 SURS may communicate with other employees of SURS and an employee of SURS or member of the Claims Panel may have the aid and advice of one or more assistants.  An ex parte communication received by any member of the Claims Panel 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, and questions concerning potential conflict of interest and possible recusal are not considered ex parte communications.  [5 ILCS 100/10-60]

ii)         Any documentary evidence, testimony evidence, argument and any other information properly presented to the Claims Panel by SURS staff during a scheduled hearing held in the absence of a claimant who waived the right to participate in the hearing will not be deemed to be ex parte communications.

5)         Decisions of the Claims Panel and Executive Committee

A)        Claims Panel Decisions

i)          The record of proceedings shall be completed upon conclusion of the hearing by the Hearing Officer, unless the Hearing Officer determines to re-open the proceedings.  In compliance with the Illinois Open Meetings Act, upon conclusion of all evidence and arguments, the Claims Panel shall deliberate in closed session and make a Decision as to the disposition of the claim based on the evidence of record when they return to open session.  The Claims Panel Decision shall be served on all parties and their agents, if any, by delivery to a third-party commercial carrier or by registered or certified mail, return receipt requested. If a Statement of Exceptions to the Decision is not filed pursuant to this subsection (g)(5)(A), the Decision is final for all purposes and not subject to administrative or judicial review.  However, if a Statement of Exceptions to the Decision is filed or, if the members of the Panel are unable to agree on a Decision, then the claim shall be presented to the Executive Committee for a final administrative decision. 

ii)         If a Statement of Exceptions is filed by either party, it must be received by SURS, along with a brief in support, within 21 days after the date of mailing of the Claims Panel Decision.  SURS will pay to procure a copy of the verbatim transcript of the Claims Panel proceedings.  Any responsive brief filed by the opposing party shall be received by SURS within 21 days after the filing of the Statement of Exceptions.  Any reply brief shall be received by SURS within 14 days after the filing of the responsive brief.  The filing of any responsive or reply brief is optional.  The Executive Director, or The Director's designee, shall provide the Executive Committee with a copy of the decision of the Claims Panel. The Executive Committee will make a final administrative decision based on the Claims Panel Decision, any Statement of Exceptions, and/or briefs properly filed.  All filings shall be served upon the opposing party and shall contain a certificate of service.  Filing deadlines in this subsection (g)(5)(A)(ii) may be continued to a date certain by the Chairperson of the Executive Committee for good cause shown on written application filed with SURS prior to the expiration of the deadline sought to be continued.

iii)        If the claim is presented to the Executive Committee because the members of the Claims Panel are unable to agree on a Decision, the Executive Committee shall make a final administrative decision based on the written record, the verbatim transcription of the proceedings, and any briefs properly filed with the Claims Panel by the parties.  SURS will pay to procure a copy of the verbatim transcript of the Claims Panel proceedings. 

B)        Executive Committee Decision

i)          When necessary pursuant to subsection (g)(5)(A), the Executive Committee of the Board shall make a decision on the claim.  No oral argument shall be permitted before the Executive Committee. 

ii)         The Executive Committee shall render one of the following decisions with respect to the claim:  affirmance of the administrative action, reversal of the administrative action, or remand of the case to the administrative staff for further investigation and/or consideration.  Remand of the case to the administrative staff shall not be considered a final decision of the Executive Committee.  A decision by the Executive Committee either reversing or affirming the decision of the administrative staff shall constitute a final decision for the purpose of review under the Administrative Review Law [735 ILCS 5/Art. III].  A final decision of the Executive Committee shall be in writing or stated in the record. 

iii)        The Executive Committee may adopt, as its own, the findings of fact and conclusions of law of the Claims Panel.  Findings of fact, if set forth in statutory language, shall be accompanied by a concise and explicit statement of the underlying facts supporting the findings. 

iv)        All decisions of the Executive Committee shall specify whether they are final and subject to the Administrative Review Law.  [5 ILCS 100/10-50]

v)         Parties and their agents, if any, shall be notified by sending the decision of the Executive Committee via a third-party commercial carrier, or by registered or certified mail, return receipt requested.  The date of mailing of the decision shall constitute the date of service for purposes of the Administrative Review Law or any other applicable law.

(Source:  Amended at 47 Ill. Reg. 14005, effective September 14, 2023)

Section 1600.510  Employer-Related Determinations and Rules for Appeal

This Section establishes procedures for employer appeals concerning matters of administration under the Illinois Pension Code.

a)         Administrative Determination.  The Board of Trustees hereby delegates to the SURS administrative staff the responsibility for making determinations that affect the rights and obligations of employers, consistent with the provisions of the Code.

b)         Review by Senior Claims Management.  Any employer adversely affected by a determination by System administrative staff may file, with a member of the SURS senior claims management or other person designated by the Executive Director, an Employer Request for Review. An Employer Request for Review must be received within 35 days after the date of the decision from which review is sought.  If an Employer Request for Review is not timely filed, the determination by administrative staff is final for all purposes and not subject to administrative or judicial review.  The review shall be based on all materials contained in the record, as well as any additional materials the employer attaches to the Employer Request for Review.  All filings or submissions, whether optional or required under this Section, shall be considered timely if date stamped by SURS within the time prescribed.  The decision reached by senior claims management or the Executive Director's designee shall be served on the employer's authorized representative by delivery to a third-party commercial carrier or by registered or certified mail, return receipt requested. 

c)         Review by the Claims Panel and Executive Committee.  Any employer adversely affected by the disposition of an Employer Request for Review made by senior claims management or the designee may request, in writing, review by the Claims Panel of the Board by filing with the SURS General Counsel, within 35 days after the date of the decision from which review is sought, a Petition for Employer Appeal All rights, obligations, procedures, pleading requirements, evidentiary standards, and standards of proof applicable to the review by the Claims Panel and any subsequent appeal to the Executive Committee of the Board under a Petition for Employer Appeal shall be as provided for member appeals under Section 1600.500(c) through (g).

d)         Effect of Appeal on Due Dates, Interest and Penalties 

1)         Due Dates.  If any provision of the Code or SURS regulations requires the employer to make payment by a certain date, the due date shall not be extended during the pendency of the appeal.  Any final decision under this Section that partially reduces the payment shall extend the due date of the remaining balance by the time period during which the matter was under appeal.

2)         Interest and Penalties on Payments.  If any provision of the Code or SURS regulations imposes interest or penalties upon an employer after a certain date for nonpayment, the interest and/or penalties shall continue to accrue during the pendency of the appeal.  Any final decision that partially reduces the payment shall also reduce the attributable interest and/or penalties.  To avoid the accrual of interest and/or penalties, the employer may make payment or perform any action required by SURS under protest.  A payment submitted or required action performed under protest must be submitted or performed on or before the date of the Petition for Employer Appeal is filed pursuant to subsection (b).  Any payment submitted or required action performed under protest shall not be considered an admission of any liability and shall not constitute a waiver of any appeal rights under this Section.

(Source:  Amended at 47 Ill. Reg. 14005, effective September 14, 2023)

Section 1600.550  Disability Claims Procedure

a)         Pursuant to Code Section 15-150, a participant may be granted a disability benefit if, while a participating employee, he or she becomes physically or mentally incapacitated and unable to perform the duties of his or her assigned position for any period exceeding 60 consecutive calendar days and the employee had completed 2 years of service at the time of disability, unless the disability is a result of an accident or the employee is a police officer who qualifies for line-of-duty disability benefits under Section 15-153(b) of the Code. An employee shall be considered disabled only during the period for which the Board determines, based upon the evidence listed in this Section, that the employee is unable to reasonably perform the duties of his or her assigned position as a result of a physical or mental disability. This determination shall be based upon:

1)         a written certificate from one or more licensed and practicing physicians appointed by or acceptable to the Board, stating that the employee is disabled and unable to reasonably perform the duties of his or her assigned position;

2)         a written certificate from the employer stating that the employee is unable to perform the duties of his or her assigned position and, if the employee is a police officer applying for a line-of-duty disability, the employer's position on whether the disability qualifies as a line-of-duty disability; and

3)         any other medical examinations, hospital records, laboratory results, or other information necessary for determining the employment capacity and condition of the employee; and

4)         if the employee is a police officer applying for a line-of-duty disability, a written certification from one or more licensed and practicing physicians appointed by or acceptable to the Board, stating that the disability qualifies as a line-of-duty disability under Section 15-153(b) of the Code.

b)         Application Filing Requirements

1)         An application for disability benefits must include the certifications described in subsections (a)(1), (a)(2), (a)(4), if applicable, and supporting documentation described in subsection (a)(3), all as explained in more detail in this Section, for each disabling condition as well as for the entire period of disability.

2)         The application must be filed within one calendar year after the date on which the disability occurred.  The application is deemed to have been filed on the date on which the System first receives any part or section of the application.  This limitation may be waived upon a showing of good cause, including, but not limited to, extenuating circumstances in which the applicant was under significant physical, mental or medical infirmity or legal status that prevented the applicant from filing within the time period.

c)         Certification By Physicians.  For purposes of subsections (a)(1) and (a)(4), the following shall apply:

1)         Physicians acceptable to the Board are attending physicians, physicians designated by the participant and physicians to whom the participant was referred by the attending or designated physician.  Physicians appointed by SURS staff to examine the participant are deemed to be physicians appointed by the Board.  The physician must be licensed to practice and be currently practicing in the field of expertise related to the underlying physical or mental condition for which disability benefits are sought.

2)         The certification must be signed by a physician described in subsection (c)(1) or an authorized representative of the physician and must state the following:

A)        the medical diagnosis of the physical or mental condition;

B)        the prognosis of the physical or mental condition;

C)        the physical or mental limitations to which the participant should

adhere; and

D)        that the participant is disabled and is unable to reasonably perform the duties of his or her assigned position as a result of the physical or mental disability; and

E)        if the employee is a police officer applying for a line-of-duty disability, that the disability qualifies as a line-of-duty disability under Section 15-153(b) of the Code.

3)         The certification must be accompanied by a report containing the following:

A)        the date of examination;

B)        the medical history of the participant;

C)        the results of any diagnostic tests used;

D)        the diagnosis of the physical or mental condition;

E)        the plan of treatment for the physical or mental condition and prognosis in response to the treatment plan;

F)         an evaluation of the physical or mental condition as it bears upon the participant's ability to reasonably perform the duties of his or her assigned position; and

G)        any existing documentation of objective medically demonstrable anatomical, physiological or psychological abnormalities manifested as test results or laboratory findings apart from self-reported symptoms.

d)        Certification by Employers.  For purposes of subsection (a)(2), the certification must be signed by an officer authorized by the employer and must state the following:

1)         the physical or mental performance requirements for the reasonable performance of the participant's assigned position;

2)         whether the participant is able to satisfy each physical or mental performance requirement for the reasonable performance of his or her assigned position to the best of the employer's knowledge or belief and the reason for that knowledge or belief;

3)         whether the participant is able to reasonably perform the duties of his or her assigned position based on the provisions of subsections (d)(1) and (d)(2); and

4)         if the employee is a police officer applying for a line-of-duty disability, the employer's position on whether the disability qualifies as a line-of-duty disability under Section 15-153(b) of the Code.

e)        Determination of Regular and Line-of-Duty Disability.  If the participant establishes, by a preponderance of the evidence, that he or she is physically or mentally disabled and unable to perform the duties of his or her assigned position as a result of the disability, the participant shall be determined eligible for regular disability benefits under Section 15-153(a) of the Code.  In lieu of regular disability benefits under Section 15-153(a) of the Code, if a police officer establishes, by a preponderance of the evidence, that as the result of sickness, accident, or injury incurred in or resulting from the performance of an act of duty, the police officer is found to be physically or mentally disabled for employment as a police officer so as to render necessary his or her suspension or retirement from employment as a police officer or is found to be unable to perform his or her duties as a police officer by reason of heart disease, stroke, tuberculosis, or any disease of the lungs or respiratory tract, resulting from employment as a police officer, the police officer shall be determined eligible for line-of-duty disability benefits under Section 15-153(b) of the Code.  Any police officer who suffers a heart attack or stroke as a result of the performance and discharge of police duty shall be considered to have been injured in the performance of an act of duty and shall be eligible for line-of-duty disability benefits under Section 15-153(b) of the Code.  For purposes of Section 15-153(b) of the Code, a police officer shall be considered to be in the performance of an act of duty while on any assignment approved by the police officer's chief, whether the assignment is on or off the employer's property. [40 ILCS 5/15-153(b)]. 

1)         SURS staff shall determine whether certifications made under subsections (a)(1), (a)(2), and (a)(4), if applicable, and supporting documentation described in subsection (a)(3) establish eligibility for regular disability benefits or line-of-duty disability benefits.

2)         At the discretion of SURS staff, the participant may be required to submit to additional examinations by staff appointed physicians or specialists to aid in the determination process.

3)         Physical or mental conditions resulting from self-inflicted injuries, substance abuse, or any act for which the participant was convicted of a misdemeanor or felony

A)        are not the result of an accident for purposes of Section 15-150 of the Code; and

B)        are not a sickness, accident, or injury incurred in or resulting from the performance of an act or duty for purposes of Section 15-153(b) of the Code.

f)         Subsequent Re-examination of Disabled Participants

1)         SURS staff shall secure from one or more physicians, periodically, re-evaluation reports concerning the continued disability of the participant.  The date of re-evaluation shall be determined by SURS staff on the basis of the medical reports received previously, the nature of the disability, and other relevant information.

2)         In the re-evaluation of disability claims, the examining physician shall be the attending physician or the physician designated by the participant, but, if the nature of the disability or other circumstances justifies the appointment of someone other than the participant's attending physician or designated physician as the examining physician, SURS staff shall make the appointment.  All other procedures that may be applicable in processing the initial claim for disability benefits shall be followed in re-evaluation of the claim.

g)         Release of Medical Information.  The participant may be required to authorize the release of all medical or other information related to the disability claim, including but not limited to medical reports, hospital records, Department of Employment Security earnings statements, income tax records, unemployment records, and any record deemed necessary to the administration of the disability claim.  The failure of the participant to submit to a re-evaluation examination or a treatment plan, to produce records, or to approve release of information required shall result in the discontinuance of disability benefit payments under Section 15-152 of the Code or suspension under Section 1600.160 of this Part, as applicable.

h)         Vacation Payments and Disability Benefit Commencement.  If an employee receives payment for unused vacation leave accrued under the employment from which the employee is disabled, the date of the "termination of payment of salary or sick leave benefits" under Section 15-151 of the Code shall be delayed by the number of work days attributable to the vacation payment.

(Source:  Amended at 49 Ill. Reg. 3321, effective February 26, 2025)

Section 1600.555  Disability Retirement Annuity Claims Procedure

a)         Pursuant to Section 15-153.2 of the Code, a participant whose disability benefits are discontinued under the provisions of clause (6) of Section 15-152 of the Code and who is not a participant in the Retirement Savings Plan is entitled to a disability retirement annuity of 35% of the basic compensation which was payable to the participant at the time the regular disability began under Section 15-153(a) of the Code, or 65% of the basic compensation that was payable to the participant at the time the line-of-duty disability began under Section 15-153(b) of the Code, provided that the Board determines that the participant has a medically determinable physical or mental impairment that prevents him or her from engaging in any substantial gainful activity, and which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months.  This determination shall be based upon:

1)         a written certificate from one or more licensed and practicing physicians appointed by or acceptable to the Board, stating that the participant is unable to engage in any substantial gainful activity; and

2)         any other medical examinations, hospital records, laboratory results, or other information necessary for determining the employment capacity and condition of the participant.

b)         Application Filing Requirements

1)         An application for a disability retirement annuity must include the certification described in subsection (a)(1) and supporting documentation described in subsection (a)(2), all as explained in more detail in this Section, for each disabling condition as well as for the entire period of the disability retirement annuity. 

2)         The application for a disability retirement annuity must be filed within one calendar year after the date on which the disability benefits are discontinued under clause (6) of Section 15-152 of the Code.  The application is deemed to have been filed on the date on which the System first receives any part or section of the application.  An untimely application shall render the participant ineligible for a disability retirement annuity.  This limitation may be waived upon a showing of good cause, including, but not limited to, extenuating circumstances in which the applicant was under a significant physical, mental or medical infirmity or legal status that prevented the applicant from filing within the time period.

c)         Certification By Physicians. For purposes of subsection (a)(1), the following shall apply:

1)         Physicians acceptable to the Board are attending physicians, physicians designated by the participant and physicians to whom the participant was referred by the attending or designated physician. Physicians appointed by SURS staff to examine the participant are deemed to be physicians appointed by the Board. The physician must be licensed to practice and be currently practicing in the field of expertise related to the underlying physical or mental condition for which disability benefits are sought.

2)         The certification must be signed by a physician described in subsection (c)(1) or an authorized representative of the physician and must state the following:

A)        the medical diagnosis of the physical or mental condition;

B)        the prognosis of the physical or mental condition; and

C)        that the participant has a medically determinable physical or mental impairment that prevents the participant from engaging in any substantial gainful activity and can be expected to result in death or has lasted or can be expected to last for a continuous period of not less than 12 months.

3)         The certification must be accompanied by a report containing the following:

A)        the date of examination;

B)        the medical history of the participant;

C)        the results of any diagnostic tests used;

D)        the diagnosis of the physical or mental condition;

E)        the plan of treatment for the physical or mental condition and prognosis in response to the treatment plan;

F)         an evaluation of the physical or mental condition that prevents the participant from engaging in any substantial gainful activity and that can be expected to result in death or has lasted or can be expected to last for a continuous period of not less than 12 months; and

G)        any existing documentation of objective medically demonstrable anatomical, physiological or psychological abnormalities manifested as test results or laboratory findings apart from self-reported symptoms.

d)         Determination of Disability Retirement Annuity.  If the participant whose disability benefits are discontinued under the provisions of clause (6) of Section 15-152 of the Code establishes, by a preponderance of the evidence, that the participant has a medically determinable physical or mental impairment that prevents the participant from engaging in any substantial gainful activity and can be expected to result in death or has lasted or can be expected to last for a continuous period of not less than 12 months, the participant shall be determined eligible for a disability retirement annuity under Section 15-153.2 of the Code. Participants in the Retirement Savings Plan are not eligible to receive disability retirement annuity benefits.

1)         SURS staff shall determine whether the certifications made under subsection (a)(1) and supporting documentation described in subsection (a)(2) establish eligibility for a disability retirement annuity.

2)         At the discretion of SURS staff, the participant may be required to submit to additional examinations by staff appointed physicians or specialists to aid in the determination process.

e)         Subsequent Re-examination of Disability Retirement Annuity Recipients

1)         SURS staff shall secure from one or more physicians, periodically, re-evaluation reports concerning the continued disability of the participant or the recipient. The date of re-evaluation shall be determined by SURS staff on the basis of the medical reports received previously, the nature of the disability, and other relevant information.

2)         In the re-evaluation of disability retirement annuity claims, the examining physician shall be the attending physician or the physician designated by the participant or the recipient.  However, if the nature of the disability or other circumstances justifies the appointment of someone other than the participant's or recipient's attending physician or designated physician as the examining physician, SURS staff shall make the appointment. All other procedures that may be applicable in processing the initial claim for a disability retirement annuity shall be followed in re‑evaluation of the claim.

f)          Release of Medical Information. The participant or the recipient may be required to authorize the release of all medical or other information related to the disability retirement annuity claim, including, but not limited to, medical reports, hospital records, Department of Employment Security earnings statements, income tax records, unemployment records, and any record deemed necessary to the administration of the disability retirement annuity claim. The failure of the participant or the recipient to submit to a re-evaluation examination or a treatment plan, to produce records, or to approve release of information required shall result in the discontinuance of disability retirement annuity payments payable to the participant or recipient who failed to comply pursuant to Section 15-153.2(d) of the Code or suspension under Section 1600.160, as applicable.

g)         The terms "substantial gainful activity" and "medically determinable physical or mental impairment" shall have the meanings ascribed to them under 20 C.F.R. 404.1510 and 404.1521, respectively.

(Source:  Added at 49 Ill. Reg. 3321, effective February 26, 2025)

Section 1600.600  Definitions

a)         The definitions in Section 1-119(a) of the Pension Code shall apply to the rules contained in this Subpart.

b)         The phrase "alternate payee" in Section 1-119(a)(1) of the Pension Code means a current spouse, former spouse, child or other dependent of a SURS member, as designated in a QILDRO.

c)         The phrase "death benefit" in Section 1-119(a)(2) of the Pension Code means a benefit paid pursuant to Section 15-141 or 15-142 of the Pension Code, or any lump-sum payment under Section 15-145(e) of the Pension Code.

d)         The phrase "member's refund" in Section 1-119(a)(5) of the Pension Code does not include an "error refund" as defined in subsection (e) of this Section.

e)         The phrase "error refund", as used in this Subpart, means a refund paid to a member as the result of an error in a payment to the System, a refund paid to a member when the required employee or employer contributions necessary to purchase or reinstate service credit have not been fully paid, or a refund of contributions made under Section 1600.240(e).

f)         The phrase "disability benefit" in Section 1-119(a)(3) of the Pension Code includes:

1)         A disability benefit under Section 15-150 of the Pension Code; or

2)         A disability retirement annuity under Section 15-153.2 of the Pension Code.

g)         The phrase "member's retirement benefit", as used in this Subpart, means the total amount of the retirement benefit as defined in Section 1-119(a)(8) of the Pension Code that would be payable to the member in the absence of a QILDRO.

h)         The phrase "partial member's refund", as used in this Subpart, includes:

1)         A refund of survivor benefit contributions;

2)         A refund of excess contributions or interest; or

3)         A refund of waived service credit.

i)          The phrase "permissive service", as used in this Subpart, means service credit purchased by payment of voluntary contributions by the member under Sections 15-113.1(c), 15-113.2, 15-113.3, 15-113.5, 15-113.6, 15-113.7, 15-113.8 and 15-113.9 of the Pension Code and service credited under Section 15-113.4 of the Pension Code.  Permissive service restored upon the repayment of a refund under Section 15-154(b) of the Pension Code is restored as permissive service.

j)          The phrase "regular service", as used in this Subpart, means service credited under Sections 15-113.1(b) and 15-113.3 of the Pension Code without the payment of voluntary contributions.  Regular service restored upon the repayment of a refund under Section 15-154(b) of the Pension Code is restored as regular service. 

k)         The phrase "effective date of retirement", as used in Section 1-119 of the Pension Code and this Subpart, means the beginning of the "annuity payment period" as defined in Section 1600.100.

(Source:  Amended at 33 Ill. Reg. 10757, effective July 1, 2009)

Section 1600.605  Requirements for a Valid Qualified Illinois Domestic Relations Order

SURS will accept a court order as a valid QILDRO or QILDRO Calculation Court Order if it meets all of the following requirements:

a)         The following requirements apply to the QILDRO and the QILDRO Calculation Court Order:

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

2)         The order must be a certified copy of the original.

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 the property distribution.  A judgment, order or notice of income withholding for support under a support enforcement mechanism under Title IV-D of the Social Security Act (42 USC 666) or any other state law that purports to divide or garnish the member's retirement benefit under any proceeding for the declaration of invalidity of marriage, legal separation or dissolution of marriage will not be honored by SURS unless the judgment, order or notice is accompanied by a QILDRO (and if applicable, a QILDRO Calculation Court Order) issued by an Illinois court.

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 Universities Retirement System as the retirement system to which it is directed.

7)         The order must identify the court that issued it.

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

9)         The orders and, if applicable, the Consent to Issuance of QILDRO, must be in the form adopted by SURS as of the date the order is received. Any alterations will invalidate the order.

10)         Except as otherwise provided in this subsection (a)(10), the effective date of the order must be after July 1, 1999 and before the date of death of the member.  If the effective date of the order is on or after the member's date of death, SURS will deem the effective date of the posthumous order as if it had been entered on the day immediately prior to the member's date of death if the order is dated no later than 6 months after the date of death and:

A)        any applicable consent requirements under subsection (b)(1) were met prior to the member's date of death; or

B)        the order is accompanied by a certified copy of a decree of dissolution of marriage that is dated before the date of death of the member and incorporates the terms of a written marital settlement agreement that was signed by both parties before the date of death of the member and provides direction for the division of the member's SURS benefits under a QILDRO.

b)         The following additional requirements apply only to the QILDRO:

1)         If the QILDRO applies to a person who became a SURS member before July 1, 1999, it must be accompanied by the original Consent to Issuance of QILDRO form signed by the member, or a certified copy of the original. The consent cannot be signed by a judge, sheriff or any person other than the member.  A QILDRO issued on or after July 1, 2006 that modifies a QILDRO issued prior to July 1, 2006 must be accompanied by an original Consent to Issuance of QILDRO signed by the member on or after July 1, 2006.  If the alternate payee is unable to obtain a signed consent from the member, the required consent can be established if the QILDRO is accompanied by a certified copy of a decree of dissolution of marriage that incorporates the terms of a written marital settlement agreement that was signed by both parties and provides direction for the division of the member's SURS benefits under a QILDRO.

2)         The QILDRO must specify each benefit to which it applies, and it must specify only one method by which the benefit shall be paid to the alternate payee. 

3)         If any benefit is to be paid using the Marital Portion Benefit Calculation, the QILDRO must comply with Code Section 1-119(n)IX and the QILDRO must contain language in conformance with Section 1-119(n)IX(1) and (2) properly completed.  The "other" option must only be checked for the purpose of using a combination of permissive service and regular service.  If the "other" option is checked, a supplemental order stating the details of the combination must accompany the QILDRO.  The supplemental order must not purport to establish a formula differing from the ones appearing under Code Section 1-119(n) or purport to create new classes of service credit.

4)         If the member is a participant of the Traditional or Portable Benefit Package, the order must designate whether the alternate payee will receive automatic annual increases as provided under Code Section 1-119(n)IV.

5)         If the member is a participant of the Self-Managed Plan who has an account balance, then the QILDRO may only provide for the division of the account balance as of a certain date.  If the Self-Managed Plan member is receiving benefits under an annuity contract, then the QILDRO may only divide the member's retirement benefit or death benefit, if any, or both.

c)         The following additional requirements apply only to the QILDRO Calculation Court Order:

1)         The QILDRO Calculation Court Order must allocate benefits consistent with the underlying QILDRO.  Benefits that will never become payable on or after the date the QILDRO Calculation Court Order is filed need not be allocated under the QILDRO Calculation Court Order

2)         Benefits allocated using a calculation method on the QILDRO Calculation Court Order must contain a clear result of the equation.  SURS is not obligated to review or verify the equations or assist in the calculations to determine the benefits.  

(Source:  Amended at 41 Ill. Reg. 11606, effective September 1, 2017)

Section 1600.610  Invalid Orders

An order failing to satisfy all the applicable requirements under Section 1600.605 shall be invalid and shall not cause the member's benefits to be divided or reduced absent the submission of a new order satisfying those requirements.  The new order shall not be treated as a modified order under Section 1600.620 and shall not be implemented retroactively.

(Source:  Amended at 33 Ill. Reg. 10757, effective July 1, 2009)

Section 1600.615  Filing a QILDRO with the System

a)         A QILDRO or QILDRO Calculation Order should be sent to the SURS Legal Department, accompanied by the consent form, if applicable, and the $50 non-refundable processing fee.

b)         A QILDRO or QILDRO Calculation Order will be deemed received by SURS on the date it is file-stamped as received at the SURS office.

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

(Source:  Amended at 33 Ill. Reg. 10757, effective July 1, 2009)

Section 1600.620  Modified QILDROs

a)         A QILDRO or QILDRO Calculation Order that has been modified by the issuing court must be submitted in the same manner as the original order. A separate $50 non-refundable processing fee is required for each modified order.

b)         A modified QILDRO will hold the same priority of payment that the original QILDRO held, as long as it does not increase the dollar amount or percentage of any benefit payable to the alternate payee or affect a different benefit that was not previously affected (other than automatic annual increases).  A modified QILDRO Calculation Court Order will not affect the priority of payment of the underlying QILDRO.

c)         If a modified QILDRO does increase the amount or affect benefits not previously affected (other than automatic annual increases), it will lose the priority held by the original QILDRO and priority of payment will be based on the date SURS received the modified QILDRO.

(Source:  Amended at 33 Ill. Reg. 10757, effective July 1, 2009)

Section 1600.625  Benefits Affected by a QILDRO

a)         A QILDRO may apply only to the following benefits administered by SURS:

1)         A monthly retirement benefit;

2)         A single-sum retirement benefit;

3)         A termination refund;

4)         A partial member's refund; and

5)         A death benefit.

b)         If a QILDRO specifies a dollar amount 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 specified in the QILDRO.

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

1)         A monthly survivor benefit;

2)         A disability benefit;

3)         A disability retirement annuity; and

4)         An error refund.

d)         Any option under a paragraph pertaining to a benefit that is left blank shall be interpreted to not apply to the order.  If all options under a particular benefit are blank, then the alternate payee shall not receive any portion of the benefit.

e)         Any QILDRO or QILDRO Calculation Court Order purporting to apply to any accelerated pension benefit payment under Section 15-185.5 or 15-185.6 of the Code shall be accompanied by a stipulated court order directing the manner and amounts of the division of the payment.  If the payment would diminish any amounts payable to any other alternate payee having priority over the current alternate payee, payment shall not be divided unless all affected parties have entered into stipulated court orders directing the manner of the division of the payment.

(Source:  Amended at 43 Ill. Reg. 8562, effective July 26, 2019)

Section 1600.630  Effect of a Valid QILDRO

a)         Timing of Effect.  In no event shall a QILDRO apply to any benefit paid by SURS before or within 30 days after the order is received.  [40 ILCS 5/15-119(c)(3)]  SURS shall not delay the payment of any benefit to a member due to the receipt of a QILDRO.  In addition to the foregoing, the following shall apply:

1)         Retirement Benefits.  A provision under a QILDRO dividing a retirement benefit under Section 1-119(n)III of the Pension Code shall take effect as ordered under either Section 1-119(n)III(B) or (C) of the Pension Code.

2)         Member's Refunds and Death Benefits.  A provision under a QILDRO dividing a member's refund or death benefit shall take effect when the member's refund is paid or as soon as administratively possible after the member's death.

3)         Self-Managed Plan Accounts.  A QILDRO pertaining to a member of the Self-Managed Plan having an account balance shall only divide the vested account balance between the member and the alternate payee as of a certain date (or the closest valuation date if the plan provider cannot provide a valuation on the date specified).  The division shall be made in relation to a dollar amount, a percentage of the gross balance, or a percentage of a balance derived from the marital period.  The System shall process the division as soon as administratively possible after receipt of the QILDRO or, if required, the QILDRO Calculation Court Order.  If the QILDRO divides the member's account balance in accordance with this subsection (a)(3), the System shall ignore purported divisions of other benefit types.

b)         Timing of Payments.  Benefits subject to a QILDRO shall be paid in the following manner:

1)         Dollar Divisions.  If a retirement benefit, member's refund or death benefit is divided by a dollar amount, then the payments shall be made when the QILDRO takes effect under subsection (a).

2)         Percentage Divisions.  If a retirement benefit, member's refund or death benefit is divided as a percentage of the gross benefit or as a percentage of the marital portion of the benefit, payment shall be made as soon as administratively possible upon the receipt of a valid QILDRO Calculation Court Order.

A)        Withholding of Anticipated Payments.  If the member participates in the Traditional or Portable Benefit Packages prior to the receipt of a QILDRO Calculation Court Order, SURS shall withhold an amount from a member's retirement benefit for which a QILDRO is effective under subsection (a).  The member and any other alternate payees shall be paid the remaining portion of the benefit in their order of priority. 

i)          If the division is by a percentage of the gross benefit, then the amount withheld shall be calculated by applying the applicable percentage to the benefit.

ii)         If the division is by a percentage of the marital period, then the amount withheld shall be calculated by applying the applicable percentage and by assuming that all service, contributions, interest or earnings attributable to periods between the marriage date and the date of dissolution are attributed to the marital period.  Any academic year containing a portion of the marital period shall, in its entirety, be considered part of the marital period for this purpose.

iii)        If SURS cannot reasonably determine from the QILDRO alone the amount to be withheld, neither the member nor the alternate payee shall be paid until the QILDRO is modified to allow for a reasonable determination of the anticipated payment or until a QILDRO Calculation Court Order is received.

iv)        If SURS discovers that it has over-withheld due to the receipt of a QILDRO Calculation Court Order, the excess shall be distributed to the member and any other alternate payees in their order of priority.  SURS shall not pay any interest to the member or any other alternate payees for any amounts over-withheld.

v)         If SURS discovers that it has under-withheld due to the receipt of a QILDRO Calculation Court Order, SURS shall make a deduction from the remaining portion of the next monthly retirement benefit payable and pay the deducted amounts to the alternate payee as soon as administratively possible.  The deduction rate shall be no more than 50% of the remaining monthly retirement benefit payment net of tax or insurance withholdings.  The deduction shall recur for each monthly retirement benefit payment thereafter until the alternate payee is paid the under-withheld amount in full.  SURS shall not pay any interest to the alternate payee for any amounts under-withheld. 

vi)        In the event that a QILDRO terminates upon the death of the alternate payee before a valid QILDRO Calculation Order is received, all withholdings shall revert to the member and to other alternate payees in their order of priority.  SURS shall not pay any interest to the member or any other alternate payees for any amounts so withheld.

B)        Preliminary Estimated Payments.  If a member is receiving preliminary estimated payments under Section 1600.420 and a QILDRO Calculation Court Order is required for payment under this subsection (b)(2), the retirement benefit shall not be finalized until a QILDRO Calculation Court Order is received by the System.

3)         Self-Managed Plan Accounts.  If the division is a percentage of the gross account balance or of the balance derived from the marital period, a QILDRO Calculation Order must be received before the account is divided.  Upon a division of the account, the alternate payee shall have the option of receiving his or her portion of the account balance in the form of a lump-sum payment or maintaining a separate account with the service provider.  The maintenance of an account balance shall not create rights under the Self-Managed Plan for the alternate payee other than the investment and distribution of his or her account.

c)         Priority of Payments

1)         Recouping Overpayments.  If a member, survivor or other beneficiary was overpaid benefits, any benefits payable shall be applied to the overpayment before any QILDRO is applied.

2)         If a benefit is subject to multiple QILDROs, each QILDRO shall be satisfied in the order in which it was received until the benefit is exhausted.

3)         The alternate payee shall be paid a portion of the death benefit to which the QILDRO applies before any death beneficiary or estate.

(Source:  Amended at 33 Ill. Reg. 10757, effective July 1, 2009)

Section 1600.635  QILDROs Against Persons Who Became Members Prior to July 1, 1999

a)         In accordance with Section 1-119(m)(1) of the Pension Code, a QILDRO that applies to a person who became a SURS member prior to July 1, 1999 must be accompanied by the original Consent to Issuance of QILDRO signed by the member. A consent form signed by a judge, sheriff or any other person other than the member is invalid.  A QILDRO issued on or after July 1, 2006 that modifies a QILDRO issued prior to July 1, 2006 must be accompanied by an original Consent to Issuance of QILDRO signed by the member on or after July 1, 2006.

b)         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.

c)         The Consent to Issuance of QILDRO must be in the form adopted by SURS (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; otherwise it will be deemed invalid. The required consent form is available from SURS upon request.

(Source:  Amended at 33 Ill. Reg. 10757, effective July 1, 2009)

Section 1600.640  Alternate Payee's Address

a)         An alternate payee is responsible to report to SURS, in writing, each change in his or her name and residence address.

b)         When a member's retirement benefit or refund subject to a QILDRO becomes payable, SURS will send notice to the alternate payee's last known address that the retirement benefit, refund or death benefit is payable. Beyond that, SURS shall have no duty to take any other action to locate an alternate payee.

c)         If the notice is returned undelivered, SURS will hold the amount payable to the alternate payee, as provided in Section 1-119(e)(2) of the Pension Code for 180 days from the date SURS sent the notice or 180 days from the date the benefit becomes payable, whichever is later. The amount held will not bear interest.

d)         If SURS is notified of the alternate payee's current address within 180 days, SURS will release the amount held to the alternate payee. If SURS does not learn of the alternate payee's current address within 180 days, SURS will release the amount held to the member.

e)         If SURS later learns of the alternate payee's current address, SURS will implement the QILDRO, but the alternate payee will have no right to any amounts already paid to the member.

(Source:  Amended at 33 Ill. Reg. 10757, effective July 1, 2009)

Section 1600.645  Electing Form of Payment

a)         A member whose benefit is subject to a QILDRO may not elect a form of payment that would diminish the amount payable to the alternate payee, unless the alternate payee has consented to such election in a notarized written statement submitted to SURS, as provided in Section 1-119(j)(1) of the Pension Code [40 ILCS 5/1-119(j)(1)].

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

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

d)         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 Pension Code.

e)         If there is some question as to whether an election would diminish the amount payable to an alternate payee, SURS may hold the election until clarification is obtained from a court of competent jurisdiction. It shall be the duty of the member or alternate payee to obtain clarification.

(Source:  Amended at 33 Ill. Reg. 10757, effective July 1, 2009)

Section 1600.650  Automatic Annual Increases

a)         The alternate payee will or will not receive a proportionate share of any automatic annual increase in the member's retirement benefit under Section 15-136 of the Pension Code, according to the designation in the QILDRO.

b)         Except as provided in subsection (c) of this Section, the initial increase in the amount due the alternate payee under the QILDRO is payable with the next succeeding increase in the member's retirement benefit after the date the QILDRO first took effect.

c)         If the QILDRO first takes effect in the same month the member's retirement benefit is increased, the alternate payee's initial increase is not payable until the next increase in the member's retirement benefit.

d)         SURS will calculate the amount of any increase payable to the alternate payee under the QILDRO.

e)         The amount of any increase payable to the alternate payee  is the percentage of increase applied to the member's retirement benefit under Section 15-136 of the Pension Code, multiplied by the alternate payee's monthly benefit as of the date of the increase.

(Source:  Amended at 33 Ill. Reg. 10757, effective July 1, 2009)

Section 1600.655  Expiration of a QILDRO

a)         A QILDRO expires upon the death of the alternate payee. The right to receive the affected benefit will then revert to the member.

b)         A QILDRO expires upon the death of the member, except to the extent that the order pertains to a death benefit.

c)         A QILDRO expires when the member takes a refund that terminates his or her participation in SURS. This is true even if the member's refund is paid to an alternate payee. A QILDRO that expires because the member took a refund is not renewed by his or her subsequent return to SURS membership.

d)         If a retired member returns to work, the QILDRO payments may be suspended. If so, the payments will resume when the member retires again.

e)         A QILDRO expires by its terms or upon receipt of a certified copy of a court order terminating the QILDRO.

f)         A QILDRO expires after the specified number of payments have been made to the alternate payee under Section 1-119(n)III(D)(2) of the Pension Code, unless the alternate payee is to receive all or a portion of the death benefit.

g)         The QILDRO expires upon payment of a death benefit or portion of the benefit to the alternate payee under Section 1-119(n)VII of the Pension Code. 

(Source:  Amended at 33 Ill. Reg. 10757, effective July 1, 2009)

Section 1600.660  Reciprocal Systems QILDRO Policy Statement

It is the policy of SURS to administer QILDROs in a manner consistent with the Policy Statement of the Association of Retirement Systems on Qualified Illinois Domestic Relations Orders (the Reciprocal Systems QILDRO Policy Statement). To the extent that there is any conflict between this Subpart and the Reciprocal Systems QILDRO Policy Statement, this Subpart shall control.

(Source:  Amended at 33 Ill. Reg. 10757, effective July 1, 2009)

Section 1600.665  Providing Benefit Information for Divorce Purposes

a)         Information by Subpoena or Member Request.  SURS shall provide the information listed under Section 1-119(h)(1) of the Pension Code within 45 days after receipt of a subpoena from any party to a proceeding for declaration of invalidity of marriage, legal separation or dissolution of marriage in which a QILDRO may be issued, or after receiving a request from the member.  If so requested in the subpoena, SURS shall also provide in response general retirement plan information available to a member and any relevant procedures, rules or modifications to the model QILDRO.

b)         QILDRO Division by Percentages.  If a QILDRO provides for the alternate payee to receive a percentage of the gross or marital portion of a benefit, SURS shall provide the applicable information to the member and the alternate payee, or to one designated representative of each, as indicated below:

1)         Self-Managed Plan Account Divisions under Section 1-119(h)(1.5)(A) of the Pension Code.  If a member is a participant in the Self-Managed Plan and the QILDRO provides that the only benefit the alternate payee is to receive is a percentage of the member's vested account balance on a specific date that has already passed, within 45 days after SURS receives the QILDRO SURS shall provide the account balance to which the QILDRO percentage is to be applied.

2)         Preliminary Information under Section 1-119(h)(1.5)(B) of the Pension Code.  SURS shall provide the information listed under Section 1-119(h)(1.5)(B) of the Pension Code within 45 days after receipt of the QILDRO.

3)         Finalized Information under Section 1-119(h)(1.5)(C) of the Pension Code.  SURS shall provide the information under Section 1-119(h)(1.5)(C) of the Pension Code within 45 days after receipt of the QILDRO if received after the effective date of retirement.  If the QILDRO is received before the effective date of retirement, SURS shall provide the information within 45 days after all information necessary for the finalization of the member's benefits has been received.

4)         Death Benefit Information under Section 1-119(h)(1.5)(D) of the Pension Code.  If the QILDRO divides a death benefit, SURS shall provide the information required under Section 1-119(h)(1.5)(C) of the Pension Code within 45 days after receipt of notice of the member's death or when administratively practicable, whichever is later.

c)         Information provided by SURS for divorce purposes does not include the value of a member's retirement benefit accrued during an academic year for which data are not yet on file with SURS.

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

e)         Information provided by SURS for divorce purposes reflects the member's total service career for which service credit in SURS has accrued, and is not isolated as to the marital period only.

f)         While SURS 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 SURS.

g)         SURS 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 the information, in response to a subpoena, or in accordance with subsections (a) and (b) of this Section.

(Source:  Amended at 33 Ill. Reg. 10757, effective July 1, 2009)

Section 1600.700  Nomination of Candidates

a)         The Board Secretary shall determine the number and type of Board positions to be filled at an election.  The Secretary shall announce the election by October 1 preceding the next election.

b)         Any candidate for an open contributing membership position on the System's Board of Trustees:

1)         Shall be, on the date voter eligibility is determined pursuant to Section 1600.715, an employee who has been certified as a SURS covered employee by the employee's employer and an employee for whom employee contributions have been received in the previous 31 days;

2)         Shall be nominated by a written petition and/or if offered by SURS, by a petition with electronic signatures submitted via an independent, secure third-party vendor selected by SURS, signed by no fewer than 400 individuals who, as of the date of signing, were participants.  Each candidate must submit their own petition and/or obtain electronic signatures on behalf of their own candidacy.  Single petitions listing multiple candidates will not be accepted.

c)         Any candidate for an open annuitant position on the System's Board of Trustees:  

1)         Must have been an annuitant for at least one full year prior to the Election Date as determined pursuant to Section 1600.705;

2)         Shall be nominated by a written petition and/or offered by SURS, by a petition with electronic signatures submitted via an independent, secure third-party vendor selected by SURS, signed by no fewer than 100 individuals who, as of the date of signing, were annuitants.  Each candidate must submit their own petition and/or obtain electronic signatures on behalf of their own candidacy.  Single petitions listing multiple candidates will not be accepted.

d)         For purposes of determining whether a SURS member is a contributing member, participant, or annuitant pursuant to this Subpart G:

1)         A SURS member who is a contributing member or participant in the Self-Managed Plan, described in Section 15-158.2 of the Pension Code, is eligible under the same terms as SURS members who are in the traditional or portable benefit package, described in Sections 15-103.1 and 15-103.2, respectively, of the Pension Code, and a benefit recipient pursuant to an annuity contract purchased under the self-managed plan is an annuitant;

2)         A SURS member receiving a preliminary estimated payment pursuant to Section 1600.420 is an annuitant;

3)         A SURS member receiving a disability pursuant to Section 15-150 of the Illinois Pension Code is not an annuitant, but  is  considered a contributing member for purposes of Board elections.

e)         All candidates must complete an application in the form adopted by the System.  Candidate application forms may be obtained from the Board Secretary, upon written or oral request by the candidate, on or after October 1 immediately preceding the Election Date.  The completed candidate application form shall be submitted to the Board Secretary by the December 31 immediately preceding the Election Date.

f)         The Board Secretary shall determine the eligibility of candidates pursuant to the Illinois Pension Code and this Part.  If a candidate should become ineligible for the Board position after submission of the candidate application form, but before the election, the Board Secretary shall declare the candidate ineligible and remove that candidate from the ballot.  If a candidate should become ineligible for the Board position after the printing of the ballots, the ineligible candidate's votes shall not be counted.

(Source:  Amended at 45 Ill. Reg. 6649, effective May 11, 2021)

Section 1600.705  Election Date/Election Day – Defined

a)         The term "Election Date" or "Election Day" shall mean May 1.

b)         If the Election Day falls on a Saturday, Sunday or holiday, the election will be held the next day on which the System is open for business.  The final tabulation of ballots shall be completed on the next business day after Election Day.

(Source:  Added at 35 Ill. Reg. 10952, effective June 22, 2011)

Section 1600.710  Petitions

a)         All petitions shall be in the form adopted by the System.  Petition forms may be obtained from the System on or after October 1 immediately preceding the Election Date.  The petition forms may be photocopied for use by the candidates.  If offered by SURS, petition signatures can also be submitted electronically via an independent, secure third-party vendor selected by SURS to accept electronic signatures.

b)         A valid petition nominating a candidate for an open contributing membership position or an open annuitant position on the System's Board of Trustees shall meet the following requirements:

1)         On page one of the petition the potential candidate must sign the petition as one of the nominating signatories.  The signature shall constitute the potential candidate's confirmation that he or she is willing to be a candidate.  If using the offered third-party vendor for submitting electronic signatures, the candidates may submit their own signatures electronically as well.

2)         The petition must bear the requisite number of original signatures of individuals eligible to nominate the candidate, as established by Section 1600.700(b) or (c).  A valid petition may consist of multiple pages and may contain blank signature lines; however, all valid signatures must be original signatures unless they are submitted via an offered third-party vendor.  Each candidate must submit their own petition and/or obtain electronic signatures on behalf of their own candidacy.  Single petitions listing multiple candidates will not be accepted.

3)         Each original or electronic signature of an eligible voter must be accompanied by the signing person's name (printed), home address (street and city), and SURS employer (or last SURS employer).  Signatures that are not accompanied by a full permanent address will not be accepted. 

4)         Petitions may be circulated for signatures commencing the October 1 immediately preceding the applicable Election Date and ending on January 31.

5)         An individual eligible to sign a petition nominating a candidate for an open contributing membership position on the Board may sign original and/or electronic petitions for as many contributing membership position candidates as desired. 

6)         An individual eligible to sign a petition nominating a candidate for an open annuitant position on the Board may sign original and/or electronic petitions for as many annuitant candidates as desired.

7)         Original-hardcopy petitions shall bear the notarized signature of the individual who circulated the petition for signatures, verifying that the signatures contained on the petition were signed in that individual's presence and are genuine, and that, to the best of the circulating individual's knowledge, the persons who signed the petition were eligible to do so under Section 1600.700(b) or (c).  These requirements do not apply to petition signatures submitted electronically through the third-party vendor offered by SURS.

8)         Original petitions and petitions with electronic signatures shall be filed with and must be received by the Board Secretary by the January 31 immediately preceding the Election Day.  Petitions received after the prescribed petition-filing period are invalid and will not be counted.

c)         The Board Secretary shall determine the validity of petitions pursuant to the Illinois Pension Code and this Part not less than 75 days prior to the Election Day and notify all candidates in accordance with the election calendar whether their petitions met all petition requirements.  Candidates filing conforming petitions will be added to the slate of candidates on the respective ballot.

d)         Any individual may, upon reasonable notice to the System, examine the petitions that have been filed with the System with respect to the election to take place; provided, however, that in order to protect the signing participants' and annuitants' privacy and confidentiality, the examination shall be subject to the following limitations:

1)         Petitions that are examined will be duplicate copies of the original petitions filed and/or printouts of electronic signatures filed, with any confidential information redacted; 

2)         Petitions and electronic signatures may only be examined at the System's offices after the validity of the petitions has been verified by the Board Secretary as provided in subsection (c); and

3)         Petitions and electronic signatures may not be removed from the System's offices, copied, or duplicated by any means.

e)         Challenge to the Petition Validation Process

1)         The challenger shall submit a written statement identifying the specific aspects of the petition validation process that is being challenged.

2)         All challenges shall be submitted to the Board Secretary no later than 7 days after the petition validation notification required in subsection (c).  Any challenge submitted more than 7 days after the date of the notification shall not be considered. The Board Secretary shall transmit any challenges to a 3 member committee of the Board, comprised of members of the Board not running in the contested election.

3)         The committee shall consider the written statement and proceed to make a final determination with respect to the challenge.

4)         A written notice of the final determination shall be sent to the challenger and all candidates within 7 days after making the determination.

5)         The determination of the committee shall constitute a final administrative decision for purposes of the Administrative Review Law [305 ILCS 5/Art. III].

(Source:  Amended at 49 Ill. Reg. 3321, effective February 26, 2025)

Section 1600.715  Eligible Voters

a)         An individual is eligible to vote for a contributing membership position on the Board of Trustees of the System if he or she was a contributing member, defined as an employee who has been certified as a SURS covered employee by the employee's employer and an employee for whom employee contributions have been received in the previous 31 days, except as provided for in subsection (e), as of March 1 of the year in which the election is held.

b)         An individual is eligible to vote for an open annuitant position on the Board of Trustees of the System if he or she was an annuitant as of March 1 of the year in which the election is held.

c)         A person who is eligible to vote for a contributing membership position pursuant to subsection (a) is not eligible to vote for an open annuitant position.

d)         A person who is eligible to vote for an annuitant position pursuant to subsection (b) is not eligible to vote for an open contributing membership position.

e)         A SURS member receiving a disability pursuant to Section 15-150 of the Illinois Pension Code is not an annuitant but is considered a contributing member for purposes of Board elections.

(Source:  Amended at 44 Ill. Reg. 17714, effective October 22, 2020)

Section 1600.720  Election Materials

a)         The Board Secretary may procure a qualified election services vendor and determine the voting methods, specific voting instructions and security measures to be used in the election, subject to the approval of the Board.

b)         At least 30 business days prior to the Election Day, the following election materials shall be emailed to the eligible voter's latest email address known to the System:

1)         Electronic instructions for accessing an electronic ballot listing, in order determined by random, blind lottery conducted by the Board Secretary, either the contributing membership candidates or the annuitant candidates, depending on the basis for the individual's eligible voter status as provided in Section 1600.715, using the entire name of each candidate in the System records on the first day nomination petitions can be accepted;

2)         Instructions for accessing candidate provided biographies in the location, format and length specified and approved by the Board Secretary;

3)         Instructions for voting methods as specified by the Board Secretary, including instructions for voting online or by phone.  These instructions will also include the voting deadline.

4)         Instructions for requesting from the election vendor a mailing of the preprinted election materials specified in subsection (c).  Individual eligible voters may choose to request hard copy materials, including a hard copy ballot, from the election vendor even if they have a valid email address on file with SURS.  If a request is made for a hard copy ballot, the eligible voter can cast his or her vote online, by phone, or by returning the hard copy ballot by the election deadline.  Only the first ballot received by the election vendor will be counted.

c)         For voters without a valid email address on file with SURS, at least 30 business days prior to the Election Day, and for voters for whom the email delivery attempt in subsection (b) was unsuccessful, as soon as administratively practicable after the election vendor is notified that the email delivery attempt was unsuccessful, the following election materials shall be mailed to the eligible voter's latest mailing address known to the System:

1)         A preprinted paper ballot listing, in order determined by random, blind lottery conducted by the Board Secretary, either the contributing membership candidates or the annuitant candidates, depending on the basis for the individual's eligible voter status as provided in Section 1600.715, using the entire name of each candidate in the System records on the first day nomination petitions can be accepted;

2)         Preprinted paper candidate provided biographies in the format and length specified and approved by the Board Secretary;

3)         Instructions for voting methods specified by the Board Secretary, including instructions for voting online, by phone or by regular mail.  These instructions shall also include the voting deadline;

4)         A preprinted, return envelope.

d)         If an eligible voter is unable to access his or her election materials as specified in subsection (b) or did not receive the preprinted election materials mailed to him or her as specified in subsection (c), the eligible voter may request that the election vendor send replacement election materials to him or her by providing a current mailing address or a valid email address.  Preprinted paper ballots, candidate biographies and other election information will not be mailed out within 5 business days prior to the Election Date; however, electronic ballots and instructions for accessing candidate election information will be electronically transmitted if authorized by the eligible voter at least one day prior to the Election Date.  If an eligible voter incorrectly marks or spoils his or her paper ballot prior to returning it, the eligible voter may request a new set of election materials from the election vendor at least 5 business days prior to the Election Date.  Paper ballots already mailed to the election vendor, or electronic or phone ballots that have already been cast by the eligible voter, shall not be replaced or revoked.  The member's identity as an eligible voter shall be authenticated prior to sending out replacement election materials.

e)         If previously mailed election materials are returned to the election vendor undelivered at least 5 business days prior to the Election Date and a forwarding address has been provided, the election vendor shall mail election materials to the forwarding address via first class U.S. mail.

f)         In addition to the election materials distributed by the election vendor, SURS will post candidate biographies, in the format and length specified and approved by the Board Secretary, on its website at least 30 days prior to the election.

(Source:  Amended at 41 Ill. Reg. 15353, effective December 5, 2017)

Section 1600.725  Casting Votes

A valid ballot, whether paper or electronic, must conform to the following requirements:

a)         All choices of candidates must be clearly indicated as directed on the voting instructions.  If paper ballots are not marked as directed, the marks are invalid and the associated votes will not be counted.  An invalid mark for one candidate will not negate other valid marks on the ballot.

b)         Each eligible voter is entitled to only one vote for any particular candidate.

c)         With respect to a ballot on which more than one trustee is to be elected, each eligible voter may vote for only one candidate for each position to be elected.  If more candidates are selected than the number of positions to be elected, the ballot is invalid and will not be counted.  If the number of candidates selected is fewer than the number of positions to be elected, the selection or selections will each count as only one vote.

d)         Only official SURS paper ballots or votes received via other authorized voting methods will be counted.  Write-in candidates are invalid and will not be counted.

(Source:  Amended at 38 Ill. Reg. 17457, effective July 30, 2014)

Section 1600.730  Return of Ballots and Ballot Counting Process

a)         For paper ballots, upon receipt of the election materials specified in Section 1600.720, the eligible voter shall:

1)         Mark his or her ballot in accordance with Section 1600.725;

2)         Place the completed ballot into the return envelope provided;

3)         Seal and mail, via U.S. mail only, the return envelope; and

4)         Mail paper ballots in the return envelope provided.  The ballot shall be mailed only to the address on the envelope.  Paper ballots delivered to the System in bulk, via hand delivery, by campus mail, or delivery other than as specified in this subsection (a)(4) are invalid and will not be counted.

b)        Ballots must be received by the close of business on Election Day.  Ballots received after Election Day are invalid and will not be counted.  A record of the receipt date of each ballot will be maintained.

c)         When multiple voting methods are authorized, the first ballot cast will be counted as the official ballot and any subsequent votes will not be counted.  The Board Secretary will develop procedures to ensure that only one ballot may be received from each eligible voter. 

d)         The Board Secretary will develop minimum standards to ensure ballots are properly recorded, secured, tabulated and retained.

e)         When all eligible ballots have been counted and tabulated, the necessary number of contributing members and annuitants who have received the greatest number of votes will be elected trustees; provided, however, the Board Secretary will ensure that, for the final composition of the Board, no more than 2 of the 4 contributing members are current employees of the University of Illinois at any of the campuses (Urbana-Champaign, Chicago, or Springfield) and no more than one of the 2 annuitants was last employed prior to retirement by the University of Illinois at any of the campuses.  If the maximum number of University of Illinois positions has been filled, then any remaining positions shall be filled as follows: 

1)         The remaining contributing member trustee positions will be filled by the contributing member nominees who are not current employees of the University of Illinois at any of the campuses and who received the greatest number of votes.

2)         The remaining annuitant trustee positions will be filled by annuitant nominees who were not last employed prior to retirement by the University of Illinois at any of the campuses and who received the greatest number of votes.

3)         In case of a tie, the contributing member nominee or annuitant nominee who will be elected will be determined by blind, random drawing.

4)         The results of the election process then will be declared by the Board Secretary.  

f)         The Board Secretary will certify to the Board the elected trustees by category and term of office.  The Board Secretary will further certify the place of employment for each contributing member and the last place of employment prior to retirement for each annuitant. 

g)         In any trustee election that can be filled by one or more candidates who are currently employed by or were last employed by any of the University of Illinois campuses, if the number of the highest vote-getting candidates affiliated with the University of Illinois campuses would cause the Board to exceed the participant limit of 2 established by Section 15-159(d)(3) or the annuitant limit of 1 established by Section 15-159(d)(4) of the Code, those candidates shall be seated, in order beginning with the longest elected term available, until the applicable limit of University of Illinois trustees is reached. All remaining University of Illinois affiliated candidates shall immediately be disqualified regardless of the number of votes they received or the elected term for which they ran. Each remaining seat shall then be filled by the non-University of Illinois candidate receiving the highest number of votes for that seat.

(Source:  Amended at 45 Ill. Reg. 2259, effective February 5, 2021)

Section 1600.735  Certification of Ballot Counting

The ballot tabulating process shall be certified to the System in writing by an independent consultant at least 7 days prior to the Election Day. The election results shall be certified to the System either by an independent consultant or by the entity tabulating the results.  The ballot tabulation process and election results will not be disclosed or announced until written certification is provided to the System.

(Source:  Added at 35 Ill. Reg. 10952, effective June 22, 2011)

Section 1600.740  Challenges to Election Results

a)         Any challenge to the election results shall be made in the following manner:

1)         The challenger shall submit a written statement identifying the specific aspects of the election results that are being challenged.

2)         All challenges shall be submitted to the Board Secretary no later than 7 days after the election results have been certified.  Any challenge submitted more than 7 days after the election results have been certified shall not be considered.

b)         The written statement timely submitted in accordance with subsection (a) shall be presented to and considered by the Board at the next regularly scheduled quarterly meeting of the Board.  The challenger shall have no right to make a presentation  at the Board meeting.  The Board shall, in its sole discretion, determine what steps, if any, need to be taken in response to the challenge, including, but not limited to, modifying the election results declared.

c)         In the event that election results have already been declared, the election results shall remain valid pending determination of any challenge.

d)         A written notice of the final determination shall be sent to the challenger and all candidates within 7 days after making the determination.  This notice shall constitute a final administrative decision of the Board for purposes of the Administrative Review Law. 

(Source:  Added at 35 Ill. Reg. 10952, effective June 22, 2011)

Section 1600.745  Candidate Informational Communication

During any election period commencing the January 1 immediately preceding the Election Date and ending the day after the Election Date, the System will make available a blind mailing list containing address files or e-mail lists of eligible voters for election candidates or other organizations to send additional informational material about the candidate.

a)         The System may assist an organization in sending out one e-mail or hardcopy communication per candidate per election cycle by providing a blind mailing list to a third-party service firm hired by the organization.  Organizations must validly exist pursuant to law and must provide a mailing address and contact information to the System at the same time that a request is made for a blind mailing list.

b)         The System may assist each candidate with sending out one communication per election cycle by:

1)         providing a blind mailing list to a third-party service firm for an e-mail or hardcopy communication; or

2)         sending an e-mail communication through a third-party service firm hired by the System.

c)         All third-party service firms must limit the use of the blind mailing list to ensure only one communication is distributed per candidate, per organization.  The third-party service firm must guarantee security of the blind mailing list and only use the member contact information for communication of candidate informational materials. 

d)         The System will not incur any of the costs to produce, mail or e-mail the additional candidate information, except for the one e-mail communication referenced in subsection (b)(2).

e)         Regardless of the source of distribution, whether the communication is distributed by SURS or a SURS-approved third-party service firm, the contents of the informational materials must be approved by the SURS Board Secretary prior to the mailing or e-mailing.

(Source:  Amended at 48 Ill. Reg. 4218, effective February 29, 2024)

Section 1600.750  Filling a Vacancy in the Term of an Elected Trustee

a)         A vacancy occurring in the elected membership of the Board shall be filled by the elected trustees as prescribed in Section 15-159(e) of the Pension Code.

b)         The elected trustees shall fill an unexpired term with currently eligible candidates or replacements otherwise satisfying the conditions in Sections 1600.700(b)(1) or (c)(1) and 1600.730(d) as follows:

1)         If an elected trustee position becomes vacant within the first 3 years of a term, the vacant position shall temporarily be filled until the July 15 following the next regularly scheduled Election Date.  The remaining 3 years of the term shall be permanently filled at the next available election.  However, if a vacancy occurs within 6 months prior to the next election, the remaining elected trustees may choose to leave the position vacant until that election.  The vacant position openings and term lengths shall be filled as follows:

A)        The vacant position shall be temporarily filled by the elected members using the eligibility rules provided in Section 1600.700(b)(1) and the process rules provided in subsection (b)(3) of this Section.

B)        If the vacancy occurs prior to the January 1 immediately preceding the next election, the vacant positions shall be filled for the remainder of the term (years 4-6), through the election process, by adding the appropriate number of available positions to the ballot at the next available election.

C)        If a vacancy occurs prior to the January 1 immediately preceding the next election, and an election is required under Section 15-159(e) of the Pension Code, the term lengths shall be determined with the candidates receiving the greatest number of votes  awarded the 6 year terms.

D)        If a vacancy occurs prior to the January 1 immediately preceding the next election and an election is not otherwise necessary under Section 15-159(e), term lengths shall be determined by blind random drawing. 

2)         If an elected trustee position becomes vacant within the last 3 years of a term, the vacant position shall be filled for the remainder of the term by the elected members using the eligibility rules provided in this subsection (b) and the process rules provided in subsection (b)(3).  However, if a vacancy occurs within 6 months prior to the next election, the remaining elected trustees may choose to leave the position vacant until that election. 

3)         Unexpired terms will be filled by the elected membership using the process outlined in this subsection (b)(3).  The Board Secretary will announce the vacancy via a press release and request nominations be submitted by a certain date in the form adopted by the System.  Once the nomination period has ended, the Board Secretary shall determine the eligibility of the candidates pursuant to Section 15-159 of the Pension Code and the eligibility qualifications provided in this subsection (b).  The list of eligible nominees will be submitted to all elected members of the Board for consideration of which candidate would best represent the contributing members or annuitants, respectively.  Departing elected members shall not be eligible to participate in the replacement process.  Majority voting of all elected members will determine the appointee.  If the elected members cannot decide on a replacement, the full Board may declare a special election to fill the vacancy.   

(Source:  Amended at 37 Ill. Reg. 15517, effective September 12, 2013)