Illinois Administrative Code › Title 80 - PUBLIC OFFICIALS AND EMPLOYEES › Part 1600 - UNIVERSITIES RETIREMENT › Subpart A - GENERAL › Section 1600.140 - Compliance with the Internal Revenue Code

Current through Register Vol. 48, No. 28, July 12, 2024
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).