Illinois Administrative Code › Title 80 - PUBLIC OFFICIALS AND EMPLOYEES › Part 1650 - THE ADMINISTRATION AND OPERATION OF THE TEACHERS' RETIREMENT SYSTEM › Subpart S - BUYOUT PROGRAMS › Section 1650.3300 - General Provisions

Current through Register Vol. 48, No. 28, July 12, 2024
The following terms, phrases, and requirements shall apply to
				  the System's administration of the buyout programs established under Sections
				  16-190.5 and 16-190.6 of the Code.
a)
				Definitions
"Accelerated Annual Increase Buyout" or "AAI Buyout" means
				  the accelerated pension benefit payment for a reduction in annual retirement
				  annuity and survivor's annuity increases provided in Section 16-190.6 of the
				  Code.
"Accelerated Pension Benefit Buyout" or "APB" means the
				  accelerated pension benefit payment in lieu of any pension benefit provided for
				  in Section 16-190.5 of the Code.
"Article 16" means Article 16 of the Pension Code (Teachers'
				  Retirement System of the State of Illinois).
"Buyout Payment" means an accelerated pension benefit payment
				  issued under Section 16-190.5 or 16-190.6 of the Code.
"Buyout Programs" means the provisions of Section 16-190.5
				  allowing for member election of an accelerated pension benefit payment in lieu
				  of any pension benefit, and the provisions of Section 16-190.6 allowing for
				  member election of an accelerated pension payment for a reduction in annual
				  retirement annuity and survivor's annuity increases.
"Code" means the Pension Code [40 ILCS 5].
"Effective Date of the Election" means the date the System
				  receives the member's election to receive a buyout payment in the form
				  prescribed by the System.
"Election Window" means a period of time of not less than 90
				  days designated by start and end dates determined by the System during which an
				  eligible member may elect the buyout.
"Factor" refers to actuarial assumptions, as determined by
				  the System's actuaries pursuant to Section 16-176 of the Code, specifically
				  developed to calculate buyout payments in accordance with Sections 16-190.5 and
				  16-190.6.
"Terminated", as used in Section 16-190.5, means an inactive
				  member who has separated from service with a TRS-covered employer for at least
				  four consecutive months, as provided in Section 16-151 of the Code.
"Valid Election" means the System has received the member's
				  buyout application form prescribed by the System, proof of birth if not already
				  on file with the System, and the alternate payee's written consent if required
				  by Section
				  1650.3330.
b) Assumptions, Information and
				Payments
1) For purposes of calculating buyout
				payments and administering the buyout programs in a reasonable and efficient
				manner within the constraints imposed by the Code, the System will apply
				uniform assumptions as determined by the System for all eligible members using
				the TRS rate of return for discounting future benefit streams and the member's
				actual age, but irrespective of individual demographic characteristics such as
				marital status, gender, dependents, etc.
2) The System will use its best efforts to
				provide accurate and sufficient information to allow an eligible member to make
				an informed decision whether to elect either of the buyout programs. The member
				is solely responsible for his or her decision and is encouraged to seek
				personal financial, legal or other professional advice as necessary and
				appropriate given individual circumstances. In no event will the System bear
				any liability for the member's buyout decision.
3) All buyout payments will be funded from
				the State Pension Obligation Acceleration Bond Fund (see Sections 16-190.5(f)
				and 16-190.6(d-5) of the Code). The System will administer buyout payments as
				long as bond proceeds are available (see Section 7.7 of the General Obligation
				Bond Act [30 ILCS 330]). To protect the System's tax-qualified status as
				contemplated in Sections 16-190.5(h) and 16-190.6(f), under no circumstances,
				including unavailability or depletion of bond proceeds, will trust assets of
				the System be used for any buyout payment.
4) If bond proceeds from the State Pension
				Obligation Acceleration Bond Fund are depleted or otherwise unavailable to fund
				buyout payments, the buyout election will be cancelled and any benefits or
				refunds due the member or member's designated beneficiaries will be calculated
				according to Articles 1 and 16 of the Code that would apply in the absence of
				the buyout election.