DEATH AND SURVIVOR. Employer Responsibility p. 1 Survivor/Beneficiary p. 6 SURS Responsibility p.7. Rev Employer Responsibility

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1 DEATH AND SURVIVOR Employer Responsibility p. 1 Survivor/Beneficiary p. 6 SURS Responsibility p.7 Rev Employer Responsibility

2 A deceased active employee s retirement benefit must be calculated to determine if the benefits are payable to any survivors. For this reason, the information that is required from the employer is the same for death as it is for retirement. The responsibility is the same under Traditional and Portable plans. The only required information for Self- Managed Plan members is termination date and last payroll information. A web event will be created on the Employer Website (Fig.1,2,3, and 4). The employer must complete all sections of the web event. The following examples illustrate a web event where all possible information is needed. A web event will only request information that is relevant to the particular employee. For example, if an employee was not academic, there would be no section on the report for academic contract verification. Fig. 1 1) Check the appropriate Reason for Termination. 1

3 2) Date of Termination is the date of death of the member. 3) Police/Fire Employment Dates are the beginning and ending dates for which an employee was employed as a police officer or a fire fighter (if applicable). 4) Number Of Hours Worked Per Day is the exact number of hours the employee actually worked each day. 5) Percent Of Employment is the exact percent of time the employee worked while active. 6) Last Payroll Date is entered as the last day of the last payroll period for which the employee was paid. A Web note should be added if the last pay does not follow normal payroll processing. Example: voucher payment 7) Vacation Days are the number of unpaid vacation days remaining on the termination date. 8) Cash Value Of Vacation Days is the combined value of all vacation days reported in step 7. 9) Unpaid Sick Leave Days is the total number of non-compensable sick leave days remaining on the termination date. 10) Paid Sick Leave Days is the total number of compensable sick leave days remaining on the termination date. 11) First Partial Academic Earnings is compensation paid prior to the beginning of the new academic year. 12) Indicate if you accepted the transfer of sick leave days from a previous SURS employer. 13) If sick leave days were transferred, the number of sick leave days that were transferred, and the name of the employer from which they were transferred should be entered. 14) Indicate if any Worker s Compensation will be payable to the employee. 2

4 Fig. 2 1) Academic Year should be reported using two digit years that reflect the beginning and ending of the academic year (Example: 96/97). 2) Effective Date is the date that the monthly salary rate became effective. There can be multiple effective dates during any one academic year. Enter information for each new effective date in an academic year on a separate line (4 th and 5 th lines in the diagram above). Always identify the academic year in each line, even if it does not change. 3) Monthly Rate should be the monthly base contract (when contract exists) amount of compensation 4) Number of Months Worked is the exact number of months the employee actually worked. 3

5 5) Number of Months Paid is the number of months in which the employee was paid. 6) Percentage of Time should reflect the exact percent of time the employee worked prior to termination. Any period of time prior to September 1, 1991, when an employee was not employed full-time must be listed in the Part-Time Verification section of the Retirement Event on the SURS Employer Website. Fig. 3 1) Effective Date is the month, day, and year that the part-time employment period began. 2) Ending Date is the month, day, and year that the part-time employment period ended. 3) Percent of Time is the exact Percent of Time worked during the part-time employment period. 4

6 For academic employees, a completed Verification Of Academic Contract section must be completed and submitted on the SURS Employer Website (Fig. 4). SURS cannot calculate the retirement annuity correctly if this information is missing or incorrect. The Statutes that govern our system require that only dollars earned during the period of the 48 months preceding termination may be used in the 48 month calculation. SURS requests academic contract information any time that we cannot conclude from an employee s SURS file if they are paid their contracted salary as they earn it. SURS will always list the two academic years for which the contract information is needed on the Verification Of Academic Contract section of the Retirement event. An academic contract year is defined as the end of the academic year for which the contract is effective. Example: Should the contract date be September 1, 1998, through December 31, 1998, the contract would be effective in academic year SURS academic years run from September 1 through the following August 31. Fig. 4 5

7 1) Academic Year is the year in which the academic year ends. 2) Contract Type is the type of contract being reported. a. Base Contract b. Summer School c. Overload d. Other (Always include a note defining Other) e. Excess Life (For employers who have to report a separate amount due to excess life insurance) 3) Contract Begin Date is the exact month, day, and year that the contract went into effect. 4) Contract End Date is the exact month, day, and year that the contract expired. 5) Length Of Contract is the total length of the contract in months and must match the perimeters defined by the Contract Begin Date and the Contract End Date (For contracts lasting less than one month always enter one month). 6) Amount Of Contract is the total compensation paid in the contract period. Survivor/Beneficiary Responsibilities The survivor or beneficiary has the responsibility of notifying SURS of the participant s death. Upon notification, SURS will create a web event on the Employer Website and prepare the appropriate forms and letters of instruction to the survivor(s) and/or beneficiaries within 7-10 days. 30-day follow-up: SURS will again request everything that has not already been received. 60-day follow-up: SURS will again request everything that has not already been received. If a Survivor or Beneficiary does not fulfill their responsibility within 120 day, the status of the death claim will change from Open to Unclaimed. If documentation is received after the claim has been changed to Unclaimed, the claim will be reopened. The claim will be finalized within 2-3 weeks of receipt of all documentation. 6

8 SURS Responsibility SURS will provide the survivor(s)/beneficiaries the appropriate forms and letters of instruction and will arrange for a counselor to meet with the claimants upon request. The options and benefit amounts available will be explained. SURS will open a death claim upon notification. The claim will be sent to a Member Services Representative who will work to obtain the information required to process the claim and verify the accuracy of the information. SURS will set up insurance deductions for State Insurance or the Community College Insurance Program, if the appropriate forms have been completed and submitted by the member. (See the Health Insurance section of this manual). When all information requested from the employer has been received, SURS will communicate with any reciprocal systems involved. Once SURS receives all required information from the survivor(s)/beneficiaries, the employer and the reciprocal system, if applicable, SURS will calculate the finalized amount. When the final calculation process has been approved, the death claim is submitted to the Pay Benefits Department for payment and an Awards Letter will be sent to the member. 7

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10 DISABILITY RETIREMENT ALLOWANCE Eligibility p.1 Employer Responsibility p.1 Employee Responsibility p.4 SURS Responsibility p.9 Rev

11 ELIGIBILITY DISABILITY RETIREMENT ALLOWANCE (DRA) One or more licensed and practicing physicians appointed by or acceptable to the Board must certify that the applicant has a medically determinable physical or mental impairment which would prevent him or her from engaging in any substantial gainful activity, or which has lasted or can be expected to last for a continuous period of more than 12 months. The terms medically determinable physical or mental impairment and substantial gainful activity shall have the meanings ascribed to them in the Social Security Act. Payment begins on the first day of the month following expiration of the disability benefit and continues until the physical or mental impairment no longer prevents the participant from engaging in any substantial gainful employment, the participant dies, or the participant elects to receive a retirement annuity. EMPLOYER RESPONSIBILITY The responsibility of SURS-covered employers at the time of application for DRA is the same under the Traditional and Portable plans. The Self-Managed plan does not include the DRA benefit. The employer must submit an Employer Summary Request Report (Figs. 1 & 2). The Employer Summary Report is a computer-generated form showing only the fields of information that are relevant to a particular retiring employee. 1

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14 Part A Member Information SURS will have completed this part of the form (Fig. 2) when the disability claim was entered into our system: employee s name, Social Security number, and date disability is to expire. Part B Employer Information 1. Enter the employment status of the retiring employee (Fig.2). If the employee has any time as a Police/Firefighter, enter the effective date he or she became a police/firefighter and the date that status ended (ending date). 2. Enter the actual date of the employee s termination ( usually the same date the disability expired, which is provided in Part A). 3. Enter the Last Payroll Date as the last day of the last payroll period for which the employee was paid. 4. Enter the number of vacation days that were paid at termination and the amount paid for these vacation days. 5. Enter the number of unpaid/unused sick leave days at termination. 6. If the employee transferred to you from another agency, indicate whether you accepted transfer of the employee s sick leave that was earned while he/she was employed at the other agency. If transfer of sick leave was accepted, enter the number of workdays that were transferred and the name of the employer where the sick leave was earned. EMPLOYEE RESPONSIBILITY Prior to expiration of the disability benefit, SURS will mail the participant a notification of benefits and options available, as well as the DRA application (Figs. 3,4,5,&6). If the member believes he or she will be eligible, they must complete and return the application to SURS immediately. Once eligibility has been established and the benefit begins, the member must submit continuing evidence of their disability as often as requested. If eligible to be gainfully employed, the member should notify SURS immediately. 4

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19 SURS RESPONSIBILITY When SURS receives the completed application, the employee s file will be directed to a member of the Disability Process Team. If any information is missing or is not filled out correctly, SURS will contact the employee concerning what remains to be done. The survivor refund letter may be mailed at this time if the member is in the Traditional Retirement Plan. The Medical Claims Processor will review the medical documentation and determine, based on this information, whether the member is eligible for the DRA. Any needed additional information will be requested from the doctor and the member will receive a letter. If the DRA is approved, the claim will be sent to a Member Service Representative to calculate, then to the Insurance Team, and finally to the Pay Benefits Department for payment. An Awards Letter is mailed to the member at this time. If the disability claim is denied, SURS will inform the employee in writing and instruct him/her what needs to be done if he/she disagrees with the decision. Once approved, SURS will pay the DRA benefit on the first working day of the month. It is SURS s responsibility to pay DRA recipients accurately and on a timely basis. It is also SURS s responsibility to monitor and recheck all DRA claims on a regular basis. 9

20 DISABILITY RETIREMENT ANNUITY PROCESS EMPLOYER 1. Submit to SURS Employer Summary Request Report, if necessary. EMPLOYEE 1. Complete the application. 2. Mail all seven parts back to SURS. 3. Submit continuing evidence of their disability as often as requested. 4. If eligible to be Gainfully Employed should notify SURS immediately. SURS Data Entry receives Application for Disability Retirement Annuity And sends on to the Medical Claims Processor. Medical Claims Processor reviews all documentation for accuracy and completion. Decision is made based on all information received. If additional information is necessary, SURS will Once the claim is calculated, the Pay contact the employee or employer. Benefits Department will process the check and mail to the employee on the If approved, the claim will be sent to the first working day of the month. claims processor to calculate. If denied, member will be contacted and given the SURS will continue to monitor the 10 opportunity to appeal the decision or examine other alternatives. employees disability on a regular basis.

21 DISABILITY Eligibility p. 1 Employer Responsibility p. 2 Employee Responsibility p. 17 SURS Responsibility p. 27 Additional Information p. 29 Disability Rev

22 Eligibility An Employee is eligible to apply for a disability if he or she: (1) becomes physically or mentally incapacitated and unable to perform the duties of his or her assigned position for over 60 days and (2) had completed 2 years of service at the time of disability, unless the disability is the result of an accident. Once eligibility has been determined, the employee must request an Application for Disability from the employer. This form should be filled out and submitted immediately, unless it is certain that the disability will be less than 60 days. The benefit cannot begin more than 30 days before the date SURS receives the application, unless the Board of Trustees determines there was good cause for missing the filing deadline. The first page of the disability application includes directions for completing the application process (Fig.1). Fig. 1 Employer Responsibilities Forms Required 1

23 1. Application for Disability (Employer Section; 2 pages) 2. Employer Summary Request Report (2 pages) Application for Disability SURS will send each employer/agency a supply of Disability Applications. The disabled employee will request this application from his or her employer. The employer must fill out the Employer Section of the application (Figs. 2 and 3). If it is filled out completely and correctly, without any estimated dates, SURS will not require any additional documents from the employer in order to process the claim. Fig. 2 Fig. 3 2

24 All required information must be included in the Application for Disability Benefits before a disability claim can be finalized. The following section includes directions and examples on how to fill out the Application for Disability and Employer Summary Request Form. Employers MUST complete the following on the Application for Disability: Employer Section Part 1. (Fig. 4) 3

25 1. Name of University, College, or Agency. 2. Full name of the employee applying for disability. 3. Social Security number of the employee. 4. The last day the employee physically worked. 5. The day the employee became disabled. 6. Last day paid: Last day paid is the date when all sick leave and vacation (if used) has been paid out. 7. The beginning and ending dates for the last pay period for which the employee will receive pay. 8. Check box that applies (SURS requires that this be answered). 9. Basic monthly earnings is the rate the employee received on his/her last day worked, and includes the effective date for this rate. Monthly basis is the number of months worked in a year. This includes percent of time and status of employment by checking the box which applies. 10. Check box that applies, and if Yes, explain (Indicate if any part of this is paid for by the employer). 11. Check box that applies, and if Yes, explain (List the accommodations). 12. Check the box that applies and if Yes, include the date they returned to work. 13. Check box that applies and if Yes, or disputed, include information requested. 14. Check the boxes that applies and if Yes, include all the information requested. 15. To be completed in full by the individual responsible for filling out this application. 4

26 Employer Section Part 1 Fig. 4 5

27 Employers MUST also complete the following: Employer Section Part 2 (Fig. 5) This section must be filled out and signed by the claimant s supervisor. 1 through 8: Complete these sections based on the employee s job description. Fig. 5 Remember: 6

28 Read all directions carefully. Do not separate any pages. The application includes three sections: Employer, Claimant, and Physician. When the Employer Section is complete, return the application to the employee. The remaining portion of the application will be the employee s responsibility to complete. Once the application is completed in full, the employee must mail this application to SURS, intact. If the application is incomplete, SURS will return it to the employee. Employer s Summary Request for Disability: (Fig. 6) The Employer Summary Request Report is a computer-generated form that SURS will send only if more information is needed because it was missing or not completely known when the Application for Disability was filled out. An example would be when the employer can only estimate the last date paid on the application. Fig. 6 7

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30 If you receive this form, make sure all the following information is filled out completely and accurately before returning it to SURS (Fig. 8). Part B Employer Information 1) Employment Status: Indicate academic, staff, or police/firefighter. 2) Actual Last Day Worked: The last day the employee physically worked. 3) Percent of Status on Last Day Worked: Percent of time employee worked prior to disability. This is the percent of time the employee worked in relation to the full time standard. Example: Normally, a Building Services worker position works 40 hours per week. A Building Services worker working 28 hours per week would be 70%. 4) Actual Last Pay Date: Last day includes all sick leave and vacation paid, if used. 5) Actual Disability Leave Begin Date: The day following the last day paid. 6) Ending Date of the Last Payroll Period: The final payroll reported to SURS. The last date of the pay period for which the employee will receive pay. 7) Monthly Rate of Pay on Last Day Worked: The amount earned each month as of the last day worked. 8) Effective Date of the Monthly Rate of Pay: The date the monthly rate went into effect. 9) Number of Months Normally Worked in a Year: Indicate 12, 9, or other. (If other, please explain.) SURS disability benefits will be paid over the same amount of months. 10) Indicate if employee became disabled while on leave or on vacation. 11) Is claimant able to perform the duties of his/her position? Indicate yes or no. By Illinois Statute, SURS is required to obtain the answer. Part C Other Benefits If any other benefit is relevant, enter the amount of the benefit, mode of payment of the benefit, (monthly, annually, etc.) and the beginning and ending dates of the policy period. 12) Workers Compensation: Document all information regarding a Worker s Compensation claim, including if it is being disputed. 13) Employer Paid Insurance Contract: Any disability insurance that is paid all or in part by the employer. 14) Salary Continuance: Seldom applicable. Identifies monies payable to an employee other than earnings, sick leave, or vacation payments. 15) Other: Any benefits that do not fall into any of the categories previously listed. Part D Return to Duty 16) Return Date: First day employee returns to duty. 17) Percent of Return to Duty: The percent of time the employee is returning to work in relation to the full-time standard (See example in Part B, number 3). 9

31 Fig. 8 Disability Leave Event: (Fig.9) Since a disability would represent a change in the employee s work status, the employer would create and submit a Disability Leave event on the SURS Employer Website (Fig. 9). This information will still need to be entered on the Disability Application. 10

32 Fig Verify and update the Member Information screen (Membership, page 6, figure 1). 2. Select the Type of Leave from the drop down menu. 3. Status Effective Date is the date that the employee s disability began. 4. Last Payroll Period is the last date of the last payroll period in which the employee worked. 5. Estimated Return Date is the date that it is anticipated the employee will return from leave. 6. Percent of Current Status is the employee s status on the date the leave began. 7. Percent of Leave is the percent of time the employee will be on leave. 8. Benefits Applied for should indicate if the employee has or has not applied for disability benefits with SURS. If benefits are being applied for, include: 9. Last Day Worked is the date the employee last worked. 10. Last Day Paid includes all sick leave and vacation (if used) paid. 11. Rate Of Pay On Last Day is the monthly rate of pay earned each month as of the last day worked. 12. Number of months is the number of months the employee is paid over. 11

33 Return From Disability Leave: Return From Leave At Part Time Employees allowed to return to work part-time will have their disability payment reduced by the amount of their earnings in excess of the actual disability benefit they are receiving every month from SURS. (Fig. 10 and 11) The employer must send a Report of Status or Return From Leave Web event to SURS indicating the day the employee has returned to work, and at what percent of time. Return From Leave At Less Than 100% If an employee is returning from leave at less than 100% time a Report of Status form (Fig. 10) must be completed and submitted to SURS (Note: Reporting an employee returning from leave at less than 100% cannot be reported on the SURS Employer Website). Fig

34 The three sections indicated below are the only sections necessary to complete on the Report of Status. Fill in all necessary sections, and mail the report back to SURS. Fig

35 Return From Leave At 100% A Return From Leave event should be created on the SURS Employer Website when returning an employee from a Disability Leave at 100%. (Fig. 12 and 13) Fig. 12 1) Verify and update the Member Information Screen (Membership, Page 6, Fig. 1). 2) Status Effective Date is the date that the employee returned from leave. 3) Monthly Pay Rate is the monthly amount received by the employee upon return from leave. 4) Pay Duration is the number of months over which the employee is paid. 5) Percent of Current Status should reflect the actual percent of time worked upon returning from leave. 14

36 Fig. 13 On the Return Information screen, enter the Percent Current Status as the same percentage as in step 5 on the previous page. This identical information is entered on two separate screens because it is a two step process to change the member s status to active and to return the member from leave. 15

37 An Employee Has Recurrance If an employee returns to work for less than 30 calendar days and becomes disabled due to the same cause, it will be considered a recurrence of the previous disability. In this case, the employee will not be required to meet another 60-day waiting period. If the recurrence is less than 5 days, a new Application for Disability will not be necessary. SURS will require a Summary Report or an Employer s Report of Disability (Fig. 14) If an employee is able to work five or more days, but less than 30, SURS will require the completion of a new Application for Disability. Fig

38 Employee Responsibilities Forms Required: 1. Application for Disability (Claimant and Physician Sections; 5 pages) 2. Report of Earnings 3. Recheck Reports 1. Application for Disability: To initiate the disability process, the employee must contact the employer. The process does not start at SURS. SURS will not mail the applications to the disabled employee. When the Employer section is complete, the employee must complete the Claimant Section of the application (Fig. 14). When the Claimant Section (Fig.15a-b) is complete, the Physician Section (Fig 15c-e) must be filled out. It is the employee s responsibility to bring this section to the physician. If the Physician Section does not include copies of medical reports and documentation to substantiate what was reported on the application, a letter is sent requesting the information. Once all three sections of the application are completed, the employee must mail the booklet to SURS. SURS will then notify the employee if anything else is needed. 17

39 Fig. 15a Claimant Section - Part 1 18

40 Fig. 15b Claimant Section - Part 2 19

41 Fig. 15c Physician Section 20

42 Fig. 15d Physician Section (cont.) 21

43 Fig. 15e Physician Section (cont.) 22

44 2. Report of Earnings An employee who has been released by the physician may return to work part-time. Disability payments will be reduced by the amount of earnings in excess of the amount of the disability benefit. If it appears that the earnings will indeed exceed the benefit, SURS will send the employee a supply of Verification of Earnings Forms along with a letter explaining the procedure they must follow in order to receive the monthly check. (Fig. 16) The disability benefit will be put on hold until the employee sends SURS his/her report of earnings. All disability recipients (except those on a monthly hold due to exceeding their disability amount) are required to complete the Earnings Card which is sent to them every four months. Fig

45 3. Recheck Report Employees on disability must periodically submit evidence of their disability. The recheck dates vary according to the employee s disability. SURS will contact each employee on issues of rechecks and inform him/her what needs to be done. (Fig. 17) Fig. 17a Recheck Report (Page 1) 24

46 Fig. 17b Recheck Report (Page 2) 25

47 Fig. 17c Recheck Report (Page 3) 26

48 SURS s Responsibilities When SURS receives the completed application, the employee s file will be directed to a Disability Process Team Member. If any information is missing or not completed correctly, SURS will contact the employee or employer (depending on the type of information required). If member is inelligible (less that two years service credit and not an accident, returned to duty before sixty day period expired, or before they are off the payroll) the member and employer will be sent a letter. When all requested information has been received and verified the Disability Process Team Member will review the medical documentation and determine, based on this information, whether the member is disabled or not. If the disability is medically approved, the claim will be sent to a Member Service Representative to calculate. The claim can then be processed if all employer information has been received (Employer Summary Report, last payroll posted, etc.). It is then forwarded to the Pay Benefits Department for payment. SURS will send the employee an Awards Letter outlining the amount of benefit, duration of payment, and the date a recheck may be requested. No action can be taken on a claim as long as the employee remains on payroll. SURS will pay the disability benefit on the last working day of the month and is responsible to pay disabled employees accurately and on a timely basis. If the disability claim is denied, SURS will inform the employee and employer in writing and provide instructions as to what steps to take if the employee disagrees with the decision. It is also SURS s responsibility to monitor and recheck all disability claims on a regular basis. A letter of notification will be sent to the employee when a recheck is being requested and the results of the recheck will be sent to the employee and employer. 27

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50 Additional Information 1. The disability benefit and application process is the same under the Traditional, Portable, and Self-Managed Plans. 2. Employees receiving disability payments will continue to earn service credit. 3. SURS will administer the insurance benefits for employees on disability from a State agency only. Disability recipients who have been certified at a 100% employment status will be the only ones eligible for insurance benefits through SURS. SURS does not administer the insurance benefits for disability recipients from a Community College. Each school will administer the insurance for its employees on disability for the first 6 months. After that, SURS will administer all insurance benefits. All employers will be notified as to when the transfer of insurance will occur. SURS will not take over any insurance files from Central Management Services that have discrepancies. Once a discrepant file has been resolved, however, SURS will accept the transfer of that file. 29

51 CONTRIBUTION PROCESSING Page Employee Contributions 2 Employer Contributions 3 FTP Payroll Contribution File 3 SURS Employer Payroll Website 4 Report of Status & Termination Report 5 Payment of Employee/Employer Contributions 5 Exceptions to Normal Procedures 6 Schedule of Expected Payrolls 8 IRS Contribution Limits 8 PA Limits\Tier II 8 Community College Health Insurance Program 10 Exhibits 11 Last Revised 03/30/2011

52 PENSION CONTRIBUTION PROCESSING Overview of Contribution Processing The State Universities Retirement System acts as plan sponsor for three retirement plan Options: the Traditional defined benefit option, the Portable defined benefit option, and the Self-Managed Plan, a defined contribution option. The process used to receive data and funds related to contributions from plan participants is the same for all three options. Each employer is required to submit an FTP Payroll Contribution file after every pay period, and complete the necessary information on the SURS Employer website to release the payroll from the website. In addition to using this process to gather the information necessary to administrate the retirement plan, SURS has also been charged by the State of Illinois to collect the employee and employer contribution data and funds for the Community College Health Insurance Program and to collect the installment payments for the purchase of SURS eligible service credit. This is accomplished through additional records to be included on the FTP file by the employers impacted by this program. Detailed discussion about the various steps involved in contribution processing as well as instructions on how to process unusual transactions follows. Employee Contributions In accordance with Chapter 40, Act 5, Article 15 of the Illinois Compiled Statutes, members of the Traditional and Portable defined benefit options contribute 8% of their gross earnings, with police officers and fire fighters contributing 9-1/2% of earnings; unless SURS has received a signed, notarized waiver of the Police Officer Retirement Formula within 60 days of SURS receiving the certification as a police officer from the employer. Members of the Self-Managed Plan contribute 8% of their gross earnings, including police officers and fire fighters. Since January 1, 1981, the Internal Revenue Service has allowed these member contributions to be picked-up by the employer and recorded as tax-deferred in the member account. See Exhibit A for examples on the proper calculation of this amount for the normal picked-up situation versus the situation where the employer pays this contribution on behalf of the employees. All contributions on pre-1981 earnings and service credit payments, plus future other public employment, prior service, refund repayments, leave payments, military service payments, and the employee portion of Early Retirement Option payments are considered as previously taxed, unless qualifying funds are rolled over to SURS to make these purchases. Previously taxed contributions will be recovered tax-free when distributed to the employee in the form of benefits or payments or to his or her beneficiary as a death and/or survivor benefit. 2

53 Employer Contributions State of Illinois-Approximately 90% of employer contributions are paid to SURS directly from the State of Illinois, as determined through the annual actuarial valuation process where the certified employer contribution is determined, approved by the Board of Trustees, and submitted to the State of Illinois Bureau of the Budget. Grant, Trust, Other Funds-Approximately 10% of employer contributions are paid from grants, trusts, and other funds which are determined by each employer and included with the employee contribution information submitted each payroll period. The calculation for the employer contribution differs between the defined benefit and self-managed plans as follows: 1) Defined Benefit Plan: The employer contribution is based upon the annual actuarial valuation determination of the Normal Cost percentage of earnings. This contribution rate changes each year, and is communicated to the employers through an annual letter from the SURS Deputy Director of Finance which is issued in early January, to be effective the following July 1. 2) Self-Managed Plan: The employer contribution is set by statute, and does not change from year to year. The rate is 7.6% of earnings and is applied as 0.5% to fund disability benefits, and 7.1% to be placed in the member accounts to fund retirement benefits. In order to submit the proper employer contribution for members with earnings under grant, trust or other funds, employers must know which plan the member has selected. To accomplish this SURS will, on a daily basis, fax an Employer Notification Report reflecting the plan elections of new members. (See Exhibit B for sample report). The employer should review these reports, and for any members selecting the Self-Managed Plan, the employer should apply the 7.6% rate to earnings of the first pay period beginning after the date of the Employer Notification Report. When processing the FTP Payroll Contribution file, SURS will verify that the correct employer contribution rate has been submitted for SMP members. If there is a discrepancy, the contribution amount will be corrected automatically, and the resulting over/under payment will be communicated to the employer to be subtracted/added to the next pay period s report of Employer Contribution and corresponding payment. This procedure is followed to avoid unnecessary delays in forwarding member contributions to their Self-Managed Plan accounts. FTP Payroll Contribution File All employers in the SURS system should remit contribution information after each pay period in the form of a file to be electronically transmitted to SURS using File Transfer Protocal (FTP). The file should include all of the required information for each certified 3

54 participant, regardless of which plan option they have selected and whether they are currently contributing or not. The detail record layout of the FTP File is provided on Exhibit C-1, C-2 and D. Specifications for setting up electronic data transmission are provided on Exhibit E. Employers who are unable to prepare and submit an electronic version of their contribution information may choose to submit a printed copy This should also be submitted for each payroll, presenting the following information : Name of each contributing participant, with an * by the name of those whose contribution is 9 1/2%. Amount of employee contributions. Social Security number. Total hours worked in the pay period, not to exceed 100% time and total hours defined as the employee s work year, or percent of full-time work if paid on a percentage contract. Total of employee contributions deducted, total of employer contributions, and total of employee /employer community college health insurance contributions at the end of each deduction register for all participants listed. The address to be used to for the printed submission is: State Universities Retirement System 1901 Fox Drive Champaign, IL SURS Employer Payroll Website After initial phone training with SURS accounting department, an employer may use the employer payroll website only if they are transmitting their payroll information electronically via the FTP process to SURS. By using this process, the employer s payroll department completes the Report of Employee Contributions, Earnings, and Employer Contributions and the Cash Sent Summary Report on the website. Then the balancing report is reviewed by the employer to ensure that payroll information totals on the FTP file agree with their totals on the paper copy of the deduction register. The totals must also agree to the total cash being sent to SURS. If any errors or omissions are discovered on the FTP Payroll file, it may be necessary to enter adjustments to the FTP payroll file on the Employer Payroll website. Please contact SURS if any assistance is needed. SURS is able to view the same screens that the employer is using on the website to help in this process. After the balancing report show all totals to be in balance, the employer can release the FTP file to SURS for normal processing. 4

55 Report of Status & Termination Report- Coordination with FTP File Processing Report of Status of Participant will impact the FTP file as follows: The first appearance on the FTP file must agree with the certification date shown on this report. An employee who meets the eligibility requirements of Section 11 must appear on FTP files beginning with the certification date. If contributions begin later than that date, see the discussion of Paying Contributions Past Due on page 7. In the case of 100% leave of absence (regular or disability) or layoff, the employee must not appear on the FTP file following the effective date of the leave of absence or layoff. In the case of return from leave (regular or disability) or return from layoff, the employee must appear on the FTP file beginning with the effective date of the return. Any change in name must appear on the FTP file. Any change in social security number must appear on the FTP file. Termination Report will impact the FTP file as follows: Employee must appear on the FTP file reflecting contributions related to final regular pay and/or unused vacation pay. Employee must not appear on FTP files thereafter, unless a new Report of Status of Participant or revised Termination Report is filed. Employee must not have contributions deducted upon final payment of unused sick leave at time of termination. Exception: Contributions may be deducted on compensable unused sick leave for a member who is part of a collective bargaining agreement that allows this. The last payroll date shown on the Termination Report must coincide with the last appearance of contributions on a FTP file; regardless of whether the contribution amount is shown as a positive or negative. (See Dan Slack Memorandum on page 30.) Payment of Employee / Employer Contributions Total payment of contributions must be sent within 5-7 days following the end of the pay period. Payment may be made via check sent to the SURS lockbox. Or, to improve the timeliness of posting contributions to member accounts, SURS encourages employers to remit payment using ACH transmission, the specifications for which are found in Exhibit F. Both forms of payment must be accompanied by the pay period-specific, 9-digit identifying number (called the AR Key) which is printed upon coupons supplied to the employer at the beginning of each fiscal year. The address of the SURS lockbox is: State Universities Retirement System P.O. Box Chicago, IL

56 The amount of the payment must agree with the total amount of contributions as shown on the Cash Sent screen on the SURS Employer Payroll website. Exceptions to Normal Procedures Corrections to the FTP File Occasionally an employer submits an FTP file that excludes corrections or adjustments that are reflected in the Report of Employee/Employer Contributions and the payment amount. In this situation, the employer s payroll department may either contact SURS and ask for the file to be rejected, correct the file and resend it OR enter adjustments to the FTP payroll file on the Employer Payroll website Prior Period Adjustments to Member Contributions There may be situations where the contributions may have been incorrectly paid in prior pay periods. To correct this, the necessary adjustments, either negative or positive, should be submitted on the current pay period FTP file, with the prior period adjustment amount and pay period dates broken out into a separate record from the current pay period information. SURS systems will then post these contributions adjustments to the appropriate pay period on the Member Subsidiary Ledger. The payment due to SURS for total contributions listed on the FTP file should reflect both the current period contributions as well as the impact of any prior period adjustments. If an employer is submitting adjustments for a member for whom the termination report has already been submitted and for whom a benefits claim is being processed, the employer should notify SURS payroll staff of this so that the member claim can be put on hold until the corrected Termination Report with accurate last payroll information is received. Using the Employer Website allows these adjustments to be made before releasing the payroll to SURS. Paying Contributions Past Due If an employer determines that an employee has a period of employment for which SURS contributions were mistakenly not deducted, the following steps should occur: Begin pension contributions for the participant immediately. Secure from the participant payment for the lump sum of pension contributions owed to SURS. Send payment to SURS using the following procedure: Include with FTP file- Employer collects the past due amount from the employee, and includes them on the current pay period FTP file. It is imperative that each pay period for which contributions are being remitted is presented on a separate record. For example, if in January $320 of contributions are reported for September through December, four records are required to present each month s contribution of $80. A letter or of 6

57 explanation regarding the past due submission should be sent to the SURS accounting staff following the transmission of FTP file. This will enable SURS to verify that the contributions were recorded in the correct pay period. The payment of these contributions may be added to the remittance of the payroll contribution total, a separate check for past due contributions is not necessary. These contributions will be considered as picked up and coded as tax deferred. In all circumstances, inasmuch as the contribution is required by Statute, it is the Employee s responsibility to pay the retirement contributions, and the employer s responsibility to secure the contribution from the employee. If an employee is unable to pay the total contribution at one time, the employer may make arrangements with the employee for payments over time, and forward the contribution to SURS when the entire amount due has been collected. Retroactive Pay Increase In the case of the remittance of contributions related to a retroactive pay increase, a separate record on the FTP file is required for each month affected. For example, if a pay increase resulting in $300 of additional contributions is granted September 30 retroactive to July 1, three records of information would be required, one for each month impacted. Each record would need to have a different month end date field so that each month would be allocated appropriately. Contributions in Error If it is determined that contributions have been deducted and remitted for a member who does not meet the criteria for SURS participation, the employer should follow these steps: 1) Defined Benefit Plan Members- the incorrectly submitted contributions should be included on the FTP file as negative adjustment amounts, broken out into separate records for each pay period impacted, as previously described in the discussion of Prior Period Adjustments to Member Contributions. 2) Self-Managed Plan Members- This is the only situation where the FTP file should not be used to adjust prior contributions submitted. In the case of a full back out, a letter or should be submitted to SURS authorizing the withdrawal of the contributions from the Self-Managed Plan accounts. SURS will coordinate this, and return the contributions back to the employer who will be responsible for correcting the salaries/wages paid to the employee. The contributions returned will be equal to the amount originally submitted by the employer; any investment gain or loss incurred during the period the contributions were held by the SMP plan will be borne by SURS. In the case of a partial back out, the employer should process that reversal record through normal payroll processing. 7

58 Schedule of Expected Payrolls Each year, SURS will request that each employer payroll department furnish a schedule of Expected Payrolls for the upcoming academic year (Sept 1 Aug 31). This will enable the pay period-specific coupons with the assigned AR keys to be printed and distributed. If your agency has any supplemental pay periods or any FTP file not previously listed as an Expected Payroll, please notify SURS and an AR key will be provided. By July 15 of each year, SURS requests an aggregate report of earnings paid to all employees for the previous July 1 through June 30. This includes employees who are SURS participants, as well as non-participants including students. IRS Contribution Limits There are various Internal Revenue Service contribution limits which apply to SURS plans as follows: Section 401(a)17 Limits: Impacts all SURS plan options - If member is certified before 7/1/96, they are not subject to this limit. - If member is certified after 7/1/96, earnings subject to the SURS employee and employer contribution is $245,000 for FY 2011 (July 1, 2010 through June 30, 2011) The IRS has not changed this limit for FY 2012 (July 1, 2011 through June 30, 2012.) This limit is updated on an annual basis by the IRS and will be provided to you by SURS. - If a member certified after 7/1/96 has prior SURS service credit or a past refund which can be purchased/repaid, they may be eligible to be grand fathered into the group not subject to this limit. - Employer Responsibility: To discontinue SURS contributions once the limit has been reached in the 7/1 6/30 fiscal year. However, a record for these individuals showing zero contributions with the accurate percent time worked should still be submitted with each payroll. Prospective employees who will be in highly paid positions should be informed of this limit. Upon hire, inquiries should be made as to the possibility of service credit purchase. - SURS Responsibility: To review contributions after end of fiscal year to determine if any members exceeded limits. Employer will be notified and should implement adjustment processing before the end of the calendar year to ensure correct W-2 reporting. It would be desirable to complete all corrections before the end of the academic year to ensure that the annual SURS Benefit Summary Statement will present accurate earnings and contribution totals. 8

59 Section 415(c) Limits: Impacts Self-Managed Plan only - Limits total annual employee and employer contributions to the SMP is $49,000 for the calendar year January 1, 2011 through December 31, This translates to annual earnings of approximately $324, for calendar year Employer Responsibility: To discontinue SURS contributions once the limit has been reached in the calendar year. However, a record for these individuals showing zero contributions with the accurate percent time worked should still be submitted with each payroll. Prospective employees who will be in highly paid positions should be informed of this limit. - SURS Responsibility: To do ongoing review of SMP contributions and earnings for highly paid members of plan, and identify if there appear to be members exceeding the limit. Employer will be notified and should implement adjustment processing before the end of the calendar year. PA Contribution Limits\Tier II PA created a second tier of benefits for participants who are first certified in SURS or the eligible reciprocal systems on or after January 1, The legislation states in part: the annual earnings, salary or wages (based on the plan year) of a member or participant to whom this Section applies shall not exceed $106,800; however that amount shall annually and thereafter be increased by the lesser of (i) 3% or that amount, including all previous adjustments, or (ii) one-half the annual unadjusted percentage increase (but not less than zero) in the consumer price index-u for the 12 months ending with the September preceding each November 1, including all previous adjustments. Therefore, the statute requires that employee contributions to SURS will be limited on a fiscal year basis, and accepted only on earnings up to the maximum set forth in Section 5/1-160 of the statue. For the period of 01/01/11 to 06/30/11 that amount is $106,800. SURS and SURS agencies will monitor earnings/contributions and cut them off once the annual fiscal year limit is met by the member. SURS will be notified of the new limit for the following year each November by the Illinois Department of Insurance. It should be noted that a definitive answer is not yet available as to whether this earnings limit is applicable to the determination of the employer contribution from federal/trust and other non-appropriated sources. 9

60 Community College Health Insurance Program SURS has been charged by the State of Illinois to collect the employee and employer contribution data and funds for the Community College Health Insurance Program. This program requires that all full-time employees of Illinois community colleges, excluding the City Colleges of Chicago, must have.5% of earnings deducted from their earnings and remitted to the State to fund the health insurance program available to community college retirees. This employee contribution is matched by an employer contribution. These contributions are collected by SURS through additional records included on the FTP file used to report pension contributions. (See Exhibit C-2 for the detailed record layout). The payment is to be included with the total payment for the FTP file sent. SURS immediately forwards these contribution amounts to State of Illinois where the program is administered. The tax treatment of the employee contributions has been an unresolved issue since the beginning of the program. SURS attempted to obtain a Private Letter Ruling from the Internal Revenue Service to clarify whether these contributions could be recorded as taxdeferred. At the implementation of the program in 1999, SURS recommended to each community college that the prudent approach would be to record the deductions as aftertax until specific permission from the IRS was received to do otherwise. To date, SURS has been unable to obtain a response from the IRS on behalf of the employer group, the IRS position being that each individual employer must obtain their own ruling. 10

61 EXHIBIT A CALCULATION OF SURS CONTRIBUTIONS: Example 1: Before 1/1/81, contributions were after-tax Basic Compensation $ 1,000 Contribution Reported to SURS 80 Taxable Income per W-2 1,000 Example 2: After 1/1/81, contributions are picked-up (tax-deferred) Basic Compensation $ 1,000 Contribution Reported to SURS 80 Taxable Income per W Example 3: Employer pays SURS contributions on behalf of employee Basic Compensation $ 1, Grossed up to reflect 8% contribution paid by employer 1, (Basic comp divided by 1 minus % paid by employer) Contribution Reported to SURS Taxable Income per W-2 1, This demonstrates that when the employer pays the employee contribution on behalf of the employee, the base to which the 8% is applied must reflect the benefit of this payment, resulting in a higher contribution than if the amount had been withheld from employee earnings. 11

62 EXHIBIT B Sample Employer Notification Report Employer Notification report Name Central Illinois State University Greg Lyle Payroll Supervisor Campus Box 0580 Date 9/20/00 Normal IL Dear Greg Lyle, This is to confirm that the following members have submitted their enrollment choice to SURS. We have entered their irrevocable choice on our system. Some have been placed in Traditional by Default if a timely election form was not received. Listed below are the members with their corresponding choices 1 SELF MANAGED PLAN Name Urbonas, Kristin Rachel Rogers, Joshua Avon 2. PORTABLE SURS PLAN Name Labonville, Marie Elizabeth SSN SSN Please examine the list of new SMP members carefully to see if any of them are being paid from grant funds and coded with an account code = 1. If that is the case, please pay employer contributions to us for that particular member at the 7.6 rate on any of their earnings subject to employer contributions. Please begin this process on the next payroll submitted for them. Since policemen and firefighters are only allowed to contribute 8% to SMP Plan, please examine the list of new SMP members to see if any of them are either police or firefighters. If that is the case, please remove the P from column one on your payroll data and send us only 8% contributions on your next payroll submitted for them. Otherwise, the member will appear on our exception report and we will have to manually work out the process to return the overpayment. Naturally, we would both like to avoid this situation. Thank you in advance for your cooperation. Sincerely Shelly Wood Accounting State Universities Retirement System 12

63 EXHIBIT C-1 FTP FILE RECORD LAYOUT SURS CONTRIBUTIONS See Exhibit C-2 for Community College Health Insurance Contributions POSITION INFORMATION 1 9 ½ % Code = P 8% Code = blank 2-7 Pay period ending date representing when the contributions were earned, or the date to which an adjustment should be applied, MMDDYY (not date of check, do not use slashes between date segments) 8-9 Blank 10 Z (always use a Z in this position) Blank Employee contribution (2 decimal positions understood, right-justified, left zero-filled) Blank Percent of time worked (3 decimals, right-justified, left zero-filled) Hours worked in the pay period not to exceed 100% time (1 decimal position understood, right-justified, left zero-filled) Total hours in the participants defined pay year (no decimal, rightjustified, left zero-filled) Last name, first name, middle initial (no commas) Agency code assigned by SURS Social security number (no dashes) 73 Accounting code (refers to payroll source of employer funding) b State (leave field blank) 1 Trust / Grant / Other Funds 2 Federal (This applies to U of I Urbana only) Employer contribution (2 decimal positions understood, right-justified, left zero-filled) 13

64 EXHIBIT C-1 RECORD LAYOUT EXPLANATION FOR SURS CONTRIBUTIONS POSITION 1 P=Police Officer or Firefighter participant whose required contribution is 9 ½ % of earnings. It is very important that a police officer or firefighter in the SMP plan have a blank in position 1, and that only 8% is deducted as required by law. 2-7 Pay period ending date which the contributions were earned, or the date to which an adjustment should be applied, MMDDYY (not date of check, do not use slashes between date segments) 8-10 Not Used 10 Always use a Z in this position on each record Not Used Employee contribution Normally 8% of earnings, unless a police officer or firefighter (9 ½%) in Traditional or Portable plan. Two decimal positions understood. Negative amounts only should be typed with a minus sign preceding the numeric digits. For example: Not Used Percent of time Report percent of time worked for all participants who work in a position defined by a percentage contract. This field should reflect the actual percent time worked for a particular period reported in the date field (positions 2-7). If the employer can report a percent of time worked for all employees in positions 29-32, then the employer does not need to use positions Positions can then simply be filled with zeros. This would be the preferred method; however, if the employer can only report hours worked instead of percent time worked, then positions need to be used with the proper data and positions would be filled with zeros. SURS can only accept information in either Percent of Time field (positions 29-32) or in Hours Worked field (positions 33-40) Hours worked Report hours worked in the pay period for all hourly participants or anyone who is not employed in a percent of time contract. The hours reported for any pay period must not exceed the full-time equivalent for the position. Example: A participant who normally would work an 8 hour day as full-time must have no more than 80 hours reported for any one bi-weekly pay period. If there is a percent time shown in positions 29-32, then positions (Hours Worked) must be filled with zeros. 14

65 NOTES: Total hours Report the total hours in the participant s normal work year. Example: An 8 hour day is a 2,080 hour year. This number would be the same each pay period unless the work-year changed Last name, first name, middle initial one space - no commas between names Agency code assigned by SURS Social security number -no dashes 73 Accounting code Designates payroll funding b (blank) General State funding no employer contributions paid 1 Trust or Grant Funds Employer contributions paid with employee contributions. 2 Federal AG Funds (This applies to U of I Urbana only) Employer contribution Report actual amount of employer contributions being sent to SURS. Two decimal positions understood. Negative amounts should be typed with a minus sign preceding the numeric digits. For example: All certified participants are required to have a record on each FTP file, regardless of the amount of contributions. (Contributions may be zero.) 2. Each participant must have a record for each pay period being reported. Example: If in September you are reporting September as well as half of August not reported in August, two records are required. a. Report August with August pay period ending date. b. Report September with September pay period ending date. 3. Either Hours Worked (positions 33-36) or Percent of Time (positions 29-32) must be entered. 4. If Hours Worked (positions 33-36) is entered, Total Hours (positions 37-40) must be entered. 5. Employer must report zero contributions and a percent time worked in positions if a member is working that particular period but is not getting paid until a later pay period. This is the only way that SURS will know that the member is working for that particular period and deserves service credit. SURS distribution of service credit program is driven from the Percent Time Worked Field in positions or the Hours Worked Field in positions If a member is not working and not getting paid for this particular pay period, employer should report zero contributions and zero percent time worked. Then no service credit is given because none is deserved. If this situation continues for 12 months, then employer must remove this individual from the payroll tape and 15

66 send a Termination Report to SURS so the member may get a refund of their contributions. 7. Whenever there is an employee contribution amount shown on a record in positions 16-22, there must be a percent of time worked in positions or actual worked shown in positions along with the annual hours shown in positions An employee who is a peace officer with arresting authority must have 9 ½% contributions deducted from earnings, unless SURS has received a signed notarized waiver of the Police Office Retirement Formula within 60 days of SURS receiving the certification as a police officer. However, anyone working as a security officer and having no arresting authority must only have 8% contributions deducted from earnings. If an employee works part-time in both capacities, two records reporting contributions are required on the deduction register separately reporting the contributions at the two different rates. 16

67 EXHIBIT C-2 FTP FILE RECORD LAYOUT COMMUNITY COLLEGE HEALTH INSURANCE CONTRIBUTIONS This record applies to Community Colleges ONLY (except City Colleges of Chicago). Other employers should not send this record type. POSITION INFORMATION 1-9 Blank "I" (always use an I in this position) Blank Employee Health Insurance Contribution Amount (2 decimal positions understood, right-justified, left zero-filled) Blank Last Name, First Name, Middle Initial (no commas) Agency Code assigned by SURS Social Security Number (no dashes) 73 Blank Employer Health Insurance Contribution Amount (2 decimal positions understood, right-justified, left zero-filled) 17

68 EXHIBIT C-2 RECORD LAYOUT EXPLANATION FOR COMMUNITY COLLEGE HEALTH INSURANCE CONTRIBUTIONS POSITION 1-9 Not used. 10 "I" must always be entered here to identify the contributions as health insurance rather than regular SURS contributions Not used Employee Health Insurance Contribution amount must be entered. This will be.5% of earnings. Negative amounts should be typed with a minus sign preceding the numeric digits. For example: (2 decimal positions understood, right-justified, left zero-filled.) Not used Last name, first name, middle initial (no commas) Agency code assigned by SURS must be entered Social Security Number, no dashes, must be entered. 73 Not used Employer Health Insurance Contribution amount must be entered. Negative amounts should be typed with a minus sign preceding the numeric digits. For example: (2 decimal positions understood, right-justified, left zero-filled.) NOTES: 1) Each member determined by the employer to be eligible for Community College health insurance contributions should have a health insurance contribution record. 2) Unlike SURS contributions, a single health insurance record can be used to represent multiple pay periods. However, this is not a requirement. One record per pay period can also be used. 3) All required Community Colleges must begin reporting health insurance contributions for pay periods starting on or after January 1, ) The paper hard copy of the payroll should have a separate column for employee health insurance and a separate column for employer health insurance. Both columns should have totals. 18

69 EXHIBIT D FTP FILE RECORD LAYOUT INSTALLMENT PURCHASE OF SERVICE CREDIT WITHHOLDING POSITION INFORMATION 1 Blank 2-7 Pay Period ending date of the payroll being sent to SURS MMDDYY (do not use date of check do not use slashes between date segments) 10 P always use a P in this position Installment Purchase of Service Credit Withholding Amount 2 decimals positions understood right justified left zero-filled Blank Last Name First Name Middle Initial (do not use commas) Agency Code assigned by SURS Social Security Number no dashes 73 Blank Not used zero fill RECORD LAYOUT EXPLANATION POSITION EXPLANATION 1 Not Used 2-7 Pay Period ending date of the payroll being sent to SURS MMDDYY (do not use date of check do not use slashes between date segments) 8-9 Not Used 10 P must always be entered here to identify the withholding of installment purchase of service credit rather than regular SURS contributions Not Used Installment Purchase of Service Credit withholding amount must be entered. Negative amounts should be typed with a minus sign preceding the numeric digits. Example: decimal positions understood right justified left zero-filled Not Used Last Name First Name Middle Initial (do not use commas) Agency code assigned by SURS must be entered Social Security Number no dashes 73 Not Used Zero-filled 19

70 EXHIBIT E Electronic Reporting of Contribution Information To SURS Reporting your SURS contributions in an electronic format is faster and more economical than paper reporting. It also helps to reduce errors that can be introduced through manual entry. Reporting directly to the SURS secured Internet site is now possible for all contribution reporting and is much more efficient than using the postal system to mail tapes or diskettes. Internet Reporting Using FTP (File Transfer Protocol) You can easily transfer your contribution information to the SURS secured Internet site. SURS prefers this method of reporting. To use the FTP method of reporting, you need to take the following steps: 1. Call Mike Brewer in SURS Information Systems Division at option 1 ext 851, or send him an at: mbrewer@surs.org. Mike will set up your initial signon credentials and pass them along. He will also coordinate the testing of your first FTP transmission to insure SURS receives your file properly and they are formatted correctly. 2. Each payroll period, create a file containing your contribution information in flat file format. The record layout remains the same as tape or diskette format. However, the naming convention of the file transmitted is very important, the File Naming Conventions section of this document. 3. Use your FTP software to log into the SURS FTP site at FTP- RELAY1.SURS.ORG Enter your user name and password, and then send your file. Please reference to following sections for specifics on using FTP. I. Microsoft Windows FTP II. File Naming Conventions 20

71 EXHIBIT E I. Microsoft Windows FTP: Please note: SURS does NOT provide software support for any FTP software. These instructions are meant only as a BASIC starting point to give you general guidelines on getting started. If you have questions regarding the software you use, please contact your software vendor. If you use Windows, and have a typical installation, you automatically have FTP software on your system. This is very basic software that requires you to input DOS-type commands from the DOS prompt on your PC. It is not menu driven. A. After you have created your SURS Contribution file, save it in a location you can easily remember using the naming conventions discussed later in this document. (In our example here, we will use a:\sm1231.pay) B. Sign on to your Internet service provider. C. Pull up an MS-DOS window by clicking on the "Start" button on the lower left-hand side of your screen, then click on "Programs", and then on the "MS-DOS Prompt". D. In the MS-DOS window, type the following commands, pressing the enter key after each command: 1. ftp 2. open ftp-relay1.surs.org (at the "User" prompt, type in your user name and then press enter) (at the "Password" prompt, type in your password and then press enter) 3. type ascii 4. cd agency\"employer id" (Enter your agency id) 5. put a:\sm1231.pay (use the actual location and filename of your file in place of "a:\sm1231.pay") 6. bye 7. exit Ipswitch is one third-party vendor which provides a Windows based FTP software for a minimal fee called WSFTP-Pro. They can be found at A free Windows based software called CoreFTP can be found at Please realize that SURS does not have any connection with either of these companies. 21

72 EXHIBIT E II. File Naming Conventions: Files should be named according to the following conventions. All file names that the employer uses on the FTP server is limited to 9 characters plus the extension. The first positions indicate the payroll description: BI Biweekly CCC City College of Chicago CCG City College Germany COC City of Champaign Firefighters COU City of Urbana Firefighters CSE Civil Service Exempt CSH Civil Service Hourly MO Monthly SH Student & Hourly SM Semi-Monthly SU Supplemental FSM Faculty Semi-Monthly The next positions are in the MMDD format, as month and day. The month and day used needs to be the Payroll Period End Date of the contribution file being sent. There won t be a year included as the files will be cleared off the FTP server on a timely basis. The extension indicates it s a payroll file.pay. EXAMPLES: Civil Service Hourly for pay period ending 04/15 City of Champaign Firefighters for pay period ending 03/12 Biweekly for pay period ending 04/15 CSH0415.PAY COC0312.PAY BI0415.PAY File Transfer Protocol (FTP) instruction for the State Universities Retirement System Revised 04/01/11 22

73 EXHIBIT F Methods of Payment by SURS Employers The following payment options are available: 1. By check: The Total Payment of the total contributions on the FTP file may be sent within 5 days following the end of the pay period to the SURS lock box at the following address: State Universities Retirement System P.O. Box Chicago, IL By Credit ACH: Employers may send a payment via an ACH file to credit the SURS account. In order for SURS to identify which payroll this payment is for, a specially formatted addenda record must be included. Contact the SURS accounting staff for more details. 3. By Debit ACH: Employers may elect to have SURS perform a debit of their designated account via ACH when the payroll is processed. Employers must first submit an Electronic Debit authorization form to SURS. If you choose to use this option, a debit payment will be posted at your designated bank account(s) approximately 3 to 4 days after you release the payroll from the Employer payroll website. Contact the SURS account staff for more details. 23

74 24

75 MEMBERSHIP Participation Requirement p. 1 Employee Contributions p. 2 Police & Firefighter Contributions p. 3 Service Credit p. 4 Process New Events New Hire p. 5 Layoff p. 7 Leave of Absence p. 11 Demographic Change p. 15 Termination p. 16 Rev

76 Participation Requirements Persons employed at 50% time or more prior to Jan. 1, 1984, could elect to become participants on the first day of employment or the first day of any payroll period prior to completing 3 years of employment. Participation became mandatory at the beginning of the fourth year of employment. However, for all who began employment on or after Jan. 1, 1984 at 50% time or more, and whose employment was permanent and continues in which services were expected to be rendered on a continuous basis for at 4 months or one academic term whichever is less, participation is mandatory on the first date of employment, if eligible to participate. This was the law until July 1, After July 1, 1991 the following law applies. Who is eligible? Any person who is employed in a permanent and continuous position or a position in which services are expected to be rendered on a continuous basis for at least 4 months or one academic term, whichever is less. Who is not eligible? A person whose employment is irregular, intermittent, or temporary. A student who is enrolled in and regularly attending classes in a college or university which is an employer of SURS, and who is employed on a temporary basis at less than full time. A person currently receiving a retirement annuity or a disability retirement allowance from SURS. A person on military leave of absence. A person eligible to participate in the Federal Civil Service Retirement System who is currently making contributions to that system based on earnings paid by an employer. A person on leave of absence without pay for more than 60 days immediately following termination of disability benefits. A person hired after June 30, 1979, to participate in a public service employment program under the Federal Comprehensive Employment and Training Act, who receives earnings in whole or in part from funds provided under the Act. A person 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. Such individuals are non-resident aliens and are employed on a J1 or F1 visa. Note: For tax purposes, J-1 and F-1 visa holders should be certified as SURS participants when they become resident aliens, assuming they meet all other qualifications for SURS participation. Any person with F-2 or J-2 visa is not considered an employee per the Illinois Pension Code, and consequently is not entitled to participate in SURS, if they are non-resident, non-immigrant aliens. They could become a SURS participant if they become resident aliens. An alien possessing a green card or who meets the substantial presence test qualifies as a SURS participant. A person employed part-time who participates in an optional retirement program sponsored by his or her employer. 1

77 Employee Contributions Employee Contribution Rate (including overtime, summer session, and vacation earnings) Traditional Plan: 8% of gross earnings. 6.5% for normal retirement contribution 0.5% for Automatic Annual Increase 1.0% for Survivor Insurance Portable Plan: 8% of gross earnings 6.5% for normal retirement contribution 0.5% for Automatic Annual Increase 1% for Portability Self-Managed Plan: The entire 8% contribution is for normal retirement. Note: In all cases, full-time community college employees contribute an additional 0.5% to help fund a health insurance plan for community college retirees. Pick-Up of Contributions The employee does not pay tax on contributions until withdrawn from the system. The employee contributions are picked up by the employer and treated as employer contributions for income tax purposes. Retirement contributions are based on the gross earnings before the employer pick-up and are included in earnings. Previously Taxed Contributions All contributions on pre-1981 earnings and service credit purchased with after-tax dollars will be considered previously taxed. Previously taxed contributions will be recovered tax- 2

78 free when distributed to the employee as a retirement annuity, refund, or as a disability benefit if the employee remains on disability beyond age 65. Social Security Coverage Participants are not eligible for Federal Social Security coverage; therefore no Social Security taxes are withheld from their earnings. Note: All employees hired on or after April 1, 1986, must pay the 1.45% deduction for Medicare. Assignment and Loans Contributions cannot be assigned or used as collateral for a loan and are not subject to garnishment. Contributions and benefits are protected from seizure in bankruptcy. SURS is not authorized to make loans to an employee or to refund his or her contributions prior to the 121 st day of a layoff or prior to his or her termination from the system. Police and Firefighter The employee contribution rate for Police and Firefighters is 9.5% of gross earnings in the Traditional and Portable Plans, and 8% in the Self-Managed Plan. To qualify as police the employee must be empowered to make arrest to protect the property, interest, students, and personnel of an employer. Traditional Plan: 9.5% of gross earnings 8.0% for normal retirement contribution 0.5% for Automatic Annual Increase 1.0% for Survivor Insurance Portable Plan: 9.5% of gross earnings 6.5% for normal retirement contribution 0.5% for Automatic Annual Increase 1.0% for Portability Self Managed Plan: The entire 8% contribution is for normal retirement. 3

79 Service Credit How Service Credit is granted 1) A partial year of service is considered in the calculation of benefits. 2) A participant receives service credit for no more than 1 year during any academic year. Academic employees do not receive additional service credit for teaching summer school, unless they otherwise did not attain 1 year of service credit. 3) Other public employment (OPE), prior service, military time, leave, and the repayment of a separation refund, purchased as credit is broken down into the Retirement System s academic year. 4) Service credit in other retirement systems in Illinois covered by the Reciprocal Act is not transferred from one system to another. Service credit is combined at the time of retirement to calculate the retirement benefit when a participant retires under the Reciprocal Act. How Service Credit Is Calculated 4

80 How to Process New Events New Hire Employer must complete a New Hire event, including all fields on the Member Information and Certification screens (Fig. 1 and 2) J1 Visa holders must pass the Substantial Presence Test to participate.) Fig. 1 5

81 Fig. 2 All of the New Hire Event-Member Information must be completed. (Fig. 2a and 2b) Name, Social Security Number, Address, Gender, Date of Birth are all required fields Fig. 2a 1) Member Type is the position type. 2) Status Effective Date is the certification date (the first day of employment). 3) Monthly Pay Rate is the amount of compensation the employee will be paid each month. 4) Pay Duration is the number of months over which the employee is paid ( 9, 10, or 12). 5) Percent Current Status should reflect the percent of time the employee works. Reports of Status can be submitted through the SURS website, personal computer (PC) program, magnetic media (tape, cartridge, diskette), or File Transfer Protocol (FTP). (For PC program or tape specifications, see the following exhibits.) 6

82 Optional Retirement Plan Election A Retirement Planning Workbook (The Power of Choice) and a Plan Election form will be sent to the new employee when SURS receives the certification from the employer. The employee may also view the same workbook on the SURS Website. Only SURS may distribute the Retirement Choice Election Form to employees. Member Guide and Beneficiary Designation When SURS receives the employee s Optional Retirement Plan election, we will mail the employee the appropriate Member Guide and Beneficiary Designation form for the retirement plan he or she elected. Only SURS may distribute Member Guides to new employees. Layoff The employer should create a Layoff event for the employee on the Employer Website when an employee goes on layoff. (Fig. 3) Before proceeding to the Layoff screen the Member Information Screen must be verified and updated. After 120 Days of a Layoff: 1) Employee does not receive service credit. 2) Employee is considered an inactive participant for benefits. 3) Employee can request a refund of contributions. 7

83 Refund of Contributions During a Layoff 1) After 120 days, employee may apply for a refund of contributions. 2) If refund is requested, SURS contacts the school to request last payroll information. 3) When a refund is processed, SURS notifies school of the date the refund is paid. When the employee returns from layoff, participation resumes immediately, and the employer must complete a new certification. Fig. 3 1) The Status Effective Date is the date that the layoff began. 2) The Estimated Return Date is the date that you anticipate returning the employee to work. 3) The Percent of Current Status reflects the employee s status on the date of the layoff. 8

84 Return From Layoff 1) When an employee returns from Layoff, a Return From Layoff event must be created And completed on the Employer Website (Fig. 4 and 5). 2) If contributions have been refunded, the employer should complete a New Hire event (Fig. 1 and 2). The employment date and certification should be the date the employee returned from layoff. 3) If contributions have not been refunded, the employee resumes making SURS contributions. Service credit is earned for the first 120 days of layoff only. Fig. 4 1) Verify and update the Member Information screen (Fig. 1). 2) The Status Effective Date is the date the employee returned from layoff. 3) Monthly Pay Rate is the monthly compensation the employees is earning on the date that her or she returns from layoff. 9

85 Fig. 5 4) Pay Duration (in months) is how many months the employee is paid over. 5) Percent Of Current Status is the percent of employment on the date that the employee returns from layoff. 1) Status Effective Date is the date that the employee returns from layoff. 2) Percent Current Status is the percent of time the employee will be returning from layoff. 10

86 Leave of Absence Leave With Pay An employee has full protection for benefits while on leave with pay. In calculating benefits, SURS will assume he or she is receiving full salary, even though the employee contributions are deducted only on the salary actually received. However, to maintain full earnings credit the employee must make contributions on the portion of earnings he or she is not receiving. The employee will still receive full service credit if the leave payments are not made; however, if he/she does not make the payments the service credit may be adjusted when benefits are calculated. An employee who is granted a leave of absence with pay at less than 50% time must also be granted a leave of absence without pay for the remaining percent of time. Leave Without Pay Employee may elect to make contributions of 8% of his or her full-time salary rate on the date the leave begins in order to receive full service credit for retirement purposes (9.5% under Police & Firefighter formula). Contributions may not be paid for more than 3 years during any period of 10 years. If employee fails to return to employment at the expiration of the leave for a period equal to the leave or 8 months, whichever is less, the contributions paid during the leave will be refunded without interest and the service credit covering the leave will be forfeited. If employee fails to complete payments, the contributions paid during the leave will be refunded without interest, and the service credit covering the leave will be forfeited. Payment can be made in a lump sum at the beginning of the leave, in monthly installments during the leave, or it can be deferred until later. The deferred payment will include interest at the effective rate and must be made as a lump sum. If employee does not elect to pay contributions, he or she will continue to receive disability, death, and survivor insurance protection but will not receive service or earnings credit for that period. The employee must return from the leave to a position at the same percent time he or she was employed when the leave began, otherwise, contributions are refunded and service credit covering the leave will be forfeited. 11

87 Leave Types Disability Leave Insurance Contract Medical Military Leave Personal Sabbatical Suspension Workers Compensation Reporting A Leave Create a Leave of Absence Event on the Employer Website (Fig. 4) Fig.4 12

88 1) Verify and update the Member Information screen (Fig.1). 2) Select the Type of Leave from the drop down menu. 3) If the leave type is medical, indicate if it is for the employee by checking yes or no. 4) Date Leave of Absence Began is the first date of the leave. 5) Estimated Return Date is the date that it is anticipated the employee will return from leave. 6) Percent of Current Status should reflect the employee s status on the date the leave began. 7) Percent of Leave is the percent of time the employee will be on leave. 8) The Monthly Rate at Start of Leave is the monthly pay the employee was receiving at the time the leave began. 9) Number of Months is the number of months the employee is paid over. 10) Earnings Forfeited is the total dollar amount of earnings the employee will be forfeiting if leave is at no pay. Return From Leave Create a Return From Leave event on the Employer Website (Fig. 5 and 6) Fig. 5 13

89 1) Verify and update the Member Information Screen (Fig. 1). 2) Status Effective Date is the date that the employee returned from leave. 3) Monthly Pay Rate should reflect the monthly amount received by the employee upon return from leave. 4) Pay Duration is the number of months over which the employee is paid. 5) Percent of Current Status should reflect the actual percent of time worked upon returning from leave. Fig. 6 6) On the Return Information screen, enter the Percent Current Status as the same percentage as in step 5 on the previous page. (This identical information is entered on two separate screens because it is a two step process to change the member s status to active and to return the member from leave.) 14

90 Demographic Change Create a Demographic Change event on the Employer Website (Fig. 7) Demographic changes must be submitted in writing over the employee s signature if there is a pending claim or a SURS benefit is being paid. Fig. 7 Previously submitted information will be displayed in the entry fields of the Demographic Change screen. Replace current information or add new information as necessary. 15

91 Terminations Create a Termination event on the Employer Website (Fig. 8 and 9). Due to security reasons, an employee on disability with SURS cannot be terminated on the Employer Website. The termination must be submitted on paper for these employees (Fig. 10). Fig. 8 1) Check the appropriate Reason for Termination. 2) Date of Termination is the exact date that the employee was terminated. 3) Police/Fire Employment Dates are the beginning and ending dates for which an employee was employed as a police officer or a firefighter. 4) Number Of Hours Worked Per Day reflects the exact number of hours the employee actually worked each day. 5) Percent Of Employment should reflect the exact percent of time the employee worked while active. 6) Last Payroll Date is the last day of the last payroll period for which the employee was paid. 16

92 7) Vacation Days reflects the number of unpaid vacation days remaining on the termination date. 8) Cash Value Of Vacation Days is the combined value of all vacation days reported in step 7. 9) Unpaid Sick Leave Days is the total number of non-compensable sick leave days remaining on the termination date. 10) Paid Sick Leave Days is the total number of compensable sick leave days remaining on the termination date. 11) First Partial Academic Earnings represent compensation paid prior to the beginning of the new academic year. 12) Indicate if you accepted the transfer of sick leave days from a previous SURS employer. 13) If sick leave days were transferred, the number of sick leave days that were transferred and the name of the employer from which they were transferred should be entered. 14) Indicate if any Worker s Compensation will be payable to the employee. Compensation information for the last 5 academic years should be entered if the terminating employee has 5 or more years of service credit or if an employee with at least 1 year of service credit is known to have accumulated enough reciprocal time to qualify for retirement. Fig. 9 17

93 1) Academic Year should be reported using two digit years that reflect the beginning and ending of the academic year 2) Effective Date is the date that the monthly salary rate became effective. There can be multiple effective dates during any one academic year. Enter information for each new effective date in an academic year on a separate line (lines 4 and 5 in the diagram above). Always identify the academic year in each line even if it does not change. 3) Monthly Rate is the full-time monthly base contract (when contract exists) amount of compensation. For hourly employees and part-time employees, the full-time monthly equivalent must be calculated and entered. 4) Number of Months Worked is the exact number of months the employee actually worked. 5) Number of Months Paid is the number of months in which the employee was paid. 6) Percentage of Time should reflect the exact percent of time the employee worked while active. Termination While On Disability For security purposes, the Employer Website cannot be used to submit a termination for an employee who is currently receiving disability benefits. A paper form (Fig. 10) must be used to submit this information. 18

94 Fig. 10 The information entered on the paper Member Termination Report is the same as the Employer Website. When employment is terminated the employee should be given a Separation Refund Worksheet (Fig. 11) and remind the employee that he/she must contact SURS to initiate a request for a refund. 19

95 Fig

96 21

97 HEALTH INSURANCE Eligibility p. 1 State p. 1 CIP p. 1 Employee Responsibility p. 2 SURS Responsibility p. 3 Additional Information p. 4 Rev

98 Health Insurance Over the past several years, legislation has changed many aspects of the insurance benefits that a member receives at retirement. This legislation includes Public Act (HB 110) and Public Act (SB 211), as well as the passing of the bill regarding health insurance for community college retirees. Once SURS receives a member s retirement application, we determine which bill impacts the member, if any, and mail to them all the necessary paperwork to implement and enroll the member, if qualified. For more detailed information on Public Act (HB 110) or Public Act (SB 211) and how they impact your employees, consult the member guides. Eligibility State To be eligible for the State of Illinois health insurance benefits, annuitants must be receiving a monthly benefit from SURS and have at least five years of qualified service. Qualified service includes those years that a member contributed to a State of Illinois University or State agency, and may also include purchased prior service time or a repay refund with a State of Illinois University or State agency. A State agency includes those members who contributed to the State Employees Retirement System or those who worked for the Illinois Board of Higher Education and contributed to the State Teacher s Retirement System. Note: If all necessary insurance paperwork is not in the SURS office by the time the member s Preliminary Estimated Payment is set up, SURS will mail the member any necessary insurance forms needed to implement enrollment. Community College Insurance Plan (CIP) To be eligible for the College Insurance Program, annuitants must be receiving a monthly benefit from SURS and either (1) have been a full-time employee of a community college district or an association of community college boards created under the Public Community College Act and eligible to participate in a group health benefit plan as an employee or (2) be a survivor of an eligible Benefit Recipient. 1

99 Note: Once CIP eligibility has been confirmed and the retirement application has been received, SURS will mail to all qualified members the benefit books and enrollment forms. The City Colleges of Chicago do not participate in the College Insurance Program. State Upon retirement of a member, employers are required to send SURS the member s latest CMS verification form or CMS1, other insurance deduction authorization forms, and any other insurance change forms that the employee may have filled out in the employer s office prior to their retirement date. Please Note: If one of your retiring employees wishes to make any changes to their health or life insurance benefits, they need to contact the SURS office. If the retirement is immediate and any documentation is missing or is not in the office when we set up a member s preliminary payment, we will set it up when it is available on the CMS membership system. If the member is not an immediate annuitant and we have no insurance information, we will default to Quality Care. The transfer of a member s record could take place up to 60 days prior to the retirement date. Community College Insurance Program From their full-time active employees, Community Colleges will collect 0.5% of gross earnings to fund the CIP retiree health plan. It is the responsibility of the employers under this plan to inform SURS of the individuals eligible for the CIP benefits. If eligibility is unknown upon retirement, SURS will contact the employer asking for information on the member s full time status. Employee Responsibilities The benefit recipient will be responsible for informing SURS of any changes to their insurance benefits. SURS Responsibilities 2

100 Once a member starts receiving an annuity payment from SURS, our office assumes the responsibility of insurance administrator for all those enrolled in the State and CIP plans. SURS will implement, on a timely basis, all enrollments, changes, dependent recertifications, premium deductions, and answer inquiries that a member may have concerning their benefits. SURS will also mail to the member all necessary paperwork to implement the administration for all changes or enrollments that are involved for each one of the qualified members. It is also SURS s responsibility to inform all qualified members of their options during the annual Benefits Choice Period. Note: Benefits Choice changes for all annuitants must be mailed to the SURS office and not to the employer. Failure to mail to SURS may result in the change being delayed, or not being done at all. Retirees: At the time SURS sets up the Preliminary Estimated Payment (PEP) we will process the following: State: Transfer of pay codes on the Central management Services System. The benefits will stay the same unless we have received a change from the member. CIP: Enroll members under the College Insurance Plan only if we have an enrollment form on file. Survivors: At the time SURS receives notification of a member s death, the deceased member s file is reviewed. Survivors are then notified within 10 days of any insurance benefits that they are entitled to. Minnesota life is also notified at this time of the member s death. Notification of life insurance proceeds will come from Minnesota Life. SURS will enroll a qualified survivor with health benefits when they get all necessary paper work back in our office or when the claim is finalized, whichever comes first. Disability Recipients: SURS administers the insurance benefits for employees on disability from a State agency only. Disability recipients who have been certified as 100% employment status will be the only ones eligible for insurance benefits through SURS. SURS does not administer the insurance benefits for disability recipients from a Community College. Each school will administer the insurance for its employees on disability for the first six months. After that, SURS will begin to administer all insurance benefits. It is at this time that SURS will notify the school of employees that are discrepant. 3

101 When the discrepancy is corrected, it is up to the employer to notify SURS. Members approved for a medical leave of absence should always be coded on the Membership system with a type/sub code of 6002 (Non-Occ. Disability w/o benefits). If the member receives a disability benefit, the Retirement System will send the GIR a copy of their approval letter. The member s type/subtype code should be changed to 6001 effective the date indicated on the retirement system report. When the Retirement System begins reporting the member for insurance deductions (usually within 6 months), they will change the proc org code to the retirement system and the premium Collection unit will no longer direct bill the member for insurance premiums. Members filing under Workmen s Compensation should also be coded a 6002 until the agency receives notification that they have been approved under Workmen s Comp. At that time, the agency should submit a correction form to change the status to Members not receiving a disability benefit are entitled to a maximum of 24 months of state paid insurance. Proper use of these codes is necessary for us to establish Medicare primacy effective dates. Additional Information 1. If you offer a supplemental insurance coverage for our annuitants, we will take the premiums from their monthly checks once we get a signed authorization from your school. 2. Public Act (HB 110) and Public Act (SB 211) impact each member differently, depending on their situation. If there is any question regarding an employee s qualification for either bill, have the member contact the SURS office. 3. A member with less than 20 years of service credit who also does not qualify for the Public Act (SB 211) provision will be given the option of paying for a portion of their health insurance benefits or waiving the coverage altogether. 4. Per CMS, if an annuitant waives their health insurance, they cannot become enrolled as a dependent under another State member s plan unless they are currently enrolled as a dependent in another State member s plan and the coverage will be continuous. 4

102 INTRODUCTION Purpose and Scope p. 1 Format, Revision, and p. 1 Maintenance p. 1 How to Use This Manual p. 1 SURS Contact Information p. 2 SURS Location Map p. 4 SURSMAC Directory p. 5 SURS-Websites p. 7 The Advocate p. 10 Rev:

103 STATE UNIVERSITIES RETIREMENT SYSTEM EMPLOYER PROCEDURES MANUAL Purpose and Scope The Employer Manual was developed by the State Universities Retirement System (SURS) to assist all agencies/employers covered by the System. It is intended to serve as a training device and reference source for all operating and supervisory personnel who are responsible for completing and submitting forms to SURS. It should also eliminate uncertainties. Additional reference material would include the Traditional, Portable, Self Managed, and Annuitant Member Guides, that may be accessed at Although these manuals address many day-to-day questions, it should not be assumed these are the final source of information. Format, Revision, and Maintainance The manual is divided into sections by subject matter. Each section contains an index and indicates the revision date and total number of pages in the section. The layout is designed to help employers stay current by allowing them to easily replace outdated information with new information. SURS will provide additions and revisions as they occur. All users of this manual are encouraged to recommend revisions, which they should submit in writing to SURS. Employers will be notified by when updates or revisions occur. Revisions can be obtained from the SURS Employer Website. How to Use This Manual The manual addresses two key areas: Employer Procedures and Member Guide. Employer Procedures section provides information on completing forms and the reporting that SURS requires from employers, such as payroll information or certification and termination reporting. Member Guide pertains to the employee and explains participation, benefits, and options. It also points out which information the employee must provide SURS. This segment of the manual will include a Member Guide for each of the three options: Traditional, Portable, and Self-Managed Plan Each section of the manual identifies procedures to be followed and key issues on a topic. Assuming there will be cross-referencing, the topics are addressed generally in the same order in both the Employer Procedures and Member Guide portions of the manual. Also included are examples of completed sample forms with instructions on how to complete them. 1

104 State Universities Retirement System of Illinois Locations and Contacts Street Address 1901 Fox Drive Champaign, IL for mail P.O. Box 2710 Champaign, IL Telephone Numbers Main (toll free) ASK-SURS ( ) Champaign-Urbana Area Employer Representative ASK-SURS press 4 anytime during message Fax SURS Website 2 3

105 SURS Employer Website Employer Representatives Larry Curtis Jennifer Rohrbacher Marge Martinie Employer Representative Address emprep.com Hours of Operation Monday through Friday 8:00 a.m. 4:30 p.m. Closed on the Following Holidays: New Year s Day; Martin Luther King Day; Memorial Day; July 4th; Labor Day; Veterans Day, Thanksgiving and day after Thanksgiving; Christmas Day 3 4

106 SURS Location Map 4 5

107 STATE UNIVERSITIES RETIREMENT SYSTEM MEMBERS ADVISORY COMMITTEE (SURSMAC) History From 1941 (when the Universities Retirement System was created by law) to 1953, the University of Illinois had its own advisory committee to advise the President on Retirement System matters. The President then referred specific recommendations to the Board of Trustees of the Retirement System. In 1953, the Committee was expanded, at the request of the Board of Trustees of the Universities Retirement System, to include representatives of all institutions that would insure full representation of all employers, and proper communication to the heads of the various institutions covered by the System. A conference was held, and it was proposed and approved that a Committee of 17 persons be established which would be advisory to the Board of Trustees of the University Retirement System. Distribution of membership was based on the percent of total participants, with the individual member to be determined by the President or Head of each employer. In 1966, a Committee was appointed to study the problem of reapportioning the membership of the Employees Advisory Committee to the Board of Trustees of the Retirement System. The Committee agreed that there should be equal representation from all institutions up to a predetermined size and that this representation should consist of approximately the same number of faculty members and nonacademic members. It was recommended that institutions with less than 5,000 participants in the Retirement System would be entitled to one academic and one nonacademic representative to the Employees Advisory Committee. Institutions with more than 5,000 participants in the Retirement System would be entitled to two academic and two nonacademic representatives. Further representation could be considered for any institution that had more than 8,000 participants in the Retirement System. Community Colleges would have both academic and nonacademic representation. This became effective on January 1, In 1971, membership on the Committee was expanded to include a retiree representative from the State-wide Annuitants Association. In 1974, representation was increased to two. On October 14, 1992, the Employees Advisory Committee approved changing the name of the committee to the SURS Members Advisory Committee (SURSMAC). 5 6

108 SURSMAC MEMBER DIRECTORY COMMUNITY COLLEGES President MEMBER REPRESENTATIVE Mr. J. P. Barrington John A. Logan College Route 2 Carterville, IL Phone: jp.barrington@jal.cc.il.us Administrator Ms. Phyllis Walden RETIRED Morton College 3801 South Central Avenue Cicero, IL Phone , Ext. 280 waldenp@morton.cc.il.us Faculty Non-academic Classified Illinois Community College Trustees Association Illinois Community College Board UNIVERSITIES Chicago State Eastern Illinois Governors State Mr. John Bennett RESIGNED FROM ICCFA Lake Land College 5001 Lake Land Boulevard Mattoon, IL Phone: 217/ jbennett@lakeland.cc.il.us Mr. Greg Joos College of DuPage nd Street Glen Ellyn, IL Phone: 630/ joosgr@cdnet.cod.edu Ms. Kimberly Villanueva Illinois Community College Trustees Assoc. 401 East Capitol Avenue, Suite 200 Springfield, IL Phone: kvillanueva@communitycolleges.org Ms. Ellen Andres Illinois Community College Board 401 East Capitol Avenue Springfield, IL Phone eandres@iccb.state.il.us Dr. Irvin Roth Chicago State University 95th Street at King Drive Chicago, IL Phone: bigqijr@csu.edu Mr. Terry Tomer Physical Plant 7 Eastern Illinois University 600 Lincoln Avenue Charleston, IL Phone: cstnt@eiu.edu Ms. Diana Ivey Human Resources Governors State University 1 University Parkway University Park, IL RETIRED MEMBER REPRESENTATIVE Mr. Larry Peterson John A. Logan College Route 2 Carterville, IL Phone: 618/ larry.peterson@jal.cc.il.us Mr. Robert Getz William Rainey Harper College 1200 West Algonquin Road Palatine, IL Phone rgetz@harpercollege.edu Mr. Gregory Clemons William Rainey Harper College 1200 West Algonquin Road Palatine, IL Phone: gclemons@harpercollege.edu Ms. Joey Gibbs Lewis & Clark Comm. College 5800 Godfrey Road Godfrey, IL Phone: jgibbs@lc.edu Dr. Larry Bates Coleman Hall 215G Eastern Illinois University 600 Lincoln Avenue Charleston, IL Phone: 217/ cflwb@eiu.edu

109 SURSMAC MEMBER DIRECTORY Phone: Illinois State Northeastern Northern SIU - Carbondale SIU - Edwardsville The University of Illinois at Chicago Mr. Jim Carlson Campus Box 2640 Illinois State University Normal, IL Phone: jhcarlso@ilstu.edu Ms. Jill Althage Ronald Williams Library Northeastern Illinois University 5500 North St. Louis Avenue Chicago, IL Phone: j-althage@neiu.edu Professor James A. Lockard Northern Illinois University DeKalb, IL Phone: jlockard@niu.edu Professor James J. Musumeci Finance SIUC Mailcode 4626 Carbondale, IL Phone: musumeci@siu.edu Mr. Jay Brooks Superintendent of Building Services PPS-SIUC, Mailcode 6727 Carbondale, IL Phone: jayb@pso.siu.edu Mr. Paul Anthony Lovejoy Library, Room 2102 Southern Illinois University, Campus Box 1063 Edwardsville, IL Phone: panthon@siue.edu Professor Stephen D. Smith 536 SEO (M/C 249) The University of Illinois at Chicago 850 South Morgan Chicago, IL Phone: smiths@math.uic.edu Mr. Shawn Marshall Facilities Management (M/C 896) The University of Illinois at Chicago Chicago, IL Phone: smarhsall@physpl.uic.edu Professor Steve Goodwin Campus Box 5590 Illinois State University Normal, IL Phone: sagoodwi@ilstu.edu Ms. Mary Griesinger Benefits Manager Northeastern Illinois University 5500 North St. Louis Avenue Chicago, IL Phone: m-griesinger@neiu.edu Mr. Larry Sallberg Grants Fiscal Adm. Northern Illinois University DeKalb, IL Phone: lsallber@niu.edu Mr. Jake Baggott Student Health Programs-SIUC Mailcode 6802 Carbondale, IL Phone: jbaggott@siu.edu Ms. Donna Blackwell Rendleman Hall, Room 3210 Southern Illinois University, Campus Box 1040 Edwardsville, IL Phone: dblackw@siue.edu Professor Donald L. Ehresmann 208B HH (M/C 201) The University of Illinois at Chicago 935 Harrison Chicago, IL Phone: dle@uic.edu Mr. Daniel Sarhage B Bldg. (M/C 896) The University of Illinois at Chicago Chicago, IL Phone: dsarhage@uic.edu 2

110 SURSMAC MEMBER DIRECTORY Professor Jay Lamabrecht LIB (M/C 234) The University of Illinois at Chicago Chicago, IL Phone: University of Illinois at Springfield University of Illinois at Urbana-Champaign Western SCIENTIFIC SURVEYS State Geological State Natural History State Water Ms. Kathy Dehen Financial Aid Office University of Illinois at Springfield P.O. Box Springfield, IL Phone: Ms. Janet Davis 3070 FLB, MC 172 University of Illinois Urbana, IL Phone: Professor Wesley D. Seitz 4014 Pinecrest Road Champaign, IL Phone: Ms. Nancy Sherer Human Resources 1 University Circle Western Illinois University Macomb, IL Phone: nc-sherer@wiu.edu Ms. Mary Glasgow State Geological Survey 137 Natural Resources, MC East Peabody Drive Champaign, IL Phone: glasgow@isgs.uiuc.edu Ms. Susan Key State Natural History Survey 172 Natural Resources, MC East Peabody Drive Champaign, IL Phone: suekey@inhs.uiuc.edu Mrs. Joyce Changnon State Water Survey 116 Water Survey Research, MC Griffith Drive Champaign, IL Phone: 217/ changnon@uiuc.edu Ms. Susan H. Orban O&M, 1501 South Oak, MC 832 University of Illinois Champaign, IL Phone: shorban@uiuc.edu Professor Thomas Ulen 228 Law Building, MC 594 University of Illinois Champaign, IL Phone: tulen@law.uiuc.edu Professor Fred J. Ebeid Marketing & Finance 1 University Circle Western Illinois University Macomb, IL Phone: f-ebeid@wiu.edu 3

111 SURSMAC MEMBER DIRECTORY STATE UNIVERSITIES ANNUITANTS ASSOC. Last Update Mr. Don H. Naylor Executive Director SUAA Stevenson Drive, Suite 301 Springfield, IL Phone: Mr. Richard P. Goodrick (IRLAC) 2411 Village Road Charleston, IL Phone: Mr. Hugh Satterlee 910 West Healey Champaign, IL Phone:

112 SURS-Covered Employers Black Hawk College Board of Examiners Carl Sandburg College Chicago State University City Colleges of Chicago City-Wide (administrative office) Dawson Technical Institute Harold Washington Kennedy King Malcolm X Olive Harvey Richard J. Daley Truman Wright College of DuPage College of Lake County Danville Area Community College Eastern Illinois University Elgin Community College Governors State University Heartland Community College Highland Community College Illinois Board of Higher Education Illinois Central College Illinois Community College Board Illinois Community College Trustees Assoc. Illinois Eastern Community College Illinois Mathematics & Science Academy Illinois State University Illinois Valley Community College John A. Logan College John Wood Community College Joliet Junior College Kankakee Community College Kaskaskia College Kishwaukee College Lake Land College Lewis & Clark Community College Lincoln Land Community College McHenry College Moraine Valley Community College Morton College Northeastern Illinois University Northern Illinois University Oakton Community College Parkland College Prairie State College Rend Lake College Richland Community College Rock Valley College Sauk Valley College Shawnee College South Suburban College Southeastern Illinois College Southern Ill. Collegiate Common Market Southern Illinois University Carbondale Southern Illinois U. School of Medicine Southern Illinois University Edwardsville Southern Ill. U. Foundation Edwardsville Southwestern Illinois College Spoon River College State Geological Survey State Natural History Survey State Universities Civil Service System State Universities Retirement System State Water Survey Triton College University of Illinois Alumni Association University of Illinois Chicago University of Illinois Foundation University of Illinois Springfield University of Illinois Urbana Waste Management & Research Waubonsee Community College Western Illinois University William Rainey Harper College 6

113 SURS Website For Members The SURS Website provides a reliable source of information for our membership. It includes news releases and legislative updates, Member Guides, information on investments, SURS forms, current and back issues of The Advocate, Benefit Summary Statements, and Beneficiary Designations. Members can calculate their estimated retirement benefit using the Benefit Estimator (see the next 2 pages) and change their address if no benefits are being received or claims pending. This website contains information for all members, whether new, long-term, inactive, or retired. We encourage employers to direct their employees to our website as a primary resource. 7

114 SURS Member Web Active Member Benefit Estimator 8

115 SURS Member Web Inactive Member Benefit Estimator 9

116 The Advocate This informative newsletter provides timely information to all members whether active, inactive, or retired. Topics include pending legislation and law changes, SURS investment results, information on SURS staff and processes, and other valuable information. 10

117 Retirement Plan Options Eligibility p.1 Employer Responsibility p.1 Employee Responsibility p.1 SURS Responsibility p.4 Rev Eligibility

118 Employees covered by SURS will have the opportunity to choose the Traditional Plan, Portable Plan, or Self-Managed Plan in which to make contributions. The plan election must be made within 6 months from the date SURS mails the Retirement Options Packet to the employee s home. This is a one-time, irrevocable decision. Employees who are eligible to make an election are: 1) All new employees who are eligible to contribute to SURS. 2) Any previous employee who contributed to SURS, terminated employment prior to April 1, 1998, and is now being re-certified. 3) Any previous employee who may have terminated employment during the election period without making a retirement choice and is now being re-certified. SURS Annuitants are not eligible to elect a retirement plan. Employer Responsibilities The employer is responsible for submitting a certification of an employee to SURS. The certification may be submitted using the Employer Website, FTP, or a Report of Status. The employer should lend the member the Retirement Options Video. No other documents pertaining to the retirement options should be given to the employee. Employee Responsibilities The employee should study the material that is included in the Power Of Choice Packet. The RETIREMENT CHOICE ELECTION FORM (Fig. 1 and 2) must be completed by the employee and mailed to SURS in the envelope that is included in the packet. The employee has six months to review all of the materials included in the Power Of Choice Packet and to mail the completed RETIREMENT CHOICE ELECTION FORM to SURS. The employee will default to the Traditional Plan if the signed and completed form is not received by SURS before the expiration date of the 6-month election period. Fig. 1 1

119 2

120 Fig. 2 SURS Responsibilities 3

121 SURS will mail the POWER OF CHOICE retirement planning workbook (Fig.3) to the member s home address on the Wednesday following the date the member s certification is entered into the SURS system. Fig. 3 When SURS receives the RETIREMENT CHOICE ELECTION FORM, the employee s file is updated to reflect his/her choice. SURS will mail the employee a new Beneficiary Designation form when the employee has chosen a plan. 4

122 5

123 SEPARATION REFUNDS Eligibility p. 1 Employer Responsibilities p. 1 Employee Responsibilities p. 2 SURS Responsibilities p. 3 Rev

124 Refunds Eligibility To be eligible for a Separation Refund, an employee must terminate employment or have been on layoff for more than 120 days and the employer must submit the required documentation to SURS. An employee cannot receive more than one Separation Refund during an academic year and if the employee returns to work prior to the payment of the refund, SURS cannot pay the refund. Employer Responsibilities The employer should provide the employee with a copy of the Separation Refund Fact Sheet (Fig. 1) when the employee terminates and then complete a Separation Refund event on the SURS Employer Website (Membership-Terminations pages 18-20). In the event that the employee contacts SURS to request a Separation Refund, and no Termination Event has been submitted by the employer, SURS will create a Separation Refund event on the SURS Employer Website (Fig. 2) for the employer to complete and submit. Fig. 1 1

125 Fig. 2 1) Member Type is automatically indicated. 2) Date of Termination is the exact date that the employee was terminated. 3) Last Payroll Date should be entered as the last day of the last payroll period for which the employee was paid. 4) Percent of Employment should reflect the exact percent of time the employee worked while active. Employee Responsibilities If an employee wants a refund upon termination of employment, he or she should contact SURS at or in Champaign-Urbana area. SURS will send the employee a Separation Refund Application requesting the employee s signature and the amount of Federal Income Tax to withhold (if applicable). The Separation Refund Application will specify whether the refund is being mailed to the employee s home or financial institution as designated. The employee should review the tax information that accompanies the Separation Refund Application. Special tax forms (W9, W8 BEN, etc.) may also be included with the Refund Application. The employee s signature on the Separation Refund Application must be notarized. 2

126 The employee should also ask the employer if a formal resignation must be submitted in order for the employer to complete and submit a Termination or Separation Refund event. SURS Responsibilities Traditional/Portable Plans When the employee calls SURS to request a refund, SURS will verify the employee s identification and demographic information. A SURS Member Service Representative (MSR) will counsel the employee on the effects of taking a separation refund. The MSR will create the Separation Refund Application based on directions from the employee as to how and where the refund is to be paid. The MSR will promptly mail the Refund Application to the employee. If the employee requesting the separation refund is active with any employer at the time the refund is requested, SURS will create a Separation Refund event on the SURS Employer Website. This is created once the Refund Application is received and it is no earlier than 7 days prior to the indicated termination date (Fig. 2). When the Separation Refund Application and any additional forms that may be required are received, SURS will check the documents to verify that all have been properly completed. When the Separation Refund event or the Termination event is processed by the employer, an MSR will compare it with SURS records and the Separation Refund Application to verify that all information agrees. The MSR will follow up with the employee and/or the employer if there are any discrepancies. Once all information has been verified and at least 30 days have past since the last reported payroll, the MSR will calculate the refund claim and give it to a Refund Approver to check for accuracy. Once approved, the claim goes to the Pay Benefits Department to again be reviewed for accuracy. If all is correct, Pay Benefits will draft a refund check on the next scheduled check-writing day. *If the employee is in the Portable Plan, was active with SURS on or after July 6, 2000, and is eligible to retire, the statutes require that a Portable Lump-Sum Retirement Application be completed for a lump-sum retirement. A standard Separation Refund 3

127 Application will be provided for employees in the Portable Plan who are not eligible for retirement. Self-Managed Plan When the employer processes a Termination event, SURS will provide the employee with the documents that are required for a Separation Refund. NOTE: It is important to understand that SURS cannot provide the employee with documents required for a refund under the Self-Managed Plan until the Termination event has been processed by the employer. 4

128 RETIREMENT Eligibility p.1 Employer Responsibility p.1 Employee Responsibility p.10 SURS Responsibility p.10 Rev

129 Eligibility To be eligible to retire, an employee must be: A. At least 55 years of age with 8 or more years of service. B. At least 62 years of age with 5 or more years of service. C. Any age with 30 years of service credit, provided your covered employment terminated on or after August 2, Service credit years may include time employed with one of the State of Illinois reciprocal retirement systems to meet the above requirements. A member cannot qualify for a retirement annuity or other benefits based on service credit purchased as Other Public Employment. Under the Traditional and Portable plans, Police Officers and Firefighters may claim their full, unreduced retirement annuity: A. At age 50 with at least 25 years of service as a police officer or firefighter covered by SURS; or B. At age 55 with at least 20 years of service as a police officer or firefighter covered by SURS. Employer Responsibility The responsibility of SURS-covered employers at the time of retirement is the same under all retirement options. Employers should distribute a Retirement Annuity Fact Sheet to assist members who have questions regarding retirement eligibility, counseling, and application process. The employer must complete and submit a Retirement Event that has been created on the SURS Employer Website (Figs. 1, 2, 3, and 4) with termination information. Please note that the Retirement event shown in the manual illustrates all possible information on a retiring employee. The Retirement event is a computer-generated request asking for only the fields of information that are relevant to the particular retiring employee. For example, if an employee is not academic, there will be no section in the event for academic contract verification. IMPORTANT: Employers should promptly submit the termination for employees retiring under the Self-Managed Plan. These employees do not receive Preliminary Estimated Payments and they have no insurance benefits until their annuity begins. Employees may be forced to purchase COBRA to have insurance coverage between the time that employment is terminated and annuity payments begin. Academic Contract Verification and Compensation information will be required if employee is a reciprocal retirement. 1

130 2

131 Fig. 1 1) Check the appropriate Reason for Termination. 2) Date of Termination is the exact date that the employee was terminated. 3) Police/Fire Employment Dates are the beginning and ending dates for which an employee was employed as a police officer or a fire fighter (if applicable). 4) Number Of Hours Worked Per Day should reflect the exact number of hours the employee actually worked each day. 5) Percent Of Employment is the exact percent of time the employee worked while active. 6) Last Payroll Date is entered as the last day of the last payroll period for which the employee was paid. 3

132 Fig. 2 7) Vacation Days is the number of unpaid vacation days remaining on the termination date. 8) Cash Value Of Vacation Days is the combined value of all vacation days reported in step 7. 9) Unpaid Sick Leave Days is the total number of non-compensable sick leave days remaining on the termination date. 10) Paid Sick Leave Days is the total number of compensable sick leave days remaining on the termination date. 11) First Partial Academic Earnings is compensation paid prior to the beginning of the new academic year. 12) Indicate if you accepted the transfer of sick leave days from a previous SURS employer. 13) If sick leave days were transferred, the number of sick leave days that were transferred, and the name of the employer from which they were transferred should be entered. 14) Indicate if any Worker s Compensation will be payable to the employee. 1) Academic Year should be reported using two digit years that reflect the beginning and ending of the academic year (Example: 96/97). 4

133 2) Effective Date is the date that the monthly salary rate became effective. There can be multiple effective dates during any one academic year. Enter information for each new effective date in an academic year on a separate line (4 th and 5 th lines in the diagram above). Always identify the academic year in each line, even if it does not change. 3) Monthly Rate should be the full-time monthly base contract (when contract exists) amount of compensation. 4) Number of Months Worked is the exact number of months the employee actually worked. 5) Number of Months Paid is the number of months in which the employee was paid. 6) Percentage of Time is the exact percent of time the employee worked while active. Any period of time prior to September 1, 1991, when an employee was not employed full-time must be listed in the Part-Time Verification section of the Retirement Event on the SURS Employer Website. Fig. 3 5

134 1) Effective Date is the month, day, and year that the part-time employment period began. 2) Ending Date is the month, day, and year that the part-time employment period ended. 3) Percent of Time is the exact Percent of Time worked during the part-time employment period. For academic employees, a completed Verification Of Academic Contract section must be completed and submitted on the SURS Employer Website (Fig. 4). SURS can not calculate the retirement annuity correctly if this information is missing or incorrect. The Statutes that govern our system require that only dollars earned during the period of the 48 months preceding termination may be used in the 48 month calculation. SURS requests academic contract information any time that we cannot conclude from an employee s SURS file if they are paid their contracted salary as they earn it. SURS will always list the two academic years for which the contract information is needed on the Verification Of Academic Contract section of the Retirement event. An academic contract year is defined as the end of the academic year for which the contract is effective. Example: Should the contract date be September 1, 1998, through December 31, 1998, the contract would be effective in academic year SURS academic years run from September 1 through the following August 31. 6

135 Fig. 4 1) Academic Year is the year in which the academic year ends. 2) Contract Type is the type of contract being reported. a. Base Contract b. Summer School c. Overload d. Other (Always include a note defining Other) e. Excess Life (For employers who have to report a separate amount due to excess life insurance) 3) Contract Begin Date is the exact month, day, and year that the contract went into effect. 4) Contract End Date is the exact month, day, and year that the contract expired. 5) Length of Contract is the total length of the contract in months and must match the perimeters defined by the Contract Begin Date and the Contract End Date. (For contract lasting less than one month always enter one month.) 6) Amount of Contract is the total compensation paid in the contract period. 7

136 Certification of Unused Sick Leave (Included in Retirement Application Packet) If an employee has intermittent employment with various SURS agencies where there is unused and unpaid sick leave remaining at termination that has not been reported to SURS, the former employee would send a Certification of Unused And Unpaid Sick Leave to the employer (Fig. 5). The employer should complete the form, sign it, and have it notarized, and send it to SURS. Fig. 5 8

137 The employer must complete Part 2 (Fig. 6). The person authorized to sign this form must have his or her signature notarized. Fig Indicate the beginning and ending dates of employment. 2. Indicate the total number of days of unused and unpaid sick leave that was available when the employee terminated employment. 3. Break down by calendar days and work days, and indicate the number of hours worked in a day. 4. Have the authorized person s signature notarized. 5. Send the completed form to SURS. (Employee Responsibility) 9

138 Employee Responsibility The employee should contact SURS for a Retirement Application. The employee should submit the Retirement Application to SURS at least 90 days prior to the effective retirement date. There are several types of retirement applications: Traditional Plan, Portable Plan, and Portable Lump Sum Retirement Turnaround Document. The Self- Managed Plan Retirement Application is currently being developed. At this time if the employee is in the Self-Managed Plan, he/she must contact the Plan Provider(s) to apply for retirement. SURS Responsibility SURS will provide the employee with a Retirement Application upon request. If the employee desires counseling, SURS will arrange for a counselor to meet with the employee prior to applying for any plan type of retirement benefits. All eligibility requirements, (see page 1) must be met and the estimate effective date must be no more than 4 years from the current date unless the member is in negotiations with their Employer and needs to declare a date for Retirement. Members are only eligible for written estimate as well as appointment once every 12 months. SURS will open a Retirement Claim upon receiving the employee s application. This case will be queued to a Member Services Representative who will work to obtain the information required to process a Retirement Claim and verify that it is accurate. In the period between the date that SURS receives the Retirement Application and the date the first finalized annuity check is paid, a Preliminary Estimated Payment (PEP) amount will be calculated and paid. The PEP will be paid on the first working day of the month in which the employee retires if: member retires on the first of the month, the application was received 90 days prior to retirement date, and all necessary information is received. The PEP will be paid on the first working day of the following month if the member chose a date other than the first of the month. The PEP will be delayed if the application was not received 90 days prior to the retirement date or not all necessary information has been received. The employee can request that annuity payments be sent to the home address or to a bank account via electronic fund transfer. SURS strongly recommends that electronic fund transfer is used. SURS will pay the PEP checks until the retirement claim is finalized. SURS will set up insurance deductions for State Insurance, the Community College Insurance Program, and College Insurance premiums, along with any voluntary 10

139 miscellaneous deductions the employee may have requested (See the Insurance section of this manual). If the employee is retiring under the Traditional Plan and has indicated on the Retirement Application that there is no eligible survivor, SURS will calculate the amount of the refundable Survivors Benefit. The employee will be given the choice of: Taking it as a lump sum refund or rolling it over to another qualified plan; Taking it as additional monthly income for life; or Waiving the above 2 options and preserving the rights of possible future survivors to qualify for Survivors Benefits. SURS will send a letter to the employee explaining the 3 options and stating the amount of the Survivor Benefit. The employee must choose an option and sign and return the Waiver Letter. The employee must also complete, sign, and return a Distribution Election form if he or she chooses a lump sum refund. When SURS receives all the information requested from the employer on the Summary Report, the employee will be notified if there are excess contributions/service credit. If there are excess contributions/service credit, the employee will have the option of taking the funds in a lump sum or as an additional lifetime annuity. Also, when SURS receives all the information requested on the Employer Summary Report, SURS will communicate with any reciprocal systems involved if the employee is retiring under the Reciprocal Act. Claims processed with reciprocity can increase normal processing time. Once SURS receives all required information from the employee, the employer, and the reciprocal system if applicable, SURS will calculate the final retirement benefit. When the final calculation process has been approved, the retirement claim is submitted to the Pay Benefits Department for payment. At this time, an adjustment will be made that will reflect any underpayment or overpayment that may have been made during the period of time that the member was receiving the PEP. Any refunds of Survivor Benefits or Excess Contributions/Service Credit are also paid at this time. Finally, a Retirement Awards Letter will be sent to both the employee and the employer. 11

140 12

141 SERVICE CREDIT PURCHASES Eligibility p. 1 Employer Responsibility p. 1 Employee Responsibility p.10 Installment Purchase p. 8 SURS Responsibility p.16 Additional Information p.17 Rev

142 Service Credit Purchases Types of Purchases 1. Leave of Absence 2. Prior Service 3. Military 4. Other Public Employment 5. Repayment of Refund Eligibility If an employee believes he or she has service credit that can be purchased, the employee should contact SURS to determine what steps should be taken to verify the service. SURS will review all pertinent information and qualifications needed for processing the request. SURS will then request verification of time and annual full-time salary rate from the employer if applicable. If the service credit in question is prior service or a leave of absence with your agency, you can proactively send SURS a verification of the prior service or a report of status for the leave. This can take the place of the employee calling SURS and begin the process for the employee s purchase, perhaps shortening the overall processing time. Once SURS receives all verifications, we will calculate the eligible service credit and notify the employee of the purchase price and method of payment. SURS will also notify the employee if they are ineligible or if additional documentation is needed. Consult the member guides for qualifying information for all service credit types. Employer Responsibility SURS does not require formal documentation from our employers for all purchase types. Outlined below are the only events that SURS will create on the Employer Website requesting information needed from employers when employees request the cost to purchase service credit. Employers may also pro-actively create these events. Events: 1. Leave of Absence 2. Prior Service 1

143 3. Salary Verification (Not required if SURS has already received this information.) If the employee elects to purchase service credit through payroll deductions the Installment Purchase Contract signed by the authorized representative is required. 1. Leave of Absence A Leave Of Absence event must be completed (or created if one does not already exist) on the Employer Website. When an employee s status changes (sabbatical, nonsabbatical, leave without pay, disability leave, Workers Compensation, etc.), this must be completed and submitted. (Fig 1) When SURS receives an event reporting a qualified leave of absence, only SURS will send the employee a letter asking if he or she wants to purchase the leave, if it is qualified. Leaves that do not qualify for purchase are disability leaves with SURS being paid, disability leaves with Workers Compensation being paid, or paid leaves. Fig. 1 2

144 1) Verify and update the Member Information screen (Fig.1/ page 6/ Membership). 2) Select the Type of Leave from the drop down menu. 3) If the leave type is medical, indicate it is by checking yes or no. 4) Date Leave of Absence Began is the day after the last day paid. 5) Estimated Return Date is the date that it is anticipated the employee will return from leave. 6) Percent of Current Status reflects the employee s percent of employment on the date the leave began. 7) Percent of Leave reflects the percent of time the employee will be on leave. 8) The Monthly Rate at Start of Leave is the monthly earnings the employee was receiving at the time the leave began. 9) Number of Months should reflect the number of months the employee is paid over. 10) Earnings Forfeited is the total dollar amount of earnings the employee will be forfeiting if leave is at no pay or partial pay. If the Leave of Absence is being created by the employer for the first time and the employee has returned to work, a Return From Leave must also be created and completed on the website (Fig. 2 and 3). Fig. 2 3

145 1) Verify and update the Member Information Screen (Fig. 1, pg. 6, Membership). 2) Status Effective Date is the date that the employee returned from leave. 3) Monthly Pay Rate is the monthly amount earned by the employee upon return from leave. 4) Pay Duration is the number of months over which the employee is paid. 5) Percent of Current Status is the actual percent of time worked upon returning from leave. Fig. 3 6) On the Return Information screen, enter the Percent Current Status as the same percentage in step 5, in figure 2. This identical information is entered on two separate screens because it is a two step process to change the member s status to active and to return the member from leave. 4

146 Prior Service A Prior Service event is created on the Employer Website when an employee calls to request the cost to purchase prior service that has not been previously verified (Fig. 4). The employer may also create a Prior Service event should the employee contact the employer rather than SURS. Before SURS can calculate the cost to purchase prior service, we need the employer to provide the dates of employment and percent of time worked. This event might also require the full-time salary equivalent (FTE) on the employee s certification date. Fig. 4 5

147 1) Verify and update the Member Information Screen (Fig. 1,pg. 6,Membership). 2) Enter the full-time or full-time equivalent monthly salary on the employee s certification date and the number of months the employee was paid over. 3) Indicating if an employee was or was not paid from Federal or Trust funds is required. 4) Effective Date is the month, day, and year in which the employee began work, in the period of time for which verification is being requested. If employment was intermittent there could be multiple Effective Dates. 5) Ending Date is the last month, day, and year that the employee worked in the period for which verification is being requested. (If employment was intermittent, there could be multiple Ending Dates). 6) Percent of Time is the actual percent of time worked during the period of time indicated. Salary Verification The formulas used to calculate service credit purchase costs are based on the FTE salary. This rate is necessary for all purchase types, except Repayment of Refunds and Leaves. If we do not have this figure on file for the employee, we will create a Salary Verification event to verify the FTE salary and length of contract on the employee s date of certification (Fig. 5). Fig. 5 6

148 1) Verify and update the Member Information Screen (Fig. 1, pg.. 6, Membership). 2) Monthly Full Time Salary Equivalent is the salary on the date shown as the Certification Date. This must be the full-time or full-time equivalent amount. 3) Number Of Months is the number of months over which the employee is paid. Installment Purchases Service Credit may be purchased in installments through payroll deduction if: Employee is enrolled in the Traditional or Portable Retirement Plan. The Employer s board has adopted a resolution agreeing to offer payroll deductions. Employee anticipates remaining actively employed for a period of time that is at least equal to the duration of the agreed upon contract. Service credit to be purchased is prior service, other public employment, military, refund repayment, or deferred leave. Employee has at least 9 continuous months earnings in the previous 12 months. Employee s minimum monthly salary must accommodate a deduction of at least $50 per month. Signed contract must be received at SURS by the specified deadline. Each Employers Board must adopt a resolution that will establish their employee s right to purchase SURS service credit using payroll deductions. A minimum of two Authorized Representatives must be designated and their names submitted to SURS. The period of service, percent of employment, and salary verification must be submitted to SURS when requested. (Figures 2, and 5) The Employer s Authorized Representative must sign the Irrevocable Payroll Deductions Authorization Form (Figure 6a & b) agreeing to process the payroll deduction. Deductions from compensation begin on the start date specified in the Irrevocable Payroll Deductions Authorization Form and continuing for the duration of the contract. It is the employer s responsibility to verify that the employee s compensation is sufficient enough to support the payroll deductions. The employer should not agree to a contract that specifies a payroll deduction period that exceeds an employee s expected length of employment. It is possible that SURS may have to make adjustments to the amount of the payroll deduction. The employer agrees to make these changes upon request. 7

149 It is the employer s responsibility to verify the number of times an employee is paid throughout the year. Note: If either the Summary of Installment Options to Purchase Service Credit form or the Irrevocable Payroll Deductions Authorizations form are not received at SURS by the required date specified on these forms, the member will be responsible for repeating all of the steps of the installment purchase process for the next quarterly contract starting date. Fig. 6a 8

150 Fig. 6b 9

151 Employee Responsibility To initiate a Service Credit purchase, SURS strongly recommends that the employee begin the process by calling or writing SURS. At this point SURS will go over all necessary information and qualifications with the employee. UForms Required: 1. DD 214, or Active Duty Military Papers (Military) 2. Summary Letter (if Installment Purchase is being used) Irrevocable Payroll Deduction Authorization Form ( if Installment Purchase is being used) (Fig. 7a, 7b, 7c, 7d) 3. Affidavit of Public Employment (Other Public Employment) (Fig. 8a, 8b, 8c, and8d) 1. DD 214, or Active Duty Military Papers An estimate for Military Time requires that the employee send SURS a copy of his/her military separation papers. In many cases this is Federal Form DD 214. If the employee does not have copies of this documentation, he/she should contact the local Veterans Affairs office. When SURS receives the DD214, we will determine the eligibility and mail the information about the cost to the employee. 2. Affidavit of Public Employment When an employee calls SURS to discuss Other Public Employment, we will send him or her an affidavit to be forwarded to the proper authorities affiliated with the other system(s). It will be the employee s responsibility to see that this affidavit is returned to SURS. (Fig. 9a, 9b, 9c) When SURS receives this affidavit and it is determined that the time of other public employment qualifies to be purchased, we will determine the eligibility and mail the information about the cost to the employee. 3. Summary Letter and Irrevocable Payroll Deduction Authorization Form see pages 8 and 9. UNOTE TO ALL EMPLOYERSU The Affidavit of Public Employment is a form that the employee must request directly from SURS. Do NOT pass this form out even if you have a blank one in your office. 10

152 The employee needs to contact SURS if they are interested in a Repayment of Refund. Fig. 7a Fig. 7b 11

153 Fig. 7b Fig. 7c Fig 8c 12

154 Fig. 7d Fig. 8c Fig 8a 13