Current through Register Vol. 48, No. 38, September 20, 2024
a) Purpose and
Applicability
1) This Section implements
Section 15-139.5 of the Code concerning employer reporting and contribution
requirements for employing or reemploying annuitants and affected annuitants,
effective for academic years beginning on or after August 1, 2013.
2) Effective November 19, 2013, this Section
shall not apply to an annuitant if the employer of that annuitant
provides documentation to SURS that:
A)
the annuitant is employed in a
status appointment position, as that term is defined in 80 Ill. Adm. Code
250.80;
and
B)
due to
obligations contained under the State Universities Civil Service Act
[110 ILCS 70], the employer does not have the ability to limit the
earnings or duration of employment for the annuitant while employed in the
status appointment position. [40
ILCS 5/15-139.5(j)]
b) Definitions. For purposes of Section
15-139.5 of the Code and this Section, the following terms shall have the
meanings ascribed in this subsection (b).
1)
"Academic Year" means the 12-month period beginning on September
1. [40
ILCS 5/15-139.5(a)]
2) "Affected Annuitant"
A) Means an annuitant
on the first
day of the academic year following the academic year in which the annuitant
first met the following conditions:
i)
While receiving a retirement
annuity under Article 15 of the Code, the annuitant was employed on or after
August 1, 2013 by one or more employers under that Article and received or
became entitled to receive during an academic year compensation for that
employment in excess of 40% of his or her highest annual earnings prior to
retirement; except that compensation paid from federal, corporate, foundation,
or trust funds or grants of State funds that identify the principal
investigator by name is excluded.
ii) For the academic year containing June 1,
2015 and academic years thereafter, the annuitant received an
annualized retirement annuity under Article 15 of at least $10,000.
[40
ILCS 5/15-139.5(b)] The annualized retirement annuity
of at least $10,000 shall be a gross monthly retirement annuity of at least
$833.33 per month.
B)
A person who becomes an affected annuitant remains an affected
annuitant, except for:i)
any
period during which the person returns to active service and does not receive a
retirement annuity from SURS; or
ii)
any period on or after December
8, 2017 during which an annuitant received an annualized retirement annuity
under Article 15 of the Code that is less than $10,000. [40
ILCS 5/15-139.5(b)]
3) "Annuitant" means a person who is
receiving a retirement annuity or, if the retirement annuity payment or
payments have not yet been paid due to SURS processing, a person whose
retirement annuity payment period has commenced. A person is not an annuitant
if he or she:
A) has received a lump-sum
retirement benefit under the Portable Benefit Package; or
B) is receiving or has received retirement
benefits under the Self-Managed Plan.
4) "Catastrophic Incident" means an
occurrence of widespread or severe damage or loss of property resulting from
any manmade or natural cause, including, but not limited to, fire (including
arson), flood, earthquake, wind, storm, explosion or extended periods of severe
inclement weather.
5)
"Compensation" means any remuneration paid by an employer that is reportable to
the Internal Revenue Service by the employer as "wages, tips, or other
compensation" on IRS Form W-2.
6)
"Critical Operations" means teaching services, medical services,
student welfare services, and any other services that are critical to the
mission of the employer. [40
ILCS 5/15-139.5(i)]
7) "Disaster" means an event that results in
the Governor declaring that a disaster exists pursuant to Section 7 of the
Illinois Emergency Management Agency Act [20 ILCS
3305/7] or an event that results in a municipality to
declare that a state of emergency exists pursuant to 65 ILCS 5/11-1
-6.
8) "Employed or Reemployed"
means the employer and annuitant have entered into an employer-employee
relationship under common law and the annuitant is not an independent
contractor. For the purposes of this Section, an annuitant whose
employment by an employer extends over more than one academic year shall be
deemed to be reemployed by that employer in each of those academic
years. [40
ILCS 5/15-139.5(a)]
9) "Highest Annual Earnings" shall have the
meaning ascribed in Section
1600.202(d).
10) "Retirement Annuity" means an annuity
payable under Section 15-136, 15-136.1, 15-136.3 or 15-136.4 of the Code,
excluding any survivor annuitant portion of a joint and survivor
annuity.
c) Initial
Notification for Employed Annuitants. Within 60 days after the date of
employing or reemploying an annuitant, the employer shall submit notification
to the System of the following items:
1)
A summary of the contract of employment or specify the rate of
compensation and the anticipated length of employment of that
annuitant [40
ILCS 5/15-139.5(a)]. If an employer enters into a new
contract with an annuitant during the same academic year of employment or
reemployment, the employer shall submit a new summary or rate of compensation
and anticipated length of employment within 60 days after the effective date of
the contract. The employer shall provide a copy of the contract upon SURS'
request.
2) A certification of
whether the annuitant will be compensated from federal, corporate,
foundation, or trust funds or grants of State funds that identify the principal
investigator by name [40
ILCS 5/15-139.5(a)].
3) Critical Operations
A) A certification of whether the annuitant
has become an affected annuitant and:
i) if
the annuitant is an affected annuitant, whether the annuitant was employed
in order to continue critical operations in the event of either an
employee's unforeseen illness, accident, or death or a catastrophic incident or
disaster; or [40
ILCS 5/15-139.5(i)]
ii) if the annuitant is an affected
annuitant, whether the employer has certified the annuitant as a participating
employee under Section 15-139(c) of the Code.
B) If the employment is for critical
operations, the notice in this subsection (c) shall be submitted within 5
business days after employing or reemploying the annuitant.
d) Annual Certification
of Employed Annuitants. For each employed annuitant, an employer shall submit
to SURS the following information no later than 30 days following the
conclusion of the academic year:
1)
The amount of compensation paid to the annuitant for employment in the
academic year; and
2)
The amount of compensation that comes from federal, corporate,
foundation, or trust funds or grants of State funds that identify the principal
investigator by name that has been paid to the annuitant in the
academic year. [40
ILCS 5/15-139.5(a)]
e) Affected Annuitants
1)
It is the obligation of the
employer to determine whether an annuitant is an affected annuitant before
employing the annuitant. For that purpose, the employer may require the
annuitant to disclose and document his or her relevant prior employment and
earnings history. Failure of the employer to make this determination correctly
and in a timely manner or to include this determination with the notification
required under subsection (d) does not excuse the employer
from making the contribution required under subsection (g).
2)
SURS may assist the employer in
determining whether a person is an affected annuitant. SURS will inform the
employer if it discovers that the employer's determination is inconsistent with
the employment and earnings information in the System's records.
[40
ILCS 5/15-139.5(c)]
f) Annuitant and Employer Information
Requests. Upon written request, SURS will provide an annuitant or employer with
the following information concerning the annuitant:
1) The annuitant's status as an annuitant or
participating employee;
2) Whether
an employer has determined and reported to SURS that the annuitant is an
affected annuitant;
3) The
annuitant's highest annual earnings;
4) The compensation paid for the annuitant's
post-retirement employment in each academic year as reported by
employers;
5) Whether any of the
annuitant's post-retirement employment or compensation has been
certified to SURS as being paid from federal, corporate, foundation, or trust
funds or grants of State funds that identify the principal investigator by
name. [40
ILCS 5/15-139.5(d)]
g) Payment of Employer Contributions
1) Certification of Contribution. If an
employer employs or reemploys an affected annuitant in an academic year, and no
exception applies, the System shall notify the employer and certify the amount
of the contribution, which shall be equal to 12 times the amount of the
gross monthly retirement annuity payable to the annuitant for the month in
which the first paid day of employment in that academic year occurs, after any
reduction in that annuity that may be imposed under Section 15-139(b)
of the Code.
2) Multiple Employers.
If an affected annuitant is employed by more than one employer in an
academic year, the employer contribution required under this Section shall be
divided among those employers in proportion to their respective portions of the
total compensation paid to the affected annuitant for that employment during
that academic year.
3)
Double Contribution Penalty
A)
If SURS
determines that an employer, without reasonable justification, has failed to
make the determination of affected annuitant status correctly and in a timely
manner, or has failed to notify SURS or to correctly document or certify to
SURS any of the information required by this Section, and that failure results
in a delayed determination by SURS that a contribution is payable under this
Section, then the amount of that employer's contribution otherwise determined
under this Section shall be doubled.
B)
SURS will deem a failure to
correctly determine the annuitant's status to be justified if the employer
establishes to SURS' satisfaction that the employer, after due diligence, made
an erroneous determination that the annuitant was not an affected annuitant due
to reasonable reliance on false or misleading information provided by the
annuitant or another employer, or an error in the annuitant's official
employment or earnings records. [40
ILCS 5/15-139.5(e)]
4) Payment Deadline and Interest. The
employer may pay the required contribution without interest at any time within
one year after receipt of the certification. If the employer fails to pay
within that year, then interest shall be charged at a rate equal to SURS'
prescribed rate of interest, compounded annually from the 366th day after
receipt of the certification from SURS. Payment must be concluded within 2
years after receipt of the certification by the employer. If the employer fails
to make complete payment, including applicable interest, within 2 years, then
SURS may, after giving notice to the employer, certify the delinquent amount to
the State Comptroller, and the Comptroller shall thereupon deduct the certified
delinquent amount from State funds payable to the employer and pay them instead
to SURS. [40
ILCS 5/15-139.5(f)] The delinquent amount shall be
certified to the Comptroller if the employer does not pay the delinquent amount
within 90 days after the date on which SURS sent the notice of the delinquency
to the employer.
5) Reparticipating
Annuitants. If an employer is required to make a contribution to SURS
as a result of employing an affected annuitant and the annuitant later elects
to forgo his or her annuity in that same academic year pursuant to
Section 15-139(c) of the Code, then the required contribution by the
employer shall be waived, and if the contribution has already been paid, it
shall be refunded to the employer without interest. [40
ILCS 5/15-139.5(g)]
6) Employment for Critical Operations.
Notwithstanding any other provision of this Section to the contrary, if
an employer employs an affected annuitant in order to continue critical
operations in the event of either an employee's unforeseen illness, accident,
or death or a catastrophic incident or disaster, then, for one and only one
academic year, the employer is not required to pay the contribution set forth
in Section 15-139.5 of the Code for that annuitant. [40
ILCS 5/15-139.5(i)]
7) Appeals. The employer may appeal a
certification of the contribution amount pursuant to Section
1600.510.