Current through Register Vol. 48, No. 38, September 20, 2024
a) This Section
shall apply only to a member who has elected to upgrade the graduated rate
applicable to all of the member's years of service earned and credited before
July 1, 1998, pursuant to Section 16-129.1 of the Pension Code [40 ILCS
5/16-129.1] and 80 Ill. Adm. Code
1650.391
and who has less than 20 years of service earned and credited before July 1,
1998.
1) A member participating in a pre-July
1, 1998 service upgrade may upgrade any optional service credit added within
the 5-year period provided in Section 16-129.1(b)(ii) at the same salary rate
as that of the original upgrade, provided that the added optional service
upgrades are paid off within the 5-year period.
2) The effective period of the election shall
begin as of the date on which the election is received by the System and shall
end upon the expiration of a 60-month period commencing on the August 15
following the date of election or payment in full, whichever is first. The
60-month period will be extended due to suspension of a payroll deduction
agreement as provided in Section
1650.1202(d).
b) A member subject to this
Section shall be required to pay an upgrade charge for any optional service
credited to the member's service on or after July 1, 1998, if the time of
employment or other qualifying event upon which the service is based is prior
to July 1, 1998, unless the charge is reduced or eliminated by the contribution
reduction provided in Section 16-129.1(b) of the Pension Code [40 ILCS
5/16-129.1(b)].
1) The "member's highest
salary rate in the 4 consecutive school years immediately prior to but not
including the school year in which the election occurs" shall be based upon the
4 most recent employer's annual reports, as amended, required to be filed in
accordance with Section 16-155 of the Pension Code [40 ILCS
5/16-155] .
2) When determining the contribution
necessary for the upgrade, that part of a member's salary with the same
employer that exceeds the annual full-time salary rate for the preceding year
by more than 20% shall be excluded.
3) If a member has less than one year of
creditable service in any of the 4 consecutive school years immediately prior
to but not including the school year in which the election occurs and was a
part-time non-contractual teacher or a substitute teacher in such year, the
annualized salary rate for the school year shall be determined by dividing the
creditable service fraction into the salary paid to the member during that
school year.
4) The service credit
given to a member at retirement pursuant to Section 16-127(b)(6) of the Pension
Code [40
ILCS 5/16-127(b)(6)] shall be
disregarded for the purpose of the calculation of the contribution necessary
for the upgrade feature.
c) Failing to make contribution.
1) A member has failed to make the full
contribution in a timely fashion:
A) if the
full contribution is not paid within the effective period; or
B) upon termination of employment as a
teacher for any cause other than death or retirement, if the member requests in
writing that the election be terminated at least 4 months after ceasing to
teach.
2) If the member
has failed to make the full contribution in a timely fashion, the election
shall be terminated and shall be no longer in effect.
3) If the member fails to make the full
contribution within the appropriate time period described in subsection (c)(1),
and:
A) if the payment is for the repayment of
a refund, the amount contributed for both the refund and upgrade shall be
refunded to the member, without interest; or
B) if the payment is for optional service
other than a refund, and:
i) if the member
has made the full upgrade contribution for the years of service earned and
credited prior to July 1, 1998, pursuant to 80 Ill. Adm. Code 1650.391, the
portion of the upgraded optional service credit determined by the System to
have been paid shall be credited to the member's account; or
ii) if the member fails to make the full
contribution for the years of service earned and credited prior to July 1,
1998, pursuant to 80 Ill. Adm. Code 1650.391, the payments made for the upgrade
shall be refunded to the member, without interest.
4) However, if the reason for the
failure is the death of the member:
A) if the
member has made the full upgrade contribution for the years of service earned
and credited prior to July 1, 1998, pursuant to 80 Ill. Adm. Code 1650.391, the
portion of the upgraded optional service credit determined by the System to
have been paid shall be credited to the member's account; or
B) if the member fails to make the full
contribution for the years of service earned and credited prior to July 1,
1998, pursuant to 80 Ill. Adm. Code
1650.391
or if the payment is for a refund, the payments made for the upgrade, together
with regular interest thereon, shall be refunded to the member's designated
beneficiary for benefits under Section 16-138 of the Pension Code [40 ILCS
5/16-129.1].
5) The date
of election for the purpose of determining the amount of optional service
credit paid shall be deemed to be:
A) if
pursuant to subsection (c)(3)(B)(i), the date upon which the failure to
contribute in a timely fashion occurred; or
B) if pursuant to subsection (c)(4)(A): the
date of the election that terminated upon the member's death, if the member had
elected the upgrade prior to his or her death; or the date of death if the
member had not previously elected the upgrade.
d) Interest on upgrade refunds shall be
calculated from the first day of the month following the date of any payment to
the date of refund as provided in 40 ILCS 5/16-129.1(b) based upon the earliest
to the latest payments.
e) In the
event an actuarial calculation provides a member a greater benefit than an
upgraded final average salary calculation, the System shall refund the upgrade
cost plus interest to the member.
