ADMINISTRATIVE CODE

SUBPART A: REPORTS BY BOARD OF TRUSTEES

Section 1650.10 Annual Financial Report (Repealed)

SUBPART B: BASIC RECORDS AND ACCOUNTS

Section 1650.110 Membership Records

Section 1650.120 Claims Records (Repealed)

Section 1650.130 Individual Accounts (Repealed)

Section 1650.140 Ledger and Account Books (Repealed)

Section 1650.150 Statistics (Repealed)

Section 1650.160 Confidentiality of Records

Section 1650.180 Filing and Payment Requirements

Section 1650.181 Early Retirement Incentive Payment Requirements (Repealed)

Section 1650.182 Waiver of Additional Amounts Due

Section 1650.183 Definition of Employer's Normal Cost

SUBPART C: FILING OF CLAIMS

Section 1650.201 Disability Benefits - Application Procedure; Effective Date

Section 1650.202 Disability Benefits - Definitions

Section 1650.203 Disability Retirement Annuity – Definitions

Section 1650.204 Gainful Employment - Consequences

Section 1650.205 Medical Examinations and Investigation of Disability Claims

Section 1650.206 Physician Certificates

Section 1650.207 Disability Due to Pregnancy

Section 1650.208 Disability Payments

Section 1650.209 Computation of Annual Salary When Member Has Different Semester Salary Rates (Repealed)

Section 1650.210 Claim Applications

Section 1650.211 Disability Recipient Eligible to Receive an Age or Disability Retirement Annuity

Section 1650.220 Reclassification of Disability Claim (Repealed)

Section 1650.221 When Member Becomes Annuitant

Section 1650.222 Death Out of Service

Section 1650.230 Medical Examinations and Investigations of Claims (Repealed)

Section 1650.240 Refunds; Canceled Service; Repayment

Section 1650.250 Death Benefits

Section 1650.260 Evidence of Age

Section 1650.270 Reversionary Annuity - Evidence of Dependency

Section 1650.271 Evidence of Parentage

Section 1650.272 Eligible Child Dependent By Reason of a Physical or Mental Disability

Section 1650.280 Evidence of Marriage

Section 1650.290 Offsets

SUBPART D: MEMBERSHIP AND SERVICE CREDITS

Section 1650.301 Early Retirement Without Discount – Return to Teaching from a Break in Service

Section 1650.310 Effective Date of Membership

Section 1650.315 Establishing Salary and Assessing Contributions for Optional Service Credit

Section 1650.320 Method of Calculating Service Credits

Section 1650.325 Method of Calculating Service Credit for Recipients of a Disability Benefits or Occupational Disability Benefit

Section 1650.330 Duplicate Service Credit

Section 1650.335 Unreported Regular Service Credit and Earnings

Section 1650.340 Service Credit for Out-of-System Service and Leaves of Absence

Section 1650.341 Service Credit for Involuntary Layoffs

Section 1650.342 Service Credit for Paid Student Teaching Service

Section 1650.345 Service Credit for Periods Away From Teaching Due to Pregnancy

Section 1650.346 Service Credit for Periods Away From Teaching Due to Adoption

Section 1650.350 Service Credit for Unused Accumulated Sick Leave Upon Retirement

Section 1650.351 Employer Contribution for Excess Sick Leave

Section 1650.355 Purchase of Optional Service - Required Minimum Payment

Section 1650.356 Payroll Deduction Program (Repealed)

Section 1650.357 Employer Payment of Member's Optional Service and/or Upgrade Contribution Balance (Repealed)

Section 1650.360 Settlement Agreements and Judgments

Section 1650.370 Calculation of Average Salary (Renumbered)

Section 1650.380 Definition of Actuarial Equivalent (Repealed)

Section 1650.390 Independent Contractors

Section 1650.391 Optional 2.2 Upgrade of Earned and Credited Service

Section 1650.392 2.2 Upgrade of Optional Service Not Credited at Initial Upgrade

SUBPART E: CONTRIBUTION CREDITS AND PAYMENTS

Section 1650.410 Return of Contributions for Duplicate or Excess Service

Section 1650.415 Return of Optional Increase in Retirement Annuity Contributions

Section 1650.416 Optional Increase in Retirement Annuity – 1% Contribution Reduction

Section 1650.417 Mandatory Distributions Pursuant to Section 401(a)(9) of the Internal Revenue Code

Section 1650.420 Interest on Deficiencies (Repealed)

Section 1650.430 Installment Payments (Repealed)

Section 1650.440 Small Deficiencies, Credits or Death Benefit Payments (Repealed)

Section 1650.450 Compensation Recognized As "Salary"

Section 1650.451 Reporting of Conditional Payments

Section 1650.460 Calculation of Average Salary

Section 1650.470 Rollover Distributions

Section 1650.480 Rollovers to the System

Section 1650.481 Employer Contribution Required for Salary Increases in Excess of 6% or 3%

Section 1650.482 Contracts and Collective Bargaining Agreements – Loss of Exemption from Employer Contributions

Section 1650.483 Employer Contributions for Salary Increases in Excess of 6% or 3% and Excess Sick Leave – Exemption from Contributions

Section 1650.484 Members Not Covered by Collective Bargaining Agreements or Employment Contracts

Section 1650.485 Employer Contributions for Salary Increases in Excess of 6% or 3% - Receipt of Bill

Section 1650.486 Employer Payment of Member's Optional Service, Refund and/or Upgrade Contribution Balance

SUBPART F: ANNUITANTS AND BENEFICIARIES

Section 1650.505 Beneficiary (Repealed)

Section 1650.510 Re-entry Into Service (Repealed)

Section 1650.511 Separation from Service

Section 1650.512 Verification of Compliance with Post-Retirement Employment Limitations

Section 1650.520 Suspension of Benefits

Section 1650.530 Power of Attorney

Section 1650.540 Conservators/Guardians

Section 1650.550 Presumption of Death

Section 1650.560 Benefits Payable on Death

Section 1650.561 Valid Beneficiary Designations

Section 1650.570 Survivors' Benefits

Section 1650.571 Payment of Monthly Survivor Benefits to a Trust

Section 1650.575 Full-time Student - Receipt of Survivors Benefits Until Age 22

Section 1650.580 Evidence of Eligibility

Section 1650.590 Comptroller Offset

Section 1650.595 Overpayments

SUBPART G: ATTORNEY GENERALS' OPINION

Section 1650.605 Policy of the Board Concerning Attorney Generals' Opinion (Repealed)

SUBPART H: ADMINISTRATIVE REVIEW

Section 1650.610 Staff Responsibility

Section 1650.620 Right of Appeal

Section 1650.630 Form of Written Request

Section 1650.635 Presiding Hearing Officer - Duties and Responsibilities

Section 1650.640 Prehearing Procedure

Section 1650.641 Claims Hearing Committee Hearing Packet

Section 1650.650 Hearing Procedure

Section 1650.660 Rules of Evidence (Repealed)

SUBPART I: AMENDMENT TO BYLAWS AND RULES

Section 1650.710 Amendments

SUBPART J: RULES OF ORDER

Section 1650.810 Parliamentary Procedure

SUBPART K: PUBLIC RECORD REQUESTS

Section 1650.910 Summary and Purpose (Repealed)

Section 1650.920 Definitions (Repealed)

Section 1650.930 Submission of Requests

Section 1650.940 Form and Content of FOIA Requests (Repealed)

Section 1650.950 Appeal of a Denial (Repealed)

Section 1650.960 Executive Director's Response to Appeal (Repealed)

Section 1650.970 Response to FOIA Requests (Repealed)

Section 1650.980 Inspection of Records at System Office

Section 1650.990 Copies of Public Records

Section 1650.995 Materials Immediately Available

SUBPART L: BOARD ELECTION PROCEDURES

Section 1650.1000 Nomination of Candidates

Section 1650.1001 Election Date/Election Day – Defined

Section 1650.1010 Petitions

Section 1650.1020 Eligible Voters

Section 1650.1030 Election Materials

Section 1650.1040 Marking of Ballots

Section 1650.1050 Return of Ballots

Section 1650.1060 Observation of Ballot Counting

Section 1650.1070 Certification of Ballot Counting

Section 1650.1080 Challenges to Ballot Counting

Section 1650.1090 Special Election to Fill Un-Expired Term of Elected Trustee

SUBPART M: QUALIFIED ILLINOIS DOMESTIC RELATIONS ORDERS

Section 1650.1110 Definitions

Section 1650.1111 Requirements for a Valid Qualified Illinois Domestic Relations Order

Section 1650.1112 Requirements for a Valid QILDRO Calculation Order

Section 1650.1113 Required Forms

Section 1650.1114 Filing a QILDRO or a Calculation Order with the System

Section 1650.1115 Benefits Affected by a QILDRO

Section 1650.1116 Effect of a Valid QILDRO

Section 1650.1117 QILDROs Against Persons Who Became Members Prior to July 1, 1999

Section 1650.1118 Alternate Payee's Address

Section 1650.1119 Electing Form of Payment

Section 1650.1120 Automatic Annual Increases

Section 1650.1121 Reciprocal Systems QILDRO Policy Statement (Repealed)

Section 1650.1122 Providing Benefit Information for Divorce Purposes

Section 1650.1123 Suspension and Expiration of a QILDRO

Section 1650.1124 Income Tax Reporting

Section 1650.1125 Lump-Sum Death Benefit Allocation to Alternate Payee

SUBPART N: PAYROLL DEDUCTION PROGRAM

Section 1650.1200 Payroll Deduction Program Guidelines (Repealed)

Section 1650.1201 Employer Responsibility Under the Payroll Deduction Program (Repealed)

Section 1650.1202 Payroll Deduction Agreements – Suspensions and Terminations (Repealed)

Section 1650.1203 Payroll Deduction Program – Full-Time Employment Defined (Repealed)

Section 1650.1204 Payroll Deduction Program – Disability Defined (Repealed)

Section 1650.1205 Employer Payment of Member's Optional Service, Refund and/or Upgrade Contribution Balance (Repealed)

SUBPART O: RETIREMENT BENEFITS

Section 1650.2900 Excess Benefit Arrangement

SUBPART P: COMPETITIVE SELECTION PROCEDURES FOR INVESTMENT SERVICES

Section 1650.3000 Summary and Purpose

Section 1650.3005 Definitions

Section 1650.3010 Public Markets Manager Database

Section 1650.3015 Emerging Investment Managers

Section 1650.3017 Candidate Profile for Investment Manager Searches

Section 1650.3020 Public Market Searches

Section 1650.3025 Small and Mid Cap Equity Searches

Section 1650.3030 Private Market and Commingled Fund Searches

Section 1650.3032 Co-Investment Opportunities

Section 1650.3035 Private Market Real Estate Separate Account Searches

Section 1650.3040 Consultant Searches

Section 1650.3045 Evaluation by Investment Committee

SUBPART Q: PLAN QUALIFICATION

Section 1650.3100 Summary and Purpose

Section 1650.3105 Exclusive Benefit Rule

Section 1650.3110 USERRA (Uniformed Services Employment and Reemployment Rights Act (38 USC 4301-4335)) Compliance

Section 1650.3115 Required Minimum Distributions

Section 1650.3120 Federal Contribution and Benefit Limitations

Section 1650.3125 Mortality Tables and Interest Rates

SUBPART R: TIER II MEMBERS AND ANNUITANTS

Section 1650.3200 Definitions

Section 1650.3220 Automatic Increase in Tier II Disability Benefits

Section 1650.3221 Tier II Disability Retirement Annuity Final Average Salary

Section 1650.3222 Tier II Disability Retirement Annuity Calculation

Section 1650.3230 Contributions for Tier II Members with Reciprocal Earnings

SUBPART S: BUYOUT PROGRAMS

Section 1650.3300 General Provisions

Section 1650.3310 Accelerated Annual Increase Buyout Program

Section 1650.3320 Accelerated Pension Benefit Buyout Program

Section 1650.3330 QILDRO Administration with Buyout Programs

SUBPART A: REPORTS BY BOARD OF TRUSTEES

TITLE 80: PUBLIC OFFICIALS AND EMPLOYEES
SUBTITLE D: RETIREMENT SYSTEMS
CHAPTER III: TEACHERS' RETIREMENT SYSTEM OF THE STATE OF ILLINOIS
PART 1650 THE ADMINISTRATION AND OPERATION OF THE TEACHERS' RETIREMENT SYSTEM
SECTION 1650.10 ANNUAL FINANCIAL REPORT (REPEALED)

Section 1650.10 Annual Financial Report (Repealed)

(Source: Repealed at 9 Ill. Reg. 20885, effective December 17, 1985)

SUBPART B: BASIC RECORDS AND ACCOUNTS

Section 1650.110 Membership Records

a) Every member shall provide information with respect to the member's date of birth, Social Security number and home address including a facsimile of his or her signature.

b) Creditable service and salary are established by submission of reports (filed by the member's employer), an affidavit of a school official based upon existing school records, or copies of contracts, board minutes, memoranda, payroll records and other materials as requested by the System for assistance in making the necessary determinations. If the preceding documentation is unavailable, the member shall submit at least one of the following types of documentation in the following order of priority:

1) Certified records of the Chief Educational Officer of the County in which the member was employed.

2) Income tax records for the entire time period showing employment as a teacher.

3) Certified records of another retirement system.

4) Other contemporaneous documentation that reliably supports the service credit to be established while eliminating the possibility of mistake or fraud.

(Source: Amended at 49 Ill. Reg. 3382, effective March 3, 2025)

Section 1650.120 Claims Records (Repealed)

(Source: Repealed at 9 Ill. Reg. 20885, effective December 17, 1985)

Section 1650.130 Individual Accounts (Repealed)

(Source: Repealed at 9 Ill. Reg. 20885, effective December 17, 1985)

Section 1650.140 Ledger and Account Books (Repealed)

(Source: Repealed at 9 Ill. Reg. 20885, effective December 17, 1985)

Section 1650.150 Statistics (Repealed)

(Source: Repealed at 9 Ill. Reg. 20885, effective December 17, 1985)

Section 1650.160 Confidentiality of Records

The Board, its Executive Director, and agents and employees of the System are prohibited from disclosing the contents of a member's, annuitant's, or beneficiary's files, records, papers, or communications except: for purposes connected with the official responsibility of the Teachers' Retirement System; to other systems subject to and participating in the Reciprocal Act; to the Department of Central Management Services for annuitant health insurance purposes; to the Social Security Administration for government pension offset determination and windfall elimination purposes; upon express (e.g., mail, verbal, personal) authorization from the individual whose record is to be released; in response to a subpoena; or when required pursuant to the Freedom of Information Act [5 ILCS 140].

(Source: Amended at 39 Ill. Reg. 14989, effective October 30, 2015)

Section 1650.180 Filing and Payment Requirements

a) All employers must file reports with the System including demographic, enrollment and earnings information, together with contributions required under Article 16 of the Illinois Pension Code (Code) [40 ILCS 5], on a pay-period basis.

b) Reports and contributions due for the month must be remitted to the System by the 10^th day of the following month. Late contributions and filings will be assessed penalties prescribed by Section 16-155 of the Code, as determined by the System.

c) The employer's report shall be properly completed and shall report service, creditable earnings, and contributions in accordance with applicable laws and rules. The exact statutory amount of contributions must be:

1) deducted from the member's pay; and/or

2) paid on behalf of the member, based on the member's earnings each pay period.

d) Employers are required to file the report via the System's employer portal. All contributions and payments must be remitted to the System via electronic means.

e) Contributions for work performed during the fiscal year are due to the System by July 10 of the following fiscal year. Effective July 1, 2020, employers cannot accelerate the payment of contributions (i.e., send more than the statutory contribution rate) in order to meet the July 10 deadline. Rather, the employer must remit all contributions corresponding with each payroll occurring within that month. To be allowed to remit the appropriate contributions to TRS by the July 10 deadline, employers must report all payrolls that will cover the work performed during the fiscal year ended June 30, even if the members will be paid in July and August. The contributions due are based on the statutory rates in effect for the fiscal year of the report.

f) All employers are required to complete an Annual Certification/Annual Report via the System’s employer portal on or before August 15 of each year. Failure to complete the Annual Certification/Annual Report by the due date shall result in additional amounts due as prescribed by Section 16-155 of the Code.

(Source: Amended at 47 Ill. Reg. 9473, effective June 22, 2023)

Section 1650.181 Early Retirement Incentive Payment Requirements (Repealed)

(Source: Repealed at 32 Ill. Reg. 13534, effective August 6, 2008)

Section 1650.182 Waiver of Additional Amounts Due

a) The System may waive additional amounts due upon good cause shown when:

1) The delinquency is attributable to circumstances commonly known as an "act of God", such as fire, flood, tornado and the like; or

2) The delinquency is attributable to other administrative reasons where no employer negligence is involved; the employer's record indicates a history of good faith and consistent compliance with the System's contribution and reporting requirements; and the employer remits the pay-period reports and required contributions within a reasonable time as determined by the System taking into consideration the reason for delinquency and the period of delinquency.

b) Circumstances purporting to justify a waiver of the additional amounts due must be certified in writing to the System by an authorized representative of the employer requesting a waiver.

(Source: Amended at 47 Ill. Reg. 9473, effective June 22, 2023)

Section 1650.183 Definition of Employer's Normal Cost

The employer's normal cost is the employer's portion of the total normal cost of benefits earned by active members during the fiscal year (which shall include the System's estimated administrative expenses for the fiscal year) that is not funded by the estimated contributions of active members for the fiscal year. The total cost of benefits and the employer's normal cost are expressed as percentages of projected active member payroll, actuarially determined, and are approved by the Board of Trustees before the fiscal year begins. The employer's normal cost rate approved by the Board of Trustees shall be used for all calculations that are to be based on the employer's normal cost, except that, for purposes of determining the contribution for optional creditable service under Section 16-128(a)(ii) of the Act, the employer's normal cost rate shall be the total cost of benefits rate for the fiscal year in which such service is verified reduced by the member contribution rate used to determine the amount under Section 16-128(a)(i) of the Act.

(Source: Added at 20 Ill. Reg. 3118, effective February 5, 1996)

SUBPART C: FILING OF CLAIMS

Section 1650.201 Disability Benefits − Application Procedure; Effective Date

a) Any member claiming a disability benefit under 40 ILCS 5/16-149 or 16-149.1 shall begin the process by filing a written notice with the System.

b) For purposes of determining when nonoccupational disability benefits become payable under 40 ILCS 5/16-149, the following shall apply:

EFFECTIVE DATE

Member files written notice of disability within 90 days from the later of commencement of disability or the date eligibility for salary ceases*.

Yes

TRS receives all documentation within six months from the later of the commencement of disability or the date eligibility for salary ceases.

TRS receives all documentation within six months after written notice of disability.

Yes

Benefits become payable from the later of the 31st calendar day the member is absent from teaching due to the disability for which benefits are sought or exhaustion of the member's sick leave**.

Benefits become payable on the date TRS receives all documentation required by law.

Benefits become payable on the date TRS receives written notice of disability.

Benefits become payable on the date TRS receives all documentation required by law.

* Eligibility for salary ceases is equal to the later of the date last worked plus 31 days or when sick leave days are completely exhausted

** If sick leave is not paid by the employer, the date sick leave would have been exhausted had the member been paid by the employer.

c) For purposes of determining when occupational disability benefits become payable under 40 ILCS 5/16-149.1, the following shall apply:

EFFECTIVE DATE

Member files written notice of disability within 90 days from the later of commencement of disability or the last day for which salary was paid.

Yes

TRS receives all documentation within six months from the later of the commencement of disability or the last day for which salary is paid.

TRS receives all documentation within six months after written notice of disability.

Yes

Benefits become payable on the date after the last day for which salary is paid.

Benefits become payable on the date TRS receives all documentation required by law.

Benefits become payable on the date TRS receives written notice of disability.

Benefits become payable on the date TRS receives all documentation required by law.

d) When a member claiming disability benefits is employed under an agreement for less than 12 full months, neither the 31-day waiting period nor the utilization of sick leave requirement, as contained in the definition of "date eligibility for salary ceases" in Section 1650.202, can be satisfied during periods not covered by the agreement. For purposes of granting disability benefits, all employment agreements are presumed to cover one full school term and are automatically renewable at the commencement of the next school term. Satisfactory evidence must be presented of an employment agreement covering a period longer than a full school term (e.g., 10, 11 or 12 months).

e) Whenever a member becomes ineligible to receive a non-occupational or occupational disability benefit due to gainful employment but is subsequently disabled for the same cause within 90 days after the member's or annuitant's last date of eligibility for benefits, benefits shall be reinstated at the previous benefit rate upon written application. Benefits shall commence the day following the last day the member is eligible to receive salary. If more than 90 days have elapsed, benefits shall be reinstated based on the greater of the member's most recent annual contract salary rate at the time the disability benefit becomes payable or the member's annual contract rate on the date the disability commenced.

(Source: Amended at 32 Ill. Reg. 13534, effective August 6, 2008)

Section 1650.202 Disability Benefits − Definitions

For purposes of non-occupational disability benefits under Section 16-149 of the Code and occupational disability benefits under Code Section 16-149.1, the following terms and phrases shall have the following definitions:

"Code" means the Illinois Pension Code [40 ILCS 5].

"Commencement of disability" shall mean the date upon which a member is determined by required medical examination to be "incapacitated to perform the duties of his or her position as a teacher" as defined in this Section.

"Date of application" shall mean the day upon which the System receives in its business offices the written or telefax notice required in this Section notifying the System the member is applying for disability benefits under the provisions of Section 16-149 or 16-149.1 of the Code.

"Date eligibility for salary ceases" shall mean the last date worked plus 31 days, or the date on which all of the member's sick leave is exhausted, whichever occurs later.

"Gainful employment" shall mean current employment from which a member realizes "earned income" as that term is defined in section 32(c)(2) of the Internal Revenue Code in excess of $10,000 in any calendar year, unreduced by contributions to a tax deferred retirement plan account authorized by the Internal Revenue Code, or the pro rata share of $10,000 if less than a calendar year, while in receipt of a disability or occupational disability benefit.

"Incapacitated to perform the duties of his or her position as a teacher" shall mean the physical or mental inability to perform substantially all of the member's assigned job duties at the commencement of disability.

"Licensed physician" shall mean any individual licensed by the state in which he or she practices medicine. All reports submitted to the System shall include the registration number of the physician submitting the report.

"Teacher", for purposes of Sections 16-149(a) and 16-149.1(a) of the Code, shall mean employment in any equivalent position set forth in Code Section 16-106 in this State or another state, territory or by or under the auspices of the United States government.

"Upon application of a member" shall mean the filing of a written or telefax notice by or on behalf of a member notifying the System that the member is applying for disability benefits under the provisions of Section 16-149 or 16-149.1 of the Code.

(Source: Amended at 40 Ill. Reg. 14099, effective September 28, 2016)

Section 1650.203 Disability Retirement Annuity – Definitions

For purposes of Section 16-149.2 of the Code, the following terms shall have the following definitions:

"Amount earned by the member" shall mean the member's "earned income" as that term is defined in section 32(c)(2) of the Internal Revenue Code in any calendar year while in receipt of a disability retirement annuity, unreduced by contributions to a tax-deferred retirement plan or account authorized by the Internal Revenue Code.

"Licensed physician" shall have the same definition as in Section 1650.202.

"No longer disabled" shall mean the member is no longer "incapacitated to perform the duties of his or her positions as a teacher" as that phrase is defined in Section 1650.202.

"Teacher" shall have the same definition as in Section 1650.202.

"The standard of disability provided in Section 16-149" shall mean "incapacitated to perform the duties of his or her position as a teacher" as that phrase is defined in Section 1650.202.

(Source: Amended at 40 Ill. Reg. 14099, effective September 28, 2016)

Section 1650.204 Gainful Employment - Consequences

A member in receipt of a disability benefit under the provisions of 40 ILCS 5/16-149 or 16-149.1 who engages in "gainful employment" as defined in Section 1650.202 shall have his or her disability or occupational disability benefit terminated as provided in Section 16-149(c) or Section 16-149.1(c), whichever is applicable.

(Source: Added at 24 Ill. Reg. 2440, effective January 27, 2000)

Section 1650.205 Medical Examinations and Investigation of Disability Claims

a) A member applying for or receiving benefits pursuant to Section 16-149, 16-149.1 or 16-149.2 of the Code shall furnish the System medical records, earnings statements, Social Security benefit or claim information, federal and state tax returns, and any other information deemed relevant by the System to process the member or annuitant's disability claim.

b) A member or annuitant shall submit to an independent medical examination at the discretion of the System. The cost of independent medical examinations shall be borne by the System.

c) In order to verify continued eligibility to receive disability benefits under the provisions of Section 16-149 or 16-149.1 of the Code, a member shall provide to the System at least annually written certifications by two state licensed and practicing physicians verifying that the member remains disabled and is unable to perform the duties of the position he or she held at the time his or her disability commenced. The physicians' examinations must have occurred within the 90 days prior to the re-examination due date. Certifications shall be accompanied by a medical report fully explaining the basis for the physician's conclusion that the member remains disabled. However, this requirement may be waived, at the System's discretion, if it is determined that the member's medical condition or prognosis is irreversible or terminal and will result in a permanent inability to return to his or her former position.

d) When a disability or occupational benefit terminates and a member elects to retire on a disability retirement annuity, the member shall submit to medical examinations, unless the member's last examinations within the preceding six months substantiate a continuing disability, in which case no new medical examinations are required.

e) An annuitant in receipt of a disability retirement annuity who becomes eligible for an age retirement annuity shall submit to medical examinations to retain disability retirement annuity status, unless the annuitant's last examinations within the preceding six months substantiate a continuing disability, in which case no new medical examinations are required.

f) Failure of a member or an annuitant to submit to medical examinations or to provide information required pursuant to Section 16-149, 16-149.1 or 16-149.2 of the Code will result in a suspension of benefit payments.

(Source: Amended at 44 Ill. Reg. 7905, effective April 24, 2020)

Section 1650.206 Physician Certificates

a) Physician certificates are required to be completed by the certifying physician or his or her staff.

b) A physician certificate completed in any part by a member shall not meet the physician certification requirements of 40 ILCS 5/16-149, 16-149.1 or 16-149.2.

(Source: Added at 24 Ill. Reg. 2440, effective January 27, 2000)

Section 1650.207 Disability Due to Pregnancy

a) A member who is disabled due to pregnancy as provided in 40 ILCS 5/16-149 shall be allowed to receive a maximum of:

1) eight weeks of disability benefits for a pregnancy involving a Cesarean delivery; or

2) six weeks of disability benefits for a pregnancy involving a normal delivery.

b) However, if complications arise during the pregnancy or as the result of delivery, the period of disability may, upon the submission of appropriate medical documentation, be extended until the member no longer qualifies for benefits under 40 ILCS 5/16-149(c).

(Source: Added at 24 Ill. Reg. 2440, effective January 27, 2000)

Section 1650.208 Disability Payments

In determining whether a member is receiving salary as a teacher and, therefore, ineligible to receive disability benefits under the provisions of 40 ILCS 5/16-149, 16-149.1 or 16-149.2, proceeds from disability insurance provided by the employer through a private insurance carrier or through a self-insured disability program shall not be considered salary for purposes of 40 ILCS 5/16-149, 16-149.1 or 16-149.2.

(Source: Added at 24 Ill. Reg. 2440, effective January 27, 2000)

Section 1650.209 Computation of Annual Salary When Member Has Different Semester Salary Rates (Repealed)

(Source: Repealed at 32 Ill. Reg. 13534, effective August 6, 2008)

Section 1650.210 Claim Applications

Any individual claiming a retirement annuity, a disability retirement annuity, a survivor benefit, a disability benefit or an occupational disability benefit shall file an application therefor in the form prescribed by the System. This application, together with the membership record, and such other information as may have been compiled during the membership of the member or submitted by the applicant shall constitute the complete record forming the basis of the claim. An application for survivor benefits shall be accompanied by a certified copy of the death certificate, other public record of death, or a physician's certificate of death. The System may require the claimant to provide a valid depository agreement authorizing funds to be electronically deposited into the recipient's bank account in lieu of paper warrants.

(Source: Amended at 43 Ill. Reg. 10791, effective September 23, 2019)

Section 1650.211 Disability Recipient Eligible to Receive an Age or Disability Retirement Annuity

a) A member may file an application to transfer from a nonoccupational or occupational disability benefit to an age retirement annuity or a disability retirement annuity prior to the expiration of the eligibility period for nonoccupational or occupational disability benefits. The effective date of the annuity shall be the first of the month following receipt of the application. An annuitant receiving a disability retirement annuity may, any time after becoming eligible for age retirement, file an application to transfer to an age retirement annuity. The effective date of the age retirement annuity shall be the first day of the month following receipt of the application.

b) At the time a disability retirement annuitant becomes eligible to receive an age retirement annuity, the disability retirement annuitant shall provide the System written certification by two state licensed and practicing physicians verifying that the member remains disabled and is unable to perform the duties of the position he or she held at the time the annuitant's disability commenced. The certifications shall be accompanied by a medical report fully explaining the basis for the physicians' conclusion that the member remains disabled. If the disability retirement annuitant is found to no longer be disabled, he or she shall be placed upon age retirement and receive an age retirement annuity.

(Source: Amended at 32 Ill. Reg. 13534, effective August 6, 2008)

Section 1650.220 Reclassification of Disability Claim (Repealed)

(Source: Repealed at 9 Ill. Reg. 20885, effective December 17, 1985)

Section 1650.221 When Member Becomes Annuitant

A member becomes an annuitant of the System upon cashing his or her first retirement annuity payment or ten calendar days after the date the first retirement annuity payment is deposited in the member's designated bank account by electronic fund transfer.

(Source: Added at 24 Ill. Reg. 2440, effective January 27, 2000)

Section 1650.222 Death Out of Service

Death occurring after the System has received an application for a retirement annuity and any outstanding payments from the member is deemed to be a death out of service when calculating survivor benefits.

(Source: Added at 24 Ill. Reg. 2440, effective January 27, 2000)

Section 1650.230 Medical Examinations and Investigations of Claims (Repealed)

(Source: Repealed at 24 Ill. Reg. 2440, effective January 27, 2000)

Section 1650.240 Refunds; Canceled Service; Repayment

a) Any member eligible to receive a refund of contributions pursuant to the provisions of Section 16-151 of the Act shall, if he or she so elects, make a written request for the refund upon a form prescribed by the System. A refund is deemed accepted and membership in the System terminates upon the cashing of a refund warrant.

b) To be credited toward the calculation of a retirement annuity, survivors benefit, or disability benefit, the service canceled by such refund must have been re-established in accordance with the provisions of the Act, by repayment of the refund in full, including statutory interest, prior to the member's retirement, death, or commencement of disability benefits.

c) A member receiving a disability benefit under the provisions of Section 16-149 of the Act is not eligible to receive a refund of contributions until four months following the date for which disability benefits are last paid.

(Source: Amended at 32 Ill. Reg. 13534, effective August 6, 2008)

Section 1650.250 Death Benefits

a) When two or more beneficiaries are eligible for a survivor benefit and only one qualifies for a periodic payment, the System shall not split the benefit payments so that one person receives a lump sum payment and the other receives an annuity. The beneficiaries shall be paid either the lump sum benefit, or the dependent beneficiary may receive an annuity, provided the non-dependent beneficiary disclaims a lump sum benefit.

b) The phrase "providing for the support of the deceased member's eligible child", as provided in Section 16-141(b)(2) of the Act means providing that support necessary so that the surviving spouse may claim the child as a dependent for federal income tax purposes.

c) The phrase "substantial gainful activity", as provided in Section 16-140(4) of the Act, means the performance of significant duties over a reasonable period of time while working for pay or profit. Full-time work or part-time work done at the employer's convenience in a competitive work situation for at least the minimum wage conclusively shows that the person is able to engage in substantial gainful activity. Certain work offered at qualified locations to physically or mentally impaired persons is considered sheltered employment. The fact that an impaired person has accepted sheltered employment is not proof of the person's ability to engage in substantial gainful activity.

(Source: Amended at 32 Ill. Reg. 13534, effective August 6, 2008)

Section 1650.260 Evidence of Age

a) Whenever evidence of age is required by the System, a birth certificate shall be required unless one cannot be acquired.

b) If no such record can be acquired, the following documents may be substituted:

1) Military records;

2) Marriage record showing date of birth;

3) Evidence of Social Security payments that require attainment of specific age;

4) Church record of birth or baptism;

5) Passport;

6) Valid driver's license; or

7) Two or more documents showing birth dates, such as, but not limited to naturalization papers, insurance policies, school records or medical records.

(Source: Amended at 32 Ill. Reg. 13534, effective August 6, 2008)

Section 1650.270 Reversionary Annuity - Evidence of Dependency

For the purposes of the reversionary annuity provided in Section 16-136 of the Act, the term "dependent" shall include a spouse, an unmarried natural or adopted child under age 18, or any other individual meeting the support requirements set forth herein. If any individual other than a spouse or unmarried natural or adopted child under age 18 is designated by the retiring member, the retiring member must furnish the System with evidence that the retiring member provided over 50% of the support of the designated individual during the 12 calendar months immediately preceding retirement. A copy of the member's federal income tax return, filed for the tax years covering the above 12 month period, shall be required as evidence of dependency.

(Source: Amended at 39 Ill. Reg. 14989, effective October 30, 2015)

Section 1650.271 Evidence of Parentage

a) A child born to the wife of a member is presumed to be legitimate.

b) A child conceived out of lawful wedlock shall not receive benefits as an eligible child until parentage has been established.

c) The following evidence shall establish parentage:

1) Certified copy of a court order finding the member was the natural father of the illegitimate child; or

2) Certified copy of a Settlement Agreement which has been approved by a court for the support of an illegitimate child; or

3) Written acknowledgment of paternity (e.g., pleadings filed in any proceeding pending before a court, or submittals to a public agency, or a document signed by the putative father) and evidence (e.g., cancelled checks or receipts from the mother) that the member contributed to the support of the child; or

4) Certified copy of a court order entered pursuant to a declaratory judgment action establishing either a support obligation or visitation rights; or

5) Copy of the public record of marriage when a child is born to a bigamous marriage; or

6) Copy of the public record of marriage of the parents of an illegitimate child who marry and the putative father acknowledges parentage in writing (e.g., pleadings filed in any proceeding pending before a court, or submittals to a public agency, or a document signed by the putative father).

d) Submission of the following evidence shall prohibit a finding of parentage.

1) The child's mother has admitted someone other than the member is the father.

2) The child has been adopted by a person other than the member.

(Source: Added at 12 Ill. Reg. 16896, effective October 3, 1988)

Section 1650.272 Eligible Child Dependent By Reason of a Physical or Mental Disability

a) To establish eligibility for a survivor benefit as an eligible child dependent by reason of a physical or mental disability under the provisions of Section 16‑140(4) of the Act, a claimant or his or her duly authorized representative shall furnish the following to the System:

1) A copy of the member's federal income tax return filed for the tax year preceding the death, evidencing that the deceased member provided over 50% of the support of the eligible disabled child; and

2) Written reports by two or more licensed physicians certifying that the claimant is physically or mentally unable to engage in substantial gainful activity as defined in Section 1650.250(c) and will remain disabled for a period of not less than twelve months. Claimant physician reports are subject to review by the System, and the claimant may be required to be examined by a physician or physicians selected by the System to verify eligibility.

b) Unless the claimant's disability has been determined to be permanent or expected to result in death within two years by the claimant's examining physicians, the claimant shall be required to furnish the System annual physician certifications of disability. Recertifications are due to the System 30 days prior to the annual anniversary of the claimant's survivor benefits start date.

(Source: Amended at 39 Ill. Reg. 14989, effective October 30, 2015)

Section 1650.280 Evidence of Marriage

a) Applicants claiming benefits as a surviving spouse shall submit as evidence of marriage a copy of the public record of marriage. If the record is unavailable due to loss or destruction, then a copy of the religious record of the marriage shall be submitted.

b) If no such records exist, the following will be accepted for consideration:

1) A copy of the federal income tax return for the year preceding the death.

2) A notarized statement from the individual who performed the marriage.

3) Notarized statements from at least two individuals in attendance of the marriage.

4) Written certification from the Social Security Administration of acceptance of the marriage and its date.

5) Such other documentation found by the System to be trustworthy, such as that produced by independent third parties.

c) The only document acceptable as evidence of dissolution or invalidity of marriage is a certified copy of the declaration or decree entered by a court of competent jurisdiction.

(Source: Amended at 32 Ill. Reg. 13534, effective August 6, 2008)

Section 1650.290 Offsets

Benefits received by a member under the Workers' Compensation Act [820 ILCS 305] or the Workers' Occupational Diseases Act [820 ILCS 310] with respect to a disability shall be applied as an offset against any occupational disability benefit provided by the System with respect to the same accident, illness or disease.

a) If the amount of compensation received is less than the monthly benefit provided under the Illinois Pension Code, only the amount of the excess of such monthly benefit over the amount of such compensation shall be payable by the System. If the amount of compensation received equals or exceeds the monthly benefit provided under the Illinois Pension Code, no benefit shall be payable by the System during the period compensation is paid under the Workers' Compensation Act or Workers' Occupational Diseases Act.

b) If the compensation for disability or death is received in a commuted lump sum or partly in a commuted lump sum and partly in monthly or weekly sums, the System shall, for offset purposes, consider the compensation as if it had been paid at a weekly rate as prescribed under the Workers' Compensation Act or Workers' Occupational Diseases Act.

c) In the event the whole or any part of the benefits received under the Workers' Compensation Act or Workers' Occupational Diseases Act is commuted into one sum, the aggregate sum of the benefits so commuted and not the commuted value thereof shall be used for purposes of ascertaining the amount of offset.

d) The amount considered for offset purposes shall not be reduced by any legal expenses granted from the award to the member.

e) An offset shall not be applied to medical expenses paid on behalf of or to the claimant.

(Source: Amended at 22 Ill. Reg. 7243, effective April 9, 1998)

SUBPART D: MEMBERSHIP AND SERVICE CREDITS

Section 1650.301 Early Retirement Without Discount – Return to Teaching from a Break in Service

To be eligible to elect early retirement without discount when a member returns from a break in teaching service, a member must meet the following requirements:

a) The member must be employed as a teacher as defined in 40 ILCS 5/16-106 within 6 months prior to his or her effective date of retirement:

1) In a full-time position (five days per week, four or more clock hours daily) for at least one full pay period (minimum two weeks); or

2) In a substitute or part-time non-contractual teacher position (daily or hourly) working 85 or more days for the same employer.

b) The member employed under subsection (a)(1) must be paid for each day worked with the daily salary rate equal to or greater than employer's minimum salary on the employer's salary schedule.

(Source: Added at 30 Ill. Reg. 194, effective December 23, 2005)

Section 1650.310 Effective Date of Membership

a) The effective date of membership in the System shall be the date of employment by an employer, as recorded by the employer.

b) In the absence of a record of the date of employment in the official proceedings of the qualifying employer, the date of membership shall be the first payroll day for which contributions were required.

c) For purposes of calculating the required contributions to purchase military service not immediately following employment under the provisions of 40 ILCS 5/16-128(a)(iii), and/or to purchase private school teaching under the provisions of 40 ILCS 5/16-128(d-5) in the absence of official records documenting the date of first full-time employment as a teacher, the date of first membership shall be defined as July 1 of the first year of System contributing service.

(Source: Amended at 29 Ill. Reg. 1546, effective January 14, 2005)

Section 1650.315 Establishing Salary and Assessing Contributions for Optional Service Credit

a) The System shall establish a salary and assess contributions for optional service utilizing the first year of service as a contributing member of the System by determining a salary equal to the member's first full-time actual salary paid as a contributing member of the System immediately succeeding the time period in question and assess contributions on the first full-time salary at the applicable statutory rate in the following instances:

1) For out-of-system service, as defined in Sections 16-127(b)(2) and 16-128(b) of the Code, that has not been verified by the System as of January 1, 2020; or

2) For all other optional service as defined in Sections 16-127 and 16-128, when salary information for a period of creditable service is unavailable.

b) In the absence of a first full-time actual salary, the System shall determine a salary rate equal to the member's first full-time equivalent salary paid as a contributing member of the System immediately succeeding the time period in question and shall assess contributions on the first full-time equivalent salary at the applicable statutory rate.

(Source: Amended at 43 Ill. Reg. 10791, effective September 23, 2019)

Section 1650.320 Method of Calculating Service Credits

a) No more than one year's service credit shall be granted for total service rendered between July 1 of one year through June 30 of the following year.

b) If the service rendered on a full-time basis, substitute basis, or part-time basis after June 30, 1990 is less than 170 days between July 1 of one year through June 30 of the following year, then credit for service shall be at a ratio of the actual number of days of service to 170 days.

c) Service credit for service rendered on a permanent and continuous part-time basis prior to July 1, 1990, between July 1 of one year through June 30 of the following year, shall be at the ratio of creditable earnings to the annual salary rate. Provided, however, that for service after June 30, 1959, if that ratio equals or exceeds the ratio of 170 days to the days in the legal school term, one year of service credit shall be granted.

d) If service prior to July 1, 1990 is rendered partially on a full-time basis and partially on a permanent and continuous part-time basis between July 1 of one year through June 30 of the following year, then credit for service shall be at the ratio of creditable earnings to the annual salary rate. Provided, however, that for service after June 30, 1959, if that ratio equals or exceeds the ratio of 170 days to the days in the legal school term, one year of service credit shall be granted.

e) Whenever the actual number of days of service is unavailable because of lack of employer records, the number of days the System uses to grant service credit shall be equal to the actual number of hours for which the member was paid, divided by four.

f) Days of service shall include any weekday, Monday through Friday, for which periodic payment is made to the member for:

1) Service rendered that requires teacher certification under the School Code;

2) Attendance, during the work week, at teacher's institutes, workshops and parent/teacher conferences scheduled in the school calendar;

3) Legal school holidays;

4) Vacation, sick or personal leave days (except when the payment is for severance pay);

5) Sabbatical leaves meeting the requirements of Section 24-6.1 of the School Code [105 ILCS 5/24-6.1];

6) Absence from duty, as documented in a contract, collective bargaining agreement, employment policies, or other employer-provided documentation reflecting the employer's approval of the absence, without loss of pay and benefits and without use of accrued time until the member resumes active employment or until the resignation date, whichever occurs first; or

7) Service rendered on e-learning days authorized by Section 10-20.56 of the School Code [105 ILCS 5].

g) A day of service may be credited for Saturday service if that day would otherwise qualify as a day of service and the service was required due to a lawful day of attendance.

(Source: Amended at 49 Ill. Reg. 3382, effective March 3, 2025)

Section 1650.325 Method of Calculating Service Credit for Recipients of a Disability Benefits or Occupational Disability Benefit

a) Service credit is earned during periods in which disability benefits are paid.

b) Service credit is earned during periods of occupational disability.

c) When a member teaches a partial school year and receives disability or occupational disability benefits a partial school year, one full year of service credit is earned when the member receives earnings from teaching and disability or occupational disability benefits for a total of 170 days during the school term or the term of the employment agreement if longer. To determine the service credit a member would have received and the contribution that a member would have made in active employment during any period for which benefits are paid or the member is on occupational disability, the System shall establish on an annual basis two school calendars; a 185-day calendar for members on nine-month contracts and a 260-day calendar for members with greater that nine-month contracts. Service credit and credit for contributions shall be earned and calculated upon the days deemed creditable therein.

d) One full year of service credit is earned when the member receives disability or occupational disability benefits for a total of 170 days during any school year.

(Source: Amended at 20 Ill. Reg. 3118, effective February 5, 1996)

Section 1650.330 Duplicate Service Credit

a) Credit will be denied those members who elect to receive or have received a monthly retirement allowance based on the same service used for pension purposes in another public, statutory retirement system other than Social Security or a military retirement allotment.

b) When it is established by receipt of written certification from a prior employer or another retirement system that an annuitant has used service credited in this System for pension purposes in another public, statutory retirement system, the duplicated credit will be removed from his or her record in this System, and his or her retirement allowance will be reduced accordingly. The System shall assert an offset in accordance with Section 1650.595 for any additional benefits paid as a result of such overpayment, against future benefits to be paid the annuitant or his or her beneficiaries.

(Source: Amended at 26 Ill. Reg. 11476, effective July 11, 2002)

Section 1650.335 Unreported Regular Service Credit and Earnings

If an employer fails to report a member's regular service credit and earnings for a period of teaching and, at the time of the discovery of the error, more than four fiscal years have elapsed since the fiscal year in which the error occurred, the member will be required to:

a) provide sufficient documentation (e.g., official school records) to establish the unreported service credit and earnings; and

b) pay the contributions required by Section 16-128(a)(i) and (iii) of the Illinois Pension Code to purchase optional service credit under Section 16-127(b)(2) of the Code.

(Source: Added at 29 Ill. Reg. 13244, effective August 9, 2005)

Section 1650.340 Service Credit for Out-of-System Service and Leaves of Absence

a) Granting Out-of-System Service

1) For purposes of granting out-of-system service as provided in Section 16-127(b)(2) of the Code, once the statutory minimum service requirement has been met, the member may purchase the portion of out-of-system service available at the time of purchase based on total creditable service years, provided one of the following conditions are met:

A) If a refund from the other system is available to the member, that refund must be taken prior to the purchase of the out-of-system service; or

B) If the member is unable to take a refund from the other system, the member must be ineligible for a benefit from that system.

2) The member may purchase additional qualifying out-of-system service, after the initial purchase, on a fiscal year basis, upon further request by the member, to a maximum of 2/5 of the total creditable service of the member or 10 years, whichever is less.

b) For purposes of granting service credit for an approved leave of absence as provided in Section 16-127(b)(5)(i) of the Code, the statutory return-to-teaching requirement is met when the member returns to teaching service creditable under this System or the State Universities Retirement System for the period of the leave or one year, whichever is less. A leave of absence is creditable as an approved leave if:

1) The member did not resign prior to the effective date of the leave; or

2) The employer promised renewed employment at the end of the leave; and

A) The employer took official action to approve the request for leave; or

B) The leave qualifies as a leave under the Family and Medical Leave Act (29 USC 2601), as certified by the employer.

(Source: Amended at 44 Ill. Reg. 7905, effective April 24, 2020)

Section 1650.341 Service Credit for Involuntary Layoffs

a) An involuntary layoff occurs when a member's employment is terminated as result of a reduction in force due to lack of funding, lack of work, an elimination of position, or a material reorganization.

b) Involuntary layoffs shall not include non-renewals of employment unrelated to reasons set forth in subsection (a) or dismissals for cause or other performance related reasons.

c) To receive service credit for an involuntary layoff, a member must be re-employed in a contractual teaching position under this System or the State Universities Retirement System for the creditable period of the layoff or one year, whichever is less.

(Source: Amended at 24 Ill. Reg. 2440, effective January 27, 2000)

Section 1650.342 Service Credit for Paid Student Teaching Service

For purposes of determining eligibility to receive optional service credit for paid student teaching service under Section 16-127(b)(11) of the Code, the member must:

a) Have rendered the paid student teaching service on or after August 7, 2019, the original effective date of 105 ILCS 5/24-8.5 of the School Code, authorizing school districts to pay salary for student teaching service;

b) Provide sufficient documentation acceptable to the System, for example, official school records, to establish the paid student teaching service credit and earnings; and

c) Pay the contributions required under Section 16-128 of the Code to purchase optional service credit.

(Source: Added at 48 Ill. Reg. 6116, effective April 5, 2024)

Section 1650.345 Service Credit for Periods Away From Teaching Due to Pregnancy

a) Service credit of up to three years shall be granted for periods beginning prior to July 1, 1983, during which a teacher ceased covered employment due to pregnancy. The maximum lifetime amount of credit available for any type of leave of absence, including pregnancy related absences, is 3.000 years. Type of leave of absences include pregnancy, leave of absence, involuntary layoff, and adoption.

b) For purposes of determining eligibility to receive optional service credit under the provisions of 40 ILCS 5/16-127(b)(5)(iii), the following definitions shall apply:

1) "Pregnancy" shall mean the period beginning at the moment of conception and continuing through termination of the pregnancy or delivery of the child.

2) "Due to pregnancy" shall mean due to the state of being pregnant and recovery therefrom due to the termination of a pregnancy or due to the delivery of a child.

3) "Covered employment" means employment in a position requiring membership contributions to the System as a condition of employment.

4) "Teaching service creditable under this System or the State Universities Retirement System" means employment in a position requiring membership contributions to the System or the State Universities Retirement System as a condition of employment.

c) The documents necessary to establish service credit under this Section shall include:

1) School employment records;

2) Medical records;

3) Birth or death certificates; and/or

4) Other contemporaneous documentation that reliably supports the service credit to be established while eliminating the possibility of mistake or fraud.

d) For purposes of granting service credit for periods away from teaching due to pregnancy, the statutory return-to-teaching requirement is met when the member returns to teaching service creditable under this System or the State Universities Retirement System for the period the member was away from teaching due to pregnancy or one year, whichever is less.

(Source: Amended at 41 Ill. Reg. 14256, effective November 8, 2017)

Section 1650.346 Service Credit for Periods Away From Teaching Due to Adoption

a) Service credit of up to three years shall be granted for periods beginning prior to July 1, 1983, during which a teacher ceased covered employment for the purpose of adopting an infant under three years of age or caring for a newly adopted infant under three years of age. The maximum lifetime amount of credit available for any type of leave of absence, including pregnancy related absences, is 3.000 years. Type of leave of absences include pregnancy, leave of absence, involuntary layoff, and adoption.

b) For purposes of determining eligibility to receive optional service credit under the provisions of 40 ILCS 5/16-127(b)(5)(iv), the following definitions shall apply:

1) "Ceased covered employment" shall mean the submission of a resignation that terminated employment in a position requiring membership contributions to the System as a condition of employment.

2) "For the purpose of adopting an infant under three years of age" shall mean the termination of covered employment:

A) To meet the requirements of an adoption agency or similar entity resulting in the adoption of an infant who is under the age of three at the time the member terminates covered employment;

B) To formally commence judicial or administrative proceedings to adopt an infant who is under the age of three at the time the adoption proceedings were initiated; or

C) To care for an infant under the age of three while an adoption proceeding is ongoing which results in the adoption of the infant.

3) "Caring for a newly adopted infant under three years of age" shall mean providing care to an adopted infant of less than three years of age when the interruption of service begins within 180 days after the court order declaring the member the adoptive parent of such an infant.

c) The documents necessary to establish service credit under this Section shall include:

1) Employment records;

2) Birth certificates;

3) Court records;

4) Adoption agency records;

5) Governmental records; and/or

6) Other contemporaneous documentation that reliably supports the service credit to be established while eliminating the possibility of mistake or fraud.

d) For purposes of granting service credit for periods away from teaching due to adoption, the statutory return-to-teaching requirement is met when the member returns to teaching service creditable under this System or the State Universities Retirement System for the period the member was away from teaching due to adoption or one year, whichever is less.

(Source: Amended at 41 Ill. Reg. 14256, effective November 8, 2017)

Section 1650.350 Service Credit for Unused Accumulated Sick Leave Upon Retirement

a) To be creditable for retirement purposes, sick leave days must actually be available for use by a member in the event of illness. Service credit is not available and shall not be computed for sick leave days added to the record of a member for the purpose of increasing a member's retirement service credit. To determine if any sick leave days granted by an employer in excess of the member's normal annual sick leave allotment during a member's final years of employment are actually available for use and reportable to the System as service credit, the System shall apply the following formula:

1) from the date upon which the sick leave days were granted, the number of days remaining in the school term or the member's employment agreement, whichever is greater, until termination shall be determined;

2) from the resulting number of days the System shall subtract the number of sick leave days previously accrued by the member; and

3) the difference is the maximum number of sick leave days that may be reported in addition to those days previously accrued, provided that the employer will allow the member to use those days in the event of illness prior to termination.

b) Unused and uncompensated sick leave days are not eligible for service credit at retirement when the member receives compensation for those days. Effective July 1, 1998, if a member receives payment for accumulated sick leave days that is also reportable to the System as creditable earnings, no service credit shall be available for the days so compensated.

c) For purposes of calculating a retirement annuity, the System shall not grant service credit for any days withdrawn by the member from a sick leave bank in excess of the days deposited in the sick leave bank and unused by the member.

d) Accumulated business, personal, or other non-vacation leave days are governed by the same standards set forth in subsections (a) and (b) for sick leave days, but only if they were actually available for use by a member in the event of illness.

e) Accumulated, unused vacation days are not creditable with the System.

(Source: Amended at 43 Ill. Reg. 5115, effective April 22, 2019)

Section 1650.351 Employer Contribution for Excess Sick Leave

a) The phrase "normal annual sick leave allotment" shall mean the amount of annual sick leave granted by a TRS employer under a collective bargaining agreement, contract or employment policies, including any business, personal or other non-vacation leave days that may be used as sick leave.

b) If an employer grants sick leave days in excess of the normal annual sick leave allotment as defined in subsection (a) in the last four school years prior to retirement, the employer is subject to the employer contribution provided in Section 16-128(d-10) of the Code.

c) The employer contribution required in Section 16-128(d-10) shall be computed as follows:

The member's highest salary rate reported by the granting employer during the four-year sick leave review period in subsection (c) x the total normal cost rate (the employer's normal cost as defined in Section 1650.183 plus the member contribution required under Section 16-152 of the Code) applicable to the last fiscal year of contributing service x the portion of sick leave service credit attributed to sick days in excess of the normal annual allotment granted by that specific employer = employer's contribution.

d) If more than one employer in the last four school years prior to retirement grants sick leave days in excess of the normal annual sick leave allotment, the contribution from each employer will be determined from sick leave days granted earliest to latest.

e) An award of sick days as part of a retirement incentive shall not constitute a normal annual sick leave allotment.

(Source: Amended at 49 Ill. Reg. 3382, effective March 3, 2025)

Section 1650.355 Purchase of Optional Service - Required Minimum Payment

The required minimum payment upon a member's outstanding optional service account balance shall be $50.00 or the balance due, whichever is less.

(Source: Added at 21 Ill. Reg. 2422, effective January 31, 1997)

Section 1650.356 Payroll Deduction Program (Repealed)

(Source: Repealed at 26 Ill. Reg. 11476, effective July 11, 2002)

Section 1650.357 Employer Payment of Member's Optional Service and/or Upgrade Contribution Balance (Repealed)

(Source: Repealed at 26 Ill. Reg. 11476, effective July 11, 2002)

Section 1650.360 Settlement Agreements and Judgments

a) In the event a member and employer enter into a settlement agreement to resolve employment issues which affect service and earnings credit, the following provisions shall govern the computation of creditable service and the reporting of creditable earnings.

b) To ensure the reportability of service and earnings credit in settlement agreements covering a retroactive time period, the settlement agreement must contain the following:

1) the time period for which the member would have received salary or service credit;

2) a statement the settlement is an award of back salary; and

3) the amount of salary the member would have been paid during the period covered by the settlement agreement had the employment issue not arisen.

c) Contributions on retroactive settlement agreements are based upon the salary a member would have otherwise earned but for the employment issue.

d) All required contributions due on retroactive settlement agreements must be paid within one year after the date of the settlement agreement; otherwise interest shall be charged at the applicable statutory rate from the date of the settlement agreement.

e) To ensure the reportability of service and earnings credit in settlement agreements covering a prospective time period, the settlement agreement must contain the following:

1) the time period for which the member is to receive service credit, not to exceed one year.

2) a statement confirming the member is to be employed as a teacher.

3) a statement that the member will continue to receive the same salary on regular pay dates and fringe benefits to which he or she would be entitled.

4) If a resignation date is contained in the settlement agreement, it must not be prior to the end of the time period covered by the settlement agreement.

f) Service credit is not presumed available nor salary presumed reportable for prospective settlement agreements covering in excess of one year.

g) To ensure the reportability of service and earnings credit awarded pursuant to a judgment of a court of competent jurisdiction, the judgment order must contain:

1) the time period for which the court determines the member should have received salary or service credit.

2) a statement the judgment is an award of salary.

3) the amount of salary the member would have received during the period covered by the judgment.

h) Contributions on judgments are based upon the salary a member would have otherwise earned but for the issue being litigated.

(Source: Amended at 22 Ill. Reg. 7243, effective April 9, 1998)

Section 1650.370 Calculation of Average Salary (Renumbered)

(Source: Section 1650.370 renumbered to Section 1650.460 at 18 Ill. Reg. 6349, effective April 15, 1994)

Section 1650.380 Definition of Actuarial Equivalent (Repealed)

(Source: Repealed at 32 Ill. Reg. 13534, effective August 6, 2008)

Section 1650.390 Independent Contractors

Any individual claiming to be an independent contractor exempt from System membership or the post-retirement work limits governing annuitants as set forth in 40 ILCS 5/16-118 must file Form SS-8 (Determination of Employee Work Status for Purposes of Federal Employment Taxes and Income Tax Withholding) with the Internal Revenue Service (IRS) seeking confirmation of independent contractor status. An IRS Form SS-8 independent contractor determination must be filed with the System before an individual can be considered to be exempt from System membership or Article 16 post-retirement work limits.

(Source: Added at 21 Ill. Reg. 2422, effective January 31, 1997)

Section 1650.391 Optional 2.2 Upgrade of Earned and Credited Service

a) Electing to upgrade.

1) A member's 2.2 upgrade cost becomes fixed on the date the member elects to upgrade and remains fixed until the expiration of the 60-month period commencing on the August 15 following election or full payment of the upgrade cost, 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).

2) Once a member has elected to upgrade his or her service credit in accordance with Section 16-129.1 of the Illinois Pension Code [40 ILCS 5/16-129.1], the member is prohibited from electing another upgrade until the fixed cost period described in subsection (a)(1) for the upgrade election has expired.

3) After filing an upgrade election, a member may upgrade any optional or refunded service added to the member's service credit record within the period provided in subsection (a)(1) at the same salary rate used to determine the original upgrade cost, provided the additional service is purchased within the same five-year period.

b) Determining the contribution necessary for upgrade.

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 optional 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 of the election; 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 has failed to make the full contribution in a timely fashion, the payments made under this Section shall be refunded to the member, without interest [40 ILCS 5/16-129.1]. However, if the member is able to re-elect, and does re-elect, for the 2.2 upgrade feature prior to the refund being made, the amount of the refund shall be used as a partial lump sum contribution towards the cost of the 2.2 upgrade feature.

4) If the member dies before making the full contribution, the payments under this Section, 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].

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 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.

(Source: Amended at 32 Ill. Reg. 13534, effective August 6, 2008)

Section 1650.392 2.2 Upgrade of Optional Service Not Credited at Initial Upgrade

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)].

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.

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

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.

(Source: Amended at 32 Ill. Reg. 13534, effective August 6, 2008)

SUBPART E: CONTRIBUTION CREDITS AND PAYMENTS

Section 1650.410 Return of Contributions for Duplicate or Excess Service

a) In the event contributions to the System are made in error for service covered by another public employee pension system in Illinois, such contributions shall be returned to the member.

b) If a member contributes to the System for optional teaching service, but is unable to claim all of this service at the date of retirement or death because the service is determined to be excess service, then the contributions for such excess service or a portion thereof may upon request be returned to the member or the member's beneficiaries.

1) The term "excess service" shall mean that period of service exceeding the amount of service allowed to be purchased under Section 16-127(b)(2) [40 ILCS 5/16-127(b)(2)].

2) The return of contributions under subsection (b) shall be limited to the amount attributable to the purchase of optional service under Section 16-127 [40 ILCS 5/16-127].

3) No interest shall be payable upon the amount returned.

(Source: Amended at 38 Ill. Reg. 21239, effective October 21, 2014)

Section 1650.415 Return of Optional Increase in Retirement Annuity Contributions

a) A member who has made contributions toward the optional increase in retirement annuity provided in 40 ILCS 5/16-129.1, and who determines such optional annuity increase is not in his or her best financial interest, may elect at retirement not to qualify for such increase in annuity and request a return of the member's optional increase in retirement annuity contributions from the System.

b) Upon such request, the member's optional increase in retirement annuity contributions will be returned to the member without interest.

(Source: Added at 25 Ill. Reg. 203, effective December 22, 2000)

Section 1650.416 Optional Increase in Retirement Annuity – 1% Contribution Reduction

a) Section 16-129.1(b) of the Pension Code [40 ILCS 5/16-129.1(b)] entitles a member who chooses to upgrade creditable service accrued prior to July 1, 1998 to the 2.2% level established by Section 16-133(a)(B)(1) of the Code to a reduction in the cost of the upgrade. The reduction shall equal 1% of the salary used to calculate the contribution required for the upgrade for each 3 years of regular creditable service earned after June 30, 1998. The System will calculate this reduction at the time of retirement, when the number of years of post-June 30, 1998 service is known, and refund that amount to the member.

b) If a member has upgraded creditable service to the 2.2% level more than once (i.e., an upgrade of regular service credit and a subsequent purchase and upgrade of optional service credit) at times when different salary rates were used in determining the contribution required for the individual upgrades, the System will calculate the reduction by the following formula:

• the number of years of creditable service after June 30, 1998

• divided by 3 (omitting any fractional period)

• divided by the number of years of upgraded service

• multiplied by the member's total upgrade contribution

EXAMPLE:

A member has 15 years of pre-July 1, 1998 service and chooses to upgrade that service to the 2.2% flat formula on August 15, 1998. The cost of the upgrade is determined as follows:

$50,000 (highest salary of the 4 years prior to 1998) x 1% = $500 x 15 years = $7500

The $7500 cost is paid in full by August 15, 2003 as required by Section 16-129.1(b) of the Code.

In early 2006, the member purchases 5 years of pre-July 1, 1998 optional service credit and must upgrade that past service to the 2.2% level as well. The cost to upgrade the 5 years of optional service credit is determined as follows:

$60,000 (highest salary of the 4 years prior to 2006) x 1% = $600 x 5 years = $3000

The $3000 cost is paid in full by the retirement date.

The member retires late in 2008, having accumulated 10 years of service between July 1, 1998 and the date of retirement. The reduction to be refunded to the member is determined as follows:

10 years of service

÷ 3 = 3% reduction (fractional period deleted)

÷ 20 years of service credit upgraded = 15%

x $10,500 (total upgrade cost: $7500 + $3000)

= $1575

(Source: Added at 28 Ill. Reg. 10055, effective June 29, 2004)

Section 1650.417 Mandatory Distributions Pursuant to Section 401(a)(9) of the Internal Revenue Code

When the System is required to make a mandatory distribution pursuant to section 401(a)(9) of the Internal Revenue Code and the member is eligible to receive either a single-sum benefit under 40 ILCS 5/16-136.4 or a refund under 40 ILCS 5/16-151, but fails to make the required election, the member shall be deemed to have elected a single-sum benefit under Section 16-136.4 of the Code.

(Source: Amended at 43 Ill. Reg. 10791, effective September 23, 2019)

Section 1650.420 Interest on Deficiencies (Repealed)

(Source: Repealed at 9 Ill. Reg. 20885, effective December 17, 1985)

Section 1650.430 Installment Payments (Repealed)

(Source: Repealed at 9 Ill. Reg. 20885, effective December 17, 1985)

Section 1650.440 Small Deficiencies, Credits or Death Benefit Payments (Repealed)

(Source: Repealed at 32 Ill. Reg. 13534, effective August 6, 2008)

Section 1650.450 Compensation Recognized As "Salary"

a) "Salary" means any form of creditable compensation received by a member in consideration of services rendered as a teacher, subject to all applicable limits and restrictions imposed on qualified plans under the Internal Revenue Code. "Salary" directly related to specific work performed during a school year is recognized on an accrual basis. Other creditable compensation is recognized on a cash basis. The System reserves the right to determine the year of salary recognition. The following common examples are for illustration only and do not limit the System's right to evaluate and determine other forms of creditable and non-creditable compensation.

b) Examples of creditable compensation recognized as "salary":

1) The gross amount of compensation earned or accruing to the member during the school year in a function requiring certification as a teacher.

2) Additional compensation earned during the school year for the performance of extra duties, not requiring teacher licensure, but which involve the supervision of students or are related to the academic program, provided the member is employed during the school year at a TRS-covered employer in a position requiring licensure. For purposes of this subsection (b)(2), a "TRS-covered employer" is any employer that employs TRS members (i.e., individuals that meet the definition of "teacher" in 40 ILCS 5/16-106).

3) The amount of back salary awarded to a member as a result of a settlement or judgment obtained due to a disputed dismissal, suspension or demotion. Court costs, attorney's fees, other compensatory damages and punitive damages shall not be reportable as salary. The back salary amount reported to the System under this Section shall be equal to the amount the member would have earned had the dispute not occurred, regardless of the actual amount paid.

4) Lump-sum payments (e.g., retirement incentives, bonuses, payments for unused vacation and sick days) becoming due and payable to the member prior to or concurrent with receipt of final paycheck for regular earnings or last paid day of work, whichever occurs last.

5) Contributions made by or on behalf of the member to qualified deferred compensation plans in accordance with sections 401(a) and 457(b) of the Internal Revenue Code, salary reduction plans or tax sheltered annuities under section 403(b) of the Internal Revenue Code, and savings plans under section 529 of the Internal Revenue Code.

6) Amounts that would otherwise qualify as salary under subsections (b)(1) through (b)(5) but are not received directly by the member because they are used to finance benefit options in a flexible benefit plan; provided, however, that to be reportable, a flexible benefit plan cannot include non-qualifying deferred compensation. For the System's purposes, a flexible benefit plan is an option offered by an employer to its employees covered under the System to receive an alternative form of creditable compensation in lieu of employer-provided insurance.

c) Examples of non-creditable compensation not recognized as "salary":

1) At termination, lump-sum payments (e.g., retirement incentives, bonuses, payments for unused vacation and sick days) becoming due and payable to the member subsequent to receipt of final paycheck for regular earnings or last paid day of work, whichever occurs last.

2) Any lump sum payment made after the death of the member.

3) Expense reimbursements, expense allowances, or fringe benefits unless included in a reportable flexible benefit plan.

4) Any monies received by the member under the Workers' Compensation Act [820 ILCS 305] or the Workers' Occupational Diseases Act [820 ILCS 310].

5) Any amount paid in lieu of discontinued or decreased non-reportable benefits, or reported in lieu of previously non-reported compensation, where the conversion occurs in the member's final seven years of service. If any form of non-creditable or non-reported compensation in any of the member's last seven creditable school years of employment exceeds that of any other subsequent year, the System will presume the difference to have been converted into salary in the subsequent year. To overcome the presumption, the member must submit documentary evidence to the System that clearly and convincingly proves that the change in compensation structure was due to a change in a collectively bargained agreement applicable to all individuals covered by the agreement, a change in employer policies affecting a group of similarly situated members some of whom are not within seven years of retirement eligibility, or a change in family status, and not to increase final average salary.

6) Any amount paid by an employer as the employer's one time contribution (or on behalf of the employee as the employee's one-time contribution) required by the System as part of the statutory early retirement option in Section 16-133.2 of the Act.

7) Options to take salary in lieu of employment-related expense allowances or reimbursements.

8) Employer payment of the member's Teachers Health Insurance Security Fund contribution.

9) Commissions (i.e., payments to a member based upon a percentage formula).

10) Contributions to and distributions from nonqualified deferred compensation arrangements.

11) Employer contributions to and distributions from medical spending accounts.

(Source: Amended at 49 Ill. Reg. 3382, effective March 3, 2025)

Section 1650.451 Reporting of Conditional Payments

Payments that are conditioned upon the occurrence of a future event (e.g., retirement) shall be reported in the school year paid to the member. However, if the condition upon which payment is predicated does not occur and the payment is repaid to the employer, an adjustment is required to remove the payment from the school year in which the payment was originally reported.

(Source: Amended at 24 Ill. Reg. 2440, effective January 27, 2000)

Section 1650.460 Calculation of Average Salary

a) The member's annual salary rate shall be used by the System when calculating average salary. If a member has a full year of service credit and the annual salary includes leave of absence earnings and substitute earnings or part-time noncontractual earnings, the annual salary rate for average salary purposes will never be less than the salary rate the leave of absence earnings is based upon. If a member receives less than one year of service credit in any school year, salary shall consist of creditable earnings.

b) The highest four consecutive school years of service within the last ten years of creditable service shall be deemed the four highest consecutive credit years posted to the member's account. Provided, however, if a member is credited with less than one school year, the System shall use partial consecutive years to establish four consecutive years of salary.

c) For average salary calculation purposes, a school year is the period July 1 to the following June 30.

d) When a member's employer consolidates or annexes with another employer, the consolidation or annexation shall not constitute a change of employer and the average salary shall be computed as though all salary were earned under the same employer.

e) Where there are creditable earnings for less than a full year of service credit, and those earnings are used in the calculation of the average salary, the annual salary rate for those earning is considered in the calculation of any member and employer contributions under Sections 16-133.2, 16-133.3, 16-133.4 and 16-133.5 of the Act.

(Source: Amended at 21 Ill. Reg. 2422, effective January 31, 1997)

Section 1650.470 Rollover Distributions

a) An eligible recipient entitled to receive a refund of contributions, lump-sum benefit, or other nonperiodic distribution from the System may elect, subject to the provisions of this Section, to have all or a portion of the distribution paid in a direct rollover from the System to an eligible retirement plan designated in writing by the eligible recipient; provided, however, that any portion thereof which is a required distribution pursuant to any applicable provision of the Internal Revenue Code is not payable in a direct rollover. A distribution made to correct a failed nondiscrimination test or because legal limits on certain contributions were exceeded cannot be rolled over.

b) If the distribution from the System is less than $200, it is not payable in a direct rollover.

c) If the distribution from the System is at least $200 but less than $500, the entire sum must either be paid in a single direct rollover or to the eligible recipient.

d) If the distribution is greater than $500, the eligible recipient may have a portion thereof paid to him or her and the balance paid in a direct rollover; provided, however, that the direct rollover must be at least $500.

e) Multiple direct rollovers from the System to more than one eligible retirement plan are not allowed.

f) An "eligible retirement plan" for purposes of this Section means:

1) A plan described in 26 USC 402(c)(8)(B), which includes:

A) An individual retirement account described in 26 USC 408(a);

B) An individual retirement annuity described in 26 USC 408(b) (other than an endowment contract);

C) A qualified trust under 26 USC 401(a);

D) An annuity plan described in 26 USC 403(a);

E) An eligible deferred compensation plan described in 26 USC 457(b) that is maintained by an eligible employer described in 26 USC 457(e)(1)(A);

F) An annuity contract described in 26 USC 403(b); and

G) Pursuant to 26 USC 408A(c)(6) and (e)(1), a Roth IRA as defined in 26 USC 408A(b).

2) Any other type of plan that is designated as an eligible retirement plan by federal law.

g) A "direct rollover" for purposes of this Section is a payment by the System to an eligible retirement plan specified by the eligible recipient as provided in subsection (a) of this Section.

h) An "eligible recipient" for purposes of this Section is:

1) A member of the System as defined in Section 16-107 of the Illinois Pension Code [40 ILCS 5/16-107];

2) An alternate payee under a valid Qualified Illinois Domestic Relations Order (QILDRO) on file with the System in accordance with Section 1-119 of the Illinois Pension Code [40 ILCS 5/1-119], as allowed by 26 USC 402(e)(1)(B);

3) A member's surviving spouse, as allowed by 26 USC 402(c)(9); or

4) A non-spouse beneficiary, as defined in 26 USC 401(a)(9)(E), of a deceased member, provided the distribution is rolled to an individual retirement plan that is treated as an inherited individual retirement account or individual retirement annuity pursuant to 26 USC 402(c)(11).

i) If the eligible recipient elects a direct rollover from the System as provided in this Section, the eligible recipient shall certify in writing the following:

1) That he or she has read the "Special Tax Notice Regarding Payments from TRS"; and

2) That the direct rollover is being made into an eligible retirement plan as defined in subsection (f) of this Section.

j) If the eligible recipient elects a direct rollover from the System as provided in this Section, the eligible recipient shall identify the type of eligible retirement plan to which the direct rollover is being made and shall obtain the certification in writing of the entity that is to receive the direct rollover as to the following:

1) That the entity receiving the direct rollover is legally eligible to receive such direct rollover;

2) That the entity receiving the direct rollover has agreed to accept such direct rollover; and

3) That the direct rollover is being made to an eligible retirement plan as defined in subsection (f) of this Section.

k) In order to receive payment from the System in a direct rollover pursuant to this Section, the System must receive from the eligible recipient all of the following together, in the form or forms prescribed by the System:

1) An application for lump-sum distribution;

2) A rollover election;

3) A certification from the eligible recipient as provided above in subsection (i) of this Section; and

4) A certification from the entity receiving the direct rollover as provided in subsection (j) of this Section.

l) Payments from the System that are part of a series of equal or substantially equal periodic payments made at least once a year cannot be paid in a direct rollover, if the payments will last for:

1) The life or life expectancy of the person entitled to receive the payments;

2) The lives or joint life expectancies of the person entitled to receive the payments and that person's beneficiary; or

3) A period of ten years or more.

(Source: Amended at 33 Ill. Reg. 15863, effective November 2, 2009)

Section 1650.480 Rollovers to the System

a) The System will accept rollovers to purchase optional service credit, repay refunds, or pay any other employee contribution authorized by Article 16 of the Pension Code [40 ILCS 5/Art. 16].

b) Members are required to establish an account or accounts receivable with the System prior to initiating a rollover. The amount of the rollover cannot exceed the amount due the System.

c) The System will accept member rollover contributions and/or direct rollovers of distributions as defined in 26 USC 402(f)(2)(A).

d) Prior to accepting a rollover, the System may require the member to establish that the amounts to be transferred to the System meet the requirements of this Section, and may also require the member to provide an opinion of counsel satisfactory to the System that the amounts to be transferred meet the requirements of this Section.

e) The System's acceptance of a rollover shall be subject to any applicable regulations, procedures, or other guidance issued by the Internal Revenue Service.

(Source: Amended at 32 Ill. Reg. 13534, effective August 6, 2008)

Section 1650.481 Employer Contribution Required for Salary Increases in Excess of 6% or 3%

a) The employer contribution required under 40 ILCS 5/16-158(f) will be determined as follows:

1) Calculate the member's monthly benefit using salaries as reported, excluding that part of the member's salary that exceeds the member's annual full-time salary rate with the same employer for the preceding year by more than 20%.

2) Calculate the member's monthly benefit using salaries as reported, excluding that part of the member's salary that exceeds the member's salary with the same employer for the preceding year by more than 6%.

3) Subtract (a)(2) from (a)(1).

4) Multiply (a)(3) by a Monthly Benefit Factor for the member's exact age at the retirement date. The Monthly Benefit Factors are based on the actuarial assumptions of the System for life expectancy and investment return as determined by the System's actuaries pursuant to 40 ILCS 5/16-176.

5) If a member's monthly benefit is calculated pursuant to 40 ILCS 5/16-133(a), this Section will not apply.

6) If there is more than one employer during the final average salary period, each employer will pay its respective contribution based on salary increases granted by that employer in excess of 6%.

7) If the member's benefit is increased as a result of applying the provisions of Section 20 of the Retirement Systems Reciprocal Act [40 ILCS 5/20], no additional employer contribution will be due.

8) If the member's benefit is reduced as a result of applying proportional reductions required by 40 ILCS 5/20-124, no employer contribution will be assessed for any salaries attributable to any reciprocal employment used in the calculation.

9) If the average salary is calculated using salary earned through employment covered by another participating system under 40 ILCS 5/20, no employer will be assessed for any salaries attributable to that employment.

10) The member's salary for any school year used to determine final average salary shall be excluded for purposes of determining the employer contribution required for salary increases in excess of 6% in any year in which the member's creditable earnings are less than 50% of the preceding year's mean salary for downstate teachers as determined by the survey of school district salaries provided in Section 2-3.103 of the School Code.

b) The employer contribution required under 40 ILCS 5/16-158(f-1) will be determined as follows:

3) Subtract (b)(2) from (b)(1).

4) Multiply (b)(3) by a Monthly Benefit Factor for the member's exact age at the retirement date. The Monthly Benefit Factors are based on the actuarial assumptions of the System for life expectancy and investment return as determined by the System's actuaries pursuant to 40 ILCS 5/16-176.

5) If a member's monthly benefit is calculated pursuant to 40 ILCS 5/16-133(a), this Section will not apply.

6) If there is more than one employer during the final average salary period, each employer will pay its respective contribution based on salary increases granted by that employer in excess of 3%.

7) If the member's benefit is increased as a result of applying the provisions of Section 20 of the Retirement Systems Reciprocal Act [40 ILCS 5/20], no additional employer contribution will be due.

10) The member's salary for any school year used to determine final average salary shall be excluded for purposes of determining the employer contribution required for salary increases in excess of 3% in any year in which the member's creditable earnings are less than 50% of the preceding year's mean salary for downstate teachers as determined by the survey of school district salaries provided in Section 2-3.103 of the School Code.

(Source: Amended at 42 Ill. Reg. 22238, effective November 20, 2018)

Section 1650.482 Contracts and Collective Bargaining Agreements – Loss of Exemption from Employer Contributions

A contract or collective bargaining agreement shall lose its exemption from employer contributions under 40 ILCS 5/16-128(d-10), 16-158(f), and/or 16-158(f-1) upon the following:

a) An increase in an existing salary or sick leave retirement incentive or the addition of a new salary or sick leave retirement incentive.

b) A renegotiated increase in salary (excluding employer payment of the .40% of salary toward the cost of the early retirement without discount option under 40 ILCS 5/16-152(a)(4)) or sick leave unless specifically provided for in a salary reopener provision in the contract or collective bargaining agreement or as permitted in Section 1650.483(c).

c) Failure to follow the retirement incentive age, service, notification or payment provisions contained in the contract, collective bargaining agreement or policy.

(Source: Amended at 42 Ill. Reg. 22238, effective November 20, 2018)

Section 1650.483 Employer Contributions for Salary Increases in Excess of 6% or 3% and Excess Sick Leave – Exemption from Contributions

a) The exemptions from employer contributions provided under 40 ILCS 5/16-128(d-10) and 40 ILCS 5/16-158(f) for those members who notify their employer of the intent to retire under the terms of an exempt contract or collective bargaining agreement but do not receive the retirement incentives until after the expiration of the contract or collective bargaining agreement shall cease no later than three school years after the expiration of the contract or collective bargaining agreement or June 30, 2011, whichever is earlier.

b) The exemptions from employer contributions provided under 40 ILCS 5/16-158(f-1) for those members who notify their employer of the intent to retire under the terms of an exempt contract or collective bargaining agreement but do not receive the retirement incentives until after the expiration of the contract or collective bargaining agreement shall cease no later than four consecutive school years after the expiration of the contract or collective bargaining agreement.

c) If a contract or collective bargaining agreement terminates or is amended during the school year, for the purpose of calculating the employer contribution:

1) If the contract or collective bargaining agreement expires July 1 through December 31, the System will consider the expiration date to be the last day of the prior fiscal year.

2) If the contract or collective bargaining agreement expires January 1 through June 29, the System will consider the expiration date to be the last day of the current fiscal year.

d) An amendment to an exempt contract or collective bargaining agreement to reduce a retirement incentive for purposes of 40 ILCS 5/16-128(d-10), 16-158(f), or 16-158(f-1) shall not terminate an employer's exempt status.

(Source: Amended at 42 Ill. Reg. 22238, effective November 20, 2018)

Section 1650.484 Members Not Covered by Collective Bargaining Agreements or Employment Contracts

a) For members not covered by collective bargaining agreements or employment contracts, the System will accept employment policies as evidence of a contractual agreement under which salary increases paid and sick leave granted shall be exempt from employer contributions under 40 ILCS 5/16-128(d-10) and 16-158(f), provided those policies were in effect prior to June 1, 2005.

b) Employees operating under employment policies will be deemed to be employed under a one school year contract for exemption from employer contribution purposes under 40 ILCS 5/16-128(d-10) and 16-158(f) unless the salary increases and/or granting of sick leave under the policy are governed by provisions in the employer's collective bargaining agreement, in which case the employer exemption shall end at the same time the exemption ends for that collective bargaining agreement.

c) For members not covered by collective bargaining agreements or contracts, the System will accept employment policies in effect prior to June 4, 2018 as evidence of a contractual agreement under which salary increases paid shall be exempt from employer contributions under 40 ILCS 5/16-158(f-1).

d) Payments made to employees operating under an employment policy in effect prior to June 4, 2018 will be exempt from the provisions of 40 ILCS 5/16-158(f-1) if notice was provided as required by the employment policy prior to June 4, 2018 and payments are made pursuant to the term of the policy prior to June 30, 2022.

(Source: Amended at 42 Ill. Reg. 22238, effective November 20, 2018)

Section 1650.485 Employer Contributions for Salary Increases in Excess of 6% or 3% − Receipt of Bill

For purposes of determining the 30 day period to dispute the amount of a bill for an employer contribution for salary increases in excess of 6% or 3% and the 90 day interest grace period provided in 40 ILCS 5/16-158(f) and 16-158(f-1), an employer shall be deemed to have received a bill for employer contributions on the first day of the month following the bill date indicated on the bill.

(Source: Amended at 42 Ill. Reg. 22238, effective November 20, 2018)

Section 1650.486 Employer Payment of Member's Optional Service, Refund and/or Upgrade Contribution Balance

Once per school year, an employer may make a payment toward a member's 2.2 upgrade, optional service and/or refund balance. The employer contribution under this option may be picked up pursuant to section 414(h)(2) of the Internal Revenue Code of 1986, as amended (26 USC 414(h)(2)), or paid on an after-tax basis as certified by the employer. The employer shall certify to the System whether the payment being made is done so on a tax-deferred or after-tax basis by completing and returning the appropriate form with the payment.

(Source: Added at 41 Ill. Reg. 718, effective January 11, 2017)

SUBPART F: ANNUITANTS AND BENEFICIARIES

Section 1650.505 Beneficiary (Repealed)

(Source: Repealed at 9 Ill. Reg. 20885, effective December 17, 1985)

Section 1650.510 Re-entry Into Service (Repealed)

(Source: Repealed at 32 Ill. Reg. 13534, effective August 6, 2008)

Section 1650.511 Separation from Service

a) Under the provisions of section 401(a) of the Internal Revenue Code (26 USC 401(a)), a member must "separate from service" to be eligible to receive a retirement benefit from the System.

b) To meet the "separation from service" requirement of the Internal Revenue Code, an annuitant cannot return to work with his or her last employer in a certified position unless:

1) Re-employment was not discussed nor arranged until 30 days after the annuitant's date of retirement.

2) The annuitant is not employed by the annuitant's last employer prior to 30 days after the annuitant's last day of contributing service. However, as provided in Section 16-118(a)(1) of the Pension Code [40 ILCS 5/16-118(a)(1)], an annuitant may not accept employment as a teacher during the school year in which the member terminated service.

3) The annuitant is employed no more than the limit provided in Section 16-118(a)(2) of the Pension Code in the school year following the school year in which the member terminated service.

c) An annuitant and employer cannot avoid the limitations in post-retirement employment provided in Section 16-118 of the Pension Code by allowing the annuitant to relinquish his or her teaching certificate and continue in the same position.

d) An annuitant and employer cannot avoid the limitations in post-retirement employment provided in Section 16-118 of the Pension Code by changing the annuitant's pre-retirement job title or by a minor adjustment in the annuitant's pre-retirement job duties causing the annuitant's former position to no longer require certification under the laws governing the certification of teachers.

e) Failure to "separate from service" shall nullify an annuitant's retirement and constitute a return to service under Section 16-150(d) of the Pension Code.

(Source: Amended at 36 Ill. Reg. 18914, effective December 14, 2012)

Section 1650.512 Verification of Compliance with Post-Retirement Employment Limitations

a) Section 16-118 of the Pension Code [40 ILCS 5/16-118] sets forth the amount of time an annuitant is allowed to be employed as a teacher by employers specified in 40 ILCS 5/16-106.

b) To ensure compliance with the post-retirement employment limitations established in Section 16-118, upon demand of the System, annuitants are required to furnish the following:

1) A certification signed by the annuitant verifying that post-retirement employment limitations were not exceeded and acknowledging that the filing of a false certification is a Class 3 felony under Section 1-135 of the Pension Code.

2) Copies of the annuitant's federal income tax returns.

3) Other substantiating documentation, such as employment records, timesheets, etc.

(Source: Added at 34 Ill. Reg. 4900, effective March 22, 2010)

Section 1650.520 Suspension of Benefits

a) Monthly benefit payments may be suspended when four monthly warrants remain uncashed. The System shall notify the benefit recipient in writing of the suspension. To remove the suspension of benefits, the System may require the recipient to provide a valid depository agreement authorizing funds to be electronically deposited into the recipient's bank account in lieu of paper warrants.

b) Recipients of a non-occupational disability benefit, occupational disability benefit, disability retirement annuity, or monthly survivor benefit who fail to return documentation of continued eligibility within the specified time period shall have their monthly benefit payment suspended. Upon receipt of the required documentation and upon determination of continued eligibility, these and subsequent payments shall be made.

(Source: Amended at 47 Ill. Reg. 9473, effective June 22, 2023)

Section 1650.530 Power of Attorney

a) Any annuitant or beneficiary receiving a monthly benefit through payment to his or her attorney-in-fact acting under a power of attorney shall be required to notify the System in writing that such power of attorney is in full force and effect, when reasonably requested to do so by the System. In default of such notice, payment to the attorney-in-fact shall be suspended until notice is received, whereupon payments will be resumed from the date of the last payment.

b) A member information and beneficiary designation (nomination of beneficiary) form may be signed by an attorney-in-fact, provided the attorney-in-fact is given specific power to execute a nomination of beneficiary form on behalf of the member or annuitant.

c) If a member or annuitant is not capable of signing the form, he or she may make a mark on the signature line if the mark is witnessed by two individuals who will not receive any benefit under the member information and beneficiary designation.

(Source: Amended at 41 Ill. Reg. 718, effective January 11, 2017)

Section 1650.540 Conservators/Guardians

Any legally appointed conservator or guardian receiving benefits for an annuitant or a beneficiary adjudged incompetent shall be required to furnish a court certification that the appointment is in force and effect, when reasonably requested to do so by the System. In default of such notice, payment shall be suspended until satisfactory certification is received, whereupon payments will be resumed from the date of the last payment.

(Source: Amended at 9 Ill. Reg. 20885, effective December 17, 1985)

Section 1650.550 Presumption of Death

a) Whenever any member, annuitant, or beneficiary has been so out of communication with the System that the fact of his or her being alive cannot be ascertained, he or she shall be presumed to be dead. In the event this presumption of death shall be removed by proof that he or she is alive, benefits shall be paid or resumed from the date of the last payment.

b) Whenever any inactive member reaches age 75 and has not been in communication with the System for longer than 20 years, he or she shall be presumed dead and the member's account shall be terminated with no interest credited. In the event this presumption shall be removed by proof the member is alive or deceased, his or her account shall be reinstituted with interest and included in the System's next required minimum distribution process in accordance with Section 1650.417, Section 1-116.1 of the Code, and Internal Revenue Code Section 401(a)(9).

(Source: Amended at 44 Ill. Reg. 7905, effective April 24, 2020)

Section 1650.560 Benefits Payable on Death

Survivor benefits shall be paid in accordance with the applicable provisions of Article 16 in effect on the date of the member's or annuitant's death. If the member or annuitant has failed to name a beneficiary, the System may make payment through a small estate affidavit provided the requirements of 755 ILCS 5/Art. 25 are met. If the assets of the estate are greater than the limit allowed for small estate affidavits, letters of administration or proof of heirship deemed reliable by the System shall be required by the System in order to process any death benefits.

(Source: Amended at 21 Ill. Reg. 2422, effective January 31, 1997)

Section 1650.561 Valid Beneficiary Designations

To be considered valid and timely filed, a beneficiary designation under 40 ILCS 5/16-138, 16-141 and 16-142 must be received and date stamped by the System prior to or on the date of the death of the member or annuitant.

(Source: Added at 32 Ill. Reg. 7979, effective May 6, 2008)

Section 1650.570 Survivors' Benefits

Survivors annuity payments on account of dependent children accepted by the spouse after the children have legally been removed from the spouse's care will be considered benefit over-payments and will be subject to collection in accordance with Section 1650.595.

(Source: Amended at 32 Ill. Reg. 13534, effective August 6, 2008)

Section 1650.571 Payment of Monthly Survivor Benefits to a Trust

a) A member may designate a trust to receive monthly survivor benefits on behalf of a dependent beneficiary.

b) However, to do so, the trust must provide that the survivor benefit annuity will be used solely for the care and benefit of the member's dependent beneficiary.

c) Prior to the processing of a claim for survivor benefits, the trustee of the trust shall furnish the System that part of the trust demonstrating that the conditions set forth in subsection (b) of this Section are met.

(Source: Added at 24 Ill. Reg. 2440, effective January 27, 2000)

Section 1650.575 Full-time Student - Receipt of Survivors Benefits Until Age 22

a) For purposes of 40 ILCS 5/16-140(4), a full-time student shall be one who is enrolled in a course of study in an accredited educational institution (other than a program of study by correspondence), and who is carrying a full-time workload as determined by the educational institution during the regular school year for the course of study the student is pursuing.

b) Accredited educational institutions include schools, colleges, universities, and post-secondary vocational institutions whose courses of study are approved by appropriate state or federal educational accreditation authorities.

c) A regular school year is the eight to nine months which includes two semester terms or three quarter terms (or their equivalent), excluding the summer term. Terms that begin after April 15 and end before September 16 are considered summer terms.

d) Survivors benefits shall be payable during the period between regular school years if the benefit recipient was a full-time student the preceding semester term or quarter term (or their equivalent).

e) To verify that an eligible child is a full-time student, the System must receive a certification signed by an official of the educational institution confirming that the student is a full-time student as provided in subsection (a) above.

f) Payment of survivor benefits under this Section will begin on the 15th of the month preceding the start of the full-time student's first semester or quarter of matriculation.

(Source: Amended at 24 Ill. Reg. 2440, effective January 27, 2000)

Section 1650.580 Evidence of Eligibility

Beneficiaries receiving monthly benefits shall furnish evidence of eligibility to receive such benefits when requested to do so by the System. The System shall request evidence of eligibility when it receives any information indicating the beneficiary is not eligible to receive a benefit. Failure to do so will result in suspension of payments until evidence of eligibility is received, whereupon payments will be resumed from the date of the last payment.

(Source: Amended at 9 Ill. Reg. 20885, effective December 17, 1985)

Section 1650.590 Comptroller Offset

Prior to the referral of any debt owed the System to the Office of the Comptroller for collection through the Comptroller Offset System as authorized under Section 10.05 of the State Comptroller Act [15 ILCS 405/10.05] and Section 5 of the Illinois State Collection Act [30 ILCS 210/5], the System shall provide the debtor:

a) Written notice that the debt is being referred to the Comptroller for offset. The notice shall set forth the amount of and basis for the debt. The notice shall further advise the debtor of the debtor's right to a hearing to contest the debt by filing a written request with the System within 30 days after receipt of the notice by the debtor. Failure to request a hearing within the 30 days provided shall terminate any right to a hearing before the System.

b) A hearing with the System, if requested by the debtor, to allow the debtor an opportunity to establish the debt has been paid or is not owed. The hearing shall be held before a three-member panel appointed by the System's Executive Director.

c) A written decision advising the debtor of the basis for the panel's decision.

(Source: Amended at 32 Ill. Reg. 13534, effective August 6, 2008)

Section 1650.595 Overpayments

a) When the System determines benefits, except for an impermissible refund as defined in Section 1650.240, have been paid erroneously in an amount greater than $50 to a member, annuitant or beneficiary (recipient), the System shall record such overpayment as an accounts receivable and make demand upon the recipient for the amount due.

b) Interest shall accrue on overpayments at the rate of 0.83% per month beginning on the first day of the month following 30 days from the date of notification to the recipient of the overpayment.

c) The System shall use its best efforts to ensure repayment of overpayments within 36 months after such overpayment.

d) If the recipient of an overpayment fails to repay the amount due plus any applicable interest within 36 months, the System will collect any amount plus applicable interest outstanding at the time the recipient next receives a benefit from the System by withholding 10% of the recipient's gross payment, if a periodic payment, including any reciprocal system payments, or 100% if a lump sum payment.

e) The System shall retain the option to refer any debt due the System to the Attorney General, the Debt Collection Board, the Comptroller's Offset System, or private collection agencies at any time it deems appropriate.

(Source: Added at 22 Ill. Reg. 7243, effective April 9, 1998)

SUBPART G: ATTORNEY GENERALS' OPINION

Section 1650.605 Policy of the Board Concerning Attorney Generals' Opinion (Repealed)

(Source: Repealed at 9 Ill. Reg. 20885, effective December 17, 1985)

SUBPART H: ADMINISTRATIVE REVIEW

Section 1650.610 Staff Responsibility

The administrative staff of the System shall be responsible for the daily functioning of the System including interpretation of the Illinois Pension Code (The Act) and processing all claims for benefits or service credit.

(Source: Added at 9 Ill. Reg. 20885, effective December 17, 1985)

Section 1650.620 Right of Appeal

Any member, beneficiary, annuitant or employer may appeal a staff disposition of a claim or interpretation of the Act to the Board of Trustees within 6 months after the staff disposition or interpretation, by filing a written request for an administrative review with the Executive Director. The appeal will be scheduled to be heard at the next meeting of the Board's Claims Hearing Committee (Committee) having space on the agenda for such hearing. The Committee shall be composed of 3 members of the Board of Trustees, plus a designated alternate Trustee, all elected by the Board, and an attorney retained by the System to serve as the Committee's Presiding Hearing Officer. Any members of the Committee may be disqualified from hearing an appeal due to bias or conflict of interest in the appeal.

(Source: Amended at 25 Ill. Reg. 203, effective December 22, 2000)

Section 1650.630 Form of Written Request

A written request for an administrative review shall include the following information: the name and address of the petitioner; the name and address of his or her authorized representative if applicable; a complete explanation of the factual and/or legal basis for the request, including relevant documentation supporting the petitioner's position; and the relief sought by the petitioner.

(Source: Amended at 25 Ill. Reg. 203, effective December 22, 2000)

Section 1650.635 Presiding Hearing Officer − Duties and Responsibilities

The Presiding Hearing Officer of the Claims Hearing Committee shall have the following powers and duties and shall perform the following functions during administrative review proceedings.

a) Pre-hearing:

1) The Presiding Hearing Officer shall monitor and supervise the pre-hearing proceedings to ensure that the Committee is presented with the information necessary to make an informed and legally supported decision on the matters being presented for administrative review.

2) The Presiding Hearing Officer shall facilitate cooperation between the petitioner and the System's Legal Counsel in the preparation of issue and fact statements. Whenever appropriate, the Presiding Hearing Officer shall encourage the use of stipulated materials to enhance the efficiency of the proceedings.

3) The Presiding Hearing Officer shall ensure the timely exchange of exhibits, witness lists and testimony summaries.

4) The Presiding Hearing Officer shall rule on discovery requests and procedural matters. The rules of civil procedure shall not be strictly applied; however, the Presiding Hearing Officer shall make necessary and appropriate legal or evidentiary rulings to ensure that both parties receive fair and timely consideration of all pre-hearing motions and discovery requests.

5) The Presiding Hearing Officer shall establish pre-hearing position statements and briefing schedules.

6) The Presiding Hearing Officer shall make any necessary and appropriate inquiries or requests of the parties in order to assure that the Committee has the requisite information to rule on the issues raised by the claim.

7) The Presiding Hearing Officer shall develop hearing procedures that assure that the hearing process remains focused on pertinent issues while providing a full and fair hearing for the petitioner and the System. Whenever appropriate, the Presiding Hearing Officer shall encourage the parties to submit the matter to the Committee on the written record.

8) When appropriate, the Presiding Hearing Officer shall facilitate settlement of the claim prior to hearing.

b) Hearing:

1) The Presiding Hearing Officer shall preside at the administrative review hearing and shall assure that the proceedings remain focused on the issues to be decided by the Committee and that both the petitioner and the System are treated fairly and equally in the presentation of their respective positions.

2) The Presiding Hearing Officer shall ensure that the agreed upon hearing format is followed.

3) The Presiding Hearing Officer shall ensure that repetitious and irrelevant arguments and evidence are excluded.

4) The Presiding Hearing Officer shall make necessary and appropriate legal or evidentiary rulings.

(Source: Amended at 32 Ill. Reg. 13534, effective August 6, 2008)

Section 1650.640 Prehearing Procedure

a) Upon written notice by the Presiding Hearing Officer, the petitioner, or his or her attorney, and counsel for the System shall make themselves available at mutually agreeable times for pre-hearing conferences for the following purposes:

1) The simplification of issues;

2) The amendment of pleadings;

3) The making of admissions of facts or stipulations for the purpose of avoiding the unnecessary introduction of evidence;

4) Establishing the procedure at the hearing;

5) The limitation of the number of witnesses;

6) The disclosure of all witnesses (expert and non-expert) to be called to testify at hearing;

7) Disclosure of the substance of the testimony of all witnesses to be called;

8) The exchange of all exhibits to be introduced at hearing;

9) Establishing briefing schedules for the submission of position statements and accompanying documentation; and

10) Such other matters as may aid in the simplification of the evidence and disposition of the proceeding.

b) To the extent that the parties are unable to agree or stipulate to matters at the pre-hearing conference, the Presiding Hearing Officer shall make the rulings and determinations necessary to assure that the issues, discovery, witnesses, evidence, and procedures prior to and at hearing remain focused on relevant and material matters. Failure to attend a pre-hearing conference or failure to adhere to rulings, schedules or agreements made at the pre-hearing conference may, in the discretion of the Presiding Hearing Officer, result in delay of the hearing or limitations on the presentation of certain positions or the use of certain evidence at the hearing.

c) Upon agreement of the parties or with the express consent of the Presiding Hearing Officer, the parties may undertake discovery, which may include interrogatories, requests for production of documents, discovery depositions, and evidence depositions. If the parties are unable to agree to all or any form of discovery, any party may submit a written request to the Presiding Hearing Officer with a copy to all other parties setting forth with sufficient particularity the information sought and the form of discovery requested. The Presiding Hearing Officer shall grant such request upon determining the information is necessary to the requesting party's case and the Committee's full understanding of the issues presented. Any additional witnesses or exhibits identified during further discovery must be exchanged in writing by certified mail at least 14 days prior to hearing.

d) Any witnesses not disclosed or exhibits not exchanged at the prehearing conference or 14 days prior to hearing, if additional discovery is allowed, shall be barred at hearing unless good cause is shown for such failure to provide. At the discretion of the Presiding Hearing Officer, a hearing may be postponed in the interest of fairness to allow a party time to investigate and prepare to respond to newly submitted evidence.

e) The parties may agree to submit the matter for the Committee's decision solely on the written record.

f) Either party may file motions necessary to resolve matters and to focus the remaining issues for hearing. The motions may include motions to dismiss and motions for summary judgment, where appropriate. Procedural matters may be resolved by the Presiding Hearing Officer. Substantive matters will be submitted to the Claims Hearing Committee for ruling.

g) If, in the judgment of the Presiding Hearing Officer, the petitioner has not diligently pursued his or her claim, the Presiding Hearing Officer may find the petitioner to be in default and dismiss the petitioner's claim. Prior to dismissing a claim, however, the Presiding Hearing Officer shall provide the petitioner with an opportunity to show cause why the claim should not be dismissed. A dismissed claim may be re-filed within 6 months after the date of its dismissal, but shall be barred thereafter. A claim may not be re-filed after a second dismissal.

(Source: Amended at 32 Ill. Reg. 13534, effective August 6, 2008)

Section 1650.641 Claims Hearing Committee Hearing Packet

a) A hearing packet shall be submitted to the members of the Committee prior to the hearing on the claim, or alternatively, prior to submission of the matter for decision based solely upon the record. The hearing packet shall contain:

1) An agreed statement of issues, and if not agreed, the proposed issues statement of each party.

2) An agreed statement of facts, and if not agreed, the proposed statement of facts of each party.

3) The position statements of the parties, including the legal arguments being made and all applicable statutory, regulatory and case law in support of those arguments, and an analysis of all relevant documentary evidence and testimony to be given in support of each party's respective positions.

4) Witness affidavits, if agreed by the parties to be admissible.

5) All exhibits to be presented at hearing.

b) The System's position statement may also include an analysis of the results or consequences of a decision affirming or overturning the original staff disposition of the matter.

(Source: Amended at 26 Ill. Reg. 11476, effective July 11, 2002)