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Retirement

Frequently Asked Questions About Retiring

Eligibility
When will I be eligible to retire with SURS service (including reciprocal service)?
How do I know how many Years of Service I have?
If I retire early (between ages 55 and 60) and I do not have 30 years of service, will my annuity be reduced?

Retirement Pay/Compensation
How can I figure out how much income I will need after I retire?
Can I get an estimate of my SURS retirement amount?
What earnings will be used to calculate my pension under the Traditional and Portable plan?
What is a retirement annuity?
How are the SURS Retirement Annuities calculated?
After I retire, will my retirement pay ever increase?
I participate in the Self-Managed Plan (SMP). Will I receive a retirement annuity?
How is my retirement annuity calculated if I participate in the Self-Managed Plan (SMP)?
I worked less than 50% time for the years used to calculate my Final Average Earnings, and my Final Average Earnings are very low. Is there a minimum annuity?

Years of Service/Service Credit
How do Years of Service affect my retirement pay?
How are my Years of Service calculated?
Does part-time work affect the amount of Service Credit I earn?
Can I convert my unused accumulated Sick Leave to increase my Service Credit?
Can I purchase more Service Years to increase my SURS annuity?
I have previously worked for other employers in the State of Illinois public retirement system. How does that service affect my SURS retirement income?
Can I use funds from my supplemental retirement plans to pay for Service Credit that I am eligible to purchase?

Social Security
Does Federal Social Security cover me as an employee of the University of Illinois?
Am I entitled to receive any Social Security income in addition to my SURS annuity?
Will my eligibility to receive SURS retirement benefits affect my Social Security Benefits?
How do I know if I qualify to receive Social Security benefits?

Other Retirement Plans/Investments
I have participated in retirement plans with previous employers. How can I find out how much I will receive from these plans?
I have invested in funds through the University's Supplemental 403(b) Retirement Plan. How do I find out how to access money from this plan when I retire?
I have invested in the State of Illinois 457 Deferred Compensation Plan. How do I find out how to access money from this plan when I retire?

Reemployed Retirees
Can I work while receiving SURS retirement benefits?
What are the SURS limitations for Reemployed Retirees?


Eligibility

When will I be eligible to retire with SURS service (including any reciprocal service)?
If participation with SURS first began prior to January 1, 2011:

  • Age 55 with 8 or more years of service, with applicable age reduction.
  • Age 62 with 5 or more years of service.
  • Any age with 30 or more years of service.*
* Not applicable if employment was terminated prior to August 2, 2002

If participation with SURS first began on or after January 1, 2011:

  • Age 62 with 10 or more years of service, with applicable age reduction.
  • Age 67 with 10 or more years of service.
View the SURS Retirement FAQs for information regarding when you can retire, what you need to do, and how long it will take. For more details about retirement eligibility, contact SURS.

How do I know how many Years of Service I have?
Login to the Member Access section of SURS website for quick access to this information. You may also contact SURS at 1-800-ASK-SURS or consult your "Personal Benefit Summary Statement" sent to you from SURS each year.

If I retire early (between ages 55 and 60) and I do not have 30 years of service, will my annuity be reduced?
Yes, there is an Early Retirement reduction for employees who retire before age 60, unless they have 30 years of service. Your benefit will be reduced ½ of 1% (.5%) for each full month you are under the age of 60.


Retirement Pay/Compensation

How can I figure out how much income I will need after I retire?
According to the U.S. Department of Labor, an easy rule of thumb is that you'll need to replace 70 to 90 percent of your pre-retirement income. If you're making $50,000 a year (before taxes), you might need $35,000 to $45,000 a year in retirement income to enjoy the same standard of living you had before retirement. Think of this as your annual "cost" of retirement. The lower your income, generally the higher the portion of it you will need to replace. For more information, see the U.S. Department of Labor publication, Savings Fitness: A Guide to Your Money and Financial Future or contact a financial planner.

A number of online tools and calculators can help you estimate your retirement expenses:

Can I get an estimate of my SURS retirement amount?
If you are within four years of retirement, you can request an estimate of retirement benefit. You must supply information such as future salary expectations and sick leave or vacation accumulations. SURS will calculate the benefit based on the current laws and the potential retirement date you provide. If you meet the four-year guideline, call SURS at 1-800-ASK-SURS to obtain an estimate request form.

If you are within four years of retirement, you may also want to schedule a private appointment with a SURS Retirement Counselor. These meetings are 30 minutes in length and are specific to your personal SURS history. Retirement amounts, death and survivor benefits, insurance, and many other topics are reviewed.

SURS meetings may be conducted on campus, at the SURS Champaign office, or by telephone. Call 800-275-7877 (800-ASK-SURS) to schedule an appointment. If you are in the Champaign-Urbana area, call 378-8800.

If you are not within four years of retirement, you can use the SURS Benefits Estimator tool on the SURS website to calculate your own ballpark estimation of benefits upon retirement. You must complete all information in the section "Information supplied by the member". This information is contained on the most recent Benefit Summary Statement sent to you by SURS. If you logon to the Member Access area of SURS website, that information will be populated automatically. Use of the estimator does not replace a SURS counseling appointment.

What earnings will be used to calculate my pension under the Traditional or Portable plan?
SURS uses a figure called "Final Average Earnings" to calculate your retirement annuity if you are on either the Traditional or Portable Plan. SURS calculates these in two ways and uses the higher earnings figure, either:

  • the average of the 4 highest-paid consecutive academic years of employment; or
  • the average of the last 48 months prior to termination of employment.
The academic year is the 12-month period starting on the first day of the fall term. For the University of Illinois, the period is August 16 through August 15. Overtime Pay and Summer Session earnings are included in the calculation. Accrued vacation earnings up to 56 workdays are included if they are paid when you terminate employment. Payment for sick leave is not included in the calculation. Also, with few exceptions, earnings during any academic year after June 30, 1997, which exceed the previous year earnings by more than 20% will be excluded from the calculation.

What is a retirement annuity?
An amount of money payable yearly for your lifetime. When you retire under the SURS Traditional Plan, an amount of money will be paid to you each year on a monthly basis until your death. Under the Portable plan, you may choose to receive a lifetime annuity or a lump sum payment when you stop working. If you retire under the Self-Managed Plan (SMP), you may choose to receive annuities or other kinds of payment distributions from your fund providers. In order to receive State of Illinois Health Insurance Benefits after retirement, you must receive your retirement income as an annuity, and all of your SMP Plan accounts must be used to buy one annuity contract.

How are the SURS Retirement Annuities calculated?
There are four formulas to calculate annuities for the Traditional and Portable Plans. SURS uses the formula that produces the highest annuity for you when you retire.

  • The General Formula calculates your annuity by multiplying 2.2% times your Final Average Earnings times your Years of Service.
  • The Money Purchase Formula is a more complex formula based on your normal retirement contributions and interest and a State of Illinois contribution divided by an age conversion factor determined by the SURS actuary. (This formula is not available to employees hired on or after July 1, 2005.)
  • The Minimum Annuity Formula, which applies to those who were employed at least 50% time during the years on which their Final Average Earnings were based, provides a minimum retirement benefit for each of your years of service, up to 30, and depends on your final average earnings at retirement.
  • The Police Officer & Firefighter Formula applies to those with at least 20 years of service as a police officer or firefighter.
More complete information about these calculations is contained in the Annuitant Guides that may be accessed from SURS.

After I retire, will my retirement pay ever increase?
If participation with SURS first began prior to January 1, 2011:

Each January 1st, your retirement annuity will automatically receive a 3% compounded increase. The first increase will begin on the January 1st following the month in which you retire and will be prorated for the number of months you were retired.
If participation with SURS first began on or after January 1, 2011:
A non-compounding annual increase will apply to the monthly retirement annuity beginning on the January 1 occurring on or after the later of your attainment of age 67 or the 1st anniversary of the commencement of your annuity. The annual increases will be the lesser of 1/2 of the Consumer Price Index - Urban (CPI-U) from the preceding year or 3%, computed on the original retirement annuity amount. If for any year the CPI-U decreases or is zero, no annual increase will apply.

I participate in the Self-Managed Plan (SMP). Will I receive a retirement annuity?
Only if you elect to receive annuity contract distributions from your investment company. You will not receive a SURS retirement annuity, but you apply for your SMP distributions or annuities through SURS, and purchase annuity contracts from one or more insurance companies approved by SURS. In order to receive State of Illinois Health Insurance Benefits after retirement, you must receive your retirement income as an annuity, and all of your SMP Plan accounts must be used to buy one annuity contract.

How is my retirement annuity calculated if I participate in the Self-Managed (SMP) plan?
The amount payable under your annuity contract depends on the value of your account when you purchase the contract, the form of annuity you select, and the insurance company rates and factors. Contact your investment company for more information.

I worked part time at less than 50% time for the years used to calculate my Final Average Earnings, and my Final Average Earnings are very low. Is there any minimum annuity?
Yes, there is a Supplemental Minimum Annuity Guarantee. Anyone receiving a monthly retirement benefit is entitled to $25 per month for each year of benefit service credit, up to 30 years. (ex. $25 x 12 yrs = $300/month annuity.) There is no requirement to be employed at 50% or more. There are no annual increases. When your normal annuity catches up by increasing 3% every January 1, then the supplement stops and you receive your normal annuity.


Years of Service/Service Credit

How do Years of Service affect my retirement pay?
When your retirement annuity is calculated, service credit is used as part of the formula. The more service credit you have earned, the higher your retirement annuity.

How are my Years of Service calculated?
You earn Service Credit based on the length of time you are employed and participate in SURS. You earn one year of service credit for each period August 16 through August 15. You can also earn a fractional year of service if you do not work the entire year. Regardless of the percentage of your employment, you accumulate service to qualify for retirement benefits equally, but if you worked 50% or less for more than three years, your benefit service credit used to calculate your annuity will be reduced.

Does part-time work affect the amount of Service Credit I earn?
Yes, but only if you have worked for 50% time or less. Your service credit used to calculate your retirement annuity will be reduced if you have been employed at 50% time or less for more than 3 years after September 1, 1959. However, your annual SURS Benefits Summary Statement does not reflect this reduction. If you have worked at 50% time or less for more than three years, contact SURS to see if you will be affected by the part-time calculation. SURS will be able to apply the part-time formula to calculate a retirement estimate for you.

Can I convert my unused accumulated Sick Leave to increase my Service Credit?
Yes. If your unused sick leave is noncompensable (i.e. earned before 01/01/1984 or on or after 01/01/1998), you can apply the entire balance of accumulated sick leave to service credit.

If your unused sick leave is compensable (i.e. earned 01/01/1984 through 12/31/1997), you can either:

  • elect to be paid for one-half of the accrual upon retiring and apply the remaining half to service credit; or
  • elect NOT to be paid for one-half of the accrual upon retiring and apply the entire accrual to service credit; or
  • elect to be paid for one-half of some of the accrual upon retiring and apply the remaining balance for service credit.

Can I purchase more Service Years to increase my SURS annuity?
Maybe. You may be able to purchase additional Service Time if you have worked for another eligible public employer, served in the military, or taken leaves of absence or disability leave. In addition, if you have previously worked for the University and resigned you may be able to reinstate your prior service credits and repay your separation refund, plus interest. For more information, contact SURS.

I have previously worked for other employers in the State of Illinois public retirement system. How does that service affect my SURS retirement income?
SURS reciprocity with other Illinois Public Retirement Systems may affect the determination of eligibility for and amount of your SURS retirement benefits under the Illinois Retirement Systems Reciprocal Act. For information, contact SURS.

Can I use funds from my supplemental retirement plans to pay for Service Credit that I am eligible to purchase?
Yes; pre-tax 403(b) and 457 funds only. The Economic Growth and Tax Relief Reconciliation Act of 2001, allows participants in a governmental defined benefit plan (for SURS, that includes participants in both the Traditional and Portable plans) to transfer money directly from a traditional (pre-tax) Section 403(b) plan or a Section 457 plan in order to purchase service credit or to repay refunds. After obtaining from SURS the cost to repay a refund or to purchase service credit, you must ask your Section 403(b) plan provider or Section 457 plan provider to transfer the funds directly to SURS, in accordance with their requirements for such distributions. For more information, contact SURS.


Social Security

Does Federal Social Security cover me as an employee of the University of Illinois?
No, Federal Social Security does not cover University of Illinois employees eligible for SURS because the University of Illinois does not contribute to the Social Security System. No Social Security taxes are withheld from earnings. The only way to receive Social Security retirement benefits is if you have worked for other employers who have contributed to the Social Security System.

Am I entitled to receive any Social Security income in addition to my SURS annuity?
If you have worked for employers other than the University of Illinois who have contributed to the Social Security System you may qualify for Social Security benefits. To receive Social Security retirement benefits, you need 40 credits of work. You may earn these credits up to a maximum of 4 each year. The amount of earnings it takes to earn a credit changes each year. Before 1978, credits were called quarters of coverage and you needed to earn at least $50 in a 3-month calendar quarter to receive one credit. For up-to-date information, consult the Social Security Administration, either by calling your local office or accessing the SSA website.

Will my eligibility to receive SURS retirement benefits affect my Social Security Benefits?
Yes, your SURS Benefits might reduce your Social Security Benefits. Those who receive a pension from work not covered by Social Security, such as work at the University of Illinois, may receive reduced Social Security benefits, due to the Windfall Elimination Provision.

How do I know if I qualify to receive Social Security benefits?
The Social Security Administration sends you a Statement each year, about three months before your birthday. The Statement shows your earnings record and potential benefits. You may also consult the Social Security Administration, either by calling your local office or accessing the SSA website.


Other Retirement Plans/Investments

I have participated in retirement plans with previous employers. How can I find out how much I will receive from these plans?
Contact your previous employer or contact the investment company that administers its retirement plan.

I have invested in funds through the University's Supplemental 403b Retirement Plan. How do I find out how to access money from this plan when I retire?
For information regarding the University's Supplemental 403(b) retirement plan, contact your specific 403(b) investment company, either TIAA-CREF or Fidelity Investments for payout or rollover information.

I have invested in the State of Illinois 457 Tax Deferred Compensation Plan. How do I find out how to access money from this plan when I retire?
Information on distribution of funds is available on the CMS Deferred Compensation Plan website.


Reemployeed Retirees

Can I work while receiving SURS retirement benefits?
Yes, however if you are on the Traditional or Portable plans there is a limitation on earnings if you return to work with an employer covered by SURS. There are no limitations on earnings if you are on the Self-Managed Plan. There are no limitations on earnings if you work for an employer not covered by SURS.

What are the SURS limitations for Reemployed Retirees?
The State Universities Retirement System (SURS) policy for reemployed retirees stipulates the following:

  • A retiree may not return to employment for an employer covered under SURS for at least 60 days after the retirement date.
  • For employees who retire before age 60, a monthly earnings limit applies. The monthly earnings cannot exceed the base monthly SURS gross annuity in any one-month period.
  • For employees who retire after age 60, in any academic year in which you are returning to work, your earnings, plus the annual base annuity from SURS, cannot be greater than your highest earnings during any academic year before retirement. In other words, you may not earn more than you earned before you retired.
Note: This policy does not change in any way the regular and existing University decision-making processes with regard to the employment of retirees. Any exception to the above policy may result in a reduction or suspension of the retiree's SURS annuity.


Maintained by University Human Resources | Contact Information | Last Update: 05-August-2014 | ID: 1616