GLOSSARY OF RETIREMENT TERMS
Accumulated Contributions: The total contributions made by the member, including contributions granted during disability.
Administrative Rules: Official rules adopted by GARS that identify the meaning of GARS benefit provisions.
Annuity: Monthly benefit payable to a retiree or survivor.
Annuitant: Any retired member or survivor receiving a GARS benefit.
Annual Pension Increase (Tier 1): A 3% pension increase on January 1 or July 1 whenever occurs first following the first full year of retirement and age 60. These annual increases are compounded on the previous year’s annuity. Pension increases are not limited to the 85% maximum.
Annual Pension Increase (Tier 2): At age 67 or over, you will receive a pension increase of 3% or the full increase in the Consumer Price Index on January 1 or July 1 following your first full year of retirement. The annual increase is compounded on your previous year's annuity. Pension increases are not limited to the maximum retirement benefit.
Beneficiary: The beneficiary designated by the member to receive GARS lump sum death benefits. This should not be confused with the Group Life Insurance beneficiary or the Deferred Compensation beneficiary.
Benefit Statement: The annual benefit statement summarizes the member's personal account and benefits. It includes service credit, projected and accrued pension benefits, disability and death benefits, and lists the member's beneficiaries. The statement is mailed in August.
Board of Trustees: The Board created to direct the affairs of GARS.
Credited Service: The total service credited to a member's account.
Defined Benefit Plan: A plan which provides a predetermined benefit amount using a formula combining service credit and salary.
Direct Deposit: By choosing Direct Deposit, the retiree/survivor's benefit is electronically deposited into their bank account.
Final Compensation Tier 1: A member's final rate of pay (final salary) on last day of service used to calculate pension benefits.
Final Compensation Tier 2: Final average salary is the average of the 96 highest consecutive months of service within the last 120 months of service. The maximum retirement benefit is 60% of your final average salary.
Illinois Compiled Statutes (ILCS): The laws of the State of Illinois arranged in a numerical order that classifies the laws by their subject matter. ILCS numbers are used to cite laws in documents. GARS is governed by 40 ILCS 5/2, et al.
IRS Form 1099-R: The annual tax form issued by the Office of the Comptroller that lists gross contributions, taxable & nontaxable amounts, and federal withholding.
Maximum Annuity: The maximum pension payable to a GARS member is 85% of final salary as a GARS member.
Member: An active Legislator or Constitutional Officer, or any former Legislator or Constitutional Officer, who has contributions credited to their account but has not received a refund, or is not receiving a retirement annuity.
Member Handbook: Provides a general explanation of GARS benefits. It is intended to serve as a supplement to the annual Benefit Statement, which includes a member's personal information.
Military Service: Service in the United States Armed Forces is allowed as credit by GARS.
Optional Service Credit: Time served while not a member of GARS that can be purchased for additional service.
Pension: Monthly benefit paid to a retiree for life.
Qualified Plan: A retirement plan qualified under the Internal Revenue Code allowing GARS and its members certain tax advantages.
QILDRO: The Qualified Illinois Domestic Relations Order (QILDRO) allows for the division of a retirement benefit or a refund of contributions due to divorce.
Qualified Survivor: A spouse, child, or dependent parent designated by statute to receive a monthly annuity upon the death of the member.
Reciprocal Retirement Systems: There are thirteen Illinois public retirement systems participating in the Retirement Systems' Reciprocal Act.
Reciprocity: A member who has at least one year of credited service in one of the thirteen Illinois Public Retirement Systems participating in the Reciprocal Act. Service under that system may be used when determining eligibility for a benefit from GARS.
Rollover: Postponing taxation of distributions by "rolling-over" the payment to another plan, or to an Individual Retirement Account (IRA).
Service Credit: Time served with GARS. Service credit is part of the equation used to calculate GARS
Solon: The GARS newsletter for retirees and survivors that contains timely and pertinent information. This newsletter is mailed in January and August.
Survivor Annuity: A monthly benefit payable upon the death of a Legislator or Constitutional Officer, to a qualified survivor.
Tax-Deferred: Contributions made by a Legislator or Constitutional Officer, that are not taxed until a benefit is paid.
TDD: Telecommunication Device for the Deaf. A means for our disabled members to communicate with our office.
Term of Office: Length of time elected for that particular office.
Tier 1: Any member hired before January 1, 2011
Tier 2: Any member hired after December 31, 2010
W-4P Form: This form is used to designate federal income tax withholding.
Withdrawal: Severance of employment of a Legislator or Constitutional Officer by resignation or dismissal.