Bruce Rauner, Governor
2005Alternative Retirement Cancellation Payment
Governor Blagojevich has signed Public Act #94-0109 allowing State employees to receive an Alternative Retirement Cancellation Payment (ARCP) consisting of a lump sum payment of their contributions with regular interest, times two.
To be eligible in Group 1, a SERS member must:
During August 2005, all members eligible to participate in the 2005 ARCP should receive an estimate of the amount payable to them, and an application to participate from SERS.
To view the eligible job titles in Group 1, click here.
To be eligible in Group 2, SERS members in any position with the Speaker of the House of Representatives, the Minority Leader of the House, the President of the Senate, the Minority Leader of the Senate, the Attorney General, the Secretary of State, the Comptroller, the Treasurer, the Auditor General, the Supreme Court, the Court of Claims and all legislative agencies are eligible to participate, with the approval of their agency head.
To be eligible in Group 2, these SERS member must:
During August, all members in the agencies referenced above who have been authorized by their agency head to participate, should receive an estimate of the amount payable to them, and an ARCP application from SERS.
All members in departments and positions deemed eligible will receive from SERS:
When SERS receives and approves a member’s application:
• The 2005 ARCP participant would receive a one-time lump sum retirement cancellation payment equal to their retirement contributions plus interest, times two.
• The taxable portion of the lump sum amount may be rolled-over into a qualified employer plan that accepts rollovers, or to a traditional Individual Retirement Account (IRA).
Retire.Contrib. Interest Total ARCP
Member A $3,000* $1,000 = $4,000 X 2 = $8,000
Member B 6,000* 2,000 = 8,000 X 2 = 16,000
Member C 9,000* 4,000 = 13,000 X 2 = 26,000
* Original Employee Contributions
If an 2005 ARCP participant returns to State service other than in a temporary position (75 days per calendar year), the participant must:
• Repay to SERS the amount that the ARCP exceeded the original employee contributions.
• Payment must be made 60 days after reemployment.
ARCP Refund Contrib. Repayment
Member A $8,000 $3,000* = $5,000
Member B 16,000 6,000* = 10,000
Member C 26,000 9,000* = 17,000
* Original Employee Contributions (refers to payment example)
• ARCP participants in the 2005 Alternative Retirement Cancellation Payment Plan would be eligible for insurance coverage if they are vested (8 years of service credit) with the State.
• Under the current Group Insurance program, 2005 ARCP participants with 20 or more years of service would be eligible for free insurance coverage.
• If a vested 2005 ARCP participant has less than 20 years of service, they would pay a portion of the insurance premiums, currently 5% for each full year under 20 years.
• Participants in the 2005 Alternative Retirement Cancellation Payment Plan would be eligible for insurance coverage on the date they would have been eligible to retire using their service on the date of the ARCP if they are vested (8 years of service credit) with the State.