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Bruce Rauner, Governor

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   ARCP Overview

2006 Alternative Retirement Cancellation Payment


2006 ARCP Counter

Governor Blagojevich has signed Public Act #94-0839 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 participate in the 2006 ARCP, a member must fall within the two groups listed below.

Group 1 (employees under the Governor)                                       

To be eligible in Group 1, a SERS member must:

  • Be on active payroll as of June 1, 2006.
  • Have continuous employment on and after January 1, 2006.
  • Have not previously received a retirement annuity from SERS.
  • Be in a specific job title.
  • Be among the first 500 employees to file a written application before August 31, 2006.
  • If the member has a Qualified Illinois Domestic Relations Order (QILDRO) in effect, the member must have a consent to participate from all alternate payees.
  • Terminate employment within one month after approval of their application or no later than September 30, whichever comes first.

During July 2006, all members eligible to participate in the 2006 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.


Group 2 (employees of other constitutional and legislative officers)

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.

There is no limit to the number of employees who can participate, but these employees must file and terminate employment by September 30, 2006.

To be eligible in Group 2, these SERS member must:

  • Be on active payroll as of June 1, 2006.
  • Have continuous employment on and after January 1, 2006.
  • Have not previously received a retirement annuity from SERS.
  • File a written application and terminate employment by September 30, 2006.
  • If the member has a Qualified Illinois Domestic Relations Order (QILDRO) in effect, the member must have a consent to participate from all alternate payees.
  • Terminate employment within one month after approval of their application or no later than September 30, whichever comes first.

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.


Notification

All members in departments and positions deemed eligible will receive from SERS:

    • An estimate of the amount payable to them.
    • An application to participate.


When SERS receives and approves a member’s application:

    • An approval letter will be mailed to the 2006 ARCP participant.
    • Form 3900 will be mailed to the participant’s agency with a copy of the approval letter.


Payment

• The 2006 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).

Payment Example

                        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


Returning to State Service

If an 2006 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.


Repayment Example of Retirement Contributions

                        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)


Insurance Coverage

• Participants in the 2006 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.
For example, if a member terminates at age 27 with 9 years of service, he would be eligible for State insurance on the first of the month after reaching age 60.

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Overview
Group 1
Group 2
Notification
Payment
Returning to State Service
Insurance Coverage
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