Bruce Rauner, Governor
Alternative Retirement Cancellation Payment (Severance Plan)
Governor Blagojevich has signed Public Act #93-0839 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.
Group 1 ARCP Counter
To be eligible in Group 1, a SERS member must:
During August 2004, all members eligible to participate 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.
• The 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
If an ARCP participant returns to State service, 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)
• ARCP participants in the 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, ARCP participants with 20 or more years of service would be eligible for free insurance coverage.
• If a vested 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 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.
This is a separate program that may or may not be offered. It will be administered by the Department of Central Management Services. The purpose is to allow CMS the opportunity to adopt by an emergency rulemaking a program of incentive payments for early termination of State service. For additional information visit CMS website at www.state.il.us/cms