Special Memo 294

Special Memorandum 294

To: Authorized Agents of Educational Employers
Re: Pending legislation: HB 4463: Exempting former Teachers’ Aides from minimum 12-month service credit requirement for a reciprocal pension

May 19, 2006

On April 26, 2006, House Bill 4463 was sent to the governor for his signature. HB 4463 would allow a former IMRF member who participated as a teacher’s aide and transferred to a position that is covered by TRS to retire under the Reciprocal Act even though the former IMRF member has less than 12 months of IMRF service credit.

The governor has until June 26, 2006, to sign HB 4463 into law. If the governor takes no action on the bill, it will automatically become law.

Retiring under the Reciprocal Act

Current law
The Illinois Retirement Systems Reciprocal Act requires a minimum of 12 months of service credit with any single reciprocal pension system to apply the service toward a reciprocal pension benefit.

If a member has less than 12 months of service with a single reciprocal retirement system, that service will not be counted in the calculation of his or her reciprocal pension.

If HB 4633 becomes law
The Illinois Retirement Systems Reciprocal Act will be revised to allow a former teacher’s aide who transferred to a position covered by the Teachers’ Retirement System (TRS) and who has less than 12 months of IMRF service credit to apply that service toward a reciprocal pension.

Former teachers’ aides covered
To be covered by this legislation, the former teacher’s aide must be participating in any Reciprocal system on or after the effective date of this legislation; he or she does not have to be a current member of TRS.

If a former teacher’s aide took a refund
If a former teacher’s aide took a refund of his or her IMRF contributions, he or she can repay the refund and reinstate the service credit by submitting IMRF Form 6.03, “Application for Reinstatement of Service Credit.” This form is available on our website, www.imrf.org.

If a former teacher’s aide took a refund AND is thinking of retiring
To be eligible to apply less than 12 months of IMRF service credit toward a Reciprocal pension, a member must be an active participant in a Reciprocal System on the day this bill becomes law.

If a former teacher’s aide took a refund and intends to retire immediately after the bill becomes law, IMRF recommends he or she apply to reinstate the refund now by submitting IMRF Form 6.03, “Application for Reinstatement of Service Credit.” This form is available on our website, www.imrf.org.

Applying to reinstate the refund does not obligate the employee to repay the refund. If HB 4633 becomes law, having an application on file will ensure that the employee will have one opportunity to reinstate the refund even if he or she retires and no longer participates in a Reciprocal system.

We ask for your assistance
In an effort to inform current TRS members about this potential change in the law, we ask that you photocopy the enclosed flyer and post it in your Teacher Lounges.

In addition, IMRF has identified a small group of former members who currently participate in TRS, are retirement age, and took a refund of their IMRF contributions. These former IMRF members may be eligible to reinstate their refunds and retire under the Reciprocal Act. We will contact these members to advise them of this pending legislation.

Questions
If a member has a question regarding repaying an IMRF refund, please call 1-800-ASK-IMRF (1-800-275-4673), Monday through Friday, 7:30 a.m. to 5:30 p.m.

All other inquiries should be directed to TRS.

You can also check the status of HB 4463 by visiting the Legislative Area of the IMRF website, www.imrf.org.