State Universities Retirement System (SURS)

Operational Standard/Purpose

The State Universities Retirement System (SURS) is the retirement administrator for employees in public higher education in the State of Illinois. Participation is mandatory for those eligible. Upon eligibility, participants make a one-time, irrevocable election among three available retirement benefit plans. Benefits in retirement depend on assigned Tier and plan election. See the SURS website for full details. In addition to retirement benefits, members may also be eligible for Disability Benefits and Survivor Benefits. Illinois legislation mandates specific rules as it relates to SURS some of which include 6% Rule and Return to Work Rule.

Scope/Applicability

Refer to the following sections of the Employee Handbook for additional information.

• Employment Separations (Off boarding)
• Employment or Re-Employment of State Universities Retirement System (SURS) Annuitants (Retirees)
• State Universities Retirement System (SURS) Return to Work Law
• Disability – State Universities Retirement System (SURS) Coverage
• Retirement – State Universities Retirement System (SURS) Annuity
• Pay Adjustments Affecting State Universities Retirement System (SURS) Annuitants (6% Rule)

Procedures

Surs Payroll Contribution Procedure(s)

1. Review the Retirement – State Universities Retirement System (SURS) Annuity section of the Employee Handbook.
2. Human Resources Department evaluates employment status of each ICC employee to determine SURS eligibility. Refer to the Retirement – State University Retirement System (SURS) Annuity section of the Employee Handbook for additional information.
3. Human Resources Department creates 8% payroll deduction for eligible employees at hire. An additional contribution of 0.5% is created for full time employees.
   Notes: SURS members do not contribute into federal Social Security. Police officers/firefighters have special rules that allow them to contribute 9.5 percent of gross earnings.
4. Human Resources Department creates an employment record with SURS for the eligible employee at hire/rehire.
5. Human Resources Department submits employee contributions to SURS each payroll.

Separating From Surs Procedure(s)

1. Retirement from SURS: An employee may separate from the SURS system upon retirement eligibility.
   1. Refer to the Employment Separations (Off boarding) and Retirement – State Universities Retirement System (SURS) Annuity sections of the Employee Handbook.
   2. Contact SURS (1-800-ASK-SURS) or Surs Retirement FAQs to begin the application for retirement.
   3. Employee submits notice of retirement to his/her supervisor and the Human Resources Department. Refer to the Employment Separations (Off boarding) Standard Operating Procedure (SOP) and Planned Administrative Retirements Standard Operating Procedure (SOP) for additional information.
   4. After employee’s final paycheck is issued, the Human Resources Department provides all final information to SURS for calculation of monthly retirement annuity.
2. Separating from SURS before Retirement:
   1. Refer to the Employment Separations (Off boarding) section of the Employee Handbook.
   2. Employee submits resignation notice to his/her supervisor and the Human Resources Department. Refer to the Employment Separations (Off boarding) Standard Operating Procedure (SOP) for additional information.
   3. After employee’s final paycheck is issued, the Human Resources Department provides all final information to SURS to close employment record.
   4. Contact SURS (1-800-ASK-SURS) or www.surs.org for information on separation refunds.

Surs 6% Rule Procedure(s)

1. Manager Responsibilities:
   1. Review the Pay Adjustments Affecting State Universities Retirement System (SURS) Annuitants (6% Rule) section in the Employee Handbook.
   2. All Illinois Central College managers and those responsible for negotiating faculty salary increases, summer appointments, retirement/separation agreements, etc., should be aware of the guidelines and implications of the 6% earnings rule and the possible financial obligations related to Public Acts 94-0004 and 94-1057. ICC will be billed when the calculation of the employer cost exceeds the 6% limit and the employer is defined as the employing department or unit. The employer cost equals the actuarial present value of the benefit increase to the employee. The actuarial present value calculation will be made by using actuarial tables provided by the SURS actuary.
2. Reviewing and Processing SURS 6% Rule Bills:
   1. SURS sends all bills and accompanying documentation for Illinois Central College to the Human Resources Department. Each bill includes a reference number. Bills will be mailed from SURS on the 10th of the month, or the first working day following the 10th if the 10th falls on a weekend or holiday.
   2. Human Resources verifies the final rate of earnings (FRE) stated on the bill against the pay history in the employees electronic payroll record. ICC has 30 days from the “service of the billing letter” (service is complete four days after mailing) during which it may contest the earnings stated in the bill.
   3. If the SURS bill is accurate, the Associate Vice President of Human Resources signs and forwards the bill to the Controller for payment processing. If ICC does not contest the bill, the amount of the bill must be paid in a lump sum payment within 90 days after the receipt of the bill. If not paid within this timeline, interest will be charged.
   4. If the bill is not accurate, the Associate Vice President of Human Resources will appeal the SURS bill by completing an Application for Recalculation of Employer Cost and the 6% Liability Validation/Appeal Form. If a timely application of appeal was received by SURS and recalculations were done, SURS will either send a recalculated bill or notification of a favorable appeal decision (if no amounts are due). If a non-favorable appeal decision is rendered, ICC should pay any contested amount within 90 days of the original receipt of the bill. If not paid within this timeline, interest will be charged.

Surs Return to Work Procedure(s)

1. Review the State Universities Retirement System (SURS) Return to Work Law section of the Employee Handbook.
2. 60-Day Waiting Period: A SURS retiree may not be re-employed by a SURS covered employer (ICC), until after 60 days from the effective date of his/her retirement. If a person receives a lump sum annuity, he/she must wait 60 days from the date of the check to be re-employed.
   1. Prior to rehire or reassignment, a SURS annuitant must complete a SURS Annuity Status Form.
3. Obtaining SURS Certification:
   1. ICC cannot obtain the required information directly from SURS to make the determination of whether an annuitant (a SURS retiree receiving an annuity) is an “affected annuitant” before employing the retiree. Therefore, as a condition of employment, any retiree applying for employment must request from SURS and provide to the College an affidavit of the necessary certified information so that an informed determination can be made as to whether the retiree is or would be an “affected annuitant”. That certified information from SURS shall include:
      1. The annuitant’s highest annual earnings prior to retirement; and
      2. The annuitant’s earnings limitations specifying whether it is monthly or annual
   2. If a former employee took a lump sum distribution or only participated in the SURS self-directed plan and is not collecting an annuity from SURS, then he/she shall not be considered an annuitant for purposes of determining if he/she is an affected annuitant.
4. Earnings Limitation:
   1. SURS Annuitants who are hired for the sole purpose of a temporary assignment (less than 90 days) will receive an hourly rate equal to the minimum of the salary range for the position in which they are assigned.
   2. Employees receiving an annuity from SURS under the traditional or portable plans may be subject to an earnings limitation in addition to the one used to determine if an individual would be an “affected annuitant”. The exact amount of earnings limitation will be stated on the annuitant’s Certification of Retirement Annuity that is provided by SURS upon finalization of an individual’s retirement claim.
      1. If an individual began receiving an annuity before age 60, there will be a monthly limitation on that person’s earnings from a SURS participating employer. That monthly amount will be increased by any applicable Automatic Annual Increase.
      2. If the individual is over 60 when the annuity begins, the limitation is an annual amount and once the annual earnings limitation is calculated, it does not change.
   3. All employees who are SURS annuitants must comply with all their earnings limitations as determined by SURS.
5. Financial Obligation:
   1. Illinois Public Act 97-968 establishes that an employer(s) who employs “affected annuitants” after August 1, 2013, will be charged an employer contribution equal to the annuitant’s annual retirement annuity. The full annual amount of the employer’s contribution is due to SURS on the first day of employment of an “affected annuitant.”
   2. Once an annuitant has become “affected,” employers are obligated to pay the SURS contribution for EVERY year the “affected annuitant” is employed on any non-exempt fund, regardless of the length of employment or compensation amount.