Section 1650.240  Refunds; Canceled Service; Repayment

a)         General Requirements. Under the provisions of the Illinois Pension Code, a member must "separate from service" within the meaning of Section 401(a) of the Internal Revenue Code (26 U.S.C. 401(a)) to be eligible to receive a refund of contributions pursuant to Section 16-151 of the Illinois Pension Code (Pension Code).

b)         Separation from Service Requirements. To meet the "separation from service" requirement, a member cannot continue to work or return to work with the member's last employer in a licensed or any other position unless:

1)         The member and employer did not agree to nor pre-arrange the member's re-employment before the member's date of termination of employment; and

2)         The member is not re-employed by the member's last employer in a licensed or any other position within 30 days after the member's date of termination of employment.

c)         Any member eligible to receive a refund of contributions pursuant to the provisions of Section 16-151 of the Pension Code shall, if the member so elects, make a written request for the refund upon a form prescribed by the System.  A refund is deemed accepted and membership in the System terminates upon the cashing of a refund warrant.

d)         To be credited toward the calculation of a retirement annuity, survivor benefit, or disability benefit, the service canceled by such refund must have been re-established in accordance with the applicable provisions of the Pension Code, by repayment of the refund in full, including statutory interest, prior to the member's retirement, death, or commencement of disability benefits.

e)         A member receiving a disability benefit under the provisions of Section 16-149 of the Pension Code is not eligible to receive a refund of contributions until four months following the date for which disability benefits are last paid.

f)         Applicability Date. The portion of subsection (b) that restricts a member from continuing to work or returning to work with the member's last employer in a non-licensed position shall not apply to refunds that are requested on or before December 31, 2026.

(Source:  Amended at 50 Ill. Reg. 4774, effective March 13, 2026)