In accordance with state law, the Illinois Department of Insurance annually determines certain annuity limitations for use in benefit determinations by the Retirement Systems and Pension Funds operating under the Illinois Pension Code. The calculations include:
If You Have Your Contributions Refunded
- You will receive no interest on your contributions.
- You will forfeit all rights to a JRS benefit for yourself and your beneficiaries.
- You may be subject to additional tax withholding and penalties.
When Refunds are Paid to You
- You pay no Illinois state income tax.
- You will pay federal tax on most benefits. Specific information will be furnished when benefits are payable.
- All benefits and refunds must be declared as income in the year in which they are received.
- You may postpone taxation of refunds by ‘rolling-over’ the taxable portion of the payment to another employer plan that accepts it, or to an Individual Retirement Account (IRA). JRS is a qualified retirement plan under Section 401(a) of the Internal Revenue Code. Therefore, you will not be taxed on your contributions until you receive them.
The best tax treatment for you depends on your individual financial situation. Therefore, JRS advises all members to check with a qualified tax consultant before receiving benefits or refunds.