Frequently Asked Questions - Active Employee

General

How do I become a member of the Fund?

What type of pension fund is the MWRDRF?

Can I borrow against my pension?

Can an active employee withdraw some pension contributions due to hardship?

Can I withdraw contributions?

I am not married, so why do I contribute for a spouse annuity?

I worked at another governmental agency in Illinois. How do I transfer my credit?

Disablity

I am unable to work due to illness. What do I need to do to receive disability benefits from the Fund?

Planning to Retire

When am I eligible to retire and receive a monthly annuity?

Is there a best time of the month to retire?

How do I request an estimate of my retirement annuity?

What documents will I be required to provide when I apply for my retirement annuity?

What does it mean to be vested?

Can I contribute more than the required amount?

When and how do I apply to retire?

How is my retirement annuity calculated?

How does divorce affect my MWRDRF benefits as a retiree?

Can I purchase service credit for military service?

Retiree Medical Insurance

Are all annuitants eligible for District-sponsored medical insurance?

Do retirees need to purchase supplemental insurance?

Do retirees have a vision plan?

Do retirees have a dental plan?

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General

Question: How do I become a member of the Fund?

Answer: Employees of the Metropolitan Water Reclamation District (MWRD) or its Retirement Fund whose duties permit 120 days of service or more per year are statutorily members of the Fund. Pension contributions will automatically be deducted from the bi-weekly paycheck.

For more information for new members, click here.

 

Question: What type of pension fund is the MWRDRF?

Answer: The Metropolitan Water Reclamation District Retirement Fund (MWRDRF) is a governmental defined benefit plan established under Illinois State law to provide annuity benefits for employees of the MWRD and its Retirement Fund. The Fund is a qualified 401(a) plan under the Internal Revenue Code. Back to the top.

 

Question: Can I borrow against my pension? Can an active employee withdraw some pension contributions due to hardship?

Answer: A member cannot borrow money from his or her contributions. Further, he or she can not receive a refund of contributions based on hardship. To receive a refund of contributions, the employee must resign from the MWRD. Back to the top.

 

Question: I am not married, so why do I contribute for a spouse annuity?

Answer: By law, all members, whether married or not married, must contribute for a spouse's annuity until resignation from service. If you are eligible to do so and take a refund of contributions upon separation, the contributions for a spouse annuity are included in a total refund of contributions.

If your resignation is at retirement, the contributions for a spouse annuity are refunded with interest to the date of payment. Payment is made at the same time as the first monthly retirement annuity payment. Back to the top.

Question: I worked at another governmental agency in Illinois. How do I transfer my credit?

Answer: The MWRD Retirement Fund is reciprocal with 12 other pension funds in the State of Illinois. These funds are:

Judges Retirement System of Illinois General Assembly Retirement System
State Employees Retirement System of Illinois State Teachers' Retirement System of Illinois
State Universities Retirement System Public School Teachers' Pension & Retirement Fund of Chicago
County Employee's Annuity and Benefit Fund of Cook County Laborers' Annuity & Benefit Fund of Chicago
Park Employees' Annuity & Benefit Fund of Chicago Illinois Municipal Retirement Fund
Municipal Employees Annuity and Benefit Fund of Chicago Forest Preserve Employees Annuity and Benefit Fund of Cook County

 

If you have service with one of these 12 pension funds, and you did not take a refund of contributions, your contributions and credit stay with that fund or funds. There is no "transfer." However, when you retire, you can choose to retire under reciprocal provisions. Upon retirement each fund pays its own portion of the combined annuity. More on reciprocity can be found here. Back to the top.

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Disablity

Question: I am unable to work due to illness. What do I need to do to receive disability benefits from the Fund?

Answer: If you have a non-work related injury or illness, click here for information about Ordinary Disability. Back to the top.

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Planning to Retire

Question: When am I eligible to retire and receive a monthly annuity?

Answer(s): That depends on when your start date. Generally:

Employees hired before June 13, 1997

Early Retirement

Normal Retirement

Deferred Retirement

Age 50 with at least 10 years of service. The annuity will be discounted by 0.5% per month for each month that the employee is less than age 60 or for each year that the employee has less than 30 years of service.

Age 60 with at least 5 years of service or at age 50 with at least 30 years of credit without discount.

An employee who withdraws after age 50 with at least 5 but less than 10 years of service is entitled to a retirement annuity at age 62 without discount.

 

Employees hired between June 13, 1997 and December 31, 2010

Early Retirement

Normal Retirement

Deferred Retirement

Age 55 with at least 10 years of service. The annuity will be discounted by 0.5% per month for each month that the employee is less than age 60 or for each year that the employee has less than 30 years of service.

Age 60 with at least 5 years of service or at age 50 with at least 30 years of credit without discount.

An employee who withdraws after age 55 with at least 5 but less than 10 years of service is entitled to a retirement annuity at age 62 without discount.

 

Employees hired after December 31, 2010

Early Retirement

Normal Retirement

Deferred Retirement

Age 62 with at least 10 years of service. The annuity will be discounted by 0.5% per month for each month that the employee is less than age 67.

Age 67 with at least 10 years of service without discount.

An employee who withdraws with at least 10 years of service is entitled to a retirement annuity at age 62, subject to early retirement discount, or at age 67

Back to the top.

Question: Is there a best time of the month to retire?

Answer: The last day of the month is normally the best day to resign. Annuity benefits are paid effective the 1st day of the month following the retirement date. No annuity is paid for a partial month.

EXAMPLE 1 - Resignation date - June 30. Your monthly annuity would be effective July 1. Your first payment would arrive on or about August 1st and would cover the months of July and August. If your annuity is being calculated under the reciprocal act, the first payment would arrive on or about September 1st and would cover the months of July, August, and September.

EXAMPLE 2 - Resignation date - July 10. Your monthly annuity would be effective August 1. No annuity payment would be issued for the month of July. Your first payment would arrive on or about September 1st and would cover the months of August and September. If your annuity is being calculated under the reciprocal act, the first payment may be delayed until October 1st and would cover August, September and October.

Back to the top.

Question: How do I request an estimate of my retirement annuity?
Answer: To request an estimate of your MWRDRF retirement annuity, please call (312) 751-3222. When you speak to the MWRDRF staff member, you will be asked questions about your intended retirement time frame, whether you have service credit with another Illinois public pension fund, whether you are married, and whether you have any military service that you would like to purchase. All of this information helps us to provide you the most complete and accurate retirement annuity estimate possible.

Response time for estimates varies from a couple of days to several weeks depending on the complexity of your case and whether you have service credit with another Illinois public pension fund. Back to the top.

 

Question: What documents will I be required to provide when I apply for my retirement annuity?

Answer: The following documents will be required:

  • Original birth certificate for employee. A passport or certificate of naturalization may be accepted in lieu of the birth certificate.
  • Original birth certificate for spouse. Similarly, a passport or certificate of naturalization may be accepted in lieu of the birth certificate.
  • Original birth certificate for children.
  • Original marriage certificate if you are currently married
  • Divorce decree or death certificate of spouse if you are divorced or widowed (from all marriages). Only first and last pages of the divorce decree will be required.
  • Copy of your Medicare card (and of your spouse if eligible) if you elect to continue health insurance and you are Medicare eligible.

Back to the top.

Question: What does it mean to be vested?
Answer: The term "vested" does not apply to your contributions at the MWRDRF. However, used loosely, "vested" means that if an employee leaves service with the employer, he or she has enough service credit to commence a retirement annuity at some time in the future. Eligibility for a retirement annuity is detailed in the answer to the question: When am I eligible to retire and receive a monthly annuity? Back to the top.

Question: Can I contribute more than the required amount?
Answer: No.  Currently the rate of contributions is 10% for Tier I employees and 9% for Tier II employees. This amount is set forth in the Statutes that govern the Fund in 40 ILCS 5/13-502. There is no variation. Back to the top.

Question: Can I withdraw contributions?

Answer: To withdraw contributions, you must separate from MWRD service and apply for a refund of contributions. By receiving a refund, the former member waives any right to any benefit from the Fund. For more information about Refunds, click here. Back to the top.

Question: When and how do I apply to retire?

Answer: When you have made the decision to retire, you can apply at any time. However, it is best to make your application four to six weeks in advance of your retirement date. The whole process, including the Retirement Fund appointment and meeting with the Human Resources (HR) Department takes about an hour and a half.

As a professional courtesy, all potential retirees are encouraged to inform their supervisors ASAP of their impending retirements to enable the District to plan for your succession with the least amount of disruption to service.  Even if you don't see eye to eye with your supervisor, exit with style.

Call the Retirement Fund office at 312-751-3222 to schedule an appointment to meet with a member of our benefits staff who will guide you through the application process. The appointment takes place at the Fund's office in the Main Office Building Annex (MOBA), 111 E. Erie St., Suite 330, Chicago, IL. If you are unable to come to the MOBA because you are disabled, you work at the Prairie Plant (Fulton County) or if you are retiring reciprocally and your final employer is not the MWRD, we will gladly send you the retirement application package via US Mail.

More information can be found here. Back to the top.

Question: How is my retirement annuity calculated?
Answer: This answer applies to employees hired before 1/1/2011.

  • Retirement benefits are calculated as a percentage of your two-year final average salary.
  • The two-year final average salary is the average of the 52 consecutive pay periods with the highest pay in the last 10 years of service. It does not include any overtime.
  • Benefits accrue at 2.20% per year for the first 20 years, and at 2.40% per year for each year thereafter.
  • The maximum benefit is 80% of your two-year final average salary.
  • If an employee does not have 30 years of service, or is not at least age 60 at retirement, his benefit is reduced for early retirement. The minimum age to receive a monthly annuity is 50 for employees hired before 6/13/1997 and 55 for employees hired after 6/13/1997.
  • The early retirement reduction is one-half a percent per month for each full month the employee is under age 60 or for each month of service that the employee has less than 30 years, whichever is less.


Example 1. John is retiring close of business April 30, 2011. He is age 62. He has 25 years of service. His final average salary is $6,000 per month.

Step 1 Calculate his annuity factor


25 years of service
20 years at 2.2% per year = 20 x 2.2% = 44%
5 years at 2.4% per year = 5 x 2.4% = 12%
Total = 44% + 12% = 56%
Step 2 Calculate the early retirement discount, if applicable
Since John is 62 years of age, he qualifies for an annuity that is calculated without a discount for early retirement. In other words, he gets 100% of his annuity as calculated in step 1 since he did not lose any percentage points for being under age 60. The decimal equivalent of 100% is 1.00.

Step 3 Multiply the annuity factor by the Early Retirement Discount Factor and then by the final average salary:

56% x 1.00 x $6,000 = $3,600

John's monthly annuity will be $3,600 per month.

Example 2. Trent is retiring close of business July 31, 2011. Trent is 58 years old and he has 27 years of service. His final average salary is $5,000 per month.

Step 1 Calculate his annuity factor
27 years of service
20 years at 2.2% per year = 20 x 2.2% = 44%
7 years at 2.4% per year = 7 x 2.4% = 16.8%
Total = 44% + 16.8% = 60.8%

Step 2 Calculate the Early Retirement Discount (ERD), if applicable
Since Trent is 58 years of age and he does not yet have 30 years of service his annuity will be discounted. The discount is 0.5% per month for each month that he has less than 30 years of service OR for each month that his age is less than 60 years, whichever yields a lower discount. With 27 years of service he is three years from 30 years of service. However, he is only two years from age 60. Therefore, the discount will be based on being two years from age 60.

2 years from age 60 = 2 x 12 months = 24 months
24 months x 0.5%/month = 12.0% discount
A discount of 12.0% means that he is entitled to 88.0% of his annuity percentage (100.0% - 12.0%)

Step 3 Multiply the annuity factor by the Early Retirement Discount Factor and then by the final average salary:

60.8% x 88.0% x $5,000 = $2,675.20

Trent's monthly annuity will be $2,675.20 per month. Back to the top.

Question: How does divorce affect my MWRDRF benefits as a retiree?

Answer: Divorce affects MWRDRF benefits in a different ways, depending on the duration of the marriage, when the marriage took place, and whether or not there is a QILDRO associated with the divorce settlement.

First and foremost, the member should inform the Fund of a divorce as soon as possible. He or she should provide the Fund with copies of the first and last pages of the divorce decree. This will enable the Fund to properly administer medical insurance benefits and ensure proper payment of benefits upon the member's death.

In all cases, if the former spouse was covered on the member's retiree medical insurance, the former spouse is no longer eligible for District-sponsored medical insurance effective the first of the month following the date of the divorce. It is very important to notify the Fund of the divorce in a timely manner. This will enable us to adjust your medical insurance premium as warranted. Also, any medical insurance claims paid for the former spouse after the divorce may be charged to the member.

The former spouse who was covered as a dependent on the member's medical insurance is eligible for COBRA after the divorce. Contact the Compensation and Benefits Section of the Human Resources Department of the District at 312-751-5166 for information relative to COBRA.

Regarding eligibility for a surviving spouse annuity for the former spouse, a divorce that is final after retirement may have different effects depending on how long the member and the former spouse were married at retirement. If the member and former spouse were married at least 10 years prior to retirement, the former spouse is still entitled to monthly surviving spouse annuity upon the member's death. If the marriage was in effect less than 10 years prior to retirement, then the former spouse is not eligible for a surviving spouse annuity upon the member's death.

If the marriage took place after retirement, the spouse was never eligible for a surviving spouse annuity.

Now you know the effect of divorce on medical insurance and surviving spouse annuity benefits, but what about the member's monthly retirement annuity? What happens to it?

The member's monthly retirement annuity will remain intact (not reduced) unless there is a court order called a QILDRO that will provide for a portion or all of the monthly retirement to be paid to the former spouse. For more details, refer to the QILDRO packet by clicking here. Back to the top.

Question: Can I purchase service credit for military service?

Answer: Now through July 24, 2013, employees with a minimum of 10 years of MWRDRF service may purchase up to two years of military service credit for time served in the active United States Armed Forces for which he or she does not already have service credit. We must have a legible copy of your DD-214, or the appropriate separation or discharge papers verifying active duty.

The cost to purchase military service is based upon:

(1)   The number of years of active military service for purchase
(not to exceed two years);

(2)   The employee's annual rate of pay upon entry into District service;

(3)   The rate of pension contributions upon entry into District service;

(4)   The employer's normal cost for contributions in the year of payment; and

(5)   Compound interest of 3% from the date of entry into District service to

the date of payment.

If you are interested in learning the cost to purchase military service or if you want to know if you qualify to purchase military service, contact the Fund office at (312) 751-3222. Back to the top.

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Retiree Medical Insurance

Question: Are all annuitants eligible for District-sponsored medical insurance?

Answer: No, not all annuitants are eligible for District-sponsored medical insurance.  Employees hired after 7/1/2005 need 10 years of District service to qualify for District-sponsored retiree medical insurance. Reciprocal annuitants whose final fund is not the MWRDRF need at least 10 years of service to qualify for District-sponsored retiree medical insurance. Back to the top.

Question: Do retirees need to purchase supplemental insurance?

Answer: District sponsored retiree health insurance program becomes secondary to Medicare coverage when the retiree becomes Medicare eligible. Between Medicare and Blue Cross, the coverage is fairly comprehensive and a supplement is not necessary. For more comprehensive information about retiree coverage, click here. Back to the top.

Question: Do retirees need to purchase supplemental insurance?

Answer: District sponsored retiree health insurance program becomes secondary to Medicare coverage when the retiree becomes Medicare eligible. Between Medicare and Blue Cross, the coverage is fairly comprehensive and a supplement is not necessary. Back to the top.

Question: Do retirees have a vision plan?

Answer: There is not a comprehensive vision plan. However, there are discounts available through both the PPO and HMO. Refer to this page for further information. Back to the top.

Question: Do retirees have a dental plan?

Answer: New retirees have the option to enroll in COBRA for up to 18 months. After that, there is no employer sponsored dental coverage. Back to the top.

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