Preparing for Retirement

The transition into retirement can be overwhelming. As your retirement date approaches, it is best to start planning for that date a few months in advance. A common question among active members of the Fund is: "What is the best time of the month to retire?" The answer is: "The last day of the month is normally the best day to retire because we do not pay partial month annuities."


Once you have settled what date to retire, the next step would be to request an estimate from the Retirement Fund. You should also verify that the Retirement Fund has all the required documents in your file.

The following documents will be required when applying for retirement benefits:

- Original birth certificate for employee

- Original birth certificate for spouse

- Original birth certificate for children

- Marriage certificate if you are currently married

- Divorce decree or death certificate of spouse if you are divorced or widowed (from all marriages)

- Copy of your Medicare card (and of your spouse if eligible)


Once you have received your estimate and are certain that you will move forward with retirement, it is suggested that you call Human Resources Department regarding deferred compensation counseling, separation pay, COBRA dental, and conversion of life insurance.

You should contact the Retirement Fund for an appointment to make your retirement application. Although we will accommodate walk-ins, it is always better to have an appointment. The advance notice allows staff to prepare the required forms before you come in to retire.

At the time of application, the following forms must be completed:


Application for Retirement Annuity: The application must be completed, signed and notarized.


No Spouse Affidavit: If the employee is unmarried at the time of retirement, all contributions for spouse's annuity will be refunded with 3% interest compounded annually.  In order to affirm the applicant's marital status, the no spouse affidavit must be completed and notarized.


No Spouse Refund Application: If the employee is unmarried at the time of retirement, formal application for the refund of spousal contributions must be made. It is important that the member reads this form carefully and reviews the tax information before completing the application. There are additional tax consequences for employees who are receiving a no spouse refund and are under age 55.


Designation of Beneficiary: Your designated beneficiary is anyone you choose. If you are married, State law establishes a surviving spouse's annuity benefit for your eligible spouse immediately after your death regardless of whether a beneficiary form is on file. However, if you do not have an eligible spouse or your spouse does not receive an annuity long enough to "collect back" all your contributions, the person(s) you designated as your beneficiary (ies) would receive any remaining contributions.


Substitute W4-P Form: Benefits received from this Fund are subject to federal income tax withholding. The member must select a withholding option and sign the form.


Signature Card: In order to verify your signature, the Fund collects your signature at retirement and we periodically request signature specimen updates.


Direct Deposit Authorization: This form must be taken to the member's bank or savings institution at which he or she chooses to have his or her monthly annuity direct deposited. We require the member's signature on the top portion of the form, and we ask that the bank representative accurately completes the bottom portion of the form.


Health Insurance Application: Currently MWRDGC offers Blue Cross Blue Shield of Illinois PPO and the HMO Illinois to their retirees and dependents under age 65 and UnitedHealthcare MAPD for their retirees and dependents over age 65. If the member selects the retiree group health insurance, the insurance application must be completed and signed.


Once these forms have been completed, the employee would meet with a Human Resources representative to sign the retirement papers. When paperwork is completed with the HR Department, the election to retire is irrevocable.


If you are retiring reciprocally, then you must contact the other Fund(s) and apply for retirement from those Funds. The retirement dates have to be the same in all Funds.


General Information as you start the retirement process:


Final District Payroll:

If you retire before the end of the year, you are only entitled to use 1/26th of your annual vacation for each full pay period that you work.  The District's Payroll Department will collect the overrun vacation time from your final check. Using more vacation than you have earned will result in the reduction of your pension service credit by the number of days of overused vacation. As a result, your retirement annuity will also decrease.

If you are considering taking vacation just before retirement, it may be more beneficial for you to retire earlier and take your vacation earnings on your final paycheck.  Please check with our office to see which is more beneficial to you.


Federal Withholding Tax:


At the time of retirement, a W4P form will have to be filled out for federal withholding tax. Currently retirement annuities paid by the Fund are exempt from State taxes in the State of Illinois. But if the member relocates to another state, the member will have to check with that state's Department of Revenue, which is typically located in the state capital.


Unfortunately, our computer programs do not update the federal withholding each year when the members receive a cost of living increase. Therefore, it is up to the member to contact our office for a new W4P form whenever they feel it is necessary to update the federal withholding tax taken from the annuity check.


Annuity Payment:


Annuity payments are paid on the first of every month for that month. You will receive your first check approximately one month after your retirement effective date. However, if you are retiring reciprocally, then your first annuity payment will be two or three months after your retirement effective date.


Cost of Living Adjustment (COLA):


For members who entered District service prior to January 1, 2011 (Tier I), retirees and surviving spouses are entitled to receive an annual cost of living increase that is equal to 3% of the current monthly annuity. The annuitants will receive their COLA on the anniversary of retirement.


Social Security Administration: Windfall Elimination Provision & Government Pension Offset:


During MWRD employment, no Social Security taxes (FICA) are deducted from your earnings. Because you are eligible for a government pension, your Social Security benefit may be reduced. Contact the Social Security Administration at 1-800-772-1213, or visit their website,  for more information on either the Windfall Elimination Provision or the Government Pension Offset.

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