Annuitant Increases

Who gets an automatic increase?

Most annuitants are entitled to an annual increase. The following groups of annuitants DO NOT receive annual increases:

Child annuitants;
Reversionary annuitants;
Term annuitants;
QILDRO recipients unless specifically noted in the QILDRO;
Employees who retired before July 1, 1985 with less than 10 years of service; and
Surviving spouse annuitants whose deceased spouse died, retired, or withdrew from service before August 23, 1989, with less than 10 years of MWRD Retirement Fund service.

Any annuitant not mentioned above gets an automatic increase. However, timing and amount will depend on the member's tier. Refer to the definitions below:

Tier I Participant: An employee of the District who first became a member before January 1, 2011 under any reciprocal retirement system or pension fund established under Chapter 40 of the Illinois Compiled Statutes except Judges, General Assembly, police and fire pension plans (both Chicago and downstate). This includes any Commissioner who fits the criteria above who elects to participate in the Fund within 90 days after becoming a Commissioner.

Tier II Participant: An employee of the District who first became a member on or after January 1, 2011 except for those who were members of any reciprocal retirement system including the IMRF, Municipal Employees Annuity and Benefit Fund of Chicago, Laborers' Annuity and Benefit Fund of Chicago, County Employees Annuity and Benefit Fund of Cook County, Forest Preserve of Cook County Employees Annuity and Benefit Fund, Chicago Park Pension, State Employees Retirement System, State Universities Retirement System, Illinois Teachers Retirement System, or Chicago Teachers Pension Fund prior to January 1, 2011. This includes any Commissioner who fits the criteria above who elects to participate in the Fund within 90 days after becoming a Commissioner.

How much is the Automatic Increase?

For Tier I Participants

The pension of an employee of the District who first became a member before January 1, 2011 under any reciprocal retirement system as described above will be increased annually by 3% of the monthly annuity payable at the time of the increase, including any increases previously granted. In other words, it is a compound increase.

Example

In 2021, the retiree's monthly annuity was $5,000. In 2022, it will be 3% of $5,000, or $150 ($5,000 x 3%). The new annuity is $5,150 ($5,000 + $150).

In 2023, when the automatic increase is due, the increase will be 3% of $5,150, or $154.50 ($5,150 x 3%). The new annuity is $5,304.50.

For Tier II Participants

The annual increase rate is the lesser of 3% and half of the CPI-u for the 12 months ending the September 30^th prior to the increase date. The increase is based upon the original annuity.

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When does the eligible annuitant receive the annual increase?

For Tier I Participants

This depends on whether it is an employee or spouse annuitant and when the employee retired.

Type of annuitant	When he/she receives his/her first Annual Increase
Employees who retired before July 12, 2001	The first payment date following the first anniversary date of retirement.
Employees who retired after July 12, 2001	The first day of the month in which the first anniversary of the date of retirement occurs.
Surviving spouse annuitants	The first day of the month in which the first anniversary of the date of retirement or death (whichever occurred first) occurs.

Subsequent automatic increases occur in the same month as the first annual increase each year thereafter.

For Tier II Participants

This depends on whether it is an employee or spouse annuitant and when the employee retired.

Type of annuitant	When he/she receives his/her first annual increase
Employee annuitants	January 1 either on or after the attainment of age 67 or the first anniversary of the annuity whichever is later
Surviving spouse annuitants when the death was after retirement	January 1 occurring on or after the commencement of the annuity
Surviving spouse annuitants when the death was before retirement	January 1 occurring after the first anniversary of the commencement of the annuity

Subsequent increases occur each January first.