SEPARATION REFUNDS. Eligibility p. 1 Employer Responsibilities p. 1 Employee Responsibilities p. 2 SURS Responsibilities p. 3. Rev.

Transcription

1 SEPARATION REFUNDS Eligibility p. 1 Employer Responsibilities p. 1 Employee Responsibilities p. 2 SURS Responsibilities p. 3 Rev

2 Refunds Eligibility To be eligible for a Separation Refund, an employee must terminate employment or have been on layoff for more than 120 days and the employer must submit the required documentation to SURS. An employee cannot receive more than one Separation Refund during an academic year and if the employee returns to work prior to the payment of the refund, SURS cannot pay the refund. Employer Responsibilities The employer should provide the employee with a copy of the Separation Refund Fact Sheet (Fig. 1) when the employee terminates and then complete a Separation Refund event on the SURS Employer Website (Membership-Terminations pages 18-20). In the event that the employee contacts SURS to request a Separation Refund, and no Termination Event has been submitted by the employer, SURS will create a Separation Refund event on the SURS Employer Website (Fig. 2) for the employer to complete and submit. Fig. 1 1

3 Fig. 2 1) Member Type is automatically indicated. 2) Date of Termination is the exact date that the employee was terminated. 3) Last Payroll Date should be entered as the last day of the last payroll period for which the employee was paid. 4) Percent of Employment should reflect the exact percent of time the employee worked while active. Employee Responsibilities If an employee wants a refund upon termination of employment, he or she should contact SURS at or in Champaign-Urbana area. SURS will send the employee a Separation Refund Application requesting the employee s signature and the amount of Federal Income Tax to withhold (if applicable). The Separation Refund Application will specify whether the refund is being mailed to the employee s home or financial institution as designated. The employee should review the tax information that accompanies the Separation Refund Application. Special tax forms (W9, W8 BEN, etc.) may also be included with the Refund Application. The employee s signature on the Separation Refund Application must be notarized. 2

4 The employee should also ask the employer if a formal resignation must be submitted in order for the employer to complete and submit a Termination or Separation Refund event. SURS Responsibilities Traditional/Portable Plans When the employee calls SURS to request a refund, SURS will verify the employee s identification and demographic information. A SURS Member Service Representative (MSR) will counsel the employee on the effects of taking a separation refund. The MSR will create the Separation Refund Application based on directions from the employee as to how and where the refund is to be paid. The MSR will promptly mail the Refund Application to the employee. If the employee requesting the separation refund is active with any employer at the time the refund is requested, SURS will create a Separation Refund event on the SURS Employer Website. This is created once the Refund Application is received and it is no earlier than 7 days prior to the indicated termination date (Fig. 2). When the Separation Refund Application and any additional forms that may be required are received, SURS will check the documents to verify that all have been properly completed. When the Separation Refund event or the Termination event is processed by the employer, an MSR will compare it with SURS records and the Separation Refund Application to verify that all information agrees. The MSR will follow up with the employee and/or the employer if there are any discrepancies. Once all information has been verified and at least 30 days have past since the last reported payroll, the MSR will calculate the refund claim and give it to a Refund Approver to check for accuracy. Once approved, the claim goes to the Pay Benefits Department to again be reviewed for accuracy. If all is correct, Pay Benefits will draft a refund check on the next scheduled check-writing day. *If the employee is in the Portable Plan, was active with SURS on or after July 6, 2000, and is eligible to retire, the statutes require that a Portable Lump-Sum Retirement Application be completed for a lump-sum retirement. A standard Separation Refund 3

5 Application will be provided for employees in the Portable Plan who are not eligible for retirement. Self-Managed Plan When the employer processes a Termination event, SURS will provide the employee with the documents that are required for a Separation Refund. NOTE: It is important to understand that SURS cannot provide the employee with documents required for a refund under the Self-Managed Plan until the Termination event has been processed by the employer. 4