GARS Tier 2 Death Benefits
Your eligible survivors, beneficiaries, or estate may qualify for death benefits.
The survivor benefit is reduced by any amounts received under the Workers’ Compensation Act or Occupational Diseases Act.
First Survivor Annuity Payment
In the event of your death, your beneficiaries must notify GARS and provide a copy of the death certificate. A survivor benefit packet will be provided to the eligible survivors and benefits will be processed once all the required documentation is received. GARS will process the first annuity payment retroactive to the first of the month following the member’s death. We make every effort to process the first annuity payment as soon as possible.
The first survivor annuity payment is mailed directly to your home from the Comptroller’s Office. GARS will send the survivor’s benefit approval letter containing information about the survivor annuity and a fact sheet explaining the taxation of the annuity.
Future Survivor Annuity Payments
Future annuity payments are issued on the 19th of each month, unless the 19th is on a weekend or holiday. Then they are mailed or deposited on the last working day before the 19th.
Benefit recipients who do not have direct deposit will have their payment mailed directly to their home address. Failure to advise GARS of an address change can result in a payment delay.
If a surviving spouse remarries, that does not cause the benefit to cease. Survivor benefits payable to children are terminated when the child marries, reaches age 18 or age 22 if they remain a full-time student. Disabled adult children who receive a survivor’s annuity continue to receive benefits until marriage, they are no longer disabled, or become gainfully employed. Gainful employment is defined as receiving gross earnings for personal services (fees, wages, salary, commissions, and similar items) which exceed the poverty level income published by the U.S. Department of Health and Human Services. This gainful employment limitation applies during any period survivor benefits are claimed or paid.
Increases for Survivors
The survivor benefit is increased by 3% or the annual unadjusted percentage increase in the Consumer Price Index-U, whichever is less, each January 1 following the first full year of receiving a survivor benefit. The increase is compounded based on the previous year’s survivor benefit. If the deceased member was an annuitant, the increase is effective on January 1 after the benefit began.
A direct deposit form is included in your survivor benefit packet. If you choose direct deposit, your financial institution must complete the lower portion of the form before returning it to GARS. You may also fax the form to GARS at 217-524-9039.
Your first survivor annuity is always mailed to your home address. If you elect direct deposit, all payments after the initial one will be deposited into your bank account.
Taxation of Survivor Annuity Payments
General Assembly Retirement System survivor benefits are exempt from Illinois income tax but are subject to federal tax. When you apply for benefits, a W-4P federal withholding form is part of your survivor benefit packet.
The W-4P form lets you designate the amount of taxes withheld from your annuity or opt out of having taxes withheld. If the W-4P form is not completed, taxes will be withheld using the filing status of married with three exemptions. You can change your withholding at any time by submitting a revised W-4P form to GARS. The form is available on the GARS website and in your online Member Services account.
The Comptroller’s Office issues a 1099-R by January 31 of each year which shows the annuity amount you received for the past year, the taxable portion, and any federal or state income tax withheld.
Lump-Sum Death Benefits After Retirement
When an annuitant dies and no survivor annuity is payable, the nominated beneficiary on file with GARS may receive a lump-sum death benefit, if one is due. The payment would consist of the contributions left in the annuitant’s account, minus the total amount of pension payments received.
The Office of the Comptroller is required to issue a 1099-R to the beneficiary by January 31 of the year following the receipt of this payment. The 1099-R will show the taxable portion of the lump sum, the portion attributable to capital gains and ordinary income, and any tax withheld.