You can establish a reversionary annuity for a spouse, parent, child, brother or sister, which will begin upon your death. A reversionary annuity is a reduction in your employee annuity to provide a life annuity for a spouse, parent, child, brother or sister. Once you start receiving the reduced annuity you cannot withdraw your request.
Establishing a Reversionary Annuity
Before you retire or at retirement, you must notify LABF in writing that you wish to establish a reversionary annuity. This designation must indicate the amount by which you wish to reduce your annuity and the person to whom the reversionary annuity is payable.
Again, the written designation can be revoked at any time prior to your retirement. It is also cancelled by virtue of any of the following events:
Upon your death if the death occurred prior to your retirement annuity; or
Upon the death of the designated person if it occurs prior to your death; or
Upon your death if the death occurs before the expiration of one year (365 days) from the date the written designation was filed with the Retirement Board for a reversionary annuity for a parent, child, brother or sister. There is no such waiting period if the beneficiary is a spouse.
The annuity to the designated person will begin on the first day of the month following your death and will continue to be paid monthly thereafter until the death of the designated person.
The amount by which you can reduce your annuity is subject to the following limitations:
You may reduce your retirement annuity up to a maximum of $400 per month.
The amount of the reversionary annuity may not be less than $50 a month.
The amount of the reversionary annuity to a spouse plus the amount of spouse’s annuity may not exceed 100% of the reduced annuity payable to the employee.
Death of Designated Reversionary Annuitant
If your designated person dies before you, your full retirement annuity will be restored beginning with the payment after the date of the designated person’s death. You must contact LABF upon the death of this person and provide a death certificate in order for your full payment to begin.
Reversionary Annuity Payment Calculation
The amount of the monthly reversionary annuity is determined by multiplying the amount of the monthly reduction in your annuity by a factor shown in Illinois Pension Code Section 5/11-134.2(f).
This factor is based on the age of the employee and the difference between the age of the employee and the age of the reversionary annuitant as of the retirement date of the employee. In determining ages, months are disregarded.