Section 1650.360  Settlement Agreements and Judgments

a)         In the event a member and employer enter into a settlement agreement to resolve employment issues which affect service and earnings credit, the following provisions shall govern the computation of creditable service and the reporting of creditable earnings.

b)         To ensure the reportability of service and earnings credit in settlement agreements covering a retroactive time period, the settlement agreement must contain the following:

1)         the time period for which the member would have received salary or service credit;

2)         a statement the settlement is an award of back salary; and

3)         the amount of salary the member would have been paid during the period covered by the settlement agreement had the employment issue not arisen.

c)         Contributions on retroactive settlement agreements are based upon the salary a member would have otherwise earned but for the employment issue.

d)         All required contributions due on retroactive settlement agreements must be paid within one year after the date of the settlement agreement; otherwise interest shall be charged at the applicable statutory rate from the date of the settlement agreement.

e)         To ensure the reportability of service and earnings credit in settlement agreements covering a prospective time period, the settlement agreement must contain the following:

1)         the time period for which the member is to receive service credit, not to exceed one year.

2)         a statement confirming the member is to be employed as a teacher.

3)         a statement that the member will continue to receive the same salary on regular pay dates and fringe benefits to which he or she would be entitled.

4)         If a resignation date is contained in the settlement agreement, it must not be prior to the end of the time period covered by the settlement agreement.

f)         Service credit is not presumed available nor salary presumed reportable for prospective settlement agreements covering in excess of one year.

g)         To ensure the reportability of service and earnings credit awarded pursuant to a judgment of a court of competent jurisdiction, the judgment order must contain:

1)         the time period for which the court determines the member should have received salary or service credit.

2)         a statement the judgment is an award of salary.

3)         the amount of salary the member would have received during the period covered by the judgment.

h)         Contributions on judgments are based upon the salary a member would have otherwise earned but for the issue being litigated.

(Source:  Amended at 22 Ill. Reg. 7243, effective April 9, 1998)