A Partial Refund Is Only Issued Upon Retirement
When you retire and your pension is about to start, a complete review of your contributions is first made. If it has been determined that you have over-contributed into the Cook County Pension Fund (CCPF), you are entitled to a partial refund for those excess amounts.
A partial refund is typically a refund if you do not have a spouse [or it may be any other overpayment with CCPF]. The percentage breakdown below highlights the portion of the spouse pension (1.5%), which is refundable to you at the time of your retirement if you do not have a spouse.
Percentage Breakdown of Your Contributions
- For your pension 6.5% or 7% for Sheriff Police
- For a surviving spouse pension 1.5% (partial refund at retirement if no spouse)
- For the annual pension increase 0.5%
- Total 8.5% or 9% for Sheriff Police
Applying for a Partial Refund
There is no special application for you to apply for a partial refund because that step is included when you start the Retirement Application process. The only decision to make is whether you wish to have this partial refund rolled over into another fund or not.
To Receive a Partial Refund
When you apply for your retirement, you must submit a copy of any former spouse’s:
- Divorce Decree if divorced
- Death Certificate if deceased
If you were never married, you will indicate on the retirement application “never married.”
Important: If you are claiming to have never been married and you are falsifying this information, a person who makes a false representation to CCPF could be guilty of a Class 3 felony, resulting in a possible forfeiture of your pension.
Understanding Tax Consequences
When taking a refund, most if not all of your contributions were pre-tax (not previously taxed). When the refund is issued to you it then becomes a taxable event, and at year-end you will receive a 1099-R reporting this distribution. If you are below age 55, in addition to having to pay ”normal” federal taxes, you may also be subject to an early withdrawal penalty (additional 10%). When taking this refund it is very important to understand your options.
Federal Tax Withholding
If you choose not to roll over your refund, federal law requires that we must withhold 20% as pre-payment for federal taxes. This applies to any taxable portion of your refund that is made payable directly to you.
The State of Illinois does not tax your refund. If you now reside in another state, contact your state’s revenue department for tax liability.
Consult Your Tax Advisor
Make sure you understand and consider tax consequences when applying for your refund. Consult your tax advisor if you have further questions.
- Once a refund check has been issued, you cannot change or amend your tax election from a direct rollover to non-rollover, or vice versa from a non-rollover to a direct rollover.
- Refund checks cannot be sent electronically to your institution.