Nick Stabler of the Teachers’ Retirement System explained options that affect the size and structure of retirees’ ongoing monthly benefits and available lump-sum settlements.

Stabler described the Accelerated Annual Increase program (AAI) as an optional, upfront settlement of future cost-of-living increases for Tier 1 members whose first Illinois public service began before Jan. 1, 2011. He said only Tier 1 members retiring by June 30, 2026, are eligible to elect AAI and that the official election is made on a separate AAI election form that must be returned before TRS processes a retiree’s first check.

“If you elect that upfront lump sum, then you'd receive no increase to your monthly benefit until you're 67,” Stabler said, adding that under AAI the post‑67 increases are smaller (1.5% of the original benefit, not compounded).

Stabler contrasted the standard annuity — which pays a retiree their full earned benefit and provides a survivor benefit (50% for Tier 1, two‑thirds for Tier 2) — with the reversionary annuity, which reduces the retiree’s monthly benefit while increasing the survivor payout. He said reversionary annuities are rare and advised members who might consider one to request a reversionary benefit estimate before the PRI.

On taxes and rollovers, TRS noted that lump-sum AAI payments are issued by paper check and that any portion paid directly to a member is subject to a mandatory 20% federal withholding; members can instead request a direct rollover to another qualified plan such as a TRS supplemental savings plan (SSP), a 403(b) or an IRA. Excess-contribution refund applications (for items such as the 2.2 upgrade or the ERO sunset amounts) are also issued by check and are generally taxable unless rolled over.

Stabler warned that AAI elections are irrevocable once made and urged members to request tailored benefit estimates before making an AAI decision.

This section also reiterated TRS contact options for benefit estimates and AAI paperwork.