In a closed loop, you drill the tank BELOW the water level. These are your "overflows", but they are always going to be under water. You drill a few more holes in the back and these are the returns.
Then you put in a pump and run it strictly for circulation. It is used to increase the flow and currents in a reef without having to deal with the look of multiple powerheads.
The sump/refugium is plumbed in separately and runs on a completely different pump. Usually at a much slower flow rate than in the tank.
On my 90g tank, I'll probably use a 300-400GPH pump for the refugium and 2000-3000GPH on the closed loop.