100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018
HB2707

 

Introduced , by Rep. Grant Wehrli

 

SYNOPSIS AS INTRODUCED:
 
40 ILCS 5/2-124  from Ch. 108 1/2, par. 2-124
40 ILCS 5/2-134  from Ch. 108 1/2, par. 2-134
40 ILCS 5/14-131
40 ILCS 5/14-135.08  from Ch. 108 1/2, par. 14-135.08
40 ILCS 5/15-155  from Ch. 108 1/2, par. 15-155
40 ILCS 5/15-165  from Ch. 108 1/2, par. 15-165
40 ILCS 5/16-158  from Ch. 108 1/2, par. 16-158
40 ILCS 5/18-131  from Ch. 108 1/2, par. 18-131
40 ILCS 5/18-140  from Ch. 108 1/2, par. 18-140

    Amends the Illinois Pension Code. In the 5 State-funded retirement systems, provides that a change in actuarial assumptions that increases or decreases the required State contribution, including a change in assumed investment returns or mortality rates, that first applies in State fiscal year 2016 or thereafter, shall be implemented in equal annual amounts over a 5-year period beginning in the State fiscal year in which the actuarial change first applies or fiscal year 2018, whichever is later. Requires each board and the State Actuary to recalculate and recertify the amount of the State contribution for State fiscal year 2018, taking into account the changes made by the amendatory Act. Effective immediately.


LRB100 05495 RPS 15506 b

FISCAL NOTE ACT MAY APPLY
PENSION IMPACT NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB2707LRB100 05495 RPS 15506 b

1    AN ACT concerning public employee benefits.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Pension Code is amended by changing
5Sections 2-124, 2-134, 14-131, 14-135.08, 15-155, 15-165,
616-158, 18-131, and 18-140 as follows:
 
7    (40 ILCS 5/2-124)  (from Ch. 108 1/2, par. 2-124)
8    (Text of Section WITHOUT the changes made by P.A. 98-599,
9which has been held unconstitutional)
10    Sec. 2-124. Contributions by State.
11    (a) The State shall make contributions to the System by
12appropriations of amounts which, together with the
13contributions of participants, interest earned on investments,
14and other income will meet the cost of maintaining and
15administering the System on a 90% funded basis in accordance
16with actuarial recommendations.
17    (b) The Board shall determine the amount of State
18contributions required for each fiscal year on the basis of the
19actuarial tables and other assumptions adopted by the Board and
20the prescribed rate of interest, using the formula in
21subsection (c).
22    (c) For State fiscal years 2012 through 2045, the minimum
23contribution to the System to be made by the State for each

 

 

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1fiscal year shall be an amount determined by the System to be
2sufficient to bring the total assets of the System up to 90% of
3the total actuarial liabilities of the System by the end of
4State fiscal year 2045. In making these determinations, the
5required State contribution shall be calculated each year as a
6level percentage of payroll over the years remaining to and
7including fiscal year 2045 and shall be determined under the
8projected unit credit actuarial cost method.
9    For State fiscal years 1996 through 2005, the State
10contribution to the System, as a percentage of the applicable
11employee payroll, shall be increased in equal annual increments
12so that by State fiscal year 2011, the State is contributing at
13the rate required under this Section.
14    Notwithstanding any other provision of this Article, the
15total required State contribution for State fiscal year 2006 is
16$4,157,000.
17    Notwithstanding any other provision of this Article, the
18total required State contribution for State fiscal year 2007 is
19$5,220,300.
20    For each of State fiscal years 2008 through 2009, the State
21contribution to the System, as a percentage of the applicable
22employee payroll, shall be increased in equal annual increments
23from the required State contribution for State fiscal year
242007, so that by State fiscal year 2011, the State is
25contributing at the rate otherwise required under this Section.
26    Notwithstanding any other provision of this Article, the

 

 

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1total required State contribution for State fiscal year 2010 is
2$10,454,000 and shall be made from the proceeds of bonds sold
3in fiscal year 2010 pursuant to Section 7.2 of the General
4Obligation Bond Act, less (i) the pro rata share of bond sale
5expenses determined by the System's share of total bond
6proceeds, (ii) any amounts received from the General Revenue
7Fund in fiscal year 2010, and (iii) any reduction in bond
8proceeds due to the issuance of discounted bonds, if
9applicable.
10    Notwithstanding any other provision of this Article, the
11total required State contribution for State fiscal year 2011 is
12the amount recertified by the System on or before April 1, 2011
13pursuant to Section 2-134 and shall be made from the proceeds
14of bonds sold in fiscal year 2011 pursuant to Section 7.2 of
15the General Obligation Bond Act, less (i) the pro rata share of
16bond sale expenses determined by the System's share of total
17bond proceeds, (ii) any amounts received from the General
18Revenue Fund in fiscal year 2011, and (iii) any reduction in
19bond proceeds due to the issuance of discounted bonds, if
20applicable.
21    Beginning in State fiscal year 2046, the minimum State
22contribution for each fiscal year shall be the amount needed to
23maintain the total assets of the System at 90% of the total
24actuarial liabilities of the System.
25    Amounts received by the System pursuant to Section 25 of
26the Budget Stabilization Act or Section 8.12 of the State

 

 

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1Finance Act in any fiscal year do not reduce and do not
2constitute payment of any portion of the minimum State
3contribution required under this Article in that fiscal year.
4Such amounts shall not reduce, and shall not be included in the
5calculation of, the required State contributions under this
6Article in any future year until the System has reached a
7funding ratio of at least 90%. A reference in this Article to
8the "required State contribution" or any substantially similar
9term does not include or apply to any amounts payable to the
10System under Section 25 of the Budget Stabilization Act.
11    Notwithstanding any other provision of this Section, the
12required State contribution for State fiscal year 2005 and for
13fiscal year 2008 and each fiscal year thereafter, as calculated
14under this Section and certified under Section 2-134, shall not
15exceed an amount equal to (i) the amount of the required State
16contribution that would have been calculated under this Section
17for that fiscal year if the System had not received any
18payments under subsection (d) of Section 7.2 of the General
19Obligation Bond Act, minus (ii) the portion of the State's
20total debt service payments for that fiscal year on the bonds
21issued in fiscal year 2003 for the purposes of that Section
227.2, as determined and certified by the Comptroller, that is
23the same as the System's portion of the total moneys
24distributed under subsection (d) of Section 7.2 of the General
25Obligation Bond Act. In determining this maximum for State
26fiscal years 2008 through 2010, however, the amount referred to

 

 

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1in item (i) shall be increased, as a percentage of the
2applicable employee payroll, in equal increments calculated
3from the sum of the required State contribution for State
4fiscal year 2007 plus the applicable portion of the State's
5total debt service payments for fiscal year 2007 on the bonds
6issued in fiscal year 2003 for the purposes of Section 7.2 of
7the General Obligation Bond Act, so that, by State fiscal year
82011, the State is contributing at the rate otherwise required
9under this Section.
10    (d) For purposes of determining the required State
11contribution to the System, the value of the System's assets
12shall be equal to the actuarial value of the System's assets,
13which shall be calculated as follows:
14    As of June 30, 2008, the actuarial value of the System's
15assets shall be equal to the market value of the assets as of
16that date. In determining the actuarial value of the System's
17assets for fiscal years after June 30, 2008, any actuarial
18gains or losses from investment return incurred in a fiscal
19year shall be recognized in equal annual amounts over the
205-year period following that fiscal year.
21    (d-5) A change in actuarial assumptions that increases or
22decreases the required State contribution, including a change
23in assumed investment returns or mortality rates, that first
24applies in State fiscal year 2016 or thereafter, shall be
25implemented in equal annual amounts over a 5-year period
26beginning in the State fiscal year in which the actuarial

 

 

HB2707- 6 -LRB100 05495 RPS 15506 b

1change first applies or fiscal year 2018, whichever is later.
2    (e) For purposes of determining the required State
3contribution to the system for a particular year, the actuarial
4value of assets shall be assumed to earn a rate of return equal
5to the system's actuarially assumed rate of return.
6(Source: P.A. 96-43, eff. 7-15-09; 96-1497, eff. 1-14-11;
796-1511, eff. 1-27-11; 96-1554, eff. 3-18-11; 97-813, eff.
87-13-12.)
 
9    (40 ILCS 5/2-134)   (from Ch. 108 1/2, par. 2-134)
10    (Text of Section WITHOUT the changes made by P.A. 98-599,
11which has been held unconstitutional)
12    Sec. 2-134. To certify required State contributions and
13submit vouchers.
14    (a) The Board shall certify to the Governor on or before
15December 15 of each year until December 15, 2011 the amount of
16the required State contribution to the System for the next
17fiscal year and shall specifically identify the System's
18projected State normal cost for that fiscal year. The
19certification shall include a copy of the actuarial
20recommendations upon which it is based and shall specifically
21identify the System's projected State normal cost for that
22fiscal year.
23    On or before November 1 of each year, beginning November 1,
242012, the Board shall submit to the State Actuary, the
25Governor, and the General Assembly a proposed certification of

 

 

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1the amount of the required State contribution to the System for
2the next fiscal year, along with all of the actuarial
3assumptions, calculations, and data upon which that proposed
4certification is based. On or before January 1 of each year
5beginning January 1, 2013, the State Actuary shall issue a
6preliminary report concerning the proposed certification and
7identifying, if necessary, recommended changes in actuarial
8assumptions that the Board must consider before finalizing its
9certification of the required State contributions. On or before
10January 15, 2013 and every January 15 thereafter, the Board
11shall certify to the Governor and the General Assembly the
12amount of the required State contribution for the next fiscal
13year. The Board's certification must note any deviations from
14the State Actuary's recommended changes, the reason or reasons
15for not following the State Actuary's recommended changes, and
16the fiscal impact of not following the State Actuary's
17recommended changes on the required State contribution.
18    On or before May 1, 2004, the Board shall recalculate and
19recertify to the Governor the amount of the required State
20contribution to the System for State fiscal year 2005, taking
21into account the amounts appropriated to and received by the
22System under subsection (d) of Section 7.2 of the General
23Obligation Bond Act.
24    On or before July 1, 2005, the Board shall recalculate and
25recertify to the Governor the amount of the required State
26contribution to the System for State fiscal year 2006, taking

 

 

HB2707- 8 -LRB100 05495 RPS 15506 b

1into account the changes in required State contributions made
2by this amendatory Act of the 94th General Assembly.
3    On or before April 1, 2011, the Board shall recalculate and
4recertify to the Governor the amount of the required State
5contribution to the System for State fiscal year 2011, applying
6the changes made by Public Act 96-889 to the System's assets
7and liabilities as of June 30, 2009 as though Public Act 96-889
8was approved on that date.
9    As soon as practical after the effective date of this
10amendatory Act of the 100th General Assembly, the State Actuary
11and the Board shall recalculate and recertify to the Governor
12and the General Assembly the amount of the State contribution
13to the System for State fiscal year 2018, taking into account
14the changes in required State contributions made by this
15amendatory Act of the 100th General Assembly.
16    (b) Beginning in State fiscal year 1996, on or as soon as
17possible after the 15th day of each month the Board shall
18submit vouchers for payment of State contributions to the
19System, in a total monthly amount of one-twelfth of the
20required annual State contribution certified under subsection
21(a). From the effective date of this amendatory Act of the 93rd
22General Assembly through June 30, 2004, the Board shall not
23submit vouchers for the remainder of fiscal year 2004 in excess
24of the fiscal year 2004 certified contribution amount
25determined under this Section after taking into consideration
26the transfer to the System under subsection (d) of Section

 

 

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16z-61 of the State Finance Act. These vouchers shall be paid by
2the State Comptroller and Treasurer by warrants drawn on the
3funds appropriated to the System for that fiscal year. If in
4any month the amount remaining unexpended from all other
5appropriations to the System for the applicable fiscal year
6(including the appropriations to the System under Section 8.12
7of the State Finance Act and Section 1 of the State Pension
8Funds Continuing Appropriation Act) is less than the amount
9lawfully vouchered under this Section, the difference shall be
10paid from the General Revenue Fund under the continuing
11appropriation authority provided in Section 1.1 of the State
12Pension Funds Continuing Appropriation Act.
13    (c) The full amount of any annual appropriation for the
14System for State fiscal year 1995 shall be transferred and made
15available to the System at the beginning of that fiscal year at
16the request of the Board. Any excess funds remaining at the end
17of any fiscal year from appropriations shall be retained by the
18System as a general reserve to meet the System's accrued
19liabilities.
20(Source: P.A. 96-1497, eff. 1-14-11; 96-1511, eff. 1-27-11;
2197-694, eff. 6-18-12.)
 
22    (40 ILCS 5/14-131)
23    Sec. 14-131. Contributions by State.
24    (a) The State shall make contributions to the System by
25appropriations of amounts which, together with other employer

 

 

HB2707- 10 -LRB100 05495 RPS 15506 b

1contributions from trust, federal, and other funds, employee
2contributions, investment income, and other income, will be
3sufficient to meet the cost of maintaining and administering
4the System on a 90% funded basis in accordance with actuarial
5recommendations.
6    For the purposes of this Section and Section 14-135.08,
7references to State contributions refer only to employer
8contributions and do not include employee contributions that
9are picked up or otherwise paid by the State or a department on
10behalf of the employee.
11    (b) The Board shall determine the total amount of State
12contributions required for each fiscal year on the basis of the
13actuarial tables and other assumptions adopted by the Board,
14using the formula in subsection (e).
15    The Board shall also determine a State contribution rate
16for each fiscal year, expressed as a percentage of payroll,
17based on the total required State contribution for that fiscal
18year (less the amount received by the System from
19appropriations under Section 8.12 of the State Finance Act and
20Section 1 of the State Pension Funds Continuing Appropriation
21Act, if any, for the fiscal year ending on the June 30
22immediately preceding the applicable November 15 certification
23deadline), the estimated payroll (including all forms of
24compensation) for personal services rendered by eligible
25employees, and the recommendations of the actuary.
26    For the purposes of this Section and Section 14.1 of the

 

 

HB2707- 11 -LRB100 05495 RPS 15506 b

1State Finance Act, the term "eligible employees" includes
2employees who participate in the System, persons who may elect
3to participate in the System but have not so elected, persons
4who are serving a qualifying period that is required for
5participation, and annuitants employed by a department as
6described in subdivision (a)(1) or (a)(2) of Section 14-111.
7    (c) Contributions shall be made by the several departments
8for each pay period by warrants drawn by the State Comptroller
9against their respective funds or appropriations based upon
10vouchers stating the amount to be so contributed. These amounts
11shall be based on the full rate certified by the Board under
12Section 14-135.08 for that fiscal year. From the effective date
13of this amendatory Act of the 93rd General Assembly through the
14payment of the final payroll from fiscal year 2004
15appropriations, the several departments shall not make
16contributions for the remainder of fiscal year 2004 but shall
17instead make payments as required under subsection (a-1) of
18Section 14.1 of the State Finance Act. The several departments
19shall resume those contributions at the commencement of fiscal
20year 2005.
21    (c-1) Notwithstanding subsection (c) of this Section, for
22fiscal years 2010, 2012, 2013, 2014, 2015, 2016, and 2017 only,
23contributions by the several departments are not required to be
24made for General Revenue Funds payrolls processed by the
25Comptroller. Payrolls paid by the several departments from all
26other State funds must continue to be processed pursuant to

 

 

HB2707- 12 -LRB100 05495 RPS 15506 b

1subsection (c) of this Section.
2    (c-2) For State fiscal years 2010, 2012, 2013, 2014, 2015,
32016, and 2017 only, on or as soon as possible after the 15th
4day of each month, the Board shall submit vouchers for payment
5of State contributions to the System, in a total monthly amount
6of one-twelfth of the fiscal year General Revenue Fund
7contribution as certified by the System pursuant to Section
814-135.08 of the Illinois Pension Code.
9    (d) If an employee is paid from trust funds or federal
10funds, the department or other employer shall pay employer
11contributions from those funds to the System at the certified
12rate, unless the terms of the trust or the federal-State
13agreement preclude the use of the funds for that purpose, in
14which case the required employer contributions shall be paid by
15the State. From the effective date of this amendatory Act of
16the 93rd General Assembly through the payment of the final
17payroll from fiscal year 2004 appropriations, the department or
18other employer shall not pay contributions for the remainder of
19fiscal year 2004 but shall instead make payments as required
20under subsection (a-1) of Section 14.1 of the State Finance
21Act. The department or other employer shall resume payment of
22contributions at the commencement of fiscal year 2005.
23    (e) For State fiscal years 2012 through 2045, the minimum
24contribution to the System to be made by the State for each
25fiscal year shall be an amount determined by the System to be
26sufficient to bring the total assets of the System up to 90% of

 

 

HB2707- 13 -LRB100 05495 RPS 15506 b

1the total actuarial liabilities of the System by the end of
2State fiscal year 2045. In making these determinations, the
3required State contribution shall be calculated each year as a
4level percentage of payroll over the years remaining to and
5including fiscal year 2045 and shall be determined under the
6projected unit credit actuarial cost method.
7    For State fiscal years 1996 through 2005, the State
8contribution to the System, as a percentage of the applicable
9employee payroll, shall be increased in equal annual increments
10so that by State fiscal year 2011, the State is contributing at
11the rate required under this Section; except that (i) for State
12fiscal year 1998, for all purposes of this Code and any other
13law of this State, the certified percentage of the applicable
14employee payroll shall be 5.052% for employees earning eligible
15creditable service under Section 14-110 and 6.500% for all
16other employees, notwithstanding any contrary certification
17made under Section 14-135.08 before the effective date of this
18amendatory Act of 1997, and (ii) in the following specified
19State fiscal years, the State contribution to the System shall
20not be less than the following indicated percentages of the
21applicable employee payroll, even if the indicated percentage
22will produce a State contribution in excess of the amount
23otherwise required under this subsection and subsection (a):
249.8% in FY 1999; 10.0% in FY 2000; 10.2% in FY 2001; 10.4% in FY
252002; 10.6% in FY 2003; and 10.8% in FY 2004.
26    Notwithstanding any other provision of this Article, the

 

 

HB2707- 14 -LRB100 05495 RPS 15506 b

1total required State contribution to the System for State
2fiscal year 2006 is $203,783,900.
3    Notwithstanding any other provision of this Article, the
4total required State contribution to the System for State
5fiscal year 2007 is $344,164,400.
6    For each of State fiscal years 2008 through 2009, the State
7contribution to the System, as a percentage of the applicable
8employee payroll, shall be increased in equal annual increments
9from the required State contribution for State fiscal year
102007, so that by State fiscal year 2011, the State is
11contributing at the rate otherwise required under this Section.
12    Notwithstanding any other provision of this Article, the
13total required State General Revenue Fund contribution for
14State fiscal year 2010 is $723,703,100 and shall be made from
15the proceeds of bonds sold in fiscal year 2010 pursuant to
16Section 7.2 of the General Obligation Bond Act, less (i) the
17pro rata share of bond sale expenses determined by the System's
18share of total bond proceeds, (ii) any amounts received from
19the General Revenue Fund in fiscal year 2010, and (iii) any
20reduction in bond proceeds due to the issuance of discounted
21bonds, if applicable.
22    Notwithstanding any other provision of this Article, the
23total required State General Revenue Fund contribution for
24State fiscal year 2011 is the amount recertified by the System
25on or before April 1, 2011 pursuant to Section 14-135.08 and
26shall be made from the proceeds of bonds sold in fiscal year

 

 

HB2707- 15 -LRB100 05495 RPS 15506 b

12011 pursuant to Section 7.2 of the General Obligation Bond
2Act, less (i) the pro rata share of bond sale expenses
3determined by the System's share of total bond proceeds, (ii)
4any amounts received from the General Revenue Fund in fiscal
5year 2011, and (iii) any reduction in bond proceeds due to the
6issuance of discounted bonds, if applicable.
7    Beginning in State fiscal year 2046, the minimum State
8contribution for each fiscal year shall be the amount needed to
9maintain the total assets of the System at 90% of the total
10actuarial liabilities of the System.
11    Amounts received by the System pursuant to Section 25 of
12the Budget Stabilization Act or Section 8.12 of the State
13Finance Act in any fiscal year do not reduce and do not
14constitute payment of any portion of the minimum State
15contribution required under this Article in that fiscal year.
16Such amounts shall not reduce, and shall not be included in the
17calculation of, the required State contributions under this
18Article in any future year until the System has reached a
19funding ratio of at least 90%. A reference in this Article to
20the "required State contribution" or any substantially similar
21term does not include or apply to any amounts payable to the
22System under Section 25 of the Budget Stabilization Act.
23    Notwithstanding any other provision of this Section, the
24required State contribution for State fiscal year 2005 and for
25fiscal year 2008 and each fiscal year thereafter, as calculated
26under this Section and certified under Section 14-135.08, shall

 

 

HB2707- 16 -LRB100 05495 RPS 15506 b

1not exceed an amount equal to (i) the amount of the required
2State contribution that would have been calculated under this
3Section for that fiscal year if the System had not received any
4payments under subsection (d) of Section 7.2 of the General
5Obligation Bond Act, minus (ii) the portion of the State's
6total debt service payments for that fiscal year on the bonds
7issued in fiscal year 2003 for the purposes of that Section
87.2, as determined and certified by the Comptroller, that is
9the same as the System's portion of the total moneys
10distributed under subsection (d) of Section 7.2 of the General
11Obligation Bond Act. In determining this maximum for State
12fiscal years 2008 through 2010, however, the amount referred to
13in item (i) shall be increased, as a percentage of the
14applicable employee payroll, in equal increments calculated
15from the sum of the required State contribution for State
16fiscal year 2007 plus the applicable portion of the State's
17total debt service payments for fiscal year 2007 on the bonds
18issued in fiscal year 2003 for the purposes of Section 7.2 of
19the General Obligation Bond Act, so that, by State fiscal year
202011, the State is contributing at the rate otherwise required
21under this Section.
22    (f) After the submission of all payments for eligible
23employees from personal services line items in fiscal year 2004
24have been made, the Comptroller shall provide to the System a
25certification of the sum of all fiscal year 2004 expenditures
26for personal services that would have been covered by payments

 

 

HB2707- 17 -LRB100 05495 RPS 15506 b

1to the System under this Section if the provisions of this
2amendatory Act of the 93rd General Assembly had not been
3enacted. Upon receipt of the certification, the System shall
4determine the amount due to the System based on the full rate
5certified by the Board under Section 14-135.08 for fiscal year
62004 in order to meet the State's obligation under this
7Section. The System shall compare this amount due to the amount
8received by the System in fiscal year 2004 through payments
9under this Section and under Section 6z-61 of the State Finance
10Act. If the amount due is more than the amount received, the
11difference shall be termed the "Fiscal Year 2004 Shortfall" for
12purposes of this Section, and the Fiscal Year 2004 Shortfall
13shall be satisfied under Section 1.2 of the State Pension Funds
14Continuing Appropriation Act. If the amount due is less than
15the amount received, the difference shall be termed the "Fiscal
16Year 2004 Overpayment" for purposes of this Section, and the
17Fiscal Year 2004 Overpayment shall be repaid by the System to
18the Pension Contribution Fund as soon as practicable after the
19certification.
20    (g) For purposes of determining the required State
21contribution to the System, the value of the System's assets
22shall be equal to the actuarial value of the System's assets,
23which shall be calculated as follows:
24    As of June 30, 2008, the actuarial value of the System's
25assets shall be equal to the market value of the assets as of
26that date. In determining the actuarial value of the System's

 

 

HB2707- 18 -LRB100 05495 RPS 15506 b

1assets for fiscal years after June 30, 2008, any actuarial
2gains or losses from investment return incurred in a fiscal
3year shall be recognized in equal annual amounts over the
45-year period following that fiscal year.
5    (g-5) A change in actuarial assumptions that increases or
6decreases the required State contribution, including a change
7in assumed investment returns or mortality rates, that first
8applies in State fiscal year 2016 or thereafter, shall be
9implemented in equal annual amounts over a 5-year period
10beginning in the State fiscal year in which the actuarial
11change first applies or fiscal year 2018, whichever is later.
12    (h) For purposes of determining the required State
13contribution to the System for a particular year, the actuarial
14value of assets shall be assumed to earn a rate of return equal
15to the System's actuarially assumed rate of return.
16    (i) After the submission of all payments for eligible
17employees from personal services line items paid from the
18General Revenue Fund in fiscal year 2010 have been made, the
19Comptroller shall provide to the System a certification of the
20sum of all fiscal year 2010 expenditures for personal services
21that would have been covered by payments to the System under
22this Section if the provisions of this amendatory Act of the
2396th General Assembly had not been enacted. Upon receipt of the
24certification, the System shall determine the amount due to the
25System based on the full rate certified by the Board under
26Section 14-135.08 for fiscal year 2010 in order to meet the

 

 

HB2707- 19 -LRB100 05495 RPS 15506 b

1State's obligation under this Section. The System shall compare
2this amount due to the amount received by the System in fiscal
3year 2010 through payments under this Section. If the amount
4due is more than the amount received, the difference shall be
5termed the "Fiscal Year 2010 Shortfall" for purposes of this
6Section, and the Fiscal Year 2010 Shortfall shall be satisfied
7under Section 1.2 of the State Pension Funds Continuing
8Appropriation Act. If the amount due is less than the amount
9received, the difference shall be termed the "Fiscal Year 2010
10Overpayment" for purposes of this Section, and the Fiscal Year
112010 Overpayment shall be repaid by the System to the General
12Revenue Fund as soon as practicable after the certification.
13    (j) After the submission of all payments for eligible
14employees from personal services line items paid from the
15General Revenue Fund in fiscal year 2011 have been made, the
16Comptroller shall provide to the System a certification of the
17sum of all fiscal year 2011 expenditures for personal services
18that would have been covered by payments to the System under
19this Section if the provisions of this amendatory Act of the
2096th General Assembly had not been enacted. Upon receipt of the
21certification, the System shall determine the amount due to the
22System based on the full rate certified by the Board under
23Section 14-135.08 for fiscal year 2011 in order to meet the
24State's obligation under this Section. The System shall compare
25this amount due to the amount received by the System in fiscal
26year 2011 through payments under this Section. If the amount

 

 

HB2707- 20 -LRB100 05495 RPS 15506 b

1due is more than the amount received, the difference shall be
2termed the "Fiscal Year 2011 Shortfall" for purposes of this
3Section, and the Fiscal Year 2011 Shortfall shall be satisfied
4under Section 1.2 of the State Pension Funds Continuing
5Appropriation Act. If the amount due is less than the amount
6received, the difference shall be termed the "Fiscal Year 2011
7Overpayment" for purposes of this Section, and the Fiscal Year
82011 Overpayment shall be repaid by the System to the General
9Revenue Fund as soon as practicable after the certification.
10    (k) For fiscal years 2012 through 2017 only, after the
11submission of all payments for eligible employees from personal
12services line items paid from the General Revenue Fund in the
13fiscal year have been made, the Comptroller shall provide to
14the System a certification of the sum of all expenditures in
15the fiscal year for personal services. Upon receipt of the
16certification, the System shall determine the amount due to the
17System based on the full rate certified by the Board under
18Section 14-135.08 for the fiscal year in order to meet the
19State's obligation under this Section. The System shall compare
20this amount due to the amount received by the System for the
21fiscal year. If the amount due is more than the amount
22received, the difference shall be termed the "Prior Fiscal Year
23Shortfall" for purposes of this Section, and the Prior Fiscal
24Year Shortfall shall be satisfied under Section 1.2 of the
25State Pension Funds Continuing Appropriation Act. If the amount
26due is less than the amount received, the difference shall be

 

 

HB2707- 21 -LRB100 05495 RPS 15506 b

1termed the "Prior Fiscal Year Overpayment" for purposes of this
2Section, and the Prior Fiscal Year Overpayment shall be repaid
3by the System to the General Revenue Fund as soon as
4practicable after the certification.
5(Source: P.A. 98-24, eff. 6-19-13; 98-674, eff. 6-30-14; 99-8,
6eff. 7-9-15; 99-523, eff. 6-30-16.)
 
7    (40 ILCS 5/14-135.08)  (from Ch. 108 1/2, par. 14-135.08)
8    (Text of Section WITHOUT the changes made by P.A. 98-599,
9which has been held unconstitutional)
10    Sec. 14-135.08. To certify required State contributions.
11    (a) To certify to the Governor and to each department, on
12or before November 15 of each year until November 15, 2011, the
13required rate for State contributions to the System for the
14next State fiscal year, as determined under subsection (b) of
15Section 14-131. The certification to the Governor under this
16subsection (a) shall include a copy of the actuarial
17recommendations upon which the rate is based and shall
18specifically identify the System's projected State normal cost
19for that fiscal year.
20    (a-5) On or before November 1 of each year, beginning
21November 1, 2012, the Board shall submit to the State Actuary,
22the Governor, and the General Assembly a proposed certification
23of the amount of the required State contribution to the System
24for the next fiscal year, along with all of the actuarial
25assumptions, calculations, and data upon which that proposed

 

 

HB2707- 22 -LRB100 05495 RPS 15506 b

1certification is based. On or before January 1 of each year
2beginning January 1, 2013, the State Actuary shall issue a
3preliminary report concerning the proposed certification and
4identifying, if necessary, recommended changes in actuarial
5assumptions that the Board must consider before finalizing its
6certification of the required State contributions. On or before
7January 15, 2013 and each January 15 thereafter, the Board
8shall certify to the Governor and the General Assembly the
9amount of the required State contribution for the next fiscal
10year. The Board's certification must note any deviations from
11the State Actuary's recommended changes, the reason or reasons
12for not following the State Actuary's recommended changes, and
13the fiscal impact of not following the State Actuary's
14recommended changes on the required State contribution.
15    (b) The certifications under subsections (a) and (a-5)
16shall include an additional amount necessary to pay all
17principal of and interest on those general obligation bonds due
18the next fiscal year authorized by Section 7.2(a) of the
19General Obligation Bond Act and issued to provide the proceeds
20deposited by the State with the System in July 2003,
21representing deposits other than amounts reserved under
22Section 7.2(c) of the General Obligation Bond Act. For State
23fiscal year 2005, the Board shall make a supplemental
24certification of the additional amount necessary to pay all
25principal of and interest on those general obligation bonds due
26in State fiscal years 2004 and 2005 authorized by Section

 

 

HB2707- 23 -LRB100 05495 RPS 15506 b

17.2(a) of the General Obligation Bond Act and issued to provide
2the proceeds deposited by the State with the System in July
32003, representing deposits other than amounts reserved under
4Section 7.2(c) of the General Obligation Bond Act, as soon as
5practical after the effective date of this amendatory Act of
6the 93rd General Assembly.
7    On or before May 1, 2004, the Board shall recalculate and
8recertify to the Governor and to each department the amount of
9the required State contribution to the System and the required
10rates for State contributions to the System for State fiscal
11year 2005, taking into account the amounts appropriated to and
12received by the System under subsection (d) of Section 7.2 of
13the General Obligation Bond Act.
14    On or before July 1, 2005, the Board shall recalculate and
15recertify to the Governor and to each department the amount of
16the required State contribution to the System and the required
17rates for State contributions to the System for State fiscal
18year 2006, taking into account the changes in required State
19contributions made by this amendatory Act of the 94th General
20Assembly.
21    As soon as practical after the effective date of this
22amendatory Act of the 100th General Assembly, the State Actuary
23and the Board shall recalculate and recertify to the Governor
24and the General Assembly the amount of the State contribution
25to the System for State fiscal year 2018, taking into account
26the changes in required State contributions made by this

 

 

HB2707- 24 -LRB100 05495 RPS 15506 b

1amendatory Act of the 100th General Assembly.
2    On or before April 1, 2011, the Board shall recalculate and
3recertify to the Governor and to each department the amount of
4the required State contribution to the System for State fiscal
5year 2011, applying the changes made by Public Act 96-889 to
6the System's assets and liabilities as of June 30, 2009 as
7though Public Act 96-889 was approved on that date.
8(Source: P.A. 96-1497, eff. 1-14-11; 96-1511, eff. 1-27-11;
997-694, eff. 6-18-12.)
 
10    (40 ILCS 5/15-155)  (from Ch. 108 1/2, par. 15-155)
11    Sec. 15-155. Employer contributions.
12    (a) The State of Illinois shall make contributions by
13appropriations of amounts which, together with the other
14employer contributions from trust, federal, and other funds,
15employee contributions, income from investments, and other
16income of this System, will be sufficient to meet the cost of
17maintaining and administering the System on a 90% funded basis
18in accordance with actuarial recommendations.
19    The Board shall determine the amount of State contributions
20required for each fiscal year on the basis of the actuarial
21tables and other assumptions adopted by the Board and the
22recommendations of the actuary, using the formula in subsection
23(a-1).
24    (a-1) For State fiscal years 2012 through 2045, the minimum
25contribution to the System to be made by the State for each

 

 

HB2707- 25 -LRB100 05495 RPS 15506 b

1fiscal year shall be an amount determined by the System to be
2sufficient to bring the total assets of the System up to 90% of
3the total actuarial liabilities of the System by the end of
4State fiscal year 2045. In making these determinations, the
5required State contribution shall be calculated each year as a
6level percentage of payroll over the years remaining to and
7including fiscal year 2045 and shall be determined under the
8projected unit credit actuarial cost method.
9    For State fiscal years 1996 through 2005, the State
10contribution to the System, as a percentage of the applicable
11employee payroll, shall be increased in equal annual increments
12so that by State fiscal year 2011, the State is contributing at
13the rate required under this Section.
14    Notwithstanding any other provision of this Article, the
15total required State contribution for State fiscal year 2006 is
16$166,641,900.
17    Notwithstanding any other provision of this Article, the
18total required State contribution for State fiscal year 2007 is
19$252,064,100.
20    For each of State fiscal years 2008 through 2009, the State
21contribution to the System, as a percentage of the applicable
22employee payroll, shall be increased in equal annual increments
23from the required State contribution for State fiscal year
242007, so that by State fiscal year 2011, the State is
25contributing at the rate otherwise required under this Section.
26    Notwithstanding any other provision of this Article, the

 

 

HB2707- 26 -LRB100 05495 RPS 15506 b

1total required State contribution for State fiscal year 2010 is
2$702,514,000 and shall be made from the State Pensions Fund and
3proceeds of bonds sold in fiscal year 2010 pursuant to Section
47.2 of the General Obligation Bond Act, less (i) the pro rata
5share of bond sale expenses determined by the System's share of
6total bond proceeds, (ii) any amounts received from the General
7Revenue Fund in fiscal year 2010, (iii) any reduction in bond
8proceeds due to the issuance of discounted bonds, if
9applicable.
10    Notwithstanding any other provision of this Article, the
11total required State contribution for State fiscal year 2011 is
12the amount recertified by the System on or before April 1, 2011
13pursuant to Section 15-165 and shall be made from the State
14Pensions Fund and proceeds of bonds sold in fiscal year 2011
15pursuant to Section 7.2 of the General Obligation Bond Act,
16less (i) the pro rata share of bond sale expenses determined by
17the System's share of total bond proceeds, (ii) any amounts
18received from the General Revenue Fund in fiscal year 2011, and
19(iii) any reduction in bond proceeds due to the issuance of
20discounted bonds, if applicable.
21    Beginning in State fiscal year 2046, the minimum State
22contribution for each fiscal year shall be the amount needed to
23maintain the total assets of the System at 90% of the total
24actuarial liabilities of the System.
25    Amounts received by the System pursuant to Section 25 of
26the Budget Stabilization Act or Section 8.12 of the State

 

 

HB2707- 27 -LRB100 05495 RPS 15506 b

1Finance Act in any fiscal year do not reduce and do not
2constitute payment of any portion of the minimum State
3contribution required under this Article in that fiscal year.
4Such amounts shall not reduce, and shall not be included in the
5calculation of, the required State contributions under this
6Article in any future year until the System has reached a
7funding ratio of at least 90%. A reference in this Article to
8the "required State contribution" or any substantially similar
9term does not include or apply to any amounts payable to the
10System under Section 25 of the Budget Stabilization Act.
11    Notwithstanding any other provision of this Section, the
12required State contribution for State fiscal year 2005 and for
13fiscal year 2008 and each fiscal year thereafter, as calculated
14under this Section and certified under Section 15-165, shall
15not exceed an amount equal to (i) the amount of the required
16State contribution that would have been calculated under this
17Section for that fiscal year if the System had not received any
18payments under subsection (d) of Section 7.2 of the General
19Obligation Bond Act, minus (ii) the portion of the State's
20total debt service payments for that fiscal year on the bonds
21issued in fiscal year 2003 for the purposes of that Section
227.2, as determined and certified by the Comptroller, that is
23the same as the System's portion of the total moneys
24distributed under subsection (d) of Section 7.2 of the General
25Obligation Bond Act. In determining this maximum for State
26fiscal years 2008 through 2010, however, the amount referred to

 

 

HB2707- 28 -LRB100 05495 RPS 15506 b

1in item (i) shall be increased, as a percentage of the
2applicable employee payroll, in equal increments calculated
3from the sum of the required State contribution for State
4fiscal year 2007 plus the applicable portion of the State's
5total debt service payments for fiscal year 2007 on the bonds
6issued in fiscal year 2003 for the purposes of Section 7.2 of
7the General Obligation Bond Act, so that, by State fiscal year
82011, the State is contributing at the rate otherwise required
9under this Section.
10    (b) If an employee is paid from trust or federal funds, the
11employer shall pay to the Board contributions from those funds
12which are sufficient to cover the accruing normal costs on
13behalf of the employee. However, universities having employees
14who are compensated out of local auxiliary funds, income funds,
15or service enterprise funds are not required to pay such
16contributions on behalf of those employees. The local auxiliary
17funds, income funds, and service enterprise funds of
18universities shall not be considered trust funds for the
19purpose of this Article, but funds of alumni associations,
20foundations, and athletic associations which are affiliated
21with the universities included as employers under this Article
22and other employers which do not receive State appropriations
23are considered to be trust funds for the purpose of this
24Article.
25    (b-1) The City of Urbana and the City of Champaign shall
26each make employer contributions to this System for their

 

 

HB2707- 29 -LRB100 05495 RPS 15506 b

1respective firefighter employees who participate in this
2System pursuant to subsection (h) of Section 15-107. The rate
3of contributions to be made by those municipalities shall be
4determined annually by the Board on the basis of the actuarial
5assumptions adopted by the Board and the recommendations of the
6actuary, and shall be expressed as a percentage of salary for
7each such employee. The Board shall certify the rate to the
8affected municipalities as soon as may be practical. The
9employer contributions required under this subsection shall be
10remitted by the municipality to the System at the same time and
11in the same manner as employee contributions.
12    (c) Through State fiscal year 1995: The total employer
13contribution shall be apportioned among the various funds of
14the State and other employers, whether trust, federal, or other
15funds, in accordance with actuarial procedures approved by the
16Board. State of Illinois contributions for employers receiving
17State appropriations for personal services shall be payable
18from appropriations made to the employers or to the System. The
19contributions for Class I community colleges covering earnings
20other than those paid from trust and federal funds, shall be
21payable solely from appropriations to the Illinois Community
22College Board or the System for employer contributions.
23    (d) Beginning in State fiscal year 1996, the required State
24contributions to the System shall be appropriated directly to
25the System and shall be payable through vouchers issued in
26accordance with subsection (c) of Section 15-165, except as

 

 

HB2707- 30 -LRB100 05495 RPS 15506 b

1provided in subsection (g).
2    (e) The State Comptroller shall draw warrants payable to
3the System upon proper certification by the System or by the
4employer in accordance with the appropriation laws and this
5Code.
6    (f) Normal costs under this Section means liability for
7pensions and other benefits which accrues to the System because
8of the credits earned for service rendered by the participants
9during the fiscal year and expenses of administering the
10System, but shall not include the principal of or any
11redemption premium or interest on any bonds issued by the Board
12or any expenses incurred or deposits required in connection
13therewith.
14    (g) If the amount of a participant's earnings for any
15academic year used to determine the final rate of earnings,
16determined on a full-time equivalent basis, exceeds the amount
17of his or her earnings with the same employer for the previous
18academic year, determined on a full-time equivalent basis, by
19more than 6%, the participant's employer shall pay to the
20System, in addition to all other payments required under this
21Section and in accordance with guidelines established by the
22System, the present value of the increase in benefits resulting
23from the portion of the increase in earnings that is in excess
24of 6%. This present value shall be computed by the System on
25the basis of the actuarial assumptions and tables used in the
26most recent actuarial valuation of the System that is available

 

 

HB2707- 31 -LRB100 05495 RPS 15506 b

1at the time of the computation. The System may require the
2employer to provide any pertinent information or
3documentation.
4    Whenever it determines that a payment is or may be required
5under this subsection (g), the System shall calculate the
6amount of the payment and bill the employer for that amount.
7The bill shall specify the calculations used to determine the
8amount due. If the employer disputes the amount of the bill, it
9may, within 30 days after receipt of the bill, apply to the
10System in writing for a recalculation. The application must
11specify in detail the grounds of the dispute and, if the
12employer asserts that the calculation is subject to subsection
13(h) or (i) of this Section, must include an affidavit setting
14forth and attesting to all facts within the employer's
15knowledge that are pertinent to the applicability of subsection
16(h) or (i). Upon receiving a timely application for
17recalculation, the System shall review the application and, if
18appropriate, recalculate the amount due.
19    The employer contributions required under this subsection
20(g) may be paid in the form of a lump sum within 90 days after
21receipt of the bill. If the employer contributions are not paid
22within 90 days after receipt of the bill, then interest will be
23charged at a rate equal to the System's annual actuarially
24assumed rate of return on investment compounded annually from
25the 91st day after receipt of the bill. Payments must be
26concluded within 3 years after the employer's receipt of the

 

 

HB2707- 32 -LRB100 05495 RPS 15506 b

1bill.
2    When assessing payment for any amount due under this
3subsection (g), the System shall include earnings, to the
4extent not established by a participant under Section 15-113.11
5or 15-113.12, that would have been paid to the participant had
6the participant not taken (i) periods of voluntary or
7involuntary furlough occurring on or after July 1, 2015 and on
8or before June 30, 2017 or (ii) periods of voluntary pay
9reduction in lieu of furlough occurring on or after July 1,
102015 and on or before June 30, 2017. Determining earnings that
11would have been paid to a participant had the participant not
12taken periods of voluntary or involuntary furlough or periods
13of voluntary pay reduction shall be the responsibility of the
14employer, and shall be reported in a manner prescribed by the
15System.
16    (h) This subsection (h) applies only to payments made or
17salary increases given on or after June 1, 2005 but before July
181, 2011. The changes made by Public Act 94-1057 shall not
19require the System to refund any payments received before July
2031, 2006 (the effective date of Public Act 94-1057).
21    When assessing payment for any amount due under subsection
22(g), the System shall exclude earnings increases paid to
23participants under contracts or collective bargaining
24agreements entered into, amended, or renewed before June 1,
252005.
26    When assessing payment for any amount due under subsection

 

 

HB2707- 33 -LRB100 05495 RPS 15506 b

1(g), the System shall exclude earnings increases paid to a
2participant at a time when the participant is 10 or more years
3from retirement eligibility under Section 15-135.
4    When assessing payment for any amount due under subsection
5(g), the System shall exclude earnings increases resulting from
6overload work, including a contract for summer teaching, or
7overtime when the employer has certified to the System, and the
8System has approved the certification, that: (i) in the case of
9overloads (A) the overload work is for the sole purpose of
10academic instruction in excess of the standard number of
11instruction hours for a full-time employee occurring during the
12academic year that the overload is paid and (B) the earnings
13increases are equal to or less than the rate of pay for
14academic instruction computed using the participant's current
15salary rate and work schedule; and (ii) in the case of
16overtime, the overtime was necessary for the educational
17mission.
18    When assessing payment for any amount due under subsection
19(g), the System shall exclude any earnings increase resulting
20from (i) a promotion for which the employee moves from one
21classification to a higher classification under the State
22Universities Civil Service System, (ii) a promotion in academic
23rank for a tenured or tenure-track faculty position, or (iii) a
24promotion that the Illinois Community College Board has
25recommended in accordance with subsection (k) of this Section.
26These earnings increases shall be excluded only if the

 

 

HB2707- 34 -LRB100 05495 RPS 15506 b

1promotion is to a position that has existed and been filled by
2a member for no less than one complete academic year and the
3earnings increase as a result of the promotion is an increase
4that results in an amount no greater than the average salary
5paid for other similar positions.
6    (i) When assessing payment for any amount due under
7subsection (g), the System shall exclude any salary increase
8described in subsection (h) of this Section given on or after
9July 1, 2011 but before July 1, 2014 under a contract or
10collective bargaining agreement entered into, amended, or
11renewed on or after June 1, 2005 but before July 1, 2011.
12Notwithstanding any other provision of this Section, any
13payments made or salary increases given after June 30, 2014
14shall be used in assessing payment for any amount due under
15subsection (g) of this Section.
16    (j) The System shall prepare a report and file copies of
17the report with the Governor and the General Assembly by
18January 1, 2007 that contains all of the following information:
19        (1) The number of recalculations required by the
20    changes made to this Section by Public Act 94-1057 for each
21    employer.
22        (2) The dollar amount by which each employer's
23    contribution to the System was changed due to
24    recalculations required by Public Act 94-1057.
25        (3) The total amount the System received from each
26    employer as a result of the changes made to this Section by

 

 

HB2707- 35 -LRB100 05495 RPS 15506 b

1    Public Act 94-4.
2        (4) The increase in the required State contribution
3    resulting from the changes made to this Section by Public
4    Act 94-1057.
5    (k) The Illinois Community College Board shall adopt rules
6for recommending lists of promotional positions submitted to
7the Board by community colleges and for reviewing the
8promotional lists on an annual basis. When recommending
9promotional lists, the Board shall consider the similarity of
10the positions submitted to those positions recognized for State
11universities by the State Universities Civil Service System.
12The Illinois Community College Board shall file a copy of its
13findings with the System. The System shall consider the
14findings of the Illinois Community College Board when making
15determinations under this Section. The System shall not exclude
16any earnings increases resulting from a promotion when the
17promotion was not submitted by a community college. Nothing in
18this subsection (k) shall require any community college to
19submit any information to the Community College Board.
20    (l) For purposes of determining the required State
21contribution to the System, the value of the System's assets
22shall be equal to the actuarial value of the System's assets,
23which shall be calculated as follows:
24    As of June 30, 2008, the actuarial value of the System's
25assets shall be equal to the market value of the assets as of
26that date. In determining the actuarial value of the System's

 

 

HB2707- 36 -LRB100 05495 RPS 15506 b

1assets for fiscal years after June 30, 2008, any actuarial
2gains or losses from investment return incurred in a fiscal
3year shall be recognized in equal annual amounts over the
45-year period following that fiscal year.
5    (l-5) A change in actuarial assumptions that increases or
6decreases the required State contribution, including a change
7in assumed investment returns or mortality rates, that first
8applies in State fiscal year 2016 or thereafter, shall be
9implemented in equal annual amounts over a 5-year period
10beginning in the State fiscal year in which the actuarial
11change first applies or fiscal year 2018, whichever is later.
12    (m) For purposes of determining the required State
13contribution to the system for a particular year, the actuarial
14value of assets shall be assumed to earn a rate of return equal
15to the system's actuarially assumed rate of return.
16(Source: P.A. 98-92, eff. 7-16-13; 98-463, eff. 8-16-13;
1799-897, eff. 1-1-17.)
 
18    (40 ILCS 5/15-165)   (from Ch. 108 1/2, par. 15-165)
19    (Text of Section WITHOUT the changes made by P.A. 98-599,
20which has been held unconstitutional)
21    Sec. 15-165. To certify amounts and submit vouchers.
22    (a) The Board shall certify to the Governor on or before
23November 15 of each year until November 15, 2011 the
24appropriation required from State funds for the purposes of
25this System for the following fiscal year. The certification

 

 

HB2707- 37 -LRB100 05495 RPS 15506 b

1under this subsection (a) shall include a copy of the actuarial
2recommendations upon which it is based and shall specifically
3identify the System's projected State normal cost for that
4fiscal year and the projected State cost for the self-managed
5plan for that fiscal year.
6    On or before May 1, 2004, the Board shall recalculate and
7recertify to the Governor the amount of the required State
8contribution to the System for State fiscal year 2005, taking
9into account the amounts appropriated to and received by the
10System under subsection (d) of Section 7.2 of the General
11Obligation Bond Act.
12    On or before July 1, 2005, the Board shall recalculate and
13recertify to the Governor the amount of the required State
14contribution to the System for State fiscal year 2006, taking
15into account the changes in required State contributions made
16by this amendatory Act of the 94th General Assembly.
17    On or before April 1, 2011, the Board shall recalculate and
18recertify to the Governor the amount of the required State
19contribution to the System for State fiscal year 2011, applying
20the changes made by Public Act 96-889 to the System's assets
21and liabilities as of June 30, 2009 as though Public Act 96-889
22was approved on that date.
23    (a-5) On or before November 1 of each year, beginning
24November 1, 2012, the Board shall submit to the State Actuary,
25the Governor, and the General Assembly a proposed certification
26of the amount of the required State contribution to the System

 

 

HB2707- 38 -LRB100 05495 RPS 15506 b

1for the next fiscal year, along with all of the actuarial
2assumptions, calculations, and data upon which that proposed
3certification is based. On or before January 1 of each year,
4beginning January 1, 2013, the State Actuary shall issue a
5preliminary report concerning the proposed certification and
6identifying, if necessary, recommended changes in actuarial
7assumptions that the Board must consider before finalizing its
8certification of the required State contributions. On or before
9January 15, 2013 and each January 15 thereafter, the Board
10shall certify to the Governor and the General Assembly the
11amount of the required State contribution for the next fiscal
12year. The Board's certification must note, in a written
13response to the State Actuary, any deviations from the State
14Actuary's recommended changes, the reason or reasons for not
15following the State Actuary's recommended changes, and the
16fiscal impact of not following the State Actuary's recommended
17changes on the required State contribution.
18    (a-10) As soon as practical after the effective date of
19this amendatory Act of the 100th General Assembly, the State
20Actuary and the Board shall recalculate and recertify to the
21Governor and the General Assembly the amount of the State
22contribution to the System for State fiscal year 2018, taking
23into account the changes in required State contributions made
24by this amendatory Act of the 100th General Assembly.
25    (b) The Board shall certify to the State Comptroller or
26employer, as the case may be, from time to time, by its

 

 

HB2707- 39 -LRB100 05495 RPS 15506 b

1chairperson and secretary, with its seal attached, the amounts
2payable to the System from the various funds.
3    (c) Beginning in State fiscal year 1996, on or as soon as
4possible after the 15th day of each month the Board shall
5submit vouchers for payment of State contributions to the
6System, in a total monthly amount of one-twelfth of the
7required annual State contribution certified under subsection
8(a). From the effective date of this amendatory Act of the 93rd
9General Assembly through June 30, 2004, the Board shall not
10submit vouchers for the remainder of fiscal year 2004 in excess
11of the fiscal year 2004 certified contribution amount
12determined under this Section after taking into consideration
13the transfer to the System under subsection (b) of Section
146z-61 of the State Finance Act. These vouchers shall be paid by
15the State Comptroller and Treasurer by warrants drawn on the
16funds appropriated to the System for that fiscal year.
17    If in any month the amount remaining unexpended from all
18other appropriations to the System for the applicable fiscal
19year (including the appropriations to the System under Section
208.12 of the State Finance Act and Section 1 of the State
21Pension Funds Continuing Appropriation Act) is less than the
22amount lawfully vouchered under this Section, the difference
23shall be paid from the General Revenue Fund under the
24continuing appropriation authority provided in Section 1.1 of
25the State Pension Funds Continuing Appropriation Act.
26    (d) So long as the payments received are the full amount

 

 

HB2707- 40 -LRB100 05495 RPS 15506 b

1lawfully vouchered under this Section, payments received by the
2System under this Section shall be applied first toward the
3employer contribution to the self-managed plan established
4under Section 15-158.2. Payments shall be applied second toward
5the employer's portion of the normal costs of the System, as
6defined in subsection (f) of Section 15-155. The balance shall
7be applied toward the unfunded actuarial liabilities of the
8System.
9    (e) In the event that the System does not receive, as a
10result of legislative enactment or otherwise, payments
11sufficient to fully fund the employer contribution to the
12self-managed plan established under Section 15-158.2 and to
13fully fund that portion of the employer's portion of the normal
14costs of the System, as calculated in accordance with Section
1515-155(a-1), then any payments received shall be applied
16proportionately to the optional retirement program established
17under Section 15-158.2 and to the employer's portion of the
18normal costs of the System, as calculated in accordance with
19Section 15-155(a-1).
20(Source: P.A. 97-694, eff. 6-18-12; 98-92, eff. 7-16-13.)
 
21    (40 ILCS 5/16-158)   (from Ch. 108 1/2, par. 16-158)
22    (Text of Section WITHOUT the changes made by P.A. 98-599,
23which has been held unconstitutional)
24    Sec. 16-158. Contributions by State and other employing
25units.

 

 

HB2707- 41 -LRB100 05495 RPS 15506 b

1    (a) The State shall make contributions to the System by
2means of appropriations from the Common School Fund and other
3State funds of amounts which, together with other employer
4contributions, employee contributions, investment income, and
5other income, will be sufficient to meet the cost of
6maintaining and administering the System on a 90% funded basis
7in accordance with actuarial recommendations.
8    The Board shall determine the amount of State contributions
9required for each fiscal year on the basis of the actuarial
10tables and other assumptions adopted by the Board and the
11recommendations of the actuary, using the formula in subsection
12(b-3).
13    (a-1) Annually, on or before November 15 until November 15,
142011, the Board shall certify to the Governor the amount of the
15required State contribution for the coming fiscal year. The
16certification under this subsection (a-1) shall include a copy
17of the actuarial recommendations upon which it is based and
18shall specifically identify the System's projected State
19normal cost for that fiscal year.
20    On or before May 1, 2004, the Board shall recalculate and
21recertify to the Governor the amount of the required State
22contribution to the System for State fiscal year 2005, taking
23into account the amounts appropriated to and received by the
24System under subsection (d) of Section 7.2 of the General
25Obligation Bond Act.
26    On or before July 1, 2005, the Board shall recalculate and

 

 

HB2707- 42 -LRB100 05495 RPS 15506 b

1recertify to the Governor the amount of the required State
2contribution to the System for State fiscal year 2006, taking
3into account the changes in required State contributions made
4by this amendatory Act of the 94th General Assembly.
5    On or before April 1, 2011, the Board shall recalculate and
6recertify to the Governor the amount of the required State
7contribution to the System for State fiscal year 2011, applying
8the changes made by Public Act 96-889 to the System's assets
9and liabilities as of June 30, 2009 as though Public Act 96-889
10was approved on that date.
11    (a-5) On or before November 1 of each year, beginning
12November 1, 2012, the Board shall submit to the State Actuary,
13the Governor, and the General Assembly a proposed certification
14of the amount of the required State contribution to the System
15for the next fiscal year, along with all of the actuarial
16assumptions, calculations, and data upon which that proposed
17certification is based. On or before January 1 of each year,
18beginning January 1, 2013, the State Actuary shall issue a
19preliminary report concerning the proposed certification and
20identifying, if necessary, recommended changes in actuarial
21assumptions that the Board must consider before finalizing its
22certification of the required State contributions. On or before
23January 15, 2013 and each January 15 thereafter, the Board
24shall certify to the Governor and the General Assembly the
25amount of the required State contribution for the next fiscal
26year. The Board's certification must note any deviations from

 

 

HB2707- 43 -LRB100 05495 RPS 15506 b

1the State Actuary's recommended changes, the reason or reasons
2for not following the State Actuary's recommended changes, and
3the fiscal impact of not following the State Actuary's
4recommended changes on the required State contribution.
5    (a-10) As soon as practical after the effective date of
6this amendatory Act of the 100th General Assembly, the State
7Actuary and the Board shall recalculate and recertify to the
8Governor and the General Assembly the amount of the State
9contribution to the System for State fiscal year 2018, taking
10into account the changes in required State contributions made
11by this amendatory Act of the 100th General Assembly.
12    (b) Through State fiscal year 1995, the State contributions
13shall be paid to the System in accordance with Section 18-7 of
14the School Code.
15    (b-1) Beginning in State fiscal year 1996, on the 15th day
16of each month, or as soon thereafter as may be practicable, the
17Board shall submit vouchers for payment of State contributions
18to the System, in a total monthly amount of one-twelfth of the
19required annual State contribution certified under subsection
20(a-1). From the effective date of this amendatory Act of the
2193rd General Assembly through June 30, 2004, the Board shall
22not submit vouchers for the remainder of fiscal year 2004 in
23excess of the fiscal year 2004 certified contribution amount
24determined under this Section after taking into consideration
25the transfer to the System under subsection (a) of Section
266z-61 of the State Finance Act. These vouchers shall be paid by

 

 

HB2707- 44 -LRB100 05495 RPS 15506 b

1the State Comptroller and Treasurer by warrants drawn on the
2funds appropriated to the System for that fiscal year.
3    If in any month the amount remaining unexpended from all
4other appropriations to the System for the applicable fiscal
5year (including the appropriations to the System under Section
68.12 of the State Finance Act and Section 1 of the State
7Pension Funds Continuing Appropriation Act) is less than the
8amount lawfully vouchered under this subsection, the
9difference shall be paid from the Common School Fund under the
10continuing appropriation authority provided in Section 1.1 of
11the State Pension Funds Continuing Appropriation Act.
12    (b-2) Allocations from the Common School Fund apportioned
13to school districts not coming under this System shall not be
14diminished or affected by the provisions of this Article.
15    (b-3) For State fiscal years 2012 through 2045, the minimum
16contribution to the System to be made by the State for each
17fiscal year shall be an amount determined by the System to be
18sufficient to bring the total assets of the System up to 90% of
19the total actuarial liabilities of the System by the end of
20State fiscal year 2045. In making these determinations, the
21required State contribution shall be calculated each year as a
22level percentage of payroll over the years remaining to and
23including fiscal year 2045 and shall be determined under the
24projected unit credit actuarial cost method.
25    For State fiscal years 1996 through 2005, the State
26contribution to the System, as a percentage of the applicable

 

 

HB2707- 45 -LRB100 05495 RPS 15506 b

1employee payroll, shall be increased in equal annual increments
2so that by State fiscal year 2011, the State is contributing at
3the rate required under this Section; except that in the
4following specified State fiscal years, the State contribution
5to the System shall not be less than the following indicated
6percentages of the applicable employee payroll, even if the
7indicated percentage will produce a State contribution in
8excess of the amount otherwise required under this subsection
9and subsection (a), and notwithstanding any contrary
10certification made under subsection (a-1) before the effective
11date of this amendatory Act of 1998: 10.02% in FY 1999; 10.77%
12in FY 2000; 11.47% in FY 2001; 12.16% in FY 2002; 12.86% in FY
132003; and 13.56% in FY 2004.
14    Notwithstanding any other provision of this Article, the
15total required State contribution for State fiscal year 2006 is
16$534,627,700.
17    Notwithstanding any other provision of this Article, the
18total required State contribution for State fiscal year 2007 is
19$738,014,500.
20    For each of State fiscal years 2008 through 2009, the State
21contribution to the System, as a percentage of the applicable
22employee payroll, shall be increased in equal annual increments
23from the required State contribution for State fiscal year
242007, so that by State fiscal year 2011, the State is
25contributing at the rate otherwise required under this Section.
26    Notwithstanding any other provision of this Article, the

 

 

HB2707- 46 -LRB100 05495 RPS 15506 b

1total required State contribution for State fiscal year 2010 is
2$2,089,268,000 and shall be made from the proceeds of bonds
3sold in fiscal year 2010 pursuant to Section 7.2 of the General
4Obligation Bond Act, less (i) the pro rata share of bond sale
5expenses determined by the System's share of total bond
6proceeds, (ii) any amounts received from the Common School Fund
7in fiscal year 2010, and (iii) any reduction in bond proceeds
8due to the issuance of discounted bonds, if applicable.
9    Notwithstanding any other provision of this Article, the
10total required State contribution for State fiscal year 2011 is
11the amount recertified by the System on or before April 1, 2011
12pursuant to subsection (a-1) of this Section and shall be made
13from the proceeds of bonds sold in fiscal year 2011 pursuant to
14Section 7.2 of the General Obligation Bond Act, less (i) the
15pro rata share of bond sale expenses determined by the System's
16share of total bond proceeds, (ii) any amounts received from
17the Common School Fund in fiscal year 2011, and (iii) any
18reduction in bond proceeds due to the issuance of discounted
19bonds, if applicable. This amount shall include, in addition to
20the amount certified by the System, an amount necessary to meet
21employer contributions required by the State as an employer
22under paragraph (e) of this Section, which may also be used by
23the System for contributions required by paragraph (a) of
24Section 16-127.
25    Beginning in State fiscal year 2046, the minimum State
26contribution for each fiscal year shall be the amount needed to

 

 

HB2707- 47 -LRB100 05495 RPS 15506 b

1maintain the total assets of the System at 90% of the total
2actuarial liabilities of the System.
3    Amounts received by the System pursuant to Section 25 of
4the Budget Stabilization Act or Section 8.12 of the State
5Finance Act in any fiscal year do not reduce and do not
6constitute payment of any portion of the minimum State
7contribution required under this Article in that fiscal year.
8Such amounts shall not reduce, and shall not be included in the
9calculation of, the required State contributions under this
10Article in any future year until the System has reached a
11funding ratio of at least 90%. A reference in this Article to
12the "required State contribution" or any substantially similar
13term does not include or apply to any amounts payable to the
14System under Section 25 of the Budget Stabilization Act.
15    Notwithstanding any other provision of this Section, the
16required State contribution for State fiscal year 2005 and for
17fiscal year 2008 and each fiscal year thereafter, as calculated
18under this Section and certified under subsection (a-1), shall
19not exceed an amount equal to (i) the amount of the required
20State contribution that would have been calculated under this
21Section for that fiscal year if the System had not received any
22payments under subsection (d) of Section 7.2 of the General
23Obligation Bond Act, minus (ii) the portion of the State's
24total debt service payments for that fiscal year on the bonds
25issued in fiscal year 2003 for the purposes of that Section
267.2, as determined and certified by the Comptroller, that is

 

 

HB2707- 48 -LRB100 05495 RPS 15506 b

1the same as the System's portion of the total moneys
2distributed under subsection (d) of Section 7.2 of the General
3Obligation Bond Act. In determining this maximum for State
4fiscal years 2008 through 2010, however, the amount referred to
5in item (i) shall be increased, as a percentage of the
6applicable employee payroll, in equal increments calculated
7from the sum of the required State contribution for State
8fiscal year 2007 plus the applicable portion of the State's
9total debt service payments for fiscal year 2007 on the bonds
10issued in fiscal year 2003 for the purposes of Section 7.2 of
11the General Obligation Bond Act, so that, by State fiscal year
122011, the State is contributing at the rate otherwise required
13under this Section.
14    (c) Payment of the required State contributions and of all
15pensions, retirement annuities, death benefits, refunds, and
16other benefits granted under or assumed by this System, and all
17expenses in connection with the administration and operation
18thereof, are obligations of the State.
19    If members are paid from special trust or federal funds
20which are administered by the employing unit, whether school
21district or other unit, the employing unit shall pay to the
22System from such funds the full accruing retirement costs based
23upon that service, which, beginning July 1, 2014, shall be at a
24rate, expressed as a percentage of salary, equal to the total
25minimum contribution to the System to be made by the State for
26that fiscal year, including both normal cost and unfunded

 

 

HB2707- 49 -LRB100 05495 RPS 15506 b

1liability components, expressed as a percentage of payroll, as
2determined by the System under subsection (b-3) of this
3Section. Employer contributions, based on salary paid to
4members from federal funds, may be forwarded by the
5distributing agency of the State of Illinois to the System
6prior to allocation, in an amount determined in accordance with
7guidelines established by such agency and the System. Any
8contribution for fiscal year 2015 collected as a result of the
9change made by this amendatory Act of the 98th General Assembly
10shall be considered a State contribution under subsection (b-3)
11of this Section.
12    (d) Effective July 1, 1986, any employer of a teacher as
13defined in paragraph (8) of Section 16-106 shall pay the
14employer's normal cost of benefits based upon the teacher's
15service, in addition to employee contributions, as determined
16by the System. Such employer contributions shall be forwarded
17monthly in accordance with guidelines established by the
18System.
19    However, with respect to benefits granted under Section
2016-133.4 or 16-133.5 to a teacher as defined in paragraph (8)
21of Section 16-106, the employer's contribution shall be 12%
22(rather than 20%) of the member's highest annual salary rate
23for each year of creditable service granted, and the employer
24shall also pay the required employee contribution on behalf of
25the teacher. For the purposes of Sections 16-133.4 and
2616-133.5, a teacher as defined in paragraph (8) of Section

 

 

HB2707- 50 -LRB100 05495 RPS 15506 b

116-106 who is serving in that capacity while on leave of
2absence from another employer under this Article shall not be
3considered an employee of the employer from which the teacher
4is on leave.
5    (e) Beginning July 1, 1998, every employer of a teacher
6shall pay to the System an employer contribution computed as
7follows:
8        (1) Beginning July 1, 1998 through June 30, 1999, the
9    employer contribution shall be equal to 0.3% of each
10    teacher's salary.
11        (2) Beginning July 1, 1999 and thereafter, the employer
12    contribution shall be equal to 0.58% of each teacher's
13    salary.
14The school district or other employing unit may pay these
15employer contributions out of any source of funding available
16for that purpose and shall forward the contributions to the
17System on the schedule established for the payment of member
18contributions.
19    These employer contributions are intended to offset a
20portion of the cost to the System of the increases in
21retirement benefits resulting from this amendatory Act of 1998.
22    Each employer of teachers is entitled to a credit against
23the contributions required under this subsection (e) with
24respect to salaries paid to teachers for the period January 1,
252002 through June 30, 2003, equal to the amount paid by that
26employer under subsection (a-5) of Section 6.6 of the State

 

 

HB2707- 51 -LRB100 05495 RPS 15506 b

1Employees Group Insurance Act of 1971 with respect to salaries
2paid to teachers for that period.
3    The additional 1% employee contribution required under
4Section 16-152 by this amendatory Act of 1998 is the
5responsibility of the teacher and not the teacher's employer,
6unless the employer agrees, through collective bargaining or
7otherwise, to make the contribution on behalf of the teacher.
8    If an employer is required by a contract in effect on May
91, 1998 between the employer and an employee organization to
10pay, on behalf of all its full-time employees covered by this
11Article, all mandatory employee contributions required under
12this Article, then the employer shall be excused from paying
13the employer contribution required under this subsection (e)
14for the balance of the term of that contract. The employer and
15the employee organization shall jointly certify to the System
16the existence of the contractual requirement, in such form as
17the System may prescribe. This exclusion shall cease upon the
18termination, extension, or renewal of the contract at any time
19after May 1, 1998.
20    (f) If the amount of a teacher's salary for any school year
21used to determine final average salary exceeds the member's
22annual full-time salary rate with the same employer for the
23previous school year by more than 6%, the teacher's employer
24shall pay to the System, in addition to all other payments
25required under this Section and in accordance with guidelines
26established by the System, the present value of the increase in

 

 

HB2707- 52 -LRB100 05495 RPS 15506 b

1benefits resulting from the portion of the increase in salary
2that is in excess of 6%. This present value shall be computed
3by the System on the basis of the actuarial assumptions and
4tables used in the most recent actuarial valuation of the
5System that is available at the time of the computation. If a
6teacher's salary for the 2005-2006 school year is used to
7determine final average salary under this subsection (f), then
8the changes made to this subsection (f) by Public Act 94-1057
9shall apply in calculating whether the increase in his or her
10salary is in excess of 6%. For the purposes of this Section,
11change in employment under Section 10-21.12 of the School Code
12on or after June 1, 2005 shall constitute a change in employer.
13The System may require the employer to provide any pertinent
14information or documentation. The changes made to this
15subsection (f) by this amendatory Act of the 94th General
16Assembly apply without regard to whether the teacher was in
17service on or after its effective date.
18    Whenever it determines that a payment is or may be required
19under this subsection, the System shall calculate the amount of
20the payment and bill the employer for that amount. The bill
21shall specify the calculations used to determine the amount
22due. If the employer disputes the amount of the bill, it may,
23within 30 days after receipt of the bill, apply to the System
24in writing for a recalculation. The application must specify in
25detail the grounds of the dispute and, if the employer asserts
26that the calculation is subject to subsection (g) or (h) of

 

 

HB2707- 53 -LRB100 05495 RPS 15506 b

1this Section, must include an affidavit setting forth and
2attesting to all facts within the employer's knowledge that are
3pertinent to the applicability of that subsection. Upon
4receiving a timely application for recalculation, the System
5shall review the application and, if appropriate, recalculate
6the amount due.
7    The employer contributions required under this subsection
8(f) may be paid in the form of a lump sum within 90 days after
9receipt of the bill. If the employer contributions are not paid
10within 90 days after receipt of the bill, then interest will be
11charged at a rate equal to the System's annual actuarially
12assumed rate of return on investment compounded annually from
13the 91st day after receipt of the bill. Payments must be
14concluded within 3 years after the employer's receipt of the
15bill.
16    (g) This subsection (g) applies only to payments made or
17salary increases given on or after June 1, 2005 but before July
181, 2011. The changes made by Public Act 94-1057 shall not
19require the System to refund any payments received before July
2031, 2006 (the effective date of Public Act 94-1057).
21    When assessing payment for any amount due under subsection
22(f), the System shall exclude salary increases paid to teachers
23under contracts or collective bargaining agreements entered
24into, amended, or renewed before June 1, 2005.
25    When assessing payment for any amount due under subsection
26(f), the System shall exclude salary increases paid to a

 

 

HB2707- 54 -LRB100 05495 RPS 15506 b

1teacher at a time when the teacher is 10 or more years from
2retirement eligibility under Section 16-132 or 16-133.2.
3    When assessing payment for any amount due under subsection
4(f), the System shall exclude salary increases resulting from
5overload work, including summer school, when the school
6district has certified to the System, and the System has
7approved the certification, that (i) the overload work is for
8the sole purpose of classroom instruction in excess of the
9standard number of classes for a full-time teacher in a school
10district during a school year and (ii) the salary increases are
11equal to or less than the rate of pay for classroom instruction
12computed on the teacher's current salary and work schedule.
13    When assessing payment for any amount due under subsection
14(f), the System shall exclude a salary increase resulting from
15a promotion (i) for which the employee is required to hold a
16certificate or supervisory endorsement issued by the State
17Teacher Certification Board that is a different certification
18or supervisory endorsement than is required for the teacher's
19previous position and (ii) to a position that has existed and
20been filled by a member for no less than one complete academic
21year and the salary increase from the promotion is an increase
22that results in an amount no greater than the lesser of the
23average salary paid for other similar positions in the district
24requiring the same certification or the amount stipulated in
25the collective bargaining agreement for a similar position
26requiring the same certification.

 

 

HB2707- 55 -LRB100 05495 RPS 15506 b

1    When assessing payment for any amount due under subsection
2(f), the System shall exclude any payment to the teacher from
3the State of Illinois or the State Board of Education over
4which the employer does not have discretion, notwithstanding
5that the payment is included in the computation of final
6average salary.
7    (h) When assessing payment for any amount due under
8subsection (f), the System shall exclude any salary increase
9described in subsection (g) of this Section given on or after
10July 1, 2011 but before July 1, 2014 under a contract or
11collective bargaining agreement entered into, amended, or
12renewed on or after June 1, 2005 but before July 1, 2011.
13Notwithstanding any other provision of this Section, any
14payments made or salary increases given after June 30, 2014
15shall be used in assessing payment for any amount due under
16subsection (f) of this Section.
17    (i) The System shall prepare a report and file copies of
18the report with the Governor and the General Assembly by
19January 1, 2007 that contains all of the following information:
20        (1) The number of recalculations required by the
21    changes made to this Section by Public Act 94-1057 for each
22    employer.
23        (2) The dollar amount by which each employer's
24    contribution to the System was changed due to
25    recalculations required by Public Act 94-1057.
26        (3) The total amount the System received from each

 

 

HB2707- 56 -LRB100 05495 RPS 15506 b

1    employer as a result of the changes made to this Section by
2    Public Act 94-4.
3        (4) The increase in the required State contribution
4    resulting from the changes made to this Section by Public
5    Act 94-1057.
6    (j) For purposes of determining the required State
7contribution to the System, the value of the System's assets
8shall be equal to the actuarial value of the System's assets,
9which shall be calculated as follows:
10    As of June 30, 2008, the actuarial value of the System's
11assets shall be equal to the market value of the assets as of
12that date. In determining the actuarial value of the System's
13assets for fiscal years after June 30, 2008, any actuarial
14gains or losses from investment return incurred in a fiscal
15year shall be recognized in equal annual amounts over the
165-year period following that fiscal year.
17    (j-5) A change in actuarial assumptions that increases or
18decreases the required State contribution, including a change
19in assumed investment returns or mortality rates, that first
20applies in State fiscal year 2016 or thereafter, shall be
21implemented in equal annual amounts over a 5-year period
22beginning in the State fiscal year in which the actuarial
23change first applies or fiscal year 2018, whichever is later.
24    (k) For purposes of determining the required State
25contribution to the system for a particular year, the actuarial
26value of assets shall be assumed to earn a rate of return equal

 

 

HB2707- 57 -LRB100 05495 RPS 15506 b

1to the system's actuarially assumed rate of return.
2(Source: P.A. 96-43, eff. 7-15-09; 96-1497, eff. 1-14-11;
396-1511, eff. 1-27-11; 96-1554, eff. 3-18-11; 97-694, eff.
46-18-12; 97-813, eff. 7-13-12; 98-674, eff. 6-30-14.)
 
5    (40 ILCS 5/18-131)  (from Ch. 108 1/2, par. 18-131)
6    Sec. 18-131. Financing; employer contributions.
7    (a) The State of Illinois shall make contributions to this
8System by appropriations of the amounts which, together with
9the contributions of participants, net earnings on
10investments, and other income, will meet the costs of
11maintaining and administering this System on a 90% funded basis
12in accordance with actuarial recommendations.
13    (b) The Board shall determine the amount of State
14contributions required for each fiscal year on the basis of the
15actuarial tables and other assumptions adopted by the Board and
16the prescribed rate of interest, using the formula in
17subsection (c).
18    (c)     For State fiscal years 2012 through 2045, the
19minimum contribution to the System to be made by the State for
20each fiscal year shall be an amount determined by the System to
21be sufficient to bring the total assets of the System up to 90%
22of the total actuarial liabilities of the System by the end of
23State fiscal year 2045. In making these determinations, the
24required State contribution shall be calculated each year as a
25level percentage of payroll over the years remaining to and

 

 

HB2707- 58 -LRB100 05495 RPS 15506 b

1including fiscal year 2045 and shall be determined under the
2projected unit credit actuarial cost method.
3    For State fiscal years 1996 through 2005, the State
4contribution to the System, as a percentage of the applicable
5employee payroll, shall be increased in equal annual increments
6so that by State fiscal year 2011, the State is contributing at
7the rate required under this Section.
8    Notwithstanding any other provision of this Article, the
9total required State contribution for State fiscal year 2006 is
10$29,189,400.
11    Notwithstanding any other provision of this Article, the
12total required State contribution for State fiscal year 2007 is
13$35,236,800.
14    For each of State fiscal years 2008 through 2009, the State
15contribution to the System, as a percentage of the applicable
16employee payroll, shall be increased in equal annual increments
17from the required State contribution for State fiscal year
182007, so that by State fiscal year 2011, the State is
19contributing at the rate otherwise required under this Section.
20    Notwithstanding any other provision of this Article, the
21total required State contribution for State fiscal year 2010 is
22$78,832,000 and shall be made from the proceeds of bonds sold
23in fiscal year 2010 pursuant to Section 7.2 of the General
24Obligation Bond Act, less (i) the pro rata share of bond sale
25expenses determined by the System's share of total bond
26proceeds, (ii) any amounts received from the General Revenue

 

 

HB2707- 59 -LRB100 05495 RPS 15506 b

1Fund in fiscal year 2010, and (iii) any reduction in bond
2proceeds due to the issuance of discounted bonds, if
3applicable.
4    Notwithstanding any other provision of this Article, the
5total required State contribution for State fiscal year 2011 is
6the amount recertified by the System on or before April 1, 2011
7pursuant to Section 18-140 and shall be made from the proceeds
8of bonds sold in fiscal year 2011 pursuant to Section 7.2 of
9the General Obligation Bond Act, less (i) the pro rata share of
10bond sale expenses determined by the System's share of total
11bond proceeds, (ii) any amounts received from the General
12Revenue Fund in fiscal year 2011, and (iii) any reduction in
13bond proceeds due to the issuance of discounted bonds, if
14applicable.
15    Beginning in State fiscal year 2046, the minimum State
16contribution for each fiscal year shall be the amount needed to
17maintain the total assets of the System at 90% of the total
18actuarial liabilities of the System.
19    Amounts received by the System pursuant to Section 25 of
20the Budget Stabilization Act or Section 8.12 of the State
21Finance Act in any fiscal year do not reduce and do not
22constitute payment of any portion of the minimum State
23contribution required under this Article in that fiscal year.
24Such amounts shall not reduce, and shall not be included in the
25calculation of, the required State contributions under this
26Article in any future year until the System has reached a

 

 

HB2707- 60 -LRB100 05495 RPS 15506 b

1funding ratio of at least 90%. A reference in this Article to
2the "required State contribution" or any substantially similar
3term does not include or apply to any amounts payable to the
4System under Section 25 of the Budget Stabilization Act.
5    Notwithstanding any other provision of this Section, the
6required State contribution for State fiscal year 2005 and for
7fiscal year 2008 and each fiscal year thereafter, as calculated
8under this Section and certified under Section 18-140, shall
9not exceed an amount equal to (i) the amount of the required
10State contribution that would have been calculated under this
11Section for that fiscal year if the System had not received any
12payments under subsection (d) of Section 7.2 of the General
13Obligation Bond Act, minus (ii) the portion of the State's
14total debt service payments for that fiscal year on the bonds
15issued in fiscal year 2003 for the purposes of that Section
167.2, as determined and certified by the Comptroller, that is
17the same as the System's portion of the total moneys
18distributed under subsection (d) of Section 7.2 of the General
19Obligation Bond Act. In determining this maximum for State
20fiscal years 2008 through 2010, however, the amount referred to
21in item (i) shall be increased, as a percentage of the
22applicable employee payroll, in equal increments calculated
23from the sum of the required State contribution for State
24fiscal year 2007 plus the applicable portion of the State's
25total debt service payments for fiscal year 2007 on the bonds
26issued in fiscal year 2003 for the purposes of Section 7.2 of

 

 

HB2707- 61 -LRB100 05495 RPS 15506 b

1the General Obligation Bond Act, so that, by State fiscal year
22011, the State is contributing at the rate otherwise required
3under this Section.
4    (d) For purposes of determining the required State
5contribution to the System, the value of the System's assets
6shall be equal to the actuarial value of the System's assets,
7which shall be calculated as follows:
8    As of June 30, 2008, the actuarial value of the System's
9assets shall be equal to the market value of the assets as of
10that date. In determining the actuarial value of the System's
11assets for fiscal years after June 30, 2008, any actuarial
12gains or losses from investment return incurred in a fiscal
13year shall be recognized in equal annual amounts over the
145-year period following that fiscal year.
15    (d-5) A change in actuarial assumptions that increases or
16decreases the required State contribution, including a change
17in assumed investment returns or mortality rates, that first
18applies in State fiscal year 2016 or thereafter, shall be
19implemented in equal annual amounts over a 5-year period
20beginning in the State fiscal year in which the actuarial
21change first applies or fiscal year 2018, whichever is later.
22    (e) For purposes of determining the required State
23contribution to the system for a particular year, the actuarial
24value of assets shall be assumed to earn a rate of return equal
25to the system's actuarially assumed rate of return.
26(Source: P.A. 96-43, eff. 7-15-09; 96-1497, eff. 1-14-11;

 

 

HB2707- 62 -LRB100 05495 RPS 15506 b

196-1511, eff. 1-27-11; 96-1554, eff. 3-18-11; 97-813, eff.
27-13-12.)
 
3    (40 ILCS 5/18-140)   (from Ch. 108 1/2, par. 18-140)
4    Sec. 18-140. To certify required State contributions and
5submit vouchers.
6    (a) The Board shall certify to the Governor, on or before
7November 15 of each year until November 15, 2011, the amount of
8the required State contribution to the System for the following
9fiscal year and shall specifically identify the System's
10projected State normal cost for that fiscal year. The
11certification shall include a copy of the actuarial
12recommendations upon which it is based and shall specifically
13identify the System's projected State normal cost for that
14fiscal year.
15    On or before November 1 of each year, beginning November 1,
162012, the Board shall submit to the State Actuary, the
17Governor, and the General Assembly a proposed certification of
18the amount of the required State contribution to the System for
19the next fiscal year, along with all of the actuarial
20assumptions, calculations, and data upon which that proposed
21certification is based. On or before January 1 of each year
22beginning January 1, 2013, the State Actuary shall issue a
23preliminary report concerning the proposed certification and
24identifying, if necessary, recommended changes in actuarial
25assumptions that the Board must consider before finalizing its

 

 

HB2707- 63 -LRB100 05495 RPS 15506 b

1certification of the required State contributions. On or before
2January 15, 2013 and every January 15 thereafter, the Board
3shall certify to the Governor and the General Assembly the
4amount of the required State contribution for the next fiscal
5year. The Board's certification must note any deviations from
6the State Actuary's recommended changes, the reason or reasons
7for not following the State Actuary's recommended changes, and
8the fiscal impact of not following the State Actuary's
9recommended changes on the required State contribution.
10    On or before May 1, 2004, the Board shall recalculate and
11recertify to the Governor the amount of the required State
12contribution to the System for State fiscal year 2005, taking
13into account the amounts appropriated to and received by the
14System under subsection (d) of Section 7.2 of the General
15Obligation Bond Act.
16    On or before July 1, 2005, the Board shall recalculate and
17recertify to the Governor the amount of the required State
18contribution to the System for State fiscal year 2006, taking
19into account the changes in required State contributions made
20by this amendatory Act of the 94th General Assembly.
21    On or before April 1, 2011, the Board shall recalculate and
22recertify to the Governor the amount of the required State
23contribution to the System for State fiscal year 2011, applying
24the changes made by Public Act 96-889 to the System's assets
25and liabilities as of June 30, 2009 as though Public Act 96-889
26was approved on that date.

 

 

HB2707- 64 -LRB100 05495 RPS 15506 b

1    As soon as practical after the effective date of this
2amendatory Act of the 100th General Assembly, the State Actuary
3and the Board shall recalculate and recertify to the Governor
4and the General Assembly the amount of the State contribution
5to the System for State fiscal year 2018, taking into account
6the changes in required State contributions made by this
7amendatory Act of the 100th General Assembly.
8    (b) Beginning in State fiscal year 1996, on or as soon as
9possible after the 15th day of each month the Board shall
10submit vouchers for payment of State contributions to the
11System, in a total monthly amount of one-twelfth of the
12required annual State contribution certified under subsection
13(a). From the effective date of this amendatory Act of the 93rd
14General Assembly through June 30, 2004, the Board shall not
15submit vouchers for the remainder of fiscal year 2004 in excess
16of the fiscal year 2004 certified contribution amount
17determined under this Section after taking into consideration
18the transfer to the System under subsection (c) of Section
196z-61 of the State Finance Act. These vouchers shall be paid by
20the State Comptroller and Treasurer by warrants drawn on the
21funds appropriated to the System for that fiscal year.
22    If in any month the amount remaining unexpended from all
23other appropriations to the System for the applicable fiscal
24year (including the appropriations to the System under Section
258.12 of the State Finance Act and Section 1 of the State
26Pension Funds Continuing Appropriation Act) is less than the

 

 

HB2707- 65 -LRB100 05495 RPS 15506 b

1amount lawfully vouchered under this Section, the difference
2shall be paid from the General Revenue Fund under the
3continuing appropriation authority provided in Section 1.1 of
4the State Pension Funds Continuing Appropriation Act.
5(Source: P.A. 96-1497, eff. 1-14-11; 96-1511, eff. 1-27-11;
697-694, eff. 6-18-12.)
 
7    Section 99. Effective date. This Act takes effect upon
8becoming law.