100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018
HB2902

 

Introduced , by Rep. Mike Fortner

 

SYNOPSIS AS INTRODUCED:
 
See Index

    Creates the Pension Buyout Act. Authorizes the Department of Central Management Services to enter into contracts with approved vendors to provide pension buyout payments to eligible retirees in the State Universities and Downstate Teachers Articles. Requires the Illinois Finance Authority to issue bonds if the amount appropriated to implement the pension buyout option is less than the amount necessary for the Department to pay the approved vendor the amount required under a contract between the Department and the approved vendor for any fiscal year. Amends the State Universities and Downstate Teachers Articles of the Illinois Pension Code. Provides that an eligible retiree may relinquish his or her right to receive any benefits from the System in exchange for a lump sum payment made by an approved vendor that is equal to the present value of the retirement annuity. Contains provisions concerning the form of the contract; rulemaking; notice to the system; certification to the Department of the amount of lump sum payments made; and qualified plan status. Establishes optional defined contribution plans. Provides that a person who participates in the pension buyout option or the defined contribution plan shall be entitled to any benefits under the State Employees Group Insurance Act of 1971 that he or she would have otherwise been entitled to. Amends the State Employees Group Insurance Act of 1971, the Department of Central Management Services Law of the Civil Administrative Code of Illinois, the Illinois Procurement Code, and the Illinois Finance Authority Act to make related changes. Amends the State Mandates Act to require implementation without reimbursement. Effective immediately.


LRB100 05932 RPS 15959 b

FISCAL NOTE ACT MAY APPLY
PENSION IMPACT NOTE ACT MAY APPLY
STATE MANDATES ACT MAY REQUIRE REIMBURSEMENT

 

 

A BILL FOR

 

HB2902LRB100 05932 RPS 15959 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 1. Short title. This Act may be cited as the
5Pension Buyout Act.
 
6    Section 5. Definitions. As used in this Act:
7    "Approved vendor" means a vendor who has entered into a
8contract with the Department to provide lump sum payments to
9eligible retirees pursuant to a pension buyout option.
10    "Authority" means the Illinois Finance Authority.
11    "Chief procurement officer" means the chief procurement
12officer appointed under paragraph (4) of subsection (a) of
13Section 10-20 of the Illinois Procurement Code.
14    "Department" means the Department of Central Management
15Services.
16    "Director" means the Director of Central Management
17Services.
18    "Pension buyout option" means a plan under Section 15-185.5
19or 16-190.5 of the Illinois Pension Code.
20    "Retirement system" means a retirement system established
21under Article 15 or 16 of the Illinois Pension Code.
 
22    Section 10. Pension buyout option administration.

 

 

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1    (a) The Department, on behalf of the State, may enter into
2contracts with approved vendors who will provide lump sum
3payments to eligible retirees pursuant to a pension buyout
4option. The contract shall be subject to the applicable
5requirements of the Illinois Procurement Code. The Department
6shall only enter into the contract after an open and
7competitive bidding process and the process shall comply with
8the procedures established by the chief procurement officer
9pursuant to Section 45-32 of the Illinois Procurement Code.
10    The contract entered into by the Department shall:
11         (1) not interfere with the ability of each retirement
12    system to include any safeguards or other provisions that
13    the retirement system may require to be included in the
14    standardized form contract approved by the retirement
15    system; and
16        (2) require the approved vendor to provide, at no cost
17    to the eligible retiree, a minimum amount of certified
18    financial planning services to the eligible retiree before
19    he or she makes an election pursuant to a pension buyout
20    option.
21    (b) The Department shall establish by rule dates by which
22the Board of Trustees of each retirement system must certify
23the amount of lump sum payments made under the pension buyout
24option for that retirement system. The Department shall
25establish by rule the minimum amount of certified financial
26planning services that the approved vendor must provide to each

 

 

HB2902- 3 -LRB100 05932 RPS 15959 b

1eligible retiree at no cost to the eligible retiree.
2    (c) If in any fiscal year the amount appropriated for all
3pension buyout options is less than the amount necessary for
4the Department to pay the amount required for that fiscal year
5under a contract between the Department and an approved vendor,
6the Director shall certify to the Authority the additional
7amount required for that fiscal year. The Authority shall issue
8bonds in the amount certified by the Director. The proceeds
9from the bonds issued under this Act shall only be used by the
10Department to pay an approved vendor the amount required for
11that fiscal year.
 
12    Section 15. Bond authorization. The Authority shall not
13have outstanding at any one time bonds for any of the purposes
14of this Act in an aggregate principal amount exceeding
15$500,000,000, excluding bonds issued to refund outstanding
16bonds.
 
17    Section 900. The State Employees Group Insurance Act of
181971 is amended by changing Sections 3 and 10 as follows:
 
19    (5 ILCS 375/3)  (from Ch. 127, par. 523)
20    Sec. 3. Definitions. Unless the context otherwise
21requires, the following words and phrases as used in this Act
22shall have the following meanings. The Department may define
23these and other words and phrases separately for the purpose of

 

 

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1implementing specific programs providing benefits under this
2Act.
3    (a) "Administrative service organization" means any
4person, firm or corporation experienced in the handling of
5claims which is fully qualified, financially sound and capable
6of meeting the service requirements of a contract of
7administration executed with the Department.
8    (b) "Annuitant" means (1) an employee who retires, or has
9retired, on or after January 1, 1966 on an immediate annuity
10under the provisions of Articles 2, 14 (including an employee
11who has elected to receive an alternative retirement
12cancellation payment under Section 14-108.5 of the Illinois
13Pension Code in lieu of an annuity), 15 (including an employee
14who has retired under the optional retirement program
15established under Section 15-158.2 or who, in lieu of receiving
16an annuity under that Article, has elected to participate in
17the pension buyout option under Section 15-185.5 of the
18Illinois Pension Code or has retired under the Tier 3 plan
19established under Section 15-155.5 of the Illinois Pension
20Code), paragraphs (2), (3), or (5) of Section 16-106 (including
21an employee who, in lieu of receiving an annuity under that
22Article, has elected to participate in the pension buyout
23option under Section 16-190.5 of the Illinois Pension Code, has
24retired under the Tier 3 plan established under Section
2516-205.5 of the Illinois Pension Code, or has retired under the
26Tier 4 plan established under Section 16-205.6 of the Illinois

 

 

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1Pension Code), or Article 18 of the Illinois Pension Code; (2)
2any person who was receiving group insurance coverage under
3this Act as of March 31, 1978 by reason of his status as an
4annuitant, even though the annuity in relation to which such
5coverage was provided is a proportional annuity based on less
6than the minimum period of service required for a retirement
7annuity in the system involved; (3) any person not otherwise
8covered by this Act who has retired as a participating member
9under Article 2 of the Illinois Pension Code but is ineligible
10for the retirement annuity under Section 2-119 of the Illinois
11Pension Code; (4) the spouse of any person who is receiving a
12retirement annuity under Article 18 of the Illinois Pension
13Code and who is covered under a group health insurance program
14sponsored by a governmental employer other than the State of
15Illinois and who has irrevocably elected to waive his or her
16coverage under this Act and to have his or her spouse
17considered as the "annuitant" under this Act and not as a
18"dependent"; or (5) an employee who retires, or has retired,
19from a qualified position, as determined according to rules
20promulgated by the Director, under a qualified local
21government, a qualified rehabilitation facility, a qualified
22domestic violence shelter or service, or a qualified child
23advocacy center. (For definition of "retired employee", see (p)
24post).
25    (b-5) (Blank).
26    (b-6) (Blank).

 

 

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1    (b-7) (Blank).
2    (c) "Carrier" means (1) an insurance company, a corporation
3organized under the Limited Health Service Organization Act or
4the Voluntary Health Services Plan Act, a partnership, or other
5nongovernmental organization, which is authorized to do group
6life or group health insurance business in Illinois, or (2) the
7State of Illinois as a self-insurer.
8    (d) "Compensation" means salary or wages payable on a
9regular payroll by the State Treasurer on a warrant of the
10State Comptroller out of any State, trust or federal fund, or
11by the Governor of the State through a disbursing officer of
12the State out of a trust or out of federal funds, or by any
13Department out of State, trust, federal or other funds held by
14the State Treasurer or the Department, to any person for
15personal services currently performed, and ordinary or
16accidental disability benefits under Articles 2, 14, 15
17(including ordinary or accidental disability benefits under
18the optional retirement program established under Section
1915-158.2), paragraphs (2), (3), or (5) of Section 16-106, or
20Article 18 of the Illinois Pension Code, for disability
21incurred after January 1, 1966, or benefits payable under the
22Workers' Compensation or Occupational Diseases Act or benefits
23payable under a sick pay plan established in accordance with
24Section 36 of the State Finance Act. "Compensation" also means
25salary or wages paid to an employee of any qualified local
26government, qualified rehabilitation facility, qualified

 

 

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1domestic violence shelter or service, or qualified child
2advocacy center.
3    (e) "Commission" means the State Employees Group Insurance
4Advisory Commission authorized by this Act. Commencing July 1,
51984, "Commission" as used in this Act means the Commission on
6Government Forecasting and Accountability as established by
7the Legislative Commission Reorganization Act of 1984.
8    (f) "Contributory", when referred to as contributory
9coverage, shall mean optional coverages or benefits elected by
10the member toward the cost of which such member makes
11contribution, or which are funded in whole or in part through
12the acceptance of a reduction in earnings or the foregoing of
13an increase in earnings by an employee, as distinguished from
14noncontributory coverage or benefits which are paid entirely by
15the State of Illinois without reduction of the member's salary.
16    (g) "Department" means any department, institution, board,
17commission, officer, court or any agency of the State
18government receiving appropriations and having power to
19certify payrolls to the Comptroller authorizing payments of
20salary and wages against such appropriations as are made by the
21General Assembly from any State fund, or against trust funds
22held by the State Treasurer and includes boards of trustees of
23the retirement systems created by Articles 2, 14, 15, 16 and 18
24of the Illinois Pension Code. "Department" also includes the
25Illinois Comprehensive Health Insurance Board, the Board of
26Examiners established under the Illinois Public Accounting

 

 

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1Act, and the Illinois Finance Authority.
2    (h) "Dependent", when the term is used in the context of
3the health and life plan, means a member's spouse and any child
4(1) from birth to age 26 including an adopted child, a child
5who lives with the member from the time of the filing of a
6petition for adoption until entry of an order of adoption, a
7stepchild or adjudicated child, or a child who lives with the
8member if such member is a court appointed guardian of the
9child or (2) age 19 or over who has a mental or physical
10disability from a cause originating prior to the age of 19 (age
1126 if enrolled as an adult child dependent). For the health
12plan only, the term "dependent" also includes (1) any person
13enrolled prior to the effective date of this Section who is
14dependent upon the member to the extent that the member may
15claim such person as a dependent for income tax deduction
16purposes and (2) any person who has received after June 30,
172000 an organ transplant and who is financially dependent upon
18the member and eligible to be claimed as a dependent for income
19tax purposes. A member requesting to cover any dependent must
20provide documentation as requested by the Department of Central
21Management Services and file with the Department any and all
22forms required by the Department.
23    (i) "Director" means the Director of the Illinois
24Department of Central Management Services.
25    (j) "Eligibility period" means the period of time a member
26has to elect enrollment in programs or to select benefits

 

 

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1without regard to age, sex or health.
2    (k) "Employee" means and includes each officer or employee
3in the service of a department who (1) receives his
4compensation for service rendered to the department on a
5warrant issued pursuant to a payroll certified by a department
6or on a warrant or check issued and drawn by a department upon
7a trust, federal or other fund or on a warrant issued pursuant
8to a payroll certified by an elected or duly appointed officer
9of the State or who receives payment of the performance of
10personal services on a warrant issued pursuant to a payroll
11certified by a Department and drawn by the Comptroller upon the
12State Treasurer against appropriations made by the General
13Assembly from any fund or against trust funds held by the State
14Treasurer, and (2) is employed full-time or part-time in a
15position normally requiring actual performance of duty during
16not less than 1/2 of a normal work period, as established by
17the Director in cooperation with each department, except that
18persons elected by popular vote will be considered employees
19during the entire term for which they are elected regardless of
20hours devoted to the service of the State, and (3) except that
21"employee" does not include any person who is not eligible by
22reason of such person's employment to participate in one of the
23State retirement systems under Articles 2, 14, 15 (either the
24regular Article 15 system or the optional retirement program
25established under Section 15-158.2) or 18, or under paragraph
26(2), (3), or (5) of Section 16-106, of the Illinois Pension

 

 

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1Code, but such term does include persons who are employed
2during the 6 month qualifying period under Article 14 of the
3Illinois Pension Code. Such term also includes any person who
4(1) after January 1, 1966, is receiving ordinary or accidental
5disability benefits under Articles 2, 14, 15 (including
6ordinary or accidental disability benefits under the optional
7retirement program established under Section 15-158.2),
8paragraphs (2), (3), or (5) of Section 16-106, or Article 18 of
9the Illinois Pension Code, for disability incurred after
10January 1, 1966, (2) receives total permanent or total
11temporary disability under the Workers' Compensation Act or
12Occupational Disease Act as a result of injuries sustained or
13illness contracted in the course of employment with the State
14of Illinois, or (3) is not otherwise covered under this Act and
15has retired as a participating member under Article 2 of the
16Illinois Pension Code but is ineligible for the retirement
17annuity under Section 2-119 of the Illinois Pension Code.
18However, a person who satisfies the criteria of the foregoing
19definition of "employee" except that such person is made
20ineligible to participate in the State Universities Retirement
21System by clause (4) of subsection (a) of Section 15-107 of the
22Illinois Pension Code is also an "employee" for the purposes of
23this Act. "Employee" also includes any person receiving or
24eligible for benefits under a sick pay plan established in
25accordance with Section 36 of the State Finance Act. "Employee"
26also includes (i) each officer or employee in the service of a

 

 

HB2902- 11 -LRB100 05932 RPS 15959 b

1qualified local government, including persons appointed as
2trustees of sanitary districts regardless of hours devoted to
3the service of the sanitary district, (ii) each employee in the
4service of a qualified rehabilitation facility, (iii) each
5full-time employee in the service of a qualified domestic
6violence shelter or service, and (iv) each full-time employee
7in the service of a qualified child advocacy center, as
8determined according to rules promulgated by the Director.
9    (l) "Member" means an employee, annuitant, retired
10employee or survivor. In the case of an annuitant or retired
11employee who first becomes an annuitant or retired employee on
12or after the effective date of this amendatory Act of the 97th
13General Assembly, the individual must meet the minimum vesting
14requirements of the applicable retirement system in order to be
15eligible for group insurance benefits under that system. In the
16case of a survivor who first becomes a survivor on or after the
17effective date of this amendatory Act of the 97th General
18Assembly, the deceased employee, annuitant, or retired
19employee upon whom the annuity is based must have been eligible
20to participate in the group insurance system under the
21applicable retirement system in order for the survivor to be
22eligible for group insurance benefits under that system.
23    (m) "Optional coverages or benefits" means those coverages
24or benefits available to the member on his or her voluntary
25election, and at his or her own expense.
26    (n) "Program" means the group life insurance, health

 

 

HB2902- 12 -LRB100 05932 RPS 15959 b

1benefits and other employee benefits designed and contracted
2for by the Director under this Act.
3    (o) "Health plan" means a health benefits program offered
4by the State of Illinois for persons eligible for the plan.
5    (p) "Retired employee" means any person who would be an
6annuitant as that term is defined herein but for the fact that
7such person retired prior to January 1, 1966. Such term also
8includes any person formerly employed by the University of
9Illinois in the Cooperative Extension Service who would be an
10annuitant but for the fact that such person was made ineligible
11to participate in the State Universities Retirement System by
12clause (4) of subsection (a) of Section 15-107 of the Illinois
13Pension Code.
14    (q) "Survivor" means a person receiving an annuity as a
15survivor of an employee or of an annuitant. "Survivor" also
16includes: (1) the surviving dependent of a person who satisfies
17the definition of "employee" except that such person is made
18ineligible to participate in the State Universities Retirement
19System by clause (4) of subsection (a) of Section 15-107 of the
20Illinois Pension Code; (2) the surviving dependent of any
21person formerly employed by the University of Illinois in the
22Cooperative Extension Service who would be an annuitant except
23for the fact that such person was made ineligible to
24participate in the State Universities Retirement System by
25clause (4) of subsection (a) of Section 15-107 of the Illinois
26Pension Code; and (3) the surviving dependent of a person who

 

 

HB2902- 13 -LRB100 05932 RPS 15959 b

1was an annuitant under this Act by virtue of receiving an
2alternative retirement cancellation payment under Section
314-108.5 of the Illinois Pension Code.
4    (q-2) "SERS" means the State Employees' Retirement System
5of Illinois, created under Article 14 of the Illinois Pension
6Code.
7    (q-3) "SURS" means the State Universities Retirement
8System, created under Article 15 of the Illinois Pension Code.
9    (q-4) "TRS" means the Teachers' Retirement System of the
10State of Illinois, created under Article 16 of the Illinois
11Pension Code.
12    (q-5) (Blank).
13    (q-6) (Blank).
14    (q-7) (Blank).
15    (r) "Medical services" means the services provided within
16the scope of their licenses by practitioners in all categories
17licensed under the Medical Practice Act of 1987.
18    (s) "Unit of local government" means any county,
19municipality, township, school district (including a
20combination of school districts under the Intergovernmental
21Cooperation Act), special district or other unit, designated as
22a unit of local government by law, which exercises limited
23governmental powers or powers in respect to limited
24governmental subjects, any not-for-profit association with a
25membership that primarily includes townships and township
26officials, that has duties that include provision of research

 

 

HB2902- 14 -LRB100 05932 RPS 15959 b

1service, dissemination of information, and other acts for the
2purpose of improving township government, and that is funded
3wholly or partly in accordance with Section 85-15 of the
4Township Code; any not-for-profit corporation or association,
5with a membership consisting primarily of municipalities, that
6operates its own utility system, and provides research,
7training, dissemination of information, or other acts to
8promote cooperation between and among municipalities that
9provide utility services and for the advancement of the goals
10and purposes of its membership; the Southern Illinois
11Collegiate Common Market, which is a consortium of higher
12education institutions in Southern Illinois; the Illinois
13Association of Park Districts; and any hospital provider that
14is owned by a county that has 100 or fewer hospital beds and
15has not already joined the program. "Qualified local
16government" means a unit of local government approved by the
17Director and participating in a program created under
18subsection (i) of Section 10 of this Act.
19    (t) "Qualified rehabilitation facility" means any
20not-for-profit organization that is accredited by the
21Commission on Accreditation of Rehabilitation Facilities or
22certified by the Department of Human Services (as successor to
23the Department of Mental Health and Developmental
24Disabilities) to provide services to persons with disabilities
25and which receives funds from the State of Illinois for
26providing those services, approved by the Director and

 

 

HB2902- 15 -LRB100 05932 RPS 15959 b

1participating in a program created under subsection (j) of
2Section 10 of this Act.
3    (u) "Qualified domestic violence shelter or service" means
4any Illinois domestic violence shelter or service and its
5administrative offices funded by the Department of Human
6Services (as successor to the Illinois Department of Public
7Aid), approved by the Director and participating in a program
8created under subsection (k) of Section 10.
9    (v) "TRS benefit recipient" means a person who:
10        (1) is not a "member" as defined in this Section; and
11        (2) is receiving a monthly benefit or retirement
12    annuity under Article 16 of the Illinois Pension Code; and
13        (3) either (i) has at least 8 years of creditable
14    service under Article 16 of the Illinois Pension Code, or
15    (ii) was enrolled in the health insurance program offered
16    under that Article on January 1, 1996, or (iii) is the
17    survivor of a benefit recipient who had at least 8 years of
18    creditable service under Article 16 of the Illinois Pension
19    Code or was enrolled in the health insurance program
20    offered under that Article on the effective date of this
21    amendatory Act of 1995, or (iv) is a recipient or survivor
22    of a recipient of a disability benefit under Article 16 of
23    the Illinois Pension Code.
24    (w) "TRS dependent beneficiary" means a person who:
25        (1) is not a "member" or "dependent" as defined in this
26    Section; and

 

 

HB2902- 16 -LRB100 05932 RPS 15959 b

1        (2) is a TRS benefit recipient's: (A) spouse, (B)
2    dependent parent who is receiving at least half of his or
3    her support from the TRS benefit recipient, or (C) natural,
4    step, adjudicated, or adopted child who is (i) under age
5    26, (ii) was, on January 1, 1996, participating as a
6    dependent beneficiary in the health insurance program
7    offered under Article 16 of the Illinois Pension Code, or
8    (iii) age 19 or over who has a mental or physical
9    disability from a cause originating prior to the age of 19
10    (age 26 if enrolled as an adult child).
11    "TRS dependent beneficiary" does not include, as indicated
12under paragraph (2) of this subsection (w), a dependent of the
13survivor of a TRS benefit recipient who first becomes a
14dependent of a survivor of a TRS benefit recipient on or after
15the effective date of this amendatory Act of the 97th General
16Assembly unless that dependent would have been eligible for
17coverage as a dependent of the deceased TRS benefit recipient
18upon whom the survivor benefit is based.
19    (x) "Military leave" refers to individuals in basic
20training for reserves, special/advanced training, annual
21training, emergency call up, activation by the President of the
22United States, or any other training or duty in service to the
23United States Armed Forces.
24    (y) (Blank).
25    (z) "Community college benefit recipient" means a person
26who:

 

 

HB2902- 17 -LRB100 05932 RPS 15959 b

1        (1) is not a "member" as defined in this Section; and
2        (2) is receiving a monthly survivor's annuity or
3    retirement annuity under Article 15 of the Illinois Pension
4    Code; and
5        (3) either (i) was a full-time employee of a community
6    college district or an association of community college
7    boards created under the Public Community College Act
8    (other than an employee whose last employer under Article
9    15 of the Illinois Pension Code was a community college
10    district subject to Article VII of the Public Community
11    College Act) and was eligible to participate in a group
12    health benefit plan as an employee during the time of
13    employment with a community college district (other than a
14    community college district subject to Article VII of the
15    Public Community College Act) or an association of
16    community college boards, or (ii) is the survivor of a
17    person described in item (i).
18    (aa) "Community college dependent beneficiary" means a
19person who:
20        (1) is not a "member" or "dependent" as defined in this
21    Section; and
22        (2) is a community college benefit recipient's: (A)
23    spouse, (B) dependent parent who is receiving at least half
24    of his or her support from the community college benefit
25    recipient, or (C) natural, step, adjudicated, or adopted
26    child who is (i) under age 26, or (ii) age 19 or over and

 

 

HB2902- 18 -LRB100 05932 RPS 15959 b

1    has a mental or physical disability from a cause
2    originating prior to the age of 19 (age 26 if enrolled as
3    an adult child).
4    "Community college dependent beneficiary" does not
5include, as indicated under paragraph (2) of this subsection
6(aa), a dependent of the survivor of a community college
7benefit recipient who first becomes a dependent of a survivor
8of a community college benefit recipient on or after the
9effective date of this amendatory Act of the 97th General
10Assembly unless that dependent would have been eligible for
11coverage as a dependent of the deceased community college
12benefit recipient upon whom the survivor annuity is based.
13    (bb) "Qualified child advocacy center" means any Illinois
14child advocacy center and its administrative offices funded by
15the Department of Children and Family Services, as defined by
16the Children's Advocacy Center Act (55 ILCS 80/), approved by
17the Director and participating in a program created under
18subsection (n) of Section 10.
19(Source: P.A. 98-488, eff. 8-16-13; 99-143, eff. 7-27-15.)
 
20    (5 ILCS 375/10)  (from Ch. 127, par. 530)
21    Sec. 10. Contributions by the State and members.
22    (a) The State shall pay the cost of basic non-contributory
23group life insurance and, subject to member paid contributions
24set by the Department or required by this Section and except as
25provided in this Section, the basic program of group health

 

 

HB2902- 19 -LRB100 05932 RPS 15959 b

1benefits on each eligible member, except a member, not
2otherwise covered by this Act, who has retired as a
3participating member under Article 2 of the Illinois Pension
4Code but is ineligible for the retirement annuity under Section
52-119 of the Illinois Pension Code, and part of each eligible
6member's and retired member's premiums for health insurance
7coverage for enrolled dependents as provided by Section 9. The
8State shall pay the cost of the basic program of group health
9benefits only after benefits are reduced by the amount of
10benefits covered by Medicare for all members and dependents who
11are eligible for benefits under Social Security or the Railroad
12Retirement system or who had sufficient Medicare-covered
13government employment, except that such reduction in benefits
14shall apply only to those members and dependents who (1) first
15become eligible for such Medicare coverage on or after July 1,
161992; or (2) are Medicare-eligible members or dependents of a
17local government unit which began participation in the program
18on or after July 1, 1992; or (3) remain eligible for, but no
19longer receive Medicare coverage which they had been receiving
20on or after July 1, 1992. The Department may determine the
21aggregate level of the State's contribution on the basis of
22actual cost of medical services adjusted for age, sex or
23geographic or other demographic characteristics which affect
24the costs of such programs.
25    The cost of participation in the basic program of group
26health benefits for the dependent or survivor of a living or

 

 

HB2902- 20 -LRB100 05932 RPS 15959 b

1deceased retired employee who was formerly employed by the
2University of Illinois in the Cooperative Extension Service and
3would be an annuitant but for the fact that he or she was made
4ineligible to participate in the State Universities Retirement
5System by clause (4) of subsection (a) of Section 15-107 of the
6Illinois Pension Code shall not be greater than the cost of
7participation that would otherwise apply to that dependent or
8survivor if he or she were the dependent or survivor of an
9annuitant under the State Universities Retirement System.
10    (a-1) (Blank).
11    (a-2) (Blank).
12    (a-3) (Blank).
13    (a-4) (Blank).
14    (a-5) (Blank).
15    (a-6) (Blank).
16    (a-7) (Blank).
17    (a-8) Any annuitant, survivor, or retired employee may
18waive or terminate coverage in the program of group health
19benefits. Any such annuitant, survivor, or retired employee who
20has waived or terminated coverage may enroll or re-enroll in
21the program of group health benefits only during the annual
22benefit choice period, as determined by the Director; except
23that in the event of termination of coverage due to nonpayment
24of premiums, the annuitant, survivor, or retired employee may
25not re-enroll in the program.
26    (a-8.5) Beginning on the effective date of this amendatory

 

 

HB2902- 21 -LRB100 05932 RPS 15959 b

1Act of the 97th General Assembly, the Director of Central
2Management Services shall, on an annual basis, determine the
3amount that the State shall contribute toward the basic program
4of group health benefits on behalf of annuitants (including
5individuals who (i) participated in the General Assembly
6Retirement System, the State Employees' Retirement System of
7Illinois, the State Universities Retirement System, the
8Teachers' Retirement System of the State of Illinois, or the
9Judges Retirement System of Illinois and (ii) qualify as
10annuitants under subsection (b) of Section 3 of this Act),
11survivors (including individuals who (i) receive an annuity as
12a survivor of an individual who participated in the General
13Assembly Retirement System, the State Employees' Retirement
14System of Illinois, the State Universities Retirement System,
15the Teachers' Retirement System of the State of Illinois, or
16the Judges Retirement System of Illinois and (ii) qualify as
17survivors under subsection (q) of Section 3 of this Act), and
18retired employees (as defined in subsection (p) of Section 3 of
19this Act). The remainder of the cost of coverage for each
20annuitant, survivor, or retired employee, as determined by the
21Director of Central Management Services, shall be the
22responsibility of that annuitant, survivor, or retired
23employee.
24    Contributions required of annuitants, survivors, and
25retired employees shall be the same for all retirement systems
26and shall also be based on whether an individual has made an

 

 

HB2902- 22 -LRB100 05932 RPS 15959 b

1election under Section 15-135.1 of the Illinois Pension Code.
2Contributions may be based on annuitants', survivors', or
3retired employees' Medicare eligibility, but may not be based
4on Social Security eligibility.
5    (a-9) No later than May 1 of each calendar year, the
6Director of Central Management Services shall certify in
7writing to the Executive Secretary of the State Employees'
8Retirement System of Illinois the amounts of the Medicare
9supplement health care premiums and the amounts of the health
10care premiums for all other retirees who are not Medicare
11eligible.
12    A separate calculation of the premiums based upon the
13actual cost of each health care plan shall be so certified.
14    The Director of Central Management Services shall provide
15to the Executive Secretary of the State Employees' Retirement
16System of Illinois such information, statistics, and other data
17as he or she may require to review the premium amounts
18certified by the Director of Central Management Services.
19    The Department of Central Management Services, or any
20successor agency designated to procure healthcare contracts
21pursuant to this Act, is authorized to establish funds,
22separate accounts provided by any bank or banks as defined by
23the Illinois Banking Act, or separate accounts provided by any
24savings and loan association or associations as defined by the
25Illinois Savings and Loan Act of 1985 to be held by the
26Director, outside the State treasury, for the purpose of

 

 

HB2902- 23 -LRB100 05932 RPS 15959 b

1receiving the transfer of moneys from the Local Government
2Health Insurance Reserve Fund. The Department may promulgate
3rules further defining the methodology for the transfers. Any
4interest earned by moneys in the funds or accounts shall inure
5to the Local Government Health Insurance Reserve Fund. The
6transferred moneys, and interest accrued thereon, shall be used
7exclusively for transfers to administrative service
8organizations or their financial institutions for payments of
9claims to claimants and providers under the self-insurance
10health plan. The transferred moneys, and interest accrued
11thereon, shall not be used for any other purpose including, but
12not limited to, reimbursement of administration fees due the
13administrative service organization pursuant to its contract
14or contracts with the Department.
15    (a-10) For purposes of determining State contributions
16under this Section, service credit established under a Tier 3
17plan or Tier 4 plan under Article 15 or 16 of the Illinois
18Pension Code shall be included in determining an employee's
19creditable service for the purposes of this Act.
20    For purposes of determining State contributions under this
21Section, any service credit terminated (i) as part of a pension
22buyout option under Article 15 or 16 of the Illinois Pension
23Code, (ii) as part of a transfer of contributions to a Tier 3
24plan under Article 15 or 16 of the Illinois Pension Code, or
25(iii) as part of a transfer of contributions to a Tier 4 plan
26under Article 16 shall be included in determining an employee's

 

 

HB2902- 24 -LRB100 05932 RPS 15959 b

1creditable service for the purposes of this Act; but no such
2service credit shall be counted more than once.
3    (b) State employees who become eligible for this program on
4or after January 1, 1980 in positions normally requiring actual
5performance of duty not less than 1/2 of a normal work period
6but not equal to that of a normal work period, shall be given
7the option of participating in the available program. If the
8employee elects coverage, the State shall contribute on behalf
9of such employee to the cost of the employee's benefit and any
10applicable dependent supplement, that sum which bears the same
11percentage as that percentage of time the employee regularly
12works when compared to normal work period.
13    (c) The basic non-contributory coverage from the basic
14program of group health benefits shall be continued for each
15employee not in pay status or on active service by reason of
16(1) leave of absence due to illness or injury, (2) authorized
17educational leave of absence or sabbatical leave, or (3)
18military leave. This coverage shall continue until expiration
19of authorized leave and return to active service, but not to
20exceed 24 months for leaves under item (1) or (2). This
2124-month limitation and the requirement of returning to active
22service shall not apply to persons receiving ordinary or
23accidental disability benefits or retirement benefits through
24the appropriate State retirement system or benefits under the
25Workers' Compensation or Occupational Disease Act.
26    (d) The basic group life insurance coverage shall continue,

 

 

HB2902- 25 -LRB100 05932 RPS 15959 b

1with full State contribution, where such person is (1) absent
2from active service by reason of disability arising from any
3cause other than self-inflicted, (2) on authorized educational
4leave of absence or sabbatical leave, or (3) on military leave.
5    (e) Where the person is in non-pay status for a period in
6excess of 30 days or on leave of absence, other than by reason
7of disability, educational or sabbatical leave, or military
8leave, such person may continue coverage only by making
9personal payment equal to the amount normally contributed by
10the State on such person's behalf. Such payments and coverage
11may be continued: (1) until such time as the person returns to
12a status eligible for coverage at State expense, but not to
13exceed 24 months or (2) until such person's employment or
14annuitant status with the State is terminated (exclusive of any
15additional service imposed pursuant to law).
16    (f) The Department shall establish by rule the extent to
17which other employee benefits will continue for persons in
18non-pay status or who are not in active service.
19    (g) The State shall not pay the cost of the basic
20non-contributory group life insurance, program of health
21benefits and other employee benefits for members who are
22survivors as defined by paragraphs (1) and (2) of subsection
23(q) of Section 3 of this Act. The costs of benefits for these
24survivors shall be paid by the survivors or by the University
25of Illinois Cooperative Extension Service, or any combination
26thereof. However, the State shall pay the amount of the

 

 

HB2902- 26 -LRB100 05932 RPS 15959 b

1reduction in the cost of participation, if any, resulting from
2the amendment to subsection (a) made by this amendatory Act of
3the 91st General Assembly.
4    (h) Those persons occupying positions with any department
5as a result of emergency appointments pursuant to Section 8b.8
6of the Personnel Code who are not considered employees under
7this Act shall be given the option of participating in the
8programs of group life insurance, health benefits and other
9employee benefits. Such persons electing coverage may
10participate only by making payment equal to the amount normally
11contributed by the State for similarly situated employees. Such
12amounts shall be determined by the Director. Such payments and
13coverage may be continued until such time as the person becomes
14an employee pursuant to this Act or such person's appointment
15is terminated.
16    (i) Any unit of local government within the State of
17Illinois may apply to the Director to have its employees,
18annuitants, and their dependents provided group health
19coverage under this Act on a non-insured basis. To participate,
20a unit of local government must agree to enroll all of its
21employees, who may select coverage under either the State group
22health benefits plan or a health maintenance organization that
23has contracted with the State to be available as a health care
24provider for employees as defined in this Act. A unit of local
25government must remit the entire cost of providing coverage
26under the State group health benefits plan or, for coverage

 

 

HB2902- 27 -LRB100 05932 RPS 15959 b

1under a health maintenance organization, an amount determined
2by the Director based on an analysis of the sex, age,
3geographic location, or other relevant demographic variables
4for its employees, except that the unit of local government
5shall not be required to enroll those of its employees who are
6covered spouses or dependents under this plan or another group
7policy or plan providing health benefits as long as (1) an
8appropriate official from the unit of local government attests
9that each employee not enrolled is a covered spouse or
10dependent under this plan or another group policy or plan, and
11(2) at least 50% of the employees are enrolled and the unit of
12local government remits the entire cost of providing coverage
13to those employees, except that a participating school district
14must have enrolled at least 50% of its full-time employees who
15have not waived coverage under the district's group health plan
16by participating in a component of the district's cafeteria
17plan. A participating school district is not required to enroll
18a full-time employee who has waived coverage under the
19district's health plan, provided that an appropriate official
20from the participating school district attests that the
21full-time employee has waived coverage by participating in a
22component of the district's cafeteria plan. For the purposes of
23this subsection, "participating school district" includes a
24unit of local government whose primary purpose is education as
25defined by the Department's rules.
26    Employees of a participating unit of local government who

 

 

HB2902- 28 -LRB100 05932 RPS 15959 b

1are not enrolled due to coverage under another group health
2policy or plan may enroll in the event of a qualifying change
3in status, special enrollment, special circumstance as defined
4by the Director, or during the annual Benefit Choice Period. A
5participating unit of local government may also elect to cover
6its annuitants. Dependent coverage shall be offered on an
7optional basis, with the costs paid by the unit of local
8government, its employees, or some combination of the two as
9determined by the unit of local government. The unit of local
10government shall be responsible for timely collection and
11transmission of dependent premiums.
12    The Director shall annually determine monthly rates of
13payment, subject to the following constraints:
14        (1) In the first year of coverage, the rates shall be
15    equal to the amount normally charged to State employees for
16    elected optional coverages or for enrolled dependents
17    coverages or other contributory coverages, or contributed
18    by the State for basic insurance coverages on behalf of its
19    employees, adjusted for differences between State
20    employees and employees of the local government in age,
21    sex, geographic location or other relevant demographic
22    variables, plus an amount sufficient to pay for the
23    additional administrative costs of providing coverage to
24    employees of the unit of local government and their
25    dependents.
26        (2) In subsequent years, a further adjustment shall be

 

 

HB2902- 29 -LRB100 05932 RPS 15959 b

1    made to reflect the actual prior years' claims experience
2    of the employees of the unit of local government.
3    In the case of coverage of local government employees under
4a health maintenance organization, the Director shall annually
5determine for each participating unit of local government the
6maximum monthly amount the unit may contribute toward that
7coverage, based on an analysis of (i) the age, sex, geographic
8location, and other relevant demographic variables of the
9unit's employees and (ii) the cost to cover those employees
10under the State group health benefits plan. The Director may
11similarly determine the maximum monthly amount each unit of
12local government may contribute toward coverage of its
13employees' dependents under a health maintenance organization.
14    Monthly payments by the unit of local government or its
15employees for group health benefits plan or health maintenance
16organization coverage shall be deposited in the Local
17Government Health Insurance Reserve Fund.
18    The Local Government Health Insurance Reserve Fund is
19hereby created as a nonappropriated trust fund to be held
20outside the State Treasury, with the State Treasurer as
21custodian. The Local Government Health Insurance Reserve Fund
22shall be a continuing fund not subject to fiscal year
23limitations. The Local Government Health Insurance Reserve
24Fund is not subject to administrative charges or charge-backs,
25including but not limited to those authorized under Section 8h
26of the State Finance Act. All revenues arising from the

 

 

HB2902- 30 -LRB100 05932 RPS 15959 b

1administration of the health benefits program established
2under this Section shall be deposited into the Local Government
3Health Insurance Reserve Fund. Any interest earned on moneys in
4the Local Government Health Insurance Reserve Fund shall be
5deposited into the Fund. All expenditures from this Fund shall
6be used for payments for health care benefits for local
7government and rehabilitation facility employees, annuitants,
8and dependents, and to reimburse the Department or its
9administrative service organization for all expenses incurred
10in the administration of benefits. No other State funds may be
11used for these purposes.
12    A local government employer's participation or desire to
13participate in a program created under this subsection shall
14not limit that employer's duty to bargain with the
15representative of any collective bargaining unit of its
16employees.
17    (j) Any rehabilitation facility within the State of
18Illinois may apply to the Director to have its employees,
19annuitants, and their eligible dependents provided group
20health coverage under this Act on a non-insured basis. To
21participate, a rehabilitation facility must agree to enroll all
22of its employees and remit the entire cost of providing such
23coverage for its employees, except that the rehabilitation
24facility shall not be required to enroll those of its employees
25who are covered spouses or dependents under this plan or
26another group policy or plan providing health benefits as long

 

 

HB2902- 31 -LRB100 05932 RPS 15959 b

1as (1) an appropriate official from the rehabilitation facility
2attests that each employee not enrolled is a covered spouse or
3dependent under this plan or another group policy or plan, and
4(2) at least 50% of the employees are enrolled and the
5rehabilitation facility remits the entire cost of providing
6coverage to those employees. Employees of a participating
7rehabilitation facility who are not enrolled due to coverage
8under another group health policy or plan may enroll in the
9event of a qualifying change in status, special enrollment,
10special circumstance as defined by the Director, or during the
11annual Benefit Choice Period. A participating rehabilitation
12facility may also elect to cover its annuitants. Dependent
13coverage shall be offered on an optional basis, with the costs
14paid by the rehabilitation facility, its employees, or some
15combination of the 2 as determined by the rehabilitation
16facility. The rehabilitation facility shall be responsible for
17timely collection and transmission of dependent premiums.
18    The Director shall annually determine quarterly rates of
19payment, subject to the following constraints:
20        (1) In the first year of coverage, the rates shall be
21    equal to the amount normally charged to State employees for
22    elected optional coverages or for enrolled dependents
23    coverages or other contributory coverages on behalf of its
24    employees, adjusted for differences between State
25    employees and employees of the rehabilitation facility in
26    age, sex, geographic location or other relevant

 

 

HB2902- 32 -LRB100 05932 RPS 15959 b

1    demographic variables, plus an amount sufficient to pay for
2    the additional administrative costs of providing coverage
3    to employees of the rehabilitation facility and their
4    dependents.
5        (2) In subsequent years, a further adjustment shall be
6    made to reflect the actual prior years' claims experience
7    of the employees of the rehabilitation facility.
8    Monthly payments by the rehabilitation facility or its
9employees for group health benefits shall be deposited in the
10Local Government Health Insurance Reserve Fund.
11    (k) Any domestic violence shelter or service within the
12State of Illinois may apply to the Director to have its
13employees, annuitants, and their dependents provided group
14health coverage under this Act on a non-insured basis. To
15participate, a domestic violence shelter or service must agree
16to enroll all of its employees and pay the entire cost of
17providing such coverage for its employees. The domestic
18violence shelter shall not be required to enroll those of its
19employees who are covered spouses or dependents under this plan
20or another group policy or plan providing health benefits as
21long as (1) an appropriate official from the domestic violence
22shelter attests that each employee not enrolled is a covered
23spouse or dependent under this plan or another group policy or
24plan and (2) at least 50% of the employees are enrolled and the
25domestic violence shelter remits the entire cost of providing
26coverage to those employees. Employees of a participating

 

 

HB2902- 33 -LRB100 05932 RPS 15959 b

1domestic violence shelter who are not enrolled due to coverage
2under another group health policy or plan may enroll in the
3event of a qualifying change in status, special enrollment, or
4special circumstance as defined by the Director or during the
5annual Benefit Choice Period. A participating domestic
6violence shelter may also elect to cover its annuitants.
7Dependent coverage shall be offered on an optional basis, with
8employees, or some combination of the 2 as determined by the
9domestic violence shelter or service. The domestic violence
10shelter or service shall be responsible for timely collection
11and transmission of dependent premiums.
12    The Director shall annually determine rates of payment,
13subject to the following constraints:
14        (1) In the first year of coverage, the rates shall be
15    equal to the amount normally charged to State employees for
16    elected optional coverages or for enrolled dependents
17    coverages or other contributory coverages on behalf of its
18    employees, adjusted for differences between State
19    employees and employees of the domestic violence shelter or
20    service in age, sex, geographic location or other relevant
21    demographic variables, plus an amount sufficient to pay for
22    the additional administrative costs of providing coverage
23    to employees of the domestic violence shelter or service
24    and their dependents.
25        (2) In subsequent years, a further adjustment shall be
26    made to reflect the actual prior years' claims experience

 

 

HB2902- 34 -LRB100 05932 RPS 15959 b

1    of the employees of the domestic violence shelter or
2    service.
3    Monthly payments by the domestic violence shelter or
4service or its employees for group health insurance shall be
5deposited in the Local Government Health Insurance Reserve
6Fund.
7    (l) A public community college or entity organized pursuant
8to the Public Community College Act may apply to the Director
9initially to have only annuitants not covered prior to July 1,
101992 by the district's health plan provided health coverage
11under this Act on a non-insured basis. The community college
12must execute a 2-year contract to participate in the Local
13Government Health Plan. Any annuitant may enroll in the event
14of a qualifying change in status, special enrollment, special
15circumstance as defined by the Director, or during the annual
16Benefit Choice Period.
17    The Director shall annually determine monthly rates of
18payment subject to the following constraints: for those
19community colleges with annuitants only enrolled, first year
20rates shall be equal to the average cost to cover claims for a
21State member adjusted for demographics, Medicare
22participation, and other factors; and in the second year, a
23further adjustment of rates shall be made to reflect the actual
24first year's claims experience of the covered annuitants.
25    (l-5) The provisions of subsection (l) become inoperative
26on July 1, 1999.

 

 

HB2902- 35 -LRB100 05932 RPS 15959 b

1    (m) The Director shall adopt any rules deemed necessary for
2implementation of this amendatory Act of 1989 (Public Act
386-978).
4    (n) Any child advocacy center within the State of Illinois
5may apply to the Director to have its employees, annuitants,
6and their dependents provided group health coverage under this
7Act on a non-insured basis. To participate, a child advocacy
8center must agree to enroll all of its employees and pay the
9entire cost of providing coverage for its employees. The child
10advocacy center shall not be required to enroll those of its
11employees who are covered spouses or dependents under this plan
12or another group policy or plan providing health benefits as
13long as (1) an appropriate official from the child advocacy
14center attests that each employee not enrolled is a covered
15spouse or dependent under this plan or another group policy or
16plan and (2) at least 50% of the employees are enrolled and the
17child advocacy center remits the entire cost of providing
18coverage to those employees. Employees of a participating child
19advocacy center who are not enrolled due to coverage under
20another group health policy or plan may enroll in the event of
21a qualifying change in status, special enrollment, or special
22circumstance as defined by the Director or during the annual
23Benefit Choice Period. A participating child advocacy center
24may also elect to cover its annuitants. Dependent coverage
25shall be offered on an optional basis, with the costs paid by
26the child advocacy center, its employees, or some combination

 

 

HB2902- 36 -LRB100 05932 RPS 15959 b

1of the 2 as determined by the child advocacy center. The child
2advocacy center shall be responsible for timely collection and
3transmission of dependent premiums.
4    The Director shall annually determine rates of payment,
5subject to the following constraints:
6        (1) In the first year of coverage, the rates shall be
7    equal to the amount normally charged to State employees for
8    elected optional coverages or for enrolled dependents
9    coverages or other contributory coverages on behalf of its
10    employees, adjusted for differences between State
11    employees and employees of the child advocacy center in
12    age, sex, geographic location, or other relevant
13    demographic variables, plus an amount sufficient to pay for
14    the additional administrative costs of providing coverage
15    to employees of the child advocacy center and their
16    dependents.
17        (2) In subsequent years, a further adjustment shall be
18    made to reflect the actual prior years' claims experience
19    of the employees of the child advocacy center.
20    Monthly payments by the child advocacy center or its
21employees for group health insurance shall be deposited into
22the Local Government Health Insurance Reserve Fund.
23(Source: P.A. 97-695, eff. 7-1-12; 98-488, eff. 8-16-13.)
 
24    Section 905. The Department of Central Management Services
25Law of the Civil Administrative Code of Illinois is amended by

 

 

HB2902- 37 -LRB100 05932 RPS 15959 b

1adding Section 405-298 as follows:
 
2    (20 ILCS 405/405-298 new)
3    Sec. 405-298. Pension buyout option. To enter into
4contracts with approved vendors under the Pension Buyout Act
5and to adopt those rules needed to implement the provisions of
6the Pension Buyout Act.
 
7    Section 910. The Illinois Finance Authority Act is amended
8by changing Section 801-40 as follows:
 
9    (20 ILCS 3501/801-40)
10    Sec. 801-40. In addition to the powers otherwise authorized
11by law and in addition to the foregoing general corporate
12powers, the Authority shall also have the following additional
13specific powers to be exercised in furtherance of the purposes
14of this Act.
15    (a) The Authority shall have power (i) to accept grants,
16loans or appropriations from the federal government or the
17State, or any agency or instrumentality thereof, to be used for
18the operating expenses of the Authority, or for any purposes of
19the Authority, including the making of direct loans of such
20funds with respect to projects, and (ii) to enter into any
21agreement with the federal government or the State, or any
22agency or instrumentality thereof, in relationship to such
23grants, loans or appropriations.

 

 

HB2902- 38 -LRB100 05932 RPS 15959 b

1    (b) The Authority shall have power to procure and enter
2into contracts for any type of insurance and indemnity
3agreements covering loss or damage to property from any cause,
4including loss of use and occupancy, or covering any other
5insurable risk.
6    (c) The Authority shall have the continuing power to issue
7bonds for its corporate purposes. Bonds may be issued by the
8Authority in one or more series and may provide for the payment
9of any interest deemed necessary on such bonds, of the costs of
10issuance of such bonds, of any premium on any insurance, or of
11the cost of any guarantees, letters of credit or other similar
12documents, may provide for the funding of the reserves deemed
13necessary in connection with such bonds, and may provide for
14the refunding or advance refunding of any bonds or for accounts
15deemed necessary in connection with any purpose of the
16Authority. The bonds may bear interest payable at any time or
17times and at any rate or rates, notwithstanding any other
18provision of law to the contrary, and such rate or rates may be
19established by an index or formula which may be implemented or
20established by persons appointed or retained therefor by the
21Authority, or may bear no interest or may bear interest payable
22at maturity or upon redemption prior to maturity, may bear such
23date or dates, may be payable at such time or times and at such
24place or places, may mature at any time or times not later than
2540 years from the date of issuance, may be sold at public or
26private sale at such time or times and at such price or prices,

 

 

HB2902- 39 -LRB100 05932 RPS 15959 b

1may be secured by such pledges, reserves, guarantees, letters
2of credit, insurance contracts or other similar credit support
3or liquidity instruments, may be executed in such manner, may
4be subject to redemption prior to maturity, may provide for the
5registration of the bonds, and may be subject to such other
6terms and conditions all as may be provided by the resolution
7or indenture authorizing the issuance of such bonds. The holder
8or holders of any bonds issued by the Authority may bring suits
9at law or proceedings in equity to compel the performance and
10observance by any person or by the Authority or any of its
11agents or employees of any contract or covenant made with the
12holders of such bonds and to compel such person or the
13Authority and any of its agents or employees to perform any
14duties required to be performed for the benefit of the holders
15of any such bonds by the provision of the resolution
16authorizing their issuance, and to enjoin such person or the
17Authority and any of its agents or employees from taking any
18action in conflict with any such contract or covenant.
19Notwithstanding the form and tenor of any such bonds and in the
20absence of any express recital on the face thereof that it is
21non-negotiable, all such bonds shall be negotiable
22instruments. Pending the preparation and execution of any such
23bonds, temporary bonds may be issued as provided by the
24resolution. The bonds shall be sold by the Authority in such
25manner as it shall determine. The bonds may be secured as
26provided in the authorizing resolution by the receipts,

 

 

HB2902- 40 -LRB100 05932 RPS 15959 b

1revenues, income and other available funds of the Authority and
2by any amounts derived by the Authority from the loan agreement
3or lease agreement with respect to the project or projects; and
4bonds may be issued as general obligations of the Authority
5payable from such revenues, funds and obligations of the
6Authority as the bond resolution shall provide, or may be
7issued as limited obligations with a claim for payment solely
8from such revenues, funds and obligations as the bond
9resolution shall provide. The Authority may grant a specific
10pledge or assignment of and lien on or security interest in
11such rights, revenues, income, or amounts and may grant a
12specific pledge or assignment of and lien on or security
13interest in any reserves, funds or accounts established in the
14resolution authorizing the issuance of bonds. Any such pledge,
15assignment, lien or security interest for the benefit of the
16holders of the Authority's bonds shall be valid and binding
17from the time the bonds are issued without any physical
18delivery or further act, and shall be valid and binding as
19against and prior to the claims of all other parties having
20claims against the Authority or any other person irrespective
21of whether the other parties have notice of the pledge,
22assignment, lien or security interest. As evidence of such
23pledge, assignment, lien and security interest, the Authority
24may execute and deliver a mortgage, trust agreement, indenture
25or security agreement or an assignment thereof. A remedy for
26any breach or default of the terms of any such agreement by the

 

 

HB2902- 41 -LRB100 05932 RPS 15959 b

1Authority may be by mandamus proceedings in any court of
2competent jurisdiction to compel the performance and
3compliance therewith, but the agreement may prescribe by whom
4or on whose behalf such action may be instituted. It is
5expressly understood that the Authority may, but need not,
6acquire title to any project with respect to which it exercises
7its authority.
8    (c-5) The Authority shall have the power to issue bonds
9under subsection (c) of Section 10 of the Pension Buyout Act
10and to adopt those rules needed to implement the provisions of
11the Pension Buyout Act.
12    (d) With respect to the powers granted by this Act, the
13Authority may adopt rules and regulations prescribing the
14procedures by which persons may apply for assistance under this
15Act. Nothing herein shall be deemed to preclude the Authority,
16prior to the filing of any formal application, from conducting
17preliminary discussions and investigations with respect to the
18subject matter of any prospective application.
19    (e) The Authority shall have power to acquire by purchase,
20lease, gift or otherwise any property or rights therein from
21any person useful for its purposes, whether improved for the
22purposes of any prospective project, or unimproved. The
23Authority may also accept any donation of funds for its
24purposes from any such source. The Authority shall have no
25independent power of condemnation but may acquire any property
26or rights therein obtained upon condemnation by any other

 

 

HB2902- 42 -LRB100 05932 RPS 15959 b

1authority, governmental entity or unit of local government with
2such power.
3    (f) The Authority shall have power to develop, construct
4and improve either under its own direction, or through
5collaboration with any approved applicant, or to acquire
6through purchase or otherwise, any project, using for such
7purpose the proceeds derived from the sale of its bonds or from
8governmental loans or grants, and to hold title in the name of
9the Authority to such projects.
10    (g) The Authority shall have power to lease pursuant to a
11lease agreement any project so developed and constructed or
12acquired to the approved tenant on such terms and conditions as
13may be appropriate to further the purposes of this Act and to
14maintain the credit of the Authority. Any such lease may
15provide for either the Authority or the approved tenant to
16assume initially, in whole or in part, the costs of
17maintenance, repair and improvements during the leasehold
18period. In no case, however, shall the total rentals from any
19project during any initial leasehold period or the total loan
20repayments to be made pursuant to any loan agreement, be less
21than an amount necessary to return over such lease or loan
22period (1) all costs incurred in connection with the
23development, construction, acquisition or improvement of the
24project and for repair, maintenance and improvements thereto
25during the period of the lease or loan; provided, however, that
26the rentals or loan repayments need not include costs met

 

 

HB2902- 43 -LRB100 05932 RPS 15959 b

1through the use of funds other than those obtained by the
2Authority through the issuance of its bonds or governmental
3loans; (2) a reasonable percentage additive to be agreed upon
4by the Authority and the borrower or tenant to cover a properly
5allocable portion of the Authority's general expenses,
6including, but not limited to, administrative expenses,
7salaries and general insurance, and (3) an amount sufficient to
8pay when due all principal of, interest and premium, if any on,
9any bonds issued by the Authority with respect to the project.
10The portion of total rentals payable under clause (3) of this
11subsection (g) shall be deposited in such special accounts,
12including all sinking funds, acquisition or construction
13funds, debt service and other funds as provided by any
14resolution, mortgage or trust agreement of the Authority
15pursuant to which any bond is issued.
16    (h) The Authority has the power, upon the termination of
17any leasehold period of any project, to sell or lease for a
18further term or terms such project on such terms and conditions
19as the Authority shall deem reasonable and consistent with the
20purposes of the Act. The net proceeds from all such sales and
21the revenues or income from such leases shall be used to
22satisfy any indebtedness of the Authority with respect to such
23project and any balance may be used to pay any expenses of the
24Authority or be used for the further development, construction,
25acquisition or improvement of projects. In the event any
26project is vacated by a tenant prior to the termination of the

 

 

HB2902- 44 -LRB100 05932 RPS 15959 b

1initial leasehold period, the Authority shall sell or lease the
2facilities of the project on the most advantageous terms
3available. The net proceeds of any such disposition shall be
4treated in the same manner as the proceeds from sales or the
5revenues or income from leases subsequent to the termination of
6any initial leasehold period.
7    (i) The Authority shall have the power to make loans to
8persons to finance a project, to enter into loan agreements
9with respect thereto, and to accept guarantees from persons of
10its loans or the resultant evidences of obligations of the
11Authority.
12    (j) The Authority may fix, determine, charge and collect
13any premiums, fees, charges, costs and expenses, including,
14without limitation, any application fees, commitment fees,
15program fees, financing charges or publication fees from any
16person in connection with its activities under this Act.
17    (k) In addition to the funds established as provided
18herein, the Authority shall have the power to create and
19establish such reserve funds and accounts as may be necessary
20or desirable to accomplish its purposes under this Act and to
21deposit its available monies into the funds and accounts.
22    (l) At the request of the governing body of any unit of
23local government, the Authority is authorized to market such
24local government's revenue bond offerings by preparing bond
25issues for sale, advertising for sealed bids, receiving bids at
26its offices, making the award to the bidder that offers the

 

 

HB2902- 45 -LRB100 05932 RPS 15959 b

1most favorable terms or arranging for negotiated placements or
2underwritings of such securities. The Authority may, at its
3discretion, offer for concurrent sale the revenue bonds of
4several local governments. Sales by the Authority of revenue
5bonds under this Section shall in no way imply State guarantee
6of such debt issue. The Authority may require such financial
7information from participating local governments as it deems
8necessary in order to carry out the purposes of this subsection
9(1).
10    (m) The Authority may make grants to any county to which
11Division 5-37 of the Counties Code is applicable to assist in
12the financing of capital development, construction and
13renovation of new or existing facilities for hospitals and
14health care facilities under that Act. Such grants may only be
15made from funds appropriated for such purposes from the Build
16Illinois Bond Fund.
17    (n) The Authority may establish an urban development action
18grant program for the purpose of assisting municipalities in
19Illinois which are experiencing severe economic distress to
20help stimulate economic development activities needed to aid in
21economic recovery. The Authority shall determine the types of
22activities and projects for which the urban development action
23grants may be used, provided that such projects and activities
24are broadly defined to include all reasonable projects and
25activities the primary objectives of which are the development
26of viable urban communities, including decent housing and a

 

 

HB2902- 46 -LRB100 05932 RPS 15959 b

1suitable living environment, and expansion of economic
2opportunity, principally for persons of low and moderate
3incomes. The Authority shall enter into grant agreements from
4monies appropriated for such purposes from the Build Illinois
5Bond Fund. The Authority shall monitor the use of the grants,
6and shall provide for audits of the funds as well as recovery
7by the Authority of any funds determined to have been spent in
8violation of this subsection (n) or any rule or regulation
9promulgated hereunder. The Authority shall provide technical
10assistance with regard to the effective use of the urban
11development action grants. The Authority shall file an annual
12report to the General Assembly concerning the progress of the
13grant program.
14    (o) The Authority may establish a Housing Partnership
15Program whereby the Authority provides zero-interest loans to
16municipalities for the purpose of assisting in the financing of
17projects for the rehabilitation of affordable multi-family
18housing for low and moderate income residents. The Authority
19may provide such loans only upon a municipality's providing
20evidence that it has obtained private funding for the
21rehabilitation project. The Authority shall provide 3 State
22dollars for every 7 dollars obtained by the municipality from
23sources other than the State of Illinois. The loans shall be
24made from monies appropriated for such purpose from the Build
25Illinois Bond Fund. The total amount of loans available under
26the Housing Partnership Program shall not exceed $30,000,000.

 

 

HB2902- 47 -LRB100 05932 RPS 15959 b

1State loan monies under this subsection shall be used only for
2the acquisition and rehabilitation of existing buildings
3containing 4 or more dwelling units. The terms of any loan made
4by the municipality under this subsection shall require
5repayment of the loan to the municipality upon any sale or
6other transfer of the project.
7    (p) The Authority may award grants to universities and
8research institutions, research consortiums and other
9not-for-profit entities for the purposes of: remodeling or
10otherwise physically altering existing laboratory or research
11facilities, expansion or physical additions to existing
12laboratory or research facilities, construction of new
13laboratory or research facilities or acquisition of modern
14equipment to support laboratory or research operations
15provided that such grants (i) be used solely in support of
16project and equipment acquisitions which enhance technology
17transfer, and (ii) not constitute more than 60 percent of the
18total project or acquisition cost.
19    (q) Grants may be awarded by the Authority to units of
20local government for the purpose of developing the appropriate
21infrastructure or defraying other costs to the local government
22in support of laboratory or research facilities provided that
23such grants may not exceed 40% of the cost to the unit of local
24government.
25    (r) The Authority may establish a Direct Loan Program to
26make loans to individuals, partnerships or corporations for the

 

 

HB2902- 48 -LRB100 05932 RPS 15959 b

1purpose of an industrial project, as defined in Section 801-10
2of this Act. For the purposes of such program and not by way of
3limitation on any other program of the Authority, the Authority
4shall have the power to issue bonds, notes, or other evidences
5of indebtedness including commercial paper for purposes of
6providing a fund of capital from which it may make such loans.
7The Authority shall have the power to use any appropriations
8from the State made especially for the Authority's Direct Loan
9Program for additional capital to make such loans or for the
10purposes of reserve funds or pledged funds which secure the
11Authority's obligations of repayment of any bond, note or other
12form of indebtedness established for the purpose of providing
13capital for which it intends to make such loans under the
14Direct Loan Program. For the purpose of obtaining such capital,
15the Authority may also enter into agreements with financial
16institutions and other persons for the purpose of selling loans
17and developing a secondary market for such loans. Loans made
18under the Direct Loan Program may be in an amount not to exceed
19$300,000 and shall be made for a portion of an industrial
20project which does not exceed 50% of the total project. No loan
21may be made by the Authority unless approved by the affirmative
22vote of at least 8 members of the board. The Authority shall
23establish procedures and publish rules which shall provide for
24the submission, review, and analysis of each direct loan
25application and which shall preserve the ability of each board
26member to reach an individual business judgment regarding the

 

 

HB2902- 49 -LRB100 05932 RPS 15959 b

1propriety of making each direct loan. The collective discretion
2of the board to approve or disapprove each loan shall be
3unencumbered. The Authority may establish and collect such fees
4and charges, determine and enforce such terms and conditions,
5and charge such interest rates as it determines to be necessary
6and appropriate to the successful administration of the Direct
7Loan Program. The Authority may require such interests in
8collateral and such guarantees as it determines are necessary
9to project the Authority's interest in the repayment of the
10principal and interest of each loan made under the Direct Loan
11Program.
12    (s) The Authority may guarantee private loans to third
13parties up to a specified dollar amount in order to promote
14economic development in this State.
15    (t) The Authority may adopt rules and regulations as may be
16necessary or advisable to implement the powers conferred by
17this Act.
18    (u) The Authority shall have the power to issue bonds,
19notes or other evidences of indebtedness, which may be used to
20make loans to units of local government which are authorized to
21enter into loan agreements and other documents and to issue
22bonds, notes and other evidences of indebtedness for the
23purpose of financing the protection of storm sewer outfalls,
24the construction of adequate storm sewer outfalls, and the
25provision for flood protection of sanitary sewage treatment
26plans, in counties that have established a stormwater

 

 

HB2902- 50 -LRB100 05932 RPS 15959 b

1management planning committee in accordance with Section
25-1062 of the Counties Code. Any such loan shall be made by the
3Authority pursuant to the provisions of Section 820-5 to 820-60
4of this Act. The unit of local government shall pay back to the
5Authority the principal amount of the loan, plus annual
6interest as determined by the Authority. The Authority shall
7have the power, subject to appropriations by the General
8Assembly, to subsidize or buy down a portion of the interest on
9such loans, up to 4% per annum.
10    (v) The Authority may accept security interests as provided
11in Sections 11-3 and 11-3.3 of the Illinois Public Aid Code.
12    (w) Moral Obligation. In the event that the Authority
13determines that monies of the Authority will not be sufficient
14for the payment of the principal of and interest on its bonds
15during the next State fiscal year, the Chairperson, as soon as
16practicable, shall certify to the Governor the amount required
17by the Authority to enable it to pay such principal of and
18interest on the bonds. The Governor shall submit the amount so
19certified to the General Assembly as soon as practicable, but
20no later than the end of the current State fiscal year. This
21subsection shall apply only to any bonds or notes as to which
22the Authority shall have determined, in the resolution
23authorizing the issuance of the bonds or notes, that this
24subsection shall apply. Whenever the Authority makes such a
25determination, that fact shall be plainly stated on the face of
26the bonds or notes and that fact shall also be reported to the

 

 

HB2902- 51 -LRB100 05932 RPS 15959 b

1Governor. In the event of a withdrawal of moneys from a reserve
2fund established with respect to any issue or issues of bonds
3of the Authority to pay principal or interest on those bonds,
4the Chairperson of the Authority, as soon as practicable, shall
5certify to the Governor the amount required to restore the
6reserve fund to the level required in the resolution or
7indenture securing those bonds. The Governor shall submit the
8amount so certified to the General Assembly as soon as
9practicable, but no later than the end of the current State
10fiscal year. The Authority shall obtain written approval from
11the Governor for any bonds and notes to be issued under this
12Section. In addition to any other bonds authorized to be issued
13under Sections 825-60, 825-65(e), 830-25 and 845-5, the
14principal amount of Authority bonds outstanding issued under
15this Section 801-40(w) or under 20 ILCS 3850/1-80 or 30 ILCS
16360/2-6(c), which have been assumed by the Authority, shall not
17exceed $150,000,000. This subsection (w) shall in no way be
18applied to any bonds issued by the Authority on behalf of the
19Illinois Power Agency under Section 825-90 of this Act.
20    (x) The Authority may enter into agreements or contracts
21with any person necessary or appropriate to place the payment
22obligations of the Authority under any of its bonds in whole or
23in part on any interest rate basis, cash flow basis, or other
24basis desired by the Authority, including without limitation
25agreements or contracts commonly known as "interest rate swap
26agreements", "forward payment conversion agreements", and

 

 

HB2902- 52 -LRB100 05932 RPS 15959 b

1"futures", or agreements or contracts to exchange cash flows or
2a series of payments, or agreements or contracts, including
3without limitation agreements or contracts commonly known as
4"options", "puts", or "calls", to hedge payment, rate spread,
5or similar exposure; provided that any such agreement or
6contract shall not constitute an obligation for borrowed money
7and shall not be taken into account under Section 845-5 of this
8Act or any other debt limit of the Authority or the State of
9Illinois.
10    (y) The Authority shall publish summaries of projects and
11actions approved by the members of the Authority on its
12website. These summaries shall include, but not be limited to,
13information regarding the:
14        (1) project;
15        (2) Board's action or actions;
16        (3) purpose of the project;
17        (4) Authority's program and contribution;
18        (5) volume cap;
19        (6) jobs retained;
20        (7) projected new jobs;
21        (8) construction jobs created;
22        (9) estimated sources and uses of funds;
23        (10) financing summary;
24        (11) project summary;
25        (12) business summary;
26        (13) ownership or economic disclosure statement;

 

 

HB2902- 53 -LRB100 05932 RPS 15959 b

1        (14) professional and financial information;
2        (15) service area; and
3        (16) legislative district.
4    The disclosure of information pursuant to this subsection
5shall comply with the Freedom of Information Act.
6(Source: P.A. 95-470, eff. 8-27-07; 95-481, eff. 8-28-07;
795-876, eff. 8-21-08; 96-795, eff. 7-1-10 (see Section 5 of
8P.A. 96-793 for the effective date of changes made by P.A.
996-795).)
 
10    Section 915. The Illinois Procurement Code is amended by
11adding Section 45-32 as follows:
 
12    (30 ILCS 500/45-32 new)
13    Sec. 45-32. Pension buyout option. The chief procurement
14officer appointed pursuant to paragraph (4) of subsection (a)
15of Section 10-20 shall determine for the Department of Central
16Management Services which vendors are approved to provide lump
17sum payments pursuant to a pension buyout option under Article
1815 or 16 of the Illinois Pension Code and the Pension Buyout
19Act. The chief procurement officer appointed pursuant to
20paragraph (4) of subsection (a) of Section 10-20 shall develop
21and distribute to the Department of Central Management Services
22a listing of all procedures for implementing this Section.
 
23    Section 920. The Illinois Pension Code is amended by

 

 

HB2902- 54 -LRB100 05932 RPS 15959 b

1changing Sections 15-108.1, 15-108.2, 15-185, 15-198, 16-158,
216-190, 16-203, 20-121, 20-123, 20-124, and 20-125 and by
3adding Sections 15-108.3, 15-185.5, 15-200.5, 16-106.40,
416-106.41, 16-106.42, 16-106.43, 16-190.5, 16-205.5, and
516-205.6 as follows:
 
6    (40 ILCS 5/15-108.1)
7    Sec. 15-108.1. Tier 1 member. "Tier 1 member": A
8participant or an annuitant of a retirement annuity under this
9Article, other than a participant in the self-managed plan
10under Section 15-158.2, who first became a participant or
11member before January 1, 2011 under any reciprocal retirement
12system or pension fund established under this Code, other than
13a retirement system or pension fund established under Articles
142, 3, 4, 5, 6, or 18 of this Code. "Tier 1 member" includes a
15person who first became a participant under this System before
16January 1, 2011 and who accepts a refund and is subsequently
17reemployed by an employer on or after January 1, 2011.
18    In the case of a Tier 1 member who elects to participate in
19the Tier 3 plan under Section 15-200.5 of this Code, that Tier
201 member shall be deemed a Tier 1 member only with respect to
21service performed or established before the effective date of
22that election.
23(Source: P.A. 98-92, eff. 7-16-13.)
 
24    (40 ILCS 5/15-108.2)

 

 

HB2902- 55 -LRB100 05932 RPS 15959 b

1    Sec. 15-108.2. Tier 2 member. "Tier 2 member": A person who
2first becomes a participant under this Article on or after
3January 1, 2011, other than a person in the self-managed plan
4established under Section 15-158.2, unless the person is
5otherwise a Tier 1 member. The changes made to this Section by
6this amendatory Act of the 98th General Assembly are a
7correction of existing law and are intended to be retroactive
8to the effective date of Public Act 96-889, notwithstanding the
9provisions of Section 1-103.1 of this Code.
10    In the case of a Tier 2 member who elects to participate in
11the Tier 3 plan under Section 15-200.5 of this Code, that Tier
122 member shall be deemed a Tier 2 member only with respect to
13service performed or established before the effective date of
14that election.
15(Source: P.A. 98-92, eff. 7-16-13; 98-596, eff. 11-19-13.)
 
16    (40 ILCS 5/15-108.3 new)
17    Sec. 15-108.3. Tier 3 member. "Tier 3 member": A Tier 1 or
18Tier 2 member who elects to participate in the Tier 3 plan
19under Section 15-200.5 of this Code, but only with respect to
20service performed on or after the effective date of that
21election.
 
22    (40 ILCS 5/15-185)  (from Ch. 108 1/2, par. 15-185)
23    Sec. 15-185. Annuities, etc., exempt. The accumulated
24employee and employer contributions shall be held in trust for

 

 

HB2902- 56 -LRB100 05932 RPS 15959 b

1each participant and annuitant, and this trust shall be treated
2as a spendthrift trust. Except as provided in this Article, all
3cash, securities and other property of this system, all
4annuities and other benefits payable under this Article and all
5accumulated credits of participants and annuitants in this
6system and the right of any person to receive an annuity or
7other benefit under this Article, or a refund of contributions,
8shall not be subject to judgment, execution, garnishment,
9attachment, or other seizure by process, in bankruptcy or
10otherwise, nor to sale, pledge, mortgage or other alienation,
11and shall not be assignable. However, a person may relinquish
12his or her creditable service under this Article and all rights
13arising from his or her service under this Article in
14accordance with Section 15-185.5. The board, however, may
15deduct from the benefits, refunds and credits payable to the
16participant, annuitant or beneficiary, amounts owed by the
17participant or annuitant to the system. No attempted sale,
18transfer or assignment of any benefit, refund or credit shall
19prevent the right of the board to make the deduction and offset
20authorized in this Section. Any participant or annuitant may
21authorize the board to deduct from disability benefits or
22annuities, premiums due under any group hospital-surgical
23insurance program which is sponsored or approved by any
24employer; however, the deductions from disability benefits may
25not begin prior to 6 months after the disability occurs.
26    A person receiving an annuity or benefit under this Article

 

 

HB2902- 57 -LRB100 05932 RPS 15959 b

1may also authorize withholding from that annuity or benefit for
2the purposes enumerated in and in accordance with the
3provisions of the State Salary and Annuity Withholding Act.
4    This Section is not intended to, and does not, affect the
5calculation of any benefit under this Article or dictate how or
6to what extent employee or employer contributions are to be
7taken into account in calculating benefits. This amendatory Act
8of the 91st General Assembly is a clarification of existing law
9and applies to every participant and annuitant without regard
10to whether status as an employee terminates before the
11effective date of this amendatory Act.
12    Public Act 86-273 is a clarification of existing law and
13shall be applicable to every participant and annuitant without
14regard to whether status as an employee terminates before the
15effective date of that Act.
16(Source: P.A. 90-65, eff. 7-7-97; 90-448, eff. 8-16-97; 90-511,
17eff. 8-22-97; 90-655, eff. 7-30-98; 91-887, eff. 7-6-00.)
 
18    (40 ILCS 5/15-185.5 new)
19    Sec. 15-185.5. Pension buyout option.
20    (a) As used in this Section:
21        "Approved vendor" means a vendor that has entered into
22    a contract with the Department of Central Management
23    Services to provide lump sum payments under this Section.
24        "Eligible retiree" means a person who (i) has made the
25    election to receive a retirement annuity; (ii) is eligible

 

 

HB2902- 58 -LRB100 05932 RPS 15959 b

1    to receive a retirement annuity; (iii) has terminated
2    service; (iv) is not subject to a QILDRO under this
3    Article; (v) is not a participant in the self-managed plan
4    or the Tier 3 plan; and (vi) has received at least the
5    minimum amount of certified financial planning services,
6    in accordance with rules adopted by the Department of
7    Central Management Services, provided by the approved
8    vendor.
9        "Pension buyout option" means a plan that authorizes an
10    eligible retiree to relinquish all service credit, rights,
11    and benefits under this Article (and this Code to the
12    extent that the provisions of this Code relate to benefits
13    under this Article), including, but not limited to, a
14    survivor's annuity, a retirement annuity, and a refund of
15    contributions, in exchange for a lump sum payment equal to
16    the present value of the retirement annuity as calculated
17    by the System using the actuarial tables and other
18    assumptions adopted by the Board.
19        "Standardized form contract" means the contract
20    approved by the System in accordance with subsection (c).
21    (b) In the event that the Department of Central Management
22Services enters into a contract with an approved vendor and
23implements a pension buyout option:
24        (1) An eligible retiree may make the election
25    authorized under this Section at any time after he or she
26    has elected to retire and has terminated service. However,

 

 

HB2902- 59 -LRB100 05932 RPS 15959 b

1    a retiree who has elected to proceed under the Retirement
2    Systems Reciprocal Act is not eligible to elect the pension
3    buyout option under this Section.
4        (2) An eligible retiree who wishes to participate in
5    the pension buyout option may request that the System
6    determine the dollar amount that the eligible retiree would
7    receive under the pension buyout option.
8        (3) After the System determines the dollar amount that
9    the eligible retiree would receive under the pension buyout
10    option, an eligible retiree who wishes to participate in
11    the pension buyout option shall do so by (i) notifying the
12    approved vendor and the System and (ii) executing the
13    standardized form contract with the approved vendor. As
14    soon as practical after the execution of the standardized
15    form contract, the approved vendor shall notify the System
16    that the eligible retiree executed the standardized form
17    contract. The System shall adopt rules concerning the
18    notice requirements.
19        (4) On the first day of the month following the
20    execution of the standardized form contract between the
21    approved vendor and the eligible retiree, the eligible
22    retiree shall have no rights or benefits under this Article
23    and this Code (to the extent that the provisions of this
24    Code relate to the eligible retiree's rights under this
25    Article) and shall be deemed to have no service credit
26    established under this Article. However, an eligible

 

 

HB2902- 60 -LRB100 05932 RPS 15959 b

1    retiree who receives a pension buyout payment under this
2    Section shall be deemed to be an annuitant for the purposes
3    of the State Employees Group Insurance Act of 1971 and
4    shall be entitled to any benefits under the State Employees
5    Group Insurance Act of 1971 that he or she would have
6    otherwise been entitled to.
7    (c) The System shall approve a standardized form contract.
8The System may by rule specify provisions that must be included
9in the standardized form contract.
10    (d) Any reduction in the System's liability arising from
11the pension buyout option shall not be included in the
12calculation or certification of required State contributions
13sooner than the next certification following the exercise of
14the pension buyout option. The calculation of required State
15contributions under this Article shall not include any
16reduction in the System's liability due to any anticipated
17pension buyout under this Section that has not yet been made.
18    (e) In accordance with rules adopted by the Department of
19Central Management Services, the Board shall certify to the
20Department of Central Management Services the amount of lump
21sum payments made under this Section by an approved vendor.
22    (f) The Board shall adopt rules necessary to implement this
23Section.
24    (g) No provision of this Section shall be interpreted in a
25way that would cause the applicable System to cease to be a
26qualified plan under the Internal Revenue Code of 1986.
 

 

 

HB2902- 61 -LRB100 05932 RPS 15959 b

1    (40 ILCS 5/15-198)
2    (Text of Section WITHOUT the changes made by P.A. 98-599,
3which has been held unconstitutional)
4    Sec. 15-198. Application and expiration of new benefit
5increases.
6    (a) As used in this Section, "new benefit increase" means
7an increase in the amount of any benefit provided under this
8Article, or an expansion of the conditions of eligibility for
9any benefit under this Article, that results from an amendment
10to this Code that takes effect after the effective date of this
11amendatory Act of the 94th General Assembly. "New benefit
12increase", however, does not include any benefit increase
13resulting from the changes made by this amendatory Act of the
14100th General Assembly.
15    (b) Notwithstanding any other provision of this Code or any
16subsequent amendment to this Code, every new benefit increase
17is subject to this Section and shall be deemed to be granted
18only in conformance with and contingent upon compliance with
19the provisions of this Section.
20    (c) The Public Act enacting a new benefit increase must
21identify and provide for payment to the System of additional
22funding at least sufficient to fund the resulting annual
23increase in cost to the System as it accrues.
24    Every new benefit increase is contingent upon the General
25Assembly providing the additional funding required under this

 

 

HB2902- 62 -LRB100 05932 RPS 15959 b

1subsection. The Commission on Government Forecasting and
2Accountability shall analyze whether adequate additional
3funding has been provided for the new benefit increase and
4shall report its analysis to the Public Pension Division of the
5Department of Financial and Professional Regulation. A new
6benefit increase created by a Public Act that does not include
7the additional funding required under this subsection is null
8and void. If the Public Pension Division determines that the
9additional funding provided for a new benefit increase under
10this subsection is or has become inadequate, it may so certify
11to the Governor and the State Comptroller and, in the absence
12of corrective action by the General Assembly, the new benefit
13increase shall expire at the end of the fiscal year in which
14the certification is made.
15    (d) Every new benefit increase shall expire 5 years after
16its effective date or on such earlier date as may be specified
17in the language enacting the new benefit increase or provided
18under subsection (c). This does not prevent the General
19Assembly from extending or re-creating a new benefit increase
20by law.
21    (e) Except as otherwise provided in the language creating
22the new benefit increase, a new benefit increase that expires
23under this Section continues to apply to persons who applied
24and qualified for the affected benefit while the new benefit
25increase was in effect and to the affected beneficiaries and
26alternate payees of such persons, but does not apply to any

 

 

HB2902- 63 -LRB100 05932 RPS 15959 b

1other person, including without limitation a person who
2continues in service after the expiration date and did not
3apply and qualify for the affected benefit while the new
4benefit increase was in effect.
5(Source: P.A. 94-4, eff. 6-1-05.)
 
6    (40 ILCS 5/15-200.5 new)
7    Sec. 15-200.5. Tier 3 plan.
8    (a) By July 1, 2018, the System shall prepare and implement
9a Tier 3 plan. The Tier 3 plan developed under this Section
10shall be a plan that aggregates employee contributions and
11employer contributions, if the employer elects to contribute,
12in individual participant accounts which, after meeting any
13other requirements, are used for payouts after retirement in
14accordance with this Section and any other applicable laws.
15    (a-5) As used in this Section, "defined benefit plan" means
16the traditional benefit package or the portable benefit package
17available under this Article to Tier 1 or Tier 2 members who
18have not made the election authorized under this Section and do
19not participate in the self-managed plan under Section
2015-158.2.
21    (b) Under the Tier 3 plan, an active Tier 1 or Tier 2
22member of this System may elect, in writing, to cease accruing
23benefits in the defined benefit plan and begin accruing
24benefits for future service in the Tier 3 plan. An active Tier
251 or Tier 2 member who elects to cease accruing benefits in his

 

 

HB2902- 64 -LRB100 05932 RPS 15959 b

1or her defined benefit plan shall be prohibited from purchasing
2service credit on or after the date of his or her election. A
3Tier 1 or Tier 2 member who elects to participate in the Tier 3
4plan shall not receive interest accruals to his or her Rule 2
5benefit on or after the date of his or her election. The
6election to participate in the Tier 3 plan is voluntary and
7irrevocable.
8        (1) Service credit under the Tier 3 plan may be used
9    for determining retirement eligibility under the defined
10    benefit plan.
11        (2) The System shall make a good faith effort to
12    contact all active Tier 1 and Tier 2 members who are
13    eligible to participate in the Tier 3 plan. The System
14    shall mail information describing the option to join the
15    Tier 3 plan to each of these employees to his or her last
16    known address on file with the System. If the employee is
17    not responsive to other means of contact, it is sufficient
18    for the System to publish the details of the option on its
19    website.
20        (3) Upon request for further information describing
21    the option, the System shall provide employees with
22    information from the System before exercising the option to
23    join the plan, including information on the impact to their
24    benefits and service. The individual consultation shall
25    include projections of the member's defined benefits at
26    retirement or earlier termination of service and the value

 

 

HB2902- 65 -LRB100 05932 RPS 15959 b

1    of the member's account at retirement or earlier
2    termination of service. The System shall not provide advice
3    or counseling with respect to whether the employee should
4    exercise the option. The System shall inform Tier 1 and
5    Tier 2 members who are eligible to participate in the Tier
6    3 plan that they may also wish to obtain information and
7    counsel relating to their option from any other available
8    source, including but not limited to labor organizations,
9    private counsel, and financial advisors.
10    (c) The Tier 3 plan developed and implemented by the System
11shall comply with the following requirements:
12        (1) A participant in the Tier 3 plan shall pay employee
13    contributions at a rate determined by the participant, but
14    not less than 3% of earnings and not more than a percentage
15    of earnings determined by the Board in accordance with the
16    requirements of State and federal law.
17        (2) An employer is not required to make employer
18    contributions to the Tier 3 plan, but if the employer
19    elects to contribute, then those contributions shall be
20    paid into the individual account of each participant in the
21    Tier 3 plan that is employed by the employer at a rate,
22    expressed as a percentage of earnings, equal to the rate of
23    the individual employee's contributions.
24        (3) The Tier 3 plan shall require 5 years of
25    participation in the Tier 3 plan before vesting in employer
26    contributions. If the participant fails to vest in them,

 

 

HB2902- 66 -LRB100 05932 RPS 15959 b

1    the employer contributions, and the earnings thereon,
2    shall be forfeited.
3        (5) The Tier 3 plan shall provide a variety of options
4    for investments. These options shall include investments
5    in a fund created by the System and managed in accordance
6    with legal and fiduciary standards, as well as investment
7    options otherwise available.
8        (6) The Tier 3 plan shall provide a variety of options
9    for payouts to participants in the Tier 3 plan who are no
10    longer active in the System and their survivors.
11        (7) To the extent authorized under federal law and as
12    authorized by the System, the plan shall allow former
13    participants in the plan to transfer or roll over employee
14    and vested State contributions, and the earnings thereon,
15    from the Tier 3 plan into other qualified retirement plans.
16        (8) The System shall reduce the employee contributions
17    credited to the member's Tier 3 plan account by an amount
18    determined by the System to cover the cost of offering
19    these benefits and any applicable administrative fees.
20    (b-5) A Tier 1 or Tier 2 member who elects to participate
21in the Tier 3 plan may irrevocably elect to terminate all
22participation in the defined benefit plan. Upon that election,
23the System shall transfer to the member's individual account an
24amount equal to the amount of contribution refund that the
25member would be eligible to receive if the member terminated
26employment on that date and elected a refund of contributions,

 

 

HB2902- 67 -LRB100 05932 RPS 15959 b

1including regular interest for the respective years. The System
2shall make the transfer as a tax free transfer in accordance
3with Internal Revenue Service guidelines, for purposes of
4funding the amount credited to the member's individual account.
5    (c) In no event shall the System, its staff, its authorized
6representatives, or the Board be liable for any information
7given to an employee under this Section. The System may
8coordinate with the Illinois Department of Central Management
9Services and other retirement systems administering a Tier 3
10plan in accordance with this amendatory Act of the 100th
11General Assembly to provide information concerning the impact
12of the Tier 3 plan set forth in this Section.
13    (d) Notwithstanding any other provision of this Section, no
14person shall begin participating in the Tier 3 plan until it
15has attained qualified plan status and received all necessary
16approvals from the U.S. Internal Revenue Service.
17    (e) The System shall report on its progress under this
18Section, including the available details of the Tier 3 plan and
19the System's plans for informing eligible Tier 1 and Tier 2
20members about the plan, to the Governor and the General
21Assembly on or before January 15, 2018.
 
22    (40 ILCS 5/16-106.40 new)
23    Sec. 16-106.40. Tier 1 member. "Tier 1 member": A member
24under this Article who first became a member or participant
25before January 1, 2011 under any reciprocal retirement system

 

 

HB2902- 68 -LRB100 05932 RPS 15959 b

1or pension fund established under this Code other than a
2retirement system or pension fund established under Article 2,
33, 4, 5, 6, or 18 of this Code.
4    In the case of a Tier 1 member who elects to participate in
5the Tier 3 plan under Section 16-205.5 of this Code or the Tier
64 plan under Section 16-205.6 of this Code, that Tier 1 member
7shall be deemed a Tier 1 member only with respect to service
8performed or established before the effective date of that
9election.
 
10    (40 ILCS 5/16-106.41 new)
11    Sec. 16-106.41. Tier 2 member. "Tier 2 member": A member of
12the System who first becomes a member under this Article on or
13after January 1, 2011 and who is not a Tier 1 member.
14    In the case of a Tier 2 member who elects to participate in
15the Tier 3 plan under Section 16-205.5 of this Code or the Tier
164 plan under Section 16-205.6 of this Code, the Tier 2 member
17shall be deemed a Tier 2 member only with respect to service
18performed or established before the effective date of that
19election.
 
20    (40 ILCS 5/16-106.42 new)
21    Sec. 16-106.42. Tier 3 member. "Tier 3 member": A Tier 1 or
22Tier 2 member who elects to participate in the Tier 3 plan
23under Section 16-205.5 of this Code, but only with respect to
24service performed on or after the effective date of that

 

 

HB2902- 69 -LRB100 05932 RPS 15959 b

1election.
 
2    (40 ILCS 5/16-106.43 new)
3    Sec. 16-106.43. Tier 4 member. "Tier 4 member": A Tier 1 or
4Tier 2 member who elects to participate in the Tier 4 plan
5under Section 16-205.6 of this Code, but only with respect to
6service performed on or after the effective date of that
7election.
 
8    (40 ILCS 5/16-190)  (from Ch. 108 1/2, par. 16-190)
9    Sec. 16-190. Annuities, etc., - exempt. The right of a
10person to a retirement annuity or other benefit, to the return
11of contributions, the retirement annuity or other benefit
12itself, any optional benefit, any other right accrued or
13accruing to any person under the provisions of this Article,
14and the moneys in the fund created by this Article, shall be
15subject neither to attachment, garnishment, execution, or
16other seizure by process, nor to sale, pledge, mortgage or
17other alienation, and shall not be assignable except as in this
18Article provided. However, a person may relinquish his or her
19creditable service under this Article and all rights arising
20from his or her service under this Article in accordance with
21Section 16-190.5. A person receiving an annuity or benefit may
22authorize withholding from such annuity or benefit for the
23purposes enumerated in the "State Salary and Annuity
24Withholding Act", approved August 21, 1961, as now or hereafter

 

 

HB2902- 70 -LRB100 05932 RPS 15959 b

1amended. The moneys in the fund are exempt from any state or
2municipal tax.
3(Source: P.A. 83-1440.)
 
4    (40 ILCS 5/16-190.5 new)
5    Sec. 16-190.5. Pension buyout option.
6    (a) As used in this Section:
7        "Approved vendor" means a vendor that has entered into
8    a contract with the Department of Central Management
9    Services to provide lump sum payments under this Section.
10        "Eligible retiree" means a person who (i) has made the
11    election to receive a retirement annuity; (ii) is eligible
12    to receive a retirement annuity; (iii) has terminated
13    service; (iv) is not a participant in the Tier 3 plan or
14    the Tier 4 plan; (v) is not subject to a QILDRO under this
15    Article; and (vi) has received at least the minimum amount
16    of certified financial planning services, in accordance
17    with rules adopted by the Department of Central Management
18    Services, provided by the approved vendor.
19        "Pension buyout option" means a plan that authorizes an
20    eligible retiree to relinquish all service credit, rights,
21    and benefits under this Article (and this Code to the
22    extent that the provisions of this Code relate to benefits
23    under this Article), including, but not limited to, a
24    survivor's annuity, a retirement annuity, and a refund of
25    contributions, in exchange for a lump sum payment equal to

 

 

HB2902- 71 -LRB100 05932 RPS 15959 b

1    the present value of the retirement annuity as calculated
2    by the System using the actuarial tables and other
3    assumptions adopted by the Board.
4        "Standardized form contract" means the contract
5    approved by the System in accordance with subsection (c).
6    (b) In the event that the Department of Central Management
7Services enters into a contract with an approved vendor and
8implements a pension buyout option:
9        (1) An eligible retiree may make the election
10    authorized under this Section at any time after he or she
11    has elected to retire and has terminated service. However,
12    a retiree who has elected to proceed under the Retirement
13    Systems Reciprocal Act is not eligible to elect the pension
14    buyout option under this Section.
15        (2) An eligible retiree who wishes to participate in
16    the pension buyout option may request that the System
17    determine the dollar amount that the eligible retiree would
18    receive under the pension buyout option.
19        (3) After the System determines the dollar amount that
20    the eligible retiree would receive under the pension buyout
21    option, an eligible retiree who wishes to participate in
22    the pension buyout option shall do so by (i) notifying the
23    approved vendor and the System and (ii) executing the
24    standardized form contract with the approved vendor. As
25    soon as practical after the execution of the standardized
26    form contract, the approved vendor shall notify the System

 

 

HB2902- 72 -LRB100 05932 RPS 15959 b

1    that the eligible retiree executed the standardized form
2    contract. The System shall adopt rules concerning the
3    notice requirements.
4        (4) On the first day of the month following the
5    execution of the standardized form contract between the
6    approved vendor and the eligible retiree, the eligible
7    retiree shall have no rights or benefits under this Article
8    and this Code (to the extent that the provisions of this
9    Code relate to the eligible retiree's rights under this
10    Article) and shall be deemed to have no service credit
11    established under this Article. However, an eligible
12    retiree who receives a pension buyout payment under this
13    Section shall be deemed to be an annuitant for the purposes
14    of the State Employees Group Insurance Act of 1971 and
15    shall be entitled to any benefits under the State Employees
16    Group Insurance Act of 1971 that he or she would have
17    otherwise been entitled to.
18    (c) The System shall approve a standardized form contract.
19The System may by rule specify provisions that must be included
20in the standardized form contract.
21    (d) Any reduction in the System's liability arising from
22the pension buyout option shall not be included in the
23calculation or certification of required State contributions
24sooner than the next certification following the exercise of
25the pension buyout option. The calculation of required State
26contributions under this Article shall not include any

 

 

HB2902- 73 -LRB100 05932 RPS 15959 b

1reduction in the System's liability due to any anticipated
2pension buyout under this Section that has not yet been made.
3    (e) In accordance with rules adopted by the Department of
4Central Management Services, the Board shall certify to the
5Department of Central Management Services the amount of lump
6sum payments made under this Section by an approved vendor.
7    (f) The Board shall adopt rules necessary to implement this
8Section.
9    (g) No provision of this Section shall be interpreted in a
10way that would cause the System to cease to be a qualified plan
11under the Internal Revenue Code of 1986.
 
12    (40 ILCS 5/16-203)
13    (Text of Section WITHOUT the changes made by P.A. 98-599,
14which has been held unconstitutional)
15    Sec. 16-203. Application and expiration of new benefit
16increases.
17    (a) As used in this Section, "new benefit increase" means
18an increase in the amount of any benefit provided under this
19Article, or an expansion of the conditions of eligibility for
20any benefit under this Article, that results from an amendment
21to this Code that takes effect after June 1, 2005 (the
22effective date of Public Act 94-4). "New benefit increase",
23however, does not include any benefit increase resulting from
24the changes made to this Article by Public Act 95-910 or this
25amendatory Act of the 100th General Assembly this amendatory

 

 

HB2902- 74 -LRB100 05932 RPS 15959 b

1Act of the 95th General Assembly.
2    (b) Notwithstanding any other provision of this Code or any
3subsequent amendment to this Code, every new benefit increase
4is subject to this Section and shall be deemed to be granted
5only in conformance with and contingent upon compliance with
6the provisions of this Section.
7    (c) The Public Act enacting a new benefit increase must
8identify and provide for payment to the System of additional
9funding at least sufficient to fund the resulting annual
10increase in cost to the System as it accrues.
11    Every new benefit increase is contingent upon the General
12Assembly providing the additional funding required under this
13subsection. The Commission on Government Forecasting and
14Accountability shall analyze whether adequate additional
15funding has been provided for the new benefit increase and
16shall report its analysis to the Public Pension Division of the
17Department of Financial and Professional Regulation. A new
18benefit increase created by a Public Act that does not include
19the additional funding required under this subsection is null
20and void. If the Public Pension Division determines that the
21additional funding provided for a new benefit increase under
22this subsection is or has become inadequate, it may so certify
23to the Governor and the State Comptroller and, in the absence
24of corrective action by the General Assembly, the new benefit
25increase shall expire at the end of the fiscal year in which
26the certification is made.

 

 

HB2902- 75 -LRB100 05932 RPS 15959 b

1    (d) Every new benefit increase shall expire 5 years after
2its effective date or on such earlier date as may be specified
3in the language enacting the new benefit increase or provided
4under subsection (c). This does not prevent the General
5Assembly from extending or re-creating a new benefit increase
6by law.
7    (e) Except as otherwise provided in the language creating
8the new benefit increase, a new benefit increase that expires
9under this Section continues to apply to persons who applied
10and qualified for the affected benefit while the new benefit
11increase was in effect and to the affected beneficiaries and
12alternate payees of such persons, but does not apply to any
13other person, including without limitation a person who
14continues in service after the expiration date and did not
15apply and qualify for the affected benefit while the new
16benefit increase was in effect.
17(Source: P.A. 94-4, eff. 6-1-05; 95-910, eff. 8-26-08.)
 
18    (40 ILCS 5/16-205.5 new)
19    Sec. 16-205.5. Tier 3 plan.
20    (a) By July 1, 2018, the System shall prepare and implement
21a Tier 3 plan. The Tier 3 plan developed under this Section
22shall be a plan that aggregates employee contributions and
23employer contributions, if the employer elects to contribute,
24in individual participant accounts which, after meeting any
25other requirements, are used for payouts after retirement in

 

 

HB2902- 76 -LRB100 05932 RPS 15959 b

1accordance with this Section and any other applicable laws.
2    (a-5) As used in this Section, "defined benefit plan" means
3the retirement plan available under this Article to Tier 1 or
4Tier 2 members who have not made the election authorized under
5this Section or Section 16-205.6.
6    (b) Under the Tier 3 plan, an active Tier 1 or Tier 2
7member of this System may elect, in writing, to cease accruing
8benefits in the defined benefit plan and begin accruing
9benefits for future service in the Tier 3 plan. An active Tier
101 or Tier 2 member who elects to cease accruing benefits in his
11or her defined benefit plan shall be prohibited from purchasing
12service credit on or after the date of his or her election. A
13Tier 1 or Tier 2 member making the irrevocable election
14provided under this subsection shall not receive interest
15accruals to his or her benefit under paragraph (A) of
16subsection (a) of Section 16-133 of this Code on or after the
17date of his or her election. The election to participate in the
18Tier 3 plan is voluntary and irrevocable.
19        (1) Service credit under the Tier 3 plan may be used
20    for determining retirement eligibility under the defined
21    benefit plan.
22        (2) The System shall make a good faith effort to
23    contact all active Tier 1 and Tier 2 members who are
24    eligible to participate in the Tier 3 plan. The System
25    shall mail information describing the option to join the
26    Tier 3 plan to each of these employees to his or her last

 

 

HB2902- 77 -LRB100 05932 RPS 15959 b

1    known address on file with the System. If the employee is
2    not responsive to other means of contact, it is sufficient
3    for the System to publish the details of the option on its
4    website.
5        (3) Upon request for further information describing
6    the option, the System shall provide employees with
7    information from the System before exercising the option to
8    join the plan, including information on the impact to their
9    benefits and service. The individual consultation shall
10    include projections of the member's defined benefits at
11    retirement or earlier termination of service and the value
12    of the member's account at retirement or earlier
13    termination of service. The System shall not provide advice
14    or counseling with respect to whether the employee should
15    exercise the option. The System shall inform Tier 1 and
16    Tier 2 members who are eligible to participate in the Tier
17    3 plan that they may also wish to obtain information and
18    counsel relating to their option from any other available
19    source, including but not limited to labor organizations,
20    private counsel, and financial advisors.
21    (c) The Tier 3 plan developed and implemented by the System
22shall comply with the following requirements:
23        (1) A participant in the Tier 3 plan shall pay employee
24    contributions at a rate determined by the participant, but
25    not less than 3% of salary and not more than a percentage
26    of salary determined by the Board in accordance with the

 

 

HB2902- 78 -LRB100 05932 RPS 15959 b

1    requirements of State and federal law.
2        (2) An employer is not required to make employer
3    contributions to the Tier 3 plan, but if the employer
4    elects to contribute, then those contributions shall be
5    paid into the individual account of each participant in the
6    Tier 3 plan that is employed by the employer at a rate,
7    expressed as a percentage of salary, equal to the rate of
8    the individual employee's contributions.
9        (3) The Tier 3 plan shall require 5 years of
10    participation in the Tier 3 plan before vesting in employer
11    contributions. If the participant fails to vest in them,
12    the employer contributions, and the earnings thereon,
13    shall be forfeited.
14        (4) The Tier 3 plan shall provide a variety of options
15    for investments. These options shall include investments
16    in a fund created by the System and managed in accordance
17    with legal and fiduciary standards, as well as investment
18    options otherwise available.
19        (5) The Tier 3 plan shall provide a variety of options
20    for payouts to participants in the Tier 3 plan who are no
21    longer active in the System and their survivors.
22        (6) To the extent authorized under federal law and as
23    authorized by the System, the plan shall allow former
24    participants in the plan to transfer or roll over employee
25    and vested State contributions, and the earnings thereon,
26    from the Tier 3 plan into other qualified retirement plans.

 

 

HB2902- 79 -LRB100 05932 RPS 15959 b

1        (7) The System shall reduce the employee contributions
2    credited to the member's Tier 3 plan account by an amount
3    determined by the System to cover the cost of offering
4    these benefits and any applicable administrative fees.
5    (b-5) A Tier 1 or Tier 2 member who elects to participate
6in the Tier 3 plan may irrevocably elect to terminate all
7participation in the defined benefit plan. Upon that election,
8the System shall transfer to the member's individual account an
9amount equal to the amount of contribution refund that the
10member would be eligible to receive if the member terminated
11employment on that date and elected a refund of contributions,
12including regular interest for the respective years. The System
13shall make the transfer as a tax free transfer in accordance
14with Internal Revenue Service guidelines, for purposes of
15funding the amount credited to the member's individual account.
16    (c) In no event shall the System, its staff, its authorized
17representatives, or the Board be liable for any information
18given to an employee under this Section. The System may
19coordinate with the Illinois Department of Central Management
20Services and other retirement systems administering a Tier 3
21plan in accordance with this amendatory Act of the 100th
22General Assembly to provide information concerning the impact
23of the Tier 3 plan set forth in this Section.
24    (d) Notwithstanding any other provision of this Section, no
25person shall begin participating in the Tier 3 plan until it
26has attained qualified plan status and received all necessary

 

 

HB2902- 80 -LRB100 05932 RPS 15959 b

1approvals from the U.S. Internal Revenue Service.
2    (e) The System shall report on its progress under this
3Section, including the available details of the Tier 3 plan and
4the System's plans for informing eligible Tier 1 and Tier 2
5members about the plan, to the Governor and the General
6Assembly on or before January 15, 2018.
 
7    (40 ILCS 5/16-205.6 new)
8    Sec. 16-205.6. Tier 4 plan.
9    (a) By July 1, 2018, the System shall prepare and implement
10a Tier 4 plan. The Tier 4 plan developed under this Section
11shall be a plan that aggregates employee and State
12contributions in individual participant accounts which, after
13meeting any other requirements, are used for payouts after
14retirement in accordance with this Section and any other
15applicable laws.
16    (a-5) As used in this Section, "defined benefit plan" means
17the retirement plan available under this Article to Tier 1 or
18Tier 2 members who have not made the election authorized under
19this Section or Section 16-205.5.
20    (b) Under the Tier 4 plan, an active Tier 1 or Tier 2
21member of this System may elect, in writing, to cease accruing
22benefits in the defined benefit plan and begin accruing
23benefits for future service in the Tier 4 plan. An active Tier
241 or Tier 2 member who elects to cease accruing benefits in his
25or her defined benefit plan shall be prohibited from purchasing

 

 

HB2902- 81 -LRB100 05932 RPS 15959 b

1service credit on or after the date of his or her election. A
2Tier 1 or Tier 2 member making the irrevocable election
3provided under this subsection shall not receive interest
4accruals to his or her benefit under paragraph (A) of
5subsection (a) of Section 16-133 of this Code on or after the
6date of his or her election. The election to participate in the
7Tier 4 plan is voluntary and irrevocable.
8        (1) Service credit under the Tier 4 plan may be used
9    for determining retirement eligibility under the defined
10    benefit plan.
11        (2) The System shall make a good faith effort to
12    contact all active Tier 1 and Tier 2 members who are
13    eligible to participate in the Tier 4 plan. The System
14    shall mail information describing the option to join the
15    Tier 4 plan to each of these employees to his or her last
16    known address on file with the System. If the employee is
17    not responsive to other means of contact, it is sufficient
18    for the System to publish the details of the option on its
19    website.
20        (3) Upon request for further information describing
21    the option, the System shall provide employees with
22    information from the System before exercising the option to
23    join the plan, including information on the impact to their
24    benefits and service. The individual consultation shall
25    include projections of the member's defined benefits at
26    retirement or earlier termination of service and the value

 

 

HB2902- 82 -LRB100 05932 RPS 15959 b

1    of the member's account at retirement or earlier
2    termination of service. The System shall not provide advice
3    or counseling with respect to whether the employee should
4    exercise the option. The System shall inform Tier 1 and
5    Tier 2 members who are eligible to participate in the Tier
6    4 plan that they may also wish to obtain information and
7    counsel relating to their option from any other available
8    source, including but not limited to labor organizations,
9    private counsel, and financial advisors.
10    (c) The Tier 4 plan developed and implemented by the System
11shall comply with the following requirements:
12        (1) A participant in the Tier 4 plan shall pay employee
13    contributions at a rate of 8% of salary.
14        (2) State contributions shall be paid into the accounts
15    of all participants in the Tier 4 plan at a rate of 8% of
16    salary.
17        (3) The Tier 4 plan shall require 5 years of
18    participation in the Tier 4 plan before vesting in State
19    contributions. If the participant fails to vest in them,
20    the State contributions, and the earnings thereon, shall be
21    forfeited.
22        (4) The Tier 4 plan shall provide for participants in
23    the plan to be eligible for the defined disability benefits
24    available to other participants under this Article. The
25    System shall reduce the State contributions credited to the
26    member's Tier 4 plan account by an amount determined by the

 

 

HB2902- 83 -LRB100 05932 RPS 15959 b

1    System to cover the cost of offering such benefits.
2        (5) The Tier 4 plan shall provide a variety of options
3    for investments. These options shall include investments
4    in a fund created by the System and managed in accordance
5    with legal and fiduciary standards, as well as investment
6    options otherwise available.
7        (6) The Tier 4 plan shall provide a variety of options
8    for payouts to participants in the Tier 4 plan who are no
9    longer active in the System and their survivors.
10        (7) To the extent authorized under federal law and as
11    authorized by the System, the plan shall allow former
12    participants in the plan to transfer or roll over employee
13    and vested State contributions, and the earnings thereon,
14    from the Tier 4 plan into other qualified retirement plans.
15        (8) The System shall reduce the employee contributions
16    credited to the member's Tier 4 plan account by an amount,
17    not exceeding 1% of the member's salary, determined by the
18    System to cover the cost of offering these benefits and any
19    applicable administrative fees.
20    (b-5) A Tier 1 or Tier 2 member who elects to participate
21in the Tier 4 plan may irrevocably elect to terminate all
22participation in the defined benefit plan. Upon that election,
23the System shall transfer to the member's individual account an
24amount equal to the amount of contribution refund that the
25member would be eligible to receive if the member terminated
26employment on that date and elected a refund of contributions,

 

 

HB2902- 84 -LRB100 05932 RPS 15959 b

1including regular interest for the respective years. The System
2shall make the transfer as a tax free transfer in accordance
3with Internal Revenue Service guidelines, for purposes of
4funding the amount credited to the member's individual account.
5    (c) In no event shall the System, its staff, its authorized
6representatives, or the Board be liable for any information
7given to an employee under this Section. The System may
8coordinate with the Illinois Department of Central Management
9Services and other retirement systems administering a Tier 4
10plan in accordance with this amendatory Act of the 100th
11General Assembly to provide information concerning the impact
12of the Tier 4 plan set forth in this Section.
13    (d) Notwithstanding any other provision of this Section, no
14person shall begin participating in the Tier 4 plan until it
15has attained qualified plan status and received all necessary
16approvals from the U.S. Internal Revenue Service.
17    (e) The System shall report on its progress under this
18Section, including the available details of the Tier 4 plan and
19the System's plans for informing eligible Tier 1 and Tier 2
20members about the plan, to the Governor and the General
21Assembly on or before January 15, 2018.
 
22    (40 ILCS 5/20-121)  (from Ch. 108 1/2, par. 20-121)
23    (Text of Section WITHOUT the changes made by P.A. 98-599,
24which has been held unconstitutional)
25    Sec. 20-121. Calculation of proportional retirement

 

 

HB2902- 85 -LRB100 05932 RPS 15959 b

1annuities.
2    (a) Upon retirement of the employee, a proportional
3retirement annuity shall be computed by each participating
4system in which pension credit has been established on the
5basis of pension credits under each system. The computation
6shall be in accordance with the formula or method prescribed by
7each participating system which is in effect at the date of the
8employee's latest withdrawal from service covered by any of the
9systems in which he has pension credits which he elects to have
10considered under this Article. However, the amount of any
11retirement annuity payable under the self-managed plan
12established under Section 15-158.2 of this Code depends solely
13on the value of the participant's vested account balances and
14is not subject to any proportional adjustment under this
15Section.
16    (a-5) For persons who participate in a Tier 3 plan
17established under Article 15 or 16 of this Code to whom the
18provisions of this Article apply, the pension credits
19established under the Tier 3 plan may be considered in
20determining eligibility for or the amount of the defined
21benefit retirement annuity that is payable by any other
22participating system.
23    (a-10) For persons who participate in a Tier 4 plan
24established under Article 16 of this Code to whom the
25provisions of this Article apply, the pension credits
26established under the Tier 4 plan may be considered in

 

 

HB2902- 86 -LRB100 05932 RPS 15959 b

1determining eligibility for or the amount of the defined
2benefit retirement annuity that is payable by any other
3participating system.
4    (b) Combined pension credit under all retirement systems
5subject to this Article shall be considered in determining
6whether the minimum qualification has been met and the formula
7or method of computation which shall be applied, except as may
8be otherwise provided with respect to vesting in State or
9employer contributions in a Tier 3 or Tier 4 plan. If a system
10has a step-rate formula for calculation of the retirement
11annuity, pension credits covering previous service which have
12been established under another system shall be considered in
13determining which range or ranges of the step-rate formula are
14to be applicable to the employee.
15    (c) Interest on pension credit shall continue to accumulate
16in accordance with the provisions of the law governing the
17retirement system in which the same has been established during
18the time an employee is in the service of another employer, on
19the assumption such employee, for interest purposes for pension
20credit, is continuing in the service covered by such retirement
21system.
22(Source: P.A. 91-887, eff. 7-6-00.)
 
23    (40 ILCS 5/20-123)  (from Ch. 108 1/2, par. 20-123)
24    (Text of Section WITHOUT the changes made by P.A. 98-599,
25which has been held unconstitutional)

 

 

HB2902- 87 -LRB100 05932 RPS 15959 b

1    Sec. 20-123. Survivor's annuity. The provisions governing
2a retirement annuity shall be applicable to a survivor's
3annuity. Appropriate credits shall be established for
4survivor's annuity purposes in those participating systems
5which provide survivor's annuities, according to the same
6conditions and subject to the same limitations and restrictions
7herein prescribed for a retirement annuity. If a participating
8system has no survivor's annuity benefit, or if the survivor's
9annuity benefit under that system is waived, pension credit
10established in that system shall not be considered in
11determining eligibility for or the amount of the survivor's
12annuity which may be payable by any other participating system.
13    For persons who participate in the self-managed plan
14established under Section 15-158.2 or the portable benefit
15package established under Section 15-136.4, pension credit
16established under Article 15 may be considered in determining
17eligibility for or the amount of the survivor's annuity that is
18payable by any other participating system, but pension credit
19established in any other system shall not result in any right
20to a survivor's annuity under the Article 15 system.
21    For persons who participate in a Tier 3 plan established
22under Article 15 or 16 of this Code to whom the provisions of
23this Article apply, the pension credits established under the
24Tier 3 plan may be considered in determining eligibility for or
25the amount of the defined benefit survivor's annuity that is
26payable by any other participating system, but pension credits

 

 

HB2902- 88 -LRB100 05932 RPS 15959 b

1established in any other system shall not result in any right
2to or increase in the value of a survivor's annuity under the
3Tier 3 plan, which depends solely on the options chosen and the
4value of the participant's vested account balances and is not
5subject to any proportional adjustment under this Section.
6    For persons who participate in a Tier 4 plan established
7under Article 16 of this Code to whom the provisions of this
8Article apply, the pension credits established under the Tier 4
9plan may be considered in determining eligibility for or the
10amount of the defined benefit survivor's annuity that is
11payable by any other participating system, but pension credits
12established in any other system shall not result in any right
13to or increase in the value of a survivor's annuity under the
14Tier 4 plan, which depends solely on the options chosen and the
15value of the participant's vested account balances and is not
16subject to any proportional adjustment under this Section.
17(Source: P.A. 91-887, eff. 7-6-00.)
 
18    (40 ILCS 5/20-124)  (from Ch. 108 1/2, par. 20-124)
19    (Text of Section WITHOUT the changes made by P.A. 98-599,
20which has been held unconstitutional)
21    Sec. 20-124. Maximum benefits.
22    (a) In no event shall the combined retirement or survivors
23annuities exceed the highest annuity which would have been
24payable by any participating system in which the employee has
25pension credits, if all of his pension credits had been

 

 

HB2902- 89 -LRB100 05932 RPS 15959 b

1validated in that system.
2    If the combined annuities should exceed the highest maximum
3as determined in accordance with this Section, the respective
4annuities shall be reduced proportionately according to the
5ratio which the amount of each proportional annuity bears to
6the aggregate of all such annuities.
7    (b) In the case of a participant in the self-managed plan
8established under Section 15-158.2 of this Code to whom the
9provisions of this Article apply:
10        (i) For purposes of calculating the combined
11    retirement annuity and the proportionate reduction, if
12    any, in a retirement annuity other than one payable under
13    the self-managed plan, the amount of the Article 15
14    retirement annuity shall be deemed to be the highest
15    annuity to which the annuitant would have been entitled if
16    he or she had participated in the traditional benefit
17    package as defined in Section 15-103.1 rather than the
18    self-managed plan.
19        (ii) For purposes of calculating the combined
20    survivor's annuity and the proportionate reduction, if
21    any, in a survivor's annuity other than one payable under
22    the self-managed plan, the amount of the Article 15
23    survivor's annuity shall be deemed to be the highest
24    survivor's annuity to which the survivor would have been
25    entitled if the deceased employee had participated in the
26    traditional benefit package as defined in Section 15-103.1

 

 

HB2902- 90 -LRB100 05932 RPS 15959 b

1    rather than the self-managed plan.
2        (iii) Benefits payable under the self-managed plan are
3    not subject to proportionate reduction under this Section.
4    (c) In the case of a participant in a Tier 3 plan
5established under Article 15 or 16 of this Code to whom the
6provisions of this Article apply:
7        (i) For purposes of calculating the combined
8    retirement annuity and the proportionate reduction, if
9    any, in a defined benefit retirement annuity, any benefit
10    payable under the Tier 3 plan shall not be considered.
11        (ii) For purposes of calculating the combined
12    survivor's annuity and the proportionate reduction, if
13    any, in a defined benefit survivor's annuity, any benefit
14    payable under the Tier 3 plan shall not be considered.
15        (iii) Benefits payable under a Tier 3 plan established
16    under Article 15 or 16 of this Code are not subject to
17    proportionate reduction under this Section.
18    (d) In the case of a participant in a Tier 4 plan
19established under Article 16 of this Code to whom the
20provisions of this Article apply:
21        (i) For purposes of calculating the combined
22    retirement annuity and the proportionate reduction, if
23    any, in a defined benefit retirement annuity, any benefit
24    payable under the Tier 4 plan shall not be considered.
25        (ii) For purposes of calculating the combined
26    survivor's annuity and the proportionate reduction, if

 

 

HB2902- 91 -LRB100 05932 RPS 15959 b

1    any, in a defined benefit survivor's annuity, any benefit
2    payable under the Tier 4 plan shall not be considered.
3        (iii) Benefits payable under a Tier 4 plan established
4    under Article 16 of this Code are not subject to
5    proportionate reduction under this Section.
6(Source: P.A. 91-887, eff. 7-6-00.)
 
7    (40 ILCS 5/20-125)  (from Ch. 108 1/2, par. 20-125)
8    (Text of Section WITHOUT the changes made by P.A. 98-599,
9which has been held unconstitutional)
10    Sec. 20-125. Return to employment - suspension of benefits.
11If a retired employee returns to employment which is covered by
12a system from which he is receiving a proportional annuity
13under this Article, his proportional annuity from all
14participating systems shall be suspended during the period of
15re-employment, except that this suspension does not apply to
16any distributions payable under the self-managed plan
17established under Section 15-158.2 of this Code, under a Tier 3
18plan established under Article 15 or 16 of this Code, or under
19a Tier 4 plan established under Article 16 of this Code.
20    The provisions of the Article under which such employment
21would be covered shall govern the determination of whether the
22employee has returned to employment, and if applicable the
23exemption of temporary employment or employment not exceeding a
24specified duration or frequency, for all participating systems
25from which the retired employee is receiving a proportional

 

 

HB2902- 92 -LRB100 05932 RPS 15959 b

1annuity under this Article, notwithstanding any contrary
2provisions in the other Articles governing such systems.
3(Source: P.A. 91-887, eff. 7-6-00.)
 
4    Section 990. The State Mandates Act is amended by adding
5Section 8.41 as follows:
 
6    (30 ILCS 805/8.41 new)
7    Sec. 8.41. Exempt mandate. Notwithstanding Sections 6 and 8
8of this Act, no reimbursement by the State is required for the
9implementation of any mandate created by this amendatory Act of
10the 100th General Assembly.
 
11    Section 999. Effective date. This Act takes effect upon
12becoming law.

 

 

HB2902- 93 -LRB100 05932 RPS 15959 b

1 INDEX
2 Statutes amended in order of appearance
3    New Act
4    5 ILCS 375/3from Ch. 127, par. 523
5    5 ILCS 375/10from Ch. 127, par. 530
6    20 ILCS 405/405-298 new
7    20 ILCS 3501/801-40
8    30 ILCS 500/45-32 new
9    40 ILCS 5/15-108.1
10    40 ILCS 5/15-108.2
11    40 ILCS 5/15-108.3 new
12    40 ILCS 5/15-185from Ch. 108 1/2, par. 15-185
13    40 ILCS 5/15-185.5 new
14    40 ILCS 5/15-198
15    40 ILCS 5/15-200.5 new
16    40 ILCS 5/16-106.40 new
17    40 ILCS 5/16-106.41 new
18    40 ILCS 5/16-106.42 new
19    40 ILCS 5/16-106.43 new
20    40 ILCS 5/16-190from Ch. 108 1/2, par. 16-190
21    40 ILCS 5/16-190.5 new
22    40 ILCS 5/16-203
23    40 ILCS 5/16-205.5 new
24    40 ILCS 5/16-205.6 new
25    40 ILCS 5/20-121from Ch. 108 1/2, par. 20-121

 

 

HB2902- 94 -LRB100 05932 RPS 15959 b

1    40 ILCS 5/20-123from Ch. 108 1/2, par. 20-123
2    40 ILCS 5/20-124from Ch. 108 1/2, par. 20-124
3    40 ILCS 5/20-125from Ch. 108 1/2, par. 20-125
4    30 ILCS 805/8.41 new