Rep. Sheri Jesiel

Filed: 3/24/2017

 

 


 

 


 
10000HB3707ham001LRB100 11379 RPS 23609 a

1
AMENDMENT TO HOUSE BILL 3707

2    AMENDMENT NO. ______. Amend House Bill 3707 by replacing
3everything after the enacting clause with the following:
 
4    "Section 5. The Illinois Pension Code is amended by
5changing Section 2-117 and by adding Sections 2-105.3 and 2-167
6as follows:
 
7    (40 ILCS 5/2-105.3 new)
8    Sec. 2-105.3. Tier 1 participant; Tier 2 participant; Tier
93 participant.
10    "Tier 1 participant": A participant who first became a
11participant before January 1, 2011.
12    In the case of a Tier 1 participant who elects to
13participate in the self-directed retirement plan under Section
142-167, that participant shall be deemed a Tier 1 participant
15only with respect to service performed or established before
16the effective date of that election.

 

 

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1    "Tier 2 participant": A participant who first became a
2participant on or after January 1, 2011 and before the
3effective date of this amendatory Act of the 100th General
4Assembly.
5    In the case of a Tier 2 participant who elects to
6participate in the self-directed retirement plan under Section
72-167, that participant shall be deemed a Tier 2 participant
8only with respect to service performed or established before
9the effective date of that election.
10    "Tier 3 participant": A participant who first becomes a
11participant on or after the effective date of this amendatory
12Act of the 100th General Assembly; or a Tier 1 or Tier 2
13participant who elects to participate in the self-directed
14retirement plan under Section 2-167 of this Code, but only with
15respect to service performed or established on or after the
16effective date of that election.
 
17    (40 ILCS 5/2-117)  (from Ch. 108 1/2, par. 2-117)
18    Sec. 2-117. Participants - Election not to participate.
19    (a) Every person who was a member on November 1, 1947, or
20in military service on such date, is subject to the provisions
21of this system beginning upon such date, unless prior to such
22date he or she filed with the board a written notice of
23election not to participate.
24    Every person who becomes a member after November 1, 1947,
25and who is then not a participant becomes a participant

 

 

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1beginning upon the date of becoming a member unless, within 24
2months from that date, he or she has filed with the board a
3written notice of election not to participate.
4    (b) A member who has filed notice of an election not to
5participate (and a former member who has not yet begun to
6receive a retirement annuity under this Article) may become a
7participant with respect to the period for which the member
8elected not to participate upon filing with the board, before
9April 1, 1993, a written rescission of the election not to
10participate. Upon contributing an amount equal to the
11contributions he or she would have made as a participant from
12November 1, 1947, or the date of becoming a member, whichever
13is later, to the date of becoming a participant, with interest
14at the rate of 4% per annum until the contributions are paid,
15the participant shall receive credit for service as a member
16prior to the date of the rescission, both before and after
17November 1, 1947. The required contributions shall be made
18before commencement of the retirement annuity; otherwise no
19credit for service prior to the date of participation shall be
20granted.
21    (c) A member who has filed notice of an election not to
22participate may become a Tier 3 participant without making a
23contribution under subsection (b) by filing with the board a
24written rescission of the election not to participate if he or
25she elects to participate in the self-directed retirement plan
26under subsection (d) of Section 2-167. A member who files the

 

 

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1written rescission pursuant to this subsection may not receive
2credit for service as a member prior to the date of the
3rescission.
4(Source: P.A. 86-273; 87-1265.)
 
5    (40 ILCS 5/2-167 new)
6    Sec. 2-167. Self-directed retirement plan.
7    (a) For the purposes of this Section:
8        "Active participant" means a participant who is in
9    active service in the System.
10        "Consumer price index-u" means the index published by
11    the Bureau of Labor Statistics of the United States
12    Department of Labor that measures the average change in
13    prices of goods and services purchased by all urban
14    consumers, United States city average, all items, 1982-84 =
15    100.
16        "Defined benefit plan" means the retirement plan
17    available under this Article to Tier 1 or Tier 2
18    participants who have not made the election authorized
19    under this Section.
20        "Employer" means the State.
21        "Pensionable salary" means the amount of salary used by
22    the System to calculate the amount of an individual's
23    retirement annuity.
24    (b) On and after the effective date of this amendatory Act
25of the 100th General Assembly, a Tier 3 participant's

 

 

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1participation in the System shall be limited to participation
2in the self-directed retirement plan established under
3subsection (d) of this Section.
4    An active Tier 1 or Tier 2 participant of this System may
5elect to cease accruing benefits in the defined benefit plan
6and begin accruing benefits for future service in the
7self-directed retirement plan established under subsection
8(d). The election to participate in the self-directed
9retirement plan is voluntary and irrevocable.
10    For an active Tier 1 or Tier 2 participant who elects to
11participate in the self-directed retirement plan, all service
12credit under the System (including service under any
13participating system if the participant elects to use the
14reciprocal provisions of Article 20) shall be considered for
15purposes of vesting in the benefits provided prior to the
16effective date of this Section, but only service earned and
17contributions made before that effective date shall be
18considered in determining the amount of those benefits. In lieu
19of receiving any such benefits, an active Tier 1 or Tier 2
20participant who elects to participate in the self-directed
21retirement plan may elect to have an account balance
22established in his or her self-directed retirement plan account
23in an amount equal to the amount of the contribution refund
24that the participant would be eligible to receive if he or she
25withdrew from service on the effective date of this Section and
26elected a refund of contributions, except that this

 

 

10000HB3707ham001- 6 -LRB100 11379 RPS 23609 a

1hypothetical refund shall include interest at the effective
2rate for the respective years. The System shall make these
3transfers of assets to the self-directed plan as tax-free
4transfers in accordance with Internal Revenue Service
5guidelines.
6    (c) The pensionable salary of an active participant shall
7be equal to the average final monthly salary of the
8participant. For a participant who first becomes a participant
9of this System on or after the effective date of this
10amendatory Act of the 100th General Assembly, the average final
11monthly salary determined by dividing the total salary of the
12participant during the 96 consecutive months of service within
13the last 120 months of service in which the total compensation
14was the highest by the number of months of service in that
15period; however, the highest salary for annuity purposes may
16not exceed $106,800, except that that amount shall annually
17thereafter be increased by the lesser of (i) 3% of that amount,
18including all previous adjustments, or (ii) the annual
19unadjusted percentage increase (but not less than zero) in the
20consumer price index-u for the 12 months ending with the
21September preceding each November 1. The new amount resulting
22from each annual adjustment shall be determined by the Public
23Pension Division of the Department of Insurance and made
24available to the Board by November 1 of each year.
25    (d) As soon as practicable after the effective date of this
26amendatory Act of the 100th General Assembly, the System shall

 

 

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1establish a self-directed retirement plan that allows Tier 3
2participants the opportunity to accumulate assets for
3retirement through a combination of employee and employer
4contributions that may be invested in mutual funds, collective
5investment funds, or other investment products and used to
6purchase annuity contracts, either fixed or variable or a
7combination thereof. The plan must be qualified under the
8Internal Revenue Code of 1986.
9    At any time after withdrawal from service, a participant in
10the self-directed plan shall be entitled to a benefit that is
11based on the account values attributable to his or her
12participant contributions and the employer contributions, as
13well as any investment returns attributable to those
14contributions. Upon a participant's first day of participation
15in the self-directed retirement plan, the participant becomes
16vested in his or her contributions to the self-directed
17retirement plan, the employer's contributions to the
18self-directed retirement plan, and the investment returns
19attributable to those contributions credited to his or her
20account.
21    (e) All persons who begin to participate in this System on
22or after the effective date of this amendatory Act of the 100th
23General Assembly and any active Tier 1 or Tier 2 participant
24who makes the election provided in subsection (b) shall
25participate in the self-directed retirement plan established
26under subsection (d) and, in lieu of the contributions

 

 

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1otherwise provided for in this Article, shall contribute 8% of
2salary to the plan. The employer of each of those participants
3shall contribute 7% of salary to that plan on behalf of the
4participant.
5    (f) The provisions of this amendatory Act of the 100th
6General Assembly apply notwithstanding any other law,
7including Section 1-160 of this Code. If there is a conflict
8between the provisions of this amendatory Act of the 100th
9General Assembly and any other law, the provisions of this
10Section shall control.
 
11    (40 ILCS 5/2-105.1 rep.)
12    Section 10. The Illinois Pension Code is amended by
13repealing Section 2-105.1.".