100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018
HB4057

 

Introduced , by Rep. Jeanne M Ives

 

SYNOPSIS AS INTRODUCED:
 
See Index

    Amends the Illinois Pension Code. For the 5 State-funded Retirement Systems: Requires implementation of a Tier 3 plan that aggregates State and employee contributions in individual participant accounts. Provides that a person who becomes a participant on or after July 1, 2018 shall participate in the Tier 3 plan. Authorizes a Tier 1 or Tier 2 participant to elect to participate in the Tier 3 plan. Requires Systems to offer an optional accelerated benefit payment to certain members in lieu of receiving a pension and authorizes the issuance of bonds for those payments. Authorizes a person to elect not to participate or to terminate participation in the Systems. Restricts participation in the General Assembly Retirement System to current participants. In Articles 7, 14, 15, and 16, for new participants, prohibits unused sick or vacation time from being used to calculate pensionable salary or establish service credit. In Articles 15 and 16, requires an employer to pay the projected costs of the increase in pension benefits associated with an increase in salary. In Article 16, prohibits an employer from making employee contributions on behalf of an employee, except as specified. Amends other Acts to prohibit collective bargaining over that prohibition and make conforming changes. Effective immediately.


LRB100 12972 RPS 27085 b

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

 

 

A BILL FOR

 

HB4057LRB100 12972 RPS 27085 b

1    AN ACT concerning public employee benefits.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The State Employees Group Insurance Act of 1971
5is amended by changing Sections 3 and 10 as follows:
 
6    (5 ILCS 375/3)  (from Ch. 127, par. 523)
7    Sec. 3. Definitions. Unless the context otherwise
8requires, the following words and phrases as used in this Act
9shall have the following meanings. The Department may define
10these and other words and phrases separately for the purpose of
11implementing specific programs providing benefits under this
12Act.
13    (a) "Administrative service organization" means any
14person, firm or corporation experienced in the handling of
15claims which is fully qualified, financially sound and capable
16of meeting the service requirements of a contract of
17administration executed with the Department.
18    (b) "Annuitant" means (1) an employee who retires, or has
19retired, on or after January 1, 1966 on an immediate annuity
20under the provisions of Article Articles 2 (including an
21employee who, in lieu of receiving an annuity under that
22Article, has retired under the Tier 3 plan established under
23Section 2-165.5 of that Article or who meets the criteria for

 

 

HB4057- 2 -LRB100 12972 RPS 27085 b

1retirement and has elected to receive an accelerated pension
2benefit payment under Section 2-154.5 of that Article), 14
3(including an employee who has elected to receive an
4alternative retirement cancellation payment under Section
514-108.5 of the Illinois Pension Code in lieu of an annuity, an
6employee who, in lieu of receiving an annuity under that
7Article, has retired under the Tier 3 plan established under
8Section 14-155.5 of that Article, or an employee who meets the
9criteria for retirement and has elected to receive an
10accelerated pension benefit payment under Section 14-147.5 of
11that Article), or 15 (including an employee who has retired
12under the optional retirement program established under
13Section 15-158.2 or the Tier 3 plan established under Section
1415-155.5 of the Illinois Pension Code or who meets the criteria
15for retirement and has elected to receive an accelerated
16pension benefit payment under Section 15-185.5 of that
17Article), paragraphs (2), (3), or (5) of Section 16-106
18(including an employee who, in lieu of receiving an annuity
19under that Article, has retired under the Tier 3 plan
20established under Section 16-205.5 of the Illinois Pension Code
21or who meets the criteria for retirement and has elected to
22receive an accelerated pension benefit payment under Section
2316-190.5 of that Article), or Article 18 (including an employee
24who, in lieu of receiving an annuity under that Article, has
25retired under the Tier 3 plan established under Section
2618-121.5 of that Article or who meets the criteria for

 

 

HB4057- 3 -LRB100 12972 RPS 27085 b

1retirement and has elected to receive an accelerated pension
2benefit payment under Section 18-161.5 of that Article) of the
3Illinois Pension Code; (2) any person who was receiving group
4insurance coverage under this Act as of March 31, 1978 by
5reason of his status as an annuitant, even though the annuity
6in relation to which such coverage was provided is a
7proportional annuity based on less than the minimum period of
8service required for a retirement annuity in the system
9involved; (3) any person not otherwise covered by this Act who
10has retired as a participating member under Article 2 of the
11Illinois Pension Code but is ineligible for the retirement
12annuity under Section 2-119 of the Illinois Pension Code; (4)
13the spouse of any person who is receiving a retirement annuity
14under Article 18 of the Illinois Pension Code and who is
15covered under a group health insurance program sponsored by a
16governmental employer other than the State of Illinois and who
17has irrevocably elected to waive his or her coverage under this
18Act and to have his or her spouse considered as the "annuitant"
19under this Act and not as a "dependent"; or (5) an employee who
20retires, or has retired, from a qualified position, as
21determined according to rules promulgated by the Director,
22under a qualified local government, a qualified rehabilitation
23facility, a qualified domestic violence shelter or service, or
24a qualified child advocacy center. (For definition of "retired
25employee", see (p) post).
26    (b-5) (Blank).

 

 

HB4057- 4 -LRB100 12972 RPS 27085 b

1    (b-6) (Blank).
2    (b-7) (Blank).
3    (c) "Carrier" means (1) an insurance company, a corporation
4organized under the Limited Health Service Organization Act or
5the Voluntary Health Services Plan Act, a partnership, or other
6nongovernmental organization, which is authorized to do group
7life or group health insurance business in Illinois, or (2) the
8State of Illinois as a self-insurer.
9    (d) "Compensation" means salary or wages payable on a
10regular payroll by the State Treasurer on a warrant of the
11State Comptroller out of any State, trust or federal fund, or
12by the Governor of the State through a disbursing officer of
13the State out of a trust or out of federal funds, or by any
14Department out of State, trust, federal or other funds held by
15the State Treasurer or the Department, to any person for
16personal services currently performed, and ordinary or
17accidental disability benefits under Articles 2, 14, 15
18(including ordinary or accidental disability benefits under
19the optional retirement program established under Section
2015-158.2), paragraphs (2), (3), or (5) of Section 16-106, or
21Article 18 of the Illinois Pension Code, for disability
22incurred after January 1, 1966, or benefits payable under the
23Workers' Compensation or Occupational Diseases Act or benefits
24payable under a sick pay plan established in accordance with
25Section 36 of the State Finance Act. "Compensation" also means
26salary or wages paid to an employee of any qualified local

 

 

HB4057- 5 -LRB100 12972 RPS 27085 b

1government, qualified rehabilitation facility, qualified
2domestic violence shelter or service, or qualified child
3advocacy center.
4    (e) "Commission" means the State Employees Group Insurance
5Advisory Commission authorized by this Act. Commencing July 1,
61984, "Commission" as used in this Act means the Commission on
7Government Forecasting and Accountability as established by
8the Legislative Commission Reorganization Act of 1984.
9    (f) "Contributory", when referred to as contributory
10coverage, shall mean optional coverages or benefits elected by
11the member toward the cost of which such member makes
12contribution, or which are funded in whole or in part through
13the acceptance of a reduction in earnings or the foregoing of
14an increase in earnings by an employee, as distinguished from
15noncontributory coverage or benefits which are paid entirely by
16the State of Illinois without reduction of the member's salary.
17    (g) "Department" means any department, institution, board,
18commission, officer, court or any agency of the State
19government receiving appropriations and having power to
20certify payrolls to the Comptroller authorizing payments of
21salary and wages against such appropriations as are made by the
22General Assembly from any State fund, or against trust funds
23held by the State Treasurer and includes boards of trustees of
24the retirement systems created by Articles 2, 14, 15, 16 and 18
25of the Illinois Pension Code. "Department" also includes the
26Illinois Comprehensive Health Insurance Board, the Board of

 

 

HB4057- 6 -LRB100 12972 RPS 27085 b

1Examiners established under the Illinois Public Accounting
2Act, and the Illinois Finance Authority.
3    (h) "Dependent", when the term is used in the context of
4the health and life plan, means a member's spouse and any child
5(1) from birth to age 26 including an adopted child, a child
6who lives with the member from the time of the filing of a
7petition for adoption until entry of an order of adoption, a
8stepchild or adjudicated child, or a child who lives with the
9member if such member is a court appointed guardian of the
10child or (2) age 19 or over who has a mental or physical
11disability from a cause originating prior to the age of 19 (age
1226 if enrolled as an adult child dependent). For the health
13plan only, the term "dependent" also includes (1) any person
14enrolled prior to the effective date of this Section who is
15dependent upon the member to the extent that the member may
16claim such person as a dependent for income tax deduction
17purposes and (2) any person who has received after June 30,
182000 an organ transplant and who is financially dependent upon
19the member and eligible to be claimed as a dependent for income
20tax purposes. A member requesting to cover any dependent must
21provide documentation as requested by the Department of Central
22Management Services and file with the Department any and all
23forms required by the Department.
24    (i) "Director" means the Director of the Illinois
25Department of Central Management Services.
26    (j) "Eligibility period" means the period of time a member

 

 

HB4057- 7 -LRB100 12972 RPS 27085 b

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

 

 

HB4057- 8 -LRB100 12972 RPS 27085 b

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

 

 

HB4057- 9 -LRB100 12972 RPS 27085 b

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

 

 

HB4057- 10 -LRB100 12972 RPS 27085 b

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

 

 

HB4057- 11 -LRB100 12972 RPS 27085 b

1Pension Code; and (3) the surviving dependent of a person who
2was an annuitant under this Act by virtue of receiving an
3alternative retirement cancellation payment under Section
414-108.5 of the Illinois Pension Code.
5    (q-2) "SERS" means the State Employees' Retirement System
6of Illinois, created under Article 14 of the Illinois Pension
7Code.
8    (q-3) "SURS" means the State Universities Retirement
9System, created under Article 15 of the Illinois Pension Code.
10    (q-4) "TRS" means the Teachers' Retirement System of the
11State of Illinois, created under Article 16 of the Illinois
12Pension Code.
13    (q-5) (Blank).
14    (q-6) (Blank).
15    (q-7) (Blank).
16    (r) "Medical services" means the services provided within
17the scope of their licenses by practitioners in all categories
18licensed under the Medical Practice Act of 1987.
19    (s) "Unit of local government" means any county,
20municipality, township, school district (including a
21combination of school districts under the Intergovernmental
22Cooperation Act), special district or other unit, designated as
23a unit of local government by law, which exercises limited
24governmental powers or powers in respect to limited
25governmental subjects, any not-for-profit association with a
26membership that primarily includes townships and township

 

 

HB4057- 12 -LRB100 12972 RPS 27085 b

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

 

 

HB4057- 13 -LRB100 12972 RPS 27085 b

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

 

 

HB4057- 14 -LRB100 12972 RPS 27085 b

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

 

 

HB4057- 15 -LRB100 12972 RPS 27085 b

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

 

 

HB4057- 16 -LRB100 12972 RPS 27085 b

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

 

 

HB4057- 17 -LRB100 12972 RPS 27085 b

1provided in this Section, the basic program of group health
2benefits on each eligible member, except a member, not
3otherwise covered by this Act, who has retired as a
4participating member under Article 2 of the Illinois Pension
5Code but is ineligible for the retirement annuity under Section
62-119 of the Illinois Pension Code, and part of each eligible
7member's and retired member's premiums for health insurance
8coverage for enrolled dependents as provided by Section 9. The
9State shall pay the cost of the basic program of group health
10benefits only after benefits are reduced by the amount of
11benefits covered by Medicare for all members and dependents who
12are eligible for benefits under Social Security or the Railroad
13Retirement system or who had sufficient Medicare-covered
14government employment, except that such reduction in benefits
15shall apply only to those members and dependents who (1) first
16become eligible for such Medicare coverage on or after July 1,
171992; or (2) are Medicare-eligible members or dependents of a
18local government unit which began participation in the program
19on or after July 1, 1992; or (3) remain eligible for, but no
20longer receive Medicare coverage which they had been receiving
21on or after July 1, 1992. The Department may determine the
22aggregate level of the State's contribution on the basis of
23actual cost of medical services adjusted for age, sex or
24geographic or other demographic characteristics which affect
25the costs of such programs.
26    The cost of participation in the basic program of group

 

 

HB4057- 18 -LRB100 12972 RPS 27085 b

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

 

 

HB4057- 19 -LRB100 12972 RPS 27085 b

1    (a-8.5) Beginning on the effective date of this amendatory
2Act of the 97th General Assembly, the Director of Central
3Management Services shall, on an annual basis, determine the
4amount that the State shall contribute toward the basic program
5of group health benefits on behalf of annuitants (including
6individuals who (i) participated in the General Assembly
7Retirement System, the State Employees' Retirement System of
8Illinois, the State Universities Retirement System, the
9Teachers' Retirement System of the State of Illinois, or the
10Judges Retirement System of Illinois and (ii) qualify as
11annuitants under subsection (b) of Section 3 of this Act),
12survivors (including individuals who (i) receive an annuity as
13a survivor of an individual who participated in the General
14Assembly Retirement System, the State Employees' Retirement
15System of Illinois, the State Universities Retirement System,
16the Teachers' Retirement System of the State of Illinois, or
17the Judges Retirement System of Illinois and (ii) qualify as
18survivors under subsection (q) of Section 3 of this Act), and
19retired employees (as defined in subsection (p) of Section 3 of
20this Act). The remainder of the cost of coverage for each
21annuitant, survivor, or retired employee, as determined by the
22Director of Central Management Services, shall be the
23responsibility of that annuitant, survivor, or retired
24employee.
25    Contributions required of annuitants, survivors, and
26retired employees shall be the same for all retirement systems

 

 

HB4057- 20 -LRB100 12972 RPS 27085 b

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

 

 

HB4057- 21 -LRB100 12972 RPS 27085 b

1Director, outside the State treasury, for the purpose of
2receiving the transfer of moneys from the Local Government
3Health Insurance Reserve Fund. The Department may promulgate
4rules further defining the methodology for the transfers. Any
5interest earned by moneys in the funds or accounts shall inure
6to the Local Government Health Insurance Reserve Fund. The
7transferred moneys, and interest accrued thereon, shall be used
8exclusively for transfers to administrative service
9organizations or their financial institutions for payments of
10claims to claimants and providers under the self-insurance
11health plan. The transferred moneys, and interest accrued
12thereon, shall not be used for any other purpose including, but
13not limited to, reimbursement of administration fees due the
14administrative service organization pursuant to its contract
15or contracts with the Department.
16    (a-10) For purposes of determining State contributions
17under this Section, service established under a Tier 3 plan
18under Article 2, 14, 15, 16, or 18 of the Illinois Pension Code
19shall be included in determining an employee's creditable
20service. Any credit terminated as part of a transfer of
21contributions to a Tier 3 plan under Article 2, 14, 15, 16, or
2218 of the Illinois Pension Code shall also be included in
23determining an employee's creditable service.
24    (a-15) To the extent that participation, benefits, or
25premiums under this Act are based on a person's service credit
26under an Article of the Illinois Pension Code, service credit

 

 

HB4057- 22 -LRB100 12972 RPS 27085 b

1terminated in exchange for an accelerated pension benefit
2payment under Section 2-154.5, 14-147.5, 15-185.5, 16-190.5,
3or 18-161.5 of that Code shall be included in determining a
4person's service credit for the purposes of this Act.
5    (b) State employees who become eligible for this program on
6or after January 1, 1980 in positions normally requiring actual
7performance of duty not less than 1/2 of a normal work period
8but not equal to that of a normal work period, shall be given
9the option of participating in the available program. If the
10employee elects coverage, the State shall contribute on behalf
11of such employee to the cost of the employee's benefit and any
12applicable dependent supplement, that sum which bears the same
13percentage as that percentage of time the employee regularly
14works when compared to normal work period.
15    (c) The basic non-contributory coverage from the basic
16program of group health benefits shall be continued for each
17employee not in pay status or on active service by reason of
18(1) leave of absence due to illness or injury, (2) authorized
19educational leave of absence or sabbatical leave, or (3)
20military leave. This coverage shall continue until expiration
21of authorized leave and return to active service, but not to
22exceed 24 months for leaves under item (1) or (2). This
2324-month limitation and the requirement of returning to active
24service shall not apply to persons receiving ordinary or
25accidental disability benefits or retirement benefits through
26the appropriate State retirement system or benefits under the

 

 

HB4057- 23 -LRB100 12972 RPS 27085 b

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

 

 

HB4057- 24 -LRB100 12972 RPS 27085 b

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

 

 

HB4057- 25 -LRB100 12972 RPS 27085 b

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

 

 

HB4057- 26 -LRB100 12972 RPS 27085 b

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

 

 

HB4057- 27 -LRB100 12972 RPS 27085 b

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

 

 

HB4057- 28 -LRB100 12972 RPS 27085 b

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

 

 

HB4057- 29 -LRB100 12972 RPS 27085 b

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

 

 

HB4057- 30 -LRB100 12972 RPS 27085 b

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

 

 

HB4057- 31 -LRB100 12972 RPS 27085 b

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

 

 

HB4057- 32 -LRB100 12972 RPS 27085 b

1        (2) In subsequent years, a further adjustment shall be
2    made to reflect the actual prior years' claims experience
3    of the employees of the domestic violence shelter or
4    service.
5    Monthly payments by the domestic violence shelter or
6service or its employees for group health insurance shall be
7deposited in the Local Government Health Insurance Reserve
8Fund.
9    (l) A public community college or entity organized pursuant
10to the Public Community College Act may apply to the Director
11initially to have only annuitants not covered prior to July 1,
121992 by the district's health plan provided health coverage
13under this Act on a non-insured basis. The community college
14must execute a 2-year contract to participate in the Local
15Government Health Plan. Any annuitant may enroll in the event
16of a qualifying change in status, special enrollment, special
17circumstance as defined by the Director, or during the annual
18Benefit Choice Period.
19    The Director shall annually determine monthly rates of
20payment subject to the following constraints: for those
21community colleges with annuitants only enrolled, first year
22rates shall be equal to the average cost to cover claims for a
23State member adjusted for demographics, Medicare
24participation, and other factors; and in the second year, a
25further adjustment of rates shall be made to reflect the actual
26first year's claims experience of the covered annuitants.

 

 

HB4057- 33 -LRB100 12972 RPS 27085 b

1    (l-5) The provisions of subsection (l) become inoperative
2on July 1, 1999.
3    (m) The Director shall adopt any rules deemed necessary for
4implementation of this amendatory Act of 1989 (Public Act
586-978).
6    (n) Any child advocacy center within the State of Illinois
7may apply to the Director to have its employees, annuitants,
8and their dependents provided group health coverage under this
9Act on a non-insured basis. To participate, a child advocacy
10center must agree to enroll all of its employees and pay the
11entire cost of providing coverage for its employees. The child
12advocacy center shall not be required to enroll those of its
13employees who are covered spouses or dependents under this plan
14or another group policy or plan providing health benefits as
15long as (1) an appropriate official from the child advocacy
16center attests that each employee not enrolled is a covered
17spouse or dependent under this plan or another group policy or
18plan and (2) at least 50% of the employees are enrolled and the
19child advocacy center remits the entire cost of providing
20coverage to those employees. Employees of a participating child
21advocacy center who are not enrolled due to coverage under
22another group health policy or plan may enroll in the event of
23a qualifying change in status, special enrollment, or special
24circumstance as defined by the Director or during the annual
25Benefit Choice Period. A participating child advocacy center
26may also elect to cover its annuitants. Dependent coverage

 

 

HB4057- 34 -LRB100 12972 RPS 27085 b

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

 

 

HB4057- 35 -LRB100 12972 RPS 27085 b

1    Section 10. The Illinois Finance Authority Act is amended
2by changing Section 801-40 as follows:
 
3    (20 ILCS 3501/801-40)
4    Sec. 801-40. In addition to the powers otherwise authorized
5by law and in addition to the foregoing general corporate
6powers, the Authority shall also have the following additional
7specific powers to be exercised in furtherance of the purposes
8of this Act.
9    (a) The Authority shall have power (i) to accept grants,
10loans or appropriations from the federal government or the
11State, or any agency or instrumentality thereof, to be used for
12the operating expenses of the Authority, or for any purposes of
13the Authority, including the making of direct loans of such
14funds with respect to projects, and (ii) to enter into any
15agreement with the federal government or the State, or any
16agency or instrumentality thereof, in relationship to such
17grants, loans or appropriations.
18    (b) The Authority shall have power to procure and enter
19into contracts for any type of insurance and indemnity
20agreements covering loss or damage to property from any cause,
21including loss of use and occupancy, or covering any other
22insurable risk.
23    (c) The Authority shall have the continuing power to issue
24bonds for its corporate purposes. Bonds may be issued by the
25Authority in one or more series and may provide for the payment

 

 

HB4057- 36 -LRB100 12972 RPS 27085 b

1of any interest deemed necessary on such bonds, of the costs of
2issuance of such bonds, of any premium on any insurance, or of
3the cost of any guarantees, letters of credit or other similar
4documents, may provide for the funding of the reserves deemed
5necessary in connection with such bonds, and may provide for
6the refunding or advance refunding of any bonds or for accounts
7deemed necessary in connection with any purpose of the
8Authority. The bonds may bear interest payable at any time or
9times and at any rate or rates, notwithstanding any other
10provision of law to the contrary, and such rate or rates may be
11established by an index or formula which may be implemented or
12established by persons appointed or retained therefor by the
13Authority, or may bear no interest or may bear interest payable
14at maturity or upon redemption prior to maturity, may bear such
15date or dates, may be payable at such time or times and at such
16place or places, may mature at any time or times not later than
1740 years from the date of issuance, may be sold at public or
18private sale at such time or times and at such price or prices,
19may be secured by such pledges, reserves, guarantees, letters
20of credit, insurance contracts or other similar credit support
21or liquidity instruments, may be executed in such manner, may
22be subject to redemption prior to maturity, may provide for the
23registration of the bonds, and may be subject to such other
24terms and conditions all as may be provided by the resolution
25or indenture authorizing the issuance of such bonds. The holder
26or holders of any bonds issued by the Authority may bring suits

 

 

HB4057- 37 -LRB100 12972 RPS 27085 b

1at law or proceedings in equity to compel the performance and
2observance by any person or by the Authority or any of its
3agents or employees of any contract or covenant made with the
4holders of such bonds and to compel such person or the
5Authority and any of its agents or employees to perform any
6duties required to be performed for the benefit of the holders
7of any such bonds by the provision of the resolution
8authorizing their issuance, and to enjoin such person or the
9Authority and any of its agents or employees from taking any
10action in conflict with any such contract or covenant.
11Notwithstanding the form and tenor of any such bonds and in the
12absence of any express recital on the face thereof that it is
13non-negotiable, all such bonds shall be negotiable
14instruments. Pending the preparation and execution of any such
15bonds, temporary bonds may be issued as provided by the
16resolution. The bonds shall be sold by the Authority in such
17manner as it shall determine. The bonds may be secured as
18provided in the authorizing resolution by the receipts,
19revenues, income and other available funds of the Authority and
20by any amounts derived by the Authority from the loan agreement
21or lease agreement with respect to the project or projects; and
22bonds may be issued as general obligations of the Authority
23payable from such revenues, funds and obligations of the
24Authority as the bond resolution shall provide, or may be
25issued as limited obligations with a claim for payment solely
26from such revenues, funds and obligations as the bond

 

 

HB4057- 38 -LRB100 12972 RPS 27085 b

1resolution shall provide. The Authority may grant a specific
2pledge or assignment of and lien on or security interest in
3such rights, revenues, income, or amounts and may grant a
4specific pledge or assignment of and lien on or security
5interest in any reserves, funds or accounts established in the
6resolution authorizing the issuance of bonds. Any such pledge,
7assignment, lien or security interest for the benefit of the
8holders of the Authority's bonds shall be valid and binding
9from the time the bonds are issued without any physical
10delivery or further act, and shall be valid and binding as
11against and prior to the claims of all other parties having
12claims against the Authority or any other person irrespective
13of whether the other parties have notice of the pledge,
14assignment, lien or security interest. As evidence of such
15pledge, assignment, lien and security interest, the Authority
16may execute and deliver a mortgage, trust agreement, indenture
17or security agreement or an assignment thereof. A remedy for
18any breach or default of the terms of any such agreement by the
19Authority may be by mandamus proceedings in any court of
20competent jurisdiction to compel the performance and
21compliance therewith, but the agreement may prescribe by whom
22or on whose behalf such action may be instituted. It is
23expressly understood that the Authority may, but need not,
24acquire title to any project with respect to which it exercises
25its authority.
26    (c-5) The Authority shall have the power to issue State

 

 

HB4057- 39 -LRB100 12972 RPS 27085 b

1Pension Obligation Acceleration Bonds if in any fiscal year the
2amount appropriated for all accelerated pension benefit
3payments is less than the amount required for those payments.
4The proceeds from the State Pension Obligation Acceleration
5Bonds issued under this subsection may only be used to pay for
6accelerated pension benefit payments for the fiscal year in
7which the State Pension Obligation Acceleration Bonds are
8issued.
9    The Authority shall not have outstanding at any one time
10State Pension Obligation Acceleration Bonds for any of the
11purposes of this subsection in an aggregate principal amount
12exceeding $250,000,000, excluding bonds issued to refund
13outstanding State Pension Obligation Acceleration Bonds.
14    (d) With respect to the powers granted by this Act, the
15Authority may adopt rules and regulations prescribing the
16procedures by which persons may apply for assistance under this
17Act. Nothing herein shall be deemed to preclude the Authority,
18prior to the filing of any formal application, from conducting
19preliminary discussions and investigations with respect to the
20subject matter of any prospective application.
21    (e) The Authority shall have power to acquire by purchase,
22lease, gift or otherwise any property or rights therein from
23any person useful for its purposes, whether improved for the
24purposes of any prospective project, or unimproved. The
25Authority may also accept any donation of funds for its
26purposes from any such source. The Authority shall have no

 

 

HB4057- 40 -LRB100 12972 RPS 27085 b

1independent power of condemnation but may acquire any property
2or rights therein obtained upon condemnation by any other
3authority, governmental entity or unit of local government with
4such power.
5    (f) The Authority shall have power to develop, construct
6and improve either under its own direction, or through
7collaboration with any approved applicant, or to acquire
8through purchase or otherwise, any project, using for such
9purpose the proceeds derived from the sale of its bonds or from
10governmental loans or grants, and to hold title in the name of
11the Authority to such projects.
12    (g) The Authority shall have power to lease pursuant to a
13lease agreement any project so developed and constructed or
14acquired to the approved tenant on such terms and conditions as
15may be appropriate to further the purposes of this Act and to
16maintain the credit of the Authority. Any such lease may
17provide for either the Authority or the approved tenant to
18assume initially, in whole or in part, the costs of
19maintenance, repair and improvements during the leasehold
20period. In no case, however, shall the total rentals from any
21project during any initial leasehold period or the total loan
22repayments to be made pursuant to any loan agreement, be less
23than an amount necessary to return over such lease or loan
24period (1) all costs incurred in connection with the
25development, construction, acquisition or improvement of the
26project and for repair, maintenance and improvements thereto

 

 

HB4057- 41 -LRB100 12972 RPS 27085 b

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

 

 

HB4057- 42 -LRB100 12972 RPS 27085 b

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

 

 

HB4057- 43 -LRB100 12972 RPS 27085 b

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

 

 

HB4057- 44 -LRB100 12972 RPS 27085 b

1activities the primary objectives of which are the development
2of viable urban communities, including decent housing and a
3suitable living environment, and expansion of economic
4opportunity, principally for persons of low and moderate
5incomes. The Authority shall enter into grant agreements from
6monies appropriated for such purposes from the Build Illinois
7Bond Fund. The Authority shall monitor the use of the grants,
8and shall provide for audits of the funds as well as recovery
9by the Authority of any funds determined to have been spent in
10violation of this subsection (n) or any rule or regulation
11promulgated hereunder. The Authority shall provide technical
12assistance with regard to the effective use of the urban
13development action grants. The Authority shall file an annual
14report to the General Assembly concerning the progress of the
15grant program.
16    (o) The Authority may establish a Housing Partnership
17Program whereby the Authority provides zero-interest loans to
18municipalities for the purpose of assisting in the financing of
19projects for the rehabilitation of affordable multi-family
20housing for low and moderate income residents. The Authority
21may provide such loans only upon a municipality's providing
22evidence that it has obtained private funding for the
23rehabilitation project. The Authority shall provide 3 State
24dollars for every 7 dollars obtained by the municipality from
25sources other than the State of Illinois. The loans shall be
26made from monies appropriated for such purpose from the Build

 

 

HB4057- 45 -LRB100 12972 RPS 27085 b

1Illinois Bond Fund. The total amount of loans available under
2the Housing Partnership Program shall not exceed $30,000,000.
3State loan monies under this subsection shall be used only for
4the acquisition and rehabilitation of existing buildings
5containing 4 or more dwelling units. The terms of any loan made
6by the municipality under this subsection shall require
7repayment of the loan to the municipality upon any sale or
8other transfer of the project.
9    (p) The Authority may award grants to universities and
10research institutions, research consortiums and other
11not-for-profit entities for the purposes of: remodeling or
12otherwise physically altering existing laboratory or research
13facilities, expansion or physical additions to existing
14laboratory or research facilities, construction of new
15laboratory or research facilities or acquisition of modern
16equipment to support laboratory or research operations
17provided that such grants (i) be used solely in support of
18project and equipment acquisitions which enhance technology
19transfer, and (ii) not constitute more than 60 percent of the
20total project or acquisition cost.
21    (q) Grants may be awarded by the Authority to units of
22local government for the purpose of developing the appropriate
23infrastructure or defraying other costs to the local government
24in support of laboratory or research facilities provided that
25such grants may not exceed 40% of the cost to the unit of local
26government.

 

 

HB4057- 46 -LRB100 12972 RPS 27085 b

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

 

 

HB4057- 47 -LRB100 12972 RPS 27085 b

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

 

 

HB4057- 48 -LRB100 12972 RPS 27085 b

1provision for flood protection of sanitary sewage treatment
2plans, in counties that have established a stormwater
3management planning committee in accordance with Section
45-1062 of the Counties Code. Any such loan shall be made by the
5Authority pursuant to the provisions of Section 820-5 to 820-60
6of this Act. The unit of local government shall pay back to the
7Authority the principal amount of the loan, plus annual
8interest as determined by the Authority. The Authority shall
9have the power, subject to appropriations by the General
10Assembly, to subsidize or buy down a portion of the interest on
11such loans, up to 4% per annum.
12    (v) The Authority may accept security interests as provided
13in Sections 11-3 and 11-3.3 of the Illinois Public Aid Code.
14    (w) Moral Obligation. In the event that the Authority
15determines that monies of the Authority will not be sufficient
16for the payment of the principal of and interest on its bonds
17during the next State fiscal year, the Chairperson, as soon as
18practicable, shall certify to the Governor the amount required
19by the Authority to enable it to pay such principal of and
20interest on the bonds. The Governor shall submit the amount so
21certified to the General Assembly as soon as practicable, but
22no later than the end of the current State fiscal year. This
23subsection shall apply only to any bonds or notes as to which
24the Authority shall have determined, in the resolution
25authorizing the issuance of the bonds or notes, that this
26subsection shall apply. Whenever the Authority makes such a

 

 

HB4057- 49 -LRB100 12972 RPS 27085 b

1determination, that fact shall be plainly stated on the face of
2the bonds or notes and that fact shall also be reported to the
3Governor. In the event of a withdrawal of moneys from a reserve
4fund established with respect to any issue or issues of bonds
5of the Authority to pay principal or interest on those bonds,
6the Chairperson of the Authority, as soon as practicable, shall
7certify to the Governor the amount required to restore the
8reserve fund to the level required in the resolution or
9indenture securing those bonds. The Governor shall submit the
10amount so certified to the General Assembly as soon as
11practicable, but no later than the end of the current State
12fiscal year. The Authority shall obtain written approval from
13the Governor for any bonds and notes to be issued under this
14Section. In addition to any other bonds authorized to be issued
15under Sections 825-60, 825-65(e), 830-25 and 845-5, the
16principal amount of Authority bonds outstanding issued under
17this Section 801-40(w) or under 20 ILCS 3850/1-80 or 30 ILCS
18360/2-6(c), which have been assumed by the Authority, shall not
19exceed $150,000,000. This subsection (w) shall in no way be
20applied to any bonds issued by the Authority on behalf of the
21Illinois Power Agency under Section 825-90 of this Act.
22    (x) The Authority may enter into agreements or contracts
23with any person necessary or appropriate to place the payment
24obligations of the Authority under any of its bonds in whole or
25in part on any interest rate basis, cash flow basis, or other
26basis desired by the Authority, including without limitation

 

 

HB4057- 50 -LRB100 12972 RPS 27085 b

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

 

 

HB4057- 51 -LRB100 12972 RPS 27085 b

1        (12) business summary;
2        (13) ownership or economic disclosure statement;
3        (14) professional and financial information;
4        (15) service area; and
5        (16) legislative district.
6    The disclosure of information pursuant to this subsection
7shall comply with the Freedom of Information Act.
8(Source: P.A. 95-470, eff. 8-27-07; 95-481, eff. 8-28-07;
995-876, eff. 8-21-08; 96-795, eff. 7-1-10 (see Section 5 of
10P.A. 96-793 for the effective date of changes made by P.A.
1196-795).)
 
12    Section 13. The State Finance Act is amended by adding
13Section 5.878 as follows:
 
14    (30 ILCS 105/5.878 new)
15    Sec. 5.878. The State Pension Obligation Acceleration Bond
16Fund.
 
17    Section 15. The General Obligation Bond Act is amended by
18changing Sections 2, 2.5, 9, 11, 12, and 13 and by adding
19Section 7.6 as follows:
 
20    (30 ILCS 330/2)  (from Ch. 127, par. 652)
21    Sec. 2. Authorization for Bonds. The State of Illinois is
22authorized to issue, sell and provide for the retirement of

 

 

HB4057- 52 -LRB100 12972 RPS 27085 b

1General Obligation Bonds of the State of Illinois for the
2categories and specific purposes expressed in Sections 2
3through 8 of this Act, in the total amount of $50,167,925,743
4$49,917,925,743.
5    The bonds authorized in this Section 2 and in Section 16 of
6this Act are herein called "Bonds".
7    Of the total amount of Bonds authorized in this Act, up to
8$2,200,000,000 in aggregate original principal amount may be
9issued and sold in accordance with the Baccalaureate Savings
10Act in the form of General Obligation College Savings Bonds.
11    Of the total amount of Bonds authorized in this Act, up to
12$300,000,000 in aggregate original principal amount may be
13issued and sold in accordance with the Retirement Savings Act
14in the form of General Obligation Retirement Savings Bonds.
15    Of the total amount of Bonds authorized in this Act, the
16additional $10,000,000,000 authorized by Public Act 93-2, the
17$3,466,000,000 authorized by Public Act 96-43, and the
18$4,096,348,300 authorized by Public Act 96-1497 shall be used
19solely as provided in Section 7.2.
20    Of the total amount of Bonds authorized in this Act, the
21additional $250,000,000 authorized by this amendatory Act of
22the 100th General Assembly shall be used solely as provided in
23Section 7.6.
24    The issuance and sale of Bonds pursuant to the General
25Obligation Bond Act is an economical and efficient method of
26financing the long-term capital needs of the State. This Act

 

 

HB4057- 53 -LRB100 12972 RPS 27085 b

1will permit the issuance of a multi-purpose General Obligation
2Bond with uniform terms and features. This will not only lower
3the cost of registration but also reduce the overall cost of
4issuing debt by improving the marketability of Illinois General
5Obligation Bonds.
6(Source: P.A. 97-333, eff. 8-12-11; 97-771, eff. 7-10-12;
797-813, eff. 7-13-12; 98-94, eff. 7-17-13; 98-463, eff.
88-16-13; 98-781, eff. 7-22-14.)
 
9    (30 ILCS 330/2.5)
10    Sec. 2.5. Limitation on issuance of Bonds.
11    (a) Except as provided in subsection (b), no Bonds may be
12issued if, after the issuance, in the next State fiscal year
13after the issuance of the Bonds, the amount of debt service
14(including principal, whether payable at maturity or pursuant
15to mandatory sinking fund installments, and interest) on all
16then-outstanding Bonds, other than (i) Bonds authorized by this
17amendatory Act of the 100th General Assembly, (ii) Bonds
18authorized by Public Act 96-43, and (iii) other than Bonds
19authorized by Public Act 96-1497, would exceed 7% of the
20aggregate appropriations from the general funds (which consist
21of the General Revenue Fund, the Common School Fund, the
22General Revenue Common School Special Account Fund, and the
23Education Assistance Fund) and the Road Fund for the fiscal
24year immediately prior to the fiscal year of the issuance.
25    (b) If the Comptroller and Treasurer each consent in

 

 

HB4057- 54 -LRB100 12972 RPS 27085 b

1writing, Bonds may be issued even if the issuance does not
2comply with subsection (a). In addition, $2,000,000,000 in
3Bonds for the purposes set forth in Sections 3, 4, 5, 6, and 7,
4and $2,000,000,000 in Refunding Bonds under Section 16, may be
5issued during State fiscal year 2017 without complying with
6subsection (a).
7(Source: P.A. 99-523, eff. 6-30-16.)
 
8    (30 ILCS 330/7.6 new)
9    Sec. 7.6. State Pension Obligation Acceleration Bonds.
10    (a) As used in this Act, "State Pension Obligation
11Acceleration Bonds" means Bonds authorized by this amendatory
12Act of the 100th General Assembly and used for the purposes set
13forth in subsection (c-5) of Section 801-40 of the Illinois
14Finance Authority Act.
15    (b) State Pension Obligation Acceleration Bonds in the
16amount of $250,000,000 are hereby authorized to be used for the
17purposes set forth in subsection (c-5) of Section 801-40 of the
18Illinois Finance Authority Act.
19    (c) The proceeds of State Pension Obligation Acceleration
20Bonds authorized in subsection (b) of this Section, less the
21amounts authorized in the Bond Sale Order to be directly paid
22out for bond sale expenses under Section 8, shall be deposited
23directly into the State Pension Obligation Acceleration Bond
24Fund, and the Comptroller and the Treasurer shall, as soon as
25practical, make payments as contemplated by subsection (c-5) of

 

 

HB4057- 55 -LRB100 12972 RPS 27085 b

1Section 801-40 of the Illinois Finance Authority Act.
2    (d) There is created the State Pension Obligation
3Acceleration Bond Fund as a special fund in the State Treasury.
4Funds deposited in the State Pension Obligation Acceleration
5Bond Fund may only be used for the purposes set forth in
6subsection (c-5) of Section 801-40 of the Illinois Finance
7Authority Act or for the payment of principal and interest due
8on State Pension Obligation Acceleration Bonds.
 
9    (30 ILCS 330/9)  (from Ch. 127, par. 659)
10    Sec. 9. Conditions for Issuance and Sale of Bonds -
11Requirements for Bonds.
12    (a) Except as otherwise provided in this subsection and
13subsection (h), Bonds shall be issued and sold from time to
14time, in one or more series, in such amounts and at such prices
15as may be directed by the Governor, upon recommendation by the
16Director of the Governor's Office of Management and Budget.
17Bonds shall be in such form (either coupon, registered or book
18entry), in such denominations, payable within 25 years from
19their date, subject to such terms of redemption with or without
20premium, bear interest payable at such times and at such fixed
21or variable rate or rates, and be dated as shall be fixed and
22determined by the Director of the Governor's Office of
23Management and Budget in the order authorizing the issuance and
24sale of any series of Bonds, which order shall be approved by
25the Governor and is herein called a "Bond Sale Order"; provided

 

 

HB4057- 56 -LRB100 12972 RPS 27085 b

1however, that interest payable at fixed or variable rates shall
2not exceed that permitted in the Bond Authorization Act, as now
3or hereafter amended. Bonds shall be payable at such place or
4places, within or without the State of Illinois, and may be
5made registrable as to either principal or as to both principal
6and interest, as shall be specified in the Bond Sale Order.
7Bonds may be callable or subject to purchase and retirement or
8tender and remarketing as fixed and determined in the Bond Sale
9Order. Bonds, other than Bonds issued under Section 3 of this
10Act for the costs associated with the purchase and
11implementation of information technology, (i) except for
12refunding Bonds satisfying the requirements of Section 16 of
13this Act and sold during fiscal year 2009, 2010, 2011, or 2017
14must be issued with principal or mandatory redemption amounts
15in equal amounts, with the first maturity issued occurring
16within the fiscal year in which the Bonds are issued or within
17the next succeeding fiscal year and (ii) must mature or be
18subject to mandatory redemption each fiscal year thereafter up
19to 25 years, except for refunding Bonds satisfying the
20requirements of Section 16 of this Act and sold during fiscal
21year 2009, 2010, or 2011 which must mature or be subject to
22mandatory redemption each fiscal year thereafter up to 16
23years. Bonds issued under Section 3 of this Act for the costs
24associated with the purchase and implementation of information
25technology must be issued with principal or mandatory
26redemption amounts in equal amounts, with the first maturity

 

 

HB4057- 57 -LRB100 12972 RPS 27085 b

1issued occurring with the fiscal year in which the respective
2bonds are issued or with the next succeeding fiscal year, with
3the respective bonds issued maturing or subject to mandatory
4redemption each fiscal year thereafter up to 10 years.
5Notwithstanding any provision of this Act to the contrary, the
6Bonds authorized by Public Act 96-43 shall be payable within 5
7years from their date and must be issued with principal or
8mandatory redemption amounts in equal amounts, with payment of
9principal or mandatory redemption beginning in the first fiscal
10year following the fiscal year in which the Bonds are issued.
11    Notwithstanding any provision of this Act to the contrary,
12the Bonds authorized by Public Act 96-1497 shall be payable
13within 8 years from their date and shall be issued with payment
14of maturing principal or scheduled mandatory redemptions in
15accordance with the following schedule, except the following
16amounts shall be prorated if less than the total additional
17amount of Bonds authorized by Public Act 96-1497 are issued:
18    Fiscal Year After Issuance    Amount
19        1-2                        $0 
20        3                          $110,712,120
21        4                          $332,136,360
22        5                          $664,272,720
23        6-8                        $996,409,080
24    In the case of any series of Bonds bearing interest at a
25variable interest rate ("Variable Rate Bonds"), in lieu of
26determining the rate or rates at which such series of Variable

 

 

HB4057- 58 -LRB100 12972 RPS 27085 b

1Rate Bonds shall bear interest and the price or prices at which
2such Variable Rate Bonds shall be initially sold or remarketed
3(in the event of purchase and subsequent resale), the Bond Sale
4Order may provide that such interest rates and prices may vary
5from time to time depending on criteria established in such
6Bond Sale Order, which criteria may include, without
7limitation, references to indices or variations in interest
8rates as may, in the judgment of a remarketing agent, be
9necessary to cause Variable Rate Bonds of such series to be
10remarketable from time to time at a price equal to their
11principal amount, and may provide for appointment of a bank,
12trust company, investment bank, or other financial institution
13to serve as remarketing agent in that connection. The Bond Sale
14Order may provide that alternative interest rates or provisions
15for establishing alternative interest rates, different
16security or claim priorities, or different call or amortization
17provisions will apply during such times as Variable Rate Bonds
18of any series are held by a person providing credit or
19liquidity enhancement arrangements for such Bonds as
20authorized in subsection (b) of this Section. The Bond Sale
21Order may also provide for such variable interest rates to be
22established pursuant to a process generally known as an auction
23rate process and may provide for appointment of one or more
24financial institutions to serve as auction agents and
25broker-dealers in connection with the establishment of such
26interest rates and the sale and remarketing of such Bonds.

 

 

HB4057- 59 -LRB100 12972 RPS 27085 b

1    (b) In connection with the issuance of any series of Bonds,
2the State may enter into arrangements to provide additional
3security and liquidity for such Bonds, including, without
4limitation, bond or interest rate insurance or letters of
5credit, lines of credit, bond purchase contracts, or other
6arrangements whereby funds are made available to retire or
7purchase Bonds, thereby assuring the ability of owners of the
8Bonds to sell or redeem their Bonds. The State may enter into
9contracts and may agree to pay fees to persons providing such
10arrangements, but only under circumstances where the Director
11of the Governor's Office of Management and Budget certifies
12that he or she reasonably expects the total interest paid or to
13be paid on the Bonds, together with the fees for the
14arrangements (being treated as if interest), would not, taken
15together, cause the Bonds to bear interest, calculated to their
16stated maturity, at a rate in excess of the rate that the Bonds
17would bear in the absence of such arrangements.
18    The State may, with respect to Bonds issued or anticipated
19to be issued, participate in and enter into arrangements with
20respect to interest rate protection or exchange agreements,
21guarantees, or financial futures contracts for the purpose of
22limiting, reducing, or managing interest rate exposure. The
23authority granted under this paragraph, however, shall not
24increase the principal amount of Bonds authorized to be issued
25by law. The arrangements may be executed and delivered by the
26Director of the Governor's Office of Management and Budget on

 

 

HB4057- 60 -LRB100 12972 RPS 27085 b

1behalf of the State. Net payments for such arrangements shall
2constitute interest on the Bonds and shall be paid from the
3General Obligation Bond Retirement and Interest Fund. The
4Director of the Governor's Office of Management and Budget
5shall at least annually certify to the Governor and the State
6Comptroller his or her estimate of the amounts of such net
7payments to be included in the calculation of interest required
8to be paid by the State.
9    (c) Prior to the issuance of any Variable Rate Bonds
10pursuant to subsection (a), the Director of the Governor's
11Office of Management and Budget shall adopt an interest rate
12risk management policy providing that the amount of the State's
13variable rate exposure with respect to Bonds shall not exceed
1420%. This policy shall remain in effect while any Bonds are
15outstanding and the issuance of Bonds shall be subject to the
16terms of such policy. The terms of this policy may be amended
17from time to time by the Director of the Governor's Office of
18Management and Budget but in no event shall any amendment cause
19the permitted level of the State's variable rate exposure with
20respect to Bonds to exceed 20%.
21    (d) "Build America Bonds" in this Section means Bonds
22authorized by Section 54AA of the Internal Revenue Code of
231986, as amended ("Internal Revenue Code"), and bonds issued
24from time to time to refund or continue to refund "Build
25America Bonds".
26    (e) Notwithstanding any other provision of this Section,

 

 

HB4057- 61 -LRB100 12972 RPS 27085 b

1Qualified School Construction Bonds shall be issued and sold
2from time to time, in one or more series, in such amounts and
3at such prices as may be directed by the Governor, upon
4recommendation by the Director of the Governor's Office of
5Management and Budget. Qualified School Construction Bonds
6shall be in such form (either coupon, registered or book
7entry), in such denominations, payable within 25 years from
8their date, subject to such terms of redemption with or without
9premium, and if the Qualified School Construction Bonds are
10issued with a supplemental coupon, bear interest payable at
11such times and at such fixed or variable rate or rates, and be
12dated as shall be fixed and determined by the Director of the
13Governor's Office of Management and Budget in the order
14authorizing the issuance and sale of any series of Qualified
15School Construction Bonds, which order shall be approved by the
16Governor and is herein called a "Bond Sale Order"; except that
17interest payable at fixed or variable rates, if any, shall not
18exceed that permitted in the Bond Authorization Act, as now or
19hereafter amended. Qualified School Construction Bonds shall
20be payable at such place or places, within or without the State
21of Illinois, and may be made registrable as to either principal
22or as to both principal and interest, as shall be specified in
23the Bond Sale Order. Qualified School Construction Bonds may be
24callable or subject to purchase and retirement or tender and
25remarketing as fixed and determined in the Bond Sale Order.
26Qualified School Construction Bonds must be issued with

 

 

HB4057- 62 -LRB100 12972 RPS 27085 b

1principal or mandatory redemption amounts or sinking fund
2payments into the General Obligation Bond Retirement and
3Interest Fund (or subaccount therefor) in equal amounts, with
4the first maturity issued, mandatory redemption payment or
5sinking fund payment occurring within the fiscal year in which
6the Qualified School Construction Bonds are issued or within
7the next succeeding fiscal year, with Qualified School
8Construction Bonds issued maturing or subject to mandatory
9redemption or with sinking fund payments thereof deposited each
10fiscal year thereafter up to 25 years. Sinking fund payments
11set forth in this subsection shall be permitted only to the
12extent authorized in Section 54F of the Internal Revenue Code
13or as otherwise determined by the Director of the Governor's
14Office of Management and Budget. "Qualified School
15Construction Bonds" in this subsection means Bonds authorized
16by Section 54F of the Internal Revenue Code and for bonds
17issued from time to time to refund or continue to refund such
18"Qualified School Construction Bonds".
19    (f) Beginning with the next issuance by the Governor's
20Office of Management and Budget to the Procurement Policy Board
21of a request for quotation for the purpose of formulating a new
22pool of qualified underwriting banks list, all entities
23responding to such a request for quotation for inclusion on
24that list shall provide a written report to the Governor's
25Office of Management and Budget and the Illinois Comptroller.
26The written report submitted to the Comptroller shall (i) be

 

 

HB4057- 63 -LRB100 12972 RPS 27085 b

1published on the Comptroller's Internet website and (ii) be
2used by the Governor's Office of Management and Budget for the
3purposes of scoring such a request for quotation. The written
4report, at a minimum, shall:
5        (1) disclose whether, within the past 3 months,
6    pursuant to its credit default swap market-making
7    activities, the firm has entered into any State of Illinois
8    credit default swaps ("CDS");
9        (2) include, in the event of State of Illinois CDS
10    activity, disclosure of the firm's cumulative notional
11    volume of State of Illinois CDS trades and the firm's
12    outstanding gross and net notional amount of State of
13    Illinois CDS, as of the end of the current 3-month period;
14        (3) indicate, pursuant to the firm's proprietary
15    trading activities, disclosure of whether the firm, within
16    the past 3 months, has entered into any proprietary trades
17    for its own account in State of Illinois CDS;
18        (4) include, in the event of State of Illinois
19    proprietary trades, disclosure of the firm's outstanding
20    gross and net notional amount of proprietary State of
21    Illinois CDS and whether the net position is short or long
22    credit protection, as of the end of the current 3-month
23    period;
24        (5) list all time periods during the past 3 months
25    during which the firm held net long or net short State of
26    Illinois CDS proprietary credit protection positions, the

 

 

HB4057- 64 -LRB100 12972 RPS 27085 b

1    amount of such positions, and whether those positions were
2    net long or net short credit protection positions; and
3        (6) indicate whether, within the previous 3 months, the
4    firm released any publicly available research or marketing
5    reports that reference State of Illinois CDS and include
6    those research or marketing reports as attachments.
7    (g) All entities included on a Governor's Office of
8Management and Budget's pool of qualified underwriting banks
9list shall, as soon as possible after March 18, 2011 (the
10effective date of Public Act 96-1554), but not later than
11January 21, 2011, and on a quarterly fiscal basis thereafter,
12provide a written report to the Governor's Office of Management
13and Budget and the Illinois Comptroller. The written reports
14submitted to the Comptroller shall be published on the
15Comptroller's Internet website. The written reports, at a
16minimum, shall:
17        (1) disclose whether, within the past 3 months,
18    pursuant to its credit default swap market-making
19    activities, the firm has entered into any State of Illinois
20    credit default swaps ("CDS");
21        (2) include, in the event of State of Illinois CDS
22    activity, disclosure of the firm's cumulative notional
23    volume of State of Illinois CDS trades and the firm's
24    outstanding gross and net notional amount of State of
25    Illinois CDS, as of the end of the current 3-month period;
26        (3) indicate, pursuant to the firm's proprietary

 

 

HB4057- 65 -LRB100 12972 RPS 27085 b

1    trading activities, disclosure of whether the firm, within
2    the past 3 months, has entered into any proprietary trades
3    for its own account in State of Illinois CDS;
4        (4) include, in the event of State of Illinois
5    proprietary trades, disclosure of the firm's outstanding
6    gross and net notional amount of proprietary State of
7    Illinois CDS and whether the net position is short or long
8    credit protection, as of the end of the current 3-month
9    period;
10        (5) list all time periods during the past 3 months
11    during which the firm held net long or net short State of
12    Illinois CDS proprietary credit protection positions, the
13    amount of such positions, and whether those positions were
14    net long or net short credit protection positions; and
15        (6) indicate whether, within the previous 3 months, the
16    firm released any publicly available research or marketing
17    reports that reference State of Illinois CDS and include
18    those research or marketing reports as attachments.
19    (h) Notwithstanding any other provision of this Section,
20for purposes of maximizing market efficiencies and cost
21savings, State Pension Obligation Acceleration Bonds may be
22issued and sold from time to time, in one or more series, in
23such amounts and at such prices as may be directed by the
24Governor, upon recommendation by the Director of the Governor's
25Office of Management and Budget. State Pension Obligation
26Acceleration Bonds shall be in such form, either coupon,

 

 

HB4057- 66 -LRB100 12972 RPS 27085 b

1registered, or book entry, in such denominations, shall bear
2interest payable at such times and at such fixed or variable
3rate or rates, and be dated as shall be fixed and determined by
4the Director of the Governor's Office of Management and Budget
5in the order authorizing the issuance and sale of any series of
6State Pension Obligation Acceleration Bonds, which order shall
7be approved by the Governor and is herein called a "Bond Sale
8Order"; provided, however, that interest payable at fixed or
9variable rates shall not exceed that permitted in the Bond
10Authorization Act. State Pension Obligation Acceleration Bonds
11shall be payable at such place or places, within or without the
12State of Illinois, and may be made registrable as to either
13principal or as to both principal and interest, as shall be
14specified in the Bond Sale Order. State Pension Obligation
15Acceleration Bonds may be callable or subject to purchase and
16retirement or tender and remarketing as fixed and determined in
17the Bond Sale Order.
18(Source: P.A. 99-523, eff. 6-30-16.)
 
19    (30 ILCS 330/11)  (from Ch. 127, par. 661)
20    Sec. 11. Sale of Bonds. Except as otherwise provided in
21this Section, Bonds shall be sold from time to time pursuant to
22notice of sale and public bid or by negotiated sale in such
23amounts and at such times as is directed by the Governor, upon
24recommendation by the Director of the Governor's Office of
25Management and Budget. At least 25%, based on total principal

 

 

HB4057- 67 -LRB100 12972 RPS 27085 b

1amount, of all Bonds issued each fiscal year shall be sold
2pursuant to notice of sale and public bid. At all times during
3each fiscal year, no more than 75%, based on total principal
4amount, of the Bonds issued each fiscal year, shall have been
5sold by negotiated sale. Failure to satisfy the requirements in
6the preceding 2 sentences shall not affect the validity of any
7previously issued Bonds; provided that all Bonds authorized by
8Public Act 96-43 and Public Act 96-1497 shall not be included
9in determining compliance for any fiscal year with the
10requirements of the preceding 2 sentences; and further provided
11that refunding Bonds satisfying the requirements of Section 16
12of this Act and sold during fiscal year 2009, 2010, 2011, or
132017 shall not be subject to the requirements in the preceding
142 sentences.
15    If any Bonds, including refunding Bonds, are to be sold by
16negotiated sale, the Director of the Governor's Office of
17Management and Budget shall comply with the competitive request
18for proposal process set forth in the Illinois Procurement Code
19and all other applicable requirements of that Code.
20    If Bonds are to be sold pursuant to notice of sale and
21public bid, the Director of the Governor's Office of Management
22and Budget may, from time to time, as Bonds are to be sold,
23advertise the sale of the Bonds in at least 2 daily newspapers,
24one of which is published in the City of Springfield and one in
25the City of Chicago. The sale of the Bonds shall also be
26advertised in the volume of the Illinois Procurement Bulletin

 

 

HB4057- 68 -LRB100 12972 RPS 27085 b

1that is published by the Department of Central Management
2Services, and shall be published once at least 10 days prior to
3the date fixed for the opening of the bids. The Director of the
4Governor's Office of Management and Budget may reschedule the
5date of sale upon the giving of such additional notice as the
6Director deems adequate to inform prospective bidders of such
7change; provided, however, that all other conditions of the
8sale shall continue as originally advertised.
9    Executed Bonds shall, upon payment therefor, be delivered
10to the purchaser, and the proceeds of Bonds shall be paid into
11the State Treasury as directed by Section 12 of this Act.
12    All State Pension Obligation Acceleration Bonds shall
13comply with this Section. Notwithstanding anything to the
14contrary, however, for purposes of complying with this Section,
15State Pension Obligation Acceleration Bonds, regardless of the
16number of series or issuances sold thereunder, shall be
17considered a single issue or series. Furthermore, for purposes
18of complying with the competitive bidding requirements of this
19Section, the words "at all times" shall not apply to any such
20sale of the State Pension Obligation Acceleration Bonds. The
21Director of the Governor's Office of Management and Budget
22shall determine the time and manner of any competitive sale of
23the State Pension Obligation Acceleration Bonds; however, that
24sale shall under no circumstances take place later than 60 days
25after the State closes the sale of 75% of the State Pension
26Obligation Acceleration Bonds by negotiated sale.

 

 

HB4057- 69 -LRB100 12972 RPS 27085 b

1(Source: P.A. 98-44, eff. 6-28-13; 99-523, eff. 6-30-16.)
 
2    (30 ILCS 330/12)  (from Ch. 127, par. 662)
3    Sec. 12. Allocation of Proceeds from Sale of Bonds.
4    (a) Proceeds from the sale of Bonds, authorized by Section
53 of this Act, shall be deposited in the separate fund known as
6the Capital Development Fund.
7    (b) Proceeds from the sale of Bonds, authorized by
8paragraph (a) of Section 4 of this Act, shall be deposited in
9the separate fund known as the Transportation Bond, Series A
10Fund.
11    (c) Proceeds from the sale of Bonds, authorized by
12paragraphs (b) and (c) of Section 4 of this Act, shall be
13deposited in the separate fund known as the Transportation
14Bond, Series B Fund.
15    (c-1) Proceeds from the sale of Bonds, authorized by
16paragraph (d) of Section 4 of this Act, shall be deposited into
17the Transportation Bond Series D Fund, which is hereby created.
18    (d) Proceeds from the sale of Bonds, authorized by Section
195 of this Act, shall be deposited in the separate fund known as
20the School Construction Fund.
21    (e) Proceeds from the sale of Bonds, authorized by Section
226 of this Act, shall be deposited in the separate fund known as
23the Anti-Pollution Fund.
24    (f) Proceeds from the sale of Bonds, authorized by Section
257 of this Act, shall be deposited in the separate fund known as

 

 

HB4057- 70 -LRB100 12972 RPS 27085 b

1the Coal Development Fund.
2    (f-2) Proceeds from the sale of Bonds, authorized by
3Section 7.2 of this Act, shall be deposited as set forth in
4Section 7.2.
5    (f-5) Proceeds from the sale of Bonds, authorized by
6Section 7.5 of this Act, shall be deposited as set forth in
7Section 7.5.
8    (f-7) Proceeds from the sale of Bonds, authorized by
9Section 7.6 of this Act, shall be deposited as set forth in
10Section 7.6.
11    (g) Proceeds from the sale of Bonds, authorized by Section
128 of this Act, shall be deposited in the Capital Development
13Fund.
14    (h) Subsequent to the issuance of any Bonds for the
15purposes described in Sections 2 through 8 of this Act, the
16Governor and the Director of the Governor's Office of
17Management and Budget may provide for the reallocation of
18unspent proceeds of such Bonds to any other purposes authorized
19under said Sections of this Act, subject to the limitations on
20aggregate principal amounts contained therein. Upon any such
21reallocation, such unspent proceeds shall be transferred to the
22appropriate funds as determined by reference to paragraphs (a)
23through (g) of this Section.
24(Source: P.A. 96-36, eff. 7-13-09.)
 
25    (30 ILCS 330/13)  (from Ch. 127, par. 663)

 

 

HB4057- 71 -LRB100 12972 RPS 27085 b

1    Sec. 13. Appropriation of Proceeds from Sale of Bonds.
2    (a) At all times, the proceeds from the sale of Bonds
3issued pursuant to this Act are subject to appropriation by the
4General Assembly and, except as provided in Sections 7.2 and
57.6 Section 7.2, may be obligated or expended only with the
6written approval of the Governor, in such amounts, at such
7times, and for such purposes as the respective State agencies,
8as defined in Section 1-7 of the Illinois State Auditing Act,
9as amended, deem necessary or desirable for the specific
10purposes contemplated in Sections 2 through 8 of this Act.
11Notwithstanding any other provision of this Act, proceeds from
12the sale of Bonds issued pursuant to this Act appropriated by
13the General Assembly to the Architect of the Capitol may be
14obligated or expended by the Architect of the Capitol without
15the written approval of the Governor.
16    (b) Proceeds from the sale of Bonds for the purpose of
17development of coal and alternative forms of energy shall be
18expended in such amounts and at such times as the Department of
19Commerce and Economic Opportunity, with the advice and
20recommendation of the Illinois Coal Development Board for coal
21development projects, may deem necessary and desirable for the
22specific purpose contemplated by Section 7 of this Act. In
23considering the approval of projects to be funded, the
24Department of Commerce and Economic Opportunity shall give
25special consideration to projects designed to remove sulfur and
26other pollutants in the preparation and utilization of coal,

 

 

HB4057- 72 -LRB100 12972 RPS 27085 b

1and in the use and operation of electric utility generating
2plants and industrial facilities which utilize Illinois coal as
3their primary source of fuel.
4    (c) Except as directed in subsection (c-1) or (c-2), any
5monies received by any officer or employee of the state
6representing a reimbursement of expenditures previously paid
7from general obligation bond proceeds shall be deposited into
8the General Obligation Bond Retirement and Interest Fund
9authorized in Section 14 of this Act.
10    (c-1) Any money received by the Department of
11Transportation as reimbursement for expenditures for high
12speed rail purposes pursuant to appropriations from the
13Transportation Bond, Series B Fund for (i) CREATE (Chicago
14Region Environmental and Transportation Efficiency), (ii) High
15Speed Rail, or (iii) AMTRAK projects authorized by the federal
16government under the provisions of the American Recovery and
17Reinvestment Act of 2009 or the Safe Accountable Flexible
18Efficient Transportation Equity Act—A Legacy for Users
19(SAFETEA-LU), or any successor federal transportation
20authorization Act, shall be deposited into the Federal High
21Speed Rail Trust Fund.
22    (c-2) Any money received by the Department of
23Transportation as reimbursement for expenditures for transit
24capital purposes pursuant to appropriations from the
25Transportation Bond, Series B Fund for projects authorized by
26the federal government under the provisions of the American

 

 

HB4057- 73 -LRB100 12972 RPS 27085 b

1Recovery and Reinvestment Act of 2009 or the Safe Accountable
2Flexible Efficient Transportation Equity Act—A Legacy for
3Users (SAFETEA-LU), or any successor federal transportation
4authorization Act, shall be deposited into the Federal Mass
5Transit Trust Fund.
6(Source: P.A. 98-674, eff. 6-30-14.)
 
7    Section 20. The Illinois Pension Code is amended by
8changing Sections 1-160, 2-101, 2-105, 2-107, 2-117, 2-162,
97-114, 7-116, 7-139, 14-103.05, 14-103.10, 14-104.3, 14-106,
1014-152.1, 15-108.1, 15-108.2, 15-112, 15-113.4, 15-134,
1115-155, 15-198, 16-123, 16-127, 16-158, 16-217, 16-152.1,
1216-203, 18-120, 18-124, 18-125, 18-125.1, 18-127, 18-128.01,
1318-133, 18-169, 20-121, 20-123, 20-124, and 20-125 and by
14adding Sections 2-105.3, 2-154.5, 2-165.5, 14-103.41,
1514-103.42, 14-103.43, 14-147.5, 14-155.5, 15-108.3, 15-185.5,
1615-200.5, 16-106.40, 16-106.41, 16-106.42, 16-190.5, 16-205.5,
1718-110.1, 18-110.2, 18-110.3, 18-121.5, and 18-161.5 as
18follows:
 
19    (40 ILCS 5/1-160)
20    (Text of Section WITHOUT the changes made by P.A. 98-641,
21which has been held unconstitutional)
22    Sec. 1-160. Provisions applicable to new hires.
23    (a) The provisions of this Section apply to a person who,
24on or after January 1, 2011, first becomes a member or a

 

 

HB4057- 74 -LRB100 12972 RPS 27085 b

1participant under any reciprocal retirement system or pension
2fund established under this Code, other than a retirement
3system or pension fund established under Article 2, 3, 4, 5, 6,
415 or 18 of this Code, notwithstanding any other provision of
5this Code to the contrary, but do not apply to any self-managed
6plan established under this Code, to any person with respect to
7service as a sheriff's law enforcement employee under Article
87, or to any participant of the retirement plan established
9under Section 22-101. Notwithstanding anything to the contrary
10in this Section, for purposes of this Section, a person who
11participated in a retirement system under Article 15 prior to
12January 1, 2011 shall be deemed a person who first became a
13member or participant prior to January 1, 2011 under any
14retirement system or pension fund subject to this Section. The
15changes made to this Section by Public Act 98-596 this
16amendatory Act of the 98th General Assembly are a clarification
17of existing law and are intended to be retroactive to January
181, 2011 (the effective date of Public Act 96-889),
19notwithstanding the provisions of Section 1-103.1 of this Code.
20    The provisions of this Section do not apply to service
21under a Tier 3 plan established under Article 2, 14, 15, 16, or
2218 of this Code.
23    (b) "Final average salary" means the average monthly (or
24annual) salary obtained by dividing the total salary or
25earnings calculated under the Article applicable to the member
26or participant during the 96 consecutive months (or 8

 

 

HB4057- 75 -LRB100 12972 RPS 27085 b

1consecutive years) of service within the last 120 months (or 10
2years) of service in which the total salary or earnings
3calculated under the applicable Article was the highest by the
4number of months (or years) of service in that period. For the
5purposes of a person who first becomes a member or participant
6of any retirement system or pension fund to which this Section
7applies on or after January 1, 2011, in this Code, "final
8average salary" shall be substituted for the following:
9        (1) In Article 7 (except for service as sheriff's law
10    enforcement employees), "final rate of earnings".
11        (2) In Articles 8, 9, 10, 11, and 12, "highest average
12    annual salary for any 4 consecutive years within the last
13    10 years of service immediately preceding the date of
14    withdrawal".
15        (3) In Article 13, "average final salary".
16        (4) In Article 14, "final average compensation".
17        (5) In Article 17, "average salary".
18        (6) In Section 22-207, "wages or salary received by him
19    at the date of retirement or discharge".
20    (b-5) Beginning on January 1, 2011, for all purposes under
21this Code (including without limitation the calculation of
22benefits and employee contributions), the annual earnings,
23salary, or wages (based on the plan year) of a member or
24participant to whom this Section applies shall not exceed
25$106,800; however, that amount shall annually thereafter be
26increased by the lesser of (i) 3% of that amount, including all

 

 

HB4057- 76 -LRB100 12972 RPS 27085 b

1previous adjustments, or (ii) one-half the annual unadjusted
2percentage increase (but not less than zero) in the consumer
3price index-u for the 12 months ending with the September
4preceding each November 1, including all previous adjustments.
5    For the purposes of this Section, "consumer price index-u"
6means the index published by the Bureau of Labor Statistics of
7the United States Department of Labor that measures the average
8change in prices of goods and services purchased by all urban
9consumers, United States city average, all items, 1982-84 =
10100. The new amount resulting from each annual adjustment shall
11be determined by the Public Pension Division of the Department
12of Insurance and made available to the boards of the retirement
13systems and pension funds by November 1 of each year.
14    (c) A member or participant is entitled to a retirement
15annuity upon written application if he or she has attained age
1667 (beginning January 1, 2015, age 65 with respect to service
17under Article 12 of this Code that is subject to this Section)
18and has at least 10 years of service credit and is otherwise
19eligible under the requirements of the applicable Article.
20    A member or participant who has attained age 62 (beginning
21January 1, 2015, age 60 with respect to service under Article
2212 of this Code that is subject to this Section) and has at
23least 10 years of service credit and is otherwise eligible
24under the requirements of the applicable Article may elect to
25receive the lower retirement annuity provided in subsection (d)
26of this Section.

 

 

HB4057- 77 -LRB100 12972 RPS 27085 b

1    (d) The retirement annuity of a member or participant who
2is retiring after attaining age 62 (beginning January 1, 2015,
3age 60 with respect to service under Article 12 of this Code
4that is subject to this Section) with at least 10 years of
5service credit shall be reduced by one-half of 1% for each full
6month that the member's age is under age 67 (beginning January
71, 2015, age 65 with respect to service under Article 12 of
8this Code that is subject to this Section).
9    (e) Any retirement annuity or supplemental annuity shall be
10subject to annual increases on the January 1 occurring either
11on or after the attainment of age 67 (beginning January 1,
122015, age 65 with respect to service under Article 12 of this
13Code that is subject to this Section) or the first anniversary
14of the annuity start date, whichever is later. Each annual
15increase shall be calculated at 3% or one-half the annual
16unadjusted percentage increase (but not less than zero) in the
17consumer price index-u for the 12 months ending with the
18September preceding each November 1, whichever is less, of the
19originally granted retirement annuity. If the annual
20unadjusted percentage change in the consumer price index-u for
21the 12 months ending with the September preceding each November
221 is zero or there is a decrease, then the annuity shall not be
23increased.
24    (f) The initial survivor's or widow's annuity of an
25otherwise eligible survivor or widow of a retired member or
26participant who first became a member or participant on or

 

 

HB4057- 78 -LRB100 12972 RPS 27085 b

1after January 1, 2011 shall be in the amount of 66 2/3% of the
2retired member's or participant's retirement annuity at the
3date of death. In the case of the death of a member or
4participant who has not retired and who first became a member
5or participant on or after January 1, 2011, eligibility for a
6survivor's or widow's annuity shall be determined by the
7applicable Article of this Code. The initial benefit shall be
866 2/3% of the earned annuity without a reduction due to age. A
9child's annuity of an otherwise eligible child shall be in the
10amount prescribed under each Article if applicable. Any
11survivor's or widow's annuity shall be increased (1) on each
12January 1 occurring on or after the commencement of the annuity
13if the deceased member died while receiving a retirement
14annuity or (2) in other cases, on each January 1 occurring
15after the first anniversary of the commencement of the annuity.
16Each annual increase shall be calculated at 3% or one-half the
17annual unadjusted percentage increase (but not less than zero)
18in the consumer price index-u for the 12 months ending with the
19September preceding each November 1, whichever is less, of the
20originally granted survivor's annuity. If the annual
21unadjusted percentage change in the consumer price index-u for
22the 12 months ending with the September preceding each November
231 is zero or there is a decrease, then the annuity shall not be
24increased.
25    (g) The benefits in Section 14-110 apply only if the person
26is a State policeman, a fire fighter in the fire protection

 

 

HB4057- 79 -LRB100 12972 RPS 27085 b

1service of a department, or a security employee of the
2Department of Corrections or the Department of Juvenile
3Justice, as those terms are defined in subsection (b) of
4Section 14-110. A person who meets the requirements of this
5Section is entitled to an annuity calculated under the
6provisions of Section 14-110, in lieu of the regular or minimum
7retirement annuity, only if the person has withdrawn from
8service with not less than 20 years of eligible creditable
9service and has attained age 60, regardless of whether the
10attainment of age 60 occurs while the person is still in
11service.
12    (h) If a person who first becomes a member or a participant
13of a retirement system or pension fund subject to this Section
14on or after January 1, 2011 is receiving a retirement annuity
15or retirement pension under that system or fund and becomes a
16member or participant under any other system or fund created by
17this Code and is employed on a full-time basis, except for
18those members or participants exempted from the provisions of
19this Section under subsection (a) of this Section, then the
20person's retirement annuity or retirement pension under that
21system or fund shall be suspended during that employment. Upon
22termination of that employment, the person's retirement
23annuity or retirement pension payments shall resume and be
24recalculated if recalculation is provided for under the
25applicable Article of this Code.
26    If a person who first becomes a member of a retirement

 

 

HB4057- 80 -LRB100 12972 RPS 27085 b

1system or pension fund subject to this Section on or after
2January 1, 2012 and is receiving a retirement annuity or
3retirement pension under that system or fund and accepts on a
4contractual basis a position to provide services to a
5governmental entity from which he or she has retired, then that
6person's annuity or retirement pension earned as an active
7employee of the employer shall be suspended during that
8contractual service. A person receiving an annuity or
9retirement pension under this Code shall notify the pension
10fund or retirement system from which he or she is receiving an
11annuity or retirement pension, as well as his or her
12contractual employer, of his or her retirement status before
13accepting contractual employment. A person who fails to submit
14such notification shall be guilty of a Class A misdemeanor and
15required to pay a fine of $1,000. Upon termination of that
16contractual employment, the person's retirement annuity or
17retirement pension payments shall resume and, if appropriate,
18be recalculated under the applicable provisions of this Code.
19    (i) (Blank).
20    (j) In the case of a conflict between the provisions of
21this Section and any other provision of this Code, the
22provisions of this Section shall control.
23(Source: P.A. 97-609, eff. 1-1-12; 98-92, eff. 7-16-13; 98-596,
24eff. 11-19-13; 98-622, eff. 6-1-14; revised 3-24-16.)
 
25    (40 ILCS 5/2-101)  (from Ch. 108 1/2, par. 2-101)

 

 

HB4057- 81 -LRB100 12972 RPS 27085 b

1    Sec. 2-101. Creation of system. A retirement system is
2created to provide retirement annuities, survivor's annuities
3and other benefits for certain members of the General Assembly,
4certain elected state officials, and their beneficiaries.
5    The system shall be known as the "General Assembly
6Retirement System". All its funds and property shall be a trust
7separate from all other entities, maintained for the purpose of
8securing payment of annuities and benefits under this Article.
9    Participation in the retirement system created under this
10Article is restricted to persons who became participants before
11the effective date of this amendatory Act of the 100th General
12Assembly. Beginning on that date, the System shall not accept
13any new participants.
14(Source: P.A. 83-1440.)
 
15    (40 ILCS 5/2-105)  (from Ch. 108 1/2, par. 2-105)
16    Sec. 2-105. Member. "Member": Members of the General
17Assembly of this State, including persons who enter military
18service while a member of the General Assembly, and any person
19serving as Governor, Lieutenant Governor, Secretary of State,
20Treasurer, Comptroller, or Attorney General for the period of
21service in such office.
22    Any person who has served for 10 or more years as Clerk or
23Assistant Clerk of the House of Representatives, Secretary or
24Assistant Secretary of the Senate, or any combination thereof,
25may elect to become a member of this system while thenceforth

 

 

HB4057- 82 -LRB100 12972 RPS 27085 b

1engaged in such service by filing a written election with the
2board. Any person so electing shall be deemed an active member
3of the General Assembly for the purpose of validating and
4transferring any service credits earned under any of the funds
5and systems established under Articles 3 through 18 of this
6Code.
7    However, notwithstanding any other provision of this
8Article, a person shall not be deemed a member for the purposes
9of this Article unless he or she became a participant of the
10System before the effective date of this amendatory Act of the
11100th General Assembly.
12(Source: P.A. 85-1008.)
 
13    (40 ILCS 5/2-105.3 new)
14    Sec. 2-105.3. Tier 1 participant; Tier 2 participant; Tier
153 participant.
16    "Tier 1 participant": A participant who first became a
17participant before January 1, 2011.
18    In the case of a Tier 1 participant who elects to
19participate in the Tier 3 plan under Section 2-165.5 of this
20Code, that participant shall be deemed a Tier 1 participant
21only with respect to service performed or established before
22the effective date of that election.
23    "Tier 2 participant": A participant who first became a
24participant on or after January 1, 2011 but before the
25effective date of this amendatory Act of the 100th General

 

 

HB4057- 83 -LRB100 12972 RPS 27085 b

1Assembly.
2    In the case of a Tier 2 participant who elects to
3participate in the Tier 3 plan under Section 2-165.5 of this
4Code, that Tier 2 member shall be deemed a Tier 2 member only
5with respect to service performed or established before the
6effective date of that election.
7    "Tier 3 participant": A participant who elects to
8participate in the Tier 3 plan under Section 2-165.5 of this
9Code, but only with respect to service performed on or after
10the effective date of that election.
 
11    (40 ILCS 5/2-107)  (from Ch. 108 1/2, par. 2-107)
12    Sec. 2-107. Participant. "Participant": Any member who
13elects to participate; and any former member who elects to
14continue participation under Section 2-117.1, for the duration
15of such continued participation. However, notwithstanding any
16other provision of this Article, a person shall not be deemed a
17participant for the purposes of this Article unless he or she
18became a participant of the System before the effective date of
19this amendatory Act of the 100th General Assembly.
20(Source: P.A. 86-1488.)
 
21    (40 ILCS 5/2-117)  (from Ch. 108 1/2, par. 2-117)
22    Sec. 2-117. Participants - Election not to participate.
23    (a) Except as provided in subsection (c), every Every
24person who was a member on November 1, 1947, or in military

 

 

HB4057- 84 -LRB100 12972 RPS 27085 b

1service on such date, is subject to the provisions of this
2system beginning upon such date, unless prior to such date he
3or she filed with the board a written notice of election not to
4participate.
5    Every person who becomes a member after November 1, 1947,
6and who is then not a participant becomes a participant
7beginning upon the date of becoming a member unless, within 24
8months from that date, he or she has filed with the board a
9written notice of election not to participate.
10    (b) A member who has filed notice of an election not to
11participate (and a former member who has not yet begun to
12receive a retirement annuity under this Article) may become a
13participant with respect to the period for which the member
14elected not to participate upon filing with the board, before
15April 1, 1993, a written rescission of the election not to
16participate. Upon contributing an amount equal to the
17contributions he or she would have made as a participant from
18November 1, 1947, or the date of becoming a member, whichever
19is later, to the date of becoming a participant, with interest
20at the rate of 4% per annum until the contributions are paid,
21the participant shall receive credit for service as a member
22prior to the date of the rescission, both before and after
23November 1, 1947. The required contributions shall be made
24before commencement of the retirement annuity; otherwise no
25credit for service prior to the date of participation shall be
26granted.

 

 

HB4057- 85 -LRB100 12972 RPS 27085 b

1    (c) Notwithstanding any other provision of this Article, an
2active participant may terminate his or her participation in
3this System (including active participation in the Tier 3 plan,
4if applicable) by notifying the System in writing. An active
5participant terminating participation in this System under
6this subsection shall be entitled to a refund of his or her
7contributions (other than contributions to the Tier 3 plan
8under Section 2-165.5) minus the benefits received prior to the
9termination of participation.
10(Source: P.A. 86-273; 87-1265.)
 
11    (40 ILCS 5/2-154.5 new)
12    Sec. 2-154.5. Accelerated pension benefit payment.
13    (a) As used in this Section:
14    "Eligible person" means a person who:
15        (1) has terminated service;
16        (2) has accrued sufficient service credit to be
17    eligible to receive a retirement annuity under this
18    Article;
19        (3) has not received any retirement annuity under this
20    Article; and
21        (4) does not have a QILDRO in effect against him or her
22    under this Article.
23    "Pension benefit" means the benefits under this Article, or
24Article 1 as it relates to those benefits, including any
25anticipated annual increases, that an eligible person is

 

 

HB4057- 86 -LRB100 12972 RPS 27085 b

1entitled to upon attainment of the applicable retirement age.
2"Pension benefit" also includes applicable survivor's or
3disability benefits.
4    (b) Before January 1, 2018, the System shall calculate,
5using actuarial tables and other assumptions adopted by the
6Board, the net present value of pension benefits for each
7eligible person and shall offer each eligible person the
8opportunity to irrevocably elect to receive an amount
9determined by the System to be equal to 70% of the net present
10value of his or her pension benefits in lieu of receiving any
11pension benefit. The offer shall specify the dollar amount that
12the eligible person will receive if he or she so elects and
13shall expire when a subsequent offer is made to an eligible
14person. The System shall make a good faith effort to contact
15every eligible person to notify him or her of the election and
16of the amount of the accelerated pension benefit payment.
17    Beginning January 1, 2018 and until July 1, 2018, an
18eligible person may irrevocably elect to receive an accelerated
19pension benefit payment in the amount that the System offers
20under this subsection in lieu of receiving any pension benefit.
21A person who elects to receive an accelerated pension benefit
22payment under this Section may not elect to proceed under the
23Retirement Systems Reciprocal Act with respect to service under
24this Article.
25    (c) A person's credits and creditable service under this
26Article shall be terminated upon the person's receipt of an

 

 

HB4057- 87 -LRB100 12972 RPS 27085 b

1accelerated pension benefit payment under this Section, and no
2other benefit shall be paid under this Article based on those
3terminated credits and creditable service, including any
4retirement, survivor, or other benefit; except that to the
5extent that participation, benefits, or premiums under the
6State Employees Group Insurance Act of 1971 are based on the
7amount of service credit, the terminated service credit shall
8be used for that purpose.
9    (d) If a person who has received an accelerated pension
10benefit payment under this Section returns to active service
11under this Article, then:
12        (1) Any benefits under the System earned as a result of
13    that return to active service shall be based solely on the
14    person's credits and creditable service arising from the
15    return to active service.
16        (2) The accelerated pension benefit payment may not be
17    repaid to the System, and the terminated credits and
18    creditable service may not under any circumstances be
19    reinstated.
20    (e) As a condition of receiving an accelerated pension
21benefit payment, an eligible person must have another
22retirement plan or account qualified under the Internal Revenue
23Code of 1986, as amended, for the accelerated pension benefit
24payment to be rolled into. The accelerated pension benefit
25payment under this Section may be subject to withholding or
26payment of applicable taxes, but to the extent permitted by

 

 

HB4057- 88 -LRB100 12972 RPS 27085 b

1federal law, a person who receives an accelerated pension
2benefit payment under this Section must direct the System to
3pay all of that payment as a rollover into another retirement
4plan or account qualified under the Internal Revenue Code of
51986, as amended.
6    (f) Before January 1, 2019, the Board shall certify to the
7Illinois Finance Authority and the General Assembly the amount
8by which the total amount of accelerated pension benefit
9payments made under this Section exceed the amount appropriated
10to the System for the purpose of making those payments.
11    (g) The Board shall adopt any rules necessary to implement
12this Section.
13    (h) No provision of this Section shall be interpreted in a
14way that would cause the applicable System to cease to be a
15qualified plan under the Internal Revenue Code of 1986.
 
16    (40 ILCS 5/2-162)
17    (Text of Section WITHOUT the changes made by P.A. 98-599,
18which has been held unconstitutional)
19    Sec. 2-162. Application and expiration of new benefit
20increases.
21    (a) As used in this Section, "new benefit increase" means
22an increase in the amount of any benefit provided under this
23Article, or an expansion of the conditions of eligibility for
24any benefit under this Article, that results from an amendment
25to this Code that takes effect after the effective date of this

 

 

HB4057- 89 -LRB100 12972 RPS 27085 b

1amendatory Act of the 94th General Assembly. "New benefit
2increase", however, does not include any benefit increase
3resulting from the changes made to this Article by this
4amendatory Act of the 100th General Assembly.
5    (b) Notwithstanding any other provision of this Code or any
6subsequent amendment to this Code, every new benefit increase
7is subject to this Section and shall be deemed to be granted
8only in conformance with and contingent upon compliance with
9the provisions of this Section.
10    (c) The Public Act enacting a new benefit increase must
11identify and provide for payment to the System of additional
12funding at least sufficient to fund the resulting annual
13increase in cost to the System as it accrues.
14    Every new benefit increase is contingent upon the General
15Assembly providing the additional funding required under this
16subsection. The Commission on Government Forecasting and
17Accountability shall analyze whether adequate additional
18funding has been provided for the new benefit increase and
19shall report its analysis to the Public Pension Division of the
20Department of Financial and Professional Regulation. A new
21benefit increase created by a Public Act that does not include
22the additional funding required under this subsection is null
23and void. If the Public Pension Division determines that the
24additional funding provided for a new benefit increase under
25this subsection is or has become inadequate, it may so certify
26to the Governor and the State Comptroller and, in the absence

 

 

HB4057- 90 -LRB100 12972 RPS 27085 b

1of corrective action by the General Assembly, the new benefit
2increase shall expire at the end of the fiscal year in which
3the certification is made.
4    (d) Every new benefit increase shall expire 5 years after
5its effective date or on such earlier date as may be specified
6in the language enacting the new benefit increase or provided
7under subsection (c). This does not prevent the General
8Assembly from extending or re-creating a new benefit increase
9by law.
10    (e) Except as otherwise provided in the language creating
11the new benefit increase, a new benefit increase that expires
12under this Section continues to apply to persons who applied
13and qualified for the affected benefit while the new benefit
14increase was in effect and to the affected beneficiaries and
15alternate payees of such persons, but does not apply to any
16other person, including without limitation a person who
17continues in service after the expiration date and did not
18apply and qualify for the affected benefit while the new
19benefit increase was in effect.
20(Source: P.A. 94-4, eff. 6-1-05.)
 
21    (40 ILCS 5/2-165.5 new)
22    Sec. 2-165.5. Tier 3 plan.
23    (a) By July 1, 2018, the System shall prepare and implement
24a Tier 3 plan. The Tier 3 plan developed under this Section
25shall be a plan that aggregates State and employee

 

 

HB4057- 91 -LRB100 12972 RPS 27085 b

1contributions in individual participant accounts which, after
2meeting any other requirements, are used for payouts after
3retirement in accordance with this Section and any other
4applicable laws. In developing, preparing, and implementing
5the Tier 3 plan and adopting rules concerning the Tier 3 plan,
6the System shall utilize the framework of the self-managed plan
7offered under Article 15 and shall endeavor to adapt the
8benefits and structure of the self-managed plan. The System
9shall consult with the State Universities Retirement System in
10developing the Tier 3 plan.
11    As used in this Section, "defined benefit plan" means the
12retirement plan available under this Article to Tier 1 or Tier
132 participants who have not made the election authorized under
14this Section.
15        (1) A participant in the Tier 3 plan shall pay employee
16    contributions at a rate of 8% of salary.
17        (2) State contributions shall be paid into the accounts
18    of all participants in the Tier 3 plan at a rate of 7.6% of
19    salary.
20        (3) The Tier 3 plan shall require one year of
21    participation in the Tier 3 plan before vesting in State
22    contributions. If the participant fails to vest in them,
23    the State contributions, and the earnings thereon, shall be
24    forfeited.
25        (4) The Tier 3 plan shall provide a variety of options
26    for investments. These options shall include investments

 

 

HB4057- 92 -LRB100 12972 RPS 27085 b

1    handled by the Illinois State Board of Investment as well
2    as private sector investment options.
3        (5) The Tier 3 plan shall provide a variety of options
4    for payouts to participants in the Tier 3 plan who are no
5    longer active in the System and their survivors.
6        (6) To the extent authorized under federal law and as
7    authorized by the System, the plan shall allow former
8    participants in the plan to transfer or roll over employee
9    and vested State contributions, and the earnings thereon,
10    from the Tier 3 plan into other qualified retirement plans.
11        (7) The System shall reduce the employee contributions
12    credited to the participant's Tier 3 plan account by an
13    amount determined by the System to cover the cost of
14    offering these benefits and any applicable administrative
15    fees.
16    (b) Under the Tier 3 plan, an active Tier 1 or Tier 2
17participant of this System may elect, in writing, to cease
18accruing benefits in the defined benefit plan and begin
19accruing benefits for future service in the Tier 3 plan. The
20election to participate in the Tier 3 plan is voluntary and
21irrevocable.
22        (1) Service credit under the Tier 3 plan may be used
23    for determining retirement eligibility under the defined
24    benefit plan.
25        (2) The System shall make a good faith effort to
26    contact all active Tier 1 and Tier 2 participants who are

 

 

HB4057- 93 -LRB100 12972 RPS 27085 b

1    eligible to participate in the Tier 3 plan. The System
2    shall mail information describing the option to join the
3    Tier 3 plan to each of these employees to his or her last
4    known address on file with the System. If the employee is
5    not responsive to other means of contact, it is sufficient
6    for the System to publish the details of the option on its
7    website.
8        (3) Upon request for further information describing
9    the option, the System shall provide employees with
10    information from the System before exercising the option to
11    join the plan, including information on the impact to their
12    benefits and service. The individual consultation shall
13    include projections of the participant's defined benefits
14    at retirement or earlier termination of service and the
15    value of the participant's account at retirement or earlier
16    termination of service. The System shall not provide advice
17    or counseling with respect to whether the employee should
18    exercise the option. The System shall inform Tier 1 and
19    Tier 2 participants who are eligible to participate in the
20    Tier 3 plan that they may also wish to obtain information
21    and counsel relating to their option from any other
22    available source, including but not limited to private
23    counsel and financial advisors.
24    (b-5) A Tier 1 or Tier 2 participant who elects to
25participate in the Tier 3 plan may irrevocably elect to
26terminate all participation in the defined benefit plan. Upon

 

 

HB4057- 94 -LRB100 12972 RPS 27085 b

1that election, the System shall transfer to the participant's
2individual account an amount equal to the amount of
3contribution refund that the participant would be eligible to
4receive if the member terminated employment on that date and
5elected a refund of contributions, including the prescribed
6rate of interest for the respective years. The System shall
7make the transfer as a tax free transfer in accordance with
8Internal Revenue Service guidelines, for purposes of funding
9the amount credited to the participant's individual account.
10    (c) In no event shall the System, its staff, its authorized
11representatives, or the Board be liable for any information
12given to an employee under this Section. The System may
13coordinate with the Illinois Department of Central Management
14Services and other retirement systems administering a Tier 3
15plan in accordance with this amendatory Act of the 100th
16General Assembly to provide information concerning the impact
17of the Tier 3 plan set forth in this Section.
18    (d) Notwithstanding any other provision of this Section, no
19person shall begin participating in the Tier 3 plan until it
20has attained qualified plan status and received all necessary
21approvals from the U.S. Internal Revenue Service.
22    (e) The System shall report on its progress under this
23Section, including the available details of the Tier 3 plan and
24the System's plans for informing eligible Tier 1 and Tier 2
25participants about the plan, to the Governor and the General
26Assembly on or before January 15, 2018.

 

 

HB4057- 95 -LRB100 12972 RPS 27085 b

1    (f) The Illinois State Board of Investment shall be the
2plan sponsor for the Tier 3 plan established under this
3Section.
 
4    (40 ILCS 5/7-114)  (from Ch. 108 1/2, par. 7-114)
5    (Text of Section WITHOUT the changes made by P.A. 98-599,
6which has been held unconstitutional)
7    Sec. 7-114. Earnings. "Earnings":
8    (a) An amount to be determined by the board, equal to the
9sum of:
10        1. The total amount of money paid to an employee for
11    personal services or official duties as an employee (except
12    those employed as independent contractors) paid out of the
13    general fund, or out of any special funds controlled by the
14    municipality, or by any instrumentality thereof, or
15    participating instrumentality, including compensation,
16    fees, allowances, or other emolument paid for official
17    duties (but not including automobile maintenance, travel
18    expense, or reimbursements for expenditures incurred in
19    the performance of duties or, in the case of a person who
20    first becomes a participant on or after the effective date
21    of this amendatory Act of the 100th General Assembly,
22    payments for unused sick or vacation time) and, for fee
23    offices, the fees or earnings of the offices to the extent
24    such fees are paid out of funds controlled by the
25    municipality, or instrumentality or participating

 

 

HB4057- 96 -LRB100 12972 RPS 27085 b

1    instrumentality; and
2        2. The money value, as determined by rules prescribed
3    by the governing body of the municipality, or
4    instrumentality thereof, of any board, lodging, fuel,
5    laundry, and other allowances provided an employee in lieu
6    of money.
7    (b) For purposes of determining benefits payable under this
8fund payments to a person who is engaged in an independently
9established trade, occupation, profession or business and who
10is paid for his service on a basis other than a monthly or
11other regular salary, are not earnings.
12    (c) If a disabled participating employee is eligible to
13receive Workers' Compensation for an accidental injury and the
14participating municipality or instrumentality which employed
15the participating employee when injured continues to pay the
16participating employee regular salary or other compensation or
17pays the employee an amount in excess of the Workers'
18Compensation amount, then earnings shall be deemed to be the
19total payments, including an amount equal to the Workers'
20Compensation payments. These payments shall be subject to
21employee contributions and allocated as if paid to the
22participating employee when the regular payroll amounts would
23have been paid if the participating employee had continued
24working, and creditable service shall be awarded for this
25period.
26    (d) If an elected official who is a participating employee

 

 

HB4057- 97 -LRB100 12972 RPS 27085 b

1becomes disabled but does not resign and is not removed from
2office, then earnings shall include all salary payments made
3for the remainder of that term of office and the official shall
4be awarded creditable service for the term of office.
5    (e) If a participating employee is paid pursuant to "An Act
6to provide for the continuation of compensation for law
7enforcement officers, correctional officers and firemen who
8suffer disabling injury in the line of duty", approved
9September 6, 1973, as amended, the payments shall be deemed
10earnings, and the participating employee shall be awarded
11creditable service for this period.
12    (f) Additional compensation received by a person while
13serving as a supervisor of assessments, assessor, deputy
14assessor or member of a board of review from the State of
15Illinois pursuant to Section 4-10 or 4-15 of the Property Tax
16Code shall not be earnings for purposes of this Article and
17shall not be included in the contribution formula or
18calculation of benefits for such person pursuant to this
19Article.
20(Source: P.A. 87-740; 88-670, eff. 12-2-94.)
 
21    (40 ILCS 5/7-116)  (from Ch. 108 1/2, par. 7-116)
22    (Text of Section WITHOUT the changes made by P.A. 98-599,
23which has been held unconstitutional)
24    Sec. 7-116. "Final rate of earnings":
25    (a) For retirement and survivor annuities, the monthly

 

 

HB4057- 98 -LRB100 12972 RPS 27085 b

1earnings obtained by dividing the total earnings received by
2the employee during the period of either (1) the 48 consecutive
3months of service within the last 120 months of service in
4which his total earnings were the highest or (2) the employee's
5total period of service, by the number of months of service in
6such period.
7    (b) For death benefits, the higher of the rate determined
8under paragraph (a) of this Section or total earnings received
9in the last 12 months of service divided by twelve. If the
10deceased employee has less than 12 months of service, the
11monthly final rate shall be the monthly rate of pay the
12employee was receiving when he began service.
13    (c) For disability benefits, the total earnings of a
14participating employee in the last 12 calendar months of
15service prior to the date he becomes disabled divided by 12.
16    (d) In computing the final rate of earnings: (1) the
17earnings rate for all periods of prior service shall be
18considered equal to the average earnings rate for the last 3
19calendar years of prior service for which creditable service is
20received under Section 7-139 or, if there is less than 3 years
21of creditable prior service, the average for the total prior
22service period for which creditable service is received under
23Section 7-139; (2) for out of state service and authorized
24leave, the earnings rate shall be the rate upon which service
25credits are granted; (3) periods of military leave shall not be
26considered; (4) the earnings rate for all periods of disability

 

 

HB4057- 99 -LRB100 12972 RPS 27085 b

1shall be considered equal to the rate of earnings upon which
2the employee's disability benefits are computed for such
3periods; (5) the earnings to be considered for each of the
4final three months of the final earnings period for persons who
5first became participants before January 1, 2012 and the
6earnings to be considered for each of the final 24 months for
7participants who first become participants on or after January
81, 2012 shall not exceed 125% of the highest earnings of any
9other month in the final earnings period; and (6) the annual
10amount of final rate of earnings shall be the monthly amount
11multiplied by the number of months of service normally required
12by the position in a year; and (7) in the case of a person who
13first becomes a participant on or after the effective date of
14this amendatory Act of the 100th General Assembly, payments for
15unused sick or vacation time shall not be considered.
16(Source: P.A. 97-609, eff. 1-1-12.)
 
17    (40 ILCS 5/7-139)  (from Ch. 108 1/2, par. 7-139)
18    (Text of Section WITHOUT the changes made by P.A. 98-599,
19which has been held unconstitutional)
20    Sec. 7-139. Credits and creditable service to employees.
21    (a) Each participating employee shall be granted credits
22and creditable service, for purposes of determining the amount
23of any annuity or benefit to which he or a beneficiary is
24entitled, as follows:
25        1. For prior service: Each participating employee who

 

 

HB4057- 100 -LRB100 12972 RPS 27085 b

1    is an employee of a participating municipality or
2    participating instrumentality on the effective date shall
3    be granted creditable service, but no credits under
4    paragraph 2 of this subsection (a), for periods of prior
5    service for which credit has not been received under any
6    other pension fund or retirement system established under
7    this Code, as follows:
8        If the effective date of participation for the
9    participating municipality or participating
10    instrumentality is on or before January 1, 1998, creditable
11    service shall be granted for the entire period of prior
12    service with that employer without any employee
13    contribution.
14        If the effective date of participation for the
15    participating municipality or participating
16    instrumentality is after January 1, 1998, creditable
17    service shall be granted for the last 20% of the period of
18    prior service with that employer, but no more than 5 years,
19    without any employee contribution. A participating
20    employee may establish creditable service for the
21    remainder of the period of prior service with that employer
22    by making an application in writing, accompanied by payment
23    of an employee contribution in an amount determined by the
24    Fund, based on the employee contribution rates in effect at
25    the time of application for the creditable service and the
26    employee's salary rate on the effective date of

 

 

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1    participation for that employer, plus interest at the
2    effective rate from the date of the prior service to the
3    date of payment. Application for this creditable service
4    may be made at any time while the employee is still in
5    service.
6        A municipality that (i) has at least 35 employees; (ii)
7    is located in a county with at least 2,000,000 inhabitants;
8    and (iii) maintains an independent defined benefit pension
9    plan for the benefit of its eligible employees may restrict
10    creditable service in whole or in part for periods of prior
11    service with the employer if the governing body of the
12    municipality adopts an irrevocable resolution to restrict
13    that creditable service and files the resolution with the
14    board before the municipality's effective date of
15    participation.
16        Any person who has withdrawn from the service of a
17    participating municipality or participating
18    instrumentality prior to the effective date, who reenters
19    the service of the same municipality or participating
20    instrumentality after the effective date and becomes a
21    participating employee is entitled to creditable service
22    for prior service as otherwise provided in this subdivision
23    (a)(1) only if he or she renders 2 years of service as a
24    participating employee after the effective date.
25    Application for such service must be made while in a
26    participating status. The salary rate to be used in the

 

 

HB4057- 102 -LRB100 12972 RPS 27085 b

1    calculation of the required employee contribution, if any,
2    shall be the employee's salary rate at the time of first
3    reentering service with the employer after the employer's
4    effective date of participation.
5        2. For current service, each participating employee
6    shall be credited with:
7            a. Additional credits of amounts equal to each
8        payment of additional contributions received from him
9        under Section 7-173, as of the date the corresponding
10        payment of earnings is payable to him.
11            b. Normal credits of amounts equal to each payment
12        of normal contributions received from him, as of the
13        date the corresponding payment of earnings is payable
14        to him, and normal contributions made for the purpose
15        of establishing out-of-state service credits as
16        permitted under the conditions set forth in paragraph 6
17        of this subsection (a).
18            c. Municipality credits in an amount equal to 1.4
19        times the normal credits, except those established by
20        out-of-state service credits, as of the date of
21        computation of any benefit if these credits would
22        increase the benefit.
23            d. Survivor credits equal to each payment of
24        survivor contributions received from the participating
25        employee as of the date the corresponding payment of
26        earnings is payable, and survivor contributions made

 

 

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1        for the purpose of establishing out-of-state service
2        credits.
3        3. For periods of temporary and total and permanent
4    disability benefits, each employee receiving disability
5    benefits shall be granted creditable service for the period
6    during which disability benefits are payable. Normal and
7    survivor credits, based upon the rate of earnings applied
8    for disability benefits, shall also be granted if such
9    credits would result in a higher benefit to any such
10    employee or his beneficiary.
11        4. For authorized leave of absence without pay: A
12    participating employee shall be granted credits and
13    creditable service for periods of authorized leave of
14    absence without pay under the following conditions:
15            a. An application for credits and creditable
16        service is submitted to the board while the employee is
17        in a status of active employment.
18            b. Not more than 12 complete months of creditable
19        service for authorized leave of absence without pay
20        shall be counted for purposes of determining any
21        benefits payable under this Article.
22            c. Credits and creditable service shall be granted
23        for leave of absence only if such leave is approved by
24        the governing body of the municipality, including
25        approval of the estimated cost thereof to the
26        municipality as determined by the fund, and employee

 

 

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1        contributions, plus interest at the effective rate
2        applicable for each year from the end of the period of
3        leave to date of payment, have been paid to the fund in
4        accordance with Section 7-173. The contributions shall
5        be computed upon the assumption earnings continued
6        during the period of leave at the rate in effect when
7        the leave began.
8            d. Benefits under the provisions of Sections
9        7-141, 7-146, 7-150 and 7-163 shall become payable to
10        employees on authorized leave of absence, or their
11        designated beneficiary, only if such leave of absence
12        is creditable hereunder, and if the employee has at
13        least one year of creditable service other than the
14        service granted for leave of absence. Any employee
15        contributions due may be deducted from any benefits
16        payable.
17            e. No credits or creditable service shall be
18        allowed for leave of absence without pay during any
19        period of prior service.
20        5. For military service: The governing body of a
21    municipality or participating instrumentality may elect to
22    allow creditable service to participating employees who
23    leave their employment to serve in the armed forces of the
24    United States for all periods of such service, provided
25    that the person returns to active employment within 90 days
26    after completion of full time active duty, but no

 

 

HB4057- 105 -LRB100 12972 RPS 27085 b

1    creditable service shall be allowed such person for any
2    period that can be used in the computation of a pension or
3    any other pay or benefit, other than pay for active duty,
4    for service in any branch of the armed forces of the United
5    States. If necessary to the computation of any benefit, the
6    board shall establish municipality credits for
7    participating employees under this paragraph on the
8    assumption that the employee received earnings at the rate
9    received at the time he left the employment to enter the
10    armed forces. A participating employee in the armed forces
11    shall not be considered an employee during such period of
12    service and no additional death and no disability benefits
13    are payable for death or disability during such period.
14        Any participating employee who left his employment
15    with a municipality or participating instrumentality to
16    serve in the armed forces of the United States and who
17    again became a participating employee within 90 days after
18    completion of full time active duty by entering the service
19    of a different municipality or participating
20    instrumentality, which has elected to allow creditable
21    service for periods of military service under the preceding
22    paragraph, shall also be allowed creditable service for his
23    period of military service on the same terms that would
24    apply if he had been employed, before entering military
25    service, by the municipality or instrumentality which
26    employed him after he left the military service and the

 

 

HB4057- 106 -LRB100 12972 RPS 27085 b

1    employer costs arising in relation to such grant of
2    creditable service shall be charged to and paid by that
3    municipality or instrumentality.
4        Notwithstanding the foregoing, any participating
5    employee shall be entitled to creditable service as
6    required by any federal law relating to re-employment
7    rights of persons who served in the United States Armed
8    Services. Such creditable service shall be granted upon
9    payment by the member of an amount equal to the employee
10    contributions which would have been required had the
11    employee continued in service at the same rate of earnings
12    during the military leave period, plus interest at the
13    effective rate.
14        5.1. In addition to any creditable service established
15    under paragraph 5 of this subsection (a), creditable
16    service may be granted for up to 48 months of service in
17    the armed forces of the United States.
18        In order to receive creditable service for military
19    service under this paragraph 5.1, a participating employee
20    must (1) apply to the Fund in writing and provide evidence
21    of the military service that is satisfactory to the Board;
22    (2) obtain the written approval of the current employer;
23    and (3) make contributions to the Fund equal to (i) the
24    employee contributions that would have been required had
25    the service been rendered as a member, plus (ii) an amount
26    determined by the board to be equal to the employer's

 

 

HB4057- 107 -LRB100 12972 RPS 27085 b

1    normal cost of the benefits accrued for that military
2    service, plus (iii) interest on items (i) and (ii) from the
3    date of first membership in the Fund to the date of
4    payment. The required interest shall be calculated at the
5    regular interest rate.
6        The changes made to this paragraph 5.1 by Public Acts
7    95-483 and 95-486 apply only to participating employees in
8    service on or after August 28, 2007 (the effective date of
9    those Public Acts).
10        6. For out-of-state service: Creditable service shall
11    be granted for service rendered to an out-of-state local
12    governmental body under the following conditions: The
13    employee had participated and has irrevocably forfeited
14    all rights to benefits in the out-of-state public employees
15    pension system; the governing body of his participating
16    municipality or instrumentality authorizes the employee to
17    establish such service; the employee has 2 years current
18    service with this municipality or participating
19    instrumentality; the employee makes a payment of
20    contributions, which shall be computed at 8% (normal) plus
21    2% (survivor) times length of service purchased times the
22    average rate of earnings for the first 2 years of service
23    with the municipality or participating instrumentality
24    whose governing body authorizes the service established
25    plus interest at the effective rate on the date such
26    credits are established, payable from the date the employee

 

 

HB4057- 108 -LRB100 12972 RPS 27085 b

1    completes the required 2 years of current service to date
2    of payment. In no case shall more than 120 months of
3    creditable service be granted under this provision.
4        7. For retroactive service: Any employee who could have
5    but did not elect to become a participating employee, or
6    who should have been a participant in the Municipal Public
7    Utilities Annuity and Benefit Fund before that fund was
8    superseded, may receive creditable service for the period
9    of service not to exceed 50 months; however, a current or
10    former elected or appointed official of a participating
11    municipality may establish credit under this paragraph 7
12    for more than 50 months of service as an official of that
13    municipality, if the excess over 50 months is approved by
14    resolution of the governing body of the affected
15    municipality filed with the Fund before January 1, 2002.
16        Any employee who is a participating employee on or
17    after September 24, 1981 and who was excluded from
18    participation by the age restrictions removed by Public Act
19    82-596 may receive creditable service for the period, on or
20    after January 1, 1979, excluded by the age restriction and,
21    in addition, if the governing body of the participating
22    municipality or participating instrumentality elects to
23    allow creditable service for all employees excluded by the
24    age restriction prior to January 1, 1979, for service
25    during the period prior to that date excluded by the age
26    restriction. Any employee who was excluded from

 

 

HB4057- 109 -LRB100 12972 RPS 27085 b

1    participation by the age restriction removed by Public Act
2    82-596 and who is not a participating employee on or after
3    September 24, 1981 may receive creditable service for
4    service after January 1, 1979. Creditable service under
5    this paragraph shall be granted upon payment of the
6    employee contributions which would have been required had
7    he participated, with interest at the effective rate for
8    each year from the end of the period of service established
9    to date of payment.
10        8. For accumulated unused sick leave: A participating
11    employee who first becomes a participating employee before
12    the effective date of this amendatory Act of the 100th
13    General Assembly and who is applying for a retirement
14    annuity shall be entitled to creditable service for that
15    portion of the employee's accumulated unused sick leave for
16    which payment is not received, as follows:
17            a. Sick leave days shall be limited to those
18        accumulated under a sick leave plan established by a
19        participating municipality or participating
20        instrumentality which is available to all employees or
21        a class of employees.
22            b. Except as provided in item b-1, only sick leave
23        days accumulated with a participating municipality or
24        participating instrumentality with which the employee
25        was in service within 60 days of the effective date of
26        his retirement annuity shall be credited; If the

 

 

HB4057- 110 -LRB100 12972 RPS 27085 b

1        employee was in service with more than one employer
2        during this period only the sick leave days with the
3        employer with which the employee has the greatest
4        number of unpaid sick leave days shall be considered.
5            b-1. If the employee was in the service of more
6        than one employer as defined in item (2) of paragraph
7        (a) of subsection (A) of Section 7-132, then the sick
8        leave days from all such employers shall be credited,
9        as long as the creditable service attributed to those
10        sick leave days does not exceed the limitation in item
11        f of this paragraph 8. In calculating the creditable
12        service under this item b-1, the sick leave days from
13        the last employer shall be considered first, then the
14        remaining sick leave days shall be considered until
15        there are no more days or the maximum creditable sick
16        leave threshold under item f of this paragraph 8 has
17        been reached.
18            c. The creditable service granted shall be
19        considered solely for the purpose of computing the
20        amount of the retirement annuity and shall not be used
21        to establish any minimum service period required by any
22        provision of the Illinois Pension Code, the effective
23        date of the retirement annuity, or the final rate of
24        earnings.
25            d. The creditable service shall be at the rate of
26        1/20 of a month for each full sick day, provided that

 

 

HB4057- 111 -LRB100 12972 RPS 27085 b

1        no more than 12 months may be credited under this
2        subdivision 8.
3            e. Employee contributions shall not be required
4        for creditable service under this subdivision 8.
5            f. Each participating municipality and
6        participating instrumentality with which an employee
7        has service within 60 days of the effective date of his
8        retirement annuity shall certify to the board the
9        number of accumulated unpaid sick leave days credited
10        to the employee at the time of termination of service.
11        9. For service transferred from another system:
12    Credits and creditable service shall be granted for service
13    under Article 4, 5, 8, 14, or 16 of this Act, to any active
14    member of this Fund, and to any inactive member who has
15    been a county sheriff, upon transfer of such credits
16    pursuant to Section 4-108.3, 5-235, 8-226.7, 14-105.6, or
17    16-131.4, and payment by the member of the amount by which
18    (1) the employer and employee contributions that would have
19    been required if he had participated in this Fund as a
20    sheriff's law enforcement employee during the period for
21    which credit is being transferred, plus interest thereon at
22    the effective rate for each year, compounded annually, from
23    the date of termination of the service for which credit is
24    being transferred to the date of payment, exceeds (2) the
25    amount actually transferred to the Fund. Such transferred
26    service shall be deemed to be service as a sheriff's law

 

 

HB4057- 112 -LRB100 12972 RPS 27085 b

1    enforcement employee for the purposes of Section 7-142.1.
2        10. (Blank).
3        11. For service transferred from an Article 3 system
4    under Section 3-110.3: Credits and creditable service
5    shall be granted for service under Article 3 of this Act as
6    provided in Section 3-110.3, to any active member of this
7    Fund, upon transfer of such credits pursuant to Section
8    3-110.3. If the board determines that the amount
9    transferred is less than the true cost to the Fund of
10    allowing that creditable service to be established, then in
11    order to establish that creditable service, the member must
12    pay to the Fund an additional contribution equal to the
13    difference, as determined by the board in accordance with
14    the rules and procedures adopted under this paragraph. If
15    the member does not make the full additional payment as
16    required by this paragraph prior to termination of his
17    participation with that employer, then his or her
18    creditable service shall be reduced by an amount equal to
19    the difference between the amount transferred under
20    Section 3-110.3, including any payments made by the member
21    under this paragraph prior to termination, and the true
22    cost to the Fund of allowing that creditable service to be
23    established, as determined by the board in accordance with
24    the rules and procedures adopted under this paragraph.
25        The board shall establish by rule the manner of making
26    the calculation required under this paragraph 11, taking

 

 

HB4057- 113 -LRB100 12972 RPS 27085 b

1    into account the appropriate actuarial assumptions; the
2    member's service, age, and salary history, and any other
3    factors that the board determines to be relevant.
4        12. For omitted service: Any employee who was employed
5    by a participating employer in a position that required
6    participation, but who was not enrolled in the Fund, may
7    establish such credits under the following conditions:
8            a. Application for such credits is received by the
9        Board while the employee is an active participant of
10        the Fund or a reciprocal retirement system.
11            b. Eligibility for participation and earnings are
12        verified by the Authorized Agent of the participating
13        employer for which the service was rendered.
14        Creditable service under this paragraph shall be
15    granted upon payment of the employee contributions that
16    would have been required had he participated, which shall
17    be calculated by the Fund using the member contribution
18    rate in effect during the period that the service was
19    rendered.
20    (b) Creditable service - amount:
21        1. One month of creditable service shall be allowed for
22    each month for which a participating employee made
23    contributions as required under Section 7-173, or for which
24    creditable service is otherwise granted hereunder. Not
25    more than 1 month of service shall be credited and counted
26    for 1 calendar month, and not more than 1 year of service

 

 

HB4057- 114 -LRB100 12972 RPS 27085 b

1    shall be credited and counted for any calendar year. A
2    calendar month means a nominal month beginning on the first
3    day thereof, and a calendar year means a year beginning
4    January 1 and ending December 31.
5        2. A seasonal employee shall be given 12 months of
6    creditable service if he renders the number of months of
7    service normally required by the position in a 12-month
8    period and he remains in service for the entire 12-month
9    period. Otherwise a fractional year of service in the
10    number of months of service rendered shall be credited.
11        3. An intermittent employee shall be given creditable
12    service for only those months in which a contribution is
13    made under Section 7-173.
14    (c) No application for correction of credits or creditable
15service shall be considered unless the board receives an
16application for correction while (1) the applicant is a
17participating employee and in active employment with a
18participating municipality or instrumentality, or (2) while
19the applicant is actively participating in a pension fund or
20retirement system which is a participating system under the
21Retirement Systems Reciprocal Act. A participating employee or
22other applicant shall not be entitled to credits or creditable
23service unless the required employee contributions are made in
24a lump sum or in installments made in accordance with board
25rule.
26    (d) Upon the granting of a retirement, surviving spouse or

 

 

HB4057- 115 -LRB100 12972 RPS 27085 b

1child annuity, a death benefit or a separation benefit, on
2account of any employee, all individual accumulated credits
3shall thereupon terminate. Upon the withdrawal of additional
4contributions, the credits applicable thereto shall thereupon
5terminate. Terminated credits shall not be applied to increase
6the benefits any remaining employee would otherwise receive
7under this Article.
8(Source: P.A. 97-415, eff. 8-16-11; 98-439, eff. 8-16-13;
998-932, eff. 8-15-14.)
 
10    (40 ILCS 5/14-103.05)  (from Ch. 108 1/2, par. 14-103.05)
11    Sec. 14-103.05. Employee.
12    (a) Except as provided in subsection (d), any Any person
13employed by a Department who receives salary for personal
14services rendered to the Department on a warrant issued
15pursuant to a payroll voucher certified by a Department and
16drawn by the State Comptroller upon the State Treasurer,
17including an elected official described in subparagraph (d) of
18Section 14-104, shall become an employee for purpose of
19membership in the Retirement System on the first day of such
20employment.
21    A person entering service on or after January 1, 1972 and
22prior to January 1, 1984 shall become a member as a condition
23of employment and shall begin making contributions as of the
24first day of employment.
25    A person entering service on or after January 1, 1984

 

 

HB4057- 116 -LRB100 12972 RPS 27085 b

1shall, upon completion of 6 months of continuous service which
2is not interrupted by a break of more than 2 months, become a
3member as a condition of employment. Contributions shall begin
4the first of the month after completion of the qualifying
5period.
6    A person employed by the Chicago Metropolitan Agency for
7Planning on the effective date of this amendatory Act of the
895th General Assembly who was a member of this System as an
9employee of the Chicago Area Transportation Study and makes an
10election under Section 14-104.13 to participate in this System
11for his or her employment with the Chicago Metropolitan Agency
12for Planning.
13    The qualifying period of 6 months of service is not
14applicable to: (1) a person who has been granted credit for
15service in a position covered by the State Universities
16Retirement System, the Teachers' Retirement System of the State
17of Illinois, the General Assembly Retirement System, or the
18Judges Retirement System of Illinois unless that service has
19been forfeited under the laws of those systems; (2) a person
20entering service on or after July 1, 1991 in a noncovered
21position; (3) a person to whom Section 14-108.2a or 14-108.2b
22applies; or (4) a person to whom subsection (a-5) of this
23Section applies.
24    (a-5) Except as provided in subsection (d), a A person
25entering service on or after December 1, 2010 and before the
26effective date of this amendatory Act of the 100th General

 

 

HB4057- 117 -LRB100 12972 RPS 27085 b

1Assembly shall become a member as a condition of employment and
2shall begin making contributions as of the first day of
3employment. A person serving in the qualifying period on
4December 1, 2010 will become a member on December 1, 2010 and
5shall begin making contributions as of December 1, 2010.
6    (b) The term "employee" does not include the following:
7        (1) members of the State Legislature, and persons
8    electing to become members of the General Assembly
9    Retirement System pursuant to Section 2-105;
10        (2) incumbents of offices normally filled by vote of
11    the people;
12        (3) except as otherwise provided in this Section, any
13    person appointed by the Governor with the advice and
14    consent of the Senate unless that person elects to
15    participate in this system;
16        (3.1) any person serving as a commissioner of an ethics
17    commission created under the State Officials and Employees
18    Ethics Act unless that person elects to participate in this
19    system with respect to that service as a commissioner;
20        (3.2) any person serving as a part-time employee in any
21    of the following positions: Legislative Inspector General,
22    Special Legislative Inspector General, employee of the
23    Office of the Legislative Inspector General, Executive
24    Director of the Legislative Ethics Commission, or staff of
25    the Legislative Ethics Commission, regardless of whether
26    he or she is in active service on or after July 8, 2004

 

 

HB4057- 118 -LRB100 12972 RPS 27085 b

1    (the effective date of Public Act 93-685), unless that
2    person elects to participate in this System with respect to
3    that service; in this item (3.2), a "part-time employee" is
4    a person who is not required to work at least 35 hours per
5    week;
6        (3.3) any person who has made an election under Section
7    1-123 and who is serving either as legal counsel in the
8    Office of the Governor or as Chief Deputy Attorney General;
9        (4) except as provided in Section 14-108.2 or
10    14-108.2c, any person who is covered or eligible to be
11    covered by the Teachers' Retirement System of the State of
12    Illinois, the State Universities Retirement System, or the
13    Judges Retirement System of Illinois;
14        (5) an employee of a municipality or any other
15    political subdivision of the State;
16        (6) any person who becomes an employee after June 30,
17    1979 as a public service employment program participant
18    under the Federal Comprehensive Employment and Training
19    Act and whose wages or fringe benefits are paid in whole or
20    in part by funds provided under such Act;
21        (7) enrollees of the Illinois Young Adult Conservation
22    Corps program, administered by the Department of Natural
23    Resources, authorized grantee pursuant to Title VIII of the
24    "Comprehensive Employment and Training Act of 1973", 29 USC
25    993, as now or hereafter amended;
26        (8) enrollees and temporary staff of programs

 

 

HB4057- 119 -LRB100 12972 RPS 27085 b

1    administered by the Department of Natural Resources under
2    the Youth Conservation Corps Act of 1970;
3        (9) any person who is a member of any professional
4    licensing or disciplinary board created under an Act
5    administered by the Department of Professional Regulation
6    or a successor agency or created or re-created after the
7    effective date of this amendatory Act of 1997, and who
8    receives per diem compensation rather than a salary,
9    notwithstanding that such per diem compensation is paid by
10    warrant issued pursuant to a payroll voucher; such persons
11    have never been included in the membership of this System,
12    and this amendatory Act of 1987 (P.A. 84-1472) is not
13    intended to effect any change in the status of such
14    persons;
15        (10) any person who is a member of the Illinois Health
16    Care Cost Containment Council, and receives per diem
17    compensation rather than a salary, notwithstanding that
18    such per diem compensation is paid by warrant issued
19    pursuant to a payroll voucher; such persons have never been
20    included in the membership of this System, and this
21    amendatory Act of 1987 is not intended to effect any change
22    in the status of such persons;
23        (11) any person who is a member of the Oil and Gas
24    Board created by Section 1.2 of the Illinois Oil and Gas
25    Act, and receives per diem compensation rather than a
26    salary, notwithstanding that such per diem compensation is

 

 

HB4057- 120 -LRB100 12972 RPS 27085 b

1    paid by warrant issued pursuant to a payroll voucher;
2        (12) a person employed by the State Board of Higher
3    Education in a position with the Illinois Century Network
4    as of June 30, 2004, who remains continuously employed
5    after that date by the Department of Central Management
6    Services in a position with the Illinois Century Network
7    and participates in the Article 15 system with respect to
8    that employment;
9        (13) any person who first becomes a member of the Civil
10    Service Commission on or after January 1, 2012;
11        (14) any person, other than the Director of Employment
12    Security, who first becomes a member of the Board of Review
13    of the Department of Employment Security on or after
14    January 1, 2012;
15        (15) any person who first becomes a member of the Civil
16    Service Commission on or after January 1, 2012;
17        (16) any person who first becomes a member of the
18    Illinois Liquor Control Commission on or after January 1,
19    2012;
20        (17) any person who first becomes a member of the
21    Secretary of State Merit Commission on or after January 1,
22    2012;
23        (18) any person who first becomes a member of the Human
24    Rights Commission on or after January 1, 2012;
25        (19) any person who first becomes a member of the State
26    Mining Board on or after January 1, 2012;

 

 

HB4057- 121 -LRB100 12972 RPS 27085 b

1        (20) any person who first becomes a member of the
2    Property Tax Appeal Board on or after January 1, 2012;
3        (21) any person who first becomes a member of the
4    Illinois Racing Board on or after January 1, 2012;
5        (22) any person who first becomes a member of the
6    Department of State Police Merit Board on or after January
7    1, 2012;
8        (23) any person who first becomes a member of the
9    Illinois State Toll Highway Authority on or after January
10    1, 2012; or
11        (24) any person who first becomes a member of the
12    Illinois State Board of Elections on or after January 1,
13    2012.
14    (c) An individual who represents or is employed as an
15officer or employee of a statewide labor organization that
16represents members of this System may participate in the System
17and shall be deemed an employee, provided that (1) the
18individual has previously earned creditable service under this
19Article, (2) the individual files with the System an
20irrevocable election to become a participant within 6 months
21after the effective date of this amendatory Act of the 94th
22General Assembly, and (3) the individual does not receive
23credit for that employment under any other provisions of this
24Code. An employee under this subsection (c) is responsible for
25paying to the System both (i) employee contributions based on
26the actual compensation received for service with the labor

 

 

HB4057- 122 -LRB100 12972 RPS 27085 b

1organization and (ii) employer contributions based on the
2percentage of payroll certified by the board; all or any part
3of these contributions may be paid on the employee's behalf or
4picked up for tax purposes (if authorized under federal law) by
5the labor organization.
6    A person who is an employee as defined in this subsection
7(c) may establish service credit for similar employment prior
8to becoming an employee under this subsection by paying to the
9System for that employment the contributions specified in this
10subsection, plus interest at the effective rate from the date
11of service to the date of payment. However, credit shall not be
12granted under this subsection (c) for any such prior employment
13for which the applicant received credit under any other
14provision of this Code or during which the applicant was on a
15leave of absence.
16    (d) Notwithstanding any other provision of this Article,
17beginning on the effective date of this amendatory Act of the
18100th General Assembly, a person is not required, as a
19condition of employment or otherwise, to participate in this
20System. An active employee may terminate his or her
21participation in this System (including active participation
22in the Tier 3 plan, if applicable) by notifying the System in
23writing. An active employee terminating participation in this
24System under this subsection shall be entitled to a refund of
25his or her contributions (other than contributions to the Tier
263 plan under Section 14-155.5) minus the benefits received

 

 

HB4057- 123 -LRB100 12972 RPS 27085 b

1prior to the termination of participation.
2(Source: P.A. 96-1490, eff. 1-1-11; 97-609, eff. 1-1-12.)
 
3    (40 ILCS 5/14-103.10)  (from Ch. 108 1/2, par. 14-103.10)
4    (Text of Section WITHOUT the changes made by P.A. 98-599,
5which has been held unconstitutional)
6    Sec. 14-103.10. Compensation.
7    (a) For periods of service prior to January 1, 1978, the
8full rate of salary or wages payable to an employee for
9personal services performed if he worked the full normal
10working period for his position, subject to the following
11maximum amounts: (1) prior to July 1, 1951, $400 per month or
12$4,800 per year; (2) between July 1, 1951 and June 30, 1957
13inclusive, $625 per month or $7,500 per year; (3) beginning
14July 1, 1957, no limitation.
15    In the case of service of an employee in a position
16involving part-time employment, compensation shall be
17determined according to the employees' earnings record.
18    (b) For periods of service on and after January 1, 1978,
19all remuneration for personal services performed defined as
20"wages" under the Social Security Enabling Act, including that
21part of such remuneration which is in excess of any maximum
22limitation provided in such Act, and including any benefits
23received by an employee under a sick pay plan in effect before
24January 1, 1981, but excluding lump sum salary payments:
25        (1) for vacation,

 

 

HB4057- 124 -LRB100 12972 RPS 27085 b

1        (2) for accumulated unused sick leave,
2        (3) upon discharge or dismissal,
3        (4) for approved holidays.
4    (c) For periods of service on or after December 16, 1978,
5compensation also includes any benefits, other than lump sum
6salary payments made at termination of employment, which an
7employee receives or is eligible to receive under a sick pay
8plan authorized by law.
9    (d) For periods of service after September 30, 1985,
10compensation also includes any remuneration for personal
11services not included as "wages" under the Social Security
12Enabling Act, which is deducted for purposes of participation
13in a program established pursuant to Section 125 of the
14Internal Revenue Code or its successor laws.
15    (e) For members for which Section 1-160 applies for periods
16of service on and after January 1, 2011, all remuneration for
17personal services performed defined as "wages" under the Social
18Security Enabling Act, excluding remuneration that is in excess
19of the annual earnings, salary, or wages of a member or
20participant, as provided in subsection (b-5) of Section 1-160,
21but including any benefits received by an employee under a sick
22pay plan in effect before January 1, 1981. Compensation shall
23exclude lump sum salary payments:
24        (1) for vacation;
25        (2) for accumulated unused sick leave;
26        (3) upon discharge or dismissal; and

 

 

HB4057- 125 -LRB100 12972 RPS 27085 b

1        (4) for approved holidays.
2    (f) Notwithstanding the other provisions of this Section,
3for service on or after July 1, 2013, "compensation" does not
4include any stipend payable to an employee for service on a
5board or commission.
6    (g) Notwithstanding any other provision of this Section,
7for an employee who first becomes a participant on or after the
8effective date of this amendatory Act of the 100th General
9Assembly, "compensation" does not include any payments or
10reimbursements for travel vouchers submitted more than 30 days
11after the last day of travel for which the voucher is
12submitted.
13(Source: P.A. 98-449, eff. 8-16-13.)
 
14    (40 ILCS 5/14-103.41 new)
15    Sec. 14-103.41. Tier 1 member. "Tier 1 member": A member of
16this System who first became a member or participant before
17January 1, 2011 under any reciprocal retirement system or
18pension fund established under this Code other than a
19retirement system or pension fund established under Article 2,
203, 4, 5, 6, or 18 of this Code.
21    In the case of a Tier 1 member who elects to participate in
22the Tier 3 plan under Section 14-155.5 of this Code, that Tier
231 member shall be deemed a Tier 1 member only with respect to
24service performed or established before the effective date of
25that election.
 

 

 

HB4057- 126 -LRB100 12972 RPS 27085 b

1    (40 ILCS 5/14-103.42 new)
2    Sec. 14-103.42. Tier 2 member. "Tier 2 member": A member of
3this System who first becomes a member under this Article on or
4after January 1, 2011 and who is not a Tier 1 member.
5    In the case of a Tier 2 member who elects to participate in
6the Tier 3 plan under Section 14-155.5 of this Code, that Tier
72 member shall be deemed a Tier 2 member only with respect to
8service performed or established before the effective date of
9that election.
 
10    (40 ILCS 5/14-103.43 new)
11    Sec. 14-103.43. Tier 3 member. "Tier 3 member": A member of
12this System who first becomes a member on or after July 1, 2018
13or a Tier 1 or Tier 2 member who elects to participate in the
14Tier 3 plan under Section 14-155.5 of this Code, but only with
15respect to service performed on or after the effective date of
16that election.
 
17    (40 ILCS 5/14-104.3)  (from Ch. 108 1/2, par. 14-104.3)
18    (Text of Section WITHOUT the changes made by P.A. 98-599,
19which has been held unconstitutional)
20    Sec. 14-104.3. Notwithstanding provisions contained in
21Section 14-103.10, any person who first becomes a member before
22the effective date of this amendatory Act of the 100th General
23Assembly and who at the time of retirement and after December

 

 

HB4057- 127 -LRB100 12972 RPS 27085 b

16, 1983 receives compensation in a lump sum for accumulated
2vacation, sickness, or personal business may receive service
3credit for such periods by making contributions within 90 days
4of withdrawal, based on the rate of compensation in effect
5immediately prior to retirement and the contribution rate then
6in effect. Any person who first becomes a member on or after
7the effective date of this amendatory Act of the 100th General
8Assembly and who receives compensation in a lump sum for
9accumulated vacation, sickness, or personal business may not
10receive service credit for such periods. Exercising the option
11provided in this Section shall not change a member's date of
12withdrawal or final average compensation for purposes of
13computing the amount or effective date of a retirement annuity.
14Any annuitant who establishes service credit as herein provided
15shall have his retirement annuity adjusted retroactively to the
16date of retirement.
17(Source: P.A. 83-1362.)
 
18    (40 ILCS 5/14-106)  (from Ch. 108 1/2, par. 14-106)
19    (Text of Section WITHOUT the changes made by P.A. 98-599,
20which has been held unconstitutional)
21    Sec. 14-106. Membership service credit.
22    (a) After January 1, 1944, all service of a member since he
23last became a member with respect to which contributions are
24made shall count as membership service; provided, that for
25service on and after July 1, 1950, 12 months of service shall

 

 

HB4057- 128 -LRB100 12972 RPS 27085 b

1constitute a year of membership service, the completion of 15
2days or more of service during any month shall constitute 1
3month of membership service, 8 to 15 days shall constitute 1/2
4month of membership service and less than 8 days shall
5constitute 1/4 month of membership service. The payroll record
6of each department shall constitute conclusive evidence of the
7record of service rendered by a member.
8    (b) For a member who is employed and paid on an
9academic-year basis rather than on a 12-month annual basis,
10employment for a full academic year shall constitute a full
11year of membership service, except that the member shall not
12receive more than one year of membership service credit (plus
13any additional service credit granted for unused sick leave)
14for service during any 12-month period. This subsection (b)
15applies to all such service for which the member has not begun
16to receive a retirement annuity before January 1, 2001.
17    (c) A person who first becomes a member before the
18effective date of this amendatory Act of the 100th General
19Assembly shall be entitled to additional service credit, under
20rules prescribed by the Board, for accumulated unused sick
21leave credited to his account in the last Department on the
22date of withdrawal from service or for any period for which he
23would have been eligible to receive benefits under a sick pay
24plan authorized by law, if he had suffered a sickness or
25accident on the date of withdrawal from service. It shall be
26the responsibility of the last Department to certify to the

 

 

HB4057- 129 -LRB100 12972 RPS 27085 b

1Board the length of time salary or benefits would have been
2paid to the member based upon the accumulated unused sick leave
3or the applicable sick pay plan if he had become entitled
4thereto because of sickness on the date that his status as an
5employee terminated. This period of service credit granted
6under this paragraph shall not be considered in determining the
7date the retirement annuity is to begin, or final average
8compensation.
9    (d) A person who first becomes a member on or after the
10effective date of this amendatory Act of the 100th General
11Assembly shall not be entitled to additional service credit for
12accumulated unused sick leave.
13(Source: P.A. 92-14, eff. 6-28-01.)
 
14    (40 ILCS 5/14-147.5 new)
15    Sec. 14-147.5. Accelerated pension benefit payment.
16    (a) As used in this Section:
17    "Eligible person" means a person who:
18        (1) has terminated service;
19        (2) has accrued sufficient service credit to be
20    eligible to receive a retirement annuity under this
21    Article;
22        (3) has not received any retirement annuity under this
23    Article; and
24        (4) does not have a QILDRO in effect against him or her
25    under this Article.

 

 

HB4057- 130 -LRB100 12972 RPS 27085 b

1    "Pension benefit" means the benefits under this Article, or
2Article 1 as it relates to those benefits, including any
3anticipated annual increases, that an eligible person is
4entitled to upon attainment of the applicable retirement age.
5"Pension benefit" also includes applicable survivor's or
6disability benefits.
7    (b) Before January 1, 2018, the System shall calculate,
8using actuarial tables and other assumptions adopted by the
9Board, the net present value of pension benefits for each
10eligible person and shall offer each eligible person the
11opportunity to irrevocably elect to receive an amount
12determined by the System to be equal to 70% of the net present
13value of his or her pension benefits in lieu of receiving any
14pension benefit. The offer shall specify the dollar amount that
15the eligible person will receive if he or she so elects and
16shall expire when a subsequent offer is made to an eligible
17person. The System shall make a good faith effort to contact
18every eligible person to notify him or her of the election and
19of the amount of the accelerated pension benefit payment.
20    Beginning January 1, 2018 and until July 1, 2018, an
21eligible person may irrevocably elect to receive an accelerated
22pension benefit payment in the amount that the System offers
23under this subsection in lieu of receiving any pension benefit.
24A person who elects to receive an accelerated pension benefit
25payment under this Section may not elect to proceed under the
26Retirement Systems Reciprocal Act with respect to service under

 

 

HB4057- 131 -LRB100 12972 RPS 27085 b

1this Article.
2    (c) A person's credits and creditable service under this
3Article shall be terminated upon the person's receipt of an
4accelerated pension benefit payment under this Section, and no
5other benefit shall be paid under this Article based on those
6terminated credits and creditable service, including any
7retirement, survivor, or other benefit; except that to the
8extent that participation, benefits, or premiums under the
9State Employees Group Insurance Act of 1971 are based on the
10amount of service credit, the terminated service credit shall
11be used for that purpose.
12    (d) If a person who has received an accelerated pension
13benefit payment under this Section returns to active service
14under this Article, then:
15        (1) Any benefits under the System earned as a result of
16    that return to active service shall be based solely on the
17    person's credits and creditable service arising from the
18    return to active service.
19        (2) The accelerated pension benefit payment may not be
20    repaid to the System, and the terminated credits and
21    creditable service may not under any circumstances be
22    reinstated.
23    (e) As a condition of receiving an accelerated pension
24benefit payment, an eligible person must have another
25retirement plan or account qualified under the Internal Revenue
26Code of 1986, as amended, for the accelerated pension benefit

 

 

HB4057- 132 -LRB100 12972 RPS 27085 b

1payment to be rolled into. The accelerated pension benefit
2payment under this Section may be subject to withholding or
3payment of applicable taxes, but to the extent permitted by
4federal law, a person who receives an accelerated pension
5benefit payment under this Section must direct the System to
6pay all of that payment as a rollover into another retirement
7plan or account qualified under the Internal Revenue Code of
81986, as amended.
9    (f) Before January 1, 2019, the Board shall certify to the
10Illinois Finance Authority and the General Assembly the amount
11by which the total amount of accelerated pension benefit
12payments made under this Section exceed the amount appropriated
13to the System for the purpose of making those payments.
14    (g) The Board shall adopt any rules necessary to implement
15this Section.
16    (h) No provision of this Section shall be interpreted in a
17way that would cause the applicable System to cease to be a
18qualified plan under the Internal Revenue Code of 1986.
 
19    (40 ILCS 5/14-152.1)
20    (Text of Section WITHOUT the changes made by P.A. 98-599,
21which has been held unconstitutional)
22    Sec. 14-152.1. Application and expiration of new benefit
23increases.
24    (a) As used in this Section, "new benefit increase" means
25an increase in the amount of any benefit provided under this

 

 

HB4057- 133 -LRB100 12972 RPS 27085 b

1Article, or an expansion of the conditions of eligibility for
2any benefit under this Article, that results from an amendment
3to this Code that takes effect after June 1, 2005 (the
4effective date of Public Act 94-4). "New benefit increase",
5however, does not include any benefit increase resulting from
6the changes made to this Article by Public Act 96-37 or this
7amendatory Act of the 100th General Assembly this amendatory
8Act of the 96th General Assembly.
9    (b) Notwithstanding any other provision of this Code or any
10subsequent amendment to this Code, every new benefit increase
11is subject to this Section and shall be deemed to be granted
12only in conformance with and contingent upon compliance with
13the provisions of this Section.
14    (c) The Public Act enacting a new benefit increase must
15identify and provide for payment to the System of additional
16funding at least sufficient to fund the resulting annual
17increase in cost to the System as it accrues.
18    Every new benefit increase is contingent upon the General
19Assembly providing the additional funding required under this
20subsection. The Commission on Government Forecasting and
21Accountability shall analyze whether adequate additional
22funding has been provided for the new benefit increase and
23shall report its analysis to the Public Pension Division of the
24Department of Financial and Professional Regulation. A new
25benefit increase created by a Public Act that does not include
26the additional funding required under this subsection is null

 

 

HB4057- 134 -LRB100 12972 RPS 27085 b

1and void. If the Public Pension Division determines that the
2additional funding provided for a new benefit increase under
3this subsection is or has become inadequate, it may so certify
4to the Governor and the State Comptroller and, in the absence
5of corrective action by the General Assembly, the new benefit
6increase shall expire at the end of the fiscal year in which
7the certification is made.
8    (d) Every new benefit increase shall expire 5 years after
9its effective date or on such earlier date as may be specified
10in the language enacting the new benefit increase or provided
11under subsection (c). This does not prevent the General
12Assembly from extending or re-creating a new benefit increase
13by law.
14    (e) Except as otherwise provided in the language creating
15the new benefit increase, a new benefit increase that expires
16under this Section continues to apply to persons who applied
17and qualified for the affected benefit while the new benefit
18increase was in effect and to the affected beneficiaries and
19alternate payees of such persons, but does not apply to any
20other person, including without limitation a person who
21continues in service after the expiration date and did not
22apply and qualify for the affected benefit while the new
23benefit increase was in effect.
24(Source: P.A. 96-37, eff. 7-13-09.)
 
25    (40 ILCS 5/14-155.5 new)

 

 

HB4057- 135 -LRB100 12972 RPS 27085 b

1    Sec. 14-155.5. Tier 3 plan.
2    (a) By July 1, 2018, the System shall prepare and implement
3a Tier 3 plan. The Tier 3 plan developed under this Section
4shall be a plan that aggregates State and employee
5contributions in individual participant accounts which, after
6meeting any other requirements, are used for payouts after
7retirement in accordance with this Section and any other
8applicable laws. In developing, preparing, and implementing
9the Tier 3 plan and adopting rules concerning the Tier 3 plan,
10the System shall utilize the framework of the self-managed plan
11offered under Article 15 and shall endeavor to adapt the
12benefits and structure of the self-managed plan. The System
13shall consult with the State Universities Retirement System in
14developing the Tier 3 plan.
15    As used in this Section, "defined benefit plan" means the
16retirement plan available under this Article to Tier 1 or Tier
172 members who have not made the election authorized under this
18Section.
19        (1) All persons who begin to participate in this System
20    on or after July 1, 2018 shall participate in the Tier 3
21    plan rather than the defined benefit plan.
22        (2) A non-covered employee who participates in the Tier
23    3 plan shall pay employee contributions at a rate of 8% of
24    compensation. A covered employee who participates in the
25    Tier 3 plan shall pay employee contributions at a rate of
26    3% of compensation.

 

 

HB4057- 136 -LRB100 12972 RPS 27085 b

1        (3) State contributions shall be paid into the accounts
2    of non-covered employees who participate in the Tier 3 plan
3    at a rate of 7.6% of compensation, less the amount
4    determined annually by the Board to cover the cost of
5    offering the defined disability benefits available to
6    other participants under this Article if the Tier 3 plan
7    offers such benefits. State contributions shall be paid
8    into the accounts of covered employees who participate in
9    the Tier 3 plan at a rate of 3% of compensation.
10        (4) The Tier 3 plan shall require one year of
11    participation in the Tier 3 plan before vesting in State
12    contributions. If the participant fails to vest in them,
13    the State contributions, and the earnings thereon, shall be
14    forfeited.
15        (5) The Tier 3 plan may provide for participants in the
16    plan to be eligible for the defined disability benefits
17    available to other participants under this Article. If it
18    does, the System shall reduce the employee contributions
19    credited to the member's Tier 3 plan account by an amount
20    determined by the System to cover the cost of offering such
21    benefits.
22        (6) The Tier 3 plan shall provide a variety of options
23    for investments. These options shall include investments
24    handled by the Illinois State Board of Investment as well
25    as private sector investment options.
26        (7) The Tier 3 plan shall provide a variety of options

 

 

HB4057- 137 -LRB100 12972 RPS 27085 b

1    for payouts to participants in the Tier 3 plan who are no
2    longer active in the System and their survivors.
3        (8) To the extent authorized under federal law and as
4    authorized by the System, the plan shall allow former
5    participants in the plan to transfer or roll over employee
6    and vested State contributions, and the earnings thereon,
7    from the Tier 3 plan into other qualified retirement plans.
8        (9) The System shall reduce the employee contributions
9    credited to the member's Tier 3 plan account by an amount
10    determined by the System to cover the cost of offering
11    these benefits and any applicable administrative fees.
12    (b) Under the Tier 3 plan, an active Tier 1 or Tier 2
13member of this System may elect, in writing, to cease accruing
14benefits in the defined benefit plan and begin accruing
15benefits for future service in the Tier 3 plan. The election to
16participate in the Tier 3 plan is voluntary and irrevocable.
17        (1) Service credit under the Tier 3 plan may be used
18    for determining retirement eligibility under the defined
19    benefit plan.
20        (2) The System shall make a good faith effort to
21    contact all active Tier 1 and Tier 2 members who are
22    eligible to participate in the Tier 3 plan. The System
23    shall mail information describing the option to join the
24    Tier 3 plan to each of these employees to his or her last
25    known address on file with the System. If the employee is
26    not responsive to other means of contact, it is sufficient

 

 

HB4057- 138 -LRB100 12972 RPS 27085 b

1    for the System to publish the details of the option on its
2    website.
3        (3) Upon request for further information describing
4    the option, the System shall provide employees with
5    information from the System before exercising the option to
6    join the plan, including information on the impact to their
7    benefits and service. The individual consultation shall
8    include projections of the member's defined benefits at
9    retirement or earlier termination of service and the value
10    of the member's account at retirement or earlier
11    termination of service. The System shall not provide advice
12    or counseling with respect to whether the employee should
13    exercise the option. The System shall inform Tier 1 and
14    Tier 2 members who are eligible to participate in the Tier
15    3 plan that they may also wish to obtain information and
16    counsel relating to their option from any other available
17    source, including but not limited to labor organizations,
18    private counsel, and financial advisors.
19    (b-5) A Tier 1 or Tier 2 member who elects to participate
20in the Tier 3 plan may irrevocably elect to terminate all
21participation in the defined benefit plan. Upon that election,
22the System shall transfer to the member's individual account an
23amount equal to the amount of contribution refund that the
24member would be eligible to receive if the member terminated
25employment on that date and elected a refund of contributions,
26including regular interest for the respective years. The System

 

 

HB4057- 139 -LRB100 12972 RPS 27085 b

1shall make the transfer as a tax free transfer in accordance
2with Internal Revenue Service guidelines, for purposes of
3funding the amount credited to the member's individual account.
4    (c) In no event shall the System, its staff, its authorized
5representatives, or the Board be liable for any information
6given to an employee under this Section. The System may
7coordinate with the Illinois Department of Central Management
8Services and other retirement systems administering a Tier 3
9plan in accordance with this amendatory Act of the 100th
10General Assembly to provide information concerning the impact
11of the Tier 3 plan set forth in this Section.
12    (d) Notwithstanding any other provision of this Section, no
13person shall begin participating in the Tier 3 plan until it
14has attained qualified plan status and received all necessary
15approvals from the U.S. Internal Revenue Service.
16    (e) The System shall report on its progress under this
17Section, including the available details of the Tier 3 plan and
18the System's plans for informing eligible Tier 1 and Tier 2
19members about the plan, to the Governor and the General
20Assembly on or before January 15, 2018.
21    (f) The Illinois State Board of Investment shall be the
22plan sponsor for the Tier 3 plan established under this
23Section.
 
24    (40 ILCS 5/15-108.1)
25    Sec. 15-108.1. Tier 1 member. "Tier 1 member": A

 

 

HB4057- 140 -LRB100 12972 RPS 27085 b

1participant or an annuitant of a retirement annuity under this
2Article, other than a participant in the self-managed plan
3under Section 15-158.2, who first became a participant or
4member before January 1, 2011 under any reciprocal retirement
5system or pension fund established under this Code, other than
6a retirement system or pension fund established under Articles
72, 3, 4, 5, 6, or 18 of this Code. "Tier 1 member" includes a
8person who first became a participant under this System before
9January 1, 2011 and who accepts a refund and is subsequently
10reemployed by an employer on or after January 1, 2011.
11    In the case of a Tier 1 member who elects to participate in
12the Tier 3 plan under Section 15-200.5 of this Code, that Tier
131 member shall be deemed a Tier 1 member only with respect to
14service performed or established before the effective date of
15that election.
16(Source: P.A. 98-92, eff. 7-16-13.)
 
17    (40 ILCS 5/15-108.2)
18    Sec. 15-108.2. Tier 2 member. "Tier 2 member": A person who
19first becomes a participant under this Article on or after
20January 1, 2011, other than a person in the self-managed plan
21established under Section 15-158.2, unless the person is
22otherwise a Tier 1 member. The changes made to this Section by
23this amendatory Act of the 98th General Assembly are a
24correction of existing law and are intended to be retroactive
25to the effective date of Public Act 96-889, notwithstanding the

 

 

HB4057- 141 -LRB100 12972 RPS 27085 b

1provisions of Section 1-103.1 of this Code.
2    In the case of a Tier 2 member who elects to participate in
3the Tier 3 plan under Section 15-200.5 of this Code, that Tier
42 member shall be deemed a Tier 2 member only with respect to
5service performed or established before the effective date of
6that election.
7(Source: P.A. 98-92, eff. 7-16-13; 98-596, eff. 11-19-13.)
 
8    (40 ILCS 5/15-108.3 new)
9    Sec. 15-108.3. Tier 3 member. "Tier 3 member": A person who
10first becomes a participant under this Article on or after July
111, 2018 or a Tier 1 or Tier 2 member who elects to participate
12in the Tier 3 plan under Section 15-200.5 of this Code, but
13only with respect to service performed on or after the
14effective date of that election.
 
15    (40 ILCS 5/15-112)  (from Ch. 108 1/2, par. 15-112)
16    Sec. 15-112. Final rate of earnings. "Final rate of
17earnings":
18    (a) This subsection (a) applies only to a Tier 1 member.
19    For an employee who is paid on an hourly basis or who
20receives an annual salary in installments during 12 months of
21each academic year, the average annual earnings during the 48
22consecutive calendar month period ending with the last day of
23final termination of employment or the 4 consecutive academic
24years of service in which the employee's earnings were the

 

 

HB4057- 142 -LRB100 12972 RPS 27085 b

1highest, whichever is greater. For any other employee, the
2average annual earnings during the 4 consecutive academic years
3of service in which his or her earnings were the highest. For
4an employee with less than 48 months or 4 consecutive academic
5years of service, the average earnings during his or her entire
6period of service. The earnings of an employee with more than
736 months of service under item (a) of Section 15-113.1 prior
8to the date of becoming a participant are, for such period,
9considered equal to the average earnings during the last 36
10months of such service.
11    (b) This subsection (b) applies to a Tier 2 member.
12    For an employee who is paid on an hourly basis or who
13receives an annual salary in installments during 12 months of
14each academic year, the average annual earnings obtained by
15dividing by 8 the total earnings of the employee during the 96
16consecutive months in which the total earnings were the highest
17within the last 120 months prior to termination.
18    For any other employee, the average annual earnings during
19the 8 consecutive academic years within the 10 years prior to
20termination in which the employee's earnings were the highest.
21For an employee with less than 96 consecutive months or 8
22consecutive academic years of service, whichever is necessary,
23the average earnings during his or her entire period of
24service.
25    (c) For an employee on leave of absence with pay, or on
26leave of absence without pay who makes contributions during

 

 

HB4057- 143 -LRB100 12972 RPS 27085 b

1such leave, earnings are assumed to be equal to the basic
2compensation on the date the leave began.
3    (d) For an employee on disability leave, earnings are
4assumed to be equal to the basic compensation on the date
5disability occurs or the average earnings during the 24 months
6immediately preceding the month in which disability occurs,
7whichever is greater.
8    (e) For a Tier 1 member who retires on or after the
9effective date of this amendatory Act of 1997 with at least 20
10years of service as a firefighter or police officer under this
11Article, the final rate of earnings shall be the annual rate of
12earnings received by the participant on his or her last day as
13a firefighter or police officer under this Article, if that is
14greater than the final rate of earnings as calculated under the
15other provisions of this Section.
16    (f) If a Tier 1 member is an employee for at least 6 months
17during the academic year in which his or her employment is
18terminated, the annual final rate of earnings shall be 25% of
19the sum of (1) the annual basic compensation for that year, and
20(2) the amount earned during the 36 months immediately
21preceding that year, if this is greater than the final rate of
22earnings as calculated under the other provisions of this
23Section.
24    (g) In the determination of the final rate of earnings for
25an employee, that part of an employee's earnings for any
26academic year beginning after June 30, 1997, which exceeds the

 

 

HB4057- 144 -LRB100 12972 RPS 27085 b

1employee's earnings with that employer for the preceding year
2by more than 20 percent shall be excluded; in the event that an
3employee has more than one employer this limitation shall be
4calculated separately for the earnings with each employer. In
5making such calculation, only the basic compensation of
6employees shall be considered, without regard to vacation or
7overtime or to contracts for summer employment.
8    (h) The following are not considered as earnings in
9determining final rate of earnings: (1) severance or separation
10pay, (2) retirement pay, (3) payment for unused sick leave, and
11(4) payments from an employer for the period used in
12determining final rate of earnings for any purpose other than
13(i) services rendered, (ii) leave of absence or vacation
14granted during that period, and (iii) vacation of up to 56 work
15days allowed upon termination of employment; except that, if
16the benefit has been collectively bargained between the
17employer and the recognized collective bargaining agent
18pursuant to the Illinois Educational Labor Relations Act,
19payment received during a period of up to 2 academic years for
20unused sick leave may be considered as earnings in accordance
21with the applicable collective bargaining agreement, subject
22to the 20% increase limitation of this Section, and if the
23person first becomes a participant on or after the effective
24date of this amendatory Act of the 100th General Assembly,
25payments for unused sick or vacation time shall not be
26considered as earnings. Any unused sick leave considered as

 

 

HB4057- 145 -LRB100 12972 RPS 27085 b

1earnings under this Section shall not be taken into account in
2calculating service credit under Section 15-113.4.
3    (i) Intermittent periods of service shall be considered as
4consecutive in determining final rate of earnings.
5(Source: P.A. 98-92, eff. 7-16-13; 99-450, eff. 8-24-15.)
 
6    (40 ILCS 5/15-113.4)  (from Ch. 108 1/2, par. 15-113.4)
7    (Text of Section WITHOUT the changes made by P.A. 98-599,
8which has been held unconstitutional)
9    Sec. 15-113.4. Service for unused sick leave. "Service for
10unused sick leave": A person who first becomes a participant
11before the effective date of this amendatory Act of the 100th
12General Assembly and who is an employee under this System or
13one of the other systems subject to Article 20 of this Code
14within 60 days immediately preceding the date on which his or
15her retirement annuity begins, is entitled to credit for
16service for that portion of unused sick leave earned in the
17course of employment with an employer and credited on the date
18of termination of employment by an employer for which payment
19is not received, in accordance with the following schedule: 30
20through 90 full calendar days and 20 through 59 full work days
21of unused sick leave, 1/4 of a year of service; 91 through 180
22full calendar days and 60 through 119 full work days, 1/2 of a
23year of service; 181 through 270 full calendar days and 120
24through 179 full work days, 3/4 of a year of service; 271
25through 360 full calendar days and 180 through 240 full work

 

 

HB4057- 146 -LRB100 12972 RPS 27085 b

1days, one year of service. Only uncompensated, unused sick
2leave earned in accordance with an employer's sick leave
3accrual policy generally applicable to employees or a class of
4employees shall be taken into account in calculating service
5credit under this Section. Any uncompensated, unused sick leave
6granted by an employer to facilitate the hiring, retirement,
7termination, or other special circumstances of an employee
8shall not be taken into account in calculating service credit
9under this Section. If a participant transfers from one
10employer to another, the unused sick leave credited by the
11previous employer shall be considered in determining service to
12be credited under this Section, even if the participant
13terminated service prior to the effective date of P.A. 86-272
14(August 23, 1989); if necessary, the retirement annuity shall
15be recalculated to reflect such sick leave credit. Each
16employer shall certify to the board the number of days of
17unused sick leave accrued to the participant's credit on the
18date that the participant's status as an employee terminated.
19This period of unused sick leave shall not be considered in
20determining the date the retirement annuity begins. A person
21who first becomes a participant on or after the effective date
22of this amendatory Act of the 100th General Assembly shall not
23receive service credit for unused sick leave.
24(Source: P.A. 90-65, eff. 7-7-97; 90-511, eff. 8-22-97.)
 
25    (40 ILCS 5/15-134)  (from Ch. 108 1/2, par. 15-134)

 

 

HB4057- 147 -LRB100 12972 RPS 27085 b

1    Sec. 15-134. Participant.
2    (a) Except as provided in subsection (a-5), each Each
3person shall, as a condition of employment, become a
4participant and be subject to this Article on the date that he
5or she becomes an employee, makes an election to participate
6in, or otherwise becomes a participant in one of the retirement
7programs offered under this Article, whichever date is later.
8    An employee who becomes a participant shall continue to be
9a participant until he or she becomes an annuitant, dies or
10accepts a refund of contributions.
11    (a-5) Notwithstanding any other provision of this Article,
12beginning on the effective date of this amendatory Act of the
13100th General Assembly, a person is not required, as a
14condition of employment or otherwise, to participate in this
15System. An active employee may terminate his or her
16participation in this System (including active participation
17in the Tier 3 plan, if applicable) by notifying the System in
18writing. An active employee terminating participation in this
19System under this subsection shall be entitled to a refund of
20his or her contributions (other than contributions to the
21self-managed plan under Section 15-158.2 or the Tier 3 plan
22under Section 15-200.5) minus the benefits received prior to
23the termination of participation.
24    (b) A person employed concurrently by 2 or more employers
25is eligible to participate in the system on compensation
26received from all employers.

 

 

HB4057- 148 -LRB100 12972 RPS 27085 b

1(Source: P.A. 98-92, eff. 7-16-13.)
 
2    (40 ILCS 5/15-155)  (from Ch. 108 1/2, par. 15-155)
3    Sec. 15-155. Employer contributions.
4    (a) The State of Illinois shall make contributions by
5appropriations of amounts which, together with the other
6employer contributions from trust, federal, and other funds,
7employee contributions, income from investments, and other
8income of this System, will be sufficient to meet the cost of
9maintaining and administering the System on a 90% funded basis
10in accordance with actuarial recommendations.
11    The Board shall determine the amount of State contributions
12required for each fiscal year on the basis of the actuarial
13tables and other assumptions adopted by the Board and the
14recommendations of the actuary, using the formula in subsection
15(a-1).
16    (a-1) For State fiscal years 2012 through 2045, the minimum
17contribution to the System to be made by the State for each
18fiscal year shall be an amount determined by the System to be
19sufficient to bring the total assets of the System up to 90% of
20the total actuarial liabilities of the System by the end of
21State fiscal year 2045. In making these determinations, the
22required State contribution shall be calculated each year as a
23level percentage of payroll over the years remaining to and
24including fiscal year 2045 and shall be determined under the
25projected unit credit actuarial cost method.

 

 

HB4057- 149 -LRB100 12972 RPS 27085 b

1    For State fiscal years 1996 through 2005, the State
2contribution to the System, as a percentage of the applicable
3employee payroll, shall be increased in equal annual increments
4so that by State fiscal year 2011, the State is contributing at
5the rate required under this Section.
6    Notwithstanding any other provision of this Article, the
7total required State contribution for State fiscal year 2006 is
8$166,641,900.
9    Notwithstanding any other provision of this Article, the
10total required State contribution for State fiscal year 2007 is
11$252,064,100.
12    For each of State fiscal years 2008 through 2009, the State
13contribution to the System, as a percentage of the applicable
14employee payroll, shall be increased in equal annual increments
15from the required State contribution for State fiscal year
162007, so that by State fiscal year 2011, the State is
17contributing at the rate otherwise required under this Section.
18    Notwithstanding any other provision of this Article, the
19total required State contribution for State fiscal year 2010 is
20$702,514,000 and shall be made from the State Pensions Fund and
21proceeds of bonds sold in fiscal year 2010 pursuant to Section
227.2 of the General Obligation Bond Act, less (i) the pro rata
23share of bond sale expenses determined by the System's share of
24total bond proceeds, (ii) any amounts received from the General
25Revenue Fund in fiscal year 2010, (iii) any reduction in bond
26proceeds due to the issuance of discounted bonds, if

 

 

HB4057- 150 -LRB100 12972 RPS 27085 b

1applicable.
2    Notwithstanding any other provision of this Article, the
3total required State contribution for State fiscal year 2011 is
4the amount recertified by the System on or before April 1, 2011
5pursuant to Section 15-165 and shall be made from the State
6Pensions Fund and proceeds of bonds sold in fiscal year 2011
7pursuant to Section 7.2 of the General Obligation Bond Act,
8less (i) the pro rata share of bond sale expenses determined by
9the System's share of total bond proceeds, (ii) any amounts
10received from the General Revenue Fund in fiscal year 2011, and
11(iii) any reduction in bond proceeds due to the issuance of
12discounted bonds, if applicable.
13    Beginning in State fiscal year 2046, the minimum State
14contribution for each fiscal year shall be the amount needed to
15maintain the total assets of the System at 90% of the total
16actuarial liabilities of the System.
17    Amounts received by the System pursuant to Section 25 of
18the Budget Stabilization Act or Section 8.12 of the State
19Finance Act in any fiscal year do not reduce and do not
20constitute payment of any portion of the minimum State
21contribution required under this Article in that fiscal year.
22Such amounts shall not reduce, and shall not be included in the
23calculation of, the required State contributions under this
24Article in any future year until the System has reached a
25funding ratio of at least 90%. A reference in this Article to
26the "required State contribution" or any substantially similar

 

 

HB4057- 151 -LRB100 12972 RPS 27085 b

1term does not include or apply to any amounts payable to the
2System under Section 25 of the Budget Stabilization Act.
3    Notwithstanding any other provision of this Section, the
4required State contribution for State fiscal year 2005 and for
5fiscal year 2008 and each fiscal year thereafter, as calculated
6under this Section and certified under Section 15-165, shall
7not exceed an amount equal to (i) the amount of the required
8State contribution that would have been calculated under this
9Section for that fiscal year if the System had not received any
10payments under subsection (d) of Section 7.2 of the General
11Obligation Bond Act, minus (ii) the portion of the State's
12total debt service payments for that fiscal year on the bonds
13issued in fiscal year 2003 for the purposes of that Section
147.2, as determined and certified by the Comptroller, that is
15the same as the System's portion of the total moneys
16distributed under subsection (d) of Section 7.2 of the General
17Obligation Bond Act. In determining this maximum for State
18fiscal years 2008 through 2010, however, the amount referred to
19in item (i) shall be increased, as a percentage of the
20applicable employee payroll, in equal increments calculated
21from the sum of the required State contribution for State
22fiscal year 2007 plus the applicable portion of the State's
23total debt service payments for fiscal year 2007 on the bonds
24issued in fiscal year 2003 for the purposes of Section 7.2 of
25the General Obligation Bond Act, so that, by State fiscal year
262011, the State is contributing at the rate otherwise required

 

 

HB4057- 152 -LRB100 12972 RPS 27085 b

1under this Section.
2    (b) If an employee is paid from trust or federal funds, the
3employer shall pay to the Board contributions from those funds
4which are sufficient to cover the accruing normal costs on
5behalf of the employee. However, universities having employees
6who are compensated out of local auxiliary funds, income funds,
7or service enterprise funds are not required to pay such
8contributions on behalf of those employees. The local auxiliary
9funds, income funds, and service enterprise funds of
10universities shall not be considered trust funds for the
11purpose of this Article, but funds of alumni associations,
12foundations, and athletic associations which are affiliated
13with the universities included as employers under this Article
14and other employers which do not receive State appropriations
15are considered to be trust funds for the purpose of this
16Article.
17    (b-1) The City of Urbana and the City of Champaign shall
18each make employer contributions to this System for their
19respective firefighter employees who participate in this
20System pursuant to subsection (h) of Section 15-107. The rate
21of contributions to be made by those municipalities shall be
22determined annually by the Board on the basis of the actuarial
23assumptions adopted by the Board and the recommendations of the
24actuary, and shall be expressed as a percentage of salary for
25each such employee. The Board shall certify the rate to the
26affected municipalities as soon as may be practical. The

 

 

HB4057- 153 -LRB100 12972 RPS 27085 b

1employer contributions required under this subsection shall be
2remitted by the municipality to the System at the same time and
3in the same manner as employee contributions.
4    (c) Through State fiscal year 1995: The total employer
5contribution shall be apportioned among the various funds of
6the State and other employers, whether trust, federal, or other
7funds, in accordance with actuarial procedures approved by the
8Board. State of Illinois contributions for employers receiving
9State appropriations for personal services shall be payable
10from appropriations made to the employers or to the System. The
11contributions for Class I community colleges covering earnings
12other than those paid from trust and federal funds, shall be
13payable solely from appropriations to the Illinois Community
14College Board or the System for employer contributions.
15    (d) Beginning in State fiscal year 1996, the required State
16contributions to the System shall be appropriated directly to
17the System and shall be payable through vouchers issued in
18accordance with subsection (c) of Section 15-165, except as
19provided in subsection (g).
20    (e) The State Comptroller shall draw warrants payable to
21the System upon proper certification by the System or by the
22employer in accordance with the appropriation laws and this
23Code.
24    (f) Normal costs under this Section means liability for
25pensions and other benefits which accrues to the System because
26of the credits earned for service rendered by the participants

 

 

HB4057- 154 -LRB100 12972 RPS 27085 b

1during the fiscal year and expenses of administering the
2System, but shall not include the principal of or any
3redemption premium or interest on any bonds issued by the Board
4or any expenses incurred or deposits required in connection
5therewith.
6    (g) If the amount of a participant's earnings for any
7academic year beginning on or after June 1, 2005 and before
8July 1, 2018 used to determine the final rate of earnings,
9determined on a full-time equivalent basis, exceeds the amount
10of his or her earnings with the same employer for the previous
11academic year, determined on a full-time equivalent basis, by
12more than 6%, the participant's employer shall pay to the
13System, in addition to all other payments required under this
14Section and in accordance with guidelines established by the
15System, the present value of the increase in benefits resulting
16from the portion of the increase in earnings that is in excess
17of 6%. This present value shall be computed by the System on
18the basis of the actuarial assumptions and tables used in the
19most recent actuarial valuation of the System that is available
20at the time of the computation. The System may require the
21employer to provide any pertinent information or
22documentation.
23    Whenever it determines that a payment is or may be required
24under this subsection (g), the System shall calculate the
25amount of the payment and bill the employer for that amount.
26The bill shall specify the calculations used to determine the

 

 

HB4057- 155 -LRB100 12972 RPS 27085 b

1amount due. If the employer disputes the amount of the bill, it
2may, within 30 days after receipt of the bill, apply to the
3System in writing for a recalculation. The application must
4specify in detail the grounds of the dispute and, if the
5employer asserts that the calculation is subject to subsection
6(h) or (i) of this Section, must include an affidavit setting
7forth and attesting to all facts within the employer's
8knowledge that are pertinent to the applicability of subsection
9(h) or (i). Upon receiving a timely application for
10recalculation, the System shall review the application and, if
11appropriate, recalculate the amount due.
12    The employer contributions required under this subsection
13(g) may be paid in the form of a lump sum within 90 days after
14receipt of the bill. If the employer contributions are not paid
15within 90 days after receipt of the bill, then interest will be
16charged at a rate equal to the System's annual actuarially
17assumed rate of return on investment compounded annually from
18the 91st day after receipt of the bill. Payments must be
19concluded within 3 years after the employer's receipt of the
20bill.
21    When assessing payment for any amount due under this
22subsection (g), the System shall include earnings, to the
23extent not established by a participant under Section 15-113.11
24or 15-113.12, that would have been paid to the participant had
25the participant not taken (i) periods of voluntary or
26involuntary furlough occurring on or after July 1, 2015 and on

 

 

HB4057- 156 -LRB100 12972 RPS 27085 b

1or before June 30, 2017 or (ii) periods of voluntary pay
2reduction in lieu of furlough occurring on or after July 1,
32015 and on or before June 30, 2017. Determining earnings that
4would have been paid to a participant had the participant not
5taken periods of voluntary or involuntary furlough or periods
6of voluntary pay reduction shall be the responsibility of the
7employer, and shall be reported in a manner prescribed by the
8System.
9    (g-1) Beginning in fiscal year 2019, if a contract or
10collective bargaining agreement entered into, amended, or
11renewed on or after the effective date of this amendatory Act
12of the 100th General Assembly provides for earnings to exceed
13the salaries provided under the preceding contract or
14collective bargaining agreement, then the employer shall pay to
15the System, in addition to all other payments required under
16this Section and in accordance with guidelines established by
17the System, the current value of the projected amount of the
18increase in benefits, as determined by the System and
19reflecting whether the participants covered under the contract
20or collective bargaining agreement are Tier 1 members or Tier 2
21members, resulting from the portion of the earnings that exceed
22the amount of the earnings provided under the preceding
23contract or collective bargaining agreement. The System may
24require the employer to provide any pertinent information or
25documentation.
26    Whenever it determines that a payment is or may be required

 

 

HB4057- 157 -LRB100 12972 RPS 27085 b

1under this subsection (g-1), the System shall calculate the
2amount of the payment and bill the employer for that amount.
3The bill shall specify the calculations used to determine the
4amount due. If the employer disputes the amount of the bill, it
5may, within 30 days after receipt of the bill, apply to the
6System in writing for a recalculation. The application must
7specify in detail the grounds of the dispute. Upon receiving a
8timely application for recalculation, the System shall review
9the application and, if appropriate, recalculate the amount
10due.
11    The employer contributions required under this subsection
12(g-1) may be paid in the form of a lump sum within 90 days after
13receipt of the bill. If the employer contributions are not paid
14within 90 days after receipt of the bill, then interest shall
15be charged at a rate equal to the System's annual actuarially
16assumed rate of return on investment compounded annually from
17the 91st day after receipt of the bill. Payments must be
18concluded within 3 years after the employer's receipt of the
19bill.
20    (h) This subsection (h) applies only to payments made or
21salary increases given on or after June 1, 2005 but before July
221, 2011. The changes made by Public Act 94-1057 shall not
23require the System to refund any payments received before July
2431, 2006 (the effective date of Public Act 94-1057).
25    When assessing payment for any amount due under subsection
26(g), the System shall exclude earnings increases paid to

 

 

HB4057- 158 -LRB100 12972 RPS 27085 b

1participants under contracts or collective bargaining
2agreements entered into, amended, or renewed before June 1,
32005.
4    When assessing payment for any amount due under subsection
5(g), the System shall exclude earnings increases paid to a
6participant at a time when the participant is 10 or more years
7from retirement eligibility under Section 15-135.
8    When assessing payment for any amount due under subsection
9(g), the System shall exclude earnings increases resulting from
10overload work, including a contract for summer teaching, or
11overtime when the employer has certified to the System, and the
12System has approved the certification, that: (i) in the case of
13overloads (A) the overload work is for the sole purpose of
14academic instruction in excess of the standard number of
15instruction hours for a full-time employee occurring during the
16academic year that the overload is paid and (B) the earnings
17increases are equal to or less than the rate of pay for
18academic instruction computed using the participant's current
19salary rate and work schedule; and (ii) in the case of
20overtime, the overtime was necessary for the educational
21mission.
22    When assessing payment for any amount due under subsection
23(g), the System shall exclude any earnings increase resulting
24from (i) a promotion for which the employee moves from one
25classification to a higher classification under the State
26Universities Civil Service System, (ii) a promotion in academic

 

 

HB4057- 159 -LRB100 12972 RPS 27085 b

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

 

 

HB4057- 160 -LRB100 12972 RPS 27085 b

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

 

 

HB4057- 161 -LRB100 12972 RPS 27085 b

1which shall be calculated as follows:
2    As of June 30, 2008, the actuarial value of the System's
3assets shall be equal to the market value of the assets as of
4that date. In determining the actuarial value of the System's
5assets for fiscal years after June 30, 2008, any actuarial
6gains or losses from investment return incurred in a fiscal
7year shall be recognized in equal annual amounts over the
85-year period following that fiscal year.
9    (m) For purposes of determining the required State
10contribution to the system for a particular year, the actuarial
11value of assets shall be assumed to earn a rate of return equal
12to the system's actuarially assumed rate of return.
13(Source: P.A. 98-92, eff. 7-16-13; 98-463, eff. 8-16-13;
1499-897, eff. 1-1-17.)
 
15    (40 ILCS 5/15-185.5 new)
16    Sec. 15-185.5. Accelerated pension benefit payment.
17    (a) As used in this Section:
18    "Eligible person" means a person who:
19        (1) has terminated service;
20        (2) has accrued sufficient service credit to be
21    eligible to receive a retirement annuity under this
22    Article;
23        (3) has not received any retirement annuity under this
24    Article;
25        (4) does not have a QILDRO in effect against him or her

 

 

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1    under this Article; and
2        (5) is not a participant in the self-managed plan under
3    Section 15-158.2.
4    "Pension benefit" means the benefits under this Article, or
5Article 1 as it relates to those benefits, including any
6anticipated annual increases, that an eligible person is
7entitled to upon attainment of the applicable retirement age.
8"Pension benefit" also includes applicable survivor's or
9disability benefits.
10    (b) Before January 1, 2018, the System shall calculate,
11using actuarial tables and other assumptions adopted by the
12Board, the net present value of pension benefits for each
13eligible person and shall offer each eligible person the
14opportunity to irrevocably elect to receive an amount
15determined by the System to be equal to 70% of the net present
16value of his or her pension benefits in lieu of receiving any
17pension benefit. The offer shall specify the dollar amount that
18the eligible person will receive if he or she so elects and
19shall expire when a subsequent offer is made to an eligible
20person. The System shall make a good faith effort to contact
21every eligible person to notify him or her of the election and
22of the amount of the accelerated pension benefit payment.
23    Beginning January 1, 2018 and until July 1, 2018, an
24eligible person may irrevocably elect to receive an accelerated
25pension benefit payment in the amount that the System offers
26under this subsection in lieu of receiving any pension benefit.

 

 

HB4057- 163 -LRB100 12972 RPS 27085 b

1A person who elects to receive an accelerated pension benefit
2payment under this Section may not elect to proceed under the
3Retirement Systems Reciprocal Act with respect to service under
4this Article.
5    (c) A person's credits and creditable service under this
6Article shall be terminated upon the person's receipt of an
7accelerated pension benefit payment under this Section, and no
8other benefit shall be paid under this Article based on those
9terminated credits and creditable service, including any
10retirement, survivor, or other benefit; except that to the
11extent that participation, benefits, or premiums under the
12State Employees Group Insurance Act of 1971 are based on the
13amount of service credit, the terminated service credit shall
14be used for that purpose.
15    (d) If a person who has received an accelerated pension
16benefit payment under this Section returns to active service
17under this Article, then:
18        (1) Any benefits under the System earned as a result of
19    that return to active service shall be based solely on the
20    person's credits and creditable service arising from the
21    return to active service.
22        (2) The accelerated pension benefit payment may not be
23    repaid to the System, and the terminated credits and
24    creditable service may not under any circumstances be
25    reinstated.
26    (e) As a condition of receiving an accelerated pension

 

 

HB4057- 164 -LRB100 12972 RPS 27085 b

1benefit payment, an eligible person must have another
2retirement plan or account qualified under the Internal Revenue
3Code of 1986, as amended, for the accelerated pension benefit
4payment to be rolled into. The accelerated pension benefit
5payment under this Section may be subject to withholding or
6payment of applicable taxes, but to the extent permitted by
7federal law, a person who receives an accelerated pension
8benefit payment under this Section must direct the System to
9pay all of that payment as a rollover into another retirement
10plan or account qualified under the Internal Revenue Code of
111986, as amended.
12    (f) Before January 1, 2019, the Board shall certify to the
13Illinois Finance Authority and the General Assembly the amount
14by which the total amount of accelerated pension benefit
15payments made under this Section exceed the amount appropriated
16to the System for the purpose of making those payments.
17    (g) The Board shall adopt any rules necessary to implement
18this Section.
19    (h) No provision of this Section shall be interpreted in a
20way that would cause the applicable System to cease to be a
21qualified plan under the Internal Revenue Code of 1986.
 
22    (40 ILCS 5/15-198)
23    (Text of Section WITHOUT the changes made by P.A. 98-599,
24which has been held unconstitutional)
25    Sec. 15-198. Application and expiration of new benefit

 

 

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1increases.
2    (a) As used in this Section, "new benefit increase" means
3an increase in the amount of any benefit provided under this
4Article, or an expansion of the conditions of eligibility for
5any benefit under this Article, that results from an amendment
6to this Code that takes effect after the effective date of this
7amendatory Act of the 94th General Assembly. "New benefit
8increase", however, does not include any benefit increase
9resulting from the changes made by this amendatory Act of the
10100th General Assembly.
11    (b) Notwithstanding any other provision of this Code or any
12subsequent amendment to this Code, every new benefit increase
13is subject to this Section and shall be deemed to be granted
14only in conformance with and contingent upon compliance with
15the provisions of this Section.
16    (c) The Public Act enacting a new benefit increase must
17identify and provide for payment to the System of additional
18funding at least sufficient to fund the resulting annual
19increase in cost to the System as it accrues.
20    Every new benefit increase is contingent upon the General
21Assembly providing the additional funding required under this
22subsection. The Commission on Government Forecasting and
23Accountability shall analyze whether adequate additional
24funding has been provided for the new benefit increase and
25shall report its analysis to the Public Pension Division of the
26Department of Financial and Professional Regulation. A new

 

 

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1benefit increase created by a Public Act that does not include
2the additional funding required under this subsection is null
3and void. If the Public Pension Division determines that the
4additional funding provided for a new benefit increase under
5this subsection is or has become inadequate, it may so certify
6to the Governor and the State Comptroller and, in the absence
7of corrective action by the General Assembly, the new benefit
8increase shall expire at the end of the fiscal year in which
9the certification is made.
10    (d) Every new benefit increase shall expire 5 years after
11its effective date or on such earlier date as may be specified
12in the language enacting the new benefit increase or provided
13under subsection (c). This does not prevent the General
14Assembly from extending or re-creating a new benefit increase
15by law.
16    (e) Except as otherwise provided in the language creating
17the new benefit increase, a new benefit increase that expires
18under this Section continues to apply to persons who applied
19and qualified for the affected benefit while the new benefit
20increase was in effect and to the affected beneficiaries and
21alternate payees of such persons, but does not apply to any
22other person, including without limitation a person who
23continues in service after the expiration date and did not
24apply and qualify for the affected benefit while the new
25benefit increase was in effect.
26(Source: P.A. 94-4, eff. 6-1-05.)
 

 

 

HB4057- 167 -LRB100 12972 RPS 27085 b

1    (40 ILCS 5/15-200.5 new)
2    Sec. 15-200.5. Tier 3 plan.
3    (a) By July 1, 2018, the System shall prepare and implement
4a Tier 3 plan. The Tier 3 plan developed under this Section
5shall be a plan that aggregates State and employee
6contributions in individual participant accounts which, after
7meeting any other requirements, are used for payouts after
8retirement in accordance with this Section and any other
9applicable laws. In developing, preparing, and implementing
10the Tier 3 plan and adopting rules concerning the Tier 3 plan,
11the System shall utilize the framework of the self-managed plan
12and shall endeavor to adapt the benefits and structure of the
13self-managed plan.
14    As used in this Section, "defined benefit plan" means the
15traditional benefit package or the portable benefit package
16available under this Article to Tier 1 or Tier 2 members who
17have not made the election authorized under this Section and do
18not participate in the self-managed plan under Section
1915-158.2.
20        (1) All persons who begin to participate in this System
21    on or after July 1, 2018 shall participate in the Tier 3
22    plan rather than the defined benefit plan or the
23    self-managed plan under Section 15-158.2.
24        (2) A participant in the Tier 3 plan shall pay employee
25    contributions at a rate of 8% of earnings.

 

 

HB4057- 168 -LRB100 12972 RPS 27085 b

1        (3) State contributions shall be paid into the accounts
2    of all participants in the Tier 3 plan at a rate of 7.6% of
3    earnings, less the amount determined annually by the Board
4    to cover the cost of offering the defined disability
5    benefits available to other participants under this
6    Article if the Tier 3 plan offers such benefits.
7        (4) The Tier 3 plan shall require one year of
8    participation in the Tier 3 plan before vesting in State
9    contributions. If the participant fails to vest in them,
10    the State contributions, and the earnings thereon, shall be
11    forfeited.
12        (5) The Tier 3 plan may provide for participants in the
13    plan to be eligible for the defined disability benefits
14    available to other participants under this Article. If it
15    does, the System shall reduce the employee contributions
16    credited to the member's Tier 3 plan account by an amount
17    determined by the System to cover the cost of offering such
18    benefits.
19        (6) The Tier 3 plan shall provide a variety of options
20    for investments. These options shall include investments
21    handled by the System as well as private sector investment
22    options.
23        (7) The Tier 3 plan shall provide a variety of options
24    for payouts to participants in the Tier 3 plan who are no
25    longer active in the System and their survivors.
26        (8) To the extent authorized under federal law and as

 

 

HB4057- 169 -LRB100 12972 RPS 27085 b

1    authorized by the System, the plan shall allow former
2    participants in the plan to transfer or roll over employee
3    and vested State contributions, and the earnings thereon,
4    from the Tier 3 plan into other qualified retirement plans.
5        (9) The System shall reduce the employee contributions
6    credited to the member's Tier 3 plan account by an amount
7    determined by the System to cover the cost of offering
8    these benefits and any applicable administrative fees.
9    (b) Under the Tier 3 plan, an active Tier 1 or Tier 2
10member of this System may elect, in writing, to cease accruing
11benefits in the defined benefit plan and begin accruing
12benefits for future service in the Tier 3 plan. An active Tier
131 or Tier 2 member who elects to cease accruing benefits in his
14or her defined benefit plan shall be prohibited from purchasing
15service credit on or after the date of his or her election. A
16Tier 1 or Tier 2 member who elects to participate in the Tier 3
17plan shall not receive interest accruals to his or her Rule 2
18benefit on or after the date of his or her election. The
19election to participate in the Tier 3 plan is voluntary and
20irrevocable.
21        (1) Service credit under the Tier 3 plan may be used
22    for determining retirement eligibility under the defined
23    benefit plan.
24        (2) The System shall make a good faith effort to
25    contact all active Tier 1 and Tier 2 members who are
26    eligible to participate in the Tier 3 plan. The System

 

 

HB4057- 170 -LRB100 12972 RPS 27085 b

1    shall mail information describing the option to join the
2    Tier 3 plan to each of these employees to his or her last
3    known address on file with the System. If the employee is
4    not responsive to other means of contact, it is sufficient
5    for the System to publish the details of the option on its
6    website.
7        (3) Upon request for further information describing
8    the option, the System shall provide employees with
9    information from the System before exercising the option to
10    join the plan, including information on the impact to their
11    benefits and service. The individual consultation shall
12    include projections of the member's defined benefits at
13    retirement or earlier termination of service and the value
14    of the member's account at retirement or earlier
15    termination of service. The System shall not provide advice
16    or counseling with respect to whether the employee should
17    exercise the option. The System shall inform Tier 1 and
18    Tier 2 members who are eligible to participate in the Tier
19    3 plan that they may also wish to obtain information and
20    counsel relating to their option from any other available
21    source, including but not limited to labor organizations,
22    private counsel, and financial advisors.
23    (b-5) A Tier 1 or Tier 2 member who elects to participate
24in the Tier 3 plan may irrevocably elect to terminate all
25participation in the defined benefit plan. Upon that election,
26the System shall transfer to the member's individual account an

 

 

HB4057- 171 -LRB100 12972 RPS 27085 b

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

 

 

HB4057- 172 -LRB100 12972 RPS 27085 b

1    (40 ILCS 5/16-106.40 new)
2    Sec. 16-106.40. Tier 1 member. "Tier 1 member": A member
3under this Article who first became a member or participant
4before January 1, 2011 under any reciprocal retirement system
5or pension fund established under this Code other than a
6retirement system or pension fund established under Article 2,
73, 4, 5, 6, or 18 of this Code.
8    In the case of a Tier 1 member who elects to participate in
9the Tier 3 plan under Section 16-205.5 of this Code, that Tier
101 member shall be deemed a Tier 1 member only with respect to
11service performed or established before the effective date of
12that election.
 
13    (40 ILCS 5/16-106.41 new)
14    Sec. 16-106.41. Tier 2 member. "Tier 2 member": A member of
15the System who first becomes a member under this Article on or
16after January 1, 2011 and who is not a Tier 1 member.
17    In the case of a Tier 2 member who elects to participate in
18the Tier 3 plan under Section 16-205.5 of this Code, the Tier 2
19member shall be deemed a Tier 2 member only with respect to
20service performed or established before the effective date of
21that election.
 
22    (40 ILCS 5/16-106.42 new)
23    Sec. 16-106.42. Tier 3 member. "Tier 3 member": A member of
24the System who first becomes a member under this Article on or

 

 

HB4057- 173 -LRB100 12972 RPS 27085 b

1after July 1, 2018 or a Tier 1 or Tier 2 member who elects to
2participate in the Tier 3 plan under Section 16-205.5 of this
3Code, but only with respect to service performed on or after
4the effective date of that election.
 
5    (40 ILCS 5/16-123)  (from Ch. 108 1/2, par. 16-123)
6    Sec. 16-123. Membership of System.
7    (a) Except as provided in subsection (c), the The
8membership of this System shall be composed of all teachers
9employed after June 30, 1939 who become members as a condition
10of employment on the date they become teachers. Membership
11shall continue until the date a member becomes an annuitant,
12dies, accepts a single-sum retirement benefit, accepts a
13refund, or forfeits the rights to a refund.
14    (b) This Article does not apply to any person first
15employed after June 30, 1979 as a public service employment
16program participant under the Federal Comprehensive Employment
17and Training Act and whose wages or fringe benefits are paid in
18whole or in part by funds provided under such Act.
19    (c) Notwithstanding any other provision of this Article,
20beginning on the effective date of this amendatory Act of the
21100th General Assembly, a person is not required, as a
22condition of employment or otherwise, to participate in this
23System. An active teacher may terminate his or her membership
24in this System (including active participation in the Tier 3
25plan, if applicable) by notifying the System in writing. An

 

 

HB4057- 174 -LRB100 12972 RPS 27085 b

1active teacher terminating his or her membership in this System
2under this subsection shall be entitled to a refund of his or
3her contributions (other than contributions to the Tier 3 plan
4under Section 16-205.5) minus the benefits received prior to
5the termination of membership.
6(Source: P.A. 87-11.)
 
7    (40 ILCS 5/16-127)  (from Ch. 108 1/2, par. 16-127)
8    (Text of Section WITHOUT the changes made by P.A. 98-599,
9which has been held unconstitutional)
10    Sec. 16-127. Computation of creditable service.
11    (a) Each member shall receive regular credit for all
12service as a teacher from the date membership begins, for which
13satisfactory evidence is supplied and all contributions have
14been paid.
15    (b) The following periods of service shall earn optional
16credit and each member shall receive credit for all such
17service for which satisfactory evidence is supplied and all
18contributions have been paid as of the date specified:
19        (1) Prior service as a teacher.
20        (2) Service in a capacity essentially similar or
21    equivalent to that of a teacher, in the public common
22    schools in school districts in this State not included
23    within the provisions of this System, or of any other
24    State, territory, dependency or possession of the United
25    States, or in schools operated by or under the auspices of

 

 

HB4057- 175 -LRB100 12972 RPS 27085 b

1    the United States, or under the auspices of any agency or
2    department of any other State, and service during any
3    period of professional speech correction or special
4    education experience for a public agency within this State
5    or any other State, territory, dependency or possession of
6    the United States, and service prior to February 1, 1951 as
7    a recreation worker for the Illinois Department of Public
8    Safety, for a period not exceeding the lesser of 2/5 of the
9    total creditable service of the member or 10 years. The
10    maximum service of 10 years which is allowable under this
11    paragraph shall be reduced by the service credit which is
12    validated by other retirement systems under paragraph (i)
13    of Section 15-113 and paragraph 1 of Section 17-133. Credit
14    granted under this paragraph may not be used in
15    determination of a retirement annuity or disability
16    benefits unless the member has at least 5 years of
17    creditable service earned subsequent to this employment
18    with one or more of the following systems: Teachers'
19    Retirement System of the State of Illinois, State
20    Universities Retirement System, and the Public School
21    Teachers' Pension and Retirement Fund of Chicago. Whenever
22    such service credit exceeds the maximum allowed for all
23    purposes of this Article, the first service rendered in
24    point of time shall be considered. The changes to this
25    subdivision (b)(2) made by Public Act 86-272 shall apply
26    not only to persons who on or after its effective date

 

 

HB4057- 176 -LRB100 12972 RPS 27085 b

1    (August 23, 1989) are in service as a teacher under the
2    System, but also to persons whose status as such a teacher
3    terminated prior to such effective date, whether or not
4    such person is an annuitant on that date.
5        (3) Any periods immediately following teaching
6    service, under this System or under Article 17, (or
7    immediately following service prior to February 1, 1951 as
8    a recreation worker for the Illinois Department of Public
9    Safety) spent in active service with the military forces of
10    the United States; periods spent in educational programs
11    that prepare for return to teaching sponsored by the
12    federal government following such active military service;
13    if a teacher returns to teaching service within one
14    calendar year after discharge or after the completion of
15    the educational program, a further period, not exceeding
16    one calendar year, between time spent in military service
17    or in such educational programs and the return to
18    employment as a teacher under this System; and a period of
19    up to 2 years of active military service not immediately
20    following employment as a teacher.
21        The changes to this Section and Section 16-128 relating
22    to military service made by P.A. 87-794 shall apply not
23    only to persons who on or after its effective date are in
24    service as a teacher under the System, but also to persons
25    whose status as a teacher terminated prior to that date,
26    whether or not the person is an annuitant on that date. In

 

 

HB4057- 177 -LRB100 12972 RPS 27085 b

1    the case of an annuitant who applies for credit allowable
2    under this Section for a period of military service that
3    did not immediately follow employment, and who has made the
4    required contributions for such credit, the annuity shall
5    be recalculated to include the additional service credit,
6    with the increase taking effect on the date the System
7    received written notification of the annuitant's intent to
8    purchase the credit, if payment of all the required
9    contributions is made within 60 days of such notice, or
10    else on the first annuity payment date following the date
11    of payment of the required contributions. In calculating
12    the automatic annual increase for an annuity that has been
13    recalculated under this Section, the increase attributable
14    to the additional service allowable under P.A. 87-794 shall
15    be included in the calculation of automatic annual
16    increases accruing after the effective date of the
17    recalculation.
18        Credit for military service shall be determined as
19    follows: if entry occurs during the months of July, August,
20    or September and the member was a teacher at the end of the
21    immediately preceding school term, credit shall be granted
22    from July 1 of the year in which he or she entered service;
23    if entry occurs during the school term and the teacher was
24    in teaching service at the beginning of the school term,
25    credit shall be granted from July 1 of such year. In all
26    other cases where credit for military service is allowed,

 

 

HB4057- 178 -LRB100 12972 RPS 27085 b

1    credit shall be granted from the date of entry into the
2    service.
3        The total period of military service for which credit
4    is granted shall not exceed 5 years for any member unless
5    the service: (A) is validated before July 1, 1964, and (B)
6    does not extend beyond July 1, 1963. Credit for military
7    service shall be granted under this Section only if not
8    more than 5 years of the military service for which credit
9    is granted under this Section is used by the member to
10    qualify for a military retirement allotment from any branch
11    of the armed forces of the United States. The changes to
12    this subdivision (b)(3) made by Public Act 86-272 shall
13    apply not only to persons who on or after its effective
14    date (August 23, 1989) are in service as a teacher under
15    the System, but also to persons whose status as such a
16    teacher terminated prior to such effective date, whether or
17    not such person is an annuitant on that date.
18        (4) Any periods served as a member of the General
19    Assembly.
20        (5)(i) Any periods for which a teacher, as defined in
21    Section 16-106, is granted a leave of absence, provided he
22    or she returns to teaching service creditable under this
23    System or the State Universities Retirement System
24    following the leave; (ii) periods during which a teacher is
25    involuntarily laid off from teaching, provided he or she
26    returns to teaching following the lay-off; (iii) periods

 

 

HB4057- 179 -LRB100 12972 RPS 27085 b

1    prior to July 1, 1983 during which a teacher ceased covered
2    employment due to pregnancy, provided that the teacher
3    returned to teaching service creditable under this System
4    or the State Universities Retirement System following the
5    pregnancy and submits evidence satisfactory to the Board
6    documenting that the employment ceased due to pregnancy;
7    and (iv) periods prior to July 1, 1983 during which a
8    teacher ceased covered employment for the purpose of
9    adopting an infant under 3 years of age or caring for a
10    newly adopted infant under 3 years of age, provided that
11    the teacher returned to teaching service creditable under
12    this System or the State Universities Retirement System
13    following the adoption and submits evidence satisfactory
14    to the Board documenting that the employment ceased for the
15    purpose of adopting an infant under 3 years of age or
16    caring for a newly adopted infant under 3 years of age.
17    However, total credit under this paragraph (5) may not
18    exceed 3 years.
19        Any qualified member or annuitant may apply for credit
20    under item (iii) or (iv) of this paragraph (5) without
21    regard to whether service was terminated before the
22    effective date of this amendatory Act of 1997. In the case
23    of an annuitant who establishes credit under item (iii) or
24    (iv), the annuity shall be recalculated to include the
25    additional service credit. The increase in annuity shall
26    take effect on the date the System receives written

 

 

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1    notification of the annuitant's intent to purchase the
2    credit, if the required evidence is submitted and the
3    required contribution paid within 60 days of that
4    notification, otherwise on the first annuity payment date
5    following the System's receipt of the required evidence and
6    contribution. The increase in an annuity recalculated
7    under this provision shall be included in the calculation
8    of automatic annual increases in the annuity accruing after
9    the effective date of the recalculation.
10        Optional credit may be purchased under this subsection
11    (b)(5) for periods during which a teacher has been granted
12    a leave of absence pursuant to Section 24-13 of the School
13    Code. A teacher whose service under this Article terminated
14    prior to the effective date of P.A. 86-1488 shall be
15    eligible to purchase such optional credit. If a teacher who
16    purchases this optional credit is already receiving a
17    retirement annuity under this Article, the annuity shall be
18    recalculated as if the annuitant had applied for the leave
19    of absence credit at the time of retirement. The difference
20    between the entitled annuity and the actual annuity shall
21    be credited to the purchase of the optional credit. The
22    remainder of the purchase cost of the optional credit shall
23    be paid on or before April 1, 1992.
24        The change in this paragraph made by Public Act 86-273
25    shall be applicable to teachers who retire after June 1,
26    1989, as well as to teachers who are in service on that

 

 

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1    date.
2        (6) For a person who first becomes a member before the
3    effective date of this amendatory Act of the 100th General
4    Assembly, any Any days of unused and uncompensated
5    accumulated sick leave earned by a teacher. The service
6    credit granted under this paragraph shall be the ratio of
7    the number of unused and uncompensated accumulated sick
8    leave days to 170 days, subject to a maximum of 2 years of
9    service credit. Prior to the member's retirement, each
10    former employer shall certify to the System the number of
11    unused and uncompensated accumulated sick leave days
12    credited to the member at the time of termination of
13    service. The period of unused sick leave shall not be
14    considered in determining the effective date of
15    retirement. A member is not required to make contributions
16    in order to obtain service credit for unused sick leave.
17        Credit for sick leave shall, at retirement, be granted
18    by the System for any retiring regional or assistant
19    regional superintendent of schools who first becomes a
20    member before the effective date of this amendatory Act of
21    the 100th General Assembly at the rate of 6 days per year
22    of creditable service or portion thereof established while
23    serving as such superintendent or assistant
24    superintendent.
25        (7) Periods prior to February 1, 1987 served as an
26    employee of the Illinois Mathematics and Science Academy

 

 

HB4057- 182 -LRB100 12972 RPS 27085 b

1    for which credit has not been terminated under Section
2    15-113.9 of this Code.
3        (8) Service as a substitute teacher for work performed
4    prior to July 1, 1990.
5        (9) Service as a part-time teacher for work performed
6    prior to July 1, 1990.
7        (10) Up to 2 years of employment with Southern Illinois
8    University - Carbondale from September 1, 1959 to August
9    31, 1961, or with Governors State University from September
10    1, 1972 to August 31, 1974, for which the teacher has no
11    credit under Article 15. To receive credit under this item
12    (10), a teacher must apply in writing to the Board and pay
13    the required contributions before May 1, 1993 and have at
14    least 12 years of service credit under this Article.
15    (b-1) A member may establish optional credit for up to 2
16years of service as a teacher or administrator employed by a
17private school recognized by the Illinois State Board of
18Education, provided that the teacher (i) was certified under
19the law governing the certification of teachers at the time the
20service was rendered, (ii) applies in writing on or after
21August 1, 2009 and on or before August 1, 2012, (iii) supplies
22satisfactory evidence of the employment, (iv) completes at
23least 10 years of contributing service as a teacher as defined
24in Section 16-106, and (v) pays the contribution required in
25subsection (d-5) of Section 16-128. The member may apply for
26credit under this subsection and pay the required contribution

 

 

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1before completing the 10 years of contributing service required
2under item (iv), but the credit may not be used until the item
3(iv) contributing service requirement has been met.
4    (c) The service credits specified in this Section shall be
5granted only if: (1) such service credits are not used for
6credit in any other statutory tax-supported public employee
7retirement system other than the federal Social Security
8program; and (2) the member makes the required contributions as
9specified in Section 16-128. Except as provided in subsection
10(b-1) of this Section, the service credit shall be effective as
11of the date the required contributions are completed.
12    Any service credits granted under this Section shall
13terminate upon cessation of membership for any cause.
14    Credit may not be granted under this Section covering any
15period for which an age retirement or disability retirement
16allowance has been paid.
17(Source: P.A. 96-546, eff. 8-17-09.)
 
18    (40 ILCS 5/16-152.1)  (from Ch. 108 1/2, par. 16-152.1)
19    Sec. 16-152.1. Pickup of contributions.
20    (a) Each employer may pick up the member contributions
21required under Section 16-152 for all salary earned after
22December 31, 1981. If an employer decides not to pick up the
23member contributions, the amount that would have been picked up
24shall continue to be deducted from salary. If contributions are
25picked up, they shall be treated as employer contributions in

 

 

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1determining tax treatment under the United States Internal
2Revenue Code. The employer shall pay these member contributions
3from the same source of funds which is used in paying salary to
4the member. The employer may pick up these contributions by a
5reduction in the cash salary of the member or by an offset
6against a future salary increase or by a combination of a
7reduction in salary and offset against a future salary
8increase. If member contributions are picked up, they shall be
9treated for all purposes of this Article 16 in the same manner
10as member contributions made prior to the date the pick up
11began.
12    (b) The State Board of Education shall pick up the
13contributions of regional superintendents required under
14Section 16-152 for all salary earned for the 1982 calendar year
15and thereafter.
16    (c) Effective July 1, 1983, each employer shall pick up the
17member contributions required under Section 16-152 for all
18salary earned after such date. Contributions so picked up shall
19be treated as employer contributions in determining tax
20treatment under the United States Internal Revenue Code. The
21employer shall pay these member contributions from the same
22source of funds which is used in paying salary to the member.
23The employer may pick up these contributions by a reduction in
24the cash salary of the member or by an offset against a future
25salary increase or by a combination of a reduction in salary
26and offset against a future salary increase. Member

 

 

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1contributions so picked up shall be treated for all purposes of
2this Article 16 in the same manner as member contributions made
3prior to the date the pick up began.
4    (d) Subject to the requirements of federal law and the
5rules of the board, beginning July 1, 1998 a member who is
6employed on a full-time basis may elect to have the employer
7pick up optional contributions that the member has elected to
8pay to the System, and the contributions so picked up shall be
9treated as employer contributions for the purposes of
10determining federal tax treatment. The election to have
11optional contributions picked up is irrevocable. At the time of
12making the election, the member shall execute a binding,
13irrevocable payroll deduction authorization. Upon receiving
14notice of the election, the employer shall pick up the
15contributions by a reduction in the cash salary of the member
16and shall pay the contributions from the same source of funds
17that is used to pay earnings to the member.
18    (e) Beginning on the effective date of this amendatory Act
19of the 100th General Assembly, no employer shall pay employee
20contributions on behalf of an employee, except for the sole
21purpose of allowing the employee to make pre-tax contributions
22as provided in this Section. The provisions of this subsection
23(e) do not apply to an employment contract or collective
24bargaining agreement that is in effect on the effective date of
25this amendatory Act of the 100th General Assembly. However, any
26such contract or agreement that is subsequently modified,

 

 

HB4057- 186 -LRB100 12972 RPS 27085 b

1amended, or renewed shall be subject to the provisions of this
2subsection (e).
3(Source: P.A. 90-448, eff. 8-16-97.)
 
4    (40 ILCS 5/16-158)   (from Ch. 108 1/2, par. 16-158)
5    (Text of Section WITHOUT the changes made by P.A. 98-599,
6which has been held unconstitutional)
7    Sec. 16-158. Contributions by State and other employing
8units.
9    (a) The State shall make contributions to the System by
10means of appropriations from the Common School Fund and other
11State funds of amounts which, together with other employer
12contributions, employee contributions, investment income, and
13other income, will be sufficient to meet the cost of
14maintaining and administering the System on a 90% funded basis
15in accordance with actuarial recommendations.
16    The Board shall determine the amount of State contributions
17required for each fiscal year on the basis of the actuarial
18tables and other assumptions adopted by the Board and the
19recommendations of the actuary, using the formula in subsection
20(b-3).
21    (a-1) Annually, on or before November 15 until November 15,
222011, the Board shall certify to the Governor the amount of the
23required State contribution for the coming fiscal year. The
24certification under this subsection (a-1) shall include a copy
25of the actuarial recommendations upon which it is based and

 

 

HB4057- 187 -LRB100 12972 RPS 27085 b

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

 

 

HB4057- 188 -LRB100 12972 RPS 27085 b

1beginning January 1, 2013, the State Actuary shall issue a
2preliminary report concerning the proposed certification and
3identifying, if necessary, recommended changes in actuarial
4assumptions that the Board must consider before finalizing its
5certification of the required State contributions. On or before
6January 15, 2013 and each January 15 thereafter, the Board
7shall certify to the Governor and the General Assembly the
8amount of the required State contribution for the next fiscal
9year. The Board's certification must note any deviations from
10the State Actuary's recommended changes, the reason or reasons
11for not following the State Actuary's recommended changes, and
12the fiscal impact of not following the State Actuary's
13recommended changes on the required State contribution.
14    (b) Through State fiscal year 1995, the State contributions
15shall be paid to the System in accordance with Section 18-7 of
16the School Code.
17    (b-1) Beginning in State fiscal year 1996, on the 15th day
18of each month, or as soon thereafter as may be practicable, the
19Board shall submit vouchers for payment of State contributions
20to the System, in a total monthly amount of one-twelfth of the
21required annual State contribution certified under subsection
22(a-1). From the effective date of this amendatory Act of the
2393rd General Assembly through June 30, 2004, the Board shall
24not submit vouchers for the remainder of fiscal year 2004 in
25excess of the fiscal year 2004 certified contribution amount
26determined under this Section after taking into consideration

 

 

HB4057- 189 -LRB100 12972 RPS 27085 b

1the transfer to the System under subsection (a) of Section
26z-61 of the State Finance Act. These vouchers shall be paid by
3the State Comptroller and Treasurer by warrants drawn on the
4funds appropriated to the System for that fiscal year.
5    If in any month the amount remaining unexpended from all
6other appropriations to the System for the applicable fiscal
7year (including the appropriations to the System under Section
88.12 of the State Finance Act and Section 1 of the State
9Pension Funds Continuing Appropriation Act) is less than the
10amount lawfully vouchered under this subsection, the
11difference shall be paid from the Common School Fund under the
12continuing appropriation authority provided in Section 1.1 of
13the State Pension Funds Continuing Appropriation Act.
14    (b-2) Allocations from the Common School Fund apportioned
15to school districts not coming under this System shall not be
16diminished or affected by the provisions of this Article.
17    (b-3) For State fiscal years 2012 through 2045, the minimum
18contribution to the System to be made by the State for each
19fiscal year shall be an amount determined by the System to be
20sufficient to bring the total assets of the System up to 90% of
21the total actuarial liabilities of the System by the end of
22State fiscal year 2045. In making these determinations, the
23required State contribution shall be calculated each year as a
24level percentage of payroll over the years remaining to and
25including fiscal year 2045 and shall be determined under the
26projected unit credit actuarial cost method.

 

 

HB4057- 190 -LRB100 12972 RPS 27085 b

1    For State fiscal years 1996 through 2005, the State
2contribution to the System, as a percentage of the applicable
3employee payroll, shall be increased in equal annual increments
4so that by State fiscal year 2011, the State is contributing at
5the rate required under this Section; except that in the
6following specified State fiscal years, the State contribution
7to the System shall not be less than the following indicated
8percentages of the applicable employee payroll, even if the
9indicated percentage will produce a State contribution in
10excess of the amount otherwise required under this subsection
11and subsection (a), and notwithstanding any contrary
12certification made under subsection (a-1) before the effective
13date of this amendatory Act of 1998: 10.02% in FY 1999; 10.77%
14in FY 2000; 11.47% in FY 2001; 12.16% in FY 2002; 12.86% in FY
152003; and 13.56% in FY 2004.
16    Notwithstanding any other provision of this Article, the
17total required State contribution for State fiscal year 2006 is
18$534,627,700.
19    Notwithstanding any other provision of this Article, the
20total required State contribution for State fiscal year 2007 is
21$738,014,500.
22    For each of State fiscal years 2008 through 2009, the State
23contribution to the System, as a percentage of the applicable
24employee payroll, shall be increased in equal annual increments
25from the required State contribution for State fiscal year
262007, so that by State fiscal year 2011, the State is

 

 

HB4057- 191 -LRB100 12972 RPS 27085 b

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

 

 

HB4057- 192 -LRB100 12972 RPS 27085 b

1    Beginning in State fiscal year 2046, the minimum State
2contribution for each fiscal year shall be the amount needed to
3maintain the total assets of the System at 90% of the total
4actuarial liabilities of the System.
5    Amounts received by the System pursuant to Section 25 of
6the Budget Stabilization Act or Section 8.12 of the State
7Finance Act in any fiscal year do not reduce and do not
8constitute payment of any portion of the minimum State
9contribution required under this Article in that fiscal year.
10Such amounts shall not reduce, and shall not be included in the
11calculation of, the required State contributions under this
12Article in any future year until the System has reached a
13funding ratio of at least 90%. A reference in this Article to
14the "required State contribution" or any substantially similar
15term does not include or apply to any amounts payable to the
16System under Section 25 of the Budget Stabilization Act.
17    Notwithstanding any other provision of this Section, the
18required State contribution for State fiscal year 2005 and for
19fiscal year 2008 and each fiscal year thereafter, as calculated
20under this Section and certified under subsection (a-1), shall
21not exceed an amount equal to (i) the amount of the required
22State contribution that would have been calculated under this
23Section for that fiscal year if the System had not received any
24payments under subsection (d) of Section 7.2 of the General
25Obligation Bond Act, minus (ii) the portion of the State's
26total debt service payments for that fiscal year on the bonds

 

 

HB4057- 193 -LRB100 12972 RPS 27085 b

1issued in fiscal year 2003 for the purposes of that Section
27.2, as determined and certified by the Comptroller, that is
3the same as the System's portion of the total moneys
4distributed under subsection (d) of Section 7.2 of the General
5Obligation Bond Act. In determining this maximum for State
6fiscal years 2008 through 2010, however, the amount referred to
7in item (i) shall be increased, as a percentage of the
8applicable employee payroll, in equal increments calculated
9from the sum of the required State contribution for State
10fiscal year 2007 plus the applicable portion of the State's
11total debt service payments for fiscal year 2007 on the bonds
12issued in fiscal year 2003 for the purposes of Section 7.2 of
13the General Obligation Bond Act, so that, by State fiscal year
142011, the State is contributing at the rate otherwise required
15under this Section.
16    (c) Payment of the required State contributions and of all
17pensions, retirement annuities, death benefits, refunds, and
18other benefits granted under or assumed by this System, and all
19expenses in connection with the administration and operation
20thereof, are obligations of the State.
21    If members are paid from special trust or federal funds
22which are administered by the employing unit, whether school
23district or other unit, the employing unit shall pay to the
24System from such funds the full accruing retirement costs based
25upon that service, which, beginning July 1, 2014, shall be at a
26rate, expressed as a percentage of salary, equal to the total

 

 

HB4057- 194 -LRB100 12972 RPS 27085 b

1minimum contribution to the System to be made by the State for
2that fiscal year, including both normal cost and unfunded
3liability components, expressed as a percentage of payroll, as
4determined by the System under subsection (b-3) of this
5Section. Employer contributions, based on salary paid to
6members from federal funds, may be forwarded by the
7distributing agency of the State of Illinois to the System
8prior to allocation, in an amount determined in accordance with
9guidelines established by such agency and the System. Any
10contribution for fiscal year 2015 collected as a result of the
11change made by this amendatory Act of the 98th General Assembly
12shall be considered a State contribution under subsection (b-3)
13of this Section.
14    (d) Effective July 1, 1986, any employer of a teacher as
15defined in paragraph (8) of Section 16-106 shall pay the
16employer's normal cost of benefits based upon the teacher's
17service, in addition to employee contributions, as determined
18by the System. Such employer contributions shall be forwarded
19monthly in accordance with guidelines established by the
20System.
21    However, with respect to benefits granted under Section
2216-133.4 or 16-133.5 to a teacher as defined in paragraph (8)
23of Section 16-106, the employer's contribution shall be 12%
24(rather than 20%) of the member's highest annual salary rate
25for each year of creditable service granted, and the employer
26shall also pay the required employee contribution on behalf of

 

 

HB4057- 195 -LRB100 12972 RPS 27085 b

1the teacher. For the purposes of Sections 16-133.4 and
216-133.5, a teacher as defined in paragraph (8) of Section
316-106 who is serving in that capacity while on leave of
4absence from another employer under this Article shall not be
5considered an employee of the employer from which the teacher
6is on leave.
7    (e) Beginning July 1, 1998, every employer of a teacher
8shall pay to the System an employer contribution computed as
9follows:
10        (1) Beginning July 1, 1998 through June 30, 1999, the
11    employer contribution shall be equal to 0.3% of each
12    teacher's salary.
13        (2) Beginning July 1, 1999 and thereafter, the employer
14    contribution shall be equal to 0.58% of each teacher's
15    salary.
16The school district or other employing unit may pay these
17employer contributions out of any source of funding available
18for that purpose and shall forward the contributions to the
19System on the schedule established for the payment of member
20contributions.
21    These employer contributions are intended to offset a
22portion of the cost to the System of the increases in
23retirement benefits resulting from this amendatory Act of 1998.
24    Each employer of teachers is entitled to a credit against
25the contributions required under this subsection (e) with
26respect to salaries paid to teachers for the period January 1,

 

 

HB4057- 196 -LRB100 12972 RPS 27085 b

12002 through June 30, 2003, equal to the amount paid by that
2employer under subsection (a-5) of Section 6.6 of the State
3Employees Group Insurance Act of 1971 with respect to salaries
4paid to teachers for that period.
5    The additional 1% employee contribution required under
6Section 16-152 by this amendatory Act of 1998 is the
7responsibility of the teacher and not the teacher's employer,
8unless the employer agrees, through collective bargaining or
9otherwise, to make the contribution on behalf of the teacher.
10    If an employer is required by a contract in effect on May
111, 1998 between the employer and an employee organization to
12pay, on behalf of all its full-time employees covered by this
13Article, all mandatory employee contributions required under
14this Article, then the employer shall be excused from paying
15the employer contribution required under this subsection (e)
16for the balance of the term of that contract. The employer and
17the employee organization shall jointly certify to the System
18the existence of the contractual requirement, in such form as
19the System may prescribe. This exclusion shall cease upon the
20termination, extension, or renewal of the contract at any time
21after May 1, 1998.
22    (f) If the amount of a teacher's salary for any school year
23beginning on or after June 1, 2005 and before July 1, 2018 used
24to determine final average salary exceeds the member's annual
25full-time salary rate with the same employer for the previous
26school year by more than 6%, the teacher's employer shall pay

 

 

HB4057- 197 -LRB100 12972 RPS 27085 b

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

 

 

HB4057- 198 -LRB100 12972 RPS 27085 b

1in writing for a recalculation. The application must specify in
2detail the grounds of the dispute and, if the employer asserts
3that the calculation is subject to subsection (g) or (h) of
4this Section, must include an affidavit setting forth and
5attesting to all facts within the employer's knowledge that are
6pertinent to the applicability of that subsection. Upon
7receiving a timely application for recalculation, the System
8shall review the application and, if appropriate, recalculate
9the amount due.
10    The employer contributions required under this subsection
11(f) may be paid in the form of a lump sum within 90 days after
12receipt of the bill. If the employer contributions are not paid
13within 90 days after receipt of the bill, then interest will be
14charged at a rate equal to the System's annual actuarially
15assumed rate of return on investment compounded annually from
16the 91st day after receipt of the bill. Payments must be
17concluded within 3 years after the employer's receipt of the
18bill.
19    (f-1) Beginning in fiscal year 2019, if a contract or
20collective bargaining agreement entered into, amended, or
21renewed on or after the effective date of this amendatory Act
22of the 100th General Assembly provides for salaries to exceed
23the salaries provided under the preceding contract or
24collective bargaining agreement, then the employer shall pay to
25the System, in addition to all other payments required under
26this Section and in accordance with guidelines established by

 

 

HB4057- 199 -LRB100 12972 RPS 27085 b

1the System, the current value of the projected amount of the
2increase in benefits, as determined by the System and
3reflecting whether the teachers covered under the contract or
4collective bargaining agreement are Tier 1 members or Tier 2
5members, resulting from the portion of the salaries that exceed
6the amount of the salaries provided under the preceding
7contract or collective bargaining agreement. The System may
8require the employer to provide any pertinent information or
9documentation.
10    Whenever it determines that a payment is or may be required
11under this subsection (f-1), the System shall calculate the
12amount of the payment and bill the employer for that amount.
13The bill shall specify the calculations used to determine the
14amount due. If the employer disputes the amount of the bill, it
15may, within 30 days after receipt of the bill, apply to the
16System in writing for a recalculation. The application must
17specify in detail the grounds of the dispute. Upon receiving a
18timely application for recalculation, the System shall review
19the application and, if appropriate, recalculate the amount
20due.
21    The employer contributions required under this subsection
22(f-1) may be paid in the form of a lump sum within 90 days after
23receipt of the bill. If the employer contributions are not paid
24within 90 days after receipt of the bill, then interest shall
25be charged at a rate equal to the System's annual actuarially
26assumed rate of return on investment compounded annually from

 

 

HB4057- 200 -LRB100 12972 RPS 27085 b

1the 91st day after receipt of the bill. Payments must be
2concluded within 3 years after the employer's receipt of the
3bill.
4    (g) This subsection (g) applies only to payments made or
5salary increases given on or after June 1, 2005 but before July
61, 2011. The changes made by Public Act 94-1057 shall not
7require the System to refund any payments received before July
831, 2006 (the effective date of Public Act 94-1057).
9    When assessing payment for any amount due under subsection
10(f), the System shall exclude salary increases paid to teachers
11under contracts or collective bargaining agreements entered
12into, amended, or renewed before June 1, 2005.
13    When assessing payment for any amount due under subsection
14(f), the System shall exclude salary increases paid to a
15teacher at a time when the teacher is 10 or more years from
16retirement eligibility under Section 16-132 or 16-133.2.
17    When assessing payment for any amount due under subsection
18(f), the System shall exclude salary increases resulting from
19overload work, including summer school, when the school
20district has certified to the System, and the System has
21approved the certification, that (i) the overload work is for
22the sole purpose of classroom instruction in excess of the
23standard number of classes for a full-time teacher in a school
24district during a school year and (ii) the salary increases are
25equal to or less than the rate of pay for classroom instruction
26computed on the teacher's current salary and work schedule.

 

 

HB4057- 201 -LRB100 12972 RPS 27085 b

1    When assessing payment for any amount due under subsection
2(f), the System shall exclude a salary increase resulting from
3a promotion (i) for which the employee is required to hold a
4certificate or supervisory endorsement issued by the State
5Teacher Certification Board that is a different certification
6or supervisory endorsement than is required for the teacher's
7previous position and (ii) to a position that has existed and
8been filled by a member for no less than one complete academic
9year and the salary increase from the promotion is an increase
10that results in an amount no greater than the lesser of the
11average salary paid for other similar positions in the district
12requiring the same certification or the amount stipulated in
13the collective bargaining agreement for a similar position
14requiring the same certification.
15    When assessing payment for any amount due under subsection
16(f), the System shall exclude any payment to the teacher from
17the State of Illinois or the State Board of Education over
18which the employer does not have discretion, notwithstanding
19that the payment is included in the computation of final
20average salary.
21    (h) When assessing payment for any amount due under
22subsection (f), the System shall exclude any salary increase
23described in subsection (g) of this Section given on or after
24July 1, 2011 but before July 1, 2014 under a contract or
25collective bargaining agreement entered into, amended, or
26renewed on or after June 1, 2005 but before July 1, 2011.

 

 

HB4057- 202 -LRB100 12972 RPS 27085 b

1Notwithstanding any other provision of this Section, any
2payments made or salary increases given after June 30, 2014
3shall be used in assessing payment for any amount due under
4subsection (f) of this Section.
5    (i) The System shall prepare a report and file copies of
6the report with the Governor and the General Assembly by
7January 1, 2007 that contains all of the following information:
8        (1) The number of recalculations required by the
9    changes made to this Section by Public Act 94-1057 for each
10    employer.
11        (2) The dollar amount by which each employer's
12    contribution to the System was changed due to
13    recalculations required by Public Act 94-1057.
14        (3) The total amount the System received from each
15    employer as a result of the changes made to this Section by
16    Public Act 94-4.
17        (4) The increase in the required State contribution
18    resulting from the changes made to this Section by Public
19    Act 94-1057.
20    (j) For purposes of determining the required State
21contribution to the System, the value of the System's assets
22shall be equal to the actuarial value of the System's assets,
23which shall be calculated as follows:
24    As of June 30, 2008, the actuarial value of the System's
25assets shall be equal to the market value of the assets as of
26that date. In determining the actuarial value of the System's

 

 

HB4057- 203 -LRB100 12972 RPS 27085 b

1assets for fiscal years after June 30, 2008, any actuarial
2gains or losses from investment return incurred in a fiscal
3year shall be recognized in equal annual amounts over the
45-year period following that fiscal year.
5    (k) For purposes of determining the required State
6contribution to the system for a particular year, the actuarial
7value of assets shall be assumed to earn a rate of return equal
8to the system's actuarially assumed rate of return.
9(Source: P.A. 96-43, eff. 7-15-09; 96-1497, eff. 1-14-11;
1096-1511, eff. 1-27-11; 96-1554, eff. 3-18-11; 97-694, eff.
116-18-12; 97-813, eff. 7-13-12; 98-674, eff. 6-30-14.)
 
12    (40 ILCS 5/16-190.5 new)
13    Sec. 16-190.5. Accelerated pension benefit payment.
14    (a) As used in this Section:
15    "Eligible person" means a person who:
16        (1) has terminated service;
17        (2) has accrued sufficient service credit to be
18    eligible to receive a retirement annuity under this
19    Article;
20        (3) has not received any retirement annuity under this
21    Article; and
22        (4) does not have a QILDRO in effect against him or her
23    under this Article.
24    "Pension benefit" means the benefits under this Article, or
25Article 1 as it relates to those benefits, including any

 

 

HB4057- 204 -LRB100 12972 RPS 27085 b

1anticipated annual increases, that an eligible person is
2entitled to upon attainment of the applicable retirement age.
3"Pension benefit" also includes applicable survivor's or
4disability benefits.
5    (b) Before January 1, 2018, the System shall calculate,
6using actuarial tables and other assumptions adopted by the
7Board, the net present value of pension benefits for each
8eligible person and shall offer each eligible person the
9opportunity to irrevocably elect to receive an amount
10determined by the System to be equal to 70% of the net present
11value of his or her pension benefits in lieu of receiving any
12pension benefit. The offer shall specify the dollar amount that
13the eligible person will receive if he or she so elects and
14shall expire when a subsequent offer is made to an eligible
15person. The System shall make a good faith effort to contact
16every eligible person to notify him or her of the election and
17of the amount of the accelerated pension benefit payment.
18    Beginning January 1, 2018 and until July 1, 2018, an
19eligible person may irrevocably elect to receive an accelerated
20pension benefit payment in the amount that the System offers
21under this subsection in lieu of receiving any pension benefit.
22A person who elects to receive an accelerated pension benefit
23payment under this Section may not elect to proceed under the
24Retirement Systems Reciprocal Act with respect to service under
25this Article.
26    (c) A person's credits and creditable service under this

 

 

HB4057- 205 -LRB100 12972 RPS 27085 b

1Article shall be terminated upon the person's receipt of an
2accelerated pension benefit payment under this Section, and no
3other benefit shall be paid under this Article based on those
4terminated credits and creditable service, including any
5retirement, survivor, or other benefit; except that to the
6extent that participation, benefits, or premiums under the
7State Employees Group Insurance Act of 1971 are based on the
8amount of service credit, the terminated service credit shall
9be used for that purpose.
10    (d) If a person who has received an accelerated pension
11benefit payment under this Section returns to active service
12under this Article, then:
13        (1) Any benefits under the System earned as a result of
14    that return to active service shall be based solely on the
15    person's credits and creditable service arising from the
16    return to active service.
17        (2) The accelerated pension benefit payment may not be
18    repaid to the System, and the terminated credits and
19    creditable service may not under any circumstances be
20    reinstated.
21    (e) As a condition of receiving an accelerated pension
22benefit payment, an eligible person must have another
23retirement plan or account qualified under the Internal Revenue
24Code of 1986, as amended, for the accelerated pension benefit
25payment to be rolled into. The accelerated pension benefit
26payment under this Section may be subject to withholding or

 

 

HB4057- 206 -LRB100 12972 RPS 27085 b

1payment of applicable taxes, but to the extent permitted by
2federal law, a person who receives an accelerated pension
3benefit payment under this Section must direct the System to
4pay all of that payment as a rollover into another retirement
5plan or account qualified under the Internal Revenue Code of
61986, as amended.
7    (f) Before January 1, 2019, the Board shall certify to the
8Illinois Finance Authority and the General Assembly the amount
9by which the total amount of accelerated pension benefit
10payments made under this Section exceed the amount appropriated
11to the System for the purpose of making those payments.
12    (g) The Board shall adopt any rules necessary to implement
13this Section.
14    (h) No provision of this Section shall be interpreted in a
15way that would cause the applicable System to cease to be a
16qualified plan under the Internal Revenue Code of 1986.
 
17    (40 ILCS 5/16-203)
18    (Text of Section WITHOUT the changes made by P.A. 98-599,
19which has been held unconstitutional)
20    Sec. 16-203. Application and expiration of new benefit
21increases.
22    (a) As used in this Section, "new benefit increase" means
23an increase in the amount of any benefit provided under this
24Article, or an expansion of the conditions of eligibility for
25any benefit under this Article, that results from an amendment

 

 

HB4057- 207 -LRB100 12972 RPS 27085 b

1to this Code that takes effect after June 1, 2005 (the
2effective date of Public Act 94-4). "New benefit increase",
3however, does not include any benefit increase resulting from
4the changes made to this Article by Public Act 95-910 or this
5amendatory Act of the 100th General Assembly this amendatory
6Act of the 95th General Assembly.
7    (b) Notwithstanding any other provision of this Code or any
8subsequent amendment to this Code, every new benefit increase
9is subject to this Section and shall be deemed to be granted
10only in conformance with and contingent upon compliance with
11the provisions of this Section.
12    (c) The Public Act enacting a new benefit increase must
13identify and provide for payment to the System of additional
14funding at least sufficient to fund the resulting annual
15increase in cost to the System as it accrues.
16    Every new benefit increase is contingent upon the General
17Assembly providing the additional funding required under this
18subsection. The Commission on Government Forecasting and
19Accountability shall analyze whether adequate additional
20funding has been provided for the new benefit increase and
21shall report its analysis to the Public Pension Division of the
22Department of Financial and Professional Regulation. A new
23benefit increase created by a Public Act that does not include
24the additional funding required under this subsection is null
25and void. If the Public Pension Division determines that the
26additional funding provided for a new benefit increase under

 

 

HB4057- 208 -LRB100 12972 RPS 27085 b

1this subsection is or has become inadequate, it may so certify
2to the Governor and the State Comptroller and, in the absence
3of corrective action by the General Assembly, the new benefit
4increase shall expire at the end of the fiscal year in which
5the certification is made.
6    (d) Every new benefit increase shall expire 5 years after
7its effective date or on such earlier date as may be specified
8in the language enacting the new benefit increase or provided
9under subsection (c). This does not prevent the General
10Assembly from extending or re-creating a new benefit increase
11by law.
12    (e) Except as otherwise provided in the language creating
13the new benefit increase, a new benefit increase that expires
14under this Section continues to apply to persons who applied
15and qualified for the affected benefit while the new benefit
16increase was in effect and to the affected beneficiaries and
17alternate payees of such persons, but does not apply to any
18other person, including without limitation a person who
19continues in service after the expiration date and did not
20apply and qualify for the affected benefit while the new
21benefit increase was in effect.
22(Source: P.A. 94-4, eff. 6-1-05; 95-910, eff. 8-26-08.)
 
23    (40 ILCS 5/16-205.5 new)
24    Sec. 16-205.5. Tier 3 plan.
25    (a) By July 1, 2018, the System shall prepare and implement

 

 

HB4057- 209 -LRB100 12972 RPS 27085 b

1a Tier 3 plan. The Tier 3 plan developed under this Section
2shall be a plan that aggregates State and employee
3contributions in individual participant accounts which, after
4meeting any other requirements, are used for payouts after
5retirement in accordance with this Section and any other
6applicable laws. In developing, preparing, and implementing
7the Tier 3 plan and adopting rules concerning the Tier 3 plan,
8the System shall utilize the framework of the self-managed plan
9offered under Article 15 and shall endeavor to adapt the
10benefits and structure of the self-managed plan. The System
11shall consult with the State Universities Retirement System in
12developing the Tier 3 plan.
13    As used in this Section, "defined benefit plan" means the
14retirement plan available under this Article to Tier 1 or Tier
152 members who have not made the election authorized under this
16Section.
17        (1) All persons who begin to participate in this System
18    on or after July 1, 2018 shall participate in the Tier 3
19    plan rather than the defined benefit plan.
20        (2) A participant in the Tier 3 plan shall pay employee
21    contributions at a rate of 8% of salary.
22        (3) State contributions shall be paid into the accounts
23    of all participants in the Tier 3 plan at a rate of 7.6% of
24    salary, less the amount determined annually by the Board to
25    cover the cost of offering the defined disability benefits
26    available to other participants under this Article if the

 

 

HB4057- 210 -LRB100 12972 RPS 27085 b

1    Tier 3 plan offers such benefits.
2        (4) The Tier 3 plan shall require one year of
3    participation in the Tier 3 plan before vesting in State
4    contributions. If the participant fails to vest in them,
5    the State contributions, and the earnings thereon, shall be
6    forfeited.
7        (5) The Tier 3 plan may provide for participants in the
8    plan to be eligible for the defined disability benefits
9    available to other participants under this Article. If it
10    does, the System shall reduce the employee contributions
11    credited to the member's Tier 3 plan account by an amount
12    determined by the System to cover the cost of offering such
13    benefits.
14        (6) 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        (7) 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        (8) 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.

 

 

HB4057- 211 -LRB100 12972 RPS 27085 b

1        (9) 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) Under the Tier 3 plan, an active Tier 1 or Tier 2
6member of this System may elect, in writing, to cease accruing
7benefits in the defined benefit plan and begin accruing
8benefits for future service in the Tier 3 plan. An active Tier
91 or Tier 2 member who elects to cease accruing benefits in his
10or her defined benefit plan shall be prohibited from purchasing
11service credit on or after the date of his or her election. A
12Tier 1 or Tier 2 member making the irrevocable election
13provided under this subsection shall not receive interest
14accruals to his or her benefit under paragraph (A) of
15subsection (a) of Section 16-133 of this Code on or after the
16date of his or her election. The election to participate in the
17Tier 3 plan is voluntary and irrevocable.
18        (1) Service credit under the Tier 3 plan may be used
19    for determining retirement eligibility under the defined
20    benefit plan.
21        (2) The System shall make a good faith effort to
22    contact all active Tier 1 and Tier 2 members who are
23    eligible to participate in the Tier 3 plan. The System
24    shall mail information describing the option to join the
25    Tier 3 plan to each of these employees to his or her last
26    known address on file with the System. If the employee is

 

 

HB4057- 212 -LRB100 12972 RPS 27085 b

1    not responsive to other means of contact, it is sufficient
2    for the System to publish the details of the option on its
3    website.
4        (3) Upon request for further information describing
5    the option, the System shall provide employees with
6    information from the System before exercising the option to
7    join the plan, including information on the impact to their
8    benefits and service. The individual consultation shall
9    include projections of the member's defined benefits at
10    retirement or earlier termination of service and the value
11    of the member's account at retirement or earlier
12    termination of service. The System shall not provide advice
13    or counseling with respect to whether the employee should
14    exercise the option. The System shall inform Tier 1 and
15    Tier 2 members who are eligible to participate in the Tier
16    3 plan that they may also wish to obtain information and
17    counsel relating to their option from any other available
18    source, including but not limited to labor organizations,
19    private counsel, and financial advisors.
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,

 

 

HB4057- 213 -LRB100 12972 RPS 27085 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 5/18-110.1 new)
23    Sec. 18-110.1. Tier 1 participant. "Tier 1 participant": A
24participant who first became a participant of this System
25before January 1, 2011.

 

 

HB4057- 214 -LRB100 12972 RPS 27085 b

1    In the case of a Tier 1 participant who elects to
2participate in the Tier 3 plan under Section 18-121.5 of this
3Code, that Tier 1 participant shall be deemed a Tier 1
4participant only with respect to service performed or
5established before the effective date of that election.
 
6    (40 ILCS 5/18-110.2 new)
7    Sec. 18-110.2. Tier 2 participant. "Tier 2 participant": A
8participant who first becomes a participant of this System on
9or after January 1, 2011.
10    In the case of a Tier 2 participant who elects to
11participate in the Tier 3 plan under Section 18-121.5 of this
12Code, that Tier 2 participant shall be deemed a Tier 2
13participant only with respect to service performed or
14established before the effective date of that election.
 
15    (40 ILCS 5/18-110.3 new)
16    Sec. 18-110.3. Tier 3 participant. "Tier 3 participant": A
17participant who first becomes a participant of this System on
18or after July 1, 2018 or a Tier 1 or Tier 2 participant who
19elects to participate in the Tier 3 plan under Section 18-121.5
20of this Code, but only with respect to service performed on or
21after the effective date of that election.
 
22    (40 ILCS 5/18-120)  (from Ch. 108 1/2, par. 18-120)
23    Sec. 18-120. Employee participation.

 

 

HB4057- 215 -LRB100 12972 RPS 27085 b

1    (a) Except as provided in subsection (b), an An eligible
2judge who is not a participant shall become a participant
3beginning on the date he or she becomes an eligible judge,
4unless the judge files with the board a written notice of
5election not to participate within 30 days of the date of being
6notified of the option.
7    A person electing not to participate shall thereafter be
8ineligible to become a participant unless the election is
9revoked as provided in Section 18-121.
10    (b) Notwithstanding any other provision of this Article, an
11active participant may terminate his or her participation in
12this System (including active participation in the Tier 3 plan,
13if applicable) by notifying the System in writing. An active
14participant terminating participation in this System under
15this subsection shall be entitled to a refund of his or her
16contributions (other than contributions to the Tier 3 plan
17under Section 18-121.5) minus the benefits received prior to
18the termination of participation.
19(Source: P.A. 83-1440.)
 
20    (40 ILCS 5/18-121.5 new)
21    Sec. 18-121.5. Tier 3 plan.
22    (a) By July 1, 2018, the System shall prepare and implement
23a Tier 3 plan. The Tier 3 plan developed under this Section
24shall be a plan that aggregates State and employee
25contributions in individual participant accounts which, after

 

 

HB4057- 216 -LRB100 12972 RPS 27085 b

1meeting any other requirements, are used for payouts after
2retirement in accordance with this Section and any other
3applicable laws. In developing, preparing, and implementing
4the Tier 3 plan and adopting rules concerning the Tier 3 plan,
5the System shall utilize the framework of the self-managed plan
6offered under Article 15 and shall endeavor to adapt the
7benefits and structure of the self-managed plan. The System
8shall consult with the State Universities Retirement System in
9developing the Tier 3 plan.
10    As used in this Section, "defined benefit plan" means the
11retirement plan available under this Article to Tier 1 or Tier
122 participants who have not made the election authorized under
13this Section.
14        (1) All persons who begin to participate in this System
15    on or after July 1, 2018 shall participate in the Tier 3
16    plan rather than the defined benefit plan.
17        (2) A participant in the Tier 3 plan shall pay employee
18    contributions at a rate of 8% of salary.
19        (3) State contributions shall be paid into the accounts
20    of all participants in the Tier 3 plan at a rate of 7.6% of
21    salary, less the amount determined annually by the Board to
22    cover the cost of offering the defined disability benefits
23    available to other participants under this Article if the
24    Tier 3 plan offers such benefits.
25        (4) The Tier 3 plan shall require one year of
26    participation in the Tier 3 plan before vesting in State

 

 

HB4057- 217 -LRB100 12972 RPS 27085 b

1    contributions. If the participant fails to vest in them,
2    the State contributions, and the earnings thereon, shall be
3    forfeited.
4        (5) The Tier 3 plan may provide for participants in the
5    plan to be eligible for defined disability benefits. If it
6    does, the System shall reduce the employee contributions
7    credited to the participant's Tier 3 plan account by an
8    amount determined by the System to cover the cost of
9    offering such benefits.
10        (6) The Tier 3 plan shall provide a variety of options
11    for investments. These options shall include investments
12    handled by the Illinois State Board of Investment as well
13    as private sector investment options.
14        (7) The Tier 3 plan shall provide a variety of options
15    for payouts to participants in the Tier 3 plan who are no
16    longer active in the System and their survivors.
17        (8) To the extent authorized under federal law and as
18    authorized by the System, the plan shall allow former
19    participants in the plan to transfer or roll over employee
20    and vested State contributions, and the earnings thereon,
21    into other qualified retirement plans.
22        (9) The System shall reduce the employee contributions
23    credited to the participant's Tier 3 plan account by an
24    amount determined by the System to cover the cost of
25    offering these benefits and any applicable administrative
26    fees.

 

 

HB4057- 218 -LRB100 12972 RPS 27085 b

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

 

 

HB4057- 219 -LRB100 12972 RPS 27085 b

1    termination of service. The System shall not provide advice
2    or counseling with respect to whether the employee should
3    exercise the option. The System shall inform Tier 1 and
4    Tier 2 participants who are eligible to participate in the
5    Tier 3 plan that they may also wish to obtain information
6    and counsel relating to their option from any other
7    available source, including but not limited to private
8    counsel and financial advisors.
9    (b-5) A Tier 1 or Tier 2 participant who elects to
10participate in the Tier 3 plan may irrevocably elect to
11terminate all participation in the defined benefit plan. Upon
12that election, the System shall transfer to the participant's
13individual account an amount equal to the amount of
14contribution refund that the participant would be eligible to
15receive if the participant terminated employment on that date
16and elected a refund of contributions, including interest at
17the prescribed rate of interest for the respective years. The
18System shall make the transfer as a tax free transfer in
19accordance with Internal Revenue Service guidelines, for
20purposes of funding the amount credited to the participant's
21individual account.
22    (c) In no event shall the System, its staff, its authorized
23representatives, or the Board be liable for any information
24given to an employee under this Section. The System may
25coordinate with the Illinois Department of Central Management
26Services and other retirement systems administering a Tier 3

 

 

HB4057- 220 -LRB100 12972 RPS 27085 b

1plan in accordance with this amendatory Act of the 100th
2General Assembly to provide information concerning the impact
3of the Tier 3 plan set forth in this Section.
4    (d) Notwithstanding any other provision of this Section, no
5person shall begin participating in the Tier 3 plan until it
6has attained qualified plan status and received all necessary
7approvals from the U.S. Internal Revenue Service.
8    (e) The System shall report on its progress under this
9Section, including the available details of the Tier 3 plan and
10the System's plans for informing eligible Tier 1 and Tier 2
11participants about the plan, to the Governor and the General
12Assembly on or before January 15, 2018.
13    (f) The Illinois State Board of Investment shall be the
14plan sponsor for the Tier 3 plan established under this
15Section.
 
16    (40 ILCS 5/18-124)  (from Ch. 108 1/2, par. 18-124)
17    Sec. 18-124. Retirement annuities - conditions for
18eligibility.
19    (a) This subsection (a) applies to a Tier 1 participant who
20first serves as a judge before the effective date of this
21amendatory Act of the 96th General Assembly.
22    A participant whose employment as a judge is terminated,
23regardless of age or cause is entitled to a retirement annuity
24beginning on the date specified in a written application
25subject to the following:

 

 

HB4057- 221 -LRB100 12972 RPS 27085 b

1        (1) the date the annuity begins is subsequent to the
2    date of final termination of employment, or the date 30
3    days prior to the receipt of the application by the board
4    for annuities based on disability, or one year before the
5    receipt of the application by the board for annuities based
6    on attained age;
7        (2) the participant is at least age 55, or has become
8    permanently disabled and as a consequence is unable to
9    perform the duties of his or her office;
10        (3) the participant has at least 10 years of service
11    credit except that a participant terminating service after
12    June 30 1975, with at least 6 years of service credit,
13    shall be entitled to a retirement annuity at age 62 or
14    over;
15        (4) the participant is not receiving or entitled to
16    receive, at the date of retirement, any salary from an
17    employer for service currently performed.
18    (b) This subsection (b) applies to a Tier 2 participant who
19first serves as a judge on or after the effective date of this
20amendatory Act of the 96th General Assembly.
21    A participant who has at least 8 years of creditable
22service is entitled to a retirement annuity when he or she has
23attained age 67.
24    A member who has attained age 62 and has at least 8 years
25of service credit may elect to receive the lower retirement
26annuity provided in subsection (d) of Section 18-125 of this

 

 

HB4057- 222 -LRB100 12972 RPS 27085 b

1Code.
2(Source: P.A. 96-889, eff. 1-1-11.)
 
3    (40 ILCS 5/18-125)  (from Ch. 108 1/2, par. 18-125)
4    Sec. 18-125. Retirement annuity amount.
5    (a) The annual retirement annuity for a participant who
6terminated service as a judge prior to July 1, 1971 shall be
7based on the law in effect at the time of termination of
8service.
9    (b) Except as provided in subsection (b-5), effective July
101, 1971, the retirement annuity for any participant in service
11on or after such date shall be 3 1/2% of final average salary,
12as defined in this Section, for each of the first 10 years of
13service, and 5% of such final average salary for each year of
14service in on excess of 10.
15    For purposes of this Section, final average salary for a
16Tier 1 participant who first serves as a judge before August
1710, 2009 (the effective date of Public Act 96-207) shall be:
18        (1) the average salary for the last 4 years of credited
19    service as a judge for a participant who terminates service
20    before July 1, 1975.
21        (2) for a participant who terminates service after June
22    30, 1975 and before July 1, 1982, the salary on the last
23    day of employment as a judge.
24        (3) for any participant who terminates service after
25    June 30, 1982 and before January 1, 1990, the average

 

 

HB4057- 223 -LRB100 12972 RPS 27085 b

1    salary for the final year of service as a judge.
2        (4) for a participant who terminates service on or
3    after January 1, 1990 but before July 14, 1995 (the
4    effective date of Public Act 89-136) this amendatory Act of
5    1995, the salary on the last day of employment as a judge.
6        (5) for a participant who terminates service on or
7    after July 14, 1995 (the effective date of Public Act
8    89-136) this amendatory Act of 1995, the salary on the last
9    day of employment as a judge, or the highest salary
10    received by the participant for employment as a judge in a
11    position held by the participant for at least 4 consecutive
12    years, whichever is greater.
13    However, in the case of a participant who elects to
14discontinue contributions as provided in subdivision (a)(2) of
15Section 18-133, the time of such election shall be considered
16the last day of employment in the determination of final
17average salary under this subsection.
18    For a Tier 1 participant who first serves as a judge on or
19after August 10, 2009 (the effective date of Public Act 96-207)
20and before January 1, 2011 (the effective date of Public Act
2196-889), final average salary shall be the average monthly
22salary obtained by dividing the total salary of the participant
23during the period of: (1) the 48 consecutive months of service
24within the last 120 months of service in which the total
25compensation was the highest, or (2) the total period of
26service, if less than 48 months, by the number of months of

 

 

HB4057- 224 -LRB100 12972 RPS 27085 b

1service in that period.
2    The maximum retirement annuity for any participant shall be
385% of final average salary.
4    (b-5) Notwithstanding any other provision of this Article,
5for a Tier 2 participant who first serves as a judge on or
6after January 1, 2011 (the effective date of Public Act
796-889), the annual retirement annuity is 3% of the
8participant's final average salary for each year of service.
9The maximum retirement annuity payable shall be 60% of the
10participant's final average salary.
11    For a Tier 2 participant who first serves as a judge on or
12after January 1, 2011 (the effective date of Public Act
1396-889), final average salary shall be the average monthly
14salary obtained by dividing the total salary of the judge
15during the 96 consecutive months of service within the last 120
16months of service in which the total salary was the highest by
17the number of months of service in that period; however,
18beginning January 1, 2011, the annual salary may not exceed
19$106,800, except that that amount shall annually thereafter be
20increased by the lesser of (i) 3% of that amount, including all
21previous adjustments, or (ii) the annual unadjusted percentage
22increase (but not less than zero) in the consumer price index-u
23for the 12 months ending with the September preceding each
24November 1. "Consumer price index-u" means the index published
25by the Bureau of Labor Statistics of the United States
26Department of Labor that measures the average change in prices

 

 

HB4057- 225 -LRB100 12972 RPS 27085 b

1of goods and services purchased by all urban consumers, United
2States city average, all items, 1982-84 = 100. The new amount
3resulting from each annual adjustment shall be determined by
4the Public Pension Division of the Department of Insurance and
5made available to the Board by November 1st of each year.
6    (c) The retirement annuity for a participant who retires
7prior to age 60 with less than 28 years of service in the
8System shall be reduced 1/2 of 1% for each month that the
9participant's age is under 60 years at the time the annuity
10commences. However, for a participant who retires on or after
11December 10, 1999 (the effective date of Public Act 91-653)
12this amendatory Act of the 91st General Assembly, the
13percentage reduction in retirement annuity imposed under this
14subsection shall be reduced by 5/12 of 1% for every month of
15service in this System in excess of 20 years, and therefore a
16participant with at least 26 years of service in this System
17may retire at age 55 without any reduction in annuity.
18    The reduction in retirement annuity imposed by this
19subsection shall not apply in the case of retirement on account
20of disability.
21    (d) Notwithstanding any other provision of this Article,
22for a Tier 2 participant who first serves as a judge on or
23after January 1, 2011 (the effective date of Public Act 96-889)
24and who is retiring after attaining age 62, the retirement
25annuity shall be reduced by 1/2 of 1% for each month that the
26participant's age is under age 67 at the time the annuity

 

 

HB4057- 226 -LRB100 12972 RPS 27085 b

1commences.
2(Source: P.A. 96-207, eff. 8-10-09; 96-889, eff. 1-1-11;
396-1000, eff. 7-2-10; 96-1490, eff. 1-1-11; revised 9-9-16.)
 
4    (40 ILCS 5/18-125.1)  (from Ch. 108 1/2, par. 18-125.1)
5    Sec. 18-125.1. Automatic increase in retirement annuity. A
6participant who retires from service after June 30, 1969,
7shall, in January of the year next following the year in which
8the first anniversary of retirement occurs, and in January of
9each year thereafter, have the amount of his or her originally
10granted retirement annuity increased as follows: for each year
11up to and including 1971, 1 1/2%; for each year from 1972
12through 1979 inclusive, 2%; and for 1980 and each year
13thereafter, 3%.
14    Notwithstanding any other provision of this Article, a
15retirement annuity for a Tier 2 participant who first serves as
16a judge on or after January 1, 2011 (the effective date of
17Public Act 96-889) shall be increased in January of the year
18next following the year in which the first anniversary of
19retirement occurs, but in no event prior to age 67, and in
20January of each year thereafter, by an amount equal to 3% or
21the annual percentage increase in the consumer price index-u as
22determined by the Public Pension Division of the Department of
23Insurance under subsection (b-5) of Section 18-125, whichever
24is less, of the retirement annuity then being paid.
25    This Section is not applicable to a participant who retires

 

 

HB4057- 227 -LRB100 12972 RPS 27085 b

1before he or she has made contributions at the rate prescribed
2in Section 18-133 for automatic increases for not less than the
3equivalent of one full year, unless such a participant arranges
4to pay the system the amount required to bring the total
5contributions for the automatic increase to the equivalent of
6one year's contribution based upon his or her last year's
7salary.
8    This Section is applicable to all participants (other than
9Tier 3 participants who do not have any service credit as a
10Tier 1 or Tier 2 participant) in service after June 30, 1969
11unless a participant has elected, prior to September 1, 1969,
12in a written direction filed with the board not to be subject
13to the provisions of this Section. Any participant in service
14on or after July 1, 1992 shall have the option of electing
15prior to April 1, 1993, in a written direction filed with the
16board, to be covered by the provisions of the 1969 amendatory
17Act. Such participant shall be required to make the aforesaid
18additional contributions with compound interest at 4% per
19annum.
20    Any participant who has become eligible to receive the
21maximum rate of annuity and who resumes service as a judge
22after receiving a retirement annuity under this Article shall
23have the amount of his or her retirement annuity increased by
243% of the originally granted annuity amount for each year of
25such resumed service, beginning in January of the year next
26following the date of such resumed service, upon subsequent

 

 

HB4057- 228 -LRB100 12972 RPS 27085 b

1termination of such resumed service.
2    Beginning January 1, 1990, all automatic annual increases
3payable under this Section shall be calculated as a percentage
4of the total annuity payable at the time of the increase,
5including previous increases granted under this Article.
6(Source: P.A. 96-889, eff. 1-1-11; 96-1490, eff. 1-1-11.)
 
7    (40 ILCS 5/18-127)  (from Ch. 108 1/2, par. 18-127)
8    Sec. 18-127. Retirement annuity - suspension on
9reemployment.
10    (a) A participant receiving a retirement annuity who is
11regularly employed for compensation by an employer other than a
12county, in any capacity, shall have his or her retirement
13annuity payments suspended during such employment. Upon
14termination of such employment, retirement annuity payments at
15the previous rate shall be resumed.
16    If such a participant resumes service as a judge, he or she
17shall receive credit for any additional service. Upon
18subsequent retirement, his or her retirement annuity shall be
19the amount previously granted, plus the amount earned by the
20additional judicial service under the provisions in effect
21during the period of such additional service. However, if the
22participant was receiving the maximum rate of annuity at the
23time of re-employment, he or she may elect, in a written
24direction filed with the board, not to receive any additional
25service credit during the period of re-employment. In such

 

 

HB4057- 229 -LRB100 12972 RPS 27085 b

1case, contributions shall not be required during the period of
2re-employment. Any such election shall be irrevocable.
3    (b) Beginning January 1, 1991, any participant receiving a
4retirement annuity who accepts temporary employment from an
5employer other than a county for a period not exceeding 75
6working days in any calendar year shall not be deemed to be
7regularly employed for compensation or to have resumed service
8as a judge for the purposes of this Article. A day shall be
9considered a working day if the annuitant performs on it any of
10his duties under the temporary employment agreement.
11    (c) Except as provided in subsection (a), beginning January
121, 1993, retirement annuities shall not be subject to
13suspension upon resumption of employment for an employer, and
14any retirement annuity that is then so suspended shall be
15reinstated on that date.
16    (d) The changes made in this Section by this amendatory Act
17of 1993 shall apply to judges no longer in service on its
18effective date, as well as to judges serving on or after that
19date.
20    (e) A participant receiving a retirement annuity under this
21Article who serves as a part-time employee in any of the
22following positions: Legislative Inspector General, Special
23Legislative Inspector General, employee of the Office of the
24Legislative Inspector General, Executive Director of the
25Legislative Ethics Commission, or staff of the Legislative
26Ethics Commission, but has not elected to participate in the

 

 

HB4057- 230 -LRB100 12972 RPS 27085 b

1Article 14 System with respect to that service, shall not be
2deemed to be regularly employed for compensation by an employer
3other than a county, nor to have resumed service as a judge, on
4the basis of that service, and the retirement annuity payments
5and other benefits of that person under this Code shall not be
6suspended, diminished, or otherwise impaired solely as a
7consequence of that service. This subsection (e) applies
8without regard to whether the person is in service as a judge
9under this Article on or after the effective date of this
10amendatory Act of the 93rd General Assembly. In this
11subsection, a "part-time employee" is a person who is not
12required to work at least 35 hours per week.
13    (f) A participant receiving a retirement annuity under this
14Article who has made an election under Section 1-123 and who is
15serving either as legal counsel in the Office of the Governor
16or as Chief Deputy Attorney General shall not be deemed to be
17regularly employed for compensation by an employer other than a
18county, nor to have resumed service as a judge, on the basis of
19that service, and the retirement annuity payments and other
20benefits of that person under this Code shall not be suspended,
21diminished, or otherwise impaired solely as a consequence of
22that service. This subsection (f) applies without regard to
23whether the person is in service as a judge under this Article
24on or after the effective date of this amendatory Act of the
2593rd General Assembly.
26    (g) Notwithstanding any other provision of this Article, if

 

 

HB4057- 231 -LRB100 12972 RPS 27085 b

1a Tier 2 participant person who first becomes a participant
2under this System on or after January 1, 2011 (the effective
3date of this amendatory Act of the 96th General Assembly) is
4receiving a retirement annuity under this Article and becomes a
5member or participant under this Article or any other Article
6of this Code and is employed on a full-time basis, then the
7person's retirement annuity under this System shall be
8suspended during that employment. Upon termination of that
9employment, the person's retirement annuity shall resume and,
10if appropriate, be recalculated under the applicable
11provisions of this Article.
12(Source: P.A. 96-889, eff. 1-1-11; 96-1490, eff. 1-1-11.)
 
13    (40 ILCS 5/18-128.01)  (from Ch. 108 1/2, par. 18-128.01)
14    Sec. 18-128.01. Amount of survivor's annuity.
15    (a) Upon the death of an annuitant, his or her surviving
16spouse shall be entitled to a survivor's annuity of 66 2/3% of
17the annuity the annuitant was receiving immediately prior to
18his or her death, inclusive of annual increases in the
19retirement annuity to the date of death.
20    (b) Upon the death of an active participant, his or her
21surviving spouse shall receive a survivor's annuity of 66 2/3%
22of the annuity earned by the participant as of the date of his
23or her death, determined without regard to whether the
24participant had attained age 60 as of that time, or 7 1/2% of
25the last salary of the decedent, whichever is greater.

 

 

HB4057- 232 -LRB100 12972 RPS 27085 b

1    (c) Upon the death of a participant who had terminated
2service with at least 10 years of service, his or her surviving
3spouse shall be entitled to a survivor's annuity of 66 2/3% of
4the annuity earned by the deceased participant at the date of
5death.
6    (d) Upon the death of an annuitant, active participant, or
7participant who had terminated service with at least 10 years
8of service, each surviving child under the age of 18 or
9disabled as defined in Section 18-128 shall be entitled to a
10child's annuity in an amount equal to 5% of the decedent's
11final salary, not to exceed in total for all such children the
12greater of 20% of the decedent's last salary or 66 2/3% of the
13annuity received or earned by the decedent as provided under
14subsections (a) and (b) of this Section. This child's annuity
15shall be paid whether or not a survivor's annuity was elected
16under Section 18-123.
17    (e) The changes made in the survivor's annuity provisions
18by Public Act 82-306 shall apply to the survivors of a deceased
19participant or annuitant whose death occurs on or after August
2021, 1981.
21    (f) Beginning January 1, 1990, every survivor's annuity
22shall be increased (1) on each January 1 occurring on or after
23the commencement of the annuity if the deceased member died
24while receiving a retirement annuity, or (2) in other cases, on
25each January 1 occurring on or after the first anniversary of
26the commencement of the annuity, by an amount equal to 3% of

 

 

HB4057- 233 -LRB100 12972 RPS 27085 b

1the current amount of the annuity, including any previous
2increases under this Article. Such increases shall apply
3without regard to whether the deceased member was in service on
4or after the effective date of this amendatory Act of 1991, but
5shall not accrue for any period prior to January 1, 1990.
6    (g) Notwithstanding any other provision of this Article,
7the initial survivor's annuity for a survivor of a Tier 2
8participant who first serves as a judge after January 1, 2011
9(the effective date of Public Act 96-889) shall be in the
10amount of 66 2/3% of the annuity received or earned by the
11decedent, and shall be increased (1) on each January 1
12occurring on or after the commencement of the annuity if the
13deceased participant died while receiving a retirement
14annuity, or (2) in other cases, on each January 1 occurring on
15or after the first anniversary of the commencement of the
16annuity, but in no event prior to age 67, by an amount equal to
173% or the annual unadjusted percentage increase in the consumer
18price index-u as determined by the Public Pension Division of
19the Department of Insurance under subsection (b-5) of Section
2018-125, whichever is less, of the survivor's annuity then being
21paid.
22(Source: P.A. 96-889, eff. 1-1-11; 96-1490, eff. 1-1-11.)
 
23    (40 ILCS 5/18-133)  (from Ch. 108 1/2, par. 18-133)
24    Sec. 18-133. Financing; employee contributions.
25    (a) Effective July 1, 1967, each participant is required to

 

 

HB4057- 234 -LRB100 12972 RPS 27085 b

1contribute 7 1/2% of each payment of salary toward the
2retirement annuity. Such contributions shall continue during
3the entire time the participant is in service, with the
4following exceptions:
5        (1) Contributions for the retirement annuity are not
6    required on salary received after 18 years of service by
7    persons who were participants before January 2, 1954.
8        (2) A participant who continues to serve as a judge
9    after becoming eligible to receive the maximum rate of
10    annuity may elect, through a written direction filed with
11    the Board, to discontinue contributing to the System. Any
12    such option elected by a judge shall be irrevocable unless
13    prior to January 1, 2000, and while continuing to serve as
14    judge, the judge (A) files with the Board a letter
15    cancelling the direction to discontinue contributing to
16    the System and requesting that such contributing resume,
17    and (B) pays into the System an amount equal to the total
18    of the discontinued contributions plus interest thereon at
19    5% per annum. Service credits earned in any other
20    "participating system" as defined in Article 20 of this
21    Code shall be considered for purposes of determining a
22    judge's eligibility to discontinue contributions under
23    this subdivision (a)(2).
24        (3) A participant who (i) has attained age 60, (ii)
25    continues to serve as a judge after becoming eligible to
26    receive the maximum rate of annuity, and (iii) has not

 

 

HB4057- 235 -LRB100 12972 RPS 27085 b

1    elected to discontinue contributing to the System under
2    subdivision (a)(2) of this Section (or has revoked any such
3    election) may elect, through a written direction filed with
4    the Board, to make contributions to the System based only
5    on the amount of the increases in salary received by the
6    judge on or after the date of the election, rather than the
7    total salary received. If a judge who is making
8    contributions to the System on the effective date of this
9    amendatory Act of the 91st General Assembly makes an
10    election to limit contributions under this subdivision
11    (a)(3) within 90 days after that effective date, the
12    election shall be deemed to become effective on that
13    effective date and the judge shall be entitled to receive a
14    refund of any excess contributions paid to the System
15    during that 90-day period; any other election under this
16    subdivision (a)(3) becomes effective on the first of the
17    month following the date of the election. An election to
18    limit contributions under this subdivision (a)(3) is
19    irrevocable. Service credits earned in any other
20    participating system as defined in Article 20 of this Code
21    shall be considered for purposes of determining a judge's
22    eligibility to make an election under this subdivision
23    (a)(3).
24    (b) Beginning July 1, 1969, each participant is required to
25contribute 1% of each payment of salary towards the automatic
26increase in annuity provided in Section 18-125.1. However, such

 

 

HB4057- 236 -LRB100 12972 RPS 27085 b

1contributions need not be made by any participant who has
2elected prior to September 15, 1969, not to be subject to the
3automatic increase in annuity provisions.
4    (c) Effective July 13, 1953, each married participant
5subject to the survivor's annuity provisions is required to
6contribute 2 1/2% of each payment of salary, whether or not he
7or she is required to make any other contributions under this
8Section. Such contributions shall be made concurrently with the
9contributions made for annuity purposes.
10    (d) Notwithstanding any other provision of this Article,
11the required contributions for a Tier 2 participant who first
12becomes a participant on or after January 1, 2011 shall not
13exceed the contributions that would be due under this Article
14if that participant's highest salary for annuity purposes were
15$106,800, plus any increase in that amount under Section
1618-125.
17(Source: P.A. 96-1490, eff. 1-1-11.)
 
18    (40 ILCS 5/18-161.5 new)
19    Sec. 18-161.5. Accelerated pension benefit payment.
20    (a) As used in this Section:
21    "Eligible person" means a person who:
22        (1) has terminated service;
23        (2) has accrued sufficient service credit to be
24    eligible to receive a retirement annuity under this
25    Article;

 

 

HB4057- 237 -LRB100 12972 RPS 27085 b

1        (3) has not received any retirement annuity under this
2    Article; and
3        (4) does not have a QILDRO in effect against him or her
4    under this Article.
5    "Pension benefit" means the benefits under this Article, or
6Article 1 as it relates to those benefits, including any
7anticipated annual increases, that an eligible person is
8entitled to upon attainment of the applicable retirement age.
9"Pension benefit" also includes applicable survivor's or
10disability benefits.
11    (b) Before January 1, 2018, the System shall calculate,
12using actuarial tables and other assumptions adopted by the
13Board, the net present value of pension benefits for each
14eligible person and shall offer each eligible person the
15opportunity to irrevocably elect to receive an amount
16determined by the System to be equal to 70% of the net present
17value of his or her pension benefits in lieu of receiving any
18pension benefit. The offer shall specify the dollar amount that
19the eligible person will receive if he or she so elects and
20shall expire when a subsequent offer is made to an eligible
21person. The System shall make a good faith effort to contact
22every eligible person to notify him or her of the election and
23of the amount of the accelerated pension benefit payment.
24    Beginning January 1, 2018 and until July 1, 2018, an
25eligible person may irrevocably elect to receive an accelerated
26pension benefit payment in the amount that the System offers

 

 

HB4057- 238 -LRB100 12972 RPS 27085 b

1under this subsection in lieu of receiving any pension benefit.
2A person who elects to receive an accelerated pension benefit
3payment under this Section may not elect to proceed under the
4Retirement Systems Reciprocal Act with respect to service under
5this Article.
6    (c) A person's credits and creditable service under this
7Article shall be terminated upon the person's receipt of an
8accelerated pension benefit payment under this Section, and no
9other benefit shall be paid under this Article based on those
10terminated credits and creditable service, including any
11retirement, survivor, or other benefit; except that to the
12extent that participation, benefits, or premiums under the
13State Employees Group Insurance Act of 1971 are based on the
14amount of service credit, the terminated service credit shall
15be used for that purpose.
16    (d) If a person who has received an accelerated pension
17benefit payment under this Section returns to active service
18under this Article, then:
19        (1) Any benefits under the System earned as a result of
20    that return to active service shall be based solely on the
21    person's credits and creditable service arising from the
22    return to active service.
23        (2) The accelerated pension benefit payment may not be
24    repaid to the System, and the terminated credits and
25    creditable service may not under any circumstances be
26    reinstated.

 

 

HB4057- 239 -LRB100 12972 RPS 27085 b

1    (e) As a condition of receiving an accelerated pension
2benefit payment, an eligible person must have another
3retirement plan or account qualified under the Internal Revenue
4Code of 1986, as amended, for the accelerated pension benefit
5payment to be rolled into. The accelerated pension benefit
6payment under this Section may be subject to withholding or
7payment of applicable taxes, but to the extent permitted by
8federal law, a person who receives an accelerated pension
9benefit payment under this Section must direct the System to
10pay all of that payment as a rollover into another retirement
11plan or account qualified under the Internal Revenue Code of
121986, as amended.
13    (f) Before January 1, 2019, the Board shall certify to the
14Illinois Finance Authority and the General Assembly the amount
15by which the total amount of accelerated pension benefit
16payments made under this Section exceed the amount appropriated
17to the System for the purpose of making those payments.
18    (g) The Board shall adopt any rules necessary to implement
19this Section.
20    (h) No provision of this Section shall be interpreted in a
21way that would cause the applicable System to cease to be a
22qualified plan under the Internal Revenue Code of 1986.
 
23    (40 ILCS 5/18-169)
24    Sec. 18-169. Application and expiration of new benefit
25increases.

 

 

HB4057- 240 -LRB100 12972 RPS 27085 b

1    (a) As used in this Section, "new benefit increase" means
2an increase in the amount of any benefit provided under this
3Article, or an expansion of the conditions of eligibility for
4any benefit under this Article, that results from an amendment
5to this Code that takes effect after the effective date of this
6amendatory Act of the 94th General Assembly. "New benefit
7increase", however, does not include any benefit increase
8resulting from the changes made by this amendatory Act of the
9100th General Assembly.
10    (b) Notwithstanding any other provision of this Code or any
11subsequent amendment to this Code, every new benefit increase
12is subject to this Section and shall be deemed to be granted
13only in conformance with and contingent upon compliance with
14the provisions of this Section.
15    (c) The Public Act enacting a new benefit increase must
16identify and provide for payment to the System of additional
17funding at least sufficient to fund the resulting annual
18increase in cost to the System as it accrues.
19    Every new benefit increase is contingent upon the General
20Assembly providing the additional funding required under this
21subsection. The Commission on Government Forecasting and
22Accountability shall analyze whether adequate additional
23funding has been provided for the new benefit increase and
24shall report its analysis to the Public Pension Division of the
25Department of Financial and Professional Regulation. A new
26benefit increase created by a Public Act that does not include

 

 

HB4057- 241 -LRB100 12972 RPS 27085 b

1the additional funding required under this subsection is null
2and void. If the Public Pension Division determines that the
3additional funding provided for a new benefit increase under
4this subsection is or has become inadequate, it may so certify
5to the Governor and the State Comptroller and, in the absence
6of corrective action by the General Assembly, the new benefit
7increase shall expire at the end of the fiscal year in which
8the certification is made.
9    (d) Every new benefit increase shall expire 5 years after
10its effective date or on such earlier date as may be specified
11in the language enacting the new benefit increase or provided
12under subsection (c). This does not prevent the General
13Assembly from extending or re-creating a new benefit increase
14by law.
15    (e) Except as otherwise provided in the language creating
16the new benefit increase, a new benefit increase that expires
17under this Section continues to apply to persons who applied
18and qualified for the affected benefit while the new benefit
19increase was in effect and to the affected beneficiaries and
20alternate payees of such persons, but does not apply to any
21other person, including without limitation a person who
22continues in service after the expiration date and did not
23apply and qualify for the affected benefit while the new
24benefit increase was in effect.
25(Source: P.A. 94-4, eff. 6-1-05.)
 

 

 

HB4057- 242 -LRB100 12972 RPS 27085 b

1    (40 ILCS 5/20-121)  (from Ch. 108 1/2, par. 20-121)
2    (Text of Section WITHOUT the changes made by P.A. 98-599,
3which has been held unconstitutional)
4    Sec. 20-121. Calculation of proportional retirement
5annuities.
6    (a) Upon retirement of the employee, a proportional
7retirement annuity shall be computed by each participating
8system in which pension credit has been established on the
9basis of pension credits under each system. The computation
10shall be in accordance with the formula or method prescribed by
11each participating system which is in effect at the date of the
12employee's latest withdrawal from service covered by any of the
13systems in which he has pension credits which he elects to have
14considered under this Article. However, the amount of any
15retirement annuity payable under the self-managed plan
16established under Section 15-158.2 of this Code depends solely
17on the value of the participant's vested account balances and
18is not subject to any proportional adjustment under this
19Section.
20    (a-5) For persons who participate in a Tier 3 plan
21established under Article 2, 14, 15, 16, or 18 of this Code to
22whom the provisions of this Article apply, the pension credits
23established under the Tier 3 plan may be considered in
24determining eligibility for or the amount of the defined
25benefit retirement annuity that is payable by any other
26participating system.

 

 

HB4057- 243 -LRB100 12972 RPS 27085 b

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

 

 

HB4057- 244 -LRB100 12972 RPS 27085 b

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

 

 

HB4057- 245 -LRB100 12972 RPS 27085 b

1depends solely on the options chosen and the value of the
2participant's vested account balances and is not subject to any
3proportional adjustment under this Section.
4(Source: P.A. 91-887, eff. 7-6-00.)
 
5    (40 ILCS 5/20-124)  (from Ch. 108 1/2, par. 20-124)
6    (Text of Section WITHOUT the changes made by P.A. 98-599,
7which has been held unconstitutional)
8    Sec. 20-124. Maximum benefits.
9    (a) In no event shall the combined retirement or survivors
10annuities exceed the highest annuity which would have been
11payable by any participating system in which the employee has
12pension credits, if all of his pension credits had been
13validated in that system.
14    If the combined annuities should exceed the highest maximum
15as determined in accordance with this Section, the respective
16annuities shall be reduced proportionately according to the
17ratio which the amount of each proportional annuity bears to
18the aggregate of all such annuities.
19    (b) In the case of a participant in the self-managed plan
20established under Section 15-158.2 of this Code to whom the
21provisions of this Article apply:
22        (i) For purposes of calculating the combined
23    retirement annuity and the proportionate reduction, if
24    any, in a retirement annuity other than one payable under
25    the self-managed plan, the amount of the Article 15

 

 

HB4057- 246 -LRB100 12972 RPS 27085 b

1    retirement annuity shall be deemed to be the highest
2    annuity to which the annuitant would have been entitled if
3    he or she had participated in the traditional benefit
4    package as defined in Section 15-103.1 rather than the
5    self-managed plan.
6        (ii) For purposes of calculating the combined
7    survivor's annuity and the proportionate reduction, if
8    any, in a survivor's annuity other than one payable under
9    the self-managed plan, the amount of the Article 15
10    survivor's annuity shall be deemed to be the highest
11    survivor's annuity to which the survivor would have been
12    entitled if the deceased employee had participated in the
13    traditional benefit package as defined in Section 15-103.1
14    rather than the self-managed plan.
15        (iii) Benefits payable under the self-managed plan are
16    not subject to proportionate reduction under this Section.
17    (c) In the case of a participant in a Tier 3 plan
18established under Article 2, 14, 15, 16, or 18 of this Code to
19whom the provisions of this Article apply:
20        (i) For purposes of calculating the combined
21    retirement annuity and the proportionate reduction, if
22    any, in a defined benefit retirement annuity, any benefit
23    payable under the Tier 3 plan shall not be considered.
24        (ii) For purposes of calculating the combined
25    survivor's annuity and the proportionate reduction, if
26    any, in a defined benefit survivor's annuity, any benefit

 

 

HB4057- 247 -LRB100 12972 RPS 27085 b

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

 

 

HB4057- 248 -LRB100 12972 RPS 27085 b

1provisions in the other Articles governing such systems.
2(Source: P.A. 91-887, eff. 7-6-00.)
 
3    (40 ILCS 5/2-165 rep.)
4    (40 ILCS 5/2-166 rep.)
5    (40 ILCS 5/14-155 rep.)
6    (40 ILCS 5/14-156 rep.)
7    (40 ILCS 5/15-200 rep.)
8    (40 ILCS 5/15-201 rep.)
9    (40 ILCS 5/16-106.4 rep.)
10    (40 ILCS 5/16-205 rep.)
11    (40 ILCS 5/16-206 rep.)
12    Section 25. The Illinois Pension Code is amended by
13repealing Sections 2-165, 2-166, 14-155, 14-156, 15-200,
1415-201, 16-106.4, 16-205, and 16-206.
 
15    Section 30. The State Pension Funds Continuing
16Appropriation Act is amended by adding Section 1.9 as follows:
 
17    (40 ILCS 15/1.9 new)
18    Sec. 1.9. Appropriations for State Pension Obligation
19Acceleration Bonds. If for any reason the aggregate
20appropriations made available are insufficient to meet the
21levels required for the payment of principal and interest due
22on State Pension Obligation Acceleration Bonds under Section
237.6 of the General Obligation Bond Act, this Section shall

 

 

HB4057- 249 -LRB100 12972 RPS 27085 b

1constitute a continuing appropriation of all amounts necessary
2for those purposes.
 
3    Section 35. The Illinois Educational Labor Relations Act is
4amended by changing Sections 4 and 17 and by adding Section
510.6 as follows:
 
6    (115 ILCS 5/4)  (from Ch. 48, par. 1704)
7    (Text of Section WITHOUT the changes made by P.A. 98-599,
8which has been held unconstitutional)
9    Sec. 4. Employer rights. Employers shall not be required to
10bargain over matters of inherent managerial policy, which shall
11include such areas of discretion or policy as the functions of
12the employer, standards of services, its overall budget, the
13organizational structure and selection of new employees and
14direction of employees. Employers, however, shall be required
15to bargain collectively with regard to policy matters directly
16affecting wages, hours and terms and conditions of employment
17as well as the impact thereon upon request by employee
18representatives, except as provided in Section 10.6. To
19preserve the rights of employers and exclusive representatives
20which have established collective bargaining relationships or
21negotiated collective bargaining agreements prior to the
22effective date of this Act, employers shall be required to
23bargain collectively with regard to any matter concerning
24wages, hours or conditions of employment about which they have

 

 

HB4057- 250 -LRB100 12972 RPS 27085 b

1bargained for and agreed to in a collective bargaining
2agreement prior to the effective date of this Act, except as
3provided in Section 10.6.
4(Source: P.A. 83-1014.)
 
5    (115 ILCS 5/10.6 new)
6    Sec. 10.6. Bargaining regarding pension contributions on
7behalf of employees; prohibited.
8    (a) Notwithstanding any other provision of this Act,
9beginning on the effective date of this amendatory Act of the
10100th General Assembly, employers shall not bargain over
11matters prohibited by subsection (e) of Section 16-152.1 of the
12Illinois Pension Code, which concerns employers paying pension
13contributions on behalf of employees.
14    (b) In case of any conflict between this Section and any
15other provisions of this Act or any other law, the provisions
16of this Section shall control.
 
17    (115 ILCS 5/17)  (from Ch. 48, par. 1717)
18    (Text of Section WITHOUT the changes made by P.A. 98-599,
19which has been held unconstitutional)
20    Sec. 17. Effect on other laws. Except as provided in
21Section 10.6, in In case of any conflict between the provisions
22of this Act and any other law, executive order or
23administrative regulation, the provisions of this Act shall
24prevail and control. Nothing in this Act shall be construed to

 

 

HB4057- 251 -LRB100 12972 RPS 27085 b

1replace or diminish the rights of employees established by
2Section 36d of "An Act to create the State Universities Civil
3Service System", approved May 11, 1905, as amended or modified.
4(Source: P.A. 83-1014.)
 
5    Section 90. The State Mandates Act is amended by adding
6Section 8.41 as follows:
 
7    (30 ILCS 805/8.41 new)
8    Sec. 8.41. Exempt mandate. Notwithstanding Sections 6 and 8
9of this Act, no reimbursement by the State is required for the
10implementation of any mandate created by this amendatory Act of
11the 100th General Assembly.
 
12    Section 99. Effective date. This Act takes effect upon
13becoming law.

 

 

HB4057- 252 -LRB100 12972 RPS 27085 b

1 INDEX
2 Statutes amended in order of appearance
3    5 ILCS 375/3from Ch. 127, par. 523
4    5 ILCS 375/10from Ch. 127, par. 530
5    20 ILCS 3501/801-40
6    30 ILCS 105/5.878 new
7    30 ILCS 330/2from Ch. 127, par. 652
8    30 ILCS 330/2.5
9    30 ILCS 330/7.6 new
10    30 ILCS 330/9from Ch. 127, par. 659
11    30 ILCS 330/11from Ch. 127, par. 661
12    30 ILCS 330/12from Ch. 127, par. 662
13    30 ILCS 330/13from Ch. 127, par. 663
14    40 ILCS 5/1-160
15    40 ILCS 5/2-101from Ch. 108 1/2, par. 2-101
16    40 ILCS 5/2-105from Ch. 108 1/2, par. 2-105
17    40 ILCS 5/2-105.3 new
18    40 ILCS 5/2-107from Ch. 108 1/2, par. 2-107
19    40 ILCS 5/2-117from Ch. 108 1/2, par. 2-117
20    40 ILCS 5/2-154.5 new
21    40 ILCS 5/2-162
22    40 ILCS 5/2-165.5 new
23    40 ILCS 5/7-114from Ch. 108 1/2, par. 7-114
24    40 ILCS 5/7-116from Ch. 108 1/2, par. 7-116
25    40 ILCS 5/7-139from Ch. 108 1/2, par. 7-139

 

 

HB4057- 253 -LRB100 12972 RPS 27085 b

1    40 ILCS 5/14-103.05from Ch. 108 1/2, par. 14-103.05
2    40 ILCS 5/14-103.10from Ch. 108 1/2, par. 14-103.10
3    40 ILCS 5/14-103.41 new
4    40 ILCS 5/14-103.42 new
5    40 ILCS 5/14-103.43 new
6    40 ILCS 5/14-104.3from Ch. 108 1/2, par. 14-104.3
7    40 ILCS 5/14-106from Ch. 108 1/2, par. 14-106
8    40 ILCS 5/14-147.5 new
9    40 ILCS 5/14-152.1
10    40 ILCS 5/14-155.5 new
11    40 ILCS 5/15-108.1
12    40 ILCS 5/15-108.2
13    40 ILCS 5/15-108.3 new
14    40 ILCS 5/15-112from Ch. 108 1/2, par. 15-112
15    40 ILCS 5/15-113.4from Ch. 108 1/2, par. 15-113.4
16    40 ILCS 5/15-134from Ch. 108 1/2, par. 15-134
17    40 ILCS 5/15-155from Ch. 108 1/2, par. 15-155
18    40 ILCS 5/15-185.5 new
19    40 ILCS 5/15-198
20    40 ILCS 5/15-200.5 new
21    40 ILCS 5/16-106.40 new
22    40 ILCS 5/16-106.41 new
23    40 ILCS 5/16-106.42 new
24    40 ILCS 5/16-123from Ch. 108 1/2, par. 16-123
25    40 ILCS 5/16-127from Ch. 108 1/2, par. 16-127
26    40 ILCS 5/16-152.1from Ch. 108 1/2, par. 16-152.1

 

 

HB4057- 254 -LRB100 12972 RPS 27085 b

1    40 ILCS 5/16-158from Ch. 108 1/2, par. 16-158
2    40 ILCS 5/16-190.5 new
3    40 ILCS 5/16-203
4    40 ILCS 5/16-205.5 new
5    40 ILCS 5/18-110.1 new
6    40 ILCS 5/18-110.2 new
7    40 ILCS 5/18-110.3 new
8    40 ILCS 5/18-120from Ch. 108 1/2, par. 18-120
9    40 ILCS 5/18-121.5 new
10    40 ILCS 5/18-124from Ch. 108 1/2, par. 18-124
11    40 ILCS 5/18-125from Ch. 108 1/2, par. 18-125
12    40 ILCS 5/18-125.1from Ch. 108 1/2, par. 18-125.1
13    40 ILCS 5/18-127from Ch. 108 1/2, par. 18-127
14    40 ILCS 5/18-128.01from Ch. 108 1/2, par. 18-128.01
15    40 ILCS 5/18-133from Ch. 108 1/2, par. 18-133
16    40 ILCS 5/18-161.5 new
17    40 ILCS 5/18-169
18    40 ILCS 5/20-121from Ch. 108 1/2, par. 20-121
19    40 ILCS 5/20-123from Ch. 108 1/2, par. 20-123
20    40 ILCS 5/20-124from Ch. 108 1/2, par. 20-124
21    40 ILCS 5/20-125from Ch. 108 1/2, par. 20-125
22    40 ILCS 5/2-165 rep.
23    40 ILCS 5/2-166 rep.
24    40 ILCS 5/14-155 rep.
25    40 ILCS 5/14-156 rep.
26    40 ILCS 5/15-200 rep.

 

 

HB4057- 255 -LRB100 12972 RPS 27085 b

1    40 ILCS 5/15-201 rep.
2    40 ILCS 5/16-106.4 rep.
3    40 ILCS 5/16-205 rep.
4    40 ILCS 5/16-206 rep.
5    40 ILCS 15/1.9 new
6    115 ILCS 5/4from Ch. 48, par. 1704
7    115 ILCS 5/10.6 new
8    115 ILCS 5/17from Ch. 48, par. 1717
9    30 ILCS 805/8.41 new