SB1345 EnrolledLRB100 10076 EFG 20248 b

1    AN ACT concerning public employee benefits.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Pension Code is amended by changing
5Sections 1-160 and 15-108.2 as follows:
 
6    (40 ILCS 5/1-160)
7    Sec. 1-160. Provisions applicable to new hires.
8    (a) The provisions of this Section apply to a person who,
9on or after January 1, 2011, first becomes a member or a
10participant under any reciprocal retirement system or pension
11fund established under this Code, other than a retirement
12system or pension fund established under Article 2, 3, 4, 5, 6,
1315 or 18 of this Code, notwithstanding any other provision of
14this Code to the contrary, but do not apply to any self-managed
15plan established under this Code, to any person with respect to
16service as a sheriff's law enforcement employee under Article
177, or to any participant of the retirement plan established
18under Section 22-101. Notwithstanding anything to the contrary
19in this Section, for purposes of this Section, a person who
20participated in a retirement system under Article 15 prior to
21January 1, 2011 shall be deemed a person who first became a
22member or participant prior to January 1, 2011 under any
23retirement system or pension fund subject to this Section. The

 

 

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1changes made to this Section by Public Act 98-596 are a
2clarification of existing law and are intended to be
3retroactive to January 1, 2011 (the effective date of Public
4Act 96-889), notwithstanding the provisions of Section 1-103.1
5of this Code.
6    This Section does not apply to a person who first becomes a
7noncovered employee member or participant under Article 14 on
8or after the implementation date of the plan created under
9Section 1-161 for that Article, unless that person elects under
10subsection (b) of Section 1-161 to instead receive the benefits
11provided under this Section and the applicable provisions of
12that Article.
13    This Section does not apply to a person who first becomes a
14member or participant under Article 16 on or after the
15implementation date of the plan created under Section 1-161 for
16that Article, unless that person elects under subsection (b) of
17Section 1-161 to instead receive the benefits provided under
18this Section and the applicable provisions of that Article.
19    This Section does not apply to a person who elects under
20subsection (c-5) of Section 1-161 to receive the benefits under
21Section 1-161.
22    This Section does not apply to a person who first becomes a
23member or participant of an affected pension fund on or after 6
24months after the resolution or ordinance date, as defined in
25Section 1-162, unless that person elects under subsection (c)
26of Section 1-162 to receive the benefits provided under this

 

 

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1Section and the applicable provisions of the Article under
2which he or she is a member or participant.
3    (b) "Final average salary" means the average monthly (or
4annual) salary obtained by dividing the total salary or
5earnings calculated under the Article applicable to the member
6or participant during the 96 consecutive months (or 8
7consecutive years) of service within the last 120 months (or 10
8years) of service in which the total salary or earnings
9calculated under the applicable Article was the highest by the
10number of months (or years) of service in that period. For the
11purposes of a person who first becomes a member or participant
12of any retirement system or pension fund to which this Section
13applies on or after January 1, 2011, in this Code, "final
14average salary" shall be substituted for the following:
15        (1) In Article 7 (except for service as sheriff's law
16    enforcement employees), "final rate of earnings".
17        (2) In Articles 8, 9, 10, 11, and 12, "highest average
18    annual salary for any 4 consecutive years within the last
19    10 years of service immediately preceding the date of
20    withdrawal".
21        (3) In Article 13, "average final salary".
22        (4) In Article 14, "final average compensation".
23        (5) In Article 17, "average salary".
24        (6) In Section 22-207, "wages or salary received by him
25    at the date of retirement or discharge".
26    (b-5) Beginning on January 1, 2011, for all purposes under

 

 

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1this Code (including without limitation the calculation of
2benefits and employee contributions), the annual earnings,
3salary, or wages (based on the plan year) of a member or
4participant to whom this Section applies shall not exceed
5$106,800; however, that amount shall annually thereafter be
6increased by the lesser of (i) 3% of that amount, including all
7previous adjustments, or (ii) one-half the annual unadjusted
8percentage increase (but not less than zero) in the consumer
9price index-u for the 12 months ending with the September
10preceding each November 1, including all previous adjustments.
11    For the purposes of this Section, "consumer price index-u"
12means the index published by the Bureau of Labor Statistics of
13the United States Department of Labor that measures the average
14change in prices of goods and services purchased by all urban
15consumers, United States city average, all items, 1982-84 =
16100. The new amount resulting from each annual adjustment shall
17be determined by the Public Pension Division of the Department
18of Insurance and made available to the boards of the retirement
19systems and pension funds by November 1 of each year.
20    (c) A member or participant is entitled to a retirement
21annuity upon written application if he or she has attained age
2267 (beginning January 1, 2015, age 65 with respect to service
23under Article 12 of this Code that is subject to this Section)
24and has at least 10 years of service credit and is otherwise
25eligible under the requirements of the applicable Article.
26    A member or participant who has attained age 62 (beginning

 

 

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1January 1, 2015, age 60 with respect to service under Article
212 of this Code that is subject to this Section) and has at
3least 10 years of service credit and is otherwise eligible
4under the requirements of the applicable Article may elect to
5receive the lower retirement annuity provided in subsection (d)
6of this Section.
7    (c-5) A person who first becomes a member or a participant
8under Article 8 or Article 11 of this Code on or after the
9effective date of this amendatory Act of the 100th General
10Assembly, notwithstanding any other provision of this Code to
11the contrary, is entitled to a retirement annuity upon written
12application if he or she has attained age 65 and has at least
1310 years of service credit under Article 8 or Article 11 of
14this Code and is otherwise eligible under the requirements of
15Article 8 or Article 11 of this Code, whichever is applicable.
16    (d) The retirement annuity of a member or participant who
17is retiring after attaining age 62 (beginning January 1, 2015,
18age 60 with respect to service under Article 12 of this Code
19that is subject to this Section) with at least 10 years of
20service credit shall be reduced by one-half of 1% for each full
21month that the member's age is under age 67 (beginning January
221, 2015, age 65 with respect to service under Article 12 of
23this Code that is subject to this Section).
24    (d-5) The retirement annuity of a person who first becomes
25a member or a participant under Article 8 or Article 11 of this
26Code on or after the effective date of this amendatory Act of

 

 

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1the 100th General Assembly who is retiring at age 60 with at
2least 10 years of service credit under Article 8 or Article 11
3shall be reduced by one-half of 1% for each full month that the
4member's age is under age 65.
5    (d-10) Each person who first became a member or participant
6under Article 8 or Article 11 of this Code on or after January
71, 2011 and prior to the effective date of this amendatory Act
8of the 100th General Assembly shall make an irrevocable
9election either:
10        (i) to be eligible for the reduced retirement age
11    provided in subsections (c-5) and (d-5) of this Section,
12    the eligibility for which is conditioned upon the member or
13    participant agreeing to the increases in employee
14    contributions for age and service annuities provided in
15    subsection (a-5) of Section 8-174 of this Code (for service
16    under Article 8) or subsection (a-5) of Section 11-170 of
17    this Code (for service under Article 11); or
18        (ii) to not agree to item (i) of this subsection
19    (d-10), in which case the member or participant shall
20    continue to be subject to the retirement age provisions in
21    subsections (c) and (d) of this Section and the employee
22    contributions for age and service annuity as provided in
23    subsection (a) of Section 8-174 of this Code (for service
24    under Article 8) or subsection (a) of Section 11-170 of
25    this Code (for service under Article 11).
26    The election provided for in this subsection shall be made

 

 

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1between October 1, 2017 and November 15, 2017. A person subject
2to this subsection who makes the required election shall remain
3bound by that election. A person subject to this subsection who
4fails for any reason to make the required election within the
5time specified in this subsection shall be deemed to have made
6the election under item (ii).
7    (e) Any retirement annuity or supplemental annuity shall be
8subject to annual increases on the January 1 occurring either
9on or after the attainment of age 67 (beginning January 1,
102015, age 65 with respect to service under Article 12 of this
11Code that is subject to this Section and beginning on the
12effective date of this amendatory Act of the 100th General
13Assembly, age 65 with respect to persons who: (i) first became
14members or participants under Article 8 or Article 11 of this
15Code on or after the effective date of this amendatory Act of
16the 100th General Assembly; or (ii) first became members or
17participants under Article 8 or Article 11 of this Code on or
18after January 1, 2011 and before the effective date of this
19amendatory Act of the 100th General Assembly and made the
20election under item (i) of subsection (d-10) of this Section)
21or the first anniversary of the annuity start date, whichever
22is later. Each annual increase shall be calculated at 3% or
23one-half the annual unadjusted percentage increase (but not
24less than zero) in the consumer price index-u for the 12 months
25ending with the September preceding each November 1, whichever
26is less, of the originally granted retirement annuity. If the

 

 

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1annual unadjusted percentage change in the consumer price
2index-u for the 12 months ending with the September preceding
3each November 1 is zero or there is a decrease, then the
4annuity shall not be increased.
5    For the purposes of Section 1-103.1 of this Code, the
6changes made to this Section by this amendatory Act of the
7100th General Assembly are applicable without regard to whether
8the employee was in active service on or after the effective
9date of this amendatory Act of the 100th General Assembly.
10    (f) The initial survivor's or widow's annuity of an
11otherwise eligible survivor or widow of a retired member or
12participant who first became a member or participant on or
13after January 1, 2011 shall be in the amount of 66 2/3% of the
14retired member's or participant's retirement annuity at the
15date of death. In the case of the death of a member or
16participant who has not retired and who first became a member
17or participant on or after January 1, 2011, eligibility for a
18survivor's or widow's annuity shall be determined by the
19applicable Article of this Code. The initial benefit shall be
2066 2/3% of the earned annuity without a reduction due to age. A
21child's annuity of an otherwise eligible child shall be in the
22amount prescribed under each Article if applicable. Any
23survivor's or widow's annuity shall be increased (1) on each
24January 1 occurring on or after the commencement of the annuity
25if the deceased member died while receiving a retirement
26annuity or (2) in other cases, on each January 1 occurring

 

 

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1after the first anniversary of the commencement of the annuity.
2Each annual increase shall be calculated at 3% or one-half the
3annual unadjusted percentage increase (but not less than zero)
4in the consumer price index-u for the 12 months ending with the
5September preceding each November 1, whichever is less, of the
6originally granted survivor's annuity. If the annual
7unadjusted percentage change in the consumer price index-u for
8the 12 months ending with the September preceding each November
91 is zero or there is a decrease, then the annuity shall not be
10increased.
11    (g) The benefits in Section 14-110 apply only if the person
12is a State policeman, a fire fighter in the fire protection
13service of a department, or a security employee of the
14Department of Corrections or the Department of Juvenile
15Justice, as those terms are defined in subsection (b) of
16Section 14-110. A person who meets the requirements of this
17Section is entitled to an annuity calculated under the
18provisions of Section 14-110, in lieu of the regular or minimum
19retirement annuity, only if the person has withdrawn from
20service with not less than 20 years of eligible creditable
21service and has attained age 60, regardless of whether the
22attainment of age 60 occurs while the person is still in
23service.
24    (h) If a person who first becomes a member or a participant
25of a retirement system or pension fund subject to this Section
26on or after January 1, 2011 is receiving a retirement annuity

 

 

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1or retirement pension under that system or fund and becomes a
2member or participant under any other system or fund created by
3this Code and is employed on a full-time basis, except for
4those members or participants exempted from the provisions of
5this Section under subsection (a) of this Section, then the
6person's retirement annuity or retirement pension under that
7system or fund shall be suspended during that employment. Upon
8termination of that employment, the person's retirement
9annuity or retirement pension payments shall resume and be
10recalculated if recalculation is provided for under the
11applicable Article of this Code.
12    If a person who first becomes a member of a retirement
13system or pension fund subject to this Section on or after
14January 1, 2012 and is receiving a retirement annuity or
15retirement pension under that system or fund and accepts on a
16contractual basis a position to provide services to a
17governmental entity from which he or she has retired, then that
18person's annuity or retirement pension earned as an active
19employee of the employer shall be suspended during that
20contractual service. A person receiving an annuity or
21retirement pension under this Code shall notify the pension
22fund or retirement system from which he or she is receiving an
23annuity or retirement pension, as well as his or her
24contractual employer, of his or her retirement status before
25accepting contractual employment. A person who fails to submit
26such notification shall be guilty of a Class A misdemeanor and

 

 

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1required to pay a fine of $1,000. Upon termination of that
2contractual employment, the person's retirement annuity or
3retirement pension payments shall resume and, if appropriate,
4be recalculated under the applicable provisions of this Code.
5    (i) (Blank).
6    (j) In the case of a conflict between the provisions of
7this Section and any other provision of this Code, the
8provisions of this Section shall control.
9(Source: P.A. 100-23, eff. 7-6-17; 100-201, eff. 8-18-17.)
 
10    (40 ILCS 5/15-108.2)
11    Sec. 15-108.2. Tier 2 member. "Tier 2 member": A person who
12first becomes a participant under this Article on or after
13January 1, 2011 and before the implementation date, as defined
14under subsection (a) of Section 1-161, determined by the Board
156 months after the effective date of this amendatory Act of the
16100th General Assembly, other than a person in the self-managed
17plan established under Section 15-158.2 or a person who makes
18the election under subsection (c) of Section 1-161, unless the
19person is otherwise a Tier 1 member. The changes made to this
20Section by this amendatory Act of the 98th General Assembly are
21a correction of existing law and are intended to be retroactive
22to the effective date of Public Act 96-889, notwithstanding the
23provisions of Section 1-103.1 of this Code.
24(Source: P.A. 100-23, eff. 7-6-17.)
 
25    Section 99. Effective date. This Act takes effect upon

 

 

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1becoming law.