101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
HB2279

 

Introduced , by Rep. Thomas Morrison

 

SYNOPSIS AS INTRODUCED:
 
See Index

    Amends the Illinois Pension Code. With respect to the 5 State-funded Retirement Systems: requires each System to prepare and implement a Tier 3 plan by July 1, 2020 that aggregates State and employee contributions in individual participant accounts that are used for payouts after retirement. Provides that a Tier 1 or Tier 2 participant may irrevocably elect to participate in the Tier 3 plan instead of the defined benefit plan and may also elect to terminate all participation in the defined benefit plan and to have a specified amount credited to his or her account under the Tier 3 plan. Makes related changes in the State Employees Group Insurance Act of 1971. In the Downstate Teachers, State Employees, and State Universities Articles, authorizes a person to elect not to participate or to terminate participation in those Systems. In the General Assembly and Judges Articles, authorizes a participant to terminate his or her participation in the System. In the Illinois Municipal Retirement Fund (IMRF), State Employees, State Universities, and Downstate Teachers Articles, for participants who first become participants on or after the effective date, prohibits (i) payments for unused sick or vacation time from being used to calculate pensionable salary and (ii) unused sick or vacation time from being used to establish service credit. In the Downstate Teachers Article, prohibits an employer from making employee contributions on behalf of an employee, except for the sole purpose of allowing an employee to make pre-tax contributions. Amends the Illinois Educational Labor Relations Act to prohibit collective bargaining over that prohibition. Effective immediately.


LRB101 09158 RPS 54252 b

FISCAL NOTE ACT MAY APPLY
PENSION IMPACT NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB2279LRB101 09158 RPS 54252 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), 14 (including an employee who

 

 

HB2279- 2 -LRB101 09158 RPS 54252 b

1has elected to receive an alternative retirement cancellation
2payment under Section 14-108.5 of the Illinois Pension Code in
3lieu of an annuity; an employee who, in lieu of receiving an
4annuity under that Article, has retired under the Tier 3 plan
5established under Section 14-155.5 of that Article; or an
6employee who meets the criteria for retirement, but in lieu of
7receiving an annuity under that Article has elected to receive
8an accelerated pension benefit payment under Section 14-147.5
9of that Article), or 15 (including an employee who has retired
10under the optional retirement program established under
11Section 15-158.2 or the Tier 3 plan established under Section
1215-155.5 of the Illinois Pension Code or who meets the criteria
13for retirement but in lieu of receiving an annuity under that
14Article has elected to receive an accelerated pension benefit
15payment under Section 15-185.5 of the Article), paragraphs (2),
16(3), or (5) of Section 16-106 (including an employee who meets
17the criteria for retirement, but in lieu of receiving an
18annuity under that Article has elected to receive an
19accelerated pension benefit payment under Section 16-190.5 of
20the Illinois Pension Code or an employee who, in lieu of
21receiving an annuity under that Article, has retired under the
22Tier 3 plan established under Section 16-205.5 of the Illinois
23Pension Code), or Article 18 (including an employee who, in
24lieu of receiving an annuity under that Article, has retired
25under the Tier 3 plan established under Section 18-121.5 of
26that Article) of the Illinois Pension Code; (2) any person who

 

 

HB2279- 3 -LRB101 09158 RPS 54252 b

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

 

 

HB2279- 4 -LRB101 09158 RPS 54252 b

1    (c) "Carrier" means (1) an insurance company, a corporation
2organized under the Limited Health Service Organization Act or
3the Voluntary Health Services Plan Act, a partnership, or other
4nongovernmental organization, which is authorized to do group
5life or group health insurance business in Illinois, or (2) the
6State of Illinois as a self-insurer.
7    (d) "Compensation" means salary or wages payable on a
8regular payroll by the State Treasurer on a warrant of the
9State Comptroller out of any State, trust or federal fund, or
10by the Governor of the State through a disbursing officer of
11the State out of a trust or out of federal funds, or by any
12Department out of State, trust, federal or other funds held by
13the State Treasurer or the Department, to any person for
14personal services currently performed, and ordinary or
15accidental disability benefits under Articles 2, 14, 15
16(including ordinary or accidental disability benefits under
17the optional retirement program established under Section
1815-158.2), paragraphs (2), (3), or (5) of Section 16-106, or
19Article 18 of the Illinois Pension Code, for disability
20incurred after January 1, 1966, or benefits payable under the
21Workers' Compensation or Occupational Diseases Act or benefits
22payable under a sick pay plan established in accordance with
23Section 36 of the State Finance Act. "Compensation" also means
24salary or wages paid to an employee of any qualified local
25government, qualified rehabilitation facility, qualified
26domestic violence shelter or service, or qualified child

 

 

HB2279- 5 -LRB101 09158 RPS 54252 b

1advocacy center.
2    (e) "Commission" means the State Employees Group Insurance
3Advisory Commission authorized by this Act. Commencing July 1,
41984, "Commission" as used in this Act means the Commission on
5Government Forecasting and Accountability as established by
6the Legislative Commission Reorganization Act of 1984.
7    (f) "Contributory", when referred to as contributory
8coverage, shall mean optional coverages or benefits elected by
9the member toward the cost of which such member makes
10contribution, or which are funded in whole or in part through
11the acceptance of a reduction in earnings or the foregoing of
12an increase in earnings by an employee, as distinguished from
13noncontributory coverage or benefits which are paid entirely by
14the State of Illinois without reduction of the member's salary.
15    (g) "Department" means any department, institution, board,
16commission, officer, court or any agency of the State
17government receiving appropriations and having power to
18certify payrolls to the Comptroller authorizing payments of
19salary and wages against such appropriations as are made by the
20General Assembly from any State fund, or against trust funds
21held by the State Treasurer and includes boards of trustees of
22the retirement systems created by Articles 2, 14, 15, 16 and 18
23of the Illinois Pension Code. "Department" also includes the
24Illinois Comprehensive Health Insurance Board, the Board of
25Examiners established under the Illinois Public Accounting
26Act, and the Illinois Finance Authority.

 

 

HB2279- 6 -LRB101 09158 RPS 54252 b

1    (h) "Dependent", when the term is used in the context of
2the health and life plan, means a member's spouse and any child
3(1) from birth to age 26 including an adopted child, a child
4who lives with the member from the time of the placement for
5adoption until entry of an order of adoption, a stepchild or
6adjudicated child, or a child who lives with the member if such
7member is a court appointed guardian of the child or (2) age 19
8or over who has a mental or physical disability from a cause
9originating prior to the age of 19 (age 26 if enrolled as an
10adult child dependent). For the health plan only, the term
11"dependent" also includes (1) any person enrolled prior to the
12effective date of this Section who is dependent upon the member
13to the extent that the member may claim such person as a
14dependent for income tax deduction purposes and (2) any person
15who has received after June 30, 2000 an organ transplant and
16who is financially dependent upon the member and eligible to be
17claimed as a dependent for income tax purposes. A member
18requesting to cover any dependent must provide documentation as
19requested by the Department of Central Management Services and
20file with the Department any and all forms required by the
21Department.
22    (i) "Director" means the Director of the Illinois
23Department of Central Management Services.
24    (j) "Eligibility period" means the period of time a member
25has to elect enrollment in programs or to select benefits
26without regard to age, sex or health.

 

 

HB2279- 7 -LRB101 09158 RPS 54252 b

1    (k) "Employee" means and includes each officer or employee
2in the service of a department who (1) receives his
3compensation for service rendered to the department on a
4warrant issued pursuant to a payroll certified by a department
5or on a warrant or check issued and drawn by a department upon
6a trust, federal or other fund or on a warrant issued pursuant
7to a payroll certified by an elected or duly appointed officer
8of the State or who receives payment of the performance of
9personal services on a warrant issued pursuant to a payroll
10certified by a Department and drawn by the Comptroller upon the
11State Treasurer against appropriations made by the General
12Assembly from any fund or against trust funds held by the State
13Treasurer, and (2) is employed full-time or part-time in a
14position normally requiring actual performance of duty during
15not less than 1/2 of a normal work period, as established by
16the Director in cooperation with each department, except that
17persons elected by popular vote will be considered employees
18during the entire term for which they are elected regardless of
19hours devoted to the service of the State, and (3) except that
20"employee" does not include any person who is not eligible by
21reason of such person's employment to participate in one of the
22State retirement systems under Articles 2, 14, 15 (either the
23regular Article 15 system or the optional retirement program
24established under Section 15-158.2) or 18, or under paragraph
25(2), (3), or (5) of Section 16-106, of the Illinois Pension
26Code, but such term does include persons who are employed

 

 

HB2279- 8 -LRB101 09158 RPS 54252 b

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

 

 

HB2279- 9 -LRB101 09158 RPS 54252 b

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

 

 

HB2279- 10 -LRB101 09158 RPS 54252 b

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

 

 

HB2279- 11 -LRB101 09158 RPS 54252 b

1alternative retirement cancellation payment under Section
214-108.5 of the Illinois Pension Code.
3    (q-2) "SERS" means the State Employees' Retirement System
4of Illinois, created under Article 14 of the Illinois Pension
5Code.
6    (q-3) "SURS" means the State Universities Retirement
7System, created under Article 15 of the Illinois Pension Code.
8    (q-4) "TRS" means the Teachers' Retirement System of the
9State of Illinois, created under Article 16 of the Illinois
10Pension Code.
11    (q-5) (Blank).
12    (q-6) (Blank).
13    (q-7) (Blank).
14    (r) "Medical services" means the services provided within
15the scope of their licenses by practitioners in all categories
16licensed under the Medical Practice Act of 1987.
17    (s) "Unit of local government" means any county,
18municipality, township, school district (including a
19combination of school districts under the Intergovernmental
20Cooperation Act), special district or other unit, designated as
21a unit of local government by law, which exercises limited
22governmental powers or powers in respect to limited
23governmental subjects, any not-for-profit association with a
24membership that primarily includes townships and township
25officials, that has duties that include provision of research
26service, dissemination of information, and other acts for the

 

 

HB2279- 12 -LRB101 09158 RPS 54252 b

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

 

 

HB2279- 13 -LRB101 09158 RPS 54252 b

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

 

 

HB2279- 14 -LRB101 09158 RPS 54252 b

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

 

 

HB2279- 15 -LRB101 09158 RPS 54252 b

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

 

 

HB2279- 16 -LRB101 09158 RPS 54252 b

1    originating prior to the age of 19 (age 26 if enrolled as
2    an adult child).
3    "Community college dependent beneficiary" does not
4include, as indicated under paragraph (2) of this subsection
5(aa), a dependent of the survivor of a community college
6benefit recipient who first becomes a dependent of a survivor
7of a community college benefit recipient on or after the
8effective date of this amendatory Act of the 97th General
9Assembly unless that dependent would have been eligible for
10coverage as a dependent of the deceased community college
11benefit recipient upon whom the survivor annuity is based.
12    (bb) "Qualified child advocacy center" means any Illinois
13child advocacy center and its administrative offices funded by
14the Department of Children and Family Services, as defined by
15the Children's Advocacy Center Act (55 ILCS 80/), approved by
16the Director and participating in a program created under
17subsection (n) of Section 10.
18    (cc) "Placement for adoption" means the assumption and
19retention by a member of a legal obligation for total or
20partial support of a child in anticipation of adoption of the
21child. The child's placement with the member terminates upon
22the termination of such legal obligation.
23(Source: P.A. 99-143, eff. 7-27-15; 100-355, eff. 1-1-18;
24100-587, eff. 6-4-18.)
 
25    (5 ILCS 375/10)  (from Ch. 127, par. 530)

 

 

HB2279- 17 -LRB101 09158 RPS 54252 b

1    Sec. 10. Contributions by the State and members.
2    (a) The State shall pay the cost of basic non-contributory
3group life insurance and, subject to member paid contributions
4set by the Department or required by this Section and except as
5provided in this Section, the basic program of group health
6benefits on each eligible member, except a member, not
7otherwise covered by this Act, who has retired as a
8participating member under Article 2 of the Illinois Pension
9Code but is ineligible for the retirement annuity under Section
102-119 of the Illinois Pension Code, and part of each eligible
11member's and retired member's premiums for health insurance
12coverage for enrolled dependents as provided by Section 9. The
13State shall pay the cost of the basic program of group health
14benefits only after benefits are reduced by the amount of
15benefits covered by Medicare for all members and dependents who
16are eligible for benefits under Social Security or the Railroad
17Retirement system or who had sufficient Medicare-covered
18government employment, except that such reduction in benefits
19shall apply only to those members and dependents who (1) first
20become eligible for such Medicare coverage on or after July 1,
211992; or (2) are Medicare-eligible members or dependents of a
22local government unit which began participation in the program
23on or after July 1, 1992; or (3) remain eligible for, but no
24longer receive Medicare coverage which they had been receiving
25on or after July 1, 1992. The Department may determine the
26aggregate level of the State's contribution on the basis of

 

 

HB2279- 18 -LRB101 09158 RPS 54252 b

1actual cost of medical services adjusted for age, sex or
2geographic or other demographic characteristics which affect
3the costs of such programs.
4    The cost of participation in the basic program of group
5health benefits for the dependent or survivor of a living or
6deceased retired employee who was formerly employed by the
7University of Illinois in the Cooperative Extension Service and
8would be an annuitant but for the fact that he or she was made
9ineligible to participate in the State Universities Retirement
10System by clause (4) of subsection (a) of Section 15-107 of the
11Illinois Pension Code shall not be greater than the cost of
12participation that would otherwise apply to that dependent or
13survivor if he or she were the dependent or survivor of an
14annuitant under the State Universities Retirement System.
15    (a-1) (Blank).
16    (a-2) (Blank).
17    (a-3) (Blank).
18    (a-4) (Blank).
19    (a-5) (Blank).
20    (a-6) (Blank).
21    (a-7) (Blank).
22    (a-8) Any annuitant, survivor, or retired employee may
23waive or terminate coverage in the program of group health
24benefits. Any such annuitant, survivor, or retired employee who
25has waived or terminated coverage may enroll or re-enroll in
26the program of group health benefits only during the annual

 

 

HB2279- 19 -LRB101 09158 RPS 54252 b

1benefit choice period, as determined by the Director; except
2that in the event of termination of coverage due to nonpayment
3of premiums, the annuitant, survivor, or retired employee may
4not re-enroll in the program.
5    (a-8.5) Beginning on the effective date of this amendatory
6Act of the 97th General Assembly, the Director of Central
7Management Services shall, on an annual basis, determine the
8amount that the State shall contribute toward the basic program
9of group health benefits on behalf of annuitants (including
10individuals who (i) participated in the General Assembly
11Retirement System, the State Employees' Retirement System of
12Illinois, the State Universities Retirement System, the
13Teachers' Retirement System of the State of Illinois, or the
14Judges Retirement System of Illinois and (ii) qualify as
15annuitants under subsection (b) of Section 3 of this Act),
16survivors (including individuals who (i) receive an annuity as
17a survivor of an individual who participated in the General
18Assembly Retirement System, the State Employees' Retirement
19System of Illinois, the State Universities Retirement System,
20the Teachers' Retirement System of the State of Illinois, or
21the Judges Retirement System of Illinois and (ii) qualify as
22survivors under subsection (q) of Section 3 of this Act), and
23retired employees (as defined in subsection (p) of Section 3 of
24this Act). The remainder of the cost of coverage for each
25annuitant, survivor, or retired employee, as determined by the
26Director of Central Management Services, shall be the

 

 

HB2279- 20 -LRB101 09158 RPS 54252 b

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

 

 

HB2279- 21 -LRB101 09158 RPS 54252 b

1separate accounts provided by any bank or banks as defined by
2the Illinois Banking Act, or separate accounts provided by any
3savings and loan association or associations as defined by the
4Illinois Savings and Loan Act of 1985 to be held by the
5Director, outside the State treasury, for the purpose of
6receiving the transfer of moneys from the Local Government
7Health Insurance Reserve Fund. The Department may promulgate
8rules further defining the methodology for the transfers. Any
9interest earned by moneys in the funds or accounts shall inure
10to the Local Government Health Insurance Reserve Fund. The
11transferred moneys, and interest accrued thereon, shall be used
12exclusively for transfers to administrative service
13organizations or their financial institutions for payments of
14claims to claimants and providers under the self-insurance
15health plan. The transferred moneys, and interest accrued
16thereon, shall not be used for any other purpose including, but
17not limited to, reimbursement of administration fees due the
18administrative service organization pursuant to its contract
19or contracts with the Department.
20    (a-10) To the extent that participation, benefits, or
21premiums under this Act are based on a person's service credit
22under an Article of the Illinois Pension Code, service credit
23terminated in exchange for an accelerated pension benefit
24payment under Section 14-147.5, 15-185.5, or 16-190.5 of that
25Code shall be included in determining a person's service credit
26for the purposes of this Act.

 

 

HB2279- 22 -LRB101 09158 RPS 54252 b

1    (a-15) For purposes of determining State contributions
2under this Section, service established under a Tier 3 plan
3under Article 2, 14, 15, 16, or 18 of the Illinois Pension Code
4shall be included in determining an employee's creditable
5service. Any credit terminated as part of a transfer of
6contributions to a Tier 3 plan under Article 2, 14, 15, 16, or
718 of the Illinois Pension Code shall also be included in
8determining an employee's creditable service.
9    (b) State employees who become eligible for this program on
10or after January 1, 1980 in positions normally requiring actual
11performance of duty not less than 1/2 of a normal work period
12but not equal to that of a normal work period, shall be given
13the option of participating in the available program. If the
14employee elects coverage, the State shall contribute on behalf
15of such employee to the cost of the employee's benefit and any
16applicable dependent supplement, that sum which bears the same
17percentage as that percentage of time the employee regularly
18works when compared to normal work period.
19    (c) The basic non-contributory coverage from the basic
20program of group health benefits shall be continued for each
21employee not in pay status or on active service by reason of
22(1) leave of absence due to illness or injury, (2) authorized
23educational leave of absence or sabbatical leave, or (3)
24military leave. This coverage shall continue until expiration
25of authorized leave and return to active service, but not to
26exceed 24 months for leaves under item (1) or (2). This

 

 

HB2279- 23 -LRB101 09158 RPS 54252 b

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

 

 

HB2279- 24 -LRB101 09158 RPS 54252 b

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

 

 

HB2279- 25 -LRB101 09158 RPS 54252 b

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

 

 

HB2279- 26 -LRB101 09158 RPS 54252 b

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

 

 

HB2279- 27 -LRB101 09158 RPS 54252 b

1    sex, geographic location or other relevant demographic
2    variables, plus an amount sufficient to pay for the
3    additional administrative costs of providing coverage to
4    employees of the unit of local government and their
5    dependents.
6        (2) In subsequent years, a further adjustment shall be
7    made to reflect the actual prior years' claims experience
8    of the employees of the unit of local government.
9    In the case of coverage of local government employees under
10a health maintenance organization, the Director shall annually
11determine for each participating unit of local government the
12maximum monthly amount the unit may contribute toward that
13coverage, based on an analysis of (i) the age, sex, geographic
14location, and other relevant demographic variables of the
15unit's employees and (ii) the cost to cover those employees
16under the State group health benefits plan. The Director may
17similarly determine the maximum monthly amount each unit of
18local government may contribute toward coverage of its
19employees' dependents under a health maintenance organization.
20    Monthly payments by the unit of local government or its
21employees for group health benefits plan or health maintenance
22organization coverage shall be deposited in the Local
23Government Health Insurance Reserve Fund.
24    The Local Government Health Insurance Reserve Fund is
25hereby created as a nonappropriated trust fund to be held
26outside the State Treasury, with the State Treasurer as

 

 

HB2279- 28 -LRB101 09158 RPS 54252 b

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

 

 

HB2279- 29 -LRB101 09158 RPS 54252 b

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

 

 

HB2279- 30 -LRB101 09158 RPS 54252 b

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

 

 

HB2279- 31 -LRB101 09158 RPS 54252 b

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

 

 

HB2279- 32 -LRB101 09158 RPS 54252 b

1    demographic variables, plus an amount sufficient to pay for
2    the additional administrative costs of providing coverage
3    to employees of the domestic violence shelter or service
4    and their dependents.
5        (2) In subsequent years, a further adjustment shall be
6    made to reflect the actual prior years' claims experience
7    of the employees of the domestic violence shelter or
8    service.
9    Monthly payments by the domestic violence shelter or
10service or its employees for group health insurance shall be
11deposited in the Local Government Health Insurance Reserve
12Fund.
13    (l) A public community college or entity organized pursuant
14to the Public Community College Act may apply to the Director
15initially to have only annuitants not covered prior to July 1,
161992 by the district's health plan provided health coverage
17under this Act on a non-insured basis. The community college
18must execute a 2-year contract to participate in the Local
19Government Health Plan. Any annuitant may enroll in the event
20of a qualifying change in status, special enrollment, special
21circumstance as defined by the Director, or during the annual
22Benefit Choice Period.
23    The Director shall annually determine monthly rates of
24payment subject to the following constraints: for those
25community colleges with annuitants only enrolled, first year
26rates shall be equal to the average cost to cover claims for a

 

 

HB2279- 33 -LRB101 09158 RPS 54252 b

1State member adjusted for demographics, Medicare
2participation, and other factors; and in the second year, a
3further adjustment of rates shall be made to reflect the actual
4first year's claims experience of the covered annuitants.
5    (l-5) The provisions of subsection (l) become inoperative
6on July 1, 1999.
7    (m) The Director shall adopt any rules deemed necessary for
8implementation of this amendatory Act of 1989 (Public Act
986-978).
10    (n) Any child advocacy center within the State of Illinois
11may apply to the Director to have its employees, annuitants,
12and their dependents provided group health coverage under this
13Act on a non-insured basis. To participate, a child advocacy
14center must agree to enroll all of its employees and pay the
15entire cost of providing coverage for its employees. The child
16advocacy center shall not be required to enroll those of its
17employees who are covered spouses or dependents under this plan
18or another group policy or plan providing health benefits as
19long as (1) an appropriate official from the child advocacy
20center attests that each employee not enrolled is a covered
21spouse or dependent under this plan or another group policy or
22plan and (2) at least 50% of the employees are enrolled and the
23child advocacy center remits the entire cost of providing
24coverage to those employees. Employees of a participating child
25advocacy center who are not enrolled due to coverage under
26another group health policy or plan may enroll in the event of

 

 

HB2279- 34 -LRB101 09158 RPS 54252 b

1a qualifying change in status, special enrollment, or special
2circumstance as defined by the Director or during the annual
3Benefit Choice Period. A participating child advocacy center
4may also elect to cover its annuitants. Dependent coverage
5shall be offered on an optional basis, with the costs paid by
6the child advocacy center, its employees, or some combination
7of the 2 as determined by the child advocacy center. The child
8advocacy center shall be responsible for timely collection and
9transmission of dependent premiums.
10    The Director shall annually determine rates of payment,
11subject to the following constraints:
12        (1) In the first year of coverage, the rates shall be
13    equal to the amount normally charged to State employees for
14    elected optional coverages or for enrolled dependents
15    coverages or other contributory coverages on behalf of its
16    employees, adjusted for differences between State
17    employees and employees of the child advocacy center in
18    age, sex, geographic location, or other relevant
19    demographic variables, plus an amount sufficient to pay for
20    the additional administrative costs of providing coverage
21    to employees of the child advocacy center and their
22    dependents.
23        (2) In subsequent years, a further adjustment shall be
24    made to reflect the actual prior years' claims experience
25    of the employees of the child advocacy center.
26    Monthly payments by the child advocacy center or its

 

 

HB2279- 35 -LRB101 09158 RPS 54252 b

1employees for group health insurance shall be deposited into
2the Local Government Health Insurance Reserve Fund.
3(Source: P.A. 100-587, eff. 6-4-18.)
 
4    Section 10. The Illinois Pension Code is amended by
5changing Sections 1-160, 1-161, 2-117, 2-162, 7-114, 7-116,
67-139, 14-103.05, 14-103.10, 14-103.41, 14-104.3, 14-106,
714-152.1, 15-108.1, 15-108.2, 15-112, 15-113.4, 15-134,
815-198, 16-106.41, 16-123, 16-127, 16-152.1, 16-203, 18-120,
918-124, 18-125, 18-125.1, 18-127, 18-128.01, 18-133, 18-169,
1020-121, 20-123, 20-124, and 20-125 and by adding Sections
112-105.3, 2-165.5, 14-155.5, 15-108.3, 15-200.5, 16-205.5,
1218-110.1, and 18-121.5 as follows:
 
13    (40 ILCS 5/1-160)
14    Sec. 1-160. Provisions applicable to new hires.
15    (a) The provisions of this Section apply to a person who,
16on or after January 1, 2011, first becomes a member or a
17participant under any reciprocal retirement system or pension
18fund established under this Code, other than a retirement
19system or pension fund established under Article 2, 3, 4, 5, 6,
2015 or 18 of this Code, notwithstanding any other provision of
21this Code to the contrary, but do not apply to any self-managed
22plan established under this Code, to any person with respect to
23service as a sheriff's law enforcement employee under Article
247, or to any participant of the retirement plan established

 

 

HB2279- 36 -LRB101 09158 RPS 54252 b

1under Section 22-101. Notwithstanding anything to the contrary
2in this Section, for purposes of this Section, a person who
3participated in a retirement system under Article 15 prior to
4January 1, 2011 shall be deemed a person who first became a
5member or participant prior to January 1, 2011 under any
6retirement system or pension fund subject to this Section. The
7changes made to this Section by Public Act 98-596 are a
8clarification of existing law and are intended to be
9retroactive to January 1, 2011 (the effective date of Public
10Act 96-889), notwithstanding the provisions of Section 1-103.1
11of this Code.
12    This Section does not apply to a person who first becomes a
13noncovered employee under Article 14 on or after the
14implementation date of the plan created under Section 1-161 for
15that Article, unless that person elects under subsection (b) of
16Section 1-161 to instead receive the benefits provided under
17this Section and the applicable provisions of that Article.
18    This Section does not apply to a person who first becomes a
19member or participant under Article 16 on or after the
20implementation date of the plan created under Section 1-161 for
21that Article, unless that person elects under subsection (b) of
22Section 1-161 to instead receive the benefits provided under
23this Section and the applicable provisions of that Article.
24    This Section does not apply to a person who elects under
25subsection (c-5) of Section 1-161 to receive the benefits under
26Section 1-161.

 

 

HB2279- 37 -LRB101 09158 RPS 54252 b

1    This Section does not apply to a person who first becomes a
2member or participant of an affected pension fund on or after 6
3months after the resolution or ordinance date, as defined in
4Section 1-162, unless that person elects under subsection (c)
5of Section 1-162 to receive the benefits provided under this
6Section and the applicable provisions of the Article under
7which he or she is a member or participant.
8    This Section does not apply to a person who participates in
9a Tier 3 plan established under Article 14, 15, or 16 of this
10Code.
11    (b) "Final average salary" means the average monthly (or
12annual) salary obtained by dividing the total salary or
13earnings calculated under the Article applicable to the member
14or participant during the 96 consecutive months (or 8
15consecutive years) of service within the last 120 months (or 10
16years) of service in which the total salary or earnings
17calculated under the applicable Article was the highest by the
18number of months (or years) of service in that period. For the
19purposes of a person who first becomes a member or participant
20of any retirement system or pension fund to which this Section
21applies on or after January 1, 2011, in this Code, "final
22average salary" shall be substituted for the following:
23        (1) In Article 7 (except for service as sheriff's law
24    enforcement employees), "final rate of earnings".
25        (2) In Articles 8, 9, 10, 11, and 12, "highest average
26    annual salary for any 4 consecutive years within the last

 

 

HB2279- 38 -LRB101 09158 RPS 54252 b

1    10 years of service immediately preceding the date of
2    withdrawal".
3        (3) In Article 13, "average final salary".
4        (4) In Article 14, "final average compensation".
5        (5) In Article 17, "average salary".
6        (6) In Section 22-207, "wages or salary received by him
7    at the date of retirement or discharge".
8    (b-5) Beginning on January 1, 2011, for all purposes under
9this Code (including without limitation the calculation of
10benefits and employee contributions), the annual earnings,
11salary, or wages (based on the plan year) of a member or
12participant to whom this Section applies shall not exceed
13$106,800; however, that amount shall annually thereafter be
14increased by the lesser of (i) 3% of that amount, including all
15previous adjustments, or (ii) one-half the annual unadjusted
16percentage increase (but not less than zero) in the consumer
17price index-u for the 12 months ending with the September
18preceding each November 1, including all previous adjustments.
19    For the purposes of this Section, "consumer price index-u"
20means the index published by the Bureau of Labor Statistics of
21the United States Department of Labor that measures the average
22change in prices of goods and services purchased by all urban
23consumers, United States city average, all items, 1982-84 =
24100. The new amount resulting from each annual adjustment shall
25be determined by the Public Pension Division of the Department
26of Insurance and made available to the boards of the retirement

 

 

HB2279- 39 -LRB101 09158 RPS 54252 b

1systems and pension funds by November 1 of each year.
2    (c) A member or participant is entitled to a retirement
3annuity upon written application if he or she has attained age
467 (beginning January 1, 2015, age 65 with respect to service
5under Article 12 of this Code that is subject to this Section)
6and has at least 10 years of service credit and is otherwise
7eligible under the requirements of the applicable Article.
8    A member or participant who has attained age 62 (beginning
9January 1, 2015, age 60 with respect to service under Article
1012 of this Code that is subject to this Section) and has at
11least 10 years of service credit and is otherwise eligible
12under the requirements of the applicable Article may elect to
13receive the lower retirement annuity provided in subsection (d)
14of this Section.
15    (c-5) A person who first becomes a member or a participant
16subject to this Section on or after July 6, 2017 (the effective
17date of Public Act 100-23), notwithstanding any other provision
18of this Code to the contrary, is entitled to a retirement
19annuity under Article 8 or Article 11 upon written application
20if he or she has attained age 65 and has at least 10 years of
21service credit and is otherwise eligible under the requirements
22of Article 8 or Article 11 of this Code, whichever is
23applicable.
24    (d) The retirement annuity of a member or participant who
25is retiring after attaining age 62 (beginning January 1, 2015,
26age 60 with respect to service under Article 12 of this Code

 

 

HB2279- 40 -LRB101 09158 RPS 54252 b

1that is subject to this Section) with at least 10 years of
2service credit shall be reduced by one-half of 1% for each full
3month that the member's age is under age 67 (beginning January
41, 2015, age 65 with respect to service under Article 12 of
5this Code that is subject to this Section).
6    (d-5) The retirement annuity payable under Article 8 or
7Article 11 to an eligible person subject to subsection (c-5) of
8this Section who is retiring at age 60 with at least 10 years
9of service credit shall be reduced by one-half of 1% for each
10full month that the member's age is under age 65.
11    (d-10) Each person who first became a member or participant
12under Article 8 or Article 11 of this Code on or after January
131, 2011 and prior to the effective date of this amendatory Act
14of the 100th General Assembly shall make an irrevocable
15election either:
16        (i) to be eligible for the reduced retirement age
17    provided in subsections (c-5) and (d-5) of this Section,
18    the eligibility for which is conditioned upon the member or
19    participant agreeing to the increases in employee
20    contributions for age and service annuities provided in
21    subsection (a-5) of Section 8-174 of this Code (for service
22    under Article 8) or subsection (a-5) of Section 11-170 of
23    this Code (for service under Article 11); or
24        (ii) to not agree to item (i) of this subsection
25    (d-10), in which case the member or participant shall
26    continue to be subject to the retirement age provisions in

 

 

HB2279- 41 -LRB101 09158 RPS 54252 b

1    subsections (c) and (d) of this Section and the employee
2    contributions for age and service annuity as provided in
3    subsection (a) of Section 8-174 of this Code (for service
4    under Article 8) or subsection (a) of Section 11-170 of
5    this Code (for service under Article 11).
6    The election provided for in this subsection shall be made
7between October 1, 2017 and November 15, 2017. A person subject
8to this subsection who makes the required election shall remain
9bound by that election. A person subject to this subsection who
10fails for any reason to make the required election within the
11time specified in this subsection shall be deemed to have made
12the election under item (ii).
13    (e) Any retirement annuity or supplemental annuity shall be
14subject to annual increases on the January 1 occurring either
15on or after the attainment of age 67 (beginning January 1,
162015, age 65 with respect to service under Article 12 of this
17Code that is subject to this Section and beginning on the
18effective date of this amendatory Act of the 100th General
19Assembly, age 65 with respect to service under Article 8 or
20Article 11 for eligible persons who: (i) are subject to
21subsection (c-5) of this Section; or (ii) made the election
22under item (i) of subsection (d-10) of this Section) or the
23first anniversary of the annuity start date, whichever is
24later. Each annual increase shall be calculated at 3% or
25one-half the annual unadjusted percentage increase (but not
26less than zero) in the consumer price index-u for the 12 months

 

 

HB2279- 42 -LRB101 09158 RPS 54252 b

1ending with the September preceding each November 1, whichever
2is less, of the originally granted retirement annuity. If the
3annual unadjusted percentage change in the consumer price
4index-u for the 12 months ending with the September preceding
5each November 1 is zero or there is a decrease, then the
6annuity shall not be increased.
7    For the purposes of Section 1-103.1 of this Code, the
8changes made to this Section by this amendatory Act of the
9100th General Assembly are applicable without regard to whether
10the employee was in active service on or after the effective
11date of this amendatory Act of the 100th General Assembly.
12    (f) The initial survivor's or widow's annuity of an
13otherwise eligible survivor or widow of a retired member or
14participant who first became a member or participant on or
15after January 1, 2011 shall be in the amount of 66 2/3% of the
16retired member's or participant's retirement annuity at the
17date of death. In the case of the death of a member or
18participant who has not retired and who first became a member
19or participant on or after January 1, 2011, eligibility for a
20survivor's or widow's annuity shall be determined by the
21applicable Article of this Code. The initial benefit shall be
2266 2/3% of the earned annuity without a reduction due to age. A
23child's annuity of an otherwise eligible child shall be in the
24amount prescribed under each Article if applicable. Any
25survivor's or widow's annuity shall be increased (1) on each
26January 1 occurring on or after the commencement of the annuity

 

 

HB2279- 43 -LRB101 09158 RPS 54252 b

1if the deceased member died while receiving a retirement
2annuity or (2) in other cases, on each January 1 occurring
3after the first anniversary of the commencement of the annuity.
4Each annual increase shall be calculated at 3% or one-half the
5annual unadjusted percentage increase (but not less than zero)
6in the consumer price index-u for the 12 months ending with the
7September preceding each November 1, whichever is less, of the
8originally granted survivor's annuity. If the annual
9unadjusted percentage change in the consumer price index-u for
10the 12 months ending with the September preceding each November
111 is zero or there is a decrease, then the annuity shall not be
12increased.
13    (g) The benefits in Section 14-110 apply only if the person
14is a State policeman, a fire fighter in the fire protection
15service of a department, a security employee of the Department
16of Corrections or the Department of Juvenile Justice, or a
17security employee of the Department of Innovation and
18Technology, as those terms are defined in subsection (b) and
19subsection (c) of Section 14-110. A person who meets the
20requirements of this Section is entitled to an annuity
21calculated under the provisions of Section 14-110, in lieu of
22the regular or minimum retirement annuity, only if the person
23has withdrawn from service with not less than 20 years of
24eligible creditable service and has attained age 60, regardless
25of whether the attainment of age 60 occurs while the person is
26still in service.

 

 

HB2279- 44 -LRB101 09158 RPS 54252 b

1    (h) If a person who first becomes a member or a participant
2of a retirement system or pension fund subject to this Section
3on or after January 1, 2011 is receiving a retirement annuity
4or retirement pension under that system or fund and becomes a
5member or participant under any other system or fund created by
6this Code and is employed on a full-time basis, except for
7those members or participants exempted from the provisions of
8this Section under subsection (a) of this Section, then the
9person's retirement annuity or retirement pension under that
10system or fund shall be suspended during that employment. Upon
11termination of that employment, the person's retirement
12annuity or retirement pension payments shall resume and be
13recalculated if recalculation is provided for under the
14applicable Article of this Code.
15    If a person who first becomes a member of a retirement
16system or pension fund subject to this Section on or after
17January 1, 2012 and is receiving a retirement annuity or
18retirement pension under that system or fund and accepts on a
19contractual basis a position to provide services to a
20governmental entity from which he or she has retired, then that
21person's annuity or retirement pension earned as an active
22employee of the employer shall be suspended during that
23contractual service. A person receiving an annuity or
24retirement pension under this Code shall notify the pension
25fund or retirement system from which he or she is receiving an
26annuity or retirement pension, as well as his or her

 

 

HB2279- 45 -LRB101 09158 RPS 54252 b

1contractual employer, of his or her retirement status before
2accepting contractual employment. A person who fails to submit
3such notification shall be guilty of a Class A misdemeanor and
4required to pay a fine of $1,000. Upon termination of that
5contractual employment, the person's retirement annuity or
6retirement pension payments shall resume and, if appropriate,
7be recalculated under the applicable provisions of this Code.
8    (i) (Blank).
9    (j) In the case of a conflict between the provisions of
10this Section and any other provision of this Code, the
11provisions of this Section shall control.
12(Source: P.A. 100-23, eff. 7-6-17; 100-201, eff. 8-18-17;
13100-563, eff. 12-8-17; 100-611, eff. 7-20-18; 100-1166, eff.
141-4-19.)
 
15    (40 ILCS 5/1-161)
16    Sec. 1-161. Optional benefits for certain Tier 2 members
17under Articles 14, 15, and 16.
18    (a) Notwithstanding any other provision of this Code to the
19contrary, the provisions of this Section apply to a person who
20first becomes a member or a participant under Article 14, 15,
21or 16 on or after the implementation date under this Section
22for the applicable Article and who does not make the election
23under subsection (b) or (c), whichever applies. The provisions
24of this Section also apply to a person who makes the election
25under subsection (c-5). However, the provisions of this Section

 

 

HB2279- 46 -LRB101 09158 RPS 54252 b

1do not apply to any participant in a self-managed plan or a
2Tier 3 plan established under Article 14, 15, or 16, nor to a
3covered employee under Article 14.
4    As used in this Section and Section 1-160, the
5"implementation date" under this Section means the earliest
6date upon which the board of a retirement system authorizes
7members of that system to begin participating in accordance
8with this Section, as determined by the board of that
9retirement system. Each of the retirement systems subject to
10this Section shall endeavor to make such participation
11available as soon as possible after the effective date of this
12Section and shall establish an implementation date by board
13resolution.
14    (b) In lieu of the benefits provided under this Section, a
15member or participant, except for a participant under Article
1615, may irrevocably elect the benefits under Section 1-160 and
17the benefits otherwise applicable to that member or
18participant. The election must be made within 30 days after
19becoming a member or participant. Each retirement system shall
20establish procedures for making this election.
21    (c) A participant under Article 15 may irrevocably elect
22the benefits otherwise provided to a Tier 2 member under
23Article 15. The election must be made within 30 days after
24becoming a member. The retirement system under Article 15 shall
25establish procedures for making this election.
26    (c-5) A non-covered participant under Article 14 to whom

 

 

HB2279- 47 -LRB101 09158 RPS 54252 b

1Section 1-160 applies, a Tier 2 member under Article 15, or a
2participant under Article 16 to whom Section 1-160 applies may
3irrevocably elect to receive the benefits under this Section in
4lieu of the benefits under Section 1-160 or the benefits
5otherwise available to a Tier 2 member under Article 15,
6whichever is applicable. Each retirement System shall
7establish procedures for making this election.
8    (d) "Final average salary" means the average monthly (or
9annual) salary obtained by dividing the total salary or
10earnings calculated under the Article applicable to the member
11or participant during the last 120 months (or 10 years) of
12service in which the total salary or earnings calculated under
13the applicable Article was the highest by the number of months
14(or years) of service in that period. For the purposes of a
15person to whom this Section applies, in this Code, "final
16average salary" shall be substituted for "final average
17compensation" in Article 14.
18    (e) Beginning on the implementation date, for all purposes
19under this Code (including without limitation the calculation
20of benefits and employee contributions), the annual earnings,
21salary, compensation, or wages (based on the plan year) of a
22member or participant to whom this Section applies shall not at
23any time exceed the federal Social Security Wage Base then in
24effect.
25    (f) A member or participant is entitled to a retirement
26annuity upon written application if he or she has attained the

 

 

HB2279- 48 -LRB101 09158 RPS 54252 b

1normal retirement age determined by the Social Security
2Administration for that member or participant's year of birth,
3but no earlier than 67 years of age, and has at least 10 years
4of service credit and is otherwise eligible under the
5requirements of the applicable Article.
6    (g) The amount of the retirement annuity to which a member
7or participant is entitled shall be computed by multiplying
81.25% for each year of service credit by his or her final
9average salary.
10    (h) Any retirement annuity or supplemental annuity shall be
11subject to annual increases on the first anniversary of the
12annuity start date. Each annual increase shall be one-half the
13annual unadjusted percentage increase (but not less than zero)
14in the consumer price index-w for the 12 months ending with the
15September preceding each November 1 of the originally granted
16retirement annuity. If the annual unadjusted percentage change
17in the consumer price index-w for the 12 months ending with the
18September preceding each November 1 is zero or there is a
19decrease, then the annuity shall not be increased.
20    For the purposes of this Section, "consumer price index-w"
21means the index published by the Bureau of Labor Statistics of
22the United States Department of Labor that measures the average
23change in prices of goods and services purchased by Urban Wage
24Earners and Clerical Workers, United States city average, all
25items, 1982-84 = 100. The new amount resulting from each annual
26adjustment shall be determined by the Public Pension Division

 

 

HB2279- 49 -LRB101 09158 RPS 54252 b

1of the Department of Insurance and made available to the boards
2of the retirement systems and pension funds by November 1 of
3each year.
4    (i) The initial survivor's or widow's annuity of an
5otherwise eligible survivor or widow of a retired member or
6participant to whom this Section applies shall be in the amount
7of 66 2/3% of the retired member's or participant's retirement
8annuity at the date of death. In the case of the death of a
9member or participant who has not retired and to whom this
10Section applies, eligibility for a survivor's or widow's
11annuity shall be determined by the applicable Article of this
12Code. The benefit shall be 66 2/3% of the earned annuity
13without a reduction due to age. A child's annuity of an
14otherwise eligible child shall be in the amount prescribed
15under each Article if applicable.
16    (j) In lieu of any other employee contributions, except for
17the contribution to the defined contribution plan under
18subsection (k) of this Section, each employee shall contribute
196.2% of his her or salary to the retirement system. However,
20the employee contribution under this subsection shall not
21exceed the amount of the total normal cost of the benefits for
22all members making contributions under this Section (except for
23the defined contribution plan under subsection (k) of this
24Section), expressed as a percentage of payroll and certified on
25or before January 15 of each year by the board of trustees of
26the retirement system. If the board of trustees of the

 

 

HB2279- 50 -LRB101 09158 RPS 54252 b

1retirement system certifies that the 6.2% employee
2contribution rate exceeds the normal cost of the benefits under
3this Section (except for the defined contribution plan under
4subsection (k) of this Section), then on or before December 1
5of that year, the board of trustees shall certify the amount of
6the normal cost of the benefits under this Section (except for
7the defined contribution plan under subsection (k) of this
8Section), expressed as a percentage of payroll, to the State
9Actuary and the Commission on Government Forecasting and
10Accountability, and the employee contribution under this
11subsection shall be reduced to that amount beginning July 1 of
12that year. Thereafter, if the normal cost of the benefits under
13this Section (except for the defined contribution plan under
14subsection (k) of this Section), expressed as a percentage of
15payroll and certified on or before January 1 of each year by
16the board of trustees of the retirement system, exceeds 6.2% of
17salary, then on or before January 15 of that year, the board of
18trustees shall certify the normal cost to the State Actuary and
19the Commission on Government Forecasting and Accountability,
20and the employee contributions shall revert back to 6.2% of
21salary beginning January 1 of the following year.
22    (k) In accordance with each retirement system's
23implementation date, each retirement system under Article 14,
2415, or 16 shall prepare and implement a defined contribution
25plan for members or participants who are subject to this
26Section. The defined contribution plan developed under this

 

 

HB2279- 51 -LRB101 09158 RPS 54252 b

1subsection shall be a plan that aggregates employer and
2employee contributions in individual participant accounts
3which, after meeting any other requirements, are used for
4payouts after retirement in accordance with this subsection and
5any other applicable laws.
6        (1) Each member or participant shall contribute a
7    minimum of 4% of his or her salary to the defined
8    contribution plan.
9        (2) For each participant in the defined contribution
10    plan who has been employed with the same employer for at
11    least one year, employer contributions shall be paid into
12    that participant's accounts at a rate expressed as a
13    percentage of salary. This rate may be set for individual
14    employees, but shall be no higher than 6% of salary and
15    shall be no lower than 2% of salary.
16        (3) Employer contributions shall vest when those
17    contributions are paid into a member's or participant's
18    account.
19        (4) The defined contribution plan shall provide a
20    variety of options for investments. These options shall
21    include investments handled by the Illinois State Board of
22    Investment as well as private sector investment options.
23        (5) The defined contribution plan shall provide a
24    variety of options for payouts to retirees and their
25    survivors.
26        (6) To the extent authorized under federal law and as

 

 

HB2279- 52 -LRB101 09158 RPS 54252 b

1    authorized by the retirement system, the defined
2    contribution plan shall allow former participants in the
3    plan to transfer or roll over employee and employer
4    contributions, and the earnings thereon, into other
5    qualified retirement plans.
6        (7) Each retirement system shall reduce the employee
7    contributions credited to the member's defined
8    contribution plan account by an amount determined by that
9    retirement system to cover the cost of offering the
10    benefits under this subsection and any applicable
11    administrative fees.
12        (8) No person shall begin participating in the defined
13    contribution plan until it has attained qualified plan
14    status and received all necessary approvals from the U.S.
15    Internal Revenue Service.
16    (l) In the case of a conflict between the provisions of
17this Section and any other provision of this Code, the
18provisions of this Section shall control.
19(Source: P.A. 100-23, eff. 7-6-17.)
 
20    (40 ILCS 5/2-105.3 new)
21    Sec. 2-105.3. Tier 1 participant; Tier 2 participant; Tier
223 participant. "Tier 1 participant": A participant who first
23became a participant before January 1, 2011.
24    In the case of a Tier 1 participant who elects to
25participate in the Tier 3 plan under Section 2-165.5 of this

 

 

HB2279- 53 -LRB101 09158 RPS 54252 b

1Code, that participant shall be deemed a Tier 1 participant
2only with respect to service performed or established before
3the effective date of that election.
4    "Tier 2 participant": A participant who first became a
5participant on or after January 1, 2011.
6    In the case of a Tier 2 participant who elects to
7participate in the Tier 3 plan under Section 2-165.5 of this
8Code, that Tier 2 member shall be deemed a Tier 2 member only
9with respect to service performed or established before the
10effective date of that election.
11    "Tier 3 participant": A Tier 1 or Tier 2 participant who
12elects to participate in the Tier 3 plan under Section 2-165.5
13of this Code, but only with respect to service performed on or
14after the effective date of that election.
 
15    (40 ILCS 5/2-117)  (from Ch. 108 1/2, par. 2-117)
16    Sec. 2-117. Participants - Election not to participate.
17    (a) Except as provided in subsection (c), every Every
18person who was a member on November 1, 1947, or in military
19service on such date, is subject to the provisions of this
20system beginning upon such date, unless prior to such date he
21or she filed with the board a written notice of election not to
22participate.
23    Every person who becomes a member after November 1, 1947,
24and who is then not a participant becomes a participant
25beginning upon the date of becoming a member unless, within 24

 

 

HB2279- 54 -LRB101 09158 RPS 54252 b

1months from that date, he or she has filed with the board a
2written notice of election not to participate.
3    (b) A member who has filed notice of an election not to
4participate (and a former member who has not yet begun to
5receive a retirement annuity under this Article) may become a
6participant with respect to the period for which the member
7elected not to participate upon filing with the board, before
8April 1, 1993, a written rescission of the election not to
9participate. Upon contributing an amount equal to the
10contributions he or she would have made as a participant from
11November 1, 1947, or the date of becoming a member, whichever
12is later, to the date of becoming a participant, with interest
13at the rate of 4% per annum until the contributions are paid,
14the participant shall receive credit for service as a member
15prior to the date of the rescission, both before and after
16November 1, 1947. The required contributions shall be made
17before commencement of the retirement annuity; otherwise no
18credit for service prior to the date of participation shall be
19granted.
20    (c) Notwithstanding any other provision of this Article, an
21active participant may terminate his or her participation in
22this System (including active participation in the Tier 3 plan,
23if applicable) by notifying the System in writing. An active
24participant terminating participation in this System under
25this subsection shall be entitled to a refund of his or her
26contributions (other than contributions to the Tier 3 plan

 

 

HB2279- 55 -LRB101 09158 RPS 54252 b

1under Section 2-165.5) minus the benefits received prior to the
2termination of participation.
3(Source: P.A. 86-273; 87-1265.)
 
4    (40 ILCS 5/2-162)
5    (Text of Section WITHOUT the changes made by P.A. 98-599,
6which has been held unconstitutional)
7    Sec. 2-162. Application and expiration of new benefit
8increases.
9    (a) As used in this Section, "new benefit increase" means
10an increase in the amount of any benefit provided under this
11Article, or an expansion of the conditions of eligibility for
12any benefit under this Article, that results from an amendment
13to this Code that takes effect after the effective date of this
14amendatory Act of the 94th General Assembly. "New benefit
15increase", however, does not include any benefit increase
16resulting from the changes made to this Article by this
17amendatory Act of the 101st General Assembly.
18    (b) Notwithstanding any other provision of this Code or any
19subsequent amendment to this Code, every new benefit increase
20is subject to this Section and shall be deemed to be granted
21only in conformance with and contingent upon compliance with
22the provisions of this Section.
23    (c) The Public Act enacting a new benefit increase must
24identify and provide for payment to the System of additional
25funding at least sufficient to fund the resulting annual

 

 

HB2279- 56 -LRB101 09158 RPS 54252 b

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

 

 

HB2279- 57 -LRB101 09158 RPS 54252 b

1and qualified for the affected benefit while the new benefit
2increase was in effect and to the affected beneficiaries and
3alternate payees of such persons, but does not apply to any
4other person, including without limitation a person who
5continues in service after the expiration date and did not
6apply and qualify for the affected benefit while the new
7benefit increase was in effect.
8(Source: P.A. 94-4, eff. 6-1-05.)
 
9    (40 ILCS 5/2-165.5 new)
10    Sec. 2-165.5. Tier 3 plan.
11    (a) By July 1, 2020, the System shall prepare and implement
12a Tier 3 plan. The Tier 3 plan developed under this Section
13shall be a plan that aggregates State and employee
14contributions in individual participant accounts that, after
15meeting any other requirements, are used for payouts after
16retirement in accordance with this Section and any other
17applicable laws.
18    As used in this Section, "defined benefit plan" means the
19retirement plan available under this Article to Tier 1 or Tier
202 participants who have not made the election authorized under
21this Section.
22        (1) A participant in the Tier 3 plan shall pay employee
23    contributions at a rate determined by the participant, but
24    not less than 3% of salary and not more than a percentage
25    of salary determined by the Board in accordance with the

 

 

HB2279- 58 -LRB101 09158 RPS 54252 b

1    requirements of State and federal law.
2        (2) State contributions shall be paid into the accounts
3    of all participants in the Tier 3 plan at a uniform rate,
4    expressed as a percentage of salary and determined for each
5    year. This rate shall be no higher than 7.6% of salary and
6    shall be no lower than 3% of salary. The State shall adjust
7    this rate annually.
8        (3) The Tier 3 plan shall require 5 years of
9    participation in the Tier 3 plan before vesting in State
10    contributions. If the participant fails to vest in them,
11    the State contributions, and the earnings thereon, shall be
12    forfeited.
13        (4) The Tier 3 plan shall provide a variety of options
14    for investments. These options shall include investments
15    handled by the Illinois State Board of Investment as well
16    as private sector investment options.
17        (5) The Tier 3 plan shall provide a variety of options
18    for payouts to participants in the Tier 3 plan who are no
19    longer active in the System and their survivors.
20        (6) To the extent authorized under federal law and as
21    authorized by the System, the plan shall allow former
22    participants in the plan to transfer or roll over employee
23    and vested State contributions, and the earnings thereon,
24    from the Tier 3 plan into other qualified retirement plans.
25        (7) The System shall reduce the employee contributions
26    credited to the participant's Tier 3 plan account by an

 

 

HB2279- 59 -LRB101 09158 RPS 54252 b

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

 

 

HB2279- 60 -LRB101 09158 RPS 54252 b

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

 

 

HB2279- 61 -LRB101 09158 RPS 54252 b

1coordinate with the Illinois Department of Central Management
2Services and other retirement systems administering a Tier 3
3plan in accordance with this amendatory Act of the 101st
4General Assembly to provide information concerning the impact
5of the Tier 3 plan set forth in this Section.
6    (d) Notwithstanding any other provision of this Section, no
7person shall begin participating in the Tier 3 plan until it
8has attained qualified plan status and received all necessary
9approvals from the U.S. Internal Revenue Service.
10    (e) The System shall report on its progress under this
11Section, including the available details of the Tier 3 plan and
12the System's plans for informing eligible Tier 1 and Tier 2
13participants about the plan, to the Governor and the General
14Assembly on or before January 15, 2020.
15    (f) The Illinois State Board of Investment shall be the
16plan sponsor for the Tier 3 plan established under this
17Section.
18    (g) The intent of this amendatory Act of the 101st General
19Assembly is to ensure that the State's normal cost of
20participation in the Tier 3 plan is similar, and if possible
21equal, to the State's normal cost of participation in the
22defined benefit plan, unless a lower State's normal cost is
23necessary to ensure cost neutrality.
 
24    (40 ILCS 5/7-114)  (from Ch. 108 1/2, par. 7-114)
25    Sec. 7-114. Earnings. "Earnings":

 

 

HB2279- 62 -LRB101 09158 RPS 54252 b

1    (a) An amount to be determined by the board, equal to the
2sum of:
3        1. The total amount of money paid to an employee for
4    personal services or official duties as an employee (except
5    those employed as independent contractors) paid out of the
6    general fund, or out of any special funds controlled by the
7    municipality, or by any instrumentality thereof, or
8    participating instrumentality, including compensation,
9    fees, allowances (but not including amounts associated
10    with a vehicle allowance payable to an employee who first
11    becomes a participating employee on or after the effective
12    date of this amendatory Act of the 100th General Assembly),
13    or other emolument paid for official duties (but not
14    including automobile maintenance, travel expense, or
15    reimbursements for expenditures incurred in the
16    performance of duties or, in the case of a person who first
17    becomes a participant on or after the effective date of
18    this amendatory Act of the 101st General Assembly, payments
19    for unused sick or vacation time) and, for fee offices, the
20    fees or earnings of the offices to the extent such fees are
21    paid out of funds controlled by the municipality, or
22    instrumentality or participating instrumentality; and
23        2. The money value, as determined by rules prescribed
24    by the governing body of the municipality, or
25    instrumentality thereof, of any board, lodging, fuel,
26    laundry, and other allowances provided an employee in lieu

 

 

HB2279- 63 -LRB101 09158 RPS 54252 b

1    of money.
2    (b) For purposes of determining benefits payable under this
3fund payments to a person who is engaged in an independently
4established trade, occupation, profession or business and who
5is paid for his service on a basis other than a monthly or
6other regular salary, are not earnings.
7    (c) If a disabled participating employee is eligible to
8receive Workers' Compensation for an accidental injury and the
9participating municipality or instrumentality which employed
10the participating employee when injured continues to pay the
11participating employee regular salary or other compensation or
12pays the employee an amount in excess of the Workers'
13Compensation amount, then earnings shall be deemed to be the
14total payments, including an amount equal to the Workers'
15Compensation payments. These payments shall be subject to
16employee contributions and allocated as if paid to the
17participating employee when the regular payroll amounts would
18have been paid if the participating employee had continued
19working, and creditable service shall be awarded for this
20period.
21    (d) If an elected official who is a participating employee
22becomes disabled but does not resign and is not removed from
23office, then earnings shall include all salary payments made
24for the remainder of that term of office and the official shall
25be awarded creditable service for the term of office.
26    (e) If a participating employee is paid pursuant to "An Act

 

 

HB2279- 64 -LRB101 09158 RPS 54252 b

1to provide for the continuation of compensation for law
2enforcement officers, correctional officers and firemen who
3suffer disabling injury in the line of duty", approved
4September 6, 1973, as amended, the payments shall be deemed
5earnings, and the participating employee shall be awarded
6creditable service for this period.
7    (f) Additional compensation received by a person while
8serving as a supervisor of assessments, assessor, deputy
9assessor or member of a board of review from the State of
10Illinois pursuant to Section 4-10 or 4-15 of the Property Tax
11Code shall not be earnings for purposes of this Article and
12shall not be included in the contribution formula or
13calculation of benefits for such person pursuant to this
14Article.
15(Source: P.A. 100-411, eff. 8-25-17.)
 
16    (40 ILCS 5/7-116)  (from Ch. 108 1/2, par. 7-116)
17    (Text of Section WITHOUT the changes made by P.A. 98-599,
18which has been held unconstitutional)
19    Sec. 7-116. "Final rate of earnings":
20    (a) For retirement and survivor annuities, the monthly
21earnings obtained by dividing the total earnings received by
22the employee during the period of either (1) the 48 consecutive
23months of service within the last 120 months of service in
24which his total earnings were the highest or (2) the employee's
25total period of service, by the number of months of service in

 

 

HB2279- 65 -LRB101 09158 RPS 54252 b

1such period.
2    (b) For death benefits, the higher of the rate determined
3under paragraph (a) of this Section or total earnings received
4in the last 12 months of service divided by twelve. If the
5deceased employee has less than 12 months of service, the
6monthly final rate shall be the monthly rate of pay the
7employee was receiving when he began service.
8    (c) For disability benefits, the total earnings of a
9participating employee in the last 12 calendar months of
10service prior to the date he becomes disabled divided by 12.
11    (d) In computing the final rate of earnings: (1) the
12earnings rate for all periods of prior service shall be
13considered equal to the average earnings rate for the last 3
14calendar years of prior service for which creditable service is
15received under Section 7-139 or, if there is less than 3 years
16of creditable prior service, the average for the total prior
17service period for which creditable service is received under
18Section 7-139; (2) for out of state service and authorized
19leave, the earnings rate shall be the rate upon which service
20credits are granted; (3) periods of military leave shall not be
21considered; (4) the earnings rate for all periods of disability
22shall be considered equal to the rate of earnings upon which
23the employee's disability benefits are computed for such
24periods; (5) the earnings to be considered for each of the
25final three months of the final earnings period for persons who
26first became participants before January 1, 2012 and the

 

 

HB2279- 66 -LRB101 09158 RPS 54252 b

1earnings to be considered for each of the final 24 months for
2participants who first become participants on or after January
31, 2012 shall not exceed 125% of the highest earnings of any
4other month in the final earnings period; and (6) the annual
5amount of final rate of earnings shall be the monthly amount
6multiplied by the number of months of service normally required
7by the position in a year; and (7) in the case of a person who
8first becomes a participant on or after the effective date of
9this amendatory Act of the 101st General Assembly, payments for
10unused sick or vacation time shall not be considered.
11(Source: P.A. 97-609, eff. 1-1-12.)
 
12    (40 ILCS 5/7-139)  (from Ch. 108 1/2, par. 7-139)
13    Sec. 7-139. Credits and creditable service to employees.
14    (a) Each participating employee shall be granted credits
15and creditable service, for purposes of determining the amount
16of any annuity or benefit to which he or a beneficiary is
17entitled, as follows:
18        1. For prior service: Each participating employee who
19    is an employee of a participating municipality or
20    participating instrumentality on the effective date shall
21    be granted creditable service, but no credits under
22    paragraph 2 of this subsection (a), for periods of prior
23    service for which credit has not been received under any
24    other pension fund or retirement system established under
25    this Code, as follows:

 

 

HB2279- 67 -LRB101 09158 RPS 54252 b

1        If the effective date of participation for the
2    participating municipality or participating
3    instrumentality is on or before January 1, 1998, creditable
4    service shall be granted for the entire period of prior
5    service with that employer without any employee
6    contribution.
7        If the effective date of participation for the
8    participating municipality or participating
9    instrumentality is after January 1, 1998, creditable
10    service shall be granted for the last 20% of the period of
11    prior service with that employer, but no more than 5 years,
12    without any employee contribution. A participating
13    employee may establish creditable service for the
14    remainder of the period of prior service with that employer
15    by making an application in writing, accompanied by payment
16    of an employee contribution in an amount determined by the
17    Fund, based on the employee contribution rates in effect at
18    the time of application for the creditable service and the
19    employee's salary rate on the effective date of
20    participation for that employer, plus interest at the
21    effective rate from the date of the prior service to the
22    date of payment. Application for this creditable service
23    may be made at any time while the employee is still in
24    service.
25        A municipality that (i) has at least 35 employees; (ii)
26    is located in a county with at least 2,000,000 inhabitants;

 

 

HB2279- 68 -LRB101 09158 RPS 54252 b

1    and (iii) maintains an independent defined benefit pension
2    plan for the benefit of its eligible employees may restrict
3    creditable service in whole or in part for periods of prior
4    service with the employer if the governing body of the
5    municipality adopts an irrevocable resolution to restrict
6    that creditable service and files the resolution with the
7    board before the municipality's effective date of
8    participation.
9        Any person who has withdrawn from the service of a
10    participating municipality or participating
11    instrumentality prior to the effective date, who reenters
12    the service of the same municipality or participating
13    instrumentality after the effective date and becomes a
14    participating employee is entitled to creditable service
15    for prior service as otherwise provided in this subdivision
16    (a)(1) only if he or she renders 2 years of service as a
17    participating employee after the effective date.
18    Application for such service must be made while in a
19    participating status. The salary rate to be used in the
20    calculation of the required employee contribution, if any,
21    shall be the employee's salary rate at the time of first
22    reentering service with the employer after the employer's
23    effective date of participation.
24        2. For current service, each participating employee
25    shall be credited with:
26            a. Additional credits of amounts equal to each

 

 

HB2279- 69 -LRB101 09158 RPS 54252 b

1        payment of additional contributions received from him
2        under Section 7-173, as of the date the corresponding
3        payment of earnings is payable to him.
4            b. Normal credits of amounts equal to each payment
5        of normal contributions received from him, as of the
6        date the corresponding payment of earnings is payable
7        to him, and normal contributions made for the purpose
8        of establishing out-of-state service credits as
9        permitted under the conditions set forth in paragraph 6
10        of this subsection (a).
11            c. Municipality credits in an amount equal to 1.4
12        times the normal credits, except those established by
13        out-of-state service credits, as of the date of
14        computation of any benefit if these credits would
15        increase the benefit.
16            d. Survivor credits equal to each payment of
17        survivor contributions received from the participating
18        employee as of the date the corresponding payment of
19        earnings is payable, and survivor contributions made
20        for the purpose of establishing out-of-state service
21        credits.
22        3. For periods of temporary and total and permanent
23    disability benefits, each employee receiving disability
24    benefits shall be granted creditable service for the period
25    during which disability benefits are payable. Normal and
26    survivor credits, based upon the rate of earnings applied

 

 

HB2279- 70 -LRB101 09158 RPS 54252 b

1    for disability benefits, shall also be granted if such
2    credits would result in a higher benefit to any such
3    employee or his beneficiary.
4        4. For authorized leave of absence without pay: A
5    participating employee shall be granted credits and
6    creditable service for periods of authorized leave of
7    absence without pay under the following conditions:
8            a. An application for credits and creditable
9        service is submitted to the board while the employee is
10        in a status of active employment.
11            b. Not more than 12 complete months of creditable
12        service for authorized leave of absence without pay
13        shall be counted for purposes of determining any
14        benefits payable under this Article.
15            c. Credits and creditable service shall be granted
16        for leave of absence only if such leave is approved by
17        the governing body of the municipality, including
18        approval of the estimated cost thereof to the
19        municipality as determined by the fund, and employee
20        contributions, plus interest at the effective rate
21        applicable for each year from the end of the period of
22        leave to date of payment, have been paid to the fund in
23        accordance with Section 7-173. The contributions shall
24        be computed upon the assumption earnings continued
25        during the period of leave at the rate in effect when
26        the leave began.

 

 

HB2279- 71 -LRB101 09158 RPS 54252 b

1            d. Benefits under the provisions of Sections
2        7-141, 7-146, 7-150 and 7-163 shall become payable to
3        employees on authorized leave of absence, or their
4        designated beneficiary, only if such leave of absence
5        is creditable hereunder, and if the employee has at
6        least one year of creditable service other than the
7        service granted for leave of absence. Any employee
8        contributions due may be deducted from any benefits
9        payable.
10            e. No credits or creditable service shall be
11        allowed for leave of absence without pay during any
12        period of prior service.
13        5. For military service: The governing body of a
14    municipality or participating instrumentality may elect to
15    allow creditable service to participating employees who
16    leave their employment to serve in the armed forces of the
17    United States for all periods of such service, provided
18    that the person returns to active employment within 90 days
19    after completion of full time active duty, but no
20    creditable service shall be allowed such person for any
21    period that can be used in the computation of a pension or
22    any other pay or benefit, other than pay for active duty,
23    for service in any branch of the armed forces of the United
24    States. If necessary to the computation of any benefit, the
25    board shall establish municipality credits for
26    participating employees under this paragraph on the

 

 

HB2279- 72 -LRB101 09158 RPS 54252 b

1    assumption that the employee received earnings at the rate
2    received at the time he left the employment to enter the
3    armed forces. A participating employee in the armed forces
4    shall not be considered an employee during such period of
5    service and no additional death and no disability benefits
6    are payable for death or disability during such period.
7        Any participating employee who left his employment
8    with a municipality or participating instrumentality to
9    serve in the armed forces of the United States and who
10    again became a participating employee within 90 days after
11    completion of full time active duty by entering the service
12    of a different municipality or participating
13    instrumentality, which has elected to allow creditable
14    service for periods of military service under the preceding
15    paragraph, shall also be allowed creditable service for his
16    period of military service on the same terms that would
17    apply if he had been employed, before entering military
18    service, by the municipality or instrumentality which
19    employed him after he left the military service and the
20    employer costs arising in relation to such grant of
21    creditable service shall be charged to and paid by that
22    municipality or instrumentality.
23        Notwithstanding the foregoing, any participating
24    employee shall be entitled to creditable service as
25    required by any federal law relating to re-employment
26    rights of persons who served in the United States Armed

 

 

HB2279- 73 -LRB101 09158 RPS 54252 b

1    Services. Such creditable service shall be granted upon
2    payment by the member of an amount equal to the employee
3    contributions which would have been required had the
4    employee continued in service at the same rate of earnings
5    during the military leave period, plus interest at the
6    effective rate.
7        5.1. In addition to any creditable service established
8    under paragraph 5 of this subsection (a), creditable
9    service may be granted for up to 48 months of service in
10    the armed forces of the United States.
11        In order to receive creditable service for military
12    service under this paragraph 5.1, a participating employee
13    must (1) apply to the Fund in writing and provide evidence
14    of the military service that is satisfactory to the Board;
15    (2) obtain the written approval of the current employer;
16    and (3) make contributions to the Fund equal to (i) the
17    employee contributions that would have been required had
18    the service been rendered as a member, plus (ii) an amount
19    determined by the board to be equal to the employer's
20    normal cost of the benefits accrued for that military
21    service, plus (iii) interest on items (i) and (ii) from the
22    date of first membership in the Fund to the date of
23    payment. The required interest shall be calculated at the
24    regular interest rate.
25        The changes made to this paragraph 5.1 by Public Acts
26    95-483 and 95-486 apply only to participating employees in

 

 

HB2279- 74 -LRB101 09158 RPS 54252 b

1    service on or after August 28, 2007 (the effective date of
2    those Public Acts).
3        6. For out-of-state service: Creditable service shall
4    be granted for service rendered to an out-of-state local
5    governmental body under the following conditions: The
6    employee had participated and has irrevocably forfeited
7    all rights to benefits in the out-of-state public employees
8    pension system; the governing body of his participating
9    municipality or instrumentality authorizes the employee to
10    establish such service; the employee has 2 years current
11    service with this municipality or participating
12    instrumentality; the employee makes a payment of
13    contributions, which shall be computed at 8% (normal) plus
14    2% (survivor) times length of service purchased times the
15    average rate of earnings for the first 2 years of service
16    with the municipality or participating instrumentality
17    whose governing body authorizes the service established
18    plus interest at the effective rate on the date such
19    credits are established, payable from the date the employee
20    completes the required 2 years of current service to date
21    of payment. In no case shall more than 120 months of
22    creditable service be granted under this provision.
23        7. For retroactive service: Any employee who could have
24    but did not elect to become a participating employee, or
25    who should have been a participant in the Municipal Public
26    Utilities Annuity and Benefit Fund before that fund was

 

 

HB2279- 75 -LRB101 09158 RPS 54252 b

1    superseded, may receive creditable service for the period
2    of service not to exceed 50 months; however, a current or
3    former elected or appointed official of a participating
4    municipality may establish credit under this paragraph 7
5    for more than 50 months of service as an official of that
6    municipality, if the excess over 50 months is approved by
7    resolution of the governing body of the affected
8    municipality filed with the Fund before January 1, 2002.
9        Any employee who is a participating employee on or
10    after September 24, 1981 and who was excluded from
11    participation by the age restrictions removed by Public Act
12    82-596 may receive creditable service for the period, on or
13    after January 1, 1979, excluded by the age restriction and,
14    in addition, if the governing body of the participating
15    municipality or participating instrumentality elects to
16    allow creditable service for all employees excluded by the
17    age restriction prior to January 1, 1979, for service
18    during the period prior to that date excluded by the age
19    restriction. Any employee who was excluded from
20    participation by the age restriction removed by Public Act
21    82-596 and who is not a participating employee on or after
22    September 24, 1981 may receive creditable service for
23    service after January 1, 1979. Creditable service under
24    this paragraph shall be granted upon payment of the
25    employee contributions which would have been required had
26    he participated, with interest at the effective rate for

 

 

HB2279- 76 -LRB101 09158 RPS 54252 b

1    each year from the end of the period of service established
2    to date of payment.
3        8. For accumulated unused sick leave: A participating
4    employee who first becomes a participating employee before
5    the effective date of this amendatory Act of the 101st
6    General Assembly and who is applying for a retirement
7    annuity shall be entitled to creditable service for that
8    portion of the employee's accumulated unused sick leave for
9    which payment is not received, as follows:
10            a. Sick leave days shall be limited to those
11        accumulated under a sick leave plan established by a
12        participating municipality or participating
13        instrumentality which is available to all employees or
14        a class of employees.
15            b. Except as provided in item b-1, only sick leave
16        days accumulated with a participating municipality or
17        participating instrumentality with which the employee
18        was in service within 60 days of the effective date of
19        his retirement annuity shall be credited; If the
20        employee was in service with more than one employer
21        during this period only the sick leave days with the
22        employer with which the employee has the greatest
23        number of unpaid sick leave days shall be considered.
24            b-1. If the employee was in the service of more
25        than one employer as defined in item (2) of paragraph
26        (a) of subsection (A) of Section 7-132, then the sick

 

 

HB2279- 77 -LRB101 09158 RPS 54252 b

1        leave days from all such employers shall be credited,
2        as long as the creditable service attributed to those
3        sick leave days does not exceed the limitation in item
4        f of this paragraph 8. In calculating the creditable
5        service under this item b-1, the sick leave days from
6        the last employer shall be considered first, then the
7        remaining sick leave days shall be considered until
8        there are no more days or the maximum creditable sick
9        leave threshold under item f of this paragraph 8 has
10        been reached.
11            c. The creditable service granted shall be
12        considered solely for the purpose of computing the
13        amount of the retirement annuity and shall not be used
14        to establish any minimum service period required by any
15        provision of the Illinois Pension Code, the effective
16        date of the retirement annuity, or the final rate of
17        earnings.
18            d. The creditable service shall be at the rate of
19        1/20 of a month for each full sick day, provided that
20        no more than 12 months may be credited under this
21        subdivision 8.
22            e. Employee contributions shall not be required
23        for creditable service under this subdivision 8.
24            f. Each participating municipality and
25        participating instrumentality with which an employee
26        has service within 60 days of the effective date of his

 

 

HB2279- 78 -LRB101 09158 RPS 54252 b

1        retirement annuity shall certify to the board the
2        number of accumulated unpaid sick leave days credited
3        to the employee at the time of termination of service.
4        9. For service transferred from another system:
5    Credits and creditable service shall be granted for service
6    under Article 4, 5, 8, 14, or 16 of this Act, to any active
7    member of this Fund, and to any inactive member who has
8    been a county sheriff, upon transfer of such credits
9    pursuant to Section 4-108.3, 5-235, 8-226.7, 14-105.6, or
10    16-131.4, and payment by the member of the amount by which
11    (1) the employer and employee contributions that would have
12    been required if he had participated in this Fund as a
13    sheriff's law enforcement employee during the period for
14    which credit is being transferred, plus interest thereon at
15    the effective rate for each year, compounded annually, from
16    the date of termination of the service for which credit is
17    being transferred to the date of payment, exceeds (2) the
18    amount actually transferred to the Fund. Such transferred
19    service shall be deemed to be service as a sheriff's law
20    enforcement employee for the purposes of Section 7-142.1.
21        10. (Blank).
22        11. For service transferred from an Article 3 system
23    under Section 3-110.3: Credits and creditable service
24    shall be granted for service under Article 3 of this Act as
25    provided in Section 3-110.3, to any active member of this
26    Fund, upon transfer of such credits pursuant to Section

 

 

HB2279- 79 -LRB101 09158 RPS 54252 b

1    3-110.3. If the board determines that the amount
2    transferred is less than the true cost to the Fund of
3    allowing that creditable service to be established, then in
4    order to establish that creditable service, the member must
5    pay to the Fund an additional contribution equal to the
6    difference, as determined by the board in accordance with
7    the rules and procedures adopted under this paragraph. If
8    the member does not make the full additional payment as
9    required by this paragraph prior to termination of his
10    participation with that employer, then his or her
11    creditable service shall be reduced by an amount equal to
12    the difference between the amount transferred under
13    Section 3-110.3, including any payments made by the member
14    under this paragraph prior to termination, and the true
15    cost to the Fund of allowing that creditable service to be
16    established, as determined by the board in accordance with
17    the rules and procedures adopted under this paragraph.
18        The board shall establish by rule the manner of making
19    the calculation required under this paragraph 11, taking
20    into account the appropriate actuarial assumptions; the
21    member's service, age, and salary history, and any other
22    factors that the board determines to be relevant.
23        12. For omitted service: Any employee who was employed
24    by a participating employer in a position that required
25    participation, but who was not enrolled in the Fund, may
26    establish such credits under the following conditions:

 

 

HB2279- 80 -LRB101 09158 RPS 54252 b

1            a. Application for such credits is received by the
2        Board while the employee is an active participant of
3        the Fund or a reciprocal retirement system.
4            b. Eligibility for participation and earnings are
5        verified by the Authorized Agent of the participating
6        employer for which the service was rendered.
7        Creditable service under this paragraph shall be
8    granted upon payment of the employee contributions that
9    would have been required had he participated, which shall
10    be calculated by the Fund using the member contribution
11    rate in effect during the period that the service was
12    rendered.
13    (b) Creditable service - amount:
14        1. One month of creditable service shall be allowed for
15    each month for which a participating employee made
16    contributions as required under Section 7-173, or for which
17    creditable service is otherwise granted hereunder. Not
18    more than 1 month of service shall be credited and counted
19    for 1 calendar month, and not more than 1 year of service
20    shall be credited and counted for any calendar year. A
21    calendar month means a nominal month beginning on the first
22    day thereof, and a calendar year means a year beginning
23    January 1 and ending December 31.
24        2. A seasonal employee shall be given 12 months of
25    creditable service if he renders the number of months of
26    service normally required by the position in a 12-month

 

 

HB2279- 81 -LRB101 09158 RPS 54252 b

1    period and he remains in service for the entire 12-month
2    period. Otherwise a fractional year of service in the
3    number of months of service rendered shall be credited.
4        3. An intermittent employee shall be given creditable
5    service for only those months in which a contribution is
6    made under Section 7-173.
7    (c) No application for correction of credits or creditable
8service shall be considered unless the board receives an
9application for correction while (1) the applicant is a
10participating employee and in active employment with a
11participating municipality or instrumentality, or (2) while
12the applicant is actively participating in a pension fund or
13retirement system which is a participating system under the
14Retirement Systems Reciprocal Act. A participating employee or
15other applicant shall not be entitled to credits or creditable
16service unless the required employee contributions are made in
17a lump sum or in installments made in accordance with board
18rule. Payments made to establish service credit under paragraph
191, 4, 5, 5.1, 6, 7, or 12 of subsection (a) of this Section must
20be received by the Board while the applicant is an active
21participant in the Fund or a reciprocal retirement system,
22except that an applicant may make one payment after termination
23of active participation in the Fund or a reciprocal retirement
24system.
25    (d) Upon the granting of a retirement, surviving spouse or
26child annuity, a death benefit or a separation benefit, on

 

 

HB2279- 82 -LRB101 09158 RPS 54252 b

1account of any employee, all individual accumulated credits
2shall thereupon terminate. Upon the withdrawal of additional
3contributions, the credits applicable thereto shall thereupon
4terminate. Terminated credits shall not be applied to increase
5the benefits any remaining employee would otherwise receive
6under this Article.
7(Source: P.A. 100-148, eff. 8-18-17.)
 
8    (40 ILCS 5/14-103.05)  (from Ch. 108 1/2, par. 14-103.05)
9    Sec. 14-103.05. Employee.
10    (a) Except as provided in subsection (d), any Any person
11employed by a Department who receives salary for personal
12services rendered to the Department on a warrant issued
13pursuant to a payroll voucher certified by a Department and
14drawn by the State Comptroller upon the State Treasurer,
15including an elected official described in subparagraph (d) of
16Section 14-104, shall become an employee for purpose of
17membership in the Retirement System on the first day of such
18employment.
19    A person entering service on or after January 1, 1972 and
20prior to January 1, 1984 shall become a member as a condition
21of employment and shall begin making contributions as of the
22first day of employment.
23    A person entering service on or after January 1, 1984
24shall, upon completion of 6 months of continuous service which
25is not interrupted by a break of more than 2 months, become a

 

 

HB2279- 83 -LRB101 09158 RPS 54252 b

1member as a condition of employment. Contributions shall begin
2the first of the month after completion of the qualifying
3period.
4    A person employed by the Chicago Metropolitan Agency for
5Planning on the effective date of this amendatory Act of the
695th General Assembly who was a member of this System as an
7employee of the Chicago Area Transportation Study and makes an
8election under Section 14-104.13 to participate in this System
9for his or her employment with the Chicago Metropolitan Agency
10for Planning.
11    The qualifying period of 6 months of service is not
12applicable to: (1) a person who has been granted credit for
13service in a position covered by the State Universities
14Retirement System, the Teachers' Retirement System of the State
15of Illinois, the General Assembly Retirement System, or the
16Judges Retirement System of Illinois unless that service has
17been forfeited under the laws of those systems; (2) a person
18entering service on or after July 1, 1991 in a noncovered
19position; (3) a person to whom Section 14-108.2a or 14-108.2b
20applies; or (4) a person to whom subsection (a-5) of this
21Section applies.
22    (a-5) Except as provided in subsection (d), a A person
23entering service on or after December 1, 2010 and before the
24effective date of this amendatory Act of the 101st General
25Assembly shall become a member as a condition of employment and
26shall begin making contributions as of the first day of

 

 

HB2279- 84 -LRB101 09158 RPS 54252 b

1employment. A person serving in the qualifying period on
2December 1, 2010 will become a member on December 1, 2010 and
3shall begin making contributions as of December 1, 2010.
4    (b) The term "employee" does not include the following:
5        (1) members of the State Legislature, and persons
6    electing to become members of the General Assembly
7    Retirement System pursuant to Section 2-105;
8        (2) incumbents of offices normally filled by vote of
9    the people;
10        (3) except as otherwise provided in this Section, any
11    person appointed by the Governor with the advice and
12    consent of the Senate unless that person elects to
13    participate in this system;
14        (3.1) any person serving as a commissioner of an ethics
15    commission created under the State Officials and Employees
16    Ethics Act unless that person elects to participate in this
17    system with respect to that service as a commissioner;
18        (3.2) any person serving as a part-time employee in any
19    of the following positions: Legislative Inspector General,
20    Special Legislative Inspector General, employee of the
21    Office of the Legislative Inspector General, Executive
22    Director of the Legislative Ethics Commission, or staff of
23    the Legislative Ethics Commission, regardless of whether
24    he or she is in active service on or after July 8, 2004
25    (the effective date of Public Act 93-685), unless that
26    person elects to participate in this System with respect to

 

 

HB2279- 85 -LRB101 09158 RPS 54252 b

1    that service; in this item (3.2), a "part-time employee" is
2    a person who is not required to work at least 35 hours per
3    week;
4        (3.3) any person who has made an election under Section
5    1-123 and who is serving either as legal counsel in the
6    Office of the Governor or as Chief Deputy Attorney General;
7        (4) except as provided in Section 14-108.2 or
8    14-108.2c, any person who is covered or eligible to be
9    covered by the Teachers' Retirement System of the State of
10    Illinois, the State Universities Retirement System, or the
11    Judges Retirement System of Illinois;
12        (5) an employee of a municipality or any other
13    political subdivision of the State;
14        (6) any person who becomes an employee after June 30,
15    1979 as a public service employment program participant
16    under the Federal Comprehensive Employment and Training
17    Act and whose wages or fringe benefits are paid in whole or
18    in part by funds provided under such Act;
19        (7) enrollees of the Illinois Young Adult Conservation
20    Corps program, administered by the Department of Natural
21    Resources, authorized grantee pursuant to Title VIII of the
22    "Comprehensive Employment and Training Act of 1973", 29 USC
23    993, as now or hereafter amended;
24        (8) enrollees and temporary staff of programs
25    administered by the Department of Natural Resources under
26    the Youth Conservation Corps Act of 1970;

 

 

HB2279- 86 -LRB101 09158 RPS 54252 b

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

 

 

HB2279- 87 -LRB101 09158 RPS 54252 b

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

 

 

HB2279- 88 -LRB101 09158 RPS 54252 b

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

 

 

HB2279- 89 -LRB101 09158 RPS 54252 b

1of these contributions may be paid on the employee's behalf or
2picked up for tax purposes (if authorized under federal law) by
3the labor organization.
4    A person who is an employee as defined in this subsection
5(c) may establish service credit for similar employment prior
6to becoming an employee under this subsection by paying to the
7System for that employment the contributions specified in this
8subsection, plus interest at the effective rate from the date
9of service to the date of payment. However, credit shall not be
10granted under this subsection (c) for any such prior employment
11for which the applicant received credit under any other
12provision of this Code or during which the applicant was on a
13leave of absence.
14    (d) Notwithstanding any other provision of this Article,
15beginning on the effective date of this amendatory Act of the
16101st General Assembly, a person is not required, as a
17condition of employment or otherwise, to participate in this
18System. An active employee may terminate his or her
19participation in this System (including active participation
20in the Tier 3 plan, if applicable) by notifying the System in
21writing. An active employee terminating participation in this
22System under this subsection shall be entitled to a refund of
23his or her contributions (other than contributions to the Tier
243 plan under Section 14-155.5) minus the benefits received
25prior to the termination of participation.
26(Source: P.A. 96-1490, eff. 1-1-11; 97-609, eff. 1-1-12.)
 

 

 

HB2279- 90 -LRB101 09158 RPS 54252 b

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

 

 

HB2279- 91 -LRB101 09158 RPS 54252 b

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

 

 

HB2279- 92 -LRB101 09158 RPS 54252 b

1for service on or after July 1, 2013, "compensation" does not
2include any stipend payable to an employee for service on a
3board or commission.
4    (g) Notwithstanding any other provision of this Section,
5for an employee who first becomes a participant on or after the
6effective date of this amendatory Act of the 101st General
7Assembly, "compensation" does not include any payments or
8reimbursements for travel vouchers submitted more than 30 days
9after the last day of travel for which the voucher is
10submitted.
11(Source: P.A. 98-449, eff. 8-16-13.)
 
12    (40 ILCS 5/14-103.41)
13    Sec. 14-103.41. Tier 1 member; Tier 2 member; Tier 3
14member. "Tier 1 member": A member of this System who first
15became a member or participant before January 1, 2011 under any
16reciprocal retirement system or pension fund established under
17this Code other than a retirement system or pension fund
18established under Article 2, 3, 4, 5, 6, or 18 of this Code.
19    In the case of a Tier 1 member who elects to participate in
20the Tier 3 plan under Section 14-155.5 of this Code, that Tier
211 member shall be deemed a Tier 1 member only with respect to
22service performed or established before the effective date of
23that election.
24    "Tier 2 member": A member of this System who first becomes
25a member under this Article on or after January 1, 2011 and who

 

 

HB2279- 93 -LRB101 09158 RPS 54252 b

1is not a Tier 1 member.
2    In the case of a Tier 2 member who elects to participate in
3the Tier 3 plan under Section 14-155.5 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    "Tier 3 member": A Tier 1 or Tier 2 member who elects to
8participate in the Tier 3 plan under Section 14-155.5 of this
9Code, but only with respect to service performed on or after
10the effective date of that election.
11(Source: P.A. 100-587, eff. 6-4-18.)
 
12    (40 ILCS 5/14-104.3)  (from Ch. 108 1/2, par. 14-104.3)
13    (Text of Section WITHOUT the changes made by P.A. 98-599,
14which has been held unconstitutional)
15    Sec. 14-104.3. Notwithstanding provisions contained in
16Section 14-103.10, any person who first becomes a member before
17the effective date of this amendatory Act of the 101st General
18Assembly and who at the time of retirement and after December
196, 1983 receives compensation in a lump sum for accumulated
20vacation, sickness, or personal business may receive service
21credit for such periods by making contributions within 90 days
22of withdrawal, based on the rate of compensation in effect
23immediately prior to retirement and the contribution rate then
24in effect. Any person who first becomes a member on or after
25the effective date of this amendatory Act of the 101st General

 

 

HB2279- 94 -LRB101 09158 RPS 54252 b

1Assembly and who receives compensation in a lump sum for
2accumulated vacation, sickness, or personal business may not
3receive service credit for such periods. Exercising the option
4provided in this Section shall not change a member's date of
5withdrawal or final average compensation for purposes of
6computing the amount or effective date of a retirement annuity.
7Any annuitant who establishes service credit as herein provided
8shall have his retirement annuity adjusted retroactively to the
9date of retirement.
10(Source: P.A. 83-1362.)
 
11    (40 ILCS 5/14-106)  (from Ch. 108 1/2, par. 14-106)
12    (Text of Section WITHOUT the changes made by P.A. 98-599,
13which has been held unconstitutional)
14    Sec. 14-106. Membership service credit.
15    (a) After January 1, 1944, all service of a member since he
16last became a member with respect to which contributions are
17made shall count as membership service; provided, that for
18service on and after July 1, 1950, 12 months of service shall
19constitute a year of membership service, the completion of 15
20days or more of service during any month shall constitute 1
21month of membership service, 8 to 15 days shall constitute 1/2
22month of membership service and less than 8 days shall
23constitute 1/4 month of membership service. The payroll record
24of each department shall constitute conclusive evidence of the
25record of service rendered by a member.

 

 

HB2279- 95 -LRB101 09158 RPS 54252 b

1    (b) For a member who is employed and paid on an
2academic-year basis rather than on a 12-month annual basis,
3employment for a full academic year shall constitute a full
4year of membership service, except that the member shall not
5receive more than one year of membership service credit (plus
6any additional service credit granted for unused sick leave)
7for service during any 12-month period. This subsection (b)
8applies to all such service for which the member has not begun
9to receive a retirement annuity before January 1, 2001.
10    (c) A person who first becomes a member before the
11effective date of this amendatory Act of the 101st General
12Assembly shall be entitled to additional service credit, under
13rules prescribed by the Board, for accumulated unused sick
14leave credited to his account in the last Department on the
15date of withdrawal from service or for any period for which he
16would have been eligible to receive benefits under a sick pay
17plan authorized by law, if he had suffered a sickness or
18accident on the date of withdrawal from service. It shall be
19the responsibility of the last Department to certify to the
20Board the length of time salary or benefits would have been
21paid to the member based upon the accumulated unused sick leave
22or the applicable sick pay plan if he had become entitled
23thereto because of sickness on the date that his status as an
24employee terminated. This period of service credit granted
25under this paragraph shall not be considered in determining the
26date the retirement annuity is to begin, or final average

 

 

HB2279- 96 -LRB101 09158 RPS 54252 b

1compensation.
2    (d) A person who first becomes a member on or after the
3effective date of this amendatory Act of the 101st General
4Assembly shall not be entitled to additional service credit for
5accumulated unused sick leave.
6(Source: P.A. 92-14, eff. 6-28-01.)
 
7    (40 ILCS 5/14-152.1)
8    Sec. 14-152.1. Application and expiration of new benefit
9increases.
10    (a) As used in this Section, "new benefit increase" means
11an increase in the amount of any benefit provided under this
12Article, or an expansion of the conditions of eligibility for
13any benefit under this Article, that results from an amendment
14to this Code that takes effect after June 1, 2005 (the
15effective date of Public Act 94-4). "New benefit increase",
16however, does not include any benefit increase resulting from
17the changes made to Article 1 or this Article by Public Act
1896-37, Public Act 100-23, Public Act 100-587, Public Act
19100-611, or this amendatory Act of the 101st General Assembly
20or this amendatory Act of the 100th General Assembly.
21    (b) Notwithstanding any other provision of this Code or any
22subsequent amendment to this Code, every new benefit increase
23is subject to this Section and shall be deemed to be granted
24only in conformance with and contingent upon compliance with
25the provisions of this Section.

 

 

HB2279- 97 -LRB101 09158 RPS 54252 b

1    (c) The Public Act enacting a new benefit increase must
2identify and provide for payment to the System of additional
3funding at least sufficient to fund the resulting annual
4increase in cost to the System as it accrues.
5    Every new benefit increase is contingent upon the General
6Assembly providing the additional funding required under this
7subsection. The Commission on Government Forecasting and
8Accountability shall analyze whether adequate additional
9funding has been provided for the new benefit increase and
10shall report its analysis to the Public Pension Division of the
11Department of Insurance. A new benefit increase created by a
12Public Act that does not include the additional funding
13required under this subsection is null and void. If the Public
14Pension Division determines that the additional funding
15provided for a new benefit increase under this subsection is or
16has become inadequate, it may so certify to the Governor and
17the State Comptroller and, in the absence of corrective action
18by the General Assembly, the new benefit increase shall expire
19at the end of the fiscal year in which the certification is
20made.
21    (d) Every new benefit increase shall expire 5 years after
22its effective date or on such earlier date as may be specified
23in the language enacting the new benefit increase or provided
24under subsection (c). This does not prevent the General
25Assembly from extending or re-creating a new benefit increase
26by law.

 

 

HB2279- 98 -LRB101 09158 RPS 54252 b

1    (e) Except as otherwise provided in the language creating
2the new benefit increase, a new benefit increase that expires
3under this Section continues to apply to persons who applied
4and qualified for the affected benefit while the new benefit
5increase was in effect and to the affected beneficiaries and
6alternate payees of such persons, but does not apply to any
7other person, including without limitation a person who
8continues in service after the expiration date and did not
9apply and qualify for the affected benefit while the new
10benefit increase was in effect.
11(Source: P.A. 100-23, eff. 7-6-17; 100-587, eff. 6-4-18;
12100-611, eff. 7-20-18; revised 7-25-18.)
 
13    (40 ILCS 5/14-155.5 new)
14    Sec. 14-155.5. Tier 3 plan.
15    (a) By July 1, 2020, the System shall prepare and implement
16a Tier 3 plan. The Tier 3 plan developed under this Section
17shall be a plan that aggregates State and employee
18contributions in individual participant accounts that, after
19meeting any other requirements, are used for payouts after
20retirement in accordance with this Section and any other
21applicable laws.
22    As used in this Section, "defined benefit plan" means the
23retirement plan available under this Article to Tier 1 or Tier
242 members who have not made the election authorized under this
25Section.

 

 

HB2279- 99 -LRB101 09158 RPS 54252 b

1        (1) A participant in the Tier 3 plan shall pay employee
2    contributions at a rate determined by the participant, but
3    not less than 3% of compensation and not more than a
4    percentage of compensation determined by the board in
5    accordance with the requirements of State and federal law.
6        (2) State contributions shall be paid into the accounts
7    of all participants in the Tier 3 plan at a uniform rate,
8    expressed as a percentage of compensation and determined
9    for each year. This rate shall be no higher than 7.6% of
10    compensation and shall be no lower than 3% of compensation.
11    The State shall adjust this rate annually.
12        (3) The Tier 3 plan shall require 5 years of
13    participation in the Tier 3 plan before vesting in State
14    contributions. If the participant fails to vest in them,
15    the State contributions, and the earnings thereon, shall be
16    forfeited.
17        (4) The Tier 3 plan may provide for participants in the
18    plan to be eligible for the defined disability benefits
19    available to other participants under this Article. If it
20    does, the System shall reduce the employee contributions
21    credited to the member's Tier 3 plan account by an amount
22    determined by the System to cover the cost of offering such
23    benefits.
24        (5) The Tier 3 plan shall provide a variety of options
25    for investments. These options shall include investments
26    handled by the Illinois State Board of Investment as well

 

 

HB2279- 100 -LRB101 09158 RPS 54252 b

1    as private sector investment options.
2        (6) The Tier 3 plan shall provide a variety of options
3    for payouts to participants in the Tier 3 plan who are no
4    longer active in the System and their survivors.
5        (7) To the extent authorized under federal law and as
6    authorized by the System, the plan shall allow former
7    participants in the plan to transfer or roll over employee
8    and vested State contributions, and the earnings thereon,
9    from the Tier 3 plan into other qualified retirement plans.
10        (8) 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
13    these benefits and any applicable administrative fees.
14    (b) Under the Tier 3 plan, an active Tier 1 or Tier 2
15member of this System may elect, in writing, to cease accruing
16benefits in the defined benefit plan and begin accruing
17benefits for future service in the Tier 3 plan. The election to
18participate in the Tier 3 plan is voluntary and irrevocable.
19        (1) Service credit under the Tier 3 plan may be used
20    for determining retirement eligibility under the defined
21    benefit plan.
22        (2) The System shall make a good faith effort to
23    contact all active Tier 1 and Tier 2 members who are
24    eligible to participate in the Tier 3 plan. The System
25    shall mail information describing the option to join the
26    Tier 3 plan to each of these employees to his or her last

 

 

HB2279- 101 -LRB101 09158 RPS 54252 b

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

 

 

HB2279- 102 -LRB101 09158 RPS 54252 b

1employment on that date and elected a refund of contributions,
2including regular interest for the respective years. The System
3shall make the transfer as a tax-free transfer in accordance
4with Internal Revenue Service guidelines, for purposes of
5funding the amount credited to the member's individual account.
6    (c) In no event shall the System, its staff, its authorized
7representatives, or the Board be liable for any information
8given to an employee under this Section. The System may
9coordinate with the Illinois Department of Central Management
10Services and other retirement systems administering a Tier 3
11plan in accordance with this amendatory Act of the 101st
12General Assembly to provide information concerning the impact
13of the Tier 3 plan set forth in this Section.
14    (d) Notwithstanding any other provision of this Section, no
15person shall begin participating in the Tier 3 plan until it
16has attained qualified plan status and received all necessary
17approvals from the U.S. Internal Revenue Service.
18    (e) The System shall report on its progress under this
19Section, including the available details of the Tier 3 plan and
20the System's plans for informing eligible Tier 1 and Tier 2
21members about the plan, to the Governor and the General
22Assembly on or before January 15, 2020.
23    (f) The Illinois State Board of Investment shall be the
24plan sponsor for the Tier 3 plan established under this
25Section.
26    (g) The intent of this amendatory Act of the 101st General

 

 

HB2279- 103 -LRB101 09158 RPS 54252 b

1Assembly is to ensure that the State's normal cost of
2participation in the Tier 3 plan is similar, and if possible
3equal, to the State's normal cost of participation in the
4defined benefit plan, unless a lower State's normal cost is
5necessary to ensure cost neutrality.
 
6    (40 ILCS 5/15-108.1)
7    Sec. 15-108.1. Tier 1 member. "Tier 1 member": A
8participant or an annuitant of a retirement annuity under this
9Article, other than a participant in the self-managed plan
10under Section 15-158.2, who first became a participant or
11member before January 1, 2011 under any reciprocal retirement
12system or pension fund established under this Code, other than
13a retirement system or pension fund established under Articles
142, 3, 4, 5, 6, or 18 of this Code. "Tier 1 member" includes a
15person who first became a participant under this System before
16January 1, 2011 and who accepts a refund and is subsequently
17reemployed by an employer on or after January 1, 2011.
18    In the case of a Tier 1 member who elects to participate in
19the Tier 3 plan under Section 15-200.5 of this Code, that Tier
201 member shall be deemed a Tier 1 member only with respect to
21service performed or established before the effective date of
22that election.
23(Source: P.A. 98-92, eff. 7-16-13.)
 
24    (40 ILCS 5/15-108.2)

 

 

HB2279- 104 -LRB101 09158 RPS 54252 b

1    Sec. 15-108.2. Tier 2 member. "Tier 2 member": A person who
2first becomes a participant under this Article on or after
3January 1, 2011 and before the implementation date, as defined
4under subsection (a) of Section 1-161, determined by the Board,
5other than a person in the self-managed plan established under
6Section 15-158.2 or a person who makes the election under
7subsection (c) of Section 1-161, unless the person is otherwise
8a Tier 1 member. The changes made to this Section by this
9amendatory Act of the 98th General Assembly are a correction of
10existing law and are intended to be retroactive to the
11effective date of Public Act 96-889, notwithstanding the
12provisions of Section 1-103.1 of this Code.
13    In the case of a Tier 2 member who elects to participate in
14the Tier 3 plan under Section 15-200.5 of this Code, that Tier
152 member shall be deemed a Tier 2 member only with respect to
16service performed or established before the effective date of
17that election.
18(Source: P.A. 100-23, eff. 7-6-17; 100-563, eff. 12-8-17.)
 
19    (40 ILCS 5/15-108.3 new)
20    Sec. 15-108.3. Tier 3 member. "Tier 3 member": A Tier 1 or
21Tier 2 member who elects to participate in the Tier 3 plan
22under Section 15-200.5 of this Code, but only with respect to
23service performed on or after the effective date of that
24election.
 

 

 

HB2279- 105 -LRB101 09158 RPS 54252 b

1    (40 ILCS 5/15-112)  (from Ch. 108 1/2, par. 15-112)
2    Sec. 15-112. Final rate of earnings. "Final rate of
3earnings":
4    (a) This subsection (a) applies only to a Tier 1 member.
5    For an employee who is paid on an hourly basis or who
6receives an annual salary in installments during 12 months of
7each academic year, the average annual earnings during the 48
8consecutive calendar month period ending with the last day of
9final termination of employment or the 4 consecutive academic
10years of service in which the employee's earnings were the
11highest, whichever is greater. For any other employee, the
12average annual earnings during the 4 consecutive academic years
13of service in which his or her earnings were the highest. For
14an employee with less than 48 months or 4 consecutive academic
15years of service, the average earnings during his or her entire
16period of service. The earnings of an employee with more than
1736 months of service under item (a) of Section 15-113.1 prior
18to the date of becoming a participant are, for such period,
19considered equal to the average earnings during the last 36
20months of such service.
21    (b) This subsection (b) applies to a Tier 2 member.
22    For an employee who is paid on an hourly basis or who
23receives an annual salary in installments during 12 months of
24each academic year, the average annual earnings obtained by
25dividing by 8 the total earnings of the employee during the 96
26consecutive months in which the total earnings were the highest

 

 

HB2279- 106 -LRB101 09158 RPS 54252 b

1within the last 120 months prior to termination.
2    For any other employee, the average annual earnings during
3the 8 consecutive academic years within the 10 years prior to
4termination in which the employee's earnings were the highest.
5For an employee with less than 96 consecutive months or 8
6consecutive academic years of service, whichever is necessary,
7the average earnings during his or her entire period of
8service.
9    (c) For an employee on leave of absence with pay, or on
10leave of absence without pay who makes contributions during
11such leave, earnings are assumed to be equal to the basic
12compensation on the date the leave began.
13    (d) For an employee on disability leave, earnings are
14assumed to be equal to the basic compensation on the date
15disability occurs or the average earnings during the 24 months
16immediately preceding the month in which disability occurs,
17whichever is greater.
18    (e) For a Tier 1 member who retires on or after the
19effective date of this amendatory Act of 1997 with at least 20
20years of service as a firefighter or police officer under this
21Article, the final rate of earnings shall be the annual rate of
22earnings received by the participant on his or her last day as
23a firefighter or police officer under this Article, if that is
24greater than the final rate of earnings as calculated under the
25other provisions of this Section.
26    (f) If a Tier 1 member is an employee for at least 6 months

 

 

HB2279- 107 -LRB101 09158 RPS 54252 b

1during the academic year in which his or her employment is
2terminated, the annual final rate of earnings shall be 25% of
3the sum of (1) the annual basic compensation for that year, and
4(2) the amount earned during the 36 months immediately
5preceding that year, if this is greater than the final rate of
6earnings as calculated under the other provisions of this
7Section.
8    (g) In the determination of the final rate of earnings for
9an employee, that part of an employee's earnings for any
10academic year beginning after June 30, 1997, which exceeds the
11employee's earnings with that employer for the preceding year
12by more than 20 percent shall be excluded; in the event that an
13employee has more than one employer this limitation shall be
14calculated separately for the earnings with each employer. In
15making such calculation, only the basic compensation of
16employees shall be considered, without regard to vacation or
17overtime or to contracts for summer employment.
18    (h) The following are not considered as earnings in
19determining final rate of earnings: (1) severance or separation
20pay, (2) retirement pay, (3) payment for unused sick leave, and
21(4) payments from an employer for the period used in
22determining final rate of earnings for any purpose other than
23(i) services rendered, (ii) leave of absence or vacation
24granted during that period, and (iii) vacation of up to 56 work
25days allowed upon termination of employment; except that, if
26the benefit has been collectively bargained between the

 

 

HB2279- 108 -LRB101 09158 RPS 54252 b

1employer and the recognized collective bargaining agent
2pursuant to the Illinois Educational Labor Relations Act,
3payment received during a period of up to 2 academic years for
4unused sick leave may be considered as earnings in accordance
5with the applicable collective bargaining agreement, subject
6to the 20% increase limitation of this Section, and if the
7person first becomes a participant on or after the effective
8date of this amendatory Act of the 101st General Assembly,
9payments for unused sick or vacation time shall not be
10considered as earnings. Any unused sick leave considered as
11earnings under this Section shall not be taken into account in
12calculating service credit under Section 15-113.4.
13    (i) Intermittent periods of service shall be considered as
14consecutive in determining final rate of earnings.
15(Source: P.A. 98-92, eff. 7-16-13; 99-450, eff. 8-24-15.)
 
16    (40 ILCS 5/15-113.4)  (from Ch. 108 1/2, par. 15-113.4)
17    (Text of Section WITHOUT the changes made by P.A. 98-599,
18which has been held unconstitutional)
19    Sec. 15-113.4. Service for unused sick leave. "Service for
20unused sick leave": A person who first becomes a participant
21before the effective date of this amendatory Act of the 101st
22General Assembly and who is an employee under this System or
23one of the other systems subject to Article 20 of this Code
24within 60 days immediately preceding the date on which his or
25her retirement annuity begins, is entitled to credit for

 

 

HB2279- 109 -LRB101 09158 RPS 54252 b

1service for that portion of unused sick leave earned in the
2course of employment with an employer and credited on the date
3of termination of employment by an employer for which payment
4is not received, in accordance with the following schedule: 30
5through 90 full calendar days and 20 through 59 full work days
6of unused sick leave, 1/4 of a year of service; 91 through 180
7full calendar days and 60 through 119 full work days, 1/2 of a
8year of service; 181 through 270 full calendar days and 120
9through 179 full work days, 3/4 of a year of service; 271
10through 360 full calendar days and 180 through 240 full work
11days, one year of service. Only uncompensated, unused sick
12leave earned in accordance with an employer's sick leave
13accrual policy generally applicable to employees or a class of
14employees shall be taken into account in calculating service
15credit under this Section. Any uncompensated, unused sick leave
16granted by an employer to facilitate the hiring, retirement,
17termination, or other special circumstances of an employee
18shall not be taken into account in calculating service credit
19under this Section. If a participant transfers from one
20employer to another, the unused sick leave credited by the
21previous employer shall be considered in determining service to
22be credited under this Section, even if the participant
23terminated service prior to the effective date of P.A. 86-272
24(August 23, 1989); if necessary, the retirement annuity shall
25be recalculated to reflect such sick leave credit. Each
26employer shall certify to the board the number of days of

 

 

HB2279- 110 -LRB101 09158 RPS 54252 b

1unused sick leave accrued to the participant's credit on the
2date that the participant's status as an employee terminated.
3This period of unused sick leave shall not be considered in
4determining the date the retirement annuity begins. A person
5who first becomes a participant on or after the effective date
6of this amendatory Act of the 101st General Assembly shall not
7receive service credit for unused sick leave.
8(Source: P.A. 90-65, eff. 7-7-97; 90-511, eff. 8-22-97.)
 
9    (40 ILCS 5/15-134)  (from Ch. 108 1/2, par. 15-134)
10    Sec. 15-134. Participant.
11    (a) Except as provided in subsection (a-5), each Each
12person shall, as a condition of employment, become a
13participant and be subject to this Article on the date that he
14or she becomes an employee, makes an election to participate
15in, or otherwise becomes a participant in one of the retirement
16programs offered under this Article, whichever date is later.
17    An employee who becomes a participant shall continue to be
18a participant until he or she becomes an annuitant, dies or
19accepts a refund of contributions.
20    (a-5) Notwithstanding any other provision of this Article,
21beginning on the effective date of this amendatory Act of the
22101st General Assembly, a person is not required, as a
23condition of employment or otherwise, to participate in this
24System. An active employee may terminate his or her
25participation in this System (including active participation

 

 

HB2279- 111 -LRB101 09158 RPS 54252 b

1in the Tier 3 plan, if applicable) by notifying the System in
2writing. An active employee terminating participation in this
3System under this subsection shall be entitled to a refund of
4his or her contributions (other than contributions to the
5self-managed plan under Section 15-158.2 or the Tier 3 plan
6under Section 15-200.5) minus the benefits received prior to
7the termination of participation.
8    (b) A person employed concurrently by 2 or more employers
9is eligible to participate in the system on compensation
10received from all employers.
11(Source: P.A. 98-92, eff. 7-16-13.)
 
12    (40 ILCS 5/15-198)
13    Sec. 15-198. Application and expiration of new benefit
14increases.
15    (a) As used in this Section, "new benefit increase" means
16an increase in the amount of any benefit provided under this
17Article, or an expansion of the conditions of eligibility for
18any benefit under this Article, that results from an amendment
19to this Code that takes effect after the effective date of this
20amendatory Act of the 94th General Assembly. "New benefit
21increase", however, does not include any benefit increase
22resulting from the changes made to Article 1 or this Article by
23Public Act 100-23, Public Act 100-587, Public Act 100-769, or
24this amendatory Act of the 101st General Assembly or this
25amendatory Act of the 100th General Assembly.

 

 

HB2279- 112 -LRB101 09158 RPS 54252 b

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

 

 

HB2279- 113 -LRB101 09158 RPS 54252 b

1its effective date or on such earlier date as may be specified
2in the language enacting the new benefit increase or provided
3under subsection (c). This does not prevent the General
4Assembly from extending or re-creating a new benefit increase
5by law.
6    (e) Except as otherwise provided in the language creating
7the new benefit increase, a new benefit increase that expires
8under this Section continues to apply to persons who applied
9and qualified for the affected benefit while the new benefit
10increase was in effect and to the affected beneficiaries and
11alternate payees of such persons, but does not apply to any
12other person, including without limitation a person who
13continues in service after the expiration date and did not
14apply and qualify for the affected benefit while the new
15benefit increase was in effect.
16(Source: P.A. 100-23, eff. 7-6-17; 100-587, eff. 6-4-18;
17100-769, eff. 8-10-18; revised 9-26-18.)
 
18    (40 ILCS 5/15-200.5 new)
19    Sec. 15-200.5. Tier 3 plan.
20    (a) By July 1, 2020, the System shall prepare and implement
21a Tier 3 plan. The Tier 3 plan developed under this Section
22shall be a plan that aggregates State and employee
23contributions in individual participant accounts that, after
24meeting any other requirements, are used for payouts after
25retirement in accordance with this Section and any other

 

 

HB2279- 114 -LRB101 09158 RPS 54252 b

1applicable laws.
2    As used in this Section, "defined benefit plan" means the
3traditional benefit package or the portable benefit package
4available under this Article to Tier 1 or Tier 2 members who
5have not made the election authorized under this Section and do
6not participate in the self-managed plan under Section
715-158.2.
8        (1) A participant in the Tier 3 plan shall pay employee
9    contributions at a rate determined by the participant, but
10    not less than 3% of earnings and not more than a percentage
11    of earnings determined by the Board in accordance with the
12    requirements of State and federal law.
13        (2) State contributions shall be paid into the accounts
14    of all participants in the Tier 3 plan at a uniform rate,
15    expressed as a percentage of earnings and determined for
16    each year. This rate shall be no higher than 7.6% of
17    earnings and shall be no lower than 3% of earnings. The
18    State shall adjust this rate annually.
19        (3) The Tier 3 plan shall require 5 years of
20    participation in the Tier 3 plan before vesting in State
21    contributions. If the participant fails to vest in them,
22    the State contributions, and the earnings thereon, shall be
23    forfeited.
24        (4) The Tier 3 plan may provide for participants in the
25    plan to be eligible for the defined disability benefits
26    available to other participants under this Article. If it

 

 

HB2279- 115 -LRB101 09158 RPS 54252 b

1    does, 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 such
4    benefits.
5        (5) The Tier 3 plan shall provide a variety of options
6    for investments. These options shall include investments
7    handled by the System as well as private sector investment
8    options.
9        (6) The Tier 3 plan shall provide a variety of options
10    for payouts to participants in the Tier 3 plan who are no
11    longer active in the System and their survivors.
12        (7) To the extent authorized under federal law and as
13    authorized by the System, the plan shall allow former
14    participants in the plan to transfer or roll over employee
15    and vested State contributions, and the earnings thereon,
16    from the Tier 3 plan into other qualified retirement plans.
17        (8) The System shall reduce the employee contributions
18    credited to the member's Tier 3 plan account by an amount
19    determined by the System to cover the cost of offering
20    these benefits and any applicable administrative fees.
21    (b) Under the Tier 3 plan, an active Tier 1 or Tier 2
22member of this System may elect, in writing, to cease accruing
23benefits in the defined benefit plan and begin accruing
24benefits for future service in the Tier 3 plan. An active Tier
251 or Tier 2 member who elects to cease accruing benefits in his
26or her defined benefit plan shall be prohibited from purchasing

 

 

HB2279- 116 -LRB101 09158 RPS 54252 b

1service credit on or after the date of his or her election. A
2Tier 1 or Tier 2 member who elects to participate in the Tier 3
3plan shall not receive interest accruals to his or her Rule 2
4benefit on or after the date of his or her election. 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 members 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 member's defined benefits at
25    retirement or earlier termination of service and the value
26    of the member's account at retirement or earlier

 

 

HB2279- 117 -LRB101 09158 RPS 54252 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 members who are eligible to participate in the Tier
5    3 plan that they may also wish to obtain information and
6    counsel relating to their option from any other available
7    source, including but not limited to labor organizations,
8    private counsel, and financial advisors.
9    (b-5) A Tier 1 or Tier 2 member who elects to participate
10in the Tier 3 plan may irrevocably elect to terminate all
11participation in the defined benefit plan. Upon that election,
12the System shall transfer to the member's individual account an
13amount equal to the amount of contribution refund that the
14member would be eligible to receive if the member terminated
15employment on that date and elected a refund of contributions,
16including interest at the effective rate for the respective
17years. The System shall make the transfer as a tax-free
18transfer in accordance with Internal Revenue Service
19guidelines, for purposes of funding the amount credited to the
20member's individual account.
21    (c) In no event shall the System, its staff, its authorized
22representatives, or the Board be liable for any information
23given to an employee under this Section. The System may
24coordinate with the Illinois Department of Central Management
25Services and other retirement systems administering a Tier 3
26plan in accordance with this amendatory Act of the 101st

 

 

HB2279- 118 -LRB101 09158 RPS 54252 b

1General Assembly to provide information concerning the impact
2of the Tier 3 plan set forth in this Section.
3    (d) Notwithstanding any other provision of this Section, no
4person shall begin participating in the Tier 3 plan until it
5has attained qualified plan status and received all necessary
6approvals from the U.S. Internal Revenue Service.
7    (e) The System shall report on its progress under this
8Section, including the available details of the Tier 3 plan and
9the System's plans for informing eligible Tier 1 and Tier 2
10members about the plan, to the Governor and the General
11Assembly on or before January 15, 2020.
12    (f) The intent of this amendatory Act of the 101st General
13Assembly is to ensure that the State's normal cost of
14participation in the Tier 3 plan is similar, and if possible
15equal, to the State's normal cost of participation in the
16defined benefit plan, unless a lower State's normal cost is
17necessary to ensure cost neutrality.
 
18    (40 ILCS 5/16-106.41)
19    Sec. 16-106.41. Tier 1 member; Tier 2 member; Tier 3
20member. "Tier 1 member": A member under this Article who first
21became a member or participant before January 1, 2011 under any
22reciprocal retirement system or pension fund established under
23this Code other than a retirement system or pension fund
24established under Article 2, 3, 4, 5, 6, or 18 of this Code.
25    In the case of a Tier 1 member who elects to participate in

 

 

HB2279- 119 -LRB101 09158 RPS 54252 b

1the Tier 3 plan under Section 16-205.5 of this Code, that Tier
21 member shall be deemed a Tier 1 member only with respect to
3service performed or established before the effective date of
4that election.
5    "Tier 2 member": A member of the System who first becomes a
6member under this Article on or after January 1, 2011 and who
7is not a Tier 1 member.
8    In the case of a Tier 2 member who elects to participate in
9the Tier 3 plan under Section 16-205.5 of this Code, the Tier 2
10member shall be deemed a Tier 2 member only with respect to
11service performed or established before the effective date of
12that election.
13    "Tier 3 member": A Tier 1 or Tier 2 member who elects to
14participate in the Tier 3 plan under Section 16-205.5 of this
15Code, but only with respect to service performed on or after
16the effective date of that election.
17(Source: P.A. 100-587, eff. 6-4-18.)
 
18    (40 ILCS 5/16-123)  (from Ch. 108 1/2, par. 16-123)
19    Sec. 16-123. Membership of System.
20    (a) Except as provided in subsection (c), the The
21membership of this System shall be composed of all teachers
22employed after June 30, 1939 who become members as a condition
23of employment on the date they become teachers. Membership
24shall continue until the date a member becomes an annuitant,
25dies, accepts a single-sum retirement benefit, accepts a

 

 

HB2279- 120 -LRB101 09158 RPS 54252 b

1refund, or forfeits the rights to a refund.
2    (b) This Article does not apply to any person first
3employed after June 30, 1979 as a public service employment
4program participant under the Federal Comprehensive Employment
5and Training Act and whose wages or fringe benefits are paid in
6whole or in part by funds provided under such Act.
7    (c) Notwithstanding any other provision of this Article,
8beginning on the effective date of this amendatory Act of the
9101st General Assembly, a person is not required, as a
10condition of employment or otherwise, to participate in this
11System. An active teacher may terminate his or her membership
12in this System (including active participation in the Tier 3
13plan, if applicable) by notifying the System in writing. An
14active teacher terminating his or her membership in this System
15under this subsection shall be entitled to a refund of his or
16her contributions (other than contributions to the Tier 3 plan
17under Section 16-205.5) minus the benefits received prior to
18the termination of membership.
19(Source: P.A. 87-11.)
 
20    (40 ILCS 5/16-127)  (from Ch. 108 1/2, par. 16-127)
21    Sec. 16-127. Computation of creditable service.
22    (a) Each member shall receive regular credit for all
23service as a teacher from the date membership begins, for which
24satisfactory evidence is supplied and all contributions have
25been paid.

 

 

HB2279- 121 -LRB101 09158 RPS 54252 b

1    (b) The following periods of service shall earn optional
2credit and each member shall receive credit for all such
3service for which satisfactory evidence is supplied and all
4contributions have been paid as of the date specified:
5        (1) Prior service as a teacher.
6        (2) Service in a capacity essentially similar or
7    equivalent to that of a teacher, in the public common
8    schools in school districts in this State not included
9    within the provisions of this System, or of any other
10    State, territory, dependency or possession of the United
11    States, or in schools operated by or under the auspices of
12    the United States, or under the auspices of any agency or
13    department of any other State, and service during any
14    period of professional speech correction or special
15    education experience for a public agency within this State
16    or any other State, territory, dependency or possession of
17    the United States, and service prior to February 1, 1951 as
18    a recreation worker for the Illinois Department of Public
19    Safety, for a period not exceeding the lesser of 2/5 of the
20    total creditable service of the member or 10 years. The
21    maximum service of 10 years which is allowable under this
22    paragraph shall be reduced by the service credit which is
23    validated by other retirement systems under paragraph (i)
24    of Section 15-113 and paragraph 1 of Section 17-133. Credit
25    granted under this paragraph may not be used in
26    determination of a retirement annuity or disability

 

 

HB2279- 122 -LRB101 09158 RPS 54252 b

1    benefits unless the member has at least 5 years of
2    creditable service earned subsequent to this employment
3    with one or more of the following systems: Teachers'
4    Retirement System of the State of Illinois, State
5    Universities Retirement System, and the Public School
6    Teachers' Pension and Retirement Fund of Chicago. Whenever
7    such service credit exceeds the maximum allowed for all
8    purposes of this Article, the first service rendered in
9    point of time shall be considered. The changes to this
10    subdivision (b)(2) made by Public Act 86-272 shall apply
11    not only to persons who on or after its effective date
12    (August 23, 1989) are in service as a teacher under the
13    System, but also to persons whose status as such a teacher
14    terminated prior to such effective date, whether or not
15    such person is an annuitant on that date.
16        (3) Any periods immediately following teaching
17    service, under this System or under Article 17, (or
18    immediately following service prior to February 1, 1951 as
19    a recreation worker for the Illinois Department of Public
20    Safety) spent in active service with the military forces of
21    the United States; periods spent in educational programs
22    that prepare for return to teaching sponsored by the
23    federal government following such active military service;
24    if a teacher returns to teaching service within one
25    calendar year after discharge or after the completion of
26    the educational program, a further period, not exceeding

 

 

HB2279- 123 -LRB101 09158 RPS 54252 b

1    one calendar year, between time spent in military service
2    or in such educational programs and the return to
3    employment as a teacher under this System; and a period of
4    up to 2 years of active military service not immediately
5    following employment as a teacher.
6        The changes to this Section and Section 16-128 relating
7    to military service made by P.A. 87-794 shall apply not
8    only to persons who on or after its effective date are in
9    service as a teacher under the System, but also to persons
10    whose status as a teacher terminated prior to that date,
11    whether or not the person is an annuitant on that date. In
12    the case of an annuitant who applies for credit allowable
13    under this Section for a period of military service that
14    did not immediately follow employment, and who has made the
15    required contributions for such credit, the annuity shall
16    be recalculated to include the additional service credit,
17    with the increase taking effect on the date the System
18    received written notification of the annuitant's intent to
19    purchase the credit, if payment of all the required
20    contributions is made within 60 days of such notice, or
21    else on the first annuity payment date following the date
22    of payment of the required contributions. In calculating
23    the automatic annual increase for an annuity that has been
24    recalculated under this Section, the increase attributable
25    to the additional service allowable under P.A. 87-794 shall
26    be included in the calculation of automatic annual

 

 

HB2279- 124 -LRB101 09158 RPS 54252 b

1    increases accruing after the effective date of the
2    recalculation.
3        Credit for military service shall be determined as
4    follows: if entry occurs during the months of July, August,
5    or September and the member was a teacher at the end of the
6    immediately preceding school term, credit shall be granted
7    from July 1 of the year in which he or she entered service;
8    if entry occurs during the school term and the teacher was
9    in teaching service at the beginning of the school term,
10    credit shall be granted from July 1 of such year. In all
11    other cases where credit for military service is allowed,
12    credit shall be granted from the date of entry into the
13    service.
14        The total period of military service for which credit
15    is granted shall not exceed 5 years for any member unless
16    the service: (A) is validated before July 1, 1964, and (B)
17    does not extend beyond July 1, 1963. Credit for military
18    service shall be granted under this Section only if not
19    more than 5 years of the military service for which credit
20    is granted under this Section is used by the member to
21    qualify for a military retirement allotment from any branch
22    of the armed forces of the United States. The changes to
23    this subdivision (b)(3) made by Public Act 86-272 shall
24    apply not only to persons who on or after its effective
25    date (August 23, 1989) are in service as a teacher under
26    the System, but also to persons whose status as such a

 

 

HB2279- 125 -LRB101 09158 RPS 54252 b

1    teacher terminated prior to such effective date, whether or
2    not such person is an annuitant on that date.
3        (4) Any periods served as a member of the General
4    Assembly.
5        (5)(i) Any periods for which a teacher, as defined in
6    Section 16-106, is granted a leave of absence, provided he
7    or she returns to teaching service creditable under this
8    System or the State Universities Retirement System
9    following the leave; (ii) periods during which a teacher is
10    involuntarily laid off from teaching, provided he or she
11    returns to teaching following the lay-off; (iii) periods
12    prior to July 1, 1983 during which a teacher ceased covered
13    employment due to pregnancy, provided that the teacher
14    returned to teaching service creditable under this System
15    or the State Universities Retirement System following the
16    pregnancy and submits evidence satisfactory to the Board
17    documenting that the employment ceased due to pregnancy;
18    and (iv) periods prior to July 1, 1983 during which a
19    teacher ceased covered employment for the purpose of
20    adopting an infant under 3 years of age or caring for a
21    newly adopted infant under 3 years of age, provided that
22    the teacher returned to teaching service creditable under
23    this System or the State Universities Retirement System
24    following the adoption and submits evidence satisfactory
25    to the Board documenting that the employment ceased for the
26    purpose of adopting an infant under 3 years of age or

 

 

HB2279- 126 -LRB101 09158 RPS 54252 b

1    caring for a newly adopted infant under 3 years of age.
2    However, total credit under this paragraph (5) may not
3    exceed 3 years.
4        Any qualified member or annuitant may apply for credit
5    under item (iii) or (iv) of this paragraph (5) without
6    regard to whether service was terminated before the
7    effective date of this amendatory Act of 1997. In the case
8    of an annuitant who establishes credit under item (iii) or
9    (iv), the annuity shall be recalculated to include the
10    additional service credit. The increase in annuity shall
11    take effect on the date the System receives written
12    notification of the annuitant's intent to purchase the
13    credit, if the required evidence is submitted and the
14    required contribution paid within 60 days of that
15    notification, otherwise on the first annuity payment date
16    following the System's receipt of the required evidence and
17    contribution. The increase in an annuity recalculated
18    under this provision shall be included in the calculation
19    of automatic annual increases in the annuity accruing after
20    the effective date of the recalculation.
21        Optional credit may be purchased under this subsection
22    (b)(5) for periods during which a teacher has been granted
23    a leave of absence pursuant to Section 24-13 of the School
24    Code. A teacher whose service under this Article terminated
25    prior to the effective date of P.A. 86-1488 shall be
26    eligible to purchase such optional credit. If a teacher who

 

 

HB2279- 127 -LRB101 09158 RPS 54252 b

1    purchases this optional credit is already receiving a
2    retirement annuity under this Article, the annuity shall be
3    recalculated as if the annuitant had applied for the leave
4    of absence credit at the time of retirement. The difference
5    between the entitled annuity and the actual annuity shall
6    be credited to the purchase of the optional credit. The
7    remainder of the purchase cost of the optional credit shall
8    be paid on or before April 1, 1992.
9        The change in this paragraph made by Public Act 86-273
10    shall be applicable to teachers who retire after June 1,
11    1989, as well as to teachers who are in service on that
12    date.
13        (6) For a person who first becomes a member before the
14    effective date of this amendatory Act of the 101st General
15    Assembly, any Any days of unused and uncompensated
16    accumulated sick leave earned by a teacher. The service
17    credit granted under this paragraph shall be the ratio of
18    the number of unused and uncompensated accumulated sick
19    leave days to 170 days, subject to a maximum of 2 years of
20    service credit. Prior to the member's retirement, each
21    former employer shall certify to the System the number of
22    unused and uncompensated accumulated sick leave days
23    credited to the member at the time of termination of
24    service. The period of unused sick leave shall not be
25    considered in determining the effective date of
26    retirement. A member is not required to make contributions

 

 

HB2279- 128 -LRB101 09158 RPS 54252 b

1    in order to obtain service credit for unused sick leave.
2        Credit for sick leave shall, at retirement, be granted
3    by the System for any retiring regional or assistant
4    regional superintendent of schools who first becomes a
5    member before the effective date of this amendatory Act of
6    the 101st General Assembly at the rate of 6 days per year
7    of creditable service or portion thereof established while
8    serving as such superintendent or assistant
9    superintendent.
10        (7) Periods prior to February 1, 1987 served as an
11    employee of the Illinois Mathematics and Science Academy
12    for which credit has not been terminated under Section
13    15-113.9 of this Code.
14        (8) Service as a substitute teacher for work performed
15    prior to July 1, 1990.
16        (9) Service as a part-time teacher for work performed
17    prior to July 1, 1990.
18        (10) Up to 2 years of employment with Southern Illinois
19    University - Carbondale from September 1, 1959 to August
20    31, 1961, or with Governors State University from September
21    1, 1972 to August 31, 1974, for which the teacher has no
22    credit under Article 15. To receive credit under this item
23    (10), a teacher must apply in writing to the Board and pay
24    the required contributions before May 1, 1993 and have at
25    least 12 years of service credit under this Article.
26    (b-1) A member may establish optional credit for up to 2

 

 

HB2279- 129 -LRB101 09158 RPS 54252 b

1years of service as a teacher or administrator employed by a
2private school recognized by the Illinois State Board of
3Education, provided that the teacher (i) was certified under
4the law governing the certification of teachers at the time the
5service was rendered, (ii) applies in writing on or after
6August 1, 2009 and on or before August 1, 2012, (iii) supplies
7satisfactory evidence of the employment, (iv) completes at
8least 10 years of contributing service as a teacher as defined
9in Section 16-106, and (v) pays the contribution required in
10subsection (d-5) of Section 16-128. The member may apply for
11credit under this subsection and pay the required contribution
12before completing the 10 years of contributing service required
13under item (iv), but the credit may not be used until the item
14(iv) contributing service requirement has been met.
15    (c) The service credits specified in this Section shall be
16granted only if: (1) such service credits are not used for
17credit in any other statutory tax-supported public employee
18retirement system other than the federal Social Security
19program; and (2) the member makes the required contributions as
20specified in Section 16-128. Except as provided in subsection
21(b-1) of this Section, the service credit shall be effective as
22of the date the required contributions are completed.
23    Any service credits granted under this Section shall
24terminate upon cessation of membership for any cause.
25    Credit may not be granted under this Section covering any
26period for which an age retirement or disability retirement

 

 

HB2279- 130 -LRB101 09158 RPS 54252 b

1allowance has been paid.
2    Credit may not be granted under this Section for service as
3an employee of an entity that provides substitute teaching
4services under Section 2-3.173 of the School Code and is not a
5school district.
6(Source: P.A. 100-813, eff. 8-13-18.)
 
7    (40 ILCS 5/16-152.1)  (from Ch. 108 1/2, par. 16-152.1)
8    Sec. 16-152.1. Pickup of contributions.
9    (a) Each employer may pick up the member contributions
10required under Section 16-152 for all salary earned after
11December 31, 1981. If an employer decides not to pick up the
12member contributions, the amount that would have been picked up
13shall continue to be deducted from salary. If contributions are
14picked up, they shall be treated as employer contributions in
15determining tax treatment under the United States Internal
16Revenue Code. The employer shall pay these member contributions
17from the same source of funds which is used in paying salary to
18the member. The employer may pick up these contributions by a
19reduction in the cash salary of the member or by an offset
20against a future salary increase or by a combination of a
21reduction in salary and offset against a future salary
22increase. If member contributions are picked up, they shall be
23treated for all purposes of this Article 16 in the same manner
24as member contributions made prior to the date the pick up
25began.

 

 

HB2279- 131 -LRB101 09158 RPS 54252 b

1    (b) The State Board of Education shall pick up the
2contributions of regional superintendents required under
3Section 16-152 for all salary earned for the 1982 calendar year
4and thereafter.
5    (c) Effective July 1, 1983, each employer shall pick up the
6member contributions required under Section 16-152 for all
7salary earned after such date. Contributions so picked up shall
8be treated as employer contributions in determining tax
9treatment under the United States Internal Revenue Code. The
10employer shall pay these member contributions from the same
11source of funds which is used in paying salary to the member.
12The employer may pick up these contributions by a reduction in
13the cash salary of the member or by an offset against a future
14salary increase or by a combination of a reduction in salary
15and offset against a future salary increase. Member
16contributions so picked up shall be treated for all purposes of
17this Article 16 in the same manner as member contributions made
18prior to the date the pick up began.
19    (d) Subject to the requirements of federal law and the
20rules of the board, beginning July 1, 1998 a member who is
21employed on a full-time basis may elect to have the employer
22pick up optional contributions that the member has elected to
23pay to the System, and the contributions so picked up shall be
24treated as employer contributions for the purposes of
25determining federal tax treatment. The election to have
26optional contributions picked up is irrevocable. At the time of

 

 

HB2279- 132 -LRB101 09158 RPS 54252 b

1making the election, the member shall execute a binding,
2irrevocable payroll deduction authorization. Upon receiving
3notice of the election, the employer shall pick up the
4contributions by a reduction in the cash salary of the member
5and shall pay the contributions from the same source of funds
6that is used to pay earnings to the member.
7    (e) Beginning on the effective date of this amendatory Act
8of the 101st General Assembly, no employer shall pay employee
9contributions on behalf of an employee, except for the sole
10purpose of allowing the employee to make pre-tax contributions
11as provided in this Section. The provisions of this subsection
12(e) do not apply to an employment contract or collective
13bargaining agreement that is in effect on the effective date of
14this amendatory Act of the 101st General Assembly. However, any
15such contract or agreement that is subsequently modified,
16amended, or renewed shall be subject to the provisions of this
17subsection (e).
18(Source: P.A. 90-448, eff. 8-16-97.)
 
19    (40 ILCS 5/16-203)
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

 

 

HB2279- 133 -LRB101 09158 RPS 54252 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 Article 1 or this Article by Public Act
595-910, Public Act 100-23, Public Act 100-587, Public Act
6100-743, Public Act 100-769, or this amendatory Act of the
7101st General Assembly or by this amendatory Act of the 100th
8General 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 Insurance. A new benefit increase created by a
25Public Act that does not include the additional funding
26required under this subsection is null and void. If the Public

 

 

HB2279- 134 -LRB101 09158 RPS 54252 b

1Pension Division determines that the additional funding
2provided for a new benefit increase under this subsection is or
3has become inadequate, it may so certify to the Governor and
4the State Comptroller and, in the absence of corrective action
5by the General Assembly, the new benefit increase shall expire
6at the end of the fiscal year in which the certification is
7made.
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. 100-23, eff. 7-6-17; 100-587, eff. 6-4-18;
25100-743, eff. 8-10-18; 100-769, eff. 8-10-18; revised
2610-15-18.)
 

 

 

HB2279- 135 -LRB101 09158 RPS 54252 b

1    (40 ILCS 5/16-205.5 new)
2    Sec. 16-205.5. Tier 3 plan.
3    (a) By July 1, 2020, 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 that, after
7meeting any other requirements, are used for payouts after
8retirement in accordance with this Section and any other
9applicable laws.
10    As used in this Section, "defined benefit plan" means the
11retirement plan available under this Article to Tier 1 or Tier
122 members who have not made the election authorized under this
13Section.
14        (1) A participant in the Tier 3 plan shall pay employee
15    contributions at a rate determined by the participant, but
16    not less than 3% of salary and not more than a percentage
17    of salary determined by the Board in accordance with the
18    requirements of State and federal law.
19        (2) State contributions shall be paid into the accounts
20    of all participants in the Tier 3 plan at a uniform rate,
21    expressed as a percentage of salary and determined for each
22    year. This rate shall be no higher than 7.6% of salary and
23    shall be no lower than 3% of salary. The State shall adjust
24    this rate annually.
25        (3) The Tier 3 plan shall require 5 years of

 

 

HB2279- 136 -LRB101 09158 RPS 54252 b

1    participation in the Tier 3 plan before vesting in State
2    contributions. If the participant fails to vest in them,
3    the State contributions, and the earnings thereon, shall be
4    forfeited.
5        (4) The Tier 3 plan may provide for participants in the
6    plan to be eligible for the defined disability benefits
7    available to other participants under this Article. If it
8    does, 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 such
11    benefits.
12        (5) The Tier 3 plan shall provide a variety of options
13    for investments. These options shall include investments
14    in a fund created by the System and managed in accordance
15    with legal and fiduciary standards, as well as investment
16    options otherwise available.
17        (6) The Tier 3 plan shall provide a variety of options
18    for payouts to participants in the Tier 3 plan who are no
19    longer active in the System and their survivors.
20        (7) To the extent authorized under federal law and as
21    authorized by the System, the plan shall allow former
22    participants in the plan to transfer or roll over employee
23    and vested State contributions, and the earnings thereon,
24    from the Tier 3 plan into other qualified retirement plans.
25        (8) The System shall reduce the employee contributions
26    credited to the member's Tier 3 plan account by an amount

 

 

HB2279- 137 -LRB101 09158 RPS 54252 b

1    determined by the System to cover the cost of offering
2    these benefits and any applicable administrative fees.
3    (b) Under the Tier 3 plan, an active Tier 1 or Tier 2
4member of this System may elect, in writing, to cease accruing
5benefits in the defined benefit plan and begin accruing
6benefits for future service in the Tier 3 plan. An active Tier
71 or Tier 2 member who elects to cease accruing benefits in his
8or her defined benefit plan shall be prohibited from purchasing
9service credit on or after the date of his or her election. A
10Tier 1 or Tier 2 member making the irrevocable election
11provided under this subsection shall not receive interest
12accruals to his or her benefit under paragraph (A) of
13subsection (a) of Section 16-133 of this Code on or after the
14date of his or her election. The election to participate in the
15Tier 3 plan is voluntary and irrevocable.
16        (1) Service credit under the Tier 3 plan may be used
17    for determining retirement eligibility under the defined
18    benefit plan.
19        (2) The System shall make a good faith effort to
20    contact all active Tier 1 and Tier 2 members who are
21    eligible to participate in the Tier 3 plan. The System
22    shall mail information describing the option to join the
23    Tier 3 plan to each of these employees to his or her last
24    known address on file with the System. If the employee is
25    not responsive to other means of contact, it is sufficient
26    for the System to publish the details of the option on its

 

 

HB2279- 138 -LRB101 09158 RPS 54252 b

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

 

 

HB2279- 139 -LRB101 09158 RPS 54252 b

1with Internal Revenue Service guidelines, for purposes of
2funding the amount credited to the member's individual account.
3    (c) In no event shall the System, its staff, its authorized
4representatives, or the Board be liable for any information
5given to an employee under this Section. The System may
6coordinate with the Illinois Department of Central Management
7Services and other retirement systems administering a Tier 3
8plan in accordance with this amendatory Act of the 101st
9General Assembly to provide information concerning the impact
10of the Tier 3 plan set forth in this Section.
11    (d) Notwithstanding any other provision of this Section, no
12person shall begin participating in the Tier 3 plan until it
13has attained qualified plan status and received all necessary
14approvals from the U.S. Internal Revenue Service.
15    (e) The System shall report on its progress under this
16Section, including the available details of the Tier 3 plan and
17the System's plans for informing eligible Tier 1 and Tier 2
18members about the plan, to the Governor and the General
19Assembly on or before January 15, 2020.
20    (f) The intent of this amendatory Act of the 101st General
21Assembly is to ensure that the State's normal cost of
22participation in the Tier 3 plan is similar, and if possible
23equal, to the State's normal cost of participation in the
24defined benefit plan, unless a lower State's normal cost is
25necessary to ensure cost neutrality.
 

 

 

HB2279- 140 -LRB101 09158 RPS 54252 b

1    (40 ILCS 5/18-110.1 new)
2    Sec. 18-110.1. Tier 1 participant; Tier 2 participant; Tier
33 participant. "Tier 1 participant": A participant who first
4became a participant of this System before January 1, 2011.
5    In the case of a Tier 1 participant who elects to
6participate in the Tier 3 plan under Section 18-121.5 of this
7Code, that Tier 1 participant shall be deemed a Tier 1
8participant only with respect to service performed or
9established before the effective date of that election.
10    "Tier 2 participant": A participant who first becomes a
11participant of this System on or after January 1, 2011.
12    In the case of a Tier 2 participant who elects to
13participate in the Tier 3 plan under Section 18-121.5 of this
14Code, that Tier 2 participant shall be deemed a Tier 2
15participant only with respect to service performed or
16established before the effective date of that election.
17    "Tier 3 participant": A Tier 1 or Tier 2 participant who
18elects to participate in the Tier 3 plan under Section 18-121.5
19of this Code, but only with respect to service performed on or
20after the effective date of that election.
 
21    (40 ILCS 5/18-120)  (from Ch. 108 1/2, par. 18-120)
22    Sec. 18-120. Employee participation.
23    (a) Except as provided in subsection (b), an An eligible
24judge who is not a participant shall become a participant
25beginning on the date he or she becomes an eligible judge,

 

 

HB2279- 141 -LRB101 09158 RPS 54252 b

1unless the judge files with the board a written notice of
2election not to participate within 30 days of the date of being
3notified of the option.
4    A person electing not to participate shall thereafter be
5ineligible to become a participant unless the election is
6revoked as provided in Section 18-121.
7    (b) Notwithstanding any other provision of this Article, an
8active participant may terminate his or her participation in
9this System (including active participation in the Tier 3 plan,
10if applicable) by notifying the System in writing. An active
11participant terminating participation in this System under
12this subsection shall be entitled to a refund of his or her
13contributions (other than contributions to the Tier 3 plan
14under Section 18-121.5) minus the benefits received prior to
15the termination of participation.
16(Source: P.A. 83-1440.)
 
17    (40 ILCS 5/18-121.5 new)
18    Sec. 18-121.5. Tier 3 plan.
19    (a) By July 1, 2020, the System shall prepare and implement
20a Tier 3 plan. The Tier 3 plan developed under this Section
21shall be a plan that aggregates State and employee
22contributions in individual participant accounts that, after
23meeting any other requirements, are used for payouts after
24retirement in accordance with this Section and any other
25applicable laws.

 

 

HB2279- 142 -LRB101 09158 RPS 54252 b

1    As used in this Section, "defined benefit plan" means the
2retirement plan available under this Article to Tier 1 or Tier
32 participants who have not made the election authorized under
4this Section.
5        (1) A participant in the Tier 3 plan shall pay employee
6    contributions at a rate determined by the participant, but
7    not less than 3% of salary and not more than a percentage
8    of salary determined by the Board in accordance with the
9    requirements of State and federal law.
10        (2) State contributions shall be paid into the accounts
11    of all participants in the Tier 3 plan at a uniform rate,
12    expressed as a percentage of salary and determined for each
13    year. This rate shall be no higher than 7.6% of salary and
14    shall be no lower than 3% of salary. The State shall adjust
15    this rate annually.
16        (3) The Tier 3 plan shall require 5 years of
17    participation in the Tier 3 plan before vesting in State
18    contributions. If the participant fails to vest in them,
19    the State contributions, and the earnings thereon, shall be
20    forfeited.
21        (4) The Tier 3 plan may provide for participants in the
22    plan to be eligible for defined disability benefits. If it
23    does, the System shall reduce the employee contributions
24    credited to the participant's Tier 3 plan account by an
25    amount determined by the System to cover the cost of
26    offering such benefits.

 

 

HB2279- 143 -LRB101 09158 RPS 54252 b

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

 

 

HB2279- 144 -LRB101 09158 RPS 54252 b

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

 

 

HB2279- 145 -LRB101 09158 RPS 54252 b

1participate in the Tier 3 plan may irrevocably elect to
2terminate all participation in the defined benefit plan. Upon
3that election, the System shall transfer to the participant's
4individual account an amount equal to the amount of
5contribution refund that the participant would be eligible to
6receive if the participant terminated employment on that date
7and elected a refund of contributions, including interest at
8the prescribed rate of interest for the respective years. The
9System shall make the transfer as a tax-free transfer in
10accordance with Internal Revenue Service guidelines, for
11purposes of funding the amount credited to the participant's
12individual account.
13    (c) In no event shall the System, its staff, its authorized
14representatives, or the Board be liable for any information
15given to an employee under this Section. The System may
16coordinate with the Illinois Department of Central Management
17Services and other retirement systems administering a Tier 3
18plan in accordance with this amendatory Act of the 101st
19General Assembly to provide information concerning the impact
20of the Tier 3 plan set forth in this Section.
21    (d) Notwithstanding any other provision of this Section, no
22person shall begin participating in the Tier 3 plan until it
23has attained qualified plan status and received all necessary
24approvals from the U.S. Internal Revenue Service.
25    (e) The System shall report on its progress under this
26Section, including the available details of the Tier 3 plan and

 

 

HB2279- 146 -LRB101 09158 RPS 54252 b

1the System's plans for informing eligible Tier 1 and Tier 2
2participants about the plan, to the Governor and the General
3Assembly on or before January 15, 2020.
4    (f) The Illinois State Board of Investment shall be the
5plan sponsor for the Tier 3 plan established under this
6Section.
7    (g) The intent of this amendatory Act of the 101st General
8Assembly is to ensure that the State's normal cost of
9participation in the Tier 3 plan is similar, and if possible
10equal, to the State's normal cost of participation in the
11defined benefit plan, unless a lower State's normal cost is
12necessary to ensure cost neutrality.
 
13    (40 ILCS 5/18-124)  (from Ch. 108 1/2, par. 18-124)
14    Sec. 18-124. Retirement annuities - conditions for
15eligibility.
16    (a) This subsection (a) applies to a Tier 1 participant who
17first serves as a judge before the effective date of this
18amendatory Act of the 96th General Assembly.
19    A participant whose employment as a judge is terminated,
20regardless of age or cause is entitled to a retirement annuity
21beginning on the date specified in a written application
22subject to the following:
23        (1) the date the annuity begins is subsequent to the
24    date of final termination of employment, or the date 30
25    days prior to the receipt of the application by the board

 

 

HB2279- 147 -LRB101 09158 RPS 54252 b

1    for annuities based on disability, or one year before the
2    receipt of the application by the board for annuities based
3    on attained age;
4        (2) the participant is at least age 55, or has become
5    permanently disabled and as a consequence is unable to
6    perform the duties of his or her office;
7        (3) the participant has at least 10 years of service
8    credit except that a participant terminating service after
9    June 30 1975, with at least 6 years of service credit,
10    shall be entitled to a retirement annuity at age 62 or
11    over;
12        (4) the participant is not receiving or entitled to
13    receive, at the date of retirement, any salary from an
14    employer for service currently performed.
15    (b) This subsection (b) applies to a Tier 2 participant who
16first serves as a judge on or after the effective date of this
17amendatory Act of the 96th General Assembly.
18    A participant who has at least 8 years of creditable
19service is entitled to a retirement annuity when he or she has
20attained age 67.
21    A member who has attained age 62 and has at least 8 years
22of service credit may elect to receive the lower retirement
23annuity provided in subsection (d) of Section 18-125 of this
24Code.
25(Source: P.A. 96-889, eff. 1-1-11.)
 

 

 

HB2279- 148 -LRB101 09158 RPS 54252 b

1    (40 ILCS 5/18-125)  (from Ch. 108 1/2, par. 18-125)
2    Sec. 18-125. Retirement annuity amount.
3    (a) The annual retirement annuity for a participant who
4terminated service as a judge prior to July 1, 1971 shall be
5based on the law in effect at the time of termination of
6service.
7    (b) Except as provided in subsection (b-5), effective July
81, 1971, the retirement annuity for any participant in service
9on or after such date shall be 3 1/2% of final average salary,
10as defined in this Section, for each of the first 10 years of
11service, and 5% of such final average salary for each year of
12service in excess of 10.
13    For purposes of this Section, final average salary for a
14Tier 1 participant who first serves as a judge before August
1510, 2009 (the effective date of Public Act 96-207) shall be:
16        (1) the average salary for the last 4 years of credited
17    service as a judge for a participant who terminates service
18    before July 1, 1975.
19        (2) for a participant who terminates service after June
20    30, 1975 and before July 1, 1982, the salary on the last
21    day of employment as a judge.
22        (3) for any participant who terminates service after
23    June 30, 1982 and before January 1, 1990, the average
24    salary for the final year of service as a judge.
25        (4) for a participant who terminates service on or
26    after January 1, 1990 but before July 14, 1995 (the

 

 

HB2279- 149 -LRB101 09158 RPS 54252 b

1    effective date of Public Act 89-136), the salary on the
2    last day of employment as a judge.
3        (5) for a participant who terminates service on or
4    after July 14, 1995 (the effective date of Public Act
5    89-136), the salary on the last day of employment as a
6    judge, or the highest salary received by the participant
7    for employment as a judge in a position held by the
8    participant for at least 4 consecutive years, whichever is
9    greater.
10    However, in the case of a participant who elects to
11discontinue contributions as provided in subdivision (a)(2) of
12Section 18-133, the time of such election shall be considered
13the last day of employment in the determination of final
14average salary under this subsection.
15    For a Tier 1 participant who first serves as a judge on or
16after August 10, 2009 (the effective date of Public Act 96-207)
17and before January 1, 2011 (the effective date of Public Act
1896-889), final average salary shall be the average monthly
19salary obtained by dividing the total salary of the participant
20during the period of: (1) the 48 consecutive months of service
21within the last 120 months of service in which the total
22compensation was the highest, or (2) the total period of
23service, if less than 48 months, by the number of months of
24service in that period.
25    The maximum retirement annuity for any participant shall be
2685% of final average salary.

 

 

HB2279- 150 -LRB101 09158 RPS 54252 b

1    (b-5) Notwithstanding any other provision of this Article,
2for a Tier 2 participant who first serves as a judge on or
3after January 1, 2011 (the effective date of Public Act
496-889), the annual retirement annuity is 3% of the
5participant's final average salary for each year of service.
6The maximum retirement annuity payable shall be 60% of the
7participant's final average salary.
8    For a Tier 2 participant who first serves as a judge on or
9after January 1, 2011 (the effective date of Public Act
1096-889), final average salary shall be the average monthly
11salary obtained by dividing the total salary of the judge
12during the 96 consecutive months of service within the last 120
13months of service in which the total salary was the highest by
14the number of months of service in that period; however,
15beginning January 1, 2011, the annual salary may not exceed
16$106,800, except that that amount shall annually thereafter be
17increased by the lesser of (i) 3% of that amount, including all
18previous adjustments, or (ii) the annual unadjusted percentage
19increase (but not less than zero) in the consumer price index-u
20for the 12 months ending with the September preceding each
21November 1. "Consumer price index-u" means the index published
22by the Bureau of Labor Statistics of the United States
23Department of Labor that measures the average change in prices
24of goods and services purchased by all urban consumers, United
25States city average, all items, 1982-84 = 100. The new amount
26resulting from each annual adjustment shall be determined by

 

 

HB2279- 151 -LRB101 09158 RPS 54252 b

1the Public Pension Division of the Department of Insurance and
2made available to the Board by November 1st of each year.
3    (c) The retirement annuity for a participant who retires
4prior to age 60 with less than 28 years of service in the
5System shall be reduced 1/2 of 1% for each month that the
6participant's age is under 60 years at the time the annuity
7commences. However, for a participant who retires on or after
8December 10, 1999 (the effective date of Public Act 91-653),
9the percentage reduction in retirement annuity imposed under
10this subsection shall be reduced by 5/12 of 1% for every month
11of service in this System in excess of 20 years, and therefore
12a participant with at least 26 years of service in this System
13may retire at age 55 without any reduction in annuity.
14    The reduction in retirement annuity imposed by this
15subsection shall not apply in the case of retirement on account
16of disability.
17    (d) Notwithstanding any other provision of this Article,
18for a Tier 2 participant who first serves as a judge on or
19after January 1, 2011 (the effective date of Public Act 96-889)
20and who is retiring after attaining age 62, the retirement
21annuity shall be reduced by 1/2 of 1% for each month that the
22participant's age is under age 67 at the time the annuity
23commences.
24(Source: P.A. 100-201, eff. 8-18-17.)
 
25    (40 ILCS 5/18-125.1)  (from Ch. 108 1/2, par. 18-125.1)

 

 

HB2279- 152 -LRB101 09158 RPS 54252 b

1    Sec. 18-125.1. Automatic increase in retirement annuity. A
2participant who retires from service after June 30, 1969,
3shall, in January of the year next following the year in which
4the first anniversary of retirement occurs, and in January of
5each year thereafter, have the amount of his or her originally
6granted retirement annuity increased as follows: for each year
7up to and including 1971, 1 1/2%; for each year from 1972
8through 1979 inclusive, 2%; and for 1980 and each year
9thereafter, 3%.
10    Notwithstanding any other provision of this Article, a
11retirement annuity for a Tier 2 participant who first serves as
12a judge on or after January 1, 2011 (the effective date of
13Public Act 96-889) shall be increased in January of the year
14next following the year in which the first anniversary of
15retirement occurs, but in no event prior to age 67, and in
16January of each year thereafter, by an amount equal to 3% or
17the annual percentage increase in the consumer price index-u as
18determined by the Public Pension Division of the Department of
19Insurance under subsection (b-5) of Section 18-125, whichever
20is less, of the retirement annuity then being paid.
21    This Section is not applicable to a participant who retires
22before he or she has made contributions at the rate prescribed
23in Section 18-133 for automatic increases for not less than the
24equivalent of one full year, unless such a participant arranges
25to pay the system the amount required to bring the total
26contributions for the automatic increase to the equivalent of

 

 

HB2279- 153 -LRB101 09158 RPS 54252 b

1one year's contribution based upon his or her last year's
2salary.
3    This Section is applicable to all participants (other than
4Tier 3 participants who do not have any service credit as a
5Tier 1 or Tier 2 participant) in service after June 30, 1969
6unless a participant has elected, prior to September 1, 1969,
7in a written direction filed with the board not to be subject
8to the provisions of this Section. Any participant in service
9on or after July 1, 1992 shall have the option of electing
10prior to April 1, 1993, in a written direction filed with the
11board, to be covered by the provisions of the 1969 amendatory
12Act. Such participant shall be required to make the aforesaid
13additional contributions with compound interest at 4% per
14annum.
15    Any participant who has become eligible to receive the
16maximum rate of annuity and who resumes service as a judge
17after receiving a retirement annuity under this Article shall
18have the amount of his or her retirement annuity increased by
193% of the originally granted annuity amount for each year of
20such resumed service, beginning in January of the year next
21following the date of such resumed service, upon subsequent
22termination of such resumed service.
23    Beginning January 1, 1990, all automatic annual increases
24payable under this Section shall be calculated as a percentage
25of the total annuity payable at the time of the increase,
26including previous increases granted under this Article.

 

 

HB2279- 154 -LRB101 09158 RPS 54252 b

1(Source: P.A. 96-889, eff. 1-1-11; 96-1490, eff. 1-1-11.)
 
2    (40 ILCS 5/18-127)  (from Ch. 108 1/2, par. 18-127)
3    Sec. 18-127. Retirement annuity - suspension on
4reemployment.
5    (a) A participant receiving a retirement annuity who is
6regularly employed for compensation by an employer other than a
7county, in any capacity, shall have his or her retirement
8annuity payments suspended during such employment. Upon
9termination of such employment, retirement annuity payments at
10the previous rate shall be resumed.
11    If such a participant resumes service as a judge, he or she
12shall receive credit for any additional service. Upon
13subsequent retirement, his or her retirement annuity shall be
14the amount previously granted, plus the amount earned by the
15additional judicial service under the provisions in effect
16during the period of such additional service. However, if the
17participant was receiving the maximum rate of annuity at the
18time of re-employment, he or she may elect, in a written
19direction filed with the board, not to receive any additional
20service credit during the period of re-employment. In such
21case, contributions shall not be required during the period of
22re-employment. Any such election shall be irrevocable.
23    (b) Beginning January 1, 1991, any participant receiving a
24retirement annuity who accepts temporary employment from an
25employer other than a county for a period not exceeding 75

 

 

HB2279- 155 -LRB101 09158 RPS 54252 b

1working days in any calendar year shall not be deemed to be
2regularly employed for compensation or to have resumed service
3as a judge for the purposes of this Article. A day shall be
4considered a working day if the annuitant performs on it any of
5his duties under the temporary employment agreement.
6    (c) Except as provided in subsection (a), beginning January
71, 1993, retirement annuities shall not be subject to
8suspension upon resumption of employment for an employer, and
9any retirement annuity that is then so suspended shall be
10reinstated on that date.
11    (d) The changes made in this Section by this amendatory Act
12of 1993 shall apply to judges no longer in service on its
13effective date, as well as to judges serving on or after that
14date.
15    (e) A participant receiving a retirement annuity under this
16Article who serves as a part-time employee in any of the
17following positions: Legislative Inspector General, Special
18Legislative Inspector General, employee of the Office of the
19Legislative Inspector General, Executive Director of the
20Legislative Ethics Commission, or staff of the Legislative
21Ethics Commission, but has not elected to participate in the
22Article 14 System with respect to that service, shall not be
23deemed to be regularly employed for compensation by an employer
24other than a county, nor to have resumed service as a judge, on
25the basis of that service, and the retirement annuity payments
26and other benefits of that person under this Code shall not be

 

 

HB2279- 156 -LRB101 09158 RPS 54252 b

1suspended, diminished, or otherwise impaired solely as a
2consequence of that service. This subsection (e) applies
3without regard to whether the person is in service as a judge
4under this Article on or after the effective date of this
5amendatory Act of the 93rd General Assembly. In this
6subsection, a "part-time employee" is a person who is not
7required to work at least 35 hours per week.
8    (f) A participant receiving a retirement annuity under this
9Article who has made an election under Section 1-123 and who is
10serving either as legal counsel in the Office of the Governor
11or as Chief Deputy Attorney General shall not be deemed to be
12regularly employed for compensation by an employer other than a
13county, nor to have resumed service as a judge, on the basis of
14that service, and the retirement annuity payments and other
15benefits of that person under this Code shall not be suspended,
16diminished, or otherwise impaired solely as a consequence of
17that service. This subsection (f) applies without regard to
18whether the person is in service as a judge under this Article
19on or after the effective date of this amendatory Act of the
2093rd General Assembly.
21    (g) Notwithstanding any other provision of this Article, if
22a Tier 2 participant person who first becomes a participant
23under this System on or after January 1, 2011 (the effective
24date of this amendatory Act of the 96th General Assembly) is
25receiving a retirement annuity under this Article and becomes a
26member or participant under this Article or any other Article

 

 

HB2279- 157 -LRB101 09158 RPS 54252 b

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

 

 

HB2279- 158 -LRB101 09158 RPS 54252 b

1    (d) Upon the death of an annuitant, active participant, or
2participant who had terminated service with at least 10 years
3of service, each surviving child under the age of 18 or
4disabled as defined in Section 18-128 shall be entitled to a
5child's annuity in an amount equal to 5% of the decedent's
6final salary, not to exceed in total for all such children the
7greater of 20% of the decedent's last salary or 66 2/3% of the
8annuity received or earned by the decedent as provided under
9subsections (a) and (b) of this Section. This child's annuity
10shall be paid whether or not a survivor's annuity was elected
11under Section 18-123.
12    (e) The changes made in the survivor's annuity provisions
13by Public Act 82-306 shall apply to the survivors of a deceased
14participant or annuitant whose death occurs on or after August
1521, 1981.
16    (f) Beginning January 1, 1990, every survivor's annuity
17shall be increased (1) on each January 1 occurring on or after
18the commencement of the annuity if the deceased member died
19while receiving a retirement annuity, or (2) in other cases, on
20each January 1 occurring on or after the first anniversary of
21the commencement of the annuity, by an amount equal to 3% of
22the current amount of the annuity, including any previous
23increases under this Article. Such increases shall apply
24without regard to whether the deceased member was in service on
25or after the effective date of this amendatory Act of 1991, but
26shall not accrue for any period prior to January 1, 1990.

 

 

HB2279- 159 -LRB101 09158 RPS 54252 b

1    (g) Notwithstanding any other provision of this Article,
2the initial survivor's annuity for a survivor of a Tier 2
3participant who first serves as a judge after January 1, 2011
4(the effective date of Public Act 96-889) shall be in the
5amount of 66 2/3% of the annuity received or earned by the
6decedent, and shall be increased (1) on each January 1
7occurring on or after the commencement of the annuity if the
8deceased participant died while receiving a retirement
9annuity, or (2) in other cases, on each January 1 occurring on
10or after the first anniversary of the commencement of the
11annuity, but in no event prior to age 67, by an amount equal to
123% or the annual unadjusted percentage increase in the consumer
13price index-u as determined by the Public Pension Division of
14the Department of Insurance under subsection (b-5) of Section
1518-125, whichever is less, of the survivor's annuity then being
16paid.
17(Source: P.A. 96-889, eff. 1-1-11; 96-1490, eff. 1-1-11.)
 
18    (40 ILCS 5/18-133)  (from Ch. 108 1/2, par. 18-133)
19    Sec. 18-133. Financing; employee contributions.
20    (a) Effective July 1, 1967, each participant is required to
21contribute 7 1/2% of each payment of salary toward the
22retirement annuity. Such contributions shall continue during
23the entire time the participant is in service, with the
24following exceptions:
25        (1) Contributions for the retirement annuity are not

 

 

HB2279- 160 -LRB101 09158 RPS 54252 b

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

 

 

HB2279- 161 -LRB101 09158 RPS 54252 b

1    judge on or after the date of the election, rather than the
2    total salary received. If a judge who is making
3    contributions to the System on the effective date of this
4    amendatory Act of the 91st General Assembly makes an
5    election to limit contributions under this subdivision
6    (a)(3) within 90 days after that effective date, the
7    election shall be deemed to become effective on that
8    effective date and the judge shall be entitled to receive a
9    refund of any excess contributions paid to the System
10    during that 90-day period; any other election under this
11    subdivision (a)(3) becomes effective on the first of the
12    month following the date of the election. An election to
13    limit contributions under this subdivision (a)(3) is
14    irrevocable. Service credits earned in any other
15    participating system as defined in Article 20 of this Code
16    shall be considered for purposes of determining a judge's
17    eligibility to make an election under this subdivision
18    (a)(3).
19    (b) Beginning July 1, 1969, each participant is required to
20contribute 1% of each payment of salary towards the automatic
21increase in annuity provided in Section 18-125.1. However, such
22contributions need not be made by any participant who has
23elected prior to September 15, 1969, not to be subject to the
24automatic increase in annuity provisions.
25    (c) Effective July 13, 1953, each married participant
26subject to the survivor's annuity provisions is required to

 

 

HB2279- 162 -LRB101 09158 RPS 54252 b

1contribute 2 1/2% of each payment of salary, whether or not he
2or she is required to make any other contributions under this
3Section. Such contributions shall be made concurrently with the
4contributions made for annuity purposes.
5    (d) Notwithstanding any other provision of this Article,
6the required contributions for a Tier 2 participant who first
7becomes a participant on or after January 1, 2011 shall not
8exceed the contributions that would be due under this Article
9if that participant's highest salary for annuity purposes were
10$106,800, plus any increase in that amount under Section
1118-125.
12(Source: P.A. 96-1490, eff. 1-1-11.)
 
13    (40 ILCS 5/18-169)
14    Sec. 18-169. Application and expiration of new benefit
15increases.
16    (a) As used in this Section, "new benefit increase" means
17an increase in the amount of any benefit provided under this
18Article, or an expansion of the conditions of eligibility for
19any benefit under this Article, that results from an amendment
20to this Code that takes effect after the effective date of this
21amendatory Act of the 94th General Assembly. "New benefit
22increase", however, does not include any benefit increase
23resulting from the changes made by this amendatory Act of the
24101st General Assembly.
25    (b) Notwithstanding any other provision of this Code or any

 

 

HB2279- 163 -LRB101 09158 RPS 54252 b

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

 

 

HB2279- 164 -LRB101 09158 RPS 54252 b

1in the language enacting the new benefit increase or provided
2under subsection (c). This does not prevent the General
3Assembly from extending or re-creating a new benefit increase
4by law.
5    (e) Except as otherwise provided in the language creating
6the new benefit increase, a new benefit increase that expires
7under this Section continues to apply to persons who applied
8and qualified for the affected benefit while the new benefit
9increase was in effect and to the affected beneficiaries and
10alternate payees of such persons, but does not apply to any
11other person, including without limitation a person who
12continues in service after the expiration date and did not
13apply and qualify for the affected benefit while the new
14benefit increase was in effect.
15(Source: P.A. 94-4, eff. 6-1-05.)
 
16    (40 ILCS 5/20-121)  (from Ch. 108 1/2, par. 20-121)
17    (Text of Section WITHOUT the changes made by P.A. 98-599,
18which has been held unconstitutional)
19    Sec. 20-121. Calculation of proportional retirement
20annuities.
21    (a) Upon retirement of the employee, a proportional
22retirement annuity shall be computed by each participating
23system in which pension credit has been established on the
24basis of pension credits under each system. The computation
25shall be in accordance with the formula or method prescribed by

 

 

HB2279- 165 -LRB101 09158 RPS 54252 b

1each participating system which is in effect at the date of the
2employee's latest withdrawal from service covered by any of the
3systems in which he has pension credits which he elects to have
4considered under this Article. However, the amount of any
5retirement annuity payable under the self-managed plan
6established under Section 15-158.2 of this Code depends solely
7on the value of the participant's vested account balances and
8is not subject to any proportional adjustment under this
9Section.
10    (a-5) For persons who participate in a Tier 3 plan
11established under Article 2, 14, 15, 16, or 18 of this Code to
12whom the provisions of this Article apply, the pension credits
13established under the Tier 3 plan may be considered in
14determining eligibility for or the amount of the defined
15benefit retirement annuity that is payable by any other
16participating system.
17    (b) Combined pension credit under all retirement systems
18subject to this Article shall be considered in determining
19whether the minimum qualification has been met and the formula
20or method of computation which shall be applied, except as may
21be otherwise provided with respect to vesting in State or
22employer contributions in a Tier 3 plan. If a system has a
23step-rate formula for calculation of the retirement annuity,
24pension credits covering previous service which have been
25established under another system shall be considered in
26determining which range or ranges of the step-rate formula are

 

 

HB2279- 166 -LRB101 09158 RPS 54252 b

1to be applicable to the employee.
2    (c) Interest on pension credit shall continue to accumulate
3in accordance with the provisions of the law governing the
4retirement system in which the same has been established during
5the time an employee is in the service of another employer, on
6the assumption such employee, for interest purposes for pension
7credit, is continuing in the service covered by such retirement
8system.
9(Source: P.A. 91-887, eff. 7-6-00.)
 
10    (40 ILCS 5/20-123)  (from Ch. 108 1/2, par. 20-123)
11    (Text of Section WITHOUT the changes made by P.A. 98-599,
12which has been held unconstitutional)
13    Sec. 20-123. Survivor's annuity. The provisions governing
14a retirement annuity shall be applicable to a survivor's
15annuity. Appropriate credits shall be established for
16survivor's annuity purposes in those participating systems
17which provide survivor's annuities, according to the same
18conditions and subject to the same limitations and restrictions
19herein prescribed for a retirement annuity. If a participating
20system has no survivor's annuity benefit, or if the survivor's
21annuity benefit under that system is waived, pension credit
22established in that system shall not be considered in
23determining eligibility for or the amount of the survivor's
24annuity which may be payable by any other participating system.
25    For persons who participate in the self-managed plan

 

 

HB2279- 167 -LRB101 09158 RPS 54252 b

1established under Section 15-158.2 or the portable benefit
2package established under Section 15-136.4, pension credit
3established under Article 15 may be considered in determining
4eligibility for or the amount of the survivor's annuity that is
5payable by any other participating system, but pension credit
6established in any other system shall not result in any right
7to a survivor's annuity under the Article 15 system.
8    For persons who participate in a Tier 3 plan established
9under Article 2, 14, 15, 16, or 18 of this Code to whom the
10provisions of this Article apply, the pension credits
11established under the Tier 3 plan may be considered in
12determining eligibility for or the amount of the defined
13benefit survivor's annuity that is payable by any other
14participating system, but pension credits established in any
15other system shall not result in any right to or increase in
16the value of a survivor's annuity under the Tier 3 plan, which
17depends solely on the options chosen and the value of the
18participant's vested account balances and is not subject to any
19proportional adjustment under this Section.
20(Source: P.A. 91-887, eff. 7-6-00.)
 
21    (40 ILCS 5/20-124)  (from Ch. 108 1/2, par. 20-124)
22    (Text of Section WITHOUT the changes made by P.A. 98-599,
23which has been held unconstitutional)
24    Sec. 20-124. Maximum benefits.
25    (a) In no event shall the combined retirement or survivors

 

 

HB2279- 168 -LRB101 09158 RPS 54252 b

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

 

 

HB2279- 169 -LRB101 09158 RPS 54252 b

1    survivor's annuity to which the survivor would have been
2    entitled if the deceased employee had participated in the
3    traditional benefit package as defined in Section 15-103.1
4    rather than the self-managed plan.
5        (iii) Benefits payable under the self-managed plan are
6    not subject to proportionate reduction under this Section.
7    (c) In the case of a participant in a Tier 3 plan
8established under Article 2, 14, 15, 16, or 18 of this Code to
9whom the provisions of this Article apply:
10        (i) For purposes of calculating the combined
11    retirement annuity and the proportionate reduction, if
12    any, in a defined benefit retirement annuity, any benefit
13    payable under the Tier 3 plan shall not be considered.
14        (ii) For purposes of calculating the combined
15    survivor's annuity and the proportionate reduction, if
16    any, in a defined benefit survivor's annuity, any benefit
17    payable under the Tier 3 plan shall not be considered.
18        (iii) Benefits payable under a Tier 3 plan established
19    under Article 2, 14, 15, 16, or 18 of this Code are not
20    subject to proportionate reduction under this Section.
21(Source: P.A. 91-887, eff. 7-6-00.)
 
22    (40 ILCS 5/20-125)  (from Ch. 108 1/2, par. 20-125)
23    (Text of Section WITHOUT the changes made by P.A. 98-599,
24which has been held unconstitutional)
25    Sec. 20-125. Return to employment - suspension of benefits.

 

 

HB2279- 170 -LRB101 09158 RPS 54252 b

1If a retired employee returns to employment which is covered by
2a system from which he is receiving a proportional annuity
3under this Article, his proportional annuity from all
4participating systems shall be suspended during the period of
5re-employment, except that this suspension does not apply to
6any distributions payable under the self-managed plan
7established under Section 15-158.2 of this Code or under a Tier
83 plan established under Article 2, 14, 15, 16, or 18 of this
9Code.
10    The provisions of the Article under which such employment
11would be covered shall govern the determination of whether the
12employee has returned to employment, and if applicable the
13exemption of temporary employment or employment not exceeding a
14specified duration or frequency, for all participating systems
15from which the retired employee is receiving a proportional
16annuity under this Article, notwithstanding any contrary
17provisions in the other Articles governing such systems.
18(Source: P.A. 91-887, eff. 7-6-00.)
 
19    Section 15. The Illinois Educational Labor Relations Act is
20amended by changing Sections 4 and 17 and by adding Section
2110.6 as follows:
 
22    (115 ILCS 5/4)  (from Ch. 48, par. 1704)
23    (Text of Section WITHOUT the changes made by P.A. 98-599,
24which has been held unconstitutional)

 

 

HB2279- 171 -LRB101 09158 RPS 54252 b

1    Sec. 4. Employer rights. Employers shall not be required to
2bargain over matters of inherent managerial policy, which shall
3include such areas of discretion or policy as the functions of
4the employer, standards of services, its overall budget, the
5organizational structure and selection of new employees and
6direction of employees. Employers, however, shall be required
7to bargain collectively with regard to policy matters directly
8affecting wages, hours and terms and conditions of employment
9as well as the impact thereon upon request by employee
10representatives, except as provided in Section 10.6. To
11preserve the rights of employers and exclusive representatives
12which have established collective bargaining relationships or
13negotiated collective bargaining agreements prior to the
14effective date of this Act, employers shall be required to
15bargain collectively with regard to any matter concerning
16wages, hours or conditions of employment about which they have
17bargained for and agreed to in a collective bargaining
18agreement prior to the effective date of this Act, except as
19provided in Section 10.6.
20(Source: P.A. 83-1014.)
 
21    (115 ILCS 5/10.6 new)
22    Sec. 10.6. Bargaining regarding pension contributions on
23behalf of employees; prohibited.
24    (a) Notwithstanding any other provision of this Act,
25beginning on the effective date of this amendatory Act of the

 

 

HB2279- 172 -LRB101 09158 RPS 54252 b

1101st General Assembly, employers shall not bargain over
2matters prohibited by subsection (e) of Section 16-152.1 of the
3Illinois Pension Code, which concerns employers paying pension
4contributions on behalf of employees.
5    (b) In case of any conflict between this Section and any
6other provisions of this Act or any other law, the provisions
7of this Section shall control.
 
8    (115 ILCS 5/17)  (from Ch. 48, par. 1717)
9    (Text of Section WITHOUT the changes made by P.A. 98-599,
10which has been held unconstitutional)
11    Sec. 17. Effect on other laws. Except as provided in
12Section 10.6, in In case of any conflict between the provisions
13of this Act and any other law, executive order or
14administrative regulation, the provisions of this Act shall
15prevail and control. Nothing in this Act shall be construed to
16replace or diminish the rights of employees established by
17Section 36d of "An Act to create the State Universities Civil
18Service System", approved May 11, 1905, as amended or modified.
19(Source: P.A. 83-1014.)
 
20    Section 99. Effective date. This Act takes effect upon
21becoming law.

 

 

HB2279- 173 -LRB101 09158 RPS 54252 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    40 ILCS 5/1-160
6    40 ILCS 5/1-161
7    40 ILCS 5/2-105.3 new
8    40 ILCS 5/2-117from Ch. 108 1/2, par. 2-117
9    40 ILCS 5/2-162
10    40 ILCS 5/2-165.5 new
11    40 ILCS 5/7-114from Ch. 108 1/2, par. 7-114
12    40 ILCS 5/7-116from Ch. 108 1/2, par. 7-116
13    40 ILCS 5/7-139from Ch. 108 1/2, par. 7-139
14    40 ILCS 5/14-103.05from Ch. 108 1/2, par. 14-103.05
15    40 ILCS 5/14-103.10from Ch. 108 1/2, par. 14-103.10
16    40 ILCS 5/14-103.41
17    40 ILCS 5/14-104.3from Ch. 108 1/2, par. 14-104.3
18    40 ILCS 5/14-106from Ch. 108 1/2, par. 14-106
19    40 ILCS 5/14-152.1
20    40 ILCS 5/14-155.5 new
21    40 ILCS 5/15-108.1
22    40 ILCS 5/15-108.2
23    40 ILCS 5/15-108.3 new
24    40 ILCS 5/15-112from Ch. 108 1/2, par. 15-112
25    40 ILCS 5/15-113.4from Ch. 108 1/2, par. 15-113.4

 

 

HB2279- 174 -LRB101 09158 RPS 54252 b

1    40 ILCS 5/15-134from Ch. 108 1/2, par. 15-134
2    40 ILCS 5/15-198
3    40 ILCS 5/15-200.5 new
4    40 ILCS 5/16-106.41
5    40 ILCS 5/16-123from Ch. 108 1/2, par. 16-123
6    40 ILCS 5/16-127from Ch. 108 1/2, par. 16-127
7    40 ILCS 5/16-152.1from Ch. 108 1/2, par. 16-152.1
8    40 ILCS 5/16-203
9    40 ILCS 5/16-205.5 new
10    40 ILCS 5/18-110.1 new
11    40 ILCS 5/18-120from Ch. 108 1/2, par. 18-120
12    40 ILCS 5/18-121.5 new
13    40 ILCS 5/18-124from Ch. 108 1/2, par. 18-124
14    40 ILCS 5/18-125from Ch. 108 1/2, par. 18-125
15    40 ILCS 5/18-125.1from Ch. 108 1/2, par. 18-125.1
16    40 ILCS 5/18-127from Ch. 108 1/2, par. 18-127
17    40 ILCS 5/18-128.01from Ch. 108 1/2, par. 18-128.01
18    40 ILCS 5/18-133from Ch. 108 1/2, par. 18-133
19    40 ILCS 5/18-169
20    40 ILCS 5/20-121from Ch. 108 1/2, par. 20-121
21    40 ILCS 5/20-123from Ch. 108 1/2, par. 20-123
22    40 ILCS 5/20-124from Ch. 108 1/2, par. 20-124
23    40 ILCS 5/20-125from Ch. 108 1/2, par. 20-125
24    115 ILCS 5/4from Ch. 48, par. 1704
25    115 ILCS 5/10.6 new
26    115 ILCS 5/17from Ch. 48, par. 1717