96TH GENERAL ASSEMBLY
State of Illinois
2009 and 2010
HB3816

 

Introduced 2/25/2009, by Rep. Jim Watson

 

SYNOPSIS AS INTRODUCED:
 
40 ILCS 5/3-110   from Ch. 108 1/2, par. 3-110
40 ILCS 5/5-212   from Ch. 108 1/2, par. 5-212
40 ILCS 5/5-214.3 new
40 ILCS 5/7-139   from Ch. 108 1/2, par. 7-139
40 ILCS 5/8-230.11 new
40 ILCS 5/9-179.1   from Ch. 108 1/2, par. 9-179.1
40 ILCS 5/13-403   from Ch. 108 1/2, par. 13-403
40 ILCS 5/15-113.3   from Ch. 108 1/2, par. 15-113.3
30 ILCS 805/8.33 new

    Amends the Downstate Police, Chicago Police, Illinois Municipal Retirement Fund, Chicago Municipal, Cook County, Metropolitan Water Reclamation District, and State Universities Articles of the Illinois Pension Code. Allows police officers to establish creditable service for up to 4 years of military service before employment. Requires payment of employee and employer contributions, plus interest. Amends the State Mandates Act to require implementation without reimbursement. Effective immediately.


LRB096 08577 AMC 18700 b

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

 

 

A BILL FOR

 

HB3816 LRB096 08577 AMC 18700 b

1     AN ACT concerning public employee benefits.
 
2     Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
 
4     Section 5. The Illinois Pension Code is amended by changing
5 Sections 3-110, 5-212, 7-139, 9-179.1, 13-403, and 15-113.3 and
6 by adding Sections 5-214.3 and 8-230.11 as follows:
 
7     (40 ILCS 5/3-110)  (from Ch. 108 1/2, par. 3-110)
8     Sec. 3-110. Creditable service.
9     (a) "Creditable service" is the time served by a police
10 officer as a member of a regularly constituted police force of
11 a municipality. In computing creditable service furloughs
12 without pay exceeding 30 days shall not be counted, but all
13 leaves of absence for illness or accident, regardless of
14 length, and all periods of disability retirement for which a
15 police officer has received no disability pension payments
16 under this Article shall be counted.
17     (a-5) Up to 3 years of time during which the police officer
18 receives a disability pension under Section 3-114.1, 3-114.2,
19 3-114.3, or 3-114.6 shall be counted as creditable service,
20 provided that (i) the police officer returns to active service
21 after the disability for a period at least equal to the period
22 for which credit is to be established and (ii) the police
23 officer makes contributions to the fund based on the rates

 

 

HB3816 - 2 - LRB096 08577 AMC 18700 b

1 specified in Section 3-125.1 and the salary upon which the
2 disability pension is based. These contributions may be paid at
3 any time prior to the commencement of a retirement pension. The
4 police officer may, but need not, elect to have the
5 contributions deducted from the disability pension or to pay
6 them in installments on a schedule approved by the board. If
7 not deducted from the disability pension, the contributions
8 shall include interest at the rate of 6% per year, compounded
9 annually, from the date for which service credit is being
10 established to the date of payment. If contributions are paid
11 under this subsection (a-5) in excess of those needed to
12 establish the credit, the excess shall be refunded. This
13 subsection (a-5) applies to persons receiving a disability
14 pension under Section 3-114.1, 3-114.2, 3-114.3, or 3-114.6 on
15 the effective date of this amendatory Act of the 91st General
16 Assembly, as well as persons who begin to receive such a
17 disability pension after that date.
18     (b) Creditable service includes all periods of service in
19 the military, naval or air forces of the United States entered
20 upon while an active police officer of a municipality, provided
21 that upon applying for a permanent pension, and in accordance
22 with the rules of the board, the police officer pays into the
23 fund the amount the officer would have contributed if he or she
24 had been a regular contributor during such period, to the
25 extent that the municipality which the police officer served
26 has not made such contributions in the officer's behalf. The

 

 

HB3816 - 3 - LRB096 08577 AMC 18700 b

1 total amount of such creditable service shall not exceed 5
2 years, except that any police officer who on July 1, 1973 had
3 more than 5 years of such creditable service shall receive the
4 total amount thereof.
5     (b-5) Creditable service includes all periods of service in
6 the military, naval, or air forces of the United States entered
7 upon before beginning service as an active police officer of a
8 municipality, provided that, in accordance with the rules of
9 the board, the police officer pays into the fund the amount the
10 police officer would have contributed if he or she had been a
11 regular contributor during such period, plus an amount
12 determined by the Board to be equal to the municipality's
13 normal cost of the benefit, plus interest calculated from the
14 date the employee last became a police officer under this
15 Article. The total amount of such creditable service shall not
16 exceed 4 years.
17     (c) Creditable service also includes service rendered by a
18 police officer while on leave of absence from a police
19 department to serve as an executive of an organization whose
20 membership consists of members of a police department, subject
21 to the following conditions: (i) the police officer is a
22 participant of a fund established under this Article with at
23 least 10 years of service as a police officer; (ii) the police
24 officer received no credit for such service under any other
25 retirement system, pension fund, or annuity and benefit fund
26 included in this Code; (iii) pursuant to the rules of the board

 

 

HB3816 - 4 - LRB096 08577 AMC 18700 b

1 the police officer pays to the fund the amount he or she would
2 have contributed had the officer been an active member of the
3 police department; and (iv) the organization pays a
4 contribution equal to the municipality's normal cost for that
5 period of service.
6         (d)(1) Creditable service also includes periods of
7     service originally established in another police pension
8     fund under this Article or in the Fund established under
9     Article 7 of this Code for which (i) the contributions have
10     been transferred under Section 3-110.7 or Section 7-139.9
11     and (ii) any additional contribution required under
12     paragraph (2) of this subsection has been paid in full in
13     accordance with the requirements of this subsection (d).
14         (2) If the board of the pension fund to which
15     creditable service and related contributions are
16     transferred under Section 3-110.7 or 7-139.9 determines
17     that the amount transferred is less than the true cost to
18     the pension fund of allowing that creditable service to be
19     established, then in order to establish that creditable
20     service the police officer must pay to the pension fund,
21     within the payment period specified in paragraph (3) of
22     this subsection, an additional contribution equal to the
23     difference, as determined by the board in accordance with
24     the rules and procedures adopted under paragraph (6) of
25     this subsection.
26         (3) Except as provided in paragraph (4), the additional

 

 

HB3816 - 5 - LRB096 08577 AMC 18700 b

1     contribution must be paid to the board (i) within 5 years
2     from the date of the transfer of contributions under
3     Section 3-110.7 or 7-139.9 and (ii) before the police
4     officer terminates service with the fund. The additional
5     contribution may be paid in a lump sum or in accordance
6     with a schedule of installment payments authorized by the
7     board.
8         (4) If the police officer dies in service before
9     payment in full has been made and before the expiration of
10     the 5-year payment period, the surviving spouse of the
11     officer may elect to pay the unpaid amount on the officer's
12     behalf within 6 months after the date of death, in which
13     case the creditable service shall be granted as though the
14     deceased police officer had paid the remaining balance on
15     the day before the date of death.
16         (5) If the additional contribution is not paid in full
17     within the required time, the creditable service shall not
18     be granted and the police officer (or the officer's
19     surviving spouse or estate) shall be entitled to receive a
20     refund of (i) any partial payment of the additional
21     contribution that has been made by the police officer and
22     (ii) those portions of the amounts transferred under
23     subdivision (a)(1) of Section 3-110.7 or subdivisions
24     (a)(1) and (a)(3) of Section 7-139.9 that represent
25     employee contributions paid by the police officer (but not
26     the accumulated interest on those contributions) and

 

 

HB3816 - 6 - LRB096 08577 AMC 18700 b

1     interest paid by the police officer to the prior pension
2     fund in order to reinstate service terminated by acceptance
3     of a refund.
4         At the time of paying a refund under this item (5), the
5     pension fund shall also repay to the pension fund from
6     which the contributions were transferred under Section
7     3-110.7 or 7-139.9 the amount originally transferred under
8     subdivision (a)(2) of that Section, plus interest at the
9     rate of 6% per year, compounded annually, from the date of
10     the original transfer to the date of repayment. Amounts
11     repaid to the Article 7 fund under this provision shall be
12     credited to the appropriate municipality.
13         Transferred credit that is not granted due to failure
14     to pay the additional contribution within the required time
15     is lost; it may not be transferred to another pension fund
16     and may not be reinstated in the pension fund from which it
17     was transferred.
18         (6) The Public Employee Pension Fund Division of the
19     Department of Insurance shall establish by rule the manner
20     of making the calculation required under paragraph (2) of
21     this subsection, taking into account the appropriate
22     actuarial assumptions; the police officer's service, age,
23     and salary history; the level of funding of the pension
24     fund to which the credits are being transferred; and any
25     other factors that the Division determines to be relevant.
26     The rules may require that all calculations made under

 

 

HB3816 - 7 - LRB096 08577 AMC 18700 b

1     paragraph (2) be reported to the Division by the board
2     performing the calculation, together with documentation of
3     the creditable service to be transferred, the amounts of
4     contributions and interest to be transferred, the manner in
5     which the calculation was performed, the numbers relied
6     upon in making the calculation, the results of the
7     calculation, and any other information the Division may
8     deem useful.
9         (e)(1) Creditable service also includes periods of
10     service originally established in the Fund established
11     under Article 7 of this Code for which the contributions
12     have been transferred under Section 7-139.11.
13         (2) If the board of the pension fund to which
14     creditable service and related contributions are
15     transferred under Section 7-139.11 determines that the
16     amount transferred is less than the true cost to the
17     pension fund of allowing that creditable service to be
18     established, then the amount of creditable service the
19     police officer may establish under this subsection (e)
20     shall be reduced by an amount equal to the difference, as
21     determined by the board in accordance with the rules and
22     procedures adopted under paragraph (3) of this subsection.
23         (3) The Public Pension Division of the Department of
24     Financial and Professional Regulation shall establish by
25     rule the manner of making the calculation required under
26     paragraph (2) of this subsection, taking into account the

 

 

HB3816 - 8 - LRB096 08577 AMC 18700 b

1     appropriate actuarial assumptions; the police officer's
2     service, age, and salary history; the level of funding of
3     the pension fund to which the credits are being
4     transferred; and any other factors that the Division
5     determines to be relevant. The rules may require that all
6     calculations made under paragraph (2) be reported to the
7     Division by the board performing the calculation, together
8     with documentation of the creditable service to be
9     transferred, the amounts of contributions and interest to
10     be transferred, the manner in which the calculation was
11     performed, the numbers relied upon in making the
12     calculation, the results of the calculation, and any other
13     information the Division may deem useful.
14         (4) Until January 1, 2010, a police officer who
15     transferred service from the Fund established under
16     Article 7 of this Code under the provisions of Public Act
17     94-356 may establish additional credit, but only for the
18     amount of the service credit reduction in that transfer, as
19     calculated under paragraph (3) of this subsection (e). This
20     credit may be established upon payment by the police
21     officer of an amount to be determined by the board, equal
22     to (1) the amount that would have been contributed as
23     employee and employer contributions had all of the service
24     been as an employee under this Article, plus interest
25     thereon at the rate of 6% per year, compounded annually
26     from the date of service to the date of transfer, less (2)

 

 

HB3816 - 9 - LRB096 08577 AMC 18700 b

1     the total amount transferred from the Article 7 Fund, plus
2     (3) interest on the difference at the rate of 6% per year,
3     compounded annually, from the date of the transfer to the
4     date of payment. The additional service credit is allowed
5     under this amendatory Act of the 95th General Assembly
6     notwithstanding the provisions of Article 7 terminating
7     all transferred credits on the date of transfer.
8 (Source: P.A. 94-356, eff. 7-29-05; 95-812, eff. 8-13-08.)
 
9     (40 ILCS 5/5-212)  (from Ch. 108 1/2, par. 5-212)
10     Sec. 5-212. Computation of service. In computing the
11 service rendered by a policeman prior to the effective date,
12 the following periods shall be counted, in addition to all
13 periods during where he performed the duties of his position,
14 as periods of service for annuity purposes only: all periods of
15 (a) vacation; (b) leave of absence with whole or part pay; (c)
16 leave of absence without pay on account of disability; and (d)
17 leave of absence during which the policeman was engaged in the
18 military or naval service of the United States of America.
19 Service credit shall not be allowed for a policeman in receipt
20 of a pension on account of disability from any pension fund
21 superseded by this fund.
22     In computing the service rendered by a policeman on or
23 after the effective date, the following periods shall be
24 counted, in addition to all periods during which he performed
25 the duties of his position, as periods of service for annuity

 

 

HB3816 - 10 - LRB096 08577 AMC 18700 b

1 purposes only: all periods of (a) vacation; (b) leave of
2 absence with whole or part pay; (c) leave of absence during
3 which the policeman was engaged in the military or naval
4 service of the United States of America; (d) time that the
5 policeman was engaged in the military or naval service of the
6 United States of America, during which he was passed over on
7 any eligible list posted from an entrance examination, due to
8 the fact that he was in such military or naval service at the
9 time he was called for appointment to the Police Department, to
10 be computed from the date he was passed over on any eligible
11 list and would have been first sworn in as a policeman had he
12 not been engaged in the military or naval service of the United
13 States of America, until the date of his discharge from such
14 military or naval service; provided that such policeman shall
15 pay into this Fund the same amount that would have been
16 deducted from his salary had he been a policeman during the
17 aforementioned portion of such military or naval service; (e)
18 disability for which the policeman receives any disability
19 benefit; (f) disability for which the policeman receives whole
20 or part pay; and (g) service for which credits and creditable
21 service have been transferred to this Fund under Section
22 9-121.1, 14-105.1 or 15-134.3 of this Code; and (h) periods of
23 service in the military, naval, or air forces of the United
24 States entered upon before beginning service as an active
25 policeman of a municipality as provided in Section 5-214.2.
26     In computing service on or after the effective date for

 

 

HB3816 - 11 - LRB096 08577 AMC 18700 b

1 ordinary disability benefit, all periods described in the
2 preceding paragraph, except any such period for which a
3 policeman receives ordinary disability benefit, shall be
4 counted as periods of service.
5     In computing service for any of the purposes of this
6 Article, no credit shall be given for any period during which a
7 policeman was not rendering active service because of his
8 discharge from the service, unless proceedings to test the
9 legality of the discharge are filed in a court of competent
10 jurisdiction within one year from the date of discharge and a
11 final judgment is entered therein declaring the discharge
12 illegal.
13     No overtime or extra service shall be included in computing
14 service of a policeman and not more than one year or a
15 fractional part thereof of service shall be allowed for service
16 rendered during any calendar year.
17     In computing service for any of the purposes of this
18 Article, credit shall be given for any periods during which a
19 policeman who is a member of the General Assembly is on leave
20 of absence or is otherwise authorized to be absent from duty to
21 enable him or her to perform legislative duties,
22 notwithstanding any reduction in salary for such periods and
23 notwithstanding that the contributions paid by the policeman
24 were based on a reduced salary rather than the full amount of
25 salary attached to his or her career service rank.
26 (Source: P.A. 92-52, eff. 7-12-01.)
 

 

 

HB3816 - 12 - LRB096 08577 AMC 18700 b

1     (40 ILCS 5/5-214.3 new)
2     Sec. 5-214.3. Credit for military service. A policeman may
3 establish creditable service under this Article for all periods
4 of service in the military, naval, or air forces of the United
5 States entered upon before beginning service as an active
6 policeman of a municipality, provided that the policeman pays
7 into the fund the amount the policeman would have contributed
8 if he or she had been a regular contributor during such period,
9 plus an amount determined by the Board to be equal to the
10 municipality's normal cost of the benefit, plus interest
11 calculated from the date the employee last became a policeman
12 under this Article. The total amount of such creditable service
13 shall not exceed 4 years.
 
14     (40 ILCS 5/7-139)  (from Ch. 108 1/2, par. 7-139)
15     Sec. 7-139. Credits and creditable service to employees.
16     (a) Each participating employee shall be granted credits
17 and creditable service, for purposes of determining the amount
18 of any annuity or benefit to which he or a beneficiary is
19 entitled, as follows:
20         1. For prior service: Each participating employee who
21     is an employee of a participating municipality or
22     participating instrumentality on the effective date shall
23     be granted creditable service, but no credits under
24     paragraph 2 of this subsection (a), for periods of prior

 

 

HB3816 - 13 - LRB096 08577 AMC 18700 b

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

 

 

HB3816 - 14 - LRB096 08577 AMC 18700 b

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

 

 

HB3816 - 15 - LRB096 08577 AMC 18700 b

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

 

 

HB3816 - 16 - LRB096 08577 AMC 18700 b

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

 

 

HB3816 - 17 - LRB096 08577 AMC 18700 b

1         leave to date of payment, have been paid to the fund in
2         accordance with Section 7-173. The contributions shall
3         be computed upon the assumption earnings continued
4         during the period of leave at the rate in effect when
5         the leave began.
6             d. Benefits under the provisions of Sections
7         7-141, 7-146, 7-150 and 7-163 shall become payable to
8         employees on authorized leave of absence, or their
9         designated beneficiary, only if such leave of absence
10         is creditable hereunder, and if the employee has at
11         least one year of creditable service other than the
12         service granted for leave of absence. Any employee
13         contributions due may be deducted from any benefits
14         payable.
15             e. No credits or creditable service shall be
16         allowed for leave of absence without pay during any
17         period of prior service.
18         5. For military service: Except as provided in
19     paragraph 5.2, the The governing body of a municipality or
20     participating instrumentality may elect to allow
21     creditable service to participating employees who leave
22     their employment to serve in the armed forces of the United
23     States for all periods of such service, provided that the
24     person returns to active employment within 90 days after
25     completion of full time active duty, but no creditable
26     service shall be allowed such person for any period that

 

 

HB3816 - 18 - LRB096 08577 AMC 18700 b

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

 

 

HB3816 - 19 - LRB096 08577 AMC 18700 b

1     creditable service shall be charged to and paid by that
2     municipality or instrumentality.
3         Notwithstanding the foregoing, any participating
4     employee shall be entitled to creditable service as
5     required by any federal law relating to re-employment
6     rights of persons who served in the United States Armed
7     Services. Such creditable service shall be granted upon
8     payment by the member of an amount equal to the employee
9     contributions which would have been required had the
10     employee continued in service at the same rate of earnings
11     during the military leave period, plus interest at the
12     effective rate.
13         5.1. In addition to any creditable service established
14     under paragraph 5 of this subsection (a) and except as
15     provided in paragraph 5.2, creditable service may be
16     granted for up to 48 months of service in the armed forces
17     of the United States.
18         In order to receive creditable service for military
19     service under this paragraph 5.1, a participating employee
20     must (1) apply to the Fund in writing and provide evidence
21     of the military service that is satisfactory to the Board;
22     (2) obtain the written approval of the current employer;
23     and (3) make contributions to the Fund equal to (i) the
24     employee contributions that would have been required had
25     the service been rendered as a member, plus (ii) an amount
26     determined by the board to be equal to the employer's

 

 

HB3816 - 20 - LRB096 08577 AMC 18700 b

1     normal cost of the benefits accrued for that military
2     service, plus (iii) interest on items (i) and (ii) from the
3     date of first membership in the Fund to the date of
4     payment. The required interest shall be calculated at the
5     regular interest rate.
6         The changes made to this paragraph 5.1 by Public Acts
7     95-483 and 95-486 apply only to participating employees in
8     service on or after August 28, 2007 (the effective date of
9     those Public Acts).
10         5.2. Beginning on the effective date of this amendatory
11     Act of the 96th General Assembly, a person employed on or
12     after the effective date of this amendatory Act by a
13     municipality or participating instrumentality to perform
14     police duties shall be granted creditable service for
15     military service described under paragraphs 5 and 5.1 upon
16     satisfaction of any requirements contained in those
17     paragraphs.
18         6. For out-of-state service: Creditable service shall
19     be granted for service rendered to an out-of-state local
20     governmental body under the following conditions: The
21     employee had participated and has irrevocably forfeited
22     all rights to benefits in the out-of-state public employees
23     pension system; the governing body of his participating
24     municipality or instrumentality authorizes the employee to
25     establish such service; the employee has 2 years current
26     service with this municipality or participating

 

 

HB3816 - 21 - LRB096 08577 AMC 18700 b

1     instrumentality; the employee makes a payment of
2     contributions, which shall be computed at 8% (normal) plus
3     2% (survivor) times length of service purchased times the
4     average rate of earnings for the first 2 years of service
5     with the municipality or participating instrumentality
6     whose governing body authorizes the service established
7     plus interest at the effective rate on the date such
8     credits are established, payable from the date the employee
9     completes the required 2 years of current service to date
10     of payment. In no case shall more than 120 months of
11     creditable service be granted under this provision.
12         7. For retroactive service: Any employee who could have
13     but did not elect to become a participating employee, or
14     who should have been a participant in the Municipal Public
15     Utilities Annuity and Benefit Fund before that fund was
16     superseded, may receive creditable service for the period
17     of service not to exceed 50 months; however, a current or
18     former elected or appointed official of a participating
19     municipality may establish credit under this paragraph 7
20     for more than 50 months of service as an official of that
21     municipality, if the excess over 50 months is approved by
22     resolution of the governing body of the affected
23     municipality filed with the Fund before January 1, 2002.
24         Any employee who is a participating employee on or
25     after September 24, 1981 and who was excluded from
26     participation by the age restrictions removed by Public Act

 

 

HB3816 - 22 - LRB096 08577 AMC 18700 b

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

 

 

HB3816 - 23 - LRB096 08577 AMC 18700 b

1         a class of employees.
2             b. Only sick leave days accumulated with a
3         participating municipality or participating
4         instrumentality with which the employee was in service
5         within 60 days of the effective date of his retirement
6         annuity shall be credited; If the employee was in
7         service with more than one employer during this period
8         only the sick leave days with the employer with which
9         the employee has the greatest number of unpaid sick
10         leave days shall be considered.
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

 

 

HB3816 - 24 - LRB096 08577 AMC 18700 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 3, 4, 5, 8, 14, or 16 of this Act, to any
7     active member of this Fund, and to any inactive member who
8     has been a county sheriff, upon transfer of such credits
9     pursuant to Section 3-110.3, 4-108.3, 5-235, 8-226.7,
10     14-105.6, or 16-131.4, and payment by the member of the
11     amount by which (1) the employer and employee contributions
12     that would have been required if he had participated in
13     this Fund as a sheriff's law enforcement employee during
14     the period for which credit is being transferred, plus
15     interest thereon at the effective rate for each year,
16     compounded annually, from the date of termination of the
17     service for which credit is being transferred to the date
18     of payment, exceeds (2) the amount actually transferred to
19     the Fund. Such transferred service shall be deemed to be
20     service as a sheriff's law enforcement employee for the
21     purposes of Section 7-142.1.
22         10. For service transferred from an Article 3 system
23     under Section 3-110.8: Credits and creditable service
24     shall be granted for service under Article 3 of this Act as
25     provided in Section 3-110.8, to any active member of this
26     Fund upon transfer of such credits pursuant to Section

 

 

HB3816 - 25 - LRB096 08577 AMC 18700 b

1     3-110.8. If the amount by which (1) the employer and
2     employee contributions that would have been required if he
3     had participated in this Fund during the period for which
4     credit is being transferred, plus interest thereon at the
5     effective rate for each year, compounded annually, from the
6     date of termination of the service for which credit is
7     being transferred to the date of payment, exceeds (2) the
8     amount actually transferred to the Fund, then the amount of
9     creditable service established under this paragraph 10
10     shall be reduced by a corresponding amount in accordance
11     with the rules and procedures established under this
12     paragraph 10.
13         The board shall establish by rule the manner of making
14     the calculation required under this paragraph 10, taking
15     into account the appropriate actuarial assumptions; the
16     member's service, age, and salary history; the level of
17     funding of the employer; and any other factors that the
18     board determines to be relevant.
19         Until January 1, 2010, members who transferred service
20     from an Article 3 system under the provisions of Public Act
21     94-356 may establish additional credit in this Fund, but
22     only up to the amount of the service credit reduction in
23     that transfer, as calculated under the actuarial
24     assumptions. This credit may be established upon payment by
25     the member of an amount to be determined by the board,
26     equal to (1) the amount that would have been contributed as

 

 

HB3816 - 26 - LRB096 08577 AMC 18700 b

1     employee and employer contributions had all the service
2     been as an employee under this Article, plus interest
3     thereon compounded annually from the date of service to the
4     date of transfer, less (2) the total amount transferred
5     from the Article 3 system, plus (3) interest on the
6     difference at the effective rate for each year, compounded
7     annually, from the date of the transfer to the date of
8     payment. The additional service credit is allowed under
9     this amendatory Act of the 95th General Assembly
10     notwithstanding the provisions of Article 3 terminating
11     all transferred credits on the date of transfer.
12     (b) Creditable service - amount:
13         1. One month of creditable service shall be allowed for
14     each month for which a participating employee made
15     contributions as required under Section 7-173, or for which
16     creditable service is otherwise granted hereunder. Not
17     more than 1 month of service shall be credited and counted
18     for 1 calendar month, and not more than 1 year of service
19     shall be credited and counted for any calendar year. A
20     calendar month means a nominal month beginning on the first
21     day thereof, and a calendar year means a year beginning
22     January 1 and ending December 31.
23         2. A seasonal employee shall be given 12 months of
24     creditable service if he renders the number of months of
25     service normally required by the position in a 12-month
26     period and he remains in service for the entire 12-month

 

 

HB3816 - 27 - LRB096 08577 AMC 18700 b

1     period. Otherwise a fractional year of service in the
2     number of months of service rendered shall be credited.
3         3. An intermittent employee shall be given creditable
4     service for only those months in which a contribution is
5     made under Section 7-173.
6     (c) No application for correction of credits or creditable
7 service shall be considered unless the board receives an
8 application for correction while (1) the applicant is a
9 participating employee and in active employment with a
10 participating municipality or instrumentality, or (2) while
11 the applicant is actively participating in a pension fund or
12 retirement system which is a participating system under the
13 Retirement Systems Reciprocal Act. A participating employee or
14 other applicant shall not be entitled to credits or creditable
15 service unless the required employee contributions are made in
16 a lump sum or in installments made in accordance with board
17 rule.
18     (d) Upon the granting of a retirement, surviving spouse or
19 child annuity, a death benefit or a separation benefit, on
20 account of any employee, all individual accumulated credits
21 shall thereupon terminate. Upon the withdrawal of additional
22 contributions, the credits applicable thereto shall thereupon
23 terminate. Terminated credits shall not be applied to increase
24 the benefits any remaining employee would otherwise receive
25 under this Article.
26 (Source: P.A. 95-483, eff. 8-28-07; 95-486, eff. 8-28-07;

 

 

HB3816 - 28 - LRB096 08577 AMC 18700 b

1 95-504, eff. 8-28-07; 95-812, eff. 8-13-08; 95-876, eff.
2 8-21-08.)
 
3     (40 ILCS 5/8-230.11 new)
4     Sec. 8-230.11. Service credit for military service. An
5 employee of the municipality serving as a police officer may
6 establish service credit under this Article for all periods of
7 service in the military, naval, or air forces of the United
8 States entered upon before beginning service as an active
9 police officer of a municipality, provided that the policeman
10 pays into the fund the amount the police officer would have
11 contributed if he or she had been a regular contributor during
12 such period, plus an amount determined by the Board to be equal
13 to the municipality's normal cost of the benefit, plus interest
14 calculated from the date the employee last became a police
15 officer under this Article. The total amount of such service
16 credit shall not exceed 4 years.
 
17     (40 ILCS 5/9-179.1)  (from Ch. 108 1/2, par. 9-179.1)
18     Sec. 9-179.1. Military service.
19     (a) A contributing employee as of January 1, 1993 with at
20 least 25 years of service credit may apply for creditable
21 service for up to 2 years of military service whether or not
22 the military service followed service as a county employee. The
23 military service need not have been served in wartime, but the
24 employee must not have been dishonorably discharged. To

 

 

HB3816 - 29 - LRB096 08577 AMC 18700 b

1 establish this creditable service the applicant must pay to the
2 Fund, while in the service of the county, an amount determined
3 by the Fund to represent the employee contributions for the
4 creditable service established, based on the employee's rate of
5 compensation on his or her last day as a contributor before the
6 military service, or on his or her first day as a contributor
7 after the military service, whichever is greater, plus interest
8 at the effective rate from the date of discharge to the date of
9 payment. If a person who has established any credit under this
10 Section applies for or receives any early retirement incentive
11 under Section 9-134.2, the credit under this Section shall be
12 forfeited and the amount paid to the Fund under this Section
13 shall be refunded.
14     (b) A contributing employee employed by the county as a
15 police officer on or after the effective date of this
16 amendatory Act of the 96th General Assembly may establish
17 creditable service for up to 4 years of military service
18 whether or not the military service followed service as a
19 county employee. The military service need not have been served
20 in wartime, but the employee must not have been dishonorably
21 discharged. To establish this creditable service the applicant
22 must pay to the Fund, while in the service of the county, an
23 amount determined by the Fund to represent the employee
24 contributions for the creditable service established, based on
25 the employee's rate of compensation on his or her last day as a
26 contributor before the military service, or on his or her first

 

 

HB3816 - 30 - LRB096 08577 AMC 18700 b

1 day as a contributor after the military service, whichever is
2 greater, plus an amount determined by the Fund to be equal to
3 the county's normal cost of the benefit, plus interest at the
4 effective rate from the date of discharge to the date of
5 payment.
6 (Source: P.A. 87-1265.)
 
7     (40 ILCS 5/13-403)  (from Ch. 108 1/2, par. 13-403)
8     Sec. 13-403. Military service.
9     (a) Any employee who, after commencement of service with
10 the Employer, enlisted, was inducted or was otherwise ordered
11 to serve in the military forces of the United States pursuant
12 to any law, shall receive full service credit for the various
13 purposes of this Article as though the employee were in the
14 active service of the Employer during the period of military
15 service provided that:
16         (1) such service credit shall be granted for military
17     service for which the employee volunteers or is inducted or
18     called into military service pursuant to a call of a duly
19     constituted authority or a law of the United States
20     declaring a national emergency;
21         (2) the employee returns to the employ of the Employer
22     within 90 days after the termination of the national
23     emergency; and
24         (3) the total service credit for such military service
25     shall not exceed 5 years except that any employee who on

 

 

HB3816 - 31 - LRB096 08577 AMC 18700 b

1     July 1, 1963 had accrued more than 5 years of such credit
2     shall be entitled to the total amount thereof.
3     (b) For a ten-year period following July 24, 2003, a
4 contributing employee or commissioner who is not a police
5 officer meeting the minimum service requirements provided
6 under this subsection may establish additional service credit
7 for a period of up to 2 years of active military service in the
8 United States Armed Forces for which he or she does not qualify
9 for credit under subsection (a), provided that (1) the person
10 was not dishonorably discharged from the military service, and
11 (2) the amount of service credit established by the person
12 under this subsection (b), when added to the amount of any
13 military service credit granted to the person under subsection
14 (a), shall not exceed 5 years.
15     A contributing employee who is a police officer and who
16 meets the minimum service requirements provided under this
17 subsection (b) may establish additional service credit for a
18 period of up to 4 years of active military service in the
19 United States Armed Forces for which he or she does not qualify
20 for credit under subsection (a), provided that (1) the person
21 was not dishonorably discharged from the military service, and
22 (2) the amount of service credit established by the person
23 under this subsection (b), when added to the amount of any
24 military service credit granted to the person under subsection
25 (a), shall not exceed 5 years.
26     The minimum service requirement for a contributing

 

 

HB3816 - 32 - LRB096 08577 AMC 18700 b

1 employee is 10 years of service credit as provided in Sections
2 13-401 and 13-402 of this Article and exclusive of Article 20.
3 The minimum service requirement for a contributing
4 commissioner is 5 years of service credit as provided in
5 Sections 13-401 and 13-402 of this Article and exclusive of
6 Article 20.
7     In order to establish military service credit under this
8 subsection (b), the applicant must submit a written application
9 to the Fund, including the applicant's discharge papers from
10 military service, and pay to the Fund (i) employee
11 contributions at the rates provided in this Article, based upon
12 the person's salary on the last date as a participating
13 employee prior to the military service or on the first date as
14 a participating employee after the military service, whichever
15 is greater, plus (ii) the current amount determined by the
16 board to be equal to the employer's normal cost of the benefits
17 accrued for such military service, plus (iii) regular interest
18 of 3% compounded annually on items (i) and (ii) from the date
19 of entry or re-entry as a participating employee following the
20 military service to the date of payment. Contributions must be
21 paid in full before the credit is granted. Credit established
22 under this subsection may be used for pension purposes only.
23     Notwithstanding any other provision of this Section, a
24 person may not establish creditable service under this Section
25 for any period for which the person receives credit under any
26 other public employee retirement system, unless the credit

 

 

HB3816 - 33 - LRB096 08577 AMC 18700 b

1 under that other retirement system has been irrevocably
2 relinquished.
3 (Source: P.A. 93-334, eff. 7-24-03; 94-621, eff. 8-18-05.)
 
4     (40 ILCS 5/15-113.3)  (from Ch. 108 1/2, par. 15-113.3)
5     Sec. 15-113.3. Service for periods of military service.
6 "Service for periods of military service": For a person who is
7 not a police officer, those Those periods, not exceeding 5
8 years, during which a person served in the armed forces of the
9 United States, of which all but 2 years must have immediately
10 followed a period of employment with an employer under this
11 System or the State Employees' Retirement System of Illinois;
12 provided that the person received a discharge other than
13 dishonorable and again became an employee under this System
14 within one year after discharge. However, for the up to 2 years
15 of military service not immediately following employment, the
16 applicant must make contributions to the System equal to (1) 8%
17 of the employee's basic compensation on the last date as a
18 participating employee prior to such military service, or on
19 the first date as a participating employee after such military
20 service, whichever is greater, plus (2) an amount determined by
21 the board to be equal to the employer's normal cost of the
22 benefits accrued for such military service, plus (3) interest
23 on items (1) and (2) at the effective rate from the later of
24 the date of first membership in the System or the date of
25 conclusion of military service to the date of payment. The

 

 

HB3816 - 34 - LRB096 08577 AMC 18700 b

1 change in the required contribution for purchased military
2 credit made by this amendatory Act of 1993 does not entitle any
3 person to a refund of contributions already paid. The
4 contributions paid under this Section are not normal
5 contributions as defined in Section 15-114 or additional
6 contributions as defined in Section 15-115.
7     For a police officer, those periods, not exceeding 5 years,
8 during which a person served in the armed forces of the United
9 States, of which all but 4 years must have immediately followed
10 a period of employment with an employer under this System or
11 the State Employees' Retirement System of Illinois; provided
12 that the person received a discharge other than dishonorable
13 and again became an employee under this System within one year
14 after discharge. However, for the up to 4 years of military
15 service not immediately following employment, the applicant
16 must make contributions to the System equal to (1) 8% of the
17 employee's basic compensation on the last date as a
18 participating employee prior to such military service, or on
19 the first date as a participating employee after such military
20 service, whichever is greater, plus (2) an amount determined by
21 the board to be equal to the employer's normal cost of the
22 benefits accrued for such military service, plus (3) interest
23 on items (1) and (2) at the effective rate from the later of
24 the date of first membership in the System or the date of
25 conclusion of military service to the date of payment. The
26 contributions paid under this Section are not normal

 

 

HB3816 - 35 - LRB096 08577 AMC 18700 b

1 contributions as defined in Section 15-114 or additional
2 contributions as defined in Section 15-115.
3     The changes to this Section made by this amendatory Act of
4 1991 shall apply not only to persons who on or after its
5 effective date are in service under the System, but also to
6 persons whose employment terminated prior to that date, whether
7 or not the person is an annuitant on that date. In the case of
8 an annuitant who applies for credit allowable under this
9 Section for a period of military service that did not
10 immediately follow employment, and who has made the required
11 contributions for such credit, the annuity shall be
12 recalculated to include the additional service credit, with the
13 increase taking effect on the date the System received written
14 notification of the annuitant's intent to purchase the credit,
15 if payment of all the required contributions is made within 60
16 days of such notice, or else on the first annuity payment date
17 following the date of payment of the required contributions. In
18 calculating the automatic annual increase for an annuity that
19 has been recalculated under this Section, the increase
20 attributable to the additional service allowable under this
21 amendatory Act of 1991 shall be included in the calculation of
22 automatic annual increases accruing after the effective date of
23 the recalculation.
24 (Source: P.A. 93-347, eff. 7-24-03.)
 
25     Section 90. The State Mandates Act is amended by adding

 

 

HB3816 - 36 - LRB096 08577 AMC 18700 b

1 Section 8.33 as follows:
 
2     (30 ILCS 805/8.33 new)
3     Sec. 8.33. Exempt mandate. Notwithstanding Sections 6 and 8
4 of this Act, no reimbursement by the State is required for the
5 implementation of any mandate created by this amendatory Act of
6 the 96th General Assembly.
 
7     Section 99. Effective date. This Act takes effect upon
8 becoming law.