Rep. David R. Leitch

Filed: 4/12/2011

 

 


 

 


 
09700HB2289ham002LRB097 07874 JDS 54420 a

1
AMENDMENT TO HOUSE BILL 2289

2    AMENDMENT NO. ______. Amend House Bill 2289 by replacing
3everything after the enacting clause with the following:
 
4    "Section 5. The Illinois Pension Code is amended by
5changing Sections 3-125 and 4-118 as follows:
 
6    (40 ILCS 5/3-125)  (from Ch. 108 1/2, par. 3-125)
7    Sec. 3-125. Financing.
8    (a) The city council or the board of trustees of the
9municipality shall annually levy a tax upon all the taxable
10property of the municipality at the rate on the dollar which
11will produce an amount which, when added to the deductions from
12the salaries or wages of police officers, and revenues
13available from other sources, will equal a sum sufficient to
14meet the annual requirements of the police pension fund. The
15annual requirements to be provided by such tax levy are equal
16to (1) the normal cost of the pension fund for the year

 

 

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1involved, plus (2) either (i) in the case of a participating
2municipality that has elected a 30-year rolling amortization
3period pursuant to subsection (f) of this Section, an amount
4sufficient to bring the total assets of the pension fund up to
590% of the total actuarial liabilities of the pension fund
6within 30 years, as annually updated and determined by an
7enrolled actuary employed by the Illinois Department of
8Insurance or by an enrolled actuary retained by the pension
9fund or the municipality, or (ii) in all other cases, an amount
10sufficient to bring the total assets of the pension fund up to
1190% of the total actuarial liabilities of the pension fund by
12the end of municipal fiscal year 2040, as annually updated and
13determined by an enrolled actuary employed by the Illinois
14Department of Insurance or by an enrolled actuary retained by
15the pension fund or the municipality. In making these
16determinations, the required minimum employer contribution
17shall be calculated each year as a level percentage of payroll
18over the years remaining up to and including fiscal year 2040
19and shall be determined under the projected unit credit
20actuarial cost method. The tax shall be levied and collected in
21the same manner as the general taxes of the municipality, and
22in addition to all other taxes now or hereafter authorized to
23be levied upon all property within the municipality, and shall
24be in addition to the amount authorized to be levied for
25general purposes as provided by Section 8-3-1 of the Illinois
26Municipal Code, approved May 29, 1961, as amended. The tax

 

 

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1shall be forwarded directly to the treasurer of the board
2within 30 business days after receipt by the county.
3    (b) For purposes of determining the required employer
4contribution to a pension fund, the value of the pension fund's
5assets shall be equal to the actuarial value of the pension
6fund's assets, which shall be calculated as follows:
7        (1) On March 30, 2011, the actuarial value of a pension
8    fund's assets shall be equal to the market value of the
9    assets as of that date.
10        (2) In determining the actuarial value of the System's
11    assets for fiscal years after March 30, 2011, any actuarial
12    gains or losses from investment return incurred in a fiscal
13    year shall be recognized in equal annual amounts over the
14    5-year period following that fiscal year.
15    (c) If a participating municipality fails to transmit to
16the fund contributions required of it under this Article for
17more than 90 days after the payment of those contributions is
18due, the fund may, after giving notice to the municipality,
19certify to the State Comptroller the amounts of the delinquent
20payments, and the Comptroller must, beginning in fiscal year
212016, deduct and deposit into the fund the certified amounts or
22a portion of those amounts from the following proportions of
23grants of State funds to the municipality:
24        (1) in fiscal year 2016, one-third of the total amount
25    of any grants of State funds to the municipality;
26        (2) in fiscal year 2017, two-thirds of the total amount

 

 

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1    of any grants of State funds to the municipality; and
2        (3) in fiscal year 2018 and each fiscal year
3    thereafter, the total amount of any grants of State funds
4    to the municipality.
5    The State Comptroller may not deduct from any grants of
6State funds to the municipality more than the amount of
7delinquent payments certified to the State Comptroller by the
8fund.
9    (d) The police pension fund shall consist of the following
10moneys which shall be set apart by the treasurer of the
11municipality:
12        (1) All moneys derived from the taxes levied hereunder;
13        (2) Contributions by police officers under Section
14    3-125.1;
15        (3) All moneys accumulated by the municipality under
16    any previous legislation establishing a fund for the
17    benefit of disabled or retired police officers;
18        (4) Donations, gifts or other transfers authorized by
19    this Article.
20    (e) The Commission on Government Forecasting and
21Accountability shall conduct a study of all funds established
22under this Article and shall report its findings to the General
23Assembly on or before January 1, 2013. To the fullest extent
24possible, the study shall include, but not be limited to, the
25following:
26        (1) fund balances;

 

 

09700HB2289ham002- 5 -LRB097 07874 JDS 54420 a

1        (2) historical employer contribution rates for each
2    fund;
3        (3) the actuarial formulas used as a basis for employer
4    contributions, including the actual assumed rate of return
5    for each year, for each fund;
6        (4) available contribution funding sources;
7        (5) the impact of any revenue limitations caused by
8    PTELL and employer home rule or non-home rule status; and
9        (6) existing statutory funding compliance procedures
10    and funding enforcement mechanisms for all municipal
11    pension funds.
12    (f) Beginning on the effective date of this amendatory Act
13of the 97th General Assembly, the corporate authorities of a
14participating municipality may, by a duly authorized
15resolution or ordinance, elect to use a 30-year rolling
16amortization period to calculate actuarial liabilities under
17subsection (a) of this Section.
18(Source: P.A. 95-530, eff. 8-28-07; 96-1495, eff. 1-1-11.)
 
19    (40 ILCS 5/4-118)  (from Ch. 108 1/2, par. 4-118)
20    Sec. 4-118. Financing.
21    (a) The city council or the board of trustees of the
22municipality shall annually levy a tax upon all the taxable
23property of the municipality at the rate on the dollar which
24will produce an amount which, when added to the deductions from
25the salaries or wages of firefighters and revenues available

 

 

09700HB2289ham002- 6 -LRB097 07874 JDS 54420 a

1from other sources, will equal a sum sufficient to meet the
2annual actuarial requirements of the pension fund, as
3determined by an enrolled actuary employed by the Illinois
4Department of Insurance or by an enrolled actuary retained by
5the pension fund or municipality. For the purposes of this
6Section, the annual actuarial requirements of the pension fund
7are equal to (1) the normal cost of the pension fund, or 17.5%
8of the salaries and wages to be paid to firefighters for the
9year involved, whichever is greater, plus (2) either (i) in the
10case of a participating municipality that has elected a 30-year
11rolling amortization period pursuant to subsection (h) of this
12Section, an amount sufficient to bring the total assets of the
13pension fund up to 90% of the total actuarial liabilities of
14the pension fund within 30 years, as annually updated and
15determined by an enrolled actuary employed by the Illinois
16Department of Insurance or by an enrolled actuary retained by
17the pension fund or the municipality, or (ii) in all other
18cases, an annual amount sufficient to bring the total assets of
19the pension fund up to 90% of the total actuarial liabilities
20of the pension fund by the end of municipal fiscal year 2040,
21as annually updated and determined by an enrolled actuary
22employed by the Illinois Department of Insurance or by an
23enrolled actuary retained by the pension fund or the
24municipality. In making these determinations, the required
25minimum employer contribution shall be calculated each year as
26a level percentage of payroll over the years remaining up to

 

 

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1and including fiscal year 2040 and shall be determined under
2the projected unit credit actuarial cost method. The amount to
3be applied towards the amortization of the unfunded accrued
4liability in any year shall not be less than the annual amount
5required to amortize the unfunded accrued liability, including
6interest, as a level percentage of payroll over the number of
7years remaining in the 40 year amortization period.
8    (a-5) For purposes of determining the required employer
9contribution to a pension fund, the value of the pension fund's
10assets shall be equal to the actuarial value of the pension
11fund's assets, which shall be calculated as follows:
12        (1) On March 30, 2011, the actuarial value of a pension
13    fund's assets shall be equal to the market value of the
14    assets as of that date.
15        (2) In determining the actuarial value of the pension
16    fund's assets for fiscal years after March 30, 2011, any
17    actuarial gains or losses from investment return incurred
18    in a fiscal year shall be recognized in equal annual
19    amounts over the 5-year period following that fiscal year.
20    (b) The tax shall be levied and collected in the same
21manner as the general taxes of the municipality, and shall be
22in addition to all other taxes now or hereafter authorized to
23be levied upon all property within the municipality, and in
24addition to the amount authorized to be levied for general
25purposes, under Section 8-3-1 of the Illinois Municipal Code or
26under Section 14 of the Fire Protection District Act. The tax

 

 

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1shall be forwarded directly to the treasurer of the board
2within 30 business days of receipt by the county (or, in the
3case of amounts added to the tax levy under subsection (f),
4used by the municipality to pay the employer contributions
5required under subsection (b-1) of Section 15-155 of this
6Code).
7    (b-5) If a participating municipality fails to transmit to
8the fund contributions required of it under this Article for
9more than 90 days after the payment of those contributions is
10due, the fund may, after giving notice to the municipality,
11certify to the State Comptroller the amounts of the delinquent
12payments, and the Comptroller must, beginning in fiscal year
132016, deduct and deposit into the fund the certified amounts or
14a portion of those amounts from the following proportions of
15grants of State funds to the municipality:
16        (1) in fiscal year 2016, one-third of the total amount
17    of any grants of State funds to the municipality;
18        (2) in fiscal year 2017, two-thirds of the total amount
19    of any grants of State funds to the municipality; and
20        (3) in fiscal year 2018 and each fiscal year
21    thereafter, the total amount of any grants of State funds
22    to the municipality.
23    The State Comptroller may not deduct from any grants of
24State funds to the municipality more than the amount of
25delinquent payments certified to the State Comptroller by the
26fund.

 

 

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1    (c) The board shall make available to the membership and
2the general public for inspection and copying at reasonable
3times the most recent Actuarial Valuation Balance Sheet and Tax
4Levy Requirement issued to the fund by the Department of
5Insurance.
6    (d) The firefighters' pension fund shall consist of the
7following moneys which shall be set apart by the treasurer of
8the municipality: (1) all moneys derived from the taxes levied
9hereunder; (2) contributions by firefighters as provided under
10Section 4-118.1; (3) all rewards in money, fees, gifts, and
11emoluments that may be paid or given for or on account of
12extraordinary service by the fire department or any member
13thereof, except when allowed to be retained by competitive
14awards; and (4) any money, real estate or personal property
15received by the board.
16    (e) For the purposes of this Section, "enrolled actuary"
17means an actuary: (1) who is a member of the Society of
18Actuaries or the American Academy of Actuaries; and (2) who is
19enrolled under Subtitle C of Title III of the Employee
20Retirement Income Security Act of 1974, or who has been engaged
21in providing actuarial services to one or more public
22retirement systems for a period of at least 3 years as of July
231, 1983.
24    (f) The corporate authorities of a municipality that
25employs a person who is described in subdivision (d) of Section
264-106 may add to the tax levy otherwise provided for in this

 

 

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1Section an amount equal to the projected cost of the employer
2contributions required to be paid by the municipality to the
3State Universities Retirement System under subsection (b-1) of
4Section 15-155 of this Code.
5    (g) The Commission on Government Forecasting and
6Accountability shall conduct a study of all funds established
7under this Article and shall report its findings to the General
8Assembly on or before January 1, 2013. To the fullest extent
9possible, the study shall include, but not be limited to, the
10following:
11        (1) fund balances;
12        (2) historical employer contribution rates for each
13    fund;
14        (3) the actuarial formulas used as a basis for employer
15    contributions, including the actual assumed rate of return
16    for each year, for each fund;
17        (4) available contribution funding sources;
18        (5) the impact of any revenue limitations caused by
19    PTELL and employer home rule or non-home rule status; and
20        (6) existing statutory funding compliance procedures
21    and funding enforcement mechanisms for all municipal
22    pension funds.
23    (h) Beginning on the effective date of this amendatory Act
24of the 97th General Assembly, the corporate authorities of a
25participating municipality may, by a duly authorized
26resolution or ordinance, elect to use a 30-year rolling

 

 

09700HB2289ham002- 11 -LRB097 07874 JDS 54420 a

1amortization period to calculate actuarial liabilities under
2subsection (a) of this Section.
3(Source: P.A. 96-1495, eff. 1-1-11.)".