97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
HB3075

 

Introduced 2/23/2011, by Rep. Daniel V. Beiser

 

SYNOPSIS AS INTRODUCED:
 
40 ILCS 5/1-160
40 ILCS 5/14-152.1
40 ILCS 5/15-198
40 ILCS 5/16-203
30 ILCS 805/8.35 new

    Amends the Illinois Pension Code. Provides that a member or participant who first becomes a member of one of the specified pension or retirement systems on or after January 1, 2011 is entitled to a retirement annuity upon written application if he or she has attained age 62 (rather than 67), has at least 10 years of service credit, and is otherwise eligible under the requirements of the applicable Article. Provides that if such a person has attained age 57 (rather than 62), has at least 10 years of service credit, and is otherwise eligible under the requirements of the applicable Article, then he or she may elect to retire early and receive a lower retirement annuity. Exempts these benefit changes from the new benefit increase provisions added by Public Act 94-4 in each of the affected Articles. Amends the State Mandates Act to require implementation without reimbursement. Effective immediately.


LRB097 08879 JDS 49009 b

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

 

 

A BILL FOR

 

HB3075LRB097 08879 JDS 49009 b

1    AN ACT concerning public employee benefits.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Pension Code is amended by changing
5Sections 1-160, 14-152.1, 15-198, and 16-203 as follows:
 
6    (40 ILCS 5/1-160)
7    Sec. 1-160. Provisions applicable to new hires.
8    (a) The provisions of this Section apply to a person who,
9on or after January 1, 2011, first becomes a member or a
10participant under any reciprocal retirement system or pension
11fund established under this Code, other than a retirement
12system or pension fund established under Article 2, 3, 4, 5, 6,
13or 18 of this Code, notwithstanding any other provision of this
14Code to the contrary, but do not apply to any self-managed plan
15established under this Code, to any person with respect to
16service as a sheriff's law enforcement employee under Article
177, or to any participant of the retirement plan established
18under Section 22-101.
19    (b) "Final average salary" means the average monthly (or
20annual) salary obtained by dividing the total salary or
21earnings calculated under the Article applicable to the member
22or participant during the 96 consecutive months (or 8
23consecutive years) of service within the last 120 months (or 10

 

 

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

 

 

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1percentage increase (but not less than zero) in the consumer
2price index-u for the 12 months ending with the September
3preceding each November 1, including all previous adjustments.
4    For the purposes of this Section, "consumer price index-u"
5means the index published by the Bureau of Labor Statistics of
6the United States Department of Labor that measures the average
7change in prices of goods and services purchased by all urban
8consumers, United States city average, all items, 1982-84 =
9100. The new amount resulting from each annual adjustment shall
10be determined by the Public Pension Division of the Department
11of Insurance and made available to the boards of the retirement
12systems and pension funds by November 1 of each year.
13    (c) A member or participant is entitled to a retirement
14annuity upon written application if he or she has attained age
1562 67 and has at least 10 years of service credit and is
16otherwise eligible under the requirements of the applicable
17Article.
18    A member or participant who has attained age 57 62 and has
19at least 10 years of service credit and is otherwise eligible
20under the requirements of the applicable Article may elect to
21receive the lower retirement annuity provided in subsection (d)
22of this Section.
23    (d) The retirement annuity of a member or participant who
24is retiring after attaining age 57 62 with at least 10 years of
25service credit shall be reduced by one-half of 1% for each full
26month that the member's age is under age 62 67.

 

 

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1    (e) Any retirement annuity or supplemental annuity shall be
2subject to annual increases on the January 1 occurring either
3on or after the attainment of age 62 67 or the first
4anniversary of the annuity start date, whichever is later. Each
5annual increase shall be calculated at 3% or one-half the
6annual unadjusted percentage increase (but not less than zero)
7in the consumer price index-u for the 12 months ending with the
8September preceding each November 1, whichever is less, of the
9originally granted retirement annuity. If the annual
10unadjusted percentage change in the consumer price index-u for
11the 12 months ending with the September preceding each November
121 is zero or there is a decrease, then the annuity shall not be
13increased.
14    (f) The initial survivor's or widow's annuity of an
15otherwise eligible survivor or widow of a retired member or
16participant who first became a member or participant on or
17after January 1, 2011 shall be in the amount of 66 2/3% of the
18retired member's or participant's retirement annuity at the
19date of death. In the case of the death of a member or
20participant who has not retired and who first became a member
21or participant on or after January 1, 2011, eligibility for a
22survivor's or widow's annuity shall be determined by the
23applicable Article of this Code. The initial benefit shall be
2466 2/3% of the earned annuity without a reduction due to age. A
25child's annuity of an otherwise eligible child shall be in the
26amount prescribed under each Article if applicable. Any

 

 

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1survivor's or widow's annuity shall be increased (1) on each
2January 1 occurring on or after the commencement of the annuity
3if the deceased member died while receiving a retirement
4annuity or (2) in other cases, on each January 1 occurring
5after the first anniversary of the commencement of the annuity.
6Each annual increase shall be calculated at 3% or one-half the
7annual unadjusted percentage increase (but not less than zero)
8in the consumer price index-u for the 12 months ending with the
9September preceding each November 1, whichever is less, of the
10originally granted survivor's annuity. If the annual
11unadjusted percentage change in the consumer price index-u for
12the 12 months ending with the September preceding each November
131 is zero or there is a decrease, then the annuity shall not be
14increased.
15    (g) The benefits in Section 14-110 apply only if the person
16is a State policeman, a fire fighter in the fire protection
17service of a department, or a security employee of the
18Department of Corrections or the Department of Juvenile
19Justice, as those terms are defined in subsection (b) of
20Section 14-110. A person who meets the requirements of this
21Section is entitled to an annuity calculated under the
22provisions of Section 14-110, in lieu of the regular or minimum
23retirement annuity, only if the person has withdrawn from
24service with not less than 20 years of eligible creditable
25service and has attained age 60, regardless of whether the
26attainment of age 60 occurs while the person is still in

 

 

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1service.
2    (h) If a person who first becomes a member or a participant
3of a retirement system or pension fund subject to this Section
4on or after January 1, 2011 is receiving a retirement annuity
5or retirement pension under that system or fund and becomes a
6member or participant under any other system or fund created by
7this Code and is employed on a full-time basis, except for
8those members or participants exempted from the provisions of
9this Section under subsection (a) of this Section, then the
10person's retirement annuity or retirement pension under that
11system or fund shall be suspended during that employment. Upon
12termination of that employment, the person's retirement
13annuity or retirement pension payments shall resume and be
14recalculated if recalculation is provided for under the
15applicable Article of this Code.
16    (i) Notwithstanding any other provision of this Section, a
17person who first becomes a participant of the retirement system
18established under Article 15 on or after January 1, 2011 shall
19have the option to enroll in the self-managed plan created
20under Section 15-158.2 of this Code.
21    (j) In the case of a conflict between the provisions of
22this Section and any other provision of this Code, the
23provisions of this Section shall control.
24(Source: P.A. 96-889, eff. 1-1-11; 96-1490, eff. 1-1-11.)
 
25    (40 ILCS 5/14-152.1)

 

 

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1    Sec. 14-152.1. Application and expiration of new benefit
2increases.
3    (a) As used in this Section, "new benefit increase" means
4an increase in the amount of any benefit provided under this
5Article, or an expansion of the conditions of eligibility for
6any benefit under this Article, that results from an amendment
7to this Code that takes effect after June 1, 2005 (the
8effective date of Public Act 94-4). "New benefit increase",
9however, does not include any benefit increase resulting from
10the changes made to this Article by this amendatory Act of the
1196th General Assembly or to Section 1-160 of this Code by this
12amendatory Act of the 97th General Assembly.
13    (b) Notwithstanding any other provision of this Code or any
14subsequent amendment to this Code, every new benefit increase
15is subject to this Section and shall be deemed to be granted
16only in conformance with and contingent upon compliance with
17the provisions of this Section.
18    (c) The Public Act enacting a new benefit increase must
19identify and provide for payment to the System of additional
20funding at least sufficient to fund the resulting annual
21increase in cost to the System as it accrues.
22    Every new benefit increase is contingent upon the General
23Assembly providing the additional funding required under this
24subsection. The Commission on Government Forecasting and
25Accountability shall analyze whether adequate additional
26funding has been provided for the new benefit increase and

 

 

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

 

 

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1benefit increase was in effect.
2(Source: P.A. 96-37, eff. 7-13-09.)
 
3    (40 ILCS 5/15-198)
4    Sec. 15-198. Application and expiration of new benefit
5increases.
6    (a) As used in this Section, "new benefit increase" means
7an increase in the amount of any benefit provided under this
8Article, or an expansion of the conditions of eligibility for
9any benefit under this Article, that results from an amendment
10to this Code that takes effect after June 1, 2005 (the
11effective date of Public Act 94-4) this amendatory Act of the
1294th General Assembly. "New benefit increase", however, does
13not include any benefit increase resulting from the changes
14made to Section 1-160 of this Code by this amendatory Act of
15the 97th General Assembly.
16    (b) Notwithstanding any other provision of this Code or any
17subsequent amendment to this Code, every new benefit increase
18is subject to this Section and shall be deemed to be granted
19only in conformance with and contingent upon compliance with
20the provisions of this Section.
21    (c) The Public Act enacting a new benefit increase must
22identify and provide for payment to the System of additional
23funding at least sufficient to fund the resulting annual
24increase in cost to the System as it accrues.
25    Every new benefit increase is contingent upon the General

 

 

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

 

 

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1alternate payees of such persons, but does not apply to any
2other person, including without limitation a person who
3continues in service after the expiration date and did not
4apply and qualify for the affected benefit while the new
5benefit increase was in effect.
6(Source: P.A. 94-4, eff. 6-1-05.)
 
7    (40 ILCS 5/16-203)
8    Sec. 16-203. 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 this Article by this amendatory Act of the
1895th General Assembly or to Section 1-160 of this Code by this
19amendatory Act of the 97th General Assembly.
20    (b) Notwithstanding any other provision of this Code or any
21subsequent amendment to this Code, every new benefit increase
22is subject to this Section and shall be deemed to be granted
23only in conformance with and contingent upon compliance with
24the provisions of this Section.
25    (c) The Public Act enacting a new benefit increase must

 

 

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

 

 

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1the new benefit increase, a new benefit increase that expires
2under this Section continues to apply to persons who applied
3and qualified for the affected benefit while the new benefit
4increase was in effect and to the affected beneficiaries and
5alternate payees of such persons, but does not apply to any
6other person, including without limitation a person who
7continues in service after the expiration date and did not
8apply and qualify for the affected benefit while the new
9benefit increase was in effect.
10(Source: P.A. 94-4, eff. 6-1-05; 95-910, eff. 8-26-08.)
 
11    Section 90. The State Mandates Act is amended by adding
12Section 8.35 as follows:
 
13    (30 ILCS 805/8.35 new)
14    Sec. 8.35. Exempt mandate. Notwithstanding Sections 6 and 8
15of this Act, no reimbursement by the State is required for the
16implementation of any mandate created by this amendatory Act of
17the 97th General Assembly.
 
18    Section 99. Effective date. This Act takes effect upon
19becoming law.