Sen. John J. Cullerton

Filed: 5/29/2012

 

 


 

 


 
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1
AMENDMENT TO HOUSE BILL 3076

2    AMENDMENT NO. ______. Amend House Bill 3076, AS AMENDED, by
3replacing everything after the enacting clause with the
4following:
 
5    "Section 5. The Illinois Public Labor Relations Act is
6amended by changing Sections 4 and 15 as follows:
 
7    (5 ILCS 315/4)  (from Ch. 48, par. 1604)
8    Sec. 4. Management Rights. Employers shall not be required
9to bargain over matters of inherent managerial policy, which
10shall include such areas of discretion or policy as the
11functions of the employer, standards of services, its overall
12budget, the organizational structure and selection of new
13employees, examination techniques and direction of employees.
14Employers, however, shall be required to bargain collectively
15with regard to policy matters directly affecting wages (but
16subject to any applicable restrictions in Section 15-134.6 of

 

 

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1the Illinois Pension Code), hours and terms and conditions of
2employment as well as the impact thereon upon request by
3employee representatives, but excluding the changes, the
4impact of changes, and the implementation of the changes set
5forth in this amendatory Act of the 97th General Assembly.
6    To preserve the rights of employers and exclusive
7representatives which have established collective bargaining
8relationships or negotiated collective bargaining agreements
9prior to the effective date of this Act, employers shall be
10required to bargain collectively with regard to any matter
11concerning wages (but subject to any applicable restrictions in
12Section 15-134.6 of the Illinois Pension Code), hours or
13conditions of employment about which they have bargained for
14and agreed to in a collective bargaining agreement prior to the
15effective date of this Act, but excluding the changes, the
16impact of changes, and the implementation of the changes set
17forth in this amendatory Act of the 97th General Assembly.
18    The chief judge of the judicial circuit that employs a
19public employee who is a court reporter, as defined in the
20Court Reporters Act, has the authority to hire, appoint,
21promote, evaluate, discipline, and discharge court reporters
22within that judicial circuit.
23    Nothing in this amendatory Act of the 94th General Assembly
24shall be construed to intrude upon the judicial functions of
25any court. This amendatory Act of the 94th General Assembly
26applies only to nonjudicial administrative matters relating to

 

 

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1the collective bargaining rights of court reporters.
2(Source: P.A. 94-98, eff. 7-1-05.)
 
3    (5 ILCS 315/15)  (from Ch. 48, par. 1615)
4    Sec. 15. Act Takes Precedence.
5    (a) In case of any conflict between the provisions of this
6Act and any other law (other than Section 5 of the State
7Employees Group Insurance Act of 1971 and other than the
8changes made to the Illinois Pension Code by Public Act 96-889
9and the changes, impact of changes, and the implementation of
10the changes made to the Illinois Pension Code and the State
11Employees Group Insurance Act of 1971 by this amendatory Act of
12the 97th 96th General Assembly), executive order or
13administrative regulation relating to wages, hours and
14conditions of employment and employment relations, the
15provisions of this Act or any collective bargaining agreement
16negotiated thereunder shall prevail and control. Nothing in
17this Act shall be construed to replace or diminish the rights
18of employees established by Sections 28 and 28a of the
19Metropolitan Transit Authority Act, Sections 2.15 through 2.19
20of the Regional Transportation Authority Act. The provisions of
21this Act are subject to the changes made by this amendatory Act
22of the 97th General Assembly, including Section 15-134.6 of the
23Illinois Pension Code, and Section 5 of the State Employees
24Group Insurance Act of 1971. Nothing in this Act shall be
25construed to replace the necessity of complaints against a

 

 

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1sworn peace officer, as defined in Section 2(a) of the Uniform
2Peace Officer Disciplinary Act, from having a complaint
3supported by a sworn affidavit.
4    (b) Except as provided in subsection (a) above, any
5collective bargaining contract between a public employer and a
6labor organization executed pursuant to this Act shall
7supersede any contrary statutes, charters, ordinances, rules
8or regulations relating to wages, hours and conditions of
9employment and employment relations adopted by the public
10employer or its agents. Any collective bargaining agreement
11entered into prior to the effective date of this Act shall
12remain in full force during its duration.
13    (c) It is the public policy of this State, pursuant to
14paragraphs (h) and (i) of Section 6 of Article VII of the
15Illinois Constitution, that the provisions of this Act are the
16exclusive exercise by the State of powers and functions which
17might otherwise be exercised by home rule units. Such powers
18and functions may not be exercised concurrently, either
19directly or indirectly, by any unit of local government,
20including any home rule unit, except as otherwise authorized by
21this Act.
22(Source: P.A. 95-331, eff. 8-21-07; 96-889, eff. 1-1-11.)
 
23    Section 10. The State Employees Group Insurance Act of 1971
24is amended by changing Sections 6.9 and 6.10 and by adding
256.10A and 6.16 as follows:
 

 

 

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1    (5 ILCS 375/6.9)
2    Sec. 6.9. Health benefits for community college benefit
3recipients and community college dependent beneficiaries.
4    (a) Purpose. It is the purpose of this amendatory Act of
51997 to establish a uniform program of health benefits for
6community college benefit recipients and their dependent
7beneficiaries under the administration of the Department of
8Central Management Services.
9    (b) Creation of program. Beginning July 1, 1999, the
10Department of Central Management Services shall be responsible
11for administering a program of health benefits for community
12college benefit recipients and community college dependent
13beneficiaries under this Section. The State Universities
14Retirement System and the boards of trustees of the various
15community college districts shall cooperate with the
16Department in this endeavor.
17    (c) Eligibility. All community college benefit recipients
18and community college dependent beneficiaries shall be
19eligible to participate in the program established under this
20Section, without any interruption or delay in coverage or
21limitation as to pre-existing medical conditions. Eligibility
22to participate shall be determined by the State Universities
23Retirement System. Eligibility information shall be
24communicated to the Department of Central Management Services
25in a format acceptable to the Department.

 

 

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1    (d) Coverage. The health benefit coverage provided under
2this Section shall be a program of health, dental, and vision
3benefits.
4    The program of health benefits under this Section may
5include any or all of the benefit limitations, including but
6not limited to a reduction in benefits based on eligibility for
7federal medicare benefits, that are provided under subsection
8(a) of Section 6 of this Act for other health benefit programs
9under this Act.
10    (e) Insurance rates and premiums. The Director shall
11determine the insurance rates and premiums for community
12college benefit recipients and community college dependent
13beneficiaries. Rates and premiums may be based in part on age
14and eligibility for federal Medicare coverage. The Director
15shall also determine premiums that will allow for the
16establishment of an actuarially sound reserve for this program.
17    The cost of health benefits under the program shall be paid
18as follows:
19        (1) For a community college benefit recipient, costs
20    shall be an amount equal to the difference between the
21    projected costs of health benefits under the program and
22    projected contributions from community college districts,
23    active contributors, and other income of the program. Other
24    income of the program shall exclude contributions made by
25    the State to retire unpaid claims of the program up to 75%
26    of the total insurance rate shall be paid from the

 

 

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1    Community College Health Insurance Security Fund.
2        (2) The balance of the rate of insurance, including the
3    entire premium for any coverage for community college
4    dependent beneficiaries that has been elected, shall be
5    paid by deductions authorized by the community college
6    benefit recipient to be withheld from his or her monthly
7    annuity or benefit payment from the State Universities
8    Retirement System; except that (i) if the balance of the
9    cost of coverage exceeds the amount of the monthly annuity
10    or benefit payment, the difference shall be paid directly
11    to the State Universities Retirement System by the
12    community college benefit recipient, and (ii) all or part
13    of the balance of the cost of coverage may, at the option
14    of the board of trustees of the community college district,
15    be paid to the State Universities Retirement System by the
16    board of the community college district from which the
17    community college benefit recipient retired. The State
18    Universities Retirement System shall promptly deposit all
19    moneys withheld by or paid to it under this subdivision
20    (e)(2) into the Community College Health Insurance
21    Security Fund. These moneys shall not be considered assets
22    of the State Universities Retirement System.
23    (f) Financing. All revenues arising from the
24administration of the health benefit program established under
25this Section shall be deposited into the Community College
26Health Insurance Security Fund, which is hereby created as a

 

 

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1nonappropriated trust fund to be held outside the State
2Treasury, with the State Treasurer as custodian. Any interest
3earned on moneys in the Community College Health Insurance
4Security Fund shall be deposited into the Fund.
5    Moneys in the Community College Health Insurance Security
6Fund shall be used only to pay the costs of the health benefit
7program established under this Section, including associated
8administrative costs and the establishment of a program
9reserve. Beginning January 1, 1999, the Department of Central
10Management Services may make expenditures from the Community
11College Health Insurance Security Fund for those costs.
12    (g) Contract for benefits. The Director shall by contract,
13self-insurance, or otherwise make available the program of
14health benefits for community college benefit recipients and
15their community college dependent beneficiaries that is
16provided for in this Section. The contract or other arrangement
17for the provision of these health benefits shall be on terms
18deemed by the Director to be in the best interest of the State
19of Illinois and the community college benefit recipients based
20on, but not limited to, such criteria as administrative cost,
21service capabilities of the carrier or other contractor, and
22the costs of the benefits.
23    (h) Continuation of program. It is the intention of the
24General Assembly that the program of health benefits provided
25under this Section be maintained on an ongoing, affordable
26basis. The program of health benefits provided under this

 

 

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1Section may be amended by the State and is not intended to be a
2pension or retirement benefit subject to protection under
3Article XIII, Section 5 of the Illinois Constitution.
4    (i) Other health benefit plans. A health benefit plan
5provided by a community college district (other than a
6community college district subject to Article VII of the Public
7Community College Act) under the terms of a collective
8bargaining agreement in effect on or prior to the effective
9date of this amendatory Act of 1997 shall continue in force
10according to the terms of that agreement, unless otherwise
11mutually agreed by the parties to that agreement and the
12affected retiree. A community college benefit recipient or
13community college dependent beneficiary whose coverage under
14such a plan expires shall be eligible to begin participating in
15the program established under this Section without any
16interruption or delay in coverage or limitation as to
17pre-existing medical conditions.
18    This Act does not prohibit any community college district
19from offering additional health benefits for its retirees or
20their dependents or survivors.
21(Source: P.A. 90-497, eff. 8-18-97; 90-655, eff. 7-30-98.)
 
22    (5 ILCS 375/6.10)
23    Sec. 6.10. Contributions to the Community College Health
24Insurance Security Fund.
25    (a) Beginning January 1, 1999, every active contributor of

 

 

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1the State Universities Retirement System (established under
2Article 15 of the Illinois Pension Code) who (1) is a full-time
3employee of a community college district (other than a
4community college district subject to Article VII of the Public
5Community College Act) or an association of community college
6boards and (2) is not an employee as defined in Section 3 of
7this Act shall make contributions toward the cost of community
8college annuitant and survivor health benefits at the rate of
90.50% of salary. Beginning July 1, 2012 and until July 1, 2013,
10the contribution rate under this subsection (a) shall be 1.25%
11of salary. Beginning July 1, 2013, the contribution rate under
12this subsection (a) shall be a percentage of salary determined
13by the Department of Central Management Services, or its
14successor, by rule, which in each fiscal year shall not exceed
15108% of the percentage of salary actually required to be
16contributed in the previous fiscal year. However, the required
17contribution rate determined by the Department or its successor
18under this subsection (a) shall equal the required contribution
19rate determined by the Department or its successor under
20subsection (b) of this Section.
21    These contributions shall be deducted by the employer and
22paid to the State Universities Retirement System as service
23agent for the Department of Central Management Services. The
24System may use the same processes for collecting the
25contributions required by this subsection that it uses to
26collect the contributions received from those employees under

 

 

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1Section 15-157 of the Illinois Pension Code. An employer may
2agree to pick up or pay the contributions required under this
3subsection on behalf of the employee; such contributions shall
4be deemed to have been paid by the employee.
5    The State Universities Retirement System shall promptly
6deposit all moneys collected under this subsection (a) into the
7Community College Health Insurance Security Fund created in
8Section 6.9 of this Act. The moneys collected under this
9Section shall be used only for the purposes authorized in
10Section 6.9 of this Act and shall not be considered to be
11assets of the State Universities Retirement System.
12Contributions made under this Section are not transferable to
13other pension funds or retirement systems and are not
14refundable upon termination of service.
15    (b) Beginning January 1, 1999, every community college
16district (other than a community college district subject to
17Article VII of the Public Community College Act) or association
18of community college boards that is an employer under the State
19Universities Retirement System shall contribute toward the
20cost of the community college health benefits provided under
21Section 6.9 of this Act an amount equal to 0.50% of the salary
22paid to its full-time employees who participate in the State
23Universities Retirement System and are not members as defined
24in Section 3 of this Act. Beginning July 1, 2012 and until July
251, 2013, the contribution rate under this subsection (b) shall
26be 1.25% of salary. Beginning July 1, 2013, the contribution

 

 

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1rate under this subsection (b) shall be a percentage of salary
2determined by the Department of Central Management Services, or
3its successor, by rule, which in each fiscal year shall not
4exceed 108% of the percentage of salary actually required to be
5contributed in the previous fiscal year. However, the required
6contribution rate determined by the Department or its successor
7under this subsection (b) shall equal the required contribution
8rate determined by the Department or its successor under
9subsection (a) of this Section.
10    These contributions shall be paid by the employer to the
11State Universities Retirement System as service agent for the
12Department of Central Management Services. The System may use
13the same processes for collecting the contributions required by
14this subsection that it uses to collect the contributions
15received from those employers under Section 15-155 of the
16Illinois Pension Code.
17    The State Universities Retirement System shall promptly
18deposit all moneys collected under this subsection (b) into the
19Community College Health Insurance Security Fund created in
20Section 6.9 of this Act. The moneys collected under this
21Section shall be used only for the purposes authorized in
22Section 6.9 of this Act and shall not be considered to be
23assets of the State Universities Retirement System.
24Contributions made under this Section are not transferable to
25other pension funds or retirement systems and are not
26refundable upon termination of service.

 

 

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1    The Department of Healthcare and Family Services, or any
2successor agency designated to procure healthcare contracts
3pursuant to this Act, is authorized to establish funds,
4separate accounts provided by any bank or banks as defined by
5the Illinois Banking Act, or separate accounts provided by any
6savings and loan association or associations as defined by the
7Illinois Savings and Loan Act of 1985 to be held by the
8Director, outside the State treasury, for the purpose of
9receiving the transfer of moneys from the Community College
10Health Insurance Security Fund. The Department may promulgate
11rules further defining the methodology for the transfers. Any
12interest earned by moneys in the funds or accounts shall inure
13to the Community College Health Insurance Security Fund. The
14transferred moneys, and interest accrued thereon, shall be used
15exclusively for transfers to administrative service
16organizations or their financial institutions for payments of
17claims to claimants and providers under the self-insurance
18health plan. The transferred moneys, and interest accrued
19thereon, shall not be used for any other purpose including, but
20not limited to, reimbursement of administration fees due the
21administrative service organization pursuant to its contract
22or contracts with the Department.
23    (c) On or before November 15 of each year but not after
24November 15, 2011, the Board of Trustees of the State
25Universities Retirement System shall certify to the Governor,
26the Director of Central Management Services, and the State

 

 

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1Comptroller its estimate of the total amount of contributions
2to be paid under subsection (a) of this Section for the next
3fiscal year. Beginning in fiscal year 2008, the amount
4certified shall be decreased or increased each year by the
5amount that the actual active employee contributions either
6fell short of or exceeded the estimate used by the Board in
7making the certification for the previous fiscal year. The
8State Universities Retirement System shall calculate the
9amount of actual active employee contributions in fiscal years
101999 through 2005. Based upon this calculation, the fiscal year
112008 certification shall include an amount equal to the
12cumulative amount that the actual active employee
13contributions either fell short of or exceeded the estimate
14used by the Board in making the certification for those fiscal
15years. The certification shall include a detailed explanation
16of the methods and information that the Board relied upon in
17preparing its estimate. As soon as possible after the effective
18date of this Section, the Board shall submit its estimate for
19fiscal year 1999.
20    (d) Beginning in fiscal year 1999, on the first day of each
21month, or as soon thereafter as may be practical, the State
22Treasurer and the State Comptroller shall transfer from the
23General Revenue Fund to the Community College Health Insurance
24Security Fund 1/12 of the annual amount appropriated for that
25fiscal year to the State Comptroller for deposit into the
26Community College Health Insurance Security Fund under Section

 

 

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11.4 of the State Pension Funds Continuing Appropriation Act.
2    (e) Except where otherwise specified in this Section, the
3definitions that apply to Article 15 of the Illinois Pension
4Code apply to this Section.
5(Source: P.A. 94-839, eff. 6-6-06; 95-632, eff. 9-25-07.)
 
6    (5 ILCS 375/6.10A new)
7    Sec. 6.10A. City colleges; optional participation in
8program of health benefits. Notwithstanding any other
9provision of this Act, the Department of Central Management
10Services shall adopt rules authorizing optional participation
11in the program of health benefits for community college benefit
12recipients and community college dependent beneficiaries by
13any person who is otherwise ineligible to participate in that
14program solely as a result of that or another person's
15employment with a community college district subject to Article
16VII of the Public Community College Act.
 
17    (5 ILCS 375/6.16 new)
18    Sec. 6.16. Health benefit election for Tier I employees and
19Tier I retirees.
20    (a) For purposes of this Section:
21    "Eligible Tier I employee" means an individual who makes or
22is deemed to have made an election under paragraph (1) of
23subsection (a) of Sections 2-110.3 and 15-134.6 of the Illinois
24Pension Code.

 

 

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1    "Eligible Tier I retiree" means an individual who makes or
2is deemed to have made an election under paragraph (1) of
3subsection (a-5) of Sections 2-110.3 and 15-134.6 of the
4Illinois Pension Code.
5    "Program of health benefits" means (i) a health plan, as
6defined in subsection (o) of Section 3 of this Act, that is
7designed and contracted for by the Director under this Act or
8any successor Act or (ii) if administration of that health plan
9is transferred to a trust established by the State or an
10independent Board in order to provide health benefits to a
11class of a persons that includes eligible Tier I retirees, then
12the plan of health benefits provided through that trust.
13    For persons who receive healthcare benefits under a
14collective bargaining agreement with a community college
15district subject to Article VII of the Public Community College
16Act, the term "program of health benefits" also includes any
17health benefit arrangement provided under such a collective
18bargaining agreement, except that if such an agreement expires
19and if those persons are otherwise eligible to participate in a
20program of health benefits pursuant to item (i) or (ii), then
21"program of health benefits" does not include the health
22benefit arrangements provided under such a collective
23bargaining agreement.
24    For persons who are eligible to receive benefits under a
25health plan made available by a community college district
26subject to Article VII of the Public Community College Act and

 

 

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1who do not receive those benefits pursuant to a collective
2bargaining agreement, "program of health benefits" also
3includes the health plan made available to such persons by the
4community college district, except that if those persons
5otherwise become eligible to participate in a program of health
6benefits pursuant to item (i) or (ii), then "program of health
7benefits" does not include the health plan made available to
8such persons by the community college district.
9    (b) As adequate and legal consideration for making the
10election under paragraph (1) of subsection (a) or (a-5) of
11Sections 2-110.3 and 15-134.6 of the Illinois Pension Code,
12each eligible Tier I employee and each eligible Tier I retiree
13shall receive a vested and enforceable contractual right to
14participate in a program of health benefits while he or she
15qualifies as an annuitant or retired employee, or as a
16community college benefit recipient receiving a retirement
17annuity. That right also extends to such a person's dependents,
18survivors, and community college dependent beneficiaries who
19are eligible under the applicable program of health benefits.
20    (c) Notwithstanding subsection (b), eligible Tier I
21employees and eligible Tier I retirees may be required to make
22contributions toward the cost of coverage under a program of
23health benefits.
24    (d) The vested and enforceable contractual right to a
25program of health benefits is not offered as, and shall not be
26considered, a pension benefit under Article XIII, Section 5 of

 

 

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1the Illinois Constitution, the Illinois Pension Code, or any
2subsequent or successor enactment providing pension benefits.
3    (e) Notwithstanding any other provision of this Act, a Tier
4I employee or Tier I retiree who has made an election under
5paragraph (2) of subsection (a) or (a-5) of Sections 2-110.3
6and 15-134.6 of the Illinois Pension Code shall not be entitled
7to participate in the program of health benefits as an
8annuitant or retired employee, or community college benefit
9recipient receiving a retirement annuity, regardless of any
10contrary election pursuant to any of those Sections under any
11other retirement system.
12    Notwithstanding any other provision of this Act, a Tier I
13employee who is not entitled to participate in the program of
14health benefits as an annuitant or retired employee, or as a
15community college benefit recipient receiving a retirement
16annuity, due to an election under paragraph (2) of subsection
17(a) or (a-5) of Sections 2-110.3 and 15-134.6 of the Illinois
18Pension Code shall not be required to make contributions toward
19the program of health benefits while he or she is an employee
20or active contributor. However, an active employee may be
21required to make contributions toward health benefits he or she
22receives during active employment.
23    (f) The Department shall coordinate with each retirement
24system administering an election in accordance with this
25amendatory Act of the 97th General Assembly to provide
26information concerning the impact of the election of health

 

 

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1benefits. Each System shall include information prepared by the
2Department in the required election packet. The Department
3shall make information available to Tier I employees and Tier I
4retirees through video materials, group presentations,
5consultation by telephone or electronic means, or any
6combination of these methods.
 
7    Section 15. The Governor's Office of Management and Budget
8Act is amended by changing Sections 7 and 8 as follows:
 
9    (20 ILCS 3005/7)  (from Ch. 127, par. 417)
10    Sec. 7. All statements and estimates of expenditures
11submitted to the Office in connection with the preparation of a
12State budget, and any other estimates of expenditures,
13supporting requests for appropriations, shall be formulated
14according to the various functions and activities for which the
15respective department, office or institution of the State
16government (including the elective officers in the executive
17department and including the University of Illinois and the
18judicial department) is responsible. All such statements and
19estimates of expenditures relating to a particular function or
20activity shall be further formulated or subject to analysis in
21accordance with the following classification of objects:
22    (1) Personal services
23    (2) State contribution for employee group insurance
24    (3) Contractual services

 

 

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1    (4) Travel
2    (5) Commodities
3    (6) Equipment
4    (7) Permanent improvements
5    (8) Land
6    (9) Electronic Data Processing
7    (10) Telecommunication services
8    (11) Operation of Automotive Equipment
9    (12) Contingencies
10    (13) Reserve
11    (14) Interest
12    (15) Awards and Grants
13    (16) Debt Retirement
14    (17) Non-cost Charges.
15    (18) State retirement contribution for annual normal cost
16    (19) State retirement contribution for unfunded accrued
17liability.
18(Source: P.A. 93-25, eff. 6-20-03.)
 
19    (20 ILCS 3005/8)  (from Ch. 127, par. 418)
20    Sec. 8. When used in connection with a State budget or
21expenditure or estimate, items (1) through (16) in the
22classification of objects stated in Section 7 shall have the
23meanings ascribed to those items in Sections 14 through 24.7,
24respectively, of the State Finance Act. "An Act in relation to
25State finance", approved June 10, 1919, as amended.

 

 

09700HB3076sam002- 21 -LRB097 06263 JDS 70346 a

1    When used in connection with a State budget or expenditure
2or estimate, items (18) and (19) in the classification of
3objects stated in Section 7 shall have the meanings ascribed to
4those items in Sections 24.12 and 24.13, respectively, of the
5State Finance Act.
6(Source: P.A. 82-325.)
 
7    Section 20. The Illinois State Auditing Act is amended by
8adding Section 2-8.1 as follows:
 
9    (30 ILCS 5/2-8.1 new)
10    Sec. 2-8.1. Actuarial Responsibilities.
11    (a) The Auditor General shall contract with or hire an
12actuary to serve as the State Actuary. The State Actuary shall
13be retained by, serve at the pleasure of, and be under the
14supervision of the Auditor General and shall be paid from
15appropriations to the office of the Auditor General. The State
16Actuary may be selected by the Auditor General without engaging
17in a competitive procurement process.
18    (b) The State Actuary shall:
19        (1) review assumptions and valuations prepared by
20    actuaries retained by the boards of trustees of the
21    State-funded retirement systems;
22        (2) issue preliminary reports to the boards of trustees
23    of the State-funded retirement systems concerning proposed
24    certifications of required State contributions submitted

 

 

09700HB3076sam002- 22 -LRB097 06263 JDS 70346 a

1    to the State Actuary by those boards;
2        (3) cooperate with the boards of trustees of the
3    State-funded retirement systems to identify recommended
4    changes in actuarial assumptions that the boards must
5    consider before finalizing their certifications of the
6    required State contributions;
7        (4) conduct reviews of the actuarial practices of the
8    boards of trustees of the State-funded retirement systems;
9        (5) make additional reports as directed by joint
10    resolution of the General Assembly; and
11        (6) perform any other duties assigned by the Auditor
12    General, including, but not limited to, reviews of the
13    actuarial practices of other entities.
14    (c) On or before January 1, 2013 and each January 1
15thereafter, the Auditor General shall submit a written report
16to the General Assembly and Governor documenting the initial
17assumptions and valuations prepared by actuaries retained by
18the boards of trustees of the State-funded retirement systems,
19any changes recommended by the State Actuary in the actuarial
20assumptions, and the responses of each board to the State
21Actuary's recommendations.
22    (d) For the purposes of this Section, "State-funded
23retirement system" means a retirement system established
24pursuant to Article 2, 14, 15, 16, or 18 of the Illinois
25Pension Code.
 

 

 

09700HB3076sam002- 23 -LRB097 06263 JDS 70346 a

1    Section 25. The State Finance Act is amended by changing
2Section 13 and by adding Sections 24.12 and 24.13 as follows:
 
3    (30 ILCS 105/13)  (from Ch. 127, par. 149)
4    Sec. 13. The objects and purposes for which appropriations
5are made are classified and standardized by items as follows:
6    (1) Personal services;
7    (2) State contribution for employee group insurance;
8    (3) Contractual services;
9    (4) Travel;
10    (5) Commodities;
11    (6) Equipment;
12    (7) Permanent improvements;
13    (8) Land;
14    (9) Electronic Data Processing;
15    (10) Operation of automotive equipment;
16    (11) Telecommunications services;
17    (12) Contingencies;
18    (13) Reserve;
19    (14) Interest;
20    (15) Awards and Grants;
21    (16) Debt Retirement;
22    (17) Non-Cost Charges;
23    (18) State retirement contribution for annual normal cost;
24    (19) State retirement contribution for unfunded accrued
25liability;

 

 

09700HB3076sam002- 24 -LRB097 06263 JDS 70346 a

1    (20) (18) Purchase Contract for Real Estate.
2    When an appropriation is made to an officer, department,
3institution, board, commission or other agency, or to a private
4association or corporation, in one or more of the items above
5specified, such appropriation shall be construed in accordance
6with the definitions and limitations specified in this Act,
7unless the appropriation act otherwise provides.
8    An appropriation for a purpose other than one specified and
9defined in this Act may be made only as an additional, separate
10and distinct item, specifically stating the object and purpose
11thereof.
12(Source: P.A. 84-263; 84-264.)
 
13    (30 ILCS 105/24.12 new)
14    Sec. 24.12. "State retirement contribution for annual
15normal cost" defined. The term "State retirement contribution
16for annual normal cost" means the portion of the total required
17State contribution to a retirement system for a fiscal year
18that represents the State's portion of the System's projected
19normal cost for that fiscal year, as determined and certified
20by the board of trustees of the retirement system in
21conformance with the applicable provisions of the Illinois
22Pension Code.
 
23    (30 ILCS 105/24.13 new)
24    Sec. 24.13. "State retirement contribution for unfunded

 

 

09700HB3076sam002- 25 -LRB097 06263 JDS 70346 a

1accrued liability" defined. The term "State retirement
2contribution for unfunded accrued liability" means the portion
3of the total required State contribution to a retirement system
4for a fiscal year that is not included in the State retirement
5contribution for annual normal cost.
 
6    Section 30. The Illinois Pension Code is amended by
7changing Sections 1-103.3, 1-160, 2-108, 2-119.1, 2-124,
82-134, 7-109, 14-106, 14-135.08, 15-106, 15-107, 15-111,
915-113.2, 15-113.6, 15-134.5, 15-136, 15-155, 15-157,
1015-158.2, 15-159, 15-163, 15-198, 16-106, 16-127, 16-158,
1118-140, 20-121, 20-123, 20-124, and 20-125 and by adding
12Sections 1-161, 1-162, 2-105.1, 2-105.2, 2-107.9, 2-110.3,
1315-107.1, 15-107.2, 15-111.1, 15-134.6, 15-155.1, 15-155.2,
14and as follows:
 
15    (40 ILCS 5/1-103.3)
16    Sec. 1-103.3. Application of 1994 amendment; funding
17standard.
18    (a) The provisions of Public Act 88-593 this amendatory Act
19of 1994 that change the method of calculating, certifying, and
20paying the required State contributions to the retirement
21systems established under Articles 2, 14, 15, 16, and 18 shall
22first apply to the State contributions required for State
23fiscal year 1996.
24    (b) (Blank). The General Assembly declares that a funding

 

 

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1ratio (the ratio of a retirement system's total assets to its
2total actuarial liabilities) of 90% is an appropriate goal for
3State-funded retirement systems in Illinois, and it finds that
4a funding ratio of 90% is now the generally-recognized norm
5throughout the nation for public employee retirement systems
6that are considered to be financially secure and funded in an
7appropriate and responsible manner.
8    (c) Every 5 years, beginning in 1999, the Commission on
9Government Forecasting and Accountability, in consultation
10with the affected retirement systems and the Governor's Office
11of Management and Budget (formerly Bureau of the Budget), shall
12consider and determine whether the funding goals 90% funding
13ratio adopted in Articles 2, 14, 15, 16, and 18 of this Code
14continue subsection (b) continues to represent an appropriate
15funding goals goal for State-funded retirement systems in
16Illinois, and it shall report its findings and recommendations
17on this subject to the Governor and the General Assembly.
18(Source: P.A. 93-1067, eff. 1-15-05.)
 
19    (40 ILCS 5/1-160)
20    Sec. 1-160. Provisions applicable to new hires.
21    (a) The provisions of this Section apply to a person who,
22on or after January 1, 2011, first becomes a member or a
23participant under any reciprocal retirement system or pension
24fund established under this Code, other than a retirement
25system or pension fund established under Article 2, 3, 4, 5, 6,

 

 

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1or 18 of this Code, notwithstanding any other provision of this
2Code to the contrary, but do not apply (i) to any self-managed
3plan established under this Code, (ii) to any person with
4respect to service as a sheriff's law enforcement employee
5under Article 7, (iii) to any person with respect to service
6for which the person participates in the cash balance plan
7established under Section 1-161, or (iv) to any participant of
8the retirement plan established under Section 22-101.
9    A person subject to this Section with respect to service
10under the State Universities Retirement System may irrevocably
11elect to transfer to the cash balance plan under Section 1-161
12with respect to service under the State Universities Retirement
13System by filing with the State Universities Retirement System
14in the manner required by that System, his or her irrevocable
15written election to transfer to the cash balance plan.
16Participation in the cash balance plan shall begin no earlier
17than July 1, 2013.
18    (b) "Final average salary" means the average monthly (or
19annual) salary obtained by dividing the total salary or
20earnings calculated under the Article applicable to the member
21or participant during the 96 consecutive months (or 8
22consecutive years) of service within the last 120 months (or 10
23years) of service in which the total salary or earnings
24calculated under the applicable Article was the highest by the
25number of months (or years) of service in that period. For the
26purposes of a person who first becomes a member or participant

 

 

09700HB3076sam002- 28 -LRB097 06263 JDS 70346 a

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

 

 

09700HB3076sam002- 29 -LRB097 06263 JDS 70346 a

1means the index published by the Bureau of Labor Statistics of
2the United States Department of Labor that measures the average
3change in prices of goods and services purchased by all urban
4consumers, United States city average, all items, 1982-84 =
5100. The new amount resulting from each annual adjustment shall
6be determined by the Public Pension Division of the Department
7of Insurance and made available to the boards of the retirement
8systems and pension funds by November 1 of each year.
9    (c) A member or participant is entitled to a retirement
10annuity upon written application if he or she has attained age
1167 and has at least 10 years of service credit and is otherwise
12eligible under the requirements of the applicable Article.
13    A member or participant who has attained age 62 and has at
14least 10 years of service credit and is otherwise eligible
15under the requirements of the applicable Article may elect to
16receive the lower retirement annuity provided in subsection (d)
17of this Section.
18    (d) The retirement annuity of a member or participant who
19is retiring after attaining age 62 with at least 10 years of
20service credit shall be reduced by one-half of 1% for each full
21month that the member's age is under age 67.
22    (e) Any retirement annuity or supplemental annuity shall be
23subject to annual increases on the January 1 occurring either
24on or after the attainment of age 67 or the first anniversary
25of the annuity start date, whichever is later. Each annual
26increase shall be calculated at 3% or one-half the annual

 

 

09700HB3076sam002- 30 -LRB097 06263 JDS 70346 a

1unadjusted percentage increase (but not less than zero) in the
2consumer price index-u for the 12 months ending with the
3September preceding each November 1, whichever is less, of the
4originally granted retirement annuity. If the annual
5unadjusted percentage change in the consumer price index-u for
6the 12 months ending with the September preceding each November
71 is zero or there is a decrease, then the annuity shall not be
8increased.
9    (f) The initial survivor's or widow's annuity of an
10otherwise eligible survivor or widow of a retired member or
11participant who first became a member or participant on or
12after January 1, 2011 shall be in the amount of 66 2/3% of the
13retired member's or participant's retirement annuity at the
14date of death. In the case of the death of a member or
15participant who has not retired and who first became a member
16or participant on or after January 1, 2011, eligibility for a
17survivor's or widow's annuity shall be determined by the
18applicable Article of this Code. The initial benefit shall be
1966 2/3% of the earned annuity without a reduction due to age. A
20child's annuity of an otherwise eligible child shall be in the
21amount prescribed under each Article if applicable. Any
22survivor's or widow's annuity shall be increased (1) on each
23January 1 occurring on or after the commencement of the annuity
24if the deceased member died while receiving a retirement
25annuity or (2) in other cases, on each January 1 occurring
26after the first anniversary of the commencement of the annuity.

 

 

09700HB3076sam002- 31 -LRB097 06263 JDS 70346 a

1Each annual increase shall be calculated at 3% or one-half the
2annual unadjusted percentage increase (but not less than zero)
3in the consumer price index-u for the 12 months ending with the
4September preceding each November 1, whichever is less, of the
5originally granted survivor's annuity. If the annual
6unadjusted percentage change in the consumer price index-u for
7the 12 months ending with the September preceding each November
81 is zero or there is a decrease, then the annuity shall not be
9increased.
10    (g) The benefits in Section 14-110 apply only if the person
11is a State policeman, a fire fighter in the fire protection
12service of a department, or a security employee of the
13Department of Corrections or the Department of Juvenile
14Justice, as those terms are defined in subsection (c) (b) of
15Section 14-110. A person who meets the requirements of this
16Section is entitled to an annuity calculated under the
17provisions of Section 14-110, in lieu of the regular or minimum
18retirement annuity, only if the person has withdrawn from
19service with not less than 20 years of eligible creditable
20service and has attained age 60, regardless of whether the
21attainment of age 60 occurs while the person is still in
22service.
23    (h) If a person who first becomes a member or a participant
24of a retirement system or pension fund subject to this Section
25on or after January 1, 2011 is receiving a retirement annuity
26or retirement pension under that system or fund and becomes a

 

 

09700HB3076sam002- 32 -LRB097 06263 JDS 70346 a

1member or participant under any other system or fund created by
2this Code and is employed on a full-time basis, except for
3those members or participants exempted from the provisions of
4this Section under subsection (a) of this Section, then the
5person's retirement annuity or retirement pension under that
6system or fund shall be suspended during that employment. Upon
7termination of that employment, the person's retirement
8annuity or retirement pension payments shall resume and be
9recalculated if recalculation is provided for under the
10applicable Article of this Code.
11    If a person who first becomes a member of a retirement
12system or pension fund subject to this Section on or after
13January 1, 2012 and is receiving a retirement annuity or
14retirement pension under that system or fund and accepts on a
15contractual basis a position to provide services to a
16governmental entity from which he or she has retired, then that
17person's annuity or retirement pension earned as an active
18employee of the employer shall be suspended during that
19contractual service. A person receiving an annuity or
20retirement pension under this Code shall notify the pension
21fund or retirement system from which he or she is receiving an
22annuity or retirement pension, as well as his or her
23contractual employer, of his or her retirement status before
24accepting contractual employment. A person who fails to submit
25such notification shall be guilty of a Class A misdemeanor and
26required to pay a fine of $1,000. Upon termination of that

 

 

09700HB3076sam002- 33 -LRB097 06263 JDS 70346 a

1contractual employment, the person's retirement annuity or
2retirement pension payments shall resume and, if appropriate,
3be recalculated under the applicable provisions of this Code.
4    (i) Notwithstanding any other provision of this Section, a
5person who first becomes a participant of the retirement system
6established under Article 15 on or after January 1, 2011 shall
7have the option to enroll in the self-managed plan created
8under Section 15-158.2 of this Code.
9    (j) In the case of a conflict between the provisions of
10this Section and any other provision of this Code, the
11provisions of this Section shall control.
12(Source: P.A. 96-889, eff. 1-1-11; 96-1490, eff. 1-1-11;
1397-609, eff. 1-1-12.)
 
14    (40 ILCS 5/1-161 new)
15    Sec. 1-161. Cash Balance Plan.
16    (a) Participation and Applicability. This Section applies
17to all new cash balance plan participants and all legacy Tier
18II participants.
19    This Section does not, however, apply to any person with
20respect to service for which the person participates in the
21self-managed plan established under Section 15-158.2 in lieu of
22the retirement benefits otherwise provided by the State
23Universities Retirement System.
24    (b) Title. The package of benefits provided under this
25Section may be referred to as the "cash balance plan". Persons

 

 

09700HB3076sam002- 34 -LRB097 06263 JDS 70346 a

1subject to the provisions of this Section may be referred to as
2"participants in the cash balance plan".
3    (b-5) Definitions. As used in this Section:
4    "Account" means the notional cash balance account
5established under this Section for a participant in the cash
6balance plan.
7    "Consumer Price Index-U" means the Consumer Price Index
8published by the Bureau of Labor Statistics of the United
9States Department of Labor that measures the average change in
10prices of goods and services purchased by all urban consumers,
11United States city average, all items, 1982-84 = 100.
12    "Salary" means "earnings" as defined in Article 15, without
13regard to the limitation in subsection (b-5) of Section 1-160.
14    "Legacy Tier II participant" means a person who was subject
15to Section 1-160 with respect to service under Article 15 of
16this Code and who irrevocably elects to participate in the cash
17balance plan created under this Section. That election must be
18made in writing, in the manner provided by the applicable
19retirement system.
20    "New cash balance plan participant" means a person who, on
21or after July 1, 2013, first begins to participate in the
22retirement system established under Article 15 of this Code.
23    (c) Cash Balance Account. A notional cash balance account
24shall be established by the applicable retirement system for
25each participant in the cash balance plan. The account is
26notional and does not contain any actual money segregated from

 

 

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1the commingled assets of the retirement system. The cash
2balance in the account is to be used in calculating benefits as
3provided in this Section, but is not to be used in the
4calculation of any refund, transfer, or other benefit under the
5applicable Article of this Code.
6    The amounts to be credited to the cash balance account
7shall consist of (i) amounts contributed by or on behalf of the
8participant as employee contributions, (ii) notional employer
9contributions, and (iii) interest credit that is attributable
10to the account, all as provided in this Section.
11    Whenever necessary for the prompt calculation or
12administration, or when the System lacks information necessary
13to the calculation or administration otherwise required of or
14for a benefit under this Section, the applicable retirement
15system may estimate an amount to be credited to or debited from
16a participant's cash balance account and then adjust the amount
17so credited or debited when more accurate information becomes
18available.
19    The applicable retirement system shall give to each
20participant in the cash balance plan who has not yet retired
21annual notice of (1) the balance in the participant's cash
22balance account and (2) an estimate of the retirement annuity
23that will be payable to the participant if he or she retires at
24age 59 1/2.
25    (c-5) Initial Account Balance for Legacy Tier II
26Participants. The applicable retirement system shall establish

 

 

09700HB3076sam002- 36 -LRB097 06263 JDS 70346 a

1an initial account balance for each legacy Tier II participant
2when he or she begins participation in the cash balance plan.
3The initial account balance shall be an amount equal to the
4employee contribution refund that the participant would be
5eligible to receive under the applicable Article of this Code
6if the participant terminated employment on that date and
7elected a refund of contributions, as prescribed by the board
8of the applicable retirement system.
9    (d) Employee Contributions. New cash balance plan
10participants and legacy Tier II participants shall make
11employee contributions to the applicable retirement system at
12the rates required under the applicable Article of this Code.
13The amount of each contribution shall be credited to the
14participant's cash balance account upon receipt and after the
15retirement system's reconciliation of the contribution.
16    (e) Notional Employer Contributions. Upon receipt of each
17employee contribution under subsection (d), an amount
18representing the employer contribution shall be credited to the
19participant's cash balance account. For a participant in the
20cash balance plan under Article 15, the notional employer
21contribution shall be 4.4% of salary.
22    The notional employer contribution to be credited to the
23participant's account is not the same as the actual employer
24contributions required under subsection (p) and the provisions
25of the applicable Article of this Code.
26    (e-1) Optional Employer Contributions. Employers may make

 

 

09700HB3076sam002- 37 -LRB097 06263 JDS 70346 a

1optional additional contributions to the applicable retirement
2system on behalf of their employees who are participants in the
3cash balance plan in accordance with procedures prescribed by
4the retirement system, to the extent permitted by federal law
5and the rules prescribed by the retirement system. The optional
6additional contributions under this subsection are actual
7monetary contributions to the retirement system, and the amount
8of each optional additional contribution shall be credited to
9the participant's cash balance account upon receipt and after
10the retirement system's reconciliation of the contribution.
11    (f) Interest Credit. An amount representing earnings on
12investments shall be determined by the retirement system in
13accordance with this Section and credited to the participant's
14cash balance account for each fiscal year in which there is a
15positive balance in that account; except that no additional
16interest credit shall be credited while an annuity based on the
17account is being paid. The interest credit amount shall be a
18percentage of the average quarterly balance in the cash balance
19account during that fiscal year, and shall be calculated on
20June 30.
21    The percentage shall be the assumed treasury rate for the
22previous fiscal year, unless neither the retirement system's
23actual rate of investment earnings for the previous fiscal year
24nor the retirement system's actual rate of investment earnings
25for the five-year period ending at the end of the previous
26fiscal year is less than the assumed treasury rate.

 

 

09700HB3076sam002- 38 -LRB097 06263 JDS 70346 a

1    If both the retirement system's actual rate of investment
2earnings for the previous fiscal year and the actual rate of
3investment earnings for the five-year period ending at the end
4of the previous fiscal year are at least the assumed treasury
5rate, then the percentage shall be:
6        (i) the assumed treasury rate, plus
7        (ii) two-thirds of the amount of the actual rate of
8    investment earnings for the previous fiscal year that
9    exceeds the assumed treasury rate.
10However, in no event shall the percentage applied under this
11subsection exceed 10%.
12    For the purposes of this subsection only, "previous fiscal
13year" means fiscal year ending one year before the interest
14rate is calculated.
15    For the purposes of this subsection only, "assumed treasury
16rate" means the average annual yield of the 30-year U.S.
17Treasury Bond over the previous fiscal year, but not less than
184%.
19    When a person applies for a benefit under this Section, the
20retirement system shall apply an interest credit based on a
21proration of an estimate of what the interest credit will be
22for the relevant year. When the retirement system certifies the
23credit on June 30, it shall adjust the benefit accordingly.
24    (f-10) Distribution upon Termination of Employment. Upon
25termination of active employment with at least 5 years of
26service credit under the applicable retirement system and prior

 

 

09700HB3076sam002- 39 -LRB097 06263 JDS 70346 a

1to making application for an annuity under this Section, a
2participant in the cash balance plan may make an irrevocable
3election to distribute an amount not to exceed 40% of the
4balance in the participant's account in the form of a direct
5rollover to another qualified plan, to the extent allowed by
6federal law. If the participant makes such an election, then
7the amount distributed shall be debited from the participant's
8cash balance account. A participant in the cash balance plan
9shall be allowed only one distribution under this subsection.
10The remaining balance in the participant's account shall be
11used for the determination of other benefits provided under
12this Section.
13    (f-15) Refund. In lieu of receiving a distribution under
14subsection (f-10), at any time after terminating active
15employment under the applicable retirement system, but before
16receiving a retirement annuity under this Section, a
17participant in the cash balance plan may elect to receive a
18refund under this subsection. The refund shall consist of an
19amount equal to the amount of all employee contributions
20credited to the participant's account, but shall not include
21any interest credit or employer contributions. If the
22participant so requests, the refund may be paid in the form of
23a direct rollover to another qualified plan, to the extent
24allowed by federal law and in accordance with the rules of the
25applicable retirement system. Upon payment of the refund, the
26participant's notional cash balance account shall be closed.

 

 

09700HB3076sam002- 40 -LRB097 06263 JDS 70346 a

1    The participant's credits in the applicable retirement
2system shall be terminated upon payment of a refund under this
3subsection.
4    (g) Retirement Annuity. A participant in the cash balance
5plan may begin collecting a retirement annuity at age 59 1/2,
6but no earlier than the date of termination of active
7employment under the applicable retirement system.
8    The amount of the retirement annuity shall be calculated by
9the retirement system, based on the balance in the cash balance
10account, the assumption of future investment returns as
11specified in this subsection, the participant's election to
12have a lifetime survivor's annuity as specified in this
13subsection, the annual increase in retirement annuity as
14specified in subsection (h), the annual increase in survivor's
15annuity as specified in subsection (l), and any actuarial
16assumptions and tables adopted by the board of the retirement
17system for this purpose. The calculation shall determine the
18amount of retirement annuity, on an actuarially equivalent
19basis, that shall be designed to result in the balance in the
20participant's account arriving at zero on the date when the
21last payment of the retirement annuity (or survivor's annuity,
22if the participant elects to provide for a survivor's annuity
23pursuant to this subsection) is anticipated to be paid under
24the relevant actuarial assumptions. A retirement annuity or a
25survivor's annuity provided under this Section shall be a life
26annuity and shall not expire if the account balance equals

 

 

09700HB3076sam002- 41 -LRB097 06263 JDS 70346 a

1zero.
2    The annuity payment shall begin on the date specified by
3the participant submitting a written application, which date
4shall not be prior to termination of employment or more than
5one year before the application is received by the board;
6however, if the participant is not an employee of an employer
7participating in this System or in a participating system as
8defined in Article 20 of this Code on April 1 of the calendar
9year next following the calendar year in which the participant
10attains age 70 1/2, the annuity payment period shall begin on
11that date regardless of whether an application has been filed.
12    The participant may elect, under the participant's written
13application for retirement, to receive a reduced annuity
14payable for his or her life and to have a lifetime survivor's
15annuity in a monthly amount equal to 50%, 75%, or 100% of that
16reduced monthly amount, to be paid after the participant's
17death to his or her eligible survivor. Eligibility for a
18survivor's annuity shall be determined under the applicable
19Article of this Code.
20    For the purpose of calculating retirement annuities,
21future investment returns shall be assumed to be a percentage
22equal to the average yield of the 30-year U.S. Treasury Bond
23over the 5 fiscal years prior to the calculation of the initial
24retirement annuity, plus 250 basis points; but not less than 4%
25nor more than 8%.
26    (h) Annual Increase in Retirement Annuity. The retirement

 

 

09700HB3076sam002- 42 -LRB097 06263 JDS 70346 a

1annuity shall be subject to an automatic annual increase in an
2amount equal to 3% of the originally granted annuity on each
3January 1 occurring on or after the first anniversary of the
4annuity start date.
5    (i) Disability Benefits. The disability benefits provided
6under the applicable retirement system apply to new cash
7balance plan participants and legacy Tier II participants in
8the cash balance plan, subject to and in accordance with the
9eligibility and other provisions of the applicable Article.
10    Retirement due to disability under Section 15-153.2 shall
11be deemed a disability benefit for the purposes of this Section
12and shall apply to new cash balance plan participants and
13legacy Tier II participants.
14    The board of the retirement system shall designate
15annually, as a percentage of salary, an amount representing the
16anticipated average cost of providing disability benefits for
17new cash balance plan participants and legacy Tier II
18participants. The amount so designated shall not exceed 1% of
19the cash balance plan participant's salary and shall be
20deducted annually from the account of each new cash balance
21plan participant and each legacy Tier II participant.
22    (j) Return to Service. Upon a return to service under the
23same retirement system after beginning to receive a retirement
24annuity under the cash balance plan, the retirement annuity
25shall be suspended and active participation in the cash balance
26plan shall resume. Upon termination of the employment, the

 

 

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1retirement annuity shall resume in an amount to be recalculated
2in accordance with subsection (g), taking into effect the
3changes in the cash balance account. If a retired annuitant
4returns to service, his or her notional cash balance account
5shall be decreased by each payment of retirement annuity prior
6to the return to service.
7    (k) Survivor's Annuity - Death before Retirement. In the
8case of the death of a new cash balance plan participant or
9legacy Tier II participant who had less than 5 years of service
10under the applicable Article and had not begun receiving a
11retirement annuity, the eligible survivor shall be entitled
12only to a refund of employee contributions under subsection
13(f-15).
14    In the case of the death of a new cash balance plan
15participant or legacy Tier II participant who had at least 5
16years of service under the applicable Article and had not begun
17receiving a retirement annuity, the eligible survivor shall be
18entitled to receive a survivor's annuity beginning at age 59
191/2 upon written application. The survivor's annuity shall be
20calculated in the same manner as a retirement annuity under
21subsection (g). At any time before receiving a survivor's
22annuity, the eligible survivor may claim a distribution under
23subsection (f-10) or a refund under subsection (f-15). The
24deceased participant's account shall continue to receive
25interest credit until the eligible survivor begins to receive a
26survivor's annuity or receives a refund of employee

 

 

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1contributions under subsection (f-15).
2    Eligibility for a survivor's annuity shall be determined
3under the applicable Article of this Code. A child's or
4parent's annuity for an otherwise eligible child or dependent
5parent shall be in the same amount, if any, prescribed under
6the applicable Article.
7    (l) Annual Increase in Survivor's Annuity. A survivor's
8annuity granted under subsection (g) or (k) shall be subject to
9an automatic annual increase in an amount equal to 3% of the
10originally granted annuity on each January 1 occurring on or
11after the first anniversary of the annuity start date.
12    (m) Applicability of Provisions. The following provisions,
13if and as they exist in this Code, do not apply to participants
14in the cash balance plan with respect to participation in the
15cash balance plan, except as they are specifically provided for
16in this Section:
17        (1) minimum service or vesting requirements (other
18    than as provided in this Section);
19        (2) provisions limiting a retirement annuity to a
20    specified percentage of salary;
21        (3) provisions authorizing a minimum retirement or
22    survivor's annuity or a supplemental annuity;
23        (4) provisions authorizing any form of retirement
24    annuity or survivor's annuity not authorized under this
25    Section;
26        (5) provisions authorizing a reversionary annuity

 

 

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1    (other than a survivor's annuity under subsection (g));
2        (6) provisions authorizing a refund of employee
3    contributions upon termination of service (except as
4    provided in this Section) or any lump-sum payout in lieu of
5    a retirement or survivor's annuity (other than the
6    distribution under subsection (f-10) or the refund under
7    subsection (f-15) of this Section;
8        (7) provisions authorizing optional service credits or
9    the payment of optional additional contributions (other
10    than the optional employer contributions specifically
11    authorized in subsection (e-1)); or
12        (8) a level income option.
13    The Retirement Systems Reciprocal Act applies to
14participants in the cash balance plan who qualify under Article
1520 of this Code, but it does not affect the calculation of
16benefits payable under this Section.
17    The other provisions of this Code continue to apply to
18participants in the cash balance plan, to the extent that they
19do not conflict with this Section. In the case of a conflict
20between the provisions of this Section and any other provision
21of this Code, the provisions of this Section control.
22    (n) Rules. The Board of Trustees of the applicable
23retirement system may adopt rules and procedures for the
24implementation of this Section, including but not limited to
25determinations of how to integrate the administration of this
26Section with the requirements of the applicable Article and any

 

 

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1other applicable provisions of this Code.
2    (o) Public Pension Division. The Public Pension Division of
3the Department of Insurance shall determine in October of each
4year the annual unadjusted percentage increase (but not less
5than zero) in the Consumer Price Index-U for the 12 months
6ending with the preceding September. The Division shall certify
7its determination to the Board of Trustees of the State
8Universities Retirement System by November 1 of each year.
9    (p) Actual Employer Contributions. Payment of employer
10contributions with respect to participants in the cash balance
11plan shall be the responsibility of the actual employer. These
12contributions shall be determined under and paid in accordance
13with the provisions of Sections 15-155. Optional employer
14contributions may be paid by employers in any amount, but must
15be paid in the manner specified by the applicable retirement
16system.
17    (q) Prospective Modification. The provisions set forth in
18this Section are subject to prospective changes made by law
19provided that any such changes shall not apply to any benefits
20accrued under this Section prior to the effective date of any
21amendatory Act of the General Assembly.
22    (r) An employee who participates in the cash balance plan
23under this Section may elect to participate in the optional
24cash balance plan under Section 1-162.
25    (s) Qualified Plan Status. No provision of this Section
26shall be interpreted in a way that would cause the applicable

 

 

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1retirement system to cease to be a qualified plan under section
2461 (a) of the Internal Revenue Code of 1986.
 
3    (40 ILCS 5/1-162 new)
4    Sec. 1-162. Optional cash balance plan.
5    (a) Participation and Applicability. Beginning on July 1,
62013, the following persons may elect to participate in the
7optional cash balance plan created under this Section:
8        (1) any person who participates in the cash balance
9    plan established under Section 1-161; and
10        (2) any Tier I employee who has made the election under
11    paragraph (1) of subsection (a) or (a-5) of Section
12    15-134.6.
13    This Section does not, however, apply to any person with
14respect to service for which the person participates in the
15self-managed plan established under Section 15-158.2 in lieu of
16the retirement benefits otherwise provided by the State
17Universities Retirement System.
18    The Board of Trustees of the applicable retirement system
19shall promulgate rules to create an annual election wherein a
20person eligible to participate in the optional cash balance
21plan may elect to participate, and an active employee who is a
22participant in the plan may elect to cease active
23participation. The election to cease active participation
24shall not disqualify the employee from eligibility to receive
25an interest credit under subsection (f), a distribution upon

 

 

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1termination under subsection (f-10), a refund under subsection
2(f-15), a retirement annuity under subsection (f-15), a
3retirement annuity under subsection (g), or a survivor annuity
4under subsection (k), or from eligibility to resume active
5participation in the optional cash balance plan in a subsequent
6year.
7    (b) Title. The package of benefits provided under this
8Section may be referred to as the "optional cash balance plan".
9Persons subject to the provisions of this Section may be
10referred to as "participants in the optional cash balance
11plan".
12    (b-5) Definitions. As used in this Section:
13    "Account" means the notional cash balance account
14established under this Section for a participant in the
15optional cash balance plan.
16    "Consumer Price Index-U" means the Consumer Price Index
17published by the Bureau of Labor Statistics of the United
18States Department of Labor that measures the average change in
19prices of goods and services purchased by all urban consumers,
20United States city average, all items, 1982-84 = 100.
21    "Salary" means "earnings" as defined in Article 15, without
22regard to the limitation in subsection (b-5) of Section 1-160.
23    "Tier I employee" means a person who is a Tier I employee
24under the applicable Article of this Code.
25    (c) Cash Balance Account. A notional cash balance account
26shall be established by the applicable retirement system for

 

 

09700HB3076sam002- 49 -LRB097 06263 JDS 70346 a

1each participant in the optional cash balance plan. The account
2is notional and does not contain any actual money segregated
3from the commingled assets of the retirement system. The cash
4balance in the account is to be used in calculating benefits as
5provided in this Section, but is not to be used in the
6calculation of any refund, transfer, or other benefit under the
7applicable Article of this Code.
8    The amounts to be credited to the cash balance account
9shall consist of (i) amounts contributed by or on behalf of the
10participant as employee contributions, (ii) notional employer
11contributions, and (iii) interest credit that is attributable
12to the account, all as provided in this Section.
13    Whenever necessary for the prompt calculation or
14administration, or when the System lacks information necessary
15to the calculation or administration otherwise required of or
16for a benefit under this Section, the applicable retirement
17system may estimate an amount to be credited to or debited from
18a participant's cash balance account and then adjust the amount
19so credited or debited when more accurate information becomes
20available.
21    The applicable retirement system shall give to each
22participant in the optional cash balance plan who has not yet
23retired annual notice of (1) the balance in the participant's
24cash balance account and (2) an estimate of the retirement
25annuity that will be payable to the participant if he or she
26retires at age 59 1/2.

 

 

09700HB3076sam002- 50 -LRB097 06263 JDS 70346 a

1    (d) Employee Contributions. In addition to the other
2contributions required under the applicable Article, each
3participant shall make contributions to the applicable
4retirement system at the rate of 2% of each payment of salary.
5The amount of each contribution shall be credited to the
6participant's cash balance account upon receipt and after the
7retirement system's reconciliation of the contribution.
8    (e) Optional Employer Contributions. Employers may make
9optional additional contributions to the applicable retirement
10system on behalf of their employees who are participants in the
11optional cash balance plan in accordance with procedures
12prescribed by the retirement system, to the extent permitted by
13federal law and the rules prescribed by the retirement system.
14The optional additional contributions under this subsection
15are actual monetary contributions to the retirement system, and
16the amount of each optional additional contribution shall be
17credited to the participant's cash balance account upon receipt
18and after the retirement system's reconciliation of the
19contribution.
20    (f) Interest Credit. An amount representing earnings on
21investments shall be determined by the retirement system in
22accordance with this Section and credited to the participant's
23cash balance account for each fiscal year in which there is a
24positive balance in that account; except that no additional
25interest credit shall be credited while an annuity based on the
26account is being paid. The interest credit amount shall be a

 

 

09700HB3076sam002- 51 -LRB097 06263 JDS 70346 a

1percentage of the average quarterly balance in the cash balance
2account during that fiscal year, and shall be calculated on
3June 30.
4    The percentage shall be the assumed treasury rate for the
5previous fiscal year, unless neither the retirement system's
6actual rate of investment earnings for the previous fiscal year
7nor the retirement system's actual rate of investment earnings
8for the five-year period ending at the end of the previous
9fiscal year is less than the assumed treasury rate.
10    If both the retirement system's actual rate of investment
11earnings for the previous fiscal year and the actual rate of
12investment earnings for the five-year period ending at the end
13of the previous fiscal year are at least the assumed treasury
14rate, then the percentage shall be:
15        (i) the assumed treasury rate, plus
16        (ii) two-thirds of the amount of the actual rate of
17    investment earnings for the previous fiscal year that
18    exceeds the assumed treasury rate.
19However, in no event shall the percentage applied under this
20subsection exceed 10%.
21    For the purposes of this subsection only, "previous fiscal
22year" means fiscal year ending one year before the interest
23rate is calculated.
24    For the purposes of this subsection only, "assumed treasury
25rate" means the average annual yield of the 30-year U.S.
26Treasury Bond over the previous fiscal year, but not less than

 

 

09700HB3076sam002- 52 -LRB097 06263 JDS 70346 a

14%.
2    When a person applies for a benefit under this Section, the
3retirement system shall apply an interest credit based on a
4proration of an estimate of what the interest credit will be
5for the relevant year. When the retirement system certifies the
6credit on June 30, it shall adjust the benefit accordingly.
7    (f-10) Distribution upon Termination of Employment. Upon
8termination of active employment with at least 5 years of
9service credit under the applicable retirement system and prior
10to making application for an annuity under this Section, a
11participant in the optional cash balance plan may make an
12irrevocable election to distribute an amount not to exceed 40%
13of the balance in the participant's account in the form of a
14direct rollover to another qualified plan, to the extent
15allowed by federal law. If the participant makes such an
16election, then the amount distributed shall be debited from the
17participant's cash balance account. A participant in the
18optional cash balance plan shall be allowed only one
19distribution under this subsection. The remaining balance in
20the participant's account shall be used for the determination
21of other benefits provided under this Section.
22    (f-15) Refund. In lieu of receiving a distribution under
23subsection (f-10), at any time after terminating active
24employment under the applicable retirement system, but before
25receiving a retirement annuity under this Section, a
26participant in the optional cash balance plan may elect to

 

 

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1receive a refund under this subsection. The refund shall
2consist of an amount equal to the amount of all employee
3contributions credited to the participant's account, but shall
4not include any interest credit or employer contributions. If
5the participant so requests, the refund may be paid in the form
6of a direct rollover to another qualified plan, to the extent
7allowed by federal law and in accordance with the rules of the
8applicable retirement system. Upon payment of the refund, the
9participant's notional cash balance account shall be closed.
10    (g) Retirement Annuity. A participant in the optional cash
11balance plan may begin collecting a retirement annuity at age
1259 1/2, but no earlier than the date of termination of active
13employment under the applicable retirement system.
14    The amount of the retirement annuity shall be calculated by
15the retirement system, based on the balance in the cash balance
16account, the assumption of future investment returns as
17specified in this subsection, the participant's election to
18have a lifetime survivor's annuity as specified in this
19subsection, the annual increase in retirement annuity as
20specified in subsection (h), the annual increase in survivor's
21annuity as specified in subsection (l), and any actuarial
22assumptions and tables adopted by the board of the retirement
23system for this purpose. The calculation shall determine the
24amount of retirement annuity, on an actuarially equivalent
25basis, that shall be designed to result in the balance in the
26participant's account arriving at zero on the date when the

 

 

09700HB3076sam002- 54 -LRB097 06263 JDS 70346 a

1last payment of the retirement annuity (or survivor's annuity,
2if the participant elects to provide for a survivor's annuity
3pursuant to this subsection) is anticipated to be paid under
4the relevant actuarial assumptions. A retirement annuity or a
5survivor's annuity provided under this Section shall be a life
6annuity and shall not expire if the account balance equals
7zero.
8    The annuity payment shall begin on the date specified by
9the participant submitting a written application, which date
10shall not be prior to termination of employment or more than
11one year before the application is received by the board;
12however, if the participant is not an employee of an employer
13participating in this System or in a participating system as
14defined in Article 20 of this Code on April 1 of the calendar
15year next following the calendar year in which the participant
16attains age 70 1/2, the annuity payment period shall begin on
17that date regardless of whether an application has been filed.
18    The participant may elect, under the participant's written
19application for retirement, to receive a reduced annuity
20payable for his or her life and to have a lifetime survivor's
21annuity in a monthly amount equal to 50%, 75%, or 100% of that
22reduced monthly amount, to be paid after the participant's
23death to his or her eligible survivor. Eligibility for a
24survivor's annuity shall be determined under the applicable
25Article of this Code.
26    For the purpose of calculating retirement annuities,

 

 

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1future investment returns shall be assumed to be a percentage
2equal to the average yield of the 30-year U.S. Treasury Bond
3over the 5 fiscal years prior to the calculation of the initial
4retirement annuity, plus 250 basis points; but not less than 4%
5nor more than 8%.
6    (h) Annual Increase in Retirement Annuity. The retirement
7annuity shall be subject to an automatic annual increase in an
8amount equal to 3% of the originally granted annuity on each
9January 1 occurring on or after the first anniversary of the
10annuity start date.
11    (i) Disability Benefits. There are no disability benefits
12provided under the optional cash balance plan, and no amounts
13for disability shall be deducted from the account of a
14participant in the optional cash balance plan. The disability
15benefits provided under the applicable retirement system apply
16to participants in the optional cash balance plan.
17    (j) Return to Service. Upon a return to service under the
18same retirement system after beginning to receive a retirement
19annuity under the optional cash balance plan, the retirement
20annuity shall be suspended and active participation in the
21optional cash balance plan shall resume. Upon termination of
22the employment, the retirement annuity shall resume in an
23amount to be recalculated in accordance with subsection (g),
24taking into effect the changes in the cash balance account. If
25a retired annuitant returns to service, his or her notional
26cash balance account shall be decreased by each payment of

 

 

09700HB3076sam002- 56 -LRB097 06263 JDS 70346 a

1retirement annuity prior to the return to service.
2    (k) Survivor's Annuity - Death before Retirement. In the
3case of a participant in the optional cash balance plan who had
4less than 5 years of service under the applicable Article and
5had not begun receiving a retirement annuity, the eligible
6survivor shall be entitled only to a refund of employee
7contributions under subsection (f-15).
8    In the case of a participant in the optional cash balance
9plan who had at least 5 years of service under the applicable
10Article and had not begun receiving a retirement annuity, the
11eligible survivor shall be entitled to receive a survivor's
12annuity beginning at age 59 1/2 upon written application. The
13survivor's annuity shall be calculated in the same manner as a
14retirement annuity under subsection (g). At any time before
15receiving a survivor's annuity, the eligible survivor may claim
16a distribution under subsection (f-10) or a refund under
17subsection (f-15). The deceased participant's account shall
18continue to receive interest credit until the eligible survivor
19begins to receive a survivor's annuity or receives a refund of
20employee contributions under subsection (f-15).
21    Eligibility for a survivor's annuity shall be determined
22under the applicable Article of this Code. A child's or
23parent's annuity for an otherwise eligible child or dependent
24parent shall be in the same amount, if any, prescribed under
25the applicable Article.
26    (l) Annual Increase in Survivor's Annuity. A survivor's

 

 

09700HB3076sam002- 57 -LRB097 06263 JDS 70346 a

1annuity granted under subsection (g) or (k) shall be subject to
2an automatic annual increase in an amount equal to 3% of the
3originally granted annuity on each January 1 occurring on or
4after the first anniversary of the annuity start date.
5    (m) Applicability of Provisions. The following provisions,
6if and as they exist in this Code, do not apply to participants
7in the optional cash balance plan with respect to participation
8in the optional cash balance plan, except as they are
9specifically provided for in this Section:
10        (1) minimum service or vesting requirements (other
11    than as provided in this Section);
12        (2) provisions limiting a retirement annuity to a
13    specified percentage of salary;
14        (3) provisions authorizing a minimum retirement or
15    survivor's annuity or a supplemental annuity;
16        (4) provisions authorizing any form of retirement
17    annuity or survivor's annuity not authorized under this
18    Section;
19        (5) provisions authorizing a reversionary annuity
20    (other than the survivor's annuity under subsection (g));
21        (6) provisions authorizing a refund of employee
22    contributions upon termination of service (other than upon
23    the death of the participant without an eligible survivor)
24    or any lump-sum payout in lieu of a retirement or
25    survivor's annuity (other than the distribution under
26    subsection (f-10) or the refund under subsection (f-15) of

 

 

09700HB3076sam002- 58 -LRB097 06263 JDS 70346 a

1    this Section;
2        (7) provisions authorizing optional service credits or
3    the payment of optional additional contributions (other
4    than the optional employer contributions specifically
5    authorized in this Section); or
6        (8) a level income option.
7    The Retirement Systems Reciprocal Act (Article 20 of this
8Code) does not apply to participation in the optional cash
9balance plan and does not affect the calculation of benefits
10payable under this Section.
11    The other provisions of this Code continue to apply to
12participants in the optional cash balance plan, to the extent
13that they do not conflict with this Section. In the case of a
14conflict between the provisions of this Section and any other
15provision of this Code, the provisions of this Section control.
16    (n) Rules. The Board of Trustees of the applicable
17retirement system may adopt rules and procedures for the
18implementation of this Section, including but not limited to
19determinations of how to integrate the administration of this
20Section with the requirements of the applicable Article and any
21other applicable provisions of this Code.
22    (o) Public Pension Division. The Public Pension Division of
23the Department of Insurance shall determine in October of each
24year the annual unadjusted percentage increase (but not less
25than zero) in the Consumer Price Index-U for the 12 months
26ending with the preceding September. The Division shall certify

 

 

09700HB3076sam002- 59 -LRB097 06263 JDS 70346 a

1its determination to the Board of Trustees of the State
2Universities Retirement System by November 1 of each year.
3    (p) Actual Employer Contributions. Payment of employer
4contributions with respect to participants in the optional cash
5balance plan shall be the responsibility of the actual
6employer. These contributions shall be determined under and
7paid in accordance with the provisions of Sections 15-155.
8Optional additional contributions by employers may be paid in
9any amount, but must be paid in the manner specified by the
10applicable retirement system.
11    (q) Prospective Modification. The provisions set forth in
12this Section are subject to prospective changes made by law
13provided that any such changes shall not apply to any benefits
14accrued under this Section prior to the effective date of any
15amendatory Act of the General Assembly.
16    (s) Qualified Plan Status. No provision of this Section
17shall be interpreted in a way that would cause the applicable
18retirement system to cease to be a qualified plan under section
19461 (a) of the Internal Revenue Code of 1986.
 
20    (40 ILCS 5/2-105.1 new)
21    Sec. 2-105.1. Tier I employee. "Tier I employee": A
22participant who first became a participant before January 1,
232011.
 
24    (40 ILCS 5/2-105.2 new)

 

 

09700HB3076sam002- 60 -LRB097 06263 JDS 70346 a

1    Sec. 2-105.2. Tier I retiree. "Tier I retiree" means a
2former Tier I employee who is receiving a retirement annuity.
 
3    (40 ILCS 5/2-107.9 new)
4    Sec. 2-107.9. Future increase in income. "Future increase
5in income": Any increase in income in any form offered for
6service as a member under this Article after June 30, 2013 that
7would qualify as "salary", as defined under Section 2-108, but
8for the fact that the increase in income was offered to the
9member on the condition that it not qualify as salary and was
10accepted by the member subject to that condition.
 
11    (40 ILCS 5/2-108)  (from Ch. 108 1/2, par. 2-108)
12    Sec. 2-108. Salary. "Salary": (1) For members of the
13General Assembly, the total compensation paid to the member by
14the State for one year of service, including the additional
15amounts, if any, paid to the member as an officer pursuant to
16Section 1 of "An Act in relation to the compensation and
17emoluments of the members of the General Assembly", approved
18December 6, 1907, as now or hereafter amended.
19    (2) For the State executive officers specified in Section
202-105, the total compensation paid to the member for one year
21of service.
22    (3) For members of the System who are participants under
23Section 2-117.1, or who are serving as Clerk or Assistant Clerk
24of the House of Representatives or Secretary or Assistant

 

 

09700HB3076sam002- 61 -LRB097 06263 JDS 70346 a

1Secretary of the Senate, the total compensation paid to the
2member for one year of service, but not to exceed the salary of
3the highest salaried officer of the General Assembly.
4    However, in the event that federal law results in any
5participant receiving imputed income based on the value of
6group term life insurance provided by the State, such imputed
7income shall not be included in salary for the purposes of this
8Article.
9    Notwithstanding any other provision of this Section,
10"salary" does not include any future increase in income that is
11offered for service as a member under this Article pursuant to
12the requirements of subsection (c) of Section 2-110.3 and
13accepted by a Tier I employee, or a Tier I retiree returning to
14active service, who has made an election under paragraph (2) of
15subsection (a) or (a-5) of Section 2-110.3.
16(Source: P.A. 86-27; 86-273; 86-1028; 86-1488.)
 
17    (40 ILCS 5/2-110.3 new)
18    Sec. 2-110.3. Election by Tier I employees and Tier I
19retirees.
20    (a) Each Tier I employee shall make an irrevocable election
21either:
22        (1) to agree to the following:
23            (i) to have the amount of the automatic annual
24        increases in his or her retirement annuity that are
25        otherwise provided for in this Article calculated,

 

 

09700HB3076sam002- 62 -LRB097 06263 JDS 70346 a

1        instead, as provided in subsection (a-1) of Section
2        2-119.1; and
3            (ii) to have his or her eligibility for automatic
4        annual increases in retirement annuity postponed as
5        provided in subsection (a-2) of Section 2-119.1 and to
6        relinquish the additional increases provided in
7        subsection (b) of Section 2-119.1; or
8        (2) to not agree to items (i) and (ii) as set forth in
9    paragraph (1) of this subsection.
10    The election required under this subsection (a) shall be
11made by each Tier I employee no earlier than January 1, 2013
12and no later than May 31, 2013, except that:
13        (i) a person who becomes a Tier I employee under this
14    Article after January 1, 2013 must make the election under
15    this subsection (a) within 60 days after becoming a Tier I
16    employee;
17        (ii) a person who returns to active service as a Tier I
18    employee under this Article after January 1, 2013 and has
19    not yet made an election under this Section must make the
20    election under this subsection (a) within 60 days after
21    returning to active service as a Tier I employee; and
22        (iii) a person who made the election under subsection
23    (a-5) as a Tier I retiree remains bound by that election
24    and shall not make a later election under this subsection
25    (a).
26    If a Tier I employee fails for any reason to make a

 

 

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1required election under this subsection within the time
2specified, then the employee shall be deemed to have made the
3election under paragraph (2) of this subsection.
4    (a-5) Each Tier I retiree shall make an irrevocable
5election either:
6        (1) to agree to the following:
7            (i) to have the amount of the automatic annual
8        increases in his or her retirement annuity that are
9        otherwise provided for in this Article calculated,
10        instead, as provided in subsection (a-1) of Section
11        2-119.1; and
12            (ii) to have his or her eligibility for automatic
13        annual increases in retirement annuity postponed as
14        provided in subsection (a-2) of Section 2-119.1 and to
15        relinquish the additional increases provided in
16        subsection (b) of Section 2-119.1; or
17        (2) to not agree to items (i) and (ii) as set forth in
18    paragraph (1) of this subsection.
19    The election required under this subsection (a-5) shall be
20made by each Tier I retiree no earlier than January 1, 2013 and
21no later than May 31, 2013, except that:
22        (i) a person who becomes a Tier I retiree under this
23    Article on or after January 1, 2013 must make the election
24    under this subsection (a-5) within 60 days after becoming a
25    Tier I retiree; and
26        (ii) a person who made the election under subsection

 

 

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1    (a) as a Tier I employee remains bound by that election and
2    shall not make a later election under this subsection
3    (a-5).
4    If a Tier I retiree fails for any reason to make a required
5election under this subsection within the time specified, then
6the Tier I retiree shall be deemed to have made the election
7under paragraph (2) of this subsection.
8    (a-10) All elections under subsection (a) or (a-5) that are
9made or deemed to be made before June 1, 2013 shall take effect
10on July 1, 2013. Elections that are made or deemed to be made
11on or after June 1, 2013 shall take effect on the first day of
12the month following the month in which the election is made or
13deemed to be made.
14    (b) As adequate and legal consideration provided under this
15amendatory Act of the 97th General Assembly for making the
16election under paragraph (1) of subsection (a) of this Section,
17any future increases in income offered for service as a member
18under this Article to a Tier I employee who has made the
19election under paragraph (1) of subsection (a) of this Section
20shall be offered expressly and irrevocably as constituting
21salary under Section 2-108.
22    As adequate and legal consideration provided under this
23amendatory Act of the 97th General Assembly for making the
24election under paragraph (1) of subsection (a-5) of this
25Section, any future increases in income offered for service as
26a member under this Article to a Tier I retiree who returns to

 

 

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1active service after having made the election under paragraph
2(1) of subsection (a-5) of this Section shall be offered
3expressly and irrevocably as constituting salary under Section
42-108.
5    (c) A Tier I employee who makes the election under
6paragraph (2) of subsection (a) of this Section shall not be
7subject to items (i) and (ii) set forth in paragraph (1) of
8subsection (a) of this Section. However, any future increases
9in income offered for service as a member under this Article to
10a Tier I employee who has made the election under paragraph (2)
11of subsection (a) of this Section shall be offered expressly
12and irrevocably as not constituting salary under Section 2-108,
13and the member may not accept any future increase in income
14that is offered in violation of this requirement.
15    A Tier I retiree who makes the election under paragraph (2)
16of subsection (a-5) of this Section shall not be subject to
17items (i) and (ii) set forth in paragraph (1) of subsection
18(a-5) of this Section. However, any future increases in income
19offered for service as a member under this Article to a Tier I
20retiree who returns to active service and has made the election
21under paragraph (2) of subsection (a-5) of this Section shall
22be offered expressly and irrevocably as not constituting salary
23under Section 2-108, and the member may not accept any future
24increase in income that is offered in violation of this
25requirement.
26    (d) The System shall make a good faith effort to contact

 

 

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1each Tier I employee and Tier I retiree subject to this
2Section. The System shall mail information describing the
3required election to each Tier I employee and Tier I retiree by
4United States Postal Service mail to his or her last known
5address on file with the System. If the Tier I employee or Tier
6I retiree is not responsive to other means of contact, it is
7sufficient for the System to publish the details of any
8required elections on its website or to publish those details
9in a regularly published newsletter or other existing public
10forum.
11    Tier I employees and Tier I retirees who are subject to
12this Section shall be provided with an election packet
13containing information regarding their options, as well as the
14forms necessary to make the required election. Upon request,
15the System shall offer Tier I employees and Tier I retirees an
16opportunity to receive information from the System before
17making the required election. The information may be provided
18through video materials, group presentations, individual
19consultation with a member or authorized representative of the
20System in person or by telephone or other electronic means, or
21any combination of those methods. The System shall not provide
22advice or counseling with respect to which election a Tier I
23employee or Tier I retiree should make or specific to the legal
24or tax circumstances of or consequences to the Tier I employee
25or Tier I retiree.
26    The System shall inform Tier I employees and Tier I

 

 

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1retirees in the election packet required under this subsection
2that the Tier I employee or Tier I retiree may also wish to
3obtain information and counsel relating to the election
4required under this Section from any other available source,
5including but not limited to labor organizations and private
6counsel.
7    In no event shall the System, its staff, or the Board be
8held liable for any information given to a member, beneficiary,
9or annuitant regarding the elections under this Section. The
10System shall coordinate with the Illinois Department of Central
11Management Services and each other retirement system
12administering an election in accordance with this amendatory
13Act of the 97th General Assembly to provide information
14concerning the impact of the election set forth in this
15Section.
16    (e) Notwithstanding any other provision of law, any future
17increases in income offered for service as a member must be
18offered expressly and irrevocably as not constituting "salary"
19under Section 2-108 to any Tier I employee, or Tier I retiree
20returning to active service, who has made an election under
21paragraph (2) or subsection (a) or (a-5) of Section 2-110.3. A
22Tier I employee, or Tier I retiree returning to active service,
23who has made an election under paragraph (2) or subsection (a)
24or (a-5) of Section 2-110.3 shall not accept any future
25increase in income that is offered for service as a member
26under this Article in violation of the requirement set forth in

 

 

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1this subsection.
2    (f) A member's election under this Section is not a
3prohibited election under subdivision (j)(1) of Section 1-119
4of this Code.
5    (g) Qualified Plan Status. No provision of this Section
6shall be interpreted in a way that would cause the System to
7cease to be a qualified plan under section 461 (a) of the
8Internal Revenue Code of 1986.
 
9    (40 ILCS 5/2-119.1)  (from Ch. 108 1/2, par. 2-119.1)
10    Sec. 2-119.1. Automatic increase in retirement annuity.
11    (a) Except as provided in subsections (a-1) and (a-2), a A
12participant who retires after June 30, 1967, and who has not
13received an initial increase under this Section before the
14effective date of this amendatory Act of 1991, shall, in
15January or July next following the first anniversary of
16retirement, whichever occurs first, and in the same month of
17each year thereafter, but in no event prior to age 60, have the
18amount of the originally granted retirement annuity increased
19as follows: for each year through 1971, 1 1/2%; for each year
20from 1972 through 1979, 2%; and for 1980 and each year
21thereafter, 3%. Annuitants who have received an initial
22increase under this subsection prior to the effective date of
23this amendatory Act of 1991 shall continue to receive their
24annual increases in the same month as the initial increase.
25    (a-1) Notwithstanding any other provision of this Article,

 

 

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1for a Tier I employee or Tier I retiree who made the election
2under paragraph (1) of subsection (a) or (a-5) of Section
32-110.3, the amount of each automatic annual increase in
4retirement annuity occurring on or after the effective date of
5that election shall be 3% or one-half of the annual unadjusted
6percentage increase, if any, in the Consumer Price Index-U for
7the 12 months ending with the preceding September, whichever is
8less, of the originally granted retirement annuity. For the
9purposes of this Section, "Consumer Price Index-U" means the
10index published by the Bureau of Labor Statistics of the United
11States Department of Labor that measures the average change in
12prices of goods and services purchased by all urban consumers,
13United States city average, all items, 1982-84 = 100.
14    (a-2) For a Tier I employee or Tier I retiree who made the
15election under paragraph (1) of subsection (a) or (a-5) of
16Section 2-110.3, the monthly retirement annuity shall first be
17subject to annual increases on the January 1 occurring on or
18next after the attainment of age 67 or the January 1 occurring
19on or next after the fifth anniversary of the annuity start
20date, whichever occurs earlier. If on the effective date of the
21election under paragraph (1) of subsection (a-5) of Section
222-110.3 a Tier I retiree has already received an annual
23increase under this Section but does not yet meet the new
24eligibility requirements of this subsection, the annual
25increases already received shall continue in force, but no
26additional annual increase shall be granted until the Tier I

 

 

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1retiree meets the new eligibility requirements.
2    (b) Beginning January 1, 1990, for eligible participants
3who remain in service after attaining 20 years of creditable
4service, the 3% increases provided under subsection (a) shall
5begin to accrue on the January 1 next following the date upon
6which the participant (1) attains age 55, or (2) attains 20
7years of creditable service, whichever occurs later, and shall
8continue to accrue while the participant remains in service;
9such increases shall become payable on January 1 or July 1,
10whichever occurs first, next following the first anniversary of
11retirement. For any person who has service credit in the System
12for the entire period from January 15, 1969 through December
1331, 1992, regardless of the date of termination of service, the
14reference to age 55 in clause (1) of this subsection (b) shall
15be deemed to mean age 50.
16    This subsection (b) does not apply to any person who first
17becomes a member of the System after August 8, 2003 (the
18effective date of Public Act 93-494) or (ii) has made the
19election under paragraph (1) of subsection (a) or (a-5) of
20Section 2-110.3; except that if on the effective date of the
21election under paragraph (1) of subsection (a-5) of Section
222-110.3 a Tier I retiree has already received a retirement
23annuity based on any annual increases under this subsection,
24those annual increases under this subsection shall continue in
25force this amendatory Act of the 93rd General Assembly.
26    (b-5) Notwithstanding any other provision of this Article,

 

 

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1a participant who first becomes a participant on or after
2January 1, 2011 (the effective date of Public Act 96-889)
3shall, in January or July next following the first anniversary
4of retirement, whichever occurs first, and in the same month of
5each year thereafter, but in no event prior to age 67, have the
6amount of the retirement annuity then being paid increased by
73% or the annual unadjusted percentage increase in the Consumer
8Price Index for All Urban Consumers as determined by the Public
9Pension Division of the Department of Insurance under
10subsection (a) of Section 2-108.1, whichever is less.
11    (c) The foregoing provisions relating to automatic
12increases are not applicable to a participant who retires
13before having made contributions (at the rate prescribed in
14Section 2-126) for automatic increases for less than the
15equivalent of one full year. However, in order to be eligible
16for the automatic increases, such a participant may make
17arrangements to pay to the system the amount required to bring
18the total contributions for the automatic increase to the
19equivalent of one year's contributions based upon his or her
20last salary.
21    (d) A participant who terminated service prior to July 1,
221967, with at least 14 years of service is entitled to an
23increase in retirement annuity beginning January, 1976, and to
24additional increases in January of each year thereafter.
25    The initial increase shall be 1 1/2% of the originally
26granted retirement annuity multiplied by the number of full

 

 

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1years that the annuitant was in receipt of such annuity prior
2to January 1, 1972, plus 2% of the originally granted
3retirement annuity for each year after that date. The
4subsequent annual increases shall be at the rate of 2% of the
5originally granted retirement annuity for each year through
61979 and at the rate of 3% for 1980 and thereafter.
7    (e) Beginning January 1, 1990, all automatic annual
8increases payable under this Section shall be calculated as a
9percentage of the total annuity payable at the time of the
10increase, including previous increases granted under this
11Article.
12(Source: P.A. 96-889, eff. 1-1-11; 96-1490, eff. 1-1-11.)
 
13    (40 ILCS 5/2-124)  (from Ch. 108 1/2, par. 2-124)
14    Sec. 2-124. Contributions by State.
15    (a) Except as otherwise provided in this Section, the The
16State shall make contributions to the System by appropriations
17of amounts which, together with the contributions of
18participants, interest earned on investments, and other income
19will meet the cost of maintaining and administering the System
20on a 90% funded basis in accordance with actuarial
21recommendations.
22    (b) The Board shall determine the amount of State
23contributions required for each fiscal year on the basis of the
24actuarial tables and other assumptions adopted by the Board and
25the prescribed rate of interest, using the formula in

 

 

09700HB3076sam002- 73 -LRB097 06263 JDS 70346 a

1subsection (c).
2    (c) Except as otherwise provided in this Section, for For
3State fiscal years 2012 through 2045, the minimum contribution
4to the System to be made by the State for each fiscal year
5shall be an amount determined by the System to be sufficient to
6bring the total assets of the System up to 90% of the total
7actuarial liabilities of the System by the end of State fiscal
8year 2045. In making these determinations, the required State
9contribution shall be calculated each year as a level
10percentage of payroll over the years remaining to and including
11fiscal year 2045 and shall be determined under the projected
12unit credit actuarial cost method.
13    For State fiscal years 1996 through 2005, the State
14contribution to the System, as a percentage of the applicable
15employee payroll, shall be increased in equal annual increments
16so that by State fiscal year 2011, the State is contributing at
17the rate required under this Section.
18    Notwithstanding any other provision of this Article, the
19total required State contribution for State fiscal year 2006 is
20$4,157,000.
21    Notwithstanding any other provision of this Article, the
22total required State contribution for State fiscal year 2007 is
23$5,220,300.
24    For each of State fiscal years 2008 through 2009, the State
25contribution to the System, as a percentage of the applicable
26employee payroll, shall be increased in equal annual increments

 

 

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1from the required State contribution for State fiscal year
22007, so that by State fiscal year 2011, the State is
3contributing at the rate otherwise required under this Section.
4    Notwithstanding any other provision of this Article, the
5total required State contribution for State fiscal year 2010 is
6$10,454,000 and shall be made from the proceeds of bonds sold
7in fiscal year 2010 pursuant to Section 7.2 of the General
8Obligation Bond Act, less (i) the pro rata share of bond sale
9expenses determined by the System's share of total bond
10proceeds, (ii) any amounts received from the General Revenue
11Fund in fiscal year 2010, and (iii) any reduction in bond
12proceeds due to the issuance of discounted bonds, if
13applicable.
14    Notwithstanding any other provision of this Article, the
15total required State contribution for State fiscal year 2011 is
16the amount recertified by the System on or before April 1, 2011
17pursuant to Section 2-134 and shall be made from the proceeds
18of bonds sold in fiscal year 2011 pursuant to Section 7.2 of
19the General Obligation Bond Act, less (i) the pro rata share of
20bond sale expenses determined by the System's share of total
21bond proceeds, (ii) any amounts received from the General
22Revenue Fund in fiscal year 2011, and (iii) any reduction in
23bond proceeds due to the issuance of discounted bonds, if
24applicable.
25    Except as otherwise provided in this Section, beginning
26Beginning in State fiscal year 2046, the minimum State

 

 

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1contribution for each fiscal year shall be the amount needed to
2maintain the total assets of the System at 90% of the total
3actuarial liabilities of the System.
4    Amounts received by the System pursuant to Section 25 of
5the Budget Stabilization Act or Section 8.12 of the State
6Finance Act in any fiscal year do not reduce and do not
7constitute payment of any portion of the minimum State
8contribution required under this Article in that fiscal year.
9Such amounts shall not reduce, and shall not be included in the
10calculation of, the required State contributions under this
11Article in any future year until the System has reached a
12funding ratio of at least 90%. A reference in this Article to
13the "required State contribution" or any substantially similar
14term does not include or apply to any amounts payable to the
15System under Section 25 of the Budget Stabilization Act.
16    Notwithstanding any other provision of this Section, the
17required State contribution for State fiscal year 2005 and for
18fiscal year 2008 and each fiscal year thereafter, as calculated
19under this Section and certified under Section 2-134, shall not
20exceed an amount equal to (i) the amount of the required State
21contribution that would have been calculated under this Section
22for that fiscal year if the System had not received any
23payments under subsection (d) of Section 7.2 of the General
24Obligation Bond Act, minus (ii) the portion of the State's
25total debt service payments for that fiscal year on the bonds
26issued in fiscal year 2003 for the purposes of that Section

 

 

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17.2, as determined and certified by the Comptroller, that is
2the same as the System's portion of the total moneys
3distributed under subsection (d) of Section 7.2 of the General
4Obligation Bond Act. In determining this maximum for State
5fiscal years 2008 through 2010, however, the amount referred to
6in item (i) shall be increased, as a percentage of the
7applicable employee payroll, in equal increments calculated
8from the sum of the required State contribution for State
9fiscal year 2007 plus the applicable portion of the State's
10total debt service payments for fiscal year 2007 on the bonds
11issued in fiscal year 2003 for the purposes of Section 7.2 of
12the General Obligation Bond Act, so that, by State fiscal year
132011, the State is contributing at the rate otherwise required
14under this Section.
15    (c-1) If at least 50% of Tier I employees making an
16election under Section 2-110.3 before June 1, 2013 choose the
17option under paragraph (1) of subsection (a) of that Section,
18then:
19        (1) In lieu of the State contributions required under
20    subsection (c), for State fiscal years 2014 through 2043
21    the minimum contribution to the System to be made by the
22    State for each fiscal year shall be an amount determined by
23    the System to be equal to the sum of (1) the State's
24    portion of the projected normal cost for that fiscal year,
25    plus (2) an amount sufficient to bring the total assets of
26    the System up to 100% of the total actuarial liabilities of

 

 

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1    the System by the end of State fiscal year 2043. In making
2    these determinations, the required State contribution
3    shall be calculated each year as a level percentage of
4    payroll over the years remaining to and including fiscal
5    year 2043 and shall be determined under the projected unit
6    credit actuarial cost method.
7        (2) Beginning in State fiscal year 2043, the minimum
8    State contribution for each fiscal year shall be the amount
9    needed to maintain the total assets of the System at 100%
10    of the total actuarial liabilities of the System.
11    (c-2) If less than 50% of Tier I employees making an
12election under Section 2-110.3 before June 1, 2013 choose the
13option under paragraph (1) of subsection (a) of that Section,
14then the annual required contribution to the System to be made
15by the State shall be determined under subsection (c) of this
16Section, instead of the annual required contribution otherwise
17specified in subsection (c-1) of this Section.
18    (d) For purposes of determining the required State
19contribution to the System, the value of the System's assets
20shall be equal to the actuarial value of the System's assets,
21which shall be calculated as follows:
22    As of June 30, 2008, the actuarial value of the System's
23assets shall be equal to the market value of the assets as of
24that date. In determining the actuarial value of the System's
25assets for fiscal years after June 30, 2008, any actuarial
26gains or losses from investment return incurred in a fiscal

 

 

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1year shall be recognized in equal annual amounts over the
25-year period following that fiscal year.
3    (e) For purposes of determining the required State
4contribution to the system for a particular year, the actuarial
5value of assets shall be assumed to earn a rate of return equal
6to the system's actuarially assumed rate of return.
7(Source: P.A. 95-950, eff. 8-29-08; 96-43, eff. 7-15-09;
896-1497, eff. 1-14-11; 96-1511, eff. 1-27-11; 96-1554, eff.
93-18-11; revised 4-6-11.)
 
10    (40 ILCS 5/2-134)   (from Ch. 108 1/2, par. 2-134)
11    Sec. 2-134. To certify required State contributions and
12submit vouchers.
13    (a) The Board shall certify to the Governor on or before
14December 15 of each year until December 15, 2011 the amount of
15the required State contribution to the System for the next
16fiscal year and shall specifically identify the System's
17projected State normal cost for that fiscal year. The
18certification shall include a copy of the actuarial
19recommendations upon which it is based and shall specifically
20identify the System's projected State normal cost for that
21fiscal year.
22    On or before November 1 of each year, beginning November 1,
232012, the Board shall submit to the State Actuary, the
24Governor, and the General Assembly a proposed certification of
25the amount of the required State contribution to the System for

 

 

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1the next fiscal year, along with all of the actuarial
2assumptions, calculations, and data upon which that proposed
3certification is based. On or before January 1 of each year
4beginning January 1, 2013, the State Actuary shall issue a
5preliminary report concerning the proposed certification and
6identifying, if necessary, recommended changes in actuarial
7assumptions that the Board must consider before finalizing its
8certification of the required State contributions. On or before
9January 15, 2013 and every January 15 thereafter, the Board
10shall certify to the Governor and the General Assembly the
11amount of the required State contribution for the next fiscal
12year. The Board's certification must note any deviations from
13the State Actuary's recommended changes, the reason or reasons
14for not following the State Actuary's recommended changes, and
15the fiscal impact of not following the State Actuary's
16recommended changes on the required State contribution.
17    On or before May 1, 2004, the Board shall recalculate and
18recertify to the Governor the amount of the required State
19contribution to the System for State fiscal year 2005, taking
20into account the amounts appropriated to and received by the
21System under subsection (d) of Section 7.2 of the General
22Obligation Bond Act.
23    On or before July 1, 2005, the Board shall recalculate and
24recertify to the Governor the amount of the required State
25contribution to the System for State fiscal year 2006, taking
26into account the changes in required State contributions made

 

 

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1by this amendatory Act of the 94th General Assembly.
2    On or before April 1, 2011, the Board shall recalculate and
3recertify to the Governor the amount of the required State
4contribution to the System for State fiscal year 2011, applying
5the changes made by Public Act 96-889 to the System's assets
6and liabilities as of June 30, 2009 as though Public Act 96-889
7was approved on that date.
8    (b) Beginning in State fiscal year 1996, on or as soon as
9possible after the 15th day of each month the Board shall
10submit vouchers for payment of State contributions to the
11System, in a total monthly amount of one-twelfth of the
12required annual State contribution certified under subsection
13(a). From the effective date of this amendatory Act of the 93rd
14General Assembly through June 30, 2004, the Board shall not
15submit vouchers for the remainder of fiscal year 2004 in excess
16of the fiscal year 2004 certified contribution amount
17determined under this Section after taking into consideration
18the transfer to the System under subsection (d) of Section
196z-61 of the State Finance Act. These vouchers shall be paid by
20the State Comptroller and Treasurer by warrants drawn on the
21funds appropriated to the System for that fiscal year. If in
22any month the amount remaining unexpended from all other
23appropriations to the System for the applicable fiscal year
24(including the appropriations to the System under Section 8.12
25of the State Finance Act and Section 1 of the State Pension
26Funds Continuing Appropriation Act) is less than the amount

 

 

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1lawfully vouchered under this Section, the difference shall be
2paid from the General Revenue Fund under the continuing
3appropriation authority provided in Section 1.1 of the State
4Pension Funds Continuing Appropriation Act.
5    (c) The full amount of any annual appropriation for the
6System for State fiscal year 1995 shall be transferred and made
7available to the System at the beginning of that fiscal year at
8the request of the Board. Any excess funds remaining at the end
9of any fiscal year from appropriations shall be retained by the
10System as a general reserve to meet the System's accrued
11liabilities.
12(Source: P.A. 95-331, eff. 8-21-07; 96-1497, eff. 1-14-11;
1396-1511, eff. 1-27-11.)
 
14    (40 ILCS 5/7-109)  (from Ch. 108 1/2, par. 7-109)
15    Sec. 7-109. Employee.
16    (1) "Employee" means any person who:
17        (a) 1. Receives earnings as payment for the performance
18        of personal services or official duties out of the
19        general fund of a municipality, or out of any special
20        fund or funds controlled by a municipality, or by an
21        instrumentality thereof, or a participating
22        instrumentality, including, in counties, the fees or
23        earnings of any county fee office; and
24            2. Under the usual common law rules applicable in
25        determining the employer-employee relationship, has

 

 

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1        the status of an employee with a municipality, or any
2        instrumentality thereof, or a participating
3        instrumentality, including aldermen, county
4        supervisors and other persons (excepting those
5        employed as independent contractors) who are paid
6        compensation, fees, allowances or other emolument for
7        official duties, and, in counties, the several county
8        fee offices.
9        (b) Serves as a township treasurer appointed under the
10    School Code, as heretofore or hereafter amended, and who
11    receives for such services regular compensation as
12    distinguished from per diem compensation, and any regular
13    employee in the office of any township treasurer whether or
14    not his earnings are paid from the income of the permanent
15    township fund or from funds subject to distribution to the
16    several school districts and parts of school districts as
17    provided in the School Code, or from both such sources; or
18    is the chief executive officer, chief educational officer,
19    chief fiscal officer, or other employee of a Financial
20    Oversight Panel established pursuant to Article 1H of the
21    School Code, other than a superintendent or certified
22    school business official, except that such person shall not
23    be treated as an employee under this Section if that person
24    has negotiated with the Financial Oversight Panel, in
25    conjunction with the school district, a contractual
26    agreement for exclusion from this Section.

 

 

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1        (c) Holds an elective office in a municipality,
2    instrumentality thereof or participating instrumentality.
3    (2) "Employee" does not include persons who:
4        (a) Are eligible for inclusion under any of the
5    following laws:
6            1. "An Act in relation to an Illinois State
7        Teachers' Pension and Retirement Fund", approved May
8        27, 1915, as amended;
9            2. Articles 15 and 16 of this Code.
10        However, such persons shall be included as employees to
11    the extent of earnings that are not eligible for inclusion
12    under the foregoing laws for services not of an
13    instructional nature of any kind.
14        However, any member of the armed forces who is employed
15    as a teacher of subjects in the Reserve Officers Training
16    Corps of any school and who is not certified under the law
17    governing the certification of teachers shall be included
18    as an employee.
19        (b) Are designated by the governing body of a
20    municipality in which a pension fund is required by law to
21    be established for policemen or firemen, respectively, as
22    performing police or fire protection duties, except that
23    when such persons are the heads of the police or fire
24    department and are not eligible to be included within any
25    such pension fund, they shall be included within this
26    Article; provided, that such persons shall not be excluded

 

 

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1    to the extent of concurrent service and earnings not
2    designated as being for police or fire protection duties.
3    However, (i) any head of a police department who was a
4    participant under this Article immediately before October
5    1, 1977 and did not elect, under Section 3-109 of this Act,
6    to participate in a police pension fund shall be an
7    "employee", and (ii) any chief of police who elects to
8    participate in this Fund under Section 3-109.1 of this
9    Code, regardless of whether such person continues to be
10    employed as chief of police or is employed in some other
11    rank or capacity within the police department, shall be an
12    employee under this Article for so long as such person is
13    employed to perform police duties by a participating
14    municipality and has not lawfully rescinded that election.
15        (c) After August 26, 2011 (the effective date of Public
16    Act 97-609) this amendatory Act of the 97th General
17    Assembly, are contributors to or eligible to contribute to
18    a Taft-Hartley pension plan established on or before June
19    1, 2011 and are employees of a theatre, arena, or
20    convention center that is located in a municipality located
21    in a county with a population greater than 5,000,000, and
22    to which the participating municipality is required to
23    contribute as the person's employer based on earnings from
24    the municipality. Nothing in this paragraph shall affect
25    service credit or creditable service for any period of
26    service prior to August 26, 2011 the effective date of this

 

 

09700HB3076sam002- 85 -LRB097 06263 JDS 70346 a

1    amendatory Act of the 97th General Assembly, and this
2    paragraph shall not apply to individuals who are
3    participating in the Fund prior to August 26, 2011 the
4    effective date of this amendatory Act of the 97th General
5    Assembly.
6        (d) Become an employee of any of the following
7    participating instrumentalities on or after the effective
8    date of this amendatory Act of the 97th General Assembly:
9    the Illinois Municipal League; the Illinois Association of
10    Park Districts; the Illinois Supervisors, County
11    Commissioners and Superintendents of Highways Association;
12    the Township School District Trustees; the United Counties
13    Council; or the Will County Governmental League.
14    (3) All persons, including, without limitation, public
15defenders and probation officers, who receive earnings from
16general or special funds of a county for performance of
17personal services or official duties within the territorial
18limits of the county, are employees of the county (unless
19excluded by subsection (2) of this Section) notwithstanding
20that they may be appointed by and are subject to the direction
21of a person or persons other than a county board or a county
22officer. It is hereby established that an employer-employee
23relationship under the usual common law rules exists between
24such employees and the county paying their salaries by reason
25of the fact that the county boards fix their rates of
26compensation, appropriate funds for payment of their earnings

 

 

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1and otherwise exercise control over them. This finding and this
2amendatory Act shall apply to all such employees from the date
3of appointment whether such date is prior to or after the
4effective date of this amendatory Act and is intended to
5clarify existing law pertaining to their status as
6participating employees in the Fund.
7(Source: P.A. 97-429, eff. 8-16-11; 97-609, eff. 8-26-11;
8revised 9-28-11.)
 
9    (40 ILCS 5/14-106)  (from Ch. 108 1/2, par. 14-106)
10    Sec. 14-106. Membership service credit.
11    (a) After January 1, 1944, all service of a member since he
12last became a member with respect to which contributions are
13made shall count as membership service; provided, that for
14service on and after July 1, 1950, 12 months of service shall
15constitute a year of membership service, the completion of 15
16days or more of service during any month shall constitute 1
17month of membership service, 8 to 15 days shall constitute 1/2
18month of membership service and less than 8 days shall
19constitute 1/4 month of membership service. The payroll record
20of each department shall constitute conclusive evidence of the
21record of service rendered by a member.
22    (b) For a member who is employed and paid on an
23academic-year basis rather than on a 12-month annual basis,
24employment for a full academic year shall constitute a full
25year of membership service, except that the member shall not

 

 

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1receive more than one year of membership service credit (plus
2any additional service credit granted for unused sick leave)
3for service during any 12-month period. This subsection (b)
4applies to all such service for which the member has not begun
5to receive a retirement annuity before January 1, 2001.
6    (c) A member who first participated in this System before
7the effective date of this amendatory Act of the 97th General
8Assembly shall be entitled to additional service credit, under
9rules prescribed by the Board, for accumulated unused sick
10leave credited to his account in the last Department on the
11date of withdrawal from service or for any period for which he
12would have been eligible to receive benefits under a sick pay
13plan authorized by law, if he had suffered a sickness or
14accident on the date of withdrawal from service. It shall be
15the responsibility of the last Department to certify to the
16Board the length of time salary or benefits would have been
17paid to the member based upon the accumulated unused sick leave
18or the applicable sick pay plan if he had become entitled
19thereto because of sickness on the date that his status as an
20employee terminated. This period of service credit granted
21under this paragraph shall not be considered in determining the
22date the retirement annuity is to begin, or final average
23compensation.
24    Service credit is not available for unused sick leave
25accumulated by a person who first participates in this System
26on or after the effective date of this amendatory Act of the

 

 

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197th General Assembly.
2(Source: P.A. 92-14, eff. 6-28-01.)
 
3    (40 ILCS 5/14-135.08)  (from Ch. 108 1/2, par. 14-135.08)
4    Sec. 14-135.08. To certify required State contributions.
5    (a) To certify to the Governor and to each department, on
6or before November 15 of each year until November 15, 2011, the
7required rate for State contributions to the System for the
8next State fiscal year, as determined under subsection (b) of
9Section 14-131. The certification to the Governor under this
10subsection (a) shall include a copy of the actuarial
11recommendations upon which the rate is based and shall
12specifically identify the System's projected State normal cost
13for that fiscal year.
14    (a-5) On or before November 1 of each year, beginning
15November 1, 2012, the Board shall submit to the State Actuary,
16the Governor, and the General Assembly a proposed certification
17of the amount of the required State contribution to the System
18for the next fiscal year, along with all of the actuarial
19assumptions, calculations, and data upon which that proposed
20certification is based. On or before January 1 of each year
21beginning January 1, 2013, the State Actuary shall issue a
22preliminary report concerning the proposed certification and
23identifying, if necessary, recommended changes in actuarial
24assumptions that the Board must consider before finalizing its
25certification of the required State contributions. On or before

 

 

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1January 15, 2013 and each January 15 thereafter, the Board
2shall certify to the Governor and the General Assembly the
3amount of the required State contribution for the next fiscal
4year. The Board's certification must note any deviations from
5the State Actuary's recommended changes, the reason or reasons
6for not following the State Actuary's recommended changes, and
7the fiscal impact of not following the State Actuary's
8recommended changes on the required State contribution.
9    (b) The certifications under subsections (a) and (a-5)
10certification shall include an additional amount necessary to
11pay all principal of and interest on those general obligation
12bonds due the next fiscal year authorized by Section 7.2(a) of
13the General Obligation Bond Act and issued to provide the
14proceeds deposited by the State with the System in July 2003,
15representing deposits other than amounts reserved under
16Section 7.2(c) of the General Obligation Bond Act. For State
17fiscal year 2005, the Board shall make a supplemental
18certification of the additional amount necessary to pay all
19principal of and interest on those general obligation bonds due
20in State fiscal years 2004 and 2005 authorized by Section
217.2(a) of the General Obligation Bond Act and issued to provide
22the proceeds deposited by the State with the System in July
232003, representing deposits other than amounts reserved under
24Section 7.2(c) of the General Obligation Bond Act, as soon as
25practical after the effective date of this amendatory Act of
26the 93rd General Assembly.

 

 

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1    On or before May 1, 2004, the Board shall recalculate and
2recertify to the Governor and to each department the amount of
3the required State contribution to the System and the required
4rates for State contributions to the System for State fiscal
5year 2005, taking into account the amounts appropriated to and
6received by the System under subsection (d) of Section 7.2 of
7the General Obligation Bond Act.
8    On or before July 1, 2005, the Board shall recalculate and
9recertify to the Governor and to each department the amount of
10the required State contribution to the System and the required
11rates for State contributions to the System for State fiscal
12year 2006, taking into account the changes in required State
13contributions made by this amendatory Act of the 94th General
14Assembly.
15    On or before April 1, 2011, the Board shall recalculate and
16recertify to the Governor and to each department the amount of
17the required State contribution to the System for State fiscal
18year 2011, applying the changes made by Public Act 96-889 to
19the System's assets and liabilities as of June 30, 2009 as
20though Public Act 96-889 was approved on that date.
21(Source: P.A. 96-1497, eff. 1-14-11; 96-1511, eff. 1-27-11.)
 
22    (40 ILCS 5/15-107)  (from Ch. 108 1/2, par. 15-107)
23    Sec. 15-107. Employee.
24    (a) "Employee" means any member of the educational,
25administrative, secretarial, clerical, mechanical, labor or

 

 

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1other staff of an employer whose employment is permanent and
2continuous or who is employed in a position in which services
3are expected to be rendered on a continuous basis for at least
44 months or one academic term, whichever is less, who (A)
5receives payment for personal services on a warrant issued
6pursuant to a payroll voucher certified by an employer and
7drawn by the State Comptroller upon the State Treasurer or by
8an employer upon trust, federal or other funds, or (B) is on a
9leave of absence without pay. Employment which is irregular,
10intermittent or temporary shall not be considered continuous
11for purposes of this paragraph.
12    However, a person is not an "employee" if he or she:
13        (1) is a student enrolled in and regularly attending
14    classes in a college or university which is an employer,
15    and is employed on a temporary basis at less than full
16    time;
17        (2) is currently receiving a retirement annuity or a
18    disability retirement annuity under Section 15-153.2 from
19    this System;
20        (3) is on a military leave of absence;
21        (4) is eligible to participate in the Federal Civil
22    Service Retirement System and is currently making
23    contributions to that system based upon earnings paid by an
24    employer;
25        (5) is on leave of absence without pay for more than 60
26    days immediately following termination of disability

 

 

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1    benefits under this Article;
2        (6) is hired after June 30, 1979 as a public service
3    employment program participant under the Federal
4    Comprehensive Employment and Training Act and receives
5    earnings in whole or in part from funds provided under that
6    Act; or
7        (7) is employed on or after July 1, 1991 to perform
8    services that are excluded by subdivision (a)(7)(f) or
9    (a)(19) of Section 210 of the federal Social Security Act
10    from the definition of employment given in that Section (42
11    U.S.C. 410).
12    (b) Any employer may, by filing a written notice with the
13board, exclude from the definition of "employee" all persons
14employed pursuant to a federally funded contract entered into
15after July 1, 1982 with a federal military department in a
16program providing training in military courses to federal
17military personnel on a military site owned by the United
18States Government, if this exclusion is not prohibited by the
19federally funded contract or federal laws or rules governing
20the administration of the contract.
21    (c) Any person appointed by the Governor under the Civil
22Administrative Code of the State is an employee, if he or she
23is a participant in this system on the effective date of the
24appointment.
25    (d) A participant on lay-off status under civil service
26rules is considered an employee for not more than 120 days from

 

 

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1the date of the lay-off.
2    (e) A participant is considered an employee during (1) the
3first 60 days of disability leave, (2) the period, not to
4exceed one year, in which his or her eligibility for disability
5benefits is being considered by the board or reviewed by the
6courts, and (3) the period he or she receives disability
7benefits under the provisions of Section 15-152, workers'
8compensation or occupational disease benefits, or disability
9income under an insurance contract financed wholly or partially
10by the employer.
11    (f) Absences without pay, other than formal leaves of
12absence, of less than 30 calendar days, are not considered as
13an interruption of a person's status as an employee. If such
14absences during any period of 12 months exceed 30 work days,
15the employee status of the person is considered as interrupted
16as of the 31st work day.
17    (g) A staff member whose employment contract requires
18services during an academic term is to be considered an
19employee during the summer and other vacation periods, unless
20he or she declines an employment contract for the succeeding
21academic term or his or her employment status is otherwise
22terminated, and he or she receives no earnings during these
23periods.
24    (h) An individual who was a participating employee employed
25in the fire department of the University of Illinois's
26Champaign-Urbana campus immediately prior to the elimination

 

 

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1of that fire department and who immediately after the
2elimination of that fire department became employed by the fire
3department of the City of Urbana or the City of Champaign shall
4continue to be considered as an employee for purposes of this
5Article for so long as the individual remains employed as a
6firefighter by the City of Urbana or the City of Champaign. The
7individual shall cease to be considered an employee under this
8subsection (h) upon the first termination of the individual's
9employment as a firefighter by the City of Urbana or the City
10of Champaign.
11    (i) An individual who is employed on a full-time basis as
12an officer or employee of a statewide teacher organization that
13serves System participants or an officer of a national teacher
14organization that serves System participants may participate
15in the System and shall be deemed an employee, provided that
16(1) the individual has previously earned creditable service
17under this Article, (2) the individual files with the System an
18irrevocable election to become a participant before the
19effective date of this amendatory Act of the 97th General
20Assembly, (3) the individual does not receive credit for that
21employment under any other Article of this Code, and (4) the
22individual first became a full-time employee of the teacher
23organization and becomes a participant before the effective
24date of this amendatory Act of the 97th General Assembly. An
25employee under this subsection (i) is responsible for paying to
26the System both (A) employee contributions based on the actual

 

 

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1compensation received for service with the teacher
2organization and (B) employer contributions equal to the normal
3costs (as defined in Section 15-155) resulting from that
4service; all or any part of these contributions may be paid on
5the employee's behalf or picked up for tax purposes (if
6authorized under federal law) by the teacher organization.
7    A person who is an employee as defined in this subsection
8(i) may establish service credit for similar employment prior
9to becoming an employee under this subsection by paying to the
10System for that employment the contributions specified in this
11subsection, plus interest at the effective rate from the date
12of service to the date of payment. However, credit shall not be
13granted under this subsection for any such prior employment for
14which the applicant received credit under any other provision
15of this Code, or during which the applicant was on a leave of
16absence under Section 15-113.2.
17    (j) A person employed by the State Board of Higher
18Education in a position with the Illinois Century Network as of
19June 30, 2004 shall be considered to be an employee for so long
20as he or she remains continuously employed after that date by
21the Department of Central Management Services in a position
22with the Illinois Century Network, the Bureau of Communication
23and Computer Services, or, if applicable, any successor bureau
24and meets the requirements of subsection (a).
25    (k) In the case of doubt as to whether any person is an
26employee within the meaning of this Section, the decision of

 

 

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1the Board shall be final.
2(Source: P.A. 97-651, eff. 1-5-12.)
 
3    (40 ILCS 5/15-107.1 new)
4    Sec. 15-107.1. Tier I employee. "Tier I employee": An
5employee under this Article, other than a participant in the
6self-managed plan under Section 15-158.2, who first became a
7member or participant before January 1, 2011 under any
8reciprocal retirement system or pension fund established under
9this Code other than a retirement system or pension fund
10established under Article 2, 3, 4, 5, 6, or 18 of this Code.
 
11    (40 ILCS 5/15-107.2 new)
12    Sec. 15-107.2. Tier I retiree. "Tier I retiree": A former
13Tier I employee who is receiving a retirement annuity.
14    A person does not become a Tier I retiree by virtue of
15receiving a reversionary, survivors, beneficiary, or
16disability annuity.
 
17    (40 ILCS 5/15-111)  (from Ch. 108 1/2, par. 15-111)
18    Sec. 15-111. Earnings. "Earnings": An amount paid for
19personal services equal to the sum of the basic compensation
20plus extra compensation for summer teaching, overtime or other
21extra service. For periods for which an employee receives
22service credit under subsection (c) of Section 15-113.1 or
23Section 15-113.2, earnings are equal to the basic compensation

 

 

09700HB3076sam002- 97 -LRB097 06263 JDS 70346 a

1on which contributions are paid by the employee during such
2periods. Compensation for employment which is irregular,
3intermittent and temporary shall not be considered earnings,
4unless the participant is also receiving earnings from the
5employer as an employee under Section 15-107.
6    With respect to transition pay paid by the University of
7Illinois to a person who was a participating employee employed
8in the fire department of the University of Illinois's
9Champaign-Urbana campus immediately prior to the elimination
10of that fire department:
11        (1) "Earnings" includes transition pay paid to the
12    employee on or after the effective date of this amendatory
13    Act of the 91st General Assembly.
14        (2) "Earnings" includes transition pay paid to the
15    employee before the effective date of this amendatory Act
16    of the 91st General Assembly only if (i) employee
17    contributions under Section 15-157 have been withheld from
18    that transition pay or (ii) the employee pays to the System
19    before January 1, 2001 an amount representing employee
20    contributions under Section 15-157 on that transition pay.
21    Employee contributions under item (ii) may be paid in a
22    lump sum, by withholding from additional transition pay
23    accruing before January 1, 2001, or in any other manner
24    approved by the System. Upon payment of the employee
25    contributions on transition pay, the corresponding
26    employer contributions become an obligation of the State.

 

 

09700HB3076sam002- 98 -LRB097 06263 JDS 70346 a

1    Notwithstanding any other provision of this Section,
2"earnings" does not include any future increase in income
3offered by an employer under this Article pursuant to the
4requirements of subsection (c) of Section 15-134.6 that is
5accepted by a Tier I employee, or a Tier I retiree returning to
6active service, who has made an election under paragraph (2) of
7subsection (a) or (a-5) of Section 15-134.6.
8(Source: P.A. 91-887, eff. 7-6-00.)
 
9    (40 ILCS 5/15-111.1 new)
10    Sec. 15-111.1. Future increase in income. "Future increase
11in income": Any increase in income in any form offered by an
12employer to an employee under this Article after June 30, 2013
13that would qualify as "earnings", as defined under Section
1415-111, but for the fact that the employer offered the increase
15in income to the employee on the condition that it not qualify
16as earnings and the employee accepted the increase in income
17subject to that condition. The term "future increase in income"
18does not include an increase in income in any form that is paid
19to a Tier I employee under an employment contract or collective
20bargaining agreement that is in effect on the effective date of
21this Section but does include an increase in income in any form
22pursuant to an extension, amendment, or renewal of any such
23employment contract or collective bargaining agreement on or
24after the effective date of this amendatory Act of the 97th
25General Assembly.
 

 

 

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1    (40 ILCS 5/15-113.2)  (from Ch. 108 1/2, par. 15-113.2)
2    Sec. 15-113.2. Service for leaves of absence. "Service for
3leaves of absence" includes those periods of leaves of absence
4at less than 50% pay, except military leave and periods of
5disability leave in excess of 60 days, for which the employee
6pays the contributions required under Section 15-157 in
7accordance with rules prescribed by the board based upon the
8employee's basic compensation on the date the leave begins, or
9in the case of leave for service with a teacher organization,
10based upon the actual compensation received by the employee for
11such service after January 26, 1988, if the employee so elects
12within 30 days of that date or the date the leave for service
13with a teacher organization begins, whichever is later;
14provided that the employee (1) returns to employment covered by
15this system at the expiration of the leave, or within 30 days
16after the termination of a disability which occurs during the
17leave and continues this employment at a percentage of time
18equal to or greater than the percentage of time immediately
19preceding the leave of absence for at least 8 consecutive
20months or a period equal to the period of the leave, whichever
21is less, or (2) is precluded from meeting the foregoing
22conditions because of disability or death. If service credit is
23denied because the employee fails to meet these conditions, the
24contributions covering the leave of absence shall be refunded
25without interest. The return to employment condition does not

 

 

09700HB3076sam002- 100 -LRB097 06263 JDS 70346 a

1apply if the leave of absence is for service with a teacher
2organization.
3    Service credit provided under this Section shall not exceed
43 years in any period of 10 years, unless the employee is on
5special leave granted by the employer for service with a
6teacher organization. Commencing with the fourth year in any
7period of 10 years, a participant on such special leave is also
8required to pay employer contributions equal to the normal cost
9as defined in Section 15-155, based upon the employee's basic
10compensation on the date the leave begins, or based upon the
11actual compensation received by the employee for service with a
12teacher organization if the employee has so elected.
13    Notwithstanding any other provision of this Article, a
14participant shall not be eligible to make contributions or
15receive service credit for a leave of absence for service with
16a teacher organization if that leave of absence for service
17with a teacher organization begins on or after the effective
18date of this amendatory Act of the 97th General Assembly.
19(Source: P.A. 90-65, eff. 7-7-97; 90-511, eff. 8-22-97.)
 
20    (40 ILCS 5/15-113.6)  (from Ch. 108 1/2, par. 15-113.6)
21    Sec. 15-113.6. Service for employment in public schools.
22"Service for employment in public schools": Includes those
23periods not exceeding the lesser of 10 years or 2/3 of the
24service granted under other Sections of this Article dealing
25with service credit, during which a person who entered the

 

 

09700HB3076sam002- 101 -LRB097 06263 JDS 70346 a

1system after September 1, 1974 was employed full time by a
2public common school, public college and public university, or
3by an agency or instrumentality of any of the foregoing, of any
4state, territory, dependency or possession of the United States
5of America, including the Philippine Islands, or a school
6operated by or under the auspices of any agency or department
7of any other state, if the person (1) cannot qualify for a
8retirement pension or other benefit based upon employer
9contributions from another retirement system, exclusive of
10federal social security, based in whole or in part upon this
11employment, and (2) pays the lesser of (A) an amount equal to
128% of his or her annual basic compensation on the date of
13becoming a participating employee subsequent to this service
14multiplied by the number of years of such service, together
15with compound interest from the date participation begins to
16the date payment is received by the board at the rate of 6% per
17annum through August 31, 1982, and at the effective rates after
18that date, and (B) 50% of the actuarial value of the increase
19in the retirement annuity provided by this service, and (3)
20contributes for at least 5 years subsequent to this employment
21to one or more of the following systems: the State Universities
22Retirement System, the Teachers' Retirement System of the State
23of Illinois, and the Public School Teachers' Pension and
24Retirement Fund of Chicago.
25    The service granted under this Section shall not be
26considered in determining whether the person has the minimum

 

 

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1number of 8 years of service required to qualify for a
2retirement annuity at age 55 or the 5 years of service required
3to qualify for a retirement annuity at age 62, as provided in
4Section 15-135, or the 10 years required by subsection (c) of
5Section 1-160 for a person subject to that Section who first
6becomes a participant on or after January 1, 2011. The maximum
7allowable service of 10 years for this governmental employment
8shall be reduced by the service credit which is validated under
9paragraph (2) of subsection (b) of Section 16-127 and paragraph
101 of Section 17-133.
11(Source: P.A. 95-83, eff. 8-13-07; 96-1490, eff. 1-1-11.)
 
12    (40 ILCS 5/15-134.5)
13    Sec. 15-134.5. Retirement program elections.
14    (a) All participating employees are participants under the
15traditional benefit package prior to January 1, 1998.
16    Effective as of the date that an employer elects, as
17described in Section 15-158.2, to offer to its employees the
18portable benefit package and the self-managed plan as
19alternatives to the traditional benefit package but not later
20than the effective date of this amendatory Act of the 97th
21General Assembly, each of that employer's eligible employees
22(as defined in subsection (b)) shall be given the choice to
23elect which retirement program he or she wishes to participate
24in with respect to all periods of covered employment occurring
25on and after the effective date of the employee's election. The

 

 

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1retirement program election made by an eligible employee must
2be made in writing, in the manner prescribed by the System, and
3within the time period described in subsection (d) or (d-1).
4    The employee election authorized by this Section is a
5one-time, irrevocable election. If an employee terminates
6employment after making the election provided under this
7subsection (a), then upon his or her subsequent re-employment
8with an employer the original election shall automatically
9apply to him or her, provided that the employer is then a
10participating employer as described in Section 15-158.2.
11    An eligible employee who fails to make this election shall,
12by default, participate in the traditional benefit package.
13    (b) "Eligible employee" means an employee (as defined in
14Section 15-107) who is either a currently eligible employee or
15a newly eligible employee. For purposes of this Section, a
16"currently eligible employee" is an employee who is employed by
17an employer on the effective date on which the employer offers
18to its employees the portable benefit package and the
19self-managed plan as alternatives to the traditional benefit
20package but not on or after the effective date of this
21amendatory Act of the 97th General Assembly. A "newly eligible
22employee" is an employee who first becomes employed by an
23employer after the effective date on which the employer offers
24its employees the portable benefit package and the self-managed
25plan as alternatives to the traditional benefit package but not
26on or after the effective date of this amendatory Act of the

 

 

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197th General Assembly. A newly eligible employee participates
2in the traditional benefit package until he or she makes an
3election to participate in the portable benefit package or the
4self-managed plan. If an employee does not elect to participate
5in the portable benefit package or the self-managed plan, he or
6she shall continue to participate in the traditional benefit
7package by default.
8    (c) An eligible employee who at the time he or she is first
9eligible to make the election described in subsection (a) does
10not have sufficient age and service to qualify for a retirement
11annuity under Section 15-135 may elect to participate in the
12traditional benefit package, the portable benefit package, or
13the self-managed plan. An eligible employee who has sufficient
14age and service to qualify for a retirement annuity under
15Section 15-135 at the time he or she is first eligible to make
16the election described in subsection (a) may elect to
17participate in the traditional benefit package or the portable
18benefit package, but may not elect to participate in the
19self-managed plan.
20    (d) A currently eligible employee must make this election
21within one year after the effective date of the employer's
22adoption of the self-managed plan.
23    A newly eligible employee must make this election within 6
24months after the date on which the System receives the report
25of status certification from the employer. If an employee
26elects to participate in the self-managed plan, no employer

 

 

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1contributions shall be remitted to the self-managed plan when
2the employee's account balance transfer is made. Employer
3contributions to the self-managed plan shall commence as of the
4first pay period that begins after the System receives the
5employee's election.
6    (d-1) A newly eligible employee who, prior to the effective
7date of this amendatory Act of the 91st General Assembly, fails
8to make the election within the period provided under
9subsection (d) and participates by default in the traditional
10benefit package may make a late election to participate in the
11portable benefit package or the self-managed plan instead of
12the traditional benefit package at any time within 6 months
13after the effective date of this amendatory Act of the 91st
14General Assembly.
15    (e) If a currently eligible employee elects the portable
16benefit package, that election shall not become effective until
17the one-year anniversary of the date on which the election is
18filed with the System, provided the employee remains
19continuously employed by the employer throughout the one-year
20waiting period, and any benefits payable to or on account of
21the employee before such one-year waiting period has ended
22shall not be determined under the provisions applicable to the
23portable benefit package but shall instead be determined in
24accordance with the traditional benefit package. If a currently
25eligible employee who has elected the portable benefit package
26terminates employment covered by the System before the one-year

 

 

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1waiting period has ended, then no benefits shall be determined
2under the portable benefit package provisions while he or she
3is inactive in the System and upon re-employment with an
4employer covered by the System he or she shall begin a new
5one-year waiting period before the provisions of the portable
6benefit package become effective.
7    (f) An eligible employee shall be provided with written
8information prepared or prescribed by the System which
9describes the employee's retirement program choices. The
10eligible employee shall be offered an opportunity to receive
11counseling from the System prior to making his or her election.
12This counseling may consist of videotaped materials, group
13presentations, individual consultation with an employee or
14authorized representative of the System in person or by
15telephone or other electronic means, or any combination of
16these methods.
17(Source: P.A. 90-766, eff. 8-14-98; 91-887, eff. 7-6-00.)
 
18    (40 ILCS 5/15-134.6 new)
19    Sec. 15-134.6. Election by Tier I employees and Tier I
20retirees.
21    (a) Each Tier I employee shall make an irrevocable election
22either:
23        (1) to agree to the following:
24            (i) to have the amount of the automatic annual
25        increases in his or her retirement annuity that are

 

 

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1        otherwise provided for in this Article calculated,
2        instead, as provided in subsection (d-1) of Section
3        15-136; and
4            (ii) to have his or her eligibility for automatic
5        annual increases in retirement annuity postponed as
6        provided in subsection (d-2) of Section 15-136; or
7        (2) to not agree to items (i) and (ii) as set forth in
8    paragraph (1) of this subsection.
9    The election required under this subsection (a) shall be
10made by each Tier I employee no earlier than January 1, 2013
11and no later than May 31, 2013, except that:
12        (i) a person who becomes a Tier I employee under this
13    Article after January 1, 2013 must make the election under
14    this subsection (a) within 60 days after becoming a Tier I
15    employee;
16        (ii) a person who returns to active service as a Tier I
17    employee under this Article after January 1, 2013 and has
18    not yet made an election under this Section must make the
19    election under this subsection (a) within 60 days after
20    returning to active service as a Tier I employee; and
21        (iii) a person who made the election under subsection
22    (a-5) as a Tier I retiree remains bound by that election
23    and shall not make a later election under this subsection
24    (a).
25    If a Tier I employee fails for any reason to make a
26required election under this subsection within the time

 

 

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1specified, then the employee shall be deemed to have made the
2election under paragraph (2) of this subsection.
3    (a-5) Each Tier I retiree shall make an irrevocable
4election either:
5        (1) to agree to the following:
6            (i) to have the amount of the automatic annual
7        increases in his or her retirement annuity that are
8        otherwise provided for in this Article calculated,
9        instead, as provided in subsection (d-1) of Section
10        15-136; and
11            (ii) to have his or her eligibility for automatic
12        annual increases in retirement annuity postponed as
13        provided in subsection (d-2) of Section 15-136; or
14        (2) to not agree to items (i) and (ii) as set forth in
15    paragraph (1) of this subsection.
16    The election required under this subsection (a-5) shall be
17made by each Tier I retiree no earlier than January 1, 2013 and
18no later than May 31, 2013, except that:
19        (i) a person who becomes a Tier I retiree under this
20    Article on or after January 1, 2013 must make the election
21    under this subsection (a-5) within 60 days after becoming a
22    Tier I retiree; and
23        (ii) a person who made the election under subsection
24    (a) as a Tier I employee remains bound by that election and
25    shall not make a later election under this subsection
26    (a-5).

 

 

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1    If a Tier I retiree fails for any reason to make a required
2election under this subsection within the time specified, then
3the Tier I retiree shall be deemed to have made the election
4under paragraph (2) of this subsection.
5    (a-10) All elections under subsection (a) or (a-5) that are
6made or deemed to be made before June 1, 2013 shall take effect
7on July 1, 2013. Elections that are made or deemed to be made
8on or after June 1, 2013 shall take effect on the first day of
9the month following the month in which the election is made or
10deemed to be made.
11    (b) As adequate and legal consideration provided under this
12amendatory Act of the 97th General Assembly for making the
13election under paragraph (1) of subsection (a) of this Section,
14any future increases in income offered by an employer under
15this Article to a Tier I employee who has made the election
16under paragraph (1) of subsection (a) of this Section shall be
17offered expressly and irrevocably as constituting earnings
18under Section 15-111. In addition, a Tier I employee who has
19made the election under paragraph (1) of subsection (a) of this
20Section shall receive the right to also participate in the
21optional cash balance plan established under Section 1-162.
22    As adequate and legal consideration provided under this
23amendatory Act of the 97th General Assembly for making the
24election under paragraph (1) of subsection (a-5) of this
25Section, any future increases in income offered by an employer
26under this Article to a Tier I retiree who returns to active

 

 

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1service after having made the election under paragraph (1) of
2subsection (a-5) of this Section shall be offered expressly and
3irrevocably as constituting earnings under Section 15-111. In
4addition, a Tier I retiree who returns to active service and
5has made the election under paragraph (1) of subsection (a) of
6this Section shall receive the right to also participate in the
7optional cash balance plan established under Section 1-162.
8    (c) A Tier I employee who makes the election under
9paragraph (2) of subsection (a) of this Section shall not be
10subject to items (i) and (ii) set forth in paragraph (1) of
11subsection (a) of this Section. However, any future increases
12in income offered by an employer under this Article to a Tier I
13employee who has made the election under paragraph (2) of
14subsection (a) of this Section shall be offered expressly and
15irrevocably as not constituting earnings under Section 15-111,
16and the employee may not accept any future increase in income
17that is offered in violation of this requirement. In addition,
18a Tier I employee who has made the election under paragraph (2)
19of subsection (a) of this Section shall not receive the right
20to participate in the optional cash balance plan established
21under Section 1-162.
22    A Tier I retiree who makes the election under paragraph (2)
23of subsection (a-5) of this Section shall not be subject to
24items (i) and (ii) set forth in paragraph (1) of subsection
25(a-5) of this Section. However, any future increases in income
26offered by an employer under this Article to a Tier I retiree

 

 

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1who returns to active service and has made the election under
2paragraph (2) of subsection (a-5) of this Section shall be
3offered expressly and irrevocably as not constituting earnings
4under Section 15-111, and the employee may not accept any
5future increase in income that is offered in violation of this
6requirement. In addition, a Tier I retiree who returns to
7active service and has made the election under paragraph (2) of
8subsection (a) of this Section shall not receive the right to
9participate in the optional cash balance plan established under
10Section 1-162.
11    (d) The System shall make a good faith effort to contact
12each Tier I employee and Tier I retiree subject to this
13Section. The System shall mail information describing the
14required election to each Tier I employee and Tier I retiree by
15United States Postal Service mail to his or her last known
16address on file with the System. If the Tier I employee or Tier
17I retiree is not responsive to other means of contact, it is
18sufficient for the System to publish the details of any
19required elections on its website or to publish those details
20in a regularly published newsletter or other existing public
21forum.
22    Tier I employees and Tier I retirees who are subject to
23this Section shall be provided with an election packet
24containing information regarding their options, as well as the
25forms necessary to make the required election. Upon request,
26the System shall offer Tier I employees and Tier I retirees an

 

 

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1opportunity to receive information from the System before
2making the required election. The information may consist of
3video materials, group presentations, individual consultation
4with a member or authorized representative of the System in
5person or by telephone or other electronic means, or any
6combination of those methods. The System shall not provide
7advice or counseling with respect to which election a Tier I
8employee or Tier I retiree should make or specific to the legal
9or tax circumstances of or consequences to the Tier I employee
10or Tier I retiree.
11    The System shall inform Tier I employees and Tier I
12retirees in the election packet required under this subsection
13that the Tier I employee or Tier I retiree may also wish to
14obtain information and counsel relating to the election
15required under this Section from any other available source,
16including but not limited to labor organizations and private
17counsel.
18    In no event shall the System, its staff, or the Board be
19held liable for any information given to a member, beneficiary,
20or annuitant regarding the elections under this Section. The
21System shall coordinate with the Illinois Department of Central
22Management Services and each other retirement system
23administering an election in accordance with this amendatory
24Act of the 97th General Assembly to provide information
25concerning the impact of the election set forth in this
26Section.

 

 

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1    (e) Notwithstanding any other provision of law, an employer
2under this Article is required to offer any future increases in
3income expressly and irrevocably as not constituting
4"earnings" under Section 15-111 to any Tier I employee, or Tier
5I retiree returning to active service, who has made an election
6under paragraph (2) or subsection (a) or (a-5) of this Section.
7A Tier I employee, or Tier I retiree returning to active
8service, who has made an election under paragraph (2) of
9subsection (a) or (a-5) of this Section shall not accept any
10future increase in income that is offered by an employer under
11this Article in violation of the requirement set forth in this
12subsection.
13    (f) A member's election under this Section is not a
14prohibited election under subdivision (j)(1) of Section 1-119
15of the Illinois Pension Code.
16    (g) An employee who has made the election under paragraph
17(1) of subsection (a) or (a-5) of this Section may elect to
18participate in the optional cash balance plan under Section
191-162.
20    The election to participate in the optional cash balance
21plan shall be made in writing, in the manner provided by the
22applicable retirement system.
23    (h) Qualified Plan Status. No provision of this Section
24shall be interpreted in a way that would cause the System to
25cease to be a qualified plan under Section 461(a) of the
26Internal Revenue Code of 1986.
 

 

 

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1    (40 ILCS 5/15-136)  (from Ch. 108 1/2, par. 15-136)
2    Sec. 15-136. Retirement annuities - Amount. The provisions
3of this Section 15-136 apply only to those participants who are
4participating in the traditional benefit package or the
5portable benefit package and do not apply to participants who
6are participating in the self-managed plan.
7    (a) The amount of a participant's retirement annuity,
8expressed in the form of a single-life annuity, shall be
9determined by whichever of the following rules is applicable
10and provides the largest annuity:
11    Rule 1: The retirement annuity shall be 1.67% of final rate
12of earnings for each of the first 10 years of service, 1.90%
13for each of the next 10 years of service, 2.10% for each year
14of service in excess of 20 but not exceeding 30, and 2.30% for
15each year in excess of 30; or for persons who retire on or
16after January 1, 1998, 2.2% of the final rate of earnings for
17each year of service.
18    Rule 2: The retirement annuity shall be the sum of the
19following, determined from amounts credited to the participant
20in accordance with the actuarial tables and the prescribed rate
21of interest in effect at the time the retirement annuity
22begins:
23        (i) the normal annuity which can be provided on an
24    actuarially equivalent basis, by the accumulated normal
25    contributions as of the date the annuity begins;

 

 

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1        (ii) an annuity from employer contributions of an
2    amount equal to that which can be provided on an
3    actuarially equivalent basis from the accumulated normal
4    contributions made by the participant under Section
5    15-113.6 and Section 15-113.7 plus 1.4 times all other
6    accumulated normal contributions made by the participant;
7    and
8        (iii) the annuity that can be provided on an
9    actuarially equivalent basis from the entire contribution
10    made by the participant under Section 15-113.3.
11    With respect to a police officer or firefighter who retires
12on or after August 14, 1998, the accumulated normal
13contributions taken into account under clauses (i) and (ii) of
14this Rule 2 shall include the additional normal contributions
15made by the police officer or firefighter under Section
1615-157(a).
17    The amount of a retirement annuity calculated under this
18Rule 2 shall be computed solely on the basis of the
19participant's accumulated normal contributions, as specified
20in this Rule and defined in Section 15-116. Neither an employee
21or employer contribution for early retirement under Section
2215-136.2 nor any other employer contribution shall be used in
23the calculation of the amount of a retirement annuity under
24this Rule 2.
25    This amendatory Act of the 91st General Assembly is a
26clarification of existing law and applies to every participant

 

 

09700HB3076sam002- 116 -LRB097 06263 JDS 70346 a

1and annuitant without regard to whether status as an employee
2terminates before the effective date of this amendatory Act.
3    This Rule 2 does not apply to a person who first becomes an
4employee under this Article on or after July 1, 2005.
5    Rule 3: The retirement annuity of a participant who is
6employed at least one-half time during the period on which his
7or her final rate of earnings is based, shall be equal to the
8participant's years of service not to exceed 30, multiplied by
9(1) $96 if the participant's final rate of earnings is less
10than $3,500, (2) $108 if the final rate of earnings is at least
11$3,500 but less than $4,500, (3) $120 if the final rate of
12earnings is at least $4,500 but less than $5,500, (4) $132 if
13the final rate of earnings is at least $5,500 but less than
14$6,500, (5) $144 if the final rate of earnings is at least
15$6,500 but less than $7,500, (6) $156 if the final rate of
16earnings is at least $7,500 but less than $8,500, (7) $168 if
17the final rate of earnings is at least $8,500 but less than
18$9,500, and (8) $180 if the final rate of earnings is $9,500 or
19more, except that the annuity for those persons having made an
20election under Section 15-154(a-1) shall be calculated and
21payable under the portable retirement benefit program pursuant
22to the provisions of Section 15-136.4.
23    Rule 4: A participant who is at least age 50 and has 25 or
24more years of service as a police officer or firefighter, and a
25participant who is age 55 or over and has at least 20 but less
26than 25 years of service as a police officer or firefighter,

 

 

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1shall be entitled to a retirement annuity of 2 1/4% of the
2final rate of earnings for each of the first 10 years of
3service as a police officer or firefighter, 2 1/2% for each of
4the next 10 years of service as a police officer or
5firefighter, and 2 3/4% for each year of service as a police
6officer or firefighter in excess of 20. The retirement annuity
7for all other service shall be computed under Rule 1.
8    For purposes of this Rule 4, a participant's service as a
9firefighter shall also include the following:
10        (i) service that is performed while the person is an
11    employee under subsection (h) of Section 15-107; and
12        (ii) in the case of an individual who was a
13    participating employee employed in the fire department of
14    the University of Illinois's Champaign-Urbana campus
15    immediately prior to the elimination of that fire
16    department and who immediately after the elimination of
17    that fire department transferred to another job with the
18    University of Illinois, service performed as an employee of
19    the University of Illinois in a position other than police
20    officer or firefighter, from the date of that transfer
21    until the employee's next termination of service with the
22    University of Illinois.
23    Rule 5: The retirement annuity of a participant who elected
24early retirement under the provisions of Section 15-136.2 and
25who, on or before February 16, 1995, brought administrative
26proceedings pursuant to the administrative rules adopted by the

 

 

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1System to challenge the calculation of his or her retirement
2annuity shall be the sum of the following, determined from
3amounts credited to the participant in accordance with the
4actuarial tables and the prescribed rate of interest in effect
5at the time the retirement annuity begins:
6        (i) the normal annuity which can be provided on an
7    actuarially equivalent basis, by the accumulated normal
8    contributions as of the date the annuity begins; and
9        (ii) an annuity from employer contributions of an
10    amount equal to that which can be provided on an
11    actuarially equivalent basis from the accumulated normal
12    contributions made by the participant under Section
13    15-113.6 and Section 15-113.7 plus 1.4 times all other
14    accumulated normal contributions made by the participant;
15    and
16        (iii) an annuity which can be provided on an
17    actuarially equivalent basis from the employee
18    contribution for early retirement under Section 15-136.2,
19    and an annuity from employer contributions of an amount
20    equal to that which can be provided on an actuarially
21    equivalent basis from the employee contribution for early
22    retirement under Section 15-136.2.
23    In no event shall a retirement annuity under this Rule 5 be
24lower than the amount obtained by adding (1) the monthly amount
25obtained by dividing the combined employee and employer
26contributions made under Section 15-136.2 by the System's

 

 

09700HB3076sam002- 119 -LRB097 06263 JDS 70346 a

1annuity factor for the age of the participant at the beginning
2of the annuity payment period and (2) the amount equal to the
3participant's annuity if calculated under Rule 1, reduced under
4Section 15-136(b) as if no contributions had been made under
5Section 15-136.2.
6    With respect to a participant who is qualified for a
7retirement annuity under this Rule 5 whose retirement annuity
8began before the effective date of this amendatory Act of the
991st General Assembly, and for whom an employee contribution
10was made under Section 15-136.2, the System shall recalculate
11the retirement annuity under this Rule 5 and shall pay any
12additional amounts due in the manner provided in Section
1315-186.1 for benefits mistakenly set too low.
14    The amount of a retirement annuity calculated under this
15Rule 5 shall be computed solely on the basis of those
16contributions specifically set forth in this Rule 5. Except as
17provided in clause (iii) of this Rule 5, neither an employee
18nor employer contribution for early retirement under Section
1915-136.2, nor any other employer contribution, shall be used in
20the calculation of the amount of a retirement annuity under
21this Rule 5.
22    The General Assembly has adopted the changes set forth in
23Section 25 of this amendatory Act of the 91st General Assembly
24in recognition that the decision of the Appellate Court for the
25Fourth District in Mattis v. State Universities Retirement
26System et al. might be deemed to give some right to the

 

 

09700HB3076sam002- 120 -LRB097 06263 JDS 70346 a

1plaintiff in that case. The changes made by Section 25 of this
2amendatory Act of the 91st General Assembly are a legislative
3implementation of the decision of the Appellate Court for the
4Fourth District in Mattis v. State Universities Retirement
5System et al. with respect to that plaintiff.
6    The changes made by Section 25 of this amendatory Act of
7the 91st General Assembly apply without regard to whether the
8person is in service as an employee on or after its effective
9date.
10    (b) The retirement annuity provided under Rules 1 and 3
11above shall be reduced by 1/2 of 1% for each month the
12participant is under age 60 at the time of retirement. However,
13this reduction shall not apply in the following cases:
14        (1) For a disabled participant whose disability
15    benefits have been discontinued because he or she has
16    exhausted eligibility for disability benefits under clause
17    (6) of Section 15-152;
18        (2) For a participant who has at least the number of
19    years of service required to retire at any age under
20    subsection (a) of Section 15-135; or
21        (3) For that portion of a retirement annuity which has
22    been provided on account of service of the participant
23    during periods when he or she performed the duties of a
24    police officer or firefighter, if these duties were
25    performed for at least 5 years immediately preceding the
26    date the retirement annuity is to begin.

 

 

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1    (c) The maximum retirement annuity provided under Rules 1,
22, 4, and 5 shall be the lesser of (1) the annual limit of
3benefits as specified in Section 415 of the Internal Revenue
4Code of 1986, as such Section may be amended from time to time
5and as such benefit limits shall be adjusted by the
6Commissioner of Internal Revenue, and (2) 80% of final rate of
7earnings.
8    (d) Subject to the provisions of subsections (d-1) and
9(d-2), an An annuitant whose status as an employee terminates
10after August 14, 1969 shall receive automatic increases in his
11or her retirement annuity as follows:
12    Effective January 1 immediately following the date the
13retirement annuity begins, the annuitant shall receive an
14increase in his or her monthly retirement annuity of 0.125% of
15the monthly retirement annuity provided under Rule 1, Rule 2,
16Rule 3, Rule 4, or Rule 5, contained in this Section,
17multiplied by the number of full months which elapsed from the
18date the retirement annuity payments began to January 1, 1972,
19plus 0.1667% of such annuity, multiplied by the number of full
20months which elapsed from January 1, 1972, or the date the
21retirement annuity payments began, whichever is later, to
22January 1, 1978, plus 0.25% of such annuity multiplied by the
23number of full months which elapsed from January 1, 1978, or
24the date the retirement annuity payments began, whichever is
25later, to the effective date of the increase.
26    The annuitant shall receive an increase in his or her

 

 

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1monthly retirement annuity on each January 1 thereafter during
2the annuitant's life of 3% of the monthly annuity provided
3under Rule 1, Rule 2, Rule 3, Rule 4, or Rule 5 contained in
4this Section. The change made under this subsection by P.A.
581-970 is effective January 1, 1980 and applies to each
6annuitant whose status as an employee terminates before or
7after that date.
8    Beginning January 1, 1990 and except as provided in
9subsections (d-1) and (d-2), all automatic annual increases
10payable under this Section shall be calculated as a percentage
11of the total annuity payable at the time of the increase,
12including all increases previously granted under this Article.
13    The change made in this subsection by P.A. 85-1008 is
14effective January 26, 1988, and is applicable without regard to
15whether status as an employee terminated before that date.
16    (d-1) Notwithstanding any other provision of this Article,
17for a Tier I employee or Tier I retiree who made the election
18under paragraph (1) of either subsection (a) or (a-5) of
19Section 15-134.6, the amount of each automatic annual increase
20in retirement annuity occurring on or after the effective date
21of that election shall be 3% or one-half of the annual
22unadjusted percentage increase, if any, in the Consumer Price
23Index-U for the 12 months ending with the preceding September,
24whichever is less, of the originally granted retirement
25annuity. For the purposes of this Section, "Consumer Price
26Index-U" means the index published by the Bureau of Labor

 

 

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1Statistics of the United States Department of Labor that
2measures the average change in prices of goods and services
3purchased by all urban consumers, United States city average,
4all items, 1982-84 = 100.
5    (d-2) Notwithstanding any other provision of this Article,
6for a Tier I employee or Tier I retiree who made the election
7under paragraph (1) of subsection (a) or (a-5) of Section
815-134.6, the monthly retirement annuity shall first be subject
9to annual increases on the January 1 occurring on or next after
10the attainment of age 67 or the January 1 occurring on or next
11after the fifth anniversary of the annuity start date,
12whichever occurs earlier. If on the effective date of the
13election under paragraph (1) of subsection (a-5) of Section
1415-134.6 a Tier I retiree has already received an annual
15increase under this Section but does not yet meet the new
16eligibility requirements of this subsection, the annual
17increases already received shall continue in force, but no
18additional annual increase shall be granted until the Tier I
19retiree meets the new eligibility requirements.
20    (e) If, on January 1, 1987, or the date the retirement
21annuity payment period begins, whichever is later, the sum of
22the retirement annuity provided under Rule 1 or Rule 2 of this
23Section and the automatic annual increases provided under the
24preceding subsection or Section 15-136.1, amounts to less than
25the retirement annuity which would be provided by Rule 3, the
26retirement annuity shall be increased as of January 1, 1987, or

 

 

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1the date the retirement annuity payment period begins,
2whichever is later, to the amount which would be provided by
3Rule 3 of this Section. Such increased amount shall be
4considered as the retirement annuity in determining benefits
5provided under other Sections of this Article. This paragraph
6applies without regard to whether status as an employee
7terminated before the effective date of this amendatory Act of
81987, provided that the annuitant was employed at least
9one-half time during the period on which the final rate of
10earnings was based.
11    (f) A participant is entitled to such additional annuity as
12may be provided on an actuarially equivalent basis, by any
13accumulated additional contributions to his or her credit.
14However, the additional contributions made by the participant
15toward the automatic increases in annuity provided under this
16Section shall not be taken into account in determining the
17amount of such additional annuity.
18    (g) If, (1) by law, a function of a governmental unit, as
19defined by Section 20-107 of this Code, is transferred in whole
20or in part to an employer, and (2) a participant transfers
21employment from such governmental unit to such employer within
226 months after the transfer of the function, and (3) the sum of
23(A) the annuity payable to the participant under Rule 1, 2, or
243 of this Section (B) all proportional annuities payable to the
25participant by all other retirement systems covered by Article
2620, and (C) the initial primary insurance amount to which the

 

 

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1participant is entitled under the Social Security Act, is less
2than the retirement annuity which would have been payable if
3all of the participant's pension credits validated under
4Section 20-109 had been validated under this system, a
5supplemental annuity equal to the difference in such amounts
6shall be payable to the participant.
7    (h) On January 1, 1981, an annuitant who was receiving a
8retirement annuity on or before January 1, 1971 shall have his
9or her retirement annuity then being paid increased $1 per
10month for each year of creditable service. On January 1, 1982,
11an annuitant whose retirement annuity began on or before
12January 1, 1977, shall have his or her retirement annuity then
13being paid increased $1 per month for each year of creditable
14service.
15    (i) On January 1, 1987, any annuitant whose retirement
16annuity began on or before January 1, 1977, shall have the
17monthly retirement annuity increased by an amount equal to 8
18per year of creditable service times the number of years that
19have elapsed since the annuity began.
20(Source: P.A. 93-347, eff. 7-24-03; 94-4, eff. 6-1-05.)
 
21    (40 ILCS 5/15-155)  (from Ch. 108 1/2, par. 15-155)
22    Sec. 15-155. State and employer Employer contributions.
23    (a) Except as otherwise provided in this Section, the The
24State of Illinois shall make contributions by appropriations of
25amounts which, together with contributions paid by employers,

 

 

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1the other employer contributions from trust, federal, and other
2funds, employee contributions, income from investments, and
3other income of this System, will be sufficient to meet the
4cost of maintaining and administering the System on a 90%
5funded basis in accordance with actuarial recommendations.
6    Beginning with State fiscal year 2014, the employers under
7this Article shall be responsible for paying the normal costs
8of the System plus the amounts required to amortize any total
9cost of the benefits of the System arising on or after July 1,
102013.
11    Beginning with State fiscal year 2014, the State's required
12contributions to the System shall be limited to the amounts
13required to amortize the total cost of the benefits of the
14System arising before July 1, 2013, plus any employer
15contributions required from the State as the actual employer of
16participants under this Article.
17    The Board shall determine the amount of State and employer
18contributions required for each fiscal year on the basis of the
19actuarial tables and other assumptions adopted by the Board and
20the recommendations of the actuary, using the formulas provided
21in this Section formula in subsection (a-1).
22    (a-1) For State fiscal years 2012 and 2013 through 2045,
23the minimum contribution to the System to be made by the State
24for each fiscal year shall be an amount determined by the
25System to be sufficient to bring the total assets of the System
26up to 90% of the total actuarial liabilities of the System by

 

 

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1the end of State fiscal year 2045. In making these
2determinations, the required State contribution shall be
3calculated each year as a level percentage of payroll over the
4years remaining to and including fiscal year 2045 and shall be
5determined under the projected unit credit actuarial cost
6method.
7    Except as provided in subsection (a-3), for State fiscal
8years 2014 through 2045 or until the State has amortized 100%
9of the total cost of benefits accrued by July 1, 2013,
10whichever is earlier, in addition to any employer contributions
11required from the State as an employer, the minimum
12contribution to the System to be made by the State for each
13fiscal year shall be an amount determined by the Board to be
14sufficient to amortize, by the end of State fiscal year 2045,
15the total cost of the benefits of the System arising before
16July 1, 2013. In making these determinations, the required
17State contribution shall be calculated each year as a level
18percentage of payroll over the years remaining to and including
19fiscal year 2043 and shall be determined under the projected
20unit credit actuarial cost method.
21    Except as provided in subsection (a-3), beginning in State
22fiscal year 2046 or on the date that the State has amortized
23100% of the total cost of benefits accrued by July 1, 2013,
24whichever is earlier, the State has no further obligation to
25make contributions to the System under this subsection (a-1).
26    For State fiscal years 1996 through 2005, the State

 

 

09700HB3076sam002- 128 -LRB097 06263 JDS 70346 a

1contribution to the System, as a percentage of the applicable
2employee payroll, shall be increased in equal annual increments
3so that by State fiscal year 2011, the State is contributing at
4the rate required under this Section.
5    Notwithstanding any other provision of this Article, the
6total required State contribution for State fiscal year 2006 is
7$166,641,900.
8    Notwithstanding any other provision of this Article, the
9total required State contribution for State fiscal year 2007 is
10$252,064,100.
11    For each of State fiscal years 2008 through 2009, the State
12contribution to the System, as a percentage of the applicable
13employee payroll, shall be increased in equal annual increments
14from the required State contribution for State fiscal year
152007, so that by State fiscal year 2011, the State is
16contributing at the rate otherwise required under this Section.
17    Notwithstanding any other provision of this Article, the
18total required State contribution for State fiscal year 2010 is
19$702,514,000 and shall be made from the State Pensions Fund and
20proceeds of bonds sold in fiscal year 2010 pursuant to Section
217.2 of the General Obligation Bond Act, less (i) the pro rata
22share of bond sale expenses determined by the System's share of
23total bond proceeds, (ii) any amounts received from the General
24Revenue Fund in fiscal year 2010, (iii) any reduction in bond
25proceeds due to the issuance of discounted bonds, if
26applicable.

 

 

09700HB3076sam002- 129 -LRB097 06263 JDS 70346 a

1    Notwithstanding any other provision of this Article, the
2total required State contribution for State fiscal year 2011 is
3the amount recertified by the System on or before April 1, 2011
4pursuant to Section 15-165 and shall be made from the State
5Pensions Fund and proceeds of bonds sold in fiscal year 2011
6pursuant to Section 7.2 of the General Obligation Bond Act,
7less (i) the pro rata share of bond sale expenses determined by
8the System's share of total bond proceeds, (ii) any amounts
9received from the General Revenue Fund in fiscal year 2011, and
10(iii) any reduction in bond proceeds due to the issuance of
11discounted bonds, if applicable.
12    Beginning in State fiscal year 2046, the minimum State
13contribution for each fiscal year shall be the amount needed to
14maintain the total assets of the System at 90% of the total
15actuarial liabilities of the System.
16    Amounts received by the System pursuant to Section 25 of
17the Budget Stabilization Act or Section 8.12 of the State
18Finance Act in any fiscal year do not reduce and do not
19constitute payment of any portion of the minimum State
20contribution required under this Article in that fiscal year.
21Such amounts shall not reduce, and shall not be included in the
22calculation of, the required State contributions under this
23Article in any future year until the System has reached a
24funding ratio of at least 90%. A reference in this Article to
25the "required State contribution" or any substantially similar
26term does not include or apply to any amounts payable to the

 

 

09700HB3076sam002- 130 -LRB097 06263 JDS 70346 a

1System under Section 25 of the Budget Stabilization Act.
2    Notwithstanding any other provision of this Section, the
3required State contribution for State fiscal year 2005 and for
4fiscal year 2008 through and each fiscal year 2013 thereafter,
5as calculated under this Section and certified under Section
615-165, shall not exceed an amount equal to (i) the amount of
7the required State contribution that would have been calculated
8under this Section for that fiscal year if the System had not
9received any payments under subsection (d) of Section 7.2 of
10the General Obligation Bond Act, minus (ii) the portion of the
11State's total debt service payments for that fiscal year on the
12bonds issued in fiscal year 2003 for the purposes of that
13Section 7.2, as determined and certified by the Comptroller,
14that is the same as the System's portion of the total moneys
15distributed under subsection (d) of Section 7.2 of the General
16Obligation Bond Act. In determining this maximum for State
17fiscal years 2008 through 2010, however, the amount referred to
18in item (i) shall be increased, as a percentage of the
19applicable employee payroll, in equal increments calculated
20from the sum of the required State contribution for State
21fiscal year 2007 plus the applicable portion of the State's
22total debt service payments for fiscal year 2007 on the bonds
23issued in fiscal year 2003 for the purposes of Section 7.2 of
24the General Obligation Bond Act, so that, by State fiscal year
252011, the State is contributing at the rate otherwise required
26under this Section.

 

 

09700HB3076sam002- 131 -LRB097 06263 JDS 70346 a

1    (a-3) If at least 50% of Tier I employees making an
2election under Section 15-134.6 before June 1, 2013 choose the
3option under paragraph (1) of subsection (a) of that Section,
4then beginning in State fiscal year 2014, instead of the
5contributions specified in subsection (a-1) of this Section,
6the State contributions specified in subsection (a-5) of this
7Section shall be paid.
8    In making its initial certification of the annual required
9contribution by the State for State fiscal year 2014, the Board
10shall assume that the new funding formula provided in
11subsection (a-5) of this Section applies. If fewer than 50% of
12Tier I employees making an election under Section 15-134.6
13before June 1, 2013 choose the option under paragraph (1) of
14subsection (a) of that Section, then:
15        (1) instead of the contributions specified in
16    subsection (a-5) of this Section, the State contributions
17    specified in subsection (a-1) shall continue to be paid;
18    and
19        (2) as soon as possible after June 1, 2013, the Board
20    shall recertify the annual required contribution by the
21    State for State fiscal year 2014.
22    (a-5) For State fiscal years 2014 through 2043 or until the
23State has amortized 100% of the total cost of benefits accrued
24by July 1, 2013, whichever is earlier, in addition to any
25employer contributions required from the State as an employer,
26the minimum contribution to the System to be made by the State

 

 

09700HB3076sam002- 132 -LRB097 06263 JDS 70346 a

1for each fiscal year shall be an amount determined by the Board
2to be sufficient to amortize, by the end of State fiscal year
32043, the total cost of the benefits of the System arising
4before July 1, 2013. In making these determinations, the
5required State contribution shall be calculated each year as a
6level percentage of payroll over the years remaining to and
7including fiscal year 2043 and shall be determined under the
8projected unit credit actuarial cost method.
9    Beginning in State fiscal year 2044 or on the date that the
10State has amortized 100% of the total cost of benefits accrued
11by July 1, 2013, whichever is earlier, the State has no further
12obligation to make contributions to the System under this
13subsection (a-5).
14    (a-10) Subject to the limitations provided in subsection
15(a-15), beginning with State fiscal year 2014, the minimum
16required contribution of employers under this Article shall be
17determined as a percentage of projected payroll, and shall be
18sufficient to produce an annual amount equal to:
19        (i) the employer's normal cost for that fiscal year for
20    employees who first became participating employees before
21    July 1, 2013; plus
22        (ii) the employer's normal cost for that fiscal year
23    for employees who first become participating employees on
24    or after July 1, 2013; plus
25        (iii) the amount required for that fiscal year to
26    amortize any unfunded actuarial accrued liability arising

 

 

09700HB3076sam002- 133 -LRB097 06263 JDS 70346 a

1    on or after July 1, 2013 as a level percentage of payroll
2    over a 30-year rolling amortization period.
3    Any contributions required from an employer under
4subsection (g) of this Section are in addition to the
5contributions required under this subsection (a-10).
6    (a-15) For State fiscal year 2014, the required
7contribution of employers under item (i) of subsection (a-10)
8shall be reduced to an amount equal to 1% of payroll.
9    For each fiscal year thereafter, until the Board determines
10and certifies to the Governor that employers are contributing
11under item (i) of subsection (a-10) the full amount actually
12specified by item (i) of subsection (a-10), the required
13contribution of employers under item (i) of subsection (a-10)
14shall be the percentage of payroll required under this
15subsection from the previous fiscal year increased by 1% of
16payroll for each of State fiscal years 2015 through 2019, and
17increased by 0.5% of payroll for each State fiscal year after
182019.
19    Contributions required of employers under items (ii) and
20(iii) of subsection (a-10), under subsection (g), and under any
21other applicable provision of this Section are in addition to
22contributions required under item (i) of subsection (a-10).
23    (a-20) Beginning in State fiscal year 2015 and continuing
24until the Board determines and certifies to the Governor that
25employers are contributing under item (i) of subsection (a-10)
26the full amount actually specified by item (i) of subsection

 

 

09700HB3076sam002- 134 -LRB097 06263 JDS 70346 a

1(a-10), the State shall make an additional contribution to the
2System for each fiscal year, equal to the difference between
3(1) the total contribution calculated under item (i) of
4subsection (a-10) for all employers for that fiscal year, and
5(2) the amount of such total contribution as reduced under
6subsection (a-15).
7    The State contribution under this subsection (a-20) is in
8addition to the State contributions required under subsection
9(a-1) or (a-5) and any contributions required to be paid by the
10State as an employer under subsections (a-10) and (g) of this
11Section.
12    (b) If an employee is paid from trust or federal funds, the
13employer shall pay to the Board contributions from those funds
14which are sufficient to cover the accruing normal costs on
15behalf of the employee. However, universities having employees
16who are compensated out of local auxiliary funds, income funds,
17or service enterprise funds are not required to pay such
18contributions on behalf of those employees. The local auxiliary
19funds, income funds, and service enterprise funds of
20universities shall not be considered trust funds for the
21purpose of this Article, but funds of alumni associations,
22foundations, and athletic associations which are affiliated
23with the universities included as employers under this Article
24and other employers which do not receive State appropriations
25are considered to be trust funds for the purpose of this
26Article.

 

 

09700HB3076sam002- 135 -LRB097 06263 JDS 70346 a

1    (b-1) The City of Urbana and the City of Champaign shall
2each make employer contributions to this System for their
3respective firefighter employees who participate in this
4System pursuant to subsection (h) of Section 15-107. The rate
5of contributions to be made by those municipalities shall be
6determined annually by the Board on the basis of the actuarial
7assumptions adopted by the Board and the recommendations of the
8actuary, and shall be expressed as a percentage of salary for
9each such employee. The Board shall certify the rate to the
10affected municipalities as soon as may be practical. The
11employer contributions required under this subsection shall be
12remitted by the municipality to the System at the same time and
13in the same manner as employee contributions.
14    (c) Through State fiscal year 1995: The total employer
15contribution shall be apportioned among the various funds of
16the State and other employers, whether trust, federal, or other
17funds, in accordance with actuarial procedures approved by the
18Board. State of Illinois contributions for employers receiving
19State appropriations for personal services shall be payable
20from appropriations made to the employers or to the System. The
21contributions for Class I community colleges covering earnings
22other than those paid from trust and federal funds, shall be
23payable solely from appropriations to the Illinois Community
24College Board or the System for employer contributions.
25    (d) Beginning in State fiscal year 1996, the required State
26contributions to the System shall be appropriated directly to

 

 

09700HB3076sam002- 136 -LRB097 06263 JDS 70346 a

1the System and shall be payable through vouchers issued in
2accordance with subsection (c) of Section 15-165, except as
3provided in subsection (g).
4    (e) The State Comptroller shall draw warrants payable to
5the System upon proper certification by the System or by the
6employer in accordance with the appropriation laws and this
7Code.
8    (f) Normal costs under this Section means liability for
9pensions and other benefits which accrues to the System because
10of the credits earned for service rendered by the participants
11during the fiscal year and expenses of administering the
12System, but shall not include the principal of or any
13redemption premium or interest on any bonds issued by the Board
14or any expenses incurred or deposits required in connection
15therewith.
16    (g) The employer contributions under this subsection (g)
17are no longer required after June 30, 2013.
18    If the amount of a participant's earnings for any academic
19year used to determine the final rate of earnings, determined
20on a full-time equivalent basis, exceeds the amount of his or
21her earnings with the same employer for the previous academic
22year, determined on a full-time equivalent basis, by more than
236%, the participant's employer shall pay to the System, in
24addition to all other payments required under this Section and
25in accordance with guidelines established by the System, the
26present value of the increase in benefits resulting from the

 

 

09700HB3076sam002- 137 -LRB097 06263 JDS 70346 a

1portion of the increase in earnings that is in excess of 6%.
2This present value shall be computed by the System on the basis
3of the actuarial assumptions and tables used in the most recent
4actuarial valuation of the System that is available at the time
5of the computation. The System may require the employer to
6provide any pertinent information or documentation.
7    Whenever it determines that a payment is or may be required
8under this subsection (g), the System shall calculate the
9amount of the payment and bill the employer for that amount.
10The bill shall specify the calculations used to determine the
11amount due. If the employer disputes the amount of the bill, it
12may, within 30 days after receipt of the bill, apply to the
13System in writing for a recalculation. The application must
14specify in detail the grounds of the dispute and, if the
15employer asserts that the calculation is subject to subsection
16(h) or (i) of this Section, must include an affidavit setting
17forth and attesting to all facts within the employer's
18knowledge that are pertinent to the applicability of subsection
19(h) or (i). Upon receiving a timely application for
20recalculation, the System shall review the application and, if
21appropriate, recalculate the amount due.
22    The employer contributions required under this subsection
23(g) (f) may be paid in the form of a lump sum within 90 days
24after receipt of the bill. If the employer contributions are
25not paid within 90 days after receipt of the bill, then
26interest will be charged at a rate equal to the System's annual

 

 

09700HB3076sam002- 138 -LRB097 06263 JDS 70346 a

1actuarially assumed rate of return on investment compounded
2annually from the 91st day after receipt of the bill. Payments
3must be concluded within 3 years after the employer's receipt
4of the bill.
5    (h) This subsection (h) applies only to payments made or
6salary increases given on or after June 1, 2005 but before July
71, 2011. The changes made by Public Act 94-1057 shall not
8require the System to refund any payments received before July
931, 2006 (the effective date of Public Act 94-1057).
10    When assessing payment for any amount due under subsection
11(g), the System shall exclude earnings increases paid to
12participants under contracts or collective bargaining
13agreements entered into, amended, or renewed before June 1,
142005.
15    When assessing payment for any amount due under subsection
16(g), the System shall exclude earnings increases paid to a
17participant at a time when the participant is 10 or more years
18from retirement eligibility under Section 15-135.
19    When assessing payment for any amount due under subsection
20(g), the System shall exclude earnings increases resulting from
21overload work, including a contract for summer teaching, or
22overtime when the employer has certified to the System, and the
23System has approved the certification, that: (i) in the case of
24overloads (A) the overload work is for the sole purpose of
25academic instruction in excess of the standard number of
26instruction hours for a full-time employee occurring during the

 

 

09700HB3076sam002- 139 -LRB097 06263 JDS 70346 a

1academic year that the overload is paid and (B) the earnings
2increases are equal to or less than the rate of pay for
3academic instruction computed using the participant's current
4salary rate and work schedule; and (ii) in the case of
5overtime, the overtime was necessary for the educational
6mission.
7    When assessing payment for any amount due under subsection
8(g), the System shall exclude any earnings increase resulting
9from (i) a promotion for which the employee moves from one
10classification to a higher classification under the State
11Universities Civil Service System, (ii) a promotion in academic
12rank for a tenured or tenure-track faculty position, or (iii) a
13promotion that the Illinois Community College Board has
14recommended in accordance with subsection (k) of this Section.
15These earnings increases shall be excluded only if the
16promotion is to a position that has existed and been filled by
17a member for no less than one complete academic year and the
18earnings increase as a result of the promotion is an increase
19that results in an amount no greater than the average salary
20paid for other similar positions.
21    (i) When assessing payment for any amount due under
22subsection (g), the System shall exclude any salary increase
23described in subsection (h) of this Section given on or after
24July 1, 2011 but before July 1, 2014 under a contract or
25collective bargaining agreement entered into, amended, or
26renewed on or after June 1, 2005 but before July 1, 2011.

 

 

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1Notwithstanding any other provision of this Section, any
2payments made or salary increases given after June 30, 2014
3shall be used in assessing payment for any amount due under
4subsection (g) of this Section.
5    (j) The System shall prepare a report and file copies of
6the report with the Governor and the General Assembly by
7January 1, 2007 that contains all of the following information:
8        (1) The number of recalculations required by the
9    changes made to this Section by Public Act 94-1057 for each
10    employer.
11        (2) The dollar amount by which each employer's
12    contribution to the System was changed due to
13    recalculations required by Public Act 94-1057.
14        (3) The total amount the System received from each
15    employer as a result of the changes made to this Section by
16    Public Act 94-4.
17        (4) The increase in the required State contribution
18    resulting from the changes made to this Section by Public
19    Act 94-1057.
20    (k) The Illinois Community College Board shall adopt rules
21for recommending lists of promotional positions submitted to
22the Board by community colleges and for reviewing the
23promotional lists on an annual basis. When recommending
24promotional lists, the Board shall consider the similarity of
25the positions submitted to those positions recognized for State
26universities by the State Universities Civil Service System.

 

 

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1The Illinois Community College Board shall file a copy of its
2findings with the System. The System shall consider the
3findings of the Illinois Community College Board when making
4determinations under this Section. The System shall not exclude
5any earnings increases resulting from a promotion when the
6promotion was not submitted by a community college. Nothing in
7this subsection (k) shall require any community college to
8submit any information to the Community College Board.
9    (l) For purposes of determining the required State
10contribution to the System, the value of the System's assets
11shall be equal to the actuarial value of the System's assets,
12which shall be calculated as follows:
13    As of June 30, 2008, the actuarial value of the System's
14assets shall be equal to the market value of the assets as of
15that date. In determining the actuarial value of the System's
16assets for fiscal years after June 30, 2008, any actuarial
17gains or losses from investment return incurred in a fiscal
18year shall be recognized in equal annual amounts over the
195-year period following that fiscal year.
20    (m) For purposes of determining the required State
21contribution to the system for a particular year, the actuarial
22value of assets shall be assumed to earn a rate of return equal
23to the system's actuarially assumed rate of return.
24    (n) If the System submits a voucher for monthly
25contributions from the State as required by this Section and
26the State fails to pay within 90 days of receipt of such a

 

 

09700HB3076sam002- 142 -LRB097 06263 JDS 70346 a

1voucher, the Board shall submit a written request to the
2Comptroller seeking payment. A copy of the request shall be
3filed with the Secretary of State, and the Secretary of State
4shall provide copies to the Governor and General Assembly. No
5earlier than the 16th day after filing a request with the
6Secretary of State, the Board shall have the right to commence
7a mandamus action in the Supreme Court of Illinois to compel
8the Comptroller to satisfy the voucher by making payment from
9the General Revenue Fund. This Section constitutes an express
10waiver of the State's sovereign immunity solely to the extent
11it permits the Board to commence a mandamus action in the
12Illinois Supreme Court to compel the Comptroller to pay a
13voucher for monthly contributions from the State as required in
14this Section.
15(Source: P.A. 95-331, eff. 8-21-07; 95-950, eff. 8-29-08;
1696-43, eff. 7-15-09; 96-1497, eff. 1-14-11; 96-1511, eff.
171-27-11; 96-1554, eff. 3-18-11; revised 4-6-11.)
 
18    (40 ILCS 5/15-155.1 new)
19    Sec. 15-155.1. Actions to enforce payment by employers.
20    (a) If any employer fails to transmit to the System
21contributions required of it under this Article or
22contributions collected by it from its participating employees
23for the purposes of this Article for more than 90 days after
24the payment of such contributions is due, then the System,
25after giving notice to that employer, may certify to the State

 

 

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1Comptroller the amounts of the delinquent payments, and the
2Comptroller shall deduct the amounts so certified or any part
3thereof from any payments or grants of State funds to the
4employer and shall pay the amounts so deducted to the System.
5If State funds from which such deductions may be made are not
6available, the System may proceed against the employer to
7recover the amounts of the delinquent payments in the
8appropriate circuit court.
9    (b) If any employer fails to transmit to the System
10contributions required of it under this Article or
11contributions collected by it from its participating employees
12for the purposes of this Article for more than 90 days after
13the payment of the contributions is due, the System, after
14giving notice to the employer, may certify the amounts of the
15delinquent payments to the county treasurer of any county in
16which the employer is located, who shall deduct the amounts so
17certified or any part thereof from the amounts collected from
18any tax levied by the employer and shall pay the amount so
19deducted to the System.
20    (c) If reports furnished to the System by the employer
21involved are inadequate for the computation of the amounts of
22any payments, the System may provide for such audit of the
23records of the employer as may be required to establish the
24amounts of the delinquent payments. The employer shall make its
25records available to the System for the purpose of the audit.
26The cost of the audit shall be added to the amount of the

 

 

09700HB3076sam002- 144 -LRB097 06263 JDS 70346 a

1payments and shall be recovered by the System from the employer
2at the same time and in the same manner as the payments are
3recovered.
 
4    (40 ILCS 5/15-155.2 new)
5    Sec. 15-155.2. Individual employer accounts.
6    (a) The System shall create and maintain individual
7accounts for each employer for the purposes of determining
8employer contributions under subsection (a-10) of Section
915-155. Each employer's account shall be notionally credited
10with the employer's liabilities accruing after July 1, 2013 and
11assets attributable to the employer's account that include (i)
12employer contributions made pursuant to subsection (a-10) of
13Section 15-155, (ii) other employer contributions from trust,
14federal, and other funds, (iii) employee contributions made
15after July 1, 2013, and (iv) income from investments. The
16System may deduct reasonable administrative expenses from each
17employer's account.
18    (b) In determining contributions required under subsection
19(a-10) of Section 15-155, the System shall determine (i) a
20blended rate of total normal cost that is applicable to
21contributions made by the University of Illinois, Southern
22Illinois University, Chicago State University, Eastern
23Illinois University, Governors State University, Illinois
24State University, Northeastern Illinois University, Northern
25Illinois University, and Western Illinois University, (ii) a

 

 

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1blended rate of total normal cost that is applicable to
2contributions made by each community college board, and (iii) a
3rate equal to the total normal cost of the System that is
4applicable to employers other than those listed under item (i)
5or (ii).
6    (c) An employer may make written application with the Board
7to have a separate rate of total normal cost determined for the
8employer. Upon receiving the written application from an
9employer, the Board may determine a total rate of normal cost
10for the employer. The employer shall be responsible for any
11cost incurred in making the determination of total normal cost.
12    The Board may establish rules for the administration of
13this Section that include but are not limited to the date by
14which an application must be submitted and the fiscal year in
15which the determination will be used to determine the
16employer's contribution required under subsection (a-10) of
17Section 15-155.
18    (d) An employer whose determination of total normal cost
19under subsection (c) is used to determine its contributions
20required under subsection (a-10) of Section 15-155 may not be
21included in the determination of a rate of total normal cost
22under subsection (c) of this Section.
 
23    (40 ILCS 5/15-157)  (from Ch. 108 1/2, par. 15-157)
24    Sec. 15-157. Employee Contributions.
25    (a) Each participating employee shall make contributions

 

 

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1towards the retirement benefits payable under the retirement
2program applicable to the employee from each payment of
3earnings applicable to employment under this system on and
4after the date of becoming a participant as follows: Prior to
5September 1, 1949, 3 1/2% of earnings; from September 1, 1949
6to August 31, 1955, 5%; from September 1, 1955 to August 31,
71969, 6%; from September 1, 1969, 6 1/2%. These contributions
8are to be considered as normal contributions for purposes of
9this Article.
10    Each participant who is a police officer or firefighter
11shall make normal contributions of 8% of each payment of
12earnings applicable to employment as a police officer or
13firefighter under this system on or after September 1, 1981,
14unless he or she files with the board within 60 days after the
15effective date of this amendatory Act of 1991 or 60 days after
16the board receives notice that he or she is employed as a
17police officer or firefighter, whichever is later, a written
18notice waiving the retirement formula provided by Rule 4 of
19Section 15-136. This waiver shall be irrevocable. If a
20participant had met the conditions set forth in Section
2115-132.1 prior to the effective date of this amendatory Act of
221991 but failed to make the additional normal contributions
23required by this paragraph, he or she may elect to pay the
24additional contributions plus compound interest at the
25effective rate. If such payment is received by the board, the
26service shall be considered as police officer service in

 

 

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1calculating the retirement annuity under Rule 4 of Section
215-136. While performing service described in clause (i) or
3(ii) of Rule 4 of Section 15-136, a participating employee
4shall be deemed to be employed as a firefighter for the purpose
5of determining the rate of employee contributions under this
6Section.
7    (a-1) Notwithstanding any other provision of this Section,
8an employee who participates in the cash balance plan under
9Section 1-161 shall pay to the System for the purpose of
10participating in the cash balance plan 8% of each payment of
11earnings while he or she is a participant in the cash balance
12plan. Each participant who is a police officer or firefighter
13who participates in the cash balance plan under Section 1-161
14shall pay to the System for the purpose of participating in the
15cash balance plan 9.5% of each payment of earnings while he or
16she is participant in the cash balance plan. Employee
17contributions required under subsections (a), (b), and (c) of
18this Section shall not apply to an employee who participates in
19the cash balance plan under Section 1-161.
20    (a-2) In addition to the contributions required under
21either subsections (a), (b), and (c) or subsection (a-1), an
22employee who elects to participate in the optional cash balance
23plan under Section 1-162 shall pay to the System for the
24purpose of participating in the optional cash balance plan a
25contribution of 2% of each payment of earnings received while
26he or she is a participant in the optional cash balance plan.

 

 

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1These contributions shall not be used for the purpose of
2determining any benefit under this Article except as provided
3in the optional cash balance plan.
4    (b) Starting September 1, 1969, each participating
5employee shall make additional contributions of 1/2 of 1% of
6earnings to finance a portion of the cost of the annual
7increases in retirement annuity provided under Section 15-136,
8except that with respect to participants in the self-managed
9plan this additional contribution shall be used to finance the
10benefits obtained under that retirement program.
11    (c) In addition to the amounts described in subsections (a)
12and (b) of this Section, each participating employee shall make
13contributions of 1% of earnings applicable under this system on
14and after August 1, 1959. The contributions made under this
15subsection (c) shall be considered as survivor's insurance
16contributions for purposes of this Article if the employee is
17covered under the traditional benefit package, and such
18contributions shall be considered as additional contributions
19for purposes of this Article if the employee is participating
20in the self-managed plan or has elected to participate in the
21portable benefit package and has completed the applicable
22one-year waiting period. Contributions in excess of $80 during
23any fiscal year beginning before August 31, 1969 and in excess
24of $120 during any fiscal year thereafter until September 1,
251971 shall be considered as additional contributions for
26purposes of this Article.

 

 

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1    (d) If the board by board rule so permits and subject to
2such conditions and limitations as may be specified in its
3rules, a participant may make other additional contributions of
4such percentage of earnings or amounts as the participant shall
5elect in a written notice thereof received by the board.
6    (e) That fraction of a participant's total accumulated
7normal contributions, the numerator of which is equal to the
8number of years of service in excess of that which is required
9to qualify for the maximum retirement annuity, and the
10denominator of which is equal to the total service of the
11participant, shall be considered as accumulated additional
12contributions. The determination of the applicable maximum
13annuity and the adjustment in contributions required by this
14provision shall be made as of the date of the participant's
15retirement.
16    (f) Notwithstanding the foregoing, a participating
17employee shall not be required to make contributions under this
18Section after the date upon which continuance of such
19contributions would otherwise cause his or her retirement
20annuity to exceed the maximum retirement annuity as specified
21in clause (1) of subsection (c) of Section 15-136.
22    (g) A participating employee may make contributions for the
23purchase of service credit under this Article.
24(Source: P.A. 90-32, eff. 6-27-97; 90-65, eff. 7-7-97; 90-448,
25eff. 8-16-97; 90-511, eff. 8-22-97; 90-576, eff. 3-31-98;
2690-655, eff. 7-30-98; 90-766, eff. 8-14-98.)
 

 

 

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1    (40 ILCS 5/15-158.2)
2    Sec. 15-158.2. Self-managed plan.
3    (a) Purpose. The General Assembly finds that it is
4important for colleges and universities to be able to attract
5and retain the most qualified employees and that in order to
6attract and retain these employees, colleges and universities
7should have the flexibility to provide a defined contribution
8plan as an alternative for eligible employees who elect not to
9participate in a defined benefit retirement program provided
10under this Article. Accordingly, the State Universities
11Retirement System is hereby authorized to establish and
12administer a self-managed plan, which shall offer
13participating employees who became participating employees
14before the effective date of this amendatory Act of the 97th
15General Assembly the opportunity to accumulate assets for
16retirement through a combination of employee and employer
17contributions that may be invested in mutual funds, collective
18investment funds, or other investment products and used to
19purchase annuity contracts, either fixed or variable or a
20combination thereof. The plan must be qualified under the
21Internal Revenue Code of 1986.
22    (b) Adoption by employers. Each employer subject to this
23Article may elect to adopt the self-managed plan established
24under this Section until the effective date of this amendatory
25Act of the 97th General Assembly; this election is irrevocable.

 

 

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1An employer's election to adopt the self-managed plan makes
2available to the eligible employees of that employer the
3elections described in Section 15-134.5.
4    The State Universities Retirement System shall be the plan
5sponsor for the self-managed plan and shall prepare a plan
6document and prescribe such rules and procedures as are
7considered necessary or desirable for the administration of the
8self-managed plan. Consistent with its fiduciary duty to the
9participants and beneficiaries of the self-managed plan, the
10Board of Trustees of the System may delegate aspects of plan
11administration as it sees fit to companies authorized to do
12business in this State, to the employers, or to a combination
13of both.
14    (c) Selection of service providers and funding vehicles.
15The System, in consultation with the employers, shall solicit
16proposals to provide administrative services and funding
17vehicles for the self-managed plan from insurance and annuity
18companies and mutual fund companies, banks, trust companies, or
19other financial institutions authorized to do business in this
20State. In reviewing the proposals received and approving and
21contracting with no fewer than 2 and no more than 7 companies,
22the Board of Trustees of the System shall consider, among other
23things, the following criteria:
24        (1) the nature and extent of the benefits that would be
25    provided to the participants;
26        (2) the reasonableness of the benefits in relation to

 

 

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1    the premium charged;
2        (3) the suitability of the benefits to the needs and
3    interests of the participating employees and the employer;
4        (4) the ability of the company to provide benefits
5    under the contract and the financial stability of the
6    company; and
7        (5) the efficacy of the contract in the recruitment and
8    retention of employees.
9    The System, in consultation with the employers, shall
10periodically review each approved company. A company may
11continue to provide administrative services and funding
12vehicles for the self-managed plan only so long as it continues
13to be an approved company under contract with the Board.
14    (d) Employee Direction. Employees who are participating in
15the program must be allowed to direct the transfer of their
16account balances among the various investment options offered,
17subject to applicable contractual provisions. The participant
18shall not be deemed a fiduciary by reason of providing such
19investment direction. A person who is a fiduciary shall not be
20liable for any loss resulting from such investment direction
21and shall not be deemed to have breached any fiduciary duty by
22acting in accordance with that direction. Neither the System
23nor the employer guarantees any of the investments in the
24employee's account balances.
25    (e) Participation. An employee eligible to participate in
26the self-managed plan must make a written election in

 

 

09700HB3076sam002- 153 -LRB097 06263 JDS 70346 a

1accordance with the provisions of Section 15-134.5 and the
2procedures established by the System. Participation in the
3self-managed plan by an electing employee shall begin on the
4first day of the first pay period following the later of the
5date the employee's election is filed with the System or the
6effective date as of which the employee's employer begins to
7offer participation in the self-managed plan. Employers may not
8make the self-managed plan available earlier than January 1,
91998. An employee's participation in any other retirement
10program administered by the System under this Article shall
11terminate on the date that participation in the self-managed
12plan begins.
13    An employee who has elected to participate in the
14self-managed plan under this Section must continue
15participation while employed in an eligible position, and may
16not participate in any other retirement program administered by
17the System under this Article while employed by that employer
18or any other employer that has adopted the self-managed plan,
19unless the self-managed plan is terminated in accordance with
20subsection (i).
21    Participation in the self-managed plan under this Section
22shall constitute membership in the State Universities
23Retirement System.
24    A participant under this Section shall be entitled to the
25benefits of Article 20 of this Code.
26    (f) Establishment of Initial Account Balance. If at the

 

 

09700HB3076sam002- 154 -LRB097 06263 JDS 70346 a

1time an employee elects to participate in the self-managed plan
2he or she has rights and credits in the System due to previous
3participation in the traditional benefit package, the System
4shall establish for the employee an opening account balance in
5the self-managed plan, equal to the amount of contribution
6refund that the employee would be eligible to receive under
7Section 15-154 if the employee terminated employment on that
8date and elected a refund of contributions, except that this
9hypothetical refund shall include interest at the effective
10rate for the respective years. The System shall transfer assets
11from the defined benefit retirement program to the self-managed
12plan, as a tax free transfer in accordance with Internal
13Revenue Service guidelines, for purposes of funding the
14employee's opening account balance.
15    (g) No Duplication of Service Credit. Notwithstanding any
16other provision of this Article, an employee may not purchase
17or receive service or service credit applicable to any other
18retirement program administered by the System under this
19Article for any period during which the employee was a
20participant in the self-managed plan established under this
21Section.
22    (h) Contributions. The self-managed plan shall be funded by
23contributions from employees participating in the self-managed
24plan and employer contributions as provided in this Section.
25    The contribution rate for employees participating in the
26self-managed plan under this Section shall be equal to the

 

 

09700HB3076sam002- 155 -LRB097 06263 JDS 70346 a

1employee contribution rate for other participants in the
2System, as provided in Section 15-157. This required
3contribution shall be made as an "employer pick-up" under
4Section 414(h) of the Internal Revenue Code of 1986 or any
5successor Section thereof. Any employee participating in the
6System's traditional benefit package prior to his or her
7election to participate in the self-managed plan shall continue
8to have the employer pick up the contributions required under
9Section 15-157. However, the amounts picked up after the
10election of the self-managed plan shall be remitted to and
11treated as assets of the self-managed plan. In no event shall
12an employee have an option of receiving these amounts in cash.
13Employees may make additional contributions to the
14self-managed plan in accordance with procedures prescribed by
15the System, to the extent permitted under rules prescribed by
16the System.
17    The program shall provide for employer contributions to be
18credited to each self-managed plan participant at a rate of
197.6% of the participating employee's salary, less the amount
20used by the System to provide disability benefits for the
21employee. The amounts so credited shall be paid into the
22participant's self-managed plan accounts in a manner to be
23prescribed by the System.
24    An amount of employer contribution, not exceeding 1% of the
25participating employee's salary, shall be used for the purpose
26of providing the disability benefits of the System to the

 

 

09700HB3076sam002- 156 -LRB097 06263 JDS 70346 a

1employee. Prior to the beginning of each plan year under the
2self-managed plan, the Board of Trustees shall determine, as a
3percentage of salary, the amount of employer contributions to
4be allocated during that plan year for providing disability
5benefits for employees in the self-managed plan.
6    The State of Illinois shall make contributions by
7appropriations to the System of the employer contributions
8required for employees who participate in the self-managed plan
9under this Section. The amount required shall be certified by
10the Board of Trustees of the System and paid by the State in
11accordance with Section 15-165. The System shall not be
12obligated to remit the required employer contributions to any
13of the insurance and annuity companies, mutual fund companies,
14banks, trust companies, financial institutions, or other
15sponsors of any of the funding vehicles offered under the
16self-managed plan until it has received the required employer
17contributions from the State. In the event of a deficiency in
18the amount of State contributions, the System shall implement
19those procedures described in subsection (c) of Section 15-165
20to obtain the required funding from the General Revenue Fund.
21    (i) Termination. The self-managed plan authorized under
22this Section may be terminated by the System, subject to the
23terms of any relevant contracts, and the System shall have no
24obligation to reestablish the self-managed plan under this
25Section. This Section does not create a right to continued
26participation in any self-managed plan set up by the System

 

 

09700HB3076sam002- 157 -LRB097 06263 JDS 70346 a

1under this Section. If the self-managed plan is terminated, the
2participants shall have the right to participate in one of the
3other retirement programs offered by the System and receive
4service credit in such other retirement program for any years
5of employment following the termination.
6    (j) Vesting; Withdrawal; Return to Service. A participant
7in the self-managed plan becomes vested in the employer
8contributions credited to his or her accounts in the
9self-managed plan on the earliest to occur of the following:
10(1) completion of 5 years of service with an employer described
11in Section 15-106; (2) the death of the participating employee
12while employed by an employer described in Section 15-106, if
13the participant has completed at least 1 1/2 years of service;
14or (3) the participant's election to retire and apply the
15reciprocal provisions of Article 20 of this Code.
16    A participant in the self-managed plan who receives a
17distribution of his or her vested amounts from the self-managed
18plan while not yet eligible for retirement under this Article
19(and Article 20, if applicable) shall forfeit all service
20credit and accrued rights in the System; if subsequently
21re-employed, the participant shall be considered a new
22employee. If a former participant again becomes a participating
23employee (or becomes employed by a participating system under
24Article 20 of this Code) and continues as such for at least 2
25years, all such rights, service credits, and previous status as
26a participant shall be restored upon repayment of the amount of

 

 

09700HB3076sam002- 158 -LRB097 06263 JDS 70346 a

1the distribution, without interest.
2    (k) Benefit amounts. If an employee who is vested in
3employer contributions terminates employment, the employee
4shall be entitled to a benefit which is based on the account
5values attributable to both employer and employee
6contributions and any investment return thereon.
7    If an employee who is not vested in employer contributions
8terminates employment, the employee shall be entitled to a
9benefit based solely on the account values attributable to the
10employee's contributions and any investment return thereon,
11and the employer contributions and any investment return
12thereon shall be forfeited. Any employer contributions which
13are forfeited shall be held in escrow by the company investing
14those contributions and shall be used as directed by the System
15for future allocations of employer contributions or for the
16restoration of amounts previously forfeited by former
17participants who again become participating employees.
18(Source: P.A. 93-347, eff. 7-24-03.)
 
19    (40 ILCS 5/15-159)  (from Ch. 108 1/2, par. 15-159)
20    Sec. 15-159. Board created.
21    (a) A board of trustees constituted as provided in this
22Section shall administer this System. The board shall be known
23as the Board of Trustees of the State Universities Retirement
24System.
25    (b) Until July 1, 1995, the Board of Trustees shall be

 

 

09700HB3076sam002- 159 -LRB097 06263 JDS 70346 a

1constituted as follows:
2    Two trustees shall be members of the Board of Trustees of
3the University of Illinois, one shall be a member of the Board
4of Trustees of Southern Illinois University, one shall be a
5member of the Board of Trustees of Chicago State University,
6one shall be a member of the Board of Trustees of Eastern
7Illinois University, one shall be a member of the Board of
8Trustees of Governors State University, one shall be a member
9of the Board of Trustees of Illinois State University, one
10shall be a member of the Board of Trustees of Northeastern
11Illinois University, one shall be a member of the Board of
12Trustees of Northern Illinois University, one shall be a member
13of the Board of Trustees of Western Illinois University, and
14one shall be a member of the Illinois Community College Board,
15selected in each case by their respective boards, and 2 shall
16be participants of the system appointed by the Governor for a 6
17year term with the first appointment made pursuant to this
18amendatory Act of 1984 to be effective September 1, 1985, and
19one shall be a participant appointed by the Illinois Community
20College Board for a 6 year term, and one shall be a participant
21appointed by the Board of Trustees of the University of
22Illinois for a 6 year term, and one shall be a participant or
23annuitant of the system who is a senior citizen age 60 or older
24appointed by the Governor for a 6 year term with the first
25appointment to be effective September 1, 1985.
26    The terms of all trustees holding office under this

 

 

09700HB3076sam002- 160 -LRB097 06263 JDS 70346 a

1subsection (b) on June 30, 1995 shall terminate at the end of
2that day and the Board shall thereafter be constituted as
3provided in subsection (c).
4    (c) Beginning July 1, 1995, the Board of Trustees shall be
5constituted as follows:
6    The Board shall consist of 9 trustees appointed by the
7Governor. Two of the trustees, designated at the time of
8appointment, shall be participants of the System. Two of the
9trustees, designated at the time of appointment, shall be
10annuitants of the System who are receiving retirement annuities
11under this Article. The 5 remaining trustees may, but need not,
12be participants or annuitants of the System.
13    The term of office of trustees appointed under this
14subsection (c) shall be 6 years, beginning on July 1. However,
15of the initial trustees appointed under this subsection (c), 3
16shall be appointed for terms of 2 years, 3 shall be appointed
17for terms of 4 years, and 3 shall be appointed for terms of 6
18years, to be designated by the Governor at the time of
19appointment.
20    The terms of all trustees holding office under this
21subsection (c) on the effective date of this amendatory Act of
22the 96th General Assembly shall terminate on that effective
23date. The Governor shall make nominations for appointment under
24this Section within 60 days after the effective date of this
25amendatory Act of the 96th General Assembly. A trustee sitting
26on the board on the effective date of this amendatory Act of

 

 

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1the 96th General Assembly may not hold over in office for more
2than 90 days after the effective date of this amendatory Act of
3the 96th General Assembly. Nothing in this Section shall
4prevent the Governor from making a temporary appointment or
5nominating a trustee holding office on the day before the
6effective date of this amendatory Act of the 96th General
7Assembly.
8    (d) Beginning on the 90th day after the effective date of
9this amendatory Act of the 96th General Assembly, the Board of
10Trustees shall be constituted as follows:
11        (1) The Chairperson of the Board of Higher Education,
12    who shall act as chairperson of this Board.
13        (2) Two Four trustees appointed by the Governor with
14    the advice and consent of the Senate who may not be members
15    of the system or hold an elective State office and who
16    shall serve for a term of 6 years, except that the terms of
17    the initial appointees under this subsection (d) shall be
18    as follows: 1 2 for a term of 3 years and 1 2 for a term of
19    6 years.
20        (3) Four active participants of the system to be
21    elected from the contributing membership of the system by
22    the contributing members, no more than 2 of which may be
23    from any of the University of Illinois campuses, who shall
24    serve for a term of 6 years, except that the terms of the
25    initial electees shall be as follows: 2 for a term of 3
26    years and 2 for a term of 6 years.

 

 

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1        (4) Two annuitants of the system who have been
2    annuitants for at least one full year, to be elected from
3    and by the annuitants of the system, no more than one of
4    which may be from any of the University of Illinois
5    campuses, who shall serve for a term of 6 years, except
6    that the terms of the initial electees shall be as follows:
7    one for a term of 3 years and one for a term of 6 years.
8        (5) One trustee to be elected by the trustees of the
9    boards of trustees of community colleges in the State.
10        (6) One trustee who serves as a trustee on the board of
11    trustees of a public institution of higher education, as
12    defined in Section 1 of the Board of Higher Education Act,
13    to be elected by the trustees of public institutions of
14    higher education.
15    The 2 positions created by this amendatory Act of the 97th
16General Assembly shall be filled as soon as practicable by
17appointment of the Board, and the persons so appointed shall
18serve until such time as the System can conduct elections to
19fill those positions.
20    For the purposes of this Section, the Governor may make a
21nomination and the Senate may confirm the nominee in advance of
22the commencement of the nominee's term of office.
23    (e) The 6 elected trustees shall be elected within 90 days
24after the effective date of this amendatory Act of the 96th
25General Assembly for a term beginning on the 90th day after the
26effective date of this amendatory Act. Trustees shall be

 

 

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1elected thereafter as terms expire for a 6-year term beginning
2July 15 next following their election, and such election shall
3be held on May 1, or on May 2 when May 1 falls on a Sunday. The
4board may establish rules for the election of trustees to
5implement the provisions of this amendatory Act of the 96th
6General Assembly and for future elections. Candidates for the
7participating trustee shall be nominated by petitions in
8writing, signed by not less than 400 participants with their
9addresses shown opposite their names. Candidates for the
10annuitant trustee shall be nominated by petitions in writing,
11signed by not less than 100 annuitants with their addresses
12shown opposite their names. If there is more than one qualified
13nominee for each elected trustee, then the board shall conduct
14a secret ballot election by mail for that trustee, in
15accordance with rules as established by the board. If there is
16only one qualified person nominated by petition for each
17elected trustee, then the election as required by this Section
18shall not be conducted for that trustee and the board shall
19declare such nominee duly elected. A vacancy occurring in the
20elective membership of the board shall be filled for the
21unexpired term by the elected trustees serving on the board for
22the remainder of the term.
23    (f) A vacancy on the board of trustees caused by
24resignation, death, expiration of term of office, or other
25reason shall be filled by a qualified person appointed by the
26Governor for the remainder of the unexpired term.

 

 

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1    (g) Trustees (other than the trustees incumbent on June 30,
21995 or as provided in subsection (c) of this Section) shall
3continue in office until their respective successors are
4appointed and have qualified, except that a trustee appointed
5to one of the participant positions shall be disqualified
6immediately upon the termination of his or her status as a
7participant and a trustee appointed to one of the annuitant
8positions shall be disqualified immediately upon the
9termination of his or her status as an annuitant receiving a
10retirement annuity.
11    (h) Each trustee must take an oath of office before a
12notary public of this State and shall qualify as a trustee upon
13the presentation to the board of a certified copy of the oath.
14The oath must state that the person will diligently and
15honestly administer the affairs of the retirement system, and
16will not knowingly violate or wilfully permit to be violated
17any provisions of this Article.
18    Each trustee shall serve without compensation but shall be
19reimbursed for expenses necessarily incurred in attending
20board meetings and carrying out his or her duties as a trustee
21or officer of the system.
22    (i) This amendatory Act of 1995 is intended to supersede
23the changes made to this Section by Public Act 89-4.
24(Source: P.A. 96-6, eff. 4-3-09; 96-1000, eff. 7-2-10.)
 
25    (40 ILCS 5/15-163)  (from Ch. 108 1/2, par. 15-163)

 

 

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1    Sec. 15-163. To consider applications and authorize
2payments.
3    To consider and pass on all certifications of employment
4and applications for annuities and benefits; to authorize the
5granting of annuities and benefits; and to limit or suspend any
6payment or payments, all in accordance with this Article.
7(Source: Laws 1963, p. 161.)
 
8    (40 ILCS 5/15-198)
9    Sec. 15-198. Application and expiration of new benefit
10increases.
11    (a) As used in this Section, "new benefit increase" means
12an increase in the amount of any benefit provided under this
13Article, or an expansion of the conditions of eligibility for
14any benefit under this Article or Article 1, that results from
15an amendment to this Code that takes effect after the effective
16date of this amendatory Act of the 94th General Assembly. "New
17benefit increase", however, does not include any benefit
18increase resulting from the changes made to this Article or
19Article 1 by this amendatory 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.)
 
11    (40 ILCS 5/16-106)  (from Ch. 108 1/2, par. 16-106)
12    Sec. 16-106. Teacher. "Teacher": The following
13individuals, provided that, for employment prior to July 1,
141990, they are employed on a full-time basis, or if not
15full-time, on a permanent and continuous basis in a position in
16which services are expected to be rendered for at least one
17school term:
18        (1) Any educational, administrative, professional or
19    other staff employed in the public common schools included
20    within this system in a position requiring certification
21    under the law governing the certification of teachers;
22        (2) Any educational, administrative, professional or
23    other staff employed in any facility of the Department of
24    Children and Family Services or the Department of Human
25    Services, in a position requiring certification under the

 

 

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1    law governing the certification of teachers, and any person
2    who (i) works in such a position for the Department of
3    Corrections, (ii) was a member of this System on May 31,
4    1987, and (iii) did not elect to become a member of the
5    State Employees' Retirement System pursuant to Section
6    14-108.2 of this Code; except that "teacher" does not
7    include any person who (A) becomes a security employee of
8    the Department of Human Services, as defined in Section
9    14-110, after June 28, 2001 (the effective date of Public
10    Act 92-14), or (B) becomes a member of the State Employees'
11    Retirement System pursuant to Section 14-108.2c of this
12    Code;
13        (3) Any regional superintendent of schools, assistant
14    regional superintendent of schools, State Superintendent
15    of Education; any person employed by the State Board of
16    Education as an executive; any executive of the boards
17    engaged in the service of public common school education in
18    school districts covered under this system of which the
19    State Superintendent of Education is an ex-officio member;
20        (4) Any employee of a school board association
21    operating in compliance with Article 23 of the School Code
22    who is certificated under the law governing the
23    certification of teachers, provided that he or she becomes
24    such an employee before the effective date of this
25    amendatory Act of the 97th General Assembly;
26        (5) Any person employed by the retirement system who:

 

 

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1            (i) was an employee of and a participant in the
2        system on August 17, 2001 (the effective date of Public
3        Act 92-416), or
4            (ii) becomes an employee of the system on or after
5        August 17, 2001;
6        (6) Any educational, administrative, professional or
7    other staff employed by and under the supervision and
8    control of a regional superintendent of schools, provided
9    such employment position requires the person to be
10    certificated under the law governing the certification of
11    teachers and is in an educational program serving 2 or more
12    districts in accordance with a joint agreement authorized
13    by the School Code or by federal legislation;
14        (7) Any educational, administrative, professional or
15    other staff employed in an educational program serving 2 or
16    more school districts in accordance with a joint agreement
17    authorized by the School Code or by federal legislation and
18    in a position requiring certification under the laws
19    governing the certification of teachers;
20        (8) Any officer or employee of a statewide teacher
21    organization or officer of a national teacher organization
22    who is certified under the law governing certification of
23    teachers, provided: (i) the individual had previously
24    established creditable service under this Article, (ii)
25    the individual files with the system an irrevocable
26    election to become a member before the effective date of

 

 

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1    this amendatory Act of the 97th General Assembly, (iii) the
2    individual does not receive credit for such service under
3    any other Article of this Code, and (iv) the individual
4    first became an officer or employee of the teacher
5    organization and becomes a member before the effective date
6    of this amendatory Act of the 97th General Assembly;
7        (9) Any educational, administrative, professional, or
8    other staff employed in a charter school operating in
9    compliance with the Charter Schools Law who is certificated
10    under the law governing the certification of teachers.
11        (10) Any person employed, on the effective date of this
12    amendatory Act of the 94th General Assembly, by the
13    Macon-Piatt Regional Office of Education in a
14    birth-through-age-three pilot program receiving funds
15    under Section 2-389 of the School Code who is required by
16    the Macon-Piatt Regional Office of Education to hold a
17    teaching certificate, provided that the Macon-Piatt
18    Regional Office of Education makes an election, within 6
19    months after the effective date of this amendatory Act of
20    the 94th General Assembly, to have the person participate
21    in the system. Any service established prior to the
22    effective date of this amendatory Act of the 94th General
23    Assembly for service as an employee of the Macon-Piatt
24    Regional Office of Education in a birth-through-age-three
25    pilot program receiving funds under Section 2-389 of the
26    School Code shall be considered service as a teacher if

 

 

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1    employee and employer contributions have been received by
2    the system and the system has not refunded those
3    contributions.
4    An annuitant receiving a retirement annuity under this
5Article or under Article 17 of this Code who is employed by a
6board of education or other employer as permitted under Section
716-118 or 16-150.1 is not a "teacher" for purposes of this
8Article. A person who has received a single-sum retirement
9benefit under Section 16-136.4 of this Article is not a
10"teacher" for purposes of this Article.
11(Source: P.A. 97-651, eff. 1-5-12.)
 
12    (40 ILCS 5/16-127)  (from Ch. 108 1/2, par. 16-127)
13    Sec. 16-127. Computation of creditable service.
14    (a) Each member shall receive regular credit for all
15service as a teacher from the date membership begins, for which
16satisfactory evidence is supplied and all contributions have
17been paid.
18    (b) The following periods of service shall earn optional
19credit and each member shall receive credit for all such
20service for which satisfactory evidence is supplied and all
21contributions have been paid as of the date specified:
22        (1) Prior service as a teacher.
23        (2) Service in a capacity essentially similar or
24    equivalent to that of a teacher, in the public common
25    schools in school districts in this State not included

 

 

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1    within the provisions of this System, or of any other
2    State, territory, dependency or possession of the United
3    States, or in schools operated by or under the auspices of
4    the United States, or under the auspices of any agency or
5    department of any other State, and service during any
6    period of professional speech correction or special
7    education experience for a public agency within this State
8    or any other State, territory, dependency or possession of
9    the United States, and service prior to February 1, 1951 as
10    a recreation worker for the Illinois Department of Public
11    Safety, for a period not exceeding the lesser of 2/5 of the
12    total creditable service of the member or 10 years. The
13    maximum service of 10 years which is allowable under this
14    paragraph shall be reduced by the service credit which is
15    validated by other retirement systems under paragraph (i)
16    of Section 15-113 and paragraph 1 of Section 17-133. Credit
17    granted under this paragraph may not be used in
18    determination of a retirement annuity or disability
19    benefits unless the member has at least 5 years of
20    creditable service earned subsequent to this employment
21    with one or more of the following systems: Teachers'
22    Retirement System of the State of Illinois, State
23    Universities Retirement System, and the Public School
24    Teachers' Pension and Retirement Fund of Chicago. Whenever
25    such service credit exceeds the maximum allowed for all
26    purposes of this Article, the first service rendered in

 

 

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1    point of time shall be considered. The changes to this
2    subdivision (b)(2) made by Public Act 86-272 shall apply
3    not only to persons who on or after its effective date
4    (August 23, 1989) are in service as a teacher under the
5    System, but also to persons whose status as such a teacher
6    terminated prior to such effective date, whether or not
7    such person is an annuitant on that date.
8        (3) Any periods immediately following teaching
9    service, under this System or under Article 17, (or
10    immediately following service prior to February 1, 1951 as
11    a recreation worker for the Illinois Department of Public
12    Safety) spent in active service with the military forces of
13    the United States; periods spent in educational programs
14    that prepare for return to teaching sponsored by the
15    federal government following such active military service;
16    if a teacher returns to teaching service within one
17    calendar year after discharge or after the completion of
18    the educational program, a further period, not exceeding
19    one calendar year, between time spent in military service
20    or in such educational programs and the return to
21    employment as a teacher under this System; and a period of
22    up to 2 years of active military service not immediately
23    following employment as a teacher.
24        The changes to this Section and Section 16-128 relating
25    to military service made by P.A. 87-794 shall apply not
26    only to persons who on or after its effective date are in

 

 

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1    service as a teacher under the System, but also to persons
2    whose status as a teacher terminated prior to that date,
3    whether or not the person is an annuitant on that date. In
4    the case of an annuitant who applies for credit allowable
5    under this Section for a period of military service that
6    did not immediately follow employment, and who has made the
7    required contributions for such credit, the annuity shall
8    be recalculated to include the additional service credit,
9    with the increase taking effect on the date the System
10    received written notification of the annuitant's intent to
11    purchase the credit, if payment of all the required
12    contributions is made within 60 days of such notice, or
13    else on the first annuity payment date following the date
14    of payment of the required contributions. In calculating
15    the automatic annual increase for an annuity that has been
16    recalculated under this Section, the increase attributable
17    to the additional service allowable under P.A. 87-794 shall
18    be included in the calculation of automatic annual
19    increases accruing after the effective date of the
20    recalculation.
21        Credit for military service shall be determined as
22    follows: if entry occurs during the months of July, August,
23    or September and the member was a teacher at the end of the
24    immediately preceding school term, credit shall be granted
25    from July 1 of the year in which he or she entered service;
26    if entry occurs during the school term and the teacher was

 

 

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1    in teaching service at the beginning of the school term,
2    credit shall be granted from July 1 of such year. In all
3    other cases where credit for military service is allowed,
4    credit shall be granted from the date of entry into the
5    service.
6        The total period of military service for which credit
7    is granted shall not exceed 5 years for any member unless
8    the service: (A) is validated before July 1, 1964, and (B)
9    does not extend beyond July 1, 1963. Credit for military
10    service shall be granted under this Section only if not
11    more than 5 years of the military service for which credit
12    is granted under this Section is used by the member to
13    qualify for a military retirement allotment from any branch
14    of the armed forces of the United States. The changes to
15    this subdivision (b)(3) made by Public Act 86-272 shall
16    apply not only to persons who on or after its effective
17    date (August 23, 1989) are in service as a teacher under
18    the System, but also to persons whose status as such a
19    teacher terminated prior to such effective date, whether or
20    not such person is an annuitant on that date.
21        (4) Any periods served as a member of the General
22    Assembly.
23        (5)(i) Any periods for which a teacher, as defined in
24    Section 16-106, is granted a leave of absence, provided he
25    or she returns to teaching service creditable under this
26    System or the State Universities Retirement System

 

 

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1    following the leave; (ii) periods during which a teacher is
2    involuntarily laid off from teaching, provided he or she
3    returns to teaching following the lay-off; (iii) periods
4    prior to July 1, 1983 during which a teacher ceased covered
5    employment due to pregnancy, provided that the teacher
6    returned to teaching service creditable under this System
7    or the State Universities Retirement System following the
8    pregnancy and submits evidence satisfactory to the Board
9    documenting that the employment ceased due to pregnancy;
10    and (iv) periods prior to July 1, 1983 during which a
11    teacher ceased covered employment for the purpose of
12    adopting an infant under 3 years of age or caring for a
13    newly adopted infant under 3 years of age, provided that
14    the teacher returned to teaching service creditable under
15    this System or the State Universities Retirement System
16    following the adoption and submits evidence satisfactory
17    to the Board documenting that the employment ceased for the
18    purpose of adopting an infant under 3 years of age or
19    caring for a newly adopted infant under 3 years of age.
20    However, total credit under this paragraph (5) may not
21    exceed 3 years.
22        Any qualified member or annuitant may apply for credit
23    under item (iii) or (iv) of this paragraph (5) without
24    regard to whether service was terminated before the
25    effective date of this amendatory Act of 1997. In the case
26    of an annuitant who establishes credit under item (iii) or

 

 

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1    (iv), the annuity shall be recalculated to include the
2    additional service credit. The increase in annuity shall
3    take effect on the date the System receives written
4    notification of the annuitant's intent to purchase the
5    credit, if the required evidence is submitted and the
6    required contribution paid within 60 days of that
7    notification, otherwise on the first annuity payment date
8    following the System's receipt of the required evidence and
9    contribution. The increase in an annuity recalculated
10    under this provision shall be included in the calculation
11    of automatic annual increases in the annuity accruing after
12    the effective date of the recalculation.
13        Optional credit may be purchased under this subsection
14    (b)(5) for periods during which a teacher has been granted
15    a leave of absence pursuant to Section 24-13 of the School
16    Code. A teacher whose service under this Article terminated
17    prior to the effective date of P.A. 86-1488 shall be
18    eligible to purchase such optional credit. If a teacher who
19    purchases this optional credit is already receiving a
20    retirement annuity under this Article, the annuity shall be
21    recalculated as if the annuitant had applied for the leave
22    of absence credit at the time of retirement. The difference
23    between the entitled annuity and the actual annuity shall
24    be credited to the purchase of the optional credit. The
25    remainder of the purchase cost of the optional credit shall
26    be paid on or before April 1, 1992.

 

 

09700HB3076sam002- 178 -LRB097 06263 JDS 70346 a

1        The change in this paragraph made by Public Act 86-273
2    shall be applicable to teachers who retire after June 1,
3    1989, as well as to teachers who are in service on that
4    date.
5        (6) Any days of unused and uncompensated accumulated
6    sick leave earned by a teacher who first became a
7    participant in the System before the effective date of this
8    amendatory Act of the 97th General Assembly. The service
9    credit granted under this paragraph shall be the ratio of
10    the number of unused and uncompensated accumulated sick
11    leave days to 170 days, subject to a maximum of 2 years of
12    service credit. Prior to the member's retirement, each
13    former employer shall certify to the System the number of
14    unused and uncompensated accumulated sick leave days
15    credited to the member at the time of termination of
16    service. The period of unused sick leave shall not be
17    considered in determining the effective date of
18    retirement. A member is not required to make contributions
19    in order to obtain service credit for unused sick leave.
20        Credit for sick leave shall, at retirement, be granted
21    by the System for any retiring regional or assistant
22    regional superintendent of schools who first became a
23    participant in this System before the effective date of
24    this amendatory Act of the 97th General Assembly at the
25    rate of 6 days per year of creditable service or portion
26    thereof established while serving as such superintendent

 

 

09700HB3076sam002- 179 -LRB097 06263 JDS 70346 a

1    or assistant superintendent.
2    Service credit is not available for unused sick leave
3accumulated by a teacher who first becomes a participant in
4this System on or after the effective date of this amendatory
5Act of the 97th General Assembly.
6        (7) Periods prior to February 1, 1987 served as an
7    employee of the Illinois Mathematics and Science Academy
8    for which credit has not been terminated under Section
9    15-113.9 of this Code.
10        (8) Service as a substitute teacher for work performed
11    prior to July 1, 1990.
12        (9) Service as a part-time teacher for work performed
13    prior to July 1, 1990.
14        (10) Up to 2 years of employment with Southern Illinois
15    University - Carbondale from September 1, 1959 to August
16    31, 1961, or with Governors State University from September
17    1, 1972 to August 31, 1974, for which the teacher has no
18    credit under Article 15. To receive credit under this item
19    (10), a teacher must apply in writing to the Board and pay
20    the required contributions before May 1, 1993 and have at
21    least 12 years of service credit under this Article.
22    (b-1) A member may establish optional credit for up to 2
23years of service as a teacher or administrator employed by a
24private school recognized by the Illinois State Board of
25Education, provided that the teacher (i) was certified under
26the law governing the certification of teachers at the time the

 

 

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1service was rendered, (ii) applies in writing on or after
2August 1, 2009 and on or before August 1, 2012, (iii) supplies
3satisfactory evidence of the employment, (iv) completes at
4least 10 years of contributing service as a teacher as defined
5in Section 16-106, and (v) pays the contribution required in
6subsection (d-5) of Section 16-128. The member may apply for
7credit under this subsection and pay the required contribution
8before completing the 10 years of contributing service required
9under item (iv), but the credit may not be used until the item
10(iv) contributing service requirement has been met.
11    (c) The service credits specified in this Section shall be
12granted only if: (1) such service credits are not used for
13credit in any other statutory tax-supported public employee
14retirement system other than the federal Social Security
15program; and (2) the member makes the required contributions as
16specified in Section 16-128. Except as provided in subsection
17(b-1) of this Section, the service credit shall be effective as
18of the date the required contributions are completed.
19    Any service credits granted under this Section shall
20terminate upon cessation of membership for any cause.
21    Credit may not be granted under this Section covering any
22period for which an age retirement or disability retirement
23allowance has been paid.
24(Source: P.A. 96-546, eff. 8-17-09.)
 
25    (40 ILCS 5/16-158)   (from Ch. 108 1/2, par. 16-158)

 

 

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1    Sec. 16-158. Contributions by State and other employing
2units.
3    (a) Except as otherwise provided in this Section, the The
4State shall make contributions to the System by means of
5appropriations from the Common School Fund and other State
6funds of amounts which, together with other employer
7contributions, employee contributions, investment income, and
8other income, will be sufficient to meet the cost of
9maintaining and administering the System on a 90% funded basis
10in accordance with actuarial recommendations.
11    Beginning with State fiscal year 2014, the employers under
12this Article shall be responsible for paying the normal costs
13of the System plus the amounts required to amortize any total
14cost of the benefits of the System arising on or after July 1,
152013.
16    Beginning with State fiscal year 2014, the State's required
17contributions to the System shall be limited to the amounts
18required to amortize the total cost of the benefits of the
19System arising before July 1, 2013, plus any employer
20contributions required from the State as the actual employer of
21participants under this Article.
22    The Board shall determine the amount of State and employer
23contributions required for each fiscal year on the basis of the
24actuarial tables and other assumptions adopted by the Board and
25the recommendations of the actuary, using the formulas provided
26in this Section formula in subsection (b-3).

 

 

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1    (a-1) Annually, on or before November 15 until November 15,
22011, the Board shall certify to the Governor the amount of the
3required State contribution for the coming fiscal year. The
4certification under this subsection (a-1) shall include a copy
5of the actuarial recommendations upon which it is based and
6shall specifically identify the System's projected State
7normal cost for that fiscal year.
8    On or before May 1, 2004, the Board shall recalculate and
9recertify to the Governor the amount of the required State
10contribution to the System for State fiscal year 2005, taking
11into account the amounts appropriated to and received by the
12System under subsection (d) of Section 7.2 of the General
13Obligation Bond Act.
14    On or before July 1, 2005 April 1, 2011, the Board shall
15recalculate and recertify to the Governor the amount of the
16required State contribution to the System for State fiscal year
172006, taking into account the changes in required State
18contributions made by this amendatory Act of the 94th General
19Assembly.
20    On or before April 1, 2011 June 15, 2010, the Board shall
21recalculate and recertify to the Governor the amount of the
22required State contribution to the System for State fiscal year
232011, applying the changes made by Public Act 96-889 to the
24System's assets and liabilities as of June 30, 2009 as though
25Public Act 96-889 was approved on that date.
26    (a-5) On or before November 1 of each year, beginning

 

 

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1November 1, 2012, the Board shall submit to the State Actuary,
2the Governor, and the General Assembly a proposed certification
3of the amount of the required State contribution to the System
4for the next fiscal year, along with all of the actuarial
5assumptions, calculations, and data upon which that proposed
6certification is based. On or before January 1 of each year,
7beginning January 1, 2013, the State Actuary shall issue a
8preliminary report concerning the proposed certification and
9identifying, if necessary, recommended changes in actuarial
10assumptions that the Board must consider before finalizing its
11certification of the required State contributions. On or before
12January 15, 2013 and each January 15 thereafter, the Board
13shall certify to the Governor and the General Assembly the
14amount of the required State contribution for the next fiscal
15year. The Board's certification must note any deviations from
16the State Actuary's recommended changes, the reason or reasons
17for not following the State Actuary's recommended changes, and
18the fiscal impact of not following the State Actuary's
19recommended changes on the required State contribution.
20    (b) Through State fiscal year 1995, the State contributions
21shall be paid to the System in accordance with Section 18-7 of
22the School Code.
23    (b-1) Beginning in State fiscal year 1996, on the 15th day
24of each month, or as soon thereafter as may be practicable, the
25Board shall submit vouchers for payment of State contributions
26to the System, in a total monthly amount of one-twelfth of the

 

 

09700HB3076sam002- 184 -LRB097 06263 JDS 70346 a

1required annual State contribution certified under subsection
2(a-1). From the effective date of this amendatory Act of the
393rd General Assembly through June 30, 2004, the Board shall
4not submit vouchers for the remainder of fiscal year 2004 in
5excess of the fiscal year 2004 certified contribution amount
6determined under this Section after taking into consideration
7the transfer to the System under subsection (a) of Section
86z-61 of the State Finance Act. These vouchers shall be paid by
9the State Comptroller and Treasurer by warrants drawn on the
10funds appropriated to the System for that fiscal year.
11    If in any month the amount remaining unexpended from all
12other appropriations to the System for the applicable fiscal
13year (including the appropriations to the System under Section
148.12 of the State Finance Act and Section 1 of the State
15Pension Funds Continuing Appropriation Act) is less than the
16amount lawfully vouchered under this subsection, the
17difference shall be paid from the Common School Fund under the
18continuing appropriation authority provided in Section 1.1 of
19the State Pension Funds Continuing Appropriation Act.
20    (b-2) Allocations from the Common School Fund apportioned
21to school districts not coming under this System shall not be
22diminished or affected by the provisions of this Article.
23    (b-3) For State fiscal years 2012 and 2013 through 2045,
24the minimum contribution to the System to be made by the State
25for each fiscal year shall be an amount determined by the
26System to be sufficient to bring the total assets of the System

 

 

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1up to 90% of the total actuarial liabilities of the System by
2the end of State fiscal year 2045. In making these
3determinations, the required State contribution shall be
4calculated each year as a level percentage of payroll over the
5years remaining to and including fiscal year 2045 and shall be
6determined under the projected unit credit actuarial cost
7method.
8    Except as provided in subsection (b-5), for State fiscal
9years 2014 through 2045 or until the State has amortized 100%
10of the total cost of benefits accrued by July 1, 2013,
11whichever is earlier, in addition to any employer contributions
12required from the State as an employer, the minimum
13contribution to the System to be made by the State for each
14fiscal year shall be an amount determined by the Board to be
15sufficient to amortize, by the end of State fiscal year 2045,
16the total cost of the benefits of the System arising before
17July 1, 2013. In making these determinations, the required
18State contribution shall be calculated each year as a level
19percentage of payroll over the years remaining to and including
20fiscal year 2043 and shall be determined under the projected
21unit credit actuarial cost method.
22    Except as provided in subsection (b-5), beginning in State
23fiscal year 2046 or on the date that the State has amortized
24100% of the total cost of benefits accrued by July 1, 2013,
25whichever is earlier, the State has no further obligation to
26make contributions to the System under this subsection (b-3).

 

 

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1    For State fiscal years 1996 through 2005, the State
2contribution to the System, as a percentage of the applicable
3employee payroll, shall be increased in equal annual increments
4so that by State fiscal year 2011, the State is contributing at
5the rate required under this Section; except that in the
6following specified State fiscal years, the State contribution
7to the System shall not be less than the following indicated
8percentages of the applicable employee payroll, even if the
9indicated percentage will produce a State contribution in
10excess of the amount otherwise required under this subsection
11and subsection (a), and notwithstanding any contrary
12certification made under subsection (a-1) before the effective
13date of this amendatory Act of 1998: 10.02% in FY 1999; 10.77%
14in FY 2000; 11.47% in FY 2001; 12.16% in FY 2002; 12.86% in FY
152003; and 13.56% in FY 2004.
16    Notwithstanding any other provision of this Article, the
17total required State contribution for State fiscal year 2006 is
18$534,627,700.
19    Notwithstanding any other provision of this Article, the
20total required State contribution for State fiscal year 2007 is
21$738,014,500.
22    For each of State fiscal years 2008 through 2009, the State
23contribution to the System, as a percentage of the applicable
24employee payroll, shall be increased in equal annual increments
25from the required State contribution for State fiscal year
262007, so that by State fiscal year 2011, the State is

 

 

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1contributing at the rate otherwise required under this Section.
2    Notwithstanding any other provision of this Article, the
3total required State contribution for State fiscal year 2010 is
4$2,089,268,000 and shall be made from the proceeds of bonds
5sold in fiscal year 2010 pursuant to Section 7.2 of the General
6Obligation Bond Act, less (i) the pro rata share of bond sale
7expenses determined by the System's share of total bond
8proceeds, (ii) any amounts received from the Common School Fund
9in fiscal year 2010, and (iii) any reduction in bond proceeds
10due to the issuance of discounted bonds, if applicable.
11    Notwithstanding any other provision of this Article, the
12total required State contribution for State fiscal year 2011 is
13the amount recertified by the System on or before April 1, 2011
14pursuant to subsection (a-1) of this Section and shall be made
15from the proceeds of bonds sold in fiscal year 2011 pursuant to
16Section 7.2 of the General Obligation Bond Act, less (i) the
17pro rata share of bond sale expenses determined by the System's
18share of total bond proceeds, (ii) any amounts received from
19the Common School Fund in fiscal year 2011, and (iii) any
20reduction in bond proceeds due to the issuance of discounted
21bonds, if applicable. This amount shall include, in addition to
22the amount certified by the System, an amount necessary to meet
23employer contributions required by the State as an employer
24under paragraph (e) of this Section, which may also be used by
25the System for contributions required by paragraph (a) of
26Section 16-127.

 

 

09700HB3076sam002- 188 -LRB097 06263 JDS 70346 a

1    Beginning in State fiscal year 2046, the minimum State
2contribution for each fiscal year shall be the amount needed to
3maintain the total assets of the System at 90% of the total
4actuarial liabilities of the System.
5    Amounts received by the System pursuant to Section 25 of
6the Budget Stabilization Act or Section 8.12 of the State
7Finance Act in any fiscal year do not reduce and do not
8constitute payment of any portion of the minimum State
9contribution required under this Article in that fiscal year.
10Such amounts shall not reduce, and shall not be included in the
11calculation of, the required State contributions under this
12Article in any future year until the System has reached a
13funding ratio of at least 90%. A reference in this Article to
14the "required State contribution" or any substantially similar
15term does not include or apply to any amounts payable to the
16System under Section 25 of the Budget Stabilization Act.
17    Notwithstanding any other provision of this Section, the
18required State contribution for State fiscal year 2005 and for
19fiscal year 2008 through and each fiscal year 2013 thereafter,
20as calculated under this Section and certified under subsection
21(a-1), shall not exceed an amount equal to (i) the amount of
22the required State contribution that would have been calculated
23under this Section for that fiscal year if the System had not
24received any payments under subsection (d) of Section 7.2 of
25the General Obligation Bond Act, minus (ii) the portion of the
26State's total debt service payments for that fiscal year on the

 

 

09700HB3076sam002- 189 -LRB097 06263 JDS 70346 a

1bonds issued in fiscal year 2003 for the purposes of that
2Section 7.2, as determined and certified by the Comptroller,
3that is the same as the System's portion of the total moneys
4distributed under subsection (d) of Section 7.2 of the General
5Obligation Bond Act. In determining this maximum for State
6fiscal years 2008 through 2010, however, the amount referred to
7in item (i) shall be increased, as a percentage of the
8applicable employee payroll, in equal increments calculated
9from the sum of the required State contribution for State
10fiscal year 2007 plus the applicable portion of the State's
11total debt service payments for fiscal year 2007 on the bonds
12issued in fiscal year 2003 for the purposes of Section 7.2 of
13the General Obligation Bond Act, so that, by State fiscal year
142011, the State is contributing at the rate otherwise required
15under this Section.
16    (b-5) If at least 50% of Tier I employees making an
17election under Section 16-131.7 before June 1, 2013 choose the
18option under paragraph (1) of subsection (a) of that Section,
19then beginning in State fiscal year 2014, instead of the
20contributions specified in subsection (b-3) of this Section,
21the State contributions specified in subsection (b-7) of this
22Section shall be paid.
23    In making its initial certification of the annual required
24contribution by the State for State fiscal year 2014, the Board
25shall assume that the new funding formula provided in
26subsection (b-7) of this Section applies. If fewer than 50% of

 

 

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1Tier I employees making an election under Section 16-131.7
2before June 1, 2013 choose the option under paragraph (1) of
3subsection (a) of that Section, then:
4        (1) instead of the contributions specified in
5    subsection (b-7) of this Section, the State contributions
6    specified in subsection (b-3) shall continue to be paid;
7    and
8        (2) as soon as possible after June 1, 2013, the Board
9    shall recertify the annual required contribution by the
10    State for State fiscal year 2014.
11    (b-7) For State fiscal years 2014 through 2043 or until the
12State has amortized 100% of the total cost of benefits accrued
13by July 1, 2013, whichever is earlier, in addition to any
14employer contributions required from the State as an employer,
15the minimum contribution to the System to be made by the State
16for each fiscal year shall be an amount determined by the Board
17to be sufficient to amortize, by the end of State fiscal year
182043, the total cost of the benefits of the System arising
19before July 1, 2013. In making these determinations, the
20required State contribution shall be calculated each year as a
21level percentage of payroll over the years remaining to and
22including fiscal year 2043 and shall be determined under the
23projected unit credit actuarial cost method.
24    Beginning in State fiscal year 2044 or on the date that the
25State has amortized 100% of the total cost of benefits accrued
26by July 1, 2013, whichever is earlier, the State has no further

 

 

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1obligation to make contributions to the System under this
2subsection (a-5).
3    (b-10) Subject to the limitations provided in subsection
4(b-15), beginning with State fiscal year 2014, the minimum
5required contribution of employers under this Article shall be
6determined as a percentage of projected payroll, and shall be
7sufficient to produce an annual amount equal to:
8        (i) the employer's normal cost for that fiscal year for
9    employees who first became participating employees before
10    July 1, 2013; plus
11        (ii) the employer's normal cost for that fiscal year
12    for employees who first become participating employees on
13    or after July 1, 2013; plus
14        (iii) the amount required for that fiscal year to
15    amortize any unfunded actuarial accrued liability arising
16    on or after July 1, 2013 as a level percentage of payroll
17    over a 30-year rolling amortization period.
18    Any contributions required from an employer under
19subsection (f) of this Section are in addition to the
20contributions required under this subsection (b-10).
21    (b-15) For State fiscal year 2014, the required
22contribution of employers under item (i) of subsection (b-10)
23shall be reduced to an amount equal to 1% of payroll.
24    For each fiscal year thereafter, until the Board determines
25and certifies to the Governor that employers are contributing
26under item (i) of subsection (b-10) the full amount actually

 

 

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1specified by item (i) of subsection (b-10), the required
2contribution of employers under item (i) of subsection (b-10)
3shall be the percentage of payroll required under this
4subsection from the previous fiscal year increased by 1% of
5payroll for each of State fiscal years 2015 through 2019, and
6increased by 0.5% of payroll for each State fiscal year after
72019.
8    Contributions required of employers under items (ii) and
9(iii) of subsection (b-10), under subsection (f), and under any
10other applicable provision of this Section are in addition to
11contributions required under item (i) of subsection (b-10).
12    (b-20) Beginning in State fiscal year 2015 and continuing
13until the Board determines and certifies to the Governor that
14employers are contributing under item (i) of subsection (b-10)
15the full amount actually specified by item (i) of subsection
16(b-10), the State shall make an additional contribution to the
17System for each fiscal year, equal to the difference between
18(1) the total contribution calculated under item (i) of
19subsection (b-10) for all employers for that fiscal year, and
20(2) the amount of such total contribution as reduced under
21subsection (b-15).
22    The State contribution under this subsection (b-20) is in
23addition to the State contributions required under subsection
24(b-3) or (b-7) and any contributions required to be paid by the
25State as an employer under subsections (b-10) and (f) of this
26Section.

 

 

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1    (c) Payment of the required State contributions and of all
2pensions, retirement annuities, death benefits, refunds, and
3other benefits granted under or assumed by this System, and all
4expenses in connection with the administration and operation
5thereof, are obligations of the State.
6    If members are paid from special trust or federal funds
7which are administered by the employing unit, whether school
8district or other unit, the employing unit shall pay to the
9System from such funds the full accruing retirement costs based
10upon that service, as determined by the System. Employer
11contributions, based on salary paid to members from federal
12funds, may be forwarded by the distributing agency of the State
13of Illinois to the System prior to allocation, in an amount
14determined in accordance with guidelines established by such
15agency and the System.
16    (d) Effective July 1, 1986, any employer of a teacher as
17defined in paragraph (8) of Section 16-106 shall pay the
18employer's normal cost of benefits based upon the teacher's
19service, in addition to employee contributions, as determined
20by the System. Such employer contributions shall be forwarded
21monthly in accordance with guidelines established by the
22System.
23    However, with respect to benefits granted under Section
2416-133.4 or 16-133.5 to a teacher as defined in paragraph (8)
25of Section 16-106, the employer's contribution shall be 12%
26(rather than 20%) of the member's highest annual salary rate

 

 

09700HB3076sam002- 194 -LRB097 06263 JDS 70346 a

1for each year of creditable service granted, and the employer
2shall also pay the required employee contribution on behalf of
3the teacher. For the purposes of Sections 16-133.4 and
416-133.5, a teacher as defined in paragraph (8) of Section
516-106 who is serving in that capacity while on leave of
6absence from another employer under this Article shall not be
7considered an employee of the employer from which the teacher
8is on leave.
9    (e) Beginning July 1, 1998, every employer of a teacher
10shall pay to the System an employer contribution computed as
11follows:
12        (1) Beginning July 1, 1998 through June 30, 1999, the
13    employer contribution shall be equal to 0.3% of each
14    teacher's salary.
15        (2) Beginning July 1, 1999 and thereafter, the employer
16    contribution shall be equal to 0.58% of each teacher's
17    salary.
18The school district or other employing unit may pay these
19employer contributions out of any source of funding available
20for that purpose and shall forward the contributions to the
21System on the schedule established for the payment of member
22contributions.
23    These employer contributions are intended to offset a
24portion of the cost to the System of the increases in
25retirement benefits resulting from this amendatory Act of 1998.
26    Each employer of teachers is entitled to a credit against

 

 

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1the contributions required under this subsection (e) with
2respect to salaries paid to teachers for the period January 1,
32002 through June 30, 2003, equal to the amount paid by that
4employer under subsection (a-5) of Section 6.6 of the State
5Employees Group Insurance Act of 1971 with respect to salaries
6paid to teachers for that period.
7    The additional 1% employee contribution required under
8Section 16-152 by this amendatory Act of 1998 is the
9responsibility of the teacher and not the teacher's employer,
10unless the employer agrees, through collective bargaining or
11otherwise, to make the contribution on behalf of the teacher.
12    If an employer is required by a contract in effect on May
131, 1998 between the employer and an employee organization to
14pay, on behalf of all its full-time employees covered by this
15Article, all mandatory employee contributions required under
16this Article, then the employer shall be excused from paying
17the employer contribution required under this subsection (e)
18for the balance of the term of that contract. The employer and
19the employee organization shall jointly certify to the System
20the existence of the contractual requirement, in such form as
21the System may prescribe. This exclusion shall cease upon the
22termination, extension, or renewal of the contract at any time
23after May 1, 1998.
24    (f) The employer contributions under this subsection (f)
25are no longer required after June 30, 2013.
26    If the amount of a teacher's salary for any school year

 

 

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1used to determine final average salary exceeds the member's
2annual full-time salary rate with the same employer for the
3previous school year by more than 6%, the teacher's employer
4shall pay to the System, in addition to all other payments
5required under this Section and in accordance with guidelines
6established by the System, the present value of the increase in
7benefits resulting from the portion of the increase in salary
8that is in excess of 6%. This present value shall be computed
9by the System on the basis of the actuarial assumptions and
10tables used in the most recent actuarial valuation of the
11System that is available at the time of the computation. If a
12teacher's salary for the 2005-2006 school year is used to
13determine final average salary under this subsection (f), then
14the changes made to this subsection (f) by Public Act 94-1057
15shall apply in calculating whether the increase in his or her
16salary is in excess of 6%. For the purposes of this Section,
17change in employment under Section 10-21.12 of the School Code
18on or after June 1, 2005 shall constitute a change in employer.
19The System may require the employer to provide any pertinent
20information or documentation. The changes made to this
21subsection (f) by this amendatory Act of the 94th General
22Assembly apply without regard to whether the teacher was in
23service on or after its effective date.
24    Whenever it determines that a payment is or may be required
25under this subsection, the System shall calculate the amount of
26the payment and bill the employer for that amount. The bill

 

 

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1shall specify the calculations used to determine the amount
2due. If the employer disputes the amount of the bill, it may,
3within 30 days after receipt of the bill, apply to the System
4in writing for a recalculation. The application must specify in
5detail the grounds of the dispute and, if the employer asserts
6that the calculation is subject to subsection (g) or (h) of
7this Section, must include an affidavit setting forth and
8attesting to all facts within the employer's knowledge that are
9pertinent to the applicability of that subsection. Upon
10receiving a timely application for recalculation, the System
11shall review the application and, if appropriate, recalculate
12the amount due.
13    The employer contributions required under this subsection
14(f) may be paid in the form of a lump sum within 90 days after
15receipt of the bill. If the employer contributions are not paid
16within 90 days after receipt of the bill, then interest will be
17charged at a rate equal to the System's annual actuarially
18assumed rate of return on investment compounded annually from
19the 91st day after receipt of the bill. Payments must be
20concluded within 3 years after the employer's receipt of the
21bill.
22    (g) This subsection (g) applies only to payments made or
23salary increases given on or after June 1, 2005 but before July
241, 2011. The changes made by Public Act 94-1057 shall not
25require the System to refund any payments received before July
2631, 2006 (the effective date of Public Act 94-1057).

 

 

09700HB3076sam002- 198 -LRB097 06263 JDS 70346 a

1    When assessing payment for any amount due under subsection
2(f), the System shall exclude salary increases paid to teachers
3under contracts or collective bargaining agreements entered
4into, amended, or renewed before June 1, 2005.
5    When assessing payment for any amount due under subsection
6(f), the System shall exclude salary increases paid to a
7teacher at a time when the teacher is 10 or more years from
8retirement eligibility under Section 16-132 or 16-133.2.
9    When assessing payment for any amount due under subsection
10(f), the System shall exclude salary increases resulting from
11overload work, including summer school, when the school
12district has certified to the System, and the System has
13approved the certification, that (i) the overload work is for
14the sole purpose of classroom instruction in excess of the
15standard number of classes for a full-time teacher in a school
16district during a school year and (ii) the salary increases are
17equal to or less than the rate of pay for classroom instruction
18computed on the teacher's current salary and work schedule.
19    When assessing payment for any amount due under subsection
20(f), the System shall exclude a salary increase resulting from
21a promotion (i) for which the employee is required to hold a
22certificate or supervisory endorsement issued by the State
23Teacher Certification Board that is a different certification
24or supervisory endorsement than is required for the teacher's
25previous position and (ii) to a position that has existed and
26been filled by a member for no less than one complete academic

 

 

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1year and the salary increase from the promotion is an increase
2that results in an amount no greater than the lesser of the
3average salary paid for other similar positions in the district
4requiring the same certification or the amount stipulated in
5the collective bargaining agreement for a similar position
6requiring the same certification.
7    When assessing payment for any amount due under subsection
8(f), the System shall exclude any payment to the teacher from
9the State of Illinois or the State Board of Education over
10which the employer does not have discretion, notwithstanding
11that the payment is included in the computation of final
12average salary.
13    (h) When assessing payment for any amount due under
14subsection (f), the System shall exclude any salary increase
15described in subsection (g) of this Section given on or after
16July 1, 2011 but before July 1, 2014 under a contract or
17collective bargaining agreement entered into, amended, or
18renewed on or after June 1, 2005 but before July 1, 2011.
19Notwithstanding any other provision of this Section, any
20payments made or salary increases given after June 30, 2014
21shall be used in assessing payment for any amount due under
22subsection (f) of this Section.
23    (i) The System shall prepare a report and file copies of
24the report with the Governor and the General Assembly by
25January 1, 2007 that contains all of the following information:
26        (1) The number of recalculations required by the

 

 

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1    changes made to this Section by Public Act 94-1057 for each
2    employer.
3        (2) The dollar amount by which each employer's
4    contribution to the System was changed due to
5    recalculations required by Public Act 94-1057.
6        (3) The total amount the System received from each
7    employer as a result of the changes made to this Section by
8    Public Act 94-4.
9        (4) The increase in the required State contribution
10    resulting from the changes made to this Section by Public
11    Act 94-1057.
12    (j) For purposes of determining the required State
13contribution to the System, the value of the System's assets
14shall be equal to the actuarial value of the System's assets,
15which shall be calculated as follows:
16    As of June 30, 2008, the actuarial value of the System's
17assets shall be equal to the market value of the assets as of
18that date. In determining the actuarial value of the System's
19assets for fiscal years after June 30, 2008, any actuarial
20gains or losses from investment return incurred in a fiscal
21year shall be recognized in equal annual amounts over the
225-year period following that fiscal year.
23    (k) For purposes of determining the required State
24contribution to the system for a particular year, the actuarial
25value of assets shall be assumed to earn a rate of return equal
26to the system's actuarially assumed rate of return.

 

 

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1    (l) If the System submits a voucher for monthly
2contributions from the State as required by this Section and
3the State fails to pay within 90 days of receipt of such a
4voucher, the Board shall submit a written request to the
5Comptroller seeking payment. A copy of the request shall be
6filed with the Secretary of State, and the Secretary of State
7shall provide copies to the Governor and General Assembly. No
8earlier than the 16th day after filing a request with the
9Secretary of State, the Board shall have the right to commence
10a mandamus action in the Supreme Court of Illinois to compel
11the Comptroller to satisfy the voucher by making payment from
12the General Revenue Fund. This Section constitutes an express
13waiver of the State's sovereign immunity solely to the extent
14it permits the Board to commence a mandamus action in the
15Illinois Supreme Court to compel the Comptroller to pay a
16voucher for monthly contributions from the State as required in
17this Section.
18(Source: P.A. 95-331, eff. 8-21-07; 95-950, eff. 8-29-08;
1996-43, eff. 7-15-09; 96-1497, eff. 1-14-11; 96-1511, eff.
201-27-11; 96-1554, eff. 3-18-11; revised 4-6-11.)
 
21    (40 ILCS 5/18-140)   (from Ch. 108 1/2, par. 18-140)
22    Sec. 18-140. To certify required State contributions and
23submit vouchers.
24    (a) The Board shall certify to the Governor, on or before
25November 15 of each year until November 15, 2011, the amount of

 

 

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1the required State contribution to the System for the following
2fiscal year and shall specifically identify the System's
3projected State normal cost for that fiscal year. The
4certification shall include a copy of the actuarial
5recommendations upon which it is based and shall specifically
6identify the System's projected State normal cost for that
7fiscal year.
8    On or before November 1 of each year, beginning November 1,
92012, the Board shall submit to the State Actuary, the
10Governor, and the General Assembly a proposed certification of
11the amount of the required State contribution to the System for
12the next fiscal year, along with all of the actuarial
13assumptions, calculations, and data upon which that proposed
14certification is based. On or before January 1 of each year
15beginning January 1, 2013, the State Actuary shall issue a
16preliminary report concerning the proposed certification and
17identifying, if necessary, recommended changes in actuarial
18assumptions that the Board must consider before finalizing its
19certification of the required State contributions. On or before
20January 15, 2013 and every January 15 thereafter, the Board
21shall certify to the Governor and the General Assembly the
22amount of the required State contribution for the next fiscal
23year. The Board's certification must note any deviations from
24the State Actuary's recommended changes, the reason or reasons
25for not following the State Actuary's recommended changes, and
26the fiscal impact of not following the State Actuary's

 

 

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1recommended changes on the required State contribution.
2    On or before May 1, 2004, the Board shall recalculate and
3recertify to the Governor the amount of the required State
4contribution to the System for State fiscal year 2005, taking
5into account the amounts appropriated to and received by the
6System under subsection (d) of Section 7.2 of the General
7Obligation Bond Act.
8    On or before July 1, 2005, the Board shall recalculate and
9recertify to the Governor the amount of the required State
10contribution to the System for State fiscal year 2006, taking
11into account the changes in required State contributions made
12by this amendatory Act of the 94th General Assembly.
13    On or before April 1, 2011, the Board shall recalculate and
14recertify to the Governor the amount of the required State
15contribution to the System for State fiscal year 2011, applying
16the changes made by Public Act 96-889 to the System's assets
17and liabilities as of June 30, 2009 as though Public Act 96-889
18was approved on that date.
19    (b) Beginning in State fiscal year 1996, on or as soon as
20possible after the 15th day of each month the Board shall
21submit vouchers for payment of State contributions to the
22System, in a total monthly amount of one-twelfth of the
23required annual State contribution certified under subsection
24(a). From the effective date of this amendatory Act of the 93rd
25General Assembly through June 30, 2004, the Board shall not
26submit vouchers for the remainder of fiscal year 2004 in excess

 

 

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1of the fiscal year 2004 certified contribution amount
2determined under this Section after taking into consideration
3the transfer to the System under subsection (c) of Section
46z-61 of the State Finance Act. These vouchers shall be paid by
5the State Comptroller and Treasurer by warrants drawn on the
6funds appropriated to the System for that fiscal year.
7    If in any month the amount remaining unexpended from all
8other appropriations to the System for the applicable fiscal
9year (including the appropriations to the System under Section
108.12 of the State Finance Act and Section 1 of the State
11Pension Funds Continuing Appropriation Act) is less than the
12amount lawfully vouchered under this Section, the difference
13shall be paid from the General Revenue Fund under the
14continuing appropriation authority provided in Section 1.1 of
15the State Pension Funds Continuing Appropriation Act.
16(Source: P.A. 96-1497, eff. 1-14-11; 96-1511, eff. 1-27-11.)
 
17    (40 ILCS 5/20-121)  (from Ch. 108 1/2, par. 20-121)
18    Sec. 20-121. Calculation of proportional retirement
19annuities. Upon retirement of the employee, a proportional
20retirement annuity shall be computed by each participating
21system in which pension credit has been established on the
22basis of pension credits under each system. The computation
23shall be in accordance with the formula or method prescribed by
24each participating system which is in effect at the date of the
25employee's latest withdrawal from service covered by any of the

 

 

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1systems in which he has pension credits which he elects to have
2considered under this Article. However, (1) the amount of any
3retirement annuity payable under the self-managed plan
4established under Section 15-158.2 of this Code depends solely
5on the value of the participant's vested account balances and
6is not subject to any proportional adjustment under this
7Section, and (2) the amount of any retirement annuity payable
8under the cash balance plan established under Section 1-161 of
9this Code shall be calculated solely in accordance with that
10Section and is not subject to any proportional adjustment under
11this Section.
12    Combined pension credit under all retirement systems
13subject to this Article shall be considered in determining
14whether the minimum qualification has been met and the formula
15or method of computation which shall be applied. If a system
16has a step-rate formula for calculation of the retirement
17annuity, pension credits covering previous service which have
18been established under another system shall be considered in
19determining which range or ranges of the step-rate formula are
20to be applicable to the employee.
21    Interest on pension credit shall continue to accumulate in
22accordance with the provisions of the law governing the
23retirement system in which the same has been established during
24the time an employee is in the service of another employer, on
25the assumption such employee, for interest purposes for pension
26credit, is continuing in the service covered by such retirement

 

 

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1system.
2(Source: P.A. 91-887, eff. 7-6-00.)
 
3    (40 ILCS 5/20-123)  (from Ch. 108 1/2, par. 20-123)
4    Sec. 20-123. Survivor's annuity. The provisions governing
5a retirement annuity shall be applicable to a survivor's
6annuity. Appropriate credits shall be established for
7survivor's annuity purposes in those participating systems
8which provide survivor's annuities, according to the same
9conditions and subject to the same limitations and restrictions
10herein prescribed for a retirement annuity. If a participating
11system has no survivor's annuity benefit, or if the survivor's
12annuity benefit under that system is waived, pension credit
13established in that system shall not be considered in
14determining eligibility for or the amount of the survivor's
15annuity which may be payable by any other participating system.
16    For persons who participate in the self-managed plan
17established under Section 15-158.2 or the portable benefit
18package established under Section 15-136.4, pension credit
19established under Article 15 may be considered in determining
20eligibility for or the amount of the survivor's annuity that is
21payable by any other participating system, but pension credit
22established in any other system shall not result in any right
23to a survivor's annuity under the Article 15 system.
24    For persons who participate in the cash balance plan
25established under Section 1-161, pension credit established

 

 

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1under the participating system with respect to which the person
2participates in the cash balance plan may be considered in
3determining eligibility for or the amount of the survivor's
4annuity that is payable by any other participating system with
5respect to which the person does not participate in the cash
6balance plan, but the amount of any survivor's annuity payable
7under the cash balance plan established under Section 1-161
8shall be calculated solely in accordance with that Section.
9(Source: P.A. 91-887, eff. 7-6-00.)
 
10    (40 ILCS 5/20-124)  (from Ch. 108 1/2, par. 20-124)
11    Sec. 20-124. Maximum benefits.
12    (a) In no event shall the combined retirement or survivors
13annuities exceed the highest annuity which would have been
14payable by any participating system in which the employee has
15pension credits, if all of his pension credits had been
16validated in that system.
17    If the combined annuities should exceed the highest maximum
18as determined in accordance with this Section, the respective
19annuities shall be reduced proportionately according to the
20ratio which the amount of each proportional annuity bears to
21the aggregate of all such annuities; except that benefits
22payable under the cash balance plan established under Section
231-161 are not subject to proportionate reduction under this
24Section.
25    (b) In the case of a participant in the self-managed plan

 

 

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1established under Section 15-158.2 of this Code to whom the
2provisions of this Article apply:
3        (i) For purposes of calculating the combined
4    retirement annuity and the proportionate reduction, if
5    any, in a retirement annuity other than one payable under
6    the self-managed plan, the amount of the Article 15
7    retirement annuity shall be deemed to be the highest
8    annuity to which the annuitant would have been entitled if
9    he or she had participated in the traditional benefit
10    package as defined in Section 15-103.1 rather than the
11    self-managed plan.
12        (ii) For purposes of calculating the combined
13    survivor's annuity and the proportionate reduction, if
14    any, in a survivor's annuity other than one payable under
15    the self-managed plan, the amount of the Article 15
16    survivor's annuity shall be deemed to be the highest
17    survivor's annuity to which the survivor would have been
18    entitled if the deceased employee had participated in the
19    traditional benefit package as defined in Section 15-103.1
20    rather than the self-managed plan.
21        (iii) Benefits payable under the self-managed plan are
22    not subject to proportionate reduction under this Section.
23(Source: P.A. 91-887, eff. 7-6-00.)
 
24    (40 ILCS 5/20-125)  (from Ch. 108 1/2, par. 20-125)
25    Sec. 20-125. Return to employment - suspension of benefits.

 

 

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1If a retired employee returns to employment which is covered by
2a system from which he is receiving a proportional annuity
3under this Article, his proportional annuity from all
4participating systems shall be suspended during the period of
5re-employment, except that this suspension does not apply to
6any distributions payable under the self-managed plan
7established under Section 15-158.2 of this Code.
8    The provisions of the Article under which such employment
9would be covered (including Section 1-161 in the case of a
10participant in the cash balance plan) shall govern the
11determination of whether the employee has returned to
12employment, and if applicable the exemption of temporary
13employment or employment not exceeding a specified duration or
14frequency, for all participating systems from which the retired
15employee is receiving a proportional annuity under this
16Article, notwithstanding any contrary provisions in the other
17Articles governing such systems.
18(Source: P.A. 91-887, eff. 7-6-00.)
 
19    Section 35. The School Code is amended by changing Sections
2024-1 and 24-8 as follows:
 
21    (105 ILCS 5/24-1)  (from Ch. 122, par. 24-1)
22    Sec. 24-1. Appointment - Salaries - Payment - School month -
23 School term.) School boards shall appoint all teachers,
24determine qualifications of employment and fix the amount of

 

 

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1their salaries subject to any limitation set forth in this Act
2and subject to any applicable restrictions in Section 15-134.6
3of the Illinois Pension Code. They shall pay the wages of
4teachers monthly, subject, however, to the provisions of
5Section 24-21. The school month shall be the same as the
6calendar month but by resolution the school board may adopt for
7its use a month of 20 days, including holidays. The school term
8shall consist of at least the minimum number of pupil
9attendance days required by Section 10-19, any additional legal
10school holidays, days of teachers' institutes, or equivalent
11professional educational experiences, and one or two days at
12the beginning of the school term when used as a teachers'
13workshop.
14(Source: P.A. 80-249.)
 
15    (105 ILCS 5/24-8)  (from Ch. 122, par. 24-8)
16    Sec. 24-8. Minimum salary. In fixing the salaries of
17teachers, school boards shall pay those who serve on a
18full-time basis not less than a rate for the school year that
19is based upon training completed in a recognized institution of
20higher learning, as follows: for the school year beginning July
211, 1980 and thereafter, less than a bachelor's degree, $9,000;
22120 semester hours or more and a bachelor's degree, $10,000;
23150 semester hours or more and a master's degree, $11,000.
24    Based upon previous public school experience in this State
25or any other State, territory, dependency or possession of the

 

 

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1United States, or in schools operated by or under the auspices
2of the United States, teachers who serve on a full-time basis
3shall have their salaries increased to at least the following
4amounts above the starting salary for a teacher in such
5district in the same classification: with less than a
6bachelor's degree, $750 after 5 years; with 120 semester hours
7or more and a bachelor's degree, $1,000 after 5 years and
8$1,600 after 8 years; with 150 semester hours or more and a
9master's degree, $1,250 after 5 years, $2,000 after 8 years and
10$2,750 after 13 years. However, any salary increase is subject
11to any applicable restrictions in Section 15-134.6 of the
12Illinois Pension Code.
13    For the purpose of this Section a teacher's salary shall
14include any amount paid by the school district on behalf of the
15teacher, as teacher contributions, to the Teachers' Retirement
16System of the State of Illinois.
17    If a school board establishes a schedule for teachers'
18salaries based on education and experience, not inconsistent
19with this Section, all certificated nurses employed by that
20board shall be paid in accordance with the provisions of such
21schedule (subject to any applicable restrictions in Section
2215-134.6 of the Illinois Pension Code).
23    For purposes of this Section, a teacher who submits a
24certificate of completion to the school office prior to the
25first day of the school term shall be considered to have the
26degree stated in such certificate.

 

 

09700HB3076sam002- 212 -LRB097 06263 JDS 70346 a

1(Source: P.A. 83-913.)
 
2    Section 40. The State Universities Civil Service Act is
3amended by changing Section 36d as follows:
 
4    (110 ILCS 70/36d)  (from Ch. 24 1/2, par. 38b3)
5    Sec. 36d. Powers and duties of the Merit Board.
6    The Merit Board shall have the power and duty-
7    (1) To approve a classification plan prepared under its
8direction, assigning to each class positions of substantially
9similar duties. The Merit Board shall have power to delegate to
10its Director the duty of assigning each position in the
11classified service to the appropriate class in the
12classification plan approved by the Merit Board.
13    (2) To prescribe the duties of each class of positions and
14the qualifications required by employment in that class.
15    (3) To prescribe the range of compensation for each class
16or to fix a single rate of compensation for employees in a
17particular class; and to establish other conditions of
18employment which an employer and employee representatives have
19agreed upon as fair and equitable. The Merit Board shall direct
20the payment of the "prevailing rate of wages" in those
21classifications in which, on January 1, 1952, any employer is
22paying such prevailing rate and in such other classes as the
23Merit Board may thereafter determine. "Prevailing rate of
24wages" as used herein shall be the wages paid generally in the

 

 

09700HB3076sam002- 213 -LRB097 06263 JDS 70346 a

1locality in which the work is being performed to employees
2engaged in work of a similar character. Subject to any
3applicable restrictions in Section 15-134.6 of the Illinois
4Pension Code, each Each employer covered by the University
5System shall be authorized to negotiate with representatives of
6employees to determine appropriate ranges or rates of
7compensation or other conditions of employment and may
8recommend to the Merit Board for establishment the rates or
9ranges or other conditions of employment which the employer and
10employee representatives have agreed upon as fair and
11equitable. Any rates or ranges established prior to January 1,
121952, and hereafter, shall not be changed except in accordance
13with the procedures herein provided.
14    (4) To recommend to the institutions and agencies specified
15in Section 36e standards for hours of work, holidays, sick
16leave, overtime compensation and vacation for the purpose of
17improving conditions of employment covered therein and for the
18purpose of insuring conformity with the prevailing rate
19principal.
20    (5) To prescribe standards of examination for each class,
21the examinations to be related to the duties of such class. The
22Merit Board shall have power to delegate to the Director and
23his staff the preparation, conduct and grading of examinations.
24Examinations may be written, oral, by statement of training and
25experience, in the form of tests of knowledge, skill, capacity,
26intellect, aptitude; or, by any other method, which in the

 

 

09700HB3076sam002- 214 -LRB097 06263 JDS 70346 a

1judgment of the Merit Board is reasonable and practical for any
2particular classification. Different examining procedures may
3be determined for the examinations in different
4classifications but all examinations in the same
5classification shall be uniform.
6    (6) To authorize the continuous recruitment of personnel
7and to that end, to delegate to the Director and his staff the
8power and the duty to conduct open and continuous competitive
9examinations for all classifications of employment.
10    (7) To cause to be established from the results of
11examinations registers for each class of positions in the
12classified service of the State Universities Civil Service
13System, of the persons who shall attain the minimum mark fixed
14by the Merit Board for the examination; and such persons shall
15take rank upon the registers as candidates in the order of
16their relative excellence as determined by examination,
17without reference to priority of time of examination.
18    (8) To provide by its rules for promotions in the
19classified service. Vacancies shall be filled by promotion
20whenever practicable. For the purpose of this paragraph, an
21advancement in class shall constitute a promotion.
22    (9) To set a probationary period of employment of no less
23than 6 months and no longer than 12 months for each class of
24positions in the classification plan, the length of the
25probationary period for each class to be determined by the
26Director.

 

 

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1    (10) To provide by its rules for employment at regular
2rates of compensation of physically handicapped persons in
3positions in which the handicap does not prevent the individual
4from furnishing satisfactory service.
5    (11) To make and publish rules, to carry out the purpose of
6the State Universities Civil Service System and for
7examination, appointments, transfers and removals and for
8maintaining and keeping records of the efficiency of officers
9and employees and groups of officers and employees in
10accordance with the provisions of Sections 36b to 36q,
11inclusive, and said Merit Board may from time to time make
12changes in such rules.
13    (12) To appoint a Director and such assistants and other
14clerical and technical help as may be necessary efficiently to
15administer Sections 36b to 36q, inclusive. To authorize the
16Director to appoint an assistant resident at the place of
17employment of each employer specified in Section 36e and this
18assistant may be authorized to give examinations and to certify
19names from the regional registers provided in Section 36k.
20    (13) To submit to the Governor of this state on or before
21November 1 of each year prior to the regular session of the
22General Assembly a report of the University System's business
23and an estimate of the amount of appropriation from state funds
24required for the purpose of administering the University
25System.
26(Source: P.A. 82-524.)
 

 

 

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1    Section 45. The University of Illinois Act is amended by
2adding Section 80 as follows:
 
3    (110 ILCS 305/80 new)
4    Sec. 80. Future increases in income. The University of
5Illinois must not pay, offer, or agree to pay any future
6increase in income, as that term is defined in Section 15-134.6
7of the Illinois Pension Code, to any person in a manner that
8violates any of those Sections.
 
9    Section 50. The Southern Illinois University Management
10Act is amended by adding Section 65 as follows:
 
11    (110 ILCS 520/65 new)
12    Sec. 65. Future increases in income. Southern Illinois
13University must not pay, offer, or agree to pay any future
14increase in income, as that term is defined in Section 15-134.6
15of the Illinois Pension Code, to any person in a manner that
16violates any of those Sections.
 
17    Section 55. The Chicago State University Law is amended by
18adding Section 5-175 as follows:
 
19    (110 ILCS 660/5-175 new)
20    Sec. 5-175. Future increases in income. Chicago State

 

 

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1University must not pay, offer, or agree to pay any future
2increase in income, as that term is defined in Section 15-134.6
3of the Illinois Pension Code, to any person in a manner that
4violates any of those Sections.
 
5    Section 60. The Eastern Illinois University Law is amended
6by adding Section 10-175 as follows:
 
7    (110 ILCS 665/10-175 new)
8    Sec. 10-175. Future increases in income. Eastern Illinois
9University must not pay, offer, or agree to pay any future
10increase in income, as that term is defined in Section 15-134.6
11of the Illinois Pension Code, to any person in a manner that
12violates any of those Sections.
 
13    Section 65. The Governors State University Law is amended
14by adding Section 15-175 as follows:
 
15    (110 ILCS 670/15-175 new)
16    Sec. 15-175. Future increases in income. Governors State
17University must not pay, offer, or agree to pay any future
18increase in income, as that term is defined in Section 15-134.6
19of the Illinois Pension Code, to any person in a manner that
20violates any of those Sections.
 
21    Section 70. The Illinois State University Law is amended by

 

 

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1adding Section 20-180 as follows:
 
2    (110 ILCS 675/20-180 new)
3    Sec. 20-180. Future increases in income. Illinois State
4University must not pay, offer, or agree to pay any future
5increase in income, as that term is defined in Section 15-134.6
6of the Illinois Pension Code, to any person in a manner that
7violates any of those Sections.
 
8    Section 75. The Northeastern Illinois University Law is
9amended by adding Section 25-175 as follows:
 
10    (110 ILCS 680/25-175 new)
11    Sec. 25-175. Future increases in income. Northeastern
12Illinois University must not pay, offer, or agree to pay any
13future increase in income, as that term is defined in Section
1415-134.6 of the Illinois Pension Code, to any person in a
15manner that violates any of those Sections.
 
16    Section 80. The Northern Illinois University Law is amended
17by adding Section 30-185 as follows:
 
18    (110 ILCS 685/30-185 new)
19    Sec. 30-185. Future increases in income. Northern Illinois
20University must not pay, offer, or agree to pay any future
21increase in income, as that term is defined in Section 15-134.6

 

 

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1of the Illinois Pension Code, to any person in a manner that
2violates any of those Sections.
 
3    Section 85. The Western Illinois University Law is amended
4by adding Section 35-180 as follows:
 
5    (110 ILCS 690/35-180 new)
6    Sec. 35-180. Future increases in income. Western Illinois
7University must not pay, offer, or agree to pay any future
8increase in income, as that term is defined in Section 15-134.6
9of the Illinois Pension Code, to any person in a manner that
10violate