Sen. John J. Cullerton

Filed: 5/29/2012

 

 


 

 


 
09700HB3865sam003LRB097 14296 JDS 70341 a

1
AMENDMENT TO HOUSE BILL 3865

2    AMENDMENT NO. ______. Amend House Bill 3865, 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 16-131.7 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 16-131.7 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 16-131.7 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 adding Section 6.16 as follows:
 

 

 

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1    (5 ILCS 375/6.16 new)
2    Sec. 6.16. Health benefit election for Tier I employees and
3Tier I retirees.
4    (a) For purposes of this Section:
5    "Eligible Tier I employee" means an individual who makes or
6is deemed to have made an election under paragraph (1) of
7subsection (a) of Sections 2-110.3 and 16-131.7 of the Illinois
8Pension Code.
9    "Eligible Tier I retiree" means an individual who makes or
10is deemed to have made an election under paragraph (1) of
11subsection (a-5) of Sections 2-110.3 and 16-131.7 of the
12Illinois Pension Code.
13    "Program of health benefits" means (i) a health plan, as
14defined in subsection (o) of Section 3 of this Act, that is
15designed and contracted for by the Director under this Act or
16any successor Act or (ii) if administration of that health plan
17is transferred to a trust established by the State or an
18independent Board in order to provide health benefits to a
19class of a persons that includes eligible Tier I retirees, then
20the plan of health benefits provided through that trust.
21    (b) As adequate and legal consideration for making the
22election under paragraph (1) of subsection (a) or (a-5) of
23Sections 2-110.3 and 16-131.7 of the Illinois Pension Code,
24each eligible Tier I employee and each eligible Tier I retiree
25shall receive a vested and enforceable contractual right to
26participate in a program of health benefits while he or she

 

 

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1qualifies as an annuitant or retired employee, or as a TRS
2benefit recipient receiving a retirement annuity. That right
3also extends to such a person's dependents, survivors, and TRS
4dependent beneficiaries, who are eligible under the applicable
5program of health benefits.
6    (c) Notwithstanding subsection (b), eligible Tier I
7employees and eligible Tier I retirees may be required to make
8contributions toward the cost of coverage under a program of
9health benefits.
10    (d) The vested and enforceable contractual right to a
11program of health benefits is not offered as, and shall not be
12considered, a pension benefit under Article XIII, Section 5 of
13the Illinois Constitution, the Illinois Pension Code, or any
14subsequent or successor enactment providing pension benefits.
15    (e) Notwithstanding any other provision of this Act, a Tier
16I employee or Tier I retiree who has made an election under
17paragraph (2) of subsection (a) or (a-5) of Sections 2-110.3
18and 16-131.7 of the Illinois Pension Code shall not be entitled
19to participate in the program of health benefits as an
20annuitant or retired employee, or as a TRS benefit recipient
21receiving a retirement annuity, regardless of any contrary
22election pursuant to any of those Sections under any other
23retirement system.
24    Notwithstanding any other provision of this Act, a Tier I
25employee who is not entitled to participate in the program of
26health benefits as an annuitant or retired employee, or as a

 

 

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1TRS benefit recipient receiving a retirement annuity, due to an
2election under paragraph (2) of subsection (a) or (a-5) of
3Sections 2-110.3 and 16-131.7 of the Illinois Pension Code
4shall not be required to make contributions toward the program
5of health benefits while he or she is an employee or active
6contributor. However, an active employee may be required to
7make contributions toward health benefits he or she receives
8during active employment.
9    (f) The Department shall coordinate with each retirement
10system administering an election in accordance with this
11amendatory Act of the 97th General Assembly to provide
12information concerning the impact of the election of health
13benefits. Each System shall include information prepared by the
14Department in the required election packet. The Department
15shall make information available to Tier I employees and Tier I
16retirees through video materials, group presentations,
17consultation by telephone or other electronic means, or any
18combination of these methods.
 
19    Section 15. The Governor's Office of Management and Budget
20Act is amended by changing Sections 7 and 8 as follows:
 
21    (20 ILCS 3005/7)  (from Ch. 127, par. 417)
22    Sec. 7. All statements and estimates of expenditures
23submitted to the Office in connection with the preparation of a
24State budget, and any other estimates of expenditures,

 

 

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1supporting requests for appropriations, shall be formulated
2according to the various functions and activities for which the
3respective department, office or institution of the State
4government (including the elective officers in the executive
5department and including the University of Illinois and the
6judicial department) is responsible. All such statements and
7estimates of expenditures relating to a particular function or
8activity shall be further formulated or subject to analysis in
9accordance with the following classification of objects:
10    (1) Personal services
11    (2) State contribution for employee group insurance
12    (3) Contractual services
13    (4) Travel
14    (5) Commodities
15    (6) Equipment
16    (7) Permanent improvements
17    (8) Land
18    (9) Electronic Data Processing
19    (10) Telecommunication services
20    (11) Operation of Automotive Equipment
21    (12) Contingencies
22    (13) Reserve
23    (14) Interest
24    (15) Awards and Grants
25    (16) Debt Retirement
26    (17) Non-cost Charges.

 

 

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1    (18) State retirement contribution for annual normal cost
2    (19) State retirement contribution for unfunded accrued
3liability.
4(Source: P.A. 93-25, eff. 6-20-03.)
 
5    (20 ILCS 3005/8)  (from Ch. 127, par. 418)
6    Sec. 8. When used in connection with a State budget or
7expenditure or estimate, items (1) through (16) in the
8classification of objects stated in Section 7 shall have the
9meanings ascribed to those items in Sections 14 through 24.7,
10respectively, of the State Finance Act. "An Act in relation to
11State finance", approved June 10, 1919, as amended.
12    When used in connection with a State budget or expenditure
13or estimate, items (18) and (19) in the classification of
14objects stated in Section 7 shall have the meanings ascribed to
15those items in Sections 24.12 and 24.13, respectively, of the
16State Finance Act.
17(Source: P.A. 82-325.)
 
18    Section 20. The Illinois State Auditing Act is amended by
19adding Section 2-8.1 as follows:
 
20    (30 ILCS 5/2-8.1 new)
21    Sec. 2-8.1. Actuarial Responsibilities.
22    (a) The Auditor General shall contract with or hire an
23actuary to serve as the State Actuary. The State Actuary shall

 

 

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1be retained by, serve at the pleasure of, and be under the
2supervision of the Auditor General and shall be paid from
3appropriations to the office of the Auditor General. The State
4Actuary may be selected by the Auditor General without engaging
5in a competitive procurement process.
6    (b) The State Actuary shall:
7        (1) review assumptions and valuations prepared by
8    actuaries retained by the boards of trustees of the
9    State-funded retirement systems;
10        (2) issue preliminary reports to the boards of trustees
11    of the State-funded retirement systems concerning proposed
12    certifications of required State contributions submitted
13    to the State Actuary by those boards;
14        (3) cooperate with the boards of trustees of the
15    State-funded retirement systems to identify recommended
16    changes in actuarial assumptions that the boards must
17    consider before finalizing their certifications of the
18    required State contributions;
19        (4) conduct reviews of the actuarial practices of the
20    boards of trustees of the State-funded retirement systems;
21        (5) make additional reports as directed by joint
22    resolution of the General Assembly; and
23        (6) perform any other duties assigned by the Auditor
24    General, including, but not limited to, reviews of the
25    actuarial practices of other entities.
26    (c) On or before January 1, 2013 and each January 1

 

 

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1thereafter, the Auditor General shall submit a written report
2to the General Assembly and Governor documenting the initial
3assumptions and valuations prepared by actuaries retained by
4the boards of trustees of the State-funded retirement systems,
5any changes recommended by the State Actuary in the actuarial
6assumptions, and the responses of each board to the State
7Actuary's recommendations.
8    (d) For the purposes of this Section, "State-funded
9retirement system" means a retirement system established
10pursuant to Article 2, 14, 15, 16, or 18 of the Illinois
11Pension Code.
 
12    Section 25. The State Finance Act is amended by changing
13Section 13 and by adding Sections 24.12 and 24.13 as follows:
 
14    (30 ILCS 105/13)  (from Ch. 127, par. 149)
15    Sec. 13. The objects and purposes for which appropriations
16are made are classified and standardized by items as follows:
17    (1) Personal services;
18    (2) State contribution for employee group insurance;
19    (3) Contractual services;
20    (4) Travel;
21    (5) Commodities;
22    (6) Equipment;
23    (7) Permanent improvements;
24    (8) Land;

 

 

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1    (9) Electronic Data Processing;
2    (10) Operation of automotive equipment;
3    (11) Telecommunications services;
4    (12) Contingencies;
5    (13) Reserve;
6    (14) Interest;
7    (15) Awards and Grants;
8    (16) Debt Retirement;
9    (17) Non-Cost Charges;
10    (18) State retirement contribution for annual normal cost;
11    (19) State retirement contribution for unfunded accrued
12liability;
13    (20) (18) Purchase Contract for Real Estate.
14    When an appropriation is made to an officer, department,
15institution, board, commission or other agency, or to a private
16association or corporation, in one or more of the items above
17specified, such appropriation shall be construed in accordance
18with the definitions and limitations specified in this Act,
19unless the appropriation act otherwise provides.
20    An appropriation for a purpose other than one specified and
21defined in this Act may be made only as an additional, separate
22and distinct item, specifically stating the object and purpose
23thereof.
24(Source: P.A. 84-263; 84-264.)
 
25    (30 ILCS 105/24.12 new)

 

 

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1    Sec. 24.12. "State retirement contribution for annual
2normal cost" defined. The term "State retirement contribution
3for annual normal cost" means the portion of the total required
4State contribution to a retirement system for a fiscal year
5that represents the State's portion of the System's projected
6normal cost for that fiscal year, as determined and certified
7by the board of trustees of the retirement system in
8conformance with the applicable provisions of the Illinois
9Pension Code.
 
10    (30 ILCS 105/24.13 new)
11    Sec. 24.13. "State retirement contribution for unfunded
12accrued liability" defined. The term "State retirement
13contribution for unfunded accrued liability" means the portion
14of the total required State contribution to a retirement system
15for a fiscal year that is not included in the State retirement
16contribution for annual normal cost.
 
17    Section 30. The Illinois Pension Code is amended by
18changing Sections 1-103.3, 1-160, 2-108, 2-119.1, 2-124,
192-134, 7-109, 14-106, 14-135.08, 15-107, 15-113.2, 15-113.6,
2015-163, 15-165, 16-106, 16-121, 16-127, 16-133.1, 16-136.1,
2116-152, 16-158, 16-163, 16-165, 16-203, 18-140, 20-121,
2220-123, 20-124, and 20-125 and by adding Sections 1-161, 1-162,
232-105.1, 2-105.2, 2-107.9, 2-110.3, 16-106.4, 16-106.5,
2416-106.6, 16-121.1, 16-131.7, 16-133.6, and 16-158.2 as

 

 

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1follows:
 
2    (40 ILCS 5/1-103.3)
3    Sec. 1-103.3. Application of 1994 amendment; funding
4standard.
5    (a) The provisions of Public Act 88-593 this amendatory Act
6of 1994 that change the method of calculating, certifying, and
7paying the required State contributions to the retirement
8systems established under Articles 2, 14, 15, 16, and 18 shall
9first apply to the State contributions required for State
10fiscal year 1996.
11    (b) (Blank). The General Assembly declares that a funding
12ratio (the ratio of a retirement system's total assets to its
13total actuarial liabilities) of 90% is an appropriate goal for
14State-funded retirement systems in Illinois, and it finds that
15a funding ratio of 90% is now the generally-recognized norm
16throughout the nation for public employee retirement systems
17that are considered to be financially secure and funded in an
18appropriate and responsible manner.
19    (c) Every 5 years, beginning in 1999, the Commission on
20Government Forecasting and Accountability, in consultation
21with the affected retirement systems and the Governor's Office
22of Management and Budget (formerly Bureau of the Budget), shall
23consider and determine whether the funding goals 90% funding
24ratio adopted in Articles 2, 14, 15, 16, and 18 of this Code
25continue subsection (b) continues to represent an appropriate

 

 

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1funding goals goal for State-funded retirement systems in
2Illinois, and it shall report its findings and recommendations
3on this subject to the Governor and the General Assembly.
4(Source: P.A. 93-1067, eff. 1-15-05.)
 
5    (40 ILCS 5/1-160)
6    Sec. 1-160. Provisions applicable to new hires.
7    (a) The provisions of this Section apply to a person who,
8on or after January 1, 2011, first becomes a member or a
9participant under any reciprocal retirement system or pension
10fund established under this Code, other than a retirement
11system or pension fund established under Article 2, 3, 4, 5, 6,
12or 18 of this Code, notwithstanding any other provision of this
13Code to the contrary, but do not apply (i) to any self-managed
14plan established under this Code, (ii) to any person with
15respect to service as a sheriff's law enforcement employee
16under Article 7, (iii) to any person with respect to service
17for which the person participates in the cash balance plan
18established under Section 1-161, or (iv) to any participant of
19the retirement plan established under Section 22-101.
20    A person subject to this Section with respect to service
21under the State Universities Retirement System may irrevocably
22elect to transfer to the cash balance plan under Section 1-161
23with respect to service under the State Universities Retirement
24System by filing with the State Universities Retirement System
25in the manner required by that System, his or her irrevocable

 

 

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1written election to transfer to the cash balance plan.
2Participation in the cash balance plan shall begin no earlier
3than July 1, 2013.
4    A person subject to this Section with respect to service
5under the Teachers' Retirement System of the State of Illinois
6may irrevocably elect to transfer to the cash balance plan
7under Section 1-161 with respect to service under the Teachers'
8Retirement System of the State of Illinois by filing with the
9Teachers' Retirement System of the State of Illinois in the
10manner required by that System, his or her irrevocable written
11election to transfer to the cash balance plan. Participation in
12the cash balance plan shall begin no earlier than July 1, 2013.
13    (b) "Final average salary" means the average monthly (or
14annual) salary obtained by dividing the total salary or
15earnings calculated under the Article applicable to the member
16or participant during the 96 consecutive months (or 8
17consecutive years) of service within the last 120 months (or 10
18years) of service in which the total salary or earnings
19calculated under the applicable Article was the highest by the
20number of months (or years) of service in that period. For the
21purposes of a person who first becomes a member or participant
22of any retirement system or pension fund to which this Section
23applies on or after January 1, 2011, in this Code, "final
24average salary" shall be substituted for the following:
25        (1) In Articles 7 (except for service as sheriff's law
26    enforcement employees) and 15, "final rate of earnings".

 

 

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1        (2) In Articles 8, 9, 10, 11, and 12, "highest average
2    annual salary for any 4 consecutive years within the last
3    10 years of service immediately preceding the date of
4    withdrawal".
5        (3) In Article 13, "average final salary".
6        (4) In Article 14, "final average compensation".
7        (5) In Article 17, "average salary".
8        (6) In Section 22-207, "wages or salary received by him
9    at the date of retirement or discharge".
10    (b-5) Beginning on January 1, 2011, for all purposes under
11this Code (including without limitation the calculation of
12benefits and employee contributions), the annual earnings,
13salary, or wages (based on the plan year) of a member or
14participant to whom this Section applies shall not exceed
15$106,800; however, that amount shall annually thereafter be
16increased by the lesser of (i) 3% of that amount, including all
17previous adjustments, or (ii) one-half the annual unadjusted
18percentage increase (but not less than zero) in the consumer
19price index-u for the 12 months ending with the September
20preceding each November 1, including all previous adjustments.
21    For the purposes of this Section, "consumer price index-u"
22means the index published by the Bureau of Labor Statistics of
23the United States Department of Labor that measures the average
24change in prices of goods and services purchased by all urban
25consumers, United States city average, all items, 1982-84 =
26100. The new amount resulting from each annual adjustment shall

 

 

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1be determined by the Public Pension Division of the Department
2of Insurance and made available to the boards of the retirement
3systems and pension funds by November 1 of each year.
4    (c) A member or participant is entitled to a retirement
5annuity upon written application if he or she has attained age
667 and has at least 10 years of service credit and is otherwise
7eligible under the requirements of the applicable Article.
8    A member or participant who has attained age 62 and has at
9least 10 years of service credit and is otherwise eligible
10under the requirements of the applicable Article may elect to
11receive the lower retirement annuity provided in subsection (d)
12of this Section.
13    (d) The retirement annuity of a member or participant who
14is retiring after attaining age 62 with at least 10 years of
15service credit shall be reduced by one-half of 1% for each full
16month that the member's age is under age 67.
17    (e) Any retirement annuity or supplemental annuity shall be
18subject to annual increases on the January 1 occurring either
19on or after the attainment of age 67 or the first anniversary
20of the annuity start date, whichever is later. Each annual
21increase shall be calculated at 3% or one-half the annual
22unadjusted percentage increase (but not less than zero) in the
23consumer price index-u for the 12 months ending with the
24September preceding each November 1, whichever is less, of the
25originally granted retirement annuity. If the annual
26unadjusted percentage change in the consumer price index-u for

 

 

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1the 12 months ending with the September preceding each November
21 is zero or there is a decrease, then the annuity shall not be
3increased.
4    (f) The initial survivor's or widow's annuity of an
5otherwise eligible survivor or widow of a retired member or
6participant who first became a member or participant on or
7after January 1, 2011 shall be in the amount of 66 2/3% of the
8retired member's or participant's retirement annuity at the
9date of death. In the case of the death of a member or
10participant who has not retired and who first became a member
11or participant on or after January 1, 2011, eligibility for a
12survivor's or widow's annuity shall be determined by the
13applicable Article of this Code. The initial benefit shall be
1466 2/3% of the earned annuity without a reduction due to age. A
15child's annuity of an otherwise eligible child shall be in the
16amount prescribed under each Article if applicable. Any
17survivor's or widow's annuity shall be increased (1) on each
18January 1 occurring on or after the commencement of the annuity
19if the deceased member died while receiving a retirement
20annuity or (2) in other cases, on each January 1 occurring
21after the first anniversary of the commencement of the annuity.
22Each annual increase shall be calculated at 3% or one-half the
23annual unadjusted percentage increase (but not less than zero)
24in the consumer price index-u for the 12 months ending with the
25September preceding each November 1, whichever is less, of the
26originally granted survivor's annuity. If the annual

 

 

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1unadjusted percentage change in the consumer price index-u for
2the 12 months ending with the September preceding each November
31 is zero or there is a decrease, then the annuity shall not be
4increased.
5    (g) The benefits in Section 14-110 apply only if the person
6is a State policeman, a fire fighter in the fire protection
7service of a department, or a security employee of the
8Department of Corrections or the Department of Juvenile
9Justice, as those terms are defined in subsection (c) (b) of
10Section 14-110. A person who meets the requirements of this
11Section is entitled to an annuity calculated under the
12provisions of Section 14-110, in lieu of the regular or minimum
13retirement annuity, only if the person has withdrawn from
14service with not less than 20 years of eligible creditable
15service and has attained age 60, regardless of whether the
16attainment of age 60 occurs while the person is still in
17service.
18    (h) If a person who first becomes a member or a participant
19of a retirement system or pension fund subject to this Section
20on or after January 1, 2011 is receiving a retirement annuity
21or retirement pension under that system or fund and becomes a
22member or participant under any other system or fund created by
23this Code and is employed on a full-time basis, except for
24those members or participants exempted from the provisions of
25this Section under subsection (a) of this Section, then the
26person's retirement annuity or retirement pension under that

 

 

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

 

 

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1established under Article 15 on or after January 1, 2011 shall
2have the option to enroll in the self-managed plan created
3under Section 15-158.2 of this Code.
4    (j) In the case of a conflict between the provisions of
5this Section and any other provision of this Code, the
6provisions of this Section shall control.
7(Source: P.A. 96-889, eff. 1-1-11; 96-1490, eff. 1-1-11;
897-609, eff. 1-1-12.)
 
9    (40 ILCS 5/1-161 new)
10    Sec. 1-161. Cash Balance Plan.
11    (a) Participation and Applicability. This Section applies
12to all new cash balance plan participants and all legacy Tier
13II participants.
14    (b) Title. The package of benefits provided under this
15Section may be referred to as the "cash balance plan". Persons
16subject to the provisions of this Section may be referred to as
17"participants in the cash balance plan".
18    (b-5) Definitions. As used in this Section:
19    "Account" means the notional cash balance account
20established under this Section for a participant in the cash
21balance plan.
22    "Consumer Price Index-U" means the Consumer Price Index
23published by the Bureau of Labor Statistics of the United
24States Department of Labor that measures the average change in
25prices of goods and services purchased by all urban consumers,

 

 

09700HB3865sam003- 23 -LRB097 14296 JDS 70341 a

1United States city average, all items, 1982-84 = 100.
2    "Salary" means "salary" as defined in Article 16, whichever
3is applicable, without regard to the limitation in subsection
4(b-5) of Section 1-160.
5    "Legacy Tier II participant" means a person who was subject
6to Section 1-160 with respect to service under Article 16 of
7this Code and who irrevocably elects to participate in the cash
8balance plan created under this Section. That election must be
9made in writing, in the manner provided by the applicable
10retirement system.
11    "New cash balance plan participant" means a person who, on
12or after July 1, 2013, first begins to participate in the
13retirement system established under Article 16 of this Code.
14    (c) Cash Balance Account. A notional cash balance account
15shall be established by the applicable retirement system for
16each participant in the cash balance plan. The account is
17notional and does not contain any actual money segregated from
18the commingled assets of the retirement system. The cash
19balance in the account is to be used in calculating benefits as
20provided in this Section, but is not to be used in the
21calculation of any refund, transfer, or other benefit under the
22applicable Article of this Code.
23    The amounts to be credited to the cash balance account
24shall consist of (i) amounts contributed by or on behalf of the
25participant as employee contributions, (ii) notional employer
26contributions, and (iii) interest credit that is attributable

 

 

09700HB3865sam003- 24 -LRB097 14296 JDS 70341 a

1to the account, all as provided in this Section.
2    Whenever necessary for the prompt calculation or
3administration, or when the System lacks information necessary
4to the calculation or administration otherwise required of or
5for a benefit under this Section, the applicable retirement
6system may estimate an amount to be credited to or debited from
7a participant's cash balance account and then adjust the amount
8so credited or debited when more accurate information becomes
9available.
10    The applicable retirement system shall give to each
11participant in the cash balance plan who has not yet retired
12annual notice of (1) the balance in the participant's cash
13balance account and (2) an estimate of the retirement annuity
14that will be payable to the participant if he or she retires at
15age 59 1/2.
16    (c-5) Initial Account Balance for Legacy Tier II
17Participants. The applicable retirement system shall establish
18an initial account balance for each legacy Tier II participant
19when he or she begins participation in the cash balance plan.
20The initial account balance shall be an amount equal to the
21employee contribution refund that the participant would be
22eligible to receive under the applicable Article of this Code
23if the participant terminated employment on that date and
24elected a refund of contributions, as prescribed by the board
25of the applicable retirement system.
26    (d) Employee Contributions. New cash balance plan

 

 

09700HB3865sam003- 25 -LRB097 14296 JDS 70341 a

1participants and legacy Tier II participants shall make
2employee contributions to the applicable retirement system at
3the rates required under the applicable Article of this Code.
4The amount of each contribution shall be credited to the
5participant's cash balance account upon receipt and after the
6retirement system's reconciliation of the contribution.
7    (e) Notional Employer Contributions. Upon receipt of each
8employee contribution under subsection (d), an amount
9representing the employer contribution shall be credited to the
10participant's cash balance account. For a participant in the
11cash balance plan under Article 16, the notional employer
12contribution shall be 3.4% of salary.
13    The notional employer contribution to be credited to the
14participant's account is not the same as the actual employer
15contributions required under subsection (p) and the provisions
16of the applicable Article of this Code.
17    (e-1) Optional Employer Contributions. Employers may make
18optional additional contributions to the applicable retirement
19system on behalf of their employees who are participants in the
20cash balance plan in accordance with procedures prescribed by
21the retirement system, to the extent permitted by federal law
22and the rules prescribed by the retirement system. The optional
23additional contributions under this subsection are actual
24monetary contributions to the retirement system, and the amount
25of each optional additional contribution shall be credited to
26the participant's cash balance account upon receipt and after

 

 

09700HB3865sam003- 26 -LRB097 14296 JDS 70341 a

1the retirement system's reconciliation of the contribution.
2    (f) Interest Credit. An amount representing earnings on
3investments shall be determined by the retirement system in
4accordance with this Section and credited to the participant's
5cash balance account for each fiscal year in which there is a
6positive balance in that account; except that no additional
7interest credit shall be credited while an annuity based on the
8account is being paid. The interest credit amount shall be a
9percentage of the average quarterly balance in the cash balance
10account during that fiscal year, and shall be calculated on
11June 30.
12    The percentage shall be the assumed treasury rate for the
13previous fiscal year, unless neither the retirement system's
14actual rate of investment earnings for the previous fiscal year
15nor the retirement system's actual rate of investment earnings
16for the five-year period ending at the end of the previous
17fiscal year is less than the assumed treasury rate.
18    If both the retirement system's actual rate of investment
19earnings for the previous fiscal year and the actual rate of
20investment earnings for the five-year period ending at the end
21of the previous fiscal year are at least the assumed treasury
22rate, then the percentage shall be:
23        (i) the assumed treasury rate, plus
24        (ii) two-thirds of the amount of the actual rate of
25    investment earnings for the previous fiscal year that
26    exceeds the assumed treasury rate.

 

 

09700HB3865sam003- 27 -LRB097 14296 JDS 70341 a

1However, in no event shall the percentage applied under this
2subsection exceed 10%.
3    For the purposes of this subsection only, "previous fiscal
4year" means fiscal year ending one year before the interest
5rate is calculated.
6    For the purposes of this subsection only, "assumed treasury
7rate" means the average annual yield of the 30-year U.S.
8Treasury Bond over the previous fiscal year, but not less than
94%.
10    When a person applies for a benefit under this Section, the
11retirement system shall apply an interest credit based on a
12proration of an estimate of what the interest credit will be
13for the relevant year. When the retirement system certifies the
14credit on June 30, it shall adjust the benefit accordingly.
15    (f-10) Distribution upon Termination of Employment. Upon
16termination of active employment with at least 5 years of
17service credit under the applicable retirement system and prior
18to making application for an annuity under this Section, a
19participant in the cash balance plan may make an irrevocable
20election to distribute an amount not to exceed 40% of the
21balance in the participant's account in the form of a direct
22rollover to another qualified plan, to the extent allowed by
23federal law. If the participant makes such an election, then
24the amount distributed shall be debited from the participant's
25cash balance account. A participant in the cash balance plan
26shall be allowed only one distribution under this subsection.

 

 

09700HB3865sam003- 28 -LRB097 14296 JDS 70341 a

1The remaining balance in the participant's account shall be
2used for the determination of other benefits provided under
3this Section.
4    (f-15) Refund. In lieu of receiving a distribution under
5subsection (f-10), at any time after terminating active
6employment under the applicable retirement system, but before
7receiving a retirement annuity under this Section, a
8participant in the cash balance plan may elect to receive a
9refund under this subsection. The refund shall consist of an
10amount equal to the amount of all employee contributions
11credited to the participant's account, but shall not include
12any interest credit or employer contributions. If the
13participant so requests, the refund may be paid in the form of
14a direct rollover to another qualified plan, to the extent
15allowed by federal law and in accordance with the rules of the
16applicable retirement system. Upon payment of the refund, the
17participant's notional cash balance account shall be closed.
18    The participant's credits in the applicable retirement
19system shall be terminated upon payment of a refund under this
20subsection.
21    (g) Retirement Annuity. A participant in the cash balance
22plan may begin collecting a retirement annuity at age 59 1/2,
23but no earlier than the date of termination of active
24employment under the applicable retirement system.
25    The amount of the retirement annuity shall be calculated by
26the retirement system, based on the balance in the cash balance

 

 

09700HB3865sam003- 29 -LRB097 14296 JDS 70341 a

1account, the assumption of future investment returns as
2specified in this subsection, the participant's election to
3have a lifetime survivor's annuity as specified in this
4subsection, the annual increase in retirement annuity as
5specified in subsection (h), the annual increase in survivor's
6annuity as specified in subsection (l), and any actuarial
7assumptions and tables adopted by the board of the retirement
8system for this purpose. The calculation shall determine the
9amount of retirement annuity, on an actuarially equivalent
10basis, that shall be designed to result in the balance in the
11participant's account arriving at zero on the date when the
12last payment of the retirement annuity (or survivor's annuity,
13if the participant elects to provide for a survivor's annuity
14pursuant to this subsection) is anticipated to be paid under
15the relevant actuarial assumptions. A retirement annuity or a
16survivor's annuity provided under this Section shall be a life
17annuity and shall not expire if the account balance equals
18zero.
19    The annuity payment shall begin on the date specified by
20the participant submitting a written application, which date
21shall not be prior to termination of employment or more than
22one year before the application is received by the board;
23however, if the participant is not an employee of an employer
24participating in this System or in a participating system as
25defined in Article 20 of this Code on April 1 of the calendar
26year next following the calendar year in which the participant

 

 

09700HB3865sam003- 30 -LRB097 14296 JDS 70341 a

1attains age 70 1/2, the annuity payment period shall begin on
2that date regardless of whether an application has been filed.
3    The participant may elect, under the participant's written
4application for retirement, to receive a reduced annuity
5payable for his or her life and to have a lifetime survivor's
6annuity in a monthly amount equal to 50%, 75%, or 100% of that
7reduced monthly amount, to be paid after the participant's
8death to his or her eligible survivor. Eligibility for a
9survivor's annuity shall be determined under the applicable
10Article of this Code.
11    For the purpose of calculating retirement annuities,
12future investment returns shall be assumed to be a percentage
13equal to the average yield of the 30-year U.S. Treasury Bond
14over the 5 fiscal years prior to the calculation of the initial
15retirement annuity, plus 250 basis points; but not less than 4%
16nor more than 8%.
17    (h) Annual Increase in Retirement Annuity. The retirement
18annuity shall be subject to an automatic annual increase in an
19amount equal to 3% of the originally granted annuity on each
20January 1 occurring on or after the first anniversary of the
21annuity start date.
22    (i) Disability Benefits. The disability benefits provided
23under the applicable retirement system apply to new cash
24balance plan participants and legacy Tier II participants in
25the cash balance plan, subject to and in accordance with the
26eligibility and other provisions of the applicable Article.

 

 

09700HB3865sam003- 31 -LRB097 14296 JDS 70341 a

1    Retirement due to disability under Section 16-149.2 shall
2be deemed a disability benefit for the purposes of this Section
3and shall apply to new cash balance plan participants and
4legacy Tier II participants.
5    The board of the retirement system shall designate
6annually, as a percentage of salary, an amount representing the
7anticipated average cost of providing disability benefits for
8new cash balance plan participants and legacy Tier II
9participants. The amount so designated shall not exceed 1% of
10the cash balance plan participant's salary and shall be
11deducted annually from the account of each new cash balance
12plan participant and each legacy Tier II participant.
13    (j) Return to Service. Upon a return to service under the
14same retirement system after beginning to receive a retirement
15annuity under the cash balance plan, the retirement annuity
16shall be suspended and active participation in the cash balance
17plan shall resume. Upon termination of the employment, the
18retirement annuity shall resume in an amount to be recalculated
19in accordance with subsection (g), taking into effect the
20changes in the cash balance account. If a retired annuitant
21returns to service, his or her notional cash balance account
22shall be decreased by each payment of retirement annuity prior
23to the return to service.
24    (k) Survivor's Annuity - Death before Retirement. In the
25case of the death of a new cash balance plan participant or
26legacy Tier II participant who had less than 5 years of service

 

 

09700HB3865sam003- 32 -LRB097 14296 JDS 70341 a

1under the applicable Article and had not begun receiving a
2retirement annuity, the eligible survivor shall be entitled
3only to a refund of employee contributions under subsection
4(f-15).
5    In the case of the death of a new cash balance plan
6participant or legacy Tier II participant who had at least 5
7years of service under the applicable Article and had not begun
8receiving a retirement annuity, the eligible survivor shall be
9entitled to receive a survivor's annuity beginning at age 59
101/2 upon written application. The survivor's annuity shall be
11calculated in the same manner as a retirement annuity under
12subsection (g). At any time before receiving a survivor's
13annuity, the eligible survivor may claim a distribution under
14subsection (f-10) or a refund under subsection (f-15). The
15deceased participant's account shall continue to receive
16interest credit until the eligible survivor begins to receive a
17survivor's annuity or receives a refund of employee
18contributions under subsection (f-15).
19    Eligibility for a survivor's annuity shall be determined
20under the applicable Article of this Code. A child's or
21parent's annuity for an otherwise eligible child or dependent
22parent shall be in the same amount, if any, prescribed under
23the applicable Article.
24    (l) Annual Increase in Survivor's Annuity. A survivor's
25annuity granted under subsection (g) or (k) shall be subject to
26an automatic annual increase in an amount equal to 3% of the

 

 

09700HB3865sam003- 33 -LRB097 14296 JDS 70341 a

1originally granted annuity on each January 1 occurring on or
2after the first anniversary of the annuity start date.
3    (m) Applicability of Provisions. The following provisions,
4if and as they exist in this Code, do not apply to participants
5in the cash balance plan with respect to participation in the
6cash balance plan, except as they are specifically provided for
7in this Section:
8        (1) minimum service or vesting requirements (other
9    than as provided in this Section);
10        (2) provisions limiting a retirement annuity to a
11    specified percentage of salary;
12        (3) provisions authorizing a minimum retirement or
13    survivor's annuity or a supplemental annuity;
14        (4) provisions authorizing any form of retirement
15    annuity or survivor's annuity not authorized under this
16    Section;
17        (5) provisions authorizing a reversionary annuity
18    (other than a survivor's annuity under subsection (g));
19        (6) provisions authorizing a refund of employee
20    contributions upon termination of service (except as
21    provided in this Section) or any lump-sum payout in lieu of
22    a retirement or survivor's annuity (other than the
23    distribution under subsection (f-10) or the refund under
24    subsection (f-15) of this Section;
25        (7) provisions authorizing optional service credits or
26    the payment of optional additional contributions (other

 

 

09700HB3865sam003- 34 -LRB097 14296 JDS 70341 a

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

 

 

09700HB3865sam003- 35 -LRB097 14296 JDS 70341 a

1contributions with respect to participants in the cash balance
2plan shall be the responsibility of the actual employer. These
3contributions shall be determined under and paid in accordance
4with the provisions of Sections 16-158. Optional employer
5contributions may be paid by employers in any amount, but must
6be paid in the manner specified by the applicable retirement
7system.
8    (q) Prospective Modification. The provisions set forth in
9this Section are subject to prospective changes made by law
10provided that any such changes shall not apply to any benefits
11accrued under this Section prior to the effective date of any
12amendatory Act of the General Assembly.
13    (r) An employee who participates in the cash balance plan
14under this Section may elect to participate in the optional
15cash balance plan under Section 1-162.
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 5/1-162 new)
21    Sec. 1-162. Optional cash balance plan.
22    (a) Participation and Applicability. Beginning on July 1,
232013, the following persons may elect to participate in the
24optional cash balance plan created under this Section:
25        (1) any person who participates in the cash balance

 

 

09700HB3865sam003- 36 -LRB097 14296 JDS 70341 a

1    plan established under Section 1-161; and
2        (2) any Tier I employee who has made the election under
3    paragraph (1) of subsection (a) or (a-5) of Section
4    16-131.7.
5    The Board of Trustees of the applicable retirement system
6shall promulgate rules to create an annual election wherein a
7person eligible to participate in the optional cash balance
8plan may elect to participate, and an active employee who is a
9participant in the plan may elect to cease active
10participation. The election to cease active participation
11shall not disqualify the employee from eligibility to receive
12an interest credit under subsection (f), a distribution upon
13termination under subsection (f-10), a refund under subsection
14(f-15), a retirement annuity under subsection (f-15), a
15retirement annuity under subsection (g), or a survivor annuity
16under subsection (k), or from eligibility to resume active
17participation in the optional cash balance plan in a subsequent
18year.
19    (b) Title. The package of benefits provided under this
20Section may be referred to as the "optional cash balance plan".
21Persons subject to the provisions of this Section may be
22referred to as "participants in the optional cash balance
23plan".
24    (b-5) Definitions. As used in this Section:
25    "Account" means the notional cash balance account
26established under this Section for a participant in the

 

 

09700HB3865sam003- 37 -LRB097 14296 JDS 70341 a

1optional cash balance plan.
2    "Consumer Price Index-U" means the Consumer Price Index
3published by the Bureau of Labor Statistics of the United
4States Department of Labor that measures the average change in
5prices of goods and services purchased by all urban consumers,
6United States city average, all items, 1982-84 = 100.
7    "Salary" means "salary" as defined in Article 16, without
8regard to the limitation in subsection (b-5) of Section 1-160.
9    "Tier I employee" means a person who is a Tier I employee
10under the applicable Article of this Code.
11    (c) Cash Balance Account. A notional cash balance account
12shall be established by the applicable retirement system for
13each participant in the optional cash balance plan. The account
14is notional and does not contain any actual money segregated
15from the commingled assets of the retirement system. The cash
16balance in the account is to be used in calculating benefits as
17provided in this Section, but is not to be used in the
18calculation of any refund, transfer, or other benefit under the
19applicable Article of this Code.
20    The amounts to be credited to the cash balance account
21shall consist of (i) amounts contributed by or on behalf of the
22participant as employee contributions, (ii) notional employer
23contributions, and (iii) interest credit that is attributable
24to the account, all as provided in this Section.
25    Whenever necessary for the prompt calculation or
26administration, or when the System lacks information necessary

 

 

09700HB3865sam003- 38 -LRB097 14296 JDS 70341 a

1to the calculation or administration otherwise required of or
2for a benefit under this Section, the applicable retirement
3system may estimate an amount to be credited to or debited from
4a participant's cash balance account and then adjust the amount
5so credited or debited when more accurate information becomes
6available.
7    The applicable retirement system shall give to each
8participant in the optional cash balance plan who has not yet
9retired annual notice of (1) the balance in the participant's
10cash balance account and (2) an estimate of the retirement
11annuity that will be payable to the participant if he or she
12retires at age 59 1/2.
13    (d) Employee Contributions. In addition to the other
14contributions required under the applicable Article, each
15participant shall make contributions to the applicable
16retirement system at the rate of 2% of each payment of salary.
17The amount of each contribution shall be credited to the
18participant's cash balance account upon receipt and after the
19retirement system's reconciliation of the contribution.
20    (e) Optional Employer Contributions. Employers may make
21optional additional contributions to the applicable retirement
22system on behalf of their employees who are participants in the
23optional cash balance plan in accordance with procedures
24prescribed by the retirement system, to the extent permitted by
25federal law and the rules prescribed by the retirement system.
26The optional additional contributions under this subsection

 

 

09700HB3865sam003- 39 -LRB097 14296 JDS 70341 a

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

 

 

09700HB3865sam003- 40 -LRB097 14296 JDS 70341 a

1        (i) the assumed treasury rate, plus
2        (ii) two-thirds of the amount of the actual rate of
3    investment earnings for the previous fiscal year that
4    exceeds the assumed treasury rate.
5However, in no event shall the percentage applied under this
6subsection exceed 10%.
7    For the purposes of this subsection only, "previous fiscal
8year" means fiscal year ending one year before the interest
9rate is calculated.
10    For the purposes of this subsection only, "assumed treasury
11rate" means the average annual yield of the 30-year U.S.
12Treasury Bond over the previous fiscal year, but not less than
134%.
14    When a person applies for a benefit under this Section, the
15retirement system shall apply an interest credit based on a
16proration of an estimate of what the interest credit will be
17for the relevant year. When the retirement system certifies the
18credit on June 30, it shall adjust the benefit accordingly.
19    (f-10) Distribution upon Termination of Employment. Upon
20termination of active employment with at least 5 years of
21service credit under the applicable retirement system and prior
22to making application for an annuity under this Section, a
23participant in the optional cash balance plan may make an
24irrevocable election to distribute an amount not to exceed 40%
25of the balance in the participant's account in the form of a
26direct rollover to another qualified plan, to the extent

 

 

09700HB3865sam003- 41 -LRB097 14296 JDS 70341 a

1allowed by federal law. If the participant makes such an
2election, then the amount distributed shall be debited from the
3participant's cash balance account. A participant in the
4optional cash balance plan shall be allowed only one
5distribution under this subsection. The remaining balance in
6the participant's account shall be used for the determination
7of other benefits provided under this Section.
8    (f-15) Refund. In lieu of receiving a distribution under
9subsection (f-10), at any time after terminating active
10employment under the applicable retirement system, but before
11receiving a retirement annuity under this Section, a
12participant in the optional cash balance plan may elect to
13receive a refund under this subsection. The refund shall
14consist of an amount equal to the amount of all employee
15contributions credited to the participant's account, but shall
16not include any interest credit or employer contributions. If
17the participant so requests, the refund may be paid in the form
18of a direct rollover to another qualified plan, to the extent
19allowed by federal law and in accordance with the rules of the
20applicable retirement system. Upon payment of the refund, the
21participant's notional cash balance account shall be closed.
22    (g) Retirement Annuity. A participant in the optional cash
23balance plan may begin collecting a retirement annuity at age
2459 1/2, but no earlier than the date of termination of active
25employment under the applicable retirement system.
26    The amount of the retirement annuity shall be calculated by

 

 

09700HB3865sam003- 42 -LRB097 14296 JDS 70341 a

1the retirement system, based on the balance in the cash balance
2account, the assumption of future investment returns as
3specified in this subsection, the participant's election to
4have a lifetime survivor's annuity as specified in this
5subsection, the annual increase in retirement annuity as
6specified in subsection (h), the annual increase in survivor's
7annuity as specified in subsection (l), and any actuarial
8assumptions and tables adopted by the board of the retirement
9system for this purpose. The calculation shall determine the
10amount of retirement annuity, on an actuarially equivalent
11basis, that shall be designed to result in the balance in the
12participant's account arriving at zero on the date when the
13last payment of the retirement annuity (or survivor's annuity,
14if the participant elects to provide for a survivor's annuity
15pursuant to this subsection) is anticipated to be paid under
16the relevant actuarial assumptions. A retirement annuity or a
17survivor's annuity provided under this Section shall be a life
18annuity and shall not expire if the account balance equals
19zero.
20    The annuity payment shall begin on the date specified by
21the participant submitting a written application, which date
22shall not be prior to termination of employment or more than
23one year before the application is received by the board;
24however, if the participant is not an employee of an employer
25participating in this System or in a participating system as
26defined in Article 20 of this Code on April 1 of the calendar

 

 

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1year next following the calendar year in which the participant
2attains age 70 1/2, the annuity payment period shall begin on
3that date regardless of whether an application has been filed.
4    The participant may elect, under the participant's written
5application for retirement, to receive a reduced annuity
6payable for his or her life and to have a lifetime survivor's
7annuity in a monthly amount equal to 50%, 75%, or 100% of that
8reduced monthly amount, to be paid after the participant's
9death to his or her eligible survivor. Eligibility for a
10survivor's annuity shall be determined under the applicable
11Article of this Code.
12    For the purpose of calculating retirement annuities,
13future investment returns shall be assumed to be a percentage
14equal to the average yield of the 30-year U.S. Treasury Bond
15over the 5 fiscal years prior to the calculation of the initial
16retirement annuity, plus 250 basis points; but not less than 4%
17nor more than 8%.
18    (h) Annual Increase in Retirement Annuity. The retirement
19annuity shall be subject to an automatic annual increase in an
20amount equal to 3% of the originally granted annuity on each
21January 1 occurring on or after the first anniversary of the
22annuity start date.
23    (i) Disability Benefits. There are no disability benefits
24provided under the optional cash balance plan, and no amounts
25for disability shall be deducted from the account of a
26participant in the optional cash balance plan. The disability

 

 

09700HB3865sam003- 44 -LRB097 14296 JDS 70341 a

1benefits provided under the applicable retirement system apply
2to participants in the optional cash balance plan.
3    (j) Return to Service. Upon a return to service under the
4same retirement system after beginning to receive a retirement
5annuity under the optional cash balance plan, the retirement
6annuity shall be suspended and active participation in the
7optional cash balance plan shall resume. Upon termination of
8the employment, the retirement annuity shall resume in an
9amount to be recalculated in accordance with subsection (g),
10taking into effect the changes in the cash balance account. If
11a retired annuitant returns to service, his or her notional
12cash balance account shall be decreased by each payment of
13retirement annuity prior to the return to service.
14    (k) Survivor's Annuity - Death before Retirement. In the
15case of a participant in the optional cash balance plan who had
16less than 5 years of service under the applicable Article and
17had not begun receiving a retirement annuity, the eligible
18survivor shall be entitled only to a refund of employee
19contributions under subsection (f-15).
20    In the case of a participant in the optional cash balance
21plan who had at least 5 years of service under the applicable
22Article and had not begun receiving a retirement annuity, the
23eligible survivor shall be entitled to receive a survivor's
24annuity beginning at age 59 1/2 upon written application. The
25survivor's annuity shall be calculated in the same manner as a
26retirement annuity under subsection (g). At any time before

 

 

09700HB3865sam003- 45 -LRB097 14296 JDS 70341 a

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

 

 

09700HB3865sam003- 46 -LRB097 14296 JDS 70341 a

1    survivor's annuity or a supplemental annuity;
2        (4) provisions authorizing any form of retirement
3    annuity or survivor's annuity not authorized under this
4    Section;
5        (5) provisions authorizing a reversionary annuity
6    (other than the survivor's annuity under subsection (g));
7        (6) provisions authorizing a refund of employee
8    contributions upon termination of service (other than upon
9    the death of the participant without an eligible survivor)
10    or any lump-sum payout in lieu of a retirement or
11    survivor's annuity (other than the distribution under
12    subsection (f-10) or the refund under subsection (f-15) of
13    this Section;
14        (7) provisions authorizing optional service credits or
15    the payment of optional additional contributions (other
16    than the optional employer contributions specifically
17    authorized in this Section); or
18        (8) a level income option.
19    The Retirement Systems Reciprocal Act (Article 20 of this
20Code) does not apply to participation in the optional cash
21balance plan and does not affect the calculation of benefits
22payable under this Section.
23    The other provisions of this Code continue to apply to
24participants in the optional cash balance plan, to the extent
25that they do not conflict with this Section. In the case of a
26conflict between the provisions of this Section and any other

 

 

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1provision of this Code, the provisions of this Section control.
2    (n) Rules. The Board of Trustees of the applicable
3retirement system may adopt rules and procedures for the
4implementation of this Section, including but not limited to
5determinations of how to integrate the administration of this
6Section with the requirements of the applicable Article and any
7other applicable provisions of this Code.
8    (o) Public Pension Division. The Public Pension Division of
9the Department of Insurance shall determine in October of each
10year the annual unadjusted percentage increase (but not less
11than zero) in the Consumer Price Index-U for the 12 months
12ending with the preceding September. The Division shall certify
13its determination to the Board of Trustees of the State
14Universities Retirement System by November 1 of each year.
15    (p) Actual Employer Contributions. Payment of employer
16contributions with respect to participants in the optional cash
17balance plan shall be the responsibility of the actual
18employer. These contributions shall be determined under and
19paid in accordance with the provisions of Sections 16-158.
20Optional additional contributions by employers may be paid in
21any amount, but must be paid in the manner specified by the
22applicable retirement system.
23    (q) Prospective Modification. The provisions set forth in
24this Section are subject to prospective changes made by law
25provided that any such changes shall not apply to any benefits
26accrued under this Section prior to the effective date of any

 

 

09700HB3865sam003- 48 -LRB097 14296 JDS 70341 a

1amendatory Act of the General Assembly.
2    (s) Qualified Plan Status. No provision of this Section
3shall be interpreted in a way that would cause the applicable
4retirement system to cease to be a qualified plan under section
5461 (a) of the Internal Revenue Code of 1986.
 
6    (40 ILCS 5/2-105.1 new)
7    Sec. 2-105.1. Tier I employee. "Tier I employee": A
8participant who first became a participant before January 1,
92011.
 
10    (40 ILCS 5/2-105.2 new)
11    Sec. 2-105.2. Tier I retiree. "Tier I retiree" means a
12former Tier I employee who is receiving a retirement annuity.
 
13    (40 ILCS 5/2-107.9 new)
14    Sec. 2-107.9. Future increase in income. "Future increase
15in income": Any increase in income in any form offered for
16service as a member under this Article after June 30, 2013 that
17would qualify as "salary", as defined under Section 2-108, but
18for the fact that the increase in income was offered to the
19member on the condition that it not qualify as salary and was
20accepted by the member subject to that condition.
 
21    (40 ILCS 5/2-108)  (from Ch. 108 1/2, par. 2-108)
22    Sec. 2-108. Salary. "Salary": (1) For members of the

 

 

09700HB3865sam003- 49 -LRB097 14296 JDS 70341 a

1General Assembly, the total compensation paid to the member by
2the State for one year of service, including the additional
3amounts, if any, paid to the member as an officer pursuant to
4Section 1 of "An Act in relation to the compensation and
5emoluments of the members of the General Assembly", approved
6December 6, 1907, as now or hereafter amended.
7    (2) For the State executive officers specified in Section
82-105, the total compensation paid to the member for one year
9of service.
10    (3) For members of the System who are participants under
11Section 2-117.1, or who are serving as Clerk or Assistant Clerk
12of the House of Representatives or Secretary or Assistant
13Secretary of the Senate, the total compensation paid to the
14member for one year of service, but not to exceed the salary of
15the highest salaried officer of the General Assembly.
16    However, in the event that federal law results in any
17participant receiving imputed income based on the value of
18group term life insurance provided by the State, such imputed
19income shall not be included in salary for the purposes of this
20Article.
21    Notwithstanding any other provision of this Section,
22"salary" does not include any future increase in income that is
23offered for service as a member under this Article pursuant to
24the requirements of subsection (c) of Section 2-110.3 and
25accepted by a Tier I employee, or a Tier I retiree returning to
26active service, who has made an election under paragraph (2) of

 

 

09700HB3865sam003- 50 -LRB097 14296 JDS 70341 a

1subsection (a) or (a-5) of Section Section 2-110.3.
2(Source: P.A. 86-27; 86-273; 86-1028; 86-1488.)
 
3    (40 ILCS 5/2-110.3 new)
4    Sec. 2-110.3. Election by Tier I employees and Tier I
5retirees.
6    (a) Each Tier I employee shall make an irrevocable election
7either:
8        (1) to agree to the following:
9            (i) to have the amount of the automatic annual
10        increases in his or her retirement annuity that are
11        otherwise provided for in this Article calculated,
12        instead, as provided in subsection (a-1) of Section
13        2-119.1; and
14            (ii) to have his or her eligibility for automatic
15        annual increases in retirement annuity postponed as
16        provided in subsection (a-2) of Section 2-119.1 and to
17        relinquish the additional increases provided in
18        subsection (b) of Section 2-119.1; or
19        (2) to not agree to items (i) and (ii) as set forth in
20    paragraph (1) of this subsection.
21    The election required under this subsection (a) shall be
22made by each Tier I employee no earlier than January 1, 2013
23and no later than May 31, 2013, except that:
24        (i) a person who becomes a Tier I employee under this
25    Article after January 1, 2013 must make the election under

 

 

09700HB3865sam003- 51 -LRB097 14296 JDS 70341 a

1    this subsection (a) within 60 days after becoming a Tier I
2    employee;
3        (ii) a person who returns to active service as a Tier I
4    employee under this Article after January 1, 2013 and has
5    not yet made an election under this Section must make the
6    election under this subsection (a) within 60 days after
7    returning to active service as a Tier I employee; and
8        (iii) a person who made the election under subsection
9    (a-5) as a Tier I retiree remains bound by that election
10    and shall not make a later election under this subsection
11    (a).
12    If a Tier I employee fails for any reason to make a
13required election under this subsection within the time
14specified, then the employee shall be deemed to have made the
15election under paragraph (2) of this subsection.
16    (a-5) Each Tier I retiree shall make an irrevocable
17election either:
18        (1) to agree to the following:
19            (i) to have the amount of the automatic annual
20        increases in his or her retirement annuity that are
21        otherwise provided for in this Article calculated,
22        instead, as provided in subsection (a-1) of Section
23        2-119.1; and
24            (ii) to have his or her eligibility for automatic
25        annual increases in retirement annuity postponed as
26        provided in subsection (a-2) of Section 2-119.1 and to

 

 

09700HB3865sam003- 52 -LRB097 14296 JDS 70341 a

1        relinquish the additional increases provided in
2        subsection (b) of Section 2-119.1; or
3        (2) to not agree to items (i) and (ii) as set forth in
4    paragraph (1) of this subsection.
5    The election required under this subsection (a-5) shall be
6made by each Tier I retiree no earlier than January 1, 2013 and
7no later than May 31, 2013, except that:
8        (i) a person who becomes a Tier I retiree under this
9    Article on or after January 1, 2013 must make the election
10    under this subsection (a-5) within 60 days after becoming a
11    Tier I retiree; and
12        (ii) a person who made the election under subsection
13    (a) as a Tier I employee remains bound by that election and
14    shall not make a later election under this subsection
15    (a-5).
16    If a Tier I retiree fails for any reason to make a required
17election under this subsection within the time specified, then
18the Tier I retiree shall be deemed to have made the election
19under paragraph (2) of this subsection.
20    (a-10) All elections under subsection (a) or (a-5) that are
21made or deemed to be made before June 1, 2013 shall take effect
22on July 1, 2013. Elections that are made or deemed to be made
23on or after June 1, 2013 shall take effect on the first day of
24the month following the month in which the election is made or
25deemed to be made.
26    (b) As adequate and legal consideration provided under this

 

 

09700HB3865sam003- 53 -LRB097 14296 JDS 70341 a

1amendatory Act of the 97th General Assembly for making the
2election under paragraph (1) of subsection (a) of this Section,
3any future increases in income offered for service as a member
4under this Article to a Tier I employee who has made the
5election under paragraph (1) of subsection (a) of this Section
6shall be offered expressly and irrevocably as constituting
7salary under Section 2-108.
8    As adequate and legal consideration provided under this
9amendatory Act of the 97th General Assembly for making the
10election under paragraph (1) of subsection (a-5) of this
11Section, any future increases in income offered for service as
12a member under this Article to a Tier I retiree who returns to
13active service after having made the election under paragraph
14(1) of subsection (a-5) of this Section shall be offered
15expressly and irrevocably as constituting salary under Section
162-108.
17    (c) A Tier I employee who makes the election under
18paragraph (2) of subsection (a) of this Section shall not be
19subject to items (i) and (ii) set forth in paragraph (1) of
20subsection (a) of this Section. However, any future increases
21in income offered for service as a member under this Article to
22a Tier I employee who has made the election under paragraph (2)
23of subsection (a) of this Section shall be offered expressly
24and irrevocably as not constituting salary under Section 2-108,
25and the member may not accept any future increase in income
26that is offered in violation of this requirement.

 

 

09700HB3865sam003- 54 -LRB097 14296 JDS 70341 a

1    A Tier I retiree who makes the election under paragraph (2)
2of subsection (a-5) of this Section shall not be subject to
3items (i) and (ii) set forth in paragraph (1) of subsection
4(a-5) of this Section. However, any future increases in income
5offered for service as a member under this Article to a Tier I
6retiree who returns to active service and has made the election
7under paragraph (2) of subsection (a-5) of this Section shall
8be offered expressly and irrevocably as not constituting salary
9under Section 2-108, and the member may not accept any future
10increase in income that is offered in violation of this
11requirement.
12    (d) The System shall make a good faith effort to contact
13each Tier I employee and Tier I retiree subject to this
14Section. The System shall mail information describing the
15required election to each Tier I employee and Tier I retiree by
16United States Postal Service mail to his or her last known
17address on file with the System. If the Tier I employee or Tier
18I retiree is not responsive to other means of contact, it is
19sufficient for the System to publish the details of any
20required elections on its website or to publish those details
21in a regularly published newsletter or other existing public
22forum.
23    Tier I employees and Tier I retirees who are subject to
24this Section shall be provided with an election packet
25containing information regarding their options, as well as the
26forms necessary to make the required election. Upon request,

 

 

09700HB3865sam003- 55 -LRB097 14296 JDS 70341 a

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

 

 

09700HB3865sam003- 56 -LRB097 14296 JDS 70341 a

1Section.
2    (e) Notwithstanding any other provision of law, any future
3increases in income offered for service as a member must be
4offered expressly and irrevocably as not constituting "salary"
5under Section 2-108 to any Tier I employee, or Tier I retiree
6returning to active service, who has made an election under
7paragraph (2) or subsection (a) or (a-5) of Section 2-110.3. A
8Tier I employee, or Tier I retiree returning to active service,
9who has made an election under paragraph (2) or subsection (a)
10or (a-5) of Section 2-110.3 shall not accept any future
11increase in income that is offered for service as a member
12under this Article in violation of the requirement set forth in
13this subsection.
14    (f) A member's election under this Section is not a
15prohibited election under subdivision (j)(1) of Section 1-119
16of this Code.
17    (g) Qualified Plan Status. No provision of this Section
18shall be interpreted in a way that would cause the System to
19cease to be a qualified plan under section 461 (a) of the
20Internal Revenue Code of 1986.
 
21    (40 ILCS 5/2-119.1)  (from Ch. 108 1/2, par. 2-119.1)
22    Sec. 2-119.1. Automatic increase in retirement annuity.
23    (a) Except as provided in subsections (a-1) and (a-2), a A
24participant who retires after June 30, 1967, and who has not
25received an initial increase under this Section before the

 

 

09700HB3865sam003- 57 -LRB097 14296 JDS 70341 a

1effective date of this amendatory Act of 1991, shall, in
2January or July next following the first anniversary of
3retirement, whichever occurs first, and in the same month of
4each year thereafter, but in no event prior to age 60, have the
5amount of the originally granted retirement annuity increased
6as follows: for each year through 1971, 1 1/2%; for each year
7from 1972 through 1979, 2%; and for 1980 and each year
8thereafter, 3%. Annuitants who have received an initial
9increase under this subsection prior to the effective date of
10this amendatory Act of 1991 shall continue to receive their
11annual increases in the same month as the initial increase.
12    (a-1) Notwithstanding any other provision of this Article,
13for a Tier I employee or Tier I retiree who made the election
14under paragraph (1) of subsection (a) or (a-5) of Section
152-110.3, the amount of each automatic annual increase in
16retirement annuity occurring on or after the effective date of
17that election shall be 3% or one-half of the annual unadjusted
18percentage increase, if any, in the Consumer Price Index-U for
19the 12 months ending with the preceding September, whichever is
20less, of the originally granted retirement annuity. For the
21purposes of this Section, "Consumer Price Index-U" means the
22index published by the Bureau of Labor Statistics of the United
23States Department of Labor that measures the average change in
24prices of goods and services purchased by all urban consumers,
25United States city average, all items, 1982-84 = 100.
26    (a-2) For a Tier I employee or Tier I retiree who made the

 

 

09700HB3865sam003- 58 -LRB097 14296 JDS 70341 a

1election under paragraph (1) of subsection (a) or (a-5) of
2Section 2-110.3, the monthly retirement annuity shall first be
3subject to annual increases on the January 1 occurring on or
4next after the attainment of age 67 or the January 1 occurring
5on or next after the fifth anniversary of the annuity start
6date, whichever occurs earlier. If on the effective date of the
7election under paragraph (1) of subsection (a-5) of Section
82-110.3 a Tier I retiree has already received an annual
9increase under this Section but does not yet meet the new
10eligibility requirements of this subsection, the annual
11increases already received shall continue in force, but no
12additional annual increase shall be granted until the Tier I
13retiree meets the new eligibility requirements.
14    (b) Beginning January 1, 1990, for eligible participants
15who remain in service after attaining 20 years of creditable
16service, the 3% increases provided under subsection (a) shall
17begin to accrue on the January 1 next following the date upon
18which the participant (1) attains age 55, or (2) attains 20
19years of creditable service, whichever occurs later, and shall
20continue to accrue while the participant remains in service;
21such increases shall become payable on January 1 or July 1,
22whichever occurs first, next following the first anniversary of
23retirement. For any person who has service credit in the System
24for the entire period from January 15, 1969 through December
2531, 1992, regardless of the date of termination of service, the
26reference to age 55 in clause (1) of this subsection (b) shall

 

 

09700HB3865sam003- 59 -LRB097 14296 JDS 70341 a

1be deemed to mean age 50.
2    This subsection (b) does not apply to any person who first
3becomes a member of the System after August 8, 2003 (the
4effective date of Public Act 93-494) or (ii) has made the
5election under paragraph (1) of subsection (a) or (a-5) of
6Section 2-110.3; except that if on the effective date of the
7election under paragraph (1) of subsection (a-5) of Section
82-110.3 a Tier I retiree has already received a retirement
9annuity based on any annual increases under this subsection,
10those annual increases under this subsection shall continue in
11force this amendatory Act of the 93rd General Assembly.
12    (b-5) Notwithstanding any other provision of this Article,
13a participant who first becomes a participant on or after
14January 1, 2011 (the effective date of Public Act 96-889)
15shall, in January or July next following the first anniversary
16of retirement, whichever occurs first, and in the same month of
17each year thereafter, but in no event prior to age 67, have the
18amount of the retirement annuity then being paid increased by
193% or the annual unadjusted percentage increase in the Consumer
20Price Index for All Urban Consumers as determined by the Public
21Pension Division of the Department of Insurance under
22subsection (a) of Section 2-108.1, whichever is less.
23    (c) The foregoing provisions relating to automatic
24increases are not applicable to a participant who retires
25before having made contributions (at the rate prescribed in
26Section 2-126) for automatic increases for less than the

 

 

09700HB3865sam003- 60 -LRB097 14296 JDS 70341 a

1equivalent of one full year. However, in order to be eligible
2for the automatic increases, such a participant may make
3arrangements to pay to the system the amount required to bring
4the total contributions for the automatic increase to the
5equivalent of one year's contributions based upon his or her
6last salary.
7    (d) A participant who terminated service prior to July 1,
81967, with at least 14 years of service is entitled to an
9increase in retirement annuity beginning January, 1976, and to
10additional increases in January of each year thereafter.
11    The initial increase shall be 1 1/2% of the originally
12granted retirement annuity multiplied by the number of full
13years that the annuitant was in receipt of such annuity prior
14to January 1, 1972, plus 2% of the originally granted
15retirement annuity for each year after that date. The
16subsequent annual increases shall be at the rate of 2% of the
17originally granted retirement annuity for each year through
181979 and at the rate of 3% for 1980 and thereafter.
19    (e) Beginning January 1, 1990, all automatic annual
20increases payable under this Section shall be calculated as a
21percentage of the total annuity payable at the time of the
22increase, including previous increases granted under this
23Article.
24(Source: P.A. 96-889, eff. 1-1-11; 96-1490, eff. 1-1-11.)
 
25    (40 ILCS 5/2-124)  (from Ch. 108 1/2, par. 2-124)

 

 

09700HB3865sam003- 61 -LRB097 14296 JDS 70341 a

1    Sec. 2-124. Contributions by State.
2    (a) Except as otherwise provided in this Section, the The
3State shall make contributions to the System by appropriations
4of amounts which, together with the contributions of
5participants, interest earned on investments, and other income
6will meet the cost of maintaining and administering the System
7on a 90% funded basis in accordance with actuarial
8recommendations.
9    (b) The Board shall determine the amount of State
10contributions required for each fiscal year on the basis of the
11actuarial tables and other assumptions adopted by the Board and
12the prescribed rate of interest, using the formula in
13subsection (c).
14    (c) Except as otherwise provided in this Section, for For
15State fiscal years 2012 through 2045, the minimum contribution
16to the System to be made by the State for each fiscal year
17shall be an amount determined by the System to be sufficient to
18bring the total assets of the System up to 90% of the total
19actuarial liabilities of the System by the end of State fiscal
20year 2045. In making these determinations, the required State
21contribution shall be calculated each year as a level
22percentage of payroll over the years remaining to and including
23fiscal year 2045 and shall be determined under the projected
24unit credit actuarial cost method.
25    For State fiscal years 1996 through 2005, the State
26contribution to the System, as a percentage of the applicable

 

 

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1employee payroll, shall be increased in equal annual increments
2so that by State fiscal year 2011, the State is contributing at
3the rate required under this Section.
4    Notwithstanding any other provision of this Article, the
5total required State contribution for State fiscal year 2006 is
6$4,157,000.
7    Notwithstanding any other provision of this Article, the
8total required State contribution for State fiscal year 2007 is
9$5,220,300.
10    For each of State fiscal years 2008 through 2009, the State
11contribution to the System, as a percentage of the applicable
12employee payroll, shall be increased in equal annual increments
13from the required State contribution for State fiscal year
142007, so that by State fiscal year 2011, the State is
15contributing at the rate otherwise required under this Section.
16    Notwithstanding any other provision of this Article, the
17total required State contribution for State fiscal year 2010 is
18$10,454,000 and shall be made from the proceeds of bonds sold
19in fiscal year 2010 pursuant to Section 7.2 of the General
20Obligation Bond Act, less (i) the pro rata share of bond sale
21expenses determined by the System's share of total bond
22proceeds, (ii) any amounts received from the General Revenue
23Fund in fiscal year 2010, and (iii) any reduction in bond
24proceeds due to the issuance of discounted bonds, if
25applicable.
26    Notwithstanding any other provision of this Article, the

 

 

09700HB3865sam003- 63 -LRB097 14296 JDS 70341 a

1total required State contribution for State fiscal year 2011 is
2the amount recertified by the System on or before April 1, 2011
3pursuant to Section 2-134 and shall be made from the proceeds
4of bonds sold in fiscal year 2011 pursuant to Section 7.2 of
5the General Obligation Bond Act, less (i) the pro rata share of
6bond sale expenses determined by the System's share of total
7bond proceeds, (ii) any amounts received from the General
8Revenue Fund in fiscal year 2011, and (iii) any reduction in
9bond proceeds due to the issuance of discounted bonds, if
10applicable.
11    Except as otherwise provided in this Section, beginning
12Beginning 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

 

 

09700HB3865sam003- 64 -LRB097 14296 JDS 70341 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 and each fiscal year thereafter, as calculated
5under this Section and certified under Section 2-134, shall not
6exceed an amount equal to (i) the amount of the required State
7contribution that would have been calculated under this Section
8for that fiscal year if the System had not received any
9payments under subsection (d) of Section 7.2 of the General
10Obligation Bond Act, minus (ii) the portion of the State's
11total debt service payments for that fiscal year on the bonds
12issued in fiscal year 2003 for the purposes of that Section
137.2, as determined and certified by the Comptroller, that is
14the 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.

 

 

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1    (c-1) If at least 50% of Tier I employees making an
2election under Section 2-110.3 before June 1, 2013 choose the
3option under paragraph (1) of subsection (a) of that Section,
4then:
5        (1) In lieu of the State contributions required under
6    subsection (c), for State fiscal years 2014 through 2043
7    the minimum contribution to the System to be made by the
8    State for each fiscal year shall be an amount determined by
9    the System to be equal to the sum of (1) the State's
10    portion of the projected normal cost for that fiscal year,
11    plus (2) an amount sufficient to bring the total assets of
12    the System up to 100% of the total actuarial liabilities of
13    the System by the end of State fiscal year 2043. In making
14    these determinations, the required State contribution
15    shall be calculated each year as a level percentage of
16    payroll over the years remaining to and including fiscal
17    year 2043 and shall be determined under the projected unit
18    credit actuarial cost method.
19        (2) Beginning in State fiscal year 2043, the minimum
20    State contribution for each fiscal year shall be the amount
21    needed to maintain the total assets of the System at 100%
22    of the total actuarial liabilities of the System.
23    (c-2) If less than 50% of Tier I employees making an
24election under Section 2-110.3 before June 1, 2013 choose the
25option under paragraph (1) of subsection (a) of that Section,
26then the annual required contribution to the System to be made

 

 

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1by the State shall be determined under subsection (c) of this
2Section, instead of the annual required contribution otherwise
3specified in subsection (c-1) of this Section.
4    (d) For purposes of determining the required State
5contribution to the System, the value of the System's assets
6shall be equal to the actuarial value of the System's assets,
7which shall be calculated as follows:
8    As of June 30, 2008, the actuarial value of the System's
9assets shall be equal to the market value of the assets as of
10that date. In determining the actuarial value of the System's
11assets for fiscal years after June 30, 2008, any actuarial
12gains or losses from investment return incurred in a fiscal
13year shall be recognized in equal annual amounts over the
145-year period following that fiscal year.
15    (e) For purposes of determining the required State
16contribution to the system for a particular year, the actuarial
17value of assets shall be assumed to earn a rate of return equal
18to the system's actuarially assumed rate of return.
19(Source: P.A. 95-950, eff. 8-29-08; 96-43, eff. 7-15-09;
2096-1497, eff. 1-14-11; 96-1511, eff. 1-27-11; 96-1554, eff.
213-18-11; revised 4-6-11.)
 
22    (40 ILCS 5/2-134)   (from Ch. 108 1/2, par. 2-134)
23    Sec. 2-134. To certify required State contributions and
24submit vouchers.
25    (a) The Board shall certify to the Governor on or before

 

 

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1December 15 of each year until December 15, 2011 the amount of
2the required State contribution to the System for the next
3fiscal year and shall specifically identify the System's
4projected State normal cost for that fiscal year. The
5certification shall include a copy of the actuarial
6recommendations upon which it is based and shall specifically
7identify the System's projected State normal cost for that
8fiscal year.
9    On or before November 1 of each year, beginning November 1,
102012, the Board shall submit to the State Actuary, the
11Governor, and the General Assembly a proposed certification of
12the amount of the required State contribution to the System for
13the next fiscal year, along with all of the actuarial
14assumptions, calculations, and data upon which that proposed
15certification is based. On or before January 1 of each year
16beginning January 1, 2013, the State Actuary shall issue a
17preliminary report concerning the proposed certification and
18identifying, if necessary, recommended changes in actuarial
19assumptions that the Board must consider before finalizing its
20certification of the required State contributions. On or before
21January 15, 2013 and every January 15 thereafter, the Board
22shall certify to the Governor and the General Assembly the
23amount of the required State contribution for the next fiscal
24year. The Board's certification must note any deviations from
25the State Actuary's recommended changes, the reason or reasons
26for not following the State Actuary's recommended changes, and

 

 

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

 

 

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1submit vouchers for the remainder of fiscal year 2004 in excess
2of the fiscal year 2004 certified contribution amount
3determined under this Section after taking into consideration
4the transfer to the System under subsection (d) of Section
56z-61 of the State Finance Act. These vouchers shall be paid by
6the State Comptroller and Treasurer by warrants drawn on the
7funds appropriated to the System for that fiscal year. If in
8any month the amount remaining unexpended from all other
9appropriations to the System for the applicable fiscal year
10(including the appropriations to the System under Section 8.12
11of the State Finance Act and Section 1 of the State Pension
12Funds Continuing Appropriation Act) is less than the amount
13lawfully vouchered under this Section, the difference shall be
14paid from the General Revenue Fund under the continuing
15appropriation authority provided in Section 1.1 of the State
16Pension Funds Continuing Appropriation Act.
17    (c) The full amount of any annual appropriation for the
18System for State fiscal year 1995 shall be transferred and made
19available to the System at the beginning of that fiscal year at
20the request of the Board. Any excess funds remaining at the end
21of any fiscal year from appropriations shall be retained by the
22System as a general reserve to meet the System's accrued
23liabilities.
24(Source: P.A. 95-331, eff. 8-21-07; 96-1497, eff. 1-14-11;
2596-1511, eff. 1-27-11.)
 

 

 

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1    (40 ILCS 5/7-109)  (from Ch. 108 1/2, par. 7-109)
2    Sec. 7-109. Employee.
3    (1) "Employee" means any person who:
4        (a) 1. Receives earnings as payment for the performance
5        of personal services or official duties out of the
6        general fund of a municipality, or out of any special
7        fund or funds controlled by a municipality, or by an
8        instrumentality thereof, or a participating
9        instrumentality, including, in counties, the fees or
10        earnings of any county fee office; and
11            2. Under the usual common law rules applicable in
12        determining the employer-employee relationship, has
13        the status of an employee with a municipality, or any
14        instrumentality thereof, or a participating
15        instrumentality, including aldermen, county
16        supervisors and other persons (excepting those
17        employed as independent contractors) who are paid
18        compensation, fees, allowances or other emolument for
19        official duties, and, in counties, the several county
20        fee offices.
21        (b) Serves as a township treasurer appointed under the
22    School Code, as heretofore or hereafter amended, and who
23    receives for such services regular compensation as
24    distinguished from per diem compensation, and any regular
25    employee in the office of any township treasurer whether or
26    not his earnings are paid from the income of the permanent

 

 

09700HB3865sam003- 71 -LRB097 14296 JDS 70341 a

1    township fund or from funds subject to distribution to the
2    several school districts and parts of school districts as
3    provided in the School Code, or from both such sources; or
4    is the chief executive officer, chief educational officer,
5    chief fiscal officer, or other employee of a Financial
6    Oversight Panel established pursuant to Article 1H of the
7    School Code, other than a superintendent or certified
8    school business official, except that such person shall not
9    be treated as an employee under this Section if that person
10    has negotiated with the Financial Oversight Panel, in
11    conjunction with the school district, a contractual
12    agreement for exclusion from this Section.
13        (c) Holds an elective office in a municipality,
14    instrumentality thereof or participating instrumentality.
15    (2) "Employee" does not include persons who:
16        (a) Are eligible for inclusion under any of the
17    following laws:
18            1. "An Act in relation to an Illinois State
19        Teachers' Pension and Retirement Fund", approved May
20        27, 1915, as amended;
21            2. Articles 15 and 16 of this Code.
22        However, such persons shall be included as employees to
23    the extent of earnings that are not eligible for inclusion
24    under the foregoing laws for services not of an
25    instructional nature of any kind.
26        However, any member of the armed forces who is employed

 

 

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1    as a teacher of subjects in the Reserve Officers Training
2    Corps of any school and who is not certified under the law
3    governing the certification of teachers shall be included
4    as an employee.
5        (b) Are designated by the governing body of a
6    municipality in which a pension fund is required by law to
7    be established for policemen or firemen, respectively, as
8    performing police or fire protection duties, except that
9    when such persons are the heads of the police or fire
10    department and are not eligible to be included within any
11    such pension fund, they shall be included within this
12    Article; provided, that such persons shall not be excluded
13    to the extent of concurrent service and earnings not
14    designated as being for police or fire protection duties.
15    However, (i) any head of a police department who was a
16    participant under this Article immediately before October
17    1, 1977 and did not elect, under Section 3-109 of this Act,
18    to participate in a police pension fund shall be an
19    "employee", and (ii) any chief of police who elects to
20    participate in this Fund under Section 3-109.1 of this
21    Code, regardless of whether such person continues to be
22    employed as chief of police or is employed in some other
23    rank or capacity within the police department, shall be an
24    employee under this Article for so long as such person is
25    employed to perform police duties by a participating
26    municipality and has not lawfully rescinded that election.

 

 

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1        (c) After August 26, 2011 (the effective date of Public
2    Act 97-609) this amendatory Act of the 97th General
3    Assembly, are contributors to or eligible to contribute to
4    a Taft-Hartley pension plan established on or before June
5    1, 2011 and are employees of a theatre, arena, or
6    convention center that is located in a municipality located
7    in a county with a population greater than 5,000,000, and
8    to which the participating municipality is required to
9    contribute as the person's employer based on earnings from
10    the municipality. Nothing in this paragraph shall affect
11    service credit or creditable service for any period of
12    service prior to August 26, 2011 the effective date of this
13    amendatory Act of the 97th General Assembly, and this
14    paragraph shall not apply to individuals who are
15    participating in the Fund prior to August 26, 2011 the
16    effective date of this amendatory Act of the 97th General
17    Assembly.
18        (d) Become an employee of any of the following
19    participating instrumentalities on or after the effective
20    date of this amendatory Act of the 97th General Assembly:
21    the Illinois Municipal League; the Illinois Association of
22    Park Districts; the Illinois Supervisors, County
23    Commissioners and Superintendents of Highways Association;
24    the Township School District Trustees; the United Counties
25    Council; or the Will County Governmental League.
26    (3) All persons, including, without limitation, public

 

 

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1defenders and probation officers, who receive earnings from
2general or special funds of a county for performance of
3personal services or official duties within the territorial
4limits of the county, are employees of the county (unless
5excluded by subsection (2) of this Section) notwithstanding
6that they may be appointed by and are subject to the direction
7of a person or persons other than a county board or a county
8officer. It is hereby established that an employer-employee
9relationship under the usual common law rules exists between
10such employees and the county paying their salaries by reason
11of the fact that the county boards fix their rates of
12compensation, appropriate funds for payment of their earnings
13and otherwise exercise control over them. This finding and this
14amendatory Act shall apply to all such employees from the date
15of appointment whether such date is prior to or after the
16effective date of this amendatory Act and is intended to
17clarify existing law pertaining to their status as
18participating employees in the Fund.
19(Source: P.A. 97-429, eff. 8-16-11; 97-609, eff. 8-26-11;
20revised 9-28-11.)
 
21    (40 ILCS 5/14-106)  (from Ch. 108 1/2, par. 14-106)
22    Sec. 14-106. Membership service credit.
23    (a) After January 1, 1944, all service of a member since he
24last became a member with respect to which contributions are
25made shall count as membership service; provided, that for

 

 

09700HB3865sam003- 75 -LRB097 14296 JDS 70341 a

1service on and after July 1, 1950, 12 months of service shall
2constitute a year of membership service, the completion of 15
3days or more of service during any month shall constitute 1
4month of membership service, 8 to 15 days shall constitute 1/2
5month of membership service and less than 8 days shall
6constitute 1/4 month of membership service. The payroll record
7of each department shall constitute conclusive evidence of the
8record of service rendered by a member.
9    (b) For a member who is employed and paid on an
10academic-year basis rather than on a 12-month annual basis,
11employment for a full academic year shall constitute a full
12year of membership service, except that the member shall not
13receive more than one year of membership service credit (plus
14any additional service credit granted for unused sick leave)
15for service during any 12-month period. This subsection (b)
16applies to all such service for which the member has not begun
17to receive a retirement annuity before January 1, 2001.
18    (c) A member who first participated in this System before
19the effective date of this amendatory Act of the 97th General
20Assembly shall be entitled to additional service credit, under
21rules prescribed by the Board, for accumulated unused sick
22leave credited to his account in the last Department on the
23date of withdrawal from service or for any period for which he
24would have been eligible to receive benefits under a sick pay
25plan authorized by law, if he had suffered a sickness or
26accident on the date of withdrawal from service. It shall be

 

 

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1the responsibility of the last Department to certify to the
2Board the length of time salary or benefits would have been
3paid to the member based upon the accumulated unused sick leave
4or the applicable sick pay plan if he had become entitled
5thereto because of sickness on the date that his status as an
6employee terminated. This period of service credit granted
7under this paragraph shall not be considered in determining the
8date the retirement annuity is to begin, or final average
9compensation.
10    Service credit is not available for unused sick leave
11accumulated by a person who first participates in this System
12on or after the effective date of this amendatory Act of the
1397th General Assembly.
14(Source: P.A. 92-14, eff. 6-28-01.)
 
15    (40 ILCS 5/14-135.08)  (from Ch. 108 1/2, par. 14-135.08)
16    Sec. 14-135.08. To certify required State contributions.
17    (a) To certify to the Governor and to each department, on
18or before November 15 of each year until November 15, 2011, the
19required rate for State contributions to the System for the
20next State fiscal year, as determined under subsection (b) of
21Section 14-131. The certification to the Governor under this
22subsection (a) shall include a copy of the actuarial
23recommendations upon which the rate is based and shall
24specifically identify the System's projected State normal cost
25for that fiscal year.

 

 

09700HB3865sam003- 77 -LRB097 14296 JDS 70341 a

1    (a-5) On or before November 1 of each year, beginning
2November 1, 2012, the Board shall submit to the State Actuary,
3the Governor, and the General Assembly a proposed certification
4of the amount of the required State contribution to the System
5for the next fiscal year, along with all of the actuarial
6assumptions, calculations, and data upon which that proposed
7certification is based. On or before January 1 of each year
8beginning January 1, 2013, the State Actuary shall issue a
9preliminary report concerning the proposed certification and
10identifying, if necessary, recommended changes in actuarial
11assumptions that the Board must consider before finalizing its
12certification of the required State contributions. On or before
13January 15, 2013 and each January 15 thereafter, the Board
14shall certify to the Governor and the General Assembly the
15amount of the required State contribution for the next fiscal
16year. The Board's certification must note any deviations from
17the State Actuary's recommended changes, the reason or reasons
18for not following the State Actuary's recommended changes, and
19the fiscal impact of not following the State Actuary's
20recommended changes on the required State contribution.
21    (b) The certifications under subsections (a) and (a-5)
22certification shall include an additional amount necessary to
23pay all principal of and interest on those general obligation
24bonds due the next fiscal year authorized by Section 7.2(a) of
25the General Obligation Bond Act and issued to provide the
26proceeds deposited by the State with the System in July 2003,

 

 

09700HB3865sam003- 78 -LRB097 14296 JDS 70341 a

1representing deposits other than amounts reserved under
2Section 7.2(c) of the General Obligation Bond Act. For State
3fiscal year 2005, the Board shall make a supplemental
4certification of the additional amount necessary to pay all
5principal of and interest on those general obligation bonds due
6in State fiscal years 2004 and 2005 authorized by Section
77.2(a) of the General Obligation Bond Act and issued to provide
8the proceeds deposited by the State with the System in July
92003, representing deposits other than amounts reserved under
10Section 7.2(c) of the General Obligation Bond Act, as soon as
11practical after the effective date of this amendatory Act of
12the 93rd General Assembly.
13    On or before May 1, 2004, the Board shall recalculate and
14recertify to the Governor and to each department the amount of
15the required State contribution to the System and the required
16rates for State contributions to the System for State fiscal
17year 2005, taking into account the amounts appropriated to and
18received by the System under subsection (d) of Section 7.2 of
19the General Obligation Bond Act.
20    On or before July 1, 2005, the Board shall recalculate and
21recertify to the Governor and to each department the amount of
22the required State contribution to the System and the required
23rates for State contributions to the System for State fiscal
24year 2006, taking into account the changes in required State
25contributions made by this amendatory Act of the 94th General
26Assembly.

 

 

09700HB3865sam003- 79 -LRB097 14296 JDS 70341 a

1    On or before April 1, 2011, the Board shall recalculate and
2recertify to the Governor and to each department the amount of
3the required State contribution to the System for State fiscal
4year 2011, applying the changes made by Public Act 96-889 to
5the System's assets and liabilities as of June 30, 2009 as
6though Public Act 96-889 was approved on that date.
7(Source: P.A. 96-1497, eff. 1-14-11; 96-1511, eff. 1-27-11.)
 
8    (40 ILCS 5/15-107)  (from Ch. 108 1/2, par. 15-107)
9    Sec. 15-107. Employee.
10    (a) "Employee" means any member of the educational,
11administrative, secretarial, clerical, mechanical, labor or
12other staff of an employer whose employment is permanent and
13continuous or who is employed in a position in which services
14are expected to be rendered on a continuous basis for at least
154 months or one academic term, whichever is less, who (A)
16receives payment for personal services on a warrant issued
17pursuant to a payroll voucher certified by an employer and
18drawn by the State Comptroller upon the State Treasurer or by
19an employer upon trust, federal or other funds, or (B) is on a
20leave of absence without pay. Employment which is irregular,
21intermittent or temporary shall not be considered continuous
22for purposes of this paragraph.
23    However, a person is not an "employee" if he or she:
24        (1) is a student enrolled in and regularly attending
25    classes in a college or university which is an employer,

 

 

09700HB3865sam003- 80 -LRB097 14296 JDS 70341 a

1    and is employed on a temporary basis at less than full
2    time;
3        (2) is currently receiving a retirement annuity or a
4    disability retirement annuity under Section 15-153.2 from
5    this System;
6        (3) is on a military leave of absence;
7        (4) is eligible to participate in the Federal Civil
8    Service Retirement System and is currently making
9    contributions to that system based upon earnings paid by an
10    employer;
11        (5) is on leave of absence without pay for more than 60
12    days immediately following termination of disability
13    benefits under this Article;
14        (6) is hired after June 30, 1979 as a public service
15    employment program participant under the Federal
16    Comprehensive Employment and Training Act and receives
17    earnings in whole or in part from funds provided under that
18    Act; or
19        (7) is employed on or after July 1, 1991 to perform
20    services that are excluded by subdivision (a)(7)(f) or
21    (a)(19) of Section 210 of the federal Social Security Act
22    from the definition of employment given in that Section (42
23    U.S.C. 410).
24    (b) Any employer may, by filing a written notice with the
25board, exclude from the definition of "employee" all persons
26employed pursuant to a federally funded contract entered into

 

 

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1after July 1, 1982 with a federal military department in a
2program providing training in military courses to federal
3military personnel on a military site owned by the United
4States Government, if this exclusion is not prohibited by the
5federally funded contract or federal laws or rules governing
6the administration of the contract.
7    (c) Any person appointed by the Governor under the Civil
8Administrative Code of the State is an employee, if he or she
9is a participant in this system on the effective date of the
10appointment.
11    (d) A participant on lay-off status under civil service
12rules is considered an employee for not more than 120 days from
13the date of the lay-off.
14    (e) A participant is considered an employee during (1) the
15first 60 days of disability leave, (2) the period, not to
16exceed one year, in which his or her eligibility for disability
17benefits is being considered by the board or reviewed by the
18courts, and (3) the period he or she receives disability
19benefits under the provisions of Section 15-152, workers'
20compensation or occupational disease benefits, or disability
21income under an insurance contract financed wholly or partially
22by the employer.
23    (f) Absences without pay, other than formal leaves of
24absence, of less than 30 calendar days, are not considered as
25an interruption of a person's status as an employee. If such
26absences during any period of 12 months exceed 30 work days,

 

 

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1the employee status of the person is considered as interrupted
2as of the 31st work day.
3    (g) A staff member whose employment contract requires
4services during an academic term is to be considered an
5employee during the summer and other vacation periods, unless
6he or she declines an employment contract for the succeeding
7academic term or his or her employment status is otherwise
8terminated, and he or she receives no earnings during these
9periods.
10    (h) An individual who was a participating employee employed
11in the fire department of the University of Illinois's
12Champaign-Urbana campus immediately prior to the elimination
13of that fire department and who immediately after the
14elimination of that fire department became employed by the fire
15department of the City of Urbana or the City of Champaign shall
16continue to be considered as an employee for purposes of this
17Article for so long as the individual remains employed as a
18firefighter by the City of Urbana or the City of Champaign. The
19individual shall cease to be considered an employee under this
20subsection (h) upon the first termination of the individual's
21employment as a firefighter by the City of Urbana or the City
22of Champaign.
23    (i) An individual who is employed on a full-time basis as
24an officer or employee of a statewide teacher organization that
25serves System participants or an officer of a national teacher
26organization that serves System participants may participate

 

 

09700HB3865sam003- 83 -LRB097 14296 JDS 70341 a

1in the System and shall be deemed an employee, provided that
2(1) the individual has previously earned creditable service
3under this Article, (2) the individual files with the System an
4irrevocable election to become a participant before the
5effective date of this amendatory Act of the 97th General
6Assembly, (3) the individual does not receive credit for that
7employment under any other Article of this Code, and (4) the
8individual first became a full-time employee of the teacher
9organization and becomes a participant before the effective
10date of this amendatory Act of the 97th General Assembly. An
11employee under this subsection (i) is responsible for paying to
12the System both (A) employee contributions based on the actual
13compensation received for service with the teacher
14organization and (B) employer contributions equal to the normal
15costs (as defined in Section 15-155) resulting from that
16service; all or any part of these contributions may be paid on
17the employee's behalf or picked up for tax purposes (if
18authorized under federal law) by the teacher organization.
19    A person who is an employee as defined in this subsection
20(i) may establish service credit for similar employment prior
21to becoming an employee under this subsection by paying to the
22System for that employment the contributions specified in this
23subsection, plus interest at the effective rate from the date
24of service to the date of payment. However, credit shall not be
25granted under this subsection for any such prior employment for
26which the applicant received credit under any other provision

 

 

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1of this Code, or during which the applicant was on a leave of
2absence under Section 15-113.2.
3    (j) A person employed by the State Board of Higher
4Education in a position with the Illinois Century Network as of
5June 30, 2004 shall be considered to be an employee for so long
6as he or she remains continuously employed after that date by
7the Department of Central Management Services in a position
8with the Illinois Century Network, the Bureau of Communication
9and Computer Services, or, if applicable, any successor bureau
10and meets the requirements of subsection (a).
11    (k) In the case of doubt as to whether any person is an
12employee within the meaning of this Section, the decision of
13the Board shall be final.
14(Source: P.A. 97-651, eff. 1-5-12.)
 
15    (40 ILCS 5/15-113.2)  (from Ch. 108 1/2, par. 15-113.2)
16    Sec. 15-113.2. Service for leaves of absence. "Service for
17leaves of absence" includes those periods of leaves of absence
18at less than 50% pay, except military leave and periods of
19disability leave in excess of 60 days, for which the employee
20pays the contributions required under Section 15-157 in
21accordance with rules prescribed by the board based upon the
22employee's basic compensation on the date the leave begins, or
23in the case of leave for service with a teacher organization,
24based upon the actual compensation received by the employee for
25such service after January 26, 1988, if the employee so elects

 

 

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1within 30 days of that date or the date the leave for service
2with a teacher organization begins, whichever is later;
3provided that the employee (1) returns to employment covered by
4this system at the expiration of the leave, or within 30 days
5after the termination of a disability which occurs during the
6leave and continues this employment at a percentage of time
7equal to or greater than the percentage of time immediately
8preceding the leave of absence for at least 8 consecutive
9months or a period equal to the period of the leave, whichever
10is less, or (2) is precluded from meeting the foregoing
11conditions because of disability or death. If service credit is
12denied because the employee fails to meet these conditions, the
13contributions covering the leave of absence shall be refunded
14without interest. The return to employment condition does not
15apply if the leave of absence is for service with a teacher
16organization.
17    Service credit provided under this Section shall not exceed
183 years in any period of 10 years, unless the employee is on
19special leave granted by the employer for service with a
20teacher organization. Commencing with the fourth year in any
21period of 10 years, a participant on such special leave is also
22required to pay employer contributions equal to the normal cost
23as defined in Section 15-155, based upon the employee's basic
24compensation on the date the leave begins, or based upon the
25actual compensation received by the employee for service with a
26teacher organization if the employee has so elected.

 

 

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1    Notwithstanding any other provision of this Article, a
2participant shall not be eligible to make contributions or
3receive service credit for a leave of absence for service with
4a teacher organization if that leave of absence for service
5with a teacher organization begins on or after the effective
6date of this amendatory Act of the 97th General Assembly.
7(Source: P.A. 90-65, eff. 7-7-97; 90-511, eff. 8-22-97.)
 
8    (40 ILCS 5/15-113.6)  (from Ch. 108 1/2, par. 15-113.6)
9    Sec. 15-113.6. Service for employment in public schools.
10"Service for employment in public schools": Includes those
11periods not exceeding the lesser of 10 years or 2/3 of the
12service granted under other Sections of this Article dealing
13with service credit, during which a person who entered the
14system after September 1, 1974 was employed full time by a
15public common school, public college and public university, or
16by an agency or instrumentality of any of the foregoing, of any
17state, territory, dependency or possession of the United States
18of America, including the Philippine Islands, or a school
19operated by or under the auspices of any agency or department
20of any other state, if the person (1) cannot qualify for a
21retirement pension or other benefit based upon employer
22contributions from another retirement system, exclusive of
23federal social security, based in whole or in part upon this
24employment, and (2) pays the lesser of (A) an amount equal to
258% of his or her annual basic compensation on the date of

 

 

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1becoming a participating employee subsequent to this service
2multiplied by the number of years of such service, together
3with compound interest from the date participation begins to
4the date payment is received by the board at the rate of 6% per
5annum through August 31, 1982, and at the effective rates after
6that date, and (B) 50% of the actuarial value of the increase
7in the retirement annuity provided by this service, and (3)
8contributes for at least 5 years subsequent to this employment
9to one or more of the following systems: the State Universities
10Retirement System, the Teachers' Retirement System of the State
11of Illinois, and the Public School Teachers' Pension and
12Retirement Fund of Chicago.
13    The service granted under this Section shall not be
14considered in determining whether the person has the minimum
15number of 8 years of service required to qualify for a
16retirement annuity at age 55 or the 5 years of service required
17to qualify for a retirement annuity at age 62, as provided in
18Section 15-135, or the 10 years required by subsection (c) of
19Section 1-160 for a person subject to that Section who first
20becomes a participant on or after January 1, 2011. The maximum
21allowable service of 10 years for this governmental employment
22shall be reduced by the service credit which is validated under
23paragraph (2) of subsection (b) of Section 16-127 and paragraph
241 of Section 17-133.
25(Source: P.A. 95-83, eff. 8-13-07; 96-1490, eff. 1-1-11.)
 

 

 

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1    (40 ILCS 5/15-163)  (from Ch. 108 1/2, par. 15-163)
2    Sec. 15-163. To consider applications and authorize
3payments.
4    To consider and pass on all certifications of employment
5and applications for annuities and benefits; to authorize the
6granting of annuities and benefits; and to limit or suspend any
7payment or payments, all in accordance with this Article.
8(Source: Laws 1963, p. 161.)
 
9    (40 ILCS 5/15-165)   (from Ch. 108 1/2, par. 15-165)
10    Sec. 15-165. To certify amounts and submit vouchers.
11    (a) The Board shall certify to the Governor on or before
12November 15 of each year until November 15, 2011 the
13appropriation required from State funds for the purposes of
14this System for the following fiscal year. The certification
15under this subsection (a) shall include a copy of the actuarial
16recommendations upon which it is based and shall specifically
17identify the System's projected State normal cost for that
18fiscal year and the projected State cost for the self-managed
19plan for that fiscal year.
20    On or before May 1, 2004, the Board shall recalculate and
21recertify to the Governor the amount of the required State
22contribution to the System for State fiscal year 2005, taking
23into account the amounts appropriated to and received by the
24System under subsection (d) of Section 7.2 of the General
25Obligation Bond Act.

 

 

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1    On or before July 1, 2005, the Board shall recalculate and
2recertify to the Governor the amount of the required State
3contribution to the System for State fiscal year 2006, taking
4into account the changes in required State contributions made
5by this amendatory Act of the 94th General Assembly.
6    On or before April 1, 2011, the Board shall recalculate and
7recertify to the Governor the amount of the required State
8contribution to the System for State fiscal year 2011, applying
9the changes made by Public Act 96-889 to the System's assets
10and liabilities as of June 30, 2009 as though Public Act 96-889
11was approved on that date.
12    (a-5) On or before November 1 of each year, beginning
13November 1, 2012, the Board shall submit to the State Actuary,
14the Governor, and the General Assembly a proposed certification
15of the amount of the required State contribution to the System
16for the next fiscal year, along with all of the actuarial
17assumptions, calculations, and data upon which that proposed
18certification is based. On or before January 1 of each year,
19beginning January 1, 2013, the State Actuary shall issue a
20preliminary report concerning the proposed certification and
21identifying, if necessary, recommended changes in actuarial
22assumptions that the Board must consider before finalizing its
23certification of the required State contributions. On or before
24January 15, 2013 and each January 15 thereafter, the Board
25shall certify to the Governor and the General Assembly the
26amount of the required State contribution for the next fiscal

 

 

09700HB3865sam003- 90 -LRB097 14296 JDS 70341 a

1year. The Board's certification must note, in a written
2response to the State Actuary, any deviations from the State
3Actuary's recommended changes, the reason or reasons for not
4following the State Actuary's recommended changes, and the
5fiscal impact of not following the State Actuary's recommended
6changes on the required State contribution.
7    (b) The Board shall certify to the State Comptroller or
8employer, as the case may be, from time to time, by its
9president and secretary, with its seal attached, the amounts
10payable to the System from the various funds.
11    (c) Beginning in State fiscal year 1996, on or as soon as
12possible after the 15th day of each month the Board shall
13submit vouchers for payment of State contributions to the
14System, in a total monthly amount of one-twelfth of the
15required annual State contribution certified under subsection
16(a). From the effective date of this amendatory Act of the 93rd
17General Assembly through June 30, 2004, the Board shall not
18submit vouchers for the remainder of fiscal year 2004 in excess
19of the fiscal year 2004 certified contribution amount
20determined under this Section after taking into consideration
21the transfer to the System under subsection (b) of Section
226z-61 of the State Finance Act. These vouchers shall be paid by
23the State Comptroller and Treasurer by warrants drawn on the
24funds appropriated to the System for that fiscal year.
25    If in any month the amount remaining unexpended from all
26other appropriations to the System for the applicable fiscal

 

 

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1year (including the appropriations to the System under Section
28.12 of the State Finance Act and Section 1 of the State
3Pension Funds Continuing Appropriation Act) is less than the
4amount lawfully vouchered under this Section, the difference
5shall be paid from the General Revenue Fund under the
6continuing appropriation authority provided in Section 1.1 of
7the State Pension Funds Continuing Appropriation Act.
8    (d) So long as the payments received are the full amount
9lawfully vouchered under this Section, payments received by the
10System under this Section shall be applied first toward the
11employer contribution to the self-managed plan established
12under Section 15-158.2. Payments shall be applied second toward
13the employer's portion of the normal costs of the System, as
14defined in subsection (f) of Section 15-155. The balance shall
15be applied toward the unfunded actuarial liabilities of the
16System.
17    (e) In the event that the System does not receive, as a
18result of legislative enactment or otherwise, payments
19sufficient to fully fund the employer contribution to the
20self-managed plan established under Section 15-158.2 and to
21fully fund that portion of the employer's portion of the normal
22costs of the System, as calculated in accordance with Section
2315-155(a-1), then any payments received shall be applied
24proportionately to the optional retirement program established
25under Section 15-158.2 and to the employer's portion of the
26normal costs of the System, as calculated in accordance with

 

 

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1Section 15-155(a-1).
2(Source: P.A. 96-1497, eff. 1-14-11; 96-1511, eff. 1-27-11.)
 
3    (40 ILCS 5/16-106)  (from Ch. 108 1/2, par. 16-106)
4    Sec. 16-106. Teacher. "Teacher": The following
5individuals, provided that, for employment prior to July 1,
61990, they are employed on a full-time basis, or if not
7full-time, on a permanent and continuous basis in a position in
8which services are expected to be rendered for at least one
9school term:
10        (1) Any educational, administrative, professional or
11    other staff employed in the public common schools included
12    within this system in a position requiring certification
13    under the law governing the certification of teachers;
14        (2) Any educational, administrative, professional or
15    other staff employed in any facility of the Department of
16    Children and Family Services or the Department of Human
17    Services, in a position requiring certification under the
18    law governing the certification of teachers, and any person
19    who (i) works in such a position for the Department of
20    Corrections, (ii) was a member of this System on May 31,
21    1987, and (iii) did not elect to become a member of the
22    State Employees' Retirement System pursuant to Section
23    14-108.2 of this Code; except that "teacher" does not
24    include any person who (A) becomes a security employee of
25    the Department of Human Services, as defined in Section

 

 

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1    14-110, after June 28, 2001 (the effective date of Public
2    Act 92-14), or (B) becomes a member of the State Employees'
3    Retirement System pursuant to Section 14-108.2c of this
4    Code;
5        (3) Any regional superintendent of schools, assistant
6    regional superintendent of schools, State Superintendent
7    of Education; any person employed by the State Board of
8    Education as an executive; any executive of the boards
9    engaged in the service of public common school education in
10    school districts covered under this system of which the
11    State Superintendent of Education is an ex-officio member;
12        (4) Any employee of a school board association
13    operating in compliance with Article 23 of the School Code
14    who is certificated under the law governing the
15    certification of teachers, provided that he or she becomes
16    such an employee before the effective date of this
17    amendatory Act of the 97th General Assembly;
18        (5) Any person employed by the retirement system who:
19            (i) was an employee of and a participant in the
20        system on August 17, 2001 (the effective date of Public
21        Act 92-416), or
22            (ii) becomes an employee of the system on or after
23        August 17, 2001;
24        (6) Any educational, administrative, professional or
25    other staff employed by and under the supervision and
26    control of a regional superintendent of schools, provided

 

 

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1    such employment position requires the person to be
2    certificated under the law governing the certification of
3    teachers and is in an educational program serving 2 or more
4    districts in accordance with a joint agreement authorized
5    by the School Code or by federal legislation;
6        (7) Any educational, administrative, professional or
7    other staff employed in an educational program serving 2 or
8    more school districts in accordance with a joint agreement
9    authorized by the School Code or by federal legislation and
10    in a position requiring certification under the laws
11    governing the certification of teachers;
12        (8) Any officer or employee of a statewide teacher
13    organization or officer of a national teacher organization
14    who is certified under the law governing certification of
15    teachers, provided: (i) the individual had previously
16    established creditable service under this Article, (ii)
17    the individual files with the system an irrevocable
18    election to become a member before the effective date of
19    this amendatory Act of the 97th General Assembly, (iii) the
20    individual does not receive credit for such service under
21    any other Article of this Code, and (iv) the individual
22    first became an officer or employee of the teacher
23    organization and becomes a member before the effective date
24    of this amendatory Act of the 97th General Assembly;
25        (9) Any educational, administrative, professional, or
26    other staff employed in a charter school operating in

 

 

09700HB3865sam003- 95 -LRB097 14296 JDS 70341 a

1    compliance with the Charter Schools Law who is certificated
2    under the law governing the certification of teachers.
3        (10) Any person employed, on the effective date of this
4    amendatory Act of the 94th General Assembly, by the
5    Macon-Piatt Regional Office of Education in a
6    birth-through-age-three pilot program receiving funds
7    under Section 2-389 of the School Code who is required by
8    the Macon-Piatt Regional Office of Education to hold a
9    teaching certificate, provided that the Macon-Piatt
10    Regional Office of Education makes an election, within 6
11    months after the effective date of this amendatory Act of
12    the 94th General Assembly, to have the person participate
13    in the system. Any service established prior to the
14    effective date of this amendatory Act of the 94th General
15    Assembly for service as an employee of the Macon-Piatt
16    Regional Office of Education in a birth-through-age-three
17    pilot program receiving funds under Section 2-389 of the
18    School Code shall be considered service as a teacher if
19    employee and employer contributions have been received by
20    the system and the system has not refunded those
21    contributions.
22    An annuitant receiving a retirement annuity under this
23Article or under Article 17 of this Code who is employed by a
24board of education or other employer as permitted under Section
2516-118 or 16-150.1 is not a "teacher" for purposes of this
26Article. A person who has received a single-sum retirement

 

 

09700HB3865sam003- 96 -LRB097 14296 JDS 70341 a

1benefit under Section 16-136.4 of this Article is not a
2"teacher" for purposes of this Article.
3(Source: P.A. 97-651, eff. 1-5-12.)
 
4    (40 ILCS 5/16-106.4 new)
5    Sec. 16-106.4. Tier I employee. "Tier I employee": A
6teacher under this Article who first became a member or
7participant before January 1, 2011 under any reciprocal
8retirement system or pension fund established under this Code
9other than a retirement system or pension fund established
10under Article 2, 3, 4, 5, 6, or 18 of this Code.
 
11    (40 ILCS 5/16-106.5 new)
12    Sec. 16-106.5. Tier I retiree. "Tier I retiree": A former
13Tier I employee who is receiving a retirement annuity.
 
14    (40 ILCS 5/16-106.6 new)
15    Sec. 16-106.6. Teacher certification. For purposes of this
16Article, a teacher shall be deemed to be certificated if he or
17she is required to be licensed by the Illinois State Board of
18Education.
 
19    (40 ILCS 5/16-121)  (from Ch. 108 1/2, par. 16-121)
20    Sec. 16-121. Salary. "Salary": The actual compensation
21received by a teacher during any school year and recognized by
22the system in accordance with rules of the board. For purposes

 

 

09700HB3865sam003- 97 -LRB097 14296 JDS 70341 a

1of this Section, "school year" includes the regular school term
2plus any additional period for which a teacher is compensated
3and such compensation is recognized by the rules of the board.
4Notwithstanding any other provision of this Section, "salary"
5does not include any future increase in income offered by an
6employer under this Article pursuant to the requirements of
7subsection (c) of Section 16-131.7 that is accepted by a Tier I
8employee, or a Tier I retiree returning to active service, who
9has made an election under paragraph (2) of subsection (a) or
10(a-5) of Section 16-131.7.
11(Source: P.A. 84-1028.)
 
12    (40 ILCS 5/16-121.1 new)
13    Sec. 16-121.1. Future increase in income. "Future increase
14in income": Any increase in income in any form offered by an
15employer to a teacher under this Article after June 30, 2013
16that would qualify as "salary", as defined under Section
1714-103.10, but for the fact that the employer offered the
18increase in income to the teacher on the condition that it not
19qualify as salary and the teacher accepted the increase in
20income subject to that condition. The term "future increase in
21income" does not include an increase in income in any form that
22is paid to a Tier I employee under an employment contract or
23collective bargaining agreement that is in effect on the
24effective date of this Section but does include an increase in
25income in any form pursuant to an extension, amendment, or

 

 

09700HB3865sam003- 98 -LRB097 14296 JDS 70341 a

1renewal of any such employment contract or collective
2bargaining agreement on or after the effective date of this
3amendatory Act of the 97th General Assembly.
 
4    (40 ILCS 5/16-127)  (from Ch. 108 1/2, par. 16-127)
5    Sec. 16-127. Computation of creditable service.
6    (a) Each member shall receive regular credit for all
7service as a teacher from the date membership begins, for which
8satisfactory evidence is supplied and all contributions have
9been paid.
10    (b) The following periods of service shall earn optional
11credit and each member shall receive credit for all such
12service for which satisfactory evidence is supplied and all
13contributions have been paid as of the date specified:
14        (1) Prior service as a teacher.
15        (2) Service in a capacity essentially similar or
16    equivalent to that of a teacher, in the public common
17    schools in school districts in this State not included
18    within the provisions of this System, or of any other
19    State, territory, dependency or possession of the United
20    States, or in schools operated by or under the auspices of
21    the United States, or under the auspices of any agency or
22    department of any other State, and service during any
23    period of professional speech correction or special
24    education experience for a public agency within this State
25    or any other State, territory, dependency or possession of

 

 

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1    the United States, and service prior to February 1, 1951 as
2    a recreation worker for the Illinois Department of Public
3    Safety, for a period not exceeding the lesser of 2/5 of the
4    total creditable service of the member or 10 years. The
5    maximum service of 10 years which is allowable under this
6    paragraph shall be reduced by the service credit which is
7    validated by other retirement systems under paragraph (i)
8    of Section 15-113 and paragraph 1 of Section 17-133. Credit
9    granted under this paragraph may not be used in
10    determination of a retirement annuity or disability
11    benefits unless the member has at least 5 years of
12    creditable service earned subsequent to this employment
13    with one or more of the following systems: Teachers'
14    Retirement System of the State of Illinois, State
15    Universities Retirement System, and the Public School
16    Teachers' Pension and Retirement Fund of Chicago. Whenever
17    such service credit exceeds the maximum allowed for all
18    purposes of this Article, the first service rendered in
19    point of time shall be considered. The changes to this
20    subdivision (b)(2) made by Public Act 86-272 shall apply
21    not only to persons who on or after its effective date
22    (August 23, 1989) are in service as a teacher under the
23    System, but also to persons whose status as such a teacher
24    terminated prior to such effective date, whether or not
25    such person is an annuitant on that date.
26        (3) Any periods immediately following teaching

 

 

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

 

 

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1    with the increase taking effect on the date the System
2    received written notification of the annuitant's intent to
3    purchase the credit, if payment of all the required
4    contributions is made within 60 days of such notice, or
5    else on the first annuity payment date following the date
6    of payment of the required contributions. In calculating
7    the automatic annual increase for an annuity that has been
8    recalculated under this Section, the increase attributable
9    to the additional service allowable under P.A. 87-794 shall
10    be included in the calculation of automatic annual
11    increases accruing after the effective date of the
12    recalculation.
13        Credit for military service shall be determined as
14    follows: if entry occurs during the months of July, August,
15    or September and the member was a teacher at the end of the
16    immediately preceding school term, credit shall be granted
17    from July 1 of the year in which he or she entered service;
18    if entry occurs during the school term and the teacher was
19    in teaching service at the beginning of the school term,
20    credit shall be granted from July 1 of such year. In all
21    other cases where credit for military service is allowed,
22    credit shall be granted from the date of entry into the
23    service.
24        The total period of military service for which credit
25    is granted shall not exceed 5 years for any member unless
26    the service: (A) is validated before July 1, 1964, and (B)

 

 

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1    does not extend beyond July 1, 1963. Credit for military
2    service shall be granted under this Section only if not
3    more than 5 years of the military service for which credit
4    is granted under this Section is used by the member to
5    qualify for a military retirement allotment from any branch
6    of the armed forces of the United States. The changes to
7    this subdivision (b)(3) made by Public Act 86-272 shall
8    apply not only to persons who on or after its effective
9    date (August 23, 1989) are in service as a teacher under
10    the System, but also to persons whose status as such a
11    teacher terminated prior to such effective date, whether or
12    not such person is an annuitant on that date.
13        (4) Any periods served as a member of the General
14    Assembly.
15        (5)(i) Any periods for which a teacher, as defined in
16    Section 16-106, is granted a leave of absence, provided he
17    or she returns to teaching service creditable under this
18    System or the State Universities Retirement System
19    following the leave; (ii) periods during which a teacher is
20    involuntarily laid off from teaching, provided he or she
21    returns to teaching following the lay-off; (iii) periods
22    prior to July 1, 1983 during which a teacher ceased covered
23    employment due to pregnancy, provided that the teacher
24    returned to teaching service creditable under this System
25    or the State Universities Retirement System following the
26    pregnancy and submits evidence satisfactory to the Board

 

 

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1    documenting that the employment ceased due to pregnancy;
2    and (iv) periods prior to July 1, 1983 during which a
3    teacher ceased covered employment for the purpose of
4    adopting an infant under 3 years of age or caring for a
5    newly adopted infant under 3 years of age, provided that
6    the teacher returned to teaching service creditable under
7    this System or the State Universities Retirement System
8    following the adoption and submits evidence satisfactory
9    to the Board documenting that the employment ceased for the
10    purpose of adopting an infant under 3 years of age or
11    caring for a newly adopted infant under 3 years of age.
12    However, total credit under this paragraph (5) may not
13    exceed 3 years.
14        Any qualified member or annuitant may apply for credit
15    under item (iii) or (iv) of this paragraph (5) without
16    regard to whether service was terminated before the
17    effective date of this amendatory Act of 1997. In the case
18    of an annuitant who establishes credit under item (iii) or
19    (iv), the annuity shall be recalculated to include the
20    additional service credit. The increase in annuity shall
21    take effect on the date the System receives written
22    notification of the annuitant's intent to purchase the
23    credit, if the required evidence is submitted and the
24    required contribution paid within 60 days of that
25    notification, otherwise on the first annuity payment date
26    following the System's receipt of the required evidence and

 

 

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1    contribution. The increase in an annuity recalculated
2    under this provision shall be included in the calculation
3    of automatic annual increases in the annuity accruing after
4    the effective date of the recalculation.
5        Optional credit may be purchased under this subsection
6    (b)(5) for periods during which a teacher has been granted
7    a leave of absence pursuant to Section 24-13 of the School
8    Code. A teacher whose service under this Article terminated
9    prior to the effective date of P.A. 86-1488 shall be
10    eligible to purchase such optional credit. If a teacher who
11    purchases this optional credit is already receiving a
12    retirement annuity under this Article, the annuity shall be
13    recalculated as if the annuitant had applied for the leave
14    of absence credit at the time of retirement. The difference
15    between the entitled annuity and the actual annuity shall
16    be credited to the purchase of the optional credit. The
17    remainder of the purchase cost of the optional credit shall
18    be paid on or before April 1, 1992.
19        The change in this paragraph made by Public Act 86-273
20    shall be applicable to teachers who retire after June 1,
21    1989, as well as to teachers who are in service on that
22    date.
23        (6) Any days of unused and uncompensated accumulated
24    sick leave earned by a teacher who first became a
25    participant in the System before the effective date of this
26    amendatory Act of the 97th General Assembly. The service

 

 

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1    credit granted under this paragraph shall be the ratio of
2    the number of unused and uncompensated accumulated sick
3    leave days to 170 days, subject to a maximum of 2 years of
4    service credit. Prior to the member's retirement, each
5    former employer shall certify to the System the number of
6    unused and uncompensated accumulated sick leave days
7    credited to the member at the time of termination of
8    service. The period of unused sick leave shall not be
9    considered in determining the effective date of
10    retirement. A member is not required to make contributions
11    in order to obtain service credit for unused sick leave.
12        Credit for sick leave shall, at retirement, be granted
13    by the System for any retiring regional or assistant
14    regional superintendent of schools who first became a
15    participant in this System before the effective date of
16    this amendatory Act of the 97th General Assembly at the
17    rate of 6 days per year of creditable service or portion
18    thereof established while serving as such superintendent
19    or assistant superintendent.
20    Service credit is not available for unused sick leave
21accumulated by a teacher who first becomes a participant in
22this System on or after the effective date of this amendatory
23Act of the 97th General Assembly.
24        (7) Periods prior to February 1, 1987 served as an
25    employee of the Illinois Mathematics and Science Academy
26    for which credit has not been terminated under Section

 

 

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1    15-113.9 of this Code.
2        (8) Service as a substitute teacher for work performed
3    prior to July 1, 1990.
4        (9) Service as a part-time teacher for work performed
5    prior to July 1, 1990.
6        (10) Up to 2 years of employment with Southern Illinois
7    University - Carbondale from September 1, 1959 to August
8    31, 1961, or with Governors State University from September
9    1, 1972 to August 31, 1974, for which the teacher has no
10    credit under Article 15. To receive credit under this item
11    (10), a teacher must apply in writing to the Board and pay
12    the required contributions before May 1, 1993 and have at
13    least 12 years of service credit under this Article.
14    (b-1) A member may establish optional credit for up to 2
15years of service as a teacher or administrator employed by a
16private school recognized by the Illinois State Board of
17Education, provided that the teacher (i) was certified under
18the law governing the certification of teachers at the time the
19service was rendered, (ii) applies in writing on or after
20August 1, 2009 and on or before August 1, 2012, (iii) supplies
21satisfactory evidence of the employment, (iv) completes at
22least 10 years of contributing service as a teacher as defined
23in Section 16-106, and (v) pays the contribution required in
24subsection (d-5) of Section 16-128. The member may apply for
25credit under this subsection and pay the required contribution
26before completing the 10 years of contributing service required

 

 

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1under item (iv), but the credit may not be used until the item
2(iv) contributing service requirement has been met.
3    (c) The service credits specified in this Section shall be
4granted only if: (1) such service credits are not used for
5credit in any other statutory tax-supported public employee
6retirement system other than the federal Social Security
7program; and (2) the member makes the required contributions as
8specified in Section 16-128. Except as provided in subsection
9(b-1) of this Section, the service credit shall be effective as
10of the date the required contributions are completed.
11    Any service credits granted under this Section shall
12terminate upon cessation of membership for any cause.
13    Credit may not be granted under this Section covering any
14period for which an age retirement or disability retirement
15allowance has been paid.
16(Source: P.A. 96-546, eff. 8-17-09.)
 
17    (40 ILCS 5/16-131.7 new)
18    Sec. 16-131.7. 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,

 

 

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1        instead, as provided in subsection (a-1) of Section
2        16-133.1 or subsection (b-1) of Section 16-136.1,
3        whichever is applicable; and
4            (ii) to have his or her eligibility for automatic
5        annual increases in retirement annuity postponed as
6        provided in subsection (a-2) of Section 16-133.1 or
7        subsection (b-2) of Section 16-136.1, whichever is
8        applicable; or
9        (2) to not agree to items (i) and (ii) as set forth in
10    paragraph (1) of this subsection and to be subject to
11    subsection (c) of this Section.
12    The election required under this subsection (a) shall be
13made by each Tier I employee no earlier than January 1, 2013
14and no later than May 31, 2013, except that:
15        (i) a person who becomes a Tier I employee under this
16    Article after January 1, 2013 must make the election under
17    this subsection (a) within 60 days after becoming a Tier I
18    employee;
19        (ii) a person who returns to active service as a Tier I
20    employee under this Article after January 1, 2013 and has
21    not yet made an election under this Section must make the
22    election under this subsection (a) within 60 days after
23    returning to active service as a Tier I employee; and
24        (iii) a person who made the election under subsection
25    (a-5) as a Tier I retiree remains bound by that election
26    and shall not make a later election under this subsection

 

 

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1    (a).
2    If a Tier I employee fails for any reason to make a
3required election under this subsection within the time
4specified, then the employee shall be deemed to have made the
5election under paragraph (2) of this subsection.
6    (a-5) Each Tier I retiree shall make an irrevocable
7election either:
8        (1) to agree to the following:
9            (i) to have the amount of the automatic annual
10        increases in his or her retirement annuity that are
11        otherwise provided for in this Article calculated,
12        instead, as provided in subsection (a-1) of Section
13        16-133.1 or subsection (b-1) of Section 16-136.1,
14        whichever is applicable; and
15            (ii) to have his or her eligibility for automatic
16        annual increases in retirement annuity postponed as
17        provided in subsection (a-2) of Section 16-133.1 or
18        subsection (b-2) of Section 16-136.1, whichever is
19        applicable; or
20        (2) to not agree to items (i) and (ii) as set forth in
21    paragraph (1) of this subsection and to be subject to
22    subsection (c) of this Section.
23    The election required under this subsection (a-5) shall be
24made by each Tier I retiree no earlier than January 1, 2013 and
25no later than May 31, 2013, except that:
26        (i) a person who becomes a Tier I retiree under this

 

 

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1    Article on or after January 1, 2013 must make the election
2    under this subsection (a-5) within 60 days after becoming a
3    Tier I retiree; and
4        (ii) a person who made the election under subsection
5    (a) as a Tier I employee remains bound by that election and
6    shall not make a later election under this subsection
7    (a-5).
8    If a Tier I retiree fails for any reason to make a required
9election under this subsection within the time specified, then
10the Tier I retiree shall be deemed to have made the election
11under paragraph (2) of this subsection.
12    (a-10) All elections under subsection (a) or (a-5) that are
13made or deemed to be made before June 1, 2013 shall take effect
14on July 1, 2013. Elections that are made or deemed to be made
15on or after June 1, 2013 shall take effect on the first day of
16the month following the month in which the election is made or
17deemed to be made.
18    (b) As adequate and legal consideration provided under this
19amendatory Act of the 97th General Assembly for making the
20election under paragraph (1) of subsection (a) of this Section,
21any future increases in income offered by an employer under
22this Article to a Tier I employee who has made the election
23under paragraph (1) of subsection (a) of this Section shall be
24offered expressly and irrevocably as constituting salary under
25Section 16-121. In addition, a Tier I employee who has made the
26election under paragraph (1) of subsection (a) of this Section

 

 

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1shall receive the right to also participate in the optional
2cash balance plan established under Section 1-162.
3    As adequate and legal consideration provided under this
4amendatory Act of the 97th General Assembly for making the
5election under paragraph (1) of subsection (a-5) of this
6Section, any future increases in income offered by an employer
7under this Article to a Tier I retiree who returns to active
8service after having made the election under paragraph (1) of
9subsection (a-5) of this Section shall be offered expressly and
10irrevocably as constituting salary under Section 16-121. In
11addition, a Tier I retiree who returns to active service and
12has made the election under paragraph (1) of subsection (a) of
13this Section shall receive the right to also participate in the
14optional cash balance plan established under Section 1-162.
15    (c) A Tier I employee who makes the election under
16paragraph (2) of subsection (a) of this Section shall not be
17subject to items (i) and (ii) set forth in paragraph (1) of
18subsection (a) of this Section. However, any future increases
19in income offered by an employer under this Article to a Tier I
20employee who has made the election under paragraph (2) of
21subsection (a) of this Section shall be offered expressly and
22irrevocably as not constituting salary under Section 16-121,
23and the employee may not accept any future increase in income
24that is offered in violation of this requirement. In addition,
25a Tier I employee who has made the election under paragraph (2)
26of subsection (a) of this Section shall not receive the right

 

 

09700HB3865sam003- 112 -LRB097 14296 JDS 70341 a

1to participate in the optional cash balance plan established
2under Section 1-162.
3    A Tier I retiree who makes the election under paragraph (2)
4of subsection (a-5) of this Section shall not be subject to
5items (i) and (ii) set forth in paragraph (1) of subsection
6(a-5) of this Section. However, any future increases in income
7offered by an employer under this Article to a Tier I retiree
8who returns to active service and has made the election under
9paragraph (2) of subsection (a-5) of this Section shall be
10offered expressly and irrevocably as not constituting salary
11under Section 16-121, and the employee may not accept any
12future increase in income that is offered in violation of this
13requirement. In addition, a Tier I retiree who returns to
14active service and has made the election under paragraph (2) of
15subsection (a) of this Section shall not receive the right to
16participate in the optional cash balance plan established under
17Section 1-162.
18    (d) The System shall make a good faith effort to contact
19each Tier I employee and Tier I retiree subject to this
20Section. The System shall mail information describing the
21required election to each Tier I employee and Tier I retiree by
22United States Postal Service mail to his or her last known
23address on file with the System. If the Tier I employee or Tier
24I retiree is not responsive to other means of contact, it is
25sufficient for the System to publish the details of any
26required elections on its website or to publish those details

 

 

09700HB3865sam003- 113 -LRB097 14296 JDS 70341 a

1in a regularly published newsletter or other existing public
2forum.
3    Tier I employees and Tier I retirees who are subject to
4this Section shall be provided with an election packet
5containing information regarding their options, as well as the
6forms necessary to make the required election. Upon request,
7the System shall offer Tier I employees and Tier I retirees an
8opportunity to receive information from the System before
9making the required election. The information may consist of
10video materials, group presentations, individual consultation
11with a member or authorized representative of the System in
12person or by telephone or other electronic means, or any
13combination of those methods. The System shall not provide
14advice or counseling with respect to which election a Tier I
15employee or Tier I retiree should make or specific to the legal
16or tax circumstances of or consequences to the Tier I employee
17or Tier I retiree.
18    The System shall inform Tier I employees and Tier I
19retirees in the election packet required under this subsection
20that the Tier I employee or Tier I retiree may also wish to
21obtain information and counsel relating to the election
22required under this Section from any other available source,
23including but not limited to labor organizations and private
24counsel.
25    In no event shall the System, its staff, or the Board be
26held liable for any information given to a member, beneficiary,

 

 

09700HB3865sam003- 114 -LRB097 14296 JDS 70341 a

1or annuitant regarding the elections under this Section. The
2System shall coordinate with the Illinois Department of Central
3Management Services and each other retirement system
4administering an election in accordance with this amendatory
5Act of the 97th General Assembly to provide information
6concerning the impact of the election set forth in this
7Section.
8    (e) Notwithstanding any other provision of law, an employer
9under this Article is required to offer any future increases in
10income expressly and irrevocably as not constituting "salary"
11under Section 16-121 to any Tier I employee, or Tier I retiree
12returning to active service, who has made an election under
13paragraph (2) or subsection (a) or (a-5) of Section 16-131.7. A
14Tier I employee, or Tier I retiree returning to active service,
15who has made an election under paragraph (2) or subsection (a)
16or (a-5) of Section 16-131.7 shall not accept any future
17increase in income that is offered by an employer under this
18Article in violation of the requirement set forth in this
19subsection.
20    (f) A member's election under this Section is not a
21prohibited election under subdivision (j)(1) of Section 1-119
22of this Code.
23    (g) An employee who has made the election under paragraph
24(1) of subsection (a) or (a-5) of this Section may elect to
25participate in the optional cash balance plan under Section
261-162.

 

 

09700HB3865sam003- 115 -LRB097 14296 JDS 70341 a

1    The election to participate in the optional cash balance
2plan shall be made in writing, in the manner provided by the
3applicable retirement system.
4    (h) Qualified Plan Status. No provision of this Section
5shall be interpreted in a way that would cause the System to
6cease to be a qualified plan under section 461 (a) of the
7Internal Revenue Code of 1986.
 
8    (40 ILCS 5/16-133.1)  (from Ch. 108 1/2, par. 16-133.1)
9    Sec. 16-133.1. Automatic annual increase in annuity.
10    (a) Each member with creditable service and retiring on or
11after August 26, 1969 is entitled to the automatic annual
12increases in annuity provided under this Section while
13receiving a retirement annuity or disability retirement
14annuity from the system.
15    An annuitant shall first be entitled to an initial increase
16under this Section on the January 1 next following the first
17anniversary of retirement, or January 1 of the year next
18following attainment of age 61, whichever is later. At such
19time, the system shall pay an initial increase determined as
20follows or as provided in subsections (a-1) and (a-2):
21        (1) 1.5% of the originally granted retirement annuity
22    or disability retirement annuity multiplied by the number
23    of years elapsed, if any, from the date of retirement until
24    January 1, 1972, plus
25        (2) 2% of the originally granted annuity multiplied by

 

 

09700HB3865sam003- 116 -LRB097 14296 JDS 70341 a

1    the number of years elapsed, if any, from the date of
2    retirement or January 1, 1972, whichever is later, until
3    January 1, 1978, plus
4        (3) 3% of the originally granted annuity multiplied by
5    the number of years elapsed from the date of retirement or
6    January 1, 1978, whichever is later, until the effective
7    date of the initial increase.
8However, the initial annual increase calculated under this
9Section for the recipient of a disability retirement annuity
10granted under Section 16-149.2 shall be reduced by an amount
11equal to the total of all increases in that annuity received
12under Section 16-149.5 (but not exceeding 100% of the amount of
13the initial increase otherwise provided under this Section).
14    Following the initial increase, automatic annual increases
15in annuity shall be payable on each January 1 thereafter during
16the lifetime of the annuitant, determined as a percentage of
17the originally granted retirement annuity or disability
18retirement annuity for increases granted prior to January 1,
191990, and calculated as a percentage of the total amount of
20annuity, including previous increases under this Section, for
21increases granted on or after January 1, 1990, as follows: 1.5%
22for periods prior to January 1, 1972, 2% for periods after
23December 31, 1971 and prior to January 1, 1978, and 3% for
24periods after December 31, 1977, or as provided in subsections
25(a-1) and (a-2).
26    (a-1) Notwithstanding any other provision of this Article,

 

 

09700HB3865sam003- 117 -LRB097 14296 JDS 70341 a

1for a Tier I employee or Tier I retiree who made the election
2under paragraph (1) of either subsection (a) or (a-5) of
3Section 16-131.7, the amount of each automatic annual increase
4in retirement annuity occurring on or after the effective date
5of that election shall be 3% or one-half of the annual
6unadjusted percentage increase, if any, in the Consumer Price
7Index-U for the 12 months ending with the preceding September,
8whichever is less, of the originally granted retirement
9annuity. For the purposes of this Section, "Consumer Price
10Index-U" means the index published by the Bureau of Labor
11Statistics of the United States Department of Labor that
12measures the average change in prices of goods and services
13purchased by all urban consumers, United States city average,
14all items, 1982-84 = 100.
15    (a-2) Notwithstanding any other provision of this Article,
16for a Tier I employee or Tier I retiree who made the election
17under paragraph (1) of subsection (a) or (a-5) of Section
1816-131.7, the monthly retirement annuity shall first be subject
19to annual increases on the January 1 occurring on or next after
20the attainment of age 67 or the January 1 occurring on or next
21after the fifth anniversary of the annuity start date,
22whichever occurs earlier. If on the effective date of the
23election under paragraph (1) of subsection (a-5) of Section
2416-131.7 a Tier I retiree has already received an annual
25increase under this Section but does not yet meet the new
26eligibility requirements of this subsection, the annual

 

 

09700HB3865sam003- 118 -LRB097 14296 JDS 70341 a

1increases already received shall continue in force, but no
2additional annual increase shall be granted until the Tier I
3retiree meets the new eligibility requirements.
4    (b) The automatic annual increases in annuity provided
5under this Section shall not be applicable unless a member has
6made contributions toward such increases for a period
7equivalent to one full year of creditable service. If a member
8contributes for service performed after August 26, 1969 but the
9member becomes an annuitant before such contributions amount to
10one full year's contributions based on the salary at the date
11of retirement, he or she may pay the necessary balance of the
12contributions to the system and be eligible for the automatic
13annual increases in annuity provided under this Section.
14    (c) Each member shall make contributions toward the cost of
15the automatic annual increases in annuity as provided under
16Section 16-152.
17    (d) An annuitant receiving a retirement annuity or
18disability retirement annuity on July 1, 1969, who subsequently
19re-enters service as a teacher is eligible for the automatic
20annual increases in annuity provided under this Section if he
21or she renders at least one year of creditable service
22following the latest re-entry.
23    (e) In addition to the automatic annual increases in
24annuity provided under this Section, an annuitant who meets the
25service requirements of this Section and whose retirement
26annuity or disability retirement annuity began on or before

 

 

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1January 1, 1971 shall receive, on January 1, 1981, an increase
2in the annuity then being paid of one dollar per month for each
3year of creditable service. On January 1, 1982, an annuitant
4whose retirement annuity or disability retirement annuity
5began on or before January 1, 1977 shall receive an increase in
6the annuity then being paid of one dollar per month for each
7year of creditable service.
8    On January 1, 1987, any annuitant whose retirement annuity
9began on or before January 1, 1977, shall receive an increase
10in the monthly retirement annuity equal to 8 per year of
11creditable service times the number of years that have elapsed
12since the annuity began.
13(Source: P.A. 91-927, eff. 12-14-00.)
 
14    (40 ILCS 5/16-133.6 new)
15    Sec. 16-133.6. Optional teacher early retirement without
16discount. A Tier I employee or Tier I retiree who makes an
17election under paragraph (1) of subsection (a) or (a-5) of
18Section 16-131.7, retires on or after July 1, 2013, and applies
19for a retirement annuity within 6 months of the last day of
20teaching for which retirement contributions were required may
21elect, at the time of application for a retirement annuity, to
22make a one-time member contribution to the System and, thereby,
23avoid the reduction in the retirement annuity for retirement
24before age 60 specified in paragraph (B) of Section 16-133. The
25exercise of the election shall also obligate the last employer

 

 

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1to make a one-time nonrefundable contribution to the System.
2Substitute teachers wishing to exercise this election must
3teach 85 or more days in one school term with one employer, who
4shall be deemed the last employer for purposes of this Section.
5The last day of teaching with that employer must be within 6
6months of the date of application for retirement. All
7substitute teaching credit applied toward the required 85 days
8must be earned after June 30, 1990.
9    The one-time member and employer contributions shall be a
10percentage of the cost of this benefit as determined by the
11System. However, when determining the one-time member and
12employer contributions, that part of a member's salary with the
13same employer which exceeds the annual salary rate for the
14preceding year by more than 20% shall be excluded. The member
15contribution shall be at the rate of 50% of the cost of the
16benefits as determined by the System. The employer contribution
17shall be at the rate of 50% of the cost of the benefits as
18determined by the System.
19    Upon receipt of the application and election, the System
20shall determine the one-time employee and employer
21contributions required. The member contribution shall be
22credited to the individual account of the member and the
23employer contribution shall be credited to the Benefit Trust
24Reserve. The avoidance of the reduction in retirement annuity
25provided under this Section is not applicable until the
26member's contribution, if any, has been received by the System;

 

 

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1however, the date that contribution is received shall not be
2considered in determining the effective date of retirement.
3    The number of members working for a single employer who may
4retire under this Section in any year may be limited at the
5option of the employer to a specified percentage of those
6eligible, not less than 10%, with the right to participate to
7be allocated among those applying on the basis of seniority in
8the service of the employer.
9    The required employer contribution under this Section
10shall be enforceable under Section 16-158.1.
 
11    (40 ILCS 5/16-136.1)  (from Ch. 108 1/2, par. 16-136.1)
12    Sec. 16-136.1. Annual increase for certain annuitants.
13    (a) Any annuitant receiving a retirement annuity on June
1430, 1969 and any member retiring after June 30, 1969 shall be
15eligible for the annual increases provided under this Section
16provided the annuitant is ineligible for the automatic annual
17increase in annuity provided under Section 16-133.1, and
18provided further that (1) retirement occurred at age 55 or over
19and was based on 5 or more years of creditable service or (2)
20if retirement occurred prior to age 55, the retirement annuity
21was based on 20 or more years of creditable service.
22    (b) Subject to the provisions of subsections (b-1) and
23(b-2), an An annuitant entitled to increases under this Section
24shall be entitled to the initial increase as of the later of:
25(1) January 1 following attainment of age 65, (2) January 1

 

 

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1following the first anniversary of retirement, or (3) the first
2day of the month following receipt of the required qualifying
3contribution from the annuitant. The initial monthly increase
4shall be computed on the basis of the period elapsed between
5the later of the date of last retirement or attainment of age
650 and the date of qualification for the initial increase, at
7the rate of 1 1/2% of the original monthly retirement annuity
8per year for periods prior to September 1, 1971, and at the
9rate of 2% per year for periods between September 1, 1971 and
10September 1, 1978, and at the rate of 3% per year for periods
11thereafter.
12    Subject to the provisions of subsections (b-1) and (b-2),
13an An annuitant who has received an initial increase under this
14Section, shall be entitled, on each January 1 following the
15granting of the initial increase, to an increase of 3% of the
16original monthly retirement annuity for increases granted
17prior to January 1, 1990, and equal to 3% of the total annuity,
18including previous increases under this Section, for increases
19granted on or after January 1, 1990. The original monthly
20retirement annuity for computations under this subsection (b)
21shall be considered to be $83.34 for any annuitant entitled to
22benefits under Section 16-134. The minimum original disability
23retirement annuity for computations under this subsection (b)
24shall be considered to be $33.34 per month for any annuitant
25retired on account of disability.
26    (b-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 either subsection (a) or (a-5) of
3Section 16-131.7, the amount of each automatic annual increase
4in retirement annuity occurring on or after the effective date
5of that election shall be 3% or one-half of the annual
6unadjusted percentage increase, if any, in the Consumer Price
7Index-U for the 12 months ending with the preceding September,
8whichever is less, of the originally granted retirement
9annuity. For the purposes of this Section, "Consumer Price
10Index-U" means the index published by the Bureau of Labor
11Statistics of the United States Department of Labor that
12measures the average change in prices of goods and services
13purchased by all urban consumers, United States city average,
14all items, 1982-84 = 100.
15    (b-2) Notwithstanding any other provision of this Article,
16for a Tier I employee or Tier I retiree who made the election
17under paragraph (1) of subsection (a) or (a-5) of Section
1816-131.7, the monthly retirement annuity shall first be subject
19to annual increases on the January 1 occurring on or next after
20the attainment of age 67 or the January 1 occurring on or next
21after the fifth anniversary of the annuity start date,
22whichever occurs earlier. If on the effective date of the
23election under paragraph (1) of subsection (a-5) of Section
2416-131.7 a Tier I retiree has already received an annual
25increase under this Section but does not yet meet the new
26eligibility requirements of this subsection, the annual

 

 

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1increases already received shall continue in force, but no
2additional annual increase shall be granted until the Tier I
3retiree meets the new eligibility requirements.
4    (c) An annuitant who otherwise qualifies for annual
5increases under this Section must make a one-time payment of 1%
6of the monthly final average salary for each full year of the
7creditable service forming the basis of the retirement annuity
8or, if the retirement annuity was not computed using final
9average salary, 1% of the original monthly retirement annuity
10for each full year of service forming the basis of the
11retirement annuity.
12    (d) In addition to other increases which may be provided by
13this Section, regardless of creditable service, annuitants not
14meeting the service requirements of Section 16-133.1 and whose
15retirement annuity began on or before January 1, 1971 shall
16receive, on January 1, 1981, an increase in the retirement
17annuity then being paid of one dollar per month for each year
18of creditable service forming the basis of the retirement
19allowance. On January 1, 1982, annuitants whose retirement
20annuity began on or before January 1, 1977, shall receive an
21increase in the retirement annuity then being paid of one
22dollar per month for each year of creditable service.
23    On January 1, 1987, any annuitant whose retirement annuity
24began on or before January 1, 1977, shall receive an increase
25in the monthly retirement annuity equal to 8 per year of
26creditable service times the number of years that have elapsed

 

 

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1since the annuity began.
2(Source: P.A. 86-273.)
 
3    (40 ILCS 5/16-152)  (from Ch. 108 1/2, par. 16-152)
4    Sec. 16-152. Contributions by members.
5    (a) Each member shall make contributions for membership
6service to this System as follows:
7        (1) Effective July 1, 1998, contributions of 7.50% of
8    salary towards the cost of the retirement annuity. Such
9    contributions shall be deemed "normal contributions".
10        (2) Effective July 1, 1969, contributions of 1/2 of 1%
11    of salary toward the cost of the automatic annual increase
12    in retirement annuity provided under Section 16-133.1.
13        (3) Effective July 24, 1959, contributions of 1% of
14    salary towards the cost of survivor benefits. Such
15    contributions shall not be credited to the individual
16    account of the member and shall not be subject to refund
17    except as provided under Section 16-143.2.
18        (4) Effective July 1, 2005, contributions of 0.40% of
19    salary toward the cost of the early retirement without
20    discount option provided under Section 16-133.2. This
21    contribution shall cease upon termination of the early
22    retirement without discount option as provided in Section
23    16-176.
24    (a-1) In addition to the contributions required under
25subsection (a), a member who elects to participate in the

 

 

09700HB3865sam003- 126 -LRB097 14296 JDS 70341 a

1optional cash balance plan under Section 1-162 shall pay to the
2System for the purpose of participating in the optional cash
3balance plan a contribution of 2% of each payment of
4compensation received while he or she is a participant in the
5optional cash balance plan. These contributions shall not be
6used for the purpose of determining any benefit under this
7Article except as provided in the optional cash balance plan.
8    (b) The minimum required contribution for any year of
9full-time teaching service shall be $192.
10    (c) Contributions shall not be required of any annuitant
11receiving a retirement annuity who is given employment as
12permitted under Section 16-118 or 16-150.1.
13    (d) A person who (i) was a member before July 1, 1998, (ii)
14retires with more than 34 years of creditable service, and
15(iii) does not elect to qualify for the augmented rate under
16Section 16-129.1 shall be entitled, at the time of retirement,
17to receive a partial refund of contributions made under this
18Section for service occurring after the later of June 30, 1998
19or attainment of 34 years of creditable service, in an amount
20equal to 1.00% of the salary upon which those contributions
21were based.
22    (e) A member's contributions toward the cost of early
23retirement without discount made under item (a)(4) of this
24Section shall not be refunded if the member has elected early
25retirement without discount under Section 16-133.2 and has
26begun to receive a retirement annuity under this Article

 

 

09700HB3865sam003- 127 -LRB097 14296 JDS 70341 a

1calculated in accordance with that election. Otherwise, a
2member's contributions toward the cost of early retirement
3without discount made under item (a)(4) of this Section shall
4be refunded according to whichever one of the following
5circumstances occurs first:
6        (1) The contributions shall be refunded to the member,
7    without interest, within 120 days after the member's
8    retirement annuity commences, if the member does not elect
9    early retirement without discount under Section 16-133.2.
10        (2) The contributions shall be included, without
11    interest, in any refund claimed by the member under Section
12    16-151.
13        (3) The contributions shall be refunded to the member's
14    designated beneficiary (or if there is no beneficiary, to
15    the member's estate), without interest, if the member dies
16    without having begun to receive a retirement annuity under
17    this Article.
18        (4) The contributions shall be refunded to the member,
19    without interest, within 120 days after the early
20    retirement without discount option provided under Section
21    16-133.2 is terminated under Section 16-176.
22(Source: P.A. 93-320, eff. 7-23-03; 94-4, eff. 6-1-05.)
 
23    (40 ILCS 5/16-158)   (from Ch. 108 1/2, par. 16-158)
24    Sec. 16-158. Contributions by State and other employing
25units.

 

 

09700HB3865sam003- 128 -LRB097 14296 JDS 70341 a

1    (a) Except as otherwise provided in this Section, the The
2State shall make contributions to the System by means of
3appropriations from the Common School Fund and other State
4funds of amounts which, together with other employer
5contributions, employee contributions, investment income, and
6other income, will be sufficient to meet the cost of
7maintaining and administering the System on a 90% funded basis
8in accordance with actuarial recommendations.
9    Beginning with State fiscal year 2014, the employers under
10this Article shall be responsible for paying the normal costs
11of the System plus the amounts required to amortize any total
12cost of the benefits of the System arising on or after July 1,
132013.
14    Beginning with State fiscal year 2014, the State's required
15contributions to the System shall be limited to the amounts
16required to amortize the total cost of the benefits of the
17System arising before July 1, 2013, plus any employer
18contributions required from the State as the actual employer of
19participants under this Article.
20    The Board shall determine the amount of State and employer
21contributions required for each fiscal year on the basis of the
22actuarial tables and other assumptions adopted by the Board and
23the recommendations of the actuary, using the formulas provided
24in this Section formula in subsection (b-3).
25    (a-1) Annually, on or before November 15 until November 15,
262011, the Board shall certify to the Governor the amount of the

 

 

09700HB3865sam003- 129 -LRB097 14296 JDS 70341 a

1required State contribution for the coming fiscal year. The
2certification under this subsection (a-1) shall include a copy
3of the actuarial recommendations upon which it is based and
4shall specifically identify the System's projected State
5normal cost for that fiscal year.
6    On or before May 1, 2004, the Board shall recalculate and
7recertify to the Governor the amount of the required State
8contribution to the System for State fiscal year 2005, taking
9into account the amounts appropriated to and received by the
10System under subsection (d) of Section 7.2 of the General
11Obligation Bond Act.
12    On or before July 1, 2005 April 1, 2011, the Board shall
13recalculate and recertify to the Governor the amount of the
14required State contribution to the System for State fiscal year
152006, taking into account the changes in required State
16contributions made by this amendatory Act of the 94th General
17Assembly.
18    On or before April 1, 2011 June 15, 2010, the Board shall
19recalculate and recertify to the Governor the amount of the
20required State contribution to the System for State fiscal year
212011, applying the changes made by Public Act 96-889 to the
22System's assets and liabilities as of June 30, 2009 as though
23Public Act 96-889 was approved on that date.
24    (a-5) On or before November 1 of each year, beginning
25November 1, 2012, the Board shall submit to the State Actuary,
26the Governor, and the General Assembly a proposed certification

 

 

09700HB3865sam003- 130 -LRB097 14296 JDS 70341 a

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

 

 

09700HB3865sam003- 131 -LRB097 14296 JDS 70341 a

193rd General Assembly through June 30, 2004, the Board shall
2not submit vouchers for the remainder of fiscal year 2004 in
3excess of the fiscal year 2004 certified contribution amount
4determined under this Section after taking into consideration
5the transfer to the System under subsection (a) of Section
66z-61 of the State Finance Act. These vouchers shall be paid by
7the State Comptroller and Treasurer by warrants drawn on the
8funds appropriated to the System for that fiscal year.
9    If in any month the amount remaining unexpended from all
10other appropriations to the System for the applicable fiscal
11year (including the appropriations to the System under Section
128.12 of the State Finance Act and Section 1 of the State
13Pension Funds Continuing Appropriation Act) is less than the
14amount lawfully vouchered under this subsection, the
15difference shall be paid from the Common School Fund under the
16continuing appropriation authority provided in Section 1.1 of
17the State Pension Funds Continuing Appropriation Act.
18    (b-2) Allocations from the Common School Fund apportioned
19to school districts not coming under this System shall not be
20diminished or affected by the provisions of this Article.
21    (b-3) For State fiscal years 2012 and 2013 through 2045,
22the minimum contribution to the System to be made by the State
23for each fiscal year shall be an amount determined by the
24System to be sufficient to bring the total assets of the System
25up to 90% of the total actuarial liabilities of the System by
26the end of State fiscal year 2045. In making these

 

 

09700HB3865sam003- 132 -LRB097 14296 JDS 70341 a

1determinations, the required State contribution shall be
2calculated each year as a level percentage of payroll over the
3years remaining to and including fiscal year 2045 and shall be
4determined under the projected unit credit actuarial cost
5method.
6    Except as provided in subsection (b-5), for State fiscal
7years 2014 through 2045 or until the State has amortized 100%
8of the total cost of benefits accrued by July 1, 2013,
9whichever is earlier, in addition to any employer contributions
10required from the State as an employer, the minimum
11contribution to the System to be made by the State for each
12fiscal year shall be an amount determined by the Board to be
13sufficient to amortize, by the end of State fiscal year 2045,
14the total cost of the benefits of the System arising before
15July 1, 2013. In making these determinations, the required
16State contribution shall be calculated each year as a level
17percentage of payroll over the years remaining to and including
18fiscal year 2043 and shall be determined under the projected
19unit credit actuarial cost method.
20    Except as provided in subsection (b-5), beginning in State
21fiscal year 2046 or on the date that the State has amortized
22100% of the total cost of benefits accrued by July 1, 2013,
23whichever is earlier, the State has no further obligation to
24make contributions to the System under this subsection (b-3).
25    For State fiscal years 1996 through 2005, the State
26contribution to the System, as a percentage of the applicable

 

 

09700HB3865sam003- 133 -LRB097 14296 JDS 70341 a

1employee payroll, shall be increased in equal annual increments
2so that by State fiscal year 2011, the State is contributing at
3the rate required under this Section; except that in the
4following specified State fiscal years, the State contribution
5to the System shall not be less than the following indicated
6percentages of the applicable employee payroll, even if the
7indicated percentage will produce a State contribution in
8excess of the amount otherwise required under this subsection
9and subsection (a), and notwithstanding any contrary
10certification made under subsection (a-1) before the effective
11date of this amendatory Act of 1998: 10.02% in FY 1999; 10.77%
12in FY 2000; 11.47% in FY 2001; 12.16% in FY 2002; 12.86% in FY
132003; and 13.56% in FY 2004.
14    Notwithstanding any other provision of this Article, the
15total required State contribution for State fiscal year 2006 is
16$534,627,700.
17    Notwithstanding any other provision of this Article, the
18total required State contribution for State fiscal year 2007 is
19$738,014,500.
20    For each of State fiscal years 2008 through 2009, the State
21contribution to the System, as a percentage of the applicable
22employee payroll, shall be increased in equal annual increments
23from the required State contribution for State fiscal year
242007, so that by State fiscal year 2011, the State is
25contributing at the rate otherwise required under this Section.
26    Notwithstanding any other provision of this Article, the

 

 

09700HB3865sam003- 134 -LRB097 14296 JDS 70341 a

1total required State contribution for State fiscal year 2010 is
2$2,089,268,000 and shall be made from the proceeds of bonds
3sold in fiscal year 2010 pursuant to Section 7.2 of the General
4Obligation Bond Act, less (i) the pro rata share of bond sale
5expenses determined by the System's share of total bond
6proceeds, (ii) any amounts received from the Common School Fund
7in fiscal year 2010, and (iii) any reduction in bond proceeds
8due to the issuance of discounted bonds, if applicable.
9    Notwithstanding any other provision of this Article, the
10total required State contribution for State fiscal year 2011 is
11the amount recertified by the System on or before April 1, 2011
12pursuant to subsection (a-1) of this Section and shall be made
13from the proceeds of bonds sold in fiscal year 2011 pursuant to
14Section 7.2 of the General Obligation Bond Act, less (i) the
15pro rata share of bond sale expenses determined by the System's
16share of total bond proceeds, (ii) any amounts received from
17the Common School Fund in fiscal year 2011, and (iii) any
18reduction in bond proceeds due to the issuance of discounted
19bonds, if applicable. This amount shall include, in addition to
20the amount certified by the System, an amount necessary to meet
21employer contributions required by the State as an employer
22under paragraph (e) of this Section, which may also be used by
23the System for contributions required by paragraph (a) of
24Section 16-127.
25    Beginning in State fiscal year 2046, the minimum State
26contribution for each fiscal year shall be the amount needed to

 

 

09700HB3865sam003- 135 -LRB097 14296 JDS 70341 a

1maintain the total assets of the System at 90% of the total
2actuarial liabilities of the System.
3    Amounts received by the System pursuant to Section 25 of
4the Budget Stabilization Act or Section 8.12 of the State
5Finance Act in any fiscal year do not reduce and do not
6constitute payment of any portion of the minimum State
7contribution required under this Article in that fiscal year.
8Such amounts shall not reduce, and shall not be included in the
9calculation of, the required State contributions under this
10Article in any future year until the System has reached a
11funding ratio of at least 90%. A reference in this Article to
12the "required State contribution" or any substantially similar
13term does not include or apply to any amounts payable to the
14System under Section 25 of the Budget Stabilization Act.
15    Notwithstanding any other provision of this Section, the
16required State contribution for State fiscal year 2005 and for
17fiscal year 2008 through and each fiscal year 2013 thereafter,
18as calculated under this Section and certified under subsection
19(a-1), shall not exceed an amount equal to (i) the amount of
20the required State contribution that would have been calculated
21under this Section for that fiscal year if the System had not
22received any payments under subsection (d) of Section 7.2 of
23the General Obligation Bond Act, minus (ii) the portion of the
24State's total debt service payments for that fiscal year on the
25bonds issued in fiscal year 2003 for the purposes of that
26Section 7.2, as determined and certified by the Comptroller,

 

 

09700HB3865sam003- 136 -LRB097 14296 JDS 70341 a

1that is the same as the System's portion of the total moneys
2distributed under subsection (d) of Section 7.2 of the General
3Obligation Bond Act. In determining this maximum for State
4fiscal years 2008 through 2010, however, the amount referred to
5in item (i) shall be increased, as a percentage of the
6applicable employee payroll, in equal increments calculated
7from the sum of the required State contribution for State
8fiscal year 2007 plus the applicable portion of the State's
9total debt service payments for fiscal year 2007 on the bonds
10issued in fiscal year 2003 for the purposes of Section 7.2 of
11the General Obligation Bond Act, so that, by State fiscal year
122011, the State is contributing at the rate otherwise required
13under this Section.
14    (b-5) If at least 50% of Tier I employees making an
15election under Section 16-131.7 before June 1, 2013 choose the
16option under paragraph (1) of subsection (a) of that Section,
17then beginning in State fiscal year 2014, instead of the
18contributions specified in subsection (b-3) of this Section,
19the State contributions specified in subsection (b-7) of this
20Section shall be paid.
21    In making its initial certification of the annual required
22contribution by the State for State fiscal year 2014, the Board
23shall assume that the new funding formula provided in
24subsection (b-7) of this Section applies. If fewer than 50% of
25Tier I employees making an election under Section 16-131.7
26before June 1, 2013 choose the option under paragraph (1) of

 

 

09700HB3865sam003- 137 -LRB097 14296 JDS 70341 a

1subsection (a) of that Section, then:
2        (1) instead of the contributions specified in
3    subsection (b-7) of this Section, the State contributions
4    specified in subsection (b-3) shall continue to be paid;
5    and
6        (2) as soon as possible after June 1, 2013, the Board
7    shall recertify the annual required contribution by the
8    State for State fiscal year 2014.
9    (b-7) For State fiscal years 2014 through 2043 or until the
10State has amortized 100% of the total cost of benefits accrued
11by July 1, 2013, whichever is earlier, in addition to any
12employer contributions required from the State as an employer,
13the minimum contribution to the System to be made by the State
14for each fiscal year shall be an amount determined by the Board
15to be sufficient to amortize, by the end of State fiscal year
162043, the total cost of the benefits of the System arising
17before July 1, 2013. In making these determinations, the
18required State contribution shall be calculated each year as a
19level percentage of payroll over the years remaining to and
20including fiscal year 2043 and shall be determined under the
21projected unit credit actuarial cost method.
22    Beginning in State fiscal year 2044 or on the date that the
23State has amortized 100% of the total cost of benefits accrued
24by July 1, 2013, whichever is earlier, the State has no further
25obligation to make contributions to the System under this
26subsection (a-5).

 

 

09700HB3865sam003- 138 -LRB097 14296 JDS 70341 a

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

 

 

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1shall be the percentage of payroll required under this
2subsection from the previous fiscal year increased by 1% of
3payroll for each of State fiscal years 2015 through 2019, and
4increased by 0.5% of payroll for each State fiscal year after
52019.
6    Contributions required of employers under items (ii) and
7(iii) of subsection (b-10), under subsection (f), and under any
8other applicable provision of this Section are in addition to
9contributions required under item (i) of subsection (b-10).
10    (b-20) Beginning in State fiscal year 2015 and continuing
11until the Board determines and certifies to the Governor that
12employers are contributing under item (i) of subsection (b-10)
13the full amount actually specified by item (i) of subsection
14(b-10), the State shall make an additional contribution to the
15System for each fiscal year, equal to the difference between
16(1) the total contribution calculated under item (i) of
17subsection (b-10) for all employers for that fiscal year, and
18(2) the amount of such total contribution as reduced under
19subsection (b-15).
20    The State contribution under this subsection (b-20) is in
21addition to the State contributions required under subsection
22(b-3) or (b-7) and any contributions required to be paid by the
23State as an employer under subsections (b-10) and (f) of this
24Section.
25    (c) Payment of the required State contributions and of all
26pensions, retirement annuities, death benefits, refunds, and

 

 

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1other benefits granted under or assumed by this System, and all
2expenses in connection with the administration and operation
3thereof, are obligations of the State.
4    If members are paid from special trust or federal funds
5which are administered by the employing unit, whether school
6district or other unit, the employing unit shall pay to the
7System from such funds the full accruing retirement costs based
8upon that service, as determined by the System. Employer
9contributions, based on salary paid to members from federal
10funds, may be forwarded by the distributing agency of the State
11of Illinois to the System prior to allocation, in an amount
12determined in accordance with guidelines established by such
13agency and the System.
14    (d) Effective July 1, 1986, any employer of a teacher as
15defined in paragraph (8) of Section 16-106 shall pay the
16employer's normal cost of benefits based upon the teacher's
17service, in addition to employee contributions, as determined
18by the System. Such employer contributions shall be forwarded
19monthly in accordance with guidelines established by the
20System.
21    However, with respect to benefits granted under Section
2216-133.4 or 16-133.5 to a teacher as defined in paragraph (8)
23of Section 16-106, the employer's contribution shall be 12%
24(rather than 20%) of the member's highest annual salary rate
25for each year of creditable service granted, and the employer
26shall also pay the required employee contribution on behalf of

 

 

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1the teacher. For the purposes of Sections 16-133.4 and
216-133.5, a teacher as defined in paragraph (8) of Section
316-106 who is serving in that capacity while on leave of
4absence from another employer under this Article shall not be
5considered an employee of the employer from which the teacher
6is on leave.
7    (e) Beginning July 1, 1998, every employer of a teacher
8shall pay to the System an employer contribution computed as
9follows:
10        (1) Beginning July 1, 1998 through June 30, 1999, the
11    employer contribution shall be equal to 0.3% of each
12    teacher's salary.
13        (2) Beginning July 1, 1999 and thereafter, the employer
14    contribution shall be equal to 0.58% of each teacher's
15    salary.
16The school district or other employing unit may pay these
17employer contributions out of any source of funding available
18for that purpose and shall forward the contributions to the
19System on the schedule established for the payment of member
20contributions.
21    These employer contributions are intended to offset a
22portion of the cost to the System of the increases in
23retirement benefits resulting from this amendatory Act of 1998.
24    Each employer of teachers is entitled to a credit against
25the contributions required under this subsection (e) with
26respect to salaries paid to teachers for the period January 1,

 

 

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12002 through June 30, 2003, equal to the amount paid by that
2employer under subsection (a-5) of Section 6.6 of the State
3Employees Group Insurance Act of 1971 with respect to salaries
4paid to teachers for that period.
5    The additional 1% employee contribution required under
6Section 16-152 by this amendatory Act of 1998 is the
7responsibility of the teacher and not the teacher's employer,
8unless the employer agrees, through collective bargaining or
9otherwise, to make the contribution on behalf of the teacher.
10    If an employer is required by a contract in effect on May
111, 1998 between the employer and an employee organization to
12pay, on behalf of all its full-time employees covered by this
13Article, all mandatory employee contributions required under
14this Article, then the employer shall be excused from paying
15the employer contribution required under this subsection (e)
16for the balance of the term of that contract. The employer and
17the employee organization shall jointly certify to the System
18the existence of the contractual requirement, in such form as
19the System may prescribe. This exclusion shall cease upon the
20termination, extension, or renewal of the contract at any time
21after May 1, 1998.
22    (f) The employer contributions under this subsection (f)
23are no longer required after June 30, 2013.
24    If the amount of a teacher's salary for any school year
25used to determine final average salary exceeds the member's
26annual full-time salary rate with the same employer for the

 

 

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

 

 

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1within 30 days after receipt of the bill, apply to the System
2in writing for a recalculation. The application must specify in
3detail the grounds of the dispute and, if the employer asserts
4that the calculation is subject to subsection (g) or (h) of
5this Section, must include an affidavit setting forth and
6attesting to all facts within the employer's knowledge that are
7pertinent to the applicability of that subsection. Upon
8receiving a timely application for recalculation, the System
9shall review the application and, if appropriate, recalculate
10the amount due.
11    The employer contributions required under this subsection
12(f) may be paid in the form of a lump sum within 90 days after
13receipt of the bill. If the employer contributions are not paid
14within 90 days after receipt of the bill, then interest will be
15charged at a rate equal to the System's annual actuarially
16assumed rate of return on investment compounded annually from
17the 91st day after receipt of the bill. Payments must be
18concluded within 3 years after the employer's receipt of the
19bill.
20    (g) This subsection (g) applies only to payments made or
21salary increases given on or after June 1, 2005 but before July
221, 2011. The changes made by Public Act 94-1057 shall not
23require the System to refund any payments received before July
2431, 2006 (the effective date of Public Act 94-1057).
25    When assessing payment for any amount due under subsection
26(f), the System shall exclude salary increases paid to teachers

 

 

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

 

 

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1average salary paid for other similar positions in the district
2requiring the same certification or the amount stipulated in
3the collective bargaining agreement for a similar position
4requiring the same certification.
5    When assessing payment for any amount due under subsection
6(f), the System shall exclude any payment to the teacher from
7the State of Illinois or the State Board of Education over
8which the employer does not have discretion, notwithstanding
9that the payment is included in the computation of final
10average salary.
11    (h) When assessing payment for any amount due under
12subsection (f), the System shall exclude any salary increase
13described in subsection (g) of this Section given on or after
14July 1, 2011 but before July 1, 2014 under a contract or
15collective bargaining agreement entered into, amended, or
16renewed on or after June 1, 2005 but before July 1, 2011.
17Notwithstanding any other provision of this Section, any
18payments made or salary increases given after June 30, 2014
19shall be used in assessing payment for any amount due under
20subsection (f) of this Section.
21    (i) The System shall prepare a report and file copies of
22the report with the Governor and the General Assembly by
23January 1, 2007 that contains all of the following information:
24        (1) The number of recalculations required by the
25    changes made to this Section by Public Act 94-1057 for each
26    employer.

 

 

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1        (2) The dollar amount by which each employer's
2    contribution to the System was changed due to
3    recalculations required by Public Act 94-1057.
4        (3) The total amount the System received from each
5    employer as a result of the changes made to this Section by
6    Public Act 94-4.
7        (4) The increase in the required State contribution
8    resulting from the changes made to this Section by Public
9    Act 94-1057.
10    (j) For purposes of determining the required State
11contribution to the System, the value of the System's assets
12shall be equal to the actuarial value of the System's assets,
13which shall be calculated as follows:
14    As of June 30, 2008, the actuarial value of the System's
15assets shall be equal to the market value of the assets as of
16that date. In determining the actuarial value of the System's
17assets for fiscal years after June 30, 2008, any actuarial
18gains or losses from investment return incurred in a fiscal
19year shall be recognized in equal annual amounts over the
205-year period following that fiscal year.
21    (k) For purposes of determining the required State
22contribution to the system for a particular year, the actuarial
23value of assets shall be assumed to earn a rate of return equal
24to the system's actuarially assumed rate of return.
25    (l) If the System submits a voucher for monthly
26contributions from the State as required by this Section and

 

 

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1the State fails to pay within 90 days of receipt of such a
2voucher, the Board shall submit a written request to the
3Comptroller seeking payment. A copy of the request shall be
4filed with the Secretary of State, and the Secretary of State
5shall provide copies to the Governor and General Assembly. No
6earlier than the 16th day after filing a request with the
7Secretary of State, the Board shall have the right to commence
8a mandamus action in the Supreme Court of Illinois to compel
9the Comptroller to satisfy the voucher by making payment from
10the General Revenue Fund. This Section constitutes an express
11waiver of the State's sovereign immunity solely to the extent
12it permits the Board to commence a mandamus action in the
13Illinois Supreme Court to compel the Comptroller to pay a
14voucher for monthly contributions from the State as required in
15this Section.
16(Source: P.A. 95-331, eff. 8-21-07; 95-950, eff. 8-29-08;
1796-43, eff. 7-15-09; 96-1497, eff. 1-14-11; 96-1511, eff.
181-27-11; 96-1554, eff. 3-18-11; revised 4-6-11.)
 
19    (40 ILCS 5/16-158.2 new)
20    Sec. 16-158.2. Individual employer accounts.
21    (a) The System shall create and maintain individual
22accounts for each employer for the purposes of determining
23employer contributions under subsection (b-10) of Section
2416-158. Each employer's account shall be notionally credited
25with the employer's liabilities accruing after July 1, 2013 and

 

 

09700HB3865sam003- 149 -LRB097 14296 JDS 70341 a

1assets attributable to the employer's account that include (i)
2employer contributions made pursuant to subsection (b-10) of
3Section 16-158, (ii) other employer contributions from trust,
4federal, and other funds, (iii) employee contributions made
5after July 1, 2013, and (iv) income from investments. The
6System may deduct reasonable administrative expenses from each
7employer's account.
8    (b) In determining contributions required under subsection
9(b-10) of Section 16-158, the System shall determine a blended
10rate of total normal cost that is applicable to all employers.
11    (c) An employer may make written application with the Board
12to have a separate rate of total normal cost determined for the
13employer. Upon receiving the written application from an
14employer, the Board may determine a total rate of normal cost
15for the employer. The employer shall be responsible for any
16cost incurred in making the determination of total normal cost.
17    The Board may establish rules for the administration of
18this Section that include but are not limited to the date by
19which an application must be submitted and the fiscal year in
20which the determination will be used to determine the
21employer's contribution required under subsection (b-10) of
22Section 16-158.
23    (d) An employer whose determination of total normal cost
24under subsection (c) is used to determine its contributions
25required under subsection (b-10) of Section 16-158 may not be
26included in the determination of a rate of total normal cost

 

 

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1under subsection (c) of this Section.
 
2    (40 ILCS 5/16-163)  (from Ch. 108 1/2, par. 16-163)
3    Sec. 16-163. Board created. A board of 13 members
4constitutes the board of trustees authorized to carry out the
5provisions of this Article and is responsible for the general
6administration of the System. The board shall be known as the
7Board of Trustees of the Teachers' Retirement System of the
8State of Illinois. The board shall be composed of the
9Superintendent of Education, ex officio, who shall be the
10president of the board; 4 6 persons, not members of the System,
11to be appointed by the Governor, with the advice and consent of
12the Senate, who shall hold no elected State office; 4 persons
13who, at the time of their election, are teachers as defined in
14Section 16-106, elected by the contributing members; and 2
15annuitant members elected by the annuitants of the System, as
16provided in Section 16-165; and 2 school board members elected
17as provided in Section 16-165.
18(Source: P.A. 96-6, eff. 4-3-09.)
 
19    (40 ILCS 5/16-165)  (from Ch. 108 1/2, par. 16-165)
20    Sec. 16-165. Board; elected members; vacancies.
21    (a) In each odd-numbered year, there shall be elected 2
22teachers who shall hold office for a term of 4 years beginning
23July 15 next following their election, in the manner provided
24under this Section. An elected teacher member of the board who

 

 

09700HB3865sam003- 151 -LRB097 14296 JDS 70341 a

1ceases to be a teacher as defined in Section 16-106 may
2continue to serve on the board for the remainder of the term to
3which he or she was elected.
4    (a-5) In each even-numbered year, there shall be elected 2
5school board members who shall hold office for a term of 4
6years, in the manner provided under this Section. An elected
7school board member who ceases to be a member of a school board
8may continue to serve on the board for the remainder of the
9term to which he or she was elected. Until the initial school
10board member has been elected, the elected school board member
11positions created by this amendatory Act of the 97th General
12Assembly shall be filled as soon as practical by appointment of
13the board.
14    (b) One elected annuitant trustee shall first be elected in
151987, and in every fourth year thereafter, for a term of 4
16years beginning July 15 next following his or her election.
17    (c) The elected annuitant position created by this
18amendatory Act of the 91st General Assembly shall be filled as
19soon as possible in the manner provided for vacancies, for an
20initial term ending July 15, 2001. One elected annuitant
21trustee shall be elected in 2001, and in every fourth year
22thereafter, for a term of 4 years beginning July 15 next
23following his or her election.
24    (d) Elections shall be held on May 1, unless May 1 falls on
25a Saturday or Sunday, in which event the election shall be
26conducted on the following Monday. Candidates shall be

 

 

09700HB3865sam003- 152 -LRB097 14296 JDS 70341 a

1nominated by petitions in writing, signed by not less than 500
2teachers, school board members, or annuitants, as the case may
3be, with their addresses shown opposite their names. The
4petitions shall be filed with the board's Secretary not less
5than 90 nor more than 120 days prior to May 1. The Secretary
6shall determine their validity not less than 75 days before the
7election.
8    (e) If, for either teacher, school board, or annuitant
9members, the number of qualified nominees exceeds the number of
10available positions, the system shall prepare an appropriate
11ballot with the names of the candidates in alphabetical order
12and shall mail one copy thereof, at least 10 days prior to the
13election day, to each teacher or annuitant of this system as of
14the latest date practicable, at the latest known address,
15together with a return envelope addressed to the board and also
16a smaller envelope marked "For Ballot Only", and a slip for
17signature. Each voter, upon marking his ballot with a cross
18mark in the square before the name of the person voted for,
19shall place the ballot in the envelope marked "For Ballot
20Only", seal the envelope, write on the slip provided therefor
21his signature and address, enclose both the slip and sealed
22envelope containing the marked ballot in the return envelope
23addressed to the board, and mail it. Whether a person is
24eligible to vote for the teacher nominees, school board
25nominees, or the annuitant nominees shall be determined from
26system payroll records as of March 1.

 

 

09700HB3865sam003- 153 -LRB097 14296 JDS 70341 a

1    Upon receipt of the return envelopes, the system shall open
2them and set aside unopened the envelopes marked "For Ballot
3Only". On election day ballots shall be publicly opened and
4counted by the trustees or canvassers appointed therefor. Each
5vote cast for a candidate represents one vote only. No ballot
6arriving after 10 o'clock a.m. on election day shall be
7counted. The 2 teacher candidates, 2 school board candidates,
8and the annuitant candidate receiving the highest number of
9votes shall be elected. The board shall declare the results of
10the election, keep a record thereof, and notify the candidates
11of the results thereof within 30 days after the election.
12    If, for any either class of members, there are only as many
13qualified nominees as there are positions available, the
14balloting as described in this Section shall not be conducted
15for those nominees, and the board shall declare them duly
16elected.
17    (f) A vacancy occurring in the elective membership of the
18board shall be filled for the unexpired term by a person
19qualified for the vacant position, selected by the remaining
20elected members of the board, if there are no more than 6
21months remaining on the term. For a term with more than 6
22months remaining, the Director of the Teachers' Retirement
23System of the State of Illinois shall institute an election in
24accordance with this Act to fill the unexpired term.
25(Source: P.A. 94-423, eff. 8-2-05; 94-710, eff. 12-5-05;
2695-331, eff. 8-21-07.)
 

 

 

09700HB3865sam003- 154 -LRB097 14296 JDS 70341 a

1    (40 ILCS 5/16-203)
2    Sec. 16-203. Application and expiration of new benefit
3increases.
4    (a) As used in this Section, "new benefit increase" means
5an increase in the amount of any benefit provided under this
6Article, or an expansion of the conditions of eligibility for
7any benefit under this Article, that results from an amendment
8to this Code that takes effect after June 1, 2005 (the
9effective date of Public Act 94-4). "New benefit increase",
10however, does not include any benefit increase resulting from
11the changes made to this Article or Article 1 by Public Act
1295-910 or this amendatory Act of the 97th 95th General
13Assembly.
14    (b) Notwithstanding any other provision of this Code or any
15subsequent amendment to this Code, every new benefit increase
16is subject to this Section and shall be deemed to be granted
17only in conformance with and contingent upon compliance with
18the provisions of this Section.
19    (c) The Public Act enacting a new benefit increase must
20identify and provide for payment to the System of additional
21funding at least sufficient to fund the resulting annual
22increase in cost to the System as it accrues.
23    Every new benefit increase is contingent upon the General
24Assembly providing the additional funding required under this
25subsection. The Commission on Government Forecasting and

 

 

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

 

 

09700HB3865sam003- 156 -LRB097 14296 JDS 70341 a

1continues in service after the expiration date and did not
2apply and qualify for the affected benefit while the new
3benefit increase was in effect.
4(Source: P.A. 94-4, eff. 6-1-05; 95-910, eff. 8-26-08.)
 
5    (40 ILCS 5/18-140)   (from Ch. 108 1/2, par. 18-140)
6    Sec. 18-140. To certify required State contributions and
7submit vouchers.
8    (a) The Board shall certify to the Governor, on or before
9November 15 of each year until November 15, 2011, the amount of
10the required State contribution to the System for the following
11fiscal year and shall specifically identify the System's
12projected State normal cost for that fiscal year. The
13certification shall include a copy of the actuarial
14recommendations upon which it is based and shall specifically
15identify the System's projected State normal cost for that
16fiscal year.
17    On or before November 1 of each year, beginning November 1,
182012, the Board shall submit to the State Actuary, the
19Governor, and the General Assembly a proposed certification of
20the amount of the required State contribution to the System for
21the next fiscal year, along with all of the actuarial
22assumptions, calculations, and data upon which that proposed
23certification is based. On or before January 1 of each year
24beginning January 1, 2013, the State Actuary shall issue a
25preliminary report concerning the proposed certification and

 

 

09700HB3865sam003- 157 -LRB097 14296 JDS 70341 a

1identifying, if necessary, recommended changes in actuarial
2assumptions that the Board must consider before finalizing its
3certification of the required State contributions. On or before
4January 15, 2013 and every January 15 thereafter, the Board
5shall certify to the Governor and the General Assembly the
6amount of the required State contribution for the next fiscal
7year. The Board's certification must note any deviations from
8the State Actuary's recommended changes, the reason or reasons
9for not following the State Actuary's recommended changes, and
10the fiscal impact of not following the State Actuary's
11recommended changes on the required State contribution.
12    On or before May 1, 2004, the Board shall recalculate and
13recertify to the Governor the amount of the required State
14contribution to the System for State fiscal year 2005, taking
15into account the amounts appropriated to and received by the
16System under subsection (d) of Section 7.2 of the General
17Obligation Bond Act.
18    On or before July 1, 2005, the Board shall recalculate and
19recertify to the Governor the amount of the required State
20contribution to the System for State fiscal year 2006, taking
21into account the changes in required State contributions made
22by this amendatory Act of the 94th General Assembly.
23    On or before April 1, 2011, the Board shall recalculate and
24recertify to the Governor the amount of the required State
25contribution to the System for State fiscal year 2011, applying
26the changes made by Public Act 96-889 to the System's assets

 

 

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1and liabilities as of June 30, 2009 as though Public Act 96-889
2was approved on that date.
3    (b) Beginning in State fiscal year 1996, on or as soon as
4possible after the 15th day of each month the Board shall
5submit vouchers for payment of State contributions to the
6System, in a total monthly amount of one-twelfth of the
7required annual State contribution certified under subsection
8(a). From the effective date of this amendatory Act of the 93rd
9General Assembly through June 30, 2004, the Board shall not
10submit vouchers for the remainder of fiscal year 2004 in excess
11of the fiscal year 2004 certified contribution amount
12determined under this Section after taking into consideration
13the transfer to the System under subsection (c) of Section
146z-61 of the State Finance Act. These vouchers shall be paid by
15the State Comptroller and Treasurer by warrants drawn on the
16funds appropriated to the System for that fiscal year.
17    If in any month the amount remaining unexpended from all
18other appropriations to the System for the applicable fiscal
19year (including the appropriations to the System under Section
208.12 of the State Finance Act and Section 1 of the State
21Pension Funds Continuing Appropriation Act) is less than the
22amount lawfully vouchered under this Section, the difference
23shall be paid from the General Revenue Fund under the
24continuing appropriation authority provided in Section 1.1 of
25the State Pension Funds Continuing Appropriation Act.
26(Source: P.A. 96-1497, eff. 1-14-11; 96-1511, eff. 1-27-11.)
 

 

 

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1    (40 ILCS 5/20-121)  (from Ch. 108 1/2, par. 20-121)
2    Sec. 20-121. Calculation of proportional retirement
3annuities. Upon retirement of the employee, a proportional
4retirement annuity shall be computed by each participating
5system in which pension credit has been established on the
6basis of pension credits under each system. The computation
7shall be in accordance with the formula or method prescribed by
8each participating system which is in effect at the date of the
9employee's latest withdrawal from service covered by any of the
10systems in which he has pension credits which he elects to have
11considered under this Article. However, (1) the amount of any
12retirement annuity payable under the self-managed plan
13established under Section 15-158.2 of this Code depends solely
14on the value of the participant's vested account balances and
15is not subject to any proportional adjustment under this
16Section, and (2) the amount of any retirement annuity payable
17under the cash balance plan established under Section 1-161 of
18this Code shall be calculated solely in accordance with that
19Section and is not subject to any proportional adjustment under
20this Section.
21    Combined pension credit under all retirement systems
22subject to this Article shall be considered in determining
23whether the minimum qualification has been met and the formula
24or method of computation which shall be applied. If a system
25has a step-rate formula for calculation of the retirement

 

 

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1annuity, pension credits covering previous service which have
2been established under another system shall be considered in
3determining which range or ranges of the step-rate formula are
4to be applicable to the employee.
5    Interest on pension credit shall continue to accumulate in
6accordance with the provisions of the law governing the
7retirement system in which the same has been established during
8the time an employee is in the service of another employer, on
9the assumption such employee, for interest purposes for pension
10credit, is continuing in the service covered by such retirement
11system.
12(Source: P.A. 91-887, eff. 7-6-00.)
 
13    (40 ILCS 5/20-123)  (from Ch. 108 1/2, par. 20-123)
14    Sec. 20-123. Survivor's annuity. The provisions governing
15a retirement annuity shall be applicable to a survivor's
16annuity. Appropriate credits shall be established for
17survivor's annuity purposes in those participating systems
18which provide survivor's annuities, according to the same
19conditions and subject to the same limitations and restrictions
20herein prescribed for a retirement annuity. If a participating
21system has no survivor's annuity benefit, or if the survivor's
22annuity benefit under that system is waived, pension credit
23established in that system shall not be considered in
24determining eligibility for or the amount of the survivor's
25annuity which may be payable by any other participating system.

 

 

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1    For persons who participate in the self-managed plan
2established under Section 15-158.2 or the portable benefit
3package established under Section 15-136.4, pension credit
4established under Article 15 may be considered in determining
5eligibility for or the amount of the survivor's annuity that is
6payable by any other participating system, but pension credit
7established in any other system shall not result in any right
8to a survivor's annuity under the Article 15 system.
9    For persons who participate in the cash balance plan
10established under Section 1-161, pension credit established
11under the participating system with respect to which the person
12participates in the cash balance plan may be considered in
13determining eligibility for or the amount of the survivor's
14annuity that is payable by any other participating system with
15respect to which the person does not participate in the cash
16balance plan, but the amount of any survivor's annuity payable
17under the cash balance plan established under Section 1-161
18shall be calculated solely in accordance with that Section.
19(Source: P.A. 91-887, eff. 7-6-00.)
 
20    (40 ILCS 5/20-124)  (from Ch. 108 1/2, par. 20-124)
21    Sec. 20-124. Maximum benefits.
22    (a) In no event shall the combined retirement or survivors
23annuities exceed the highest annuity which would have been
24payable by any participating system in which the employee has
25pension credits, if all of his pension credits had been

 

 

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1validated in that system.
2    If the combined annuities should exceed the highest maximum
3as determined in accordance with this Section, the respective
4annuities shall be reduced proportionately according to the
5ratio which the amount of each proportional annuity bears to
6the aggregate of all such annuities; except that benefits
7payable under the cash balance plan established under Section
81-161 are not subject to proportionate reduction under this
9Section.
10    (b) In the case of a participant in the self-managed plan
11established under Section 15-158.2 of this Code to whom the
12provisions of this Article apply:
13        (i) For purposes of calculating the combined
14    retirement annuity and the proportionate reduction, if
15    any, in a retirement annuity other than one payable under
16    the self-managed plan, the amount of the Article 15
17    retirement annuity shall be deemed to be the highest
18    annuity to which the annuitant would have been entitled if
19    he or she had participated in the traditional benefit
20    package as defined in Section 15-103.1 rather than the
21    self-managed plan.
22        (ii) For purposes of calculating the combined
23    survivor's annuity and the proportionate reduction, if
24    any, in a survivor's annuity other than one payable under
25    the self-managed plan, the amount of the Article 15
26    survivor's annuity shall be deemed to be the highest

 

 

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1    survivor's annuity to which the survivor would have been
2    entitled if the deceased employee had participated in the
3    traditional benefit package as defined in Section 15-103.1
4    rather than the self-managed plan.
5        (iii) Benefits payable under the self-managed plan are
6    not subject to proportionate reduction under this Section.
7(Source: P.A. 91-887, eff. 7-6-00.)
 
8    (40 ILCS 5/20-125)  (from Ch. 108 1/2, par. 20-125)
9    Sec. 20-125. Return to employment - suspension of benefits.
10If a retired employee returns to employment which is covered by
11a system from which he is receiving a proportional annuity
12under this Article, his proportional annuity from all
13participating systems shall be suspended during the period of
14re-employment, except that this suspension does not apply to
15any distributions payable under the self-managed plan
16established under Section 15-158.2 of this Code.
17    The provisions of the Article under which such employment
18would be covered (including Section 1-161 in the case of a
19participant in the cash balance plan) shall govern the
20determination of whether the employee has returned to
21employment, and if applicable the exemption of temporary
22employment or employment not exceeding a specified duration or
23frequency, for all participating systems from which the retired
24employee is receiving a proportional annuity under this
25Article, notwithstanding any contrary provisions in the other

 

 

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1Articles governing such systems.
2(Source: P.A. 91-887, eff. 7-6-00.)
 
3    Section 35. The School Code is amended by changing Sections
424-1 and 24-8 as follows:
 
5    (105 ILCS 5/24-1)  (from Ch. 122, par. 24-1)
6    Sec. 24-1. Appointment - Salaries - Payment - School month -
7 School term.) School boards shall appoint all teachers,
8determine qualifications of employment and fix the amount of
9their salaries subject to any limitation set forth in this Act
10and subject to any applicable restrictions in Section 16-131.7
11of the Illinois Pension Code. They shall pay the wages of
12teachers monthly, subject, however, to the provisions of
13Section 24-21. The school month shall be the same as the
14calendar month but by resolution the school board may adopt for
15its use a month of 20 days, including holidays. The school term
16shall consist of at least the minimum number of pupil
17attendance days required by Section 10-19, any additional legal
18school holidays, days of teachers' institutes, or equivalent
19professional educational experiences, and one or two days at
20the beginning of the school term when used as a teachers'
21workshop.
22(Source: P.A. 80-249.)
 
23    (105 ILCS 5/24-8)  (from Ch. 122, par. 24-8)

 

 

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1    Sec. 24-8. Minimum salary. In fixing the salaries of
2teachers, school boards shall pay those who serve on a
3full-time basis not less than a rate for the school year that
4is based upon training completed in a recognized institution of
5higher learning, as follows: for the school year beginning July
61, 1980 and thereafter, less than a bachelor's degree, $9,000;
7120 semester hours or more and a bachelor's degree, $10,000;
8150 semester hours or more and a master's degree, $11,000.
9    Based upon previous public school experience in this State
10or any other State, territory, dependency or possession of the
11United States, or in schools operated by or under the auspices
12of the United States, teachers who serve on a full-time basis
13shall have their salaries increased to at least the following
14amounts above the starting salary for a teacher in such
15district in the same classification: with less than a
16bachelor's degree, $750 after 5 years; with 120 semester hours
17or more and a bachelor's degree, $1,000 after 5 years and
18$1,600 after 8 years; with 150 semester hours or more and a
19master's degree, $1,250 after 5 years, $2,000 after 8 years and
20$2,750 after 13 years. However, any salary increase is subject
21to any applicable restrictions in Section 16-131.7 of the
22Illinois Pension Code.
23    For the purpose of this Section a teacher's salary shall
24include any amount paid by the school district on behalf of the
25teacher, as teacher contributions, to the Teachers' Retirement
26System of the State of Illinois.

 

 

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1    If a school board establishes a schedule for teachers'
2salaries based on education and experience, not inconsistent
3with this Section, all certificated nurses employed by that
4board shall be paid in accordance with the provisions of such
5schedule (subject to any applicable restrictions in Section
616-131.7 of the Illinois Pension Code).
7    For purposes of this Section, a teacher who submits a
8certificate of completion to the school office prior to the
9first day of the school term shall be considered to have the
10degree stated in such certificate.
11(Source: P.A. 83-913.)
 
12    Section 40. The State Universities Civil Service Act is
13amended by changing Section 36d as follows:
 
14    (110 ILCS 70/36d)  (from Ch. 24 1/2, par. 38b3)
15    Sec. 36d. Powers and duties of the Merit Board.
16    The Merit Board shall have the power and duty-
17    (1) To approve a classification plan prepared under its
18direction, assigning to each class positions of substantially
19similar duties. The Merit Board shall have power to delegate to
20its Director the duty of assigning each position in the
21classified service to the appropriate class in the
22classification plan approved by the Merit Board.
23    (2) To prescribe the duties of each class of positions and
24the qualifications required by employment in that class.

 

 

09700HB3865sam003- 167 -LRB097 14296 JDS 70341 a

1    (3) To prescribe the range of compensation for each class
2or to fix a single rate of compensation for employees in a
3particular class; and to establish other conditions of
4employment which an employer and employee representatives have
5agreed upon as fair and equitable. The Merit Board shall direct
6the payment of the "prevailing rate of wages" in those
7classifications in which, on January 1, 1952, any employer is
8paying such prevailing rate and in such other classes as the
9Merit Board may thereafter determine. "Prevailing rate of
10wages" as used herein shall be the wages paid generally in the
11locality in which the work is being performed to employees
12engaged in work of a similar character. Subject to any
13applicable restrictions in Section 16-131.7 of the Illinois
14Pension Code, each Each employer covered by the University
15System shall be authorized to negotiate with representatives of
16employees to determine appropriate ranges or rates of
17compensation or other conditions of employment and may
18recommend to the Merit Board for establishment the rates or
19ranges or other conditions of employment which the employer and
20employee representatives have agreed upon as fair and
21equitable. Any rates or ranges established prior to January 1,
221952, and hereafter, shall not be changed except in accordance
23with the procedures herein provided.
24    (4) To recommend to the institutions and agencies specified
25in Section 36e standards for hours of work, holidays, sick
26leave, overtime compensation and vacation for the purpose of

 

 

09700HB3865sam003- 168 -LRB097 14296 JDS 70341 a

1improving conditions of employment covered therein and for the
2purpose of insuring conformity with the prevailing rate
3principal.
4    (5) To prescribe standards of examination for each class,
5the examinations to be related to the duties of such class. The
6Merit Board shall have power to delegate to the Director and
7his staff the preparation, conduct and grading of examinations.
8Examinations may be written, oral, by statement of training and
9experience, in the form of tests of knowledge, skill, capacity,
10intellect, aptitude; or, by any other method, which in the
11judgment of the Merit Board is reasonable and practical for any
12particular classification. Different examining procedures may
13be determined for the examinations in different
14classifications but all examinations in the same
15classification shall be uniform.
16    (6) To authorize the continuous recruitment of personnel
17and to that end, to delegate to the Director and his staff the
18power and the duty to conduct open and continuous competitive
19examinations for all classifications of employment.
20    (7) To cause to be established from the results of
21examinations registers for each class of positions in the
22classified service of the State Universities Civil Service
23System, of the persons who shall attain the minimum mark fixed
24by the Merit Board for the examination; and such persons shall
25take rank upon the registers as candidates in the order of
26their relative excellence as determined by examination,

 

 

09700HB3865sam003- 169 -LRB097 14296 JDS 70341 a

1without reference to priority of time of examination.
2    (8) To provide by its rules for promotions in the
3classified service. Vacancies shall be filled by promotion
4whenever practicable. For the purpose of this paragraph, an
5advancement in class shall constitute a promotion.
6    (9) To set a probationary period of employment of no less
7than 6 months and no longer than 12 months for each class of
8positions in the classification plan, the length of the
9probationary period for each class to be determined by the
10Director.
11    (10) To provide by its rules for employment at regular
12rates of compensation of physically handicapped persons in
13positions in which the handicap does not prevent the individual
14from furnishing satisfactory service.
15    (11) To make and publish rules, to carry out the purpose of
16the State Universities Civil Service System and for
17examination, appointments, transfers and removals and for
18maintaining and keeping records of the efficiency of officers
19and employees and groups of officers and employees in
20accordance with the provisions of Sections 36b to 36q,
21inclusive, and said Merit Board may from time to time make
22changes in such rules.
23    (12) To appoint a Director and such assistants and other
24clerical and technical help as may be necessary efficiently to
25administer Sections 36b to 36q, inclusive. To authorize the
26Director to appoint an assistant resident at the place of

 

 

09700HB3865sam003- 170 -LRB097 14296 JDS 70341 a

1employment of each employer specified in Section 36e and this
2assistant may be authorized to give examinations and to certify
3names from the regional registers provided in Section 36k.
4    (13) To submit to the Governor of this state on or before
5November 1 of each year prior to the regular session of the
6General Assembly a report of the University System's business
7and an estimate of the amount of appropriation from state funds
8required for the purpose of administering the University
9System.
10(Source: P.A. 82-524.)
 
11    Section 45. The University of Illinois Act is amended by
12adding Section 80 as follows:
 
13    (110 ILCS 305/80 new)
14    Sec. 80. Future increases in income. The University of
15Illinois must not pay, offer, or agree to pay any future
16increase in income, as that term is defined in Section 16-131.7
17of the Illinois Pension Code, to any person in a manner that
18violates any of those Sections.
 
19    Section 50. The Southern Illinois University Management
20Act is amended by adding Section 65 as follows:
 
21    (110 ILCS 520/65 new)
22    Sec. 65. Future increases in income. Southern Illinois

 

 

09700HB3865sam003- 171 -LRB097 14296 JDS 70341 a

1University must not pay, offer, or agree to pay any future
2increase in income, as that term is defined in Section 16-131.7
3of the Illinois Pension Code, to any person in a manner that
4violates any of those Sections.
 
5    Section 55. The Chicago State University Law is amended by
6adding Section 5-175 as follows:
 
7    (110 ILCS 660/5-175 new)
8    Sec. 5-175. Future increases in income. Chicago State
9University must not pay, offer, or agree to pay any future
10increase in income, as that term is defined in Section 16-131.7
11of the Illinois Pension Code, to any person in a manner that
12violates any of those Sections.
 
13    Section 60. The Eastern Illinois University Law is amended
14by adding Section 10-175 as follows:
 
15    (110 ILCS 665/10-175 new)
16    Sec. 10-175. Future increases in income. Eastern Illinois
17University must not pay, offer, or agree to pay any future
18increase in income, as that term is defined in Section 16-131.7
19of the Illinois Pension Code, to any person in a manner that
20violates any of those Sections.
 
21    Section 65. The Governors State University Law is amended

 

 

09700HB3865sam003- 172 -LRB097 14296 JDS 70341 a

1by adding Section 15-175 as follows:
 
2    (110 ILCS 670/15-175 new)
3    Sec. 15-175. Future increases in income. Governors State
4University must not pay, offer, or agree to pay any future
5increase in income, as that term is defined in Section 16-131.7
6of the Illinois Pension Code, to any person in a manner that
7violates any of those Sections.
 
8    Section 70. The Illinois State University Law is amended by
9adding Section 20-180 as follows:
 
10    (110 ILCS 675/20-180 new)
11    Sec. 20-180. Future increases in income. Illinois State
12University must not pay, offer, or agree to pay any future
13increase in income, as that term is defined in Section 16-131.7
14of the Illinois Pension Code, to any person in a manner that
15violates any of those Sections.
 
16    Section 75. The Northeastern Illinois University Law is
17amended by adding Section 25-175 as follows:
 
18    (110 ILCS 680/25-175 new)
19    Sec. 25-175. Future increases in income. Northeastern
20Illinois University must not pay, offer, or agree to pay any
21future increase in income, as that term is defined in Section

 

 

09700HB3865sam003- 173 -LRB097 14296 JDS 70341 a

116-131.7 of the Illinois Pension Code, to any person in a
2manner that violates any of those Sections.
 
3    Section 80. The Northern Illinois University Law is amended
4by adding Section 30-185 as follows:
 
5    (110 ILCS 685/30-185 new)
6    Sec. 30-185. Future increases in income. Northern Illinois
7University must not pay, offer, or agree to pay any future
8increase in income, as that term is defined in Section 16-131.7
9of the Illinois Pension Code, to any person in a manner that
10violates any of those Sections.
 
11    Section 85. The Western Illinois University Law is amended
12by adding Section 35-180 as follows:
 
13    (110 ILCS 690/35-180 new)
14    Sec. 35-180. Future increases in income. Western Illinois
15University must not pay, offer, or agree to pay any future
16increase in income, as that term is defined in Section 16-131.7
17of the Illinois Pension Code, to any person in a manner that
18violates any of those Sections.
 
19    Section 90. The Public Community College Act is amended by
20changing Sections 3-26 and 3-42 as follows:
 

 

 

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1    (110 ILCS 805/3-26)  (from Ch. 122, par. 103-26)
2    Sec. 3-26. (a) To make appointments and fix the salaries of
3a chief administrative officer, who shall be the executive
4officer of the board, other administrative personnel, and all
5teachers, but subject to any applicable restrictions in Section
616-131.7 of the Illinois Pension Code. In making these
7appointments and fixing the salaries, the board may make no
8discrimination on account of sex, race, creed, color or
9national origin.
10    (b) Upon the written request of an employee, to withhold
11from the compensation of that employee the membership dues of
12such employee payable to any specified labor organization as
13defined in the Illinois Educational Labor Relations Act. Under
14such arrangement, an amount shall be withheld for each regular
15payroll period which is equal to the prorata share of the
16annual membership dues plus any payments or contributions and
17the board shall pay such withholding to the specified labor
18organization within 10 working days from the time of the
19withholding.
20(Source: P.A. 83-1014.)
 
21    (110 ILCS 805/3-42)  (from Ch. 122, par. 103-42)
22    Sec. 3-42. To employ such personnel as may be needed, to
23establish policies governing their employment and dismissal,
24and to fix the amount of their compensation, subject to any
25applicable restrictions in Section 16-131.7 of the Illinois

 

 

09700HB3865sam003- 175 -LRB097 14296 JDS 70341 a

1Pension Code. In the employment, establishment of policies and
2fixing of compensation the board may make no discrimination on
3account of sex, race, creed, color or national origin.
4    Residence within any community college district or outside
5any community college district shall not be considered:
6        (a) in determining whether to retain or not retain any
7    employee of a community college employed prior to July 1,
8    1977 or prior to the adoption by the community college
9    board of a resolution making residency within the community
10    college district of some or all employees a condition of
11    employment, whichever is later;
12        (b) in assigning, promoting or transferring any
13    employee of a community college to an office or position
14    employed prior to July 1, 1977 or prior to the adoption by
15    the community college board of a resolution making
16    residency within the community college district of some or
17    all employees a condition of employment, whichever is
18    later; or
19        (c) in determining the salary or other compensation of
20    any employee of a community college.
21(Source: P.A. 80-248.)
 
22    Section 95. The Illinois Educational Labor Relations Act is
23amended by changing Sections 4 and 17 as follows:
 
24    (115 ILCS 5/4)  (from Ch. 48, par. 1704)

 

 

09700HB3865sam003- 176 -LRB097 14296 JDS 70341 a

1    Sec. 4. Employer rights. Employers shall not be required to
2bargain over matters of inherent managerial policy, which shall
3include such areas of discretion or policy as the functions of
4the employer, standards of services, its overall budget, the
5organizational structure and selection of new employees and
6direction of employees. Employers, however, shall be required
7to bargain collectively with regard to policy matters directly
8affecting wages (but subject to any applicable restrictions in
9Section 16-131.7 of the Illinois Pension Code), hours and terms
10and conditions of employment as well as the impact thereon upon
11request by employee representatives, but excluding the
12changes, the impact of changes, and the implementation of the
13changes set forth in this amendatory Act of the 97th General
14Assembly. To preserve the rights of employers and exclusive
15representatives which have established collective bargaining
16relationships or negotiated collective bargaining agreements
17prior to the effective date of this Act, employers shall be
18required to bargain collectively with regard to any matter
19concerning wages (but subject to subject to any applicable
20restrictions in Section 16-131.7 of the Illinois Pension Code),
21hours or conditions of employment about which they have
22bargained for and agreed to in a collective bargaining
23agreement prior to the effective date of this Act, but
24excluding the changes, the impact of changes, and the
25implementation of the changes set forth in this amendatory Act
26of the 97th General Assembly.

 

 

09700HB3865sam003- 177 -LRB097 14296 JDS 70341 a

1(Source: P.A. 83-1014.)
 
2    (115 ILCS 5/17)  (from Ch. 48, par. 1717)
3    Sec. 17. Effect on other laws. In case of any conflict
4between the provisions of this Act and any other law (other
5than Section 16-131.7 of the Illinois Pension Code), executive
6order or administrative regulation, the provisions of this Act
7shall prevail and control. The provisions of this Act are
8subject to any applicable restrictions in Section 16-131.7 of
9the Illinois Pension Code, as well as the changes, impact of
10changes, and implementation of changes set forth in this
11amendatory Act of the 97th General Assembly. Nothing in this
12Act shall be construed to replace or diminish the rights of
13employees established by Section 36d of "An Act to create the
14State Universities Civil Service System", approved May 11,
151905, as amended or modified.
16(Source: P.A. 83-1014.)
 
17    Section 100. The State Mandates Act is amended by adding
18Section 8.36 as follows:
 
19    (30 ILCS 805/8.36 new)
20    Sec. 8.36. Exempt mandate. Notwithstanding Sections 6 and 8
21of this Act, no reimbursement by the State is required for the
22implementation of any mandate created by this amendatory Act of
23the 97th General Assembly.
 

 

 

09700HB3865sam003- 178 -LRB097 14296 JDS 70341 a

1    Section 105. Severability and inseverability. The
2provisions set forth in Sections 5, 15, 20, 25, 35 through 100,
3and 999 of this Act, as well as Sections 2-134, 7-109,
414-135.08, 15-107, 15-113.2, 15-113.6, 15-163, 15-165, 16-106,
5and Section 18-140 and subsection (a-5) of Section 16-158 of
6the Illinois Pension Code, as set forth in Section 30 of this
7Act, are severable pursuant to Section 1.31 of the Statute on
8Statutes, and are not mutually dependent upon the provisions
9set forth in any other Section of this Act.
10    Section 10 of this Act and the other provisions of Section
1130 of this Act are mutually dependent and inseverable. If any
12of those provision is held invalid other than as applied to a
13particular person or circumstance, then all of those provisions
14are invalid.
 
15    Section 999. Effective date. This Act takes effect upon
16becoming law.".