97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
HB5377

 

Introduced 2/15/2012, by Rep. Michael W. Tryon

 

SYNOPSIS AS INTRODUCED:
 
40 ILCS 5/2-119.1  from Ch. 108 1/2, par. 2-119.1
40 ILCS 5/14-114  from Ch. 108 1/2, par. 14-114
40 ILCS 5/15-136  from Ch. 108 1/2, par. 15-136
40 ILCS 5/16-133.1  from Ch. 108 1/2, par. 16-133.1
40 ILCS 5/16-136.1  from Ch. 108 1/2, par. 16-136.1
40 ILCS 5/18-125.1  from Ch. 108 1/2, par. 18-125.1

    Amends the Illinois Pension Code in relation to the 5 State-funded retirement systems. Decreases annual increases (COLAs) for certain persons who first became participants before January 1, 2011 and did not begin to receive a retirement annuity before the effective date of this amendatory Act. Provides that the automatic annual increases shall be (1) 3% of the first $50,000 of the annual total annuity payable at the time of the increase, and (2) if the annual total annuity payable at the time of the increase exceeds $50,000, a percentage of that excess equal to the lesser of 3% or one-half of the annual unadjusted percentage increase (but not less than zero) in the Consumer Price Index for All Urban Consumers.


LRB097 18801 EFG 64038 b

FISCAL NOTE ACT MAY APPLY
PENSION IMPACT NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB5377LRB097 18801 EFG 64038 b

1    AN ACT concerning public employee benefits.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Pension Code is amended by changing
5Sections 2-119.1, 14-114, 15-136, 16-133.1, 16-136.1, and
618-125.1 as follows:
 
7    (40 ILCS 5/2-119.1)  (from Ch. 108 1/2, par. 2-119.1)
8    Sec. 2-119.1. Automatic increase in retirement annuity.
9    (a) A participant who retires after June 30, 1967, and who
10has not received an initial increase under this Section before
11the effective date of this amendatory Act of 1991, shall, in
12January or July next following the first anniversary of
13retirement, whichever occurs first, and in the same month of
14each year thereafter, but in no event prior to age 60, have the
15amount of the originally granted retirement annuity increased
16as follows: for each year through 1971, 1 1/2%; for each year
17from 1972 through 1979, 2%; and for 1980 and each year
18thereafter, 3%. Annuitants who have received an initial
19increase under this subsection prior to the effective date of
20this amendatory Act of 1991 shall continue to receive their
21annual increases in the same month as the initial increase.
22    (b) Beginning January 1, 1990, for eligible participants
23who remain in service after attaining 20 years of creditable

 

 

HB5377- 2 -LRB097 18801 EFG 64038 b

1service, the 3% increases provided under subsection (a) shall
2begin to accrue on the January 1 next following the date upon
3which the participant (1) attains age 55, or (2) attains 20
4years of creditable service, whichever occurs later, and shall
5continue to accrue while the participant remains in service;
6such increases shall become payable on January 1 or July 1,
7whichever occurs first, next following the first anniversary of
8retirement. For any person who has service credit in the System
9for the entire period from January 15, 1969 through December
1031, 1992, regardless of the date of termination of service, the
11reference to age 55 in clause (1) of this subsection (b) shall
12be deemed to mean age 50.
13    This subsection (b) does not apply to any person who first
14becomes a member of the System after the effective date of this
15amendatory Act of the 93rd General Assembly.
16    (b-5) Notwithstanding any other provision of this Article,
17a participant who first becomes a participant on or after
18January 1, 2011 (the effective date of Public Act 96-889)
19shall, in January or July next following the first anniversary
20of retirement, whichever occurs first, and in the same month of
21each year thereafter, but in no event prior to age 67, have the
22amount of the retirement annuity then being paid increased by
233% or the annual unadjusted percentage increase in the Consumer
24Price Index for All Urban Consumers as determined by the Public
25Pension Division of the Department of Insurance under
26subsection (a) of Section 2-108.1, whichever is less.

 

 

HB5377- 3 -LRB097 18801 EFG 64038 b

1    (b-10) Notwithstanding any other provision of this
2Article, for a person who first became a participant of this
3System before January 1, 2011 and who did not begin to receive
4a retirement annuity from the System before the effective date
5of this amendatory Act of the 97th General Assembly, the
6automatic annual increases payable under this Section shall be
7calculated as follows: (1) 3% of the first $50,000 of the
8annual total annuity payable at the time of the increase, and
9(2) if the annual total annuity payable at the time of the
10increase exceeds $50,000, a percentage of that excess equal to
11the lesser of 3% or one-half of the annual unadjusted
12percentage increase (but not less than zero) in the Consumer
13Price Index for All Urban Consumers (United States city
14average, all items, 1982-84 = 100) for the 12 months ending
15with the previous September, as determined by the Public
16Pension Division of the Department of Insurance.
17    (c) The foregoing provisions relating to automatic
18increases are not applicable to a participant who retires
19before having made contributions (at the rate prescribed in
20Section 2-126) for automatic increases for less than the
21equivalent of one full year. However, in order to be eligible
22for the automatic increases, such a participant may make
23arrangements to pay to the system the amount required to bring
24the total contributions for the automatic increase to the
25equivalent of one year's contributions based upon his or her
26last salary.

 

 

HB5377- 4 -LRB097 18801 EFG 64038 b

1    (d) A participant who terminated service prior to July 1,
21967, with at least 14 years of service is entitled to an
3increase in retirement annuity beginning January, 1976, and to
4additional increases in January of each year thereafter.
5    The initial increase shall be 1 1/2% of the originally
6granted retirement annuity multiplied by the number of full
7years that the annuitant was in receipt of such annuity prior
8to January 1, 1972, plus 2% of the originally granted
9retirement annuity for each year after that date. The
10subsequent annual increases shall be at the rate of 2% of the
11originally granted retirement annuity for each year through
121979 and at the rate of 3% for 1980 and thereafter.
13    (e) Beginning January 1, 1990, and except as provided in
14subsections (b-5) and (b-10), all automatic annual increases
15payable under this Section shall be calculated as a percentage
16of the total annuity payable at the time of the increase,
17including previous increases granted under this Article.
18(Source: P.A. 96-889, eff. 1-1-11; 96-1490, eff. 1-1-11.)
 
19    (40 ILCS 5/14-114)  (from Ch. 108 1/2, par. 14-114)
20    Sec. 14-114. Automatic increase in retirement annuity.
21    (a) Any person receiving a retirement annuity under this
22Article who retires having attained age 60, or who retires
23before age 60 having at least 35 years of creditable service,
24or who retires on or after January 1, 2001 at an age which,
25when added to the number of years of his or her creditable

 

 

HB5377- 5 -LRB097 18801 EFG 64038 b

1service, equals at least 85, shall, on January 1 next following
2the first full year of retirement, have the amount of the then
3fixed and payable monthly retirement annuity increased 3%. Any
4person receiving a retirement annuity under this Article who
5retires before attainment of age 60 and with less than (i) 35
6years of creditable service if retirement is before January 1,
72001, or (ii) the number of years of creditable service which,
8when added to the member's age, would equal 85, if retirement
9is on or after January 1, 2001, shall have the amount of the
10fixed and payable retirement annuity increased by 3% on the
11January 1 occurring on or next following (1) attainment of age
1260, or (2) the first anniversary of retirement, whichever
13occurs later. However, for persons who receive the alternative
14retirement annuity under Section 14-110, references in this
15subsection (a) to attainment of age 60 shall be deemed to refer
16to attainment of age 55. For a person receiving early
17retirement incentives under Section 14-108.3 whose retirement
18annuity began after January 1, 1992 pursuant to an extension
19granted under subsection (e) of that Section, the first
20anniversary of retirement shall be deemed to be January 1,
211993. For a person who retires on or after June 28, 2001 and on
22or before October 1, 2001, and whose retirement annuity is
23calculated, in whole or in part, under Section 14-110 or
24subsection (g) or (h) of Section 14-108, the first anniversary
25of retirement shall be deemed to be January 1, 2002.
26    On each January 1 following the date of the initial

 

 

HB5377- 6 -LRB097 18801 EFG 64038 b

1increase under this subsection, the employee's monthly
2retirement annuity shall be increased by an additional 3%.
3    Beginning January 1, 1990, and except as provided in
4subsection (a-5) all automatic annual increases payable under
5this Section shall be calculated as a percentage of the total
6annuity payable at the time of the increase, including previous
7increases granted under this Article.
8    (a-5) Notwithstanding any other provision of this Article,
9for a person who first became a participant of this System
10before January 1, 2011 and who did not begin to receive a
11retirement annuity from the System before the effective date of
12this amendatory Act of the 97th General Assembly, the automatic
13annual increases payable under this Section shall be calculated
14as follows: (1) 3% of the first $50,000 of the annual total
15annuity payable at the time of the increase, and (2) if the
16annual total annuity payable at the time of the increase
17exceeds $50,000, a percentage of that excess equal to the
18lesser of 3% or one-half of the annual unadjusted percentage
19increase (but not less than zero) in the Consumer Price Index
20for All Urban Consumers (United States city average, all items,
211982-84 = 100) for the 12 months ending with the previous
22September, as determined by the Public Pension Division of the
23Department of Insurance.
24    (b) The provisions of subsection (a) of this Section shall
25be applicable to an employee only if the employee makes the
26additional contributions required after December 31, 1969 for

 

 

HB5377- 7 -LRB097 18801 EFG 64038 b

1the purpose of the automatic increases for not less than the
2equivalent of one full year. If an employee becomes an
3annuitant before his additional contributions equal one full
4year's contributions based on his salary at the date of
5retirement, the employee may pay the necessary balance of the
6contributions to the system, without interest, and be eligible
7for the increasing annuity authorized by this Section.
8    (c) The provisions of subsection (a) of this Section shall
9not be applicable to any annuitant who is on retirement on
10December 31, 1969, and thereafter returns to State service,
11unless the member has established at least one year of
12additional creditable service following reentry into service.
13    (d) In addition to other increases which may be provided by
14this Section, on January 1, 1981 any annuitant who was
15receiving a retirement annuity on or before January 1, 1971
16shall have his retirement annuity then being paid increased $1
17per month for each year of creditable service. On January 1,
181982, any annuitant who began receiving a retirement annuity on
19or before January 1, 1977, shall have his retirement annuity
20then being paid increased $1 per month for each year of
21creditable service.
22    On January 1, 1987, any annuitant who began receiving a
23retirement annuity on or before January 1, 1977, shall have the
24monthly retirement annuity increased by an amount equal to 8¢
25per year of creditable service times the number of years that
26have elapsed since the annuity began.

 

 

HB5377- 8 -LRB097 18801 EFG 64038 b

1    (e) Every person who receives the alternative retirement
2annuity under Section 14-110 and who is eligible to receive the
33% increase under subsection (a) on January 1, 1986, shall also
4receive on that date a one-time increase in retirement annuity
5equal to the difference between (1) his actual retirement
6annuity on that date, including any increases received under
7subsection (a), and (2) the amount of retirement annuity he
8would have received on that date if the amendments to
9subsection (a) made by Public Act 84-162 had been in effect
10since the date of his retirement.
11(Source: P.A. 91-927, eff. 12-14-00; 92-14, eff. 6-28-01;
1292-651, eff. 7-11-02.)
 
13    (40 ILCS 5/15-136)  (from Ch. 108 1/2, par. 15-136)
14    Sec. 15-136. Retirement annuities - Amount. The provisions
15of this Section 15-136 apply only to those participants who are
16participating in the traditional benefit package or the
17portable benefit package and do not apply to participants who
18are participating in the self-managed plan.
19    (a) The amount of a participant's retirement annuity,
20expressed in the form of a single-life annuity, shall be
21determined by whichever of the following rules is applicable
22and provides the largest annuity:
23    Rule 1: The retirement annuity shall be 1.67% of final rate
24of earnings for each of the first 10 years of service, 1.90%
25for each of the next 10 years of service, 2.10% for each year

 

 

HB5377- 9 -LRB097 18801 EFG 64038 b

1of service in excess of 20 but not exceeding 30, and 2.30% for
2each year in excess of 30; or for persons who retire on or
3after January 1, 1998, 2.2% of the final rate of earnings for
4each year of service.
5    Rule 2: The retirement annuity shall be the sum of the
6following, determined from amounts credited to the participant
7in accordance with the actuarial tables and the prescribed rate
8of interest in effect at the time the retirement annuity
9begins:
10        (i) the normal annuity which can be provided on an
11    actuarially equivalent basis, by the accumulated normal
12    contributions as of the date the annuity begins;
13        (ii) an annuity from employer contributions of an
14    amount equal to that which can be provided on an
15    actuarially equivalent basis from the accumulated normal
16    contributions made by the participant under Section
17    15-113.6 and Section 15-113.7 plus 1.4 times all other
18    accumulated normal contributions made by the participant;
19    and
20        (iii) the annuity that can be provided on an
21    actuarially equivalent basis from the entire contribution
22    made by the participant under Section 15-113.3.
23    With respect to a police officer or firefighter who retires
24on or after August 14, 1998, the accumulated normal
25contributions taken into account under clauses (i) and (ii) of
26this Rule 2 shall include the additional normal contributions

 

 

HB5377- 10 -LRB097 18801 EFG 64038 b

1made by the police officer or firefighter under Section
215-157(a).
3    The amount of a retirement annuity calculated under this
4Rule 2 shall be computed solely on the basis of the
5participant's accumulated normal contributions, as specified
6in this Rule and defined in Section 15-116. Neither an employee
7or employer contribution for early retirement under Section
815-136.2 nor any other employer contribution shall be used in
9the calculation of the amount of a retirement annuity under
10this Rule 2.
11    This amendatory Act of the 91st General Assembly is a
12clarification of existing law and applies to every participant
13and annuitant without regard to whether status as an employee
14terminates before the effective date of this amendatory Act.
15    This Rule 2 does not apply to a person who first becomes an
16employee under this Article on or after July 1, 2005.
17    Rule 3: The retirement annuity of a participant who is
18employed at least one-half time during the period on which his
19or her final rate of earnings is based, shall be equal to the
20participant's years of service not to exceed 30, multiplied by
21(1) $96 if the participant's final rate of earnings is less
22than $3,500, (2) $108 if the final rate of earnings is at least
23$3,500 but less than $4,500, (3) $120 if the final rate of
24earnings is at least $4,500 but less than $5,500, (4) $132 if
25the final rate of earnings is at least $5,500 but less than
26$6,500, (5) $144 if the final rate of earnings is at least

 

 

HB5377- 11 -LRB097 18801 EFG 64038 b

1$6,500 but less than $7,500, (6) $156 if the final rate of
2earnings is at least $7,500 but less than $8,500, (7) $168 if
3the final rate of earnings is at least $8,500 but less than
4$9,500, and (8) $180 if the final rate of earnings is $9,500 or
5more, except that the annuity for those persons having made an
6election under Section 15-154(a-1) shall be calculated and
7payable under the portable retirement benefit program pursuant
8to the provisions of Section 15-136.4.
9    Rule 4: A participant who is at least age 50 and has 25 or
10more years of service as a police officer or firefighter, and a
11participant who is age 55 or over and has at least 20 but less
12than 25 years of service as a police officer or firefighter,
13shall be entitled to a retirement annuity of 2 1/4% of the
14final rate of earnings for each of the first 10 years of
15service as a police officer or firefighter, 2 1/2% for each of
16the next 10 years of service as a police officer or
17firefighter, and 2 3/4% for each year of service as a police
18officer or firefighter in excess of 20. The retirement annuity
19for all other service shall be computed under Rule 1.
20    For purposes of this Rule 4, a participant's service as a
21firefighter shall also include the following:
22        (i) service that is performed while the person is an
23    employee under subsection (h) of Section 15-107; and
24        (ii) in the case of an individual who was a
25    participating employee employed in the fire department of
26    the University of Illinois's Champaign-Urbana campus

 

 

HB5377- 12 -LRB097 18801 EFG 64038 b

1    immediately prior to the elimination of that fire
2    department and who immediately after the elimination of
3    that fire department transferred to another job with the
4    University of Illinois, service performed as an employee of
5    the University of Illinois in a position other than police
6    officer or firefighter, from the date of that transfer
7    until the employee's next termination of service with the
8    University of Illinois.
9    Rule 5: The retirement annuity of a participant who elected
10early retirement under the provisions of Section 15-136.2 and
11who, on or before February 16, 1995, brought administrative
12proceedings pursuant to the administrative rules adopted by the
13System to challenge the calculation of his or her retirement
14annuity shall be the sum of the following, determined from
15amounts credited to the participant in accordance with the
16actuarial tables and the prescribed rate of interest in effect
17at the time the retirement annuity begins:
18        (i) the normal annuity which can be provided on an
19    actuarially equivalent basis, by the accumulated normal
20    contributions as of the date the annuity begins; and
21        (ii) an annuity from employer contributions of an
22    amount equal to that which can be provided on an
23    actuarially equivalent basis from the accumulated normal
24    contributions made by the participant under Section
25    15-113.6 and Section 15-113.7 plus 1.4 times all other
26    accumulated normal contributions made by the participant;

 

 

HB5377- 13 -LRB097 18801 EFG 64038 b

1    and
2        (iii) an annuity which can be provided on an
3    actuarially equivalent basis from the employee
4    contribution for early retirement under Section 15-136.2,
5    and an annuity from employer contributions of an amount
6    equal to that which can be provided on an actuarially
7    equivalent basis from the employee contribution for early
8    retirement under Section 15-136.2.
9    In no event shall a retirement annuity under this Rule 5 be
10lower than the amount obtained by adding (1) the monthly amount
11obtained by dividing the combined employee and employer
12contributions made under Section 15-136.2 by the System's
13annuity factor for the age of the participant at the beginning
14of the annuity payment period and (2) the amount equal to the
15participant's annuity if calculated under Rule 1, reduced under
16Section 15-136(b) as if no contributions had been made under
17Section 15-136.2.
18    With respect to a participant who is qualified for a
19retirement annuity under this Rule 5 whose retirement annuity
20began before the effective date of this amendatory Act of the
2191st General Assembly, and for whom an employee contribution
22was made under Section 15-136.2, the System shall recalculate
23the retirement annuity under this Rule 5 and shall pay any
24additional amounts due in the manner provided in Section
2515-186.1 for benefits mistakenly set too low.
26    The amount of a retirement annuity calculated under this

 

 

HB5377- 14 -LRB097 18801 EFG 64038 b

1Rule 5 shall be computed solely on the basis of those
2contributions specifically set forth in this Rule 5. Except as
3provided in clause (iii) of this Rule 5, neither an employee
4nor employer contribution for early retirement under Section
515-136.2, nor any other employer contribution, shall be used in
6the calculation of the amount of a retirement annuity under
7this Rule 5.
8    The General Assembly has adopted the changes set forth in
9Section 25 of this amendatory Act of the 91st General Assembly
10in recognition that the decision of the Appellate Court for the
11Fourth District in Mattis v. State Universities Retirement
12System et al. might be deemed to give some right to the
13plaintiff in that case. The changes made by Section 25 of this
14amendatory Act of the 91st General Assembly are a legislative
15implementation of the decision of the Appellate Court for the
16Fourth District in Mattis v. State Universities Retirement
17System et al. with respect to that plaintiff.
18    The changes made by Section 25 of this amendatory Act of
19the 91st General Assembly apply without regard to whether the
20person is in service as an employee on or after its effective
21date.
22    (b) The retirement annuity provided under Rules 1 and 3
23above shall be reduced by 1/2 of 1% for each month the
24participant is under age 60 at the time of retirement. However,
25this reduction shall not apply in the following cases:
26        (1) For a disabled participant whose disability

 

 

HB5377- 15 -LRB097 18801 EFG 64038 b

1    benefits have been discontinued because he or she has
2    exhausted eligibility for disability benefits under clause
3    (6) of Section 15-152;
4        (2) For a participant who has at least the number of
5    years of service required to retire at any age under
6    subsection (a) of Section 15-135; or
7        (3) For that portion of a retirement annuity which has
8    been provided on account of service of the participant
9    during periods when he or she performed the duties of a
10    police officer or firefighter, if these duties were
11    performed for at least 5 years immediately preceding the
12    date the retirement annuity is to begin.
13    (c) The maximum retirement annuity provided under Rules 1,
142, 4, and 5 shall be the lesser of (1) the annual limit of
15benefits as specified in Section 415 of the Internal Revenue
16Code of 1986, as such Section may be amended from time to time
17and as such benefit limits shall be adjusted by the
18Commissioner of Internal Revenue, and (2) 80% of final rate of
19earnings.
20    (d) An annuitant whose status as an employee terminates
21after August 14, 1969 shall receive automatic increases in his
22or her retirement annuity as follows:
23    Effective January 1 immediately following the date the
24retirement annuity begins, the annuitant shall receive an
25increase in his or her monthly retirement annuity of 0.125% of
26the monthly retirement annuity provided under Rule 1, Rule 2,

 

 

HB5377- 16 -LRB097 18801 EFG 64038 b

1Rule 3, Rule 4, or Rule 5, contained in this Section,
2multiplied by the number of full months which elapsed from the
3date the retirement annuity payments began to January 1, 1972,
4plus 0.1667% of such annuity, multiplied by the number of full
5months which elapsed from January 1, 1972, or the date the
6retirement annuity payments began, whichever is later, to
7January 1, 1978, plus 0.25% of such annuity multiplied by the
8number of full months which elapsed from January 1, 1978, or
9the date the retirement annuity payments began, whichever is
10later, to the effective date of the increase.
11    The annuitant shall receive an increase in his or her
12monthly retirement annuity on each January 1 thereafter during
13the annuitant's life of 3% of the monthly annuity provided
14under Rule 1, Rule 2, Rule 3, Rule 4, or Rule 5 contained in
15this Section. The change made under this subsection by P.A.
1681-970 is effective January 1, 1980 and applies to each
17annuitant whose status as an employee terminates before or
18after that date.
19    Beginning January 1, 1990, and except as provided in
20subsection (d-5), all automatic annual increases payable under
21this Section shall be calculated as a percentage of the total
22annuity payable at the time of the increase, including all
23increases previously granted under this Article.
24    The change made in this subsection by P.A. 85-1008 is
25effective January 26, 1988, and is applicable without regard to
26whether status as an employee terminated before that date.

 

 

HB5377- 17 -LRB097 18801 EFG 64038 b

1    (d-5) Notwithstanding any other provision of this Article,
2for a person who first became a participant of this System
3before January 1, 2011 and who did not begin to receive a
4retirement annuity from the System before the effective date of
5this amendatory Act of the 97th General Assembly, the automatic
6annual increases payable under this Section shall be calculated
7as follows: (1) 3% of the first $50,000 of the annual total
8annuity payable at the time of the increase, and (2) if the
9annual total annuity payable at the time of the increase
10exceeds $50,000, a percentage of that excess equal to the
11lesser of 3% or one-half of the annual unadjusted percentage
12increase (but not less than zero) in the Consumer Price Index
13for All Urban Consumers (United States city average, all items,
141982-84 = 100) for the 12 months ending with the previous
15September, as determined by the Public Pension Division of the
16Department of Insurance.
17    (e) If, on January 1, 1987, or the date the retirement
18annuity payment period begins, whichever is later, the sum of
19the retirement annuity provided under Rule 1 or Rule 2 of this
20Section and the automatic annual increases provided under the
21preceding subsection or Section 15-136.1, amounts to less than
22the retirement annuity which would be provided by Rule 3, the
23retirement annuity shall be increased as of January 1, 1987, or
24the date the retirement annuity payment period begins,
25whichever is later, to the amount which would be provided by
26Rule 3 of this Section. Such increased amount shall be

 

 

HB5377- 18 -LRB097 18801 EFG 64038 b

1considered as the retirement annuity in determining benefits
2provided under other Sections of this Article. This paragraph
3applies without regard to whether status as an employee
4terminated before the effective date of this amendatory Act of
51987, provided that the annuitant was employed at least
6one-half time during the period on which the final rate of
7earnings was based.
8    (f) A participant is entitled to such additional annuity as
9may be provided on an actuarially equivalent basis, by any
10accumulated additional contributions to his or her credit.
11However, the additional contributions made by the participant
12toward the automatic increases in annuity provided under this
13Section shall not be taken into account in determining the
14amount of such additional annuity.
15    (g) If, (1) by law, a function of a governmental unit, as
16defined by Section 20-107 of this Code, is transferred in whole
17or in part to an employer, and (2) a participant transfers
18employment from such governmental unit to such employer within
196 months after the transfer of the function, and (3) the sum of
20(A) the annuity payable to the participant under Rule 1, 2, or
213 of this Section (B) all proportional annuities payable to the
22participant by all other retirement systems covered by Article
2320, and (C) the initial primary insurance amount to which the
24participant is entitled under the Social Security Act, is less
25than the retirement annuity which would have been payable if
26all of the participant's pension credits validated under

 

 

HB5377- 19 -LRB097 18801 EFG 64038 b

1Section 20-109 had been validated under this system, a
2supplemental annuity equal to the difference in such amounts
3shall be payable to the participant.
4    (h) On January 1, 1981, an annuitant who was receiving a
5retirement annuity on or before January 1, 1971 shall have his
6or her retirement annuity then being paid increased $1 per
7month for each year of creditable service. On January 1, 1982,
8an annuitant whose retirement annuity began on or before
9January 1, 1977, shall have his or her retirement annuity then
10being paid increased $1 per month for each year of creditable
11service.
12    (i) On January 1, 1987, any annuitant whose retirement
13annuity began on or before January 1, 1977, shall have the
14monthly retirement annuity increased by an amount equal to 8¢
15per year of creditable service times the number of years that
16have elapsed since the annuity began.
17(Source: P.A. 93-347, eff. 7-24-03; 94-4, eff. 6-1-05.)
 
18    (40 ILCS 5/16-133.1)  (from Ch. 108 1/2, par. 16-133.1)
19    Sec. 16-133.1. Automatic annual increase in annuity.
20    (a) Each member with creditable service and retiring on or
21after August 26, 1969 is entitled to the automatic annual
22increases in annuity provided under this Section while
23receiving a retirement annuity or disability retirement
24annuity from the system.
25    An annuitant shall first be entitled to an initial increase

 

 

HB5377- 20 -LRB097 18801 EFG 64038 b

1under this Section on the January 1 next following the first
2anniversary of retirement, or January 1 of the year next
3following attainment of age 61, whichever is later. At such
4time, the system shall pay an initial increase determined as
5follows and in accordance with subsection (a-5):
6        (1) 1.5% of the originally granted retirement annuity
7    or disability retirement annuity multiplied by the number
8    of years elapsed, if any, from the date of retirement until
9    January 1, 1972, plus
10        (2) 2% of the originally granted annuity multiplied by
11    the number of years elapsed, if any, from the date of
12    retirement or January 1, 1972, whichever is later, until
13    January 1, 1978, plus
14        (3) 3% of the originally granted annuity multiplied by
15    the number of years elapsed from the date of retirement or
16    January 1, 1978, whichever is later, until the effective
17    date of the initial increase.
18However, the initial annual increase calculated under this
19Section for the recipient of a disability retirement annuity
20granted under Section 16-149.2 shall be reduced by an amount
21equal to the total of all increases in that annuity received
22under Section 16-149.5 (but not exceeding 100% of the amount of
23the initial increase otherwise provided under this Section).
24    Following the initial increase, automatic annual increases
25in annuity shall be payable on each January 1 thereafter during
26the lifetime of the annuitant, determined as a percentage of

 

 

HB5377- 21 -LRB097 18801 EFG 64038 b

1the originally granted retirement annuity or disability
2retirement annuity for increases granted prior to January 1,
31990, and calculated as a percentage of the total amount of
4annuity, including previous increases under this Section, for
5increases granted on or after January 1, 1990, as follows: 1.5%
6for periods prior to January 1, 1972, 2% for periods after
7December 31, 1971 and prior to January 1, 1978, and 3% for
8periods after December 31, 1977.
9    (a-5) Notwithstanding any other provision of this Article,
10for a person who first became a participant of this System
11before January 1, 2011 and who did not begin to receive a
12retirement annuity from the System before the effective date of
13this amendatory Act of the 97th General Assembly, the automatic
14annual increases payable under this Section shall be calculated
15as follows: (1) 3% of the first $50,000 of the annual total
16annuity payable at the time of the increase, and (2) if the
17annual total annuity payable at the time of the increase
18exceeds $50,000, a percentage of that excess equal to the
19lesser of 3% or one-half of the annual unadjusted percentage
20increase (but not less than zero) in the Consumer Price Index
21for All Urban Consumers (United States city average, all items,
221982-84 = 100) for the 12 months ending with the previous
23September, as determined by the Public Pension Division of the
24Department of Insurance.
25    (b) The automatic annual increases in annuity provided
26under this Section shall not be applicable unless a member has

 

 

HB5377- 22 -LRB097 18801 EFG 64038 b

1made contributions toward such increases for a period
2equivalent to one full year of creditable service. If a member
3contributes for service performed after August 26, 1969 but the
4member becomes an annuitant before such contributions amount to
5one full year's contributions based on the salary at the date
6of retirement, he or she may pay the necessary balance of the
7contributions to the system and be eligible for the automatic
8annual increases in annuity provided under this Section.
9    (c) Each member shall make contributions toward the cost of
10the automatic annual increases in annuity as provided under
11Section 16-152.
12    (d) An annuitant receiving a retirement annuity or
13disability retirement annuity on July 1, 1969, who subsequently
14re-enters service as a teacher is eligible for the automatic
15annual increases in annuity provided under this Section if he
16or she renders at least one year of creditable service
17following the latest re-entry.
18    (e) In addition to the automatic annual increases in
19annuity provided under this Section, an annuitant who meets the
20service requirements of this Section and whose retirement
21annuity or disability retirement annuity began on or before
22January 1, 1971 shall receive, on January 1, 1981, an increase
23in the annuity then being paid of one dollar per month for each
24year of creditable service. On January 1, 1982, an annuitant
25whose retirement annuity or disability retirement annuity
26began on or before January 1, 1977 shall receive an increase in

 

 

HB5377- 23 -LRB097 18801 EFG 64038 b

1the annuity then being paid of one dollar per month for each
2year of creditable service.
3    On January 1, 1987, any annuitant whose retirement annuity
4began on or before January 1, 1977, shall receive an increase
5in the monthly retirement annuity equal to 8¢ per year of
6creditable service times the number of years that have elapsed
7since the annuity began.
8(Source: P.A. 91-927, eff. 12-14-00.)
 
9    (40 ILCS 5/16-136.1)  (from Ch. 108 1/2, par. 16-136.1)
10    Sec. 16-136.1. Annual increase for certain annuitants. (a)
11Any annuitant receiving a retirement annuity on June 30, 1969
12and any member retiring after June 30, 1969 shall be eligible
13for the annual increases provided under this Section provided
14the annuitant is ineligible for the automatic annual increase
15in annuity provided under Section 16-133.1, and provided
16further that (1) retirement occurred at age 55 or over and was
17based on 5 or more years of creditable service or (2) if
18retirement occurred prior to age 55, the retirement annuity was
19based on 20 or more years of creditable service.
20    (b) An annuitant entitled to increases under this Section
21shall be entitled to the initial increase as of the later of:
22(1) January 1 following attainment of age 65, (2) January 1
23following the first anniversary of retirement, or (3) the first
24day of the month following receipt of the required qualifying
25contribution from the annuitant. The initial monthly increase

 

 

HB5377- 24 -LRB097 18801 EFG 64038 b

1shall be computed on the basis of the period elapsed between
2the later of the date of last retirement or attainment of age
350 and the date of qualification for the initial increase, at
4the rate of 1 1/2% of the original monthly retirement annuity
5per year for periods prior to September 1, 1971, and at the
6rate of 2% per year for periods between September 1, 1971 and
7September 1, 1978, and at the rate of 3% per year for periods
8thereafter, subject to the provisions of subsection (b-5).
9    Subject to the provisions of subsection (b-5), an An
10annuitant who has received an initial increase under this
11Section, shall be entitled, on each January 1 following the
12granting of the initial increase, to an increase of 3% of the
13original monthly retirement annuity for increases granted
14prior to January 1, 1990, and equal to 3% of the total annuity,
15including previous increases under this Section, for increases
16granted on or after January 1, 1990. The original monthly
17retirement annuity for computations under this subsection (b)
18shall be considered to be $83.34 for any annuitant entitled to
19benefits under Section 16-134. The minimum original disability
20retirement annuity for computations under this subsection (b)
21shall be considered to be $33.34 per month for any annuitant
22retired on account of disability.
23    (b-5) Notwithstanding any other provision of this Article,
24for a person who first became a participant of this System
25before January 1, 2011 and who did not begin to receive a
26retirement annuity from the System before the effective date of

 

 

HB5377- 25 -LRB097 18801 EFG 64038 b

1this amendatory Act of the 97th General Assembly, the automatic
2annual increases payable under this Section shall be calculated
3as follows: (1) 3% of the first $50,000 of the annual total
4annuity payable at the time of the increase, and (2) if the
5annual total annuity payable at the time of the increase
6exceeds $50,000, a percentage of that excess equal to the
7lesser of 3% or one-half of the annual unadjusted percentage
8increase (but not less than zero) in the Consumer Price Index
9for All Urban Consumers (United States city average, all items,
101982-84 = 100) for the 12 months ending with the previous
11September, as determined by the Public Pension Division of the
12Department of Insurance.
13    (c) An annuitant who otherwise qualifies for annual
14increases under this Section must make a one-time payment of 1%
15of the monthly final average salary for each full year of the
16creditable service forming the basis of the retirement annuity
17or, if the retirement annuity was not computed using final
18average salary, 1% of the original monthly retirement annuity
19for each full year of service forming the basis of the
20retirement annuity.
21    (d) In addition to other increases which may be provided by
22this Section, regardless of creditable service, annuitants not
23meeting the service requirements of Section 16-133.1 and whose
24retirement annuity began on or before January 1, 1971 shall
25receive, on January 1, 1981, an increase in the retirement
26annuity then being paid of one dollar per month for each year

 

 

HB5377- 26 -LRB097 18801 EFG 64038 b

1of creditable service forming the basis of the retirement
2allowance. On January 1, 1982, annuitants whose retirement
3annuity began on or before January 1, 1977, shall receive an
4increase in the retirement annuity then being paid of one
5dollar per month for each year of creditable service.
6    On January 1, 1987, any annuitant whose retirement annuity
7began on or before January 1, 1977, shall receive an increase
8in the monthly retirement annuity equal to 8¢ per year of
9creditable service times the number of years that have elapsed
10since the annuity began.
11(Source: P.A. 86-273.)
 
12    (40 ILCS 5/18-125.1)  (from Ch. 108 1/2, par. 18-125.1)
13    Sec. 18-125.1. Automatic increase in retirement annuity.
14    (a) A participant who retires from service after June 30,
151969, shall, in January of the year next following the year in
16which the first anniversary of retirement occurs, and in
17January of each year thereafter, have the amount of his or her
18originally granted retirement annuity increased as follows:
19for each year up to and including 1971, 1 1/2%; for each year
20from 1972 through 1979 inclusive, 2%; and for 1980 and each
21year thereafter, 3%.
22    (b) Notwithstanding any other provision of this Article, a
23retirement annuity for a participant who first serves as a
24judge on or after January 1, 2011 (the effective date of Public
25Act 96-889) shall be increased in January of the year next

 

 

HB5377- 27 -LRB097 18801 EFG 64038 b

1following the year in which the first anniversary of retirement
2occurs, but in no event prior to age 67, and in January of each
3year thereafter, by an amount equal to 3% or the annual
4percentage increase in the consumer price index-u as determined
5by the Public Pension Division of the Department of Insurance
6under subsection (b-5) of Section 18-125, whichever is less, of
7the retirement annuity then being paid.
8    (c) Notwithstanding any other provision of this Article,
9for a person who first became a participant of this System
10before January 1, 2011 and who did not begin to receive a
11retirement annuity from the System before the effective date of
12this amendatory Act of the 97th General Assembly, the automatic
13annual increases payable under this Section shall be calculated
14as follows: (1) 3% of the first $50,000 of the annual total
15annuity payable at the time of the increase, and (2) if the
16annual total annuity payable at the time of the increase
17exceeds $50,000, a percentage of that excess equal to the
18lesser of 3% or one-half of the annual unadjusted percentage
19increase (but not less than zero) in the Consumer Price Index
20for All Urban Consumers (United States city average, all items,
211982-84 = 100) for the 12 months ending with the previous
22September, as determined by the Public Pension Division of the
23Department of Insurance.
24    (d) This Section is not applicable to a participant who
25retires before he or she has made contributions at the rate
26prescribed in Section 18-133 for automatic increases for not

 

 

HB5377- 28 -LRB097 18801 EFG 64038 b

1less than the equivalent of one full year, unless such a
2participant arranges to pay the system the amount required to
3bring the total contributions for the automatic increase to the
4equivalent of one year's contribution based upon his or her
5last year's salary.
6    This Section is applicable to all participants in service
7after June 30, 1969 unless a participant has elected, prior to
8September 1, 1969, in a written direction filed with the board
9not to be subject to the provisions of this Section. Any
10participant in service on or after July 1, 1992 shall have the
11option of electing prior to April 1, 1993, in a written
12direction filed with the board, to be covered by the provisions
13of the 1969 amendatory Act. Such participant shall be required
14to make the aforesaid additional contributions with compound
15interest at 4% per annum.
16    (e) Subject to the limitation in subsection (b) or (c), if
17applicable, a Any participant who has become eligible to
18receive the maximum rate of annuity and who resumes service as
19a judge after receiving a retirement annuity under this Article
20shall have the amount of his or her retirement annuity
21increased by 3% of the originally granted annuity amount for
22each year of such resumed service, beginning in January of the
23year next following the date of such resumed service, upon
24subsequent termination of such resumed service.
25    (f) Beginning January 1, 1990, and except as provided in
26subsection (b) or (c), all automatic annual increases payable

 

 

HB5377- 29 -LRB097 18801 EFG 64038 b

1under this Section shall be calculated as a percentage of the
2total annuity payable at the time of the increase, including
3previous increases granted under this Article.
4(Source: P.A. 96-889, eff. 1-1-11; 96-1490, eff. 1-1-11.)