97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
HB6210

 

Introduced , by Rep. Elaine Nekritz

 

SYNOPSIS AS INTRODUCED:
 
See Index

    Amends the General Provision, State Universities, and Downstate Teachers Articles of the Illinois Pension Code. Provides that Tier I employees and Tier I retirees must make an irrevocable election either: (1) to accept changes in eligibility for, and the amount of, automatic annual increases in retirement annuity or (2) to avoid those changes. Provides that a person who elects the first choice may have any future increases in income included as compensation and is entitled to certain healthcare benefits. Provides that a person who elects the second choice forgoes those benefits. Prohibits departments from offering to a person who elects the second choice any future increase in income in a form that would constitute compensation. Requires the System to provide information describing the consequences of making the election. Provides that, for an employee who first becomes a participant on or after the effective date of the amendatory Act, "compensation" does not include any payments for travel vouchers that are submitted late. Defines "future increase in income", "Tier I employee", and "Tier I retiree". Amends the State Finance Act. To the list of standardized items of appropriation, adds "State retirement contribution for annual normal cost" and "State retirement contribution for unfunded accrued liability". Defines those terms. Amends the Governor's Office of Management and Budget Act. Adds those terms to a list of classifications to be used in statements and estimates of expenditures submitted to the Office in connection with the preparation of a State budget. Amends the Illinois Public Labor Relations Act and other Acts to make related changes. Makes other changes. Effective immediately.


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FISCAL NOTE ACT MAY APPLY
PENSION IMPACT NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB6210LRB097 22285 JDS 71037 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 Public Labor Relations Act is
5amended by changing Sections 4 and 15 as follows:
 
6    (5 ILCS 315/4)  (from Ch. 48, par. 1604)
7    Sec. 4. Management Rights. Employers shall not be required
8to bargain over matters of inherent managerial policy, which
9shall include such areas of discretion or policy as the
10functions of the employer, standards of services, its overall
11budget, the organizational structure and selection of new
12employees, examination techniques and direction of employees.
13Employers, however, shall be required to bargain collectively
14with regard to policy matters directly affecting wages (but
15subject to any applicable restrictions in Section 15-134.6 or
1616-131.7 of the Illinois Pension Code), hours and terms and
17conditions of employment as well as the impact thereon upon
18request by employee representatives, but excluding the
19changes, the impact of changes, and the implementation of the
20changes set forth in this amendatory Act of the 97th General
21Assembly.
22    To preserve the rights of employers and exclusive
23representatives which have established collective bargaining

 

 

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1relationships or negotiated collective bargaining agreements
2prior to the effective date of this Act, employers shall be
3required to bargain collectively with regard to any matter
4concerning wages (but subject to any applicable restrictions in
5Section 15-134.6 or 16-131.7 of the Illinois Pension Code),
6hours or conditions of employment about which they have
7bargained for and agreed to in a collective bargaining
8agreement prior to the effective date of this Act, but
9excluding the changes, the impact of changes, and the
10implementation of the changes set forth in this amendatory Act
11of the 97th General Assembly.
12    The chief judge of the judicial circuit that employs a
13public employee who is a court reporter, as defined in the
14Court Reporters Act, has the authority to hire, appoint,
15promote, evaluate, discipline, and discharge court reporters
16within that judicial circuit.
17    Nothing in this amendatory Act of the 94th General Assembly
18shall be construed to intrude upon the judicial functions of
19any court. This amendatory Act of the 94th General Assembly
20applies only to nonjudicial administrative matters relating to
21the collective bargaining rights of court reporters.
22(Source: P.A. 94-98, eff. 7-1-05.)
 
23    (5 ILCS 315/15)  (from Ch. 48, par. 1615)
24    Sec. 15. Act Takes Precedence.
25    (a) In case of any conflict between the provisions of this

 

 

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1Act and any other law (other than Section 5 of the State
2Employees Group Insurance Act of 1971 and other than the
3changes made to the Illinois Pension Code by Public Act 96-889
4and the changes, impact of changes, and the implementation of
5the changes made to the Illinois Pension Code and the State
6Employees Group Insurance Act of 1971 by this amendatory Act of
7the 97th 96th General Assembly), executive order or
8administrative regulation relating to wages, hours and
9conditions of employment and employment relations, the
10provisions of this Act or any collective bargaining agreement
11negotiated thereunder shall prevail and control. Nothing in
12this Act shall be construed to replace or diminish the rights
13of employees established by Sections 28 and 28a of the
14Metropolitan Transit Authority Act, Sections 2.15 through 2.19
15of the Regional Transportation Authority Act. The provisions of
16this Act are subject to the changes made by this amendatory Act
17of the 97th General Assembly, including Sections 15-134.6 and
1816-131.7 of the Illinois Pension Code, and Section 5 of the
19State Employees Group Insurance Act of 1971. Nothing in this
20Act shall be construed to replace the necessity of complaints
21against a sworn peace officer, as defined in Section 2(a) of
22the Uniform Peace Officer Disciplinary Act, from having a
23complaint supported by a sworn affidavit.
24    (b) Except as provided in subsection (a) above, any
25collective bargaining contract between a public employer and a
26labor organization executed pursuant to this Act shall

 

 

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1supersede any contrary statutes, charters, ordinances, rules
2or regulations relating to wages, hours and conditions of
3employment and employment relations adopted by the public
4employer or its agents. Any collective bargaining agreement
5entered into prior to the effective date of this Act shall
6remain in full force during its duration.
7    (c) It is the public policy of this State, pursuant to
8paragraphs (h) and (i) of Section 6 of Article VII of the
9Illinois Constitution, that the provisions of this Act are the
10exclusive exercise by the State of powers and functions which
11might otherwise be exercised by home rule units. Such powers
12and functions may not be exercised concurrently, either
13directly or indirectly, by any unit of local government,
14including any home rule unit, except as otherwise authorized by
15this Act.
16(Source: P.A. 95-331, eff. 8-21-07; 96-889, eff. 1-1-11.)
 
17    Section 10. The State Employees Group Insurance Act of 1971
18is amended by changing Sections 6.9 and 6.10 and by adding
19Sections 6.10A and 6.16 as follows:
 
20    (5 ILCS 375/6.9)
21    Sec. 6.9. Health benefits for community college benefit
22recipients and community college dependent beneficiaries.
23    (a) Purpose. It is the purpose of this amendatory Act of
241997 to establish a uniform program of health benefits for

 

 

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1community college benefit recipients and their dependent
2beneficiaries under the administration of the Department of
3Central Management Services.
4    (b) Creation of program. Beginning July 1, 1999, the
5Department of Central Management Services shall be responsible
6for administering a program of health benefits for community
7college benefit recipients and community college dependent
8beneficiaries under this Section. The State Universities
9Retirement System and the boards of trustees of the various
10community college districts shall cooperate with the
11Department in this endeavor.
12    (c) Eligibility. All community college benefit recipients
13and community college dependent beneficiaries shall be
14eligible to participate in the program established under this
15Section, without any interruption or delay in coverage or
16limitation as to pre-existing medical conditions. Eligibility
17to participate shall be determined by the State Universities
18Retirement System. Eligibility information shall be
19communicated to the Department of Central Management Services
20in a format acceptable to the Department.
21    (d) Coverage. The health benefit coverage provided under
22this Section shall be a program of health, dental, and vision
23benefits.
24    The program of health benefits under this Section may
25include any or all of the benefit limitations, including but
26not limited to a reduction in benefits based on eligibility for

 

 

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1federal medicare benefits, that are provided under subsection
2(a) of Section 6 of this Act for other health benefit programs
3under this Act.
4    (e) Insurance rates and premiums. The Director shall
5determine the insurance rates and premiums for community
6college benefit recipients and community college dependent
7beneficiaries. Rates and premiums may be based in part on age
8and eligibility for federal Medicare coverage. The Director
9shall also determine premiums that will allow for the
10establishment of an actuarially sound reserve for this program.
11    The cost of health benefits under the program shall be paid
12as follows:
13        (1) For a community college benefit recipient, costs
14    shall be an amount equal to the difference between the
15    projected costs of health benefits under the program and
16    projected contributions from community college districts,
17    active contributors, and other income of the program. Other
18    income of the program shall exclude contributions made by
19    the State to retire unpaid claims of the program up to 75%
20    of the total insurance rate shall be paid from the
21    Community College Health Insurance Security Fund.
22        (2) The balance of the rate of insurance, including the
23    entire premium for any coverage for community college
24    dependent beneficiaries that has been elected, shall be
25    paid by deductions authorized by the community college
26    benefit recipient to be withheld from his or her monthly

 

 

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1    annuity or benefit payment from the State Universities
2    Retirement System; except that (i) if the balance of the
3    cost of coverage exceeds the amount of the monthly annuity
4    or benefit payment, the difference shall be paid directly
5    to the State Universities Retirement System by the
6    community college benefit recipient, and (ii) all or part
7    of the balance of the cost of coverage may, at the option
8    of the board of trustees of the community college district,
9    be paid to the State Universities Retirement System by the
10    board of the community college district from which the
11    community college benefit recipient retired. The State
12    Universities Retirement System shall promptly deposit all
13    moneys withheld by or paid to it under this subdivision
14    (e)(2) into the Community College Health Insurance
15    Security Fund. These moneys shall not be considered assets
16    of the State Universities Retirement System.
17    (f) Financing. All revenues arising from the
18administration of the health benefit program established under
19this Section shall be deposited into the Community College
20Health Insurance Security Fund, which is hereby created as a
21nonappropriated trust fund to be held outside the State
22Treasury, with the State Treasurer as custodian. Any interest
23earned on moneys in the Community College Health Insurance
24Security Fund shall be deposited into the Fund.
25    Moneys in the Community College Health Insurance Security
26Fund shall be used only to pay the costs of the health benefit

 

 

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1program established under this Section, including associated
2administrative costs and the establishment of a program
3reserve. Beginning January 1, 1999, the Department of Central
4Management Services may make expenditures from the Community
5College Health Insurance Security Fund for those costs.
6    (g) Contract for benefits. The Director shall by contract,
7self-insurance, or otherwise make available the program of
8health benefits for community college benefit recipients and
9their community college dependent beneficiaries that is
10provided for in this Section. The contract or other arrangement
11for the provision of these health benefits shall be on terms
12deemed by the Director to be in the best interest of the State
13of Illinois and the community college benefit recipients based
14on, but not limited to, such criteria as administrative cost,
15service capabilities of the carrier or other contractor, and
16the costs of the benefits.
17    (h) Continuation of program. It is the intention of the
18General Assembly that the program of health benefits provided
19under this Section be maintained on an ongoing, affordable
20basis. The program of health benefits provided under this
21Section may be amended by the State and is not intended to be a
22pension or retirement benefit subject to protection under
23Article XIII, Section 5 of the Illinois Constitution.
24    (i) Other health benefit plans. A health benefit plan
25provided by a community college district (other than a
26community college district subject to Article VII of the Public

 

 

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

 

 

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1this Act shall make contributions toward the cost of community
2college annuitant and survivor health benefits at the rate of
30.50% of salary. Beginning August 17, 2012 and until July 1,
42013, the contribution rate under this subsection (a) shall be
51.25% of salary. Beginning July 1, 2013, the contribution rate
6under this subsection (a) shall be a percentage of salary
7determined by the Department of Central Management Services, or
8its successor, by rule, which in each fiscal year shall not
9exceed 108% of the percentage of salary actually required to be
10contributed in the previous fiscal year. However, the required
11contribution rate determined by the Department or its successor
12under this subsection (a) shall equal the required contribution
13rate determined by the Department or its successor under
14subsection (b) of this Section.
15    These contributions shall be deducted by the employer and
16paid to the State Universities Retirement System as service
17agent for the Department of Central Management Services. The
18System may use the same processes for collecting the
19contributions required by this subsection that it uses to
20collect the contributions received from those employees under
21Section 15-157 of the Illinois Pension Code. An employer may
22agree to pick up or pay the contributions required under this
23subsection on behalf of the employee; such contributions shall
24be deemed to have been paid by the employee.
25    The State Universities Retirement System shall promptly
26deposit all moneys collected under this subsection (a) into the

 

 

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1Community College Health Insurance Security Fund created in
2Section 6.9 of this Act. The moneys collected under this
3Section shall be used only for the purposes authorized in
4Section 6.9 of this Act and shall not be considered to be
5assets of the State Universities Retirement System.
6Contributions made under this Section are not transferable to
7other pension funds or retirement systems and are not
8refundable upon termination of service.
9    (b) Beginning January 1, 1999, every community college
10district (other than a community college district subject to
11Article VII of the Public Community College Act) or association
12of community college boards that is an employer under the State
13Universities Retirement System shall contribute toward the
14cost of the community college health benefits provided under
15Section 6.9 of this Act an amount equal to 0.50% of the salary
16paid to its full-time employees who participate in the State
17Universities Retirement System and are not members as defined
18in Section 3 of this Act. Beginning August 17, 2012 and until
19July 1, 2013, the contribution rate under this subsection (b)
20shall be 1.25% of salary. Beginning July 1, 2013, the
21contribution rate under this subsection (b) shall be a
22percentage of salary determined by the Department of Central
23Management Services, or its successor, by rule, which in each
24fiscal year shall not exceed 108% of the percentage of salary
25actually required to be contributed in the previous fiscal
26year. However, the required contribution rate determined by the

 

 

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1Department or its successor under this subsection (b) shall
2equal the required contribution rate determined by the
3Department or its successor under subsection (a) of this
4Section.
5    These contributions shall be paid by the employer to the
6State Universities Retirement System as service agent for the
7Department of Central Management Services. The System may use
8the same processes for collecting the contributions required by
9this subsection that it uses to collect the contributions
10received from those employers under Section 15-155 of the
11Illinois Pension Code.
12    The State Universities Retirement System shall promptly
13deposit all moneys collected under this subsection (b) into the
14Community College Health Insurance Security Fund created in
15Section 6.9 of this Act. The moneys collected under this
16Section shall be used only for the purposes authorized in
17Section 6.9 of this Act and shall not be considered to be
18assets of the State Universities Retirement System.
19Contributions made under this Section are not transferable to
20other pension funds or retirement systems and are not
21refundable upon termination of service.
22    The Department of Healthcare and Family Services, or any
23successor agency designated to procure healthcare contracts
24pursuant to this Act, is authorized to establish funds,
25separate accounts provided by any bank or banks as defined by
26the Illinois Banking Act, or separate accounts provided by any

 

 

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1savings and loan association or associations as defined by the
2Illinois Savings and Loan Act of 1985 to be held by the
3Director, outside the State treasury, for the purpose of
4receiving the transfer of moneys from the Community College
5Health Insurance Security Fund. The Department may promulgate
6rules further defining the methodology for the transfers. Any
7interest earned by moneys in the funds or accounts shall inure
8to the Community College Health Insurance Security Fund. The
9transferred moneys, and interest accrued thereon, shall be used
10exclusively for transfers to administrative service
11organizations or their financial institutions for payments of
12claims to claimants and providers under the self-insurance
13health plan. The transferred moneys, and interest accrued
14thereon, shall not be used for any other purpose including, but
15not limited to, reimbursement of administration fees due the
16administrative service organization pursuant to its contract
17or contracts with the Department.
18    (c) On or before November 15 of each year but not after
19November 15, 2011, the Board of Trustees of the State
20Universities Retirement System shall certify to the Governor,
21the Director of Central Management Services, and the State
22Comptroller its estimate of the total amount of contributions
23to be paid under subsection (a) of this Section for the next
24fiscal year. Beginning in fiscal year 2008, the amount
25certified shall be decreased or increased each year by the
26amount that the actual active employee contributions either

 

 

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1fell short of or exceeded the estimate used by the Board in
2making the certification for the previous fiscal year. The
3State Universities Retirement System shall calculate the
4amount of actual active employee contributions in fiscal years
51999 through 2005. Based upon this calculation, the fiscal year
62008 certification shall include an amount equal to the
7cumulative amount that the actual active employee
8contributions either fell short of or exceeded the estimate
9used by the Board in making the certification for those fiscal
10years. The certification shall include a detailed explanation
11of the methods and information that the Board relied upon in
12preparing its estimate. As soon as possible after the effective
13date of this Section, the Board shall submit its estimate for
14fiscal year 1999.
15    (d) Beginning in fiscal year 1999, on the first day of each
16month, or as soon thereafter as may be practical, the State
17Treasurer and the State Comptroller shall transfer from the
18General Revenue Fund to the Community College Health Insurance
19Security Fund 1/12 of the annual amount appropriated for that
20fiscal year to the State Comptroller for deposit into the
21Community College Health Insurance Security Fund under Section
221.4 of the State Pension Funds Continuing Appropriation Act.
23    (e) Except where otherwise specified in this Section, the
24definitions that apply to Article 15 of the Illinois Pension
25Code apply to this Section.
26(Source: P.A. 94-839, eff. 6-6-06; 95-632, eff. 9-25-07.)
 

 

 

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1    (5 ILCS 375/6.10A new)
2    Sec. 6.10A. City colleges; optional participation in
3program of health benefits. Notwithstanding any other
4provision of this Act, the Department of Central Management
5Services shall adopt rules authorizing optional participation
6in the program of health benefits for community college benefit
7recipients and community college dependent beneficiaries by
8any person who is otherwise ineligible to participate in that
9program solely as a result of that or another person's
10employment with a community college district subject to Article
11VII of the Public Community College Act.
 
12    (5 ILCS 375/6.16 new)
13    Sec. 6.16. Health benefit election for Tier I employees and
14Tier I retirees.
15    (a) For purposes of this Section:
16    "Eligible Tier I employee" means an individual who makes or
17is deemed to have made an election under paragraph (1) of
18subsection (a) of Section 15-134.6 or 16-131.7 of the Illinois
19Pension Code.
20    "Eligible Tier I retiree" means an individual who makes or
21is deemed to have made an election under paragraph (1) of
22subsection (a-5) of Section 15-134.6 or 16-131.7 of the
23Illinois Pension Code.
24    "Program of health benefits" means (i) a health plan, as

 

 

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

 

 

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1benefits pursuant to item (i) or (ii), then "program of health
2benefits" does not include the health plan made available to
3such persons by the community college district.
4    (b) As adequate and legal consideration for making the
5election under paragraph (1) of subsection (a) or (a-5) of
6Section 15-134.6 or 16-131.7 of the Illinois Pension Code, each
7eligible Tier I employee and each eligible Tier I retiree shall
8receive a vested and enforceable contractual right to
9participate in a program of health benefits while he or she
10qualifies as an annuitant or retired employee, or as a TRS
11benefit recipient or community college benefit recipient
12receiving a retirement annuity. That right also extends to such
13a person's dependents, survivors, TRS dependent beneficiaries,
14and community college dependent beneficiaries who are eligible
15under the applicable program of health benefits, except as
16qualified under subsection (e).
17    (c) Notwithstanding subsection (b), eligible Tier I
18employees and eligible Tier I retirees may be required to make
19contributions toward the cost of coverage under a program of
20health benefits.
21    (d) The vested and enforceable contractual right to a
22program of health benefits is not offered as, and shall not be
23considered, a pension benefit under Article XIII, Section 5 of
24the Illinois Constitution, the Illinois Pension Code, or any
25subsequent or successor enactment providing pension benefits.
26    (e) Notwithstanding any other provision of this Act, a Tier

 

 

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1I employee or Tier I retiree who has made an election under
2paragraph (2) of subsection (a) or (a-5) of Section 15-134.6 or
316-131.7 of the Illinois Pension Code shall not be entitled to
4participate in the program of health benefits as an annuitant,
5dependent, survivor, or retired employee, or as a TRS benefit
6recipient or community college benefit recipient receiving a
7retirement annuity, regardless of any contrary election
8pursuant to any of those Sections under any other retirement
9system.
10    Notwithstanding any other provision of this Act, a Tier I
11employee who is not entitled to participate in the program of
12health benefits as an annuitant, dependent, survivor, or
13retired employee, or as a TRS benefit recipient or community
14college benefit recipient receiving a retirement annuity, due
15to an election under paragraph (2) of subsection (a) or (a-5)
16of Section 15-134.6 or 16-131.7 of the Illinois Pension Code
17shall not be required to make contributions toward the program
18of health benefits while he or she is an employee or active
19contributor. However, an active employee may be required to
20make contributions toward the health benefits he or she
21receives during active employment.
22    (f) The Department shall coordinate with each retirement
23system administering an election in accordance with this
24amendatory Act of the 97th General Assembly to provide
25information concerning the impact of the election of health
26benefits. Each System shall include information prepared by the

 

 

HB6210- 19 -LRB097 22285 JDS 71037 b

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

 

 

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

 

 

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1or estimate, items (18) and (19) in the classification of
2objects stated in Section 7 shall have the meanings ascribed to
3those items in Sections 24.12 and 24.13, respectively, of the
4State Finance Act.
5(Source: P.A. 82-325.)
 
6    Section 20. The Pension Impact Note Act is amended by
7changing Section 2 as follows:
 
8    (25 ILCS 55/2)  (from Ch. 63, par. 42.42)
9    Sec. 2. Pension impact notes.
10    (a) The Commission on Government Forecasting and
11Accountability, hereafter in this Act referred to as the
12"Commission", shall prepare a written pension system impact
13note in relation to any bill introduced in either house of the
14General Assembly which proposes to amend, revise, or add to any
15provision of the Illinois Pension Code or the State Pension
16Funds Continuing Appropriation Act. Upon the introduction of
17any such bill, the Clerk of the House or the Secretary of the
18Senate shall forward the bill to the Commission, which shall
19prepare such a note within 7 calendar days after receiving the
20request. The bill shall be held on second reading until the
21note has been received.
22    (b) Beginning on the effective date of this amendatory Act
23of the 97th General Assembly, if any bill is introduced in
24either house of the General Assembly that amends, revises, or

 

 

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1adds any provision to Article 2, 14, 15, 16, or 18 of the
2Illinois Pension Code or that amends, revises, or adds any
3other provision of that Code that affects a retirement system
4created under Article 2, 14, 15, 16, or 18 of the Illinois
5Pension Code, then the retirement system established under the
6applicable Article shall also prepare a written pension impact
7note for that bill. Upon the introduction of any such bill, the
8Clerk of the House or the Secretary of the Senate shall forward
9the bill to the applicable retirement system, which shall
10prepare such a note within 7 calendar days after receiving the
11request. The bill shall be held on second reading until the
12note has been received.
13    (c) Copies of each pension impact note shall be furnished
14by the Commission to the presiding officer of each house, the
15minority leader of each house, the Clerk of the House of
16Representatives, the Secretary of the Senate, the sponsor of
17the bill which is the subject of the note, the member, if any,
18who initiated the request for the note, the Chairman of the
19House Committee on Personnel and Pensions, and the Chairman of
20the Senate Committee on Insurance, Pensions and Licensed
21Activities.
22(Source: P.A. 93-632, eff. 2-1-04; 93-1067, eff. 1-15-05.)
 
23    Section 25. The State Finance Act is amended by changing
24Section 13 and by adding Sections 24.12 and 24.13 as follows:
 

 

 

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1    (30 ILCS 105/13)  (from Ch. 127, par. 149)
2    Sec. 13. The objects and purposes for which appropriations
3are made are classified and standardized by items as follows:
4    (1) Personal services;
5    (2) State contribution for employee group insurance;
6    (3) Contractual services;
7    (4) Travel;
8    (5) Commodities;
9    (6) Equipment;
10    (7) Permanent improvements;
11    (8) Land;
12    (9) Electronic Data Processing;
13    (10) Operation of automotive equipment;
14    (11) Telecommunications services;
15    (12) Contingencies;
16    (13) Reserve;
17    (14) Interest;
18    (15) Awards and Grants;
19    (16) Debt Retirement;
20    (17) Non-Cost Charges;
21    (18) State retirement contribution for annual normal cost;
22    (19) State retirement contribution for unfunded accrued
23liability;
24    (20) (18) Purchase Contract for Real Estate.
25    When an appropriation is made to an officer, department,
26institution, board, commission or other agency, or to a private

 

 

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

 

 

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1for a fiscal year that is not included in the State retirement
2contribution for annual normal cost.
 
3    Section 30. The Illinois Pension Code is amended by
4changing Sections 1-103.3, 1-160, 7-109, 15-106, 15-107,
515-111, 15-113.2, 15-134.5, 15-136, 15-155, 15-157, 15-158.2,
615-159, 15-163, 15-165, 15-198, 16-106, 16-121, 16-127,
716-133.1, 16-136.1, 16-152, 16-158, 16-163, 16-165, 16-203,
818-140, 20-121, 20-123, 20-124, and 20-125 and by adding
9Sections 1-161, 1-162, 15-107.1, 15-107.2, 15-111.1, 15-134.6,
1015-155.1, 15-155.2, 16-106.4, 16-106.5, 16-106.6, 16-121.1,
1116-131.7, 16-133.6, and 16-158.2 as follows:
 
12    (40 ILCS 5/1-103.3)
13    Sec. 1-103.3. Application of 1994 amendment; funding
14standard.
15    (a) The provisions of Public Act 88-593 this amendatory Act
16of 1994 that change the method of calculating, certifying, and
17paying the required State contributions to the retirement
18systems established under Articles 2, 14, 15, 16, and 18 shall
19first apply to the State contributions required for State
20fiscal year 1996.
21    (b) (Blank). The General Assembly declares that a funding
22ratio (the ratio of a retirement system's total assets to its
23total actuarial liabilities) of 90% is an appropriate goal for
24State-funded retirement systems in Illinois, and it finds that

 

 

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1a funding ratio of 90% is now the generally-recognized norm
2throughout the nation for public employee retirement systems
3that are considered to be financially secure and funded in an
4appropriate and responsible manner.
5    (c) Every 5 years, beginning in 1999, the Commission on
6Government Forecasting and Accountability, in consultation
7with the affected retirement systems and the Governor's Office
8of Management and Budget (formerly Bureau of the Budget), shall
9consider and determine whether the funding goals 90% funding
10ratio adopted in Articles 2, 14, 15, 16, and 18 of this Code
11continue subsection (b) continues to represent an appropriate
12funding goals goal for State-funded retirement systems in
13Illinois, and it shall report its findings and recommendations
14on this subject to the Governor and the General Assembly.
15(Source: P.A. 93-1067, eff. 1-15-05.)
 
16    (40 ILCS 5/1-160)
17    Sec. 1-160. Provisions applicable to new hires.
18    (a) The provisions of this Section apply to a person who,
19on or after January 1, 2011, first becomes a member or a
20participant under any reciprocal retirement system or pension
21fund established under this Code, other than a retirement
22system or pension fund established under Article 2, 3, 4, 5, 6,
23or 18 of this Code, notwithstanding any other provision of this
24Code to the contrary, but do not apply (i) to any self-managed
25plan established under this Code, (ii) to any person with

 

 

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1respect to service as a sheriff's law enforcement employee
2under Article 7, (iii) to any person with respect to service
3for which the person participates in the cash balance plan
4established under Section 1-161, or (iv) to any participant of
5the retirement plan established under Section 22-101.
6    A person subject to this Section with respect to service
7under the State Universities Retirement System may irrevocably
8elect to transfer to the cash balance plan under Section 1-161
9with respect to service under the State Universities Retirement
10System by filing with the State Universities Retirement System
11in the manner required by that System, his or her irrevocable
12written election to transfer to the cash balance plan.
13Participation in the cash balance plan shall begin no earlier
14than July 1, 2013.
15    A person subject to this Section with respect to service
16under the Teachers' Retirement System of the State of Illinois
17may irrevocably elect to transfer to the cash balance plan
18under Section 1-161 with respect to service under the Teachers'
19Retirement System of the State of Illinois by filing with the
20Teachers' Retirement System of the State of Illinois in the
21manner required by that System, his or her irrevocable written
22election to transfer to the cash balance plan. Participation in
23the cash balance plan shall begin no earlier than July 1, 2013.
24    (b) "Final average salary" means the average monthly (or
25annual) salary obtained by dividing the total salary or
26earnings calculated under the Article applicable to the member

 

 

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1or participant during the 96 consecutive months (or 8
2consecutive years) of service within the last 120 months (or 10
3years) of service in which the total salary or earnings
4calculated under the applicable Article was the highest by the
5number of months (or years) of service in that period. For the
6purposes of a person who first becomes a member or participant
7of any retirement system or pension fund to which this Section
8applies on or after January 1, 2011, in this Code, "final
9average salary" shall be substituted for the following:
10        (1) In Articles 7 (except for service as sheriff's law
11    enforcement employees) and 15, "final rate of earnings".
12        (2) In Articles 8, 9, 10, 11, and 12, "highest average
13    annual salary for any 4 consecutive years within the last
14    10 years of service immediately preceding the date of
15    withdrawal".
16        (3) In Article 13, "average final salary".
17        (4) In Article 14, "final average compensation".
18        (5) In Article 17, "average salary".
19        (6) In Section 22-207, "wages or salary received by him
20    at the date of retirement or discharge".
21    (b-5) Beginning on January 1, 2011, for all purposes under
22this Code (including without limitation the calculation of
23benefits and employee contributions), the annual earnings,
24salary, or wages (based on the plan year) of a member or
25participant to whom this Section applies shall not exceed
26$106,800; however, that amount shall annually thereafter be

 

 

HB6210- 29 -LRB097 22285 JDS 71037 b

1increased by the lesser of (i) 3% of that amount, including all
2previous adjustments, or (ii) one-half the annual unadjusted
3percentage increase (but not less than zero) in the consumer
4price index-u for the 12 months ending with the September
5preceding each November 1, including all previous adjustments.
6    For the purposes of this Section, "consumer price index-u"
7means the index published by the Bureau of Labor Statistics of
8the United States Department of Labor that measures the average
9change in prices of goods and services purchased by all urban
10consumers, United States city average, all items, 1982-84 =
11100. The new amount resulting from each annual adjustment shall
12be determined by the Public Pension Division of the Department
13of Insurance and made available to the boards of the retirement
14systems and pension funds by November 1 of each year.
15    (c) A member or participant is entitled to a retirement
16annuity upon written application if he or she has attained age
1767 and has at least 10 years of service credit and is otherwise
18eligible under the requirements of the applicable Article.
19    A member or participant who has attained age 62 and has at
20least 10 years of service credit and is otherwise eligible
21under the requirements of the applicable Article may elect to
22receive the lower retirement annuity provided in subsection (d)
23of this Section.
24    (d) The retirement annuity of a member or participant who
25is retiring after attaining age 62 with at least 10 years of
26service credit shall be reduced by one-half of 1% for each full

 

 

HB6210- 30 -LRB097 22285 JDS 71037 b

1month that the member's age is under age 67.
2    (e) Any retirement annuity or supplemental annuity shall be
3subject to annual increases on the January 1 occurring either
4on or after the attainment of age 67 or the first anniversary
5of the annuity start date, whichever is later. Each annual
6increase shall be calculated at 3% or one-half the annual
7unadjusted percentage increase (but not less than zero) in the
8consumer price index-u for the 12 months ending with the
9September preceding each November 1, whichever is less, of the
10originally granted retirement annuity. If the annual
11unadjusted percentage change in the consumer price index-u for
12the 12 months ending with the September preceding each November
131 is zero or there is a decrease, then the annuity shall not be
14increased.
15    (f) The initial survivor's or widow's annuity of an
16otherwise eligible survivor or widow of a retired member or
17participant who first became a member or participant on or
18after January 1, 2011 shall be in the amount of 66 2/3% of the
19retired member's or participant's retirement annuity at the
20date of death. In the case of the death of a member or
21participant who has not retired and who first became a member
22or participant on or after January 1, 2011, eligibility for a
23survivor's or widow's annuity shall be determined by the
24applicable Article of this Code. The initial benefit shall be
2566 2/3% of the earned annuity without a reduction due to age. A
26child's annuity of an otherwise eligible child shall be in the

 

 

HB6210- 31 -LRB097 22285 JDS 71037 b

1amount prescribed under each Article if applicable. Any
2survivor's or widow's annuity shall be increased (1) on each
3January 1 occurring on or after the commencement of the annuity
4if the deceased member died while receiving a retirement
5annuity or (2) in other cases, on each January 1 occurring
6after the first anniversary of the commencement of the annuity.
7Each annual increase shall be calculated at 3% or one-half the
8annual unadjusted percentage increase (but not less than zero)
9in the consumer price index-u for the 12 months ending with the
10September preceding each November 1, whichever is less, of the
11originally granted survivor's annuity. If the annual
12unadjusted percentage change in the consumer price index-u for
13the 12 months ending with the September preceding each November
141 is zero or there is a decrease, then the annuity shall not be
15increased.
16    (g) The benefits in Section 14-110 apply only if the person
17is a State policeman, a fire fighter in the fire protection
18service of a department, or a security employee of the
19Department of Corrections or the Department of Juvenile
20Justice, as those terms are defined in subsection (c) (b) of
21Section 14-110. A person who meets the requirements of this
22Section is entitled to an annuity calculated under the
23provisions of Section 14-110, in lieu of the regular or minimum
24retirement annuity, only if the person has withdrawn from
25service with not less than 20 years of eligible creditable
26service and has attained age 60, regardless of whether the

 

 

HB6210- 32 -LRB097 22285 JDS 71037 b

1attainment of age 60 occurs while the person is still in
2service.
3    (h) If a person who first becomes a member or a participant
4of a retirement system or pension fund subject to this Section
5on or after January 1, 2011 is receiving a retirement annuity
6or retirement pension under that system or fund and becomes a
7member or participant under any other system or fund created by
8this Code and is employed on a full-time basis, except for
9those members or participants exempted from the provisions of
10this Section under subsection (a) of this Section, then the
11person's retirement annuity or retirement pension under that
12system or fund shall be suspended during that employment. Upon
13termination of that employment, the person's retirement
14annuity or retirement pension payments shall resume and be
15recalculated if recalculation is provided for under the
16applicable Article of this Code.
17    If a person who first becomes a member of a retirement
18system or pension fund subject to this Section on or after
19January 1, 2012 and is receiving a retirement annuity or
20retirement pension under that system or fund and accepts on a
21contractual basis a position to provide services to a
22governmental entity from which he or she has retired, then that
23person's annuity or retirement pension earned as an active
24employee of the employer shall be suspended during that
25contractual service. A person receiving an annuity or
26retirement pension under this Code shall notify the pension

 

 

HB6210- 33 -LRB097 22285 JDS 71037 b

1fund or retirement system from which he or she is receiving an
2annuity or retirement pension, as well as his or her
3contractual employer, of his or her retirement status before
4accepting contractual employment. A person who fails to submit
5such notification shall be guilty of a Class A misdemeanor and
6required to pay a fine of $1,000. Upon termination of that
7contractual employment, the person's retirement annuity or
8retirement pension payments shall resume and, if appropriate,
9be recalculated under the applicable provisions of this Code.
10    (i) Notwithstanding any other provision of this Section, a
11person who first becomes a participant of the retirement system
12established under Article 15 on or after January 1, 2011 shall
13have the option to enroll in the self-managed plan created
14under Section 15-158.2 of this Code.
15    (j) In the case of a conflict between the provisions of
16this Section and any other provision of this Code, the
17provisions of this Section shall control.
18(Source: P.A. 96-889, eff. 1-1-11; 96-1490, eff. 1-1-11;
1997-609, eff. 1-1-12.)
 
20    (40 ILCS 5/1-161 new)
21    Sec. 1-161. Cash Balance Plan.
22    (a) Participation and Applicability. This Section applies
23to all new cash balance plan participants and all legacy Tier
24II participants.
25    This Section does not, however, apply to any person with

 

 

HB6210- 34 -LRB097 22285 JDS 71037 b

1respect to service for which the person participates in the
2self-managed plan established under Section 15-158.2 in lieu of
3the retirement benefits otherwise provided by the State
4Universities Retirement System.
5    (b) Title. The package of benefits provided under this
6Section may be referred to as the "cash balance plan". Persons
7subject to the provisions of this Section may be referred to as
8"participants in the cash balance plan".
9    (b-5) Definitions. As used in this Section:
10    "Account" means the notional cash balance account
11established under this Section for a participant in the cash
12balance plan.
13    "Consumer Price Index-U" means the Consumer Price Index
14published by the Bureau of Labor Statistics of the United
15States Department of Labor that measures the average change in
16prices of goods and services purchased by all urban consumers,
17United States city average, all items, 1982-84 = 100.
18    "Salary" means "earnings" as defined in Article 15 or
19"salary" as defined in Article 16, whichever is applicable,
20without regard to the limitation in subsection (b-5) of Section
211-160.
22    "Legacy Tier II participant" means a person who was subject
23to Section 1-160 with respect to service under Article 15 or 16
24of this Code and who irrevocably elects to participate in the
25cash balance plan created under this Section. That election
26must be made in writing, in the manner provided by the

 

 

HB6210- 35 -LRB097 22285 JDS 71037 b

1applicable retirement system.
2    "New cash balance plan participant" means a person who, on
3or after July 1, 2013, first begins to participate in the
4retirement system established under Article 15 or 16 of this
5Code.
6    (c) Cash Balance Account. A notional cash balance account
7shall be established by the applicable retirement system for
8each participant in the cash balance plan. The account is
9notional and does not contain any actual money segregated from
10the commingled assets of the retirement system. The cash
11balance in the account is to be used in calculating benefits as
12provided in this Section, but is not to be used in the
13calculation of any refund, transfer, or other benefit under the
14applicable Article of this Code.
15    The amounts to be credited to the cash balance account
16shall consist of (i) amounts contributed by or on behalf of the
17participant as employee contributions, (ii) notional employer
18contributions, and (iii) interest credit that is attributable
19to the account, all as provided in this Section.
20    Whenever necessary for the prompt calculation or
21administration, or when the System lacks information necessary
22to the calculation or administration otherwise required of or
23for a benefit under this Section, the applicable retirement
24system may estimate an amount to be credited to or debited from
25a participant's cash balance account and then adjust the amount
26so credited or debited when more accurate information becomes

 

 

HB6210- 36 -LRB097 22285 JDS 71037 b

1available.
2    The applicable retirement system shall give to each
3participant in the cash balance plan who has not yet retired
4annual notice of (1) the balance in the participant's cash
5balance account and (2) an estimate of the retirement annuity
6that will be payable to the participant if he or she retires at
7age 59 1/2.
8    (c-5) Initial Account Balance for Legacy Tier II
9Participants. The applicable retirement system shall establish
10an initial account balance for each legacy Tier II participant
11when he or she begins participation in the cash balance plan.
12The initial account balance shall be an amount equal to the
13employee contribution refund that the participant would be
14eligible to receive under the applicable Article of this Code
15if the participant terminated employment on that date and
16elected a refund of contributions, as prescribed by the board
17of the applicable retirement system.
18    (d) Employee Contributions. New cash balance plan
19participants and legacy Tier II participants shall make
20employee contributions to the applicable retirement system at
21the rates required under the applicable Article of this Code.
22The amount of each contribution shall be credited to the
23participant's cash balance account upon receipt and after the
24retirement system's reconciliation of the contribution.
25    (e) Notional Employer Contributions. Upon receipt of each
26employee contribution under subsection (d), an amount

 

 

HB6210- 37 -LRB097 22285 JDS 71037 b

1representing the employer contribution shall be credited to the
2participant's cash balance account. For a participant in the
3cash balance plan under Article 15, the notional employer
4contribution shall be 4.4% of salary. For a participant in the
5cash balance plan under Article 16, the notional employer
6contribution shall be 3.4% of salary.
7    The notional employer contribution to be credited to the
8participant's account is not the same as the actual employer
9contributions required under subsection (p) and the provisions
10of the applicable Article of this Code.
11    (e-1) Optional Employer Contributions. Employers may make
12optional additional contributions to the applicable retirement
13system on behalf of their employees who are participants in the
14cash balance plan in accordance with procedures prescribed by
15the retirement system, to the extent permitted by federal law
16and the rules prescribed by the retirement system. The optional
17additional contributions under this subsection are actual
18monetary contributions to the retirement system, and the amount
19of each optional additional contribution shall be credited to
20the participant's cash balance account upon receipt and after
21the retirement system's reconciliation of the contribution.
22    (f) Interest Credit. An amount representing earnings on
23investments shall be determined by the retirement system in
24accordance with this Section and credited to the participant's
25cash balance account for each fiscal year in which there is a
26positive balance in that account; except that no additional

 

 

HB6210- 38 -LRB097 22285 JDS 71037 b

1interest credit shall be credited while an annuity based on the
2account is being paid. The interest credit amount shall be a
3percentage of the average quarterly balance in the cash balance
4account during that fiscal year, and shall be calculated on
5June 30.
6    The percentage shall be the assumed treasury rate for the
7previous fiscal year, unless neither the retirement system's
8actual rate of investment earnings for the previous fiscal year
9nor the retirement system's actual rate of investment earnings
10for the five-year period ending at the end of the previous
11fiscal year is less than the assumed treasury rate.
12    If both the retirement system's actual rate of investment
13earnings for the previous fiscal year and the actual rate of
14investment earnings for the five-year period ending at the end
15of the previous fiscal year are at least the assumed treasury
16rate, then the percentage shall be:
17        (i) the assumed treasury rate, plus
18        (ii) two-thirds of the amount of the actual rate of
19    investment earnings for the previous fiscal year that
20    exceeds the assumed treasury rate.
21However, in no event shall the percentage applied under this
22subsection exceed 10%.
23    For the purposes of this subsection only, "previous fiscal
24year" means fiscal year ending one year before the interest
25rate is calculated.
26    For the purposes of this subsection only, "assumed treasury

 

 

HB6210- 39 -LRB097 22285 JDS 71037 b

1rate" means the average annual yield of the 30-year U.S.
2Treasury Bond over the previous fiscal year, but not less than
34%.
4    When a person applies for a benefit under this Section, the
5retirement system shall apply an interest credit based on a
6proration of an estimate of what the interest credit will be
7for the relevant year. When the retirement system certifies the
8credit on June 30, it shall adjust the benefit accordingly.
9    (f-10) Distribution upon Termination of Employment. Upon
10termination of active employment with at least 5 years of
11service credit under the applicable retirement system and prior
12to making application for an annuity under this Section, a
13participant in the cash balance plan may make an irrevocable
14election to distribute an amount not to exceed 40% of the
15balance in the participant's account in the form of a direct
16rollover to another qualified plan, to the extent allowed by
17federal law. If the participant makes such an election, then
18the amount distributed shall be debited from the participant's
19cash balance account. A participant in the cash balance plan
20shall be allowed only one distribution under this subsection.
21The remaining balance in the participant's account shall be
22used for the determination of other benefits provided under
23this Section.
24    (f-15) Refund. In lieu of receiving a distribution under
25subsection (f-10), at any time after terminating active
26employment under the applicable retirement system, but before

 

 

HB6210- 40 -LRB097 22285 JDS 71037 b

1receiving a retirement annuity under this Section, a
2participant in the cash balance plan may elect to receive a
3refund under this subsection. The refund shall consist of an
4amount equal to the amount of all employee contributions
5credited to the participant's account, but shall not include
6any interest credit or employer contributions. If the
7participant so requests, the refund may be paid in the form of
8a direct rollover to another qualified plan, to the extent
9allowed by federal law and in accordance with the rules of the
10applicable retirement system. Upon payment of the refund, the
11participant's notional cash balance account shall be closed.
12    The participant's credits in the applicable retirement
13system shall be terminated upon payment of a refund under this
14subsection.
15    (g) Retirement Annuity. A participant in the cash balance
16plan may begin collecting a retirement annuity at age 59 1/2,
17but no earlier than the date of termination of active
18employment under the applicable retirement system.
19    The amount of the retirement annuity shall be calculated by
20the retirement system, based on the balance in the cash balance
21account, the assumption of future investment returns as
22specified in this subsection, the participant's election to
23have a lifetime survivor's annuity as specified in this
24subsection, the annual increase in retirement annuity as
25specified in subsection (h), the annual increase in survivor's
26annuity as specified in subsection (l), and any actuarial

 

 

HB6210- 41 -LRB097 22285 JDS 71037 b

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

 

 

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1reduced monthly amount, to be paid after the participant's
2death to his or her eligible survivor. Eligibility for a
3survivor's annuity shall be determined under the applicable
4Article of this Code.
5    For the purpose of calculating retirement annuities,
6future investment returns shall be assumed to be a percentage
7equal to the average yield of the 30-year U.S. Treasury Bond
8over the 5 fiscal years prior to the calculation of the initial
9retirement annuity, plus 250 basis points; but not less than 4%
10nor more than 8%.
11    (h) Annual Increase in Retirement Annuity. The retirement
12annuity shall be subject to an automatic annual increase in an
13amount equal to 3% of the originally granted annuity on each
14January 1 occurring on or after the first anniversary of the
15annuity start date.
16    (i) Disability Benefits. The disability benefits provided
17under the applicable retirement system apply to new cash
18balance plan participants and legacy Tier II participants in
19the cash balance plan, subject to and in accordance with the
20eligibility and other provisions of the applicable Article.
21    Retirement due to disability under Section 15-153.2 or
2216-149.2 shall be deemed a disability benefit for the purposes
23of this Section and shall apply to new cash balance plan
24participants and legacy Tier II participants.
25    The board of the retirement system shall designate
26annually, as a percentage of salary, an amount representing the

 

 

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

 

 

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1years of service under the applicable Article and had not begun
2receiving a retirement annuity, the eligible survivor shall be
3entitled to receive a survivor's annuity beginning at age 59
41/2 upon written application. The survivor's annuity shall be
5calculated in the same manner as a retirement annuity under
6subsection (g). At any time before receiving a survivor's
7annuity, the eligible survivor may claim a distribution under
8subsection (f-10) or a refund under subsection (f-15). The
9deceased participant's account shall continue to receive
10interest credit until the eligible survivor begins to receive a
11survivor's annuity or receives a refund of employee
12contributions under subsection (f-15).
13    Eligibility for a survivor's annuity shall be determined
14under the applicable Article of this Code. A child's or
15parent's annuity for an otherwise eligible child or dependent
16parent shall be in the same amount, if any, prescribed under
17the applicable Article.
18    (l) Annual Increase in Survivor's Annuity. A survivor's
19annuity granted under subsection (g) or (k) shall be subject to
20an automatic annual increase in an amount equal to 3% of the
21originally granted annuity on each January 1 occurring on or
22after the first anniversary of the annuity start date.
23    (m) Applicability of Provisions. The following provisions,
24if and as they exist in this Code, do not apply to participants
25in the cash balance plan with respect to participation in the
26cash balance plan, except as they are specifically provided for

 

 

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1in this Section:
2        (1) minimum service or vesting requirements (other
3    than as provided in this Section);
4        (2) provisions limiting a retirement annuity to a
5    specified percentage of salary;
6        (3) provisions authorizing a minimum retirement or
7    survivor's annuity or a supplemental annuity;
8        (4) provisions authorizing any form of retirement
9    annuity or survivor's annuity not authorized under this
10    Section;
11        (5) provisions authorizing a reversionary annuity
12    (other than a survivor's annuity under subsection (g));
13        (6) provisions authorizing a refund of employee
14    contributions upon termination of service (except as
15    provided in this Section) or any lump-sum payout in lieu of
16    a retirement or survivor's annuity (other than the
17    distribution under subsection (f-10) or the refund under
18    subsection (f-15) of this Section;
19        (7) provisions authorizing optional service credits or
20    the payment of optional additional contributions (other
21    than the optional employer contributions specifically
22    authorized in subsection (e-1)); or
23        (8) a level income option.
24    The Retirement Systems Reciprocal Act applies to
25participants in the cash balance plan who qualify under Article
2620 of this Code, but it does not affect the calculation of

 

 

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1benefits payable under this Section.
2    The other provisions of this Code continue to apply to
3participants in the cash balance plan, to the extent that they
4do not conflict with this Section. In the case of a conflict
5between the provisions of this Section and any other provision
6of this Code, the provisions of this Section control.
7    (n) Rules. The Board of Trustees of the applicable
8retirement system may adopt rules and procedures for the
9implementation of this Section, including but not limited to
10determinations of how to integrate the administration of this
11Section with the requirements of the applicable Article and any
12other applicable provisions of this Code.
13    (o) Public Pension Division. The Public Pension Division of
14the Department of Insurance shall determine in October of each
15year the annual unadjusted percentage increase (but not less
16than zero) in the Consumer Price Index-U for the 12 months
17ending with the preceding September. The Division shall certify
18its determination to the Board of Trustees of the State
19Universities Retirement System by November 1 of each year.
20    (p) Actual Employer Contributions. Payment of employer
21contributions with respect to participants in the cash balance
22plan shall be the responsibility of the actual employer. These
23contributions shall be determined under and paid in accordance
24with the provisions of Sections 15-155. Optional employer
25contributions may be paid by employers in any amount, but must
26be paid in the manner specified by the applicable retirement

 

 

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1system.
2    (q) Prospective Modification. The provisions set forth in
3this Section are subject to prospective changes made by law
4provided that any such changes shall not apply to any benefits
5accrued under this Section prior to the effective date of any
6amendatory Act of the General Assembly.
7    (r) An employee who participates in the cash balance plan
8under this Section may elect to participate in the optional
9cash balance plan under Section 1-162.
10    (s) Qualified Plan Status. No provision of this Section
11shall be interpreted in a way that would cause the applicable
12retirement system to cease to be a qualified plan under Section
13401 (a) of the Internal Revenue Code of 1986.
 
14    (40 ILCS 5/1-162 new)
15    Sec. 1-162. Optional cash balance plan.
16    (a) Participation and Applicability. Beginning on July 1,
172013, the following persons may elect to participate in the
18optional cash balance plan created under this Section:
19        (1) any person who participates in the cash balance
20    plan established under Section 1-161; and
21        (2) any Tier I employee who has made the election under
22    or paragraph (1) of subsection (a) or (a-5) of Section
23    15-134.6, or paragraph (1) of subsection (a) or (a-5) of
24    Section 16-131.7.
25    This Section does not, however, apply to any person with

 

 

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1respect to service for which the person participates in the
2self-managed plan established under Section 15-158.2 in lieu of
3the retirement benefits otherwise provided by the State
4Universities Retirement System.
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

 

 

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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 "earnings" as defined in Article 15 or
8"salary" as defined in Article 16, whichever is applicable,
9without regard to the limitation in subsection (b-5) of Section
101-160.
11    "Tier I employee" means a person who is a Tier I employee
12under the applicable Article of this Code.
13    (c) Cash Balance Account. A notional cash balance account
14shall be established by the applicable retirement system for
15each participant in the optional cash balance plan. The account
16is notional and does not contain any actual money segregated
17from the commingled assets of the retirement system. The cash
18balance in the account is to be used in calculating benefits as
19provided in this Section, but is not to be used in the
20calculation of any refund, transfer, or other benefit under the
21applicable Article of this Code.
22    The amounts to be credited to the cash balance account
23shall consist of (i) amounts contributed by or on behalf of the
24participant as employee contributions, (ii) notional employer
25contributions, and (iii) interest credit that is attributable
26to the account, all as provided in this Section.

 

 

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

 

 

HB6210- 51 -LRB097 22285 JDS 71037 b

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

 

 

HB6210- 52 -LRB097 22285 JDS 71037 b

1of the previous fiscal year are at least the assumed treasury
2rate, then the percentage shall be:
3        (i) the assumed treasury rate, plus
4        (ii) two-thirds of the amount of the actual rate of
5    investment earnings for the previous fiscal year that
6    exceeds the assumed treasury rate.
7However, in no event shall the percentage applied under this
8subsection exceed 10%.
9    For the purposes of this subsection only, "previous fiscal
10year" means fiscal year ending one year before the interest
11rate is calculated.
12    For the purposes of this subsection only, "assumed treasury
13rate" means the average annual yield of the 30-year U.S.
14Treasury Bond over the previous fiscal year, but not less than
154%.
16    When a person applies for a benefit under this Section, the
17retirement system shall apply an interest credit based on a
18proration of an estimate of what the interest credit will be
19for the relevant year. When the retirement system certifies the
20credit on June 30, it shall adjust the benefit accordingly.
21    (f-10) Distribution upon Termination of Employment. Upon
22termination of active employment with at least 5 years of
23service credit under the applicable retirement system and prior
24to making application for an annuity under this Section, a
25participant in the optional cash balance plan may make an
26irrevocable election to distribute an amount not to exceed 40%

 

 

HB6210- 53 -LRB097 22285 JDS 71037 b

1of the balance in the participant's account in the form of a
2direct rollover to another qualified plan, to the extent
3allowed by federal law. If the participant makes such an
4election, then the amount distributed shall be debited from the
5participant's cash balance account. A participant in the
6optional cash balance plan shall be allowed only one
7distribution under this subsection. The remaining balance in
8the participant's account shall be used for the determination
9of other benefits provided under this Section.
10    (f-15) Refund. In lieu of receiving a distribution under
11subsection (f-10), at any time after terminating active
12employment under the applicable retirement system, but before
13receiving a retirement annuity under this Section, a
14participant in the optional cash balance plan may elect to
15receive a refund under this subsection. The refund shall
16consist of an amount equal to the amount of all employee
17contributions credited to the participant's account, but shall
18not include any interest credit or employer contributions. If
19the participant so requests, the refund may be paid in the form
20of a direct rollover to another qualified plan, to the extent
21allowed by federal law and in accordance with the rules of the
22applicable retirement system. Upon payment of the refund, the
23participant's notional cash balance account shall be closed.
24    (g) Retirement Annuity. A participant in the optional cash
25balance plan may begin collecting a retirement annuity at age
2659 1/2, but no earlier than the date of termination of active

 

 

HB6210- 54 -LRB097 22285 JDS 71037 b

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

 

 

HB6210- 55 -LRB097 22285 JDS 71037 b

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

 

 

HB6210- 56 -LRB097 22285 JDS 71037 b

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

 

 

HB6210- 57 -LRB097 22285 JDS 71037 b

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

 

 

HB6210- 58 -LRB097 22285 JDS 71037 b

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

 

 

HB6210- 59 -LRB097 22285 JDS 71037 b

1that they do not conflict with this Section. In the case of a
2conflict between the provisions of this Section and any other
3provision of this Code, the provisions of this Section control.
4    (n) Rules. The Board of Trustees of the applicable
5retirement system may adopt rules and procedures for the
6implementation of this Section, including but not limited to
7determinations of how to integrate the administration of this
8Section with the requirements of the applicable Article and any
9other applicable provisions of this Code.
10    (o) Public Pension Division. The Public Pension Division of
11the Department of Insurance shall determine in October of each
12year the annual unadjusted percentage increase (but not less
13than zero) in the Consumer Price Index-U for the 12 months
14ending with the preceding September. The Division shall certify
15its determination to the Board of Trustees of the State
16Universities Retirement System by November 1 of each year.
17    (p) Actual Employer Contributions. Payment of employer
18contributions with respect to participants in the optional cash
19balance plan shall be the responsibility of the actual
20employer. These contributions shall be determined under and
21paid in accordance with the provisions of Sections 15-155.
22Optional additional contributions by employers may be paid in
23any amount, but must be paid in the manner specified by the
24applicable retirement system.
25    (q) Prospective Modification. The provisions set forth in
26this Section are subject to prospective changes made by law

 

 

HB6210- 60 -LRB097 22285 JDS 71037 b

1provided that any such changes shall not apply to any benefits
2accrued under this Section prior to the effective date of any
3amendatory Act of the General Assembly.
4    (s) Qualified Plan Status. No provision of this Section
5shall be interpreted in a way that would cause the applicable
6retirement system to cease to be a qualified plan under Section
7401 (a) of the Internal Revenue Code of 1986.
 
8    (40 ILCS 5/7-109)  (from Ch. 108 1/2, par. 7-109)
9    Sec. 7-109. Employee.
10    (1) "Employee" means any person who:
11        (a) 1. Receives earnings as payment for the performance
12        of personal services or official duties out of the
13        general fund of a municipality, or out of any special
14        fund or funds controlled by a municipality, or by an
15        instrumentality thereof, or a participating
16        instrumentality, including, in counties, the fees or
17        earnings of any county fee office; and
18            2. Under the usual common law rules applicable in
19        determining the employer-employee relationship, has
20        the status of an employee with a municipality, or any
21        instrumentality thereof, or a participating
22        instrumentality, including aldermen, county
23        supervisors and other persons (excepting those
24        employed as independent contractors) who are paid
25        compensation, fees, allowances or other emolument for

 

 

HB6210- 61 -LRB097 22285 JDS 71037 b

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

 

 

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1        Teachers' Pension and Retirement Fund", approved May
2        27, 1915, as amended;
3            2. Articles 15 and 16 of this Code.
4        However, such persons shall be included as employees to
5    the extent of earnings that are not eligible for inclusion
6    under the foregoing laws for services not of an
7    instructional nature of any kind.
8        However, any member of the armed forces who is employed
9    as a teacher of subjects in the Reserve Officers Training
10    Corps of any school and who is not certified under the law
11    governing the certification of teachers shall be included
12    as an employee.
13        (b) Are designated by the governing body of a
14    municipality in which a pension fund is required by law to
15    be established for policemen or firemen, respectively, as
16    performing police or fire protection duties, except that
17    when such persons are the heads of the police or fire
18    department and are not eligible to be included within any
19    such pension fund, they shall be included within this
20    Article; provided, that such persons shall not be excluded
21    to the extent of concurrent service and earnings not
22    designated as being for police or fire protection duties.
23    However, (i) any head of a police department who was a
24    participant under this Article immediately before October
25    1, 1977 and did not elect, under Section 3-109 of this Act,
26    to participate in a police pension fund shall be an

 

 

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

 

 

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1    participating instrumentalities on or after the effective
2    date of this amendatory Act of the 97th General Assembly:
3    the Illinois Municipal League; the Illinois Association of
4    Park Districts; the Illinois Supervisors, County
5    Commissioners and Superintendents of Highways Association;
6    the Township School District Trustees; the United Counties
7    Council; or the Will County Governmental League.
8    (3) All persons, including, without limitation, public
9defenders and probation officers, who receive earnings from
10general or special funds of a county for performance of
11personal services or official duties within the territorial
12limits of the county, are employees of the county (unless
13excluded by subsection (2) of this Section) notwithstanding
14that they may be appointed by and are subject to the direction
15of a person or persons other than a county board or a county
16officer. It is hereby established that an employer-employee
17relationship under the usual common law rules exists between
18such employees and the county paying their salaries by reason
19of the fact that the county boards fix their rates of
20compensation, appropriate funds for payment of their earnings
21and otherwise exercise control over them. This finding and this
22amendatory Act shall apply to all such employees from the date
23of appointment whether such date is prior to or after the
24effective date of this amendatory Act and is intended to
25clarify existing law pertaining to their status as
26participating employees in the Fund.

 

 

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1(Source: P.A. 97-429, eff. 8-16-11; 97-609, eff. 8-26-11;
2revised 9-28-11.)
 
3    (40 ILCS 5/15-106)  (from Ch. 108 1/2, par. 15-106)
4    Sec. 15-106. Employer. "Employer": The University of
5Illinois, Southern Illinois University, Chicago State
6University, Eastern Illinois University, Governors State
7University, Illinois State University, Northeastern Illinois
8University, Northern Illinois University, Western Illinois
9University, the State Board of Higher Education, the Illinois
10Mathematics and Science Academy, the University Civil Service
11Merit Board, the Board of Trustees of the State Universities
12Retirement System, the Illinois Community College Board,
13community college boards, any association of community college
14boards organized under Section 3-55 of the Public Community
15College Act, the Board of Examiners established under the
16Illinois Public Accounting Act, and, only during the period for
17which employer contributions required under Section 15-155 are
18paid, the following organizations: the alumni associations,
19the foundations and the athletic associations which are
20affiliated with the universities and colleges included in this
21Section as employers. An individual that begins employment
22after the effective date of this amendatory Act of the 97th
23General Assembly with an entity not defined as an employer in
24this Section shall not be deemed an employee for the purposes
25of this Article with respect to that employment and shall not

 

 

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1be eligible to participate in the System with respect to that
2employment; provided, however, that those individuals who are
3both employed and already participants in the System on the
4effective date of this amendatory Act of the 97th General
5Assembly shall be allowed to continue as participants in the
6System for the duration of that employment.
7    Notwithstanding any provision of law to the contrary, an
8individual who begins employment with any of the following
9employers on or after the effective date of this amendatory Act
10of the 97th General Assembly shall not be deemed an employee
11and shall not be eligible to participate in the System with
12respect to that employment: any association of community
13college boards organized under Section 3-55 of the Public
14Community College Act, the Association of Illinois
15Middle-Grade Schools, the Illinois Association of School
16Administrators, the Illinois Association for Supervision and
17Curriculum Development, the Illinois Principals Association,
18the Illinois Association of School Business Officials, or the
19Illinois Special Olympics; provided, however, that those
20individuals who are both employed and already participants in
21the System on the effective date of this amendatory Act of the
2297th General Assembly shall be allowed to continue as
23participants in the System for the duration of that employment.
24    A department as defined in Section 14-103.04 is an employer
25for any person appointed by the Governor under the Civil
26Administrative Code of Illinois who is a participating employee

 

 

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1as defined in Section 15-109. The Department of Central
2Management Services is an employer with respect to persons
3employed by the State Board of Higher Education in positions
4with the Illinois Century Network as of June 30, 2004 who
5remain continuously employed after that date by the Department
6of Central Management Services in positions with the Illinois
7Century Network, the Bureau of Communication and Computer
8Services, or, if applicable, any successor bureau.
9    The cities of Champaign and Urbana shall be considered
10employers, but only during the period for which contributions
11are required to be made under subsection (b-1) of Section
1215-155 and only with respect to individuals described in
13subsection (h) of Section 15-107.
14(Source: P.A. 95-369, eff. 8-23-07; 95-728, eff. 7-1-08 - See
15Sec. 999.)
 
16    (40 ILCS 5/15-107)  (from Ch. 108 1/2, par. 15-107)
17    Sec. 15-107. Employee.
18    (a) "Employee" means any member of the educational,
19administrative, secretarial, clerical, mechanical, labor or
20other staff of an employer whose employment is permanent and
21continuous or who is employed in a position in which services
22are expected to be rendered on a continuous basis for at least
234 months or one academic term, whichever is less, who (A)
24receives payment for personal services on a warrant issued
25pursuant to a payroll voucher certified by an employer and

 

 

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1drawn by the State Comptroller upon the State Treasurer or by
2an employer upon trust, federal or other funds, or (B) is on a
3leave of absence without pay. Employment which is irregular,
4intermittent or temporary shall not be considered continuous
5for purposes of this paragraph.
6    However, a person is not an "employee" if he or she:
7        (1) is a student enrolled in and regularly attending
8    classes in a college or university which is an employer,
9    and is employed on a temporary basis at less than full
10    time;
11        (2) is currently receiving a retirement annuity or a
12    disability retirement annuity under Section 15-153.2 from
13    this System;
14        (3) is on a military leave of absence;
15        (4) is eligible to participate in the Federal Civil
16    Service Retirement System and is currently making
17    contributions to that system based upon earnings paid by an
18    employer;
19        (5) is on leave of absence without pay for more than 60
20    days immediately following termination of disability
21    benefits under this Article;
22        (6) is hired after June 30, 1979 as a public service
23    employment program participant under the Federal
24    Comprehensive Employment and Training Act and receives
25    earnings in whole or in part from funds provided under that
26    Act; or

 

 

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1        (7) is employed on or after July 1, 1991 to perform
2    services that are excluded by subdivision (a)(7)(f) or
3    (a)(19) of Section 210 of the federal Social Security Act
4    from the definition of employment given in that Section (42
5    U.S.C. 410).
6    (b) Any employer may, by filing a written notice with the
7board, exclude from the definition of "employee" all persons
8employed pursuant to a federally funded contract entered into
9after July 1, 1982 with a federal military department in a
10program providing training in military courses to federal
11military personnel on a military site owned by the United
12States Government, if this exclusion is not prohibited by the
13federally funded contract or federal laws or rules governing
14the administration of the contract.
15    (c) Any person appointed by the Governor under the Civil
16Administrative Code of the State is an employee, if he or she
17is a participant in this system on the effective date of the
18appointment.
19    (d) A participant on lay-off status under civil service
20rules is considered an employee for not more than 120 days from
21the date of the lay-off.
22    (e) A participant is considered an employee during (1) the
23first 60 days of disability leave, (2) the period, not to
24exceed one year, in which his or her eligibility for disability
25benefits is being considered by the board or reviewed by the
26courts, and (3) the period he or she receives disability

 

 

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

 

 

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1individual shall cease to be considered an employee under this
2subsection (h) upon the first termination of the individual's
3employment as a firefighter by the City of Urbana or the City
4of Champaign.
5    (i) An individual who is employed on a full-time basis as
6an officer or employee of a statewide teacher organization that
7serves System participants or an officer of a national teacher
8organization that serves System participants may participate
9in the System and shall be deemed an employee, provided that
10(1) the individual has previously earned creditable service
11under this Article, (2) the individual files with the System an
12irrevocable election to become a participant before the
13effective date of this amendatory Act of the 97th General
14Assembly, (3) the individual does not receive credit for that
15employment under any other Article of this Code, and (4) the
16individual first became a full-time employee of the teacher
17organization and becomes a participant before the effective
18date of this amendatory Act of the 97th General Assembly. An
19employee under this subsection (i) is responsible for paying to
20the System both (A) employee contributions based on the actual
21compensation received for service with the teacher
22organization and (B) employer contributions equal to the normal
23costs (as defined in Section 15-155) resulting from that
24service; all or any part of these contributions may be paid on
25the employee's behalf or picked up for tax purposes (if
26authorized under federal law) by the teacher organization.

 

 

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1    A person who is an employee as defined in this subsection
2(i) may establish service credit for similar employment prior
3to becoming an employee under this subsection by paying to the
4System for that employment the contributions specified in this
5subsection, plus interest at the effective rate from the date
6of service to the date of payment. However, credit shall not be
7granted under this subsection for any such prior employment for
8which the applicant received credit under any other provision
9of this Code, or during which the applicant was on a leave of
10absence under Section 15-113.2.
11    (j) A person employed by the State Board of Higher
12Education in a position with the Illinois Century Network as of
13June 30, 2004 shall be considered to be an employee for so long
14as he or she remains continuously employed after that date by
15the Department of Central Management Services in a position
16with the Illinois Century Network, the Bureau of Communication
17and Computer Services, or, if applicable, any successor bureau
18and meets the requirements of subsection (a).
19    (k) In the case of doubt as to whether any person is an
20employee within the meaning of this Section, the decision of
21the Board shall be final.
22(Source: P.A. 97-651, eff. 1-5-12.)
 
23    (40 ILCS 5/15-107.1 new)
24    Sec. 15-107.1. Tier I employee. "Tier I employee": An
25employee under this Article, other than a participant in the

 

 

HB6210- 73 -LRB097 22285 JDS 71037 b

1self-managed plan under Section 15-158.2, who first became a
2member or participant before January 1, 2011 under any
3reciprocal retirement system or pension fund established under
4this Code other than a retirement system or pension fund
5established under Article 2, 3, 4, 5, 6, or 18 of this Code.
 
6    (40 ILCS 5/15-107.2 new)
7    Sec. 15-107.2. Tier I retiree. "Tier I retiree": A former
8Tier I employee who is receiving a retirement annuity.
9    A person does not become a Tier I retiree by virtue of
10receiving a reversionary, survivors, beneficiary, or
11disability annuity.
 
12    (40 ILCS 5/15-111)  (from Ch. 108 1/2, par. 15-111)
13    Sec. 15-111. Earnings. "Earnings": An amount paid for
14personal services equal to the sum of the basic compensation
15plus extra compensation for summer teaching, overtime or other
16extra service. For periods for which an employee receives
17service credit under subsection (c) of Section 15-113.1 or
18Section 15-113.2, earnings are equal to the basic compensation
19on which contributions are paid by the employee during such
20periods. Compensation for employment which is irregular,
21intermittent and temporary shall not be considered earnings,
22unless the participant is also receiving earnings from the
23employer as an employee under Section 15-107.
24    With respect to transition pay paid by the University of

 

 

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1Illinois to a person who was a participating employee employed
2in the fire department of the University of Illinois's
3Champaign-Urbana campus immediately prior to the elimination
4of that fire department:
5        (1) "Earnings" includes transition pay paid to the
6    employee on or after the effective date of this amendatory
7    Act of the 91st General Assembly.
8        (2) "Earnings" includes transition pay paid to the
9    employee before the effective date of this amendatory Act
10    of the 91st General Assembly only if (i) employee
11    contributions under Section 15-157 have been withheld from
12    that transition pay or (ii) the employee pays to the System
13    before January 1, 2001 an amount representing employee
14    contributions under Section 15-157 on that transition pay.
15    Employee contributions under item (ii) may be paid in a
16    lump sum, by withholding from additional transition pay
17    accruing before January 1, 2001, or in any other manner
18    approved by the System. Upon payment of the employee
19    contributions on transition pay, the corresponding
20    employer contributions become an obligation of the State.
21    Notwithstanding any other provision of this Section,
22"earnings" does not include any future increase in income
23offered by an employer under this Article pursuant to the
24requirements of subsection (c) of Section 15-134.6 that is
25accepted by a Tier I employee, or a Tier I retiree returning to
26active service, who has made an election under paragraph (2) of

 

 

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1subsection (a) or (a-5) of Section 15-134.6.
2(Source: P.A. 91-887, eff. 7-6-00.)
 
3    (40 ILCS 5/15-111.1 new)
4    Sec. 15-111.1. Future increase in income. "Future increase
5in income": Any increase in income in any form offered by an
6employer to an employee under this Article after June 30, 2013
7that would qualify as "earnings", as defined under Section
815-111, but for the fact that the employer offered the increase
9in income to the employee on the condition that it not qualify
10as earnings and the employee accepted the increase in income
11subject to that condition. The term "future increase in income"
12does not include an increase in income in any form that is paid
13to a Tier I employee under an employment contract or collective
14bargaining agreement that is in effect on the effective date of
15this Section but does include an increase in income in any form
16pursuant to an extension, amendment, or renewal of any such
17employment contract or collective bargaining agreement on or
18after the effective date of this amendatory Act of the 97th
19General Assembly.
 
20    (40 ILCS 5/15-113.2)  (from Ch. 108 1/2, par. 15-113.2)
21    Sec. 15-113.2. Service for leaves of absence. "Service for
22leaves of absence" includes those periods of leaves of absence
23at less than 50% pay, except military leave and periods of
24disability leave in excess of 60 days, for which the employee

 

 

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

 

 

HB6210- 77 -LRB097 22285 JDS 71037 b

1period of 10 years, a participant on such special leave is also
2required to pay employer contributions equal to the normal cost
3as defined in Section 15-155, based upon the employee's basic
4compensation on the date the leave begins, or based upon the
5actual compensation received by the employee for service with a
6teacher organization if the employee has so elected.
7    Notwithstanding any other provision of this Article, a
8participant shall not be eligible to make contributions or
9receive service credit for a leave of absence for service with
10a teacher organization if that leave of absence for service
11with a teacher organization begins on or after the effective
12date of this amendatory Act of the 97th General Assembly.
13(Source: P.A. 90-65, eff. 7-7-97; 90-511, eff. 8-22-97.)
 
14    (40 ILCS 5/15-134.5)
15    Sec. 15-134.5. Retirement program elections.
16    (a) All participating employees are participants under the
17traditional benefit package prior to January 1, 1998.
18    Effective as of the date that an employer elects, as
19described in Section 15-158.2, to offer to its employees the
20portable benefit package and the self-managed plan as
21alternatives to the traditional benefit package but not later
22than the effective date of this amendatory Act of the 97th
23General Assembly, each of that employer's eligible employees
24(as defined in subsection (b)) shall be given the choice to
25elect which retirement program he or she wishes to participate

 

 

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

 

 

HB6210- 79 -LRB097 22285 JDS 71037 b

1plan as alternatives to the traditional benefit package but not
2on or after the effective date of this amendatory Act of the
397th General Assembly. A newly eligible employee participates
4in the traditional benefit package until he or she makes an
5election to participate in the portable benefit package or the
6self-managed plan. If an employee does not elect to participate
7in the portable benefit package or the self-managed plan, he or
8she shall continue to participate in the traditional benefit
9package by default.
10    (c) An eligible employee who at the time he or she is first
11eligible to make the election described in subsection (a) does
12not have sufficient age and service to qualify for a retirement
13annuity under Section 15-135 may elect to participate in the
14traditional benefit package, the portable benefit package, or
15the self-managed plan. An eligible employee who has sufficient
16age and service to qualify for a retirement annuity under
17Section 15-135 at the time he or she is first eligible to make
18the election described in subsection (a) may elect to
19participate in the traditional benefit package or the portable
20benefit package, but may not elect to participate in the
21self-managed plan.
22    (d) A currently eligible employee must make this election
23within one year after the effective date of the employer's
24adoption of the self-managed plan.
25    A newly eligible employee must make this election within 6
26months after the date on which the System receives the report

 

 

HB6210- 80 -LRB097 22285 JDS 71037 b

1of status certification from the employer. If an employee
2elects to participate in the self-managed plan, no employer
3contributions shall be remitted to the self-managed plan when
4the employee's account balance transfer is made. Employer
5contributions to the self-managed plan shall commence as of the
6first pay period that begins after the System receives the
7employee's election.
8    (d-1) A newly eligible employee who, prior to the effective
9date of this amendatory Act of the 91st General Assembly, fails
10to make the election within the period provided under
11subsection (d) and participates by default in the traditional
12benefit package may make a late election to participate in the
13portable benefit package or the self-managed plan instead of
14the traditional benefit package at any time within 6 months
15after the effective date of this amendatory Act of the 91st
16General Assembly.
17    (e) If a currently eligible employee elects the portable
18benefit package, that election shall not become effective until
19the one-year anniversary of the date on which the election is
20filed with the System, provided the employee remains
21continuously employed by the employer throughout the one-year
22waiting period, and any benefits payable to or on account of
23the employee before such one-year waiting period has ended
24shall not be determined under the provisions applicable to the
25portable benefit package but shall instead be determined in
26accordance with the traditional benefit package. If a currently

 

 

HB6210- 81 -LRB097 22285 JDS 71037 b

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

 

 

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

 

 

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

 

 

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1    shall not make a later election under this subsection
2    (a-5).
3    If a Tier I retiree fails for any reason to make a required
4election under this subsection within the time specified, then
5the Tier I retiree shall be deemed to have made the election
6under paragraph (2) of this subsection.
7    (a-10) All elections under subsection (a) or (a-5) that are
8made or deemed to be made before June 1, 2013 shall take effect
9on July 1, 2013. Elections that are made or deemed to be made
10on or after June 1, 2013 shall take effect on the first day of
11the month following the month in which the election is made or
12deemed to be made.
13    (b) As adequate and legal consideration provided under this
14amendatory Act of the 97th General Assembly for making the
15election under paragraph (1) of subsection (a) of this Section,
16any future increases in income offered by an employer under
17this Article to a Tier I employee who has made the election
18under paragraph (1) of subsection (a) of this Section shall be
19offered expressly and irrevocably as constituting earnings
20under Section 15-111. In addition, a Tier I employee who has
21made the election under paragraph (1) of subsection (a) of this
22Section shall receive the right to also participate in the
23optional cash balance plan established under Section 1-162.
24    As adequate and legal consideration provided under this
25amendatory Act of the 97th General Assembly for making the
26election under paragraph (1) of subsection (a-5) of this

 

 

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

 

 

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

 

 

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

 

 

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1or annuitant regarding the elections under this Section.
2    (e) Notwithstanding any other provision of law, an employer
3under this Article is required to offer any future increases in
4income expressly and irrevocably as not constituting
5"earnings" under Section 15-111 to any Tier I employee, or Tier
6I retiree returning to active service, who has made an election
7under paragraph (2) or subsection (a) or (a-5) of this Section.
8A Tier I employee, or Tier I retiree returning to active
9service, who has made an election under paragraph (2) of
10subsection (a) or (a-5) of this Section shall not accept any
11future increase in income that is offered by an employer under
12this Article in violation of the requirement set forth in this
13subsection.
14    (f) A member's election under this Section is not a
15prohibited election under subdivision (j)(1) of Section 1-119
16of the Illinois Pension Code.
17    (g) An employee who has made the election under paragraph
18(1) of subsection (a) or (a-5) of this Section may elect to
19participate in the optional cash balance plan under Section
201-162.
21    The election to participate in the optional cash balance
22plan shall be made in writing, in the manner provided by the
23applicable retirement system.
24    (h) Qualified Plan Status. No provision of this Section
25shall be interpreted in a way that would cause the System to
26cease to be a qualified plan under Section 401(a) of the

 

 

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1Internal Revenue Code of 1986.
 
2    (40 ILCS 5/15-136)  (from Ch. 108 1/2, par. 15-136)
3    Sec. 15-136. Retirement annuities - Amount. The provisions
4of this Section 15-136 apply only to those participants who are
5participating in the traditional benefit package or the
6portable benefit package and do not apply to participants who
7are participating in the self-managed plan.
8    (a) The amount of a participant's retirement annuity,
9expressed in the form of a single-life annuity, shall be
10determined by whichever of the following rules is applicable
11and provides the largest annuity:
12    Rule 1: The retirement annuity shall be 1.67% of final rate
13of earnings for each of the first 10 years of service, 1.90%
14for each of the next 10 years of service, 2.10% for each year
15of service in excess of 20 but not exceeding 30, and 2.30% for
16each year in excess of 30; or for persons who retire on or
17after January 1, 1998, 2.2% of the final rate of earnings for
18each year of service.
19    Rule 2: The retirement annuity shall be the sum of the
20following, determined from amounts credited to the participant
21in accordance with the actuarial tables and the prescribed rate
22of interest in effect at the time the retirement annuity
23begins:
24        (i) the normal annuity which can be provided on an
25    actuarially equivalent basis, by the accumulated normal

 

 

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1    contributions as of the date the annuity begins;
2        (ii) an annuity from employer contributions of an
3    amount equal to that which can be provided on an
4    actuarially equivalent basis from the accumulated normal
5    contributions made by the participant under Section
6    15-113.6 and Section 15-113.7 plus 1.4 times all other
7    accumulated normal contributions made by the participant;
8    and
9        (iii) the annuity that can be provided on an
10    actuarially equivalent basis from the entire contribution
11    made by the participant under Section 15-113.3.
12    With respect to a police officer or firefighter who retires
13on or after August 14, 1998, the accumulated normal
14contributions taken into account under clauses (i) and (ii) of
15this Rule 2 shall include the additional normal contributions
16made by the police officer or firefighter under Section
1715-157(a).
18    The amount of a retirement annuity calculated under this
19Rule 2 shall be computed solely on the basis of the
20participant's accumulated normal contributions, as specified
21in this Rule and defined in Section 15-116. Neither an employee
22or employer contribution for early retirement under Section
2315-136.2 nor any other employer contribution shall be used in
24the calculation of the amount of a retirement annuity under
25this Rule 2.
26    This amendatory Act of the 91st General Assembly is a

 

 

HB6210- 91 -LRB097 22285 JDS 71037 b

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

 

 

HB6210- 92 -LRB097 22285 JDS 71037 b

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

 

 

HB6210- 93 -LRB097 22285 JDS 71037 b

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

 

 

HB6210- 94 -LRB097 22285 JDS 71037 b

1contributions made under Section 15-136.2 by the System's
2annuity factor for the age of the participant at the beginning
3of the annuity payment period and (2) the amount equal to the
4participant's annuity if calculated under Rule 1, reduced under
5Section 15-136(b) as if no contributions had been made under
6Section 15-136.2.
7    With respect to a participant who is qualified for a
8retirement annuity under this Rule 5 whose retirement annuity
9began before the effective date of this amendatory Act of the
1091st General Assembly, and for whom an employee contribution
11was made under Section 15-136.2, the System shall recalculate
12the retirement annuity under this Rule 5 and shall pay any
13additional amounts due in the manner provided in Section
1415-186.1 for benefits mistakenly set too low.
15    The amount of a retirement annuity calculated under this
16Rule 5 shall be computed solely on the basis of those
17contributions specifically set forth in this Rule 5. Except as
18provided in clause (iii) of this Rule 5, neither an employee
19nor employer contribution for early retirement under Section
2015-136.2, nor any other employer contribution, shall be used in
21the calculation of the amount of a retirement annuity under
22this Rule 5.
23    The General Assembly has adopted the changes set forth in
24Section 25 of this amendatory Act of the 91st General Assembly
25in recognition that the decision of the Appellate Court for the
26Fourth District in Mattis v. State Universities Retirement

 

 

HB6210- 95 -LRB097 22285 JDS 71037 b

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

 

 

HB6210- 96 -LRB097 22285 JDS 71037 b

1    date the retirement annuity is to begin.
2    (c) The maximum retirement annuity provided under Rules 1,
32, 4, and 5 shall be the lesser of (1) the annual limit of
4benefits as specified in Section 415 of the Internal Revenue
5Code of 1986, as such Section may be amended from time to time
6and as such benefit limits shall be adjusted by the
7Commissioner of Internal Revenue, and (2) 80% of final rate of
8earnings.
9    (d) Subject to the provisions of subsections (d-1) and
10(d-2), an An annuitant whose status as an employee terminates
11after August 14, 1969 shall receive automatic increases in his
12or her retirement annuity as follows:
13    Effective January 1 immediately following the date the
14retirement annuity begins, the annuitant shall receive an
15increase in his or her monthly retirement annuity of 0.125% of
16the monthly retirement annuity provided under Rule 1, Rule 2,
17Rule 3, Rule 4, or Rule 5, contained in this Section,
18multiplied by the number of full months which elapsed from the
19date the retirement annuity payments began to January 1, 1972,
20plus 0.1667% of such annuity, multiplied by the number of full
21months which elapsed from January 1, 1972, or the date the
22retirement annuity payments began, whichever is later, to
23January 1, 1978, plus 0.25% of such annuity multiplied by the
24number of full months which elapsed from January 1, 1978, or
25the date the retirement annuity payments began, whichever is
26later, to the effective date of the increase.

 

 

HB6210- 97 -LRB097 22285 JDS 71037 b

1    The annuitant shall receive an increase in his or her
2monthly retirement annuity on each January 1 thereafter during
3the annuitant's life of 3% of the monthly annuity provided
4under Rule 1, Rule 2, Rule 3, Rule 4, or Rule 5 contained in
5this Section. The change made under this subsection by P.A.
681-970 is effective January 1, 1980 and applies to each
7annuitant whose status as an employee terminates before or
8after that date.
9    Beginning January 1, 1990 and except as provided in
10subsections (d-1) and (d-2), all automatic annual increases
11payable under this Section shall be calculated as a percentage
12of the total annuity payable at the time of the increase,
13including all increases previously granted under this Article.
14    The change made in this subsection by P.A. 85-1008 is
15effective January 26, 1988, and is applicable without regard to
16whether status as an employee terminated before that date.
17    (d-1) Notwithstanding any other provision of this Article,
18for a Tier I employee or Tier I retiree who made the election
19under paragraph (1) of either subsection (a) or (a-5) of
20Section 15-134.6, the amount of each automatic annual increase
21in retirement annuity occurring on or after the effective date
22of that election shall be 3% or one-half of the annual
23unadjusted percentage increase, if any, in the Consumer Price
24Index-U for the 12 months ending with the preceding September,
25whichever is less, of the originally granted retirement
26annuity. For the purposes of this Section, "Consumer Price

 

 

HB6210- 98 -LRB097 22285 JDS 71037 b

1Index-U" means the index published by the Bureau of Labor
2Statistics of the United States Department of Labor that
3measures the average change in prices of goods and services
4purchased by all urban consumers, United States city average,
5all items, 1982-84 = 100.
6    (d-2) Notwithstanding any other provision of this Article,
7for a Tier I employee or Tier I retiree who made the election
8under paragraph (1) of subsection (a) or (a-5) of Section
915-134.6, the monthly retirement annuity shall first be subject
10to annual increases on the January 1 occurring on or next after
11the attainment of age 67 or the January 1 occurring on or next
12after the fifth anniversary of the annuity start date,
13whichever occurs earlier. If on the effective date of the
14election under paragraph (1) of subsection (a-5) of Section
1515-134.6 a Tier I retiree has already received an annual
16increase under this Section but does not yet meet the new
17eligibility requirements of this subsection, the annual
18increases already received shall continue in force, but no
19additional annual increase shall be granted until the Tier I
20retiree meets the new eligibility requirements.
21    (e) If, on January 1, 1987, or the date the retirement
22annuity payment period begins, whichever is later, the sum of
23the retirement annuity provided under Rule 1 or Rule 2 of this
24Section and the automatic annual increases provided under the
25preceding subsection or Section 15-136.1, amounts to less than
26the retirement annuity which would be provided by Rule 3, the

 

 

HB6210- 99 -LRB097 22285 JDS 71037 b

1retirement annuity shall be increased as of January 1, 1987, or
2the date the retirement annuity payment period begins,
3whichever is later, to the amount which would be provided by
4Rule 3 of this Section. Such increased amount shall be
5considered as the retirement annuity in determining benefits
6provided under other Sections of this Article. This paragraph
7applies without regard to whether status as an employee
8terminated before the effective date of this amendatory Act of
91987, provided that the annuitant was employed at least
10one-half time during the period on which the final rate of
11earnings was based.
12    (f) A participant is entitled to such additional annuity as
13may be provided on an actuarially equivalent basis, by any
14accumulated additional contributions to his or her credit.
15However, the additional contributions made by the participant
16toward the automatic increases in annuity provided under this
17Section shall not be taken into account in determining the
18amount of such additional annuity.
19    (g) If, (1) by law, a function of a governmental unit, as
20defined by Section 20-107 of this Code, is transferred in whole
21or in part to an employer, and (2) a participant transfers
22employment from such governmental unit to such employer within
236 months after the transfer of the function, and (3) the sum of
24(A) the annuity payable to the participant under Rule 1, 2, or
253 of this Section (B) all proportional annuities payable to the
26participant by all other retirement systems covered by Article

 

 

HB6210- 100 -LRB097 22285 JDS 71037 b

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

 

 

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1amounts which, together with contributions paid by employers,
2the other employer contributions from trust, federal, and other
3funds, employee contributions, income from investments, and
4other income of this System, will be sufficient to meet the
5cost of maintaining and administering the System on a 90%
6funded basis in accordance with actuarial recommendations.
7    Beginning with State fiscal year 2014, the employers under
8this Article shall be responsible for paying the normal costs
9of the System plus the amounts required to amortize any total
10cost of the benefits of the System arising on or after July 1,
112013.
12    Beginning with State fiscal year 2014, the State's required
13contributions to the System shall be limited to the amounts
14required to amortize the total cost of the benefits of the
15System arising before July 1, 2013, plus any employer
16contributions required from the State as the actual employer of
17participants under this Article.
18    The Board shall determine the amount of State and employer
19contributions required for each fiscal year on the basis of the
20actuarial tables and other assumptions adopted by the Board and
21the recommendations of the actuary, using the formulas provided
22in this Section formula in subsection (a-1).
23    (a-1) For State fiscal years 2012 and 2013 through 2045,
24the minimum contribution to the System to be made by the State
25for each fiscal year shall be an amount determined by the
26System to be sufficient to bring the total assets of the System

 

 

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

 

 

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1    For State fiscal years 1996 through 2005, the State
2contribution to the System, as a percentage of the applicable
3employee payroll, shall be increased in equal annual increments
4so that by State fiscal year 2011, the State is contributing at
5the rate required under this Section.
6    Notwithstanding any other provision of this Article, the
7total required State contribution for State fiscal year 2006 is
8$166,641,900.
9    Notwithstanding any other provision of this Article, the
10total required State contribution for State fiscal year 2007 is
11$252,064,100.
12    For each of State fiscal years 2008 through 2009, the State
13contribution to the System, as a percentage of the applicable
14employee payroll, shall be increased in equal annual increments
15from the required State contribution for State fiscal year
162007, so that by State fiscal year 2011, the State is
17contributing at the rate otherwise required under this Section.
18    Notwithstanding any other provision of this Article, the
19total required State contribution for State fiscal year 2010 is
20$702,514,000 and shall be made from the State Pensions Fund and
21proceeds of bonds sold in fiscal year 2010 pursuant to Section
227.2 of the General Obligation Bond Act, less (i) the pro rata
23share of bond sale expenses determined by the System's share of
24total bond proceeds, (ii) any amounts received from the General
25Revenue Fund in fiscal year 2010, (iii) any reduction in bond
26proceeds due to the issuance of discounted bonds, if

 

 

HB6210- 104 -LRB097 22285 JDS 71037 b

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

 

 

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1term does not include or apply to any amounts payable to the
2System under Section 25 of the Budget Stabilization Act.
3    Notwithstanding any other provision of this Section, the
4required State contribution for State fiscal year 2005 and for
5fiscal year 2008 through and each fiscal year 2013 thereafter,
6as calculated under this Section and certified under Section
715-165, shall not exceed an amount equal to (i) the amount of
8the required State contribution that would have been calculated
9under this Section for that fiscal year if the System had not
10received any payments under subsection (d) of Section 7.2 of
11the General Obligation Bond Act, minus (ii) the portion of the
12State's total debt service payments for that fiscal year on the
13bonds issued in fiscal year 2003 for the purposes of that
14Section 7.2, as determined and certified by the Comptroller,
15that is the same as the System's portion of the total moneys
16distributed under subsection (d) of Section 7.2 of the General
17Obligation Bond Act. In determining this maximum for State
18fiscal years 2008 through 2010, however, the amount referred to
19in item (i) shall be increased, as a percentage of the
20applicable employee payroll, in equal increments calculated
21from the sum of the required State contribution for State
22fiscal year 2007 plus the applicable portion of the State's
23total debt service payments for fiscal year 2007 on the bonds
24issued in fiscal year 2003 for the purposes of Section 7.2 of
25the General Obligation Bond Act, so that, by State fiscal year
262011, the State is contributing at the rate otherwise required

 

 

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

 

 

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1the minimum contribution to the System to be made by the State
2for each fiscal year shall be an amount determined by the Board
3to be sufficient to amortize, by the end of State fiscal year
42043, the total cost of the benefits of the System arising
5before July 1, 2013. In making these determinations, the
6required State contribution shall be calculated each year as a
7level percentage of payroll over the years remaining to and
8including fiscal year 2043 and shall be determined under the
9projected unit credit actuarial cost method.
10    Beginning in State fiscal year 2044 or on the date that the
11State has amortized 100% of the total cost of benefits accrued
12by July 1, 2013, whichever is earlier, the State has no further
13obligation to make contributions to the System under this
14subsection (a-5).
15    (a-10) Subject to the limitations provided in subsection
16(a-15), beginning with State fiscal year 2014, the minimum
17required contribution of employers under this Article shall be
18determined as a percentage of projected payroll, and shall be
19sufficient to produce an annual amount equal to:
20        (i) the employer's normal cost for that fiscal year for
21    employees who first became participating employees before
22    July 1, 2013; plus
23        (ii) the employer's normal cost for that fiscal year
24    for employees who first become participating employees on
25    or after July 1, 2013; plus
26        (iii) the amount required for that fiscal year to

 

 

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1    amortize any unfunded actuarial accrued liability
2    associated with the total cost of benefits accrued on or
3    after July 1, 2013 as a level percentage of payroll over a
4    30-year rolling amortization period.
5    Any contributions required from an employer under
6subsection (g) of this Section are in addition to the
7contributions required under this subsection (a-10).
8    (a-15) For State fiscal year 2014, the required
9contribution of employers under item (i) of subsection (a-10)
10shall be reduced to an amount equal to 0.6% of payroll.
11    For each fiscal year thereafter, until the Board determines
12and certifies to the Governor that employers are contributing
13under item (i) of subsection (a-10) the full amount actually
14specified by item (i) of subsection (a-10), the required
15contribution of employers under item (i) of subsection (a-10)
16shall be the percentage of payroll required under this
17subsection from the previous fiscal year increased by 0.6% of
18payroll for each of State fiscal years 2015 through 2024, and
19increased by 0.5% of payroll for each State fiscal year after
202024.
21    Contributions required of employers under items (ii) and
22(iii) of subsection (a-10), under subsection (g), and under any
23other applicable provision of this Section are in addition to
24contributions required under item (i) of subsection (a-10).
25    (a-20) Beginning in State fiscal year 2015 and continuing
26until the Board determines and certifies to the Governor that

 

 

HB6210- 109 -LRB097 22285 JDS 71037 b

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

 

 

HB6210- 110 -LRB097 22285 JDS 71037 b

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

 

 

HB6210- 111 -LRB097 22285 JDS 71037 b

1    (d) Beginning in State fiscal year 1996, the required State
2contributions to the System shall be appropriated directly to
3the System and shall be payable through vouchers issued in
4accordance with subsection (c) of Section 15-165, except as
5provided in subsection (g).
6    (e) The State Comptroller shall draw warrants payable to
7the System upon proper certification by the System or by the
8employer in accordance with the appropriation laws and this
9Code.
10    (f) Normal costs under this Section means liability for
11pensions and other benefits which accrues to the System because
12of the credits earned for service rendered by the participants
13during the fiscal year and expenses of administering the
14System, but shall not include the principal of or any
15redemption premium or interest on any bonds issued by the Board
16or any expenses incurred or deposits required in connection
17therewith.
18    (g) The employer contributions under this subsection (g)
19are no longer required after June 30, 2013.
20    If the amount of a participant's earnings for any academic
21year used to determine the final rate of earnings, determined
22on a full-time equivalent basis, exceeds the amount of his or
23her earnings with the same employer for the previous academic
24year, determined on a full-time equivalent basis, by more than
256%, the participant's employer shall pay to the System, in
26addition to all other payments required under this Section and

 

 

HB6210- 112 -LRB097 22285 JDS 71037 b

1in accordance with guidelines established by the System, the
2present value of the increase in benefits resulting from the
3portion of the increase in earnings that is in excess of 6%.
4This present value shall be computed by the System on the basis
5of the actuarial assumptions and tables used in the most recent
6actuarial valuation of the System that is available at the time
7of the computation. The System may require the employer to
8provide any pertinent information or documentation.
9    Whenever it determines that a payment is or may be required
10under this subsection (g), the System shall calculate the
11amount of the payment and bill the employer for that amount.
12The bill shall specify the calculations used to determine the
13amount due. If the employer disputes the amount of the bill, it
14may, within 30 days after receipt of the bill, apply to the
15System in writing for a recalculation. The application must
16specify in detail the grounds of the dispute and, if the
17employer asserts that the calculation is subject to subsection
18(h) or (i) of this Section, must include an affidavit setting
19forth and attesting to all facts within the employer's
20knowledge that are pertinent to the applicability of subsection
21(h) or (i). Upon receiving a timely application for
22recalculation, the System shall review the application and, if
23appropriate, recalculate the amount due.
24    The employer contributions required under this subsection
25(g) (f) may be paid in the form of a lump sum within 90 days
26after receipt of the bill. If the employer contributions are

 

 

HB6210- 113 -LRB097 22285 JDS 71037 b

1not paid within 90 days after receipt of the bill, then
2interest will be charged at a rate equal to the System's annual
3actuarially assumed rate of return on investment compounded
4annually from the 91st day after receipt of the bill. Payments
5must be concluded within 3 years after the employer's receipt
6of the bill.
7    (h) This subsection (h) applies only to payments made or
8salary increases given on or after June 1, 2005 but before July
91, 2011. The changes made by Public Act 94-1057 shall not
10require the System to refund any payments received before July
1131, 2006 (the effective date of Public Act 94-1057).
12    When assessing payment for any amount due under subsection
13(g), the System shall exclude earnings increases paid to
14participants under contracts or collective bargaining
15agreements entered into, amended, or renewed before June 1,
162005.
17    When assessing payment for any amount due under subsection
18(g), the System shall exclude earnings increases paid to a
19participant at a time when the participant is 10 or more years
20from retirement eligibility under Section 15-135.
21    When assessing payment for any amount due under subsection
22(g), the System shall exclude earnings increases resulting from
23overload work, including a contract for summer teaching, or
24overtime when the employer has certified to the System, and the
25System has approved the certification, that: (i) in the case of
26overloads (A) the overload work is for the sole purpose of

 

 

HB6210- 114 -LRB097 22285 JDS 71037 b

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

 

 

HB6210- 115 -LRB097 22285 JDS 71037 b

1collective bargaining agreement entered into, amended, or
2renewed on or after June 1, 2005 but before July 1, 2011.
3Notwithstanding any other provision of this Section, any
4payments made or salary increases given after June 30, 2014
5shall be used in assessing payment for any amount due under
6subsection (g) of this Section.
7    (j) The System shall prepare a report and file copies of
8the report with the Governor and the General Assembly by
9January 1, 2007 that contains all of the following information:
10        (1) The number of recalculations required by the
11    changes made to this Section by Public Act 94-1057 for each
12    employer.
13        (2) The dollar amount by which each employer's
14    contribution to the System was changed due to
15    recalculations required by Public Act 94-1057.
16        (3) The total amount the System received from each
17    employer as a result of the changes made to this Section by
18    Public Act 94-4.
19        (4) The increase in the required State contribution
20    resulting from the changes made to this Section by Public
21    Act 94-1057.
22    (k) The Illinois Community College Board shall adopt rules
23for recommending lists of promotional positions submitted to
24the Board by community colleges and for reviewing the
25promotional lists on an annual basis. When recommending
26promotional lists, the Board shall consider the similarity of

 

 

HB6210- 116 -LRB097 22285 JDS 71037 b

1the positions submitted to those positions recognized for State
2universities by the State Universities Civil Service System.
3The Illinois Community College Board shall file a copy of its
4findings with the System. The System shall consider the
5findings of the Illinois Community College Board when making
6determinations under this Section. The System shall not exclude
7any earnings increases resulting from a promotion when the
8promotion was not submitted by a community college. Nothing in
9this subsection (k) shall require any community college to
10submit any information to the Community College Board.
11    (l) For purposes of determining the required State
12contribution to the System, the value of the System's assets
13shall be equal to the actuarial value of the System's assets,
14which shall be calculated as follows:
15    As of June 30, 2008, the actuarial value of the System's
16assets shall be equal to the market value of the assets as of
17that date. In determining the actuarial value of the System's
18assets for fiscal years after June 30, 2008, any actuarial
19gains or losses from investment return incurred in a fiscal
20year shall be recognized in equal annual amounts over the
215-year period following that fiscal year.
22    (m) For purposes of determining the required State
23contribution to the system for a particular year, the actuarial
24value of assets shall be assumed to earn a rate of return equal
25to the system's actuarially assumed rate of return.
26    (n) If the System submits a voucher for monthly

 

 

HB6210- 117 -LRB097 22285 JDS 71037 b

1contributions from the State as required by this Section and
2the State fails to pay within 90 days of receipt of such a
3voucher, the Board shall submit a written request to the
4Comptroller seeking payment. A copy of the request shall be
5filed with the Secretary of State, and the Secretary of State
6shall provide copies to the Governor and General Assembly. No
7earlier than the 16th day after filing a request with the
8Secretary of State, the Board shall have the right to commence
9a mandamus action in the Supreme Court of Illinois to compel
10the Comptroller to satisfy the voucher by making payment from
11the General Revenue Fund. This Section constitutes an express
12waiver of the State's sovereign immunity solely to the extent
13it permits the Board to commence a mandamus action in the
14Illinois Supreme Court to compel the Comptroller to pay a
15voucher for monthly contributions from the State as required in
16this Section.
17    Any payments required to be made by the State pursuant to
18an action commenced under this subsection are expressly
19subordinated to the payment of the principal, interest, and
20premium, if any, on any bonded debt obligation of the State or
21any other State-created entity, either currently outstanding
22or to be issued, for which the source of repayment or security
23thereon is derived directly or indirectly from tax revenues
24collected by the State or any other State-created entity.
25Payments on such bonded obligations include any statutory fund
26transfers or other prefunding mechanisms or formulas set forth,

 

 

HB6210- 118 -LRB097 22285 JDS 71037 b

1now or hereafter, in State law or bond indentures, into debt
2service funds or accounts of the State related to such bonded
3obligations, consistent with the payment schedules associated
4with such obligations.
5(Source: P.A. 95-331, eff. 8-21-07; 95-950, eff. 8-29-08;
696-43, eff. 7-15-09; 96-1497, eff. 1-14-11; 96-1511, eff.
71-27-11; 96-1554, eff. 3-18-11; revised 4-6-11.)
 
8    (40 ILCS 5/15-155.1 new)
9    Sec. 15-155.1. Actions to enforce payment by employers.
10    (a) If any employer fails to transmit to the System
11contributions required of it under this Article or
12contributions collected by it from its participating employees
13for the purposes of this Article for more than 90 days after
14the payment of such contributions is due, then the System,
15after giving notice to that employer, may certify to the State
16Comptroller the amounts of the delinquent payments, and the
17Comptroller shall deduct the amounts so certified or any part
18thereof from any payments or grants of State funds to the
19employer and shall pay the amounts so deducted to the System.
20If State funds from which such deductions may be made are not
21available, the System may proceed against the employer to
22recover the amounts of the delinquent payments in the
23appropriate circuit court.
24    (b) If any employer fails to transmit to the System
25contributions required of it under this Article or

 

 

HB6210- 119 -LRB097 22285 JDS 71037 b

1contributions collected by it from its participating employees
2for the purposes of this Article for more than 90 days after
3the payment of the contributions is due, the System, after
4giving notice to the employer, may certify the amounts of the
5delinquent payments to the county treasurer of any county in
6which the employer is located, who shall deduct the amounts so
7certified or any part thereof from the amounts collected from
8any tax levied by the employer and shall pay the amount so
9deducted to the System.
10    (c) If reports furnished to the System by the employer
11involved are inadequate for the computation of the amounts of
12any payments, the System may provide for such audit of the
13records of the employer as may be required to establish the
14amounts of the delinquent payments. The employer shall make its
15records available to the System for the purpose of the audit.
16The cost of the audit shall be added to the amount of the
17payments and shall be recovered by the System from the employer
18at the same time and in the same manner as the payments are
19recovered.
 
20    (40 ILCS 5/15-155.2 new)
21    Sec. 15-155.2. Individual employer accounts.
22    (a) The System shall create and maintain individual
23accounts for each employer for the purposes of determining
24employer contributions under subsection (a-10) of Section
2515-155. Each employer's account shall be notionally credited

 

 

HB6210- 120 -LRB097 22285 JDS 71037 b

1with the employer's liabilities accruing after July 1, 2013 and
2assets attributable to the employer's account that include (i)
3employer contributions made pursuant to subsection (a-10) of
4Section 15-155, (ii) other employer contributions from trust,
5federal, and other funds, (iii) employee contributions made
6after July 1, 2013, and (iv) income from investments. The
7System may deduct reasonable administrative expenses from each
8employer's account.
9    (b) In determining contributions required under subsection
10(a-10) of Section 15-155, the System shall determine (i) a
11blended rate of total normal cost that is applicable to
12contributions made by the University of Illinois, Southern
13Illinois University, Chicago State University, Eastern
14Illinois University, Governors State University, Illinois
15State University, Northeastern Illinois University, Northern
16Illinois University, and Western Illinois University, (ii) a
17blended rate of total normal cost that is applicable to
18contributions made by each community college board, and (iii) a
19rate equal to the total normal cost of the System that is
20applicable to employers other than those listed under item (i)
21or (ii).
22    (c) An employer may make written application with the Board
23to have a separate rate of total normal cost determined for the
24employer. Upon receiving the written application from an
25employer, the Board may determine a total rate of normal cost
26for the employer. The employer shall be responsible for any

 

 

HB6210- 121 -LRB097 22285 JDS 71037 b

1cost incurred in making the determination of total normal cost.
2    The Board may establish rules for the administration of
3this Section that include but are not limited to the date by
4which an application must be submitted and the fiscal year in
5which the determination will be used to determine the
6employer's contribution required under subsection (a-10) of
7Section 15-155.
8    (d) An employer whose determination of total normal cost
9under subsection (c) is used to determine its contributions
10required under subsection (a-10) of Section 15-155 may not be
11included in the determination of a rate of total normal cost
12under subsection (c) of this Section.
 
13    (40 ILCS 5/15-157)  (from Ch. 108 1/2, par. 15-157)
14    Sec. 15-157. Employee Contributions.
15    (a) Each participating employee shall make contributions
16towards the retirement benefits payable under the retirement
17program applicable to the employee from each payment of
18earnings applicable to employment under this system on and
19after the date of becoming a participant as follows: Prior to
20September 1, 1949, 3 1/2% of earnings; from September 1, 1949
21to August 31, 1955, 5%; from September 1, 1955 to August 31,
221969, 6%; from September 1, 1969, 6 1/2%. These contributions
23are to be considered as normal contributions for purposes of
24this Article.
25    Each participant who is a police officer or firefighter

 

 

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1shall make normal contributions of 8% of each payment of
2earnings applicable to employment as a police officer or
3firefighter under this system on or after September 1, 1981,
4unless he or she files with the board within 60 days after the
5effective date of this amendatory Act of 1991 or 60 days after
6the board receives notice that he or she is employed as a
7police officer or firefighter, whichever is later, a written
8notice waiving the retirement formula provided by Rule 4 of
9Section 15-136. This waiver shall be irrevocable. If a
10participant had met the conditions set forth in Section
1115-132.1 prior to the effective date of this amendatory Act of
121991 but failed to make the additional normal contributions
13required by this paragraph, he or she may elect to pay the
14additional contributions plus compound interest at the
15effective rate. If such payment is received by the board, the
16service shall be considered as police officer service in
17calculating the retirement annuity under Rule 4 of Section
1815-136. While performing service described in clause (i) or
19(ii) of Rule 4 of Section 15-136, a participating employee
20shall be deemed to be employed as a firefighter for the purpose
21of determining the rate of employee contributions under this
22Section.
23    (a-1) Notwithstanding any other provision of this Section,
24an employee who participates in the cash balance plan under
25Section 1-161 shall pay to the System for the purpose of
26participating in the cash balance plan 8% of each payment of

 

 

HB6210- 123 -LRB097 22285 JDS 71037 b

1earnings while he or she is a participant in the cash balance
2plan. Each participant who is a police officer or firefighter
3who participates in the cash balance plan under Section 1-161
4shall pay to the System for the purpose of participating in the
5cash balance plan 9.5% of each payment of earnings while he or
6she is participant in the cash balance plan. Employee
7contributions required under subsections (a), (b), and (c) of
8this Section shall not apply to an employee who participates in
9the cash balance plan under Section 1-161.
10    (a-2) In addition to the contributions required under
11either subsections (a), (b), and (c) or subsection (a-1), an
12employee who elects to participate in the optional cash balance
13plan under Section 1-162 shall pay to the System for the
14purpose of participating in the optional cash balance plan a
15contribution of 2% of each payment of earnings received while
16he or she is a participant in the optional cash balance plan.
17These contributions shall not be used for the purpose of
18determining any benefit under this Article except as provided
19in the optional cash balance plan.
20    (b) Starting September 1, 1969, each participating
21employee shall make additional contributions of 1/2 of 1% of
22earnings to finance a portion of the cost of the annual
23increases in retirement annuity provided under Section 15-136,
24except that with respect to participants in the self-managed
25plan this additional contribution shall be used to finance the
26benefits obtained under that retirement program.

 

 

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1    (c) In addition to the amounts described in subsections (a)
2and (b) of this Section, each participating employee shall make
3contributions of 1% of earnings applicable under this system on
4and after August 1, 1959. The contributions made under this
5subsection (c) shall be considered as survivor's insurance
6contributions for purposes of this Article if the employee is
7covered under the traditional benefit package, and such
8contributions shall be considered as additional contributions
9for purposes of this Article if the employee is participating
10in the self-managed plan or has elected to participate in the
11portable benefit package and has completed the applicable
12one-year waiting period. Contributions in excess of $80 during
13any fiscal year beginning before August 31, 1969 and in excess
14of $120 during any fiscal year thereafter until September 1,
151971 shall be considered as additional contributions for
16purposes of this Article.
17    (d) If the board by board rule so permits and subject to
18such conditions and limitations as may be specified in its
19rules, a participant may make other additional contributions of
20such percentage of earnings or amounts as the participant shall
21elect in a written notice thereof received by the board.
22    (e) That fraction of a participant's total accumulated
23normal contributions, the numerator of which is equal to the
24number of years of service in excess of that which is required
25to qualify for the maximum retirement annuity, and the
26denominator of which is equal to the total service of the

 

 

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1participant, shall be considered as accumulated additional
2contributions. The determination of the applicable maximum
3annuity and the adjustment in contributions required by this
4provision shall be made as of the date of the participant's
5retirement.
6    (f) Notwithstanding the foregoing, a participating
7employee shall not be required to make contributions under this
8Section after the date upon which continuance of such
9contributions would otherwise cause his or her retirement
10annuity to exceed the maximum retirement annuity as specified
11in clause (1) of subsection (c) of Section 15-136.
12    (g) A participating employee may make contributions for the
13purchase of service credit under this Article.
14(Source: P.A. 90-32, eff. 6-27-97; 90-65, eff. 7-7-97; 90-448,
15eff. 8-16-97; 90-511, eff. 8-22-97; 90-576, eff. 3-31-98;
1690-655, eff. 7-30-98; 90-766, eff. 8-14-98.)
 
17    (40 ILCS 5/15-158.2)
18    Sec. 15-158.2. Self-managed plan.
19    (a) Purpose. The General Assembly finds that it is
20important for colleges and universities to be able to attract
21and retain the most qualified employees and that in order to
22attract and retain these employees, colleges and universities
23should have the flexibility to provide a defined contribution
24plan as an alternative for eligible employees who elect not to
25participate in a defined benefit retirement program provided

 

 

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1under this Article. Accordingly, the State Universities
2Retirement System is hereby authorized to establish and
3administer a self-managed plan, which shall offer
4participating employees who became participating employees
5before the effective date of this amendatory Act of the 97th
6General Assembly the opportunity to accumulate assets for
7retirement through a combination of employee and employer
8contributions that may be invested in mutual funds, collective
9investment funds, or other investment products and used to
10purchase annuity contracts, either fixed or variable or a
11combination thereof. The plan must be qualified under the
12Internal Revenue Code of 1986.
13    (b) Adoption by employers. Each employer subject to this
14Article may elect to adopt the self-managed plan established
15under this Section until the effective date of this amendatory
16Act of the 97th General Assembly; this election is irrevocable.
17An employer's election to adopt the self-managed plan makes
18available to the eligible employees of that employer the
19elections described in Section 15-134.5.
20    The State Universities Retirement System shall be the plan
21sponsor for the self-managed plan and shall prepare a plan
22document and prescribe such rules and procedures as are
23considered necessary or desirable for the administration of the
24self-managed plan. Consistent with its fiduciary duty to the
25participants and beneficiaries of the self-managed plan, the
26Board of Trustees of the System may delegate aspects of plan

 

 

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1administration as it sees fit to companies authorized to do
2business in this State, to the employers, or to a combination
3of both.
4    (c) Selection of service providers and funding vehicles.
5The System, in consultation with the employers, shall solicit
6proposals to provide administrative services and funding
7vehicles for the self-managed plan from insurance and annuity
8companies and mutual fund companies, banks, trust companies, or
9other financial institutions authorized to do business in this
10State. In reviewing the proposals received and approving and
11contracting with no fewer than 2 and no more than 7 companies,
12the Board of Trustees of the System shall consider, among other
13things, the following criteria:
14        (1) the nature and extent of the benefits that would be
15    provided to the participants;
16        (2) the reasonableness of the benefits in relation to
17    the premium charged;
18        (3) the suitability of the benefits to the needs and
19    interests of the participating employees and the employer;
20        (4) the ability of the company to provide benefits
21    under the contract and the financial stability of the
22    company; and
23        (5) the efficacy of the contract in the recruitment and
24    retention of employees.
25    The System, in consultation with the employers, shall
26periodically review each approved company. A company may

 

 

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1continue to provide administrative services and funding
2vehicles for the self-managed plan only so long as it continues
3to be an approved company under contract with the Board.
4    (d) Employee Direction. Employees who are participating in
5the program must be allowed to direct the transfer of their
6account balances among the various investment options offered,
7subject to applicable contractual provisions. The participant
8shall not be deemed a fiduciary by reason of providing such
9investment direction. A person who is a fiduciary shall not be
10liable for any loss resulting from such investment direction
11and shall not be deemed to have breached any fiduciary duty by
12acting in accordance with that direction. Neither the System
13nor the employer guarantees any of the investments in the
14employee's account balances.
15    (e) Participation. An employee eligible to participate in
16the self-managed plan must make a written election in
17accordance with the provisions of Section 15-134.5 and the
18procedures established by the System. Participation in the
19self-managed plan by an electing employee shall begin on the
20first day of the first pay period following the later of the
21date the employee's election is filed with the System or the
22effective date as of which the employee's employer begins to
23offer participation in the self-managed plan. Employers may not
24make the self-managed plan available earlier than January 1,
251998. An employee's participation in any other retirement
26program administered by the System under this Article shall

 

 

HB6210- 129 -LRB097 22285 JDS 71037 b

1terminate on the date that participation in the self-managed
2plan begins.
3    An employee who has elected to participate in the
4self-managed plan under this Section must continue
5participation while employed in an eligible position, and may
6not participate in any other retirement program administered by
7the System under this Article while employed by that employer
8or any other employer that has adopted the self-managed plan,
9unless the self-managed plan is terminated in accordance with
10subsection (i).
11    Participation in the self-managed plan under this Section
12shall constitute membership in the State Universities
13Retirement System.
14    A participant under this Section shall be entitled to the
15benefits of Article 20 of this Code.
16    (f) Establishment of Initial Account Balance. If at the
17time an employee elects to participate in the self-managed plan
18he or she has rights and credits in the System due to previous
19participation in the traditional benefit package, the System
20shall establish for the employee an opening account balance in
21the self-managed plan, equal to the amount of contribution
22refund that the employee would be eligible to receive under
23Section 15-154 if the employee terminated employment on that
24date and elected a refund of contributions, except that this
25hypothetical refund shall include interest at the effective
26rate for the respective years. The System shall transfer assets

 

 

HB6210- 130 -LRB097 22285 JDS 71037 b

1from the defined benefit retirement program to the self-managed
2plan, as a tax free transfer in accordance with Internal
3Revenue Service guidelines, for purposes of funding the
4employee's opening account balance.
5    (g) No Duplication of Service Credit. Notwithstanding any
6other provision of this Article, an employee may not purchase
7or receive service or service credit applicable to any other
8retirement program administered by the System under this
9Article for any period during which the employee was a
10participant in the self-managed plan established under this
11Section.
12    (h) Contributions. The self-managed plan shall be funded by
13contributions from employees participating in the self-managed
14plan and employer contributions as provided in this Section.
15    The contribution rate for employees participating in the
16self-managed plan under this Section shall be equal to the
17employee contribution rate for other participants in the
18System, as provided in Section 15-157. This required
19contribution shall be made as an "employer pick-up" under
20Section 414(h) of the Internal Revenue Code of 1986 or any
21successor Section thereof. Any employee participating in the
22System's traditional benefit package prior to his or her
23election to participate in the self-managed plan shall continue
24to have the employer pick up the contributions required under
25Section 15-157. However, the amounts picked up after the
26election of the self-managed plan shall be remitted to and

 

 

HB6210- 131 -LRB097 22285 JDS 71037 b

1treated as assets of the self-managed plan. In no event shall
2an employee have an option of receiving these amounts in cash.
3Employees may make additional contributions to the
4self-managed plan in accordance with procedures prescribed by
5the System, to the extent permitted under rules prescribed by
6the System.
7    The program shall provide for employer contributions to be
8credited to each self-managed plan participant at a rate of
97.6% of the participating employee's salary, less the amount
10used by the System to provide disability benefits for the
11employee. The amounts so credited shall be paid into the
12participant's self-managed plan accounts in a manner to be
13prescribed by the System.
14    An amount of employer contribution, not exceeding 1% of the
15participating employee's salary, shall be used for the purpose
16of providing the disability benefits of the System to the
17employee. Prior to the beginning of each plan year under the
18self-managed plan, the Board of Trustees shall determine, as a
19percentage of salary, the amount of employer contributions to
20be allocated during that plan year for providing disability
21benefits for employees in the self-managed plan.
22    The State of Illinois shall make contributions by
23appropriations to the System of the employer contributions
24required for employees who participate in the self-managed plan
25under this Section. The amount required shall be certified by
26the Board of Trustees of the System and paid by the State in

 

 

HB6210- 132 -LRB097 22285 JDS 71037 b

1accordance with Section 15-165. The System shall not be
2obligated to remit the required employer contributions to any
3of the insurance and annuity companies, mutual fund companies,
4banks, trust companies, financial institutions, or other
5sponsors of any of the funding vehicles offered under the
6self-managed plan until it has received the required employer
7contributions from the State. In the event of a deficiency in
8the amount of State contributions, the System shall implement
9those procedures described in subsection (c) of Section 15-165
10to obtain the required funding from the General Revenue Fund.
11    (i) Termination. The self-managed plan authorized under
12this Section may be terminated by the System, subject to the
13terms of any relevant contracts, and the System shall have no
14obligation to reestablish the self-managed plan under this
15Section. This Section does not create a right to continued
16participation in any self-managed plan set up by the System
17under this Section. If the self-managed plan is terminated, the
18participants shall have the right to participate in one of the
19other retirement programs offered by the System and receive
20service credit in such other retirement program for any years
21of employment following the termination.
22    (j) Vesting; Withdrawal; Return to Service. A participant
23in the self-managed plan becomes vested in the employer
24contributions credited to his or her accounts in the
25self-managed plan on the earliest to occur of the following:
26(1) completion of 5 years of service with an employer described

 

 

HB6210- 133 -LRB097 22285 JDS 71037 b

1in Section 15-106; (2) the death of the participating employee
2while employed by an employer described in Section 15-106, if
3the participant has completed at least 1 1/2 years of service;
4or (3) the participant's election to retire and apply the
5reciprocal provisions of Article 20 of this Code.
6    A participant in the self-managed plan who receives a
7distribution of his or her vested amounts from the self-managed
8plan while not yet eligible for retirement under this Article
9(and Article 20, if applicable) shall forfeit all service
10credit and accrued rights in the System; if subsequently
11re-employed, the participant shall be considered a new
12employee. If a former participant again becomes a participating
13employee (or becomes employed by a participating system under
14Article 20 of this Code) and continues as such for at least 2
15years, all such rights, service credits, and previous status as
16a participant shall be restored upon repayment of the amount of
17the distribution, without interest.
18    (k) Benefit amounts. If an employee who is vested in
19employer contributions terminates employment, the employee
20shall be entitled to a benefit which is based on the account
21values attributable to both employer and employee
22contributions and any investment return thereon.
23    If an employee who is not vested in employer contributions
24terminates employment, the employee shall be entitled to a
25benefit based solely on the account values attributable to the
26employee's contributions and any investment return thereon,

 

 

HB6210- 134 -LRB097 22285 JDS 71037 b

1and the employer contributions and any investment return
2thereon shall be forfeited. Any employer contributions which
3are forfeited shall be held in escrow by the company investing
4those contributions and shall be used as directed by the System
5for future allocations of employer contributions or for the
6restoration of amounts previously forfeited by former
7participants who again become participating employees.
8(Source: P.A. 93-347, eff. 7-24-03.)
 
9    (40 ILCS 5/15-159)  (from Ch. 108 1/2, par. 15-159)
10    Sec. 15-159. Board created.
11    (a) A board of trustees constituted as provided in this
12Section shall administer this System. The board shall be known
13as the Board of Trustees of the State Universities Retirement
14System.
15    (b) Until July 1, 1995, the Board of Trustees shall be
16constituted as follows:
17    Two trustees shall be members of the Board of Trustees of
18the University of Illinois, one shall be a member of the Board
19of Trustees of Southern Illinois University, one shall be a
20member of the Board of Trustees of Chicago State University,
21one shall be a member of the Board of Trustees of Eastern
22Illinois University, one shall be a member of the Board of
23Trustees of Governors State University, one shall be a member
24of the Board of Trustees of Illinois State University, one
25shall be a member of the Board of Trustees of Northeastern

 

 

HB6210- 135 -LRB097 22285 JDS 71037 b

1Illinois University, one shall be a member of the Board of
2Trustees of Northern Illinois University, one shall be a member
3of the Board of Trustees of Western Illinois University, and
4one shall be a member of the Illinois Community College Board,
5selected in each case by their respective boards, and 2 shall
6be participants of the system appointed by the Governor for a 6
7year term with the first appointment made pursuant to this
8amendatory Act of 1984 to be effective September 1, 1985, and
9one shall be a participant appointed by the Illinois Community
10College Board for a 6 year term, and one shall be a participant
11appointed by the Board of Trustees of the University of
12Illinois for a 6 year term, and one shall be a participant or
13annuitant of the system who is a senior citizen age 60 or older
14appointed by the Governor for a 6 year term with the first
15appointment to be effective September 1, 1985.
16    The terms of all trustees holding office under this
17subsection (b) on June 30, 1995 shall terminate at the end of
18that day and the Board shall thereafter be constituted as
19provided in subsection (c).
20    (c) Beginning July 1, 1995, the Board of Trustees shall be
21constituted as follows:
22    The Board shall consist of 9 trustees appointed by the
23Governor. Two of the trustees, designated at the time of
24appointment, shall be participants of the System. Two of the
25trustees, designated at the time of appointment, shall be
26annuitants of the System who are receiving retirement annuities

 

 

HB6210- 136 -LRB097 22285 JDS 71037 b

1under this Article. The 5 remaining trustees may, but need not,
2be participants or annuitants of the System.
3    The term of office of trustees appointed under this
4subsection (c) shall be 6 years, beginning on July 1. However,
5of the initial trustees appointed under this subsection (c), 3
6shall be appointed for terms of 2 years, 3 shall be appointed
7for terms of 4 years, and 3 shall be appointed for terms of 6
8years, to be designated by the Governor at the time of
9appointment.
10    The terms of all trustees holding office under this
11subsection (c) on the effective date of this amendatory Act of
12the 96th General Assembly shall terminate on that effective
13date. The Governor shall make nominations for appointment under
14this Section within 60 days after the effective date of this
15amendatory Act of the 96th General Assembly. A trustee sitting
16on the board on the effective date of this amendatory Act of
17the 96th General Assembly may not hold over in office for more
18than 90 days after the effective date of this amendatory Act of
19the 96th General Assembly. Nothing in this Section shall
20prevent the Governor from making a temporary appointment or
21nominating a trustee holding office on the day before the
22effective date of this amendatory Act of the 96th General
23Assembly.
24    (d) Beginning on the 90th day after the effective date of
25this amendatory Act of the 96th General Assembly, the Board of
26Trustees shall be constituted as follows:

 

 

HB6210- 137 -LRB097 22285 JDS 71037 b

1        (1) The Chairperson of the Board of Higher Education,
2    who shall act as chairperson of this Board.
3        (2) Two Four trustees appointed by the Governor with
4    the advice and consent of the Senate who may not be members
5    of the system or hold an elective State office and who
6    shall serve for a term of 6 years, except that the terms of
7    the initial appointees under this subsection (d) shall be
8    as follows: 1 2 for a term of 3 years and 1 2 for a term of
9    6 years.
10        (3) Four active participants of the system to be
11    elected from the contributing membership of the system by
12    the contributing members, no more than 2 of which may be
13    from any of the University of Illinois campuses, who shall
14    serve for a term of 6 years, except that the terms of the
15    initial electees shall be as follows: 2 for a term of 3
16    years and 2 for a term of 6 years.
17        (4) Two annuitants of the system who have been
18    annuitants for at least one full year, to be elected from
19    and by the annuitants of the system, no more than one of
20    which may be from any of the University of Illinois
21    campuses, who shall serve for a term of 6 years, except
22    that the terms of the initial electees shall be as follows:
23    one for a term of 3 years and one for a term of 6 years.
24        (5) One trustee to be elected by the trustees of the
25    boards of trustees of community colleges in the State who
26    is not a participant in the System.

 

 

HB6210- 138 -LRB097 22285 JDS 71037 b

1        (6) One trustee who serves as a trustee on the board of
2    trustees of a public institution of higher education, as
3    defined in Section 1 of the Board of Higher Education Act,
4    to be elected by the trustees of public institutions of
5    higher education and who is not a participant in the
6    System.
7    The 2 positions created by this amendatory Act of the 97th
8General Assembly shall be filled as soon as practicable by
9appointment of the Board, and the persons so appointed shall
10serve until such time as the System can conduct elections to
11fill those positions.
12    For the purposes of this Section, the Governor may make a
13nomination and the Senate may confirm the nominee in advance of
14the commencement of the nominee's term of office.
15    (e) The 6 elected trustees shall be elected within 90 days
16after the effective date of this amendatory Act of the 96th
17General Assembly for a term beginning on the 90th day after the
18effective date of this amendatory Act. Trustees shall be
19elected thereafter as terms expire for a 6-year term beginning
20July 15 next following their election, and such election shall
21be held on May 1, or on May 2 when May 1 falls on a Sunday. The
22board may establish rules for the election of trustees to
23implement the provisions of this amendatory Act of the 96th
24General Assembly and for future elections. Candidates for the
25participating trustee shall be nominated by petitions in
26writing, signed by not less than 400 participants with their

 

 

HB6210- 139 -LRB097 22285 JDS 71037 b

1addresses shown opposite their names. Candidates for the
2annuitant trustee shall be nominated by petitions in writing,
3signed by not less than 100 annuitants with their addresses
4shown opposite their names. If there is more than one qualified
5nominee for each elected trustee, then the board shall conduct
6a secret ballot election by mail for that trustee, in
7accordance with rules as established by the board. If there is
8only one qualified person nominated by petition for each
9elected trustee, then the election as required by this Section
10shall not be conducted for that trustee and the board shall
11declare such nominee duly elected. A vacancy occurring in the
12elective membership of the board shall be filled for the
13unexpired term by the elected trustees serving on the board for
14the remainder of the term.
15    (f) A vacancy on the board of trustees caused by
16resignation, death, expiration of term of office, or other
17reason shall be filled by a qualified person appointed by the
18Governor for the remainder of the unexpired term.
19    (g) Trustees (other than the trustees incumbent on June 30,
201995 or as provided in subsection (c) of this Section) shall
21continue in office until their respective successors are
22appointed and have qualified, except that a trustee appointed
23to one of the participant positions shall be disqualified
24immediately upon the termination of his or her status as a
25participant and a trustee appointed to one of the annuitant
26positions shall be disqualified immediately upon the

 

 

HB6210- 140 -LRB097 22285 JDS 71037 b

1termination of his or her status as an annuitant receiving a
2retirement annuity.
3    (h) Each trustee must take an oath of office before a
4notary public of this State and shall qualify as a trustee upon
5the presentation to the board of a certified copy of the oath.
6The oath must state that the person will diligently and
7honestly administer the affairs of the retirement system, and
8will not knowingly violate or wilfully permit to be violated
9any provisions of this Article.
10    Each trustee shall serve without compensation but shall be
11reimbursed for expenses necessarily incurred in attending
12board meetings and carrying out his or her duties as a trustee
13or officer of the system.
14    (i) This amendatory Act of 1995 is intended to supersede
15the changes made to this Section by Public Act 89-4.
16(Source: P.A. 96-6, eff. 4-3-09; 96-1000, eff. 7-2-10.)
 
17    (40 ILCS 5/15-163)  (from Ch. 108 1/2, par. 15-163)
18    Sec. 15-163. To consider applications and authorize
19payments.
20    To consider and pass on all certifications of employment
21and applications for annuities and benefits; to authorize the
22granting of annuities and benefits; and to limit or suspend any
23payment or payments, all in accordance with this Article.
24(Source: Laws 1963, p. 161.)
 

 

 

HB6210- 141 -LRB097 22285 JDS 71037 b

1    (40 ILCS 5/15-165)   (from Ch. 108 1/2, par. 15-165)
2    Sec. 15-165. To certify amounts and submit vouchers.
3    (a) The Board shall certify to the Governor on or before
4November 15 of each year through until November 15, 2011 the
5appropriation required from State funds for the purposes of
6this System for the following fiscal year. The certification
7under this subsection (a) shall include a copy of the actuarial
8recommendations upon which it is based and shall specifically
9identify the System's projected State normal cost for that
10fiscal year and the projected State cost for the self-managed
11plan for that fiscal year.
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    (a-5) On or before November 1 of each year, beginning
4November 1, 2012, the Board shall submit to the State Actuary,
5the Governor, and the General Assembly a proposed certification
6of the amount of the required State contribution to the System
7for the next fiscal year, along with all of the actuarial
8assumptions, calculations, and data upon which that proposed
9certification is based. On or before January 1 of each year,
10beginning January 1, 2013, the State Actuary shall issue a
11preliminary report concerning the proposed certification and
12identifying, if necessary, recommended changes in actuarial
13assumptions that the Board must consider before finalizing its
14certification of the required State contributions.
15    On or before January 15, 2013 and each January 15
16thereafter, the Board shall certify to the Governor and the
17General Assembly the amount of the required State contribution
18for the next fiscal year. The certification shall include a
19copy of the actuarial recommendations upon which it is based
20and shall specifically identify the System's projected State
21normal cost for that fiscal year and the projected State cost
22for the self-managed plan for that fiscal year. The Board's
23certification must note, in a written response to the State
24Actuary, any deviations from the State Actuary's recommended
25changes, the reason or reasons for not following the State
26Actuary's recommended changes, and the fiscal impact of not

 

 

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1following the State Actuary's recommended changes on the
2required State contribution.
3    (b) The Board shall certify to the State Comptroller or
4employer, as the case may be, from time to time, by its
5president and secretary, with its seal attached, the amounts
6payable to the System from the various funds.
7    (c) Beginning in State fiscal year 1996, on or as soon as
8possible after the 15th day of each month the Board shall
9submit vouchers for payment of State contributions to the
10System, in a total monthly amount of one-twelfth of the
11required annual State contribution certified under subsection
12(a). From the effective date of this amendatory Act of the 93rd
13General Assembly through June 30, 2004, the Board shall not
14submit vouchers for the remainder of fiscal year 2004 in excess
15of the fiscal year 2004 certified contribution amount
16determined under this Section after taking into consideration
17the transfer to the System under subsection (b) of Section
186z-61 of the State Finance Act. These vouchers shall be paid by
19the State Comptroller and Treasurer by warrants drawn on the
20funds appropriated to the System for that fiscal year.
21    If in any month the amount remaining unexpended from all
22other appropriations to the System for the applicable fiscal
23year (including the appropriations to the System under Section
248.12 of the State Finance Act and Section 1 of the State
25Pension Funds Continuing Appropriation Act) is less than the
26amount lawfully vouchered under this Section, the difference

 

 

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1shall be paid from the General Revenue Fund under the
2continuing appropriation authority provided in Section 1.1 of
3the State Pension Funds Continuing Appropriation Act.
4    (d) So long as the payments received are the full amount
5lawfully vouchered under this Section, payments received by the
6System under this Section shall be applied first toward the
7employer contribution to the self-managed plan established
8under Section 15-158.2. Payments shall be applied second toward
9the employer's portion of the normal costs of the System, as
10defined in subsection (f) of Section 15-155. The balance shall
11be applied toward the unfunded actuarial liabilities of the
12System.
13    (e) In the event that the System does not receive, as a
14result of legislative enactment or otherwise, payments
15sufficient to fully fund the employer contribution to the
16self-managed plan established under Section 15-158.2 and to
17fully fund that portion of the employer's portion of the normal
18costs of the System, as calculated in accordance with Section
1915-155(a-1), then any payments received shall be applied
20proportionately to the optional retirement program established
21under Section 15-158.2 and to the employer's portion of the
22normal costs of the System, as calculated in accordance with
23Section 15-155(a-1).
24(Source: P.A. 96-1497, eff. 1-14-11; 96-1511, eff. 1-27-11;
2597-694, eff. 6-18-12.)
 

 

 

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1    (40 ILCS 5/15-198)
2    Sec. 15-198. 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 or Article 1, that results from
8an amendment to this Code that takes effect after the effective
9date of this amendatory Act of the 94th General Assembly. "New
10benefit increase", however, does not include any benefit
11increase resulting from the changes made to this Article or
12Article 1 by this amendatory Act of the 97th General Assembly.
13    (b) Notwithstanding any other provision of this Code or any
14subsequent amendment to this Code, every new benefit increase
15is subject to this Section and shall be deemed to be granted
16only in conformance with and contingent upon compliance with
17the provisions of this Section.
18    (c) The Public Act enacting a new benefit increase must
19identify and provide for payment to the System of additional
20funding at least sufficient to fund the resulting annual
21increase in cost to the System as it accrues.
22    Every new benefit increase is contingent upon the General
23Assembly providing the additional funding required under this
24subsection. The Commission on Government Forecasting and
25Accountability shall analyze whether adequate additional
26funding has been provided for the new benefit increase and

 

 

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

 

 

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1benefit increase was in effect.
2(Source: P.A. 94-4, eff. 6-1-05.)
 
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

 

 

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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

 

 

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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. A person employed as a paraprofessional educator
19shall not be deemed to be certificated for the purposes of this
20Section.
 
21    (40 ILCS 5/16-121)  (from Ch. 108 1/2, par. 16-121)
22    Sec. 16-121. Salary. "Salary": The actual compensation

 

 

HB6210- 152 -LRB097 22285 JDS 71037 b

1received by a teacher during any school year and recognized by
2the system in accordance with rules of the board. For purposes
3of this Section, "school year" includes the regular school term
4plus any additional period for which a teacher is compensated
5and such compensation is recognized by the rules of the board.
6Notwithstanding any other provision of this Section, "salary"
7does not include any future increase in income offered by an
8employer under this Article pursuant to the requirements of
9subsection (c) of Section 16-131.7 that is accepted by a Tier I
10employee, or a Tier I retiree returning to active service, who
11has made an election under paragraph (2) of subsection (a) or
12(a-5) of Section 16-131.7.
13(Source: P.A. 84-1028.)
 
14    (40 ILCS 5/16-121.1 new)
15    Sec. 16-121.1. Future increase in income. "Future increase
16in income": Any increase in income in any form offered by an
17employer to a teacher under this Article after June 30, 2013
18that would qualify as "salary", as defined under Section
1914-103.10, but for the fact that the employer offered the
20increase in income to the teacher on the condition that it not
21qualify as salary and the teacher accepted the increase in
22income subject to that condition. The term "future increase in
23income" does not include an increase in income in any form that
24is paid to a Tier I employee under an employment contract or
25collective bargaining agreement that is in effect on the

 

 

HB6210- 153 -LRB097 22285 JDS 71037 b

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

 

 

HB6210- 154 -LRB097 22285 JDS 71037 b

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

 

 

HB6210- 155 -LRB097 22285 JDS 71037 b

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

 

 

HB6210- 156 -LRB097 22285 JDS 71037 b

1    required contributions for such credit, the annuity shall
2    be recalculated to include the additional service credit,
3    with the increase taking effect on the date the System
4    received written notification of the annuitant's intent to
5    purchase the credit, if payment of all the required
6    contributions is made within 60 days of such notice, or
7    else on the first annuity payment date following the date
8    of payment of the required contributions. In calculating
9    the automatic annual increase for an annuity that has been
10    recalculated under this Section, the increase attributable
11    to the additional service allowable under P.A. 87-794 shall
12    be included in the calculation of automatic annual
13    increases accruing after the effective date of the
14    recalculation.
15        Credit for military service shall be determined as
16    follows: if entry occurs during the months of July, August,
17    or September and the member was a teacher at the end of the
18    immediately preceding school term, credit shall be granted
19    from July 1 of the year in which he or she entered service;
20    if entry occurs during the school term and the teacher was
21    in teaching service at the beginning of the school term,
22    credit shall be granted from July 1 of such year. In all
23    other cases where credit for military service is allowed,
24    credit shall be granted from the date of entry into the
25    service.
26        The total period of military service for which credit

 

 

HB6210- 157 -LRB097 22285 JDS 71037 b

1    is granted shall not exceed 5 years for any member unless
2    the service: (A) is validated before July 1, 1964, and (B)
3    does not extend beyond July 1, 1963. Credit for military
4    service shall be granted under this Section only if not
5    more than 5 years of the military service for which credit
6    is granted under this Section is used by the member to
7    qualify for a military retirement allotment from any branch
8    of the armed forces of the United States. The changes to
9    this subdivision (b)(3) made by Public Act 86-272 shall
10    apply not only to persons who on or after its effective
11    date (August 23, 1989) are in service as a teacher under
12    the System, but also to persons whose status as such a
13    teacher terminated prior to such effective date, whether or
14    not such person is an annuitant on that date.
15        (4) Any periods served as a member of the General
16    Assembly.
17        (5)(i) Any periods for which a teacher, as defined in
18    Section 16-106, is granted a leave of absence, provided he
19    or she returns to teaching service creditable under this
20    System or the State Universities Retirement System
21    following the leave; (ii) periods during which a teacher is
22    involuntarily laid off from teaching, provided he or she
23    returns to teaching following the lay-off; (iii) periods
24    prior to July 1, 1983 during which a teacher ceased covered
25    employment due to pregnancy, provided that the teacher
26    returned to teaching service creditable under this System

 

 

HB6210- 158 -LRB097 22285 JDS 71037 b

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

 

 

HB6210- 159 -LRB097 22285 JDS 71037 b

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

 

 

HB6210- 160 -LRB097 22285 JDS 71037 b

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

 

 

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1    employee of the Illinois Mathematics and Science Academy
2    for which credit has not been terminated under Section
3    15-113.9 of this Code.
4        (8) Service as a substitute teacher for work performed
5    prior to July 1, 1990.
6        (9) Service as a part-time teacher for work performed
7    prior to July 1, 1990.
8        (10) Up to 2 years of employment with Southern Illinois
9    University - Carbondale from September 1, 1959 to August
10    31, 1961, or with Governors State University from September
11    1, 1972 to August 31, 1974, for which the teacher has no
12    credit under Article 15. To receive credit under this item
13    (10), a teacher must apply in writing to the Board and pay
14    the required contributions before May 1, 1993 and have at
15    least 12 years of service credit under this Article.
16    (b-1) A member may establish optional credit for up to 2
17years of service as a teacher or administrator employed by a
18private school recognized by the Illinois State Board of
19Education, provided that the teacher (i) was certified under
20the law governing the certification of teachers at the time the
21service was rendered, (ii) applies in writing on or after
22August 1, 2009 and on or before August 1, 2012, (iii) supplies
23satisfactory evidence of the employment, (iv) completes at
24least 10 years of contributing service as a teacher as defined
25in Section 16-106, and (v) pays the contribution required in
26subsection (d-5) of Section 16-128. The member may apply for

 

 

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1credit under this subsection and pay the required contribution
2before completing the 10 years of contributing service required
3under item (iv), but the credit may not be used until the item
4(iv) contributing service requirement has been met.
5    (c) The service credits specified in this Section shall be
6granted only if: (1) such service credits are not used for
7credit in any other statutory tax-supported public employee
8retirement system other than the federal Social Security
9program; and (2) the member makes the required contributions as
10specified in Section 16-128. Except as provided in subsection
11(b-1) of this Section, the service credit shall be effective as
12of the date the required contributions are completed.
13    Any service credits granted under this Section shall
14terminate upon cessation of membership for any cause.
15    Credit may not be granted under this Section covering any
16period for which an age retirement or disability retirement
17allowance has been paid.
18(Source: P.A. 96-546, eff. 8-17-09.)
 
19    (40 ILCS 5/16-131.7 new)
20    Sec. 16-131.7. Election by Tier I employees and Tier I
21retirees.
22    (a) Each Tier I employee shall make an irrevocable election
23either:
24        (1) to agree to the following:
25            (i) to have the amount of the automatic annual

 

 

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

 

 

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

 

 

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1no later than May 31, 2013, except that:
2        (i) a person who becomes a Tier I retiree under this
3    Article on or after January 1, 2013 must make the election
4    under this subsection (a-5) within 60 days after becoming a
5    Tier I retiree; and
6        (ii) a person who made the election under subsection
7    (a) as a Tier I employee remains bound by that election and
8    shall not make a later election under this subsection
9    (a-5).
10    If a Tier I retiree fails for any reason to make a required
11election under this subsection within the time specified, then
12the Tier I retiree shall be deemed to have made the election
13under paragraph (2) of this subsection.
14    (a-10) All elections under subsection (a) or (a-5) that are
15made or deemed to be made before June 1, 2013 shall take effect
16on July 1, 2013. Elections that are made or deemed to be made
17on or after June 1, 2013 shall take effect on the first day of
18the month following the month in which the election is made or
19deemed to be made.
20    (b) As adequate and legal consideration provided under this
21amendatory Act of the 97th General Assembly for making the
22election under paragraph (1) of subsection (a) of this Section,
23any future increases in income offered by an employer under
24this Article to a Tier I employee who has made the election
25under paragraph (1) of subsection (a) of this Section shall be
26offered expressly and irrevocably as constituting salary under

 

 

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

 

 

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

 

 

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1sufficient for the System to publish the details of any
2required elections on its website or to publish those details
3in a regularly published newsletter or other existing public
4forum.
5    Tier I employees and Tier I retirees who are subject to
6this Section shall be provided with an election packet
7containing information regarding their options, as well as the
8forms necessary to make the required election. Upon request,
9the System shall offer Tier I employees and Tier I retirees an
10opportunity to receive information from the System before
11making the required election. The information may consist of
12video materials, group presentations, individual consultation
13with a member or authorized representative of the System in
14person or by telephone or other electronic means, or any
15combination of those methods. The System shall not provide
16advice or counseling with respect to which election a Tier I
17employee or Tier I retiree should make or specific to the legal
18or tax circumstances of or consequences to the Tier I employee
19or Tier I retiree.
20    The System shall inform Tier I employees and Tier I
21retirees in the election packet required under this subsection
22that the Tier I employee or Tier I retiree may also wish to
23obtain information and counsel relating to the election
24required under this Section from any other available source,
25including but not limited to labor organizations and private
26counsel.

 

 

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1    The System shall coordinate with the Illinois Department of
2Central Management Services and each other retirement system
3administering an election in accordance with this amendatory
4Act of the 97th General Assembly to provide information
5concerning the impact of the election under this Section.
6    In no event shall the System, its staff, or the Board be
7held liable for any information given to a member, beneficiary,
8or annuitant regarding the elections under this Section.
9    (e) Notwithstanding any other provision of law, an employer
10under this Article is required to offer any future increases in
11income expressly and irrevocably as not constituting "salary"
12under Section 16-121 to any Tier I employee, or Tier I retiree
13returning to active service, who has made an election under
14paragraph (2) or subsection (a) or (a-5) of Section 16-131.7. A
15Tier I employee, or Tier I retiree returning to active service,
16who has made an election under paragraph (2) or subsection (a)
17or (a-5) of Section 16-131.7 shall not accept any future
18increase in income that is offered by an employer under this
19Article in violation of the requirement set forth in this
20subsection.
21    (f) A member's election under this Section is not a
22prohibited election under subdivision (j)(1) of Section 1-119
23of this Code.
24    (g) An employee who has made the election under paragraph
25(1) of subsection (a) or (a-5) of this Section may elect to
26participate in the optional cash balance plan under Section

 

 

HB6210- 170 -LRB097 22285 JDS 71037 b

11-162.
2    The election to participate in the optional cash balance
3plan shall be made in writing, in the manner provided by the
4applicable retirement system.
5    (h) Qualified Plan Status. No provision of this Section
6shall be interpreted in a way that would cause the System to
7cease to be a qualified plan under Section 401(a) of the
8Internal Revenue Code of 1986.
 
9    (40 ILCS 5/16-133.1)  (from Ch. 108 1/2, par. 16-133.1)
10    Sec. 16-133.1. Automatic annual increase in annuity.
11    (a) Each member with creditable service and retiring on or
12after August 26, 1969 is entitled to the automatic annual
13increases in annuity provided under this Section while
14receiving a retirement annuity or disability retirement
15annuity from the system.
16    An annuitant shall first be entitled to an initial increase
17under this Section on the January 1 next following the first
18anniversary of retirement, or January 1 of the year next
19following attainment of age 61, whichever is later. At such
20time, the system shall pay an initial increase determined as
21follows or as provided in subsections (a-1) and (a-2):
22        (1) 1.5% of the originally granted retirement annuity
23    or disability retirement annuity multiplied by the number
24    of years elapsed, if any, from the date of retirement until
25    January 1, 1972, plus

 

 

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1        (2) 2% of the originally granted annuity multiplied by
2    the number of years elapsed, if any, from the date of
3    retirement or January 1, 1972, whichever is later, until
4    January 1, 1978, plus
5        (3) 3% of the originally granted annuity multiplied by
6    the number of years elapsed from the date of retirement or
7    January 1, 1978, whichever is later, until the effective
8    date of the initial increase.
9However, the initial annual increase calculated under this
10Section for the recipient of a disability retirement annuity
11granted under Section 16-149.2 shall be reduced by an amount
12equal to the total of all increases in that annuity received
13under Section 16-149.5 (but not exceeding 100% of the amount of
14the initial increase otherwise provided under this Section).
15    Following the initial increase, automatic annual increases
16in annuity shall be payable on each January 1 thereafter during
17the lifetime of the annuitant, determined as a percentage of
18the originally granted retirement annuity or disability
19retirement annuity for increases granted prior to January 1,
201990, and calculated as a percentage of the total amount of
21annuity, including previous increases under this Section, for
22increases granted on or after January 1, 1990, as follows: 1.5%
23for periods prior to January 1, 1972, 2% for periods after
24December 31, 1971 and prior to January 1, 1978, and 3% for
25periods after December 31, 1977, or as provided in subsections
26(a-1) and (a-2).

 

 

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1    (a-1) Notwithstanding any other provision of this Article,
2for a Tier I employee or Tier I retiree who made the election
3under paragraph (1) of either subsection (a) or (a-5) of
4Section 16-131.7, the amount of each automatic annual increase
5in retirement annuity occurring on or after the effective date
6of that election shall be 3% or one-half of the annual
7unadjusted percentage increase, if any, in the Consumer Price
8Index-U for the 12 months ending with the preceding September,
9whichever is less, of the originally granted retirement
10annuity. For the purposes of this Section, "Consumer Price
11Index-U" means the index published by the Bureau of Labor
12Statistics of the United States Department of Labor that
13measures the average change in prices of goods and services
14purchased by all urban consumers, United States city average,
15all items, 1982-84 = 100.
16    (a-2) Notwithstanding any other provision of this Article,
17for a Tier I employee or Tier I retiree who made the election
18under paragraph (1) of subsection (a) or (a-5) of Section
1916-131.7, the monthly retirement annuity shall first be subject
20to annual increases on the January 1 occurring on or next after
21the attainment of age 67 or the January 1 occurring on or next
22after the fifth anniversary of the annuity start date,
23whichever occurs earlier. If on the effective date of the
24election under paragraph (1) of subsection (a-5) of Section
2516-131.7 a Tier I retiree has already received an annual
26increase under this Section but does not yet meet the new

 

 

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

 

 

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

 

 

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

 

 

HB6210- 176 -LRB097 22285 JDS 71037 b

1member's contribution, if any, has been received by the System;
2however, the date that contribution is received shall not be
3considered in determining the effective date of retirement.
4    The number of members working for a single employer who may
5retire under this Section in any year may be limited at the
6option of the employer to a specified percentage of those
7eligible, not less than 10%, with the right to participate to
8be allocated among those applying on the basis of seniority in
9the service of the employer.
10    The required employer contribution under this Section
11shall be enforceable under Section 16-158.1.
 
12    (40 ILCS 5/16-136.1)  (from Ch. 108 1/2, par. 16-136.1)
13    Sec. 16-136.1. Annual increase for certain annuitants.
14    (a) Any annuitant receiving a retirement annuity on June
1530, 1969 and any member retiring after June 30, 1969 shall be
16eligible for the annual increases provided under this Section
17provided the annuitant is ineligible for the automatic annual
18increase in annuity provided under Section 16-133.1, and
19provided further that (1) retirement occurred at age 55 or over
20and was based on 5 or more years of creditable service or (2)
21if retirement occurred prior to age 55, the retirement annuity
22was based on 20 or more years of creditable service.
23    (b) Subject to the provisions of subsections (b-1) and
24(b-2), an An annuitant entitled to increases under this Section
25shall be entitled to the initial increase as of the later of:

 

 

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1(1) January 1 following attainment of age 65, (2) January 1
2following the first anniversary of retirement, or (3) the first
3day of the month following receipt of the required qualifying
4contribution from the annuitant. The initial monthly increase
5shall be computed on the basis of the period elapsed between
6the later of the date of last retirement or attainment of age
750 and the date of qualification for the initial increase, at
8the rate of 1 1/2% of the original monthly retirement annuity
9per year for periods prior to September 1, 1971, and at the
10rate of 2% per year for periods between September 1, 1971 and
11September 1, 1978, and at the rate of 3% per year for periods
12thereafter.
13    Subject to the provisions of subsections (b-1) and (b-2),
14an An annuitant who has received an initial increase under this
15Section, shall be entitled, on each January 1 following the
16granting of the initial increase, to an increase of 3% of the
17original monthly retirement annuity for increases granted
18prior to January 1, 1990, and equal to 3% of the total annuity,
19including previous increases under this Section, for increases
20granted on or after January 1, 1990. The original monthly
21retirement annuity for computations under this subsection (b)
22shall be considered to be $83.34 for any annuitant entitled to
23benefits under Section 16-134. The minimum original disability
24retirement annuity for computations under this subsection (b)
25shall be considered to be $33.34 per month for any annuitant
26retired on account of disability.

 

 

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1    (b-1) Notwithstanding any other provision of this Article,
2for a Tier I employee or Tier I retiree who made the election
3under paragraph (1) of either subsection (a) or (a-5) of
4Section 16-131.7, the amount of each automatic annual increase
5in retirement annuity occurring on or after the effective date
6of that election shall be 3% or one-half of the annual
7unadjusted percentage increase, if any, in the Consumer Price
8Index-U for the 12 months ending with the preceding September,
9whichever is less, of the originally granted retirement
10annuity. For the purposes of this Section, "Consumer Price
11Index-U" means the index published by the Bureau of Labor
12Statistics of the United States Department of Labor that
13measures the average change in prices of goods and services
14purchased by all urban consumers, United States city average,
15all items, 1982-84 = 100.
16    (b-2) Notwithstanding any other provision of this Article,
17for a Tier I employee or Tier I retiree who made the election
18under paragraph (1) of subsection (a) or (a-5) of Section
1916-131.7, the monthly retirement annuity shall first be subject
20to annual increases on the January 1 occurring on or next after
21the attainment of age 67 or the January 1 occurring on or next
22after the fifth anniversary of the annuity start date,
23whichever occurs earlier. If on the effective date of the
24election under paragraph (1) of subsection (a-5) of Section
2516-131.7 a Tier I retiree has already received an annual
26increase under this Section but does not yet meet the new

 

 

HB6210- 179 -LRB097 22285 JDS 71037 b

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

 

 

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

 

 

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

 

 

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

 

 

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1units.
2    (a) Except as otherwise provided in this Section, the The
3State shall make contributions to the System by means of
4appropriations from the Common School Fund and other State
5funds of amounts which, together with other employer
6contributions, employee contributions, investment income, and
7other income, will be sufficient to meet the cost of
8maintaining and administering the System on a 90% funded basis
9in accordance with actuarial recommendations.
10    Beginning with State fiscal year 2014, the employers under
11this Article shall be responsible for paying the normal costs
12of the System plus the amounts required to amortize any total
13cost of the benefits of the System arising on or after July 1,
142013.
15    Beginning with State fiscal year 2014, the State's required
16contributions to the System shall be limited to the amounts
17required to amortize the total cost of the benefits of the
18System arising before July 1, 2013, plus any employer
19contributions required from the State as the actual employer of
20participants under this Article.
21    The Board shall determine the amount of State and employer
22contributions required for each fiscal year on the basis of the
23actuarial tables and other assumptions adopted by the Board and
24the recommendations of the actuary, using the formulas provided
25in this Section formula in subsection (b-3).
26    (a-1) Annually, on or before November 15 through until

 

 

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1November 15, 2011, the Board shall certify to the Governor the
2amount of the required State contribution for the coming fiscal
3year. The certification under this subsection (a-1) shall
4include a copy of the actuarial recommendations upon which it
5is based and shall specifically identify the System's projected
6State normal cost for that fiscal year.
7    On or before May 1, 2004, the Board shall recalculate and
8recertify to the Governor the amount of the required State
9contribution to the System for State fiscal year 2005, taking
10into account the amounts appropriated to and received by the
11System under subsection (d) of Section 7.2 of the General
12Obligation Bond Act.
13    On or before July 1, 2005, the Board shall recalculate and
14recertify to the Governor the amount of the required State
15contribution to the System for State fiscal year 2006, taking
16into account the changes in required State contributions made
17by this amendatory Act of the 94th General Assembly.
18    On or before April 1, 2011, the Board shall recalculate and
19recertify to the Governor the amount of the required State
20contribution to the System for State fiscal year 2011, applying
21the changes made by Public Act 96-889 to the System's assets
22and liabilities as of June 30, 2009 as though Public Act 96-889
23was 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

 

 

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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 certification 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. The Board's certification must note any deviations
17from the State Actuary's recommended changes, the reason or
18reasons for not following the State Actuary's recommended
19changes, and the fiscal impact of not following the State
20Actuary's recommended changes on the required State
21contribution.
22    (b) Through State fiscal year 1995, the State contributions
23shall be paid to the System in accordance with Section 18-7 of
24the School Code.
25    (b-1) Beginning in State fiscal year 1996, on the 15th day
26of each month, or as soon thereafter as may be practicable, the

 

 

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1Board shall submit vouchers for payment of State contributions
2to the System, in a total monthly amount of one-twelfth of the
3required annual State contribution certified under subsection
4(a-1). From the effective date of this amendatory Act of the
593rd General Assembly through June 30, 2004, the Board shall
6not submit vouchers for the remainder of fiscal year 2004 in
7excess of the fiscal year 2004 certified contribution amount
8determined under this Section after taking into consideration
9the transfer to the System under subsection (a) of Section
106z-61 of the State Finance Act. These vouchers shall be paid by
11the State Comptroller and Treasurer by warrants drawn on the
12funds appropriated to the System for that fiscal year.
13    If in any month the amount remaining unexpended from all
14other appropriations to the System for the applicable fiscal
15year (including the appropriations to the System under Section
168.12 of the State Finance Act and Section 1 of the State
17Pension Funds Continuing Appropriation Act) is less than the
18amount lawfully vouchered under this subsection, the
19difference shall be paid from the Common School Fund under the
20continuing appropriation authority provided in Section 1.1 of
21the State Pension Funds Continuing Appropriation Act.
22    (b-2) Allocations from the Common School Fund apportioned
23to school districts not coming under this System shall not be
24diminished or affected by the provisions of this Article.
25    (b-3) For State fiscal years 2012 and 2013 through 2045,
26the minimum contribution to the System to be made by the State

 

 

HB6210- 187 -LRB097 22285 JDS 71037 b

1for each fiscal year shall be an amount determined by the
2System to be sufficient to bring the total assets of the System
3up to 90% of the total actuarial liabilities of the System by
4the end of State fiscal year 2045. In making these
5determinations, the required State contribution shall be
6calculated each year as a level percentage of payroll over the
7years remaining to and including fiscal year 2045 and shall be
8determined under the projected unit credit actuarial cost
9method.
10    Except as provided in subsection (b-5), for State fiscal
11years 2014 through 2045 or until the State has amortized 100%
12of the total cost of benefits accrued by July 1, 2013,
13whichever is earlier, in addition to any employer contributions
14required from the State as an employer, the minimum
15contribution to the System to be made by the State for each
16fiscal year shall be an amount determined by the Board to be
17sufficient to amortize, by the end of State fiscal year 2045,
18the total cost of the benefits of the System arising before
19July 1, 2013. In making these determinations, the required
20State contribution shall be calculated each year as a level
21percentage of payroll over the years remaining to and including
22fiscal year 2043 and shall be determined under the projected
23unit credit actuarial cost method.
24    Except as provided in subsection (b-5), beginning in State
25fiscal year 2046 or on the date that the State has amortized
26100% of the total cost of benefits accrued by July 1, 2013,

 

 

HB6210- 188 -LRB097 22285 JDS 71037 b

1whichever is earlier, the State has no further obligation to
2make contributions to the System under this subsection (b-3).
3    For State fiscal years 1996 through 2005, the State
4contribution to the System, as a percentage of the applicable
5employee payroll, shall be increased in equal annual increments
6so that by State fiscal year 2011, the State is contributing at
7the rate required under this Section; except that in the
8following specified State fiscal years, the State contribution
9to the System shall not be less than the following indicated
10percentages of the applicable employee payroll, even if the
11indicated percentage will produce a State contribution in
12excess of the amount otherwise required under this subsection
13and subsection (a), and notwithstanding any contrary
14certification made under subsection (a-1) before the effective
15date of this amendatory Act of 1998: 10.02% in FY 1999; 10.77%
16in FY 2000; 11.47% in FY 2001; 12.16% in FY 2002; 12.86% in FY
172003; and 13.56% in FY 2004.
18    Notwithstanding any other provision of this Article, the
19total required State contribution for State fiscal year 2006 is
20$534,627,700.
21    Notwithstanding any other provision of this Article, the
22total required State contribution for State fiscal year 2007 is
23$738,014,500.
24    For each of State fiscal years 2008 through 2009, the State
25contribution to the System, as a percentage of the applicable
26employee payroll, shall be increased in equal annual increments

 

 

HB6210- 189 -LRB097 22285 JDS 71037 b

1from the required State contribution for State fiscal year
22007, so that by State fiscal year 2011, the State is
3contributing at the rate otherwise required under this Section.
4    Notwithstanding any other provision of this Article, the
5total required State contribution for State fiscal year 2010 is
6$2,089,268,000 and shall be made from the proceeds of bonds
7sold in fiscal year 2010 pursuant to Section 7.2 of the General
8Obligation Bond Act, less (i) the pro rata share of bond sale
9expenses determined by the System's share of total bond
10proceeds, (ii) any amounts received from the Common School Fund
11in fiscal year 2010, and (iii) any reduction in bond proceeds
12due to the issuance of discounted bonds, if applicable.
13    Notwithstanding any other provision of this Article, the
14total required State contribution for State fiscal year 2011 is
15the amount recertified by the System on or before April 1, 2011
16pursuant to subsection (a-1) of this Section and shall be made
17from the proceeds of bonds sold in fiscal year 2011 pursuant to
18Section 7.2 of the General Obligation Bond Act, less (i) the
19pro rata share of bond sale expenses determined by the System's
20share of total bond proceeds, (ii) any amounts received from
21the Common School Fund in fiscal year 2011, and (iii) any
22reduction in bond proceeds due to the issuance of discounted
23bonds, if applicable. This amount shall include, in addition to
24the amount certified by the System, an amount necessary to meet
25employer contributions required by the State as an employer
26under paragraph (e) of this Section, which may also be used by

 

 

HB6210- 190 -LRB097 22285 JDS 71037 b

1the System for contributions required by paragraph (a) of
2Section 16-127.
3    Beginning in State fiscal year 2046, the minimum State
4contribution for each fiscal year shall be the amount needed to
5maintain the total assets of the System at 90% of the total
6actuarial liabilities of the System.
7    Amounts received by the System pursuant to Section 25 of
8the Budget Stabilization Act or Section 8.12 of the State
9Finance Act in any fiscal year do not reduce and do not
10constitute payment of any portion of the minimum State
11contribution required under this Article in that fiscal year.
12Such amounts shall not reduce, and shall not be included in the
13calculation of, the required State contributions under this
14Article in any future year until the System has reached a
15funding ratio of at least 90%. A reference in this Article to
16the "required State contribution" or any substantially similar
17term does not include or apply to any amounts payable to the
18System under Section 25 of the Budget Stabilization Act.
19    Notwithstanding any other provision of this Section, the
20required State contribution for State fiscal year 2005 and for
21fiscal year 2008 through and each fiscal year 2013 thereafter,
22as calculated under this Section and certified under subsection
23(a-1), shall not exceed an amount equal to (i) the amount of
24the required State contribution that would have been calculated
25under this Section for that fiscal year if the System had not
26received any payments under subsection (d) of Section 7.2 of

 

 

HB6210- 191 -LRB097 22285 JDS 71037 b

1the General Obligation Bond Act, minus (ii) the portion of the
2State's total debt service payments for that fiscal year on the
3bonds issued in fiscal year 2003 for the purposes of that
4Section 7.2, as determined and certified by the Comptroller,
5that is the same as the System's portion of the total moneys
6distributed under subsection (d) of Section 7.2 of the General
7Obligation Bond Act. In determining this maximum for State
8fiscal years 2008 through 2010, however, the amount referred to
9in item (i) shall be increased, as a percentage of the
10applicable employee payroll, in equal increments calculated
11from the sum of the required State contribution for State
12fiscal year 2007 plus the applicable portion of the State's
13total debt service payments for fiscal year 2007 on the bonds
14issued in fiscal year 2003 for the purposes of Section 7.2 of
15the General Obligation Bond Act, so that, by State fiscal year
162011, the State is contributing at the rate otherwise required
17under this Section.
18    (b-5) If at least 50% of Tier I employees making an
19election under Section 16-131.7 before June 1, 2013 choose the
20option under paragraph (1) of subsection (a) of that Section,
21then beginning in State fiscal year 2014, instead of the
22contributions specified in subsection (b-3) of this Section,
23the State contributions specified in subsection (b-7) of this
24Section shall be paid.
25    In making its initial certification of the annual required
26contribution by the State for State fiscal year 2014, the Board

 

 

HB6210- 192 -LRB097 22285 JDS 71037 b

1shall assume that the new funding formula provided in
2subsection (b-7) of this Section applies. If fewer than 50% of
3Tier I employees making an election under Section 16-131.7
4before June 1, 2013 choose the option under paragraph (1) of
5subsection (a) of that Section, then:
6        (1) instead of the contributions specified in
7    subsection (b-7) of this Section, the State contributions
8    specified in subsection (b-3) shall continue to be paid;
9    and
10        (2) as soon as possible after June 1, 2013, the Board
11    shall recertify the annual required contribution by the
12    State for State fiscal year 2014.
13    (b-7) For State fiscal years 2014 through 2043 or until the
14State has amortized 100% of the total cost of benefits accrued
15by July 1, 2013, whichever is earlier, in addition to any
16employer contributions required from the State as an employer,
17the minimum contribution to the System to be made by the State
18for each fiscal year shall be an amount determined by the Board
19to be sufficient to amortize, by the end of State fiscal year
202043, the total cost of the benefits of the System arising
21before July 1, 2013. In making these determinations, the
22required State contribution shall be calculated each year as a
23level percentage of payroll over the years remaining to and
24including fiscal year 2043 and shall be determined under the
25projected unit credit actuarial cost method.
26    Beginning in State fiscal year 2044 or on the date that the

 

 

HB6210- 193 -LRB097 22285 JDS 71037 b

1State has amortized 100% of the total cost of benefits accrued
2by July 1, 2013, whichever is earlier, the State has no further
3obligation to make contributions to the System under this
4subsection (a-5).
5    (b-10) Subject to the limitations provided in subsection
6(b-15), beginning with State fiscal year 2014, the minimum
7required contribution of employers under this Article shall be
8determined as a percentage of projected payroll, and shall be
9sufficient to produce an annual amount equal to:
10        (i) the employer's normal cost for that fiscal year for
11    employees who first became participating employees before
12    July 1, 2013; plus
13        (ii) the employer's normal cost for that fiscal year
14    for employees who first become participating employees on
15    or after July 1, 2013; plus
16        (iii) the amount required for that fiscal year to
17    amortize any unfunded actuarial accrued liability
18    associated with the total cost of benefits accrued on or
19    after July 1, 2013 as a level percentage of payroll over a
20    30-year rolling amortization period.
21    Any contributions required from an employer under
22subsection (f) of this Section are in addition to the
23contributions required under this subsection (b-10).
24    (b-15) For State fiscal year 2014, the required
25contribution of employers under item (i) of subsection (b-10)
26shall be reduced to an amount equal to 0.5% of payroll.

 

 

HB6210- 194 -LRB097 22285 JDS 71037 b

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

 

 

HB6210- 195 -LRB097 22285 JDS 71037 b

1Section.
2    (c) Payment of the required State contributions and of all
3pensions, retirement annuities, death benefits, refunds, and
4other benefits granted under or assumed by this System, and all
5expenses in connection with the administration and operation
6thereof, are obligations of the State.
7    If members are paid from special trust or federal funds
8which are administered by the employing unit, whether school
9district or other unit, the employing unit shall pay to the
10System from such funds the full accruing retirement costs based
11upon that service, as determined by the System. Employer
12contributions, based on salary paid to members from federal
13funds, may be forwarded by the distributing agency of the State
14of Illinois to the System prior to allocation, in an amount
15determined in accordance with guidelines established by such
16agency and the System.
17    (d) Effective July 1, 1986, any employer of a teacher as
18defined in paragraph (8) of Section 16-106 shall pay the
19employer's normal cost of benefits based upon the teacher's
20service, in addition to employee contributions, as determined
21by the System. Such employer contributions shall be forwarded
22monthly in accordance with guidelines established by the
23System.
24    However, with respect to benefits granted under Section
2516-133.4 or 16-133.5 to a teacher as defined in paragraph (8)
26of Section 16-106, the employer's contribution shall be 12%

 

 

HB6210- 196 -LRB097 22285 JDS 71037 b

1(rather than 20%) of the member's highest annual salary rate
2for each year of creditable service granted, and the employer
3shall also pay the required employee contribution on behalf of
4the teacher. For the purposes of Sections 16-133.4 and
516-133.5, a teacher as defined in paragraph (8) of Section
616-106 who is serving in that capacity while on leave of
7absence from another employer under this Article shall not be
8considered an employee of the employer from which the teacher
9is on leave.
10    (e) Beginning July 1, 1998, every employer of a teacher
11shall pay to the System an employer contribution computed as
12follows:
13        (1) Beginning July 1, 1998 through June 30, 1999, the
14    employer contribution shall be equal to 0.3% of each
15    teacher's salary.
16        (2) Beginning July 1, 1999 and thereafter, the employer
17    contribution shall be equal to 0.58% of each teacher's
18    salary.
19The school district or other employing unit may pay these
20employer contributions out of any source of funding available
21for that purpose and shall forward the contributions to the
22System on the schedule established for the payment of member
23contributions.
24    These employer contributions are intended to offset a
25portion of the cost to the System of the increases in
26retirement benefits resulting from this amendatory Act of 1998.

 

 

HB6210- 197 -LRB097 22285 JDS 71037 b

1    Each employer of teachers is entitled to a credit against
2the contributions required under this subsection (e) with
3respect to salaries paid to teachers for the period January 1,
42002 through June 30, 2003, equal to the amount paid by that
5employer under subsection (a-5) of Section 6.6 of the State
6Employees Group Insurance Act of 1971 with respect to salaries
7paid to teachers for that period.
8    The additional 1% employee contribution required under
9Section 16-152 by this amendatory Act of 1998 is the
10responsibility of the teacher and not the teacher's employer,
11unless the employer agrees, through collective bargaining or
12otherwise, to make the contribution on behalf of the teacher.
13    If an employer is required by a contract in effect on May
141, 1998 between the employer and an employee organization to
15pay, on behalf of all its full-time employees covered by this
16Article, all mandatory employee contributions required under
17this Article, then the employer shall be excused from paying
18the employer contribution required under this subsection (e)
19for the balance of the term of that contract. The employer and
20the employee organization shall jointly certify to the System
21the existence of the contractual requirement, in such form as
22the System may prescribe. This exclusion shall cease upon the
23termination, extension, or renewal of the contract at any time
24after May 1, 1998.
25    (f) The employer contributions under this subsection (f)
26are no longer required after June 30, 2013. If the amount of a

 

 

HB6210- 198 -LRB097 22285 JDS 71037 b

1teacher's salary for any school year used to determine final
2average salary exceeds the member's annual full-time salary
3rate with the same employer for the previous school year by
4more than 6%, the teacher's employer shall pay to the System,
5in addition to all other payments required under this Section
6and in accordance with guidelines established by the System,
7the present value of the increase in benefits resulting from
8the portion of the increase in salary that is in excess of 6%.
9This present value shall be computed by the System on the basis
10of the actuarial assumptions and tables used in the most recent
11actuarial valuation of the System that is available at the time
12of the computation. If a teacher's salary for the 2005-2006
13school year is used to determine final average salary under
14this subsection (f), then the changes made to this subsection
15(f) by Public Act 94-1057 shall apply in calculating whether
16the increase in his or her salary is in excess of 6%. For the
17purposes of this Section, change in employment under Section
1810-21.12 of the School Code on or after June 1, 2005 shall
19constitute a change in employer. The System may require the
20employer to provide any pertinent information or
21documentation. The changes made to this subsection (f) by this
22amendatory Act of the 94th General Assembly apply without
23regard to whether the teacher was in service on or after its
24effective date.
25    Whenever it determines that a payment is or may be required
26under this subsection, the System shall calculate the amount of

 

 

HB6210- 199 -LRB097 22285 JDS 71037 b

1the payment and bill the employer for that amount. The bill
2shall specify the calculations used to determine the amount
3due. If the employer disputes the amount of the bill, it may,
4within 30 days after receipt of the bill, apply to the System
5in writing for a recalculation. The application must specify in
6detail the grounds of the dispute and, if the employer asserts
7that the calculation is subject to subsection (g) or (h) of
8this Section, must include an affidavit setting forth and
9attesting to all facts within the employer's knowledge that are
10pertinent to the applicability of that subsection. Upon
11receiving a timely application for recalculation, the System
12shall review the application and, if appropriate, recalculate
13the amount due.
14    The employer contributions required under this subsection
15(f) may be paid in the form of a lump sum within 90 days after
16receipt of the bill. If the employer contributions are not paid
17within 90 days after receipt of the bill, then interest will be
18charged at a rate equal to the System's annual actuarially
19assumed rate of return on investment compounded annually from
20the 91st day after receipt of the bill. Payments must be
21concluded within 3 years after the employer's receipt of the
22bill.
23    (g) This subsection (g) applies only to payments made or
24salary increases given on or after June 1, 2005 but before July
251, 2011. The changes made by Public Act 94-1057 shall not
26require the System to refund any payments received before July

 

 

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131, 2006 (the effective date of Public Act 94-1057).
2    When assessing payment for any amount due under subsection
3(f), the System shall exclude salary increases paid to teachers
4under contracts or collective bargaining agreements entered
5into, amended, or renewed before June 1, 2005.
6    When assessing payment for any amount due under subsection
7(f), the System shall exclude salary increases paid to a
8teacher at a time when the teacher is 10 or more years from
9retirement eligibility under Section 16-132 or 16-133.2.
10    When assessing payment for any amount due under subsection
11(f), the System shall exclude salary increases resulting from
12overload work, including summer school, when the school
13district has certified to the System, and the System has
14approved the certification, that (i) the overload work is for
15the sole purpose of classroom instruction in excess of the
16standard number of classes for a full-time teacher in a school
17district during a school year and (ii) the salary increases are
18equal to or less than the rate of pay for classroom instruction
19computed on the teacher's current salary and work schedule.
20    When assessing payment for any amount due under subsection
21(f), the System shall exclude a salary increase resulting from
22a promotion (i) for which the employee is required to hold a
23certificate or supervisory endorsement issued by the State
24Teacher Certification Board that is a different certification
25or supervisory endorsement than is required for the teacher's
26previous position and (ii) to a position that has existed and

 

 

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

 

 

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1        (1) The number of recalculations required by the
2    changes made to this Section by Public Act 94-1057 for each
3    employer.
4        (2) The dollar amount by which each employer's
5    contribution to the System was changed due to
6    recalculations required by Public Act 94-1057.
7        (3) The total amount the System received from each
8    employer as a result of the changes made to this Section by
9    Public Act 94-4.
10        (4) The increase in the required State contribution
11    resulting from the changes made to this Section by Public
12    Act 94-1057.
13    (j) For purposes of determining the required State
14contribution to the System, the value of the System's assets
15shall be equal to the actuarial value of the System's assets,
16which shall be calculated as follows:
17    As of June 30, 2008, the actuarial value of the System's
18assets shall be equal to the market value of the assets as of
19that date. In determining the actuarial value of the System's
20assets for fiscal years after June 30, 2008, any actuarial
21gains or losses from investment return incurred in a fiscal
22year shall be recognized in equal annual amounts over the
235-year period following that fiscal year.
24    (k) For purposes of determining the required State
25contribution to the system for a particular year, the actuarial
26value of assets shall be assumed to earn a rate of return equal

 

 

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1to the system's actuarially assumed rate of return.
2    (l) If the System submits a voucher for monthly
3contributions from the State as required by this Section and
4the State fails to pay within 90 days of receipt of such a
5voucher, the Board shall submit a written request to the
6Comptroller seeking payment. A copy of the request shall be
7filed with the Secretary of State, and the Secretary of State
8shall provide copies to the Governor and General Assembly. No
9earlier than the 16th day after filing a request with the
10Secretary of State, the Board shall have the right to commence
11a mandamus action in the Supreme Court of Illinois to compel
12the Comptroller to satisfy the voucher by making payment from
13the General Revenue Fund. This Section constitutes an express
14waiver of the State's sovereign immunity solely to the extent
15it permits the Board to commence a mandamus action in the
16Illinois Supreme Court to compel the Comptroller to pay a
17voucher for monthly contributions from the State as required in
18this Section.
19    Any payments required to be made by the State pursuant to
20an action commenced under this subsection are expressly
21subordinated to the payment of the principal, interest, and
22premium, if any, on any bonded debt obligation of the State or
23any other State-created entity, either currently outstanding
24or to be issued, for which the source of repayment or security
25thereon is derived directly or indirectly from tax revenues
26collected by the State or any other State-created entity.

 

 

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1Payments on such bonded obligations include any statutory fund
2transfers or other prefunding mechanisms or formulas set forth,
3now or hereafter, in State law or bond indentures, into debt
4service funds or accounts of the State related to such bonded
5obligations, consistent with the payment schedules associated
6with such obligations.
7(Source: P.A. 96-43, eff. 7-15-09; 96-1497, eff. 1-14-11;
896-1511, eff. 1-27-11; 96-1554, eff. 3-18-11; 97-694, eff.
96-18-12; 97-813, eff. 7-13-12.)
 
10    (40 ILCS 5/16-158.2 new)
11    Sec. 16-158.2. Individual employer accounts.
12    (a) The System shall create and maintain individual
13accounts for each employer for the purposes of determining
14employer contributions under subsection (b-10) of Section
1516-158. Each employer's account shall be notionally credited
16with the employer's liabilities accruing after July 1, 2013 and
17assets attributable to the employer's account that include (i)
18employer contributions made pursuant to subsection (b-10) of
19Section 16-158, (ii) other employer contributions from trust,
20federal, and other funds, (iii) employee contributions made
21after July 1, 2013, and (iv) income from investments. The
22System may deduct reasonable administrative expenses from each
23employer's account.
24    (b) In determining contributions required under subsection
25(b-10) of Section 16-158, the System shall determine a blended

 

 

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1rate of total normal cost that is applicable to all employers.
2    (c) An employer may make written application with the Board
3to have a separate rate of total normal cost determined for the
4employer. Upon receiving the written application from an
5employer, the Board may determine a total rate of normal cost
6for the employer. The employer shall be responsible for any
7cost incurred in making the determination of total normal cost.
8    The Board may establish rules for the administration of
9this Section that include but are not limited to the date by
10which an application must be submitted and the fiscal year in
11which the determination will be used to determine the
12employer's contribution required under subsection (b-10) of
13Section 16-158.
14    (d) An employer whose determination of total normal cost
15under subsection (c) is used to determine its contributions
16required under subsection (b-10) of Section 16-158 may not be
17included in the determination of a rate of total normal cost
18under subsection (c) of this Section.
 
19    (40 ILCS 5/16-163)  (from Ch. 108 1/2, par. 16-163)
20    Sec. 16-163. Board created. A board of 13 members
21constitutes the board of trustees authorized to carry out the
22provisions of this Article and is responsible for the general
23administration of the System. The board shall be known as the
24Board of Trustees of the Teachers' Retirement System of the
25State of Illinois. The board shall be composed of the

 

 

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1Superintendent of Education, ex officio, who shall be the
2president of the board; 4 6 persons, not members of the System,
3to be appointed by the Governor, with the advice and consent of
4the Senate, who shall hold no elected State office; 4 persons
5who, at the time of their election, are teachers as defined in
6Section 16-106, elected by the contributing members; and 2
7annuitant members elected by the annuitants of the System, as
8provided in Section 16-165; and 2 school board members who are
9not participants in the System elected as provided in Section
1016-165.
11(Source: P.A. 96-6, eff. 4-3-09.)
 
12    (40 ILCS 5/16-165)  (from Ch. 108 1/2, par. 16-165)
13    Sec. 16-165. Board; elected members; vacancies.
14    (a) In each odd-numbered year, there shall be elected 2
15teachers who shall hold office for a term of 4 years beginning
16July 15 next following their election, in the manner provided
17under this Section. An elected teacher member of the board who
18ceases to be a teacher as defined in Section 16-106 may
19continue to serve on the board for the remainder of the term to
20which he or she was elected.
21    (a-5) In each even-numbered year, there shall be elected 2
22school board members who are not participants in the System who
23shall hold office for a term of 4 years, in the manner provided
24under this Section. An elected school board member who ceases
25to be a member of a school board may continue to serve on the

 

 

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1board for the remainder of the term to which he or she was
2elected. Until the initial school board member has been
3elected, the elected school board member positions created by
4this amendatory Act of the 97th General Assembly shall be
5filled as soon as practical by appointment of the board.
6    (b) One elected annuitant trustee shall first be elected in
71987, and in every fourth year thereafter, for a term of 4
8years beginning July 15 next following his or her election.
9    (c) The elected annuitant position created by this
10amendatory Act of the 91st General Assembly shall be filled as
11soon as possible in the manner provided for vacancies, for an
12initial term ending July 15, 2001. One elected annuitant
13trustee shall be elected in 2001, and in every fourth year
14thereafter, for a term of 4 years beginning July 15 next
15following his or her election.
16    (d) Elections shall be held on May 1, unless May 1 falls on
17a Saturday or Sunday, in which event the election shall be
18conducted on the following Monday. Candidates shall be
19nominated by petitions in writing, signed by not less than 500
20teachers, school board members, or annuitants, as the case may
21be, with their addresses shown opposite their names. The
22petitions shall be filed with the board's Secretary not less
23than 90 nor more than 120 days prior to May 1. The Secretary
24shall determine their validity not less than 75 days before the
25election.
26    (e) If, for either teacher, school board, or annuitant

 

 

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1members, the number of qualified nominees exceeds the number of
2available positions, the system shall prepare an appropriate
3ballot with the names of the candidates in alphabetical order
4and shall mail one copy thereof, at least 10 days prior to the
5election day, to each teacher or annuitant of this system as of
6the latest date practicable, at the latest known address,
7together with a return envelope addressed to the board and also
8a smaller envelope marked "For Ballot Only", and a slip for
9signature. Each voter, upon marking his ballot with a cross
10mark in the square before the name of the person voted for,
11shall place the ballot in the envelope marked "For Ballot
12Only", seal the envelope, write on the slip provided therefor
13his signature and address, enclose both the slip and sealed
14envelope containing the marked ballot in the return envelope
15addressed to the board, and mail it. Whether a person is
16eligible to vote for the teacher nominees, school board
17nominees, or the annuitant nominees shall be determined from
18system payroll records as of March 1.
19    Upon receipt of the return envelopes, the system shall open
20them and set aside unopened the envelopes marked "For Ballot
21Only". On election day ballots shall be publicly opened and
22counted by the trustees or canvassers appointed therefor. Each
23vote cast for a candidate represents one vote only. No ballot
24arriving after 10 o'clock a.m. on election day shall be
25counted. The 2 teacher candidates, 2 school board candidates,
26and the annuitant candidate receiving the highest number of

 

 

HB6210- 209 -LRB097 22285 JDS 71037 b

1votes shall be elected. The board shall declare the results of
2the election, keep a record thereof, and notify the candidates
3of the results thereof within 30 days after the election.
4    If, for any either class of members, there are only as many
5qualified nominees as there are positions available, the
6balloting as described in this Section shall not be conducted
7for those nominees, and the board shall declare them duly
8elected.
9    (f) A vacancy occurring in the elective membership of the
10board shall be filled for the unexpired term by a person
11qualified for the vacant position, selected by the remaining
12elected members of the board, if there are no more than 6
13months remaining on the term. For a term with more than 6
14months remaining, the Director of the Teachers' Retirement
15System of the State of Illinois shall institute an election in
16accordance with this Act to fill the unexpired term.
17(Source: P.A. 94-423, eff. 8-2-05; 94-710, eff. 12-5-05;
1895-331, eff. 8-21-07.)
 
19    (40 ILCS 5/16-203)
20    Sec. 16-203. Application and expiration of new benefit
21increases.
22    (a) As used in this Section, "new benefit increase" means
23an increase in the amount of any benefit provided under this
24Article, or an expansion of the conditions of eligibility for
25any benefit under this Article, that results from an amendment

 

 

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1to this Code that takes effect after June 1, 2005 (the
2effective date of Public Act 94-4). "New benefit increase",
3however, does not include any benefit increase resulting from
4the changes made to this Article or Article 1 by Public Act
595-910 or this amendatory Act of the 97th 95th General
6Assembly.
7    (b) Notwithstanding any other provision of this Code or any
8subsequent amendment to this Code, every new benefit increase
9is subject to this Section and shall be deemed to be granted
10only in conformance with and contingent upon compliance with
11the provisions of this Section.
12    (c) The Public Act enacting a new benefit increase must
13identify and provide for payment to the System of additional
14funding at least sufficient to fund the resulting annual
15increase in cost to the System as it accrues.
16    Every new benefit increase is contingent upon the General
17Assembly providing the additional funding required under this
18subsection. The Commission on Government Forecasting and
19Accountability shall analyze whether adequate additional
20funding has been provided for the new benefit increase and
21shall report its analysis to the Public Pension Division of the
22Department of Financial and Professional Regulation. A new
23benefit increase created by a Public Act that does not include
24the additional funding required under this subsection is null
25and void. If the Public Pension Division determines that the
26additional funding provided for a new benefit increase under

 

 

HB6210- 211 -LRB097 22285 JDS 71037 b

1this subsection is or has become inadequate, it may so certify
2to the Governor and the State Comptroller and, in the absence
3of corrective action by the General Assembly, the new benefit
4increase shall expire at the end of the fiscal year in which
5the certification is made.
6    (d) Every new benefit increase shall expire 5 years after
7its effective date or on such earlier date as may be specified
8in the language enacting the new benefit increase or provided
9under subsection (c). This does not prevent the General
10Assembly from extending or re-creating a new benefit increase
11by law.
12    (e) Except as otherwise provided in the language creating
13the new benefit increase, a new benefit increase that expires
14under this Section continues to apply to persons who applied
15and qualified for the affected benefit while the new benefit
16increase was in effect and to the affected beneficiaries and
17alternate payees of such persons, but does not apply to any
18other person, including without limitation a person who
19continues in service after the expiration date and did not
20apply and qualify for the affected benefit while the new
21benefit increase was in effect.
22(Source: P.A. 94-4, eff. 6-1-05; 95-910, eff. 8-26-08.)
 
23    (40 ILCS 5/18-140)   (from Ch. 108 1/2, par. 18-140)
24    Sec. 18-140. To certify required State contributions and
25submit vouchers.

 

 

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1    (a) The Board shall certify to the Governor, on or before
2November 15 of each year through until November 15, 2011, the
3amount of the required State contribution to the System for the
4following fiscal year and shall specifically identify the
5System's projected State normal cost for that fiscal year. The
6certification under this subsection (a) shall include a copy of
7the actuarial recommendations upon which it is based and shall
8specifically identify the System's projected State normal cost
9for that fiscal year.
10    (a-5) On or before November 1 of each year, beginning
11November 1, 2012, the Board shall submit to the State Actuary,
12the Governor, and the General Assembly a proposed certification
13of the amount of the required State contribution to the System
14for the next fiscal year, along with all of the actuarial
15assumptions, calculations, and data upon which that proposed
16certification is based. On or before January 1 of each year,
17beginning January 1, 2013, the State Actuary shall issue a
18preliminary report concerning the proposed certification and
19identifying, if necessary, recommended changes in actuarial
20assumptions that the Board must consider before finalizing its
21certification of the required State contributions.
22    On or before January 15, 2013 and every January 15
23thereafter, the Board shall certify to the Governor and the
24General Assembly the amount of the required State contribution
25for the next fiscal year. The certification shall include a
26copy of the actuarial recommendations upon which it is based

 

 

HB6210- 213 -LRB097 22285 JDS 71037 b

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

 

 

HB6210- 214 -LRB097 22285 JDS 71037 b

1submit vouchers for payment of State contributions to the
2System, in a total monthly amount of one-twelfth of the
3required annual State contribution certified under subsection
4(a). From the effective date of this amendatory Act of the 93rd
5General Assembly through June 30, 2004, the Board shall not
6submit vouchers for the remainder of fiscal year 2004 in excess
7of the fiscal year 2004 certified contribution amount
8determined under this Section after taking into consideration
9the transfer to the System under subsection (c) of Section
106z-61 of the State Finance Act. These vouchers shall be paid by
11the State Comptroller and Treasurer by warrants drawn on the
12funds appropriated to the System for that fiscal year.
13    If in any month the amount remaining unexpended from all
14other appropriations to the System for the applicable fiscal
15year (including the appropriations to the System under Section
168.12 of the State Finance Act and Section 1 of the State
17Pension Funds Continuing Appropriation Act) is less than the
18amount lawfully vouchered under this Section, the difference
19shall be paid from the General Revenue Fund under the
20continuing appropriation authority provided in Section 1.1 of
21the State Pension Funds Continuing Appropriation Act.
22(Source: P.A. 96-1497, eff. 1-14-11; 96-1511, eff. 1-27-11;
2397-694, eff. 6-18-12.)
 
24    (40 ILCS 5/20-121)  (from Ch. 108 1/2, par. 20-121)
25    Sec. 20-121. Calculation of proportional retirement

 

 

HB6210- 215 -LRB097 22285 JDS 71037 b

1annuities. Upon retirement of the employee, a proportional
2retirement annuity shall be computed by each participating
3system in which pension credit has been established on the
4basis of pension credits under each system. The computation
5shall be in accordance with the formula or method prescribed by
6each participating system which is in effect at the date of the
7employee's latest withdrawal from service covered by any of the
8systems in which he has pension credits which he elects to have
9considered under this Article. However, (1) the amount of any
10retirement annuity payable under the self-managed plan
11established under Section 15-158.2 of this Code depends solely
12on the value of the participant's vested account balances and
13is not subject to any proportional adjustment under this
14Section, and (2) the amount of any retirement annuity payable
15under the cash balance plan established under Section 1-161 of
16this Code shall be calculated solely in accordance with that
17Section and is not subject to any proportional adjustment under
18this Section.
19    Combined pension credit under all retirement systems
20subject to this Article shall be considered in determining
21whether the minimum qualification has been met and the formula
22or method of computation which shall be applied. If a system
23has a step-rate formula for calculation of the retirement
24annuity, pension credits covering previous service which have
25been established under another system shall be considered in
26determining which range or ranges of the step-rate formula are

 

 

HB6210- 216 -LRB097 22285 JDS 71037 b

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

 

 

HB6210- 217 -LRB097 22285 JDS 71037 b

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

 

 

HB6210- 218 -LRB097 22285 JDS 71037 b

1annuities shall be reduced proportionately according to the
2ratio which the amount of each proportional annuity bears to
3the aggregate of all such annuities; except that benefits
4payable under the cash balance plan established under Section
51-161 are not subject to proportionate reduction under this
6Section.
7    (b) In the case of a participant in the self-managed plan
8established under Section 15-158.2 of this Code to whom the
9provisions of this Article apply:
10        (i) For purposes of calculating the combined
11    retirement annuity and the proportionate reduction, if
12    any, in a retirement annuity other than one payab