97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
HB6258

 

Introduced , by Rep. Elaine Nekritz

 

SYNOPSIS AS INTRODUCED:
 
See Index

    Amends the General Provisions, General Assembly, State Employee, State Universities, and Downstate Teacher Articles of the Illinois Pension Code. In the General Provisions Article, creates a cash balance plan for new hires of the State Universities and Teachers' Retirement Systems and for certain Tier II participants. Increases the retirement age for certain Tier I members and participants. Changes the conditions of eligibility for, and the amount of, automatic annual increases for Tier I retirees. Increases required employee contributions for Tier I members and participants. Limits pensionable salary for Tier I participants. Changes the required State contribution to each of the affected retirement systems so that those systems are 100% funded by 2043. Guarantees certain funding levels. In the State Universities and Downstate Teacher Articles, shifts costs to local employers. Makes other changes. 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 State Mandates Act to require implementation without reimbursement. Includes an inseverability provision. Makes other changes. Effective immediately.


LRB097 23545 JDS 72554 b

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

 

 

A BILL FOR

 

HB6258LRB097 23545 JDS 72554 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 Governor's Office of Management and Budget
5Act is amended by changing Sections 7 and 8 as follows:
 
6    (20 ILCS 3005/7)  (from Ch. 127, par. 417)
7    Sec. 7. All statements and estimates of expenditures
8submitted to the Office in connection with the preparation of a
9State budget, and any other estimates of expenditures,
10supporting requests for appropriations, shall be formulated
11according to the various functions and activities for which the
12respective department, office or institution of the State
13government (including the elective officers in the executive
14department and including the University of Illinois and the
15judicial department) is responsible. All such statements and
16estimates of expenditures relating to a particular function or
17activity shall be further formulated or subject to analysis in
18accordance with the following classification of objects:
19    (1) Personal services
20    (2) State contribution for employee group insurance
21    (3) Contractual services
22    (4) Travel
23    (5) Commodities

 

 

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

 

 

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1objects stated in Section 7 shall have the meanings ascribed to
2those items in Sections 24.12 and 24.13, respectively, of the
3State Finance Act.
4(Source: P.A. 82-325.)
 
5    Section 10. The State Finance Act is amended by changing
6Section 13 and by adding Sections 24.12 and 24.13 as follows:
 
7    (30 ILCS 105/13)  (from Ch. 127, par. 149)
8    Sec. 13. The objects and purposes for which appropriations
9are made are classified and standardized by items as follows:
10    (1) Personal services;
11    (2) State contribution for employee group insurance;
12    (3) Contractual services;
13    (4) Travel;
14    (5) Commodities;
15    (6) Equipment;
16    (7) Permanent improvements;
17    (8) Land;
18    (9) Electronic Data Processing;
19    (10) Operation of automotive equipment;
20    (11) Telecommunications services;
21    (12) Contingencies;
22    (13) Reserve;
23    (14) Interest;
24    (15) Awards and Grants;

 

 

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1    (16) Debt Retirement;
2    (17) Non-Cost Charges;
3    (18) State retirement contribution for annual normal cost;
4    (19) State retirement contribution for unfunded accrued
5liability;
6    (20) (18) Purchase Contract for Real Estate.
7    When an appropriation is made to an officer, department,
8institution, board, commission or other agency, or to a private
9association or corporation, in one or more of the items above
10specified, such appropriation shall be construed in accordance
11with the definitions and limitations specified in this Act,
12unless the appropriation act otherwise provides.
13    An appropriation for a purpose other than one specified and
14defined in this Act may be made only as an additional, separate
15and distinct item, specifically stating the object and purpose
16thereof.
17(Source: P.A. 84-263; 84-264.)
 
18    (30 ILCS 105/24.12 new)
19    Sec. 24.12. "State retirement contribution for annual
20normal cost" defined. The term "State retirement contribution
21for annual normal cost" means the portion of the total required
22State contribution to a retirement system for a fiscal year
23that represents the State's portion of the System's projected
24normal cost for that fiscal year, as determined and certified
25by the board of trustees of the retirement system in

 

 

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1conformance with the applicable provisions of the Illinois
2Pension Code.
 
3    (30 ILCS 105/24.13 new)
4    Sec. 24.13. "State retirement contribution for unfunded
5accrued liability" defined. The term "State retirement
6contribution for unfunded accrued liability" means the portion
7of the total required State contribution to a retirement system
8for a fiscal year that is not included in the State retirement
9contribution for annual normal cost.
 
10    Section 15. The Budget Stabilization Act is amended by
11changing Section 20 as follows:
 
12    (30 ILCS 122/20)
13    Sec. 20. Pension Stabilization Fund.
14    (a) The Pension Stabilization Fund is hereby created as a
15special fund in the State treasury. Moneys in the fund shall be
16used for the sole purpose of making payments to the designated
17retirement systems as provided in Section 25.
18    (b) For each fiscal year when the General Assembly's
19appropriations and transfers or diversions as required by law
20from general funds do not exceed 99% of the estimated general
21funds revenues pursuant to subsection (a) of Section 10, the
22Comptroller shall transfer from the General Revenue Fund as
23provided by this Section a total amount equal to 0.5% of the

 

 

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1estimated general funds revenues to the Pension Stabilization
2Fund.
3    (c) For each fiscal year through State fiscal year 2013,
4when the General Assembly's appropriations and transfers or
5diversions as required by law from general funds do not exceed
698% of the estimated general funds revenues pursuant to
7subsection (b) of Section 10, the Comptroller shall transfer
8from the General Revenue Fund as provided by this Section a
9total amount equal to 1.0% of the estimated general funds
10revenues to the Pension Stabilization Fund.
11    (c-10) In State fiscal year 2016 and each fiscal year
12thereafter, the State Comptroller shall order transferred and
13the State Treasurer shall transfer $693,500,000 from the
14General Revenue Fund to the Pension Stabilization Fund.
15    (c-15) In addition, in State fiscal year 2020 and each
16fiscal year thereafter, the State Comptroller shall order
17transferred and the State Treasurer shall transfer
18$900,000,000 from the General Revenue Fund to the Pension
19Stabilization Fund.
20    (c-20) In addition, in State fiscal year 2034 and each
21fiscal year thereafter, the State Comptroller shall order
22transferred and the State Treasurer shall transfer
23$1,100,000,000 from the General Revenue Fund to the Pension
24Stabilization Fund.
25    (c-25) The transfers made pursuant to subsections (c-10)
26through (c-20) of this Section shall continue through State

 

 

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1fiscal year 2045 or until each of the designated retirement
2systems, as defined in Section 25, has achieved a funding ratio
3of at least 100%, whichever occurs first.
4    (d) The Comptroller shall transfer 1/12 of the total amount
5to be transferred each fiscal year under this Section into the
6Pension Stabilization Fund on the first day of each month of
7that fiscal year or as soon thereafter as possible; except that
8the final transfer of the fiscal year shall be made as soon as
9practical after the August 31 following the end of the fiscal
10year.
11    Until State fiscal year 2014, before Before the final
12transfer for a fiscal year is made, the Comptroller shall
13reconcile the estimated general funds revenues used in
14calculating the other transfers under this Section for that
15fiscal year with the actual general funds revenues for that
16fiscal year. The final transfer for the fiscal year shall be
17adjusted so that the total amount transferred under this
18Section for that fiscal year is equal to the percentage
19specified in subsection (b) or (c) of this Section, whichever
20is applicable, of the actual general funds revenues for that
21fiscal year. The actual general funds revenues for the fiscal
22year shall be calculated in a manner consistent with subsection
23(c) of Section 10 of this Act.
24(Source: P.A. 94-839, eff. 6-6-06.)
 
25    Section 20. The Illinois Pension Code is amended by

 

 

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1changing Sections 1-103.3, 1-160, 2-108, 2-119, 2-119.1,
22-121.1, 2-124, 2-125, 2-126, 2-134, 2-162, 14-103.10, 14-107,
314-108, 14-110, 14-114, 14-131, 14-132, 14-133, 14-135.08,
414-152.1, 15-111, 15-113.6, 15-113.7, 15-134.5, 15-135,
515-136, 15-155, 15-156, 15-157, 15-158.2, 15-165, 15-198,
616-121, 16-132, 16-133, 16-133.1, 16-152, 16-158, 16-158.1,
716-203, 20-121, 20-123, 20-124, and 20-125 and by adding
8Sections 1-161, 2-105.1, 2-105.2, 14-103.40, 14-103.41,
915-107.1, 15-107.2, 15-155.1, 16-106.4, 16-106.5, and 16-158.2
10as follows:
 
11    (40 ILCS 5/1-103.3)
12    Sec. 1-103.3. Application of 1994 amendment; funding
13standard.
14    (a) The provisions of Public Act 88-593 this amendatory Act
15of 1994 that change the method of calculating, certifying, and
16paying the required State contributions to the retirement
17systems established under Articles 2, 14, 15, 16, and 18 shall
18first apply to the State contributions required for State
19fiscal year 1996.
20    (b) (Blank) The General Assembly declares that a funding
21ratio (the ratio of a retirement system's total assets to its
22total actuarial liabilities) of 90% is an appropriate goal for
23State-funded retirement systems in Illinois, and it finds that
24a funding ratio of 90% is now the generally-recognized norm
25throughout the nation for public employee retirement systems

 

 

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

 

 

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1for which the person participates in the cash balance plan
2established under Section 1-161, or (iv) to any participant of
3the retirement plan established under Section 22-101.
4    A person subject to this Section with respect to service
5under the State Universities Retirement System may irrevocably
6elect to transfer to the cash balance plan under Section 1-161
7with respect to service under the State Universities Retirement
8System by filing with the State Universities Retirement System
9by December 31, 2013, in the manner required by that System,
10his or her irrevocable written election to transfer to the cash
11balance plan. A person subject to this Section who returns to
12active service under Article 15 after November 1, 2013 shall
13have 60 days after returning to active service to make this
14election. Participation in the cash balance plan shall begin no
15earlier than July 1, 2013. For a person who transfers to the
16cash balance plan, the benefits that would otherwise be payable
17under this Section with respect to service in the State
18Universities Retirement System shall instead be payable as
19provided in the cash balance plan.
20    A person subject to this Section with respect to service
21under the Teachers' Retirement System of the State of Illinois
22may irrevocably elect to transfer to the cash balance plan
23under Section 1-161 with respect to service under the Teachers'
24Retirement System of the State of Illinois by filing with the
25Teachers' Retirement System of the State of Illinois by
26December 31, 2013, in the manner required by that System, his

 

 

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1or her irrevocable written election to transfer to the cash
2balance plan. A person subject to this Section who returns to
3active service under Article 16 after November 1, 2013 shall
4have 60 days after returning to active service to make this
5election. Participation in the cash balance plan shall begin no
6earlier than July 1, 2013. For a person who transfers to the
7cash balance plan, the benefits that would otherwise be payable
8under this Section with respect to service in the Teachers'
9Retirement System of the State of Illinois shall instead be
10payable as provided in the cash balance plan.
11    (b) "Final average salary" means the average monthly (or
12annual) salary obtained by dividing the total salary or
13earnings calculated under the Article applicable to the member
14or participant during the 96 consecutive months (or 8
15consecutive years) of service within the last 120 months (or 10
16years) of service in which the total salary or earnings
17calculated under the applicable Article was the highest by the
18number of months (or years) of service in that period. For the
19purposes of a person who first becomes a member or participant
20of any retirement system or pension fund to which this Section
21applies on or after January 1, 2011, in this Code, "final
22average salary" shall be substituted for the following:
23        (1) In Articles 7 (except for service as sheriff's law
24    enforcement employees) and 15, "final rate of earnings".
25        (2) In Articles 8, 9, 10, 11, and 12, "highest average
26    annual salary for any 4 consecutive years within the last

 

 

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1    10 years of service immediately preceding the date of
2    withdrawal".
3        (3) In Article 13, "average final salary".
4        (4) In Article 14, "final average compensation".
5        (5) In Article 17, "average salary".
6        (6) In Section 22-207, "wages or salary received by him
7    at the date of retirement or discharge".
8    (b-5) Beginning on January 1, 2011, for all purposes under
9this Code (including without limitation the calculation of
10benefits and employee contributions), the annual earnings,
11salary, or wages (based on the plan year) of a member or
12participant to whom this Section applies shall not exceed
13$106,800; however, that amount shall annually thereafter be
14increased by the lesser of (i) 3% of that amount, including all
15previous adjustments, or (ii) one-half the annual unadjusted
16percentage increase (but not less than zero) in the consumer
17price index-u for the 12 months ending with the September
18preceding each November 1, including all previous adjustments.
19    For the purposes of this Section, "consumer price index-u"
20means the index published by the Bureau of Labor Statistics of
21the United States Department of Labor that measures the average
22change in prices of goods and services purchased by all urban
23consumers, United States city average, all items, 1982-84 =
24100. The new amount resulting from each annual adjustment shall
25be determined by the Public Pension Division of the Department
26of Insurance and made available to the boards of the retirement

 

 

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

 

 

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1increased.
2    (f) The initial survivor's or widow's annuity of an
3otherwise eligible survivor or widow of a retired member or
4participant who first became a member or participant on or
5after January 1, 2011 shall be in the amount of 66 2/3% of the
6retired member's or participant's retirement annuity at the
7date of death. In the case of the death of a member or
8participant who has not retired and who first became a member
9or participant on or after January 1, 2011, eligibility for a
10survivor's or widow's annuity shall be determined by the
11applicable Article of this Code. The initial benefit shall be
1266 2/3% of the earned annuity without a reduction due to age. A
13child's annuity of an otherwise eligible child shall be in the
14amount prescribed under each Article if applicable. Any
15survivor's or widow's annuity shall be increased (1) on each
16January 1 occurring on or after the commencement of the annuity
17if the deceased member died while receiving a retirement
18annuity or (2) in other cases, on each January 1 occurring
19after the first anniversary of the commencement of the annuity.
20Each annual increase shall be calculated at 3% or one-half the
21annual unadjusted percentage increase (but not less than zero)
22in the consumer price index-u for the 12 months ending with the
23September preceding each November 1, whichever is less, of the
24originally granted survivor's annuity. If the annual
25unadjusted percentage change in the consumer price index-u for
26the 12 months ending with the September preceding each November

 

 

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

 

 

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1annuity or retirement pension payments shall resume and be
2recalculated if recalculation is provided for under the
3applicable Article of this Code.
4    If a person who first becomes a member of a retirement
5system or pension fund subject to this Section on or after
6January 1, 2012 and is receiving a retirement annuity or
7retirement pension under that system or fund and accepts on a
8contractual basis a position to provide services to a
9governmental entity from which he or she has retired, then that
10person's annuity or retirement pension earned as an active
11employee of the employer shall be suspended during that
12contractual service. A person receiving an annuity or
13retirement pension under this Code shall notify the pension
14fund or retirement system from which he or she is receiving an
15annuity or retirement pension, as well as his or her
16contractual employer, of his or her retirement status before
17accepting contractual employment. A person who fails to submit
18such notification shall be guilty of a Class A misdemeanor and
19required to pay a fine of $1,000. Upon termination of that
20contractual employment, the person's retirement annuity or
21retirement pension payments shall resume and, if appropriate,
22be recalculated under the applicable provisions of this Code.
23    (i) Notwithstanding any other provision of this Section, a
24person who first becomes a participant of the retirement system
25established under Article 15 on or after January 1, 2011 but
26before the effective date of this amendatory Act of the 97th

 

 

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1General Assembly shall have the option to enroll in the
2self-managed plan created under Section 15-158.2 of this Code.
3    (j) In the case of a conflict between the provisions of
4this Section and any other provision of this Code, the
5provisions of this Section shall control.
6(Source: P.A. 96-889, eff. 1-1-11; 96-1490, eff. 1-1-11;
797-609, eff. 1-1-12.)
 
8    (40 ILCS 5/1-161 new)
9    Sec. 1-161. Cash Balance Plan.
10    (a) Participation and Applicability. This Section applies
11to all new cash balance plan participants and all legacy Tier
12II participants.
13    (b) Title. The package of benefits provided under this
14Section may be referred to as the "cash balance plan". Persons
15subject to the provisions of this Section may be referred to as
16"participants in the cash balance plan" or, in this Section,
17simply as "participants".
18    (b-5) Definitions. As used in this Section:
19    "Account" means the notional cash balance account
20established under this Section by the applicable retirement
21system for a participant in the cash balance plan.
22    "Eligible child" means:
23        (1) with respect to a participant in the retirement
24    system established under Article 15 of this Code, a person
25    who would be eligible for a survivors insurance benefit as

 

 

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1    a dependent unmarried child under Article 15 of this Code
2    if the deceased participant had been a participant in the
3    traditional benefit package; or
4        (2) with respect to a participant in the retirement
5    system established under Article 16, an eligible child as
6    defined in subdivision (a)(4) of Section 16-140 of this
7    Code who would be eligible for survivors' benefits if the
8    deceased participant had not been subject to this Section.
9    "Eligible parent" means:
10        (1) with respect to a participant in the retirement
11    system established under Article 15 of this Code, a person
12    who would be eligible for a survivors insurance benefit as
13    a dependent parent under Article 15 of this Code if the
14    deceased participant had been a participant in the
15    traditional benefit package; or
16        (2) with respect to a participant in the retirement
17    system established under Article 16, a dependent parent as
18    defined in subdivision (a)(5) of Section 16-140 of this
19    Code who would be eligible for survivors' benefits if the
20    deceased participant had not been subject to this Section.
21    "Eligible surviving spouse" means:
22        (1) with respect to a participant in the retirement
23    system established under Article 15 of this Code, a person
24    who would be eligible for a survivors annuity as a
25    surviving spouse under Article 15 of this Code if the
26    deceased participant had been a participant in the

 

 

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1    traditional benefit package; or
2        (2) with respect to a participant in the retirement
3    system established under Article 16, a dependent
4    beneficiary as defined in subdivision (a)(3)(A) or
5    (a)(3)(A-1) of Section 16-140 of this Code who would be
6    eligible for survivors' benefits payable in the form of an
7    annuity if the deceased participant had not been subject to
8    this Section.
9    "Eligible survivor" means:
10        (1) with respect to a participant in the retirement
11    system established under Article 15 of this Code, a person
12    who would be eligible for survivors insurance benefits as a
13    survivors insurance beneficiary (as defined in Section
14    15-131 of this Code) if the deceased participant had been a
15    participant in the traditional benefit package; or
16        (2) with respect to a participant in the retirement
17    system established under Article 16, a person who would be
18    eligible for survivors' benefits under Article 16 of this
19    Code if the deceased participant had not been subject to
20    this Section.
21    "Salary" means "earnings" as defined in Article 15 or
22"salary" as defined in Article 16, whichever is applicable.
23    "Legacy Tier II participant" means a person who was subject
24to Section 1-160 with respect to service under Article 15 or 16
25of this Code and who irrevocably elects to participate in the
26cash balance plan created under this Section. That election

 

 

HB6258- 20 -LRB097 23545 JDS 72554 b

1must be made in writing, in the manner provided by the
2applicable retirement system.
3    "New cash balance plan participant" means a person who, on
4or after July 1, 2013, first begins to participate in the
5retirement system established under Article 15 or 16 of this
6Code.
7    (c) Cash Balance Account. A notional cash balance account
8shall be established by the applicable retirement system for
9each participant in the cash balance plan. The account is
10notional and does not contain any actual money segregated from
11the commingled assets of the retirement system. The cash
12balance in the account is to be used in calculating benefits as
13provided in this Section, but is not to be used in the
14calculation of any refund, transfer, or other benefit under the
15applicable Article of this Code.
16    If a person participates in the cash balance plan with
17respect to service under more than one retirement system, each
18retirement system shall establish a separate cash balance
19account for the participant, and the participant shall be
20entitled to separate benefits from each retirement system based
21upon the participant's service and cash balance account under
22that retirement system. References in this Section to a
23participant's account mean the account established by, and
24related to his or her service under, the applicable retirement
25system.
26    The amounts to be credited to the cash balance account

 

 

HB6258- 21 -LRB097 23545 JDS 72554 b

1shall include (i) amounts contributed by or on behalf of the
2participant as employee contributions, (ii) notional employer
3contributions and notional amounts based on optional employer
4contributions, and (iii) interest credit that is attributable
5to the account, all as provided in this Section.
6    The amounts to be debited from the cash balance account
7shall include (i) amounts representing contributions for
8disability benefits, (ii) amounts representing contributions
9for survivor benefits not based on the cash balance account,
10and (iii) upon a return to service after retirement, amounts
11representing each payment of retirement annuity following the
12latest retirement and preceding the return to service, all as
13provided in this Section.
14    The applicable retirement system shall give to each
15participant in the cash balance plan who has not yet retired
16annual notice of the balance in the participant's cash balance
17account.
18    (c-5) Initial Account Balance for Legacy Tier II
19Participants. The applicable retirement system shall establish
20an initial account balance for each legacy Tier II participant
21when he or she begins participation in the cash balance plan.
22The initial account balance shall be an amount equal to the
23refund that the participant would be eligible to receive under
24the applicable Article of this Code if the participant
25terminated employment on that date and elected a refund of
26contributions. If a legacy Tier II participant has purchased

 

 

HB6258- 22 -LRB097 23545 JDS 72554 b

1service credit prior to irrevocably electing to participate in
2the cash balance plan created under this Section, then the
3initial account balance shall include an amount equal to the
4contributions made by the participant to purchase that service
5credit.
6    By accepting the initial account balance, the participant
7relinquishes the right to any benefits (including survivor
8benefits) that would otherwise be payable under Section 1-160
9with respect to service in the applicable retirement system,
10but does not forfeit any service credit earned with respect to
11such service.
12    (d) Employee Contributions. New cash balance plan
13participants and legacy Tier II participants shall make
14employee contributions to the applicable retirement system at
15the rates required under the applicable Article of this Code.
16The amount of each contribution shall be credited to the
17participant's cash balance account after the retirement
18system's receipt and reconciliation of the contribution.
19    (e) Notional Employer Contributions. Upon crediting each
20employee contribution under subsection (d), an amount
21representing the corresponding employer contribution shall be
22credited to the participant's cash balance account. Notional
23employer contributions shall be 6.2% of salary.
24    The notional employer contribution to be credited to the
25participant's account is not the same as the actual employer
26contributions required under subsection (o) and the provisions

 

 

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1of the applicable Article of this Code.
2    (e-1) Notional Amount Based on Optional Employer
3Contributions. If an employer agrees to make optional employer
4contributions under subsection (p), then, for the period
5specified in the agreement, an amount representing the
6percentage of salary specified in the agreement shall be
7credited to the cash balance account of each affected
8participant after receipt and reconciliation of the
9corresponding employee contribution under subsection (d).
10    The notional amount to be credited to the participant's
11account is not the same amount as the actual optional employer
12contribution required under subsection (p) and the provisions
13of the applicable Article of this Code.
14    (f) Interest Credit. An interest credit shall be determined
15by the retirement system in accordance with this Section and
16credited to the participant's cash balance account for each
17fiscal year in which there is a positive balance in that
18account; except that no additional interest credit shall be
19credited while an annuity based on the account is being paid.
20The interest credit amount shall be a percentage of the average
21balance in the cash balance account during that fiscal year,
22and shall be calculated on June 30.
23    The percentage shall be the assumed treasury rate for the
24previous fiscal year, unless neither the retirement system's
25actual rate of investment earnings for the previous fiscal year
26nor the retirement system's actual rate of investment earnings

 

 

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1for the five-year period ending at the end of the previous
2fiscal year is less than the assumed treasury rate.
3    If both the retirement system's actual rate of investment
4earnings for the previous fiscal year and the actual rate of
5investment earnings for the five-year period ending at the end
6of the previous fiscal year are at least the assumed treasury
7rate, then the percentage shall be:
8        (i) the assumed treasury rate, plus
9        (ii) two-thirds of the amount of the actual rate of
10    investment earnings for the previous fiscal year that
11    exceeds the assumed treasury rate.
12However, in no event shall the percentage applied under this
13subsection exceed 10%.
14    For the purposes of this subsection only, "previous fiscal
15year" means the fiscal year ending one year before the interest
16rate is calculated.
17    For the purposes of this subsection only, "assumed treasury
18rate" means the average annual yield of the 30-year U.S.
19Treasury Bond over the previous fiscal year, but not less than
204%.
21    When a person applies for a retirement annuity under
22subsection (g) or a surviving spouse's annuity under subsection
23(k), the retirement system shall calculate the initial annuity
24without applying an interest credit for the portion of the
25fiscal year before the initial annuity payment date. On the
26first June 30 occurring on or after the initial annuity payment

 

 

HB6258- 25 -LRB097 23545 JDS 72554 b

1date, the retirement system shall (1) calculate a prorated
2interest credit for the portion of the fiscal year before the
3initial annuity payment date, (2) credit the prorated amount to
4the participant's account, and (3) recalculate the amount of
5the annuity from the initial annuity payment date. The
6retirement system shall pay to the annuitant in a lump-sum,
7without interest, the difference, for the portion of the fiscal
8year on and after the initial annuity payment, between the
9original annuity amount and the annuity amount as recalculated
10under this subsection.
11    (f-10) Distribution after Termination of Employment. After
12termination of the participant's active employment with at
13least 5 years of service credit under the applicable retirement
14system but prior to applying for an annuity under this Section,
15a participant in the cash balance plan or an eligible surviving
16spouse under subsection (k) may make an irrevocable election to
17receive a distribution from the applicable retirement system in
18an amount not to exceed 40% of the balance in the participant's
19account in the form of a direct rollover to another qualified
20plan, to the extent allowed by federal law. Only one
21distribution under this subsection may be made with respect to
22a participant's cash balance account.
23    Upon payment of the distribution, the amount distributed
24shall be debited from the participant's cash balance account.
25The remaining balance in the account shall be used for the
26determination of the other benefits provided to the participant

 

 

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1or eligible surviving spouse under this Section. Once a
2distribution under this subsection (f-10) has been paid,
3neither the participant nor an eligible survivor may repay the
4amount distributed or reinstate any benefit arising under this
5Section from the distributed amount.
6    (f-15) Refund. In lieu of receiving a distribution under
7subsection (f-10) or a retirement annuity under subsection (g),
8at any time after terminating active employment under the
9applicable retirement system, a participant in the cash balance
10plan may elect to receive a refund under this subsection. The
11refund shall consist of an amount equal to the amount of all
12employee contributions credited to the participant's account,
13but shall not include any interest credit or employer
14contributions. If the participant so requests, the refund may
15be paid in the form of a direct rollover to another qualified
16plan, to the extent allowed by federal law and in accordance
17with the rules of the applicable retirement system.
18    Upon payment of the refund, the participant's notional cash
19balance account is closed, and the participant's credits in the
20applicable retirement system are terminated. A person who
21receives a refund under this subsection forfeits all rights
22under the applicable retirement system, including any right to
23repay refunded amounts and to reinstate any benefit under that
24retirement system.
25    An eligible surviving spouse under subsection (k) may elect
26to receive a refund under this subsection in lieu of a

 

 

HB6258- 27 -LRB097 23545 JDS 72554 b

1survivor's annuity unless a distribution has been made under
2subsection (f-10) with respect to the participant's cash
3balance account.
4    (g) Retirement Annuity. A participant in the cash balance
5plan may begin collecting a retirement annuity at age 59 1/2,
6but not before reaching the age of 59 1/2 and not before the
7date of termination of active employment under the applicable
8retirement system.
9    The amount of the retirement annuity shall be calculated by
10the retirement system, based on the balance in the cash balance
11account, the assumption of future investment returns as
12specified in this subsection, the participant's election to
13have a lifetime surviving spouse's annuity as specified in this
14subsection, the annual increase in retirement annuity as
15specified in subsection (h), the annual increase in survivor's
16annuity as specified in subsection (l), and any actuarial
17assumptions and tables adopted by the board of the retirement
18system for this purpose. The calculation shall be designed to
19determine, on an actuarially equivalent basis, the amount of
20retirement annuity that will result in total annuity payments
21being equal to the total balance in the participant's account
22on the date when the last payment of retirement annuity (or
23surviving spouse's annuity, if the participant elects to
24provide for a surviving spouse's annuity pursuant to this
25subsection) is anticipated to be paid under the relevant
26actuarial assumptions.

 

 

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1    For the purpose of calculating retirement annuities,
2future investment returns shall be assumed to be a percentage
3equal to the average yield of the 30-year U.S. Treasury Bond
4over the 5 fiscal years prior to the calculation of the initial
5retirement annuity, plus 200 basis points; but not less than 4%
6nor more than 8%.
7    A retirement annuity or surviving spouse's annuity
8provided under this subsection shall be a life annuity and
9shall not expire for the reason that the total amount paid has
10reached or exceeded the account balance.
11    The annuity payment shall begin on the date specified by
12the participant submitting a written application, which date
13shall not be prior to termination of employment or more than
14one year before the application is received by the board;
15however, if the participant is not an employee of an employer
16participating in the applicable retirement system or in a
17participating system as defined in Article 20 of this Code on
18April 1 of the calendar year next following the calendar year
19in which the participant attains age 70 1/2, the annuity
20payment period shall begin on that date regardless of whether
21an application has been filed.
22    The participant may elect, in the participant's written
23application for retirement, to receive a reduced retirement
24annuity payable for his or her life and to have a surviving
25spouse's annuity in a monthly amount equal to 50%, 75%, or 100%
26of that reduced monthly amount, to be paid to his or her

 

 

HB6258- 29 -LRB097 23545 JDS 72554 b

1eligible surviving spouse, commencing upon the participant's
2death.
3    When the final payment of the retirement annuity (or
4surviving spouse's annuity, if the participant elects to
5provide for a surviving spouse's annuity pursuant to this
6subsection) has been paid, the account shall be closed. When
7the participant has died and there are no longer any eligible
8survivors, any unused employee contributions shall be
9forfeited to the applicable retirement system.
10    (h) Annual Increase in Retirement Annuity. The retirement
11annuity shall be subject to an automatic annual increase in an
12amount equal to 3% of the originally granted annuity on each
13January 1 occurring on or after the first anniversary of the
14annuity start date. Automatic annual increases in a surviving
15spouse's annuity provided under subsection (g) shall be in
16accordance with subsection (k-5) of this Section.
17    (i) Disability Benefits. The disability benefits provided
18under the applicable retirement system apply to new cash
19balance plan participants and legacy Tier II participants in
20the cash balance plan, subject to and in accordance with the
21eligibility and other provisions of the applicable Article.
22    Retirement due to disability under Section 15-153.2 or
2316-149.2 shall be deemed a disability benefit for the purposes
24of this Section and shall apply to new cash balance plan
25participants and legacy Tier II participants.
26    The board of the retirement system shall designate

 

 

HB6258- 30 -LRB097 23545 JDS 72554 b

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

 

 

HB6258- 31 -LRB097 23545 JDS 72554 b

1participant or legacy Tier II participant who had at least 5
2years of service under the applicable Article and had not begun
3receiving a retirement annuity or taken a refund under
4subsection (f-15), the eligible surviving spouse shall, upon
5written application, be entitled to receive a surviving
6spouse's annuity beginning at age 59 1/2 (regardless of the
7existence of dependent eligible children). The surviving
8spouse's annuity shall be equal to 66 2/3% of the amount of
9retirement annuity that the deceased participant would have
10been entitled to if he or she had retired on the date of death
11having attained age 59 1/2 and without having elected to take a
12reduced annuity to provide a surviving spouse's annuity.
13    At any time before beginning to receive a surviving
14spouse's annuity under this subsection, the eligible surviving
15spouse may claim a distribution under subsection (f-10) or a
16refund under subsection (f-15). The deceased participant's
17account shall continue to receive interest credit until the
18eligible surviving spouse begins to receive a surviving
19spouse's annuity or receives a refund of employee contributions
20under subsection (f-15).
21    A surviving spouse's annuity provided under this
22subsection shall be a life annuity and shall not expire for the
23reason that the amount paid has reached or exceeded the account
24balance. When the final payment of the surviving spouse's
25annuity has been paid, the account shall be closed. When the
26participant has died and there are no longer any eligible

 

 

HB6258- 32 -LRB097 23545 JDS 72554 b

1survivors, any unused employee contributions shall be
2forfeited to the applicable retirement system.
3    (k-5) Annual Increase in Surviving Spouse's Annuity. A
4surviving spouse's annuity granted under subsection (g) or (k)
5shall be subject to an automatic annual increase in an amount
6equal to 3% of the originally granted annuity on each January 1
7occurring on or after the first anniversary of the annuity
8start date.
9    (l) Benefits for Eligible Children and Eligible Parents.
10Upon the death of a participant in the cash balance plan, an
11eligible child or eligible parent may be entitled to receive
12death benefits and survivors insurance benefits under Article
1315 or survivors' benefits under Article 16 of this Code. These
14benefits shall be deemed to be "survivor benefits not based on
15the cash balance account" for the purposes of this Section.
16    Eligibility for these benefits shall be determined under
17this Section and the applicable Article of this Code, including
18without limitation any provision restricting eligibility on
19the basis of (i) an election to receive a lump-sum death
20benefit or (ii) a permitted designation of a different or
21alternate beneficiary.
22    The amount of these benefits shall be determined under this
23Section and the applicable Article of this Code, including
24without limitation any limitation on the minimum or maximum
25amount of such benefits, individually or in combination. In
26applying any limitation on the minimum or maximum amount of

 

 

HB6258- 33 -LRB097 23545 JDS 72554 b

1such benefits that depends on the existence or amount of a
2benefit payable to the surviving spouse, the retirement system
3shall use the amount of surviving spouse annuity payable by the
4retirement system under this Section rather than the amount
5otherwise provided under the applicable Article. Under no
6circumstance shall the sum of the benefits payable to all
7eligible survivors of a particular deceased participant by the
8applicable retirement system in accordance with this Section
9exceed the sum of the benefits that would be payable to all
10eligible survivors if the deceased participant had not been
11subject to this Section.
12The board of the retirement system shall designate annually, as
13a percentage of salary, an amount representing the anticipated
14average cost of providing survivor benefits not based on the
15cash balance account for dependent children and dependent
16parents of deceased participants in the cash balance plan. The
17amount so designated shall not exceed XXX% of the cash balance
18plan participant's salary and shall be deducted annually from
19the account of each participant receiving salary.
20    (m) Applicability of Provisions. The following provisions,
21if and as they exist in this Code, do not apply to participants
22in the cash balance plan with respect to participation in the
23cash balance plan, except as they are specifically provided for
24in this Section:
25        (1) minimum service or vesting requirements (other
26    than as provided in this Section);

 

 

HB6258- 34 -LRB097 23545 JDS 72554 b

1        (2) provisions limiting a retirement annuity to a
2    specified percentage of salary;
3        (3) provisions authorizing a minimum retirement or
4    survivor's annuity or a supplemental annuity (except as
5    provided in subsection (l) of this Section with respect to
6    eligible children and eligible parents);
7        (4) provisions authorizing any form of annuity not
8    authorized under this Section;
9        (5) provisions authorizing a reversionary annuity
10    (other than a surviving spouse's annuity under subsection
11    (g));
12        (6) provisions authorizing a refund of employee
13    contributions upon termination of service (except as
14    provided in this Section) or any lump-sum payout in lieu of
15    a retirement annuity or survivor's benefit (other than
16    lump-sum death benefits and other than the distribution
17    under subsection (f-10) and the refund under subsection
18    (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

 

 

HB6258- 35 -LRB097 23545 JDS 72554 b

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) Actual Employer Contributions. Payment of employer
14contributions with respect to participants in the cash balance
15plan shall be the responsibility of the actual employer. These
16contributions shall be determined under and paid in accordance
17with the provisions of Sections 15-155 and 16-158.
18    (p) Actual Optional Employer Contributions. An employer
19may agree with the applicable retirement system to make
20optional employer contributions to the system on behalf of
21employees who are participants in the cash balance plan, to the
22extent permitted by federal law and in accordance with the
23rules and procedures of the system.
24    Any such agreement must apply to all employees of the
25employer who are participants in the cash balance plan. The
26agreement shall be filed in writing with the applicable

 

 

HB6258- 36 -LRB097 23545 JDS 72554 b

1retirement system, and shall specify (i) the additional
2percentage of salary to be credited to the accounts of the
3employees, (ii) the period during which the optional employer
4contributions will apply, and (iii) that the employer agrees to
5pay to the applicable retirement system the employer's normal
6cost of the benefits resulting from those credited amounts, as
7well as any unfunded accrued liability resulting from the cost
8of those benefits, all as determined by the system in
9accordance with the applicable Article.
10    (q) Prospective Modification. The provisions set forth in
11this Section are subject to prospective changes made by law
12provided that any such changes shall not apply to any benefits
13accrued under this Section prior to the effective date of any
14amendatory Act of the General Assembly.
15    (r) Qualified Plan Status. No provision of this Section
16shall be interpreted in a way that would cause the applicable
17retirement system to cease to be a qualified plan under the
18Internal Revenue Code of 1986.
 
19    (40 ILCS 5/2-105.1 new)
20    Sec. 2-105.1. Tier I participant."Tier I participant": A
21participant who first became a participant before January 1,
222011.
 
23    (40 ILCS 5/2-105.2 new)
24    Sec. 2-105.2. Tier I retiree. "Tier I retiree" means a

 

 

HB6258- 37 -LRB097 23545 JDS 72554 b

1former Tier I participant who is receiving a retirement
2annuity.
 
3    (40 ILCS 5/2-108)  (from Ch. 108 1/2, par. 2-108)
4    Sec. 2-108. Salary. "Salary": (1) For members of the
5General Assembly, the total compensation paid to the member by
6the State for one year of service, including the additional
7amounts, if any, paid to the member as an officer pursuant to
8Section 1 of "An Act in relation to the compensation and
9emoluments of the members of the General Assembly", approved
10December 6, 1907, as now or hereafter amended.
11    (2) For the State executive officers specified in Section
122-105, the total compensation paid to the member for one year
13of service.
14    (3) For members of the System who are participants under
15Section 2-117.1, or who are serving as Clerk or Assistant Clerk
16of the House of Representatives or Secretary or Assistant
17Secretary of the Senate, the total compensation paid to the
18member for one year of service, but not to exceed the salary of
19the highest salaried officer of the General Assembly.
20    However, in the event that federal law results in any
21participant receiving imputed income based on the value of
22group term life insurance provided by the State, such imputed
23income shall not be included in salary for the purposes of this
24Article.
25    Notwithstanding any other provision of this Code, the

 

 

HB6258- 38 -LRB097 23545 JDS 72554 b

1salary of a Tier I participant for the purposes of this Code
2shall not exceed, for periods of service in a term of office
3beginning on or after the effective date of this amendatory Act
4of the 97th General Assembly, the annual contribution and
5benefit base established for the applicable year by the
6Commissioner of Social Security under the federal Social
7Security Act.
8(Source: P.A. 86-27; 86-273; 86-1028; 86-1488.)
 
9    (40 ILCS 5/2-119)  (from Ch. 108 1/2, par. 2-119)
10    Sec. 2-119. Retirement annuity - conditions for
11eligibility.
12    (a) A participant whose service as a member is terminated,
13regardless of age or cause, is entitled to a retirement annuity
14beginning on the date specified by the participant in a written
15application subject to the following conditions:
16        1. The date the annuity begins does not precede the
17    date of final termination of service, or is not more than
18    30 days before the receipt of the application by the board
19    in the case of annuities based on disability or one year
20    before the receipt of the application in the case of
21    annuities based on attained age;
22        2. The participant meets one of the following
23    eligibility requirements:
24        For a participant who first becomes a participant of
25    this System before January 1, 2011 (the effective date of

 

 

HB6258- 39 -LRB097 23545 JDS 72554 b

1    Public Act 96-889):
2            (A) He or she has attained age 55 and has at least
3        8 years of service credit;
4            (B) He or she has attained age 62 and terminated
5        service after July 1, 1971 with at least 4 years of
6        service credit; or
7            (C) He or she has completed 8 years of service and
8        has become permanently disabled and as a consequence,
9        is unable to perform the duties of his or her office.
10        For a participant who first becomes a participant of
11    this System on or after January 1, 2011 (the effective date
12    of Public Act 96-889), he or she has attained age 67 and
13    has at least 8 years of service credit.
14    (a-5) Notwithstanding subsection (a) of this Section, for a
15Tier I participant who begins receiving a retirement annuity
16under this Section after July 1, 2013:
17        (1) If the Tier I participant is at least 45 years old
18    on the effective date of this amendatory Act of the 97th
19    General Assembly, then the references to age 55 and 62 in
20    subsection (a) of this Section remain unchanged.
21        (2) If the Tier I participant is at least 40 but less
22    than 45 years old on the effective date of this amendatory
23    Act of the 97th General Assembly, then the references to
24    age 55 and 62 in subsection (a) of this Section are
25    increased by one year.
26        (3) If the Tier I participant is at least 35 but less

 

 

HB6258- 40 -LRB097 23545 JDS 72554 b

1    than 40 years old on the effective date of this amendatory
2    Act of the 97th General Assembly, then the references to
3    age 55 and 62 in subsection (a) of this Section are
4    increased by 3 years.
5        (4) If the Tier I participant is less than 35 years old
6    on the effective date of this amendatory Act of the 97th
7    General Assembly, then the references to age 55 and 62 in
8    subsection (a) of this Section are increased by 5 years.
9    Notwithstanding Section 1-103.1, this subsection (a-5)
10applies without regard to whether or not the Tier I member is
11in active service under this Article on or after the effective
12date of this amendatory Act of the 97th General Assembly.
13    (a-5) A participant who first becomes a participant of this
14System on or after January 1, 2011 (the effective date of
15Public Act 96-889) who has attained age 62 and has at least 8
16years of service credit may elect to receive the lower
17retirement annuity provided in paragraph (c) of Section
182-119.01 of this Code.
19    (b) A participant shall be considered permanently disabled
20only if: (1) disability occurs while in service and is of such
21a nature as to prevent him or her from reasonably performing
22the duties of his or her office at the time; and (2) the board
23has received a written certificate by at least 2 licensed
24physicians appointed by the board stating that the member is
25disabled and that the disability is likely to be permanent.
26(Source: P.A. 96-889, eff. 1-1-11; 96-1490, eff. 1-1-11.)
 

 

 

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1    (40 ILCS 5/2-119.1)  (from Ch. 108 1/2, par. 2-119.1)
2    Sec. 2-119.1. Automatic increase in retirement annuity.
3    (a) Except as provided in subsections (a-1) and (a-2), a A
4participant who retires after June 30, 1967, and who has not
5received an initial increase under this Section before the
6effective date of this amendatory Act of 1991, shall, in
7January or July next following the first anniversary of
8retirement, whichever occurs first, and in the same month of
9each year thereafter, but in no event prior to age 60, have the
10amount of the originally granted retirement annuity increased
11as follows: for each year through 1971, 1 1/2%; for each year
12from 1972 through 1979, 2%; and for 1980 and each year
13thereafter, 3%. Annuitants who have received an initial
14increase under this subsection prior to the effective date of
15this amendatory Act of 1991 shall continue to receive their
16annual increases in the same month as the initial increase.
17    (a-1) Notwithstanding any other provision of this Article,
18for a Tier I retiree, the amount of each automatic annual
19increase in retirement annuity occurring on or after the
20effective date of this amendatory Act of the 97th General
21Assembly shall be the lesser of $750 or 3% of the total annuity
22payable at the time of the increase, including previous
23increases granted.
24    (a-2) Notwithstanding any other provision of this Article,
25for a Tier I retiree, the monthly retirement annuity shall

 

 

HB6258- 42 -LRB097 23545 JDS 72554 b

1first be subject to annual increases on the January 1 occurring
2on or next after the attainment of age 67 or the January 1
3occurring on or next after the fifth anniversary of the annuity
4start date, whichever occurs earlier. If on the effective date
5of this amendatory Act of the 97th General Assembly a Tier I
6retiree has already received an annual increase under this
7Section but does not yet meet the new eligibility requirements
8of this subsection, the annual increases already received shall
9continue in force, but no additional annual increase shall be
10granted until the Tier I retiree meets the new eligibility
11requirements.
12    (a-3) Notwithstanding Section 1-103.1, subsections (a-1)
13and (a-2) apply without regard to whether or not the Tier I
14retiree is in active service under this Article on or after the
15effective date of this amendatory Act of the 97th General
16Assembly.
17    (b) Beginning January 1, 1990, for eligible participants
18who remain in service after attaining 20 years of creditable
19service, the 3% increases provided under subsection (a) shall
20begin to accrue on the January 1 next following the date upon
21which the participant (1) attains age 55, or (2) attains 20
22years of creditable service, whichever occurs later, and shall
23continue to accrue while the participant remains in service;
24such increases shall become payable on January 1 or July 1,
25whichever occurs first, next following the first anniversary of
26retirement. For any person who has service credit in the System

 

 

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1for the entire period from January 15, 1969 through December
231, 1992, regardless of the date of termination of service, the
3reference to age 55 in clause (1) of this subsection (b) shall
4be deemed to mean age 50.
5    This subsection (b) does not apply to any person who first
6becomes a member of the System after August 8, 2003 (the
7effective date of Public Act 93-494) this amendatory Act of the
893rd General Assembly.
9    (b-5) Notwithstanding any other provision of this Article,
10a participant who first becomes a participant on or after
11January 1, 2011 (the effective date of Public Act 96-889)
12shall, in January or July next following the first anniversary
13of retirement, whichever occurs first, and in the same month of
14each year thereafter, but in no event prior to age 67, have the
15amount of the originally granted retirement annuity then being
16paid increased by 3% or one-half the annual unadjusted
17percentage increase in the Consumer Price Index for All Urban
18Consumers as determined by the Public Pension Division of the
19Department of Insurance under subsection (a) of Section
202-108.1, whichever is less. The changes made to this subsection
21by this amendatory Act of the 97th General Assembly do not
22apply to any automatic annual increase granted under this
23subsection before the effective date of this amendatory Act.
24    (c) The foregoing provisions relating to automatic
25increases are not applicable to a participant who retires
26before having made contributions (at the rate prescribed in

 

 

HB6258- 44 -LRB097 23545 JDS 72554 b

1Section 2-126) for automatic increases for less than the
2equivalent of one full year. However, in order to be eligible
3for the automatic increases, such a participant may make
4arrangements to pay to the system the amount required to bring
5the total contributions for the automatic increase to the
6equivalent of one year's contributions based upon his or her
7last salary.
8    (d) A participant who terminated service prior to July 1,
91967, with at least 14 years of service is entitled to an
10increase in retirement annuity beginning January, 1976, and to
11additional increases in January of each year thereafter.
12    The initial increase shall be 1 1/2% of the originally
13granted retirement annuity multiplied by the number of full
14years that the annuitant was in receipt of such annuity prior
15to January 1, 1972, plus 2% of the originally granted
16retirement annuity for each year after that date. The
17subsequent annual increases shall be at the rate of 2% of the
18originally granted retirement annuity for each year through
191979 and at the rate of 3% for 1980 and thereafter.
20    (e) Beginning January 1, 1990, all automatic annual
21increases payable under this Section shall be calculated as a
22percentage of the total annuity payable at the time of the
23increase, including previous increases granted under this
24Article.
25(Source: P.A. 96-889, eff. 1-1-11; 96-1490, eff. 1-1-11.)
 

 

 

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1    (40 ILCS 5/2-121.1)  (from Ch. 108 1/2, par. 2-121.1)
2    Sec. 2-121.1. Survivor's annuity - amount.
3    (a) A surviving spouse shall be entitled to 66 2/3% of the
4amount of retirement annuity to which the participant or
5annuitant was entitled on the date of death, without regard to
6whether the participant had attained age 55 prior to his or her
7death, subject to a minimum payment of 10% of salary. If a
8surviving spouse, regardless of age, has in his or her care at
9the date of death any eligible child or children of the
10participant, the survivor's annuity shall be the greater of the
11following: (1) 66 2/3% of the amount of retirement annuity to
12which the participant or annuitant was entitled on the date of
13death, or (2) 30% of the participant's salary increased by 10%
14of salary on account of each such child, subject to a total
15payment for the surviving spouse and children of 50% of salary.
16If eligible children survive but there is no surviving spouse,
17or if the surviving spouse dies or becomes disqualified by
18remarriage while eligible children survive, each eligible
19child shall be entitled to an annuity of 20% of salary, subject
20to a maximum total payment for all such children of 50% of
21salary.
22    However, the survivor's annuity payable under this Section
23shall not be less than 100% of the amount of retirement annuity
24to which the participant or annuitant was entitled on the date
25of death, if he or she is survived by a dependent disabled
26child.

 

 

HB6258- 46 -LRB097 23545 JDS 72554 b

1    The salary to be used for determining these benefits shall
2be the salary used for determining the amount of retirement
3annuity as provided in Section 2-119.01.
4    (b) Upon the death of a participant after the termination
5of service or upon death of an annuitant, the maximum total
6payment to a surviving spouse and eligible children, or to
7eligible children alone if there is no surviving spouse, shall
8be 75% of the retirement annuity to which the participant or
9annuitant was entitled, unless there is a dependent disabled
10child among the survivors.
11    (c) When a child ceases to be an eligible child, the
12annuity to that child, or to the surviving spouse on account of
13that child, shall thereupon cease, and the annuity payable to
14the surviving spouse or other eligible children shall be
15recalculated if necessary.
16    Upon the ineligibility of the last eligible child, the
17annuity shall immediately revert to the amount payable upon
18death of a participant or annuitant who leaves no eligible
19children. If the surviving spouse is then under age 50, the
20annuity as revised shall be deferred until the attainment of
21age 50.
22    (d) Beginning January 1, 1990, every survivor's annuity
23shall be increased (1) on each January 1 occurring on or after
24the commencement of the annuity if the deceased member died
25while receiving a retirement annuity, or (2) in other cases, on
26each January 1 occurring on or after the first anniversary of

 

 

HB6258- 47 -LRB097 23545 JDS 72554 b

1the commencement of the annuity, by an amount equal to 3% of
2the current amount of the annuity, including any previous
3increases under this Article. Such increases shall apply
4without regard to whether the deceased member was in service on
5or after the effective date of this amendatory Act of 1991, but
6shall not accrue for any period prior to January 1, 1990.
7    (d-5) Notwithstanding any other provision of this Article,
8the initial survivor's annuity of a survivor of a participant
9who first becomes a participant on or after January 1, 2011
10(the effective date of Public Act 96-889) shall be in the
11amount of 66 2/3% of the amount of the retirement annuity to
12which the participant or annuitant was entitled on the date of
13death and shall be increased (1) on each January 1 occurring on
14or after the commencement of the annuity if the deceased member
15died while receiving a retirement annuity or (2) in other
16cases, on each January 1 occurring on or after the first
17anniversary of the commencement of the annuity, by an amount
18equal to 3% or one-half the annual unadjusted percentage
19increase in the Consumer Price Index for All Urban Consumers as
20determined by the Public Pension Division of the Department of
21Insurance under subsection (a) of Section 2-108.1, whichever is
22less, of the originally granted survivor's annuity then being
23paid. The changes made to this subsection by this amendatory
24Act of the 97th General Assembly do not apply to any automatic
25annual increase granted under this subsection before the
26effective date of this amendatory Act.

 

 

HB6258- 48 -LRB097 23545 JDS 72554 b

1    (e) Notwithstanding any other provision of this Article,
2beginning January 1, 1990, the minimum survivor's annuity
3payable to any person who is entitled to receive a survivor's
4annuity under this Article shall be $300 per month, without
5regard to whether or not the deceased participant was in
6service on the effective date of this amendatory Act of 1989.
7    (f) In the case of a proportional survivor's annuity
8arising under the Retirement Systems Reciprocal Act where the
9amount payable by the System on January 1, 1993 is less than
10$300 per month, the amount payable by the System shall be
11increased beginning on that date by a monthly amount equal to
12$2 for each full year that has expired since the annuity began.
13(Source: P.A. 96-889, eff. 1-1-11; 96-1490, eff. 1-1-11.)
 
14    (40 ILCS 5/2-124)  (from Ch. 108 1/2, par. 2-124)
15    Sec. 2-124. Contributions by State.
16    (a) The State shall make contributions to the System by
17appropriations of amounts which, together with the
18contributions of participants, interest earned on investments,
19and other income will meet the cost of maintaining and
20administering the System on a 100% 90% funded basis in
21accordance with actuarial recommendations by the end of State
22fiscal year 2043.
23    (b) The Board shall determine the amount of State
24contributions required for each fiscal year on the basis of the
25actuarial tables and other assumptions adopted by the Board and

 

 

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1the prescribed rate of interest, using the formula in
2subsection (c).
3    (c) For State fiscal years 2014 through 2043, the minimum
4contribution to the System to be made by the State for each
5fiscal year shall be an amount determined by the System to be
6equal to the sum of (1) the State's portion of the projected
7normal cost for that fiscal year, plus (2) an amount sufficient
8to bring the total assets of the System up to 100% of the total
9actuarial liabilities of the System by the end of State fiscal
10year 2043. In making these determinations, the required State
11contribution shall be calculated each year as a level
12percentage of payroll over the years remaining to and including
13fiscal year 2043 and shall be determined under the projected
14unit credit actuarial cost method.
15    For State fiscal years 2012 and 2013 through 2045, the
16minimum contribution to the System to be made by the State for
17each fiscal year shall be an amount determined by the System to
18be sufficient to bring the total assets of the System up to 90%
19of the total actuarial liabilities of the System by the end of
20State fiscal year 2045. In making these determinations, the
21required State contribution shall be calculated each year as a
22level percentage of payroll over the years remaining to and
23including fiscal year 2045 and shall be determined under the
24projected unit credit actuarial cost method.
25    For State fiscal years 1996 through 2005, the State
26contribution to the System, as a percentage of the applicable

 

 

HB6258- 50 -LRB097 23545 JDS 72554 b

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

 

 

HB6258- 51 -LRB097 23545 JDS 72554 b

1total required State contribution for State fiscal year 2011 is
2the amount recertified by the System on or before April 1, 2011
3pursuant to Section 2-134 and shall be made from the proceeds
4of bonds sold in fiscal year 2011 pursuant to Section 7.2 of
5the General Obligation Bond Act, less (i) the pro rata share of
6bond sale expenses determined by the System's share of total
7bond proceeds, (ii) any amounts received from the General
8Revenue Fund in fiscal year 2011, and (iii) any reduction in
9bond proceeds due to the issuance of discounted bonds, if
10applicable.
11    Beginning in State fiscal year 2044, the minimum State
12contribution for each fiscal year shall be the amount needed to
13maintain the total assets of the System at 100% of the total
14actuarial liabilities of the System.
15    Beginning in State fiscal year 2046, the minimum State
16contribution for each fiscal year shall be the amount needed to
17maintain the total assets of the System at 90% of the total
18actuarial liabilities of the System.
19    Amounts received by the System pursuant to Section 25 of
20the Budget Stabilization Act or Section 8.12 of the State
21Finance Act in any fiscal year do not reduce and do not
22constitute payment of any portion of the minimum State
23contribution required under this Article in that fiscal year.
24Such amounts shall not reduce, and shall not be included in the
25calculation of, the required State contributions under this
26Article in any future year until the System has reached a

 

 

HB6258- 52 -LRB097 23545 JDS 72554 b

1funding ratio of at least 100% 90%. A reference in this Article
2to the "required State contribution" or any substantially
3similar term does not include or apply to any amounts payable
4to the System under Section 25 of the Budget Stabilization Act.
5    Notwithstanding any other provision of this Section, the
6required State contribution for State fiscal year 2005 and for
7fiscal year 2008 and each fiscal year thereafter through State
8fiscal year 2013, as calculated under this Section and
9certified under Section 2-134, shall not exceed an amount equal
10to (i) the amount of the required State contribution that would
11have been calculated under this Section for that fiscal year if
12the System had not received any payments under subsection (d)
13of Section 7.2 of the General Obligation Bond Act, minus (ii)
14the portion of the State's total debt service payments for that
15fiscal year on the bonds issued in fiscal year 2003 for the
16purposes of that Section 7.2, as determined and certified by
17the Comptroller, that is the same as the System's portion of
18the total moneys distributed under subsection (d) of Section
197.2 of the General Obligation Bond Act. In determining this
20maximum for State fiscal years 2008 through 2010, however, the
21amount referred to in item (i) shall be increased, as a
22percentage of the applicable employee payroll, in equal
23increments calculated from the sum of the required State
24contribution for State fiscal year 2007 plus the applicable
25portion of the State's total debt service payments for fiscal
26year 2007 on the bonds issued in fiscal year 2003 for the

 

 

HB6258- 53 -LRB097 23545 JDS 72554 b

1purposes of Section 7.2 of the General Obligation Bond Act, so
2that, by State fiscal year 2011, the State is contributing at
3the rate otherwise required under this Section.
4    (d) For purposes of determining the required State
5contribution to the System, the value of the System's assets
6shall be equal to the actuarial value of the System's assets,
7which shall be calculated as follows:
8    As of June 30, 2008, the actuarial value of the System's
9assets shall be equal to the market value of the assets as of
10that date. In determining the actuarial value of the System's
11assets for fiscal years after June 30, 2008, any actuarial
12gains or losses from investment return incurred in a fiscal
13year shall be recognized in equal annual amounts over the
145-year period following that fiscal year.
15    (e) For purposes of determining the required State
16contribution to the system for a particular year, the actuarial
17value of assets shall be assumed to earn a rate of return equal
18to the system's actuarially assumed rate of return.
19(Source: P.A. 96-43, eff. 7-15-09; 96-1497, eff. 1-14-11;
2096-1511, eff. 1-27-11; 96-1554, eff. 3-18-11; 97-813, eff.
217-13-12.)
 
22    (40 ILCS 5/2-125)  (from Ch. 108 1/2, par. 2-125)
23    Sec. 2-125. Obligations of State; funding guarantee.
24    (a) The payment of (1) the required State contributions,
25(2) all benefits granted under this system and (3) all expenses

 

 

HB6258- 54 -LRB097 23545 JDS 72554 b

1of administration and operation are obligations of the State to
2the extent specified in this Article.
3    (b) All income, interest and dividends derived from
4deposits and investments shall be credited to the account of
5the system in the State Treasury and used to pay benefits under
6this Article.
7    (c) Beginning July 1, 2013, the State shall be
8contractually obligated to contribute to the System under
9Section 2-124 in each State fiscal year an amount not less than
10the sum of (i) the State's normal cost for that year and (ii)
11the portion of the unfunded accrued liability assigned to that
12year by law in accordance with a schedule that distributes
13payments equitably over a reasonable period of time and in
14accordance with accepted actuarial practices. The obligations
15created under this subsection (c) are contractual obligations
16protected and enforceable under Article I, Section 16 and
17Article XIII, Section 5 of the Illinois Constitution.
18    Notwithstanding any other provision of law, if the State
19fails to pay in a State fiscal year the amount guaranteed under
20this subsection, the System may bring a mandamus action in the
21Circuit Court of Sangamon County to compel the State to make
22that payment, irrespective of other remedies that may be
23available to the System. In ordering the State to make the
24required payment, the court may order a reasonable payment
25schedule to enable the State to make the required payment
26without significantly imperiling the public health, safety, or

 

 

HB6258- 55 -LRB097 23545 JDS 72554 b

1welfare.
2(Source: P.A. 83-1440.)
 
3    (40 ILCS 5/2-126)  (from Ch. 108 1/2, par. 2-126)
4    Sec. 2-126. Contributions by participants.
5    (a) Each participant shall contribute toward the cost of
6his or her retirement annuity a percentage of each payment of
7salary received by him or her for service as a member as
8follows: for service between October 31, 1947 and January 1,
91959, 5%; for service between January 1, 1959 and June 30,
101969, 6%; for service between July 1, 1969 and January 10,
111973, 6 1/2%; for service after January 10, 1973, 7%; for
12service after December 31, 1981, 8 1/2%.
13    (a-5) In addition to the contributions otherwise required
14under this Article, each Tier I participant shall also make the
15following contributions toward the cost of his or her
16retirement annuity from each payment of salary received by him
17or her for service as a member:
18        (1) beginning July 1, 2013 and through June 30, 2014,
19    1% of salary; and
20        (2) beginning on July 1, 2014, 2% of salary.
21    (b) Beginning August 2, 1949, each male participant, and
22from July 1, 1971, each female participant shall contribute
23towards the cost of the survivor's annuity 2% of salary.
24    A participant who has no eligible survivor's annuity
25beneficiary may elect to cease making contributions for

 

 

HB6258- 56 -LRB097 23545 JDS 72554 b

1survivor's annuity under this subsection. A survivor's annuity
2shall not be payable upon the death of a person who has made
3this election, unless prior to that death the election has been
4revoked and the amount of the contributions that would have
5been paid under this subsection in the absence of the election
6is paid to the System, together with interest at the rate of 4%
7per year from the date the contributions would have been made
8to the date of payment.
9    (c) Beginning July 1, 1967, each participant shall
10contribute 1% of salary towards the cost of automatic increase
11in annuity provided in Section 2-119.1. These contributions
12shall be made concurrently with contributions for retirement
13annuity purposes.
14    (d) In addition, each participant serving as an officer of
15the General Assembly shall contribute, for the same purposes
16and at the same rates as are required of a regular participant,
17on each additional payment received as an officer. If the
18participant serves as an officer for at least 2 but less than 4
19years, he or she shall contribute an amount equal to the amount
20that would have been contributed had the participant served as
21an officer for 4 years. Persons who serve as officers in the
2287th General Assembly but cannot receive the additional payment
23to officers because of the ban on increases in salary during
24their terms may nonetheless make contributions based on those
25additional payments for the purpose of having the additional
26payments included in their highest salary for annuity purposes;

 

 

HB6258- 57 -LRB097 23545 JDS 72554 b

1however, persons electing to make these additional
2contributions must also pay an amount representing the
3corresponding employer contributions, as calculated by the
4System.
5    (e) Notwithstanding any other provision of this Article,
6the required contribution of a participant who first becomes a
7participant on or after January 1, 2011 shall not exceed the
8contribution that would be due under this Article if that
9participant's highest salary for annuity purposes were
10$106,800, plus any increases in that amount under Section
112-108.1.
12(Source: P.A. 96-1490, eff. 1-1-11.)
 
13    (40 ILCS 5/2-134)   (from Ch. 108 1/2, par. 2-134)
14    Sec. 2-134. To certify required State contributions and
15submit vouchers.
16    (a) The Board shall certify to the Governor on or before
17December 15 of each year through until December 15, 2011 the
18amount of the required State contribution to the System for the
19next fiscal year and shall specifically identify the System's
20projected State normal cost for that fiscal year. The
21certification shall include a copy of the actuarial
22recommendations upon which it is based and shall specifically
23identify the System's projected State normal cost for that
24fiscal year.
25    (a-5) On or before November 1 of each year, beginning

 

 

HB6258- 58 -LRB097 23545 JDS 72554 b

1November 1, 2012, the Board shall submit to the State Actuary,
2the Governor, and the General Assembly a proposed certification
3of the amount of the required State contribution to the System
4for the next fiscal year, along with all of the actuarial
5assumptions, calculations, and data upon which that proposed
6certification is based. On or before January 1 of each year,
7beginning January 1, 2013, the State Actuary shall issue a
8preliminary report concerning the proposed certification and
9identifying, if necessary, recommended changes in actuarial
10assumptions that the Board must consider before finalizing its
11certification of the required State contributions.
12    On or before January 15, 2013 and every January 15
13thereafter, the Board shall certify to the Governor and the
14General Assembly the amount of the required State contribution
15for the next fiscal year. The Board's certification shall
16include a copy of the actuarial recommendations upon which it
17is based and shall specifically identify the System's projected
18State normal cost for that fiscal year. The Board's
19certification must note any deviations from the State Actuary's
20recommended changes, the reason or reasons for not following
21the State Actuary's recommended changes, and the fiscal impact
22of not following the State Actuary's recommended changes on the
23required State contribution.
24    (a-7) On or before May 1, 2004, the Board shall recalculate
25and recertify to the Governor the amount of the required State
26contribution to the System for State fiscal year 2005, taking

 

 

HB6258- 59 -LRB097 23545 JDS 72554 b

1into account the amounts appropriated to and received by the
2System under subsection (d) of Section 7.2 of the General
3Obligation Bond Act.
4    On or before July 1, 2005, the Board shall recalculate and
5recertify to the Governor the amount of the required State
6contribution to the System for State fiscal year 2006, taking
7into account the changes in required State contributions made
8by this amendatory Act of the 94th General Assembly.
9    On or before April 1, 2011, the Board shall recalculate and
10recertify to the Governor the amount of the required State
11contribution to the System for State fiscal year 2011, applying
12the changes made by Public Act 96-889 to the System's assets
13and liabilities as of June 30, 2009 as though Public Act 96-889
14was approved on that date.
15    On or before July 1, 2013, the Board shall, if necessary,
16recalculate and recertify to the Governor the amount of the
17required State contribution to the System for State fiscal year
182014, taking into account the changes in required State
19contributions made by this amendatory Act of the 97th General
20Assembly.
21    (b) Beginning in State fiscal year 1996, on or as soon as
22possible after the 15th day of each month the Board shall
23submit vouchers for payment of State contributions to the
24System, in a total monthly amount of one-twelfth of the
25required annual State contribution certified under subsection
26(a). From the effective date of this amendatory Act of the 93rd

 

 

HB6258- 60 -LRB097 23545 JDS 72554 b

1General Assembly through June 30, 2004, the Board shall not
2submit vouchers for the remainder of fiscal year 2004 in excess
3of the fiscal year 2004 certified contribution amount
4determined under this Section after taking into consideration
5the transfer to the System under subsection (d) of Section
66z-61 of the State Finance Act. These vouchers shall be paid by
7the State Comptroller and Treasurer by warrants drawn on the
8funds appropriated to the System for that fiscal year. If in
9any month the amount remaining unexpended from all other
10appropriations to the System for the applicable fiscal year
11(including the appropriations to the System under Section 8.12
12of the State Finance Act and Section 1 of the State Pension
13Funds Continuing Appropriation Act) is less than the amount
14lawfully vouchered under this Section, the difference shall be
15paid from the General Revenue Fund under the continuing
16appropriation authority provided in Section 1.1 of the State
17Pension Funds Continuing Appropriation Act.
18    (c) The full amount of any annual appropriation for the
19System for State fiscal year 1995 shall be transferred and made
20available to the System at the beginning of that fiscal year at
21the request of the Board. Any excess funds remaining at the end
22of any fiscal year from appropriations shall be retained by the
23System as a general reserve to meet the System's accrued
24liabilities.
25(Source: P.A. 96-1497, eff. 1-14-11; 96-1511, eff. 1-27-11;
2697-694, eff. 6-18-12.)
 

 

 

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1    (40 ILCS 5/2-162)
2    Sec. 2-162. Application and expiration of new benefit
3increases.
4    (a) As used in this Section, "new benefit increase" means
5an increase in the amount of any benefit provided under this
6Article, or an expansion of the conditions of eligibility for
7any benefit under this Article, that results from an amendment
8to this Code that takes effect after the effective date of this
9amendatory Act of the 94th General Assembly. "New benefit
10increase", however, does not include any benefit increase
11resulting from the changes made to this Article by this
12amendatory Act of the 97th General Assembly.
13    (b) Notwithstanding any other provision of this Code or any
14subsequent amendment to this Code, every new benefit increase
15is subject to this Section and shall be deemed to be granted
16only in conformance with and contingent upon compliance with
17the provisions of this Section.
18    (c) The Public Act enacting a new benefit increase must
19identify and provide for payment to the System of additional
20funding at least sufficient to fund the resulting annual
21increase in cost to the System as it accrues.
22    Every new benefit increase is contingent upon the General
23Assembly providing the additional funding required under this
24subsection. The Commission on Government Forecasting and
25Accountability shall analyze whether adequate additional

 

 

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

 

 

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1apply and qualify for the affected benefit while the new
2benefit increase was in effect.
3(Source: P.A. 94-4, eff. 6-1-05.)
 
4    (40 ILCS 5/14-103.10)  (from Ch. 108 1/2, par. 14-103.10)
5    Sec. 14-103.10. Compensation.
6    (a) For periods of service prior to January 1, 1978, the
7full rate of salary or wages payable to an employee for
8personal services performed if he worked the full normal
9working period for his position, subject to the following
10maximum amounts: (1) prior to July 1, 1951, $400 per month or
11$4,800 per year; (2) between July 1, 1951 and June 30, 1957
12inclusive, $625 per month or $7,500 per year; (3) beginning
13July 1, 1957, no limitation.
14    In the case of service of an employee in a position
15involving part-time employment, compensation shall be
16determined according to the employees' earnings record.
17    (b) For periods of service on and after January 1, 1978,
18all remuneration for personal services performed defined as
19"wages" under the Social Security Enabling Act, including that
20part of such remuneration which is in excess of any maximum
21limitation provided in such Act, and including any benefits
22received by an employee under a sick pay plan in effect before
23January 1, 1981, but excluding lump sum salary payments:
24        (1) for vacation,
25        (2) for accumulated unused sick leave,

 

 

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1        (3) upon discharge or dismissal,
2        (4) for approved holidays.
3    (c) For periods of service on or after December 16, 1978,
4compensation also includes any benefits, other than lump sum
5salary payments made at termination of employment, which an
6employee receives or is eligible to receive under a sick pay
7plan authorized by law.
8    (d) For periods of service after September 30, 1985,
9compensation also includes any remuneration for personal
10services not included as "wages" under the Social Security
11Enabling Act, which is deducted for purposes of participation
12in a program established pursuant to Section 125 of the
13Internal Revenue Code or its successor laws.
14    (e) For members for which Section 1-160 applies for periods
15of service on and after January 1, 2011, all remuneration for
16personal services performed defined as "wages" under the Social
17Security Enabling Act, excluding remuneration that is in excess
18of the annual earnings, salary, or wages of a member or
19participant, as provided in subsection (b-5) of Section 1-160,
20but including any benefits received by an employee under a sick
21pay plan in effect before January 1, 1981. Compensation shall
22exclude lump sum salary payments:
23        (1) for vacation;
24        (2) for accumulated unused sick leave;
25        (3) upon discharge or dismissal; and
26        (4) for approved holidays.

 

 

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1    (f) Notwithstanding any other provision of this Code, the
2compensation of a Tier I member for the purposes of this Code
3shall not exceed, for periods of service on or after the
4effective date of this amendatory Act of the 97th General
5Assembly, the annual contribution and benefit base established
6for the applicable year by the Commissioner of Social Security
7under the federal Social Security Act; except that this
8limitation does not apply to a member's compensation that is
9determined under an employment contract or collective
10bargaining agreement that is in effect on the effective date of
11this amendatory Act of the 97th General Assembly and has not
12been amended or renewed after that date.
13(Source: P.A. 96-1490, eff. 1-1-11.)
 
14    (40 ILCS 5/14-103.40 new)
15    Sec. 14-103.40. Tier I member. "Tier I member": A member of
16this System who first became a member or participant before
17January 1, 2011 under any reciprocal retirement system or
18pension fund established under this Code other than a
19retirement system or pension fund established under Article 2,
203, 4, 5, 6, or 18 of this Code.
 
21    (40 ILCS 5/14-103.41 new)
22    Sec. 14-103.41. Tier I retiree. "Tier I retiree": A former
23Tier I member who is receiving a retirement annuity.
 

 

 

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1    (40 ILCS 5/14-107)  (from Ch. 108 1/2, par. 14-107)
2    Sec. 14-107. Retirement annuity - service and age -
3conditions.
4    (a) A member is entitled to a retirement annuity after
5having at least 8 years of creditable service.
6    (b) A member who has at least 35 years of creditable
7service may claim his or her retirement annuity at any age. A
8member having at least 8 years of creditable service but less
9than 35 may claim his or her retirement annuity upon or after
10attainment of age 60 or, beginning January 1, 2001, any lesser
11age which, when added to the number of years of his or her
12creditable service, equals at least 85. A member upon or after
13attainment of age 55 having at least 25 years of creditable
14service (30 years if retirement is before January 1, 2001) may
15elect to receive the lower retirement annuity provided in
16paragraph (c) of Section 14-108 of this Code. For purposes of
17the rule of 85, portions of years shall be counted in whole
18months.
19    (c) Notwithstanding subsection (b) of this Section, for a
20Tier I member who begins receiving a retirement annuity under
21this Article after July 1, 2013:
22        (1) If the Tier I member is at least 45 years old on
23    the effective date of this amendatory Act of the 97th
24    General Assembly, then the references to age 55 and 60 in
25    subsection (b) of this Section remain unchanged and the
26    references to 85 in subsection (b) of this Section remain

 

 

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1    unchanged.
2        (2) If the Tier I member is at least 40 but less than
3    45 years old on the effective date of this amendatory Act
4    of the 97th General Assembly, then the references to age 55
5    and 60 in subsection (b) of this Section are increased by
6    one year and the references to 85 in subsection (b) are
7    increased to 87.
8        (3) If the Tier I member is at least 35 but less than
9    40 years old on the effective date of this amendatory Act
10    of the 97th General Assembly, then the references to age 55
11    and 60 in subsection (b) of this Section are increased by 3
12    years and the references to 85 in subsection (b) are
13    increased to 91.
14        (4) If the Tier I member is less than 35 years old on
15    the effective date of this amendatory Act of the 97th
16    General Assembly, then the references to age 55 and 60 in
17    subsection (b) of this Section are increased by 5 years and
18    the references to 85 in subsection (b) are increased to 95.
19    Notwithstanding Section 1-103.1, this subsection (c)
20applies without regard to whether or not the Tier I member is
21in active service under this Article on or after the effective
22date of this amendatory Act of the 97th General Assembly.
23    (d) The allowance shall begin with the first full calendar
24month specified in the member's application therefor, the first
25day of which shall not be before the date of withdrawal as
26approved by the board. Regardless of the date of withdrawal,

 

 

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1the allowance need not begin within one year of application
2therefor.
3(Source: P.A. 91-927, eff. 12-14-00.)
 
4    (40 ILCS 5/14-108)  (from Ch. 108 1/2, par. 14-108)
5    Sec. 14-108. Amount of retirement annuity. A member who has
6contributed to the System for at least 12 months shall be
7entitled to a prior service annuity for each year of certified
8prior service credited to him, except that a member shall
9receive 1/3 of the prior service annuity for each year of
10service for which contributions have been made and all of such
11annuity shall be payable after the member has made
12contributions for a period of 3 years. Proportionate amounts
13shall be payable for service of less than a full year after
14completion of at least 12 months.
15    The total period of service to be considered in
16establishing the measure of prior service annuity shall include
17service credited in the Teachers' Retirement System of the
18State of Illinois and the State Universities Retirement System
19for which contributions have been made by the member to such
20systems; provided that at least 1 year of the total period of 3
21years prescribed for the allowance of a full measure of prior
22service annuity shall consist of membership service in this
23system for which credit has been granted.
24    (a) In the case of a member who retires on or after January
251, 1998 and is a noncovered employee, the retirement annuity

 

 

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1for membership service and prior service shall be 2.2% of final
2average compensation for each year of service. Any service
3credit established as a covered employee shall be computed as
4stated in paragraph (b).
5    (b) In the case of a member who retires on or after January
61, 1998 and is a covered employee, the retirement annuity for
7membership service and prior service shall be computed as
8stated in paragraph (a) for all service credit established as a
9noncovered employee; for service credit established as a
10covered employee it shall be 1.67% of final average
11compensation for each year of service.
12    (c) For a member retiring after attaining age 55 but before
13age 60 with at least 30 but less than 35 years of creditable
14service if retirement is before January 1, 2001, or with at
15least 25 but less than 30 years of creditable service if
16retirement is on or after January 1, 2001, the retirement
17annuity shall be reduced by 1/2 of 1% for each month that the
18member's age is under age 60 at the time of retirement. For
19members to whom subsection (c) of Section 14-107 applies, the
20references to age 55 and 60 in this subsection (c) are
21increased as provided in subsection (c) of Section 14-107.
22    (d) A retirement annuity shall not exceed 75% of final
23average compensation, subject to such extension as may result
24from the application of Section 14-114 or Section 14-115.
25    (e) The retirement annuity payable to any covered employee
26who is a member of the System and in service on January 1,

 

 

HB6258- 70 -LRB097 23545 JDS 72554 b

11969, or in service thereafter in 1969 as a result of
2legislation enacted by the Illinois General Assembly
3transferring the member to State employment from county
4employment in a county Department of Public Aid in counties of
53,000,000 or more population, under a plan of coordination with
6the Old Age, Survivors and Disability provisions thereof, if
7not fully insured for Old Age Insurance payments under the
8Federal Old Age, Survivors and Disability Insurance provisions
9at the date of acceptance of a retirement annuity, shall not be
10less than the amount for which the member would have been
11eligible if coordination were not applicable.
12    (f) The retirement annuity payable to any covered employee
13who is a member of the System and in service on January 1,
141969, or in service thereafter in 1969 as a result of the
15legislation designated in the immediately preceding paragraph,
16if fully insured for Old Age Insurance payments under the
17Federal Social Security Act at the date of acceptance of a
18retirement annuity, shall not be less than an amount which when
19added to the Primary Insurance Benefit payable to the member
20upon attainment of age 65 under such Federal Act, will equal
21the annuity which would otherwise be payable if the coordinated
22plan of coverage were not applicable.
23    (g) In the case of a member who is a noncovered employee,
24the retirement annuity for membership service as a security
25employee of the Department of Corrections or security employee
26of the Department of Human Services shall be: if retirement

 

 

HB6258- 71 -LRB097 23545 JDS 72554 b

1occurs on or after January 1, 2001, 3% of final average
2compensation for each year of creditable service; or if
3retirement occurs before January 1, 2001, 1.9% of final average
4compensation for each of the first 10 years of service, 2.1%
5for each of the next 10 years of service, 2.25% for each year
6of service in excess of 20 but not exceeding 30, and 2.5% for
7each year in excess of 30; except that the annuity may be
8calculated under subsection (a) rather than this subsection (g)
9if the resulting annuity is greater.
10    (h) In the case of a member who is a covered employee, the
11retirement annuity for membership service as a security
12employee of the Department of Corrections or security employee
13of the Department of Human Services shall be: if retirement
14occurs on or after January 1, 2001, 2.5% of final average
15compensation for each year of creditable service; if retirement
16occurs before January 1, 2001, 1.67% of final average
17compensation for each of the first 10 years of service, 1.90%
18for each of the next 10 years of service, 2.10% for each year
19of service in excess of 20 but not exceeding 30, and 2.30% for
20each year in excess of 30.
21    (i) For the purposes of this Section and Section 14-133 of
22this Act, the term "security employee of the Department of
23Corrections" and the term "security employee of the Department
24of Human Services" shall have the meanings ascribed to them in
25subsection (c) of Section 14-110.
26    (j) The retirement annuity computed pursuant to paragraphs

 

 

HB6258- 72 -LRB097 23545 JDS 72554 b

1(g) or (h) shall be applicable only to those security employees
2of the Department of Corrections and security employees of the
3Department of Human Services who have at least 20 years of
4membership service and who are not eligible for the alternative
5retirement annuity provided under Section 14-110. However,
6persons transferring to this System under Section 14-108.2 or
714-108.2c who have service credit under Article 16 of this Code
8may count such service toward establishing their eligibility
9under the 20-year service requirement of this subsection; but
10such service may be used only for establishing such
11eligibility, and not for the purpose of increasing or
12calculating any benefit.
13    (k) (Blank).
14    (l) The changes to this Section made by this amendatory Act
15of 1997 (changing certain retirement annuity formulas from a
16stepped rate to a flat rate) apply to members who retire on or
17after January 1, 1998, without regard to whether employment
18terminated before the effective date of this amendatory Act of
191997. An annuity shall not be calculated in steps by using the
20new flat rate for some steps and the superseded stepped rate
21for other steps of the same type of service.
22(Source: P.A. 91-927, eff. 12-14-00; 92-14, eff. 6-28-01.)
 
23    (40 ILCS 5/14-110)  (from Ch. 108 1/2, par. 14-110)
24    Sec. 14-110. Alternative retirement annuity.
25    (a) Any member who has withdrawn from service with not less

 

 

HB6258- 73 -LRB097 23545 JDS 72554 b

1than 20 years of eligible creditable service and has attained
2age 55, and any member who has withdrawn from service with not
3less than 25 years of eligible creditable service and has
4attained age 50, regardless of whether the attainment of either
5of the specified ages occurs while the member is still in
6service, shall be entitled to receive at the option of the
7member, in lieu of the regular or minimum retirement annuity, a
8retirement annuity computed as follows:
9        (i) for periods of service as a noncovered employee: if
10    retirement occurs on or after January 1, 2001, 3% of final
11    average compensation for each year of creditable service;
12    if retirement occurs before January 1, 2001, 2 1/4% of
13    final average compensation for each of the first 10 years
14    of creditable service, 2 1/2% for each year above 10 years
15    to and including 20 years of creditable service, and 2 3/4%
16    for each year of creditable service above 20 years; and
17        (ii) for periods of eligible creditable service as a
18    covered employee: if retirement occurs on or after January
19    1, 2001, 2.5% of final average compensation for each year
20    of creditable service; if retirement occurs before January
21    1, 2001, 1.67% of final average compensation for each of
22    the first 10 years of such service, 1.90% for each of the
23    next 10 years of such service, 2.10% for each year of such
24    service in excess of 20 but not exceeding 30, and 2.30% for
25    each year in excess of 30.
26    Such annuity shall be subject to a maximum of 75% of final

 

 

HB6258- 74 -LRB097 23545 JDS 72554 b

1average compensation if retirement occurs before January 1,
22001 or to a maximum of 80% of final average compensation if
3retirement occurs on or after January 1, 2001.
4    These rates shall not be applicable to any service
5performed by a member as a covered employee which is not
6eligible creditable service. Service as a covered employee
7which is not eligible creditable service shall be subject to
8the rates and provisions of Section 14-108.
9    (a-5) Notwithstanding subsection (a) of this Section, for a
10Tier I member who begins receiving a retirement annuity under
11this Section after July 1, 2013:
12        (1) If the Tier I member is at least 45 years old on
13    the effective date of this amendatory Act of the 97th
14    General Assembly, then the references to age 50 and 55 in
15    subsection (a) of this Section remain unchanged.
16        (2) If the Tier I member is at least 40 but less than
17    45 years old on the effective date of this amendatory Act
18    of the 97th General Assembly, then the references to age 50
19    and 55 in subsection (a) of this Section are increased by
20    one year.
21        (3) If the Tier I member is at least 35 but less than
22    40 years old on the effective date of this amendatory Act
23    of the 97th General Assembly, then the references to age 50
24    and 55 in subsection (a) of this Section are increased by 3
25    years.
26        (4) If the Tier I member is less than 35 years old on

 

 

HB6258- 75 -LRB097 23545 JDS 72554 b

1    the effective date of this amendatory Act of the 97th
2    General Assembly, then the references to age 50 and 55 in
3    subsection (a) of this Section are increased by 5 years.
4    Notwithstanding Section 1-103.1, this subsection (a-5)
5applies without regard to whether or not the Tier I member is
6in active service under this Article on or after the effective
7date of this amendatory Act of the 97th General Assembly.
8    (b) For the purpose of this Section, "eligible creditable
9service" means creditable service resulting from service in one
10or more of the following positions:
11        (1) State policeman;
12        (2) fire fighter in the fire protection service of a
13    department;
14        (3) air pilot;
15        (4) special agent;
16        (5) investigator for the Secretary of State;
17        (6) conservation police officer;
18        (7) investigator for the Department of Revenue or the
19    Illinois Gaming Board;
20        (8) security employee of the Department of Human
21    Services;
22        (9) Central Management Services security police
23    officer;
24        (10) security employee of the Department of
25    Corrections or the Department of Juvenile Justice;
26        (11) dangerous drugs investigator;

 

 

HB6258- 76 -LRB097 23545 JDS 72554 b

1        (12) investigator for the Department of State Police;
2        (13) investigator for the Office of the Attorney
3    General;
4        (14) controlled substance inspector;
5        (15) investigator for the Office of the State's
6    Attorneys Appellate Prosecutor;
7        (16) Commerce Commission police officer;
8        (17) arson investigator;
9        (18) State highway maintenance worker.
10    A person employed in one of the positions specified in this
11subsection is entitled to eligible creditable service for
12service credit earned under this Article while undergoing the
13basic police training course approved by the Illinois Law
14Enforcement Training Standards Board, if completion of that
15training is required of persons serving in that position. For
16the purposes of this Code, service during the required basic
17police training course shall be deemed performance of the
18duties of the specified position, even though the person is not
19a sworn peace officer at the time of the training.
20    (c) For the purposes of this Section:
21        (1) The term "state policeman" includes any title or
22    position in the Department of State Police that is held by
23    an individual employed under the State Police Act.
24        (2) The term "fire fighter in the fire protection
25    service of a department" includes all officers in such fire
26    protection service including fire chiefs and assistant

 

 

HB6258- 77 -LRB097 23545 JDS 72554 b

1    fire chiefs.
2        (3) The term "air pilot" includes any employee whose
3    official job description on file in the Department of
4    Central Management Services, or in the department by which
5    he is employed if that department is not covered by the
6    Personnel Code, states that his principal duty is the
7    operation of aircraft, and who possesses a pilot's license;
8    however, the change in this definition made by this
9    amendatory Act of 1983 shall not operate to exclude any
10    noncovered employee who was an "air pilot" for the purposes
11    of this Section on January 1, 1984.
12        (4) The term "special agent" means any person who by
13    reason of employment by the Division of Narcotic Control,
14    the Bureau of Investigation or, after July 1, 1977, the
15    Division of Criminal Investigation, the Division of
16    Internal Investigation, the Division of Operations, or any
17    other Division or organizational entity in the Department
18    of State Police is vested by law with duties to maintain
19    public order, investigate violations of the criminal law of
20    this State, enforce the laws of this State, make arrests
21    and recover property. The term "special agent" includes any
22    title or position in the Department of State Police that is
23    held by an individual employed under the State Police Act.
24        (5) The term "investigator for the Secretary of State"
25    means any person employed by the Office of the Secretary of
26    State and vested with such investigative duties as render

 

 

HB6258- 78 -LRB097 23545 JDS 72554 b

1    him ineligible for coverage under the Social Security Act
2    by reason of Sections 218(d)(5)(A), 218(d)(8)(D) and
3    218(l)(1) of that Act.
4        A person who became employed as an investigator for the
5    Secretary of State between January 1, 1967 and December 31,
6    1975, and who has served as such until attainment of age
7    60, either continuously or with a single break in service
8    of not more than 3 years duration, which break terminated
9    before January 1, 1976, shall be entitled to have his
10    retirement annuity calculated in accordance with
11    subsection (a), notwithstanding that he has less than 20
12    years of credit for such service.
13        (6) The term "Conservation Police Officer" means any
14    person employed by the Division of Law Enforcement of the
15    Department of Natural Resources and vested with such law
16    enforcement duties as render him ineligible for coverage
17    under the Social Security Act by reason of Sections
18    218(d)(5)(A), 218(d)(8)(D), and 218(l)(1) of that Act. The
19    term "Conservation Police Officer" includes the positions
20    of Chief Conservation Police Administrator and Assistant
21    Conservation Police Administrator.
22        (7) The term "investigator for the Department of
23    Revenue" means any person employed by the Department of
24    Revenue and vested with such investigative duties as render
25    him ineligible for coverage under the Social Security Act
26    by reason of Sections 218(d)(5)(A), 218(d)(8)(D) and

 

 

HB6258- 79 -LRB097 23545 JDS 72554 b

1    218(l)(1) of that Act.
2        The term "investigator for the Illinois Gaming Board"
3    means any person employed as such by the Illinois Gaming
4    Board and vested with such peace officer duties as render
5    the person ineligible for coverage under the Social
6    Security Act by reason of Sections 218(d)(5)(A),
7    218(d)(8)(D), and 218(l)(1) of that Act.
8        (8) The term "security employee of the Department of
9    Human Services" means any person employed by the Department
10    of Human Services who (i) is employed at the Chester Mental
11    Health Center and has daily contact with the residents
12    thereof, (ii) is employed within a security unit at a
13    facility operated by the Department and has daily contact
14    with the residents of the security unit, (iii) is employed
15    at a facility operated by the Department that includes a
16    security unit and is regularly scheduled to work at least
17    50% of his or her working hours within that security unit,
18    or (iv) is a mental health police officer. "Mental health
19    police officer" means any person employed by the Department
20    of Human Services in a position pertaining to the
21    Department's mental health and developmental disabilities
22    functions who is vested with such law enforcement duties as
23    render the person ineligible for coverage under the Social
24    Security Act by reason of Sections 218(d)(5)(A),
25    218(d)(8)(D) and 218(l)(1) of that Act. "Security unit"
26    means that portion of a facility that is devoted to the

 

 

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1    care, containment, and treatment of persons committed to
2    the Department of Human Services as sexually violent
3    persons, persons unfit to stand trial, or persons not
4    guilty by reason of insanity. With respect to past
5    employment, references to the Department of Human Services
6    include its predecessor, the Department of Mental Health
7    and Developmental Disabilities.
8        The changes made to this subdivision (c)(8) by Public
9    Act 92-14 apply to persons who retire on or after January
10    1, 2001, notwithstanding Section 1-103.1.
11        (9) "Central Management Services security police
12    officer" means any person employed by the Department of
13    Central Management Services who is vested with such law
14    enforcement duties as render him ineligible for coverage
15    under the Social Security Act by reason of Sections
16    218(d)(5)(A), 218(d)(8)(D) and 218(l)(1) of that Act.
17        (10) For a member who first became an employee under
18    this Article before July 1, 2005, the term "security
19    employee of the Department of Corrections or the Department
20    of Juvenile Justice" means any employee of the Department
21    of Corrections or the Department of Juvenile Justice or the
22    former Department of Personnel, and any member or employee
23    of the Prisoner Review Board, who has daily contact with
24    inmates or youth by working within a correctional facility
25    or Juvenile facility operated by the Department of Juvenile
26    Justice or who is a parole officer or an employee who has

 

 

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1    direct contact with committed persons in the performance of
2    his or her job duties. For a member who first becomes an
3    employee under this Article on or after July 1, 2005, the
4    term means an employee of the Department of Corrections or
5    the Department of Juvenile Justice who is any of the
6    following: (i) officially headquartered at a correctional
7    facility or Juvenile facility operated by the Department of
8    Juvenile Justice, (ii) a parole officer, (iii) a member of
9    the apprehension unit, (iv) a member of the intelligence
10    unit, (v) a member of the sort team, or (vi) an
11    investigator.
12        (11) The term "dangerous drugs investigator" means any
13    person who is employed as such by the Department of Human
14    Services.
15        (12) The term "investigator for the Department of State
16    Police" means a person employed by the Department of State
17    Police who is vested under Section 4 of the Narcotic
18    Control Division Abolition Act with such law enforcement
19    powers as render him ineligible for coverage under the
20    Social Security Act by reason of Sections 218(d)(5)(A),
21    218(d)(8)(D) and 218(l)(1) of that Act.
22        (13) "Investigator for the Office of the Attorney
23    General" means any person who is employed as such by the
24    Office of the Attorney General and is vested with such
25    investigative duties as render him ineligible for coverage
26    under the Social Security Act by reason of Sections

 

 

HB6258- 82 -LRB097 23545 JDS 72554 b

1    218(d)(5)(A), 218(d)(8)(D) and 218(l)(1) of that Act. For
2    the period before January 1, 1989, the term includes all
3    persons who were employed as investigators by the Office of
4    the Attorney General, without regard to social security
5    status.
6        (14) "Controlled substance inspector" means any person
7    who is employed as such by the Department of Professional
8    Regulation and is vested with such law enforcement duties
9    as render him ineligible for coverage under the Social
10    Security Act by reason of Sections 218(d)(5)(A),
11    218(d)(8)(D) and 218(l)(1) of that Act. The term
12    "controlled substance inspector" includes the Program
13    Executive of Enforcement and the Assistant Program
14    Executive of Enforcement.
15        (15) The term "investigator for the Office of the
16    State's Attorneys Appellate Prosecutor" means a person
17    employed in that capacity on a full time basis under the
18    authority of Section 7.06 of the State's Attorneys
19    Appellate Prosecutor's Act.
20        (16) "Commerce Commission police officer" means any
21    person employed by the Illinois Commerce Commission who is
22    vested with such law enforcement duties as render him
23    ineligible for coverage under the Social Security Act by
24    reason of Sections 218(d)(5)(A), 218(d)(8)(D), and
25    218(l)(1) of that Act.
26        (17) "Arson investigator" means any person who is

 

 

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1    employed as such by the Office of the State Fire Marshal
2    and is vested with such law enforcement duties as render
3    the person ineligible for coverage under the Social
4    Security Act by reason of Sections 218(d)(5)(A),
5    218(d)(8)(D), and 218(l)(1) of that Act. A person who was
6    employed as an arson investigator on January 1, 1995 and is
7    no longer in service but not yet receiving a retirement
8    annuity may convert his or her creditable service for
9    employment as an arson investigator into eligible
10    creditable service by paying to the System the difference
11    between the employee contributions actually paid for that
12    service and the amounts that would have been contributed if
13    the applicant were contributing at the rate applicable to
14    persons with the same social security status earning
15    eligible creditable service on the date of application.
16        (18) The term "State highway maintenance worker" means
17    a person who is either of the following:
18            (i) A person employed on a full-time basis by the
19        Illinois Department of Transportation in the position
20        of highway maintainer, highway maintenance lead
21        worker, highway maintenance lead/lead worker, heavy
22        construction equipment operator, power shovel
23        operator, or bridge mechanic; and whose principal
24        responsibility is to perform, on the roadway, the
25        actual maintenance necessary to keep the highways that
26        form a part of the State highway system in serviceable

 

 

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1        condition for vehicular traffic.
2            (ii) A person employed on a full-time basis by the
3        Illinois State Toll Highway Authority in the position
4        of equipment operator/laborer H-4, equipment
5        operator/laborer H-6, welder H-4, welder H-6,
6        mechanical/electrical H-4, mechanical/electrical H-6,
7        water/sewer H-4, water/sewer H-6, sign maker/hanger
8        H-4, sign maker/hanger H-6, roadway lighting H-4,
9        roadway lighting H-6, structural H-4, structural H-6,
10        painter H-4, or painter H-6; and whose principal
11        responsibility is to perform, on the roadway, the
12        actual maintenance necessary to keep the Authority's
13        tollways in serviceable condition for vehicular
14        traffic.
15    (d) A security employee of the Department of Corrections or
16the Department of Juvenile Justice, and a security employee of
17the Department of Human Services who is not a mental health
18police officer, shall not be eligible for the alternative
19retirement annuity provided by this Section unless he or she
20meets the following minimum age and service requirements at the
21time of retirement:
22        (i) 25 years of eligible creditable service and age 55;
23    or
24        (ii) beginning January 1, 1987, 25 years of eligible
25    creditable service and age 54, or 24 years of eligible
26    creditable service and age 55; or

 

 

HB6258- 85 -LRB097 23545 JDS 72554 b

1        (iii) beginning January 1, 1988, 25 years of eligible
2    creditable service and age 53, or 23 years of eligible
3    creditable service and age 55; or
4        (iv) beginning January 1, 1989, 25 years of eligible
5    creditable service and age 52, or 22 years of eligible
6    creditable service and age 55; or
7        (v) beginning January 1, 1990, 25 years of eligible
8    creditable service and age 51, or 21 years of eligible
9    creditable service and age 55; or
10        (vi) beginning January 1, 1991, 25 years of eligible
11    creditable service and age 50, or 20 years of eligible
12    creditable service and age 55.
13    For members to whom subsection (a-5) of this Section
14applies, the references to age 50 and 55 in item (vi) of this
15subsection are increased as provided in subsection (a-5).
16    Persons who have service credit under Article 16 of this
17Code for service as a security employee of the Department of
18Corrections or the Department of Juvenile Justice, or the
19Department of Human Services in a position requiring
20certification as a teacher may count such service toward
21establishing their eligibility under the service requirements
22of this Section; but such service may be used only for
23establishing such eligibility, and not for the purpose of
24increasing or calculating any benefit.
25    (e) If a member enters military service while working in a
26position in which eligible creditable service may be earned,

 

 

HB6258- 86 -LRB097 23545 JDS 72554 b

1and returns to State service in the same or another such
2position, and fulfills in all other respects the conditions
3prescribed in this Article for credit for military service,
4such military service shall be credited as eligible creditable
5service for the purposes of the retirement annuity prescribed
6in this Section.
7    (f) For purposes of calculating retirement annuities under
8this Section, periods of service rendered after December 31,
91968 and before October 1, 1975 as a covered employee in the
10position of special agent, conservation police officer, mental
11health police officer, or investigator for the Secretary of
12State, shall be deemed to have been service as a noncovered
13employee, provided that the employee pays to the System prior
14to retirement an amount equal to (1) the difference between the
15employee contributions that would have been required for such
16service as a noncovered employee, and the amount of employee
17contributions actually paid, plus (2) if payment is made after
18July 31, 1987, regular interest on the amount specified in item
19(1) from the date of service to the date of payment.
20    For purposes of calculating retirement annuities under
21this Section, periods of service rendered after December 31,
221968 and before January 1, 1982 as a covered employee in the
23position of investigator for the Department of Revenue shall be
24deemed to have been service as a noncovered employee, provided
25that the employee pays to the System prior to retirement an
26amount equal to (1) the difference between the employee

 

 

HB6258- 87 -LRB097 23545 JDS 72554 b

1contributions that would have been required for such service as
2a noncovered employee, and the amount of employee contributions
3actually paid, plus (2) if payment is made after January 1,
41990, regular interest on the amount specified in item (1) from
5the date of service to the date of payment.
6    (g) A State policeman may elect, not later than January 1,
71990, to establish eligible creditable service for up to 10
8years of his service as a policeman under Article 3, by filing
9a written election with the Board, accompanied by payment of an
10amount to be determined by the Board, equal to (i) the
11difference between the amount of employee and employer
12contributions transferred to the System under Section 3-110.5,
13and the amounts that would have been contributed had such
14contributions been made at the rates applicable to State
15policemen, plus (ii) interest thereon at the effective rate for
16each year, compounded annually, from the date of service to the
17date of payment.
18    Subject to the limitation in subsection (i), a State
19policeman may elect, not later than July 1, 1993, to establish
20eligible creditable service for up to 10 years of his service
21as a member of the County Police Department under Article 9, by
22filing a written election with the Board, accompanied by
23payment of an amount to be determined by the Board, equal to
24(i) the difference between the amount of employee and employer
25contributions transferred to the System under Section 9-121.10
26and the amounts that would have been contributed had those

 

 

HB6258- 88 -LRB097 23545 JDS 72554 b

1contributions been made at the rates applicable to State
2policemen, plus (ii) interest thereon at the effective rate for
3each year, compounded annually, from the date of service to the
4date of payment.
5    (h) Subject to the limitation in subsection (i), a State
6policeman or investigator for the Secretary of State may elect
7to establish eligible creditable service for up to 12 years of
8his service as a policeman under Article 5, by filing a written
9election with the Board on or before January 31, 1992, and
10paying to the System by January 31, 1994 an amount to be
11determined by the Board, equal to (i) the difference between
12the amount of employee and employer contributions transferred
13to the System under Section 5-236, and the amounts that would
14have been contributed had such contributions been made at the
15rates applicable to State policemen, plus (ii) interest thereon
16at the effective rate for each year, compounded annually, from
17the date of service to the date of payment.
18    Subject to the limitation in subsection (i), a State
19policeman, conservation police officer, or investigator for
20the Secretary of State may elect to establish eligible
21creditable service for up to 10 years of service as a sheriff's
22law enforcement employee under Article 7, by filing a written
23election with the Board on or before January 31, 1993, and
24paying to the System by January 31, 1994 an amount to be
25determined by the Board, equal to (i) the difference between
26the amount of employee and employer contributions transferred

 

 

HB6258- 89 -LRB097 23545 JDS 72554 b

1to the System under Section 7-139.7, and the amounts that would
2have been contributed had such contributions been made at the
3rates applicable to State policemen, plus (ii) interest thereon
4at the effective rate for each year, compounded annually, from
5the date of service to the date of payment.
6    Subject to the limitation in subsection (i), a State
7policeman, conservation police officer, or investigator for
8the Secretary of State may elect to establish eligible
9creditable service for up to 5 years of service as a police
10officer under Article 3, a policeman under Article 5, a
11sheriff's law enforcement employee under Article 7, a member of
12the county police department under Article 9, or a police
13officer under Article 15 by filing a written election with the
14Board and paying to the System an amount to be determined by
15the Board, equal to (i) the difference between the amount of
16employee and employer contributions transferred to the System
17under Section 3-110.6, 5-236, 7-139.8, 9-121.10, or 15-134.4
18and the amounts that would have been contributed had such
19contributions been made at the rates applicable to State
20policemen, plus (ii) interest thereon at the effective rate for
21each year, compounded annually, from the date of service to the
22date of payment.
23    Subject to the limitation in subsection (i), an
24investigator for the Office of the Attorney General, or an
25investigator for the Department of Revenue, may elect to
26establish eligible creditable service for up to 5 years of

 

 

HB6258- 90 -LRB097 23545 JDS 72554 b

1service as a police officer under Article 3, a policeman under
2Article 5, a sheriff's law enforcement employee under Article
37, or a member of the county police department under Article 9
4by filing a written election with the Board within 6 months
5after August 25, 2009 (the effective date of Public Act 96-745)
6and paying to the System an amount to be determined by the
7Board, equal to (i) the difference between the amount of
8employee and employer contributions transferred to the System
9under Section 3-110.6, 5-236, 7-139.8, or 9-121.10 and the
10amounts that would have been contributed had such contributions
11been made at the rates applicable to State policemen, plus (ii)
12interest thereon at the actuarially assumed rate for each year,
13compounded annually, from the date of service to the date of
14payment.
15    Subject to the limitation in subsection (i), a State
16policeman, conservation police officer, investigator for the
17Office of the Attorney General, an investigator for the
18Department of Revenue, or investigator for the Secretary of
19State may elect to establish eligible creditable service for up
20to 5 years of service as a person employed by a participating
21municipality to perform police duties, or law enforcement
22officer employed on a full-time basis by a forest preserve
23district under Article 7, a county corrections officer, or a
24court services officer under Article 9, by filing a written
25election with the Board within 6 months after August 25, 2009
26(the effective date of Public Act 96-745) and paying to the

 

 

HB6258- 91 -LRB097 23545 JDS 72554 b

1System an amount to be determined by the Board, equal to (i)
2the difference between the amount of employee and employer
3contributions transferred to the System under Sections 7-139.8
4and 9-121.10 and the amounts that would have been contributed
5had such contributions been made at the rates applicable to
6State policemen, plus (ii) interest thereon at the actuarially
7assumed rate for each year, compounded annually, from the date
8of service to the date of payment.
9    (i) The total amount of eligible creditable service
10established by any person under subsections (g), (h), (j), (k),
11and (l) of this Section shall not exceed 12 years.
12    (j) Subject to the limitation in subsection (i), an
13investigator for the Office of the State's Attorneys Appellate
14Prosecutor or a controlled substance inspector may elect to
15establish eligible creditable service for up to 10 years of his
16service as a policeman under Article 3 or a sheriff's law
17enforcement employee under Article 7, by filing a written
18election with the Board, accompanied by payment of an amount to
19be determined by the Board, equal to (1) the difference between
20the amount of employee and employer contributions transferred
21to the System under Section 3-110.6 or 7-139.8, and the amounts
22that would have been contributed had such contributions been
23made at the rates applicable to State policemen, plus (2)
24interest thereon at the effective rate for each year,
25compounded annually, from the date of service to the date of
26payment.

 

 

HB6258- 92 -LRB097 23545 JDS 72554 b

1    (k) Subject to the limitation in subsection (i) of this
2Section, an alternative formula employee may elect to establish
3eligible creditable service for periods spent as a full-time
4law enforcement officer or full-time corrections officer
5employed by the federal government or by a state or local
6government located outside of Illinois, for which credit is not
7held in any other public employee pension fund or retirement
8system. To obtain this credit, the applicant must file a
9written application with the Board by March 31, 1998,
10accompanied by evidence of eligibility acceptable to the Board
11and payment of an amount to be determined by the Board, equal
12to (1) employee contributions for the credit being established,
13based upon the applicant's salary on the first day as an
14alternative formula employee after the employment for which
15credit is being established and the rates then applicable to
16alternative formula employees, plus (2) an amount determined by
17the Board to be the employer's normal cost of the benefits
18accrued for the credit being established, plus (3) regular
19interest on the amounts in items (1) and (2) from the first day
20as an alternative formula employee after the employment for
21which credit is being established to the date of payment.
22    (l) Subject to the limitation in subsection (i), a security
23employee of the Department of Corrections may elect, not later
24than July 1, 1998, to establish eligible creditable service for
25up to 10 years of his or her service as a policeman under
26Article 3, by filing a written election with the Board,

 

 

HB6258- 93 -LRB097 23545 JDS 72554 b

1accompanied by payment of an amount to be determined by the
2Board, equal to (i) the difference between the amount of
3employee and employer contributions transferred to the System
4under Section 3-110.5, and the amounts that would have been
5contributed had such contributions been made at the rates
6applicable to security employees of the Department of
7Corrections, plus (ii) interest thereon at the effective rate
8for each year, compounded annually, from the date of service to
9the date of payment.
10    (m) The amendatory changes to this Section made by this
11amendatory Act of the 94th General Assembly apply only to: (1)
12security employees of the Department of Juvenile Justice
13employed by the Department of Corrections before the effective
14date of this amendatory Act of the 94th General Assembly and
15transferred to the Department of Juvenile Justice by this
16amendatory Act of the 94th General Assembly; and (2) persons
17employed by the Department of Juvenile Justice on or after the
18effective date of this amendatory Act of the 94th General
19Assembly who are required by subsection (b) of Section 3-2.5-15
20of the Unified Code of Corrections to have a bachelor's or
21advanced degree from an accredited college or university with a
22specialization in criminal justice, education, psychology,
23social work, or a closely related social science or, in the
24case of persons who provide vocational training, who are
25required to have adequate knowledge in the skill for which they
26are providing the vocational training.

 

 

HB6258- 94 -LRB097 23545 JDS 72554 b

1    (n) A person employed in a position under subsection (b) of
2this Section who has purchased service credit under subsection
3(j) of Section 14-104 or subsection (b) of Section 14-105 in
4any other capacity under this Article may convert up to 5 years
5of that service credit into service credit covered under this
6Section by paying to the Fund an amount equal to (1) the
7additional employee contribution required under Section
814-133, plus (2) the additional employer contribution required
9under Section 14-131, plus (3) interest on items (1) and (2) at
10the actuarially assumed rate from the date of the service to
11the date of payment.
12(Source: P.A. 95-530, eff. 8-28-07; 95-1036, eff. 2-17-09;
1396-37, eff. 7-13-09; 96-745, eff. 8-25-09; 96-1000, eff.
147-2-10.)
 
15    (40 ILCS 5/14-114)  (from Ch. 108 1/2, par. 14-114)
16    Sec. 14-114. Automatic increase in retirement annuity.
17    (a) Except as provided in subsections (a-1) and (a-2), any
18Any person receiving a retirement annuity under this Article
19who retires having attained age 60, or who retires before age
2060 having at least 35 years of creditable service, or who
21retires on or after January 1, 2001 at an age which, when added
22to the number of years of his or her creditable service, equals
23at least 85, shall, on January 1 next following the first full
24year of retirement, have the amount of the then fixed and
25payable monthly retirement annuity increased 3%. Any person

 

 

HB6258- 95 -LRB097 23545 JDS 72554 b

1receiving a retirement annuity under this Article who retires
2before attainment of age 60 and with less than (i) 35 years of
3creditable service if retirement is before January 1, 2001, or
4(ii) the number of years of creditable service which, when
5added to the member's age, would equal 85, if retirement is on
6or after January 1, 2001, shall have the amount of the fixed
7and payable retirement annuity increased by 3% on the January 1
8occurring on or next following (1) attainment of age 60, or (2)
9the first anniversary of retirement, whichever occurs later.
10However, for persons who receive the alternative retirement
11annuity under Section 14-110, references in this subsection (a)
12to attainment of age 60 shall be deemed to refer to attainment
13of age 55. For a person receiving early retirement incentives
14under Section 14-108.3 whose retirement annuity began after
15January 1, 1992 pursuant to an extension granted under
16subsection (e) of that Section, the first anniversary of
17retirement shall be deemed to be January 1, 1993. For a person
18who retires on or after June 28, 2001 and on or before October
191, 2001, and whose retirement annuity is calculated, in whole
20or in part, under Section 14-110 or subsection (g) or (h) of
21Section 14-108, the first anniversary of retirement shall be
22deemed to be January 1, 2002.
23    On each January 1 following the date of the initial
24increase under this subsection, the employee's monthly
25retirement annuity shall be increased by an additional 3%.
26    Beginning January 1, 1990 and except as provided in

 

 

HB6258- 96 -LRB097 23545 JDS 72554 b

1subsections (a-1) and (a-2), all automatic annual increases
2payable under this Section shall be calculated as a percentage
3of the total annuity payable at the time of the increase,
4including previous increases granted under this Article.
5    (a-1) Notwithstanding any other provision of this Article,
6for a Tier I retiree, the amount of each automatic annual
7increase in retirement annuity occurring on or after the
8effective date of this amendatory Act of the 97th General
9Assembly shall be the lesser of $600 ($750 if the annuity is
10based primarily upon service as a noncovered employee) or 3% of
11the total annuity payable at the time of the increase,
12including previous increases granted.
13    (a-2) Notwithstanding any other provision of this Article,
14for a Tier I retiree, the monthly retirement annuity shall
15first be subject to annual increases on the January 1 occurring
16on or next after the attainment of age 67 or the January 1
17occurring on or next after the fifth anniversary of the annuity
18start date, whichever occurs earlier. If on the effective date
19of this amendatory Act of the 97th General Assembly a Tier I
20retiree has already received an annual increase under this
21Section but does not yet meet the new eligibility requirements
22of this subsection, the annual increases already received shall
23continue in force, but no additional annual increase shall be
24granted until the Tier I retiree meets the new eligibility
25requirements.
26    (a-3) Notwithstanding Section 1-103.1, subsections (a-1)

 

 

HB6258- 97 -LRB097 23545 JDS 72554 b

1and (a-2) apply without regard to whether or not the Tier I
2retiree is in active service under this Article on or after the
3effective date of this amendatory Act of the 97th General
4Assembly.
5    (b) The provisions of subsection (a) of this Section shall
6be applicable to an employee only if the employee makes the
7additional contributions required after December 31, 1969 for
8the purpose of the automatic increases for not less than the
9equivalent of one full year. If an employee becomes an
10annuitant before his additional contributions equal one full
11year's contributions based on his salary at the date of
12retirement, the employee may pay the necessary balance of the
13contributions to the system, without interest, and be eligible
14for the increasing annuity authorized by this Section.
15    (c) The provisions of subsection (a) of this Section shall
16not be applicable to any annuitant who is on retirement on
17December 31, 1969, and thereafter returns to State service,
18unless the member has established at least one year of
19additional creditable service following reentry into service.
20    (d) In addition to other increases which may be provided by
21this Section, on January 1, 1981 any annuitant who was
22receiving a retirement annuity on or before January 1, 1971
23shall have his retirement annuity then being paid increased $1
24per month for each year of creditable service. On January 1,
251982, any annuitant who began receiving a retirement annuity on
26or before January 1, 1977, shall have his retirement annuity

 

 

HB6258- 98 -LRB097 23545 JDS 72554 b

1then being paid increased $1 per month for each year of
2creditable service.
3    On January 1, 1987, any annuitant who began receiving a
4retirement annuity on or before January 1, 1977, shall have the
5monthly retirement annuity increased by an amount equal to 8
6per year of creditable service times the number of years that
7have elapsed since the annuity began.
8    (e) Every person who receives the alternative retirement
9annuity under Section 14-110 and who is eligible to receive the
103% increase under subsection (a) on January 1, 1986, shall also
11receive on that date a one-time increase in retirement annuity
12equal to the difference between (1) his actual retirement
13annuity on that date, including any increases received under
14subsection (a), and (2) the amount of retirement annuity he
15would have received on that date if the amendments to
16subsection (a) made by Public Act 84-162 had been in effect
17since the date of his retirement.
18(Source: P.A. 91-927, eff. 12-14-00; 92-14, eff. 6-28-01;
1992-651, eff. 7-11-02.)
 
20    (40 ILCS 5/14-131)
21    Sec. 14-131. Contributions by State.
22    (a) The State shall make contributions to the System by
23appropriations of amounts which, together with other employer
24contributions from trust, federal, and other funds, employee
25contributions, investment income, and other income, will be

 

 

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1sufficient to meet the cost of maintaining and administering
2the System on a 100% 90% funded basis in accordance with
3actuarial recommendations by the end of State fiscal year 2043.
4    For the purposes of this Section and Section 14-135.08,
5references to State contributions refer only to employer
6contributions and do not include employee contributions that
7are picked up or otherwise paid by the State or a department on
8behalf of the employee.
9    (b) The Board shall determine the total amount of State
10contributions required for each fiscal year on the basis of the
11actuarial tables and other assumptions adopted by the Board,
12using the formula in subsection (e).
13    The Board shall also determine a State contribution rate
14for each fiscal year, expressed as a percentage of payroll,
15based on the total required State contribution for that fiscal
16year (less the amount received by the System from
17appropriations under Section 8.12 of the State Finance Act and
18Section 1 of the State Pension Funds Continuing Appropriation
19Act, if any, for the fiscal year ending on the June 30
20immediately preceding the applicable November 15 certification
21deadline), the estimated payroll (including all forms of
22compensation) for personal services rendered by eligible
23employees, and the recommendations of the actuary.
24    For the purposes of this Section and Section 14.1 of the
25State Finance Act, the term "eligible employees" includes
26employees who participate in the System, persons who may elect

 

 

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1to participate in the System but have not so elected, persons
2who are serving a qualifying period that is required for
3participation, and annuitants employed by a department as
4described in subdivision (a)(1) or (a)(2) of Section 14-111.
5    (c) Contributions shall be made by the several departments
6for each pay period by warrants drawn by the State Comptroller
7against their respective funds or appropriations based upon
8vouchers stating the amount to be so contributed. These amounts
9shall be based on the full rate certified by the Board under
10Section 14-135.08 for that fiscal year. From the effective date
11of this amendatory Act of the 93rd General Assembly through the
12payment of the final payroll from fiscal year 2004
13appropriations, the several departments shall not make
14contributions for the remainder of fiscal year 2004 but shall
15instead make payments as required under subsection (a-1) of
16Section 14.1 of the State Finance Act. The several departments
17shall resume those contributions at the commencement of fiscal
18year 2005.
19    (c-1) Notwithstanding subsection (c) of this Section, for
20fiscal years 2010, 2012, and 2013 only, contributions by the
21several departments are not required to be made for General
22Revenue Funds payrolls processed by the Comptroller. Payrolls
23paid by the several departments from all other State funds must
24continue to be processed pursuant to subsection (c) of this
25Section.
26    (c-2) For State fiscal years 2010, 2012, and 2013 only, on

 

 

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1or as soon as possible after the 15th day of each month, the
2Board shall submit vouchers for payment of State contributions
3to the System, in a total monthly amount of one-twelfth of the
4fiscal year General Revenue Fund contribution as certified by
5the System pursuant to Section 14-135.08 of the Illinois
6Pension Code.
7    (d) If an employee is paid from trust funds or federal
8funds, the department or other employer shall pay employer
9contributions from those funds to the System at the certified
10rate, unless the terms of the trust or the federal-State
11agreement preclude the use of the funds for that purpose, in
12which case the required employer contributions shall be paid by
13the State. From the effective date of this amendatory Act of
14the 93rd General Assembly through the payment of the final
15payroll from fiscal year 2004 appropriations, the department or
16other employer shall not pay contributions for the remainder of
17fiscal year 2004 but shall instead make payments as required
18under subsection (a-1) of Section 14.1 of the State Finance
19Act. The department or other employer shall resume payment of
20contributions at the commencement of fiscal year 2005.
21    (e) For State fiscal years 2014 through 2043, the minimum
22contribution to the System to be made by the State for each
23fiscal year shall be an amount determined by the System to be
24equal to the sum of (1) the State's portion of the projected
25normal cost for that fiscal year, plus (2) an amount sufficient
26to bring the total assets of the System up to 100% of the total

 

 

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1actuarial liabilities of the System by the end of State fiscal
2year 2043. In making these determinations, the required State
3contribution shall be calculated each year as a level
4percentage of payroll over the years remaining to and including
5fiscal year 2043 and shall be determined under the projected
6unit credit actuarial cost method.
7For State fiscal years 2012 and 2013 through 2045, the minimum
8contribution to the System to be made by the State for each
9fiscal year shall be an amount determined by the System to be
10sufficient to bring the total assets of the System up to 90% of
11the total actuarial liabilities of the System by the end of
12State fiscal year 2045. In making these determinations, the
13required State contribution shall be calculated each year as a
14level percentage of payroll over the years remaining to and
15including fiscal year 2045 and shall be determined under the
16projected unit credit actuarial cost method.
17    For State fiscal years 1996 through 2005, the State
18contribution to the System, as a percentage of the applicable
19employee payroll, shall be increased in equal annual increments
20so that by State fiscal year 2011, the State is contributing at
21the rate required under this Section; except that (i) for State
22fiscal year 1998, for all purposes of this Code and any other
23law of this State, the certified percentage of the applicable
24employee payroll shall be 5.052% for employees earning eligible
25creditable service under Section 14-110 and 6.500% for all
26other employees, notwithstanding any contrary certification

 

 

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1made under Section 14-135.08 before the effective date of this
2amendatory Act of 1997, and (ii) in the following specified
3State fiscal years, the State contribution to the System shall
4not be less than the following indicated percentages of the
5applicable employee payroll, even if the indicated percentage
6will produce a State contribution in excess of the amount
7otherwise required under this subsection and subsection (a):
89.8% in FY 1999; 10.0% in FY 2000; 10.2% in FY 2001; 10.4% in FY
92002; 10.6% in FY 2003; and 10.8% in FY 2004.
10    Notwithstanding any other provision of this Article, the
11total required State contribution to the System for State
12fiscal year 2006 is $203,783,900.
13    Notwithstanding any other provision of this Article, the
14total required State contribution to the System for State
15fiscal year 2007 is $344,164,400.
16    For each of State fiscal years 2008 through 2009, the State
17contribution to the System, as a percentage of the applicable
18employee payroll, shall be increased in equal annual increments
19from the required State contribution for State fiscal year
202007, so that by State fiscal year 2011, the State is
21contributing at the rate otherwise required under this Section.
22    Notwithstanding any other provision of this Article, the
23total required State General Revenue Fund contribution for
24State fiscal year 2010 is $723,703,100 and shall be made from
25the proceeds of bonds sold in fiscal year 2010 pursuant to
26Section 7.2 of the General Obligation Bond Act, less (i) the

 

 

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1pro rata share of bond sale expenses determined by the System's
2share of total bond proceeds, (ii) any amounts received from
3the General Revenue Fund in fiscal year 2010, and (iii) any
4reduction in bond proceeds due to the issuance of discounted
5bonds, if applicable.
6    Notwithstanding any other provision of this Article, the
7total required State General Revenue Fund contribution for
8State fiscal year 2011 is the amount recertified by the System
9on or before April 1, 2011 pursuant to Section 14-135.08 and
10shall be made from the proceeds of bonds sold in fiscal year
112011 pursuant to Section 7.2 of the General Obligation Bond
12Act, less (i) the pro rata share of bond sale expenses
13determined by the System's share of total bond proceeds, (ii)
14any amounts received from the General Revenue Fund in fiscal
15year 2011, and (iii) any reduction in bond proceeds due to the
16issuance of discounted bonds, if applicable.
17    Beginning in State fiscal year 2044, the minimum State
18contribution for each fiscal year shall be the amount needed to
19maintain the total assets of the System at 100% of the total
20actuarial liabilities of the System.
21    Beginning in State fiscal year 2046, the minimum State
22contribution for each fiscal year shall be the amount needed to
23maintain the total assets of the System at 90% of the total
24actuarial liabilities of the System.
25    Amounts received by the System pursuant to Section 25 of
26the Budget Stabilization Act or Section 8.12 of the State

 

 

HB6258- 105 -LRB097 23545 JDS 72554 b

1Finance Act in any fiscal year do not reduce and do not
2constitute payment of any portion of the minimum State
3contribution required under this Article in that fiscal year.
4Such amounts shall not reduce, and shall not be included in the
5calculation of, the required State contributions under this
6Article in any future year until the System has reached a
7funding ratio of at least 100% 90%. A reference in this Article
8to the "required State contribution" or any substantially
9similar term does not include or apply to any amounts payable
10to the System under Section 25 of the Budget Stabilization Act.
11    Notwithstanding any other provision of this Section, the
12required State contribution for State fiscal year 2005 and for
13fiscal year 2008 and each fiscal year thereafter through State
14fiscal year 2013, as calculated under this Section and
15certified under Section 14-135.08, shall not exceed an amount
16equal to (i) the amount of the required State contribution that
17would have been calculated under this Section for that fiscal
18year if the System had not received any payments under
19subsection (d) of Section 7.2 of the General Obligation Bond
20Act, minus (ii) the portion of the State's total debt service
21payments for that fiscal year on the bonds issued in fiscal
22year 2003 for the purposes of that Section 7.2, as determined
23and certified by the Comptroller, that is the same as the
24System's portion of the total moneys distributed under
25subsection (d) of Section 7.2 of the General Obligation Bond
26Act. In determining this maximum for State fiscal years 2008

 

 

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1through 2010, however, the amount referred to in item (i) shall
2be increased, as a percentage of the applicable employee
3payroll, in equal increments calculated from the sum of the
4required State contribution for State fiscal year 2007 plus the
5applicable portion of the State's total debt service payments
6for fiscal year 2007 on the bonds issued in fiscal year 2003
7for the purposes of Section 7.2 of the General Obligation Bond
8Act, so that, by State fiscal year 2011, the State is
9contributing at the rate otherwise required under this Section.
10    (f) After the submission of all payments for eligible
11employees from personal services line items in fiscal year 2004
12have been made, the Comptroller shall provide to the System a
13certification of the sum of all fiscal year 2004 expenditures
14for personal services that would have been covered by payments
15to the System under this Section if the provisions of this
16amendatory Act of the 93rd General Assembly had not been
17enacted. Upon receipt of the certification, the System shall
18determine the amount due to the System based on the full rate
19certified by the Board under Section 14-135.08 for fiscal year
202004 in order to meet the State's obligation under this
21Section. The System shall compare this amount due to the amount
22received by the System in fiscal year 2004 through payments
23under this Section and under Section 6z-61 of the State Finance
24Act. If the amount due is more than the amount received, the
25difference shall be termed the "Fiscal Year 2004 Shortfall" for
26purposes of this Section, and the Fiscal Year 2004 Shortfall

 

 

HB6258- 107 -LRB097 23545 JDS 72554 b

1shall be satisfied under Section 1.2 of the State Pension Funds
2Continuing Appropriation Act. If the amount due is less than
3the amount received, the difference shall be termed the "Fiscal
4Year 2004 Overpayment" for purposes of this Section, and the
5Fiscal Year 2004 Overpayment shall be repaid by the System to
6the Pension Contribution Fund as soon as practicable after the
7certification.
8    (g) For purposes of determining the required State
9contribution to the System, the value of the System's assets
10shall be equal to the actuarial value of the System's assets,
11which shall be calculated as follows:
12    As of June 30, 2008, the actuarial value of the System's
13assets shall be equal to the market value of the assets as of
14that date. In determining the actuarial value of the System's
15assets for fiscal years after June 30, 2008, any actuarial
16gains or losses from investment return incurred in a fiscal
17year shall be recognized in equal annual amounts over the
185-year period following that fiscal year.
19    (h) For purposes of determining the required State
20contribution to the System for a particular year, the actuarial
21value of assets shall be assumed to earn a rate of return equal
22to the System's actuarially assumed rate of return.
23    (i) After the submission of all payments for eligible
24employees from personal services line items paid from the
25General Revenue Fund in fiscal year 2010 have been made, the
26Comptroller shall provide to the System a certification of the

 

 

HB6258- 108 -LRB097 23545 JDS 72554 b

1sum of all fiscal year 2010 expenditures for personal services
2that would have been covered by payments to the System under
3this Section if the provisions of this amendatory Act of the
496th General Assembly had not been enacted. Upon receipt of the
5certification, the System shall determine the amount due to the
6System based on the full rate certified by the Board under
7Section 14-135.08 for fiscal year 2010 in order to meet the
8State's obligation under this Section. The System shall compare
9this amount due to the amount received by the System in fiscal
10year 2010 through payments under this Section. If the amount
11due is more than the amount received, the difference shall be
12termed the "Fiscal Year 2010 Shortfall" for purposes of this
13Section, and the Fiscal Year 2010 Shortfall shall be satisfied
14under Section 1.2 of the State Pension Funds Continuing
15Appropriation Act. If the amount due is less than the amount
16received, the difference shall be termed the "Fiscal Year 2010
17Overpayment" for purposes of this Section, and the Fiscal Year
182010 Overpayment shall be repaid by the System to the General
19Revenue Fund as soon as practicable after the certification.
20    (j) After the submission of all payments for eligible
21employees from personal services line items paid from the
22General Revenue Fund in fiscal year 2011 have been made, the
23Comptroller shall provide to the System a certification of the
24sum of all fiscal year 2011 expenditures for personal services
25that would have been covered by payments to the System under
26this Section if the provisions of this amendatory Act of the

 

 

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196th General Assembly had not been enacted. Upon receipt of the
2certification, the System shall determine the amount due to the
3System based on the full rate certified by the Board under
4Section 14-135.08 for fiscal year 2011 in order to meet the
5State's obligation under this Section. The System shall compare
6this amount due to the amount received by the System in fiscal
7year 2011 through payments under this Section. If the amount
8due is more than the amount received, the difference shall be
9termed the "Fiscal Year 2011 Shortfall" for purposes of this
10Section, and the Fiscal Year 2011 Shortfall shall be satisfied
11under Section 1.2 of the State Pension Funds Continuing
12Appropriation Act. If the amount due is less than the amount
13received, the difference shall be termed the "Fiscal Year 2011
14Overpayment" for purposes of this Section, and the Fiscal Year
152011 Overpayment shall be repaid by the System to the General
16Revenue Fund as soon as practicable after the certification.
17    (k) For fiscal years 2012 and 2013 only, after the
18submission of all payments for eligible employees from personal
19services line items paid from the General Revenue Fund in the
20fiscal year have been made, the Comptroller shall provide to
21the System a certification of the sum of all expenditures in
22the fiscal year for personal services. Upon receipt of the
23certification, the System shall determine the amount due to the
24System based on the full rate certified by the Board under
25Section 14-135.08 for the fiscal year in order to meet the
26State's obligation under this Section. The System shall compare

 

 

HB6258- 110 -LRB097 23545 JDS 72554 b

1this amount due to the amount received by the System for the
2fiscal year. If the amount due is more than the amount
3received, the difference shall be termed the "Prior Fiscal Year
4Shortfall" for purposes of this Section, and the Prior Fiscal
5Year Shortfall shall be satisfied under Section 1.2 of the
6State Pension Funds Continuing Appropriation Act. If the amount
7due is less than the amount received, the difference shall be
8termed the "Prior Fiscal Year Overpayment" for purposes of this
9Section, and the Prior Fiscal Year Overpayment shall be repaid
10by the System to the General Revenue Fund as soon as
11practicable after the certification.
12(Source: P.A. 96-43, eff. 7-15-09; 96-45, eff. 7-15-09;
1396-1000, eff. 7-2-10; 96-1497, eff. 1-14-11; 96-1511, eff.
141-27-11; 96-1554, eff. 3-18-11; 97-72, eff. 7-1-11; 97-732,
15eff. 6-30-12.)
 
16    (40 ILCS 5/14-132)  (from Ch. 108 1/2, par. 14-132)
17    Sec. 14-132. Obligations of State; funding guarantee.
18    (a) The payment of the required department contributions,
19all allowances, annuities, benefits granted under this
20Article, and all expenses of administration of the system are
21obligations of the State of Illinois to the extent specified in
22this Article.
23    (b) All income of the system shall be credited to a
24separate account for this system in the State treasury and
25shall be used to pay allowances, annuities, benefits and

 

 

HB6258- 111 -LRB097 23545 JDS 72554 b

1administration expense.
2    (c) Beginning July 1, 2013, the State shall be
3contractually obligated to contribute to the System under
4Section 14-131 in each State fiscal year an amount not less
5than the sum of (i) the State's normal cost for that year and
6(ii) the portion of the unfunded accrued liability assigned to
7that year by law in accordance with a schedule that distributes
8payments equitably over a reasonable period of time and in
9accordance with accepted actuarial practices. The obligations
10created under this subsection (c) are contractual obligations
11protected and enforceable under Article I, Section 16 and
12Article XIII, Section 5 of the Illinois Constitution.
13    Notwithstanding any other provision of law, if the State
14fails to pay in a State fiscal year the amount guaranteed under
15this subsection, the System may bring a mandamus action in the
16Circuit Court of Sangamon County to compel the State to make
17that payment, irrespective of other remedies that may be
18available to the System. In ordering the State to make the
19required payment, the court may order a reasonable payment
20schedule to enable the State to make the required payment
21without significantly imperiling the public health, safety, or
22welfare.
23(Source: P.A. 80-841.)
 
24    (40 ILCS 5/14-133)  (from Ch. 108 1/2, par. 14-133)
25    Sec. 14-133. Contributions on behalf of members.

 

 

HB6258- 112 -LRB097 23545 JDS 72554 b

1    (a) Each participating employee shall make contributions
2to the System, based on the employee's compensation, as
3follows:
4        (1) Covered employees, except as indicated below, 3.5%
5    for retirement annuity, and 0.5% for a widow or survivors
6    annuity;
7        (2) Noncovered employees, except as indicated below,
8    7% for retirement annuity and 1% for a widow or survivors
9    annuity;
10        (3) Noncovered employees serving in a position in which
11    "eligible creditable service" as defined in Section 14-110
12    may be earned, 1% for a widow or survivors annuity plus the
13    following amount for retirement annuity: 8.5% through
14    December 31, 2001; 9.5% in 2002; 10.5% in 2003; and 11.5%
15    in 2004 and thereafter;
16        (4) Covered employees serving in a position in which
17    "eligible creditable service" as defined in Section 14-110
18    may be earned, 0.5% for a widow or survivors annuity plus
19    the following amount for retirement annuity: 5% through
20    December 31, 2001; 6% in 2002; 7% in 2003; and 8% in 2004
21    and thereafter;
22        (5) Each security employee of the Department of
23    Corrections or of the Department of Human Services who is a
24    covered employee, 0.5% for a widow or survivors annuity
25    plus the following amount for retirement annuity: 5%
26    through December 31, 2001; 6% in 2002; 7% in 2003; and 8%

 

 

HB6258- 113 -LRB097 23545 JDS 72554 b

1    in 2004 and thereafter;
2        (6) Each security employee of the Department of
3    Corrections or of the Department of Human Services who is
4    not a covered employee, 1% for a widow or survivors annuity
5    plus the following amount for retirement annuity: 8.5%
6    through December 31, 2001; 9.5% in 2002; 10.5% in 2003; and
7    11.5% in 2004 and thereafter.
8    (a-5) In addition to the contributions otherwise required
9under this Article, each Tier I member shall also make the
10following contributions for retirement annuity from each
11payment of compensation:
12        (1) beginning July 1, 2013 and through June 30, 2014,
13    1% of compensation; and
14        (2) beginning on July 1, 2014, 2% of compensation.
15    (b) Contributions shall be in the form of a deduction from
16compensation and shall be made notwithstanding that the
17compensation paid in cash to the employee shall be reduced
18thereby below the minimum prescribed by law or regulation. Each
19member is deemed to consent and agree to the deductions from
20compensation provided for in this Article, and shall receipt in
21full for salary or compensation.
22(Source: P.A. 92-14, eff. 6-28-01.)
 
23    (40 ILCS 5/14-135.08)  (from Ch. 108 1/2, par. 14-135.08)
24    Sec. 14-135.08. To certify required State contributions.
25    (a) To certify to the Governor and to each department, on

 

 

HB6258- 114 -LRB097 23545 JDS 72554 b

1or before November 15 of each year through until November 15,
22011, the required rate for State contributions to the System
3for the next State fiscal year, as determined under subsection
4(b) of Section 14-131. The certification to the Governor under
5this subsection (a) shall include a copy of the actuarial
6recommendations upon which the rate is based and shall
7specifically identify the System's projected State normal cost
8for that fiscal year.
9    (a-5) On or before November 1 of each year, beginning
10November 1, 2012, the Board shall submit to the State Actuary,
11the Governor, and the General Assembly a proposed certification
12of the amount of the required State contribution to the System
13for the next fiscal year, along with all of the actuarial
14assumptions, calculations, and data upon which that proposed
15certification is based. On or before January 1 of each year,
16beginning January 1, 2013, the State Actuary shall issue a
17preliminary report concerning the proposed certification and
18identifying, if necessary, recommended changes in actuarial
19assumptions that the Board must consider before finalizing its
20certification of the required State contributions.
21    On or before January 15, 2013 and each January 15
22thereafter, the Board shall certify to the Governor and the
23General Assembly the amount of the required State contribution
24for the next fiscal year. The certification shall include a
25copy of the actuarial recommendations upon which it is based
26and shall specifically identify the System's projected State

 

 

HB6258- 115 -LRB097 23545 JDS 72554 b

1normal cost for that fiscal year. The Board's certification
2must note any deviations from the State Actuary's recommended
3changes, the reason or reasons for not following the State
4Actuary's recommended changes, and the fiscal impact of not
5following the State Actuary's recommended changes on the
6required State contribution.
7    (b) The certifications under subsections (a) and (a-5)
8shall include an additional amount necessary to pay all
9principal of and interest on those general obligation bonds due
10the next fiscal year authorized by Section 7.2(a) of the
11General Obligation Bond Act and issued to provide the proceeds
12deposited by the State with the System in July 2003,
13representing deposits other than amounts reserved under
14Section 7.2(c) of the General Obligation Bond Act. For State
15fiscal year 2005, the Board shall make a supplemental
16certification of the additional amount necessary to pay all
17principal of and interest on those general obligation bonds due
18in State fiscal years 2004 and 2005 authorized by Section
197.2(a) of the General Obligation Bond Act and issued to provide
20the proceeds deposited by the State with the System in July
212003, representing deposits other than amounts reserved under
22Section 7.2(c) of the General Obligation Bond Act, as soon as
23practical after the effective date of this amendatory Act of
24the 93rd General Assembly.
25    On or before May 1, 2004, the Board shall recalculate and
26recertify to the Governor and to each department the amount of

 

 

HB6258- 116 -LRB097 23545 JDS 72554 b

1the required State contribution to the System and the required
2rates for State contributions to the System for State fiscal
3year 2005, taking into account the amounts appropriated to and
4received by the System under subsection (d) of Section 7.2 of
5the General Obligation Bond Act.
6    On or before July 1, 2005, the Board shall recalculate and
7recertify to the Governor and to each department the amount of
8the required State contribution to the System and the required
9rates for State contributions to the System for State fiscal
10year 2006, taking into account the changes in required State
11contributions made by this amendatory Act of the 94th General
12Assembly.
13    On or before April 1, 2011, the Board shall recalculate and
14recertify to the Governor and to each department the amount of
15the required State contribution to the System for State fiscal
16year 2011, applying the changes made by Public Act 96-889 to
17the System's assets and liabilities as of June 30, 2009 as
18though Public Act 96-889 was approved on that date.
19    On or before July 1, 2013, the Board shall, if necessary,
20recalculate and recertify to the Governor the amount of the
21required State contribution to the System for State fiscal year
222014, taking into account the changes in required State
23contributions made by this amendatory Act of the 97th General
24Assembly.
25(Source: P.A. 96-1497, eff. 1-14-11; 96-1511, eff. 1-27-11;
2697-694, eff. 6-18-12.)
 

 

 

HB6258- 117 -LRB097 23545 JDS 72554 b

1    (40 ILCS 5/14-152.1)
2    Sec. 14-152.1. Application and expiration of new benefit
3increases.
4    (a) As used in this Section, "new benefit increase" means
5an increase in the amount of any benefit provided under this
6Article, or an expansion of the conditions of eligibility for
7any benefit under this Article, that results from an amendment
8to this Code that takes effect after June 1, 2005 (the
9effective date of Public Act 94-4). "New benefit increase",
10however, does not include any benefit increase resulting from
11the changes made to this Article by Public Act 96-37 or by this
12amendatory Act of the 97th 96th 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

 

 

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

 

 

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1apply and qualify for the affected benefit while the new
2benefit increase was in effect.
3(Source: P.A. 96-37, eff. 7-13-09.)
 
4    (40 ILCS 5/15-107.1 new)
5    Sec. 15-107.1. Tier I participant. "Tier I participant": A
6participant under this Article, other than a participant in the
7self-managed plan under Section 15-158.2, who first became a
8member or participant before January 1, 2011 under any
9reciprocal retirement system or pension fund established under
10this Code other than a retirement system or pension fund
11established under Article 2, 3, 4, 5, 6, or 18 of this Code.
 
12    (40 ILCS 5/15-107.2 new)
13    Sec. 15-107.2. Tier I retiree. "Tier I retiree": A former
14Tier I participant who is receiving a retirement annuity.
15    A person does not become a Tier I retiree by virtue of
16receiving a reversionary, survivors, beneficiary, or
17disability annuity.
 
18    (40 ILCS 5/15-111)  (from Ch. 108 1/2, par. 15-111)
19    Sec. 15-111. Earnings. "Earnings": An amount paid for
20personal services equal to the sum of the basic compensation
21plus extra compensation for summer teaching, overtime or other
22extra service. For periods for which an employee receives
23service credit under subsection (c) of Section 15-113.1 or

 

 

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1Section 15-113.2, earnings are equal to the basic compensation
2on which contributions are paid by the employee during such
3periods. Compensation for employment which is irregular,
4intermittent and temporary shall not be considered earnings,
5unless the participant is also receiving earnings from the
6employer as an employee under Section 15-107.
7    With respect to transition pay paid by the University of
8Illinois to a person who was a participating employee employed
9in the fire department of the University of Illinois's
10Champaign-Urbana campus immediately prior to the elimination
11of that fire department:
12        (1) "Earnings" includes transition pay paid to the
13    employee on or after the effective date of this amendatory
14    Act of the 91st General Assembly.
15        (2) "Earnings" includes transition pay paid to the
16    employee before the effective date of this amendatory Act
17    of the 91st General Assembly only if (i) employee
18    contributions under Section 15-157 have been withheld from
19    that transition pay or (ii) the employee pays to the System
20    before January 1, 2001 an amount representing employee
21    contributions under Section 15-157 on that transition pay.
22    Employee contributions under item (ii) may be paid in a
23    lump sum, by withholding from additional transition pay
24    accruing before January 1, 2001, or in any other manner
25    approved by the System. Upon payment of the employee
26    contributions on transition pay, the corresponding

 

 

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1    employer contributions become an obligation of the State.
2    Notwithstanding any other provision of this Code, the
3earnings of a Tier I participant for the purposes of this Code
4shall not exceed, for periods of service on or after the
5effective date of this amendatory Act of the 97th General
6Assembly, the annual contribution and benefit base established
7for the applicable year by the Commissioner of Social Security
8under the federal Social Security Act; except that this
9limitation does not apply to a participant's earnings that are
10determined under an employment contract or collective
11bargaining agreement that is in effect on the effective date of
12this amendatory Act of the 97th General Assembly and has not
13been amended or renewed after that date.
14(Source: P.A. 91-887, eff. 7-6-00.)
 
15    (40 ILCS 5/15-113.6)  (from Ch. 108 1/2, par. 15-113.6)
16    Sec. 15-113.6. Service for employment in public schools.
17"Service for employment in public schools": Includes those
18periods not exceeding the lesser of 10 years or 2/3 of the
19service granted under other Sections of this Article dealing
20with service credit, during which a person who entered the
21system after September 1, 1974 was employed full time by a
22public common school, public college and public university, or
23by an agency or instrumentality of any of the foregoing, of any
24state, territory, dependency or possession of the United States
25of America, including the Philippine Islands, or a school

 

 

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1operated by or under the auspices of any agency or department
2of any other state, if the person (1) cannot qualify for a
3retirement pension or other benefit based upon employer
4contributions from another retirement system, exclusive of
5federal social security, based in whole or in part upon this
6employment, and (2) pays the lesser of (A) an amount equal to
78% of his or her annual basic compensation on the date of
8becoming a participating employee subsequent to this service
9multiplied by the number of years of such service, together
10with compound interest from the date participation begins to
11the date payment is received by the board at the rate of 6% per
12annum through August 31, 1982, and at the effective rates after
13that date, and (B) 50% of the actuarial value of the increase
14in the retirement annuity provided by this service, and (3)
15contributes for at least 5 years subsequent to this employment
16to one or more of the following systems: the State Universities
17Retirement System, the Teachers' Retirement System of the State
18of Illinois, and the Public School Teachers' Pension and
19Retirement Fund of Chicago.
20    The service granted under this Section shall not be
21considered in determining whether the person has the minimum
22number of 8 years of service required to qualify for a
23retirement annuity at age 55 or the 5 years of service required
24to qualify for a retirement annuity at age 62, as provided in
25Section 15-135, or the 10 years required by subsection (c) of
26Section 1-160 for a person who first becomes a participant on

 

 

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1or after January 1, 2011. The maximum allowable service of 10
2years for this governmental employment shall be reduced by the
3service credit which is validated under paragraph (2) of
4subsection (b) of Section 16-127 and paragraph 1 of Section
517-133.
6(Source: P.A. 95-83, eff. 8-13-07; 96-1490, eff. 1-1-11.)
 
7    (40 ILCS 5/15-113.7)  (from Ch. 108 1/2, par. 15-113.7)
8    Sec. 15-113.7. Service for other public employment.
9"Service for other public employment": Includes those periods
10not exceeding the lesser of 10 years or 2/3 of the service
11granted under other Sections of this Article dealing with
12service credit, during which a person was employed full time by
13the United States government, or by the government of a state,
14or by a political subdivision of a state, or by an agency or
15instrumentality of any of the foregoing, if the person (1)
16cannot qualify for a retirement pension or other benefit based
17upon employer contributions from another retirement system,
18exclusive of federal social security, based in whole or in part
19upon this employment, and (2) pays the lesser of (A) an amount
20equal to 8% of his or her annual basic compensation on the date
21of becoming a participating employee subsequent to this service
22multiplied by the number of years of such service, together
23with compound interest from the date participation begins to
24the date payment is received by the board at the rate of 6% per
25annum through August 31, 1982, and at the effective rates after

 

 

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1that date, and (B) 50% of the actuarial value of the increase
2in the retirement annuity provided by this service, and (3)
3contributes for at least 5 years subsequent to this employment
4to one or more of the following systems: the State Universities
5Retirement System, the Teachers' Retirement System of the State
6of Illinois, and the Public School Teachers' Pension and
7Retirement Fund of Chicago. If a function of a governmental
8unit as defined by Section 20-107 is transferred by law, in
9whole or in part to an employer, and an employee transfers
10employment from this governmental unit to such employer within
116 months of the transfer of the function, the payment for
12service authorized under this Section shall not exceed the
13amount which would have been payable for this service to the
14retirement system covering the governmental unit from which the
15function was transferred.
16    The service granted under this Section shall not be
17considered in determining whether the person has the minimum
18number of 8 years of service required to qualify for a
19retirement annuity at age 55 or the 5 years of service required
20to qualify for a retirement annuity at age 62, as provided in
21Section 15-135. The maximum allowable service of 10 years for
22this governmental employment shall be reduced by the service
23credit which is validated under paragraph (2) of subsection (b)
24of Section 16-127 and paragraph one of Section 17-133.
25    Except as hereinafter provided, this Section shall not
26apply to persons who become participants in the system after

 

 

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1September 1, 1974.
2(Source: P.A. 95-83, eff. 8-13-07.)
 
3    (40 ILCS 5/15-134.5)
4    Sec. 15-134.5. Retirement program elections.
5    (a) All participating employees are participants under the
6traditional benefit package prior to January 1, 1998.
7    Effective as of the date that an employer elects, as
8described in Section 15-158.2, to offer to its employees the
9portable benefit package and the self-managed plan as
10alternatives to the traditional benefit package, each of that
11employer's eligible employees (as defined in subsection (b))
12shall be given the choice to elect which retirement program he
13or she wishes to participate in with respect to all periods of
14covered employment occurring on and after the effective date of
15the employee's election. The retirement program election made
16by an eligible employee must be made in writing, in the manner
17prescribed by the System, and within the time period described
18in subsection (d) or (d-1).
19    The employee election authorized by this Section is a
20one-time, irrevocable election. If an employee terminates
21employment after making the election provided under this
22subsection (a), then upon his or her subsequent re-employment
23with an employer the original election shall automatically
24apply to him or her, provided that the employer is then a
25participating employer as described in Section 15-158.2.

 

 

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1    An eligible employee who fails to make this election shall,
2by default, participate in the traditional benefit package.
3    (b) "Eligible employee" means an employee (as defined in
4Section 15-107) who is either a currently eligible employee or
5a newly eligible employee. For purposes of this Section, a
6"currently eligible employee" is an employee who is employed by
7an employer on the effective date on which the employer offers
8to its employees the portable benefit package and the
9self-managed plan as alternatives to the traditional benefit
10package. A "newly eligible employee" is an employee who first
11becomes employed by an employer after the effective date on
12which the employer offers its employees the portable benefit
13package and the self-managed plan as alternatives to the
14traditional benefit package. A newly eligible employee
15participates in the traditional benefit package until he or she
16makes an election to participate in the portable benefit
17package or the self-managed plan. If an employee does not elect
18to participate in the portable benefit package or the
19self-managed plan, he or she shall continue to participate in
20the traditional benefit package by default.
21    (c) An eligible employee who at the time he or she is first
22eligible to make the election described in subsection (a) does
23not have sufficient age and service to qualify for a retirement
24annuity under Section 15-135 may elect to participate in the
25traditional benefit package, the portable benefit package, or
26the self-managed plan. An eligible employee who has sufficient

 

 

HB6258- 127 -LRB097 23545 JDS 72554 b

1age and service to qualify for a retirement annuity under
2Section 15-135 at the time he or she is first eligible to make
3the election described in subsection (a) may elect to
4participate in the traditional benefit package or the portable
5benefit package, but may not elect to participate in the
6self-managed plan.
7    (d) A currently eligible employee must make this election
8within one year after the effective date of the employer's
9adoption of the self-managed plan.
10    A newly eligible employee must make this election within 6
11months after the date on which the System receives the report
12of status certification from the employer. If an employee
13elects to participate in the self-managed plan, no employer
14contributions shall be remitted to the self-managed plan when
15the employee's account balance transfer is made. Employer
16contributions to the self-managed plan shall commence as of the
17first pay period that begins after the System receives the
18employee's election.
19    (d-1) A newly eligible employee who, prior to the effective
20date of this amendatory Act of the 91st General Assembly, fails
21to make the election within the period provided under
22subsection (d) and participates by default in the traditional
23benefit package may make a late election to participate in the
24portable benefit package or the self-managed plan instead of
25the traditional benefit package at any time within 6 months
26after the effective date of this amendatory Act of the 91st

 

 

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1General Assembly.
2    (e) If a currently eligible employee elects the portable
3benefit package, that election shall not become effective until
4the one-year anniversary of the date on which the election is
5filed with the System, provided the employee remains
6continuously employed by the employer throughout the one-year
7waiting period, and any benefits payable to or on account of
8the employee before such one-year waiting period has ended
9shall not be determined under the provisions applicable to the
10portable benefit package but shall instead be determined in
11accordance with the traditional benefit package. If a currently
12eligible employee who has elected the portable benefit package
13terminates employment covered by the System before the one-year
14waiting period has ended, then no benefits shall be determined
15under the portable benefit package provisions while he or she
16is inactive in the System and upon re-employment with an
17employer covered by the System he or she shall begin a new
18one-year waiting period before the provisions of the portable
19benefit package become effective.
20    (f) An eligible employee shall be provided with written
21information prepared or prescribed by the System which
22describes the employee's retirement program choices. The
23eligible employee shall be offered an opportunity to receive
24counseling from the System prior to making his or her election.
25This counseling may consist of videotaped materials, group
26presentations, individual consultation with an employee or

 

 

HB6258- 129 -LRB097 23545 JDS 72554 b

1authorized representative of the System in person or by
2telephone or other electronic means, or any combination of
3these methods.
4    (g) Notwithstanding any other provision of this Section, a
5person may not elect to participate or begin participation in
6the self-managed plan established under Section 15-158.2 on or
7after the effective date of this amendatory Act of the 97th
8General Assembly.
9(Source: P.A. 90-766, eff. 8-14-98; 91-887, eff. 7-6-00.)
 
10    (40 ILCS 5/15-135)  (from Ch. 108 1/2, par. 15-135)
11    Sec. 15-135. Retirement annuities - Conditions.
12    (a) A participant who retires in one of the following
13specified years with the specified amount of service is
14entitled to a retirement annuity at any age under the
15retirement program applicable to the participant:
16        35 years if retirement is in 1997 or before;
17        34 years if retirement is in 1998;
18        33 years if retirement is in 1999;
19        32 years if retirement is in 2000;
20        31 years if retirement is in 2001;
21        30 years if retirement is in 2002 or later.
22    A participant with 8 or more years of service after
23September 1, 1941, is entitled to a retirement annuity on or
24after attainment of age 55.
25    A participant with at least 5 but less than 8 years of

 

 

HB6258- 130 -LRB097 23545 JDS 72554 b

1service after September 1, 1941, is entitled to a retirement
2annuity on or after attainment of age 62.
3    A participant who has at least 25 years of service in this
4system as a police officer or firefighter is entitled to a
5retirement annuity on or after the attainment of age 50, if
6Rule 4 of Section 15-136 is applicable to the participant.
7    (a-5) Notwithstanding subsection (a) of this Section, for a
8Tier I participant who begins receiving a retirement annuity
9under this Article after July 1, 2013:
10        (1) If the Tier I participant is at least 45 years old
11    on the effective date of this amendatory Act of the 97th
12    General Assembly, then the references to age 50, 55, and 62
13    in subsection (a) of this Section remain unchanged.
14        (2) If the Tier I participant is at least 40 but less
15    than 45 years old on the effective date of this amendatory
16    Act of the 97th General Assembly, then the references to
17    age 50, 55, and 62 in subsection (a) of this Section are
18    increased by one year.
19        (3) If the Tier I participant is at least 35 but less
20    than 40 years old on the effective date of this amendatory
21    Act of the 97th General Assembly, then the references to
22    age 50, 55, and 62 in subsection (a) of this Section are
23    increased by 3 years.
24        (4) If the Tier I participant is less than 35 years old
25    on the effective date of this amendatory Act of the 97th
26    General Assembly, then the references to age 50, 55, and 62

 

 

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1    in subsection (a) of this Section are increased by 5 years.
2    Notwithstanding Section 1-103.1, this subsection (a-5)
3applies without regard to whether or not the Tier I participant
4is in active service under this Article on or after the
5effective date of this amendatory Act of the 97th General
6Assembly.
7    (b) The annuity payment period shall begin on the date
8specified by the participant or the recipient of a disability
9retirement annuity submitting a written application, which
10date shall not be prior to termination of employment or more
11than one year before the application is received by the board;
12however, if the participant is not an employee of an employer
13participating in this System or in a participating system as
14defined in Article 20 of this Code on April 1 of the calendar
15year next following the calendar year in which the participant
16attains age 70 1/2, the annuity payment period shall begin on
17that date regardless of whether an application has been filed.
18    (c) An annuity is not payable if the amount provided under
19Section 15-136 is less than $10 per month.
20(Source: P.A. 97-933, eff. 8-10-12; 97-968, eff. 8-16-12.)
 
21    (40 ILCS 5/15-136)  (from Ch. 108 1/2, par. 15-136)
22    Sec. 15-136. Retirement annuities - Amount. The provisions
23of this Section 15-136 apply only to those participants who are
24participating in the traditional benefit package or the
25portable benefit package and do not apply to participants who

 

 

HB6258- 132 -LRB097 23545 JDS 72554 b

1are participating in the self-managed plan.
2    (a) The amount of a participant's retirement annuity,
3expressed in the form of a single-life annuity, shall be
4determined by whichever of the following rules is applicable
5and provides the largest annuity:
6    Rule 1: The retirement annuity shall be 1.67% of final rate
7of earnings for each of the first 10 years of service, 1.90%
8for each of the next 10 years of service, 2.10% for each year
9of service in excess of 20 but not exceeding 30, and 2.30% for
10each year in excess of 30; or for persons who retire on or
11after January 1, 1998, 2.2% of the final rate of earnings for
12each year of service.
13    Rule 2: The retirement annuity shall be the sum of the
14following, determined from amounts credited to the participant
15in accordance with the actuarial tables and the effective rate
16of interest in effect at the time the retirement annuity
17begins:
18        (i) the normal annuity which can be provided on an
19    actuarially equivalent basis, by the accumulated normal
20    contributions as of the date the annuity begins;
21        (ii) an annuity from employer contributions of an
22    amount equal to that which can be provided on an
23    actuarially equivalent basis from the accumulated normal
24    contributions made by the participant under Section
25    15-113.6 and Section 15-113.7 plus 1.4 times all other
26    accumulated normal contributions made by the participant;

 

 

HB6258- 133 -LRB097 23545 JDS 72554 b

1    and
2        (iii) the annuity that can be provided on an
3    actuarially equivalent basis from the entire contribution
4    made by the participant under Section 15-113.3.
5    For the purpose of calculating an annuity under this Rule
62, the contribution required under subsection (c-5) of Section
715-157 shall not be considered when determining the
8participant's accumulated normal contributions under clause
9(i) or the employer contribution under clause (ii).
10    With respect to a police officer or firefighter who retires
11on or after August 14, 1998, the accumulated normal
12contributions taken into account under clauses (i) and (ii) of
13this Rule 2 shall include the additional normal contributions
14made by the police officer or firefighter under Section
1515-157(a).
16    The amount of a retirement annuity calculated under this
17Rule 2 shall be computed solely on the basis of the
18participant's accumulated normal contributions, as specified
19in this Rule and defined in Section 15-116. Neither an employee
20or employer contribution for early retirement under Section
2115-136.2 nor any other employer contribution shall be used in
22the calculation of the amount of a retirement annuity under
23this Rule 2.
24    This amendatory Act of the 91st General Assembly is a
25clarification of existing law and applies to every participant
26and annuitant without regard to whether status as an employee

 

 

HB6258- 134 -LRB097 23545 JDS 72554 b

1terminates before the effective date of this amendatory Act.
2    This Rule 2 does not apply to a person who first becomes an
3employee under this Article on or after July 1, 2005.
4    Rule 3: The retirement annuity of a participant who is
5employed at least one-half time during the period on which his
6or her final rate of earnings is based, shall be equal to the
7participant's years of service not to exceed 30, multiplied by
8(1) $96 if the participant's final rate of earnings is less
9than $3,500, (2) $108 if the final rate of earnings is at least
10$3,500 but less than $4,500, (3) $120 if the final rate of
11earnings is at least $4,500 but less than $5,500, (4) $132 if
12the final rate of earnings is at least $5,500 but less than
13$6,500, (5) $144 if the final rate of earnings is at least
14$6,500 but less than $7,500, (6) $156 if the final rate of
15earnings is at least $7,500 but less than $8,500, (7) $168 if
16the final rate of earnings is at least $8,500 but less than
17$9,500, and (8) $180 if the final rate of earnings is $9,500 or
18more, except that the annuity for those persons having made an
19election under Section 15-154(a-1) shall be calculated and
20payable under the portable retirement benefit program pursuant
21to the provisions of Section 15-136.4.
22    Rule 4: A participant who is at least age 50 and has 25 or
23more years of service as a police officer or firefighter, and a
24participant who is age 55 or over and has at least 20 but less
25than 25 years of service as a police officer or firefighter,
26shall be entitled to a retirement annuity of 2 1/4% of the

 

 

HB6258- 135 -LRB097 23545 JDS 72554 b

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

 

 

HB6258- 136 -LRB097 23545 JDS 72554 b

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

 

 

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1of the annuity payment period and (2) the amount equal to the
2participant's annuity if calculated under Rule 1, reduced under
3Section 15-136(b) as if no contributions had been made under
4Section 15-136.2.
5    With respect to a participant who is qualified for a
6retirement annuity under this Rule 5 whose retirement annuity
7began before the effective date of this amendatory Act of the
891st General Assembly, and for whom an employee contribution
9was made under Section 15-136.2, the System shall recalculate
10the retirement annuity under this Rule 5 and shall pay any
11additional amounts due in the manner provided in Section
1215-186.1 for benefits mistakenly set too low.
13    The amount of a retirement annuity calculated under this
14Rule 5 shall be computed solely on the basis of those
15contributions specifically set forth in this Rule 5. Except as
16provided in clause (iii) of this Rule 5, neither an employee
17nor employer contribution for early retirement under Section
1815-136.2, nor any other employer contribution, shall be used in
19the calculation of the amount of a retirement annuity under
20this Rule 5.
21    The General Assembly has adopted the changes set forth in
22Section 25 of this amendatory Act of the 91st General Assembly
23in recognition that the decision of the Appellate Court for the
24Fourth District in Mattis v. State Universities Retirement
25System et al. might be deemed to give some right to the
26plaintiff in that case. The changes made by Section 25 of this

 

 

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

 

 

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

 

 

HB6258- 140 -LRB097 23545 JDS 72554 b

1the annuitant's life of 3% of the monthly annuity provided
2under Rule 1, Rule 2, Rule 3, Rule 4, or Rule 5 contained in
3this Section. The change made under this subsection by P.A.
481-970 is effective January 1, 1980 and applies to each
5annuitant whose status as an employee terminates before or
6after that date.
7    Beginning January 1, 1990 and except as provided in
8subsections (d-1) and (d-2), all automatic annual increases
9payable under this Section shall be calculated as a percentage
10of the total annuity payable at the time of the increase,
11including all increases previously granted under this Article.
12    The change made in this subsection by P.A. 85-1008 is
13effective January 26, 1988, and is applicable without regard to
14whether status as an employee terminated before that date.
15    (d-1) Notwithstanding any other provision of this Article,
16for a Tier I retiree, the amount of each automatic annual
17increase in retirement annuity occurring on or after the
18effective date of this amendatory Act of the 97th General
19Assembly shall be the lesser of $750 or 3% of the total annuity
20payable at the time of the increase, including previous
21increases granted.
22    (d-2) Notwithstanding any other provision of this Article,
23for a Tier I retiree, the monthly retirement annuity shall
24first be subject to annual increases on the January 1 occurring
25on or next after the attainment of age 67 or the January 1
26occurring on or next after the fifth anniversary of the annuity

 

 

HB6258- 141 -LRB097 23545 JDS 72554 b

1start date, whichever occurs earlier. If on the effective date
2of this amendatory Act of the 97th General Assembly a Tier I
3retiree has already received an annual increase under this
4Section but does not yet meet the new eligibility requirements
5of this subsection, the annual increases already received shall
6continue in force, but no additional annual increase shall be
7granted until the Tier I retiree meets the new eligibility
8requirements.
9    (d-3) Notwithstanding Section 1-103.1, subsections (d-1)
10and (d-2) apply without regard to whether or not the Tier I
11retiree is in active service under this Article on or after the
12effective date of this amendatory Act of the 97th General
13Assembly.
14    (e) If, on January 1, 1987, or the date the retirement
15annuity payment period begins, whichever is later, the sum of
16the retirement annuity provided under Rule 1 or Rule 2 of this
17Section and the automatic annual increases provided under the
18preceding subsection or Section 15-136.1, amounts to less than
19the retirement annuity which would be provided by Rule 3, the
20retirement annuity shall be increased as of January 1, 1987, or
21the date the retirement annuity payment period begins,
22whichever is later, to the amount which would be provided by
23Rule 3 of this Section. Such increased amount shall be
24considered as the retirement annuity in determining benefits
25provided under other Sections of this Article. This paragraph
26applies without regard to whether status as an employee

 

 

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1terminated before the effective date of this amendatory Act of
21987, provided that the annuitant was employed at least
3one-half time during the period on which the final rate of
4earnings was based.
5    (f) A participant is entitled to such additional annuity as
6may be provided on an actuarially equivalent basis, by any
7accumulated additional contributions to his or her credit.
8However, the additional contributions made by the participant
9toward the automatic increases in annuity provided under this
10Section and the contributions made under subsection (c-5) of
11Section 15-157 by this amendatory Act of the 97th General
12Assembly shall not be taken into account in determining the
13amount of such additional annuity.
14    (g) If, (1) by law, a function of a governmental unit, as
15defined by Section 20-107 of this Code, is transferred in whole
16or in part to an employer, and (2) a participant transfers
17employment from such governmental unit to such employer within
186 months after the transfer of the function, and (3) the sum of
19(A) the annuity payable to the participant under Rule 1, 2, or
203 of this Section (B) all proportional annuities payable to the
21participant by all other retirement systems covered by Article
2220, and (C) the initial primary insurance amount to which the
23participant is entitled under the Social Security Act, is less
24than the retirement annuity which would have been payable if
25all of the participant's pension credits validated under
26Section 20-109 had been validated under this system, a

 

 

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1supplemental annuity equal to the difference in such amounts
2shall be payable to the participant.
3    (h) On January 1, 1981, an annuitant who was receiving a
4retirement annuity on or before January 1, 1971 shall have his
5or her retirement annuity then being paid increased $1 per
6month for each year of creditable service. On January 1, 1982,
7an annuitant whose retirement annuity began on or before
8January 1, 1977, shall have his or her retirement annuity then
9being paid increased $1 per month for each year of creditable
10service.
11    (i) On January 1, 1987, any annuitant whose retirement
12annuity began on or before January 1, 1977, shall have the
13monthly retirement annuity increased by an amount equal to 8
14per year of creditable service times the number of years that
15have elapsed since the annuity began.
16    (j) For participants to whom subsection (a-5) of Section
1715-135 applies, the references to age 50, 55, and 62 in this
18Section are increased as provided in subsection (a-5) of
19Section 15-135.
20(Source: P.A. 97-933, eff. 8-10-12; 97-968, eff. 8-16-12.)
 
21    (40 ILCS 5/15-155)  (from Ch. 108 1/2, par. 15-155)
22    Sec. 15-155. Employer contributions.
23    (a) The State of Illinois shall make contributions by
24appropriations of amounts which, together with the other
25employer contributions from trust, federal, and other funds,

 

 

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1employee contributions, income from investments, and other
2income of this System, will be sufficient to meet the cost of
3maintaining and administering the System on a 100% 90% funded
4basis in accordance with actuarial recommendations by the end
5of State fiscal year 2043.
6    Beginning with State fiscal year 2014, the State's required
7contributions to the System under subsection (a-1) shall be
8limited to the amounts required to amortize the total cost of
9the benefits of the System arising before July 1, 2013. The
10State shall also pay any employer contributions required from
11the State as the actual employer of participants under this
12Article and any contribution required under subsection (a-20).
13    The Board shall determine the amount of State and employer
14contributions required for each fiscal year on the basis of the
15actuarial tables and other assumptions adopted by the Board and
16the recommendations of the actuary, using the formulas provided
17in this Section formula in subsection (a-1).
18    (a-1) For State fiscal years 2014 through 2043, the minimum
19contribution to the System to be made by the State under this
20subsection (a-1) for each fiscal year shall be an amount
21determined by the Board to be sufficient to amortize the
22unfunded accrued liability that is attributable to benefits
23that accrued before July 1, 2013 as a level percentage of
24payroll over the years remaining to and including fiscal year
252043, determined under the projected unit credit actuarial cost
26method.

 

 

HB6258- 145 -LRB097 23545 JDS 72554 b

1    For State fiscal year 2044 and thereafter, the minimum
2contribution to the System to be made by the State under this
3subsection (a-1) for each fiscal year shall be an amount
4determined by the Board to be sufficient to amortize, over a
530-year rolling amortization period, any unfunded liability
6arising on or after July 1, 2043 that is attributable to
7benefits that accrued before July 1, 2013.
8    For State fiscal years 2012 and 2013 through 2045, the
9minimum contribution to the System to be made by the State for
10each fiscal year shall be an amount determined by the System to
11be sufficient to bring the total assets of the System up to 90%
12of the total actuarial liabilities of the System by the end of
13State fiscal year 2045. In making these determinations, the
14required State contribution shall be calculated each year as a
15level percentage of payroll over the years remaining to and
16including fiscal year 2045 and shall be determined under the
17projected unit credit actuarial cost method.
18    For State fiscal years 1996 through 2005, the State
19contribution to the System, as a percentage of the applicable
20employee payroll, shall be increased in equal annual increments
21so that by State fiscal year 2011, the State is contributing at
22the rate required under this Section.
23    Notwithstanding any other provision of this Article, the
24total required State contribution for State fiscal year 2006 is
25$166,641,900.
26    Notwithstanding any other provision of this Article, the

 

 

HB6258- 146 -LRB097 23545 JDS 72554 b

1total required State contribution for State fiscal year 2007 is
2$252,064,100.
3    For each of State fiscal years 2008 through 2009, the State
4contribution to the System, as a percentage of the applicable
5employee payroll, shall be increased in equal annual increments
6from the required State contribution for State fiscal year
72007, so that by State fiscal year 2011, the State is
8contributing at the rate otherwise required under this Section.
9    Notwithstanding any other provision of this Article, the
10total required State contribution for State fiscal year 2010 is
11$702,514,000 and shall be made from the State Pensions Fund and
12proceeds of bonds sold in fiscal year 2010 pursuant to Section
137.2 of the General Obligation Bond Act, less (i) the pro rata
14share of bond sale expenses determined by the System's share of
15total bond proceeds, (ii) any amounts received from the General
16Revenue Fund in fiscal year 2010, (iii) any reduction in bond
17proceeds due to the issuance of discounted bonds, if
18applicable.
19    Notwithstanding any other provision of this Article, the
20total required State contribution for State fiscal year 2011 is
21the amount recertified by the System on or before April 1, 2011
22pursuant to Section 15-165 and shall be made from the State
23Pensions Fund and proceeds of bonds sold in fiscal year 2011
24pursuant to Section 7.2 of the General Obligation Bond Act,
25less (i) the pro rata share of bond sale expenses determined by
26the System's share of total bond proceeds, (ii) any amounts

 

 

HB6258- 147 -LRB097 23545 JDS 72554 b

1received from the General Revenue Fund in fiscal year 2011, and
2(iii) any reduction in bond proceeds due to the issuance of
3discounted bonds, if applicable.
4    Beginning in State fiscal year 2046, the minimum State
5contribution for each fiscal year shall be the amount needed to
6maintain the total assets of the System at 90% of the total
7actuarial liabilities of the System.
8    Amounts received by the System pursuant to Section 25 of
9the Budget Stabilization Act or Section 8.12 of the State
10Finance Act in any fiscal year do not reduce and do not
11constitute payment of any portion of the minimum State
12contribution required under this Article in that fiscal year.
13Such amounts shall not reduce, and shall not be included in the
14calculation of, the required State contributions under this
15Article in any future year until the System has reached a
16funding ratio of at least 100% 90%. A reference in this Article
17to the "required State contribution" or any substantially
18similar term does not include or apply to any amounts payable
19to the System under Section 25 of the Budget Stabilization Act.
20    Notwithstanding any other provision of this Section, the
21required State contribution for State fiscal year 2005 and for
22fiscal year 2008 and each fiscal year thereafter through State
23fiscal year 2013, as calculated under this Section and
24certified under Section 15-165, shall not exceed an amount
25equal to (i) the amount of the required State contribution that
26would have been calculated under this Section for that fiscal

 

 

HB6258- 148 -LRB097 23545 JDS 72554 b

1year if the System had not received any payments under
2subsection (d) of Section 7.2 of the General Obligation Bond
3Act, minus (ii) the portion of the State's total debt service
4payments for that fiscal year on the bonds issued in fiscal
5year 2003 for the purposes of that Section 7.2, as determined
6and certified by the Comptroller, that is the same as the
7System's portion of the total moneys distributed under
8subsection (d) of Section 7.2 of the General Obligation Bond
9Act. In determining this maximum for State fiscal years 2008
10through 2010, however, the amount referred to in item (i) shall
11be increased, as a percentage of the applicable employee
12payroll, in equal increments calculated from the sum of the
13required State contribution for State fiscal year 2007 plus the
14applicable portion of the State's total debt service payments
15for fiscal year 2007 on the bonds issued in fiscal year 2003
16for the purposes of Section 7.2 of the General Obligation Bond
17Act, so that, by State fiscal year 2011, the State is
18contributing at the rate otherwise required under this Section.
19    (a-10) Subject to the limitations provided in subsection
20(a-15), beginning with State fiscal year 2014, the minimum
21required contribution of each employer under this Article shall
22be sufficient to produce an annual amount equal to:
23        (i) the employer's normal cost for that fiscal year,
24    exclusive of the employer's normal cost that arises from
25    optional employer contributions agreed to by that employer
26    for that fiscal year under Section 1-161; plus

 

 

HB6258- 149 -LRB097 23545 JDS 72554 b

1        (ii) the employer's normal cost for that fiscal year
2    that arises from optional employer contributions agreed to
3    by that employer for that fiscal year under Section 1-161;
4    plus
5        (iii) the amount required for that fiscal year to
6    amortize that employer's portion of the unfunded accrued
7    liability associated with the cost of benefits accrued on
8    or after July 1, 2013 as a level percentage of payroll over
9    a 30-year rolling amortization period, as determined for
10    each employer by the Board.
11    Each employer under this Article shall make these
12contributions in the amounts determined and the manner
13prescribed from time to time by the Board.
14    (a-15) The System shall determine the employer's normal
15cost under item (i) of subsection (a-10) as a percentage of
16projected payroll applicable to all employers, based on
17actuarial assumptions applicable to the System as a whole. The
18required employer contribution under item (i) in a fiscal year
19shall not exceed a percentage of payroll determined by
20subtracting 2013 from the applicable fiscal year and
21multiplying the result by 0.5%.
22    The System shall determine the employer's normal cost under
23item (ii) of subsection (a-10) as an additional percentage of
24projected payroll payable by a specific employer, based on the
25optional employer contributions agreed to by that employer for
26that fiscal year under Section 1-161 and the actuarial

 

 

HB6258- 150 -LRB097 23545 JDS 72554 b

1assumptions applicable to the System as a whole.
2    The System shall determine the employer's portion of the
3unfunded accrued liability under item (iii) of subsection
4(a-10) separately for each employer, as a percentage of that
5employer's projected payroll, based on the liabilities
6attributable to that employer arising on or after July 1, 2013
7and the actuarial assumptions applicable to the System as a
8whole.
9    For use in determining the employer's contribution for
10unfunded accrued liability under item (iii), the System shall
11maintain a separate account for each employer. The separate
12account shall be maintained in such form and detail as the
13System determines to be appropriate. The separate account shall
14reflect the following items to the extent that they are
15attributable to that employer and arise on or after July 1,
162013: employer contributions, State contributions under
17subsection (a-20), employee contributions, investment returns,
18payments of benefits, and that employer's proportionate share
19of the System's administrative expenses.
20    In the event that the Board determines that there is a
21deficiency or surplus in the account of an employer with
22respect to the , the Board shall determine the employer's
23contribution rate under item (iii) of subsection (a-10) so as
24to address that deficiency or surplus over a reasonable period
25of time as determined by the Board.
26    (a-20) Beginning in State fiscal year 2014, for any fiscal

 

 

HB6258- 151 -LRB097 23545 JDS 72554 b

1year in which (1) the System's normal cost for all employers
2for that fiscal year, exclusive of the normal cost that arises
3from optional employer contributions agreed to by employers for
4that fiscal year under Section 1-161, exceeds (2) the total
5contribution calculated under item (i) of subsection (a-10) for
6all employers for that fiscal year, the State shall make an
7additional contribution to the System for that fiscal year
8equal to the difference.
9    The State contribution under this subsection (a-20) is in
10addition to the State contributions required under subsection
11(a-1) and any contributions required to be paid by the State as
12an employer under subsection (a-10) of this Section.
13    (b) If an employee is paid from trust or federal funds, the
14employer shall pay to the Board contributions from those funds
15which are sufficient to cover the accruing normal costs on
16behalf of the employee. However, universities having employees
17who are compensated out of local auxiliary funds, income funds,
18or service enterprise funds are not required to pay such
19contributions on behalf of those employees. The local auxiliary
20funds, income funds, and service enterprise funds of
21universities shall not be considered trust funds for the
22purpose of this Article, but funds of alumni associations,
23foundations, and athletic associations which are affiliated
24with the universities included as employers under this Article
25and other employers which do not receive State appropriations
26are considered to be trust funds for the purpose of this

 

 

HB6258- 152 -LRB097 23545 JDS 72554 b

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

 

 

HB6258- 153 -LRB097 23545 JDS 72554 b

1contributions to the System shall be appropriated directly to
2the System and shall be payable through vouchers issued in
3accordance with subsection (c) of Section 15-165, except as
4provided in subsection (g).
5    (e) The State Comptroller shall draw warrants payable to
6the System upon proper certification by the System or by the
7employer in accordance with the appropriation laws and this
8Code.
9    (f) Normal costs under this Section means liability for
10pensions and other benefits which accrues to the System because
11of the credits earned for service rendered by the participants
12during the fiscal year and expenses of administering the
13System, but shall not include the principal of or any
14redemption premium or interest on any bonds issued by the Board
15or any expenses incurred or deposits required in connection
16therewith.
17    (g) The employer contributions under this subsection (g)
18are no longer required after June 30, 2013.
19    If the amount of a participant's earnings for any academic
20year used to determine the final rate of earnings, determined
21on a full-time equivalent basis, exceeds the amount of his or
22her earnings with the same employer for the previous academic
23year, determined on a full-time equivalent basis, by more than
246%, the participant's employer shall pay to the System, in
25addition to all other payments required under this Section and
26in accordance with guidelines established by the System, the

 

 

HB6258- 154 -LRB097 23545 JDS 72554 b

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

 

 

HB6258- 155 -LRB097 23545 JDS 72554 b

1interest will be charged at a rate equal to the System's annual
2actuarially assumed rate of return on investment compounded
3annually from the 91st day after receipt of the bill. Payments
4must be concluded within 3 years after the employer's receipt
5of the bill.
6    (h) This subsection (h) applies only to payments made or
7salary increases given on or after June 1, 2005 but before July
81, 2011. The changes made by Public Act 94-1057 shall not
9require the System to refund any payments received before July
1031, 2006 (the effective date of Public Act 94-1057).
11    When assessing payment for any amount due under subsection
12(g), the System shall exclude earnings increases paid to
13participants under contracts or collective bargaining
14agreements entered into, amended, or renewed before June 1,
152005.
16    When assessing payment for any amount due under subsection
17(g), the System shall exclude earnings increases paid to a
18participant at a time when the participant is 10 or more years
19from retirement eligibility under Section 15-135.
20    When assessing payment for any amount due under subsection
21(g), the System shall exclude earnings increases resulting from
22overload work, including a contract for summer teaching, or
23overtime when the employer has certified to the System, and the
24System has approved the certification, that: (i) in the case of
25overloads (A) the overload work is for the sole purpose of
26academic instruction in excess of the standard number of

 

 

HB6258- 156 -LRB097 23545 JDS 72554 b

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

 

 

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

 

 

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1universities by the State Universities Civil Service System.
2The Illinois Community College Board shall file a copy of its
3findings with the System. The System shall consider the
4findings of the Illinois Community College Board when making
5determinations under this Section. The System shall not exclude
6any earnings increases resulting from a promotion when the
7promotion was not submitted by a community college. Nothing in
8this subsection (k) shall require any community college to
9submit any information to the Community College Board.
10    (l) For purposes of determining the required State
11contribution to the System, the value of the System's assets
12shall be equal to the actuarial value of the System's assets,
13which shall be calculated as follows:
14    As of June 30, 2008, the actuarial value of the System's
15assets shall be equal to the market value of the assets as of
16that date. In determining the actuarial value of the System's
17assets for fiscal years after June 30, 2008, any actuarial
18gains or losses from investment return incurred in a fiscal
19year shall be recognized in equal annual amounts over the
205-year period following that fiscal year.
21    (m) For purposes of determining the required State
22contribution to the system for a particular year, the actuarial
23value of assets shall be assumed to earn a rate of return equal
24to the system's actuarially assumed rate of return.
25(Source: P.A. 96-43, eff. 7-15-09; 96-1497, eff. 1-14-11;
2696-1511, eff. 1-27-11; 96-1554, eff. 3-18-11; 97-813, eff.

 

 

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17-13-12; revised 10-17-12.)
 
2    (40 ILCS 5/15-155.1 new)
3    Sec. 15-155.1. Actions to enforce payments by employers
4other than the State. Any employer, other than the State, that
5fails to transmit to the System contributions required of it
6under this Article or contributions required of employees, for
7more than 90 days after such contributions are due, is subject
8to the following: after giving notice to the employer, the
9System may certify to the State Comptroller or the Illinois
10Community College Board, whichever is applicable, the amounts
11of such delinquent payments and the State Comptroller or the
12Illinois Community College Board, whichever is applicable,
13shall deduct the amounts so certified or any part thereof from
14any State funds to be remitted to the employer and shall pay
15the amount so deducted to the System. If State funds from which
16such deductions may be made are not available, the System may
17proceed against the employer to recover the amounts of such
18delinquent payments in the appropriate circuit court.
19    The System may provide for an audit of the records of an
20employer, other than the State, as may be required to establish
21the amounts of required contributions. The employer shall make
22its records available to the System for the purpose of such
23audit. The cost of such audit shall be added to the amount of
24the delinquent payments and may be recovered by the System from
25the employer at the same time and in the same manner as the

 

 

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1delinquent payments are recovered.
 
2    (40 ILCS 5/15-156)  (from Ch. 108 1/2, par. 15-156)
3    Sec. 15-156. Obligations of State; funding guarantees.
4    (a) The payment of (1) the required State contributions,
5(2) all benefits granted under this system and (3) all expenses
6in connection with the administration and operation thereof are
7obligations of the State of Illinois to the extent specified in
8this Article. The accumulated employee normal, additional and
9survivors insurance contributions credited to the accounts of
10active and inactive participants shall not be used to pay the
11State's share of the obligations.
12    (b) Beginning July 1, 2013, the State shall be
13contractually obligated to contribute to the System under
14Section 15-155 in each State fiscal year an amount not less
15than the sum of (i) the State's required contribution under
16subsections (a-10) and (a-20) of Section 15-155 and (ii) the
17portion of the total cost of the benefits of the System arising
18before July 1, 2013 assigned to that State fiscal year by law
19in accordance with a schedule that distributes payments
20equitably over a reasonable period of time and in accordance
21with accepted actuarial practices. The obligations created
22under this subsection (b) are contractual obligations
23protected and enforceable under Article I, Section 16 and
24Article XIII, Section 5 of the Illinois Constitution.
25    Notwithstanding any other provision of law, if the State

 

 

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1fails to pay in a State fiscal year the amount guaranteed under
2this subsection, the System may bring a mandamus action in the
3circuit court of Champaign or Sangamon County to compel the
4State to make that payment, irrespective of other remedies that
5may be available to the System. In ordering the State to make
6the required payment, the court may order a reasonable payment
7schedule to enable the State to make the required payment
8without significantly imperiling the public health, safety, or
9welfare.
10(Source: P.A. 83-1440.)
 
11    (40 ILCS 5/15-157)  (from Ch. 108 1/2, par. 15-157)
12    Sec. 15-157. Employee Contributions.
13    (a) Each participating employee shall make contributions
14towards the retirement benefits payable under the retirement
15program applicable to the employee from each payment of
16earnings applicable to employment under this system on and
17after the date of becoming a participant as follows: Prior to
18September 1, 1949, 3 1/2% of earnings; from September 1, 1949
19to August 31, 1955, 5%; from September 1, 1955 to August 31,
201969, 6%; from September 1, 1969, 6 1/2%. These contributions
21are to be considered as normal contributions for purposes of
22this Article.
23    Each participant who is a police officer or firefighter
24shall make normal contributions of 8% of each payment of
25earnings applicable to employment as a police officer or

 

 

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1firefighter under this system on or after September 1, 1981,
2unless he or she files with the board within 60 days after the
3effective date of this amendatory Act of 1991 or 60 days after
4the board receives notice that he or she is employed as a
5police officer or firefighter, whichever is later, a written
6notice waiving the retirement formula provided by Rule 4 of
7Section 15-136. This waiver shall be irrevocable. If a
8participant had met the conditions set forth in Section
915-132.1 prior to the effective date of this amendatory Act of
101991 but failed to make the additional normal contributions
11required by this paragraph, he or she may elect to pay the
12additional contributions plus compound interest at the
13effective rate. If such payment is received by the board, the
14service shall be considered as police officer service in
15calculating the retirement annuity under Rule 4 of Section
1615-136. While performing service described in clause (i) or
17(ii) of Rule 4 of Section 15-136, a participating employee
18shall be deemed to be employed as a firefighter for the purpose
19of determining the rate of employee contributions under this
20Section.
21    (b) Starting September 1, 1969, each participating
22employee shall make additional contributions of 1/2 of 1% of
23earnings to finance a portion of the cost of the annual
24increases in retirement annuity provided under Section 15-136,
25except that with respect to participants in the self-managed
26plan this additional contribution shall be used to finance the

 

 

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1benefits obtained under that retirement program.
2    (c) In addition to the amounts described in subsections (a)
3and (b) of this Section, each participating employee shall make
4contributions of 1% of earnings applicable under this system on
5and after August 1, 1959. The contributions made under this
6subsection (c) shall be considered as survivor's insurance
7contributions for purposes of this Article if the employee is
8covered under the traditional benefit package, and such
9contributions shall be considered as additional contributions
10for purposes of this Article if the employee is participating
11in the self-managed plan or has elected to participate in the
12portable benefit package and has completed the applicable
13one-year waiting period. Contributions in excess of $80 during
14any fiscal year beginning before August 31, 1969 and in excess
15of $120 during any fiscal year thereafter until September 1,
161971 shall be considered as additional contributions for
17purposes of this Article.
18    (c-5) In addition to the contributions otherwise required
19under this Article, each Tier I participant shall also make the
20following contributions toward the retirement benefits payable
21under the retirement program applicable to the employee from
22each payment of earnings applicable to employment under this
23system:
24        (1) beginning July 1, 2013 and through June 30, 2014,
25    1% of earnings; and
26        (2) beginning on July 1, 2014, 2% of earnings.

 

 

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1    Except as otherwise specified, these contributions are to
2be considered as normal contributions for purposes of this
3Article.
4    (d) If the board by board rule so permits and subject to
5such conditions and limitations as may be specified in its
6rules, a participant may make other additional contributions of
7such percentage of earnings or amounts as the participant shall
8elect in a written notice thereof received by the board.
9    (e) That fraction of a participant's total accumulated
10normal contributions, the numerator of which is equal to the
11number of years of service in excess of that which is required
12to qualify for the maximum retirement annuity, and the
13denominator of which is equal to the total service of the
14participant, shall be considered as accumulated additional
15contributions. The determination of the applicable maximum
16annuity and the adjustment in contributions required by this
17provision shall be made as of the date of the participant's
18retirement.
19    (f) Notwithstanding the foregoing, a participating
20employee shall not be required to make contributions under this
21Section after the date upon which continuance of such
22contributions would otherwise cause his or her retirement
23annuity to exceed the maximum retirement annuity as specified
24in clause (1) of subsection (c) of Section 15-136.
25    (g) A participating employee may make contributions for the
26purchase of service credit under this Article.

 

 

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1(Source: P.A. 90-32, eff. 6-27-97; 90-65, eff. 7-7-97; 90-448,
2eff. 8-16-97; 90-511, eff. 8-22-97; 90-576, eff. 3-31-98;
390-655, eff. 7-30-98; 90-766, eff. 8-14-98.)
 
4    (40 ILCS 5/15-158.2)
5    Sec. 15-158.2. Self-managed plan.
6    (a) Purpose. The General Assembly finds that it is
7important for colleges and universities to be able to attract
8and retain the most qualified employees and that in order to
9attract and retain these employees, colleges and universities
10should have the flexibility to provide a defined contribution
11plan as an alternative for eligible employees who elect not to
12participate in a defined benefit retirement program provided
13under this Article. Accordingly, the State Universities
14Retirement System is hereby authorized to establish and
15administer a self-managed plan, which shall offer
16participating employees who became participating employees
17before the effective date of this amendatory Act of the 97th
18General Assembly the opportunity to accumulate assets for
19retirement through a combination of employee and employer
20contributions that may be invested in mutual funds, collective
21investment funds, or other investment products and used to
22purchase annuity contracts, either fixed or variable or a
23combination thereof. The plan must be qualified under the
24Internal Revenue Code of 1986.
25    (b) Adoption by employers. Until the effective date of this

 

 

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1amendatory Act of the 97th General Assembly, each Each employer
2subject to this Article may elect to adopt the self-managed
3plan established under this Section; this election is
4irrevocable. An employer's election to adopt the self-managed
5plan makes available to the eligible employees of that employer
6the elections described in Section 15-134.5.
7    The State Universities Retirement System shall be the plan
8sponsor for the self-managed plan and shall prepare a plan
9document and prescribe such rules and procedures as are
10considered necessary or desirable for the administration of the
11self-managed plan. Consistent with its fiduciary duty to the
12participants and beneficiaries of the self-managed plan, the
13Board of Trustees of the System may delegate aspects of plan
14administration as it sees fit to companies authorized to do
15business in this State, to the employers, or to a combination
16of both.
17    (c) Selection of service providers and funding vehicles.
18The System, in consultation with the employers, shall solicit
19proposals to provide administrative services and funding
20vehicles for the self-managed plan from insurance and annuity
21companies and mutual fund companies, banks, trust companies, or
22other financial institutions authorized to do business in this
23State. In reviewing the proposals received and approving and
24contracting with no fewer than 2 and no more than 7 companies,
25the Board of Trustees of the System shall consider, among other
26things, the following criteria:

 

 

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

 

 

HB6258- 168 -LRB097 23545 JDS 72554 b

1employee's account balances.
2    (e) Participation. An employee eligible to participate in
3the self-managed plan must make a written election in
4accordance with the provisions of Section 15-134.5 and the
5procedures established by the System. Participation in the
6self-managed plan by an electing employee shall begin on the
7first day of the first pay period following the later of the
8date the employee's election is filed with the System or the
9effective date as of which the employee's employer begins to
10offer participation in the self-managed plan. Employers may not
11make the self-managed plan available earlier than January 1,
121998. An employee's participation in any other retirement
13program administered by the System under this Article shall
14terminate on the date that participation in the self-managed
15plan begins.
16    An employee who has elected to participate in the
17self-managed plan under this Section must continue
18participation while employed in an eligible position, and may
19not participate in any other retirement program administered by
20the System under this Article while employed by that employer
21or any other employer that has adopted the self-managed plan,
22unless the self-managed plan is terminated in accordance with
23subsection (i).
24    Participation in the self-managed plan under this Section
25shall constitute membership in the State Universities
26Retirement System.

 

 

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

 

 

HB6258- 170 -LRB097 23545 JDS 72554 b

1plan and employer contributions as provided in this Section.
2    The contribution rate for employees participating in the
3self-managed plan under this Section shall be equal to the
4employee contribution rate for other participants in the
5System, as provided in Section 15-157. This required
6contribution shall be made as an "employer pick-up" under
7Section 414(h) of the Internal Revenue Code of 1986 or any
8successor Section thereof. Any employee participating in the
9System's traditional benefit package prior to his or her
10election to participate in the self-managed plan shall continue
11to have the employer pick up the contributions required under
12Section 15-157. However, the amounts picked up after the
13election of the self-managed plan shall be remitted to and
14treated as assets of the self-managed plan. In no event shall
15an employee have an option of receiving these amounts in cash.
16Employees may make additional contributions to the
17self-managed plan in accordance with procedures prescribed by
18the System, to the extent permitted under rules prescribed by
19the System.
20    The program shall provide for employer contributions to be
21credited to each self-managed plan participant at a rate of
227.6% of the participating employee's salary, less the amount
23used by the System to provide disability benefits for the
24employee. The amounts so credited shall be paid into the
25participant's self-managed plan accounts in a manner to be
26prescribed by the System.

 

 

HB6258- 171 -LRB097 23545 JDS 72554 b

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

 

 

HB6258- 172 -LRB097 23545 JDS 72554 b

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

 

 

HB6258- 173 -LRB097 23545 JDS 72554 b

1Article 20 of this Code) and continues as such for at least 2
2years, all such rights, service credits, and previous status as
3a participant shall be restored upon repayment of the amount of
4the distribution, without interest.
5    (k) Benefit amounts. If an employee who is vested in
6employer contributions terminates employment, the employee
7shall be entitled to a benefit which is based on the account
8values attributable to both employer and employee
9contributions and any investment return thereon.
10    If an employee who is not vested in employer contributions
11terminates employment, the employee shall be entitled to a
12benefit based solely on the account values attributable to the
13employee's contributions and any investment return thereon,
14and the employer contributions and any investment return
15thereon shall be forfeited. Any employer contributions which
16are forfeited shall be held in escrow by the company investing
17those contributions and shall be used as directed by the System
18for future allocations of employer contributions or for the
19restoration of amounts previously forfeited by former
20participants who again become participating employees.
21    (l) Notwithstanding any other provision of this Section, a
22person may not elect to participate or begin participation in
23the self-managed plan established under this Section on or
24after the effective date of this amendatory Act of the 97th
25General Assembly.
26(Source: P.A. 93-347, eff. 7-24-03.)
 

 

 

HB6258- 174 -LRB097 23545 JDS 72554 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

 

 

HB6258- 175 -LRB097 23545 JDS 72554 b

1the changes made by Public Act 96-889 to the System's assets
2and liabilities as of June 30, 2009 as though Public Act 96-889
3was approved on that date.
4    On or before July 1, 2013, the Board shall, if necessary,
5recalculate and recertify to the Governor the amount of the
6required State contribution to the System for State fiscal year
72014, taking into account the changes in required State
8contributions made by this amendatory Act of the 97th General
9Assembly.
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 each 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

 

 

HB6258- 176 -LRB097 23545 JDS 72554 b

1and shall specifically identify the System's projected State
2normal cost for that fiscal year and the projected State cost
3for the self-managed plan for that fiscal year. The Board's
4certification must note, in a written response to the State
5Actuary, any deviations from the State Actuary's recommended
6changes, the reason or reasons for not following the State
7Actuary's recommended changes, and the fiscal impact of not
8following the State Actuary's recommended changes on the
9required State contribution.
10    (b) The Board shall certify to the State Comptroller or
11employer, as the case may be, from time to time, by its
12president and secretary, with its seal attached, the amounts
13payable to the System from the various funds.
14    (c) Beginning in State fiscal year 1996, on or as soon as
15possible after the 15th day of each month the Board shall
16submit vouchers for payment of State contributions to the
17System, in a total monthly amount of one-twelfth of the
18required annual State contribution certified under subsection
19(a). From the effective date of this amendatory Act of the 93rd
20General Assembly through June 30, 2004, the Board shall not
21submit vouchers for the remainder of fiscal year 2004 in excess
22of the fiscal year 2004 certified contribution amount
23determined under this Section after taking into consideration
24the transfer to the System under subsection (b) of Section
256z-61 of the State Finance Act. These vouchers shall be paid by
26the State Comptroller and Treasurer by warrants drawn on the

 

 

HB6258- 177 -LRB097 23545 JDS 72554 b

1funds appropriated to the System for that fiscal year.
2    If in any month the amount remaining unexpended from all
3other appropriations to the System for the applicable fiscal
4year (including the appropriations to the System under Section
58.12 of the State Finance Act and Section 1 of the State
6Pension Funds Continuing Appropriation Act) is less than the
7amount lawfully vouchered under this Section, the difference
8shall be paid from the General Revenue Fund under the
9continuing appropriation authority provided in Section 1.1 of
10the State Pension Funds Continuing Appropriation Act.
11    (d) So long as the payments received are the full amount
12lawfully vouchered under this Section, payments received by the
13System under this Section shall be applied first toward the
14employer contribution to the self-managed plan established
15under Section 15-158.2. Payments shall be applied second toward
16the employer's portion of the normal costs of the System, as
17defined in subsection (f) of Section 15-155. The balance shall
18be applied toward the unfunded actuarial liabilities of the
19System.
20    (e) In the event that the System does not receive, as a
21result of legislative enactment or otherwise, payments
22sufficient to fully fund the employer contribution to the
23self-managed plan established under Section 15-158.2 and to
24fully fund that portion of the employer's portion of the normal
25costs of the System, as calculated in accordance with Section
2615-155(a-1), then any payments received shall be applied

 

 

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1proportionately to the optional retirement program established
2under Section 15-158.2 and to the employer's portion of the
3normal costs of the System, as calculated in accordance with
4Section 15-155(a-1).
5(Source: P.A. 96-1497, eff. 1-14-11; 96-1511, eff. 1-27-11;
697-694, eff. 6-18-12.)
 
7    (40 ILCS 5/15-198)
8    Sec. 15-198. Application and expiration of new benefit
9increases.
10    (a) As used in this Section, "new benefit increase" means
11an increase in the amount of any benefit provided under this
12Article, or an expansion of the conditions of eligibility for
13any benefit under this Article or Article 1, that results from
14an amendment to this Code that takes effect after the effective
15date of this amendatory Act of the 94th General Assembly. "New
16benefit increase", however, does not include any benefit
17increase resulting from the changes made to this Article or
18Article 1 by this amendatory Act of the 97th General Assembly.
19    (b) Notwithstanding any other provision of this Code or any
20subsequent amendment to this Code, every new benefit increase
21is subject to this Section and shall be deemed to be granted
22only in conformance with and contingent upon compliance with
23the provisions of this Section.
24    (c) The Public Act enacting a new benefit increase must
25identify and provide for payment to the System of additional

 

 

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

 

 

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1under this Section continues to apply to persons who applied
2and qualified for the affected benefit while the new benefit
3increase was in effect and to the affected beneficiaries and
4alternate payees of such persons, but does not apply to any
5other person, including without limitation a person who
6continues in service after the expiration date and did not
7apply and qualify for the affected benefit while the new
8benefit increase was in effect.
9(Source: P.A. 94-4, eff. 6-1-05.)
 
10    (40 ILCS 5/16-106.4 new)
11    Sec. 16-106.4. Tier I member. "Tier I member": A member
12under this Article who first became a member or participant
13before January 1, 2011 under any reciprocal retirement system
14or pension fund established under this Code other than a
15retirement system or pension fund established under Article 2,
163, 4, 5, 6, or 18 of this Code.
 
17    (40 ILCS 5/16-106.5 new)
18    Sec. 16-106.5. Tier I retiree. "Tier I retiree": A former
19Tier I member who is receiving a retirement annuity.
 
20    (40 ILCS 5/16-121)  (from Ch. 108 1/2, par. 16-121)
21    Sec. 16-121. Salary. "Salary": The actual compensation
22received by a teacher during any school year and recognized by
23the system in accordance with rules of the board. For purposes

 

 

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1of this Section, "school year" includes the regular school term
2plus any additional period for which a teacher is compensated
3and such compensation is recognized by the rules of the board.
4    Notwithstanding any other provision of this Code, the
5salary of a Tier I member for the purposes of this Code shall
6not exceed, for periods of service on or after the effective
7date of this amendatory Act of the 97th General Assembly, the
8annual contribution and benefit base established for the
9applicable year by the Commissioner of Social Security under
10the federal Social Security Act; except that this limitation
11does not apply to a member's salary that is determined under an
12employment contract or collective bargaining agreement that is
13in effect on the effective date of this amendatory Act of the
1497th General Assembly and has not been amended or renewed after
15that date.
16(Source: P.A. 84-1028.)
 
17    (40 ILCS 5/16-132)  (from Ch. 108 1/2, par. 16-132)
18    Sec. 16-132. Retirement annuity eligibility.
19    (a) A member who has at least 20 years of creditable
20service is entitled to a retirement annuity upon or after
21attainment of age 55. A member who has at least 10 but less
22than 20 years of creditable service is entitled to a retirement
23annuity upon or after attainment of age 60. A member who has at
24least 5 but less than 10 years of creditable service is
25entitled to a retirement annuity upon or after attainment of

 

 

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1age 62. A member who (i) has earned during the period
2immediately preceding the last day of service at least one year
3of contributing creditable service as an employee of a
4department as defined in Section 14-103.04, (ii) has earned at
5least 5 years of contributing creditable service as an employee
6of a department as defined in Section 14-103.04, and (iii)
7retires on or after January 1, 2001 is entitled to a retirement
8annuity upon or after attainment of an age which, when added to
9the number of years of his or her total creditable service,
10equals at least 85. Portions of years shall be counted as
11decimal equivalents.
12    A member who is eligible to receive a retirement annuity of
13at least 74.6% of final average salary and will attain age 55
14on or before December 31 during the year which commences on
15July 1 shall be deemed to attain age 55 on the preceding June
161.
17    (b) Notwithstanding subsection (a) of this Section, for a
18Tier I member who begins receiving a retirement annuity under
19this Article after July 1, 2013:
20        (1) If the Tier I member is at least 45 years old on
21    the effective date of this amendatory Act of the 97th
22    General Assembly, then the references to age 55, 60, and 62
23    in subsection (a) of this Section remain unchanged and the
24    reference to 85 in subsection (a) of this Section remains
25    unchanged.
26        (2) If the Tier I member is at least 40 but less than

 

 

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1    45 years old on the effective date of this amendatory Act
2    of the 97th General Assembly, then the references to age
3    55, 60, and 62 in subsection (a) of this Section are
4    increased by one year and the reference to 85 in subsection
5    (a) is increased to 87.
6        (3) If the Tier I member is at least 35 but less than
7    40 years old on the effective date of this amendatory Act
8    of the 97th General Assembly, then the references to age
9    55, 60, and 62 in subsection (a) of this Section are
10    increased by 3 years and the reference to 85 in subsection
11    (a) is increased to 91.
12        (4) If the Tier I member is less than 35 years old on
13    the effective date of this amendatory Act of the 97th
14    General Assembly, then the references to age 55, 60, and 62
15    in subsection (a) of this Section are increased by 5 years
16    and the reference to 85 in subsection (a) is increased to
17    95.
18    Notwithstanding Section 1-103.1, this subsection (b)
19applies without regard to whether or not the Tier I member is
20in active service under this Article on or after the effective
21date of this amendatory Act of the 97th General Assembly.
22    (c) A member meeting the above eligibility conditions is
23entitled to a retirement annuity upon written application to
24the board setting forth the date the member wishes the
25retirement annuity to commence. However, the effective date of
26the retirement annuity shall be no earlier than the day

 

 

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1following the last day of creditable service, regardless of the
2date of official termination of employment.
3    (d) To be eligible for a retirement annuity, a member shall
4not be employed as a teacher in the schools included under this
5System or under Article 17, except (i) as provided in Section
616-118 or 16-150.1, (ii) if the member is disabled (in which
7event, eligibility for salary must cease), or (iii) if the
8System is required by federal law to commence payment due to
9the member's age; the changes to this sentence made by Public
10Act 93-320 this amendatory Act of the 93rd General Assembly
11apply without regard to whether the member terminated
12employment before or after its effective date.
13(Source: P.A. 93-320, eff. 7-23-03.)
 
14    (40 ILCS 5/16-133)  (from Ch. 108 1/2, par. 16-133)
15    Sec. 16-133. Retirement annuity; amount.
16    (a) The amount of the retirement annuity shall be (i) in
17the case of a person who first became a teacher under this
18Article before July 1, 2005, the larger of the amounts
19determined under paragraphs (A) and (B) below, or (ii) in the
20case of a person who first becomes a teacher under this Article
21on or after July 1, 2005, the amount determined under the
22applicable provisions of paragraph (B):
23        (A) An amount consisting of the sum of the following:
24            (1) An amount that can be provided on an
25        actuarially equivalent basis by the member's

 

 

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1        accumulated contributions at the time of retirement;
2        and
3            (2) The sum of (i) the amount that can be provided
4        on an actuarially equivalent basis by the member's
5        accumulated contributions representing service prior
6        to July 1, 1947, and (ii) the amount that can be
7        provided on an actuarially equivalent basis by the
8        amount obtained by multiplying 1.4 times the member's
9        accumulated contributions covering service subsequent
10        to June 30, 1947; and
11            (3) If there is prior service, 2 times the amount
12        that would have been determined under subparagraph (2)
13        of paragraph (A) above on account of contributions
14        which would have been made during the period of prior
15        service creditable to the member had the System been in
16        operation and had the member made contributions at the
17        contribution rate in effect prior to July 1, 1947.
18        For the purpose of calculating the sum provided under
19    this paragraph (A), the contribution required under
20    subsection (a-5) of Section 16-152 shall not be considered
21    when determining the amount of the member's accumulated
22    contributions under subparagraph (1) or (2).
23        This paragraph (A) does not apply to a person who first
24    becomes a teacher under this Article on or after July 1,
25    2005.
26        (B) An amount consisting of the greater of the

 

 

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1    following:
2            (1) For creditable service earned before July 1,
3        1998 that has not been augmented under Section
4        16-129.1: 1.67% of final average salary for each of the
5        first 10 years of creditable service, 1.90% of final
6        average salary for each year in excess of 10 but not
7        exceeding 20, 2.10% of final average salary for each
8        year in excess of 20 but not exceeding 30, and 2.30% of
9        final average salary for each year in excess of 30; and
10            For creditable service earned on or after July 1,
11        1998 by a member who has at least 24 years of
12        creditable service on July 1, 1998 and who does not
13        elect to augment service under Section 16-129.1: 2.2%
14        of final average salary for each year of creditable
15        service earned on or after July 1, 1998 but before the
16        member reaches a total of 30 years of creditable
17        service and 2.3% of final average salary for each year
18        of creditable service earned on or after July 1, 1998
19        and after the member reaches a total of 30 years of
20        creditable service; and
21            For all other creditable service: 2.2% of final
22        average salary for each year of creditable service; or
23            (2) 1.5% of final average salary for each year of
24        creditable service plus the sum $7.50 for each of the
25        first 20 years of creditable service.
26    The amount of the retirement annuity determined under this

 

 

HB6258- 187 -LRB097 23545 JDS 72554 b

1    paragraph (B) shall be reduced by 1/2 of 1% for each month
2    that the member is less than age 60 at the time the
3    retirement annuity begins. However, this reduction shall
4    not apply (i) if the member has at least 35 years of
5    creditable service, or (ii) if the member retires on
6    account of disability under Section 16-149.2 of this
7    Article with at least 20 years of creditable service, or
8    (iii) if the member (1) has earned during the period
9    immediately preceding the last day of service at least one
10    year of contributing creditable service as an employee of a
11    department as defined in Section 14-103.04, (2) has earned
12    at least 5 years of contributing creditable service as an
13    employee of a department as defined in Section 14-103.04,
14    (3) retires on or after January 1, 2001, and (4) retires
15    having attained an age which, when added to the number of
16    years of his or her total creditable service, equals at
17    least 85. Portions of years shall be counted as decimal
18    equivalents. For participants to whom subsection (b) of
19    Section 16-132 applies, the reference to age 60 in this
20    paragraph and the reference to 85 in this paragraph are
21    increased as provided in subsection (b) of Section 16-132.
22    (b) For purposes of this Section, final average salary
23shall be the average salary for the highest 4 consecutive years
24within the last 10 years of creditable service as determined
25under rules of the board. The minimum final average salary
26shall be considered to be $2,400 per year.

 

 

HB6258- 188 -LRB097 23545 JDS 72554 b

1    In the determination of final average salary for members
2other than elected officials and their appointees when such
3appointees are allowed by statute, that part of a member's
4salary for any year beginning after June 30, 1979 which exceeds
5the member's annual full-time salary rate with the same
6employer for the preceding year by more than 20% shall be
7excluded. The exclusion shall not apply in any year in which
8the member's creditable earnings are less than 50% of the
9preceding year's mean salary for downstate teachers as
10determined by the survey of school district salaries provided
11in Section 2-3.103 of the School Code.
12    (c) In determining the amount of the retirement annuity
13under paragraph (B) of this Section, a fractional year shall be
14granted proportional credit.
15    (d) The retirement annuity determined under paragraph (B)
16of this Section shall be available only to members who render
17teaching service after July 1, 1947 for which member
18contributions are required, and to annuitants who re-enter
19under the provisions of Section 16-150.
20    (e) The maximum retirement annuity provided under
21paragraph (B) of this Section shall be 75% of final average
22salary.
23    (f) A member retiring after the effective date of this
24amendatory Act of 1998 shall receive a pension equal to 75% of
25final average salary if the member is qualified to receive a
26retirement annuity equal to at least 74.6% of final average

 

 

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1salary under this Article or as proportional annuities under
2Article 20 of this Code.
3(Source: P.A. 94-4, eff. 6-1-05.)
 
4    (40 ILCS 5/16-133.1)  (from Ch. 108 1/2, par. 16-133.1)
5    Sec. 16-133.1. Automatic annual increase in annuity.
6    (a) Each member with creditable service and retiring on or
7after August 26, 1969 is entitled to the automatic annual
8increases in annuity provided under this Section while
9receiving a retirement annuity or disability retirement
10annuity from the system.
11    An annuitant shall first be entitled to an initial increase
12under this Section on the January 1 next following the first
13anniversary of retirement, or January 1 of the year next
14following attainment of age 61, whichever is later. At such
15time, the system shall pay an initial increase determined as
16follows or as provided in subsections (a-1) and (a-2):
17        (1) 1.5% of the originally granted retirement annuity
18    or disability retirement annuity multiplied by the number
19    of years elapsed, if any, from the date of retirement until
20    January 1, 1972, plus
21        (2) 2% of the originally granted annuity multiplied by
22    the number of years elapsed, if any, from the date of
23    retirement or January 1, 1972, whichever is later, until
24    January 1, 1978, plus
25        (3) 3% of the originally granted annuity multiplied by

 

 

HB6258- 190 -LRB097 23545 JDS 72554 b

1    the number of years elapsed from the date of retirement or
2    January 1, 1978, whichever is later, until the effective
3    date of the initial increase.
4However, the initial annual increase calculated under this
5Section for the recipient of a disability retirement annuity
6granted under Section 16-149.2 shall be reduced by an amount
7equal to the total of all increases in that annuity received
8under Section 16-149.5 (but not exceeding 100% of the amount of
9the initial increase otherwise provided under this Section).
10    Following the initial increase, automatic annual increases
11in annuity shall be payable on each January 1 thereafter during
12the lifetime of the annuitant, determined as a percentage of
13the originally granted retirement annuity or disability
14retirement annuity for increases granted prior to January 1,
151990, and calculated as a percentage of the total amount of
16annuity, including previous increases under this Section, for
17increases granted on or after January 1, 1990, as follows: 1.5%
18for periods prior to January 1, 1972, 2% for periods after
19December 31, 1971 and prior to January 1, 1978, and 3% for
20periods after December 31, 1977, or as provided in subsections
21(a-1) and (a-2).
22    (a-1) Notwithstanding any other provision of this Article,
23for a Tier I retiree, the amount of each automatic annual
24increase in retirement annuity occurring on or after the
25effective date of this amendatory Act of the 97th General
26Assembly shall be the lesser of $750 or 3% of the total annuity

 

 

HB6258- 191 -LRB097 23545 JDS 72554 b

1payable at the time of the increase, including previous
2increases granted.
3    (a-2) Notwithstanding any other provision of this Article,
4for a Tier I retiree, the monthly retirement annuity shall
5first be subject to annual increases on the January 1 occurring
6on or next after the attainment of age 67 or the January 1
7occurring on or next after the fifth anniversary of the annuity
8start date, whichever occurs earlier. If on the effective date
9of this amendatory Act of the 97th General Assembly a Tier I
10retiree has already received an annual increase under this
11Section but does not yet meet the new eligibility requirements
12of this subsection, the annual increases already received shall
13continue in force, but no additional annual increase shall be
14granted until the Tier I retiree meets the new eligibility
15requirements.
16    (a-3) Notwithstanding Section 1-103.1, subsections (a-1)
17and (a-2) apply without regard to whether or not the Tier I
18retiree is in active service under this Article on or after the
19effective date of this amendatory Act of the 97th General
20Assembly.
21    (b) The automatic annual increases in annuity provided
22under this Section shall not be applicable unless a member has
23made contributions toward such increases for a period
24equivalent to one full year of creditable service. If a member
25contributes for service performed after August 26, 1969 but the
26member becomes an annuitant before such contributions amount to

 

 

HB6258- 192 -LRB097 23545 JDS 72554 b

1one full year's contributions based on the salary at the date
2of retirement, he or she may pay the necessary balance of the
3contributions to the system and be eligible for the automatic
4annual increases in annuity provided under this Section.
5    (c) Each member shall make contributions toward the cost of
6the automatic annual increases in annuity as provided under
7Section 16-152.
8    (d) An annuitant receiving a retirement annuity or
9disability retirement annuity on July 1, 1969, who subsequently
10re-enters service as a teacher is eligible for the automatic
11annual increases in annuity provided under this Section if he
12or she renders at least one year of creditable service
13following the latest re-entry.
14    (e) In addition to the automatic annual increases in
15annuity provided under this Section, an annuitant who meets the
16service requirements of this Section and whose retirement
17annuity or disability retirement annuity began on or before
18January 1, 1971 shall receive, on January 1, 1981, an increase
19in the annuity then being paid of one dollar per month for each
20year of creditable service. On January 1, 1982, an annuitant
21whose retirement annuity or disability retirement annuity
22began on or before January 1, 1977 shall receive an increase in
23the annuity then being paid of one dollar per month for each
24year of creditable service.
25    On January 1, 1987, any annuitant whose retirement annuity
26began on or before January 1, 1977, shall receive an increase

 

 

HB6258- 193 -LRB097 23545 JDS 72554 b

1in the monthly retirement annuity equal to 8 per year of
2creditable service times the number of years that have elapsed
3since the annuity began.
4(Source: P.A. 91-927, eff. 12-14-00.)
 
5    (40 ILCS 5/16-152)  (from Ch. 108 1/2, par. 16-152)
6    Sec. 16-152. Contributions by members.
7    (a) Each member shall make contributions for membership
8service to this System as follows:
9        (1) Effective July 1, 1998, contributions of 7.50% of
10    salary towards the cost of the retirement annuity. Such
11    contributions shall be deemed "normal contributions".
12        (2) Effective July 1, 1969, contributions of 1/2 of 1%
13    of salary toward the cost of the automatic annual increase
14    in retirement annuity provided under Section 16-133.1.
15        (3) Effective July 24, 1959, contributions of 1% of
16    salary towards the cost of survivor benefits. Such
17    contributions shall not be credited to the individual
18    account of the member and shall not be subject to refund
19    except as provided under Section 16-143.2.
20        (4) Effective July 1, 2005, contributions of 0.40% of
21    salary toward the cost of the early retirement without
22    discount option provided under Section 16-133.2. This
23    contribution shall cease upon termination of the early
24    retirement without discount option as provided in Section
25    16-176.

 

 

HB6258- 194 -LRB097 23545 JDS 72554 b

1    (a-5) In addition to the contributions otherwise required
2under this Article, each Tier I member shall also make the
3following contributions toward the cost of the retirement
4annuity from each payment of salary:
5        (1) beginning July 1, 2013 and through June 30, 2014,
6    1% of salary; and
7        (2) beginning on July 1, 2014, 2% of salary.
8    Except as otherwise specified, these contributions are to
9be considered as normal contributions for purposes of this
10Article.
11    (b) The minimum required contribution for any year of
12full-time teaching service shall be $192.
13    (c) Contributions shall not be required of any annuitant
14receiving a retirement annuity who is given employment as
15permitted under Section 16-118 or 16-150.1.
16    (d) A person who (i) was a member before July 1, 1998, (ii)
17retires with more than 34 years of creditable service, and
18(iii) does not elect to qualify for the augmented rate under
19Section 16-129.1 shall be entitled, at the time of retirement,
20to receive a partial refund of contributions made under this
21Section for service occurring after the later of June 30, 1998
22or attainment of 34 years of creditable service, in an amount
23equal to 1.00% of the salary upon which those contributions
24were based.
25    (e) A member's contributions toward the cost of early
26retirement without discount made under item (a)(4) of this

 

 

HB6258- 195 -LRB097 23545 JDS 72554 b

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

 

 

HB6258- 196 -LRB097 23545 JDS 72554 b

1    (40 ILCS 5/16-158)   (from Ch. 108 1/2, par. 16-158)
2    Sec. 16-158. Contributions by State and other employing
3units; funding guarantee.
4    (a) The State shall make contributions to the System by
5means of appropriations from the Common School Fund and other
6State funds of amounts which, together with other employer
7contributions, employee contributions, investment income, and
8other income, will be sufficient to meet the cost of
9maintaining and administering the System on a 100% 90% funded
10basis in accordance with actuarial recommendations by the end
11of State fiscal year 2043.
12    Beginning with State fiscal year 2014, the State's required
13contributions to the System under subsection (b-3) shall be
14limited to the amounts required to amortize the total cost of
15the benefits of the System arising before July 1, 2013. The
16State shall also pay any employer contributions required from
17the State as the actual employer of participants under this
18Article and any contribution required under subsection (b-20).
19    The Board shall determine the amount of State and employer
20contributions required for each fiscal year on the basis of the
21actuarial tables and other assumptions adopted by the Board and
22the recommendations of the actuary, using the formulas provided
23in this Section formula in subsection (b-3).
24    (a-1) Annually, on or before November 15 through until
25November 15, 2011, the Board shall certify to the Governor the
26amount of the required State contribution for the coming fiscal

 

 

HB6258- 197 -LRB097 23545 JDS 72554 b

1year. The certification under this subsection (a-1) shall
2include a copy of the actuarial recommendations upon which it
3is based and shall specifically identify the System's projected
4State normal cost for that fiscal year.
5    On or before May 1, 2004, the Board shall recalculate and
6recertify to the Governor the amount of the required State
7contribution to the System for State fiscal year 2005, taking
8into account the amounts appropriated to and received by the
9System under subsection (d) of Section 7.2 of the General
10Obligation Bond Act.
11    On or before July 1, 2005, the Board shall recalculate and
12recertify to the Governor the amount of the required State
13contribution to the System for State fiscal year 2006, taking
14into account the changes in required State contributions made
15by this amendatory Act of the 94th General Assembly.
16    On or before April 1, 2011, the Board shall recalculate and
17recertify to the Governor the amount of the required State
18contribution to the System for State fiscal year 2011, applying
19the changes made by Public Act 96-889 to the System's assets
20and liabilities as of June 30, 2009 as though Public Act 96-889
21was approved on that date.
22    On or before July 1, 2013, the Board shall, if necessary,
23recalculate and recertify to the Governor the amount of the
24required State contribution to the System for State fiscal year
252014, taking into account the changes in required State
26contributions made by this amendatory Act of the 97th General

 

 

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1Assembly.
2    (a-5) On or before November 1 of each year, beginning
3November 1, 2012, the Board shall submit to the State Actuary,
4the Governor, and the General Assembly a proposed certification
5of the amount of the required State contribution to the System
6for the next fiscal year, along with all of the actuarial
7assumptions, calculations, and data upon which that proposed
8certification is based. On or before January 1 of each year,
9beginning January 1, 2013, the State Actuary shall issue a
10preliminary report concerning the proposed certification and
11identifying, if necessary, recommended changes in actuarial
12assumptions that the Board must consider before finalizing its
13certification of the required State contributions.
14    On or before January 15, 2013 and each January 15
15thereafter, the Board shall certify to the Governor and the
16General Assembly the amount of the required State contribution
17for the next fiscal year. The certification shall include a
18copy of the actuarial recommendations upon which it is based
19and shall specifically identify the System's projected State
20normal cost for that fiscal year. The Board's certification
21must note any deviations from the State Actuary's recommended
22changes, the reason or reasons for not following the State
23Actuary's recommended changes, and the fiscal impact of not
24following the State Actuary's recommended changes on the
25required State contribution.
26    (b) Through State fiscal year 1995, the State contributions

 

 

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1shall be paid to the System in accordance with Section 18-7 of
2the School Code.
3    (b-1) Beginning in State fiscal year 1996, on the 15th day
4of each month, or as soon thereafter as may be practicable, the
5Board shall submit vouchers for payment of State contributions
6to the System, in a total monthly amount of one-twelfth of the
7required annual State contribution certified under subsection
8(a-1). From the effective date of this amendatory Act of the
993rd General Assembly through June 30, 2004, the Board shall
10not submit vouchers for the remainder of fiscal year 2004 in
11excess of the fiscal year 2004 certified contribution amount
12determined under this Section after taking into consideration
13the transfer to the System under subsection (a) of Section
146z-61 of the State Finance Act. These vouchers shall be paid by
15the State Comptroller and Treasurer by warrants drawn on the
16funds appropriated to the System for that fiscal year.
17    If in any month the amount remaining unexpended from all
18other appropriations to the System for the applicable fiscal
19year (including the appropriations to the System under Section
208.12 of the State Finance Act and Section 1 of the State
21Pension Funds Continuing Appropriation Act) is less than the
22amount lawfully vouchered under this subsection, the
23difference shall be paid from the Common School Fund under the
24continuing appropriation authority provided in Section 1.1 of
25the State Pension Funds Continuing Appropriation Act.
26    (b-2) Allocations from the Common School Fund apportioned

 

 

HB6258- 200 -LRB097 23545 JDS 72554 b

1to school districts not coming under this System shall not be
2diminished or affected by the provisions of this Article.
3    (b-3) For State fiscal years 2014 through 2043, the minimum
4contribution to the System to be made by the State under this
5subsection (b-3) for each fiscal year shall be an amount
6determined by the Board to be sufficient to amortize the
7unfunded accrued liability that is attributable to benefits
8that accrued before July 1, 2013 as a level percentage of
9payroll over the years remaining to and including fiscal year
102043, determined under the projected unit credit actuarial cost
11method.
12    For State fiscal year 2044 and thereafter, the minimum
13contribution to the System to be made by the State under this
14subsection (b-3) for each fiscal year shall be an amount
15determined by the Board to be sufficient to amortize, over a
1630-year rolling amortization period, any unfunded liability
17arising on or after July 1, 2043 that is attributable to
18benefits that accrued before July 1, 2013.
19    For State fiscal years 2012 and 2013 through 2045, the
20minimum contribution to the System to be made by the State for
21each fiscal year shall be an amount determined by the System to
22be sufficient to bring the total assets of the System up to 90%
23of the total actuarial liabilities of the System by the end of
24State fiscal year 2045. In making these determinations, the
25required State contribution shall be calculated each year as a
26level percentage of payroll over the years remaining to and

 

 

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1including fiscal year 2045 and shall be determined under the
2projected unit credit actuarial cost method.
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

 

 

HB6258- 202 -LRB097 23545 JDS 72554 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

 

 

HB6258- 203 -LRB097 23545 JDS 72554 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 100% 90%. A reference in this Article
16to the "required State contribution" or any substantially
17similar term does not include or apply to any amounts payable
18to the System 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 and each fiscal year thereafter through State
22fiscal year 2013, as calculated under this Section and
23certified under subsection (a-1), shall not exceed an amount
24equal to (i) the amount of the required State contribution that
25would have been calculated under this Section for that fiscal
26year if the System had not received any payments under

 

 

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1subsection (d) of Section 7.2 of the General Obligation Bond
2Act, minus (ii) the portion of the State's total debt service
3payments for that fiscal year on the bonds issued in fiscal
4year 2003 for the purposes of that Section 7.2, as determined
5and certified by the Comptroller, that is the same as the
6System's portion of the total moneys distributed under
7subsection (d) of Section 7.2 of the General Obligation Bond
8Act. In determining this maximum for State fiscal years 2008
9through 2010, however, the amount referred to in item (i) shall
10be increased, as a percentage of the applicable employee
11payroll, in equal increments calculated from the sum of the
12required State contribution for State fiscal year 2007 plus the
13applicable portion of the State's total debt service payments
14for fiscal year 2007 on the bonds issued in fiscal year 2003
15for the purposes of Section 7.2 of the General Obligation Bond
16Act, so that, by State fiscal year 2011, the State is
17contributing at the rate otherwise required under this Section.
18    (b-10) Subject to the limitations provided in subsection
19(b-15), beginning with State fiscal year 2014, the minimum
20required contribution of each employer under this Article shall
21be sufficient to produce an annual amount equal to:
22        (i) the employer's normal cost for that fiscal year,
23    exclusive of the employer's normal cost that arises from
24    optional employer contributions agreed to by that employer
25    for that fiscal year under Section 1-161; plus
26        (ii) the employer's normal cost for that fiscal year

 

 

HB6258- 205 -LRB097 23545 JDS 72554 b

1    that arises from optional employer contributions agreed to
2    by that employer for that fiscal year under Section 1-161;
3    plus
4        (iii) the amount required for that fiscal year to
5    amortize that employer's portion of the unfunded accrued
6    liability associated with the cost of benefits accrued on
7    or after July 1, 2013 as a level percentage of payroll over
8    a 30-year rolling amortization period, as determined for
9    each employer by the Board.
10    Each employer under this Article shall make these
11contributions in the amounts determined and the manner
12prescribed from time to time by the Board.
13    (b-15) The System shall determine the employer's normal
14cost under item (i) of subsection (b-10) as a percentage of
15projected payroll applicable to all employers, based on
16actuarial assumptions applicable to the System as a whole. The
17required employer contribution under item (i) in a fiscal year
18shall not exceed a percentage of payroll determined by
19subtracting 2013 from the applicable fiscal year and
20multiplying the result by 0.5%.
21    The System shall determine the employer's normal cost under
22item (ii) of subsection (b-10) as an additional percentage of
23projected payroll payable by a specific employer, based on the
24optional employer contributions agreed to by that employer for
25that fiscal year under Section 1-161 and the actuarial
26assumptions applicable to the System as a whole.

 

 

HB6258- 206 -LRB097 23545 JDS 72554 b

1    The System shall determine the employer's portion of the
2unfunded accrued liability under item (iii) of subsection
3(b-10) separately for each employer, as a percentage of that
4employer's projected payroll, based on the liabilities
5attributable to that employer and the actuarial assumptions
6applicable to the System as a whole.
7    For use in determining the employer's contribution for
8unfunded accrued liability under item (iii), the System shall
9maintain a separate account for each employer. The separate
10account shall be maintained in such form and detail as the
11System determines to be appropriate. The separate account shall
12reflect the following items to the extent that they are
13attributable to that employer and arise on or after July 1,
142013: employer contributions, State contributions under
15subsection (b-20), employee contributions, investment returns,
16payments of benefits, and that employer's proportionate share
17of the System's administrative expenses.
18    In the event that the Board determines that there is a
19deficiency or surplus in the account of an employer with
20respect to the projected liabilities attributable to that
21employer arising on or after July 1, 2013, the Board shall
22determine the employer's contribution rate under item (iii) of
23subsection (b-10) so as to address that deficiency or surplus
24over a reasonable period of time as determined by the Board.
25    (b-20) Beginning in State fiscal year 2014, for any fiscal
26year in which (1) the System's normal cost for all employers

 

 

HB6258- 207 -LRB097 23545 JDS 72554 b

1for that fiscal year, exclusive of the normal cost that arises
2from optional employer contributions agreed to by employers for
3that fiscal year under Section 1-161, exceeds (2) the total
4contribution calculated under item (i) of subsection (b-10) for
5all employers for that fiscal year, the State shall make an
6additional contribution to the System for that fiscal year
7equal to the difference.
8    The State contribution under this subsection (b-20) is in
9addition to the State contributions required under subsection
10(b-1) and any contributions required to be paid by the State as
11an employer under subsection (b-10) of this Section.
12    (c) Payment of the required State contributions and of all
13pensions, retirement annuities, death benefits, refunds, and
14other benefits granted under or assumed by this System, and all
15expenses in connection with the administration and operation
16thereof, are obligations of the State.
17    If members are paid from special trust or federal funds
18which are administered by the employing unit, whether school
19district or other unit, the employing unit shall pay to the
20System from such funds the full accruing retirement costs based
21upon that service, as determined by the System. Employer
22contributions, based on salary paid to members from federal
23funds, may be forwarded by the distributing agency of the State
24of Illinois to the System prior to allocation, in an amount
25determined in accordance with guidelines established by such
26agency and the System.

 

 

HB6258- 208 -LRB097 23545 JDS 72554 b

1    (d) Effective July 1, 1986, any employer of a teacher as
2defined in paragraph (8) of Section 16-106 shall pay the
3employer's normal cost of benefits based upon the teacher's
4service, in addition to employee contributions, as determined
5by the System. Such employer contributions shall be forwarded
6monthly in accordance with guidelines established by the
7System.
8    However, with respect to benefits granted under Section
916-133.4 or 16-133.5 to a teacher as defined in paragraph (8)
10of Section 16-106, the employer's contribution shall be 12%
11(rather than 20%) of the member's highest annual salary rate
12for each year of creditable service granted, and the employer
13shall also pay the required employee contribution on behalf of
14the teacher. For the purposes of Sections 16-133.4 and
1516-133.5, a teacher as defined in paragraph (8) of Section
1616-106 who is serving in that capacity while on leave of
17absence from another employer under this Article shall not be
18considered an employee of the employer from which the teacher
19is on leave.
20    (e) Beginning July 1, 1998, every employer of a teacher
21shall pay to the System an employer contribution computed as
22follows:
23        (1) Beginning July 1, 1998 through June 30, 1999, the
24    employer contribution shall be equal to 0.3% of each
25    teacher's salary.
26        (2) Beginning July 1, 1999 and thereafter, the employer

 

 

HB6258- 209 -LRB097 23545 JDS 72554 b

1    contribution shall be equal to 0.58% of each teacher's
2    salary.
3The school district or other employing unit may pay these
4employer contributions out of any source of funding available
5for that purpose and shall forward the contributions to the
6System on the schedule established for the payment of member
7contributions.
8    These employer contributions are intended to offset a
9portion of the cost to the System of the increases in
10retirement benefits resulting from this amendatory Act of 1998.
11    Each employer of teachers is entitled to a credit against
12the contributions required under this subsection (e) with
13respect to salaries paid to teachers for the period January 1,
142002 through June 30, 2003, equal to the amount paid by that
15employer under subsection (a-5) of Section 6.6 of the State
16Employees Group Insurance Act of 1971 with respect to salaries
17paid to teachers for that period.
18    The additional 1% employee contribution required under
19Section 16-152 by this amendatory Act of 1998 is the
20responsibility of the teacher and not the teacher's employer,
21unless the employer agrees, through collective bargaining or
22otherwise, to make the contribution on behalf of the teacher.
23    If an employer is required by a contract in effect on May
241, 1998 between the employer and an employee organization to
25pay, on behalf of all its full-time employees covered by this
26Article, all mandatory employee contributions required under

 

 

HB6258- 210 -LRB097 23545 JDS 72554 b

1this Article, then the employer shall be excused from paying
2the employer contribution required under this subsection (e)
3for the balance of the term of that contract. The employer and
4the employee organization shall jointly certify to the System
5the existence of the contractual requirement, in such form as
6the System may prescribe. This exclusion shall cease upon the
7termination, extension, or renewal of the contract at any time
8after May 1, 1998.
9    (f) The employer contributions under this subsection (f)
10are no longer required after June 30, 2013.
11    If the amount of a teacher's salary for any school year
12used to determine final average salary exceeds the member's
13annual full-time salary rate with the same employer for the
14previous school year by more than 6%, the teacher's employer
15shall pay to the System, in addition to all other payments
16required under this Section and in accordance with guidelines
17established by the System, the present value of the increase in
18benefits resulting from the portion of the increase in salary
19that is in excess of 6%. This present value shall be computed
20by the System on the basis of the actuarial assumptions and
21tables used in the most recent actuarial valuation of the
22System that is available at the time of the computation. If a
23teacher's salary for the 2005-2006 school year is used to
24determine final average salary under this subsection (f), then
25the changes made to this subsection (f) by Public Act 94-1057
26shall apply in calculating whether the increase in his or her

 

 

HB6258- 211 -LRB097 23545 JDS 72554 b

1salary is in excess of 6%. For the purposes of this Section,
2change in employment under Section 10-21.12 of the School Code
3on or after June 1, 2005 shall constitute a change in employer.
4The System may require the employer to provide any pertinent
5information or documentation. The changes made to this
6subsection (f) by this amendatory Act of the 94th General
7Assembly apply without regard to whether the teacher was in
8service on or after its effective date.
9    Whenever it determines that a payment is or may be required
10under this subsection, the System shall calculate the amount of
11the payment and bill the employer for that amount. The bill
12shall specify the calculations used to determine the amount
13due. If the employer disputes the amount of the bill, it may,
14within 30 days after receipt of the bill, apply to the System
15in writing for a recalculation. The application must specify in
16detail the grounds of the dispute and, if the employer asserts
17that the calculation is subject to subsection (g) or (h) of
18this Section, must include an affidavit setting forth and
19attesting to all facts within the employer's knowledge that are
20pertinent to the applicability of that subsection. Upon
21receiving a timely application for recalculation, the System
22shall review the application and, if appropriate, recalculate
23the amount due.
24    The employer contributions required under this subsection
25(f) may be paid in the form of a lump sum within 90 days after
26receipt of the bill. If the employer contributions are not paid

 

 

HB6258- 212 -LRB097 23545 JDS 72554 b

1within 90 days after receipt of the bill, then interest will be
2charged at a rate equal to the System's annual actuarially
3assumed rate of return on investment compounded annually from
4the 91st day after receipt of the bill. Payments must be
5concluded within 3 years after the employer's receipt of the
6bill.
7    (g) This subsection (g) 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(f), the System shall exclude salary increases paid to teachers
14under contracts or collective bargaining agreements entered
15into, amended, or renewed before June 1, 2005.
16    When assessing payment for any amount due under subsection
17(f), the System shall exclude salary increases paid to a
18teacher at a time when the teacher is 10 or more years from
19retirement eligibility under Section 16-132 or 16-133.2.
20    When assessing payment for any amount due under subsection
21(f), the System shall exclude salary increases resulting from
22overload work, including summer school, when the school
23district has certified to the System, and the System has
24approved the certification, that (i) the overload work is for
25the sole purpose of classroom instruction in excess of the
26standard number of classes for a full-time teacher in a school

 

 

HB6258- 213 -LRB097 23545 JDS 72554 b

1district during a school year and (ii) the salary increases are
2equal to or less than the rate of pay for classroom instruction
3computed on the teacher's current salary and work schedule.
4    When assessing payment for any amount due under subsection
5(f), the System shall exclude a salary increase resulting from
6a promotion (i) for which the employee is required to hold a
7certificate or supervisory endorsement issued by the State
8Teacher Certification Board that is a different certification
9or supervisory endorsement than is required for the teacher's
10previous position and (ii) to a position that has existed and
11been filled by a member for no less than one complete academic
12year and the salary increase from the promotion is an increase
13that results in an amount no greater than the lesser of the
14average salary paid for other similar positions in the district
15requiring the same certification or the amount stipulated in
16the collective bargaining agreement for a similar position
17requiring the same certification.
18    When assessing payment for any amount due under subsection
19(f), the System shall exclude any payment to the teacher from
20the State of Illinois or the State Board of Education over
21which the employer does not have discretion, notwithstanding
22that the payment is included in the computation of final
23average salary.
24    (h) When assessing payment for any amount due under
25subsection (f), the System shall exclude any salary increase
26described in subsection (g) of this Section given on or after

 

 

HB6258- 214 -LRB097 23545 JDS 72554 b

1July 1, 2011 but before July 1, 2014 under a contract or
2collective bargaining agreement entered into, amended, or
3renewed on or after June 1, 2005 but before July 1, 2011.
4Notwithstanding any other provision of this Section, any
5payments made or salary increases given after June 30, 2014
6shall be used in assessing payment for any amount due under
7subsection (f) of this Section.
8    (i) The System shall prepare a report and file copies of
9the report with the Governor and the General Assembly by
10January 1, 2007 that contains all of the following information:
11        (1) The number of recalculations required by the
12    changes made to this Section by Public Act 94-1057 for each
13    employer.
14        (2) The dollar amount by which each employer's
15    contribution to the System was changed due to
16    recalculations required by Public Act 94-1057.
17        (3) The total amount the System received from each
18    employer as a result of the changes made to this Section by
19    Public Act 94-4.
20        (4) The increase in the required State contribution
21    resulting from the changes made to this Section by Public
22    Act 94-1057.
23    (j) For purposes of determining the required State
24contribution to the System, the value of the System's assets
25shall be equal to the actuarial value of the System's assets,
26which shall be calculated as follows:

 

 

HB6258- 215 -LRB097 23545 JDS 72554 b

1    As of June 30, 2008, the actuarial value of the System's
2assets shall be equal to the market value of the assets as of
3that date. In determining the actuarial value of the System's
4assets for fiscal years after June 30, 2008, any actuarial
5gains or losses from investment return incurred in a fiscal
6year shall be recognized in equal annual amounts over the
75-year period following that fiscal year.
8    (k) For purposes of determining the required State
9contribution to the system for a particular year, the actuarial
10value of assets shall be assumed to earn a rate of return equal
11to the system's actuarially assumed rate of return.
12(Source: P.A. 96-43, eff. 7-15-09; 96-1497, eff. 1-14-11;
1396-1511, eff. 1-27-11; 96-1554, eff. 3-18-11; 97-694, eff.
146-18-12; 97-813, eff. 7-13-12.)
 
15    (40 ILCS 5/16-158.1)  (from Ch. 108 1/2, par. 16-158.1)
16    Sec. 16-158.1. Actions to enforce payments by school
17districts and other employing units other than the State. Any
18school district or other employing unit, other than the State,
19that fails failing to transmit to the System contributions
20required of it under this Article or contributions required of
21teachers, for more than 90 days after such contributions are
22due is subject to the following: after giving notice to the
23district or other unit, the System may certify to the State
24Comptroller or the Regional Superintendent of Schools the
25amounts of such delinquent payments and the State Comptroller

 

 

HB6258- 216 -LRB097 23545 JDS 72554 b

1or the Regional Superintendent of Schools shall deduct the
2amounts so certified or any part thereof from any State funds
3to be remitted to the school district or other employing unit
4involved and shall pay the amount so deducted to the System. If
5State funds from which such deductions may be made are not
6available, the System may proceed against the school district
7or other employing unit to recover the amounts of such
8delinquent payments in the appropriate circuit court.
9    The System may provide for an audit of the records of a
10school district or other employing unit, other than the State,
11as may be required to establish the amounts of required
12contributions. The school district or other employing unit
13shall make its records available to the System for the purpose
14of such audit. The cost of such audit shall be added to the
15amount of the delinquent payments and shall be recovered by the
16System from the school district or other employing unit at the
17same time and in the same manner as the delinquent payments are
18recovered.
19(Source: P.A. 90-448, eff. 8-16-97.)
 
20    (40 ILCS 5/16-158.2 new)
21    Sec. 16-158.2. Obligations of State; funding guarantee.
22    (a) Payment of the required State contributions and of all
23pensions, retirement annuities, death benefits, refunds, and
24other benefits granted under or assumed by this System, and all
25expenses in connection with the administration and operation

 

 

HB6258- 217 -LRB097 23545 JDS 72554 b

1thereof, are obligations of the State.
2    (b) Beginning July 1, 2013, the State shall be
3contractually obligated to contribute to the System under
4Section 16-158 in each State fiscal year an amount not less
5than the sum of (i) the State's required contribution under
6subsections (b-10) and (b-20) of Section 16-158 and (ii) the
7portion of the total cost of the benefits of the System arising
8before July 1, 2013 assigned to that State fiscal year by law
9in accordance with a schedule that distributes payments
10equitably over a reasonable period of time and in accordance
11with accepted actuarial practices. The obligations created
12under this subsection (b) are contractual obligations
13protected and enforceable under Article I, Section 16 and
14Article XIII, Section 5 of the Illinois Constitution.
15    Notwithstanding any other provision of law, if the State
16fails to pay in a State fiscal year the amount guaranteed under
17this subsection, the System may bring a mandamus action in the
18circuit court of Sangamon County to compel the State to make
19that payment, irrespective of other remedies that may be
20available to the System. In ordering the State to make the
21required payment, the court may order a reasonable payment
22schedule to enable the State to make the required payment
23without significantly imperiling the public health, safety, or
24welfare.
 
25    (40 ILCS 5/16-203)

 

 

HB6258- 218 -LRB097 23545 JDS 72554 b

1    Sec. 16-203. Application and expiration of new benefit
2increases.
3    (a) As used in this Section, "new benefit increase" means
4an increase in the amount of any benefit provided under this
5Article, or an expansion of the conditions of eligibility for