Rep. Tom Cross

Filed: 11/7/2011

 

 


 

 


 
09700SB0512ham002LRB097 06621 JDS 59545 a

1
AMENDMENT TO SENATE BILL 512

2    AMENDMENT NO. ______. Amend Senate Bill 512, AS AMENDED, by
3replacing everything after the enacting clause with the
4following:
 
5    "Section 5. The Illinois Public Labor Relations Act is
6amended by changing Section 15 as follows:
 
7    (5 ILCS 315/15)  (from Ch. 48, par. 1615)
8    Sec. 15. Act Takes Precedence.
9    (a) In case of any conflict between the provisions of this
10Act and any other law (other than Section 5 of the State
11Employees Group Insurance Act of 1971 and other than the
12changes made to the Illinois Pension Code by Public Act 96-889
13or this amendatory Act of the 97th General Assembly this
14amendatory Act of the 96th General Assembly), executive order,
15or administrative regulation relating to wages, hours and
16conditions of employment and employment relations, the

 

 

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1provisions of this Act or any collective bargaining agreement
2negotiated thereunder shall prevail and control. Nothing in
3this Act shall be construed to replace or diminish the rights
4of employees established by Sections 28 and 28a of the
5Metropolitan Transit Authority Act, Sections 2.15 through 2.19
6of the Regional Transportation Authority Act. The provisions of
7this Act are subject to Section 5 of the State Employees Group
8Insurance Act of 1971. Nothing in this Act shall be construed
9to replace the necessity of complaints against a sworn peace
10officer, as defined in Section 2(a) of the Uniform Peace
11Officer Disciplinary Act, from having a complaint supported by
12a sworn affidavit.
13    (b) Except as provided in subsection (a) above, any
14collective bargaining contract between a public employer and a
15labor organization executed pursuant to this Act shall
16supersede any contrary statutes, charters, ordinances, rules
17or regulations relating to wages, hours and conditions of
18employment and employment relations adopted by the public
19employer or its agents. Any collective bargaining agreement
20entered into prior to the effective date of this Act shall
21remain in full force during its duration.
22    (c) It is the public policy of this State, pursuant to
23paragraphs (h) and (i) of Section 6 of Article VII of the
24Illinois Constitution, that the provisions of this Act are the
25exclusive exercise by the State of powers and functions which
26might otherwise be exercised by home rule units. Such powers

 

 

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1and functions may not be exercised concurrently, either
2directly or indirectly, by any unit of local government,
3including any home rule unit, except as otherwise authorized by
4this Act.
5(Source: P.A. 95-331, eff. 8-21-07; 96-889, eff. 1-1-11.)
 
6    Section 10. The Illinois Pension Code is amended by
7changing Sections 1-160, 2-108.1, 2-124, 2-126, 8-125, 8-173,
88-251, 9-128.1, 9-133, 9-160, 9-164, 9-170, 9-174, 9-176,
99-219, 9-220, 9-235, 10-103, 10-109, 11-124, 11-169, 11-170,
1011-230, 12-116, 12-149, 12-150, 12-167, 12-168, 12-169,
1112-183, 12-190.3, 14-103.10, 14-131, 14-133, 15-113.6, 15-134,
1215-134.5, 15-136, 15-136.3, 15-136.4, 15-141, 15-146, 15-154,
1315-155, 15-157, 15-158.2, 16-133, 16-136.2, 16-152, 16-158,
1417-116, 17-130, 17-149.1, 20-121, 20-123, 20-124, 20-125, and
1520-131 and by adding Sections 1-166, 1-167, 2-119.02, 2-119.03,
162-119.04, 2-124.1, 2-126.2, 2-163, 8-103.1, 8-103.2, 8-103.3,
178-174.2, 8-190.1, 8-190.2, 8-190.3, 8-190.4, 8-255, 9-103.1,
189-103.2, 9-103.3, 9-170.3, 9-170.4, 9-170.5, 9-170.6, 9-170.7,
199-240, 10-110, 10-111, 11-123.1, 11-123.2, 11-123.3, 11-131.1,
2011-131.2, 11-131.3, 11-131.4, 11-235, 12-125.2, 12-125.3,
2112-125.4, 12-128.1, 12-128.2, 12-128.3, 12-151.3, 12-193.5,
2214-108.2d, 14-108.2e, 14-108.2f, 14-109.1, 14-131.1, 14-133.2,
2314-202, 15-103.4, 15-134.6, 15-134.7, 15-136.5, 15-155.1,
2415-157.2, 15-158.5, 15-199, 16-133.6, 16-133.7, 16-133.8,
2516-152.2, 16-158.2, 16-204, 17-109.3, 17-109.4, 17-109.5,

 

 

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117-130.4, 17-130.5, 17-130.6, 17-130.7, 17-160, and 17-165 as
2follows:
 
3    (40 ILCS 5/1-160)
4    Sec. 1-160. Provisions applicable to new hires.
5    (a) The provisions of this Section apply to a person who,
6on or after January 1, 2011, first becomes a member or a
7participant under any reciprocal retirement system or pension
8fund established under this Code, other than a retirement
9system or pension fund established under Article 2, 3, 4, 5, 6,
10or 18 of this Code or, beginning on the effective date of this
11amendatory Act of the 97th General Assembly, a retirement
12system under Article 14, 15, or 16 of this Code,
13notwithstanding any other provision of this Code to the
14contrary, but do not apply to any self-managed plan established
15under this Code, to any person with respect to service as a
16sheriff's law enforcement employee under Article 7, or to any
17participant of the retirement plan established under Section
1822-101.
19    (b) "Final average salary" means the average monthly (or
20annual) salary obtained by dividing the total salary or
21earnings calculated under the Article applicable to the member
22or participant during the 96 consecutive months (or 8
23consecutive years) of service within the last 120 months (or 10
24years) of service in which the total salary or earnings
25calculated under the applicable Article was the highest by the

 

 

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

 

 

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1percentage increase (but not less than zero) in the consumer
2price index-u for the 12 months ending with the September
3preceding each November 1, including all previous adjustments.
4    For the purposes of this Section, "consumer price index-u"
5means the index published by the Bureau of Labor Statistics of
6the United States Department of Labor that measures the average
7change in prices of goods and services purchased by all urban
8consumers, United States city average, all items, 1982-84 =
9100. The new amount resulting from each annual adjustment shall
10be determined by the Public Pension Division of the Department
11of Insurance and made available to the boards of the retirement
12systems and pension funds by November 1 of each year.
13    (c) A member or participant is entitled to a retirement
14annuity upon written application if he or she has attained age
1567 and has at least 10 years of service credit and is otherwise
16eligible under the requirements of the applicable Article.
17    A member or participant who has attained age 62 and has at
18least 10 years of service credit and is otherwise eligible
19under the requirements of the applicable Article may elect to
20receive the lower retirement annuity provided in subsection (d)
21of this Section.
22    (d) The retirement annuity of a member or participant who
23is retiring after attaining age 62 with at least 10 years of
24service credit shall be reduced by one-half of 1% for each full
25month that the member's age is under age 67.
26    (e) Any retirement annuity or supplemental annuity shall be

 

 

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1subject to annual increases on the January 1 occurring either
2on or after the attainment of age 67 or the first anniversary
3of the annuity start date, whichever is later. Each annual
4increase shall be calculated at 3% or one-half the annual
5unadjusted percentage increase (but not less than zero) in the
6consumer price index-u for the 12 months ending with the
7September preceding each November 1, whichever is less, of the
8originally granted retirement annuity. If the annual
9unadjusted percentage change in the consumer price index-u for
10the 12 months ending with the September preceding each November
111 is zero or there is a decrease, then the annuity shall not be
12increased.
13    (f) The initial survivor's or widow's annuity of an
14otherwise eligible survivor or widow of a retired member or
15participant who first became a member or participant on or
16after January 1, 2011 shall be in the amount of 66 2/3% of the
17retired member's or participant's retirement annuity at the
18date of death. In the case of the death of a member or
19participant who has not retired and who first became a member
20or participant on or after January 1, 2011, eligibility for a
21survivor's or widow's annuity shall be determined by the
22applicable Article of this Code. The initial benefit shall be
2366 2/3% of the earned annuity without a reduction due to age. A
24child's annuity of an otherwise eligible child shall be in the
25amount prescribed under each Article if applicable. Any
26survivor's or widow's annuity shall be increased (1) on each

 

 

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

 

 

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

 

 

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1contractual employer, of his or her retirement status before
2accepting contractual employment. A person who fails to submit
3such notification shall be guilty of a Class A misdemeanor and
4required to pay a fine of $1,000. Upon termination of that
5contractual employment, the person's retirement annuity or
6retirement pension payments shall resume and, if appropriate,
7be recalculated under the applicable provisions of this Code.
8    (i) (Blank). Notwithstanding any other provision of this
9Section, a person who first becomes a participant of the
10retirement system established under Article 15 on or after
11January 1, 2011 shall have the option to enroll in the
12self-managed plan created under Section 15-158.2 of this Code.
13    (j) In the case of a conflict between the provisions of
14this Section and any other provision of this Code, the
15provisions of this Section shall control.
16(Source: P.A. 96-889, eff. 1-1-11; 96-1490, eff. 1-1-11;
1797-609, eff. 1-1-12.)
 
18    (40 ILCS 5/1-166 new)
19    Sec. 1-166. Actuarial review. The Commission on Government
20Forecasting and Accountability shall retain an independent
21actuarial firm that does not provide valuation services to any
22of the State-funded retirement systems, and that firm shall
23review and comment on the assumptions and methodologies used by
24those systems in determining liabilities and contributions.
25The actuarial firm shall report to the Commission before July

 

 

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11, 2013 and every 3 years thereafter. The report shall include,
2but need not be limited to: an evaluation of the sustainability
3of long-term funding schedules as compared to anticipated State
4revenues over the same projection period; a comparison of
5expected rates of asset return among the various systems,
6including comments on the rationale for any differences in such
7rates of return; and an evaluation of long-term payroll
8projections compared with anticipated individual salary growth
9and the revenue sources supporting such payrolls.
 
10    (40 ILCS 5/1-167 new)
11    Sec. 1-167. Maximum benefit limitation. In no circumstance
12shall the changes made to this Code by this amendatory Act of
13the 97th General Assembly result in a defined benefit pension
14or annuity based on a combination of the traditional benefit
15package and the revised benefit package or reformed benefit
16package, as applicable, that would be greater than what the
17participant would have received by remaining in the traditional
18benefit package.
 
19    (40 ILCS 5/2-108.1)  (from Ch. 108 1/2, par. 2-108.1)
20    Sec. 2-108.1. Highest salary for annuity purposes.
21    (a) "Highest salary for annuity purposes" means whichever
22of the following is applicable to the participant:
23    For a participant who first becomes a participant of this
24System before August 10, 2009 (the effective date of Public Act

 

 

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196-207):
2        (1) For a participant who is a member of the General
3    Assembly on his or her last day of service: the highest
4    salary that is prescribed by law, on the participant's last
5    day of service, for a member of the General Assembly who is
6    not an officer; plus, if the participant was elected or
7    appointed to serve as an officer of the General Assembly
8    for 2 or more years and has made contributions as required
9    under subsection (d) of Section 2-126, the highest
10    additional amount of compensation prescribed by law, at the
11    time of the participant's service as an officer, for
12    members of the General Assembly who serve in that office.
13        (2) For a participant who holds one of the State
14    executive offices specified in Section 2-105 on his or her
15    last day of service: the highest salary prescribed by law
16    for service in that office on the participant's last day of
17    service.
18        (3) For a participant who is Clerk or Assistant Clerk
19    of the House of Representatives or Secretary or Assistant
20    Secretary of the Senate on his or her last day of service:
21    the salary received for service in that capacity on the
22    last day of service, but not to exceed the highest salary
23    (including additional compensation for service as an
24    officer) that is prescribed by law on the participant's
25    last day of service for the highest paid officer of the
26    General Assembly.

 

 

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1        (4) For a participant who is a continuing participant
2    under Section 2-117.1 on his or her last day of service:
3    the salary received for service in that capacity on the
4    last day of service, but not to exceed the highest salary
5    (including additional compensation for service as an
6    officer) that is prescribed by law on the participant's
7    last day of service for the highest paid officer of the
8    General Assembly.
9    For a participant who first becomes a participant of this
10System on or after August 10, 2009 (the effective date of
11Public Act 96-207) and before January 1, 2011 (the effective
12date of Public Act 96-889), the average monthly salary obtained
13by dividing the total salary of the participant during the
14period of: (1) the 48 consecutive months of service within the
15last 120 months of service in which the total compensation was
16the highest, or (2) the total period of service, if less than
1748 months, by the number of months of service in that period.
18    For a participant who first becomes a participant of this
19System on or after January 1, 2011 (the effective date of
20Public Act 96-889), the average monthly salary obtained by
21dividing the total salary of the participant during the 96
22consecutive months of service within the last 120 months of
23service in which the total compensation was the highest by the
24number of months of service in that period; however, beginning
25January 1, 2011, the highest salary for annuity purposes may
26not exceed $106,800, except that that amount shall annually

 

 

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1thereafter be increased by the lesser of (i) 3% of that amount,
2including all previous adjustments, or (ii) the annual
3unadjusted percentage increase (but not less than zero) in the
4consumer price index-u for the 12 months ending with the
5September preceding each November 1. "Consumer price index-u"
6means the index published by the Bureau of Labor Statistics of
7the United States Department of Labor that measures the average
8change in prices of goods and services purchased by all urban
9consumers, United States city average, all items, 1982-84 =
10100. The new amount resulting from each annual adjustment shall
11be determined by the Public Pension Division of the Department
12of Insurance and made available to the Board by November 1 of
13each year.
14    On and after January 9, 2013, for a participant who first
15becomes a participant of this System on or after January 1,
162011 or elects the revised benefit package under subdivision
17(a)(2) of Section 2-119.02, the maximum highest annual salary
18amount shall be adjusted to $110,100, as adjusted for periods
19after 2012 based on the methodology and formula used to
20calculate annual increases in wages under 42 U.S.C. Section
21415(a) for purposes of computing benefits and adjusting wages
22under the federal Social Security program. Each year thereafter
23on January 1, this amount shall be adjusted based on the
24methodology and formula used to calculate annual increases in
25wages under 42 U.S.C. Section 415(a) for purposes of computing
26benefits and adjusting wages under the federal Social Security

 

 

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1program.
2    (b) The earnings limitations of subsection (a) apply to
3earnings under any other participating system under the
4Retirement Systems Reciprocal Act that are considered in
5calculating a proportional annuity under this Article, except
6in the case of a person who first became a member of this
7System before August 22, 1994.
8    (c) In calculating the subsection (a) earnings limitation
9to be applied to earnings under any other participating system
10under the Retirement Systems Reciprocal Act for the purpose of
11calculating a proportional annuity under this Article, the
12participant's last day of service shall be deemed to mean the
13last day of service in any participating system from which the
14person has applied for a proportional annuity under the
15Retirement Systems Reciprocal Act.
16(Source: P.A. 96-207, eff. 8-10-09; 96-889, eff. 1-1-11;
1796-1490, eff. 1-1-11.)
 
18    (40 ILCS 5/2-119.02 new)
19    Sec. 2-119.02. Benefit accruals on and after January 9,
202013.
21    (a) Each participant under this Article, other than a
22person who first becomes a participant on or after January 1,
232011, shall elect which retirement program he or she wishes to
24participate in with respect to all periods of service occurring
25on and after January 9, 2013. The retirement program election

 

 

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1made by the participant must be made (i) by January 9, 2013,
2and (ii) if applicable, every 3 years thereafter. The
3participant shall elect one of the following retirement
4programs:
5        (1) the traditional benefit package provided by the
6    System prior to Public Act 96-889;
7        (2) the revised benefit package provided by the System
8    to new participants under Public Act 96-889, Public Act
9    96-1490, and this amendatory Act of the 97th General
10    Assembly; or
11        (3) the self-managed plan provided by the System under
12    Section 2-119.03.
13    (b) A person who first becomes a participant of the System
14on or after January 1, 2011, shall elect which retirement
15program he or she wishes to participate in with respect to all
16periods of service occurring on and after January 9, 2013. The
17participant shall elect one of the retirement programs provided
18in paragraph (2) or (3) of subsection (a) of this Section. The
19participant must make that election (i) by January 9, 2013 or
20within 6 months after the participant's first day of service,
21whichever is later, and (ii) if applicable, every 3 years
22thereafter.
23    (c) The participant election authorized by this Section is
24an irrevocable election, except that an individual making an
25election for the retirement program described under paragraph
26(1) or (2) of subsection (a) shall make an election for the

 

 

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1period of 3 years, and shall make subsequent elections during a
26-month period prescribed by the System. The election shall be
3made in the manner prescribed by the System. Any participant
4who fails to make the initial election shall, by default,
5participate in the revised benefit package provided under
6paragraph (2) of subsection (a) of this Section.
7    (d) Participants who have already made an election pursuant
8to subsection (a) or (b) shall be given the opportunity to make
9a new election as follows:
10        (1) each participant in the traditional benefit
11    package provided under paragraph (1) of subsection (a) of
12    this Section shall have the opportunity to elect to
13    terminate participation in the traditional benefit package
14    and to elect to have retirement benefits for future service
15    provided under either the revised benefit package provided
16    under paragraph (2) of subsection (a) of this Section or
17    the self-managed plan provided under paragraph (3) of
18    subsection (a) of this Section;
19        (2) each participant in the revised benefit package
20    provided under paragraph (2) of subsection (a) of this
21    Section shall have the opportunity to elect to terminate
22    participation in the revised benefit package and to elect
23    to have retirement benefits for future service provided
24    under the self-managed plan provided under paragraph (3) of
25    subsection (a) of this Section; and
26        (3) the elections permitted under paragraphs (1) and

 

 

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1    (2) must be made during a 6-month period in the manner
2    prescribed by the System.
3    (e) If a participant with an accrued benefit under the
4traditional benefit package provided by the System prior to
5Public Act 96-889 elects the revised benefit package provided
6under paragraph (2) of subsection (a) of this Section, the
7participant's total accrued benefit for purposes of
8determining an annuity shall be the sum of (i) the
9participant's benefit accruals before the effective date of the
10election, based on the participant's highest salary for annuity
11purposes and service as of the effective date of the election
12and frozen on such date, and (ii) the participant's benefit
13accruals based on the participant's highest salary for annuity
14purposes and service on and after the effective date of the
15election, as modified by the Public Act 96-889, Public Act
1696-1490, and this amendatory Act of the 97th General Assembly.
17All rights and features provided under the traditional benefit
18package will be preserved with respect to benefits earned under
19such package with respect to service completed prior to the
20election to participate in the revised benefit package.
21Furthermore, the participant shall be entitled to the benefit
22of the survivor's annuity provided under Public Act 96-889 and
23Public Act 96-1490. All service completed under the System
24shall count for purposes of determining retirement eligibility
25and vesting under both the traditional benefit package and the
26revised benefit package.

 

 

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1    (f) If a participant with an accrued benefit under the
2traditional benefit package or the revised benefit package
3elects the self-managed plan provided under paragraph (3) of
4subsection (a) of this Section, the participant's total accrued
5benefit for purposes of determining an annuity shall be the
6participant's benefit accruals before the effective date of the
7election, based on the participant's highest salary for annuity
8purposes and service as of the effective date of the election
9and frozen on such date. However, the participant shall also
10have an accrued self-managed plan benefit as specified in
11subsection (g) of Section 2-119.03, for periods of service on
12or after the effective date of the election. All rights and
13features provided under the traditional benefit package will be
14preserved with respect to benefits earned under such package
15with respect to service completed prior to the election to
16participate in the self-managed plan. All service completed
17under the System shall count for purposes of determining
18retirement eligibility and vesting under the traditional
19benefit package, the revised benefit package, and the
20self-managed plan.
21    (g) An individual who is a participant in the System, but
22is not a member of the General Assembly on January 9, 2013,
23shall elect, based on the eligibility criteria specified in
24this Article, one of the 3 retirement programs provided under
25paragraphs (1), (2), or (3) of subsection (a) of this Section
26within 6 months after becoming a member of the General

 

 

09700SB0512ham002- 20 -LRB097 06621 JDS 59545 a

1Assembly.
 
2    (40 ILCS 5/2-119.03 new)
3    Sec. 2-119.03. Self-managed plan.
4    (a) The Illinois State Board of Investment created under
5Article 22A of this Code shall establish and administer a
6self-managed plan on behalf of the retirement system
7established under this Article. The plan shall offer
8participants the opportunity to accumulate assets for
9retirement through a combination of participant and employer
10contributions that may be invested in mutual funds, collective
11investment funds, or other investment products and may be used
12to purchase annuity contracts that are fixed, variable, or a
13combination thereof. The plan must be qualified under the
14Internal Revenue Code of 1986. The plan shall not include the
15retirement annuities, survivors annuities, death benefits, or
16refunds provided under this Article.
17    (b) The Illinois State Board of Investment shall be the
18plan sponsor for the self-managed plan and shall prepare a plan
19document and prescribe the rules and procedures that are
20necessary or desirable for the administration of the
21self-managed plan.
22    (c) A member eligible to participate in the self-managed
23plan must make a written election in accordance with the
24provisions of Section 2-119.02 and the procedures established
25by the retirement system. Participation in the self-managed

 

 

09700SB0512ham002- 21 -LRB097 06621 JDS 59545 a

1plan by an electing member shall begin on the first of the
2month following the date the member's election is filed with
3the retirement system, but in no case prior to January 9, 2013.
4    (d) Members who are participating in the program must be
5allowed to direct the transfer of their account balances among
6the various investment options offered, subject to applicable
7contractual provisions. The participant shall not be deemed a
8fiduciary by reason of providing investment direction. A person
9who is a fiduciary, including the plan sponsor, shall not be
10liable for any loss resulting from the investment direction of
11the participant and shall not be deemed to have breached any
12fiduciary duty by acting in accordance with that direction. The
13System, the Illinois State Board of Investment, and the
14employer do not guarantee any of the investments in the
15participant's account balances.
16    (e) The self-managed plan shall be funded by contributions
17pursuant to salary reduction agreements for participants in the
18self-managed plan and employer contributions as provided in
19Section 2-124.1 of this Code. Participants may make additional
20contributions to the self-managed plan in accordance with the
21procedures prescribed by the plan sponsor, to the extent
22permitted under rules prescribed by the plan sponsor.
23Participant and employer contributions shall be paid into the
24participants' self-managed plan accounts in a manner to be
25prescribed by the plan sponsor.
26    (f) A participant in the self-managed plan becomes vested

 

 

09700SB0512ham002- 22 -LRB097 06621 JDS 59545 a

1in the employer contributions credited to his or her accounts
2in the self-managed plan on the earliest to occur of the
3following: (1) completion of 5 years of service with the System
4or (2) if the participant has completed at least 1 1/2 years of
5service, the death of the participant.
6    (g) If a participant who is vested in employer
7contributions terminates employment, the participant shall be
8entitled to a benefit that is based on the account values
9attributable to both employer and participant contributions
10and any investment return on those contributions. If a
11participant who is not vested in employer contributions
12terminates employment, the participant shall be entitled to a
13benefit based solely on the account values attributable to the
14participant's contributions and any investment return on those
15contributions, and the employer contributions and any
16investment return on those contributions shall be forfeited.
17Any employer contributions that are forfeited shall be held in
18escrow by the company investing those contributions and shall
19be used as directed by the System for future allocations of
20employer contributions.
21    The self-managed plan shall be funded by contributions
22pursuant to salary reduction agreements for participants in the
23self-managed plan and employer contributions as provided in
24this Section.
25    The participant contribution shall be made as an "employer
26pick up" under Section 414(h) of the Internal Revenue Code of

 

 

09700SB0512ham002- 23 -LRB097 06621 JDS 59545 a

11986 or any successor Section thereof. In no event shall a
2participant have an option of receiving these amounts in cash,
3and payment of the participant contribution shall be a
4condition of employment. The participant contribution shall be
5deducted from the participant's salary in the amount specified
6by Paragraph 3 of subsection (e) of Section 2-126, unless the
7employer agrees to pick up and pay the participant contribution
8in addition to the participant's salary, pursuant to Section
92-126.1.
10    The program shall provide for employer contributions to be
11credited to each self-managed plan participant at a rate of 6%
12of the participant's salary. The amounts so credited shall be
13paid into the participants' self-managed plan accounts in a
14manner to be prescribed by the System. The program shall also
15provide for employer contributions to be used by the System to
16provide disability benefits for the participant. Prior to the
17beginning of each plan year under the self-managed plan, the
18Board of Trustees shall determine, as a percentage of salary,
19the amount of employer contributions to be allocated during
20that plan year for providing disability benefits for
21participants in the self-managed plan.
22    The State of Illinois shall make contributions by
23appropriations to the System of the employer contributions
24required for members who participate in the self-managed plan
25under this Section. The amount required shall be certified by
26the Board of Trustees of the System and paid by the State in

 

 

09700SB0512ham002- 24 -LRB097 06621 JDS 59545 a

1accordance with Section 2-124. The System shall not be
2obligated to remit the required State contributions to any
3person or entity until it has received the required
4contributions from the State.
5    A participant under this Section shall be entitled to the
6benefits of Article 20 of this Code.
 
7    (40 ILCS 5/2-119.04 new)
8    Sec. 2-119.04. Minimum benefit and allocation provisions.
9Each participant in the System shall receive a minimum benefit
10or allocation for service on and after January 9, 2013,
11determined as follows:
12        (1) If the participant is participating in the
13    traditional benefit package provided under paragraph (1)
14    of subsection (a) of Section 2-119.02 of this Code or the
15    revised benefit package provided under paragraph (2) of
16    subsection (a) of Section 2-119.02 of this Code, the
17    participant shall receive a minimum benefit (commencing on
18    his or her Social Security retirement age) for the
19    participant's period of service covered by each such
20    defined benefit package that is equal to the annual primary
21    insurance amount the participant would have under Social
22    Security for such period of service. For the purposes of
23    this item (1), the primary insurance amount a participant
24    would have under Social Security shall be calculated so
25    that the System meets the requirements necessary to be

 

 

09700SB0512ham002- 25 -LRB097 06621 JDS 59545 a

1    considered a retirement system under Section 3121(b)(7)(F)
2    of the Internal Revenue Code and the regulations in effect
3    thereunder.
4        (2) If the participant is participating in the
5    self-managed plan provided under Section 2-119.03 of this
6    Code, the member shall receive a minimum allocation equal
7    to 7.5% of the participant's salary for service during the
8    period. All contributions shall be taken into account for
9    this purpose. For the purposes of this paragraph (2), the
10    minimum allocation shall be calculated so that the System
11    meets the requirements necessary to be considered a
12    retirement system under Section 3121(b)(7)(F) of the
13    Internal Revenue Code and the regulations in effect
14    thereunder.
 
15    (40 ILCS 5/2-124)  (from Ch. 108 1/2, par. 2-124)
16    Sec. 2-124. Contributions by State.
17    (a) The State shall make contributions to the System by
18appropriations of amounts which, together with the
19contributions of participants, interest earned on investments,
20and other income will meet the cost of maintaining and
21administering the System on a 90% funded basis in accordance
22with actuarial recommendations.
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

 

 

09700SB0512ham002- 26 -LRB097 06621 JDS 59545 a

1the prescribed rate of interest, using the formula in
2subsection (c).
3    (c) For State fiscal years 2014 2012 through 2045, the
4minimum contribution to the System to be made by the State for
5each fiscal year shall be an amount equal to the sum of (i) the
6contribution determined under Section 2-124.1, plus (ii) an
7amount determined by the System to be sufficient to bring the
8total assets of the System up to 90% of the total actuarial
9liabilities of the System by the end of State fiscal year 2045.
10In making the these determinations under item (ii) of this
11subsection (c), for State fiscal years 2017 through 2045, the
12required State contribution shall be calculated each year as a
13level percentage of revenue provided by the individual income
14tax, sales tax, and corporate income tax assuming a 2.3%
15average annual growth rate in these revenues based on the most
16recent fiscal year's actual revenues as reported by the
17Commission on Government Forecasting and Accountability
18payroll over the years remaining to and including fiscal year
192045 and shall be determined under the projected unit credit
20actuarial cost method.
21    Notwithstanding any other provision of this Article, for
22For State fiscal years 2014 1996 through 2016 2005, the State
23contribution to the System under item (ii) of this subsection
24(c), as a percentage of State revenue from the individual
25income tax, sales tax, and corporate income tax the applicable
26employee payroll, shall be increased in equal annual increments

 

 

09700SB0512ham002- 27 -LRB097 06621 JDS 59545 a

1so that by State fiscal year 2017 2011, the State is
2contributing at the rate required under this Section.
3    For State fiscal years 2014 through 2045, the total State
4contribution required in each fiscal year under this subsection
5(c) must not be less than 100% of the prior fiscal year's
6actual or required contribution, whichever is greater.
7    Notwithstanding any other provision of this Article, the
8total required State contribution for this System for State
9fiscal year 2013 shall be $14,466,286.
10    Notwithstanding any other provision of this Article, the
11total required State contribution for State fiscal year 2006 is
12$4,157,000.
13    Notwithstanding any other provision of this Article, the
14total required State contribution for State fiscal year 2007 is
15$5,220,300.
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 contribution for State fiscal year 2010 is
24$10,454,000 and shall be made from the proceeds of bonds sold
25in fiscal year 2010 pursuant to Section 7.2 of the General
26Obligation Bond Act, less (i) the pro rata share of bond sale

 

 

09700SB0512ham002- 28 -LRB097 06621 JDS 59545 a

1expenses determined by the System's share of total bond
2proceeds, (ii) any amounts received from the General Revenue
3Fund in fiscal year 2010, and (iii) any reduction in bond
4proceeds due to the issuance of discounted bonds, if
5applicable.
6    Notwithstanding any other provision of this Article, the
7total required State contribution for State fiscal year 2011 is
8the amount recertified by the System on or before April 1, 2011
9pursuant to Section 2-134 and shall be made from the proceeds
10of bonds sold in fiscal year 2011 pursuant to Section 7.2 of
11the General Obligation Bond Act, less (i) the pro rata share of
12bond sale expenses determined by the System's share of total
13bond proceeds, (ii) any amounts received from the General
14Revenue Fund in fiscal year 2011, and (iii) any reduction in
15bond proceeds due to the issuance of discounted bonds, if
16applicable.
17    Beginning in State fiscal year 2046, the minimum State
18contribution shall be an amount equal to the contribution
19determined under Section 2-124.1, plus an amount sufficient for
20each fiscal year shall be the amount needed to maintain the
21total assets of the System at 90% of the total actuarial
22liabilities of the System.
23    Amounts received by the System pursuant to Section 25 of
24the Budget Stabilization Act or Section 8.12 of the State
25Finance Act in any fiscal year do not reduce and do not
26constitute payment of any portion of the minimum State

 

 

09700SB0512ham002- 29 -LRB097 06621 JDS 59545 a

1contribution required under this Article in that fiscal year.
2Such amounts shall not reduce, and shall not be included in the
3calculation of, the required State contributions under this
4Article in any future year until the System has reached a
5funding ratio of at least 90%. A reference in this Article to
6the "required State contribution" or any substantially similar
7term does not include or apply to any amounts payable to the
8System under Section 25 of the Budget Stabilization Act.
9    Notwithstanding any other provision of this Section, the
10required State contribution for State fiscal year 2005 and for
11fiscal year 2008 and each fiscal year thereafter until fiscal
12year 2013, as calculated under this Section and certified under
13Section 2-134, shall not exceed an amount equal to (i) the
14amount of the required State contribution that would have been
15calculated under this Section for that fiscal year if the
16System had not received any payments under subsection (d) of
17Section 7.2 of the General Obligation Bond Act, minus (ii) the
18portion of the State's total debt service payments for that
19fiscal year on the bonds issued in fiscal year 2003 for the
20purposes of that Section 7.2, as determined and certified by
21the Comptroller, that is the same as the System's portion of
22the total moneys distributed under subsection (d) of Section
237.2 of the General Obligation Bond Act. In determining this
24maximum for State fiscal years 2008 through 2010, however, the
25amount referred to in item (i) shall be increased, as a
26percentage of the applicable employee payroll, in equal

 

 

09700SB0512ham002- 30 -LRB097 06621 JDS 59545 a

1increments calculated from the sum of the required State
2contribution for State fiscal year 2007 plus the applicable
3portion of the State's total debt service payments for fiscal
4year 2007 on the bonds issued in fiscal year 2003 for the
5purposes of Section 7.2 of the General Obligation Bond Act, so
6that, by State fiscal year 2011, the State is contributing at
7the rate otherwise required under this Section.
8    (d) 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    (e) 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(Source: P.A. 95-950, eff. 8-29-08; 96-43, eff. 7-15-09;
2496-1497, eff. 1-14-11; 96-1511, eff. 1-27-11; 96-1554, eff.
253-18-11; revised 4-6-11.)
 

 

 

09700SB0512ham002- 31 -LRB097 06621 JDS 59545 a

1    (40 ILCS 5/2-124.1 new)
2    Sec. 2-124.1. Additional State contribution. The following
3rules apply in determining the additional contribution by the
4State of Illinois in State fiscal year 2014 and each fiscal
5year thereafter.
6    (1) With respect to participants who elect the traditional
7benefit package provided under paragraph (1) of subsection (a)
8of Section 2-119.02 of this Code, an amount equal to the 6% of
9the salary of the participant group.
10    (2) With respect to participants who elect the revised
11benefit package provided under paragraph (2) of subsection (a)
12of Section 2-119.02 of this Code, an amount equal to 6% of the
13pensionable salary of the participant group.
14    (3) With respect to participants who elect the self-managed
15plan provided under paragraph (3) of subsection (a) of Section
162-119.02 of this Code, an amount equal to (i) 6% of the salary
17of the participant group and (ii) an amount determined by the
18System that is necessary to finance the disability plan
19provided for that group under this Article.
 
20    (40 ILCS 5/2-126)  (from Ch. 108 1/2, par. 2-126)
21    Sec. 2-126. Contributions by participants.
22    (a) Each participant shall contribute toward the cost of
23his or her retirement annuity a percentage of each payment of
24salary received by him or her for service as a member as
25follows: for service between October 31, 1947 and January 1,

 

 

09700SB0512ham002- 32 -LRB097 06621 JDS 59545 a

11959, 5%; for service between January 1, 1959 and June 30,
21969, 6%; for service between July 1, 1969 and January 10,
31973, 6 1/2%; for service after January 10, 1973, 7%; for
4service after December 31, 1981, 8 1/2%.
5    (b) Beginning August 2, 1949, each male participant, and
6from July 1, 1971, each female participant shall contribute
7towards the cost of the survivor's annuity 2% of salary.
8    A participant who has no eligible survivor's annuity
9beneficiary may elect to cease making contributions for
10survivor's annuity under this subsection. A survivor's annuity
11shall not be payable upon the death of a person who has made
12this election, unless prior to that death the election has been
13revoked and the amount of the contributions that would have
14been paid under this subsection in the absence of the election
15is paid to the System, together with interest at the rate of 4%
16per year from the date the contributions would have been made
17to the date of payment.
18    (c) Beginning July 1, 1967, each participant shall
19contribute 1% of salary towards the cost of automatic increase
20in annuity provided in Section 2-119.1. These contributions
21shall be made concurrently with contributions for retirement
22annuity purposes.
23    (d) In addition, each participant serving as an officer of
24the General Assembly shall contribute, for the same purposes
25and at the same rates as are required of a regular participant,
26on each additional payment received as an officer. If the

 

 

09700SB0512ham002- 33 -LRB097 06621 JDS 59545 a

1participant serves as an officer for at least 2 but less than 4
2years, he or she shall contribute an amount equal to the amount
3that would have been contributed had the participant served as
4an officer for 4 years. Persons who serve as officers in the
587th General Assembly but cannot receive the additional payment
6to officers because of the ban on increases in salary during
7their terms may nonetheless make contributions based on those
8additional payments for the purpose of having the additional
9payments included in their highest salary for annuity purposes;
10however, persons electing to make these additional
11contributions must also pay an amount representing the
12corresponding employer contributions, as calculated by the
13System.
14    (e) Notwithstanding any other provision of this Article,
15the required contribution of a participant who first becomes a
16participant on or after January 1, 2011 shall not exceed the
17contribution that would be due under this Article if that
18participant's highest salary for annuity purposes were
19$106,800, plus any increases in that amount under Section
202-108.1.
21    (f) Notwithstanding anything in this Section to the
22contrary, beginning with terms of office that begin on and
23after January 9, 2013, all participants shall be required to
24make the following contributions:
25        (1) Participants who elect the traditional benefit
26    package provided under paragraph (1) of subsection (a) of

 

 

09700SB0512ham002- 34 -LRB097 06621 JDS 59545 a

1    Section 2-119.02 of this Code shall contribute:
2            (A) In fiscal year 2014, fiscal year 2015, and
3        fiscal year 2016, an amount equal to 24.89% of salary.
4            (B) In fiscal year 2017 and in each fiscal year
5        thereafter, a percentage of salary equal to the
6        actuarially determined fiscal year 2017 normal cost of
7        the traditional benefit package, minus 6%, provided
8        that no participant's contribution shall be less than
9        6% or more than 26.89% of salary. The System shall
10        certify the actuarially determined fiscal year 2017
11        normal cost of the traditional benefit package and the
12        amount of the required participant contribution.
13        (2) In fiscal year 2014 and in each fiscal year
14    thereafter, participants who elect the revised benefit
15    package provided under paragraph (2) of subsection (a) of
16    Section 2-119.02 of this Code shall contribute an amount
17    equal to the greater of the actuarially determined long
18    term normal cost of the revised benefit package as
19    calculated in fiscal year 2014 or 12%, minus contributions
20    by the State of Illinois in fiscal year 2014 under
21    paragraph (2) of subsection (a) of Section 2-124.1,
22    provided that no participant's contribution shall be less
23    than 6% of salary. The System shall certify the actuarially
24    determined long term normal cost of such revised benefit
25    package and the amount of the required participant
26    contribution. For purposes of this paragraph (2), long term

 

 

09700SB0512ham002- 35 -LRB097 06621 JDS 59545 a

1    normal cost shall be defined as the normal cost of the
2    revised benefit package assuming that all active
3    participants are covered under the revised benefit
4    package. Contributions under this paragraph (2) shall be
5    based on pensionable salary.
6        (3) In fiscal year 2014 and in each fiscal year
7    thereafter, participants who elect the self-managed plan
8    provided under paragraph (3) of subsection (a) of Section
9    2-119.02 of this Code shall contribute a minimum amount
10    equal to 6% of salary. Participants who elect the
11    self-managed plan provided under paragraph (3) of
12    subsection (a) of Section 2-119.02 of this Code may elect
13    to increase the participant contribution in accordance
14    with rules prescribed by the Board and the plan sponsor.
15(Source: P.A. 96-1490, eff. 1-1-11.)
 
16    (40 ILCS 5/2-126.2 new)
17    Sec. 2-126.2. Increases in participant contributions. If
18the participant contribution required under Section 2-126
19increases for any participant pursuant to this amendatory Act
20of the 97th General Assembly, the additional participant
21contribution in excess of the prior participant contribution
22shall be deducted from the participant's salary unless the
23participant's employer agrees pursuant to Section 414(h) of the
24Internal Revenue Code to pick up and pay part or all of such
25increased contribution in addition to the participant's

 

 

09700SB0512ham002- 36 -LRB097 06621 JDS 59545 a

1salary.
 
2    (40 ILCS 5/2-163 new)
3    Sec. 2-163. Qualified plan status. No provision of this
4Article shall be interpreted in a way that would cause the
5System to cease to be a qualified plan under Section 401(a) of
6the Internal Revenue Code.
 
7    (40 ILCS 5/8-103.1 new)
8    Sec. 8-103.1. Reformed benefit package. "Reformed benefit
9package": The defined benefit retirement program maintained
10under the Fund for employees who first become participants in
11the Fund on or after January 1, 2011.
 
12    (40 ILCS 5/8-103.2 new)
13    Sec. 8-103.2. Self-managed plan. "Self-managed plan": The
14defined contribution retirement program maintained under the
15Fund as described in Section 8-190.2. The self-managed plan
16shall not include retirement annuities or survivor's,
17disability, or insurance benefits payable directly from the
18Fund as provided by this Article.
 
19    (40 ILCS 5/8-103.3 new)
20    Sec. 8-103.3. Traditional benefit package. "Traditional
21benefit package": The defined benefit retirement program
22maintained under the Fund for employees who first became

 

 

09700SB0512ham002- 37 -LRB097 06621 JDS 59545 a

1participants in the Fund before January 1, 2011.
 
2    (40 ILCS 5/8-125)  (from Ch. 108 1/2, par. 8-125)
3    Sec. 8-125. Annuity.
4    "Annuity": Equal monthly payments for life, unless
5otherwise specified.
6    For annuities taking effect before January 1, 1998, the
7first payment shall be due and payable one month after the
8occurrence of the event upon which payment of the annuity
9depends, and the last payment shall be due and payable as of
10the date of the annuitant's death and shall be prorated from
11the date of the last preceding payment to the date of death for
12deaths that occur on or before March 31, 2000. All payments
13made on or after April 1, 2000 shall be made on the first day of
14the calendar month and the last payment shall be made on the
15first day of the calendar month in which the annuity payment
16period ends. All payments for months beginning with April of
172000 shall be for the entire calendar month, without proration.
18A pro rata amount shall be paid for that part of the month from
19the March 2000 annuity payment date through March 31, 2000.
20    For annuities taking effect on or after January 1, 1998,
21payments shall be made as of the first day of the calendar
22month, with the first payment to be made as of the first day of
23the calendar month coincidental with or next following the
24first day of the annuity payment period, and the last payment
25to be made as of the first day of the calendar month in which

 

 

09700SB0512ham002- 38 -LRB097 06621 JDS 59545 a

1the annuity payment period ends. For annuities taking effect on
2or after January 1, 1998, all payments shall be for the entire
3calendar month, without proration.
4    For the purposes of this Section, the "annuity payment
5period" means the period beginning on the day after the
6occurrence of the event upon which payment of the annuity
7depends, and ending on the day upon which the death of the
8annuitant or other event terminating the annuity occurs.
9    The provisions of this Section do not apply to participants
10who are participating in the self-managed plan.
11(Source: P.A. 90-31, eff. 6-27-97; 91-887, eff. 7-6-00.)
 
12    (40 ILCS 5/8-173)  (from Ch. 108 1/2, par. 8-173)
13    Sec. 8-173. Financing; tax levy.
14    (a) Except as provided in subsection (f) of this Section,
15the city council of the city shall levy a tax annually upon all
16taxable property in the city at a rate that will produce a sum
17which, when added to the amounts deducted from the salaries of
18the employees or otherwise contributed by them and the amounts
19deposited under subsection (f), will be sufficient for the
20requirements of this Article, but which when extended will
21produce an amount not to exceed the greater of the following:
22(a) the sum obtained by the levy of a tax of .1093% of the
23value, as equalized or assessed by the Department of Revenue,
24of all taxable property within such city, or (b) the sum of
25$12,000,000. However any city in which a Fund has been

 

 

09700SB0512ham002- 39 -LRB097 06621 JDS 59545 a

1established and in operation under this Article for more than 3
2years prior to 1970 shall levy for the year 1970 a tax at a rate
3on the dollar of assessed valuation of all taxable property
4that will produce, when extended, an amount not to exceed 1.2
5times the total amount of contributions made by employees to
6the Fund for annuity purposes in the calendar year 1968, and,
7for the year 1971 and 1972 such levy that will produce, when
8extended, an amount not to exceed 1.3 times the total amount of
9contributions made by employees to the Fund for annuity
10purposes in the calendar years 1969 and 1970, respectively; and
11for the year 1973 an amount not to exceed 1.365 times such
12total amount of contributions made by employees for annuity
13purposes in the calendar year 1971; and for the year 1974 an
14amount not to exceed 1.430 times such total amount of
15contributions made by employees for annuity purposes in the
16calendar year 1972; and for the year 1975 an amount not to
17exceed 1.495 times such total amount of contributions made by
18employees for annuity purposes in the calendar year 1973; and
19for the year 1976 an amount not to exceed 1.560 times such
20total amount of contributions made by employees for annuity
21purposes in the calendar year 1974; and for the year 1977 an
22amount not to exceed 1.625 times such total amount of
23contributions made by employees for annuity purposes in the
24calendar year 1975; and for the year 1978 and each year
25thereafter, such levy as will produce, when extended, an amount
26not to exceed the total amount of contributions made by or on

 

 

09700SB0512ham002- 40 -LRB097 06621 JDS 59545 a

1behalf of employees to the Fund for annuity purposes in the
2calendar year 2 years prior to the year for which the annual
3applicable tax is levied, multiplied by 1.690 for the years
41978 through 1998 and by 1.250 for the years year 1999 through
52012. For 2013 and for each year thereafter, the amount levied
6shall be equal to the amount levied in 2010.
7    The tax shall be levied and collected in like manner with
8the general taxes of the city, and shall be exclusive of and in
9addition to the amount of tax the city is now or may hereafter
10be authorized to levy for general purposes under any laws which
11may limit the amount of tax which the city may levy for general
12purposes. The county clerk of the county in which the city is
13located, in reducing tax levies under the provisions of any Act
14concerning the levy and extension of taxes, shall not consider
15the tax herein provided for as a part of the general tax levy
16for city purposes, and shall not include the same within any
17limitation of the percent of the assessed valuation upon which
18taxes are required to be extended for such city.
19    Revenues derived from such tax shall be paid to the city
20treasurer of the city as collected and held by him for the
21benefit of the fund.
22    If the payments on account of taxes are insufficient during
23any year to meet the requirements of this Article, the city may
24issue tax anticipation warrants against the current tax levy.
25    (b) On or before January 10, annually, the board shall
26notify the city council of the requirements of this Article

 

 

09700SB0512ham002- 41 -LRB097 06621 JDS 59545 a

1that the tax herein provided shall be levied for that current
2year. The board shall compute the amounts necessary to be
3credited to the reserves established and maintained as herein
4provided, and shall make an annual determination of the amount
5of the required city contributions, and certify the results
6thereof to the city council.
7    (c) In respect to employees of the city who are transferred
8to the employment of a park district by virtue of the "Exchange
9of Functions Act of 1957", the corporate authorities of the
10park district shall annually levy a tax upon all the taxable
11property in the park district at such rate per cent of the
12value of such property, as equalized or assessed by the
13Department of Revenue, as shall be sufficient, when added to
14the amounts deducted from their salaries and otherwise
15contributed by them to provide the benefits to which they and
16their dependents and beneficiaries are entitled under this
17Article. The city shall not levy a tax hereunder in respect to
18such employees.
19    The tax so levied by the park district shall be in addition
20to and exclusive of all other taxes authorized to be levied by
21the park district for corporate, annuity fund, or other
22purposes. The county clerk of the county in which the park
23district is located, in reducing any tax levied under the
24provisions of any act concerning the levy and extension of
25taxes shall not consider such tax as part of the general tax
26levy for park purposes, and shall not include the same in any

 

 

09700SB0512ham002- 42 -LRB097 06621 JDS 59545 a

1limitation of the per cent of the assessed valuation upon which
2taxes are required to be extended for the park district. The
3proceeds of the tax levied by the park district, upon receipt
4by the district, shall be immediately paid over to the city
5treasurer of the city for the uses and purposes of the fund.
6    The various sums to be contributed by the city and park
7district and allocated for the purposes of this Article, and
8any interest to be contributed by the city, shall be derived
9from the revenue from the taxes authorized in this Section or
10otherwise as expressly provided in this Section.
11    If it is not possible or practicable for the city to make
12contributions for age and service annuity and widow's annuity
13at the same time that employee contributions are made for such
14purposes, such city contributions shall be construed to be due
15and payable as of the end of the fiscal year for which the tax
16is levied and shall accrue thereafter with interest at the
17effective rate until paid.
18    (d) With respect to employees whose wages are funded as
19participants under the Comprehensive Employment and Training
20Act of 1973, as amended (P.L. 93-203, 87 Stat. 839, P.L.
2193-567, 88 Stat. 1845), hereinafter referred to as CETA,
22subsequent to October 1, 1978, and in instances where the board
23has elected to establish a manpower program reserve, the board
24shall compute the amounts necessary to be credited to the
25manpower program reserves established and maintained as herein
26provided, and shall make a periodic determination of the amount

 

 

09700SB0512ham002- 43 -LRB097 06621 JDS 59545 a

1of required contributions from the City to the reserve to be
2reimbursed by the federal government in accordance with rules
3and regulations established by the Secretary of the United
4States Department of Labor or his designee, and certify the
5results thereof to the City Council. Any such amounts shall
6become a credit to the City and will be used to reduce the
7amount which the City would otherwise contribute during
8succeeding years for all employees.
9    (e) In lieu of establishing a manpower program reserve with
10respect to employees whose wages are funded as participants
11under the Comprehensive Employment and Training Act of 1973, as
12authorized by subsection (d), the board may elect to establish
13a special municipality contribution rate for all such
14employees. If this option is elected, the City shall contribute
15to the Fund from federal funds provided under the Comprehensive
16Employment and Training Act program at the special rate so
17established and such contributions shall become a credit to the
18City and be used to reduce the amount which the City would
19otherwise contribute during succeeding years for all
20employees.
21    (f) In lieu of levying all or a portion of the tax required
22under this Section in any year, the city may deposit with the
23city treasurer no later than March 1 of that year for the
24benefit of the fund, to be held in accordance with this
25Article, an amount that, together with the taxes levied under
26this Section for that year, is not less than the amount of the

 

 

09700SB0512ham002- 44 -LRB097 06621 JDS 59545 a

1city contributions for that year as certified by the board to
2the city council. The deposit may be derived from any source
3legally available for that purpose, including, but not limited
4to, the proceeds of city borrowings. The making of a deposit
5shall satisfy fully the requirements of this Section for that
6year to the extent of the amounts so deposited. Amounts
7deposited under this subsection may be used by the fund for any
8of the purposes for which the proceeds of the tax levied by the
9city under this Section may be used, including the payment of
10any amount that is otherwise required by this Article to be
11paid from the proceeds of that tax.
12(Source: P.A. 90-31, eff. 6-27-97; 90-655, eff. 7-30-98;
1390-766, eff. 8-14-98.)
 
14    (40 ILCS 5/8-174.2 new)
15    Sec. 8-174.2. Employee contributions beginning July 1,
162013. Notwithstanding any other provision of this Article,
17beginning July 1, 2013, all participants shall be required to
18make the following contributions:
19        (1) Participants who elect the traditional benefit
20    package under paragraph (1) of subsection (a) of Section
21    8-190.1 of this Code shall contribute:
22            (A) In fiscal year 2014, fiscal year 2015, and
23        fiscal year 2016, an amount equal to 12.75% of salary.
24            (B) In fiscal year 2017 and in each fiscal year
25        thereafter, a percentage of salary equal to the

 

 

09700SB0512ham002- 45 -LRB097 06621 JDS 59545 a

1        actuarially determined normal cost of the traditional
2        benefit package, minus an amount equal to 6% of total
3        pensionable salary. The Fund shall certify the
4        actuarially determined normal cost of the traditional
5        benefit package and the amount of required participant
6        contributions by July 1, 2016 and every 3 years
7        thereafter.
8        (2) Participants who elect the reformed benefit
9    package under paragraph (2) of subsection (a) of Section
10    8-190.1 of this Code shall contribute:
11            (A) In fiscal year 2014, fiscal year 2015, and
12        fiscal year 2016, an amount equal to 7% of salary.
13            (B) In fiscal year 2017 and in each fiscal year
14        thereafter, a percentage of salary equal to the
15        actuarially determined normal cost of the reformed
16        benefit package, minus an amount equal to 6% of total
17        pensionable salary. The Fund shall certify the
18        actuarially determined normal cost of the reformed
19        benefit package and the amount of required participant
20        contributions by July 1, 2016 and every 3 years
21        thereafter.
22        (3) Participants who elect the self-managed plan under
23    paragraph (3) of subsection (a) of Section 8-190.1 of this
24    Code shall contribute a minimum of 6% of salary.
25    Participants who elect the self-managed plan provided
26    under Section 8-190.2 of this Code may elect to increase

 

 

09700SB0512ham002- 46 -LRB097 06621 JDS 59545 a

1    their employee contributions in accordance with rules
2    prescribed by the Board.
3    No prior contribution increases or other additional
4contributions specified by this Section shall apply to any
5participant for service on or after July 1, 2013.
 
6    (40 ILCS 5/8-190.1 new)
7    Sec. 8-190.1. Benefit accruals on and after July 1, 2013.
8    (a) Each participant under this Article, other than a
9person who first becomes an employee and a participant on or
10after January 1, 2011, shall choose which retirement program he
11or she wishes to participate in with respect to all periods of
12employment occurring on and after July 1, 2013, except that
13such participants with more than 5 years of creditable service
14at the time of such election shall only be eligible to elect
15one of the retirement programs in paragraphs (1) or (2) of this
16subsection (a). The retirement program election made by the
17participating employee must be made no later than January 1,
182013. The participant shall elect one of the following
19retirement programs:
20        (1) the traditional benefit package provided by the
21    Fund;
22        (2) the reformed benefit package provided by the Fund;
23    or
24        (3) the self-managed plan provided by the Fund.
25    (b) A person who first becomes an employee and a

 

 

09700SB0512ham002- 47 -LRB097 06621 JDS 59545 a

1participant in the Fund on or after January 1, 2011 shall be
2given the choice to elect which retirement program he or she
3wishes to participate in with respect to all periods of covered
4employment occurring on and after July 1, 2013. The participant
5shall elect one of the retirement programs provided in
6paragraph (2) or (3) of subsection (a) of this Section. The
7participant must make the election (i) by January 1, 2013 or
8within 6 months after the participant's first day of covered
9employment, whichever is later, and (ii) if applicable, every 3
10years thereafter.
11    (c) The member election authorized by this Section is an
12irrevocable election, except that any individual making an
13election for the retirement program described under paragraph
14(1) or (2) of subsection (a) shall make an election for a
15period of 3 years, and shall make subsequent elections every 3
16years during a 6-month period prescribed by the Fund. The
17election shall be made in the manner prescribed by the Fund.
18Any member who fails to make the election shall, by default,
19participate in the benefit program provided under paragraph (2)
20of subsection (a) of this Section.
21    (d) Participants who have already made an election pursuant
22to subsection (a) or (b) shall be given the opportunity to make
23a new election as follows:
24        (1) Each participant in the traditional benefit
25    package provided under paragraph (1) of subsection (a) of
26    this Section shall have the opportunity to elect to

 

 

09700SB0512ham002- 48 -LRB097 06621 JDS 59545 a

1    terminate participation in the traditional benefit package
2    and to elect to have retirement benefits for future service
3    provided under either the reformed benefit package
4    provided under paragraph (2) of subsection (a) of this
5    Section or the self-managed plan provided under paragraph
6    (3) of subsection (a) of this Section. However, such a
7    participant with more than 5 years of creditable service
8    shall be prohibited from electing the self-managed plan.
9        (2) Each participant that has less than 5 years of
10    creditable service and participates in the reformed
11    benefit package provided under paragraph (2) of subsection
12    (a) of this Section shall have the opportunity to elect to
13    terminate participation in the reformed benefit package
14    and to elect to have retirement benefits for future service
15    provided under the self-managed plan provided under
16    paragraph (3) of subsection (a) of this Section.
17        (3) The elections permitted under paragraphs (1) and
18    (2) must be made during a 6-month period in the manner
19    prescribed by the Fund.
20    (e) If a participant with an accrued benefit under the
21traditional benefit package elects the reformed benefit
22package, the participant's total accrued benefit for purposes
23of determining an annuity shall be the sum of (i) the
24participant's benefit accruals under the traditional benefit
25package, based on the participant's pay and service under the
26traditional benefit package, and frozen with respect to pay for

 

 

09700SB0512ham002- 49 -LRB097 06621 JDS 59545 a

1service earned subsequent to participation under the
2traditional benefit package and (ii) the participant's benefit
3accruals based on pay and service under the reformed benefit
4package. All rights and features provided under the traditional
5benefit package will be preserved with respect to benefits
6earned under such package with respect to service completed
7prior to the election to participate in the reformed benefit
8package. All service completed under the Fund shall count for
9purposes of determining retirement eligibility and vesting
10under both the traditional benefit package and the reformed
11benefit package, provided that the vesting requirements of the
12traditional benefit package shall continue to govern vesting
13for participants in the reformed benefit package.
14    (f) If a participant with an accrued benefit under the
15traditional benefit package or the reformed benefit package
16elects the self-managed plan provided under paragraph (3) of
17subsection (a) of this Section, the participant's total accrued
18benefit for purposes of determining an annuity shall be the
19participant's benefit accruals prior to participation in the
20self-managed plan, based on the participant's pay and service,
21and fixed with respect to pay for service earned subsequent to
22participation in the traditional or reformed benefit package.
23However, the participant shall also have an accrued
24self-managed plan balance as specified in subsection (h) of
25Section 8-190.2, for periods of covered employment on or after
26participation in the self-managed plan. All rights and features

 

 

09700SB0512ham002- 50 -LRB097 06621 JDS 59545 a

1provided under the traditional or reformed benefit package will
2be preserved with respect to benefits earned under such package
3with respect to service completed prior to the election to
4participate in the self-managed plan. All service completed
5under the traditional or reformed benefit package and the
6self-managed plan shall count for purposes of determining
7retirement eligibility and vesting under the traditional
8benefit package and the self-managed plan.
9    (g) An individual with less than 5 years of creditable
10service and who is a participant in the Fund but is not a
11participating employee on January 1, 2013 shall be allowed to
12elect, based on the eligibility criteria specified in this
13Code, one of the retirement programs provided in paragraph (1),
14(2), or (3) of subsection (a) of this Section within 6 months
15after becoming an employee, based on eligibility.
16    An individual with 5 or more years of creditable service
17and who is a participant in the Fund but is not a participating
18employee on January 1, 2013 shall be allowed to elect, based on
19the eligibility criteria specified in this Code, one of the
20retirement programs provided in paragraph (1) or (2) of
21subsection (a) of this Section within 6 months after becoming
22an employee, based on eligibility.
 
23    (40 ILCS 5/8-190.2 new)
24    Sec. 8-190.2. Self-managed plan.
25    (a) Purpose. The Municipal Employees', Officers', and

 

 

09700SB0512ham002- 51 -LRB097 06621 JDS 59545 a

1Officials' Annuity and Benefit Fund shall establish and
2administer a self-managed plan, which shall offer participants
3the opportunity to accumulate assets for retirement through a
4combination of employee and employer contributions that may be
5invested in mutual funds, collective investment funds, or other
6investment products and may be used to purchase annuity
7contracts, either fixed or variable or a combination thereof.
8The plan must be qualified under the Internal Revenue Code of
91986.
10    (b) The Municipal Employees', Officers', and Officials'
11Annuity and Benefit Fund shall be the plan sponsor for the
12self-managed plan and shall prepare a plan document and
13prescribe such rules and procedures as are considered necessary
14or desirable for the administration of the self-managed plan.
15Consistent with its fiduciary duty to the participants and
16beneficiaries of the self-managed plan, the Board of Trustees
17of the Fund may delegate aspects of plan administration as it
18sees fit to companies authorized to do business in this State.
19    (c) Selection of service providers and funding vehicles.
20The Fund may solicit proposals to provide administrative
21services and funding vehicles for the self-managed plan from
22insurance and annuity companies and mutual fund companies,
23banks, trust companies, or other financial institutions
24authorized to do business in this State.
25    The Fund shall periodically review each approved company. A
26company may continue to provide administrative services and

 

 

09700SB0512ham002- 52 -LRB097 06621 JDS 59545 a

1funding vehicles for the self-managed plan only so long as it
2continues to be an approved company under contract with the
3Board.
4    (d) Employee direction. Employees who are participating in
5the program must be allowed to direct the transfer of their
6account balances among the various investment options offered,
7subject to applicable contractual provisions. The employee
8shall not be deemed a fiduciary by reason of providing such
9investment direction. A person who is a fiduciary shall not be
10liable for any loss resulting from such investment direction
11and shall not be deemed to have breached any fiduciary duty by
12acting in accordance with that direction. Neither the Fund nor
13the employer guarantees any of the investments in the
14employee's account balances.
15    (e) Participation. An employee eligible to participate in
16the self-managed plan must make a written election under
17Section 8-190.1 and the procedures established by the Fund.
18Participation in the self-managed plan by an electing employee
19shall begin on the first day of the first pay period following
20the later of (i) the date the employee's election is filed with
21the Fund or (ii) July 1, 2013.
22    An employee who has elected to participate in the
23self-managed plan under this Section must continue
24participation while employed in an eligible position.
25Participation in the self-managed plan under this Section shall
26constitute membership in the Municipal Employees', Officers',

 

 

09700SB0512ham002- 53 -LRB097 06621 JDS 59545 a

1and Officials' Annuity and Benefit Fund.
2    An employee under this Section shall be entitled to the
3benefits of Article 20 of this Code.
4    (f) Contributions. The self-managed plan shall be funded by
5contributions from employees participating in the self-managed
6plan and employer contributions as provided in this Section.
7    This required contribution shall be made as an "employer
8pick up" under Section 414(h) of the Internal Revenue Code of
91986 or any successor Section thereof. In no event shall a
10employee have an option of receiving these amounts in cash. The
11program shall provide for employer contributions to be credited
12to each self-managed plan participant at a rate of 6% of the
13participant's salary. The amounts so credited shall be paid
14into the employee's self-managed plan account in a manner to be
15prescribed by the Fund.
16    The employer shall make contributions by appropriations to
17the Fund of the employer contributions required for employees
18who participate in the self-managed plan under this Section.
19The amount required shall be certified by the Board of Trustees
20of the Fund and paid by the employer in accordance with this
21Article. The Fund shall not be obligated to remit the required
22employer contributions to any person or entity until it has
23received the required employer contributions from the
24employer.
25    (g) Vesting; withdrawal; return to service. A participant
26in the self-managed plan becomes vested in the employer

 

 

09700SB0512ham002- 54 -LRB097 06621 JDS 59545 a

1contributions credited to his or her account in the
2self-managed plan on the earliest to occur of the following:
3(1) completion of 5 years of creditable service; (2) the death
4of the participant while in active service, if the participant
5has completed at least 1 1/2 years of service; or (3) the
6participant's election to retire and apply the reciprocal
7provisions of Article 20 of this Code.
8    (h) Benefit amounts. If a participant who is vested in
9employer contributions terminates employment, the participant
10shall be entitled to a benefit which is based on the account
11values attributable to employer and participant contributions
12and any investment return thereon.
13    If a participant who is not vested in employer
14contributions terminates employment, the participant shall be
15entitled to a benefit based solely on the account values
16attributable to the participant's contributions and any
17investment return thereon, and the employer contributions and
18any investment return thereon shall be forfeited. Any employer
19contributions which are forfeited shall become part of the
20trust.
 
21    (40 ILCS 5/8-190.3 new)
22    Sec. 8-190.3. Minimum benefit and allocation provisions.
23Each participant in the Fund shall receive a minimum benefit or
24allocation determined as follows:
25        (1) If the participant is participating in the

 

 

09700SB0512ham002- 55 -LRB097 06621 JDS 59545 a

1    traditional benefit package provided under paragraph (1)
2    of subsection (a) of Section 8-103.3 of this Code or the
3    revised defined benefit package provided under paragraph
4    (2) of subsection (a) of Section 8-103.3 of this Code, the
5    participant shall receive a minimum benefit (commencing on
6    his or her Social Security retirement age) that is equal to
7    the annual primary insurance amount the participant would
8    have under Social Security. For the purposes of this item
9    (1), the primary insurance amount a participant would have
10    under Social Security shall be calculated so that the Fund
11    meets the requirements necessary to be considered a
12    retirement system under Section 3121(b)(7)(F) of the
13    Internal Revenue Code and the regulations in effect
14    thereunder.
15        (2) If the participant is participating in the
16    self-managed plan provided under Section 8-103.2 of this
17    Code, the member shall receive a minimum allocation equal
18    to 7.5% of the participant's compensation for service
19    during the period. All contributions shall be taken into
20    account for this purpose. For the purposes of this
21    paragraph (2), the minimum allocation shall be calculated
22    so that the Fund meets the requirements necessary to be
23    considered a retirement system under Section 3121(b)(7)(F)
24    of the Internal Revenue Code and the regulations in effect
25    thereunder.
 

 

 

09700SB0512ham002- 56 -LRB097 06621 JDS 59545 a

1    (40 ILCS 5/8-190.4 new)
2    Sec. 8-190.4. Employer contributions to the self-managed
3plan. For members electing benefits under paragraph (3) of
4subsection (a) of Section 8-190.1, an employer contribution
5equal to 6% of total pension payroll for the respective
6employee group.
 
7    (40 ILCS 5/8-251)  (from Ch. 108 1/2, par. 8-251)
8    Sec. 8-251. Felony conviction.
9    None of the benefits provided for in this Article shall be
10paid to any person who is convicted of any felony relating to
11or arising out of or in connection with his service as a
12municipal employee.
13    This section shall not operate to impair any contract or
14vested right heretofore acquired under any law or laws
15continued in this Article, nor to preclude the right to a
16refund.
17    All future entrants entering service subsequent to July 11,
181955 shall be deemed to have consented to the provisions of
19this section as a condition of coverage.
20    No refund paid to any person who is convicted of a felony
21relating to or arising out of or in connection with the
22person's service as an employee shall include employer
23contributions or interest or, in the case of the self-managed
24plan authorized under Section 8-190.2, any employer
25contributions or investment return on employer contributions.

 

 

09700SB0512ham002- 57 -LRB097 06621 JDS 59545 a

1(Source: Laws 1963, p. 161.)
 
2    (40 ILCS 5/8-255 new)
3    Sec. 8-255. Qualified plan status. No provision of this
4Article shall be interpreted in a way that would cause the Fund
5to cease to be a qualified plan under Section 401(a) of the
6Internal Revenue Code.
 
7    (40 ILCS 5/9-103.1 new)
8    Sec. 9-103.1. Reformed benefit package. "Reformed benefit
9package": The defined benefit retirement program maintained
10under the Fund for employees who first become participants in
11the Fund on or after January 1, 2011. The reformed benefit
12package includes benefits as modified by the provisions of
13Section 1-160.
 
14    (40 ILCS 5/9-103.2 new)
15    Sec. 9-103.2. Self-managed plan. "Self-managed plan": The
16defined contribution retirement program maintained under the
17Fund as described in Section 9-170.5. The self-managed plan
18shall not include any of the following: retirement annuities
19payable directly from the Fund as provided under Sections
209-121.6, 9-121.7, 9-125, 9-126, 9-127, 9-128, 9-128.1, 9-132,
219-134, and 9-160; automatic increase in annuities payable
22directly from the Fund as provided under Sections 9-133 and
239-133.1; reversionary annuities payable directly from the Fund

 

 

09700SB0512ham002- 58 -LRB097 06621 JDS 59545 a

1as provided under Section 9-135; death benefits payable
2directly from the Fund as provided under Section 9-135.1;
3widow's and survivor's annuities payable directly from the Fund
4as provided under Sections 9-137, 9-138, 9-139, 9-140, 9-141,
59-142, 9-143, 9-144, 9-145, 9-146.1, 9-146.2, 9-147, 9-148,
69-148.1, 9-150, 9-150.1, and 9-153; child's annuities payable
7directly from the Fund as provided under Sections 9-154 and
89-155, refunds as provided under Sections 9-164 and 9-167; and
9annuities to disabled employees whose ordinary disability
10benefits have expired as provided under Section 9-174.
 
11    (40 ILCS 5/9-103.3 new)
12    Sec. 9-103.3. Traditional benefit package. "Traditional
13benefit package": The defined benefit retirement program
14maintained under the Fund for employees who first became
15participants in the Fund before January 1, 2011.
 
16    (40 ILCS 5/9-128.1)  (from Ch. 108 1/2, par. 9-128.1)
17    Sec. 9-128.1. Annuities for members of the County Police
18Department.
19    (a) In lieu of the regular or minimum annuity or annuities
20for any deputy sheriff who is a member of a County Police
21Department, he may, upon withdrawal from service after not less
22than 20 years of service in the position of deputy sheriff as
23defined below, upon or after attainment of age 55, receive a
24total annuity equal to 2% for each year of service based upon

 

 

09700SB0512ham002- 59 -LRB097 06621 JDS 59545 a

1his highest average annual salary for any 4 consecutive years
2within the last 10 years of service immediately preceding the
3date of withdrawal from service, subject to a maximum annuity
4equal to 75% of such average annual salary.
5    (b) Any deputy sheriff who withdraws from the service after
6July 1, 1979, after having attained age 53 in the service with
723 or more years of service credit shall be entitled to an
8annuity computed as follows if such annuity is greater than
9that provided in the foregoing paragraphs of this Section
109-128.1: An annuity equal to 50% of the average salary for the
114 highest consecutive years of the last 10 years of service
12plus additional annuity equal to 2% of such average salary for
13each completed year of service or fraction thereof rendered
14after his attainment of age 53 and the completion of 23 years
15of service, plus an additional annuity equal to 1% of such
16average salary for each completed year of service or fraction
17thereof in excess of 23 years up to age 53.
18    (c) Any deputy sheriff who withdraws from the service after
19December 31, 1987 with 20 or more years of service credit,
20shall be entitled, upon attainment of age 50, to an annuity
21computed as follows if such annuity is greater than that
22provided in the foregoing paragraphs of this Section 9-128.1:
23An annuity equal to 50% of the average salary for the 4 highest
24consecutive years of the last 10 years of service, plus
25additional annuity equal to 2% of such average salary for each
26completed year of service or fraction thereof in excess of 20

 

 

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1years.
2    (d) A deputy sheriff who reaches compulsory retirement age
3and who has less than 23 years of service shall be entitled to
4a minimum annuity equal to an amount determined by the product
5of (1) his years of service and (2) 2% of his average salary
6for the 4 consecutive highest years of salary within the last
710 years of service immediately prior to his reaching
8compulsory retirement age.
9    (e) Any deputy sheriff who retires after January 1, 1984
10and elects to receive an annuity under this Section, and who
11has credits under this Article for service not as a deputy
12sheriff, shall be entitled to receive, in addition to the
13amount of annuity otherwise provided under this Section, an
14additional amount of annuity provided from the totals
15accumulated to his credit for prior service and age and service
16annuities for such service not as a deputy sheriff.
17    (f) The term "deputy sheriff" means an employee charged
18with the duty of law enforcement as a deputy sheriff as
19specified in Section 1 of "An Act in relation to County Police
20Departments in certain Counties, creating a County Police
21Department Merit Board and defining its powers and duties",
22approved August 5, 1963, who rendered service in such position
23before and after such date.
24    The terms "deputy sheriff" and "member of a County Police
25Department" shall also include an elected sheriff of the county
26who has elected to become a contributor and who has submitted

 

 

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1to the board his written election to be included within the
2provisions of this Section. With respect to any such sheriff,
3service as the elected sheriff of the county shall be deemed to
4be service in the position of deputy sheriff for the purposes
5of this Section provided that the employee contributions
6therefor are made at the rate prescribed for members of the
7County Police Department. A sheriff electing to be included
8under this Section may also elect to have his service as
9sheriff of the county before the date of such election included
10as service as a deputy sheriff for the purposes of this
11Section, by making an additional contribution for each year of
12such service, equal to the difference between the amount he
13would have contributed to the Fund during such year had he been
14contributing at the rate then in effect for members of the
15County Police Department and the amount actually contributed,
16plus interest thereon at the rate of 6% per annum from the end
17of such year to the date of payment.
18    (g) In no case shall an annual annuity provided in this
19Section 9-128.1 exceed 80% of the average annual salary for any
204 consecutive years within the last 10 years of service
21immediately preceding the date of withdrawal from service.
22    A deputy sheriff may in addition, be entitled to the
23benefits provided by Section 9-133 or 9-133.1 if he so
24qualifies under such Sections.
25    (h) A deputy sheriff may elect, between January 1 and
26January 15, 1983, to transfer his creditable service as a

 

 

09700SB0512ham002- 62 -LRB097 06621 JDS 59545 a

1member of the State Employees' Retirement System of Illinois to
2any Fund established under this Article of which he is a
3member, and such transferred creditable service shall be
4included as service for the purpose of calculating his benefits
5under this Article to the extent that the payment specified in
6Section 14-105.3 has been received by such Fund.
7    (i) An active deputy sheriff who has at least 15 years of
8service credit in that capacity may elect to have any or all of
9his credits under this Article for service not as a deputy
10sheriff deemed to be credits for service as a deputy sheriff,
11by filing a written election with the Board, accompanied by
12payment of an amount to be determined by the Board, equal to
13(1) the difference between the amount of employee contributions
14actually contributed by the applicant for such service not as a
15deputy sheriff, and the amounts that would have been
16contributed had such contributions been made at the rates
17applicable to service as a deputy sheriff, plus (2) interest
18thereon at the rate of 3% per annum, compounded annually, from
19the date of service to the date of payment.
20    (j) Beginning on the effective date of this amendatory Act
21of 1996, the terms "deputy sheriff" and "member of a County
22Police Department" shall also include any chief of the County
23Police Department or undersheriff of the County Sheriff's
24Department who has submitted to the board his or her written
25election to be included within the provisions of this Section.
26With respect to any such police chief or undersheriff, service

 

 

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1as a chief of the County Police Department or an undersheriff
2of the County Sheriff's Department shall be deemed to be
3service in the position of deputy sheriff for the purposes of
4this Section, provided that the employee contributions
5therefor are made at the rate prescribed for members of the
6County Police Department.
7    A chief of the County Police Department or undersheriff of
8the County Sheriff's Department electing to be included under
9this Section may also elect to have his or her service as chief
10of the County Police Department or undersheriff of the County
11Sheriff's Department before the date of the election included
12as service as a deputy sheriff for the purposes of this
13Section, by making an additional contribution for each year of
14such service, equal to the difference between the amount that
15he or she would have contributed to the Fund during that year
16at the rate then in effect for members of the County Police
17Department and the amount actually contributed, plus interest
18thereon at the rate of 6% per year, compounded annually, from
19the end of that year to the date of payment.
20    A chief of the County Police Department or undersheriff of
21the County Sheriff's Department who has elected to be included
22within the provisions of this Section may transfer to this Fund
23credits and creditable service accumulated under any pension
24fund or retirement system established under Article 3, 7, 8,
2514, or 15, upon payment to the Fund of (1) the amount by which
26the employee contributions that would have been required if he

 

 

09700SB0512ham002- 64 -LRB097 06621 JDS 59545 a

1or she had participated in this Fund during the period for
2which credit is being transferred, plus interest, plus an equal
3amount for employer contributions, exceeds the amounts
4actually transferred from that other fund or system to this
5Fund, plus (2) interest thereon at 6% per year, compounded
6annually, from the date of transfer to the date of payment.
7    A chief of the County Police Department or undersheriff of
8the County Sheriff's Department may purchase credits and
9creditable service for up to 2 years of public employment
10rendered to an out-of-state public agency. Payment for that
11service shall be at the applicable rates in effect for employee
12and employer contributions during the period for which credit
13is being purchased, plus interest at the rate of 6% per year,
14compounded annually, from the date of service until the date of
15payment.
16    (k) The benefits of this Section do not apply to employees
17that first become participants on or after July 1, 2013.
18(Source: P.A. 89-643, eff. 8-9-96.)
 
19    (40 ILCS 5/9-133)  (from Ch. 108 1/2, par. 9-133)
20    Sec. 9-133. Automatic increase in annuity.
21    (a) An employee who retired or retires from service after
22December 31, 1959, having attained age 60 or more or, beginning
23January 1, 1991, having attained 30 or more years of creditable
24service, shall, in the month of January of the year following
25the year in which the first anniversary of retirement occurs,

 

 

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1have his then fixed and payable monthly annuity increased by 1
21/2%, and such first fixed annuity as granted at retirement
3increased by a further 1 1/2% in January of each year
4thereafter. Beginning with January of the year 1972, such
5increases shall be at the rate of 2% in lieu of the aforesaid
6specified 1 1/2%. Beginning with January of the year 1982, such
7increases shall be at the rate of 3% in lieu of the aforesaid
8specified 2%. Beginning January 1, 1998, these increases shall
9be at the rate of 3% of the current amount of the annuity,
10including any previous increases received under this Article,
11without regard to whether the annuitant is in service on or
12after the effective date of this amendatory Act of 1997.
13    An employee who retires on annuity before age 60 and,
14beginning January 1, 1991, with less than 30 years of
15creditable service shall receive such increases beginning with
16January of the year immediately following the year in which he
17attains the age of 60 years. An employee who retires on annuity
18before age 60 and before January 1, 1991, with at least 30
19years of creditable service, shall be entitled to receive the
20first increase under this subsection no later than January 1,
211993.
22    For an employee who, in accordance with the provisions of
23Section 9-108.1 of this Act, shall have become a member of the
24State System established under Article 14 on February 1, 1974,
25the first such automatic increase shall begin in January of
261975.

 

 

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1    (b) Subsection (a) is not applicable to an employee
2retiring and receiving a term annuity, as defined in this Act,
3nor to any otherwise qualified employee who retires before he
4makes employee contributions (at the 1/2 of 1% rate as provided
5in this Section) for this additional annuity for not less than
6the equivalent of one full year. Such employee, however, shall
7make arrangement to pay to the fund a balance of such
8contributions, based on his final salary, as will bring such
91/2 of 1% contributions, computed without interest, to the
10equivalent of one year's contributions.
11    Beginning with the month of January, 1960, each employee
12shall contribute by means of salary deductions 1/2 of 1% of
13each salary payment, concurrently with and in addition to the
14employee contributions otherwise provided for annuity
15purposes.
16    Beginning July 1, 2013, contributions will no longer be
17allocated for the automatic increase.
18    Each such additional contribution shall be used, together
19with county contributions, to defray the cost of the specified
20annuity increments.
21    Such additional employee contributions are not refundable,
22except to an employee who withdraws and applies for refund
23under this Article, or applies for annuity, and also in cases
24where a term annuity becomes payable. In such cases his
25contributions shall be refunded, without interest.
26(Source: P.A. 95-369, eff. 8-23-07.)
 

 

 

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1    (40 ILCS 5/9-160)  (from Ch. 108 1/2, par. 9-160)
2    Sec. 9-160. Annuity after withdrawal while disabled. An
3employee whose disability continues after he has received
4ordinary disability benefit for the maximum period of time
5prescribed by this Article, and who withdraws before age 60
6while still so disabled, is entitled to receive the annuity
7provided from the total sum accumulated to his credit from
8employee contributions and county contributions to be computed
9as of his age on the date of withdrawal.
10    The annuity to which his wife shall be entitled upon his
11death, shall be fixed on the date of his withdrawal. It shall
12be provided on a reversionary annuity basis from the total sum
13accumulated to his credit for widow's annuity on the date of
14such withdrawal.
15    Upon the death of any such employee while on annuity, if
16his service was at least 4 years after the date of his original
17entry, and at least 2 years after the date of his latest
18re-entry, his unmarried child or children under age 18 shall be
19entitled to annuity specified in this Article for children of
20an employee who retires after age 50 (age 55 for withdrawal
21before January 1, 1988), subject to prescribed limitations on
22total payments to a family of an employee.
23(Source: P.A. 85-964.)
 
24    (40 ILCS 5/9-164)  (from Ch. 108 1/2, par. 9-164)

 

 

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1    Sec. 9-164. Refunds - Withdrawal before age 55 or with less
2than 10 years of service.
3    (1) An employee, without regard to length of service, who
4withdraws before age 55 (age 62 for an employee that was
5participating in the reformed benefit package who first becomes
6a member on or after January 1, 2011), and any employee with
7less than 10 years of service who withdraws before age 60, and
8any employee that was participating in the reformed benefit
9package who first becomes a member on or after January 1, 2011
10who withdraws with less than 10 years of service, shall be
11entitled to a refund of the total sums accumulated to his
12credit as of date of withdrawal for age and service annuity and
13widow's annuity resulting from amounts contributed by him or by
14the county in lieu of employee contributions during duty
15disability. If he is a present employee he shall also be
16entitled to a refund of the total sum accumulated from any sums
17contributed by him and applied to any county pension fund
18superseded by this fund. An employee withdrawing on or after
19January 1, 1984 may receive a refund only after he has been off
20the payroll for at least 30 days during which time he has
21received no salary.
22    (2) Upon receipt of the refund, the employee surrenders and
23forfeits all rights to any annuity or other benefits for
24himself and for any other persons who might have benefited
25through him; provided that he may have any such period of
26service counted in computing the term of his service - for age

 

 

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1and service annuity purposes only - if he becomes an employee
2before age 65, excepting as limited by the provisions of this
3Article relating to the basis of computing the term of service.
4    (3) An employee who does not receive a refund shall have
5all amounts to his credit for annuity purposes on the date of
6his withdrawal improved by interest only until he becomes 65
7while out of service at the effective rate for his benefit and
8the benefit of any person who may have any right to annuity
9through him if he re-enters service and attains a right to
10annuity.
11    (4) Any such employee shall retain such right to a refund
12of such amounts when he shall apply for same until he re-enters
13the service or until the amount of annuity shall have been
14fixed as provided in this Article. Thereafter, no such right
15shall exist in the case of any such employee.
16(Source: P.A. 96-1490, eff. 1-1-11.)
 
17    (40 ILCS 5/9-170)  (from Ch. 108 1/2, par. 9-170)
18    Sec. 9-170. Contributions for age and service annuities for
19present employees, future entrants and re-entrants.
20    (a) Beginning on the effective date as to a present
21employee in paragraph (a) or (c) of Section 9-109, or as to a
22future entrant in paragraph (a) of Section 9-110, and beginning
23on September 1, 1935 as to a present employee in paragraph (b)
24(1) of Section 9-109 or as to a future entrant in paragraph (b)
25or (d) of Section 9-110, and beginning from the date of

 

 

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1becoming a contributor as to any present employee in paragraph
2(b)(2) or (d) of Section 9-109, or any future entrant in
3paragraph (c) or (e) of Section 9-110, there shall be deducted
4and contributed to this fund 3 1/4% of each payment of salary
5for age and service annuity until July 1, 1947. Beginning July
61, 1947 and prior to July 1, 1953, 5% and beginning July 1,
71953, and prior to September 1, 1971, 6%; and beginning
8September 1, 1971, 6 1/2% of each payment of salary of such
9employees shall be deducted and contributed for such purpose.
10    From and after January 1, 1966, each deputy sheriff as
11defined in Section 9-128.1 who is a member of the County Police
12Department and a participant of this fund shall contribute 7%
13of salary for age and service annuity. At the time of
14retirement on annuity, a deputy sheriff who is a member of the
15County Police Department, who chooses to retire under
16provisions of this Article other than Section 9-128.1, may
17receive a refund of the difference between the contributions
18made as a deputy sheriff who is a member of the County Police
19Department and the contributions that would have been made for
20such service not as a deputy sheriff who is a member of the
21County Police Department, including interest earned.
22    Such deductions beginning on the effective date and prior
23to July 1, 1947 shall be made and continued for a future
24entrant while he is in the service until he attains age 65, and
25beginning on the effective date and prior to July 1, 1953 for a
26present employee while he is in the service until the amount so

 

 

09700SB0512ham002- 71 -LRB097 06621 JDS 59545 a

1deducted from his salary or paid by him according to law to any
2county pension fund in force on the effective date, with
3interest on both such amounts at 4% per annum, equals the sum
4that would have been to his credit from sums deducted from his
5salary if deductions at the rate herein stated had been made
6during his entire service until he attained age 65, with
7interest at 4% per annum for the period subsequent to his
8attainment of age 65. Such deductions beginning July 1, 1947
9for future entrants and beginning July 1, 1953 for present
10employees shall be made and continued while such future entrant
11or present employee is in the service.
12    (b) Concurrently with each employee contribution, the
13county shall contribute beginning on the effective date and
14prior to July 1, 1947, 5 3/4%, and beginning on July 1, 1947
15and prior to July 1, 1953, 7%; and beginning on July 1, 1953,
166% of each payment of such salary until the employee attains
17age 65.
18    (c) Each present employee contribution made prior to the
19date the age and service annuity for such employee is fixed,
20each future entrant contribution, and each corresponding
21county contribution shall be allocated to the account of and
22credited to the employee for whose benefit it is made.
23    (d) Notwithstanding any other provision of this Article,
24beginning July 1, 2013, all participants shall be required to
25make the following contributions:
26        (1) Participants who elect the traditional benefit

 

 

09700SB0512ham002- 72 -LRB097 06621 JDS 59545 a

1    package under paragraph (1) of subsection (a) of Section
2    9-170.3 of this Code shall contribute a percentage of
3    salary equal to the sum of subparagraphs (A) and (B) of
4    this paragraph (1) as follows:
5            (A) An amount equal to the greater of (i) 6% of
6        salary or (ii) one-half of the actuarially determined
7        normal cost of the reformed benefit package.
8            (B) An additional percentage of salary that is
9        actuarially determined to equal the difference between
10        the normal cost of the traditional benefit package and
11        the normal cost of the reformed benefit package. That
12        additional percentage shall be based on the fiscal year
13        2011 contribution and updated every 3 years
14        thereafter. The employer shall contribute 13.09% of
15        employee salary.
16        (2) Participants who elect the reformed benefit
17    package under paragraph (2) of subsection (a) of Section
18    9-170.3 of this Code shall contribute an amount equal to
19    the greater of (i) 7% of salary or (ii) one-half of the
20    actuarially determined normal cost of the reformed benefit
21    package, including the cost of retiree health benefits as
22    determined by the fund's actuary. The actuarially
23    determined normal cost of the reformed benefit package
24    shall be based on the fiscal year 2011 contribution and
25    updated every 3 years thereafter. The employer
26    contribution amount shall be calculated as the employee

 

 

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1    contribution multiplied by 1.54.
2        (3) Participants who elect the self-managed plan under
3    paragraph (3) of subsection (a) of Section 9-170.3 of this
4    Code shall contribute a minimum of 6% of salary.
5    Participants who elect the self-managed plan provided
6    under Section 9-170.3 of this Code may elect to increase
7    their employee contributions in accordance with rules
8    prescribed by the board.
9    No prior contribution increases or other additional
10contributions specified by this Section shall apply to any
11participant for service on or after January 1, 2013.
12(Source: P.A. 86-1488.)
 
13    (40 ILCS 5/9-170.3 new)
14    Sec. 9-170.3. Benefit accruals on and after July 1, 2013.
15    (a) Each participating employee under this Article, other
16than a person who first becomes an employee and a participant
17on or after January 1, 2011, shall choose which retirement
18program he or she wishes to participate in with respect to all
19periods of employment occurring on and after July 1, 2013,
20except that such participants with more than 5 years of
21creditable service at the time of election shall only be
22eligible to elect one of the retirement programs in paragraphs
23(1) or (2) of this subsection (a). The retirement program
24election made by the participating employee must be made no
25later than January 1, 2013. The participating employee shall

 

 

09700SB0512ham002- 74 -LRB097 06621 JDS 59545 a

1elect one of the following retirement programs:
2        (1) the traditional benefit package provided by the
3    Fund;
4        (2) the reformed benefit package provided by the Fund;
5    or
6        (3) the self-managed plan provided by the Fund.
7    (b) A person who first becomes an employee and a
8participant in the Fund on or after January 1, 2011 shall be
9given the choice to elect which retirement program he or she
10wishes to participate in with respect to all periods of
11employment occurring on and after July 1, 2013. The participant
12shall elect one of the retirement programs provided in
13paragraph (2) or (3) of subsection (a) of this Section. The
14participant must make the election (i) by January 1, 2013 or
15within 6 months after the participant's first day of
16employment, whichever is later, and (ii) if applicable, every 3
17years thereafter.
18    (c) The participant election authorized by this Section is
19an irrevocable election, except that any individual making an
20election for the retirement program described under paragraph
21(1) or (2) of subsection (a) shall make an election for a
22period of 3 years and shall make subsequent elections every 3
23years during a 6-month period prescribed by the Fund. The
24election shall be made in writing, in the manner prescribed by
25the Fund. Any participant who fails to make the election shall,
26by default, participate in the benefit program provided under

 

 

09700SB0512ham002- 75 -LRB097 06621 JDS 59545 a

1paragraph (2) of subsection (a) of this Section.
2    (d) Participants who have already made an election pursuant
3to subsection (a) shall be given the opportunity to make a new
4election as follows:
5        (1) Each participant in the traditional benefit
6    package provided under paragraph (1) of subsection (a) of
7    this Section shall have the opportunity to elect to
8    terminate participation in the traditional benefit package
9    and to elect to have retirement benefits for future service
10    provided under the reformed benefit package provided under
11    paragraph (2) of subsection (a) of this Section or the
12    self-managed plan under paragraph (3) of subsection (a) of
13    this Section.
14        (2) Each participant in the reformed benefit package
15    provided under paragraph (2) of subsection (a) of this
16    Section shall have the opportunity to elect to terminate
17    participation in the reformed benefit package and to elect
18    to have retirement benefits for future service provided
19    under the self-managed plan provided under paragraph (3) of
20    subsection (a) of this Section.
21        (3) The elections permitted under paragraphs (1) and
22    (2) must be made during a 6-month period in the manner
23    prescribed by the Fund.
24    (e) If a participant under the traditional benefit package
25elects the reformed benefit package, the participant's total
26salary and service credit for purposes of determining an

 

 

09700SB0512ham002- 76 -LRB097 06621 JDS 59545 a

1annuity shall be the sum of (i) the participant's benefit
2accruals under the traditional benefit package, based on the
3participant's salary and service under the traditional benefit
4package and frozen with respect to salary for service earned
5subsequent to participation under the traditional benefit
6package and (ii) the participant's benefit accruals based on
7salary and service under the reformed benefit package. All
8rights and features provided under the traditional benefit
9package will be preserved with respect to benefits earned under
10such package completed prior to the election to participate in
11the reformed benefit package. All credited service under the
12Fund shall count for purposes of determining retirement
13eligibility and vesting under the both traditional benefit
14package and the reformed benefit package, provided that the
15vesting requirements of the traditional benefit package shall
16continue to govern vesting for participants in the reformed
17benefit package.
18    For a participant under the traditional benefit package who
19elects the reformed benefit package, the combined maximum
20benefit of the traditional benefit package plus the reformed
21benefit package as determined in this subsection shall not
22exceed the greater of 80% of the final average salary used to
23calculate the reformed benefit annuity or 80% of the final
24average salary used to calculate the traditional benefit
25annuity.
26    (f) If a participant with an accrued benefit under the

 

 

09700SB0512ham002- 77 -LRB097 06621 JDS 59545 a

1traditional benefit package or the reformed benefit package
2provided under paragraph (2) of subsection (a) of this Section
3elects the self-managed plan provided under paragraph (3) of
4subsection (a) of this Section, the participant's total accrued
5benefit for purposes of determining an annuity shall be the
6participant's benefit accruals prior to participation in the
7self-managed plan, based on the participant's salary and
8service and fixed with respect to salary for service earned
9subsequent to participation in the traditional or reformed
10benefit package. However, the participant shall also have an
11accrued self-managed plan balance, as specified in subsection
12(i) of Section 9-170.5, for periods of employment on or after
13participation in the self-managed plan. A11 rights and features
14provided under the traditional or reformed benefit package will
15be preserved with respect to benefits earned under that package
16with respect to service completed prior to the election to
17participate in the self-managed plan. All credited service
18under the Fund shall count for purposes of determining
19retirement eligibility and vesting under the reformed benefit
20package and the self-managed plan.
21    (g) An individual with less than 5 years of creditable
22service and who is a participant in the Fund but is not a
23participating employee on January 1, 2013 shall be allowed to
24elect, based on the eligibility criteria specified in this
25Code, one of the retirement programs provided in paragraph (1),
26(2), or (3) of subsection (a) of this Section within 6 months

 

 

09700SB0512ham002- 78 -LRB097 06621 JDS 59545 a

1after becoming an employee, based on eligibility.
2    An individual with 5 or more years of creditable service
3and who is a participant in the Fund but is not a participating
4employee on January 1, 2013 shall be allowed to elect, based on
5the eligibility criteria specified in this Code, one of the
6retirement programs provided in paragraph (1) or (2) of
7subsection (a) of this Section within 6 months after becoming
8an employee, based on eligibility.
 
9    (40 ILCS 5/9-170.4 new)
10    Sec. 9-170.4. Minimum benefit and allocation provisions.
11    (a) If the participant is participating in the traditional
12benefit package provided under paragraph (1) of subsection (a)
13of Section 9-170.3 of this Code or the revised defined benefit
14package provided under paragraph (2) of subsection (a) of
15Section 9-170.3 of this Code, the participant shall receive a
16minimum benefit (commencing on his or her Social Security
17retirement age) that is equal to the annual primary insurance
18amount the participant would have under Social Security. For
19the purposes of this Section, the primary insurance amount a
20participant would have under Social Security shall be
21calculated so that the System meets the requirements necessary
22to be considered a "retirement system" under Section
233121(b)(7)(F) of the Internal Revenue Code and the regulations
24in effect thereunder.
25    (b) If the participant is participating in the self-managed

 

 

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1plan provided under Section 9-170.5 of this Code, the member
2shall receive a minimum allocation equal to 7.5% of the
3participant's compensation for service during the period. All
4contributions shall be taken into account for this purpose. For
5the purposes of this paragraph (2), the minimum allocation
6shall be calculated so that the Fund meets the requirements
7necessary to be considered a retirement system under Section
83121(b)(7)(F) of the Internal Revenue Code and the regulations
9in effect thereunder.
 
10    (40 ILCS 5/9-170.5 new)
11    Sec. 9-170.5. Self-managed plan.
12    (a) Purpose. The Fund shall establish and administer a
13self-managed plan, which shall offer participants the
14opportunity to accumulate assets for retirement through a
15combination of employee and employer contributions that may be
16invested in mutual funds, collective investment funds, or other
17investment products and may be used to purchase annuity
18contracts, either fixed or variable or a combination thereof.
19The plan must be qualified under the Internal Revenue Code of
201986.
21    (b) The Fund shall be the plan sponsor for the self-managed
22plan and shall prepare a plan document and prescribe such rules
23and procedures as are considered necessary or desirable for the
24administration of the self-managed plan. Consistent with its
25fiduciary duty to the participants and beneficiaries of the

 

 

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1self-managed plan, the Board of Trustees of the Fund may
2delegate aspects of plan administration as it sees fit to
3companies authorized to do business in this State.
4    (c) Selection of service providers and funding vehicles.
5The Fund may solicit proposals to provide administrative
6services and funding vehicles for the self-managed plan from
7insurance and annuity companies and mutual fund companies,
8banks, trust companies, or other financial institutions
9authorized to do business in this State.
10    The Fund shall periodically review each approved company. A
11company may continue to provide administrative services and
12funding vehicles for the self-managed plan only so long as it
13continues to be an approved company under contract with the
14Board.
15    (d) Participant direction. Participants in the program
16must be allowed to direct the transfer of their account
17balances among the various investment options offered, subject
18to applicable contractual provisions. The participants shall
19not be deemed a fiduciary by reason of providing such
20investment direction. A person who is a fiduciary shall not be
21liable for any loss resulting from such investment direction
22and shall not be deemed to have breached any fiduciary duty by
23acting in accordance with that direction. Neither the Fund nor
24the employer guarantees any of the investments in the
25employee's account balances.
26    (e) Participation. A participant eligible to participate

 

 

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1in the self-managed plan must make a written election under
2Section 9-170.3 and the procedures established by the Fund.
3Participation in the self-managed plan by an electing employee
4shall begin by the first day of the second pay period following
5the later of (i) the date the participant's election is filed
6with the Fund or (ii) July 1, 2013.
7    A participant who has elected to participate in the
8self-managed plan under this Section must continue
9participation while employed in a participating employment
10position. Participation in the self-managed plan under this
11Section shall constitute membership in the Fund.
12    A participant under this Section shall be entitled to the
13benefits of Article 20 of this Code.
14    (f) Contributions. The self-managed plan shall be funded by
15contributions from participants participating in the
16self-managed plan and employer contributions as provided in
17this Section.
18    This required contribution shall be made as an "employer
19pick up" under Section 414(h) of the Internal Revenue Code of
201986 or any successor Section thereof. In no event shall a
21participant have an option of receiving these amounts in cash.
22The self-managed plan shall provide for employer contributions
23to be credited to each self-managed plan participant at a rate
24of 6% of the participant's salary. The amounts so credited
25shall be paid into the employee's self-managed plan account in
26a manner to be prescribed by the Fund. The employer shall

 

 

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1contribute 6% to the self-managed plan regardless of the
2existence of the current funding mechanism.
3    Under the self-managed plan, an amount of employer
4contributions, not exceeding 1% of the participating
5employees' salary, shall be used for the purpose of providing
6disability benefits of the Fund to employees. Prior to the
7beginning of each calendar year under the self-managed plan,
8the Board of Trustees shall determine, as a percentage of
9salary, the amount of employer contributions to be allocated
10during that plan year for providing disability benefits for
11employees in the self-managed plan.
12    The employer shall make contributions to the Fund of the
13employer contributions required for participants who
14participate in the self-managed plan under this Section. The
15employer amount required shall be certified by the Board of
16Trustees of the Fund and provided to the employer on or before
17March 1st of each year and paid by the employer on or before
18June 1st of that year for participants in the self-managed plan
19in accordance with this Article. The Fund shall not be
20obligated to remit the required employer contributions to any
21person or entity until it has received the required employer
22contributions from the employer. The Fund shall not be liable
23to any member participating in the self-managed plan for any
24damages resulting from any delay in remitting employee or
25employer contributions.
26    (g) Vesting; withdrawal; return to service. A participant

 

 

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1in the self-managed plan becomes vested in the employer
2contributions credited to his or her account in the
3self-managed plan on the earliest to occur of the following:
4(1) completion of 5 years of creditable service; (2) the death
5of the participant while in active service, if the participant
6has completed at least 1 1/2 years of service; or (3) the
7participant's election to retire and apply the reciprocal
8provisions of Article 20 of this Code.
9    (h) Benefit amounts. If a participant who is vested in
10employer contributions terminates employment, the participant
11shall be entitled to a benefit which is based on the account
12values attributable to employer and participant contributions
13and any investment return thereon.
14    (i) No duplication of service credit. Notwithstanding any
15other provision of this Article, an employee may not purchase
16or receive service or service credit applicable to any other
17retirement program administered by the Fund under this Article
18for any period during which the employee was a participant in
19the self-managed plan established under this Section.
20    If a member who is not vested in employer contributions
21terminates employment, the member shall be entitled to a
22benefit based solely on the account values attributable to the
23member's contributions and any investment return thereon, and
24the employer contributions and any investment return thereon
25shall be forfeited. Any employer contributions that are
26forfeited shall be held in escrow by the company investing

 

 

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1those contributions and shall be used as directed by the Fund.
2    A participant in the self-managed plan who receives a
3distribution of his or her vested amounts from the self-managed
4plan while not yet eligible for retirement under this Article
5(and Article 20, if applicable) shall forfeit all service
6credit and accrued rights in the Fund.
 
7    (40 ILCS 5/9-170.6 new)
8    Sec. 9-170.6. Employer contributions to the self-managed
9plan. Beginning in fiscal year 2014, for members electing
10benefits under paragraph (3) of subsection (a) of Section
119-170.5, an employer contribution shall be made each fiscal
12year in an amount equal to 6% of total pensionable payroll for
13the respective employee group.
 
14    (40 ILCS 5/9-170.7 new)
15    Sec. 9-170.7. Maximum self-managed plan participation. By
16January 1, 2013, the Fund shall certify its total active
17participant population. When the number of participants that
18elect the self-managed plan is equal to 20% of the total active
19participant population, then no participant may elect the
20self-managed plan. Beginning in 2016 and every 3 years
21thereafter, the Fund shall recertify its total active
22participant population and the number of participants in the
23self-managed plan. If the number of participants in the
24self-managed plan is less than 20% of the recertified total

 

 

09700SB0512ham002- 85 -LRB097 06621 JDS 59545 a

1active participant population, then eligible participants may
2elect to participate in the self-managed plan. However,
3participants shall be prohibited from electing to participate
4once the Fund determines that the number of participants in the
5self-managed plan is equal to 20% of the number of total active
6participants in the Fund.
 
7    (40 ILCS 5/9-174)  (from Ch. 108 1/2, par. 9-174)
8    Sec. 9-174. Contributions by disabled employee whose
9ordinary disability benefit has expired.
10    In the case of any disabled employee whose credit for
11ordinary disability benefit purposes has expired and who
12continues to be disabled such employee shall have the right to
13contribute to the fund at the current contribution rate for the
14member's applicable benefit package for a period not to exceed
15a total of 12 months during his entire period of service and to
16receive credit for all annuity purposes for any such periods
17paid for. Such payment shall not affect the employee's
18resignation date for purposes of annuity.
19(Source: P.A. 86-1488.)
 
20    (40 ILCS 5/9-176)  (from Ch. 108 1/2, par. 9-176)
21    Sec. 9-176. Contributions for widow's annuity for widows of
22present employees, future entrants and re-entrants.
23    (a) Beginning on the effective date as to a present
24employee in paragraph (a) or (c) of Section 9--109, or as to a

 

 

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1future entrant in paragraph (a) of Section 9--110, and
2beginning on September 1, 1935, as to a present employee in
3paragraph (b) (1) of section 9--109 or as to a future entrant
4in paragraph (b) or (d) of Section 9--110, and beginning from
5the date of becoming a contributor as to any present employee
6in paragraph (b) (2) or (d) of Section 9--109, or any future
7entrant in paragraph (c) or (e) of Section 9--110, there shall
8be deducted and contributed by each male employee 1%, and from
9and after January 1, 1966, and until July 1, 2013, 1 1/2%, of
10each payment of salary for widow's annuity. Deductions shall be
11continued during service until the employee attains age 65.
12    (b) Concurrently with each employee contribution, the
13county shall contribute beginning on the effective date and
14prior to July 1, 1947, 1 3/4%, and beginning on July 1, 1947,
152% of salary.
16    (c) Each employee contribution made prior to the date when
17the amount of widow's annuity for an employee is fixed and each
18concurrent County Contribution Credit shall be allocated to the
19account of and credited to the employee for whose benefit it is
20made.
21    (d) Beginning July 1, 2013, contributions will no longer be
22allocated for widow's annuity.
23(Source: Laws 1965, p. 1254.)
 
24    (40 ILCS 5/9-219)  (from Ch. 108 1/2, par. 9-219)
25    Sec. 9-219. Computation of service.

 

 

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1    (1) In computing the term of service of an employee prior
2to the effective date, the entire period beginning on the date
3he was first appointed and ending on the day before the
4effective date, except any intervening period during which he
5was separated by withdrawal from service, shall be counted for
6all purposes of this Article.
7    (2) In computing the term of service of any employee on or
8after the effective date, the following periods of time shall
9be counted as periods of service for age and service, widow's
10and child's annuity purposes:
11        (a) The time during which he performed the duties of
12    his position.
13        (b) Vacations, leaves of absence with whole or part
14    pay, and leaves of absence without pay not longer than 90
15    days.
16        (c) For an employee who is a member of a county police
17    department or a correctional officer with the county
18    department of corrections, approved leaves of absence
19    without pay during which the employee serves as a full-time
20    officer or employee of an employee association, the
21    membership of which consists of other participants in the
22    Fund, provided that the employee contributes to the Fund
23    (1) the amount that he would have contributed had he
24    remained an active employee in the position he occupied at
25    the time the leave of absence was granted, (2) an amount
26    calculated by the Board representing employer

 

 

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1    contributions, and (3) regular interest thereon from the
2    date of service to the date of payment. However, if the
3    employee's application to establish credit under this
4    subsection is received by the Fund on or after July 1, 2002
5    and before July 1, 2003, the amount representing employer
6    contributions specified in item (2) shall be waived.
7        For a former member of a county police department who
8    has received a refund under Section 9-164, periods during
9    which the employee serves as head of an employee
10    association, the membership of which consists of other
11    police officers, provided that the employee contributes to
12    the Fund (1) the amount that he would have contributed had
13    he remained an active member of the county police
14    department in the position he occupied at the time he left
15    service, (2) an amount calculated by the Board representing
16    employer contributions, and (3) regular interest thereon
17    from the date of service to the date of payment. However,
18    if the former member of the county police department
19    retires on or after January 1, 1993 but no later than March
20    1, 1993, the amount representing employer contributions
21    specified in item (2) shall be waived.
22        (d) Any period of disability for which he received
23    disability benefit or whole or part pay.
24        (e) Accumulated vacation or other time for which an
25    employee who retires on or after November 1, 1990 receives
26    a lump sum payment at the time of retirement, provided that

 

 

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1    contributions were made to the fund at the time such lump
2    sum payment was received. The service granted for the lump
3    sum payment shall not change the employee's date of
4    withdrawal for computing the effective date of the annuity.
5        (f) An employee may receive service credit for annuity
6    purposes for accumulated sick leave as of the date of the
7    employee's withdrawal from service, not to exceed a total
8    of 180 days, provided that the amount of such accumulated
9    sick leave is certified by the County Comptroller to the
10    Board and the employee pays an amount equal to the current
11    contribution rate for the member's applicable benefit
12    package 8.5% (9% for members of the County Police
13    Department who are eligible to receive an annuity under
14    Section 9-128.1) of the amount that would have been paid
15    had such accumulated sick leave been paid at the employee's
16    final rate of salary. Such payment shall be made within 30
17    days after the date of withdrawal and prior to receipt of
18    the first annuity check. The service credit granted for
19    such accumulated sick leave shall not change the employee's
20    date of withdrawal for the purpose of computing the
21    effective date of the annuity.
22    (3) In computing the term of service of an employee on or
23after the effective date for ordinary disability benefit
24purposes, the following periods of time shall be counted as
25periods of service:
26        (a) Unless otherwise specified in Section 9-157, the

 

 

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1    time during which he performed the duties of his position.
2        (b) Paid vacations and leaves of absence with whole or
3    part pay.
4        (c) Any period for which he received duty disability
5    benefit.
6        (d) Any period of disability for which he received
7    whole or part pay.
8    (4) For an employee who on January 1, 1958, was transferred
9by Act of the 70th General Assembly from his position in a
10department of welfare of any city located in the county in
11which this Article is in force and effect to a similar position
12in a department of such county, service shall also be credited
13for ordinary disability benefit and child's annuity for such
14period of department of welfare service during which period he
15was a contributor to a statutory annuity and benefit fund in
16such city and for which purposes service credit would otherwise
17not be credited by virtue of such involuntary transfer.
18    (5) An employee described in subsection (e) of Section
199-108 shall receive credit for child's annuity and ordinary
20disability benefit for the period of time for which he was
21credited with service in the fund from which he was
22involuntarily separated through class or group transfer;
23provided, that no such credit shall be allowed to the extent
24that it results in a duplication of credits or benefits, and
25neither shall such credit be allowed to the extent that it was
26or may be forfeited by the application for and acceptance of a

 

 

09700SB0512ham002- 91 -LRB097 06621 JDS 59545 a

1refund from the fund from which the employee was transferred.
2    (6) Overtime or extra service shall not be included in
3computing service. Not more than 1 year of service shall be
4allowed for service rendered during any calendar year.
5(Source: P.A. 92-599, eff. 6-28-02.)
 
6    (40 ILCS 5/9-220)  (from Ch. 108 1/2, par. 9-220)
7    Sec. 9-220. Basis of service credit.
8    (a) In computing the period of service of any employee for
9annuity purposes under Section 9-134, the following provisions
10shall govern:
11        (1) All periods prior to the effective date shall be
12    computed in accordance with the provisions governing the
13    computation of such service.
14        (2) Service on or after the effective date shall
15    include:
16            (i) The actual period of time the employee
17        contributes or has contributed to the fund for service
18        rendered to age 65 plus the actual period of time after
19        age 65 for which the employee performs the duties of
20        his position or performs such duties and is given a
21        county contribution for age and service annuity or
22        minimum annuity purposes.
23            (ii) Leaves of absence from duty, or vacation, for
24        which an employee receives all or part of his salary.
25            (iii) Accumulated vacation or other time for which

 

 

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1        an employee who retires on or after November 1, 1990
2        receives a lump sum payment at the time of retirement,
3        provided that contributions were made to the fund at
4        the time such lump sum payment was received. The
5        service granted for the lump sum payment shall not
6        change the employee's date of withdrawal for computing
7        the effective date of the annuity.
8            (iv) Accumulated sick leave as of the date of the
9        employee's withdrawal from service, not to exceed a
10        total of 180 days, provided that the amount of such
11        accumulated sick leave is certified by the County
12        Comptroller to the Board and the employee pays an
13        amount equal to the current contribution rate for the
14        member's applicable benefit package 8.5% (9% for
15        members of the County Police Department who are
16        eligible to receive an annuity under Section 9-128.1)
17        of the amount that would have been paid had such
18        accumulated sick leave been paid at the employee's
19        final rate of salary. Such payment shall be made within
20        30 days after the date of withdrawal and prior to
21        receipt of the first annuity check. The service credit
22        granted for such accumulated sick leave shall not
23        change the employee's date of withdrawal for the
24        purpose of computing the effective date of the annuity.
25            (v) Periods during which the employee has had
26        contributions for annuity purposes made for him in

 

 

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1        accordance with law while on military leave of absence
2        during World War II.
3            (vi) Periods during which the employee receives a
4        disability benefit under this Article.
5            (vii) For any person who first becomes a member on
6        or after January 1, 2011, the actual period of time the
7        employee contributes or has contributed to the fund for
8        service rendered up to the limitation on salary in
9        subsection (b-5) of Section 1-160 plus the actual
10        period of time thereafter for which the employee
11        performs the duties of his position and ceased
12        contributing due to the salary limitation in
13        subsection (b-5) of Section 1-160.
14        (3) The right to have certain periods of time
15    considered as service as stated in paragraph (2) of Section
16    9-164 shall not apply for annuity purposes unless the
17    refunds shall have been repaid in accordance with this
18    Article.
19        (4) All service shall be computed in whole calendar
20    months, and at least 15 days of service in any one calendar
21    month shall constitute one calendar month of service, and 1
22    year of service shall be equal to the number of months,
23    days or hours for which an appropriation was made in the
24    annual appropriation ordinance for the position held by the
25    employee.
26    (b) For all other annuity purposes of this Article the

 

 

09700SB0512ham002- 94 -LRB097 06621 JDS 59545 a

1following schedule shall govern the computation of a year of
2service of an employee whose salary or wages is on the basis
3stated, and any fractional part of a year of service shall be
4determined according to said schedule:
5    Annual or Monthly Basis: Service during 4 months in any 1
6calendar year;
7    Weekly Basis: Service during any 17 weeks of any 1 calendar
8year, and service during any week shall constitute a week of
9service;
10    Daily Basis: Service during 100 days in any 1 calendar
11year, and service during any day shall constitute a day of
12service;
13    Hourly Basis: Service during 800 hours in any 1 calendar
14year, and service during any hour shall constitute an hour of
15service.
16(Source: P.A. 96-1490, eff. 1-1-11.)
 
17    (40 ILCS 5/9-235)  (from Ch. 108 1/2, par. 9-235)
18    Sec. 9-235. Felony conviction.
19    None of the benefits provided in this Article shall be paid
20to any person who is convicted of any felony relating to or
21arising out of or in connection with his service as an
22employee.
23    This section shall not operate to impair any contract or
24vested right heretofore acquired under any law or laws
25continued in this Article, nor to preclude the right to a

 

 

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1refund.
2    All future entrants entering service after July 11, 1955,
3shall be deemed to have consented to the provisions of this
4section as a condition of coverage.
5    No refund paid to any person who is convicted of a felony
6relating to or arising out of or in connection with the
7person's service as a member shall include employer
8contributions or interest or, in the case of the self-managed
9plan authorized under Section 9-170.5, any employer
10contributions or investment return on employer contributions.
11(Source: Laws 1963, p. 161.)
 
12    (40 ILCS 5/9-240 new)
13    Sec. 9-240. Qualified plan status. No provision of this
14Article shall be interpreted in a way that would cause the Fund
15to cease to be a qualified plan under Section 401(a) of the
16Internal Revenue Code.
 
17    (40 ILCS 5/10-103)  (from Ch. 108 1/2, par. 10-103)
18    Sec. 10-103. Members, contributions and benefits. The
19board shall cause the same deductions to be made from salaries
20and, subject to Section 10-109, allow the same annuities,
21refunds, and benefits, including, but not limited to,
22self-managed plan benefits, for employees of the district as
23are made and allowed for employees of the county.
24(Source: P.A. 95-1036, eff. 2-17-09.)
 

 

 

09700SB0512ham002- 96 -LRB097 06621 JDS 59545 a

1    (40 ILCS 5/10-109)
2    Sec. 10-109. Felony conviction. None of the benefits
3provided in this Article shall be paid to any person who is
4convicted of any felony relating to or arising out of or in
5connection with his service as an employee.
6    This Section shall not operate to impair any contract or
7vested right heretofore acquired under any law or laws
8continued in this Article, nor to preclude the right to a
9refund.
10    All future entrants entering service after the effective
11date of this amendatory Act of the 95th General Assembly shall
12be deemed to have consented to the provisions of this Section
13as a condition of coverage.
14    No refund paid to any person who is convicted of a felony
15relating to or arising out of or in connection with the
16person's service as a member shall include employer
17contributions or interest or, in the case of the self-managed
18plan, any employer contributions or investment return on
19employer contributions.
20(Source: P.A. 95-1036, eff. 2-17-09.)
 
21    (40 ILCS 5/10-110 new)
22    Sec. 10-110. Maximum self-managed plan participation. By
23January 1, 2013, the Fund shall certify the total active
24participant population. When the number of participants that

 

 

09700SB0512ham002- 97 -LRB097 06621 JDS 59545 a

1elect the self-managed plan is equal to 20% of the total active
2participant population, then no participant may elect the
3self-managed plan. Beginning in 2016 and every 3 years
4thereafter, the Fund shall recertify the total active
5participant population and the number of participants in the
6self-managed plan. If the number of participants in the
7self-managed plan is less than 20% of the recertified total
8active participant population, then eligible participants may
9elect to participate in the self-managed plan. However,
10participants shall be prohibited from electing to participate
11once the Fund determines that the number of participants in the
12self-managed plan is equal to 20% of the number of total active
13participants in the Fund.
 
14    (40 ILCS 5/10-111 new)
15    Sec. 10-111. Employer contributions to the self-managed
16plan. Beginning in fiscal year 2014, for participants electing
17benefits under the self-managed plan, an employer contribution
18shall be made each fiscal year in an amount equal to 6% of
19total pensionable payroll for the respective employee group.
 
20    (40 ILCS 5/11-123.1 new)
21    Sec. 11-123.1. Reformed benefit package. "Reformed benefit
22package": The defined benefit retirement program maintained
23under the Fund for employees who first become participants in
24the Fund on or after January 1, 2011.
 

 

 

09700SB0512ham002- 98 -LRB097 06621 JDS 59545 a

1    (40 ILCS 5/11-123.2 new)
2    Sec. 11-123.2. Self-managed plan. "Self-managed plan": The
3defined contribution retirement program maintained under the
4Fund as described in Section 11-131.2. The self-managed plan
5shall not include retirement annuities or death, survivor,
6disability, or insurance benefits that are payable directly
7from the Fund as provided under this Article.
 
8    (40 ILCS 5/11-123.3 new)
9    Sec. 11-123.3. Traditional benefit package. "Traditional
10benefit package": The defined benefit retirement program
11maintained under the Fund for employees who first became
12participants in the Fund before January 1, 2011.
 
13    (40 ILCS 5/11-124)  (from Ch. 108 1/2, par. 11-124)
14    Sec. 11-124. Annuity.
15    "Annuity": Equal monthly payments for life, unless
16terminated earlier under Section 11-148, 11-152, 11-153, or
1711-230.
18    For annuities taking effect before January 1, 1998, the
19first payment shall be due and payable one month after the
20occurrence of the event upon which payment of the annuity
21depends. Until August 1, 1999, payment shall be made for any
22part of a monthly period in which death of the annuitant
23occurs. Beginning August 1, 1999, all payments shall be made on

 

 

09700SB0512ham002- 99 -LRB097 06621 JDS 59545 a

1the first day of the calendar month and shall be for the entire
2calendar month, without proration. The last payment shall be
3made on the first day of the calendar month in which the
4annuity payment period ends. A pro rata amount shall be paid
5for that part of the month from the July 1999 annuity payment
6date through July 31, 1999.
7    For annuities taking effect on or after January 1, 1998,
8payments shall be made as of the first day of the calendar
9month, with the first payment to be made as of the first day of
10the calendar month coincidental with or next following the
11first day of the annuity payment period, and the last payment
12to be made as of the first day of the calendar month in which
13the annuity payment period ends. For annuities taking effect on
14or after January 1, 1998, all payments shall be for the entire
15calendar month, without proration.
16    For the purposes of this Section, the "annuity payment
17period" means the period beginning on the day after the
18occurrence of the event upon which payment of the annuity
19depends, and ending on the day upon which the death of the
20annuitant or other event terminating the annuity occurs.
21    The provisions of this Section do not apply to participants
22who are participating in the self-managed plan.
23(Source: P.A. 90-31, eff. 6-27-97; 91-887, eff. 7-6-00.)
 
24    (40 ILCS 5/11-131.1 new)
25    Sec. 11-131.1. Benefit accruals on and after July 1, 2013.

 

 

09700SB0512ham002- 100 -LRB097 06621 JDS 59545 a

1    (a) Each participating employee under this Article, other
2than a person who first becomes an employee and a participant
3on or after January 1, 2011, shall choose which retirement
4program he or she wishes to participate in with respect to all
5periods of employment occurring on and after July 1, 2013,
6except that such participants with more than 5 years of
7creditable service at the time of such election shall only be
8eligible to elect one of the retirement programs in paragraphs
9(1) or (2) of this subsection (a). The retirement program
10election made by the participating employee must be made no
11later than January 1, 2013. The participating employee shall
12elect one of the following retirement programs:
13        (1) the traditional benefit package provided by the
14    Fund;
15        (2) the reformed benefit package provided by the Fund;
16    or
17        (3) the self-managed plan provided by the Fund.
18    (b) A person who first becomes an employee and a
19participant in the Fund on or after January 1, 2011 shall be
20given the choice to elect which retirement program he or she
21wishes to participate in with respect to all periods of covered
22employment occurring on and after July 1, 2013. The participant
23shall elect one of the retirement programs provided in
24paragraph (2) or (3) of subsection (a) of this Section. The
25participant must make the election (i) by January 1, 2013 or
26within 6 months after the participant's first day of

 

 

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1employment, whichever is later, and (ii) if applicable, every 3
2years thereafter.
3    (c) The participant election authorized by this Section is
4a one-time, irrevocable election, except that any individual
5making an election for the retirement program described under
6paragraph (1) or (2) of subsection (a) shall make an election
7for a period of 3 years and shall make subsequent elections
8every 3 years during a 6-month period prescribed by the Fund.
9The election shall be made in writing, in the manner prescribed
10by the Fund. Any participant who fails to make the election
11shall, by default, participate in the benefit program provided
12under paragraph (2) of subsection (a) of this Section.
13    (d) Participants who have already made an election pursuant
14to subsection (a) or (b) shall be given the opportunity to make
15a new election as follows:
16        (1) Each participant in the traditional benefit
17    package provided under paragraph (1) of subsection (a) of
18    this Section shall have the opportunity to elect to
19    terminate participation in the traditional benefit package
20    and to elect to have retirement benefits for future service
21    provided under either the reformed benefit package
22    provided under paragraph (2) of subsection (a) of this
23    Section or the self-managed plan provided under paragraph
24    (3) of subsection (a) of this Section. However, such
25    participants with more than 5 years of creditable service
26    shall be prohibited from electing paragraph (3) of

 

 

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1    subsection (a) of this Section.
2        (2) Each participant that has less than 5 years of
3    creditable service and participates in the reformed
4    benefit package provided under paragraph (2) of subsection
5    (a) of this Section shall have the opportunity to elect to
6    terminate participation in the reformed benefit package
7    and to elect to have retirement benefits for future service
8    provided under the self-managed plan provided under
9    paragraph (3) of subsection (a) of this Section.
10        (3) The elections permitted under paragraphs (1) and
11    (2) must be made during a 6-month period in the manner
12    prescribed by the Fund.
13    (e) If a participant with an accrued benefit under the
14traditional benefit package elects the reformed benefit
15package, the participant's total accrued benefit for purposes
16of determining an annuity shall be the sum of (i) the
17participant's benefit accruals under the traditional benefit
18package, based on the participant's pay and service under the
19traditional benefit package and frozen with respect to pay for
20service earned subsequent to participation under the
21traditional benefit package and (ii) the participant's benefit
22accruals based on pay and service under the reformed benefit
23package. All rights and features provided under the traditional
24benefit package will be preserved with respect to benefits
25earned under such package with respect to service completed
26prior to the election to participate in the reformed benefit

 

 

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1package. All service completed under the Fund shall count for
2purposes of determining retirement eligibility and vesting
3under both the traditional benefit package and the reformed
4benefit package, provided that the vesting requirements of the
5traditional benefit package shall continue to govern vesting
6for participants in the reformed benefit package.
7    (f) If a participant with an accrued benefit under the
8traditional benefit package or the reformed benefit package
9elects the self-managed plan provided under paragraph (3) of
10subsection (a) of this Section, the participant's total accrued
11benefit for purposes of determining an annuity shall be the
12participant's benefit accruals prior to participation in the
13self-managed plan, based on the participant's pay and service
14and frozen with respect to pay for service earned subsequent to
15participation in the traditional or reformed benefit package.
16However, the participant shall also have an accrued
17self-managed plan balance as specified in subsection (h) of
18Section 11-131.2, for periods of covered employment on or after
19participation in the self-managed plan. All rights and features
20provided under the traditional or reformed benefit package will
21be preserved with respect to benefits earned under such package
22with respect to service completed prior to the election to
23participate in the self-managed plan. All service completed
24under the traditional or reformed benefit package and the
25self-managed plan shall count for purposes of determining
26retirement eligibility and vesting under the traditional

 

 

09700SB0512ham002- 104 -LRB097 06621 JDS 59545 a

1benefit package and the self-managed plan.
2    (g) An individual with less than 5 years of creditable
3service and who is a participant in the Fund but is not a
4participating employee on January 1, 2013 shall be allowed to
5elect, based on the eligibility criteria specified in this
6Code, one of the retirement programs provided in paragraph (1),
7(2), or (3) of subsection (a) of this Section within 6 months
8after becoming a participating employee, based on eligibility.
9    An individual with 5 or more years of creditable service
10and who is a participant in the Fund but is not a participating
11employee on January 1, 2013 shall be allowed to elect, based on
12the eligibility criteria specified in this Code, one of the
13retirement programs provided in paragraph (1) or (2) of
14subsection (a) of this Section within 6 months after becoming a
15participating employee, based on eligibility.
 
16    (40 ILCS 5/11-131.2 new)
17    Sec. 11-131.2. Self-managed plan.
18    (a) Purpose. The Laborers' and Retirement Board Employees'
19Annuity and Benefit Fund shall establish and administer a
20self-managed plan, which shall offer members the opportunity to
21accumulate assets for retirement through a combination of
22employee and employer contributions that may be invested in
23mutual funds, collective investment funds, or other investment
24products and may be used to purchase annuity contracts, either
25fixed or variable or a combination thereof. The plan must be

 

 

09700SB0512ham002- 105 -LRB097 06621 JDS 59545 a

1qualified under the Internal Revenue Code of 1986.
2    (b) The Laborers' and Retirement Board Employees' Annuity
3and Benefit Fund shall be the plan sponsor for the self-managed
4plan and shall prepare a plan document and prescribe such rules
5and procedures as are considered necessary or desirable for the
6administration of the self-managed plan. Consistent with its
7fiduciary duty to the participants and beneficiaries of the
8self-managed plan, the Board may delegate aspects of plan
9administration as it sees fit to companies authorized to do
10business in this State.
11    (c) Selection of service providers and funding vehicles.
12The Fund may solicit proposals to provide administrative
13services and funding vehicles for the self-managed plan from
14insurance and annuity companies and mutual fund companies,
15banks, trust companies, or other financial institutions
16authorized to do business in this State.
17    The Fund shall periodically review each approved company. A
18company may continue to provide administrative services and
19funding vehicles for the self-managed plan only so long as it
20continues to be an approved company under contract with the
21Board.
22    (d) Employee direction. Employees who are participating in
23the program must be allowed to direct the transfer of their
24account balances among the various investment options offered,
25subject to applicable contractual provisions. The employee
26shall not be deemed a fiduciary by reason of providing such

 

 

09700SB0512ham002- 106 -LRB097 06621 JDS 59545 a

1investment direction. A person who is a fiduciary shall not be
2liable for any loss resulting from such investment direction
3and shall not be deemed to have breached any fiduciary duty by
4acting in accordance with that direction. Neither the Fund nor
5the employer guarantees any of the investments in the
6employee's account balances.
7    (e) Participation. An employee eligible to participate in
8the self-managed plan must make a written election under
9Section 11-131.1 and the procedures established by the Fund.
10Participation in the self-managed plan by an electing employee
11shall begin on the first day of the first pay period following
12the later of (i) the date the employee's election is filed with
13the Fund or (ii) July 1, 2013.
14    An employee who has elected to participate in the
15self-managed plan under this Section must continue
16participation while employed in an eligible position.
17Participation in the self-managed plan under this Section shall
18constitute membership in the Laborers' and Retirement Board
19Employees' Annuity and Benefit Fund.
20    An employee under this Section shall be entitled to the
21benefits of Article 20 of this Code.
22    (f) Contributions. The self-managed plan shall be funded by
23contributions from employees participating in the self-managed
24plan and employer contributions as provided in this Section.
25    This required contribution shall be made as an "employer
26pick up" under Section 414(h) of the Internal Revenue Code of

 

 

09700SB0512ham002- 107 -LRB097 06621 JDS 59545 a

11986 or any successor Section thereof. In no event shall an
2employee have an option of receiving these amounts in cash. The
3program shall provide for employer contributions to be credited
4to each self-managed plan participant at a rate of 6% of the
5participating member's salary. The amounts so credited shall be
6paid into the employee's self-managed plan account in a manner
7to be prescribed by the Fund.
8    The employer shall make contributions by the
9appropriations to the Fund of the employer contributions
10required for employees who participate in the self-managed plan
11under this Section. The amount required shall be certified by
12the Board and paid by the employer in accordance with this
13Article. The Fund shall not be obligated to remit the required
14employer contributions to any person or entity until it has
15received the required employer contributions from the
16employer.
17    (g) Vesting; withdrawal; return to service. A participant
18in the self-managed plan becomes vested in the employer
19contributions credited to his or her account in the
20self-managed plan on the earliest to occur of the following:
21(1) completion of 5 years of creditable service; (2) the death
22of the participant while in active service, if the participant
23has completed at least 1 1/2 years of service; or (3) the
24participant's election to retire and apply the reciprocal
25provisions of Article 20 of this Code.
26    (h) Benefit amounts. If a participant who is vested in

 

 

09700SB0512ham002- 108 -LRB097 06621 JDS 59545 a

1employer contributions terminates employment, the employee
2shall be entitled to a benefit which is based on the account
3values attributable to the employer and member contributions
4and any investment return thereon.
5    If a participant who is not vested in employer
6contributions terminates employment, the participant shall be
7entitled to a benefit based solely on the account values
8attributable to the participant's contributions and any
9investment return thereon, and the employer contributions and
10any investment return thereon shall be forfeited. Any employer
11contributions which are forfeited shall become part of the
12trust.
 
13    (40 ILCS 5/11-131.3 new)
14    Sec. 11-131.3. Minimum benefit and allocation provisions.
15Each participant in the System shall receive a minimum benefit
16or allocation determined as follows:
17        (1) If the participant is participating in the
18    traditional benefit package provided under paragraph (1)
19    of subsection (a) of Section 11-131.1 of this Code or the
20    revised defined benefit package provided under paragraph
21    (2) of subsection (a) of Section 11-131.1 of this Code, the
22    participant shall receive a minimum benefit (commencing on
23    his or her Social Security retirement age) that is equal to
24    the annual primary insurance amount the participant would
25    have under Social Security. For the purposes of this item

 

 

09700SB0512ham002- 109 -LRB097 06621 JDS 59545 a

1    (1), the primary insurance amount a participant would have
2    under Social Security shall be calculated so that the
3    System meets the requirements necessary to be considered a
4    retirement system under Section 3121(b)(7)(F) of the
5    Internal Revenue Code and the regulations in effect
6    thereunder.
7        (2) If the participant is participating in the
8    self-managed plan provided under Section 11-131.2 of this
9    Code, the member shall receive a minimum allocation equal
10    to 7.5% of the participant's compensation for service
11    during the period. All contributions shall be taken into
12    account for this purpose. For the purposes of this
13    paragraph (2), the minimum allocation shall be calculated
14    so that the System meets the requirements necessary to be
15    considered a retirement system under Section 3121(b)(7)(F)
16    of the Internal Revenue Code and the regulations in effect
17    thereunder.
 
18    (40 ILCS 5/11-131.4 new)
19    Sec. 11-131.4. Employer contributions to the self-managed
20plan. Beginning in fiscal year 2013, for members electing
21benefits under paragraph (3) of subsection (a) of Section
2211-131.1, an employer contribution shall be made each fiscal
23year in an amount equal to 6% of total pensionable payroll for
24the respective employee group.
 

 

 

09700SB0512ham002- 110 -LRB097 06621 JDS 59545 a

1    (40 ILCS 5/11-169)  (from Ch. 108 1/2, par. 11-169)
2    Sec. 11-169. Financing; tax levy.
3    (a) Except as provided in subsection (f) of this Section,
4the city council of the city shall levy a tax annually upon all
5taxable property in the city at the rate that will produce a
6sum which, when added to the amounts deducted from the salaries
7of the employees or otherwise contributed by them and the
8amounts deposited under subsection (f), will be sufficient for
9the requirements of this Article. For the years prior to the
10year 1950 the tax rate shall be as provided for under "The 1935
11Act". Beginning with the year 1950 to and including the year
121969 such tax shall be not more than .036% annually of the
13value, as equalized or assessed by the Department of Revenue,
14of all taxable property within such city. Beginning with the
15year 1970 and each year thereafter the city shall levy a tax
16annually at a rate on the dollar of the value, as equalized or
17assessed by the Department of Revenue of all taxable property
18within such city that will produce, when extended, not to
19exceed an amount equal to the total amount of contributions by
20the employees to the fund made in the calendar year 2 years
21prior to the year for which the annual applicable tax is
22levied, multiplied by 1.1 for the years 1970, 1971 and 1972;
231.145 for the year 1973; 1.19 for the year 1974; 1.235 for the
24year 1975; 1.280 for the year 1976; 1.325 for the year 1977;
251.370 for the years 1978 through 1998; and 1.000 for the years
26year 1999 through 2012. For 2013 and for each year thereafter,

 

 

09700SB0512ham002- 111 -LRB097 06621 JDS 59545 a

1the amount levied shall be equal to the amount levied in 2010.
2    The tax shall be levied and collected in like manner with
3the general taxes of the city, and shall be exclusive of and in
4addition to the amount of tax the city is now or may hereafter
5be authorized to levy for general purposes under any laws which
6may limit the amount of tax which the city may levy for general
7purposes. The county clerk of the county in which the city is
8located, in reducing tax levies under the provisions of any Act
9concerning the levy and extension of taxes, shall not consider
10the tax herein provided for as a part of the general tax levy
11for city purposes, and shall not include the same within any
12limitation of the per cent of the assessed valuation upon which
13taxes are required to be extended for such city.
14    Revenues derived from such tax shall be paid to the city
15treasurer of the city as collected and held by him for the
16benefit of the fund.
17    If the payments on account of taxes are insufficient during
18any year to meet the requirements of this Article, the city may
19issue tax anticipation warrants against the current tax levy.
20    (b) On or before January 10, annually, the board shall
21notify the city council of the requirement of this Article that
22the tax herein provided shall be levied for that current year.
23The board shall compute the amounts necessary for the purposes
24of this fund to be credited to the reserves established and
25maintained as herein provided, and shall make an annual
26determination of the amount of the required city contributions;

 

 

09700SB0512ham002- 112 -LRB097 06621 JDS 59545 a

1and certify the results thereof to the city council.
2    (c) In respect to employees of the city who are transferred
3to the employment of a park district by virtue of "Exchange of
4Functions Act of 1957" the corporate authorities of the park
5district shall annually levy a tax upon all the taxable
6property in the park district at such rate per cent of the
7value of such property, as equalized or assessed by the
8Department of Revenue, as shall be sufficient, when added to
9the amounts deducted from their salaries and otherwise
10contributed by them, to provide the benefits to which they and
11their dependents and beneficiaries are entitled under this
12Article. The city shall not levy a tax hereunder in respect to
13such employees.
14    The tax so levied by the park district shall be in addition
15to and exclusive of all other taxes authorized to be levied by
16the park district for corporate, annuity fund, or other
17purposes. The county clerk of the county in which the park
18district is located, in reducing any tax levied under the
19provisions of any Act concerning the levy and extension of
20taxes shall not consider such tax as part of the general tax
21levy for park purposes, and shall not include the same in any
22limitation of the per cent of the assessed valuation upon which
23taxes are required to be extended for the park district. The
24proceeds of the tax levied by the park district, upon receipt
25by the district, shall be immediately paid over to the city
26treasurer of the city for the uses and purposes of the fund.

 

 

09700SB0512ham002- 113 -LRB097 06621 JDS 59545 a

1    The various sums to be contributed by the city and
2allocated for the purposes of this Article, and any interest to
3be contributed by the city, shall be taken from the revenue
4derived from the taxes authorized in this Section, and no money
5of such city derived from any source other than the levy and
6collection of those taxes or the sale of tax anticipation
7warrants in accordance with the provisions of this Article
8shall be used to provide revenue for this Article, except as
9expressly provided in this Section.
10    If it is not possible for the city to make contributions
11for age and service annuity and widow's annuity concurrently
12with the employee's contributions made for such purposes, such
13city shall make such contributions as soon as possible and
14practicable thereafter with interest thereon at the effective
15rate to the time they shall be made.
16    (d) With respect to employees whose wages are funded as
17participants under the Comprehensive Employment and Training
18Act of 1973, as amended (P.L. 93-203, 87 Stat. 839, P.L.
1993-567, 88 Stat. 1845), hereinafter referred to as CETA,
20subsequent to October 1, 1978, and in instances where the board
21has elected to establish a manpower program reserve, the board
22shall compute the amounts necessary to be credited to the
23manpower program reserves established and maintained as herein
24provided, and shall make a periodic determination of the amount
25of required contributions from the City to the reserve to be
26reimbursed by the federal government in accordance with rules

 

 

09700SB0512ham002- 114 -LRB097 06621 JDS 59545 a

1and regulations established by the Secretary of the United
2States Department of Labor or his designee, and certify the
3results thereof to the City Council. Any such amounts shall
4become a credit to the City and will be used to reduce the
5amount which the City would otherwise contribute during
6succeeding years for all employees.
7    (e) In lieu of establishing a manpower program reserve with
8respect to employees whose wages are funded as participants
9under the Comprehensive Employment and Training Act of 1973, as
10authorized by subsection (d), the board may elect to establish
11a special municipality contribution rate for all such
12employees. If this option is elected, the City shall contribute
13to the Fund from federal funds provided under the Comprehensive
14Employment and Training Act program at the special rate so
15established and such contributions shall become a credit to the
16City and be used to reduce the amount which the City would
17otherwise contribute during succeeding years for all
18employees.
19    (f) In lieu of levying all or a portion of the tax required
20under this Section in any year, the city may deposit with the
21city treasurer no later than March 1 of that year for the
22benefit of the fund, to be held in accordance with this
23Article, an amount that, together with the taxes levied under
24this Section for that year, is not less than the amount of the
25city contributions for that year as certified by the board to
26the city council. The deposit may be derived from any source

 

 

09700SB0512ham002- 115 -LRB097 06621 JDS 59545 a

1legally available for that purpose, including, but not limited
2to, the proceeds of city borrowings. The making of a deposit
3shall satisfy fully the requirements of this Section for that
4year to the extent of the amounts so deposited. Amounts
5deposited under this subsection may be used by the fund for any
6of the purposes for which the proceeds of the tax levied by the
7city under this Section may be used, including the payment of
8any amount that is otherwise required by this Article to be
9paid from the proceeds of that tax.
10(Source: P.A. 90-31, eff. 6-27-97; 90-766, eff. 8-14-98.)
 
11    (40 ILCS 5/11-170)  (from Ch. 108 1/2, par. 11-170)
12    Sec. 11-170. Contributions for age and service annuities
13for present employees, future entrants and re-entrants.
14    (a) Beginning on the effective date and prior to July 1,
151947, 3 1/4%; and beginning on July 1, 1947 and prior to July
161, 1953, 5%; and beginning July 1, 1953 and prior to January 1,
171972, 6%; and beginning January 1, 1972, 6 1/2% of each payment
18of the salary of each present employee, future entrant and
19re-entrant shall be contributed to the fund as a deduction from
20salary for age and service annuity. Such deductions beginning
21on the effective date and prior to June 30, 1947, inclusive
22shall be made for a future entrant while he is in service until
23he attains age 65, and for a present employee while he is in
24service until the amount so deducted from his salary with
25interest at the rate of 4% per annum shall be equal to the sum

 

 

09700SB0512ham002- 116 -LRB097 06621 JDS 59545 a

1which would have accumulated to his credit from sums deducted
2from his salary if deductions at the rate herein stated had
3been made during his entire service until he attained age 65
4with interest at 4% per annum for the period subsequent to his
5attainment of age 65. Such deductions beginning July 1, 1947
6shall be made and continued for employees while in the service.
7    (b) Concurrently with each employee contribution, the city
8shall contribute beginning on the effective date and prior to
9July 1, 1947, 5 3/4%; and beginning July 1, 1947 and prior to
10July 1, 1953, 7%; and beginning July 1, 1953, 6% of each
11payment of such salary until the employee attains age 65.
12    (c) Each employee contribution made prior to the date age
13and service annuity for an employee is fixed and each
14corresponding city contribution shall be allocated to the
15account of and credited to the employee for whose benefit it is
16made.
17    (d) Notwithstanding any other provision of this Article,
18beginning July 1, 2013, all participants shall be required to
19make the following contributions:
20        (1) Participants who elect the traditional benefit
21    package under paragraph (1) of subsection (a) of Section
22    11-131.1 of this Code shall contribute:
23            (A) In fiscal year 2014, fiscal year 2015, and
24        fiscal year 2016, an amount equal to 12.75% of salary.
25            (B) In fiscal year 2017 and in each fiscal year
26        thereafter, a percentage of salary equal to the

 

 

09700SB0512ham002- 117 -LRB097 06621 JDS 59545 a

1        actuarially determined normal cost of the traditional
2        benefit package, minus an amount equal to 6% of total
3        pensionable salary. The Fund shall certify the
4        actuarially determined normal cost of the traditional
5        benefit package and the amount of required participant
6        contributions by July 1, 2016 and every 3 years
7        thereafter.
8        (2) Participants who elect the reformed benefit
9    package under paragraph (2) of subsection (a) of Section
10    11-131.1 of this Code shall contribute:
11            (A) In fiscal year 2014, fiscal year 2015, and
12        fiscal year 2016, an amount equal to 7% of salary.
13            (B) In fiscal year 2017 and in each fiscal year
14        thereafter, a percentage of salary equal to the
15        actuarially determined normal cost of the reformed
16        benefit package, minus an amount equal to 6% of total
17        pensionable salary. The Fund shall certify the
18        actuarially determined normal cost of the reformed
19        benefit package and the amount of required participant
20        contributions by July 1, 2016 and every 3 years
21        thereafter.
22        (3) Participants who elect the self-managed plan under
23    paragraph (3) of subsection (a) of Section 11-131.1 of this
24    Code shall contribute a minimum of 6% of salary.
25    Participants who elect the self-managed plan provided
26    under Section 11-131.2 of this Code may elect to increase

 

 

09700SB0512ham002- 118 -LRB097 06621 JDS 59545 a

1    their employee contributions in accordance with rules
2    prescribed by the Board.
3    No prior contribution increases or other additional
4contributions specified by this Section shall apply to any
5participant for service on or after July 1, 2013.
6(Source: P.A. 81-1536.)
 
7    (40 ILCS 5/11-230)  (from Ch. 108 1/2, par. 11-230)
8    Sec. 11-230. Felony conviction.
9    None of the benefits provided in this Article shall be paid
10to any person who is convicted of any felony relating to or
11arising out of or in connection with his service as employee.
12    This section shall not operate to impair any contract or
13vested right heretofore acquired under any law or laws
14continued in this Article, nor to preclude the right to a
15refund.
16    All future entrants entering service after July 11, 1955,
17shall be deemed to have consented to the provisions of this
18section as a condition of coverage.
19    No refund paid to any person who is convicted of a felony
20relating to or arising out of or in connection with the
21person's service as an employee shall include employer
22contributions or interest or, in the case of the self-managed
23plan authorized under Section 11-131.2, any employer
24contributions or investment return on employer contributions.
25(Source: Laws 1963, p. 161.)
 

 

 

09700SB0512ham002- 119 -LRB097 06621 JDS 59545 a

1    (40 ILCS 5/11-235 new)
2    Sec. 11-235. Qualified plan status. No provision of this
3Article shall be interpreted in a way that would cause the Fund
4to cease to be a qualified plan under Section 401(a) of the
5Internal Revenue Code.
 
6    (40 ILCS 5/12-116)  (from Ch. 108 1/2, par. 12-116)
7    Sec. 12-116. Fiscal year.
8    "Fiscal year": For periods prior to July 1, 2011, the The
9year commencing with July 1st and ending with June 30th next
10following. Beginning January 1, 2013, the year commencing
11January 1 and ending December 31. The fiscal year which begins
12July 1, 2012 shall end December 31, 2012.
13(Source: Laws 1963, p. 161.)
 
14    (40 ILCS 5/12-125.2 new)
15    Sec. 12-125.2. Reformed benefit package. "Reformed benefit
16package": The defined benefit retirement program maintained
17under the Fund for employees who first become employees in the
18Fund on or after January 1, 2011.
 
19    (40 ILCS 5/12-125.3 new)
20    Sec. 12-125.3. Self-managed plan. "Self-managed plan": The
21defined contribution retirement program maintained under the
22Fund as described in Section 12-128.2.
 

 

 

09700SB0512ham002- 120 -LRB097 06621 JDS 59545 a

1    (40 ILCS 5/12-125.4 new)
2    Sec. 12-125.4. Traditional benefit package. "Traditional
3benefit package": The defined benefit retirement program
4maintained under the Fund for employees who first became
5employees in the Fund before January 1, 2011.
 
6    (40 ILCS 5/12-128.1 new)
7    Sec. 12-128.1. Benefit accruals on and after July 1, 2013.
8    (a) Each employee under this Article, other than a person
9who first becomes an employee on or after January 1, 2011,
10shall choose which retirement program he or she wishes to
11participate in with respect to all periods of covered
12employment occurring on and after July 1, 2013, except that
13such employees with more than 5 years of creditable service at
14the time of such election shall only be eligible to elect one
15of the of the retirement programs in paragraphs (1) or (2) of
16this subsection (a). The retirement program election made by
17the employee must be made no later than January 1, 2013. The
18employee shall elect one of the following retirement programs:
19        (1) the traditional benefit package provided by the
20    Fund;
21        (2) the reformed benefit package provided by the Fund;
22    or
23        (3) the self-managed plan provided by the Fund.
24    (b) A person who first becomes an employee in the Fund on

 

 

09700SB0512ham002- 121 -LRB097 06621 JDS 59545 a

1or after January 1, 2011 shall be given the choice to elect
2which retirement program he or she wishes to participate in
3with respect to all periods of employment occurring on and
4after July 1, 2013. The employee shall elect one of the
5retirement programs provided in paragraph (2) or (3) of
6subsection (a) of this Section. The participant must make the
7election (i) by January 1, 2013 or within 6 months after the
8employee's first day of covered employment, whichever is later,
9and (ii) if applicable, every 3 years thereafter.
10    (c) The employee election authorized by this Section is an
11irrevocable election, except that any individual making an
12election for the retirement program described under paragraph
13(1) or (2) of subsection (a) shall make an election for a
14period of 3 years and shall make subsequent elections every 3
15years during a 6-month period prescribed by the Fund. The
16election shall be made in writing, in the manner prescribed by
17the Fund. Any participant who fails to make the election shall,
18by default, participate in the benefit program provided under
19paragraph (2) of subsection (a) of this Section.
20    (d) Employees who have already made an election pursuant to
21subsection (a) or (b) shall be given the opportunity to make a
22new election as follows:
23        (1) Each employee in the traditional benefit package
24    provided under paragraph (1) of subsection (a) of this
25    Section shall have the opportunity to elect to terminate
26    participation in the traditional benefit package and to

 

 

09700SB0512ham002- 122 -LRB097 06621 JDS 59545 a

1    elect to have retirement benefits for future service
2    provided under either the reformed benefit package
3    provided under paragraph (2) of subsection (a) of this
4    Section or the self-managed plan provided under paragraph
5    (3) of subsection (a) of this Section. However, such
6    participants with more than 5 years of creditable service
7    shall be prohibited from electing paragraph (3) of
8    subsection (a) of this Section.
9        (2) Each employee that has less than 5 years of
10    creditable service and participates in the reformed
11    benefit package provided under paragraph (2) of subsection
12    (a) of this Section shall have the opportunity to elect to
13    terminate participation in the reformed benefit package
14    and to elect to have retirement benefits for future service
15    provided under the self-managed plan provided under
16    paragraph (3) of subsection (a) of this Section.
17        (3) The elections permitted under paragraphs (1) and
18    (2) must be made during a 6-month period in the manner
19    prescribed by the Fund.
20    (e) If an employee with an accrued benefit under the
21traditional benefit package elects the reformed benefit
22package, the employee's total accrued benefit for purposes of
23determining an annuity shall be the sum of (i) the employee's
24benefit accruals under the traditional benefit package, based
25on the employee's pay and service under the traditional benefit
26package and frozen with respect to pay for service earned

 

 

09700SB0512ham002- 123 -LRB097 06621 JDS 59545 a

1subsequent to participation under the traditional benefit
2package and (ii) the employee's benefit accruals based on pay
3and service under the reformed benefit package. All rights and
4features provided under the traditional benefit package will be
5preserved with respect to benefits earned under such package
6with respect to service completed prior to the election to
7participate in the reformed benefit package. All service
8completed under the Fund shall count for purposes of
9determining retirement eligibility and vesting under both the
10traditional benefit package and the reformed benefit package,
11provided that the vesting requirements of the traditional
12benefit package shall continue to govern vesting for employees
13in the reformed benefit package.
14    (f) If an employee with an accrued benefit under the
15traditional benefit package or the reformed benefit package
16elects the self-managed plan provided under paragraph (3) of
17subsection (a) of this Section, the employee's total accrued
18benefit for purposes of determining an annuity shall be the
19employee's benefit accruals prior to participation in the
20self-managed plan, based on the employee's pay and service and
21frozen with respect to pay for service earned subsequent to
22participation in the traditional or reformed benefit package.
23However, the employee shall also have an accrued self-managed
24plan balance as specified in subsection (h) of Section
2512-128.2, for periods of covered employment on or after
26participation in the self-managed plan. All rights and features

 

 

09700SB0512ham002- 124 -LRB097 06621 JDS 59545 a

1provided under the traditional benefit package must be
2preserved with respect to benefits earned under that package
3with respect to service completed prior to the election to
4participate in the self-managed plan. All service completed
5under the traditional benefit package and the self-managed plan
6shall count for purposes of determining retirement eligibility
7and vesting under the traditional benefit package and the
8self-managed plan.
9    (g) An individual with less than 5 years of creditable
10service and who is a participant in the Fund but is not a
11participating employee on January 1, 2013 shall be allowed to
12elect, based on the eligibility criteria specified in this
13Code, one of the retirement programs provided in paragraph (1),
14(2), or (3) of subsection (a) of this Section within 6 months
15after becoming an employee, based on eligibility.
16    An individual with 5 or more years of creditable service
17and who is a participant in the Fund but is not a participating
18employee on January 1, 2013 shall be allowed to elect, based on
19the eligibility criteria specified in this Code, one of the
20retirement programs provided in paragraph (1) or (2) of
21subsection (a) of this Section within 6 months after becoming
22an employee, based on eligibility.
 
23    (40 ILCS 5/12-128.2 new)
24    Sec. 12-128.2. Self-managed plan.
25    (a) Purpose. The Park Employees' and Retirement Board

 

 

09700SB0512ham002- 125 -LRB097 06621 JDS 59545 a

1Employees' Annuity and Benefit Fund shall establish and
2administer a self-managed plan, which shall offer employees the
3opportunity to accumulate assets for retirement through a
4combination of employee and employer contributions that may be
5invested in mutual funds, collective investment funds, or other
6investment products and may be used to purchase annuity
7contracts, either fixed or variable or a combination thereof.
8The plan must be qualified under the Internal Revenue Code of
91986.
10    (b) The Park Employees' and Retirement Board Employees'
11Annuity and Benefit Fund shall be the plan sponsor for the
12self-managed plan and shall prepare a plan document and
13prescribe such rules and procedures as are considered necessary
14or desirable for the administration of the self-managed plan.
15Consistent with its fiduciary duty to the participants and
16beneficiaries of the self-managed plan, the Board of Trustees
17of the Fund may delegate aspects of plan administration as it
18sees fit to companies authorized to do business in this State.
19    (c) Selection of service providers and funding vehicles.
20The Fund may solicit proposals to provide administrative
21services and funding vehicles for the self-managed plan from
22insurance and annuity companies and mutual fund companies,
23banks, trust companies, or other financial institutions
24authorized to do business in this State.
25    The Fund shall periodically review each approved company. A
26company may continue to provide administrative services and

 

 

09700SB0512ham002- 126 -LRB097 06621 JDS 59545 a

1funding vehicles for the self-managed plan only so long as it
2continues to be an approved company under contract with the
3Board.
4    (d) Employee direction. Employees who are participating in
5the program must be allowed to direct the transfer of their
6account balances among the various investment options offered,
7subject to applicable contractual provisions. The employee
8shall not be deemed a fiduciary by reason of providing such
9investment direction. A person who is a fiduciary shall not be
10liable for any loss resulting from such investment direction
11and shall not be deemed to have breached any fiduciary duty by
12acting in accordance with that direction. Neither the Fund nor
13the employer guarantees any of the investments in the
14employee's account balances.
15    (e) Participation. An employee eligible to participate in
16the self-managed plan must make a written election under
17Section 12-128.1 and the procedures established by the Fund.
18Participation in the self-managed plan by an electing employee
19shall begin on the first day of the first pay period following
20the date the employee's election is filed with the Fund.
21    An employee who has elected to participate in the
22self-managed plan under this Section must continue
23participation while employed in an eligible position.
24Participation in the self-managed plan under this Section shall
25constitute membership in the Park Employees' and Retirement
26Board Employees' Annuity and Benefit Fund.

 

 

09700SB0512ham002- 127 -LRB097 06621 JDS 59545 a

1    An employee under this Section shall be entitled to the
2benefits of Article 20 of this Code.
3    (f) Contributions. The self-managed plan shall be funded by
4contributions from employees participating in the self-managed
5plan and employer contributions as provided in this Section.
6    This required contribution shall be made as an "employer
7pick up" under Section 414(h) of the Internal Revenue Code of
81986 or any successor Section thereof. In no event shall a
9employee have an option of receiving these amounts in cash. The
10program shall provide for employer contributions to be credited
11to each self-managed plan participant at a rate of 6% of the
12participating employee's salary, less the amount used by the
13Fund to provide disability benefits for the employee. The
14amounts so credited shall be paid into the employee's
15self-managed plan account in a manner to be prescribed by the
16Fund.
17    The required amount of employer contributions shall be used
18for the purpose of providing the disability benefits of the
19Fund to the employee. Prior to the beginning of each plan year
20under the self-managed plan, the Board of Trustees shall
21determine, as a percentage of salary, the amount of employer
22contributions to be allocated during that plan year for
23providing disability benefits for employees in the
24self-managed plan.
25    The employer shall make contributions to the Fund of the
26employer contributions required for employees who participate

 

 

09700SB0512ham002- 128 -LRB097 06621 JDS 59545 a

1in the self-managed plan under this Section. The amount
2required shall be certified by the Board and paid by the
3employer in accordance with this Article. The Fund shall not be
4obligated to remit the required employer contributions to any
5person or entity until it has received the required employer
6contributions from the employer.
7    (g) Vesting; withdrawal; return to service. An employee in
8the self-managed plan becomes vested in the employer
9contributions credited to his or her account in the
10self-managed plan on the earliest to occur of the following:
11(1) completion of 5 years of creditable service; (2) the death
12of the employee while in active service, if the employee has
13completed at least 1 1/2 years of service; or (3) the
14employee's election to retire and apply the reciprocal
15provisions of Article 20 of this Code.
16    (h) Benefit amounts. If an employee who is vested in
17employer contributions terminates employment, the employee
18shall be entitled to a benefit which is based on the account
19values attributable to employer and employee contributions and
20any investment return thereon.
21    If an employee who is not vested in employer contributions
22terminates employment, the employee shall be entitled to a
23benefit based solely on the account values attributable to the
24employee's contributions and any investment return thereon,
25and the employer contributions and any investment return
26thereon shall be forfeited. Any employer contributions which

 

 

09700SB0512ham002- 129 -LRB097 06621 JDS 59545 a

1are forfeited shall become part of the trust.
 
2    (40 ILCS 5/12-128.3 new)
3    Sec. 12-128.3. Employer contributions to the self-managed
4plan. Beginning in fiscal year 2014, for members electing
5benefits under paragraph (3) of subsection (a) of Section
612-128.1, an employer contribution shall be made each fiscal
7year in an amount equal to (i) 6% of total pension payroll for
8the respective employee group and (ii) an amount determined by
9the Fund to be sufficient to fund the disability plan provided
10in this Article.
 
11    (40 ILCS 5/12-149)   (from Ch. 108 1/2, par. 12-149)
12    Sec. 12-149. Financing. The board of park commissioners of
13any such park district shall annually levy a tax (in addition
14to the taxes now authorized by law) upon all taxable property
15embraced in the district, at the rate which, when added to the
16employee contributions under this Article and applied to the
17fund created hereunder, shall be sufficient to provide for the
18purposes of this Article in accordance with the provisions
19thereof. Such tax shall be levied and collected with and in
20like manner as the general taxes of such district, and shall
21not in any event be included within any limitations of rate for
22general park purposes as now or hereafter provided by law, but
23shall be excluded therefrom and be in addition thereto. The
24amount of such annual tax to and including the year 1977 shall

 

 

09700SB0512ham002- 130 -LRB097 06621 JDS 59545 a

1not exceed .0275% of the value, as equalized or assessed by the
2Department of Revenue, of all taxable property embraced within
3the park district, provided that for the year 1978, and for
4each year thereafter, the amount of such annual tax shall be at
5a rate on the dollar of assessed valuation of all taxable
6property that will produce, when extended, for the year 1978
7the following sum: 0.825 times the amount of employee
8contributions during the fiscal year 1976; for the year 1979,
90.85 times the amount of employee contributions during the
10fiscal year 1977; for the year 1980, 0.90 times the amount of
11employee contributions during the fiscal year 1978; for the
12year 1981, 0.95 times the amount of employee contributions
13during the fiscal year 1979; for the year 1982, 1.00 times the
14amount of employee contributions during the fiscal year 1980;
15for the year 1983, 1.05 times the amount of contributions made
16on behalf of employees during the fiscal year 1981; and for the
17years year 1984 through 2012 and each year thereafter, an
18amount equal to 1.10 times the employee contributions during
19the fiscal year 2-years prior to the year for which the
20applicable tax is levied. Beginning in 2012 and in each fiscal
21year thereafter, the amount levied shall be equal to the amount
22levied in 2010. As used in this Section, the term "employee
23contributions" means contributions by employees for retirement
24annuity, spouse's annuity, automatic increase in retirement
25annuity, and death benefit.
26    In respect to park district employees, other than

 

 

09700SB0512ham002- 131 -LRB097 06621 JDS 59545 a

1policemen, who are transferred to the employment of a city by
2virtue of the "Exchange of Functions Act of 1957", the
3corporate authorities of the city shall annually levy a tax
4upon all taxable property embraced in the city, as equalized or
5assessed by the Department of Revenue, at such rate per cent of
6the value of such property as shall be sufficient, when added
7to the amounts deducted from the salary or wages of such
8employees, to provide the benefits to which such employees,
9their dependents and beneficiaries are entitled under the
10provisions of this Article. The park district shall not levy a
11tax hereunder in respect to such employees. The tax levied by
12the city under authority of this Article shall be in addition
13to and exclusive of all other taxes authorized by law to be
14levied by the city for corporate, annuity fund or other
15purposes.
16    All moneys accruing from the levy and collection of taxes,
17pursuant to this section, shall be remitted to the board by the
18employers as soon as they are received. Where a city has levied
19a tax pursuant to this Section in respect to park district
20employees transferred to the employment of a city, the
21treasurer of such city or other authorized officer shall remit
22the moneys accruing from the levy and collection of such tax as
23soon as they are received. Such remittances shall be made upon
24a pro rata share basis, whereby each employer shall pay to the
25board such employer's proportionate percentage of each payment
26of taxes received by it, according to the ratio which its tax

 

 

09700SB0512ham002- 132 -LRB097 06621 JDS 59545 a

1levy for this fund bears to the total tax levy of such
2employer.
3    Should any board of park commissioners included under the
4provisions of this Article be without authority to levy the tax
5provided in this Section the corporation authorities (meaning
6the supervisor, clerk and assessor) of the town or towns for
7which such board shall be the board of park commissioners shall
8levy such tax.
9    Employer contributions to the Fund may be reduced by
10$5,000,000 for calendar years 2004 and 2005.
11(Source: P.A. 93-654, eff. 1-16-04.)
 
12    (40 ILCS 5/12-150)  (from Ch. 108 1/2, par. 12-150)
13    Sec. 12-150. Contributions by employees for service
14annuity.
15    (a) From each payment of salary to a present employee
16beginning August 4, 1961, and prior to September 1, 1971, there
17shall be deducted as contributions for service annuity 6% of
18such payment. Beginning September 1, 1971, the deduction shall
19be 6 1/2% of salary. These contributions shall continue until
20the amounts thus deducted will provide an accumulation, at
21regular interest, at least equal to the amount that would be
22provided on such date from employee contributions, assuming
23regular interest to such date, if such employee had been
24contributing in accordance with the provisions of "The 1919
25Act" and this Article from the beginning of his service and the

 

 

09700SB0512ham002- 133 -LRB097 06621 JDS 59545 a

1salary of the employee during his prior service was the same as
2it was on July 1, 1919, or on July 1, 1937 in the case of an
3employee of the board.
4    (b) From each payment of salary to a future entrant
5beginning August 4, 1961, and prior to September 1, 1971, there
6shall be deducted as contributions for service annuity 6% of
7such payment. Beginning September 1, 1971, the deduction shall
8be 6 1/2% of salary. Beginning January 1, 1990, the deduction
9shall be 7% of salary.
10    (c) For service rendered prior to August 4, 1961, the rates
11of contribution by employees for service annuity shall be as
12follows: July 1, 1919 to July 20, 1947, inclusive, 4% of
13salary; July 21, 1947 to August 3, 1961, inclusive, 5% of
14salary.
15    For the period from July 1, 1919, to August 4, 1961 such
16deductions for a present employee shall continue until such
17date as the amounts deducted will provide an accumulation at
18least equal to that which would be provided on such date,
19assuming regular interest to such date, from deductions from
20salary of such employee if such employee had been under the
21provisions of "The 1919 Act" and this Article from the
22beginning of his service and the salary of such employee during
23his period of prior service was the same as it was on July 1,
241919 or on July 1, 1937 in the case of an employee of the board.
25    (d) Any employee shall have the option to contribute for
26service annuity an amount, together with regular interest,

 

 

09700SB0512ham002- 134 -LRB097 06621 JDS 59545 a

1equal to the difference between the amount he had accumulated
2in the fund on June 30, 1947, from contributions at the rate of
34% of salary, together with regular interest, and the amount he
4would have accumulated, together with regular interest, if he
5had made contributions at the rate of 5% of salary. All such
6contributions shall be subject to salary limitations and other
7conditions in effect prior to July 1, 1947. Upon making such
8contribution the employer of such employee shall contribute in
9the ratio of 2 to 1 with such employee.
10    (e) Notwithstanding any other provision of this Article,
11beginning July 1, 2013, all employees shall be required to make
12the following contributions:
13        (1) Employees who elect the traditional benefit
14    package under paragraph (1) of subsection (a) of Section
15    12-128.1 of this Code shall contribute:
16            (A) In fiscal year 2014, fiscal year 2015, and
17        fiscal year 2016, an amount equal to 12.75% of salary.
18            (B) In fiscal year 2017 and in each fiscal year
19        thereafter, a percentage of salary equal to the
20        actuarially determined normal cost of the traditional
21        benefit package, minus an amount equal to 6% of total
22        pensionable salary. The Fund shall certify the
23        actuarially determined normal cost of the traditional
24        benefit package and the amount of required participant
25        contributions by July 1, 2016 and every 3 years
26        thereafter.

 

 

09700SB0512ham002- 135 -LRB097 06621 JDS 59545 a

1        (2) Employees who elect the reformed benefit package
2    under paragraph (2) of subsection (a) of Section 12-128.1
3    of this Code shall contribute:
4            (A) In fiscal year 2014, fiscal year 2015, and
5        fiscal year 2016, an amount equal to 7% of salary.
6            (B) In fiscal year 2017 and in each fiscal year
7        thereafter, a percentage of salary equal to the
8        actuarially determined normal cost of the reformed
9        benefit package, minus an amount equal to 6% of total
10        pensionable salary. The Fund shall certify the
11        actuarially determined normal cost of the reformed
12        benefit package and the amount of required participant
13        contributions by July 1, 2016 and every 3 years
14        thereafter.
15        (3) Employees who elect the self-managed plan under
16    paragraph (3) of subsection (a) of Section 12-128.1 of this
17    Code shall contribute a minimum of 6% of salary.
18    Participants who elect the self-managed plan provided
19    under Section 12-128.2 of this Code may elect to increase
20    their employee contributions in accordance with rules
21    prescribed by the Board.
22    No prior contribution increases or other additional
23contributions specified by this Section shall apply to any
24employee for service on or after July 1, 2013.
25(Source: P.A. 86-272.)
 

 

 

09700SB0512ham002- 136 -LRB097 06621 JDS 59545 a

1    (40 ILCS 5/12-151.3 new)
2    Sec. 12-151.3. Minimum benefit and allocation provisions.
3Each participant in the System shall receive a minimum benefit
4or allocation determined as follows:
5        (1) If the participant is participating in the
6    traditional benefit package provided under paragraph (1)
7    of subsection (a) of Section 12-128.1 of this Code or the
8    revised defined benefit package provided under paragraph
9    (2) of subsection (a) of Section 12-128.1 of this Code, the
10    participant shall receive a minimum benefit (commencing on
11    his or her Social Security retirement age) that is equal to
12    the annual primary insurance amount the participant would
13    have under Social Security. For the purposes of this item
14    (1), the primary insurance amount a participant would have
15    under Social Security shall be calculated so that the
16    System meets the requirements necessary to be considered a
17    retirement system under Section 3121(b)(7)(F) of the
18    Internal Revenue Code and the regulations in effect
19    thereunder.
20        (2) If the participant is participating in the
21    self-managed plan provided under Section 12-128.2 of this
22    Code, the member shall receive a minimum allocation equal
23    to 7.5% of the participant's compensation for service
24    during the period. All contributions shall be taken into
25    account for this purpose. For the purposes of this
26    paragraph (2), the minimum allocation shall be calculated

 

 

09700SB0512ham002- 137 -LRB097 06621 JDS 59545 a

1    so that the System meets the requirements necessary to be
2    considered a retirement system under Section 3121(b)(7)(F)
3    of the Internal Revenue Code and the regulations in effect
4    thereunder.
 
5    (40 ILCS 5/12-167)  (from Ch. 108 1/2, par. 12-167)
6    Sec. 12-167. To keep records, books and prepare reports.
7    To keep a record of all its proceedings which shall be open
8to inspection by the public; to keep such books and records as
9are necessary for the transaction of its business; and to
10prepare a report, as of the last day June 30 of each fiscal
11year, setting forth the income and disbursements of the fund
12for the year, and the amount of its assets and liabilities at
13the close of the year. Such statement shall include, among
14other things, the following information:
15    (a) the total of the reserves on all annuities being paid
16and to be paid from the fund to employees and widows whose
17annuities are determined but not entered upon, calculating such
18reserves as if the annuities were actually entered upon;
19    (b) the total of the liabilities of the employer for prior
20service annuities and widow's prior service annuities,
21including the present values of such annuities that are entered
22upon.
23(Source: Laws 1963, p. 161.)
 
24    (40 ILCS 5/12-168)  (from Ch. 108 1/2, par. 12-168)

 

 

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1    Sec. 12-168. To have an audit.
2    To have an annual audit of the books, records and reserves
3of the fund as of the last day of each fiscal June 30th, in each
4year, by a certified public accountant. A copy of the report of
5such audit shall be filed with the board of park commissioners,
6and a synopsis thereof shall be prepared for public
7distribution.
8(Source: Laws 1963, p. 161.)
 
9    (40 ILCS 5/12-169)  (from Ch. 108 1/2, par. 12-169)
10    Sec. 12-169. To appoint employees.
11    To appoint such actuarial, legal, medical, clerical and
12other employees as may be necessary in the administration of
13the fund and fix their compensation.
14    One or more actuaries shall be employed with duty to
15determine the amount of money necessary to be provided under
16this Article, and to assist the board in preparing the annual
17statement as of the last day June 30 of each fiscal year, and
18to certify to the correctness thereof.
19(Source: Laws 1963, p. 161.)
 
20    (40 ILCS 5/12-183)  (from Ch. 108 1/2, par. 12-183)
21    Sec. 12-183. Annual actuarial valuation.
22    An actuarial valuation shall be made annually of the
23liabilities and reserves for present and prospective annuities
24and benefits, and beginning January 1, 2013 July 1, 1973 a

 

 

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1general investigation shall be made and shall be completed
2every 5 years thereafter of the operating experience of the
3fund as to mortality, disability, retirement, marital status of
4employees, withdrawal from service without right to annuity,
5investment earnings and other factors of actuarial criteria.
6    Upon the basis of the annual actuarial valuation and
7quinquennial actuarial investigations, the actuary shall
8recommend the tables to be used in the annual valuations and in
9current operations including the prescribed rate of interest,
10and shall advise the board on any matters of actuarial
11character affecting the financial condition of the fund and its
12operations.
13(Source: P.A. 78-266.)
 
14    (40 ILCS 5/12-190.3)  (from Ch. 108 1/2, par. 12-190.3)
15    Sec. 12-190.3. Fraud. Any person who knowingly makes any
16false statement or falsifies or permits to be falsified any
17record of this Fund in any attempt to defraud the Fund is
18guilty of a Class A misdemeanor.
19    None of the benefits provided for in this Article shall be
20paid to any person who is convicted of any misdemeanor or
21felony relating to or arising out of or in connection with any
22attempt to defraud the Fund.
23    This Section shall not operate to impair any contract or
24vested right previously acquired under any law or laws
25continued in this Article, nor to preclude the right to a

 

 

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1refund.
2    No refund paid to any person who is convicted of a felony
3relating to or arising out of or in connection with the
4person's service as an employee shall include employer
5contributions or interest or, in the case of the self-managed
6plan authorized under Section 12-128.2, any employer
7contributions or investment return on employer contributions.
8(Source: P.A. 96-1466, eff. 8-20-10.)
 
9    (40 ILCS 5/12-193.5 new)
10    Sec. 12-193.5. Qualified plan status. No provision of this
11Article shall be interpreted in a way that would cause the Fund
12to cease to be a qualified plan under Section 401(a) of the
13Internal Revenue Code.
 
14    (40 ILCS 5/14-103.10)  (from Ch. 108 1/2, par. 14-103.10)
15    Sec. 14-103.10. Compensation.
16    (a) For periods of service prior to January 1, 1978, the
17full rate of salary or wages payable to an employee for
18personal services performed if he worked the full normal
19working period for his position, subject to the following
20maximum amounts: (1) prior to July 1, 1951, $400 per month or
21$4,800 per year; (2) between July 1, 1951 and June 30, 1957
22inclusive, $625 per month or $7,500 per year; (3) beginning
23July 1, 1957, no limitation.
24    In the case of service of an employee in a position

 

 

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1involving part-time employment, compensation shall be
2determined according to the employees' earnings record.
3    (b) For periods of service on and after January 1, 1978,
4all remuneration for personal services performed defined as
5"wages" under the Social Security Enabling Act, including that
6part of such remuneration which is in excess of any maximum
7limitation provided in such Act, and including any benefits
8received by an employee under a sick pay plan in effect before
9January 1, 1981, but excluding lump sum salary payments:
10        (1) for vacation,
11        (2) for accumulated unused sick leave,
12        (3) upon discharge or dismissal,
13        (4) for approved holidays.
14    (c) For periods of service on or after December 16, 1978,
15compensation also includes any benefits, other than lump sum
16salary payments made at termination of employment, which an
17employee receives or is eligible to receive under a sick pay
18plan authorized by law.
19    (d) For periods of service after September 30, 1985,
20compensation also includes any remuneration for personal
21services not included as "wages" under the Social Security
22Enabling Act, which is deducted for purposes of participation
23in a program established pursuant to Section 125 of the
24Internal Revenue Code or its successor laws.
25    (e) For members for which Section 14-108.2f 1-160 applies
26for periods of service on and after January 1, 2011, all

 

 

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1remuneration for personal services performed defined as
2"wages" under the Social Security Enabling Act, excluding
3remuneration that is in excess of the annual earnings, salary,
4or wages of a member or participant, as provided in subsection
5(b-5) of Section 1-160, but including any benefits received by
6an employee under a sick pay plan in effect before January 1,
71981. Compensation shall exclude lump sum salary payments:
8        (1) for vacation;
9        (2) for accumulated unused sick leave;
10        (3) upon discharge or dismissal; and
11        (4) for approved holidays.
12(Source: P.A. 96-1490, eff. 1-1-11.)
 
13    (40 ILCS 5/14-108.2d new)
14    Sec. 14-108.2d. Benefit accruals on and after July 1, 2013.
15    (a) Except for members covered under paragraphs (1), (2),
16(6), (9), and (16) of subsection (b) of Section 14-110 and
17members covered under paragraph (5) of Section 14-110 who are
18sworn police officers, each member under this Article, other
19than a person who first becomes an employee and a member on or
20after January 1, 2011, shall elect which retirement program he
21or she wishes to participate in with respect to all periods of
22membership service occurring on and after July 1, 2013. The
23retirement program election made by the member must be made (i)
24no later than July 1, 2013 in accordance with rules prescribed
25by the Board, and (ii) if applicable, every 3 years thereafter.

 

 

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1The member shall elect one of the following retirement
2programs:
3        (1) the traditional benefit package provided by the
4    System prior to Public Act 96-889;
5        (2) the revised benefit package provided by the System
6    under Section 14-108.2f; or
7        (3) the self-managed plan provided by the System under
8    Section 14-108.2e.
9    (b) A person who first becomes a member of the System on or
10after January 1, 2011 shall elect which retirement program he
11or she wishes to participate in with respect to all periods of
12membership service occurring on and after July 1, 2013. The
13member shall elect one of the retirement programs provided in
14paragraph (2) or (3) of subsection (a) of this Section. The
15member must make that election (i) by July 1, 2013 or within 6
16months after the member's first day of employment, whichever is
17later, and (ii) if applicable, every 3 years thereafter.
18    (c) The member election authorized by this Section is an
19irrevocable election, except that any individual making an
20election for the retirement program described under paragraph
21(1) or (2) of subsection (a) shall make an election for a
22period of 3 years and shall make subsequent elections during a
236-month period prescribed by the System. The election shall be
24made in the manner prescribed by the System. Any member who
25fails to make the initial election shall, by default,
26participate in the revised benefit package provided under

 

 

09700SB0512ham002- 144 -LRB097 06621 JDS 59545 a

1paragraph (2) of subsection (a) of this Section.
2    (d) Members who have already made an election pursuant to
3subsection (a) or (b) shall be given the opportunity to make a
4new election as follows:
5        (1) each member in the traditional benefit package
6    provided under paragraph (1) of subsection (a) of this
7    Section shall have the opportunity to elect to terminate
8    participation in the traditional benefit package and to
9    elect to have retirement benefits for future service
10    provided under either the revised benefit package provided
11    under paragraph (2) of subsection (a) of this Section or
12    the self-managed plan provided under paragraph (3) of
13    subsection (a) of this Section;
14        (2) each member in the revised benefit package provided
15    under paragraph (2) of subsection (a) of this Section shall
16    have the opportunity to elect to terminate participation in
17    the revised benefit package and to elect to have retirement
18    benefits for future service provided under the
19    self-managed plan provided under paragraph (3) of
20    subsection (a) of this Section; and
21        (3) the elections permitted under paragraphs (1) and
22    (2) must be made during a 6-month period in the manner
23    prescribed by the system.
24    (e) If a member with an accrued benefit under the
25traditional benefit package provided by the System prior to
26Public Act 96-889 elects the revised benefit package provided

 

 

09700SB0512ham002- 145 -LRB097 06621 JDS 59545 a

1under paragraph (2) of subsection (a) of this Section, the
2member's total accrued benefit for purposes of determining an
3annuity shall be the sum of (i) the member's benefit accruals
4before the effective date of the election, based on the
5member's final average compensation and service as of the
6effective date of the election and frozen on such date, and
7(ii) the member's benefit accruals based on final average
8compensation and service on or after the effective date of the
9election, as modified by the rules provided in Section
1014-108.2f. All rights and features provided under the
11traditional benefit package will be preserved with respect to
12benefits earned under such package with respect to service
13completed prior to the election to participate in the revised
14benefit package. Furthermore, the member shall be entitled to
15the benefit of the survivor's annuity provided under Section
1614-108.2f. All service completed under the System shall count
17for purposes of determining retirement eligibility and vesting
18under both the traditional benefit package and the revised
19benefit package.
20    (f) If a member with an accrued benefit under the
21traditional benefit package or revised benefit package elects
22the self-managed plan provided under paragraph (3) of
23subsection (a) of this Section, the member's total accrued
24benefit for purposes of determining an annuity shall be the
25member's benefit accruals before the effective date of the
26election, based on the member's final average compensation and

 

 

09700SB0512ham002- 146 -LRB097 06621 JDS 59545 a

1service as of the effective date of the election and frozen on
2such date. However, the member shall also have an accrued
3self-managed plan benefit as specified in subsection (g) of
4Section 14-108.2e, for periods of service on or after the
5effective date of the election. All rights and features
6provided under the traditional benefit package will be
7preserved with respect to benefits earned under such package
8with respect to service completed prior to the election to
9participate in the self-managed plan. All service completed
10under the System shall count for purposes of determining
11retirement eligibility and vesting under the traditional
12benefit package, the revised benefit package, and the
13self-managed plan.
14    (g) An individual who is a member in the System, but is not
15an employee as of July 1, 2013, shall elect, based on the
16eligibility criteria specified in this Article, one of the 3
17retirement programs provided under paragraphs (1), (2), or (3)
18of subsection (a) of this Section within 6 months after
19becoming an employee.
 
20    (40 ILCS 5/14-108.2e new)
21    Sec. 14-108.2e. Self-managed plan.
22    (a) The Illinois State Board of Investment created under
23Article 22A of this Code shall establish and administer a
24self-managed plan on behalf of the retirement system
25established under this Article. The plan shall offer

 

 

09700SB0512ham002- 147 -LRB097 06621 JDS 59545 a

1participating employees the opportunity to accumulate assets
2for retirement through a combination of employee and employer
3contributions that may be invested in mutual funds, collective
4investment funds, or other investment products and may be used
5to purchase annuity contracts that are fixed, variable, or a
6combination thereof. The plan must be qualified under the
7Internal Revenue Code of 1986. The plan shall not include the
8retirement annuities, widows annuities, survivors annuities,
9death benefits, or refunds provided under this Article.
10    (b) The Illinois State Board of Investment shall be the
11plan sponsor for the self-managed plan and shall prepare a plan
12document and prescribe the rules and procedures that are
13necessary or desirable for the administration of the
14self-managed plan.
15    (c) An employee eligible to participate in the self-managed
16plan must make a written election in accordance with the by the
17retirement system. Participation in the self-managed plan by an
18electing employee shall begin on the beginning of the month
19following the date the employee's election is filed with the
20retirement system, but in no case prior to July 1, 2013.
21    (d) Employees who are participating in the program must be
22allowed to direct the transfer of their account balances among
23the various investment options offered, subject to applicable
24contractual provisions. The participant shall not be deemed a
25fiduciary by reason of providing investment direction. A person
26who is a fiduciary, including the plan sponsor, shall not be

 

 

09700SB0512ham002- 148 -LRB097 06621 JDS 59545 a

1liable for any loss resulting from the investment direction of
2the employee and shall not be deemed to have breached any
3fiduciary duty by acting in accordance with that direction. The
4retirement system, the Illinois State Board of Investment, and
5the employer do not guarantee any of the investments in the
6employee's account balances.
7    (e) The self-managed plan shall be funded by contributions
8pursuant to salary reduction agreements for employees
9participating in the self-managed plan and employer
10contributions as provided in Section 14-131.1 of this Code.
11Employees may make additional contributions to the
12self-managed plan in accordance with the procedures prescribed
13by the plan sponsor, to the extent permitted under rules
14prescribed by the plan sponsor. Employee and employer
15contributions shall be paid into the participants'
16self-managed plan accounts in a manner to be prescribed by the
17plan sponsor.
18    (f) A participant in the self-managed plan becomes vested
19in the employer contributions credited to his or her accounts
20in the self-managed plan on the earliest to occur of the
21following: (1) completion of 5 years of service with an
22employer covered by Article 14 of this Code or (2) if the
23participant has completed at least 1 1/2 years of service, the
24death of the participating employee while employed by an
25employer covered by Article 14 of this Code.
26    (g) If an employee who is vested in employer contributions

 

 

09700SB0512ham002- 149 -LRB097 06621 JDS 59545 a

1terminates employment, the employee shall be entitled to a
2benefit that is based on the account values attributable to
3both employer and employee contributions and any investment
4return on those contributions. If an employee who is not vested
5in employer contributions terminates employment, the employee
6shall be entitled to a benefit based solely on the account
7values attributable to the employee's contributions and any
8investment return on those contributions, and the employer
9contributions and any investment return on those contributions
10shall be forfeited. Any employer contributions that are
11forfeited shall be held in escrow by the company investing
12those contributions and shall be used as directed by the System
13for future allocations of employer contributions.
14    The employee contribution shall be made as an "employer
15pick up" under Section 414(h) of the Internal Revenue Code of
161986 or any successor Section thereof. In no event shall an
17employee have an option of receiving these amounts in cash, and
18payment of the employee contribution shall be a condition of
19employment. The employee contribution shall be deducted from
20the employee's compensation in the amount specified by
21subparagraph (F) of paragraph (7) of subsection (a) of Section
2214-133, unless the employer agrees to pick up and pay the
23employee contribution in addition to the employee's
24compensation, pursuant to Section 14-133.1.
25    The program shall provide for employer contributions to be
26credited to each self-managed plan participant at a rate of 6%

 

 

09700SB0512ham002- 150 -LRB097 06621 JDS 59545 a

1of the participating member's compensation. The amounts so
2credited shall be paid into the member's self-managed plan
3account in a manner to be prescribed by the System. The program
4shall also provide for employer contributions to be used by the
5System to provide disability benefits for the participant.
6Prior to the beginning of each plan year under the self-managed
7plan, the Board of Trustees shall determine, as a percentage of
8compensation, the amount of employer contributions to be
9allocated during that plan year for providing disability
10benefits for members in the self-managed plan.
11    The State of Illinois shall make contributions by
12appropriations to the System of the employer contributions
13required for employees who participate in the self-managed plan
14under this Section. The amount required shall be certified by
15the Board of Trustees of the System and paid by the State in
16accordance with Section 14-131. The System shall not be
17obligated to remit the required employer contributions to any
18person or entity until it has received the required employer
19contributions from the State.
20    A member under this Section shall be entitled to the
21benefits of Article 20 of this Code.
 
22    (40 ILCS 5/14-108.2f new)
23    Sec. 14-108.2f. Revised benefit package.
24    (a) The provisions of this Section apply to a person who,
25on or after January 1, 2011, first becomes an employee under

 

 

09700SB0512ham002- 151 -LRB097 06621 JDS 59545 a

1this Article, and any member who elects this benefit package
2pursuant to Section 14-108.2d, but do not apply to the
3self-managed plan established under this Article.
4    (b) "Final average compensation" means the average annual
5compensation obtained by dividing the total compensation
6calculated under the Article applicable to the member during
7the 8 consecutive years of service within the last 10 years of
8service in which the total compensation calculated under this
9Article was the highest by the number of years of service in
10that period.
11    (b-5) For all purposes under this Article (including
12without limitation the calculation of benefits and employee
13contributions and contributions by the State of Illinois under
14subsection (a) of Section 14-131.1 with respect to the revised
15benefit package), the annual compensation of a member shall not
16exceed $106,800; however, that amount shall annually
17thereafter be increased by the lesser of (i) 3% of that amount,
18including all previous adjustments, or (ii) one-half the annual
19unadjusted percentage increase (but not less than zero) in the
20consumer price index-u for the 12 months ending with the
21September preceding each November 1, including all previous
22adjustments.
23    For the purposes of this Section, "consumer price index-u"
24means the index published by the Bureau of Labor Statistics of
25the United States Department of Labor that measures the average
26change in prices of goods and services purchased by all urban

 

 

09700SB0512ham002- 152 -LRB097 06621 JDS 59545 a

1consumers, United States city average, all items, 1982-84 =100.
2The new amount resulting from each annual adjustment shall be
3determined by the Public Pension Division of the Department of
4Insurance and made available to the boards of the retirement
5systems and pension funds by November 1 of each year.
6    Beginning on July 1, 2013, the maximum annual compensation
7amount shall be adjusted to $110,100, as adjusted for periods
8after 2012 based on the methodology and formula used to
9calculate annual increases in wages under 42 U.S.C. Section
10415(a) for purposes of computing benefits and adjusting wages
11under the federal Social Security program. Each year thereafter
12on January 1, this amount shall be adjusted based on the
13methodology and formula used to calculate annual increases in
14wages under 42 U.S.C. Section 415(a) for purposes of computing
15benefits and adjusting wages under the federal Social Security
16program.
17    (c) A member is entitled to a retirement annuity upon
18written application if he or she has attained age 67 and has at
19least 10 years of service credit and is otherwise eligible
20under the requirements of this Article. A member who has
21attained age 62 and has at least 10 years of service credit and
22is otherwise eligible under the requirements of this Article
23may elect to receive the lower retirement annuity provided in
24subsection (d) of this Section.
25    (d) The retirement annuity of a member who is retiring
26after attaining age 62 with at least 10 years of service credit

 

 

09700SB0512ham002- 153 -LRB097 06621 JDS 59545 a

1shall be reduced by one-half of 1% for each full month that the
2member's age is under age 67.
3    (e) Any retirement annuity shall be subject to annual
4increases on the January 1 occurring either on or after the
5attainment of age 67 or the first anniversary of the annuity
6start date, whichever is later. Each annual increase shall be
7calculated at 3% or one-half the annual unadjusted percentage
8increase (but not less than zero) in the consumer price index-u
9for the 12 months ending with the September preceding each
10November 1, whichever is less, of the originally granted
11retirement annuity. If the annual unadjusted percentage change
12in the consumer price index-u for the 12 months ending with the
13September preceding each November 1 is zero or there is a
14decrease, then the annuity shall not be increased.
15    (f) The initial survivor's annuity of an otherwise eligible
16survivor of a retired member shall be in the amount of 66 2/3%
17of the retired member's retirement annuity at the date of
18death. In the case of the death of a member who has not retired
19and, eligibility for a survivor's or widow's annuity shall be
20determined by this Article. The initial benefit shall be 66
212/3% of the earned annuity without a reduction due to age. Any
22survivor's annuity shall be increased (1) on each January 1
23occurring on or after the commencement of the annuity if the
24deceased member died while receiving a retirement annuity or
25(2) in other cases, on each January 1 occurring after the first
26anniversary of the commencement of the annuity. Each annual

 

 

09700SB0512ham002- 154 -LRB097 06621 JDS 59545 a

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

 

 

09700SB0512ham002- 155 -LRB097 06621 JDS 59545 a

1service and has attained age 60, regardless of whether the
2attainment of age 60 occurs while the person is still in
3service.
4    (i) Notwithstanding any other provision of this Section, a
5participant in the revised benefit package provided by this
6Section shall have the option to enroll in the self-managed
7plan created under Section 14-108.2e.
 
8    (40 ILCS 5/14-109.1 new)
9    Sec. 14-109.1. Minimum benefit and allocation provisions.
10Each noncovered member participating in the System shall
11receive a minimum benefit or allocation for service on or after
12July 1, 2013 determined as follows:
13    (1) If the noncovered member is participating in the
14traditional benefit package provided under paragraph (1) of
15subsection (a) of Section 14-108.2d of this Code or the revised
16benefit package provided under paragraph (2) of subsection (a)
17of Section 14-108.2d of this Code, the employee shall receive a
18minimum benefit (commencing on his or her Social Security
19retirement age) for the employee's period of service covered by
20each such defined benefit package that is equal to the annual
21primary insurance amount the employee would have under Social
22Security for such period of service. For the purposes of this
23item (1), the primary insurance amount an individual would have
24under Social Security shall be calculated so that the System
25meets the requirements necessary to be considered a retirement

 

 

09700SB0512ham002- 156 -LRB097 06621 JDS 59545 a

1system under Section 3121(b)(7)(F) of the Internal Revenue Code
2and the regulations in effect thereunder.
3    (2) If the noncovered member is participating in the
4self-managed plan provided under Section 14-108.2e of this
5Code, the member shall receive a minimum allocation equal to
67.5% of the member's compensation for service during the
7period. All contributions shall be taken into account for this
8purpose. For the purposes of this paragraph (2), the minimum
9allocation shall be calculated so that the System meets the
10requirements necessary to be considered a retirement system
11under Section 3121(b)(7)(F) of the Internal Revenue Code and
12the regulations in effect thereunder.
 
13    (40 ILCS 5/14-131)
14    Sec. 14-131. Contributions by State.
15    (a) The State shall make contributions to the System by
16appropriations of amounts which, together with other employer
17contributions from trust, federal, and other funds, employee
18contributions, investment income, and other income, will be
19sufficient to meet the cost of maintaining and administering
20the System on a 90% funded basis in accordance with actuarial
21recommendations.
22    For the purposes of this Section and Section 14-135.08,
23references to State contributions refer only to employer
24contributions and do not include employee contributions that
25are picked up or otherwise paid by the State or a department on

 

 

09700SB0512ham002- 157 -LRB097 06621 JDS 59545 a

1behalf of the employee.
2    (b) The Board shall determine the total amount of State
3contributions required for each fiscal year on the basis of the
4actuarial tables and other assumptions adopted by the Board,
5using the formula in subsection (e).
6    The Board shall also determine a State contribution rate
7for each fiscal year, expressed as a percentage of payroll,
8based on the total required State contribution for that fiscal
9year (less the amount received by the System from
10appropriations under Section 8.12 of the State Finance Act and
11Section 1 of the State Pension Funds Continuing Appropriation
12Act, if any, for the fiscal year ending on the June 30
13immediately preceding the applicable November 15 certification
14deadline), the estimated payroll (including all forms of
15compensation) for personal services rendered by eligible
16employees, and the recommendations of the actuary.
17    For the purposes of this Section and Section 14.1 of the
18State Finance Act, the term "eligible employees" includes
19employees who participate in the System, persons who may elect
20to participate in the System but have not so elected, persons
21who are serving a qualifying period that is required for
22participation, and annuitants employed by a department as
23described in subdivision (a)(1) or (a)(2) of Section 14-111.
24    (c) Contributions shall be made by the several departments
25for each pay period by warrants drawn by the State Comptroller
26against their respective funds or appropriations based upon

 

 

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1vouchers stating the amount to be so contributed. These amounts
2shall be based on the full rate certified by the Board under
3Section 14-135.08 for that fiscal year. From the effective date
4of this amendatory Act of the 93rd General Assembly through the
5payment of the final payroll from fiscal year 2004
6appropriations, the several departments shall not make
7contributions for the remainder of fiscal year 2004 but shall
8instead make payments as required under subsection (a-1) of
9Section 14.1 of the State Finance Act. The several departments
10shall resume those contributions at the commencement of fiscal
11year 2005.
12    (c-1) Notwithstanding subsection (c) of this Section, for
13fiscal years 2010 and 2012 only, contributions by the several
14departments are not required to be made for General Revenue
15Funds payrolls processed by the Comptroller. Payrolls paid by
16the several departments from all other State funds must
17continue to be processed pursuant to subsection (c) of this
18Section.
19    (c-2) For State fiscal years 2010 and 2012 only, on or as
20soon as possible after the 15th day of each month, the Board
21shall submit vouchers for payment of State contributions to the
22System, in a total monthly amount of one-twelfth of the fiscal
23year General Revenue Fund contribution as certified by the
24System pursuant to Section 14-135.08 of the Illinois Pension
25Code.
26    (d) If an employee is paid from trust funds or federal

 

 

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1funds, the department or other employer shall pay employer
2contributions from those funds to the System at the certified
3rate, unless the terms of the trust or the federal-State
4agreement preclude the use of the funds for that purpose, in
5which case the required employer contributions shall be paid by
6the State. From the effective date of this amendatory Act of
7the 93rd General Assembly through the payment of the final
8payroll from fiscal year 2004 appropriations, the department or
9other employer shall not pay contributions for the remainder of
10fiscal year 2004 but shall instead make payments as required
11under subsection (a-1) of Section 14.1 of the State Finance
12Act. The department or other employer shall resume payment of
13contributions at the commencement of fiscal year 2005.
14    (e) For State fiscal years 2014 2012 through 2045, the
15minimum contribution to the System to be made by the State for
16each fiscal year shall be an amount equal to the sum of (i) the
17contribution determined under Section 14-131.1, plus (ii) an
18amount determined by the System to be sufficient to bring the
19total assets of the System up to 90% of the total actuarial
20liabilities of the System by the end of State fiscal year 2045.
21In making the these determinations under item (ii) of this
22subsection (e), for State fiscal years 2017 through 2045, the
23required State contribution shall be calculated each year as a
24level percentage of revenue provided by the individual income
25tax, sales tax, and corporate income tax assuming a 2.3%
26average annual growth rate in these revenues based on the most

 

 

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1recent fiscal year's actual revenues as reported by the
2Commission on Government Forecasting and Accountability
3payroll over the years remaining to and including fiscal year
42045 and shall be determined under the projected unit credit
5actuarial cost method.
6    Notwithstanding any other provision of this Article, for
7For State fiscal years 2014 1996 through 2016 2005, the State
8contribution to the System under item (ii) of this subsection
9(e), as a percentage of State revenue from the individual
10income tax, sales tax, and corporate income tax the applicable
11employee payroll, shall be increased in equal annual increments
12so that by State fiscal year 2017 2011, the State is
13contributing at the rate required under this Section.
14    For State fiscal years 2014 through 2045, the total State
15contribution required in each fiscal year under this subsection
16(e) must not be less than 100% of the prior fiscal year's
17actual or required contribution, whichever is greater.
18    Notwithstanding any other provision of this Article, the
19total required State contribution for this System for State
20fiscal year 2013 shall be $1,697,411,761.
21    For ; except that (i) for State fiscal year 1998, for all
22purposes of this Code and any other law of this State, the
23certified percentage of the applicable employee payroll shall
24be 5.052% for employees earning eligible creditable service
25under Section 14-110 and 6.500% for all other employees,
26notwithstanding any contrary certification made under Section

 

 

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114-135.08 before the effective date of this amendatory Act of
21997. In , and (ii) in the following specified State fiscal
3years, the State contribution to the System shall not be less
4than the following indicated percentages of the applicable
5employee payroll, even if the indicated percentage will produce
6a State contribution in excess of the amount otherwise required
7under this subsection and subsection (a): 9.8% in FY 1999;
810.0% in FY 2000; 10.2% in FY 2001; 10.4% in FY 2002; 10.6% in
9FY 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 2046, the minimum State
18contribution shall be an amount equal to the contribution
19determined under Section 14-131.1, plus an amount sufficient
20for each fiscal year shall be the amount needed to maintain the
21total assets of the System at 90% of the total actuarial
22liabilities of the System.
23    Amounts received by the System pursuant to Section 25 of
24the Budget Stabilization Act or Section 8.12 of the State
25Finance Act in any fiscal year do not reduce and do not
26constitute payment of any portion of the minimum State

 

 

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1contribution required under this Article in that fiscal year.
2Such amounts shall not reduce, and shall not be included in the
3calculation of, the required State contributions under this
4Article in any future year until the System has reached a
5funding ratio of at least 90%. A reference in this Article to
6the "required State contribution" or any substantially similar
7term does not include or apply to any amounts payable to the
8System under Section 25 of the Budget Stabilization Act.
9    Notwithstanding any other provision of this Section, the
10required State contribution for State fiscal year 2005 and for
11fiscal year 2008 and each fiscal year thereafter until fiscal
12year 2013, as calculated under this Section and certified under
13Section 14-135.08, shall not exceed an amount equal to (i) the
14amount of the required State contribution that would have been
15calculated under this Section for that fiscal year if the
16System had not received any payments under subsection (d) of
17Section 7.2 of the General Obligation Bond Act, minus (ii) the
18portion of the State's total debt service payments for that
19fiscal year on the bonds issued in fiscal year 2003 for the
20purposes of that Section 7.2, as determined and certified by
21the Comptroller, that is the same as the System's portion of
22the total moneys distributed under subsection (d) of Section
237.2 of the General Obligation Bond Act. In determining this
24maximum for State fiscal years 2008 through 2010, however, the
25amount referred to in item (i) shall be increased, as a
26percentage of the applicable employee payroll, in equal

 

 

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1increments calculated from the sum of the required State
2contribution for State fiscal year 2007 plus the applicable
3portion of the State's total debt service payments for fiscal
4year 2007 on the bonds issued in fiscal year 2003 for the
5purposes of Section 7.2 of the General Obligation Bond Act, so
6that, by State fiscal year 2011, the State is contributing at
7the rate otherwise required under this Section.
8    (f) After the submission of all payments for eligible
9employees from personal services line items in fiscal year 2004
10have been made, the Comptroller shall provide to the System a
11certification of the sum of all fiscal year 2004 expenditures
12for personal services that would have been covered by payments
13to the System under this Section if the provisions of this
14amendatory Act of the 93rd General Assembly had not been
15enacted. Upon receipt of the certification, the System shall
16determine the amount due to the System based on the full rate
17certified by the Board under Section 14-135.08 for fiscal year
182004 in order to meet the State's obligation under this
19Section. The System shall compare this amount due to the amount
20received by the System in fiscal year 2004 through payments
21under this Section and under Section 6z-61 of the State Finance
22Act. If the amount due is more than the amount received, the
23difference shall be termed the "Fiscal Year 2004 Shortfall" for
24purposes of this Section, and the Fiscal Year 2004 Shortfall
25shall be satisfied under Section 1.2 of the State Pension Funds
26Continuing Appropriation Act. If the amount due is less than

 

 

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1the amount received, the difference shall be termed the "Fiscal
2Year 2004 Overpayment" for purposes of this Section, and the
3Fiscal Year 2004 Overpayment shall be repaid by the System to
4the Pension Contribution Fund as soon as practicable after the
5certification.
6    (g) For purposes of determining the required State
7contribution to the System, the value of the System's assets
8shall be equal to the actuarial value of the System's assets,
9which shall be calculated as follows:
10    As of June 30, 2008, the actuarial value of the System's
11assets shall be equal to the market value of the assets as of
12that date. In determining the actuarial value of the System's
13assets for fiscal years after June 30, 2008, any actuarial
14gains or losses from investment return incurred in a fiscal
15year shall be recognized in equal annual amounts over the
165-year period following that fiscal year.
17    (h) For purposes of determining the required State
18contribution to the System for a particular year, the actuarial
19value of assets shall be assumed to earn a rate of return equal
20to the System's actuarially assumed rate of return.
21    (i) After the submission of all payments for eligible
22employees from personal services line items paid from the
23General Revenue Fund in fiscal year 2010 have been made, the
24Comptroller shall provide to the System a certification of the
25sum of all fiscal year 2010 expenditures for personal services
26that would have been covered by payments to the System under

 

 

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1this Section if the provisions of this amendatory Act of the
296th General Assembly had not been enacted. Upon receipt of the
3certification, the System shall determine the amount due to the
4System based on the full rate certified by the Board under
5Section 14-135.08 for fiscal year 2010 in order to meet the
6State's obligation under this Section. The System shall compare
7this amount due to the amount received by the System in fiscal
8year 2010 through payments under this Section. If the amount
9due is more than the amount received, the difference shall be
10termed the "Fiscal Year 2010 Shortfall" for purposes of this
11Section, and the Fiscal Year 2010 Shortfall shall be satisfied
12under Section 1.2 of the State Pension Funds Continuing
13Appropriation Act. If the amount due is less than the amount
14received, the difference shall be termed the "Fiscal Year 2010
15Overpayment" for purposes of this Section, and the Fiscal Year
162010 Overpayment shall be repaid by the System to the General
17Revenue Fund as soon as practicable after the certification.
18    (j) After the submission of all payments for eligible
19employees from personal services line items paid from the
20General Revenue Fund in fiscal year 2011 have been made, the
21Comptroller shall provide to the System a certification of the
22sum of all fiscal year 2011 expenditures for personal services
23that would have been covered by payments to the System under
24this Section if the provisions of this amendatory Act of the
2596th General Assembly had not been enacted. Upon receipt of the
26certification, the System shall determine the amount due to the

 

 

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1System based on the full rate certified by the Board under
2Section 14-135.08 for fiscal year 2011 in order to meet the
3State's obligation under this Section. The System shall compare
4this amount due to the amount received by the System in fiscal
5year 2011 through payments under this Section. If the amount
6due is more than the amount received, the difference shall be
7termed the "Fiscal Year 2011 Shortfall" for purposes of this
8Section, and the Fiscal Year 2011 Shortfall shall be satisfied
9under Section 1.2 of the State Pension Funds Continuing
10Appropriation Act. If the amount due is less than the amount
11received, the difference shall be termed the "Fiscal Year 2011
12Overpayment" for purposes of this Section, and the Fiscal Year
132011 Overpayment shall be repaid by the System to the General
14Revenue Fund as soon as practicable after the certification.
15    (k) For fiscal year 2012 only, after the submission of all
16payments for eligible employees from personal services line
17items paid from the General Revenue Fund in the fiscal year
18have been made, the Comptroller shall provide to the System a
19certification of the sum of all expenditures in the fiscal year
20for personal services. Upon receipt of the certification, the
21System shall determine the amount due to the System based on
22the full rate certified by the Board under Section 14-135.08
23for the fiscal year in order to meet the State's obligation
24under this Section. The System shall compare this amount due to
25the amount received by the System for the fiscal year. If the
26amount due is more than the amount received, the difference

 

 

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1shall be termed the "Fiscal Year Shortfall" for purposes of
2this Section, and the Fiscal Year Shortfall shall be satisfied
3under Section 1.2 of the State Pension Funds Continuing
4Appropriation Act. If the amount due is less than the amount
5received, the difference shall be termed the "Fiscal Year
6Overpayment" for purposes of this Section, and the Fiscal Year
7Overpayment shall be repaid by the System to the General
8Revenue Fund as soon as practicable after the certification.
9(Source: P.A. 96-43, eff. 7-15-09; 96-45, eff. 7-15-09;
1096-1000, eff. 7-2-10; 96-1497, eff. 1-14-11; 96-1511, eff.
111-27-11; 96-1554, eff. 3-18-11; 97-72, eff. 7-1-11.)
 
12    (40 ILCS 5/14-131.1 new)
13    Sec. 14-131.1. Additional State contributions.
14    (a) In fiscal year 2014, 2015, and 2016, the following
15rules apply in determining the additional contributions by the
16State of Illinois:
17        (1) With respect to covered employees who (i)
18    participate in the traditional or revised benefit package
19    or the self-managed plan and (ii) are subject to paragraph
20    (1) of subsection (a) of Section 14-133, 4.04% of
21    pensionable payroll.
22        (2) With respect to noncovered employees who (i)
23    participate in the traditional or revised benefit package
24    or the self-managed plan and (ii) are subject to paragraph
25    (2), (3), or (6) of subsection (a) of Section 14-133, 6.00%

 

 

09700SB0512ham002- 169 -LRB097 06621 JDS 59545 a

1    of pensionable payroll.
2        (3) With respect to covered employees who (i)
3    participate in the traditional or revised benefit package
4    or the self-managed plan and (ii) are subject to paragraph
5    (4) or (5) of subsection (a) of Section 14-133, 4.46% of
6    pensionable payroll.
7    (b) In fiscal year 2017 and in each fiscal year thereafter,
8the following rules apply in determining the additional
9contributions by the State of Illinois:
10        (1) With respect to covered employees who (i)
11    participate in the traditional or revised benefit package
12    or the self-managed plan and (ii) are subject to paragraph
13    (1) of subsection (a) of Section 14-133, one half of the
14    actuarially determined long term normal cost of the revised
15    benefit package as calculated in fiscal year 2014.
16        (2) With respect to noncovered employees who (i)
17    participate in the traditional or revised benefit package
18    or the self-managed plan and (ii) are subject to paragraph
19    (2), (3), or (6) of subsection (a) of Section 14-133, 6.00%
20    of total compensation for the employee group.
21        (3) With respect to covered employees who (i)
22    participate in the traditional or revised benefit package
23    or the self-managed plan and (ii) are subject to paragraph
24    (4) or (5) of subsection (a) of Section 14-133, one half of
25    the actuarially determined long term normal cost of the
26    revised benefit package as calculated in fiscal year 2014.

 

 

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1    For purposes of this subsection (b), long term normal cost
2shall be defined as the normal cost of the revised benefit
3package assuming that all employees are covered under the
4revised benefit package.
5    (c) For all employees covered under the self-managed plan,
6the State of Illinois shall contribute an amount determined by
7the System to be sufficient to fund the disability benefits
8provided under this Article.
 
9    (40 ILCS 5/14-133)  (from Ch. 108 1/2, par. 14-133)
10    Sec. 14-133. Contributions on behalf of members.
11    (a) Each participating employee shall make contributions
12to the System, based on the employee's compensation, as
13follows:
14        (1) Covered employees, except as indicated below, 3.5%
15    for retirement annuity, and 0.5% for a widow or survivors
16    annuity;
17        (2) Noncovered employees, except as indicated below,
18    7% for retirement annuity and 1% for a widow or survivors
19    annuity;
20        (3) Noncovered employees serving in a position in which
21    "eligible creditable service" as defined in Section 14-110
22    may be earned, 1% for a widow or survivors annuity plus the
23    following amount for retirement annuity: 8.5% through
24    December 31, 2001; 9.5% in 2002; 10.5% in 2003; and 11.5%
25    in 2004 and thereafter;

 

 

09700SB0512ham002- 171 -LRB097 06621 JDS 59545 a

1        (4) Covered employees serving in a position in which
2    "eligible creditable service" as defined in Section 14-110
3    may be earned, 0.5% for a widow or survivors annuity plus
4    the following amount for retirement annuity: 5% through
5    December 31, 2001; 6% in 2002; 7% in 2003; and 8% in 2004
6    and thereafter;
7        (5) Each security employee of the Department of
8    Corrections or of the Department of Human Services who is a
9    covered employee, 0.5% for a widow or survivors annuity
10    plus the following amount for retirement annuity: 5%
11    through December 31, 2001; 6% in 2002; 7% in 2003; and 8%
12    in 2004 and thereafter;
13        (6) Each security employee of the Department of
14    Corrections or of the Department of Human Services who is
15    not a covered employee, 1% for a widow or survivors annuity
16    plus the following amount for retirement annuity: 8.5%
17    through December 31, 2001; 9.5% in 2002; 10.5% in 2003; and
18    11.5% in 2004 and thereafter.
19        (7) Notwithstanding anything in this Section to the
20    contrary, beginning July 1, 2013, all participating
21    employees shall be required to make the following
22    contributions:
23            (A) Covered employees who elect the traditional
24        benefit package provided under paragraph (1) of
25        subsection (a) of Section 14-108.2d of this Code and
26        who are subject to paragraph (1) of subsection (a) of

 

 

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1        Section 14-133 shall contribute:
2                (I) In fiscal year 2014, fiscal year 2015, and
3            fiscal year 2016, 9.29%.
4                (II) In fiscal year 2017 and in each fiscal
5            year thereafter, a percentage of compensation
6            equal to the actuarially determined fiscal year
7            2017 normal cost of the traditional benefit
8            package, minus contributions by the State of
9            Illinois in fiscal year 2017 under paragraph (1) of
10            subsection (a) of Section 14-131.1, provided that
11            no employee's contribution shall be more than 2%
12            greater than the employee contribution certified
13            for fiscal year 2014.
14            (B) Noncovered employees who elect the traditional
15        benefit package provided under paragraph (1) of
16        subsection (a) of Section 14-108.2d of this Code and
17        who are subject to either paragraph (3) or (6) of
18        subsection (a) of Section 14-133 shall contribute:
19                (I) In fiscal year 2014, fiscal year 2015, and
20            fiscal year 2016, an amount equal to 18.91% of
21            compensation.
22                (II) In fiscal year 2017 and in each fiscal
23            year thereafter, a percentage of compensation
24            equal to the actuarially determined fiscal year
25            2017 normal cost of the traditional benefit
26            package, minus contributions by the State of

 

 

09700SB0512ham002- 173 -LRB097 06621 JDS 59545 a

1            Illinois in fiscal year 2017 under paragraph (2) of
2            subsection (a) of Section 14-131.1, provided that
3            no employee's contribution shall be less than 6% or
4            more than 20.91% of compensation.
5            (C) Covered employees who elect the traditional
6        benefit package provided under paragraph (1) of
7        subsection (a) of Section 14-108.2d of this Code and
8        who are subject to either paragraph (4) or (5) of
9        subsection (a) of Section 14-133 shall contribute:
10                (I) In fiscal year 2014, fiscal year 2015, and
11            fiscal year 2016, 16.65%.
12                (II) In fiscal year 2017 and in each fiscal
13            year thereafter, a percentage of compensation
14            equal to the actuarially determined fiscal year
15            2017 normal cost of the traditional benefit
16            package, minus contributions by the State of
17            Illinois in fiscal year 2017 under paragraph (3) of
18            subsection (a) of Section 14-131.1, provided that
19            no employee's contribution shall be more than 2%
20            greater than the employee contribution certified
21            for fiscal year 2014.
22            (D) Noncovered employees who elect the traditional
23        benefit package provided under paragraph (1) of
24        subsection (a) of Section 14-108.2d of this Code and
25        who are subject to paragraph (2) of subsection (a) of
26        Section 14-133 shall contribute:

 

 

09700SB0512ham002- 174 -LRB097 06621 JDS 59545 a

1                (I) In fiscal year 2014, fiscal year 2015, and
2            fiscal year 2016, an amount equal to 9.29% of
3            compensation.
4                (II) In fiscal year 2017 and in each fiscal
5            year thereafter, a percentage of compensation
6            equal to the actuarially determined fiscal year
7            2017 normal cost of the traditional benefit
8            package, minus contributions by the State of
9            Illinois in fiscal year 2017 under paragraph (2) of
10            subsection (a) of Section 14-131.1, provided that
11            no employee's contribution shall be less than 6% or
12            more than 2% greater than the employee's
13            contribution certified for fiscal year 2014.
14            (E) Employees who elect the revised benefit
15        package provided under paragraph (2) of subsection (a)
16        of Section 14-108.2d of this Code shall contribute a
17        percentage of compensation determined as follows:
18                (I) In fiscal year 2014 and in each fiscal year
19            thereafter, covered employees who are subject to
20            paragraph (1) of subsection (a) of Section 14-133
21            shall contribute one half of the actuarially
22            determined long term normal cost of the revised
23            benefit package as calculated in fiscal year 2014.
24                (II) In fiscal year 2014 and in each fiscal
25            year thereafter, covered employees who are subject
26            to either paragraph (4) or (5) of subsection (a) of

 

 

09700SB0512ham002- 175 -LRB097 06621 JDS 59545 a

1            Section 14-133 shall contribute one half of the
2            actuarially determined long term normal cost of
3            the revised benefit package as calculated in
4            fiscal year 2014.
5                (III) In fiscal year 2014 and in each fiscal
6            year thereafter, noncovered employees who are
7            subject to either paragraph (2), (3), or (6) of
8            subsection (a) of Section 14-133 shall contribute
9            an amount equal to the greater of the actuarially
10            determined long term normal cost of the revised
11            benefit package as calculated in fiscal year 2014
12            or 12%, minus contributions by the State of
13            Illinois in fiscal year 2014 under paragraph (2) of
14            subsection (a) of Section 14-131.1.
15            Contributions under this subparagraph (E) shall be
16        based on pensionable payroll.
17            (F) In fiscal year 2014 and in each fiscal year
18        thereafter, employees who elect the self-managed plan
19        provided under paragraph (3) of subsection (a) of
20        Section 14-108.2d of this Code shall contribute a
21        minimum percentage of compensation determined as
22        follows:
23                (I) Covered employees who are subject to
24            paragraph (1) of subsection (a) of Section 14-133
25            shall contribute one half of the actuarially
26            determined long term normal cost of the revised

 

 

09700SB0512ham002- 176 -LRB097 06621 JDS 59545 a

1            benefit package as calculated in fiscal year 2014.
2                (II) Covered employees who are subject to
3            either paragraph (4) or (5) of subsection (a) of
4            Section 14-133 shall contribute one half of the
5            actuarially determined long term normal cost of
6            the revised benefit package as calculated in
7            fiscal year 2014.
8                (III) Noncovered employees who are subject to
9            either paragraph (2), (3) or (6) of subsection (a)
10            of Section 14-133 shall contribute 6% of
11            compensation.
12            Employees who elect the self-managed plan provided
13        under paragraph (3) of subsection (a) of Section
14        14-108.2d of this Code may elect to increase the
15        employee contribution in accordance with rules
16        prescribed by the Board.
17        The System shall certify the actuarially determined
18    normal cost and long term normal cost amounts, and the
19    amount of the required employee contribution, as provided
20    above. For purposes of this paragraph (7), long term normal
21    cost shall be defined as the normal cost of the revised
22    benefit package assuming that all employees are
23    participants under the revised benefit package.
24    (b) Contributions shall be in the form of a deduction from
25compensation and shall be made notwithstanding that the
26compensation paid in cash to the employee shall be reduced

 

 

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1thereby below the minimum prescribed by law or regulation. Each
2member is deemed to consent and agree to the deductions from
3compensation provided for in this Article, and shall receipt in
4full for salary or compensation.
5(Source: P.A. 92-14, eff. 6-28-01.)
 
6    (40 ILCS 5/14-133.2 new)
7    Sec. 14-133.2. Increases in participant contributions. If
8the employee contribution required under Section 14-133
9increases for any employee pursuant to this amendatory Act of
10the 97th General Assembly, the additional employee
11contribution in excess of the prior employee contribution shall
12be deducted from the employee's compensation unless the
13department that employs such employee agrees pursuant to
14Section 414(h) of the Internal Revenue Code to pick up and pay
15part or all of such increased contribution in addition to the
16employee's compensation.
 
17    (40 ILCS 5/14-202 new)
18    Sec. 14-202. Qualified plan status. No provision of this
19Article shall be interpreted in a way that would cause the
20System to cease to be a qualified plan under Section 401(a) of
21the Internal Revenue Code.
 
22    (40 ILCS 5/15-103.4 new)
23    Sec. 15-103.4. Revised benefit package. "Revised benefit

 

 

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1package": The defined benefit retirement program maintained
2under the System as provided by Public Act 96-889 and described
3in Section 15-134.6.
 
4    (40 ILCS 5/15-113.6)  (from Ch. 108 1/2, par. 15-113.6)
5    Sec. 15-113.6. Service for employment in public schools.
6"Service for employment in public schools": Includes those
7periods not exceeding the lesser of 10 years or 2/3 of the
8service granted under other Sections of this Article dealing
9with service credit, during which a person who entered the
10system after September 1, 1974 was employed full time by a
11public common school, public college and public university, or
12by an agency or instrumentality of any of the foregoing, of any
13state, territory, dependency or possession of the United States
14of America, including the Philippine Islands, or a school
15operated by or under the auspices of any agency or department
16of any other state, if the person (1) cannot qualify for a
17retirement pension or other benefit based upon employer
18contributions from another retirement system, exclusive of
19federal social security, based in whole or in part upon this
20employment, and (2) pays the lesser of (A) an amount equal to
218% of his or her annual basic compensation on the date of
22becoming a participating employee subsequent to this service
23multiplied by the number of years of such service, together
24with compound interest from the date participation begins to
25the date payment is received by the board at the rate of 6% per

 

 

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1annum through August 31, 1982, and at the effective rates after
2that date, and (B) 50% of the actuarial value of the increase
3in the retirement annuity provided by this service, and (3)
4contributes for at least 5 years subsequent to this employment
5to one or more of the following systems: the State Universities
6Retirement System, the Teachers' Retirement System of the State
7of Illinois, and the Public School Teachers' Pension and
8Retirement Fund of Chicago.
9    The service granted under this Section shall not be
10considered in determining whether the person has the minimum of
118 years of service required to qualify for a retirement annuity
12at age 55 or the 5 years of service required to qualify for a
13retirement annuity at age 62, as provided in Section 15-135, or
14the 10 years required by subsection (c) of Section 15-134.6
151-160 for a person who first becomes a participant on or after
16January 1, 2011. The maximum allowable service of 10 years for
17this governmental employment shall be reduced by the service
18credit which is validated under paragraph (2) of subsection (b)
19of Section 16-127 and paragraph 1 of Section 17-133.
20(Source: P.A. 95-83, eff. 8-13-07; 96-1490, eff. 1-1-11.)
 
21    (40 ILCS 5/15-134)  (from Ch. 108 1/2, par. 15-134)
22    Sec. 15-134. Participant.
23    (a) Each person shall, as a condition of employment, become
24a participant and be subject to this Article on the date that
25he or she becomes an employee, makes an election to participate

 

 

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1in, or otherwise becomes a participant in one of the retirement
2programs offered under this Article, whichever date is later.
3    An employee who becomes a participant shall continue to be
4a participant until he or she becomes an annuitant, dies or
5accepts a refund of contributions. For purposes of subsection
6(f) of Section 15-134.6 1-160, the term "participant" shall
7include a person receiving a retirement annuity.
8    (b) A person employed concurrently by 2 or more employers
9is eligible to participate in the system on compensation
10received from all employers.
11(Source: P.A. 96-1490, eff. 1-1-11.)
 
12    (40 ILCS 5/15-134.5)
13    Sec. 15-134.5. Retirement program elections.
14    (a) All participating employees are participants under the
15traditional benefit package prior to January 1, 1998.
16    Effective as of the date that an employer elects, as
17described in Section 15-158.2, to offer to its employees the
18portable benefit package and the self-managed plan as
19alternatives to the traditional benefit package, each of that
20employer's eligible employees (as defined in subsection (b))
21shall be given the choice to elect which retirement program he
22or she wishes to participate in with respect to all periods of
23covered employment occurring on and after the effective date of
24the employee's election. The retirement program election made
25by an eligible employee must be made in writing, in the manner

 

 

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1prescribed by the System, and within the time period described
2in subsection (d) or (d-1).
3    The employee election authorized by this Section is a
4one-time, irrevocable election. If an employee terminates
5employment after making the election provided under this
6subsection (a), then upon his or her subsequent re-employment
7with an employer the original election shall automatically
8apply to him or her, provided that the employer is then a
9participating employer as described in Section 15-158.2.
10    An eligible employee who fails to make this election shall,
11by default, participate in the traditional benefit package.
12Beginning on July 1, 2013, all participating employees who are
13not participants in the self-managed plan, except persons who
14qualify as employees under subsection (h) of Section 15-107 and
15police officers, shall be required to make the election
16provided under Section 15-134.7, and a participating employee
17who fails to make such an election shall, by default,
18participate in the revised benefit package.
19    (b) "Eligible employee" means an employee (as defined in
20Section 15-107) who is either a currently eligible employee or
21a newly eligible employee. For purposes of this Section, a
22"currently eligible employee" is an employee who is employed by
23an employer on the effective date on which the employer offers
24to its employees the portable benefit package and the
25self-managed plan as alternatives to the traditional benefit
26package. A "newly eligible employee" is an employee who first

 

 

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

 

 

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

 

 

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1accordance with the traditional benefit package. If a currently
2eligible employee who has elected the portable benefit package
3terminates employment covered by the System before the one-year
4waiting period has ended, then no benefits shall be determined
5under the portable benefit package provisions while he or she
6is inactive in the System and upon re-employment with an
7employer covered by the System he or she shall begin a new
8one-year waiting period before the provisions of the portable
9benefit package become effective.
10    (f) An eligible employee shall be provided with written
11information prepared or prescribed by the System which
12describes the employee's retirement program choices. The
13eligible employee shall be offered an opportunity to receive
14counseling from the System prior to making his or her election.
15This counseling may consist of videotaped materials, group
16presentations, individual consultation with an employee or
17authorized representative of the System in person or by
18telephone or other electronic means, or any combination of
19these methods.
20(Source: P.A. 90-766, eff. 8-14-98; 91-887, eff. 7-6-00.)
 
21    (40 ILCS 5/15-134.6 new)
22    Sec. 15-134.6. Revised benefit package.
23    (a) The provisions of this Section apply to a person who,
24on or after January 1, 2011, first becomes a participant under
25this Article, and any person who elects this benefit package

 

 

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1pursuant to Section 15-134.7, but do not apply to the
2self-managed plan established under this Article.
3    (b) "Final rate of earnings" means the average monthly (or
4annual) earnings obtained by dividing the total earnings or
5earnings calculated under this Article applicable to the
6participant during the 96 consecutive months (or 8 consecutive
7years) of service within the last 120 months (or 10 years) of
8service in which the total earnings calculated under this
9Article was the highest by the number of months (or years) of
10service in that period.
11    (b-5) For all purposes under this Article (including
12without limitation the calculation of benefits and employee
13contributions and contributions by the State of Illinois under
14paragraph (2) of Section 15-155.1 with respect to the revised
15benefit package), the annual earnings of a participant to whom
16this Section applies shall not exceed $106,800; however, that
17amount shall annually thereafter be increased by the lesser of
18(i) 3% of that amount, including all previous adjustments, or
19(ii) one half the annual unadjusted percentage increase (but
20not less than zero) in the consumer price index-u for the 12
21months ending with the September preceding each November 1,
22including all previous adjustments.
23    For the purposes of this Section, "consumer price index-u"
24means the index published by the Bureau of Labor Statistics of
25the United States Department of Labor that measures the average
26change in prices of goods and services purchased by all urban

 

 

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1consumers, United States city average, all items, 1982 84 =100.
2The new amount resulting from each annual adjustment shall be
3determined by the Public Pension Division of the Department of
4Insurance and made available to the boards of the retirement
5systems and pension funds by November 1 of each year.
6    Beginning on July 1, 2013, the maximum annual earnings
7amount shall be adjusted to $110,100, as adjusted for periods
8after 2012 based on the methodology and formula used to
9calculate annual increases in wages under 42 U.S.C. Section
10415(a) for purposes of computing benefits and adjusting wages
11under the federal Social Security program. Each year thereafter
12on January 1, this amount shall be adjusted based on the
13methodology and formula used to calculate annual increases in
14wages under 42 U.S.C. Section 415(a) for purposes of computing
15benefits and adjusting wages under the federal Social Security
16program.
17    (c) A participant is entitled to a retirement annuity upon
18written application if he or she has attained age 67 and has at
19least 10 years of service credit and is otherwise eligible
20under the requirements of this Article. A participant who has
21attained age 62 and has at least 10 years of service credit and
22is otherwise eligible under the requirements of this Article
23may elect to receive the lower retirement annuity provided in
24subsection (d) of this Section.
25    (d) The retirement annuity of a participant who is retiring
26after attaining age 62 with at least 10 years of service credit

 

 

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1shall be reduced by one half of 1% for each full month that the
2member's age is under age 67.
3    (e) Any retirement annuity or supplemental annuity shall be
4subject to annual increases on the January 1 occurring either
5on or after the attainment of age 67 or the first anniversary
6of the annuity start date, whichever is later. Each annual
7increase shall be calculated at 3% or one half the annual
8unadjusted percentage increase (but not less than zero) in the
9consumer price index-u for the 12 months ending with the
10September preceding each November 1, whichever is less, of the
11originally granted retirement annuity. If the annual
12unadjusted percentage change in the consumer price index-u for
13the 12 months ending with the September preceding each November
141 is zero or there is a decrease, then the annuity shall not be
15increased.
16    (f) The initial survivor's or widow's annuity of an
17otherwise eligible survivor or widow of a retired participant
18shall be in the amount of 66 2/3% of the retired participant's
19retirement annuity at the date of death. In the case of the
20death of a participant who has not retired, eligibility for a
21survivor's or widow's annuity shall be determined by the
22applicable section of this Article. The initial benefit shall
23be 66 2/3% of the earned annuity without a reduction due to
24age. A child's annuity of an otherwise eligible child shall be
25in the amount prescribed under this Article if applicable. Any
26survivor's or widow's annuity shall be increased (1) on each

 

 

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1January 1 occurring on or after the commencement of the annuity
2if the deceased member died while receiving a retirement
3annuity or (2) in other cases, on each January 1 occurring
4after the first anniversary of the commencement of the annuity.
5Each annual increase shall be calculated at 3% or one half the
6annual unadjusted percentage increase (but not less than zero)
7in the consumer price index-u for the 12 months ending with the
8September preceding each November 1, whichever is less, of the
9originally granted survivor's annuity. If the annual
10unadjusted percentage change in the consumer price index-u for
11the 12 months ending with the September preceding each November
121 is zero or there is a decrease, then the annuity shall not be
13increased.
14    (g) If a person who first becomes a participant on or after
15January 1, 2011 is receiving a retirement annuity under this
16system and becomes a member or participant under any other
17system or fund created by this Code and is employed on a
18full-time basis, except for those members or participants
19exempted from the provisions of this Section under subsection
20(a) of this Section, then the person's retirement annuity shall
21be suspended during that employment. Upon termination of that
22employment, the person's retirement annuity shall resume and be
23recalculated if recalculation is provided for under this
24Article.
25    (h) Notwithstanding any other provision of this Section, a
26participant in the revised benefit package provided by this

 

 

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1Section shall have the option to enroll in the self-managed
2plan created under Section 15-158.2.
3    (i) 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    (40 ILCS 5/15-134.7 new)
7    Sec. 15-134.7. Benefits accruals on and after July 1, 2013.
8    (a) Each participating employee under this Article, other
9than a person who first becomes an employee and a participant
10on or after January 1, 2011, a person who qualifies as an
11employee under subsection (h) of Section 15-107, a person who
12qualifies as a police officer, or a person who becomes an
13employee and a participant before July 1, 2013 and who elects
14the self-managed plan provided under Section 15-158.2, shall
15elect which retirement program he or she wishes to participate
16in with respect to all periods of service occurring on and
17after July 1, 2013. The retirement program election made by the
18participating employee must be made (i) no later than July 1,
192013 in the manner prescribed by the System, and (ii) if
20applicable, every 3 years thereafter. The participating
21employee shall elect one of the following retirement programs:
22        (1) the traditional or portable benefit package;
23        (2) the revised benefit package; or
24        (3) the self-managed plan provided by the System.
25    (b) A person who first becomes an employee and a

 

 

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1participant in the System, on or after January 1, 2011, shall
2elect which retirement program he or she wishes to participate
3in with respect to all periods of service occurring on and
4after July 1, 2013. The participant shall elect one of the
5retirement programs provided in paragraph (2) or (3) of
6subsection (a) of this Section. The participant must make that
7election (i) by June 30, 2013 or within 6 months after the
8participant's first day of employment, whichever is later, and
9(ii) if applicable, ever 3 years thereafter.
10    (c) The participant election authorized by this Section is
11an irrevocable election, except that any individual making an
12election for the benefit described in paragraph (1) or (2) of
13subsection (a) shall make an election for a period of 3 years
14and shall make a subsequent election during the benefit
15recalculation period in the manner prescribed by the System.
16The election shall be made in the manner prescribed by the
17System. Any participant who fails to make the initial election
18shall, by default, participate in the revised benefit package
19provided under paragraph (2) of subsection (a) of this Section.
20    (d) Participants who have already made an election pursuant
21to subsection (a) or (b) shall be given the opportunity to make
22a new election as follows:
23        (1) each participant in the traditional benefit
24    package provided under paragraph (1) of subsection (a) of
25    this Section shall have the opportunity to elect to
26    terminate participation in the traditional benefit package

 

 

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1    and to elect to have retirement benefits for future service
2    provided under either the revised benefit package provided
3    under paragraph (2) of subsection (a) of this Section or
4    the self-managed plan provided under paragraph (3) of
5    subsection (a) of this Section;
6        (2) each participant in the revised benefit package
7    provided under paragraph (2) of subsection (a) of this
8    Section shall have the opportunity to elect to terminate
9    participation in the revised benefit package and to elect
10    to have retirement benefits for future service provided
11    under the self-managed plan provided under paragraph (3) of
12    subsection (a) of this Section; and
13        (3) the elections permitted under paragraphs (1) and
14    (2) must be made during a 6-month period in a manner
15    prescribed by the System.
16    (e) If a participant with an accrued benefit under the
17traditional or portable benefit package elects to participate
18under the revised benefit package, the participant's total
19accrued benefit for purposes of determining an annuity shall be
20the sum of (i) the participant's benefit accruals under the
21traditional or portable benefit package before the effective
22date of the election, based on the participant's final rate of
23earnings and service under the traditional or portable benefit
24package as of the effective date of the election and frozen on
25such date, and (ii) the participant's benefit accruals based on
26the participant's final rate of earnings and service on and

 

 

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1after the effective date of the election under the revised
2benefit package. All rights and features provided under the
3traditional or portable benefit package will be preserved with
4respect to benefits earned under such package with respect to
5service completed prior to participation in the revised benefit
6package. Participants who elect to participate under the
7revised benefit package shall be entitled to the benefit of the
8survivor's annuity provided under the revised benefit package
9based upon all service completed under the System. All service
10completed under the System shall count for purposes of
11determining retirement eligibility and vesting under both the
12traditional or portable defined benefit package and the revised
13benefit package.
14    (f) If a participant with an accrued benefit under the
15traditional, portable, or revised benefit package elects to
16participate under the self-managed plan, the participant's
17total accrued benefit for purposes of determining an annuity
18shall be the participant's benefit accruals prior to the
19effective date of the election, based on the participant's
20final rate of earnings and service as of the effective date of
21the election, and frozen on such date. However, the participant
22shall also have an accrued self-managed plan benefit as
23specified in subsection (k) of Section 15-158.2, for periods of
24service on or after the effective date of the election. All
25rights and features provided under the traditional, portable,
26or revised benefit package will be preserved with respect to

 

 

09700SB0512ham002- 193 -LRB097 06621 JDS 59545 a

1benefits earned under such package with respect to service
2completed prior to the election to participate in the
3self-managed plan. All service completed with the System shall
4count for purposes of determining retirement eligibility and
5vesting under the traditional or portable benefit package, the
6revised benefit package, and the self-managed plan.
7    (g) An individual who is a in the System, but is not a
8participating employee as of July 1, 2013, shall, based on the
9eligibility criteria specified in this Article, elect one of
10the 3 retirement programs provided under paragraphs (1), (2),
11or (3) of subsection (a) of this Section within 6 months after
12becoming a participating employee, provided that a participant
13who previously elected the self-managed plan provided under
14Section 15-158.2 may not make a subsequent election of a
15different retirement program.
16    (h) This Section does not apply to persons who qualify as
17employees under subsection (h) of Section 15-107.
 
18    (40 ILCS 5/15-136)  (from Ch. 108 1/2, par. 15-136)
19    Sec. 15-136. Retirement annuities - Amount. The provisions
20of this Section 15-136 apply only to those participants who are
21participating in the traditional benefit package or the
22portable benefit package and do not apply to participants who
23are participating in the self-managed plan.
24    (a) The amount of a participant's retirement annuity,
25expressed in the form of a single-life annuity, shall be

 

 

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

 

 

09700SB0512ham002- 195 -LRB097 06621 JDS 59545 a

1    made by the participant under Section 15-113.3.
2    With respect to a police officer or firefighter who retires
3on or after August 14, 1998, the accumulated normal
4contributions taken into account under clauses (i) and (ii) of
5this Rule 2 shall include the additional normal contributions
6made by the police officer or firefighter under Section
715-157(a).
8    Beginning on July 1, 2013, for purposes of calculating an
9annuity under this Rule 2, employee contributions in excess of
10the employee contribution rates that apply to the annuity and
11are in effect immediately prior to July 1, 2013 shall not be
12considered when determining the participant's accumulated
13normal contributions under clause (i) or the employer
14contribution under clause (ii).
15    The amount of a retirement annuity calculated under this
16Rule 2 shall be computed solely on the basis of the
17participant's accumulated normal contributions, as specified
18in this Rule and defined in Section 15-116. Neither an employee
19or employer contribution for early retirement under Section
2015-136.2 nor any other employer contribution shall be used in
21the calculation of the amount of a retirement annuity under
22this Rule 2.
23    This amendatory Act of the 91st General Assembly is a
24clarification of existing law and applies to every participant
25and annuitant without regard to whether status as an employee
26terminates before the effective date of this amendatory Act.

 

 

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

 

 

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

 

 

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

 

 

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1participant's annuity if calculated under Rule 1, reduced under
2Section 15-136(b) as if no contributions had been made under
3Section 15-136.2.
4    With respect to a participant who is qualified for a
5retirement annuity under this Rule 5 whose retirement annuity
6began before the effective date of this amendatory Act of the
791st General Assembly, and for whom an employee contribution
8was made under Section 15-136.2, the System shall recalculate
9the retirement annuity under this Rule 5 and shall pay any
10additional amounts due in the manner provided in Section
1115-186.1 for benefits mistakenly set too low.
12    The amount of a retirement annuity calculated under this
13Rule 5 shall be computed solely on the basis of those
14contributions specifically set forth in this Rule 5. Except as
15provided in clause (iii) of this Rule 5, neither an employee
16nor employer contribution for early retirement under Section
1715-136.2, nor any other employer contribution, shall be used in
18the calculation of the amount of a retirement annuity under
19this Rule 5.
20    The General Assembly has adopted the changes set forth in
21Section 25 of this amendatory Act of the 91st General Assembly
22in recognition that the decision of the Appellate Court for the
23Fourth District in Mattis v. State Universities Retirement
24System et al. might be deemed to give some right to the
25plaintiff in that case. The changes made by Section 25 of this
26amendatory Act of the 91st General Assembly are a legislative

 

 

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1implementation of the decision of the Appellate Court for the
2Fourth District in Mattis v. State Universities Retirement
3System et al. with respect to that plaintiff.
4    The changes made by Section 25 of this amendatory Act of
5the 91st General Assembly apply without regard to whether the
6person is in service as an employee on or after its effective
7date.
8    (b) The retirement annuity provided under Rules 1 and 3
9above shall be reduced by 1/2 of 1% for each month the
10participant is under age 60 at the time of retirement. However,
11this reduction shall not apply in the following cases:
12        (1) For a disabled participant whose disability
13    benefits have been discontinued because he or she has
14    exhausted eligibility for disability benefits under clause
15    (6) of Section 15-152;
16        (2) For a participant who has at least the number of
17    years of service required to retire at any age under
18    subsection (a) of Section 15-135; or
19        (3) For that portion of a retirement annuity which has
20    been provided on account of service of the participant
21    during periods when he or she performed the duties of a
22    police officer or firefighter, if these duties were
23    performed for at least 5 years immediately preceding the
24    date the retirement annuity is to begin.
25    (c) The maximum retirement annuity provided under Rules 1,
262, 4, and 5 shall be the lesser of (1) the annual limit of

 

 

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

 

 

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1this Section. The change made under this subsection by P.A.
281-970 is effective January 1, 1980 and applies to each
3annuitant whose status as an employee terminates before or
4after that date.
5    Beginning January 1, 1990, all automatic annual increases
6payable under this Section shall be calculated as a percentage
7of the total annuity payable at the time of the increase,
8including all increases previously granted under this Article.
9    The change made in this subsection by P.A. 85-1008 is
10effective January 26, 1988, and is applicable without regard to
11whether status as an employee terminated before that date.
12    (e) If, on January 1, 1987, or the date the retirement
13annuity payment period begins, whichever is later, the sum of
14the retirement annuity provided under Rule 1 or Rule 2 of this
15Section and the automatic annual increases provided under the
16preceding subsection or Section 15-136.1, amounts to less than
17the retirement annuity which would be provided by Rule 3, the
18retirement annuity shall be increased as of January 1, 1987, or
19the date the retirement annuity payment period begins,
20whichever is later, to the amount which would be provided by
21Rule 3 of this Section. Such increased amount shall be
22considered as the retirement annuity in determining benefits
23provided under other Sections of this Article. This paragraph
24applies without regard to whether status as an employee
25terminated before the effective date of this amendatory Act of
261987, provided that the annuitant was employed at least

 

 

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1one-half time during the period on which the final rate of
2earnings was based.
3    (f) A participant is entitled to such additional annuity as
4may be provided on an actuarially equivalent basis, by any
5accumulated additional contributions to his or her credit.
6However, the additional contributions made by the participant
7toward the automatic increases in annuity provided under this
8Section shall not be taken into account in determining the
9amount of such additional annuity.
10    (g) If, (1) by law, a function of a governmental unit, as
11defined by Section 20-107 of this Code, is transferred in whole
12or in part to an employer, and (2) a participant transfers
13employment from such governmental unit to such employer within
146 months after the transfer of the function, and (3) the sum of
15(A) the annuity payable to the participant under Rule 1, 2, or
163 of this Section (B) all proportional annuities payable to the
17participant by all other retirement systems covered by Article
1820, and (C) the initial primary insurance amount to which the
19participant is entitled under the Social Security Act, is less
20than the retirement annuity which would have been payable if
21all of the participant's pension credits validated under
22Section 20-109 had been validated under this system, a
23supplemental annuity equal to the difference in such amounts
24shall be payable to the participant.
25    (h) On January 1, 1981, an annuitant who was receiving a
26retirement annuity on or before January 1, 1971 shall have his

 

 

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1or her retirement annuity then being paid increased $1 per
2month for each year of creditable service. On January 1, 1982,
3an annuitant whose retirement annuity began on or before
4January 1, 1977, shall have his or her retirement annuity then
5being paid increased $1 per month for each year of creditable
6service.
7    (i) On January 1, 1987, any annuitant whose retirement
8annuity began on or before January 1, 1977, shall have the
9monthly retirement annuity increased by an amount equal to 8
10per year of creditable service times the number of years that
11have elapsed since the annuity began.
12(Source: P.A. 93-347, eff. 7-24-03; 94-4, eff. 6-1-05.)
 
13    (40 ILCS 5/15-136.3)
14    Sec. 15-136.3. Minimum retirement annuity.
15    (a) Beginning January 1, 1997, any person who is receiving
16a monthly retirement annuity under this Article which, after
17inclusion of (1) all one-time and automatic annual increases to
18which the person is entitled, (2) any supplemental annuity
19payable under Section 15-136.1, and (3) any amount deducted
20under Section 15-138 or 15-140 to provide a reversionary
21annuity, is less than the minimum monthly retirement benefit
22amount specified in subsection (b) of this Section, shall be
23entitled to a monthly supplemental payment equal to the
24difference.
25    (b) For purposes of the calculation in subsection (a), the

 

 

09700SB0512ham002- 205 -LRB097 06621 JDS 59545 a

1minimum monthly retirement benefit amount is the sum of $25 for
2each year of service credit, up to a maximum of 30 years of
3service.
4    (c) This Section applies to all persons receiving a
5retirement annuity under this Article, without regard to
6whether or not employment terminated prior to the effective
7date of this Section. The annual increase provided in
8subsection (e) of Section 15-134.6 1-160 does not apply to any
9benefit provided under this Section.
10(Source: P.A. 96-1490, eff. 1-1-11.)
 
11    (40 ILCS 5/15-136.4)
12    Sec. 15-136.4. Retirement and Survivor Benefits Under
13Portable Benefit Package.
14    (a) This Section 15-136.4 describes the form of annuity and
15survivor benefits available to a participant who has elected
16the portable benefit package and has completed the one-year
17waiting period required under subsection (e) of Section
1815-134.5. For purposes of this Section, the term "eligible
19spouse" means the husband or wife of a participant to whom the
20participant is married on the date the participant's annuity
21payment period begins, provided however, that if the
22participant should die prior to the commencement of retirement
23annuity benefits, then "eligible spouse" means the husband or
24wife, if any, to whom the participant was married throughout
25the one-year period preceding the date of his or her death.

 

 

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1    (b) This subsection (b) describes the normal form of
2annuity payable to a participant subject to this Section
315-136.4. If the participant is unmarried on the date his or
4her annuity payment period begins, then the annuity payments
5shall be made in the form of a single-life annuity as described
6in Section 15-118. If the participant is married on the date
7his or her annuity payments commence, then the annuity payments
8shall be paid in the form of a qualified joint and survivor
9annuity that is the actuarial equivalent of the single-life
10annuity. Under the "qualified joint and survivor annuity", a
11reduced amount shall be paid to the participant for his or her
12lifetime and his or her eligible spouse, if surviving at the
13participant's death, shall be entitled to receive thereafter a
14lifetime survivorship annuity in a monthly amount equal to 50%
15of the reduced monthly amount that was payable to the
16participant. The last payment of a qualified joint and survivor
17annuity shall be made as of the first day of the month in which
18the death of the survivor occurs.
19    (c) Instead of the normal form of annuity that would be
20paid under subsection (b), a participant may elect in writing
21within the 90-day period prior to the date his or her annuity
22payments commence to waive the normal form of annuity payment
23and receive an optional form of payment as described in
24subsection (h). If the participant is married and elects an
25optional form of payment under subsection (h) other than a
26joint and survivor annuity with the eligible spouse designated

 

 

09700SB0512ham002- 207 -LRB097 06621 JDS 59545 a

1as the contingent annuitant, then such election shall require
2the consent of his or her eligible spouse in the manner
3described in subsection (d). At any time during the 90-day
4period preceding the date the participant's payment period
5begins, the participant may revoke the optional form of payment
6elected under this subsection (c) and reinstate coverage under
7the qualified joint and survivor annuity without the spouse's
8consent, but an election to revoke the optional form elected
9and elect a new optional form of payment or designate a
10different contingent annuitant shall not be effective without
11the eligible spouse's consent.
12    (d) The eligible spouse's consent to any election made
13pursuant to this Section that requires the eligible spouse's
14consent shall be in writing and shall acknowledge the effect of
15the consent. In addition, the eligible spouse's signature on
16the written consent must be witnessed by a notary public. The
17eligible spouse's consent need not be obtained if the system is
18satisfied that there is no eligible spouse, that the eligible
19spouse cannot be located, or because of any other relevant
20circumstances. An eligible spouse's consent under this Section
21is valid only with respect to the specified optional form of
22payment and, if applicable, contingent annuitant designated by
23the participant. If the optional form of payment or the
24contingent annuitant is subsequently changed (other than by a
25revocation of the optional form of payment and reinstatement of
26the qualified joint and survivor annuity), a new consent by the

 

 

09700SB0512ham002- 208 -LRB097 06621 JDS 59545 a

1eligible spouse is required. The eligible spouse's consent to
2an election made by a participant pursuant to this Section,
3once made, may not be revoked by the eligible spouse.
4    (e) Within a reasonable period of time preceding the date a
5participant's annuity commences, a participant shall be
6supplied with a written explanation of (1) the terms and
7conditions of the normal form single-life annuity and qualified
8joint and survivor annuity, (2) the participant's right to
9elect a single-life annuity or an optional form of payment
10under subsection (h) subject to his or her eligible spouse's
11consent, if applicable, and (3) the participant's right to
12reinstate coverage under the qualified joint and survivor
13annuity prior to his or her annuity commencement date by
14revoking an election of an optional form of payment under
15subsection (h).
16    (f) If a married participant with at least 1.5 years of
17service dies prior to commencing retirement annuity payments
18and prior to taking a refund under Section 15-154, his or her
19eligible spouse is entitled to receive a pre-retirement
20survivor annuity, if there is not then in effect a waiver of
21the pre-retirement survivor annuity. The pre-retirement
22survivor annuity payable under this subsection shall be a
23monthly annuity payable for the eligible spouse's life,
24commencing as of the beginning of the month next following the
25later of the date of the participant's death or the date the
26participant would have first met the eligibility requirements

 

 

09700SB0512ham002- 209 -LRB097 06621 JDS 59545 a

1for retirement, and continuing through the beginning of the
2month in which the death of the eligible spouse occurs. The
3monthly amount payable to the spouse under the pre-retirement
4survivor annuity shall be equal to the monthly amount that
5would be payable as a survivor annuity under the qualified
6joint and survivor annuity described in subsection (b) if: (1)
7in the case of a participant who dies on or after the date on
8which the participant has met the eligibility requirements for
9retirement, the participant had retired with an immediate
10qualified joint and survivor annuity on the day before the
11participant's date of death; or (2) in the case of a
12participant who dies before the earliest date on which the
13participant would have met the eligibility requirements for
14retirement age, the participant had separated from service on
15the date of death, survived to the earliest retirement age
16based on service prior to his or her death, retired with an
17immediate qualified joint and survivor annuity at the earliest
18retirement age, and died on the day after the day on which the
19participant would have attained the earliest retirement age.
20    (g) A married participant who has not retired may elect at
21any time to waive the pre-retirement survivor annuity described
22in subsection (f). Any such election shall require the consent
23of the participant's eligible spouse in the manner described in
24subsection (d). A waiver of the pre-retirement survivor annuity
25shall increase the lump sum death benefit payable under
26subsection (b) of Section 15-141. Prior to electing any waiver

 

 

09700SB0512ham002- 210 -LRB097 06621 JDS 59545 a

1of the pre-retirement survivor annuity, the participant shall
2be provided with a written explanation of (1) the terms and
3conditions of the pre-retirement survivor annuity and the death
4benefits payable from the system both with and without the
5pre-retirement survivor annuity, (2) the participant's right
6to elect a waiver of the pre-retirement survivor annuity
7coverage subject to his or her spouse's consent, and (3) the
8participant's right to reinstate pre-retirement survivor
9annuity coverage at any time by revoking a prior waiver of such
10coverage.
11    (h) By filing a timely election with the system, a
12participant who will be eligible to receive a retirement
13annuity under this Section may waive the normal form of annuity
14payment described in subsection (b), subject to obtaining the
15consent of his or her eligible spouse, if applicable, and elect
16to receive any one of the following optional forms of payment:
17        (1) Joint and Survivor Annuity Options: The
18    participant may elect to receive a reduced annuity payable
19    for his or her life and to have a lifetime survivorship
20    annuity in a monthly amount equal to 50%, 75%, or 100% (as
21    elected by the participant) of that reduced monthly amount,
22    to be paid after the participant's death to his or her
23    contingent annuitant, if the contingent annuitant is alive
24    at the time of the participant's death.
25        (2) Single-Life Annuity Option (optional for married
26    participants). The participant may elect to receive a

 

 

09700SB0512ham002- 211 -LRB097 06621 JDS 59545 a

1    single-life annuity payable for his or her life only.
2        (3) Lump sum retirement benefit. The participant may
3    elect to receive a lump sum retirement benefit that is
4    equal to the amount of a refund payable under Section
5    15-154(a-2), as modified for periods of service beginning
6    on or after July 1, 2013.
7All joint and survivor annuity forms shall be in an amount that
8is the actuarial equivalent of the single-life annuity.
9    For the purposes of this Section, the term "contingent
10annuitant" means the beneficiary who is designated by a
11participant at the time the participant elects a joint and
12survivor annuity to receive the lifetime survivorship annuity
13in the event the beneficiary survives the participant at the
14participant's death.
15    (i) Under no circumstances may an option be elected,
16changed, or revoked after the date the participant's retirement
17annuity commences.
18    (j) An election made pursuant to subsection (h) shall
19become inoperative if the participant or the contingent
20annuitant dies before the date the participant's annuity
21payments commence, or if the eligible spouse's consent is
22required and not given.
23    (k) (Blank).
24    (l) The automatic annual increases described in subsection
25(d) of Section 15-136 shall apply to retirement benefits under
26the portable benefit package and the automatic annual increases

 

 

09700SB0512ham002- 212 -LRB097 06621 JDS 59545 a

1described in subsection (j) of Section 15-145 shall apply to
2survivor benefits under the portable benefit package.
3(Source: P.A. 96-586, eff. 8-18-09.)
 
4    (40 ILCS 5/15-136.5 new)
5    Sec. 15-136.5. Minimum benefit and allocation provisions.
6Each employee participating in the System shall receive a
7minimum benefit or allocation for service on or after July 1,
82013 determined as follows:
9    (1) If the employee is participating in the traditional or
10portable benefit package or the revised benefit package, the
11employee shall receive a minimum benefit (commencing on his or
12her Social Security retirement age) for the employee's period
13of service covered by each such defined benefit package that is
14equal to the annual primary insurance amount the employee would
15have under Social Security for such period of service. For the
16purposes of this item (1), the primary insurance amount an
17individual would have under Social Security shall be calculated
18so that the System meets the requirements necessary to be
19considered a retirement system under Section 3121(b)(7)(F) of
20the Internal Revenue Code and the regulations in effect
21thereunder.
22    (2) If the employee is participating in the self-managed
23plan, the employee shall receive a minimum allocation equal to
247.5% of the employee's earnings for service during the period.
25All contributions shall be taken into account for this purpose.

 

 

09700SB0512ham002- 213 -LRB097 06621 JDS 59545 a

1For the purposes of this paragraph (2), the minimum allocation
2shall be calculated so that the System meets the requirements
3necessary to be considered a retirement system under Section
43121(b)(7)(F) of the Internal Revenue Code and the regulations
5in effect thereunder.
 
6    (40 ILCS 5/15-141)  (from Ch. 108 1/2, par. 15-141)
7    Sec. 15-141. Death benefits - Death of participant.
8    (a) The beneficiary of a participant under the traditional
9benefit package is entitled to a death benefit equal to the sum
10of (1) the employee's accumulated normal and additional
11contributions on the date of death, (2) the employee's
12accumulated survivors insurance contributions on the date of
13death, if a survivors insurance benefit is not payable, (3) an
14amount equal to the employee's final rate of earnings, but not
15more than $5,000, if (i) the beneficiary, under rules of the
16board, was dependent upon the participant, (ii) the participant
17was a participating employee immediately prior to his or her
18death, and (iii) a survivors insurance benefit is not payable,
19and (4) $2,500 if (i) the beneficiary was not dependent upon
20the participant, (ii) the participant was a participating
21employee immediately prior to his or her death, and (iii) a
22survivors insurance benefit is not payable.
23    (b) If the participant has elected to participate in the
24portable benefit package and has completed the one-year waiting
25period required under subsection (e) of Section 15-134.5, the

 

 

09700SB0512ham002- 214 -LRB097 06621 JDS 59545 a

1death benefit shall be equal to the employee's accumulated
2normal and additional contributions on the date of death plus,
3if the employee died with 1.5 or more years of service for
4employment as defined in Section 15-113.1, employer
5contributions in an amount equal to the sum of the accumulated
6normal and additional contributions; except that if a
7pre-retirement survivor annuity is payable under Section
815-136.4, the death benefit payable under this paragraph shall
9be reduced, but to not less than zero, by the actuarial value
10of the benefit payable to the surviving spouse. If the
11recipient of a pre-retirement survivor annuity dies before an
12amount equal to all accumulated normal and additional
13contributions as of the date of death have been paid out, the
14remaining difference shall be paid to the member's beneficiary.
15The primary beneficiary of the participant must be his or her
16spouse unless the spouse has consented to the designation of
17another beneficiary in the manner described in subsection (d)
18of Section 15-136.4.
19    (c) If payments are made under any State or federal
20workers' compensation or occupational diseases law because of
21the death of an employee, the portion of the death benefit
22payable from employer contributions shall be reduced by the
23total amount of the payments.
24    (d) Beginning on July 1, 2013, for purposes of calculating
25the death benefit under subsection (b) of this Section,
26employee contributions in excess of the employee contribution

 

 

09700SB0512ham002- 215 -LRB097 06621 JDS 59545 a

1rates that apply to that benefit and are in effect immediately
2prior to July 1, 2013 shall not be considered when determining
3the participant's accumulated normal and additional
4contributions or the employer contribution, provided that the
5death benefit amount attributable to service on or after July
61, 2013 shall not be less than the participant's employee
7contributions during such period of service.
8(Source: P.A. 95-83, eff. 8-13-07.)
 
9    (40 ILCS 5/15-146)  (from Ch. 108 1/2, par. 15-146)
10    Sec. 15-146. Survivors insurance benefits - Minimum
11amounts.
12    (a) The minimum total survivors annuity payable on account
13of the death of a participant shall be 50% of the retirement
14annuity which would have been provided under Rule 1, Rule 2,
15Rule 3, or Rule 5 of Section 15-136 upon the participant's
16attainment of the minimum age at which the penalty for early
17retirement would not be applicable or the date of the
18participant's death, whichever is later, on the basis of
19credits earned prior to the time of death.
20    (b) The minimum total survivors annuity payable on account
21of the death of an annuitant shall be 50% of the retirement
22annuity which is payable under Section 15-136 at the time of
23death or 50% of the disability retirement annuity payable under
24Section 15-153.2. This minimum survivors annuity shall apply to
25each participant and annuitant who dies after September 16,

 

 

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11979, whether or not his or her employee status terminates
2before or after that date.
3    (c) If an annuitant has elected a reversionary annuity, the
4retirement annuity referred to in this Section is that which
5would have been payable had such election not been filed.
6    (d) Beginning January 1, 2002, any person who is receiving
7a survivors annuity under this Article which, after inclusion
8of all one-time and automatic annual increases to which the
9person is entitled, is less than the sum of $17.50 for each
10year (up to a maximum of 30 years) of the deceased member's
11service credit, shall be entitled to a monthly supplemental
12payment equal to the difference.
13    If 2 or more persons are receiving survivors annuities
14based on the same deceased member, the calculation of the
15supplemental payment under this subsection shall be based on
16the total of those annuities and divided pro rata. The
17supplemental payment is not subject to any limitation on the
18maximum amount of the annuity and shall not be included in the
19calculation of any automatic annual increase under Section
2015-145. The annual increase provided in subsection (f) of
21Section 15-134.6 1-160 does not apply to any benefit provided
22under this subsection.
23(Source: P.A. 96-1490, eff. 1-1-11.)
 
24    (40 ILCS 5/15-154)  (from Ch. 108 1/2, par. 15-154)
25    Sec. 15-154. Refunds.

 

 

09700SB0512ham002- 217 -LRB097 06621 JDS 59545 a

1    (a) A participant whose status as an employee is
2terminated, regardless of cause, or who has been on lay off
3status for more than 120 days, and who is not on leave of
4absence, is entitled to a refund of contributions upon
5application; except that not more than one such refund
6application may be made during any academic year.
7    Except as set forth in subsections (a-1) and (a-2), the
8refund shall be the sum of the accumulated normal, additional,
9and survivors insurance contributions, plus the entire
10contribution made by the participant under Section 15-113.3,
11less the amount of interest credited on these contributions
12each year in excess of 4 1/2% of the amount on which interest
13was calculated.
14    (a-1) A person who elects, in accordance with the
15requirements of Section 15-134.5, to participate in the
16portable benefit package and who becomes a participating
17employee under that retirement program upon the conclusion of
18the one-year waiting period applicable to the portable benefit
19package election shall have his or her refund calculated in
20accordance with the provisions of subsection (a-2).
21    (a-2) The refund payable to a participant described in
22subsection (a-1) shall be the sum of the participant's
23accumulated normal and additional contributions, as defined in
24Sections 15-116 and 15-117, plus the entire contribution made
25by the participant under Section 15-113.3. If the participant
26terminates with 5 or more years of service for employment as