Rep. Michael J. Madigan

Filed: 5/29/2012

 

 


 

 


 
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1
AMENDMENT TO SENATE BILL 1673

2    AMENDMENT NO. ______. Amend Senate Bill 1673 by replacing
3everything after the enacting clause with the following:
 
4    "Section 5. The Illinois Public Labor Relations Act is
5amended by changing Sections 4 and 15 as follows:
 
6    (5 ILCS 315/4)  (from Ch. 48, par. 1604)
7    Sec. 4. Management Rights. Employers shall not be required
8to bargain over matters of inherent managerial policy, which
9shall include such areas of discretion or policy as the
10functions of the employer, standards of services, its overall
11budget, the organizational structure and selection of new
12employees, examination techniques and direction of employees.
13Employers, however, shall be required to bargain collectively
14with regard to policy matters directly affecting wages (but
15subject to any applicable restrictions in Section 14-106.5,
1615-134.6, or 16-131.7 of the Illinois Pension Code), hours and

 

 

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1terms and conditions of employment as well as the impact
2thereon upon request by employee representatives, but
3excluding the changes, the impact of changes, and the
4implementation of the changes set forth in this amendatory Act
5of the 97th General Assembly.
6    To preserve the rights of employers and exclusive
7representatives which have established collective bargaining
8relationships or negotiated collective bargaining agreements
9prior to the effective date of this Act, employers shall be
10required to bargain collectively with regard to any matter
11concerning wages (but subject to any applicable restrictions in
12Section 14-106.5, 15-134.6, or 16-131.7 of the Illinois Pension
13Code), hours or conditions of employment about which they have
14bargained for and agreed to in a collective bargaining
15agreement prior to the effective date of this Act, but
16excluding the changes, the impact of changes, and the
17implementation of the changes set forth in this amendatory Act
18of the 97th General Assembly.
19    The chief judge of the judicial circuit that employs a
20public employee who is a court reporter, as defined in the
21Court Reporters Act, has the authority to hire, appoint,
22promote, evaluate, discipline, and discharge court reporters
23within that judicial circuit.
24    Nothing in this amendatory Act of the 94th General Assembly
25shall be construed to intrude upon the judicial functions of
26any court. This amendatory Act of the 94th General Assembly

 

 

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1applies only to nonjudicial administrative matters relating to
2the collective bargaining rights of court reporters.
3(Source: P.A. 94-98, eff. 7-1-05.)
 
4    (5 ILCS 315/15)  (from Ch. 48, par. 1615)
5    Sec. 15. Act Takes Precedence.
6    (a) In case of any conflict between the provisions of this
7Act and any other law (other than Section 5 of the State
8Employees Group Insurance Act of 1971 and other than the
9changes made to the Illinois Pension Code by Public Act 96-889
10and the changes, impact of changes, and the implementation of
11the changes made to the Illinois Pension Code and the State
12Employees Group Insurance Act of 1971 by this amendatory Act of
13the 97th 96th General Assembly), executive order or
14administrative regulation relating to wages, hours and
15conditions of employment and employment relations, the
16provisions of this Act or any collective bargaining agreement
17negotiated thereunder shall prevail and control. Nothing in
18this Act shall be construed to replace or diminish the rights
19of employees established by Sections 28 and 28a of the
20Metropolitan Transit Authority Act, Sections 2.15 through 2.19
21of the Regional Transportation Authority Act. The provisions of
22this Act are subject to the changes made by this amendatory Act
23of the 97th General Assembly, including Sections 14-106.5,
2415-134.6, and 16-131.7 of the Illinois Pension Code, and
25Section 5 of the State Employees Group Insurance Act of 1971.

 

 

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1Nothing in this Act shall be construed to replace the necessity
2of complaints against a sworn peace officer, as defined in
3Section 2(a) of the Uniform Peace Officer Disciplinary Act,
4from having a complaint supported by a sworn affidavit.
5    (b) Except as provided in subsection (a) above, any
6collective bargaining contract between a public employer and a
7labor organization executed pursuant to this Act shall
8supersede any contrary statutes, charters, ordinances, rules
9or regulations relating to wages, hours and conditions of
10employment and employment relations adopted by the public
11employer or its agents. Any collective bargaining agreement
12entered into prior to the effective date of this Act shall
13remain in full force during its duration.
14    (c) It is the public policy of this State, pursuant to
15paragraphs (h) and (i) of Section 6 of Article VII of the
16Illinois Constitution, that the provisions of this Act are the
17exclusive exercise by the State of powers and functions which
18might otherwise be exercised by home rule units. Such powers
19and functions may not be exercised concurrently, either
20directly or indirectly, by any unit of local government,
21including any home rule unit, except as otherwise authorized by
22this Act.
23(Source: P.A. 95-331, eff. 8-21-07; 96-889, eff. 1-1-11.)
 
24    Section 10. The State Employees Group Insurance Act of 1971
25is amended by changing Sections 6.9 and 6.10 and by adding

 

 

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1Sections 6.10A and 6.16 as follows:
 
2    (5 ILCS 375/6.9)
3    Sec. 6.9. Health benefits for community college benefit
4recipients and community college dependent beneficiaries.
5    (a) Purpose. It is the purpose of this amendatory Act of
61997 to establish a uniform program of health benefits for
7community college benefit recipients and their dependent
8beneficiaries under the administration of the Department of
9Central Management Services.
10    (b) Creation of program. Beginning July 1, 1999, the
11Department of Central Management Services shall be responsible
12for administering a program of health benefits for community
13college benefit recipients and community college dependent
14beneficiaries under this Section. The State Universities
15Retirement System and the boards of trustees of the various
16community college districts shall cooperate with the
17Department in this endeavor.
18    (c) Eligibility. All community college benefit recipients
19and community college dependent beneficiaries shall be
20eligible to participate in the program established under this
21Section, without any interruption or delay in coverage or
22limitation as to pre-existing medical conditions. Eligibility
23to participate shall be determined by the State Universities
24Retirement System. Eligibility information shall be
25communicated to the Department of Central Management Services

 

 

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1in a format acceptable to the Department.
2    (d) Coverage. The health benefit coverage provided under
3this Section shall be a program of health, dental, and vision
4benefits.
5    The program of health benefits under this Section may
6include any or all of the benefit limitations, including but
7not limited to a reduction in benefits based on eligibility for
8federal medicare benefits, that are provided under subsection
9(a) of Section 6 of this Act for other health benefit programs
10under this Act.
11    (e) Insurance rates and premiums. The Director shall
12determine the insurance rates and premiums for community
13college benefit recipients and community college dependent
14beneficiaries. Rates and premiums may be based in part on age
15and eligibility for federal Medicare coverage. The Director
16shall also determine premiums that will allow for the
17establishment of an actuarially sound reserve for this program.
18    The cost of health benefits under the program shall be paid
19as follows:
20        (1) For a community college benefit recipient, costs
21    shall be an amount equal to the difference between the
22    projected costs of health benefits under the program and
23    projected contributions from community college districts,
24    active contributors, and other income of the program. Other
25    income of the program shall exclude contributions made by
26    the State to retire unpaid claims of the program up to 75%

 

 

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1    of the total insurance rate shall be paid from the
2    Community College Health Insurance Security Fund.
3        (2) The balance of the rate of insurance, including the
4    entire premium for any coverage for community college
5    dependent beneficiaries that has been elected, shall be
6    paid by deductions authorized by the community college
7    benefit recipient to be withheld from his or her monthly
8    annuity or benefit payment from the State Universities
9    Retirement System; except that (i) if the balance of the
10    cost of coverage exceeds the amount of the monthly annuity
11    or benefit payment, the difference shall be paid directly
12    to the State Universities Retirement System by the
13    community college benefit recipient, and (ii) all or part
14    of the balance of the cost of coverage may, at the option
15    of the board of trustees of the community college district,
16    be paid to the State Universities Retirement System by the
17    board of the community college district from which the
18    community college benefit recipient retired. The State
19    Universities Retirement System shall promptly deposit all
20    moneys withheld by or paid to it under this subdivision
21    (e)(2) into the Community College Health Insurance
22    Security Fund. These moneys shall not be considered assets
23    of the State Universities Retirement System.
24    (f) Financing. All revenues arising from the
25administration of the health benefit program established under
26this Section shall be deposited into the Community College

 

 

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1Health Insurance Security Fund, which is hereby created as a
2nonappropriated trust fund to be held outside the State
3Treasury, with the State Treasurer as custodian. Any interest
4earned on moneys in the Community College Health Insurance
5Security Fund shall be deposited into the Fund.
6    Moneys in the Community College Health Insurance Security
7Fund shall be used only to pay the costs of the health benefit
8program established under this Section, including associated
9administrative costs and the establishment of a program
10reserve. Beginning January 1, 1999, the Department of Central
11Management Services may make expenditures from the Community
12College Health Insurance Security Fund for those costs.
13    (g) Contract for benefits. The Director shall by contract,
14self-insurance, or otherwise make available the program of
15health benefits for community college benefit recipients and
16their community college dependent beneficiaries that is
17provided for in this Section. The contract or other arrangement
18for the provision of these health benefits shall be on terms
19deemed by the Director to be in the best interest of the State
20of Illinois and the community college benefit recipients based
21on, but not limited to, such criteria as administrative cost,
22service capabilities of the carrier or other contractor, and
23the costs of the benefits.
24    (h) Continuation of program. It is the intention of the
25General Assembly that the program of health benefits provided
26under this Section be maintained on an ongoing, affordable

 

 

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

 

 

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1    (a) Beginning January 1, 1999, every active contributor of
2the State Universities Retirement System (established under
3Article 15 of the Illinois Pension Code) who (1) is a full-time
4employee of a community college district (other than a
5community college district subject to Article VII of the Public
6Community College Act) or an association of community college
7boards and (2) is not an employee as defined in Section 3 of
8this Act shall make contributions toward the cost of community
9college annuitant and survivor health benefits at the rate of
100.50% of salary. Beginning July 1, 2012 and until July 1, 2013,
11the contribution rate under this subsection (a) shall be 1.25%
12of salary. Beginning July 1, 2013, the contribution rate under
13this subsection (a) shall be a percentage of salary determined
14by the Department of Central Management Services, or its
15successor, by rule, which in each fiscal year shall not exceed
16108% of the percentage of salary actually required to be
17contributed in the previous fiscal year. However, the required
18contribution rate determined by the Department or its successor
19under this subsection (a) shall equal the required contribution
20rate determined by the Department or its successor under
21subsection (b) of this Section.
22    These contributions shall be deducted by the employer and
23paid to the State Universities Retirement System as service
24agent for the Department of Central Management Services. The
25System may use the same processes for collecting the
26contributions required by this subsection that it uses to

 

 

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1collect the contributions received from those employees under
2Section 15-157 of the Illinois Pension Code. An employer may
3agree to pick up or pay the contributions required under this
4subsection on behalf of the employee; such contributions shall
5be deemed to have been paid by the employee.
6    The State Universities Retirement System shall promptly
7deposit all moneys collected under this subsection (a) into the
8Community College Health Insurance Security Fund created in
9Section 6.9 of this Act. The moneys collected under this
10Section shall be used only for the purposes authorized in
11Section 6.9 of this Act and shall not be considered to be
12assets of the State Universities Retirement System.
13Contributions made under this Section are not transferable to
14other pension funds or retirement systems and are not
15refundable upon termination of service.
16    (b) Beginning January 1, 1999, every community college
17district (other than a community college district subject to
18Article VII of the Public Community College Act) or association
19of community college boards that is an employer under the State
20Universities Retirement System shall contribute toward the
21cost of the community college health benefits provided under
22Section 6.9 of this Act an amount equal to 0.50% of the salary
23paid to its full-time employees who participate in the State
24Universities Retirement System and are not members as defined
25in Section 3 of this Act. Beginning July 1, 2012 and until July
261, 2013, the contribution rate under this subsection (b) shall

 

 

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1be 1.25% of salary. Beginning July 1, 2013, the contribution
2rate under this subsection (b) shall be a percentage of salary
3determined by the Department of Central Management Services, or
4its successor, by rule, which in each fiscal year shall not
5exceed 108% of the percentage of salary actually required to be
6contributed in the previous fiscal year. However, the required
7contribution rate determined by the Department or its successor
8under this subsection (b) shall equal the required contribution
9rate determined by the Department or its successor under
10subsection (a) of this Section.
11    These contributions shall be paid by the employer to the
12State Universities Retirement System as service agent for the
13Department of Central Management Services. The System may use
14the same processes for collecting the contributions required by
15this subsection that it uses to collect the contributions
16received from those employers under Section 15-155 of the
17Illinois Pension Code.
18    The State Universities Retirement System shall promptly
19deposit all moneys collected under this subsection (b) into the
20Community College Health Insurance Security Fund created in
21Section 6.9 of this Act. The moneys collected under this
22Section shall be used only for the purposes authorized in
23Section 6.9 of this Act and shall not be considered to be
24assets of the State Universities Retirement System.
25Contributions made under this Section are not transferable to
26other pension funds or retirement systems and are not

 

 

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1refundable upon termination of service.
2    The Department of Healthcare and Family Services, or any
3successor agency designated to procure healthcare contracts
4pursuant to this Act, is authorized to establish funds,
5separate accounts provided by any bank or banks as defined by
6the Illinois Banking Act, or separate accounts provided by any
7savings and loan association or associations as defined by the
8Illinois Savings and Loan Act of 1985 to be held by the
9Director, outside the State treasury, for the purpose of
10receiving the transfer of moneys from the Community College
11Health Insurance Security Fund. The Department may promulgate
12rules further defining the methodology for the transfers. Any
13interest earned by moneys in the funds or accounts shall inure
14to the Community College Health Insurance Security Fund. The
15transferred moneys, and interest accrued thereon, shall be used
16exclusively for transfers to administrative service
17organizations or their financial institutions for payments of
18claims to claimants and providers under the self-insurance
19health plan. The transferred moneys, and interest accrued
20thereon, shall not be used for any other purpose including, but
21not limited to, reimbursement of administration fees due the
22administrative service organization pursuant to its contract
23or contracts with the Department.
24    (c) On or before November 15 of each year but not after
25November 15, 2011, the Board of Trustees of the State
26Universities Retirement System shall certify to the Governor,

 

 

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1the Director of Central Management Services, and the State
2Comptroller its estimate of the total amount of contributions
3to be paid under subsection (a) of this Section for the next
4fiscal year. Beginning in fiscal year 2008, the amount
5certified shall be decreased or increased each year by the
6amount that the actual active employee contributions either
7fell short of or exceeded the estimate used by the Board in
8making the certification for the previous fiscal year. The
9State Universities Retirement System shall calculate the
10amount of actual active employee contributions in fiscal years
111999 through 2005. Based upon this calculation, the fiscal year
122008 certification shall include an amount equal to the
13cumulative amount that the actual active employee
14contributions either fell short of or exceeded the estimate
15used by the Board in making the certification for those fiscal
16years. The certification shall include a detailed explanation
17of the methods and information that the Board relied upon in
18preparing its estimate. As soon as possible after the effective
19date of this Section, the Board shall submit its estimate for
20fiscal year 1999.
21    (d) Beginning in fiscal year 1999, on the first day of each
22month, or as soon thereafter as may be practical, the State
23Treasurer and the State Comptroller shall transfer from the
24General Revenue Fund to the Community College Health Insurance
25Security Fund 1/12 of the annual amount appropriated for that
26fiscal year to the State Comptroller for deposit into the

 

 

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1Community College Health Insurance Security Fund under Section
21.4 of the State Pension Funds Continuing Appropriation Act.
3    (e) Except where otherwise specified in this Section, the
4definitions that apply to Article 15 of the Illinois Pension
5Code apply to this Section.
6(Source: P.A. 94-839, eff. 6-6-06; 95-632, eff. 9-25-07.)
 
7    (5 ILCS 375/6.10A new)
8    Sec. 6.10A. City colleges; optional participation in
9program of health benefits. Notwithstanding any other
10provision of this Act, the Department of Central Management
11Services shall adopt rules authorizing optional participation
12in the program of health benefits for community college benefit
13recipients and community college dependent beneficiaries by
14any person who is otherwise ineligible to participate in that
15program solely as a result of that or another person's
16employment with a community college district subject to Article
17VII of the Public Community College Act.
 
18    (5 ILCS 375/6.16 new)
19    Sec. 6.16. Health benefit election for Tier I employees and
20Tier I retirees.
21    (a) For purposes of this Section:
22    "Eligible Tier I employee" means an individual who makes or
23is deemed to have made an election under paragraph (1) of
24subsection (a) of Section 14-106.5, 15-134.6, or 16-131.7 of

 

 

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1the Illinois Pension Code.
2    "Eligible Tier I retiree" means an individual who makes or
3is deemed to have made an election under paragraph (1) of
4subsection (a-5) of Section 14-106.5, 15-134.6, or 16-131.7 of
5the Illinois Pension Code.
6    "Program of health benefits" means (i) a health plan, as
7defined in subsection (o) of Section 3 of this Act, that is
8designed and contracted for by the Director under this Act or
9any successor Act or (ii) if administration of that health plan
10is transferred to a trust established by the State or an
11independent Board in order to provide health benefits to a
12class of a persons that includes eligible Tier I retirees, then
13the plan of health benefits provided through that trust.
14    For persons who receive healthcare benefits under a
15collective bargaining agreement with a community college
16district subject to Article VII of the Public Community College
17Act, the term "program of health benefits" also includes any
18health benefit arrangement provided under such a collective
19bargaining agreement, except that if such an agreement expires
20and if those persons are otherwise eligible to participate in a
21program of health benefits pursuant to item (i) or (ii), then
22"program of health benefits" does not include the health
23benefit arrangements provided under such a collective
24bargaining agreement.
25    For persons who are eligible to receive benefits under a
26health plan made available by a community college district

 

 

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1subject to Article VII of the Public Community College Act and
2who do not receive those benefits pursuant to a collective
3bargaining agreement, "program of health benefits" also
4includes the health plan made available to such persons by the
5community college district, except that if those persons
6otherwise become eligible to participate in a program of health
7benefits pursuant to item (i) or (ii), then "program of health
8benefits" does not include the health plan made available to
9such persons by the community college district.
10    (b) As adequate and legal consideration for making the
11election under paragraph (1) of subsection (a) or (a-5) of
12Section 14-106.5, 15-134.6, or 16-131.7 of the Illinois Pension
13Code, each eligible Tier I employee and each eligible Tier I
14retiree shall receive a vested and enforceable contractual
15right to participate in a program of health benefits while he
16or she qualifies as an annuitant or retired employee, or as a
17TRS benefit recipient or community college benefit recipient
18receiving a retirement annuity. That right also extends to such
19a person's dependents, survivors, TRS dependent beneficiaries,
20and community college dependent beneficiaries who are eligible
21under the applicable program of health benefits.
22    (c) Notwithstanding subsection (b), eligible Tier I
23employees and eligible Tier I retirees may be required to make
24contributions toward the cost of coverage under a program of
25health benefits.
26    (d) The vested and enforceable contractual right to a

 

 

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1program of health benefits is not offered as, and shall not be
2considered, a pension benefit under Article XIII, Section 5 of
3the Illinois Constitution, the Illinois Pension Code, or any
4subsequent or successor enactment providing pension benefits.
5    (e) Notwithstanding any other provision of this Act, a Tier
6I employee or Tier I retiree who has made an election under
7paragraph (2) of subsection (a) or (a-5) of Section 14-106.5,
815-134.6, or 16-131.7 of the Illinois Pension Code shall not be
9entitled to participate in the program of health benefits as an
10annuitant or retired employee, or as a TRS benefit recipient or
11community college benefit recipient receiving a retirement
12annuity, regardless of any contrary election pursuant to any of
13those Sections under any other retirement system.
14    Notwithstanding any other provision of this Act, a Tier I
15employee who is not entitled to participate in the program of
16health benefits as an annuitant or retired employee, or as a
17TRS benefit recipient or community college benefit recipient
18receiving a retirement annuity, due to an election under
19paragraph (2) of subsection (a) or (a-5) of Section 14-106.5,
2015-134.6, or 16-131.7 of the Illinois Pension Code shall not be
21required to make contributions toward the program of health
22benefits while he or she is an employee or active contributor.
 
23    Section 15. The Governor's Office of Management and Budget
24Act is amended by changing Sections 7 and 8 as follows:
 

 

 

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1    (20 ILCS 3005/7)  (from Ch. 127, par. 417)
2    Sec. 7. All statements and estimates of expenditures
3submitted to the Office in connection with the preparation of a
4State budget, and any other estimates of expenditures,
5supporting requests for appropriations, shall be formulated
6according to the various functions and activities for which the
7respective department, office or institution of the State
8government (including the elective officers in the executive
9department and including the University of Illinois and the
10judicial department) is responsible. All such statements and
11estimates of expenditures relating to a particular function or
12activity shall be further formulated or subject to analysis in
13accordance with the following classification of objects:
14    (1) Personal services
15    (2) State contribution for employee group insurance
16    (3) Contractual services
17    (4) Travel
18    (5) Commodities
19    (6) Equipment
20    (7) Permanent improvements
21    (8) Land
22    (9) Electronic Data Processing
23    (10) Telecommunication services
24    (11) Operation of Automotive Equipment
25    (12) Contingencies
26    (13) Reserve

 

 

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

 

 

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1    (30 ILCS 5/2-8.1 new)
2    Sec. 2-8.1. Actuarial Responsibilities.
3    (a) The Auditor General shall contract with or hire an
4actuary to serve as the State Actuary. The State Actuary shall
5be retained by, serve at the pleasure of, and be under the
6supervision of the Auditor General and shall be paid from
7appropriations to the office of the Auditor General. The State
8Actuary may be selected by the Auditor General without engaging
9in a competitive procurement process.
10    (b) The State Actuary shall:
11        (1) review assumptions and valuations prepared by
12    actuaries retained by the boards of trustees of the
13    State-funded retirement systems;
14        (2) issue preliminary reports to the boards of trustees
15    of the State-funded retirement systems concerning proposed
16    certifications of required State contributions submitted
17    to the State Actuary by those boards;
18        (3) cooperate with the boards of trustees of the
19    State-funded retirement systems to identify recommended
20    changes in actuarial assumptions that the boards must
21    consider before finalizing their certifications of the
22    required State contributions;
23        (4) conduct reviews of the actuarial practices of the
24    boards of trustees of the State-funded retirement systems;
25        (5) make additional reports as directed by joint
26    resolution of the General Assembly; and

 

 

09700SB1673ham003- 22 -LRB097 07605 EFG 70268 a

1        (6) perform any other duties assigned by the Auditor
2    General, including, but not limited to, reviews of the
3    actuarial practices of other entities.
4    (c) On or before January 1, 2013 and each January 1
5thereafter, the Auditor General shall submit a written report
6to the General Assembly and Governor documenting the initial
7assumptions and valuations prepared by actuaries retained by
8the boards of trustees of the State-funded retirement systems,
9any changes recommended by the State Actuary in the actuarial
10assumptions, and the responses of each board to the State
11Actuary's recommendations.
12    (d) For the purposes of this Section, "State-funded
13retirement system" means a retirement system established
14pursuant to Article 2, 14, 15, 16, or 18 of the Illinois
15Pension Code.
 
16    Section 25. The State Finance Act is amended by changing
17Section 13 and by adding Sections 24.12 and 24.13 as follows:
 
18    (30 ILCS 105/13)  (from Ch. 127, par. 149)
19    Sec. 13. The objects and purposes for which appropriations
20are made are classified and standardized by items as follows:
21    (1) Personal services;
22    (2) State contribution for employee group insurance;
23    (3) Contractual services;
24    (4) Travel;

 

 

09700SB1673ham003- 23 -LRB097 07605 EFG 70268 a

1    (5) Commodities;
2    (6) Equipment;
3    (7) Permanent improvements;
4    (8) Land;
5    (9) Electronic Data Processing;
6    (10) Operation of automotive equipment;
7    (11) Telecommunications services;
8    (12) Contingencies;
9    (13) Reserve;
10    (14) Interest;
11    (15) Awards and Grants;
12    (16) Debt Retirement;
13    (17) Non-Cost Charges;
14    (18) State retirement contribution for annual normal cost;
15    (19) State retirement contribution for unfunded accrued
16liability;
17    (20) (18) Purchase Contract for Real Estate.
18    When an appropriation is made to an officer, department,
19institution, board, commission or other agency, or to a private
20association or corporation, in one or more of the items above
21specified, such appropriation shall be construed in accordance
22with the definitions and limitations specified in this Act,
23unless the appropriation act otherwise provides.
24    An appropriation for a purpose other than one specified and
25defined in this Act may be made only as an additional, separate
26and distinct item, specifically stating the object and purpose

 

 

09700SB1673ham003- 24 -LRB097 07605 EFG 70268 a

1thereof.
2(Source: P.A. 84-263; 84-264.)
 
3    (30 ILCS 105/24.12 new)
4    Sec. 24.12. "State retirement contribution for annual
5normal cost" defined. The term "State retirement contribution
6for annual normal cost" means the portion of the total required
7State contribution to a retirement system for a fiscal year
8that represents the State's portion of the System's projected
9normal cost for that fiscal year, as determined and certified
10by the board of trustees of the retirement system in
11conformance with the applicable provisions of the Illinois
12Pension Code.
 
13    (30 ILCS 105/24.13 new)
14    Sec. 24.13. "State retirement contribution for unfunded
15accrued liability" defined. The term "State retirement
16contribution for unfunded accrued liability" means the portion
17of the total required State contribution to a retirement system
18for a fiscal year that is not included in the State retirement
19contribution for annual normal cost.
 
20    Section 30. The Illinois Pension Code is amended by
21changing Sections 1-103.3, 1-160, 2-108, 2-119.1, 2-124,
222-134, 7-109, 14-103.10, 14-106, 14-114, 14-131, 14-132,
2314-133, 14-135.08, 14-152.1, 15-106, 15-107, 15-111, 15-113.2,

 

 

09700SB1673ham003- 25 -LRB097 07605 EFG 70268 a

115-113.6, 15-134.5, 15-136, 15-155, 15-157, 15-158.2, 15-159,
215-163, 15-165, 15-198, 16-106, 16-121, 16-127, 16-133.1,
316-136.1, 16-152, 16-158, 16-163, 16-165, 16-203, 18-140,
420-121, 20-123, 20-124, and 20-125 and by adding Sections
51-161, 1-162, 2-105.1, 2-105.2, 2-107.9, 2-110.3, 14-103.40,
614-103.41, 14-103.42, 14-106.5, 15-107.1, 15-107.2, 15-111.1,
715-134.6, 15-155.1, 15-155.2, 16-106.4, 16-106.5, 16-106.6,
816-121.1, 16-131.7, 16-133.6, and 16-158.2 as follows:
 
9    (40 ILCS 5/1-103.3)
10    Sec. 1-103.3. Application of 1994 amendment; funding
11standard.
12    (a) The provisions of Public Act 88-593 this amendatory Act
13of 1994 that change the method of calculating, certifying, and
14paying the required State contributions to the retirement
15systems established under Articles 2, 14, 15, 16, and 18 shall
16first apply to the State contributions required for State
17fiscal year 1996.
18    (b) (Blank). The General Assembly declares that a funding
19ratio (the ratio of a retirement system's total assets to its
20total actuarial liabilities) of 90% is an appropriate goal for
21State-funded retirement systems in Illinois, and it finds that
22a funding ratio of 90% is now the generally-recognized norm
23throughout the nation for public employee retirement systems
24that are considered to be financially secure and funded in an
25appropriate and responsible manner.

 

 

09700SB1673ham003- 26 -LRB097 07605 EFG 70268 a

1    (c) Every 5 years, beginning in 1999, the Commission on
2Government Forecasting and Accountability, in consultation
3with the affected retirement systems and the Governor's Office
4of Management and Budget (formerly Bureau of the Budget), shall
5consider and determine whether the funding goals 90% funding
6ratio adopted in Articles 2, 14, 15, 16, and 18 of this Code
7continue subsection (b) continues to represent an appropriate
8funding goals goal for State-funded retirement systems in
9Illinois, and it shall report its findings and recommendations
10on this subject to the Governor and the General Assembly.
11(Source: P.A. 93-1067, eff. 1-15-05.)
 
12    (40 ILCS 5/1-160)
13    Sec. 1-160. Provisions applicable to new hires.
14    (a) The provisions of this Section apply to a person who,
15on or after January 1, 2011, first becomes a member or a
16participant under any reciprocal retirement system or pension
17fund established under this Code, other than a retirement
18system or pension fund established under Article 2, 3, 4, 5, 6,
19or 18 of this Code, notwithstanding any other provision of this
20Code to the contrary, but do not apply (i) to any self-managed
21plan established under this Code, (ii) to any person with
22respect to service as a sheriff's law enforcement employee
23under Article 7, (iii) to any person with respect to service
24for which the person participates in the cash balance plan
25established under Section 1-161, or (iv) to any participant of

 

 

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1the retirement plan established under Section 22-101.
2    A person subject to this Section with respect to service
3under the State Universities Retirement System may irrevocably
4elect to transfer to the cash balance plan under Section 1-161
5with respect to service under the State Universities Retirement
6System by filing with the State Universities Retirement System
7in the manner required by that System, his or her irrevocable
8written election to transfer to the cash balance plan.
9Participation in the cash balance plan shall begin no earlier
10than July 1, 2013.
11    Beginning July 1, 2013, a person subject to this Section
12with respect to service under the Teachers' Retirement System
13of the State of Illinois may irrevocably elect to transfer to
14the cash balance plan under Section 1-161 with respect to
15service under the Teachers' Retirement System of the State of
16Illinois by filing with the Teachers' Retirement System of the
17State of Illinois in the manner required by that System, his or
18her irrevocable written election to transfer to the cash
19balance plan. Participation in the cash balance plan shall
20begin no earlier than July 1, 2013.
21    (b) "Final average salary" means the average monthly (or
22annual) salary obtained by dividing the total salary or
23earnings calculated under the Article applicable to the member
24or participant during the 96 consecutive months (or 8
25consecutive years) of service within the last 120 months (or 10
26years) of service in which the total salary or earnings

 

 

09700SB1673ham003- 28 -LRB097 07605 EFG 70268 a

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

 

 

09700SB1673ham003- 29 -LRB097 07605 EFG 70268 a

1price index-u for the 12 months ending with the September
2preceding each November 1, including all previous adjustments.
3    For the purposes of this Section, "consumer price index-u"
4means the index published by the Bureau of Labor Statistics of
5the United States Department of Labor that measures the average
6change in prices of goods and services purchased by all urban
7consumers, United States city average, all items, 1982-84 =
8100. The new amount resulting from each annual adjustment shall
9be determined by the Public Pension Division of the Department
10of Insurance and made available to the boards of the retirement
11systems and pension funds by November 1 of each year.
12    (c) A member or participant is entitled to a retirement
13annuity upon written application if he or she has attained age
1467 and has at least 10 years of service credit and is otherwise
15eligible under the requirements of the applicable Article.
16    A member or participant who has attained age 62 and has at
17least 10 years of service credit and is otherwise eligible
18under the requirements of the applicable Article may elect to
19receive the lower retirement annuity provided in subsection (d)
20of this Section.
21    (d) The retirement annuity of a member or participant who
22is retiring after attaining age 62 with at least 10 years of
23service credit shall be reduced by one-half of 1% for each full
24month that the member's age is under age 67.
25    (e) Any retirement annuity or supplemental annuity shall be
26subject to annual increases on the January 1 occurring either

 

 

09700SB1673ham003- 30 -LRB097 07605 EFG 70268 a

1on or after the attainment of age 67 or the first anniversary
2of the annuity start date, whichever is later. Each annual
3increase shall be calculated at 3% or one-half the annual
4unadjusted percentage increase (but not less than zero) in the
5consumer price index-u for the 12 months ending with the
6September preceding each November 1, whichever is less, of the
7originally granted retirement annuity. If the annual
8unadjusted percentage change in the consumer price index-u for
9the 12 months ending with the September preceding each November
101 is zero or there is a decrease, then the annuity shall not be
11increased.
12    (f) The initial survivor's or widow's annuity of an
13otherwise eligible survivor or widow of a retired member or
14participant who first became a member or participant on or
15after January 1, 2011 shall be in the amount of 66 2/3% of the
16retired member's or participant's retirement annuity at the
17date of death. In the case of the death of a member or
18participant who has not retired and who first became a member
19or participant on or after January 1, 2011, eligibility for a
20survivor's or widow's annuity shall be determined by the
21applicable Article of this Code. The initial benefit shall be
2266 2/3% of the earned annuity without a reduction due to age. A
23child's annuity of an otherwise eligible child shall be in the
24amount prescribed under each Article if applicable. Any
25survivor's or widow's annuity shall be increased (1) on each
26January 1 occurring on or after the commencement of the annuity

 

 

09700SB1673ham003- 31 -LRB097 07605 EFG 70268 a

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

 

 

09700SB1673ham003- 32 -LRB097 07605 EFG 70268 a

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

 

 

09700SB1673ham003- 33 -LRB097 07605 EFG 70268 a

1accepting contractual employment. A person who fails to submit
2such notification shall be guilty of a Class A misdemeanor and
3required to pay a fine of $1,000. Upon termination of that
4contractual employment, the person's retirement annuity or
5retirement pension payments shall resume and, if appropriate,
6be recalculated under the applicable provisions of this Code.
7    (i) Notwithstanding any other provision of this Section, a
8person who first becomes a participant of the retirement system
9established under Article 15 on or after January 1, 2011 shall
10have the option to enroll in the self-managed plan created
11under Section 15-158.2 of this Code.
12    (j) In the case of a conflict between the provisions of
13this Section and any other provision of this Code, the
14provisions of this Section shall control.
15(Source: P.A. 96-889, eff. 1-1-11; 96-1490, eff. 1-1-11;
1697-609, eff. 1-1-12.)
 
17    (40 ILCS 5/1-161 new)
18    Sec. 1-161. Cash Balance Plan.
19    (a) Participation and Applicability. This Section applies
20to all new cash balance plan participants and all legacy Tier
21II participants.
22    This Section does not, however, apply to any person with
23respect to service for which the person participates in the
24self-managed plan established under Section 15-158.2 in lieu of
25the retirement benefits otherwise provided by the State

 

 

09700SB1673ham003- 34 -LRB097 07605 EFG 70268 a

1Universities Retirement System.
2    (b) Title. The package of benefits provided under this
3Section may be referred to as the "cash balance plan". Persons
4subject to the provisions of this Section may be referred to as
5"participants in the cash balance plan".
6    (b-5) Definitions. As used in this Section:
7    "Account" means the notional cash balance account
8established under this Section for a participant in the cash
9balance plan.
10    "Consumer Price Index-U" means the Consumer Price Index
11published by the Bureau of Labor Statistics of the United
12States Department of Labor that measures the average change in
13prices of goods and services purchased by all urban consumers,
14United States city average, all items, 1982-84 = 100.
15    "Salary" means "earnings" as defined in Article 15 or
16"salary" as defined in Article 16, whichever is applicable,
17without regard to the limitation in subsection (b-5) of Section
181-160.
19    "Legacy Tier II participant" means a person who was subject
20to Section 1-160 with respect to service under Article 15 or 16
21of this Code and who irrevocably elects to participate in the
22cash balance plan created under this Section. That election
23must be made in writing, in the manner provided by the
24applicable retirement system.
25    "New cash balance plan participant" means a person who, on
26or after July 1, 2013, first begins to participate in the

 

 

09700SB1673ham003- 35 -LRB097 07605 EFG 70268 a

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

 

 

09700SB1673ham003- 36 -LRB097 07605 EFG 70268 a

1annual notice of (1) the balance in the participant's cash
2balance account and (2) an estimate of the retirement annuity
3that will be payable to the participant if he or she retires at
4age 59 1/2.
5    (c-5) Initial Account Balance for Legacy Tier II
6Participants. The applicable retirement system shall establish
7an initial account balance for each legacy Tier II participant
8when he or she begins participation in the cash balance plan.
9The initial account balance shall be an amount equal to the
10employee contribution refund that the participant would be
11eligible to receive under the applicable Article of this Code
12if the participant terminated employment on that date and
13elected a refund of contributions, as prescribed by the board
14of the applicable retirement system.
15    (d) Employee Contributions. New cash balance plan
16participants and legacy Tier II participants shall make
17employee contributions to the applicable retirement system at
18the rates required under the applicable Article of this Code.
19The amount of each contribution shall be credited to the
20participant's cash balance account upon receipt and after the
21retirement system's reconciliation of the contribution.
22    (e) Notional Employer Contributions. Upon receipt of each
23employee contribution under subsection (d), an amount
24representing the employer contribution shall be credited to the
25participant's cash balance account. For a participant in the
26cash balance plan under Article 15, the notional employer

 

 

09700SB1673ham003- 37 -LRB097 07605 EFG 70268 a

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

 

 

09700SB1673ham003- 38 -LRB097 07605 EFG 70268 a

1account during that fiscal year, and shall be calculated on
2June 30.
3    The percentage shall be the assumed treasury rate for the
4previous fiscal year, unless neither the retirement system's
5actual rate of investment earnings for the previous fiscal year
6nor the retirement system's actual rate of investment earnings
7for the five-year period ending at the end of the previous
8fiscal year is less than the assumed treasury rate.
9    If both the retirement system's actual rate of investment
10earnings for the previous fiscal year and the actual rate of
11investment earnings for the five-year period ending at the end
12of the previous fiscal year are at least the assumed treasury
13rate, then the percentage shall be:
14        (i) the assumed treasury rate, plus
15        (ii) two-thirds of the amount of the actual rate of
16    investment earnings for the previous fiscal year that
17    exceeds the assumed treasury rate.
18However, in no event shall the percentage applied under this
19subsection exceed 10%.
20    For the purposes of this subsection only, "previous fiscal
21year" means fiscal year ending one year before the interest
22rate is calculated.
23    For the purposes of this subsection only, "assumed treasury
24rate" means the average annual yield of the 30-year U.S.
25Treasury Bond over the previous fiscal year, but not less than
264%.

 

 

09700SB1673ham003- 39 -LRB097 07605 EFG 70268 a

1    When a person applies for a benefit under this Section, the
2retirement system shall apply an interest credit based on a
3proration of an estimate of what the interest credit will be
4for the relevant year. When the retirement system certifies the
5credit on June 30, it shall adjust the benefit accordingly.
6    (f-10) Distribution upon Termination of Employment. Upon
7termination of active employment with at least 5 years of
8service credit under the applicable retirement system and prior
9to making application for an annuity under this Section, a
10participant in the cash balance plan may make an irrevocable
11election to distribute an amount not to exceed 40% of the
12balance in the participant's account in the form of a direct
13rollover to another qualified plan, to the extent allowed by
14federal law. If the participant makes such an election, then
15the amount distributed shall be debited from the participant's
16cash balance account. A participant in the cash balance plan
17shall be allowed only one distribution under this subsection.
18The remaining balance in the participant's account shall be
19used for the determination of other benefits provided under
20this Section.
21    (f-15) Refund. In lieu of receiving a distribution under
22subsection (f-10), at any time after terminating active
23employment under the applicable retirement system, but before
24receiving a retirement annuity under this Section, a
25participant in the cash balance plan may elect to receive a
26refund under this subsection. The refund shall consist of an

 

 

09700SB1673ham003- 40 -LRB097 07605 EFG 70268 a

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

 

 

09700SB1673ham003- 41 -LRB097 07605 EFG 70268 a

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

 

 

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1Article of this Code.
2    For the purpose of calculating retirement annuities,
3future investment returns shall be assumed to be a percentage
4equal to the average yield of the 30-year U.S. Treasury Bond
5over the 5 fiscal years prior to the calculation of the initial
6retirement annuity, plus 250 basis points; but not less than 4%
7nor more than 8%.
8    (h) Annual Increase in Retirement Annuity. The retirement
9annuity shall be subject to an automatic annual increase in an
10amount equal to 3% of the originally granted annuity on each
11January 1 occurring on or after the first anniversary of the
12annuity start date.
13    (i) Disability Benefits. The disability benefits provided
14under the applicable retirement system apply to new cash
15balance plan participants and legacy Tier II participants in
16the cash balance plan, subject to and in accordance with the
17eligibility and other provisions of the applicable Article.
18    Retirement due to disability under Section 15-153.2 or
1916-149.2 shall be deemed a disability benefit for the purposes
20of this Section and shall apply to new cash balance plan
21participants and legacy Tier II participants.
22    The board of the retirement system shall designate
23annually, as a percentage of salary, an amount representing the
24anticipated average cost of providing disability benefits for
25new cash balance plan participants and legacy Tier II
26participants. The amount so designated shall not exceed 1% of

 

 

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

 

 

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

 

 

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1        (2) provisions limiting a retirement annuity to a
2    specified percentage of salary;
3        (3) provisions authorizing a minimum retirement or
4    survivor's annuity or a supplemental annuity;
5        (4) provisions authorizing any form of retirement
6    annuity or survivor's annuity not authorized under this
7    Section;
8        (5) provisions authorizing a reversionary annuity
9    (other than a survivor's annuity under subsection (g));
10        (6) provisions authorizing a refund of employee
11    contributions upon termination of service (except as
12    provided in this Section) or any lump-sum payout in lieu of
13    a retirement or survivor's annuity (other than the
14    distribution under subsection (f-10) or the refund under
15    subsection (f-15) of this Section;
16        (7) provisions authorizing optional service credits or
17    the payment of optional additional contributions (other
18    than the optional employer contributions specifically
19    authorized in subsection (e-1)); or
20        (8) a level income option.
21    The Retirement Systems Reciprocal Act applies to
22participants in the cash balance plan who qualify under Article
2320 of this Code, but it does not affect the calculation of
24benefits payable under this Section.
25    The other provisions of this Code continue to apply to
26participants in the cash balance plan, to the extent that they

 

 

09700SB1673ham003- 46 -LRB097 07605 EFG 70268 a

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

 

 

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1provided that any such changes shall not apply to any benefits
2accrued under this Section prior to the effective date of any
3amendatory Act of the General Assembly.
4    (r) An employee who participates in the cash balance plan
5under this Section may elect to participate in the optional
6cash balance plan under Section 1-162.
7    (s) Qualified Plan Status. No provision of this Section
8shall be interpreted in a way that would cause the applicable
9retirement system to cease to be a qualified plan under section
10461 (a) of the Internal Revenue Code of 1986.
 
11    (40 ILCS 5/1-162 new)
12    Sec. 1-162. Optional cash balance plan.
13    (a) Participation and Applicability. Beginning on July 1,
142013, the following persons may elect to participate in the
15optional cash balance plan created under this Section:
16        (1) any person who participates in the cash balance
17    plan established under Section 1-161; and
18        (2) any Tier I employee who has made the election under
19    paragraph (1) of subsection (a) or (a-5) of Section
20    14-106.5 or paragraph (1) of subsection (a) or (a-5) of
21    Section 15-134.6, or paragraph (1) of subsection (a) or
22    (a-5) of Section 16-131.7.
23    This Section does not, however, apply to any person with
24respect to service for which the person participates in the
25self-managed plan established under Section 15-158.2 in lieu of

 

 

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

 

 

09700SB1673ham003- 49 -LRB097 07605 EFG 70268 a

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

 

 

09700SB1673ham003- 50 -LRB097 07605 EFG 70268 a

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

 

 

09700SB1673ham003- 51 -LRB097 07605 EFG 70268 a

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

 

 

09700SB1673ham003- 52 -LRB097 07605 EFG 70268 a

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

 

 

09700SB1673ham003- 53 -LRB097 07605 EFG 70268 a

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

 

 

09700SB1673ham003- 54 -LRB097 07605 EFG 70268 a

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

 

 

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

 

 

09700SB1673ham003- 56 -LRB097 07605 EFG 70268 a

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

 

 

09700SB1673ham003- 57 -LRB097 07605 EFG 70268 a

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

 

 

09700SB1673ham003- 58 -LRB097 07605 EFG 70268 a

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

 

 

09700SB1673ham003- 59 -LRB097 07605 EFG 70268 a

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

 

 

09700SB1673ham003- 60 -LRB097 07605 EFG 70268 a

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

 

 

09700SB1673ham003- 61 -LRB097 07605 EFG 70268 a

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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1the System shall offer Tier I employees and Tier I retirees an
2opportunity to receive information from the System before
3making the required election. The information may be provided
4through video materials, group presentations, individual
5consultation with a member or authorized representative of the
6System in person or by telephone or other electronic means, or
7any combination of those methods. The System shall not provide
8advice or counseling with respect to which election a Tier I
9employee or Tier I retiree should make or specific to the legal
10or tax circumstances of or consequences to the Tier I employee
11or Tier I retiree.
12    The System shall inform Tier I employees and Tier I
13retirees in the election packet required under this subsection
14that the Tier I employee or Tier I retiree may also wish to
15obtain information and counsel relating to the election
16required under this Section from any other available source,
17including but not limited to labor organizations and private
18counsel.
19    In no event shall the System, its staff, or the Board be
20held liable for any information given to a member, beneficiary,
21or annuitant regarding the elections under this Section.
22    (e) Notwithstanding any other provision of law, any future
23increases in income offered for service as a member must be
24offered expressly and irrevocably as not constituting "salary"
25under Section 2-108 to any Tier I employee, or Tier I retiree
26returning to active service, who has made an election under

 

 

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1paragraph (2) or subsection (a) or (a-5) of Section 2-110.3. A
2Tier I employee, or Tier I retiree returning to active service,
3who has made an election under paragraph (2) or subsection (a)
4or (a-5) of Section 2-110.3 shall not accept any future
5increase in income that is offered for service as a member
6under this Article in violation of the requirement set forth in
7this subsection.
8    (f) A member's election under this Section is not a
9prohibited election under subdivision (j)(1) of Section 1-119
10of this Code.
11    (g) Qualified Plan Status. No provision of this Section
12shall be interpreted in a way that would cause the System to
13cease to be a qualified plan under section 461 (a) of the
14Internal Revenue Code of 1986.
 
15    (40 ILCS 5/2-119.1)  (from Ch. 108 1/2, par. 2-119.1)
16    Sec. 2-119.1. Automatic increase in retirement annuity.
17    (a) Except as provided in subsections (a-1) and (a-2), a A
18participant who retires after June 30, 1967, and who has not
19received an initial increase under this Section before the
20effective date of this amendatory Act of 1991, shall, in
21January or July next following the first anniversary of
22retirement, whichever occurs first, and in the same month of
23each year thereafter, but in no event prior to age 60, have the
24amount of the originally granted retirement annuity increased
25as follows: for each year through 1971, 1 1/2%; for each year

 

 

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1from 1972 through 1979, 2%; and for 1980 and each year
2thereafter, 3%. Annuitants who have received an initial
3increase under this subsection prior to the effective date of
4this amendatory Act of 1991 shall continue to receive their
5annual increases in the same month as the initial increase.
6    (a-1) Notwithstanding any other provision of this Article,
7for a Tier I employee or Tier I retiree who made the election
8under paragraph (1) of subsection (a) or (a-5) of Section
92-110.3, the amount of each automatic annual increase in
10retirement annuity occurring on or after the effective date of
11that election shall be 3% or one-half of the annual unadjusted
12percentage increase, if any, in the Consumer Price Index-U for
13the 12 months ending with the preceding September, whichever is
14less, of the originally granted retirement annuity. For the
15purposes of this Section, "Consumer Price Index-U" means the
16index published by the Bureau of Labor Statistics of the United
17States Department of Labor that measures the average change in
18prices of goods and services purchased by all urban consumers,
19United States city average, all items, 1982-84 = 100.
20    (a-2) For a Tier I employee or Tier I retiree who made the
21election under paragraph (1) of subsection (a) or (a-5) of
22Section 2-110.3, the monthly retirement annuity shall first be
23subject to annual increases on the January 1 occurring on or
24next after the attainment of age 67 or the January 1 occurring
25on or next after the fifth anniversary of the annuity start
26date, whichever occurs earlier. If on the effective date of the

 

 

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1election under paragraph (1) of subsection (a-5) of Section
22-110.3 a Tier I retiree has already received an annual
3increase under this Section but does not yet meet the new
4eligibility requirements of this subsection, the annual
5increases already received shall continue in force, but no
6additional annual increase shall be granted until the Tier I
7retiree meets the new eligibility requirements.
8    (b) Beginning January 1, 1990, for eligible participants
9who remain in service after attaining 20 years of creditable
10service, the 3% increases provided under subsection (a) shall
11begin to accrue on the January 1 next following the date upon
12which the participant (1) attains age 55, or (2) attains 20
13years of creditable service, whichever occurs later, and shall
14continue to accrue while the participant remains in service;
15such increases shall become payable on January 1 or July 1,
16whichever occurs first, next following the first anniversary of
17retirement. For any person who has service credit in the System
18for the entire period from January 15, 1969 through December
1931, 1992, regardless of the date of termination of service, the
20reference to age 55 in clause (1) of this subsection (b) shall
21be deemed to mean age 50.
22    This subsection (b) does not apply to any person who first
23becomes a member of the System after August 8, 2003 (the
24effective date of Public Act 93-494) or (ii) has made the
25election under paragraph (1) of subsection (a) or (a-5) of
26Section 2-110.3; except that if on the effective date of the

 

 

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1election under paragraph (1) of subsection (a-5) of Section
22-110.3 a Tier I retiree has already received a retirement
3annuity based on any annual increases under this subsection,
4those annual increases under this subsection shall continue in
5force this amendatory Act of the 93rd General Assembly.
6    (b-5) Notwithstanding any other provision of this Article,
7a participant who first becomes a participant on or after
8January 1, 2011 (the effective date of Public Act 96-889)
9shall, in January or July next following the first anniversary
10of retirement, whichever occurs first, and in the same month of
11each year thereafter, but in no event prior to age 67, have the
12amount of the retirement annuity then being paid increased by
133% or the annual unadjusted percentage increase in the Consumer
14Price Index for All Urban Consumers as determined by the Public
15Pension Division of the Department of Insurance under
16subsection (a) of Section 2-108.1, whichever is less.
17    (c) The foregoing provisions relating to automatic
18increases are not applicable to a participant who retires
19before having made contributions (at the rate prescribed in
20Section 2-126) for automatic increases for less than the
21equivalent of one full year. However, in order to be eligible
22for the automatic increases, such a participant may make
23arrangements to pay to the system the amount required to bring
24the total contributions for the automatic increase to the
25equivalent of one year's contributions based upon his or her
26last salary.

 

 

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1    (d) A participant who terminated service prior to July 1,
21967, with at least 14 years of service is entitled to an
3increase in retirement annuity beginning January, 1976, and to
4additional increases in January of each year thereafter.
5    The initial increase shall be 1 1/2% of the originally
6granted retirement annuity multiplied by the number of full
7years that the annuitant was in receipt of such annuity prior
8to January 1, 1972, plus 2% of the originally granted
9retirement annuity for each year after that date. The
10subsequent annual increases shall be at the rate of 2% of the
11originally granted retirement annuity for each year through
121979 and at the rate of 3% for 1980 and thereafter.
13    (e) Beginning January 1, 1990, all automatic annual
14increases payable under this Section shall be calculated as a
15percentage of the total annuity payable at the time of the
16increase, including previous increases granted under this
17Article.
18(Source: P.A. 96-889, eff. 1-1-11; 96-1490, eff. 1-1-11.)
 
19    (40 ILCS 5/2-124)  (from Ch. 108 1/2, par. 2-124)
20    Sec. 2-124. Contributions by State.
21    (a) Except as otherwise provided in this Section, the The
22State shall make contributions to the System by appropriations
23of amounts which, together with the contributions of
24participants, interest earned on investments, and other income
25will meet the cost of maintaining and administering the System

 

 

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1on a 90% funded basis in accordance with actuarial
2recommendations.
3    (b) The Board shall determine the amount of State
4contributions required for each fiscal year on the basis of the
5actuarial tables and other assumptions adopted by the Board and
6the prescribed rate of interest, using the formula in
7subsection (c).
8    (c) Except as otherwise provided in this Section, for For
9State fiscal years 2012 through 2045, the minimum contribution
10to the System to be made by the State for each fiscal year
11shall be an amount determined by the System to be sufficient to
12bring the total assets of the System up to 90% of the total
13actuarial liabilities of the System by the end of State fiscal
14year 2045. In making these determinations, the required State
15contribution shall be calculated each year as a level
16percentage of payroll over the years remaining to and including
17fiscal year 2045 and shall be determined under the projected
18unit credit actuarial cost method.
19    For State fiscal years 1996 through 2005, the State
20contribution to the System, as a percentage of the applicable
21employee payroll, shall be increased in equal annual increments
22so that by State fiscal year 2011, the State is contributing at
23the rate required under this Section.
24    Notwithstanding any other provision of this Article, the
25total required State contribution for State fiscal year 2006 is
26$4,157,000.

 

 

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1    Notwithstanding any other provision of this Article, the
2total required State contribution for State fiscal year 2007 is
3$5,220,300.
4    For each of State fiscal years 2008 through 2009, the State
5contribution to the System, as a percentage of the applicable
6employee payroll, shall be increased in equal annual increments
7from the required State contribution for State fiscal year
82007, so that by State fiscal year 2011, the State is
9contributing at the rate otherwise required under this Section.
10    Notwithstanding any other provision of this Article, the
11total required State contribution for State fiscal year 2010 is
12$10,454,000 and shall be made from the proceeds of bonds sold
13in fiscal year 2010 pursuant to Section 7.2 of the General
14Obligation Bond Act, less (i) the pro rata share of bond sale
15expenses determined by the System's share of total bond
16proceeds, (ii) any amounts received from the General Revenue
17Fund in fiscal year 2010, and (iii) any reduction in bond
18proceeds due to the issuance of discounted bonds, if
19applicable.
20    Notwithstanding any other provision of this Article, the
21total required State contribution for State fiscal year 2011 is
22the amount recertified by the System on or before April 1, 2011
23pursuant to Section 2-134 and shall be made from the proceeds
24of bonds sold in fiscal year 2011 pursuant to Section 7.2 of
25the General Obligation Bond Act, less (i) the pro rata share of
26bond sale expenses determined by the System's share of total

 

 

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1bond proceeds, (ii) any amounts received from the General
2Revenue Fund in fiscal year 2011, and (iii) any reduction in
3bond proceeds due to the issuance of discounted bonds, if
4applicable.
5    Except as otherwise provided in this Section, beginning
6Beginning in State fiscal year 2046, the minimum State
7contribution for each fiscal year shall be the amount needed to
8maintain the total assets of the System at 90% of the total
9actuarial liabilities of the System.
10    Amounts received by the System pursuant to Section 25 of
11the Budget Stabilization Act or Section 8.12 of the State
12Finance Act in any fiscal year do not reduce and do not
13constitute payment of any portion of the minimum State
14contribution required under this Article in that fiscal year.
15Such amounts shall not reduce, and shall not be included in the
16calculation of, the required State contributions under this
17Article in any future year until the System has reached a
18funding ratio of at least 90%. A reference in this Article to
19the "required State contribution" or any substantially similar
20term does not include or apply to any amounts payable to the
21System under Section 25 of the Budget Stabilization Act.
22    Notwithstanding any other provision of this Section, the
23required State contribution for State fiscal year 2005 and for
24fiscal year 2008 and each fiscal year thereafter, as calculated
25under this Section and certified under Section 2-134, shall not
26exceed an amount equal to (i) the amount of the required State

 

 

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1contribution that would have been calculated under this Section
2for that fiscal year if the System had not received any
3payments under subsection (d) of Section 7.2 of the General
4Obligation Bond Act, minus (ii) the portion of the State's
5total debt service payments for that fiscal year on the bonds
6issued in fiscal year 2003 for the purposes of that Section
77.2, as determined and certified by the Comptroller, that is
8the same as the System's portion of the total moneys
9distributed under subsection (d) of Section 7.2 of the General
10Obligation Bond Act. In determining this maximum for State
11fiscal years 2008 through 2010, however, the amount referred to
12in item (i) shall be increased, as a percentage of the
13applicable employee payroll, in equal increments calculated
14from the sum of the required State contribution for State
15fiscal year 2007 plus the applicable portion of the State's
16total debt service payments for fiscal year 2007 on the bonds
17issued in fiscal year 2003 for the purposes of Section 7.2 of
18the General Obligation Bond Act, so that, by State fiscal year
192011, the State is contributing at the rate otherwise required
20under this Section.
21    (c-1) If at least 50% of Tier I employees making an
22election under Section 2-110.3 before June 1, 2013 choose the
23option under paragraph (1) of subsection (a) of that Section,
24then:
25        (1) In lieu of the State contributions required under
26    subsection (c), for State fiscal years 2014 through 2043

 

 

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

 

 

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1which shall be calculated as follows:
2    As of June 30, 2008, the actuarial value of the System's
3assets shall be equal to the market value of the assets as of
4that date. In determining the actuarial value of the System's
5assets for fiscal years after June 30, 2008, any actuarial
6gains or losses from investment return incurred in a fiscal
7year shall be recognized in equal annual amounts over the
85-year period following that fiscal year.
9    (e) For purposes of determining the required State
10contribution to the system for a particular year, the actuarial
11value of assets shall be assumed to earn a rate of return equal
12to the system's actuarially assumed rate of return.
13(Source: P.A. 95-950, eff. 8-29-08; 96-43, eff. 7-15-09;
1496-1497, eff. 1-14-11; 96-1511, eff. 1-27-11; 96-1554, eff.
153-18-11; revised 4-6-11.)
 
16    (40 ILCS 5/2-134)   (from Ch. 108 1/2, par. 2-134)
17    Sec. 2-134. To certify required State contributions and
18submit vouchers.
19    (a) The Board shall certify to the Governor on or before
20December 15 of each year until December 15, 2011 the amount of
21the required State contribution to the System for the next
22fiscal year and shall specifically identify the System's
23projected State normal cost for that fiscal year. The
24certification shall include a copy of the actuarial
25recommendations upon which it is based and shall specifically

 

 

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1identify the System's projected State normal cost for that
2fiscal year.
3    On or before November 1 of each year, beginning November 1,
42012, the Board shall submit to the State Actuary, the
5Governor, and the General Assembly a proposed certification of
6the amount of the required State contribution to the System for
7the next fiscal year, along with all of the actuarial
8assumptions, calculations, and data upon which that proposed
9certification is based. On or before January 1 of each year
10beginning January 1, 2013, the State Actuary shall issue a
11preliminary report concerning the proposed certification and
12identifying, if necessary, recommended changes in actuarial
13assumptions that the Board must consider before finalizing its
14certification of the required State contributions. On or before
15January 15, 2013 and every January 15 thereafter, the Board
16shall certify to the Governor and the General Assembly the
17amount of the required State contribution for the next fiscal
18year. The Board's certification must note any deviations from
19the State Actuary's recommended changes, the reason or reasons
20for not following the State Actuary's recommended changes, and
21the fiscal impact of not following the State Actuary's
22recommended changes on the required State contribution.
23    On or before May 1, 2004, the Board shall recalculate and
24recertify to the Governor the amount of the required State
25contribution to the System for State fiscal year 2005, taking
26into account the amounts appropriated to and received by the

 

 

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1System under subsection (d) of Section 7.2 of the General
2Obligation Bond Act.
3    On or before July 1, 2005, the Board shall recalculate and
4recertify to the Governor the amount of the required State
5contribution to the System for State fiscal year 2006, taking
6into account the changes in required State contributions made
7by this amendatory Act of the 94th General Assembly.
8    On or before April 1, 2011, the Board shall recalculate and
9recertify to the Governor the amount of the required State
10contribution to the System for State fiscal year 2011, applying
11the changes made by Public Act 96-889 to the System's assets
12and liabilities as of June 30, 2009 as though Public Act 96-889
13was approved on that date.
14    (b) Beginning in State fiscal year 1996, on or as soon as
15possible after the 15th day of each month the Board shall
16submit vouchers for payment of State contributions to the
17System, in a total monthly amount of one-twelfth of the
18required annual State contribution certified under subsection
19(a). From the effective date of this amendatory Act of the 93rd
20General Assembly through June 30, 2004, the Board shall not
21submit vouchers for the remainder of fiscal year 2004 in excess
22of the fiscal year 2004 certified contribution amount
23determined under this Section after taking into consideration
24the transfer to the System under subsection (d) of Section
256z-61 of the State Finance Act. These vouchers shall be paid by
26the State Comptroller and Treasurer by warrants drawn on the

 

 

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1funds appropriated to the System for that fiscal year. If in
2any month the amount remaining unexpended from all other
3appropriations to the System for the applicable fiscal year
4(including the appropriations to the System under Section 8.12
5of the State Finance Act and Section 1 of the State Pension
6Funds Continuing Appropriation Act) is less than the amount
7lawfully vouchered under this Section, the difference shall be
8paid from the General Revenue Fund under the continuing
9appropriation authority provided in Section 1.1 of the State
10Pension Funds Continuing Appropriation Act.
11    (c) The full amount of any annual appropriation for the
12System for State fiscal year 1995 shall be transferred and made
13available to the System at the beginning of that fiscal year at
14the request of the Board. Any excess funds remaining at the end
15of any fiscal year from appropriations shall be retained by the
16System as a general reserve to meet the System's accrued
17liabilities.
18(Source: P.A. 95-331, eff. 8-21-07; 96-1497, eff. 1-14-11;
1996-1511, eff. 1-27-11.)
 
20    (40 ILCS 5/7-109)  (from Ch. 108 1/2, par. 7-109)
21    Sec. 7-109. Employee.
22    (1) "Employee" means any person who:
23        (a) 1. Receives earnings as payment for the performance
24        of personal services or official duties out of the
25        general fund of a municipality, or out of any special

 

 

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1        fund or funds controlled by a municipality, or by an
2        instrumentality thereof, or a participating
3        instrumentality, including, in counties, the fees or
4        earnings of any county fee office; and
5            2. Under the usual common law rules applicable in
6        determining the employer-employee relationship, has
7        the status of an employee with a municipality, or any
8        instrumentality thereof, or a participating
9        instrumentality, including aldermen, county
10        supervisors and other persons (excepting those
11        employed as independent contractors) who are paid
12        compensation, fees, allowances or other emolument for
13        official duties, and, in counties, the several county
14        fee offices.
15        (b) Serves as a township treasurer appointed under the
16    School Code, as heretofore or hereafter amended, and who
17    receives for such services regular compensation as
18    distinguished from per diem compensation, and any regular
19    employee in the office of any township treasurer whether or
20    not his earnings are paid from the income of the permanent
21    township fund or from funds subject to distribution to the
22    several school districts and parts of school districts as
23    provided in the School Code, or from both such sources; or
24    is the chief executive officer, chief educational officer,
25    chief fiscal officer, or other employee of a Financial
26    Oversight Panel established pursuant to Article 1H of the

 

 

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1    School Code, other than a superintendent or certified
2    school business official, except that such person shall not
3    be treated as an employee under this Section if that person
4    has negotiated with the Financial Oversight Panel, in
5    conjunction with the school district, a contractual
6    agreement for exclusion from this Section.
7        (c) Holds an elective office in a municipality,
8    instrumentality thereof or participating instrumentality.
9    (2) "Employee" does not include persons who:
10        (a) Are eligible for inclusion under any of the
11    following laws:
12            1. "An Act in relation to an Illinois State
13        Teachers' Pension and Retirement Fund", approved May
14        27, 1915, as amended;
15            2. Articles 15 and 16 of this Code.
16        However, such persons shall be included as employees to
17    the extent of earnings that are not eligible for inclusion
18    under the foregoing laws for services not of an
19    instructional nature of any kind.
20        However, any member of the armed forces who is employed
21    as a teacher of subjects in the Reserve Officers Training
22    Corps of any school and who is not certified under the law
23    governing the certification of teachers shall be included
24    as an employee.
25        (b) Are designated by the governing body of a
26    municipality in which a pension fund is required by law to

 

 

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1    be established for policemen or firemen, respectively, as
2    performing police or fire protection duties, except that
3    when such persons are the heads of the police or fire
4    department and are not eligible to be included within any
5    such pension fund, they shall be included within this
6    Article; provided, that such persons shall not be excluded
7    to the extent of concurrent service and earnings not
8    designated as being for police or fire protection duties.
9    However, (i) any head of a police department who was a
10    participant under this Article immediately before October
11    1, 1977 and did not elect, under Section 3-109 of this Act,
12    to participate in a police pension fund shall be an
13    "employee", and (ii) any chief of police who elects to
14    participate in this Fund under Section 3-109.1 of this
15    Code, regardless of whether such person continues to be
16    employed as chief of police or is employed in some other
17    rank or capacity within the police department, shall be an
18    employee under this Article for so long as such person is
19    employed to perform police duties by a participating
20    municipality and has not lawfully rescinded that election.
21        (c) After August 26, 2011 (the effective date of Public
22    Act 97-609) this amendatory Act of the 97th General
23    Assembly, are contributors to or eligible to contribute to
24    a Taft-Hartley pension plan established on or before June
25    1, 2011 and are employees of a theatre, arena, or
26    convention center that is located in a municipality located

 

 

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1    in a county with a population greater than 5,000,000, and
2    to which the participating municipality is required to
3    contribute as the person's employer based on earnings from
4    the municipality. Nothing in this paragraph shall affect
5    service credit or creditable service for any period of
6    service prior to August 26, 2011 the effective date of this
7    amendatory Act of the 97th General Assembly, and this
8    paragraph shall not apply to individuals who are
9    participating in the Fund prior to August 26, 2011 the
10    effective date of this amendatory Act of the 97th General
11    Assembly.
12        (d) Become an employee of any of the following
13    participating instrumentalities on or after the effective
14    date of this amendatory Act of the 97th General Assembly:
15    the Illinois Municipal League; the Illinois Association of
16    Park Districts; the Illinois Supervisors, County
17    Commissioners and Superintendents of Highways Association;
18    the Township School District Trustees; the United Counties
19    Council; or the Will County Governmental League.
20    (3) All persons, including, without limitation, public
21defenders and probation officers, who receive earnings from
22general or special funds of a county for performance of
23personal services or official duties within the territorial
24limits of the county, are employees of the county (unless
25excluded by subsection (2) of this Section) notwithstanding
26that they may be appointed by and are subject to the direction

 

 

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1of a person or persons other than a county board or a county
2officer. It is hereby established that an employer-employee
3relationship under the usual common law rules exists between
4such employees and the county paying their salaries by reason
5of the fact that the county boards fix their rates of
6compensation, appropriate funds for payment of their earnings
7and otherwise exercise control over them. This finding and this
8amendatory Act shall apply to all such employees from the date
9of appointment whether such date is prior to or after the
10effective date of this amendatory Act and is intended to
11clarify existing law pertaining to their status as
12participating employees in the Fund.
13(Source: P.A. 97-429, eff. 8-16-11; 97-609, eff. 8-26-11;
14revised 9-28-11.)
 
15    (40 ILCS 5/14-103.10)  (from Ch. 108 1/2, par. 14-103.10)
16    Sec. 14-103.10. Compensation.
17    (a) For periods of service prior to January 1, 1978, the
18full rate of salary or wages payable to an employee for
19personal services performed if he worked the full normal
20working period for his position, subject to the following
21maximum amounts: (1) prior to July 1, 1951, $400 per month or
22$4,800 per year; (2) between July 1, 1951 and June 30, 1957
23inclusive, $625 per month or $7,500 per year; (3) beginning
24July 1, 1957, no limitation.
25    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 1-160 applies for periods
26of service on and after January 1, 2011, all remuneration for

 

 

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1personal services performed defined as "wages" under the Social
2Security Enabling Act, excluding remuneration that is in excess
3of the annual earnings, salary, or wages of a member or
4participant, as provided in subsection (b-5) of Section 1-160,
5but including any benefits received by an employee under a sick
6pay plan in effect before January 1, 1981. Compensation shall
7exclude 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    (f) Notwithstanding any other provision of this Section,
13"compensation" does not include any future increase in income
14offered by a department under this Article pursuant to the
15requirements of subsection (c) of Section 14-106.5 that is
16accepted by a Tier I employee, or a Tier I retiree returning to
17active service, who has made an election under paragraph (2) of
18subsection (a) or (a-5) of Section 14-106.5.
19    (g) Notwithstanding the other provisions of this Section,
20for an employee who first becomes a participant on or after the
21effective date of this amendatory Act of the 97th General
22Assembly, "compensation" does not include any payments or
23reimbursements for travel vouchers.
24(Source: P.A. 96-1490, eff. 1-1-11.)
 
25    (40 ILCS 5/14-103.40 new)

 

 

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1    Sec. 14-103.40. Tier I employee. "Tier I employee": An
2employee under this Article who first became a member or
3participant before January 1, 2011 under any reciprocal
4retirement system or pension fund established under this Code
5other than a retirement system or pension fund established
6under Article 2, 3, 4, 5, 6, or 18 of this Code.
 
7    (40 ILCS 5/14-103.41 new)
8    Sec. 14-103.41. Tier I retiree. "Tier I retiree": A former
9Tier I employee who is receiving a retirement annuity.
 
10    (40 ILCS 5/14-103.42 new)
11    Sec. 14-103.42. Future increase in income. "Future
12increase in income": Any increase in income in any form offered
13by a department to an employee under this Article after June
1430, 2013 that would qualify as "compensation", as defined under
15Section 14-103.10, but for the fact that the department offered
16the increase in income to the employee on the condition that it
17not qualify as compensation and the employee accepted the
18increase in income subject to that condition. The term "future
19increase in income" does not include an increase in income in
20any form that is paid to a Tier I employee under an employment
21contract or collective bargaining agreement that is in effect
22on the effective date of this Section but does include an
23increase in income in any form pursuant to an extension,
24amendment, or renewal of any such employment contract or

 

 

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1collective bargaining agreement on or after the effective date
2of this amendatory Act of the 97th General Assembly.
 
3    (40 ILCS 5/14-106)  (from Ch. 108 1/2, par. 14-106)
4    Sec. 14-106. Membership service credit.
5    (a) After January 1, 1944, all service of a member since he
6last became a member with respect to which contributions are
7made shall count as membership service; provided, that for
8service on and after July 1, 1950, 12 months of service shall
9constitute a year of membership service, the completion of 15
10days or more of service during any month shall constitute 1
11month of membership service, 8 to 15 days shall constitute 1/2
12month of membership service and less than 8 days shall
13constitute 1/4 month of membership service. The payroll record
14of each department shall constitute conclusive evidence of the
15record of service rendered by a member.
16    (b) For a member who is employed and paid on an
17academic-year basis rather than on a 12-month annual basis,
18employment for a full academic year shall constitute a full
19year of membership service, except that the member shall not
20receive more than one year of membership service credit (plus
21any additional service credit granted for unused sick leave)
22for service during any 12-month period. This subsection (b)
23applies to all such service for which the member has not begun
24to receive a retirement annuity before January 1, 2001.
25    (c) A member who first participated in this System before

 

 

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1the effective date of this amendatory Act of the 97th General
2Assembly shall be entitled to additional service credit, under
3rules prescribed by the Board, for accumulated unused sick
4leave credited to his account in the last Department on the
5date of withdrawal from service or for any period for which he
6would have been eligible to receive benefits under a sick pay
7plan authorized by law, if he had suffered a sickness or
8accident on the date of withdrawal from service. It shall be
9the responsibility of the last Department to certify to the
10Board the length of time salary or benefits would have been
11paid to the member based upon the accumulated unused sick leave
12or the applicable sick pay plan if he had become entitled
13thereto because of sickness on the date that his status as an
14employee terminated. This period of service credit granted
15under this paragraph shall not be considered in determining the
16date the retirement annuity is to begin, or final average
17compensation.
18    Service credit is not available for unused sick leave
19accumulated by a person who first participates in this System
20on or after the effective date of this amendatory Act of the
2197th General Assembly.
22(Source: P.A. 92-14, eff. 6-28-01.)
 
23    (40 ILCS 5/14-106.5 new)
24    Sec. 14-106.5. Election by Tier I employees and Tier I
25retirees.

 

 

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1    (a) Each Tier I employee shall make an irrevocable election
2either:
3        (1) to agree to the following:
4            (i) to have the amount of the automatic annual
5        increases in his or her retirement annuity that are
6        otherwise provided for in this Article calculated,
7        instead, as provided in subsection (a-1) of Section
8        14-114; and
9            (ii) to have his or her eligibility for automatic
10        annual increases in retirement annuity postponed as
11        provided in subsection (a-2) of Section 14-114; or
12        (2) to not agree to items (i) and (ii) as set forth in
13    paragraph (1) of this subsection.
14    The election required under this subsection (a) shall be
15made by each Tier I employee no earlier than January 1, 2013
16and no later than May 31, 2013, except that:
17        (i) a person who becomes a Tier I employee under this
18    Article after January 1, 2013 must make the election under
19    this subsection (a) within 60 days after becoming a Tier I
20    employee;
21        (ii) a person who returns to active service as a Tier I
22    employee under this Article after January 1, 2013 and has
23    not yet made an election under this Section must make the
24    election under this subsection (a) within 60 days after
25    returning to active service as a Tier I employee; and
26        (iii) a person who made the election under subsection

 

 

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1    (a-5) as a Tier I retiree remains bound by that election
2    and shall not make a later election under this subsection
3    (a).
4    If a Tier I employee fails for any reason to make a
5required election under this subsection within the time
6specified, then the employee shall be deemed to have made the
7election under paragraph (2) of this subsection.
8    (a-5) Each Tier I retiree shall make an irrevocable
9election either:
10        (1) to agree to the following:
11            (i) to have the amount of the automatic annual
12        increases in his or her retirement annuity that are
13        otherwise provided for in this Article calculated,
14        instead, as provided in subsection (a-1) of Section
15        14-114; and
16            (ii) to have his or her eligibility for automatic
17        annual increases in retirement annuity postponed as
18        provided in subsection (a-2) of Section 14-114; or
19        (2) to not agree to items (i) and (ii) as set forth in
20    paragraph (1) of this subsection.
21    The election required under this subsection (a-5) shall be
22made by each Tier I retiree no earlier than January 1, 2013 and
23no later than May 31, 2013, except that:
24        (i) a person who becomes a Tier I retiree under this
25    Article on or after January 1, 2013 must make the election
26    under this subsection (a-5) within 60 days after becoming a

 

 

09700SB1673ham003- 94 -LRB097 07605 EFG 70268 a

1    Tier I retiree; and
2        (ii) a person who made the election under subsection
3    (a) as a Tier I employee remains bound by that election and
4    shall not make a later election under this subsection
5    (a-5).
6    If a Tier I retiree fails for any reason to make a required
7election under this subsection within the time specified, then
8the Tier I retiree shall be deemed to have made the election
9under paragraph (2) of this subsection.
10    (a-10) All elections under subsection (a) or (a-5) that are
11made or deemed to be made before June 1, 2013 shall take effect
12on July 1, 2013. Elections that are made or deemed to be made
13on or after June 1, 2013 shall take effect on the first day of
14the month following the month in which the election is made or
15deemed to be made.
16    (b) As adequate and legal consideration provided under this
17amendatory Act of the 97th General Assembly for making the
18election under paragraph (1) of subsection (a) of this Section,
19any future increases in income offered by a department under
20this Article to a Tier I employee who has made the election
21under paragraph (1) of subsection (a) of this Section shall be
22offered expressly and irrevocably as constituting compensation
23under Section 14-103.10. In addition, a Tier I employee who has
24made the election under paragraph (1) of subsection (a) of this
25Section shall receive the right to also participate in the
26optional cash balance plan established under Section 1-162.

 

 

09700SB1673ham003- 95 -LRB097 07605 EFG 70268 a

1    As adequate and legal consideration provided under this
2amendatory Act of the 97th General Assembly for making the
3election under paragraph (1) of subsection (a-5) of this
4Section, any future increases in income offered by a department
5under this Article to a Tier I retiree who returns to active
6service after having made the election under paragraph (1) of
7subsection (a-5) of this Section shall be offered expressly and
8irrevocably as constituting compensation under Section
914-103.10. In addition, a Tier I retiree who returns to active
10service and has made the election under paragraph (1) of
11subsection (a) of this Section shall receive the right to also
12participate in the optional cash balance plan established under
13Section 1-162.
14    (c) A Tier I employee who makes the election under
15paragraph (2) of subsection (a) of this Section shall not be
16subject to items (i) and (ii) set forth in paragraph (1) of
17subsection (a) of this Section. However, any future increases
18in income offered by a department under this Article to a Tier
19I employee who has made the election under paragraph (2) of
20subsection (a) of this Section shall be offered by the
21department expressly and irrevocably as not constituting
22compensation under Section 14-103.10, and the employee may not
23accept any future increase in income that is offered in
24violation of this requirement. In addition, a Tier I employee
25who has made the election under paragraph (2) of subsection (a)
26of this Section shall not receive the right to participate in

 

 

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1the optional cash balance plan established under Section 1-162.
2    A Tier I retiree who makes the election under paragraph (2)
3of subsection (a-5) of this Section shall not be subject to
4items (i) and (ii) set forth in paragraph (1) of subsection
5(a-5) of this Section. However, any future increases in income
6offered by a department under this Article to a Tier I retiree
7who returns to active service and has made the election under
8paragraph (2) of subsection (a-5) of this Section shall be
9offered by the department expressly and irrevocably as not
10constituting compensation under Section 14-103.10, and the
11employee may not accept any future increase in income that is
12offered in violation of this requirement. In addition, a Tier I
13retiree who returns to active service and has made the election
14under paragraph (2) of subsection (a) of this Section shall not
15receive the right to participate in the optional cash balance
16plan established under Section 1-162.
17    (d) The System shall make a good faith effort to contact
18each Tier I employee and Tier I retiree subject to this
19Section. The System shall mail information describing the
20required election to each Tier I employee and Tier I retiree by
21United States Postal Service mail to his or her last known
22address on file with the System. If the Tier I employee or Tier
23I retiree is not responsive to other means of contact, it is
24sufficient for the System to publish the details of any
25required elections on its website or to publish those details
26in a regularly published newsletter or other existing public

 

 

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

 

 

09700SB1673ham003- 98 -LRB097 07605 EFG 70268 a

1    (e) Notwithstanding any other provision of law, a
2department under this Article is required to offer any future
3increases in income expressly and irrevocably as not
4constituting "compensation" under Section 14-103.10 to any
5Tier I employee, or Tier I retiree returning to active service,
6who has made an election under paragraph (2) of subsection (a)
7or (a-5) of Section 14-106.5. A Tier I employee, or Tier I
8retiree returning to active service, who has made an election
9under paragraph (2) of subsection (a) or (a-5) of Section
1014-106.5 shall not accept any future increase in income that is
11offered by an employer under this Article in violation of the
12requirement set forth in this subsection.
13    (f) A member's election under this Section is not a
14prohibited election under subdivision (j)(1) of Section 1-119
15of this Code.
16    (g) An employee who has made the election under paragraph
17(1) of subsection (a) or (a-5) of this Section may elect to
18participate in the optional cash balance plan under Section
191-162.
20    The election to participate in the optional cash balance
21plan shall be made in writing, in the manner provided by the
22applicable retirement system.
23    (h) Qualified Plan Status. No provision of this Section
24shall be interpreted in a way that would cause the System to
25cease to be a qualified plan under section 461 (a) of the
26Internal Revenue Code of 1986.
 

 

 

09700SB1673ham003- 99 -LRB097 07605 EFG 70268 a

1    (40 ILCS 5/14-114)  (from Ch. 108 1/2, par. 14-114)
2    Sec. 14-114. Automatic increase in retirement annuity.
3    (a) Subject to the provisions of subsections (a-1) and
4(a-2), any Any person receiving a retirement annuity under this
5Article who retires having attained age 60, or who retires
6before age 60 having at least 35 years of creditable service,
7or who retires on or after January 1, 2001 at an age which,
8when added to the number of years of his or her creditable
9service, equals at least 85, shall, on January 1 next following
10the first full year of retirement, have the amount of the then
11fixed and payable monthly retirement annuity increased 3%. Any
12person receiving a retirement annuity under this Article who
13retires before attainment of age 60 and with less than (i) 35
14years of creditable service if retirement is before January 1,
152001, or (ii) the number of years of creditable service which,
16when added to the member's age, would equal 85, if retirement
17is on or after January 1, 2001, shall have the amount of the
18fixed and payable retirement annuity increased by 3% on the
19January 1 occurring on or next following (1) attainment of age
2060, or (2) the first anniversary of retirement, whichever
21occurs later. However, for persons who receive the alternative
22retirement annuity under Section 14-110, references in this
23subsection (a) to attainment of age 60 shall be deemed to refer
24to attainment of age 55. For a person receiving early
25retirement incentives under Section 14-108.3 whose retirement

 

 

09700SB1673ham003- 100 -LRB097 07605 EFG 70268 a

1annuity began after January 1, 1992 pursuant to an extension
2granted under subsection (e) of that Section, the first
3anniversary of retirement shall be deemed to be January 1,
41993. For a person who retires on or after June 28, 2001 and on
5or before October 1, 2001, and whose retirement annuity is
6calculated, in whole or in part, under Section 14-110 or
7subsection (g) or (h) of Section 14-108, the first anniversary
8of retirement shall be deemed to be January 1, 2002.
9    On each January 1 following the date of the initial
10increase under this subsection, the employee's monthly
11retirement annuity shall be increased by an additional 3%.
12    Beginning January 1, 1990 and except as provided in
13subsections (a-1) and (a-2), all automatic annual increases
14payable under this Section shall be calculated as a percentage
15of the total annuity payable at the time of the increase,
16including previous increases granted under this Article.
17    (a-1) Notwithstanding any other provision of this Article,
18for a Tier I employee or Tier I retiree who made the election
19under paragraph (1) of subsection (a) or (a-5) of Section
2014-106.5, the amount of each automatic annual increase in
21retirement annuity occurring on or after the effective date of
22that election shall be 3% or one-half of the annual unadjusted
23percentage increase, if any, in the Consumer Price Index-U for
24the 12 months ending with the preceding September, whichever is
25less, of the originally granted retirement annuity. For the
26purposes of this Section, "Consumer Price Index-U" means the

 

 

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1index published by the Bureau of Labor Statistics of the United
2States Department of Labor that measures the average change in
3prices of goods and services purchased by all urban consumers,
4United States city average, all items, 1982-84 = 100.
5    (a-2) Notwithstanding any other provision of this Article,
6for a Tier I employee or Tier I retiree who made the election
7under paragraph (1) of subsection (a) or (a-5) of Section
814-106.5, the monthly retirement annuity shall first be subject
9to annual increases on the January 1 occurring on or next after
10either the attainment of age 67 or the January 1 occurring on
11or next after the fifth anniversary of the annuity start date,
12whichever occurs earlier. If on the effective date of the
13election under paragraph (1) of subsection (a-5) of Section
1414-106.5 a Tier I retiree has already received an annual
15increase under this Section but does not yet meet the new
16eligibility requirements of this subsection, the annual
17increases already received shall continue in force, but no
18additional annual increase shall be granted until the Tier I
19retiree meets the new eligibility requirements.
20    (b) The provisions of subsection (a) of this Section shall
21be applicable to an employee only if the employee makes the
22additional contributions required after December 31, 1969 for
23the purpose of the automatic increases for not less than the
24equivalent of one full year. If an employee becomes an
25annuitant before his additional contributions equal one full
26year's contributions based on his salary at the date of

 

 

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1retirement, the employee may pay the necessary balance of the
2contributions to the system, without interest, and be eligible
3for the increasing annuity authorized by this Section.
4    (c) The provisions of subsection (a) of this Section shall
5not be applicable to any annuitant who is on retirement on
6December 31, 1969, and thereafter returns to State service,
7unless the member has established at least one year of
8additional creditable service following reentry into service.
9    (d) In addition to other increases which may be provided by
10this Section, on January 1, 1981 any annuitant who was
11receiving a retirement annuity on or before January 1, 1971
12shall have his retirement annuity then being paid increased $1
13per month for each year of creditable service. On January 1,
141982, any annuitant who began receiving a retirement annuity on
15or before January 1, 1977, shall have his retirement annuity
16then being paid increased $1 per month for each year of
17creditable service.
18    On January 1, 1987, any annuitant who began receiving a
19retirement annuity on or before January 1, 1977, shall have the
20monthly retirement annuity increased by an amount equal to 8
21per year of creditable service times the number of years that
22have elapsed since the annuity began.
23    (e) Every person who receives the alternative retirement
24annuity under Section 14-110 and who is eligible to receive the
253% increase under subsection (a) on January 1, 1986, shall also
26receive on that date a one-time increase in retirement annuity

 

 

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1equal to the difference between (1) his actual retirement
2annuity on that date, including any increases received under
3subsection (a), and (2) the amount of retirement annuity he
4would have received on that date if the amendments to
5subsection (a) made by Public Act 84-162 had been in effect
6since the date of his retirement.
7(Source: P.A. 91-927, eff. 12-14-00; 92-14, eff. 6-28-01;
892-651, eff. 7-11-02.)
 
9    (40 ILCS 5/14-131)
10    Sec. 14-131. Contributions by State.
11    (a) Except as otherwise provided in this Section, the The
12State shall make contributions to the System by appropriations
13of amounts which, together with other employer contributions
14from trust, federal, and other funds, employee contributions,
15investment income, and other income, will be sufficient to meet
16the cost of maintaining and administering the System on a 90%
17funded basis in accordance with actuarial recommendations.
18    For the purposes of this Section and Section 14-135.08,
19references to State contributions refer only to employer
20contributions and do not include employee contributions that
21are picked up or otherwise paid by the State or a department on
22behalf of the employee.
23    (b) The Board shall determine the total amount of State
24contributions required for each fiscal year on the basis of the
25actuarial tables and other assumptions adopted by the Board,

 

 

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1using the formula in subsection (e).
2    The Board shall also determine a State contribution rate
3for each fiscal year, expressed as a percentage of payroll,
4based on the total required State contribution for that fiscal
5year (less the amount received by the System from
6appropriations under Section 8.12 of the State Finance Act and
7Section 1 of the State Pension Funds Continuing Appropriation
8Act, if any, for the fiscal year ending on the June 30
9immediately preceding the applicable November 15 certification
10deadline), the estimated payroll (including all forms of
11compensation) for personal services rendered by eligible
12employees, and the recommendations of the actuary.
13    For the purposes of this Section and Section 14.1 of the
14State Finance Act, the term "eligible employees" includes
15employees who participate in the System, persons who may elect
16to participate in the System but have not so elected, persons
17who are serving a qualifying period that is required for
18participation, and annuitants employed by a department as
19described in subdivision (a)(1) or (a)(2) of Section 14-111.
20    (c) Contributions shall be made by the several departments
21for each pay period by warrants drawn by the State Comptroller
22against their respective funds or appropriations based upon
23vouchers stating the amount to be so contributed. These amounts
24shall be based on the full rate certified by the Board under
25Section 14-135.08 for that fiscal year. From the effective date
26of this amendatory Act of the 93rd General Assembly through the

 

 

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

 

 

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1which case the required employer contributions shall be paid by
2the State. From the effective date of this amendatory Act of
3the 93rd General Assembly through the payment of the final
4payroll from fiscal year 2004 appropriations, the department or
5other employer shall not pay contributions for the remainder of
6fiscal year 2004 but shall instead make payments as required
7under subsection (a-1) of Section 14.1 of the State Finance
8Act. The department or other employer shall resume payment of
9contributions at the commencement of fiscal year 2005.
10    (e) Except as otherwise provided in this Section, for For
11State fiscal years 2012 through 2045, the minimum contribution
12to the System to be made by the State for each fiscal year
13shall be an amount determined by the System to be sufficient to
14bring the total assets of the System up to 90% of the total
15actuarial liabilities of the System by the end of State fiscal
16year 2045. In making these determinations, the required State
17contribution shall be calculated each year as a level
18percentage of payroll over the years remaining to and including
19fiscal year 2045 and shall be determined under the projected
20unit credit actuarial cost method.
21    For State fiscal years 1996 through 2005, the State
22contribution to the System, as a percentage of the applicable
23employee payroll, shall be increased in equal annual increments
24so that by State fiscal year 2011, the State is contributing at
25the rate required under this Section; except that (i) for State
26fiscal year 1998, for all purposes of this Code and any other

 

 

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1law of this State, the certified percentage of the applicable
2employee payroll shall be 5.052% for employees earning eligible
3creditable service under Section 14-110 and 6.500% for all
4other employees, notwithstanding any contrary certification
5made under Section 14-135.08 before the effective date of this
6amendatory Act of 1997, and (ii) in the following specified
7State fiscal years, the State contribution to the System shall
8not be less than the following indicated percentages of the
9applicable employee payroll, even if the indicated percentage
10will produce a State contribution in excess of the amount
11otherwise required under this subsection and subsection (a):
129.8% in FY 1999; 10.0% in FY 2000; 10.2% in FY 2001; 10.4% in FY
132002; 10.6% in FY 2003; and 10.8% in FY 2004.
14    Notwithstanding any other provision of this Article, the
15total required State contribution to the System for State
16fiscal year 2006 is $203,783,900.
17    Notwithstanding any other provision of this Article, the
18total required State contribution to the System for State
19fiscal year 2007 is $344,164,400.
20    For each of State fiscal years 2008 through 2009, the State
21contribution to the System, as a percentage of the applicable
22employee payroll, shall be increased in equal annual increments
23from the required State contribution for State fiscal year
242007, so that by State fiscal year 2011, the State is
25contributing at the rate otherwise required under this Section.
26    Notwithstanding any other provision of this Article, the

 

 

09700SB1673ham003- 108 -LRB097 07605 EFG 70268 a

1total required State General Revenue Fund contribution for
2State fiscal year 2010 is $723,703,100 and shall be made from
3the proceeds of bonds sold in fiscal year 2010 pursuant to
4Section 7.2 of the General Obligation Bond Act, less (i) the
5pro rata share of bond sale expenses determined by the System's
6share of total bond proceeds, (ii) any amounts received from
7the General Revenue Fund in fiscal year 2010, and (iii) any
8reduction in bond proceeds due to the issuance of discounted
9bonds, if applicable.
10    Notwithstanding any other provision of this Article, the
11total required State General Revenue Fund contribution for
12State fiscal year 2011 is the amount recertified by the System
13on or before April 1, 2011 pursuant to Section 14-135.08 and
14shall be made from the proceeds of bonds sold in fiscal year
152011 pursuant to Section 7.2 of the General Obligation Bond
16Act, less (i) the pro rata share of bond sale expenses
17determined by the System's share of total bond proceeds, (ii)
18any amounts received from the General Revenue Fund in fiscal
19year 2011, and (iii) any reduction in bond proceeds due to the
20issuance of discounted bonds, if applicable.
21    Except as otherwise provided in this Section, beginning
22Beginning in State fiscal year 2046, the minimum State
23contribution for each fiscal year shall be the amount needed to
24maintain the total assets of the System at 90% of the total
25actuarial liabilities of the System.
26    Amounts received by the System pursuant to Section 25 of

 

 

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1the Budget Stabilization Act or Section 8.12 of the State
2Finance Act in any fiscal year do not reduce and do not
3constitute payment of any portion of the minimum State
4contribution required under this Article in that fiscal year.
5Such amounts shall not reduce, and shall not be included in the
6calculation of, the required State contributions under this
7Article in any future year until the System has reached a
8funding ratio of at least 90%. A reference in this Article to
9the "required State contribution" or any substantially similar
10term does not include or apply to any amounts payable to the
11System under Section 25 of the Budget Stabilization Act.
12    Notwithstanding any other provision of this Section, the
13required State contribution for State fiscal year 2005 and for
14fiscal year 2008 and each fiscal year thereafter, as calculated
15under this Section and certified under Section 14-135.08, shall
16not exceed an amount equal to (i) the amount of the required
17State contribution that would have been calculated under this
18Section for that fiscal year if the System had not received any
19payments under subsection (d) of Section 7.2 of the General
20Obligation Bond Act, minus (ii) the portion of the State's
21total debt service payments for that fiscal year on the bonds
22issued in fiscal year 2003 for the purposes of that Section
237.2, as determined and certified by the Comptroller, that is
24the same as the System's portion of the total moneys
25distributed under subsection (d) of Section 7.2 of the General
26Obligation Bond Act. In determining this maximum for State

 

 

09700SB1673ham003- 110 -LRB097 07605 EFG 70268 a

1fiscal years 2008 through 2010, however, the amount referred to
2in item (i) shall be increased, as a percentage of the
3applicable employee payroll, in equal increments calculated
4from the sum of the required State contribution for State
5fiscal year 2007 plus the applicable portion of the State's
6total debt service payments for fiscal year 2007 on the bonds
7issued in fiscal year 2003 for the purposes of Section 7.2 of
8the General Obligation Bond Act, so that, by State fiscal year
92011, the State is contributing at the rate otherwise required
10under this Section.
11    (e-1) If at least 50% of Tier I employees making an
12election under Section 14-106.5 before June 1, 2013 choose the
13option under paragraph (1) of subsection (a) of that Section,
14then:
15        (1) In lieu of the State contributions required under
16    subsection (e), for State fiscal years 2014 through 2043
17    the minimum contribution to the System to be made by the
18    State for each fiscal year shall be an amount determined by
19    the System to be equal to the sum of (1) the State's
20    portion of the projected normal cost for that fiscal year,
21    plus (2) an amount sufficient to bring the total assets of
22    the System up to 100% of the total actuarial liabilities of
23    the System by the end of State fiscal year 2043. In making
24    these determinations, the required State contribution
25    shall be calculated each year as a level percentage of
26    payroll over the years remaining to and including fiscal

 

 

09700SB1673ham003- 111 -LRB097 07605 EFG 70268 a

1    year 2043 and shall be determined under the projected unit
2    credit actuarial cost method.
3        (2) Beginning in State fiscal year 2044, the minimum
4    State contribution for each fiscal year shall be the amount
5    needed to maintain the total assets of the System at 100%
6    of the total actuarial liabilities of the System.
7    (e-2) If less than 50% of Tier I employees making an
8election under Section 14-106.5 before June 1, 2013 choose the
9option under paragraph (1) of subsection (a) of that Section,
10then:
11        (1) Instead of the annual required contribution
12    otherwise specified in subsection (e-1) of this Section,
13    the annual required contribution to the System to be made
14    by the State shall be determined under subsection (e) of
15    this Section.
16        (2) As soon as possible after June 1, 2014, the Board
17    shall recertify the annual required contribution by the
18    State for State fiscal year 2015.
19    (f) After the submission of all payments for eligible
20employees from personal services line items in fiscal year 2004
21have been made, the Comptroller shall provide to the System a
22certification of the sum of all fiscal year 2004 expenditures
23for personal services that would have been covered by payments
24to the System under this Section if the provisions of this
25amendatory Act of the 93rd General Assembly had not been
26enacted. Upon receipt of the certification, the System shall

 

 

09700SB1673ham003- 112 -LRB097 07605 EFG 70268 a

1determine the amount due to the System based on the full rate
2certified by the Board under Section 14-135.08 for fiscal year
32004 in order to meet the State's obligation under this
4Section. The System shall compare this amount due to the amount
5received by the System in fiscal year 2004 through payments
6under this Section and under Section 6z-61 of the State Finance
7Act. If the amount due is more than the amount received, the
8difference shall be termed the "Fiscal Year 2004 Shortfall" for
9purposes of this Section, and the Fiscal Year 2004 Shortfall
10shall be satisfied under Section 1.2 of the State Pension Funds
11Continuing Appropriation Act. If the amount due is less than
12the amount received, the difference shall be termed the "Fiscal
13Year 2004 Overpayment" for purposes of this Section, and the
14Fiscal Year 2004 Overpayment shall be repaid by the System to
15the Pension Contribution Fund as soon as practicable after the
16certification.
17    (g) For purposes of determining the required State
18contribution to the System, the value of the System's assets
19shall be equal to the actuarial value of the System's assets,
20which shall be calculated as follows:
21    As of June 30, 2008, the actuarial value of the System's
22assets shall be equal to the market value of the assets as of
23that date. In determining the actuarial value of the System's
24assets for fiscal years after June 30, 2008, any actuarial
25gains or losses from investment return incurred in a fiscal
26year shall be recognized in equal annual amounts over the

 

 

09700SB1673ham003- 113 -LRB097 07605 EFG 70268 a

15-year period following that fiscal year.
2    (h) For purposes of determining the required State
3contribution to the System for a particular year, the actuarial
4value of assets shall be assumed to earn a rate of return equal
5to the System's actuarially assumed rate of return.
6    (i) After the submission of all payments for eligible
7employees from personal services line items paid from the
8General Revenue Fund in fiscal year 2010 have been made, the
9Comptroller shall provide to the System a certification of the
10sum of all fiscal year 2010 expenditures for personal services
11that would have been covered by payments to the System under
12this Section if the provisions of this amendatory Act of the
1396th General Assembly had not been enacted. Upon receipt of the
14certification, the System shall determine the amount due to the
15System based on the full rate certified by the Board under
16Section 14-135.08 for fiscal year 2010 in order to meet the
17State's obligation under this Section. The System shall compare
18this amount due to the amount received by the System in fiscal
19year 2010 through payments under this Section. If the amount
20due is more than the amount received, the difference shall be
21termed the "Fiscal Year 2010 Shortfall" for purposes of this
22Section, and the Fiscal Year 2010 Shortfall shall be satisfied
23under Section 1.2 of the State Pension Funds Continuing
24Appropriation Act. If the amount due is less than the amount
25received, the difference shall be termed the "Fiscal Year 2010
26Overpayment" for purposes of this Section, and the Fiscal Year

 

 

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12010 Overpayment shall be repaid by the System to the General
2Revenue Fund as soon as practicable after the certification.
3    (j) After the submission of all payments for eligible
4employees from personal services line items paid from the
5General Revenue Fund in fiscal year 2011 have been made, the
6Comptroller shall provide to the System a certification of the
7sum of all fiscal year 2011 expenditures for personal services
8that would have been covered by payments to the System under
9this Section if the provisions of this amendatory Act of the
1096th General Assembly had not been enacted. Upon receipt of the
11certification, the System shall determine the amount due to the
12System based on the full rate certified by the Board under
13Section 14-135.08 for fiscal year 2011 in order to meet the
14State's obligation under this Section. The System shall compare
15this amount due to the amount received by the System in fiscal
16year 2011 through payments under this Section. If the amount
17due is more than the amount received, the difference shall be
18termed the "Fiscal Year 2011 Shortfall" for purposes of this
19Section, and the Fiscal Year 2011 Shortfall shall be satisfied
20under Section 1.2 of the State Pension Funds Continuing
21Appropriation Act. If the amount due is less than the amount
22received, the difference shall be termed the "Fiscal Year 2011
23Overpayment" for purposes of this Section, and the Fiscal Year
242011 Overpayment shall be repaid by the System to the General
25Revenue Fund as soon as practicable after the certification.
26    (k) For fiscal year 2012 only, after the submission of all

 

 

09700SB1673ham003- 115 -LRB097 07605 EFG 70268 a

1payments for eligible employees from personal services line
2items paid from the General Revenue Fund in the fiscal year
3have been made, the Comptroller shall provide to the System a
4certification of the sum of all expenditures in the fiscal year
5for personal services. Upon receipt of the certification, the
6System shall determine the amount due to the System based on
7the full rate certified by the Board under Section 14-135.08
8for the fiscal year in order to meet the State's obligation
9under this Section. The System shall compare this amount due to
10the amount received by the System for the fiscal year. If the
11amount due is more than the amount received, the difference
12shall be termed the "Fiscal Year Shortfall" for purposes of
13this Section, and the Fiscal Year Shortfall shall be satisfied
14under Section 1.2 of the State Pension Funds Continuing
15Appropriation Act. If the amount due is less than the amount
16received, the difference shall be termed the "Fiscal Year
17Overpayment" for purposes of this Section, and the Fiscal Year
18Overpayment shall be repaid by the System to the General
19Revenue Fund as soon as practicable after the certification.
20(Source: P.A. 96-43, eff. 7-15-09; 96-45, eff. 7-15-09;
2196-1000, eff. 7-2-10; 96-1497, eff. 1-14-11; 96-1511, eff.
221-27-11; 96-1554, eff. 3-18-11; 97-72, eff. 7-1-11.)
 
23    (40 ILCS 5/14-132)  (from Ch. 108 1/2, par. 14-132)
24    Sec. 14-132. Obligations of State.
25    (a) The payment of the required department contributions,

 

 

09700SB1673ham003- 116 -LRB097 07605 EFG 70268 a

1all allowances, annuities, benefits granted under this
2Article, and all expenses of administration of the system are
3obligations of the State of Illinois to the extent specified in
4this Article.
5    (b) All income of the system shall be credited to a
6separate account for this system in the State treasury and
7shall be used to pay allowances, annuities, benefits and
8administration expense.
9    (c) If the System submits a voucher for monthly
10contributions as required in Section 14-131 and the State fails
11to pay within 90 days of receipt of such a voucher, the Board
12shall submit a written request to the Comptroller seeking
13payment. A copy of the request shall be filed with the
14Secretary of State, and the Secretary of State shall provide
15copies to the Governor and General Assembly. No earlier than
16the 16th day after filing a request with the Secretary of
17State, the Board shall have the right to commence a mandamus
18action in the Supreme Court of Illinois to compel the
19Comptroller to satisfy the voucher by making payment from the
20General Revenue Fund. This Section constitutes an express
21waiver of the State's sovereign immunity solely to the extent
22it permits the Board to commence a mandamus action in the
23Illinois Supreme Court to compel the Comptroller to pay a
24voucher for monthly contributions as required in Section
2514-131.
26(Source: P.A. 80-841.)
 

 

 

09700SB1673ham003- 117 -LRB097 07605 EFG 70268 a

1    (40 ILCS 5/14-133)  (from Ch. 108 1/2, par. 14-133)
2    Sec. 14-133. Contributions on behalf of members.
3    (a) Each participating employee shall make contributions
4to the System, based on the employee's compensation, as
5follows:
6        (1) Covered employees, except as indicated below, 3.5%
7    for retirement annuity, and 0.5% for a widow or survivors
8    annuity;
9        (2) Noncovered employees, except as indicated below,
10    7% for retirement annuity and 1% for a widow or survivors
11    annuity;
12        (3) Noncovered employees serving in a position in which
13    "eligible creditable service" as defined in Section 14-110
14    may be earned, 1% for a widow or survivors annuity plus the
15    following amount for retirement annuity: 8.5% through
16    December 31, 2001; 9.5% in 2002; 10.5% in 2003; and 11.5%
17    in 2004 and thereafter;
18        (4) Covered employees serving in a position in which
19    "eligible creditable service" as defined in Section 14-110
20    may be earned, 0.5% for a widow or survivors annuity plus
21    the following amount for retirement annuity: 5% through
22    December 31, 2001; 6% in 2002; 7% in 2003; and 8% in 2004
23    and thereafter;
24        (5) Each security employee of the Department of
25    Corrections or of the Department of Human Services who is a

 

 

09700SB1673ham003- 118 -LRB097 07605 EFG 70268 a

1    covered employee, 0.5% for a widow or survivors annuity
2    plus the following amount for retirement annuity: 5%
3    through December 31, 2001; 6% in 2002; 7% in 2003; and 8%
4    in 2004 and thereafter;
5        (6) Each security employee of the Department of
6    Corrections or of the Department of Human Services who is
7    not a covered employee, 1% for a widow or survivors annuity
8    plus the following amount for retirement annuity: 8.5%
9    through December 31, 2001; 9.5% in 2002; 10.5% in 2003; and
10    11.5% in 2004 and thereafter.
11    (a-1) In addition to the contributions required under
12subsection (a), an employee who elects to participate in the
13optional cash balance plan under Section 1-162 shall pay to the
14System for the purpose of participating in the optional cash
15balance plan an additional contribution of 2% of each payment
16of compensation received while he or she is a participant in
17the optional cash balance plan. These contributions shall not
18be used for the purpose of determining any benefit under this
19Article except as provided in the optional cash balance plan.
20    (b) Contributions shall be in the form of a deduction from
21compensation and shall be made notwithstanding that the
22compensation paid in cash to the employee shall be reduced
23thereby below the minimum prescribed by law or regulation. Each
24member is deemed to consent and agree to the deductions from
25compensation provided for in this Article, and shall receipt in
26full for salary or compensation.

 

 

09700SB1673ham003- 119 -LRB097 07605 EFG 70268 a

1(Source: P.A. 92-14, eff. 6-28-01.)
 
2    (40 ILCS 5/14-135.08)  (from Ch. 108 1/2, par. 14-135.08)
3    Sec. 14-135.08. To certify required State contributions.
4    (a) To certify to the Governor and to each department, on
5or before November 15 of each year until November 15, 2011, the
6required rate for State contributions to the System for the
7next State fiscal year, as determined under subsection (b) of
8Section 14-131. The certification to the Governor under this
9subsection (a) shall include a copy of the actuarial
10recommendations upon which the rate is based and shall
11specifically identify the System's projected State normal cost
12for that fiscal year.
13    (a-5) On or before November 1 of each year, beginning
14November 1, 2012, the Board shall submit to the State Actuary,
15the Governor, and the General Assembly a proposed certification
16of the amount of the required State contribution to the System
17for the next fiscal year, along with all of the actuarial
18assumptions, calculations, and data upon which that proposed
19certification is based. On or before January 1 of each year
20beginning January 1, 2013, the State Actuary shall issue a
21preliminary report concerning the proposed certification and
22identifying, if necessary, recommended changes in actuarial
23assumptions that the Board must consider before finalizing its
24certification of the required State contributions. On or before
25January 15, 2013 and each January 15 thereafter, the Board

 

 

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1shall certify to the Governor and the General Assembly the
2amount of the required State contribution for the next fiscal
3year. The Board's certification must note any deviations from
4the State Actuary's recommended changes, the reason or reasons
5for not following the State Actuary's recommended changes, and
6the fiscal impact of not following the State Actuary's
7recommended changes on the required State contribution.
8    (b) The certifications under subsections (a) and (a-5)
9certification shall include an additional amount necessary to
10pay all principal of and interest on those general obligation
11bonds due the next fiscal year authorized by Section 7.2(a) of
12the General Obligation Bond Act and issued to provide the
13proceeds deposited by the State with the System in July 2003,
14representing deposits other than amounts reserved under
15Section 7.2(c) of the General Obligation Bond Act. For State
16fiscal year 2005, the Board shall make a supplemental
17certification of the additional amount necessary to pay all
18principal of and interest on those general obligation bonds due
19in State fiscal years 2004 and 2005 authorized by Section
207.2(a) of the General Obligation Bond Act and issued to provide
21the proceeds deposited by the State with the System in July
222003, representing deposits other than amounts reserved under
23Section 7.2(c) of the General Obligation Bond Act, as soon as
24practical after the effective date of this amendatory Act of
25the 93rd General Assembly.
26    On or before May 1, 2004, the Board shall recalculate and

 

 

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1recertify to the Governor and to each department the amount of
2the required State contribution to the System and the required
3rates for State contributions to the System for State fiscal
4year 2005, taking into account the amounts appropriated to and
5received by the System under subsection (d) of Section 7.2 of
6the General Obligation Bond Act.
7    On or before July 1, 2005, the Board shall recalculate and
8recertify to the Governor and to each department the amount of
9the required State contribution to the System and the required
10rates for State contributions to the System for State fiscal
11year 2006, taking into account the changes in required State
12contributions made by this amendatory Act of the 94th General
13Assembly.
14    On or before April 1, 2011, the Board shall recalculate and
15recertify to the Governor and to each department the amount of
16the required State contribution to the System for State fiscal
17year 2011, applying the changes made by Public Act 96-889 to
18the System's assets and liabilities as of June 30, 2009 as
19though Public Act 96-889 was approved on that date.
20(Source: P.A. 96-1497, eff. 1-14-11; 96-1511, eff. 1-27-11.)
 
21    (40 ILCS 5/14-152.1)
22    Sec. 14-152.1. Application and expiration of new benefit
23increases.
24    (a) As used in this Section, "new benefit increase" means
25an increase in the amount of any benefit provided under this

 

 

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1Article, or an expansion of the conditions of eligibility for
2any benefit under this Article, that results from an amendment
3to this Code that takes effect after June 1, 2005 (the
4effective date of Public Act 94-4). "New benefit increase",
5however, does not include any benefit increase resulting from
6the changes made to this Article or Article 1 by Public Act
796-37 or this amendatory Act of the 97th 96th General Assembly.
8    (b) Notwithstanding any other provision of this Code or any
9subsequent amendment to this Code, every new benefit increase
10is subject to this Section and shall be deemed to be granted
11only in conformance with and contingent upon compliance with
12the provisions of this Section.
13    (c) The Public Act enacting a new benefit increase must
14identify and provide for payment to the System of additional
15funding at least sufficient to fund the resulting annual
16increase in cost to the System as it accrues.
17    Every new benefit increase is contingent upon the General
18Assembly providing the additional funding required under this
19subsection. The Commission on Government Forecasting and
20Accountability shall analyze whether adequate additional
21funding has been provided for the new benefit increase and
22shall report its analysis to the Public Pension Division of the
23Department of Financial and Professional Regulation. A new
24benefit increase created by a Public Act that does not include
25the additional funding required under this subsection is null
26and void. If the Public Pension Division determines that the

 

 

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1additional funding provided for a new benefit increase under
2this subsection is or has become inadequate, it may so certify
3to the Governor and the State Comptroller and, in the absence
4of corrective action by the General Assembly, the new benefit
5increase shall expire at the end of the fiscal year in which
6the certification is made.
7    (d) Every new benefit increase shall expire 5 years after
8its effective date or on such earlier date as may be specified
9in the language enacting the new benefit increase or provided
10under subsection (c). This does not prevent the General
11Assembly from extending or re-creating a new benefit increase
12by law.
13    (e) Except as otherwise provided in the language creating
14the new benefit increase, a new benefit increase that expires
15under this Section continues to apply to persons who applied
16and qualified for the affected benefit while the new benefit
17increase was in effect and to the affected beneficiaries and
18alternate payees of such persons, but does not apply to any
19other person, including without limitation a person who
20continues in service after the expiration date and did not
21apply and qualify for the affected benefit while the new
22benefit increase was in effect.
23(Source: P.A. 96-37, eff. 7-13-09.)
 
24    (40 ILCS 5/15-106)  (from Ch. 108 1/2, par. 15-106)
25    Sec. 15-106. Employer. "Employer": The University of

 

 

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1Illinois, Southern Illinois University, Chicago State
2University, Eastern Illinois University, Governors State
3University, Illinois State University, Northeastern Illinois
4University, Northern Illinois University, Western Illinois
5University, the State Board of Higher Education, the Illinois
6Mathematics and Science Academy, the University Civil Service
7Merit Board, the Board of Trustees of the State Universities
8Retirement System, the Illinois Community College Board,
9community college boards, any association of community college
10boards organized under Section 3-55 of the Public Community
11College Act, the Board of Examiners established under the
12Illinois Public Accounting Act, and, only during the period for
13which employer contributions required under Section 15-155 are
14paid, the following organizations: the alumni associations,
15the foundations and the athletic associations which are
16affiliated with the universities and colleges included in this
17Section as employers. An individual that begins employment
18after the effective date of this amendatory Act of the 97th
19General Assembly with an entity not defined as an employer in
20this Section shall not be deemed an employee for the purposes
21of this Article with respect to that employment and shall not
22be eligible to participate in the System with respect to that
23employment; provided, however, that those individuals who are
24both employed and already participants in the System on the
25effective date of this amendatory Act of the 97th General
26Assembly shall be allowed to continue as participants in the

 

 

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1System for the duration of that employment.
2    Notwithstanding any provision of law to the contrary, an
3individual who begins employment with any of the following
4employers on or after the effective date of this amendatory Act
5of the 97th General Assembly shall not be deemed an employee
6and shall not be eligible to participate in the System with
7respect to that employment: any association of community
8college boards organized under Section 3-55 of the Public
9Community College Act, the Association of Illinois
10Middle-Grade Schools, the Illinois Association of School
11Administrators, the Illinois Association for Supervision and
12Curriculum Development, the Illinois Principals Association,
13the Illinois Association of School Business Officials, or the
14Illinois Special Olympics; provided, however, that those
15individuals who are both employed and already participants in
16the System on the effective date of this amendatory Act of the
1797th General Assembly shall be allowed to continue as
18participants in the System for the duration of that employment.
19    A department as defined in Section 14-103.04 is an employer
20for any person appointed by the Governor under the Civil
21Administrative Code of Illinois who is a participating employee
22as defined in Section 15-109. The Department of Central
23Management Services is an employer with respect to persons
24employed by the State Board of Higher Education in positions
25with the Illinois Century Network as of June 30, 2004 who
26remain continuously employed after that date by the Department

 

 

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1of Central Management Services in positions with the Illinois
2Century Network, the Bureau of Communication and Computer
3Services, or, if applicable, any successor bureau.
4    The cities of Champaign and Urbana shall be considered
5employers, but only during the period for which contributions
6are required to be made under subsection (b-1) of Section
715-155 and only with respect to individuals described in
8subsection (h) of Section 15-107.
9(Source: P.A. 95-369, eff. 8-23-07; 95-728, eff. 7-1-08 - See
10Sec. 999.)
 
11    (40 ILCS 5/15-107)  (from Ch. 108 1/2, par. 15-107)
12    Sec. 15-107. Employee.
13    (a) "Employee" means any member of the educational,
14administrative, secretarial, clerical, mechanical, labor or
15other staff of an employer whose employment is permanent and
16continuous or who is employed in a position in which services
17are expected to be rendered on a continuous basis for at least
184 months or one academic term, whichever is less, who (A)
19receives payment for personal services on a warrant issued
20pursuant to a payroll voucher certified by an employer and
21drawn by the State Comptroller upon the State Treasurer or by
22an employer upon trust, federal or other funds, or (B) is on a
23leave of absence without pay. Employment which is irregular,
24intermittent or temporary shall not be considered continuous
25for purposes of this paragraph.

 

 

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1    However, a person is not an "employee" if he or she:
2        (1) is a student enrolled in and regularly attending
3    classes in a college or university which is an employer,
4    and is employed on a temporary basis at less than full
5    time;
6        (2) is currently receiving a retirement annuity or a
7    disability retirement annuity under Section 15-153.2 from
8    this System;
9        (3) is on a military leave of absence;
10        (4) is eligible to participate in the Federal Civil
11    Service Retirement System and is currently making
12    contributions to that system based upon earnings paid by an
13    employer;
14        (5) is on leave of absence without pay for more than 60
15    days immediately following termination of disability
16    benefits under this Article;
17        (6) is hired after June 30, 1979 as a public service
18    employment program participant under the Federal
19    Comprehensive Employment and Training Act and receives
20    earnings in whole or in part from funds provided under that
21    Act; or
22        (7) is employed on or after July 1, 1991 to perform
23    services that are excluded by subdivision (a)(7)(f) or
24    (a)(19) of Section 210 of the federal Social Security Act
25    from the definition of employment given in that Section (42
26    U.S.C. 410).

 

 

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

 

 

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1absence, of less than 30 calendar days, are not considered as
2an interruption of a person's status as an employee. If such
3absences during any period of 12 months exceed 30 work days,
4the employee status of the person is considered as interrupted
5as of the 31st work day.
6    (g) A staff member whose employment contract requires
7services during an academic term is to be considered an
8employee during the summer and other vacation periods, unless
9he or she declines an employment contract for the succeeding
10academic term or his or her employment status is otherwise
11terminated, and he or she receives no earnings during these
12periods.
13    (h) An individual who was a participating employee employed
14in the fire department of the University of Illinois's
15Champaign-Urbana campus immediately prior to the elimination
16of that fire department and who immediately after the
17elimination of that fire department became employed by the fire
18department of the City of Urbana or the City of Champaign shall
19continue to be considered as an employee for purposes of this
20Article for so long as the individual remains employed as a
21firefighter by the City of Urbana or the City of Champaign. The
22individual shall cease to be considered an employee under this
23subsection (h) upon the first termination of the individual's
24employment as a firefighter by the City of Urbana or the City
25of Champaign.
26    (i) An individual who is employed on a full-time basis as

 

 

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

 

 

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1of service to the date of payment. However, credit shall not be
2granted under this subsection for any such prior employment for
3which the applicant received credit under any other provision
4of this Code, or during which the applicant was on a leave of
5absence under Section 15-113.2.
6    (j) A person employed by the State Board of Higher
7Education in a position with the Illinois Century Network as of
8June 30, 2004 shall be considered to be an employee for so long
9as he or she remains continuously employed after that date by
10the Department of Central Management Services in a position
11with the Illinois Century Network, the Bureau of Communication
12and Computer Services, or, if applicable, any successor bureau
13and meets the requirements of subsection (a).
14    (k) In the case of doubt as to whether any person is an
15employee within the meaning of this Section, the decision of
16the Board shall be final.
17(Source: P.A. 97-651, eff. 1-5-12.)
 
18    (40 ILCS 5/15-107.1 new)
19    Sec. 15-107.1. Tier I employee. "Tier I employee": An
20employee under this Article, other than a participant in the
21self-managed plan under Section 15-158.2, who first became a
22member or participant before January 1, 2011 under any
23reciprocal retirement system or pension fund established under
24this Code other than a retirement system or pension fund
25established under Article 2, 3, 4, 5, 6, or 18 of this Code.
 

 

 

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1    (40 ILCS 5/15-107.2 new)
2    Sec. 15-107.2. Tier I retiree. "Tier I retiree": A former
3Tier I employee who is receiving a retirement annuity.
4    A person does not become a Tier I retiree by virtue of
5receiving a reversionary, survivors, beneficiary, or
6disability annuity.
 
7    (40 ILCS 5/15-111)  (from Ch. 108 1/2, par. 15-111)
8    Sec. 15-111. Earnings. "Earnings": An amount paid for
9personal services equal to the sum of the basic compensation
10plus extra compensation for summer teaching, overtime or other
11extra service. For periods for which an employee receives
12service credit under subsection (c) of Section 15-113.1 or
13Section 15-113.2, earnings are equal to the basic compensation
14on which contributions are paid by the employee during such
15periods. Compensation for employment which is irregular,
16intermittent and temporary shall not be considered earnings,
17unless the participant is also receiving earnings from the
18employer as an employee under Section 15-107.
19    With respect to transition pay paid by the University of
20Illinois to a person who was a participating employee employed
21in the fire department of the University of Illinois's
22Champaign-Urbana campus immediately prior to the elimination
23of that fire department:
24        (1) "Earnings" includes transition pay paid to the

 

 

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1    employee on or after the effective date of this amendatory
2    Act of the 91st General Assembly.
3        (2) "Earnings" includes transition pay paid to the
4    employee before the effective date of this amendatory Act
5    of the 91st General Assembly only if (i) employee
6    contributions under Section 15-157 have been withheld from
7    that transition pay or (ii) the employee pays to the System
8    before January 1, 2001 an amount representing employee
9    contributions under Section 15-157 on that transition pay.
10    Employee contributions under item (ii) may be paid in a
11    lump sum, by withholding from additional transition pay
12    accruing before January 1, 2001, or in any other manner
13    approved by the System. Upon payment of the employee
14    contributions on transition pay, the corresponding
15    employer contributions become an obligation of the State.
16    Notwithstanding any other provision of this Section,
17"earnings" does not include any future increase in income
18offered by an employer under this Article pursuant to the
19requirements of subsection (c) of Section 15-134.6 that is
20accepted by a Tier I employee, or a Tier I retiree returning to
21active service, who has made an election under paragraph (2) of
22subsection (a) or (a-5) of Section 15-134.6.
23(Source: P.A. 91-887, eff. 7-6-00.)
 
24    (40 ILCS 5/15-111.1 new)
25    Sec. 15-111.1. Future increase in income. "Future increase

 

 

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1in income": Any increase in income in any form offered by an
2employer to an employee under this Article after June 30, 2013
3that would qualify as "earnings", as defined under Section
415-111, but for the fact that the employer offered the increase
5in income to the employee on the condition that it not qualify
6as earnings and the employee accepted the increase in income
7subject to that condition. The term "future increase in income"
8does not include an increase in income in any form that is paid
9to a Tier I employee under an employment contract or collective
10bargaining agreement that is in effect on the effective date of
11this Section but does include an increase in income in any form
12pursuant to an extension, amendment, or renewal of any such
13employment contract or collective bargaining agreement on or
14after the effective date of this amendatory Act of the 97th
15General Assembly.
 
16    (40 ILCS 5/15-113.2)  (from Ch. 108 1/2, par. 15-113.2)
17    Sec. 15-113.2. Service for leaves of absence. "Service for
18leaves of absence" includes those periods of leaves of absence
19at less than 50% pay, except military leave and periods of
20disability leave in excess of 60 days, for which the employee
21pays the contributions required under Section 15-157 in
22accordance with rules prescribed by the board based upon the
23employee's basic compensation on the date the leave begins, or
24in the case of leave for service with a teacher organization,
25based upon the actual compensation received by the employee for

 

 

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1such service after January 26, 1988, if the employee so elects
2within 30 days of that date or the date the leave for service
3with a teacher organization begins, whichever is later;
4provided that the employee (1) returns to employment covered by
5this system at the expiration of the leave, or within 30 days
6after the termination of a disability which occurs during the
7leave and continues this employment at a percentage of time
8equal to or greater than the percentage of time immediately
9preceding the leave of absence for at least 8 consecutive
10months or a period equal to the period of the leave, whichever
11is less, or (2) is precluded from meeting the foregoing
12conditions because of disability or death. If service credit is
13denied because the employee fails to meet these conditions, the
14contributions covering the leave of absence shall be refunded
15without interest. The return to employment condition does not
16apply if the leave of absence is for service with a teacher
17organization.
18    Service credit provided under this Section shall not exceed
193 years in any period of 10 years, unless the employee is on
20special leave granted by the employer for service with a
21teacher organization. Commencing with the fourth year in any
22period of 10 years, a participant on such special leave is also
23required to pay employer contributions equal to the normal cost
24as defined in Section 15-155, based upon the employee's basic
25compensation on the date the leave begins, or based upon the
26actual compensation received by the employee for service with a

 

 

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1teacher organization if the employee has so elected.
2    Notwithstanding any other provision of this Article, a
3participant shall not be eligible to make contributions or
4receive service credit for a leave of absence for service with
5a teacher organization if that leave of absence for service
6with a teacher organization begins on or after the effective
7date of this amendatory Act of the 97th General Assembly.
8(Source: P.A. 90-65, eff. 7-7-97; 90-511, eff. 8-22-97.)
 
9    (40 ILCS 5/15-113.6)  (from Ch. 108 1/2, par. 15-113.6)
10    Sec. 15-113.6. Service for employment in public schools.
11"Service for employment in public schools": Includes those
12periods not exceeding the lesser of 10 years or 2/3 of the
13service granted under other Sections of this Article dealing
14with service credit, during which a person who entered the
15system after September 1, 1974 was employed full time by a
16public common school, public college and public university, or
17by an agency or instrumentality of any of the foregoing, of any
18state, territory, dependency or possession of the United States
19of America, including the Philippine Islands, or a school
20operated by or under the auspices of any agency or department
21of any other state, if the person (1) cannot qualify for a
22retirement pension or other benefit based upon employer
23contributions from another retirement system, exclusive of
24federal social security, based in whole or in part upon this
25employment, and (2) pays the lesser of (A) an amount equal to

 

 

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18% of his or her annual basic compensation on the date of
2becoming a participating employee subsequent to this service
3multiplied by the number of years of such service, together
4with compound interest from the date participation begins to
5the date payment is received by the board at the rate of 6% per
6annum through August 31, 1982, and at the effective rates after
7that date, and (B) 50% of the actuarial value of the increase
8in the retirement annuity provided by this service, and (3)
9contributes for at least 5 years subsequent to this employment
10to one or more of the following systems: the State Universities
11Retirement System, the Teachers' Retirement System of the State
12of Illinois, and the Public School Teachers' Pension and
13Retirement Fund of Chicago.
14    The service granted under this Section shall not be
15considered in determining whether the person has the minimum
16number of 8 years of service required to qualify for a
17retirement annuity at age 55 or the 5 years of service required
18to qualify for a retirement annuity at age 62, as provided in
19Section 15-135, or the 10 years required by subsection (c) of
20Section 1-160 for a person subject to that Section who first
21becomes a participant on or after January 1, 2011. The maximum
22allowable service of 10 years for this governmental employment
23shall be reduced by the service credit which is validated under
24paragraph (2) of subsection (b) of Section 16-127 and paragraph
251 of Section 17-133.
26(Source: P.A. 95-83, eff. 8-13-07; 96-1490, eff. 1-1-11.)
 

 

 

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1    (40 ILCS 5/15-134.5)
2    Sec. 15-134.5. Retirement program elections.
3    (a) All participating employees are participants under the
4traditional benefit package prior to January 1, 1998.
5    Effective as of the date that an employer elects, as
6described in Section 15-158.2, to offer to its employees the
7portable benefit package and the self-managed plan as
8alternatives to the traditional benefit package but not later
9than the effective date of this amendatory Act of the 97th
10General Assembly, each of that employer's eligible employees
11(as defined in subsection (b)) shall be given the choice to
12elect which retirement program he or she wishes to participate
13in with respect to all periods of covered employment occurring
14on and after the effective date of the employee's election. The
15retirement program election made by an eligible employee must
16be made in writing, in the manner prescribed by the System, and
17within the time period described in subsection (d) or (d-1).
18    The employee election authorized by this Section is a
19one-time, irrevocable election. If an employee terminates
20employment after making the election provided under this
21subsection (a), then upon his or her subsequent re-employment
22with an employer the original election shall automatically
23apply to him or her, provided that the employer is then a
24participating employer as described in Section 15-158.2.
25    An eligible employee who fails to make this election shall,

 

 

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1by default, participate in the traditional benefit package.
2    (b) "Eligible employee" means an employee (as defined in
3Section 15-107) who is either a currently eligible employee or
4a newly eligible employee. For purposes of this Section, a
5"currently eligible employee" is an employee who is employed by
6an employer on the effective date on which the employer offers
7to its employees the portable benefit package and the
8self-managed plan as alternatives to the traditional benefit
9package but not on or after the effective date of this
10amendatory Act of the 97th General Assembly. A "newly eligible
11employee" is an employee who first becomes employed by an
12employer after the effective date on which the employer offers
13its employees the portable benefit package and the self-managed
14plan as alternatives to the traditional benefit package but not
15on or after the effective date of this amendatory Act of the
1697th General Assembly. A newly eligible employee participates
17in the traditional benefit package until he or she makes an
18election to participate in the portable benefit package or the
19self-managed plan. If an employee does not elect to participate
20in the portable benefit package or the self-managed plan, he or
21she shall continue to participate in the traditional benefit
22package by default.
23    (c) An eligible employee who at the time he or she is first
24eligible to make the election described in subsection (a) does
25not have sufficient age and service to qualify for a retirement
26annuity under Section 15-135 may elect to participate in the

 

 

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

 

 

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1the traditional benefit package at any time within 6 months
2after the effective date of this amendatory Act of the 91st
3General Assembly.
4    (e) If a currently eligible employee elects the portable
5benefit package, that election shall not become effective until
6the one-year anniversary of the date on which the election is
7filed with the System, provided the employee remains
8continuously employed by the employer throughout the one-year
9waiting period, and any benefits payable to or on account of
10the employee before such one-year waiting period has ended
11shall not be determined under the provisions applicable to the
12portable benefit package but shall instead be determined in
13accordance with the traditional benefit package. If a currently
14eligible employee who has elected the portable benefit package
15terminates employment covered by the System before the one-year
16waiting period has ended, then no benefits shall be determined
17under the portable benefit package provisions while he or she
18is inactive in the System and upon re-employment with an
19employer covered by the System he or she shall begin a new
20one-year waiting period before the provisions of the portable
21benefit package become effective.
22    (f) An eligible employee shall be provided with written
23information prepared or prescribed by the System which
24describes the employee's retirement program choices. The
25eligible employee shall be offered an opportunity to receive
26counseling from the System prior to making his or her election.

 

 

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1This counseling may consist of videotaped materials, group
2presentations, individual consultation with an employee or
3authorized representative of the System in person or by
4telephone or other electronic means, or any combination of
5these methods.
6(Source: P.A. 90-766, eff. 8-14-98; 91-887, eff. 7-6-00.)
 
7    (40 ILCS 5/15-134.6 new)
8    Sec. 15-134.6. Election by Tier I employees and Tier I
9retirees.
10    (a) Each Tier I employee shall make an irrevocable election
11either:
12        (1) to agree to the following:
13            (i) to have the amount of the automatic annual
14        increases in his or her retirement annuity that are
15        otherwise provided for in this Article calculated,
16        instead, as provided in subsection (d-1) of Section
17        15-136; and
18            (ii) to have his or her eligibility for automatic
19        annual increases in retirement annuity postponed as
20        provided in subsection (d-2) of Section 15-136; or
21        (2) to not agree to items (i) and (ii) as set forth in
22    paragraph (1) of this subsection.
23    The election required under this subsection (a) shall be
24made by each Tier I employee no earlier than January 1, 2013
25and no later than May 31, 2013, except that:

 

 

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1        (i) a person who becomes a Tier I employee under this
2    Article after January 1, 2013 must make the election under
3    this subsection (a) within 60 days after becoming a Tier I
4    employee;
5        (ii) a person who returns to active service as a Tier I
6    employee under this Article after January 1, 2013 and has
7    not yet made an election under this Section must make the
8    election under this subsection (a) within 60 days after
9    returning to active service as a Tier I employee; and
10        (iii) a person who made the election under subsection
11    (a-5) as a Tier I retiree remains bound by that election
12    and shall not make a later election under this subsection
13    (a).
14    If a Tier I employee fails for any reason to make a
15required election under this subsection within the time
16specified, then the employee shall be deemed to have made the
17election under paragraph (2) of this subsection.
18    (a-5) Each Tier I retiree shall make an irrevocable
19election either:
20        (1) to agree to the following:
21            (i) to have the amount of the automatic annual
22        increases in his or her retirement annuity that are
23        otherwise provided for in this Article calculated,
24        instead, as provided in subsection (d-1) of Section
25        15-136; and
26            (ii) to have his or her eligibility for automatic

 

 

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1        annual increases in retirement annuity postponed as
2        provided in subsection (d-2) of Section 15-136; or
3        (2) to not agree to items (i) and (ii) as set forth in
4    paragraph (1) of this subsection.
5    The election required under this subsection (a-5) shall be
6made by each Tier I retiree no earlier than January 1, 2013 and
7no later than May 31, 2013, except that:
8        (i) a person who becomes a Tier I retiree under this
9    Article on or after January 1, 2013 must make the election
10    under this subsection (a-5) within 60 days after becoming a
11    Tier I retiree; and
12        (ii) a person who made the election under subsection
13    (a) as a Tier I employee remains bound by that election and
14    shall not make a later election under this subsection
15    (a-5).
16    If a Tier I retiree fails for any reason to make a required
17election under this subsection within the time specified, then
18the Tier I retiree shall be deemed to have made the election
19under paragraph (2) of this subsection.
20    (a-10) All elections under subsection (a) or (a-5) that are
21made or deemed to be made before June 1, 2013 shall take effect
22on July 1, 2013. Elections that are made or deemed to be made
23on or after June 1, 2013 shall take effect on the first day of
24the month following the month in which the election is made or
25deemed to be made.
26    (b) As adequate and legal consideration provided under this

 

 

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1amendatory Act of the 97th General Assembly for making the
2election under paragraph (1) of subsection (a) of this Section,
3any future increases in income offered by an employer under
4this Article to a Tier I employee who has made the election
5under paragraph (1) of subsection (a) of this Section shall be
6offered expressly and irrevocably as constituting earnings
7under Section 15-111. In addition, a Tier I employee who has
8made the election under paragraph (1) of subsection (a) of this
9Section shall receive the right to also participate in the
10optional cash balance plan established under Section 1-162.
11    As adequate and legal consideration provided under this
12amendatory Act of the 97th General Assembly for making the
13election under paragraph (1) of subsection (a-5) of this
14Section, any future increases in income offered by an employer
15under this Article to a Tier I retiree who returns to active
16service after having made the election under paragraph (1) of
17subsection (a-5) of this Section shall be offered expressly and
18irrevocably as constituting earnings under Section 15-111. In
19addition, a Tier I retiree who returns to active service and
20has made the election under paragraph (1) of subsection (a) of
21this Section shall receive the right to also participate in the
22optional cash balance plan established under Section 1-162.
23    (c) A Tier I employee who makes the election under
24paragraph (2) of subsection (a) of this Section shall not be
25subject to items (i) and (ii) set forth in paragraph (1) of
26subsection (a) of this Section. However, any future increases

 

 

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

 

 

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1each Tier I employee and Tier I retiree subject to this
2Section. The System shall mail information describing the
3required election to each Tier I employee and Tier I retiree by
4United States Postal Service mail to his or her last known
5address on file with the System. If the Tier I employee or Tier
6I retiree is not responsive to other means of contact, it is
7sufficient for the System to publish the details of any
8required elections on its website or to publish those details
9in a regularly published newsletter or other existing public
10forum.
11    Tier I employees and Tier I retirees who are subject to
12this Section shall be provided with an election packet
13containing information regarding their options, as well as the
14forms necessary to make the required election. Upon request,
15the System shall offer Tier I employees and Tier I retirees an
16opportunity to receive information from the System before
17making the required election. The information may consist of
18video materials, group presentations, individual consultation
19with a member or authorized representative of the System in
20person or by telephone or other electronic means, or any
21combination of those methods. The System shall not provide
22advice or counseling with respect to which election a Tier I
23employee or Tier I retiree should make or specific to the legal
24or tax circumstances of or consequences to the Tier I employee
25or Tier I retiree.
26    The System shall inform Tier I employees and Tier I

 

 

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1retirees in the election packet required under this subsection
2that the Tier I employee or Tier I retiree may also wish to
3obtain information and counsel relating to the election
4required under this Section from any other available source,
5including but not limited to labor organizations and private
6counsel.
7    In no event shall the System, its staff, or the Board be
8held liable for any information given to a member, beneficiary,
9or annuitant regarding the elections under this Section.
10    (e) Notwithstanding any other provision of law, an employer
11under this Article is required to offer any future increases in
12income expressly and irrevocably as not constituting
13"earnings" under Section 15-111 to any Tier I employee, or Tier
14I retiree returning to active service, who has made an election
15under paragraph (2) or subsection (a) or (a-5) of this Section.
16A Tier I employee, or Tier I retiree returning to active
17service, who has made an election under paragraph (2) of
18subsection (a) or (a-5) of this Section shall not accept any
19future increase in income that is offered by an employer under
20this Article in violation of the requirement set forth in this
21subsection.
22    (f) A member's election under this Section is not a
23prohibited election under subdivision (j)(1) of Section 1-119
24of the Illinois Pension Code.
25    (g) An employee who has made the election under paragraph
26(1) of subsection (a) or (a-5) of this Section may elect to

 

 

09700SB1673ham003- 149 -LRB097 07605 EFG 70268 a

1participate in the optional cash balance plan under Section
21-162.
3    The election to participate in the optional cash balance
4plan shall be made in writing, in the manner provided by the
5applicable retirement system.
6    (h) Qualified Plan Status. No provision of this Section
7shall be interpreted in a way that would cause the System to
8cease to be a qualified plan under Section 461(a) of the
9Internal Revenue Code of 1986.
 
10    (40 ILCS 5/15-136)  (from Ch. 108 1/2, par. 15-136)
11    Sec. 15-136. Retirement annuities - Amount. The provisions
12of this Section 15-136 apply only to those participants who are
13participating in the traditional benefit package or the
14portable benefit package and do not apply to participants who
15are participating in the self-managed plan.
16    (a) The amount of a participant's retirement annuity,
17expressed in the form of a single-life annuity, shall be
18determined by whichever of the following rules is applicable
19and provides the largest annuity:
20    Rule 1: The retirement annuity shall be 1.67% of final rate
21of earnings for each of the first 10 years of service, 1.90%
22for each of the next 10 years of service, 2.10% for each year
23of service in excess of 20 but not exceeding 30, and 2.30% for
24each year in excess of 30; or for persons who retire on or
25after January 1, 1998, 2.2% of the final rate of earnings for

 

 

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1each year of service.
2    Rule 2: The retirement annuity shall be the sum of the
3following, determined from amounts credited to the participant
4in accordance with the actuarial tables and the prescribed rate
5of interest in effect at the time the retirement annuity
6begins:
7        (i) the normal annuity which can be provided on an
8    actuarially equivalent basis, by the accumulated normal
9    contributions as of the date the annuity begins;
10        (ii) an annuity from employer contributions of an
11    amount equal to that which can be provided on an
12    actuarially equivalent basis from the accumulated normal
13    contributions made by the participant under Section
14    15-113.6 and Section 15-113.7 plus 1.4 times all other
15    accumulated normal contributions made by the participant;
16    and
17        (iii) the annuity that can be provided on an
18    actuarially equivalent basis from the entire contribution
19    made by the participant under Section 15-113.3.
20    With respect to a police officer or firefighter who retires
21on or after August 14, 1998, the accumulated normal
22contributions taken into account under clauses (i) and (ii) of
23this Rule 2 shall include the additional normal contributions
24made by the police officer or firefighter under Section
2515-157(a).
26    The amount of a retirement annuity calculated under this

 

 

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1Rule 2 shall be computed solely on the basis of the
2participant's accumulated normal contributions, as specified
3in this Rule and defined in Section 15-116. Neither an employee
4or employer contribution for early retirement under Section
515-136.2 nor any other employer contribution shall be used in
6the calculation of the amount of a retirement annuity under
7this Rule 2.
8    This amendatory Act of the 91st General Assembly is a
9clarification of existing law and applies to every participant
10and annuitant without regard to whether status as an employee
11terminates before the effective date of this amendatory Act.
12    This Rule 2 does not apply to a person who first becomes an
13employee under this Article on or after July 1, 2005.
14    Rule 3: The retirement annuity of a participant who is
15employed at least one-half time during the period on which his
16or her final rate of earnings is based, shall be equal to the
17participant's years of service not to exceed 30, multiplied by
18(1) $96 if the participant's final rate of earnings is less
19than $3,500, (2) $108 if the final rate of earnings is at least
20$3,500 but less than $4,500, (3) $120 if the final rate of
21earnings is at least $4,500 but less than $5,500, (4) $132 if
22the final rate of earnings is at least $5,500 but less than
23$6,500, (5) $144 if the final rate of earnings is at least
24$6,500 but less than $7,500, (6) $156 if the final rate of
25earnings is at least $7,500 but less than $8,500, (7) $168 if
26the final rate of earnings is at least $8,500 but less than

 

 

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

 

 

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1    University of Illinois, service performed as an employee of
2    the University of Illinois in a position other than police
3    officer or firefighter, from the date of that transfer
4    until the employee's next termination of service with the
5    University of Illinois.
6    Rule 5: The retirement annuity of a participant who elected
7early retirement under the provisions of Section 15-136.2 and
8who, on or before February 16, 1995, brought administrative
9proceedings pursuant to the administrative rules adopted by the
10System to challenge the calculation of his or her retirement
11annuity shall be the sum of the following, determined from
12amounts credited to the participant in accordance with the
13actuarial tables and the prescribed rate of interest in effect
14at the time the retirement annuity begins:
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; and
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) an annuity which can be provided on an
26    actuarially equivalent basis from the employee

 

 

09700SB1673ham003- 154 -LRB097 07605 EFG 70268 a

1    contribution for early retirement under Section 15-136.2,
2    and an annuity from employer contributions of an amount
3    equal to that which can be provided on an actuarially
4    equivalent basis from the employee contribution for early
5    retirement under Section 15-136.2.
6    In no event shall a retirement annuity under this Rule 5 be
7lower than the amount obtained by adding (1) the monthly amount
8obtained by dividing the combined employee and employer
9contributions made under Section 15-136.2 by the System's
10annuity factor for the age of the participant at the beginning
11of the annuity payment period and (2) the amount equal to the
12participant's annuity if calculated under Rule 1, reduced under
13Section 15-136(b) as if no contributions had been made under
14Section 15-136.2.
15    With respect to a participant who is qualified for a
16retirement annuity under this Rule 5 whose retirement annuity
17began before the effective date of this amendatory Act of the
1891st General Assembly, and for whom an employee contribution
19was made under Section 15-136.2, the System shall recalculate
20the retirement annuity under this Rule 5 and shall pay any
21additional amounts due in the manner provided in Section
2215-186.1 for benefits mistakenly set too low.
23    The amount of a retirement annuity calculated under this
24Rule 5 shall be computed solely on the basis of those
25contributions specifically set forth in this Rule 5. Except as
26provided in clause (iii) of this Rule 5, neither an employee

 

 

09700SB1673ham003- 155 -LRB097 07605 EFG 70268 a

1nor employer contribution for early retirement under Section
215-136.2, nor any other employer contribution, shall be used in
3the calculation of the amount of a retirement annuity under
4this Rule 5.
5    The General Assembly has adopted the changes set forth in
6Section 25 of this amendatory Act of the 91st General Assembly
7in recognition that the decision of the Appellate Court for the
8Fourth District in Mattis v. State Universities Retirement
9System et al. might be deemed to give some right to the
10plaintiff in that case. The changes made by Section 25 of this
11amendatory Act of the 91st General Assembly are a legislative
12implementation of the decision of the Appellate Court for the
13Fourth District in Mattis v. State Universities Retirement
14System et al. with respect to that plaintiff.
15    The changes made by Section 25 of this amendatory Act of
16the 91st General Assembly apply without regard to whether the
17person is in service as an employee on or after its effective
18date.
19    (b) The retirement annuity provided under Rules 1 and 3
20above shall be reduced by 1/2 of 1% for each month the
21participant is under age 60 at the time of retirement. However,
22this reduction shall not apply in the following cases:
23        (1) For a disabled participant whose disability
24    benefits have been discontinued because he or she has
25    exhausted eligibility for disability benefits under clause
26    (6) of Section 15-152;

 

 

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1        (2) For a participant who has at least the number of
2    years of service required to retire at any age under
3    subsection (a) of Section 15-135; or
4        (3) For that portion of a retirement annuity which has
5    been provided on account of service of the participant
6    during periods when he or she performed the duties of a
7    police officer or firefighter, if these duties were
8    performed for at least 5 years immediately preceding the
9    date the retirement annuity is to begin.
10    (c) The maximum retirement annuity provided under Rules 1,
112, 4, and 5 shall be the lesser of (1) the annual limit of
12benefits as specified in Section 415 of the Internal Revenue
13Code of 1986, as such Section may be amended from time to time
14and as such benefit limits shall be adjusted by the
15Commissioner of Internal Revenue, and (2) 80% of final rate of
16earnings.
17    (d) Subject to the provisions of subsections (d-1) and
18(d-2), an An annuitant whose status as an employee terminates
19after August 14, 1969 shall receive automatic increases in his
20or her retirement annuity as follows:
21    Effective January 1 immediately following the date the
22retirement annuity begins, the annuitant shall receive an
23increase in his or her monthly retirement annuity of 0.125% of
24the monthly retirement annuity provided under Rule 1, Rule 2,
25Rule 3, Rule 4, or Rule 5, contained in this Section,
26multiplied by the number of full months which elapsed from the

 

 

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1date the retirement annuity payments began to January 1, 1972,
2plus 0.1667% of such annuity, multiplied by the number of full
3months which elapsed from January 1, 1972, or the date the
4retirement annuity payments began, whichever is later, to
5January 1, 1978, plus 0.25% of such annuity multiplied by the
6number of full months which elapsed from January 1, 1978, or
7the date the retirement annuity payments began, whichever is
8later, to the effective date of the increase.
9    The annuitant shall receive an increase in his or her
10monthly retirement annuity on each January 1 thereafter during
11the annuitant's life of 3% of the monthly annuity provided
12under Rule 1, Rule 2, Rule 3, Rule 4, or Rule 5 contained in
13this Section. The change made under this subsection by P.A.
1481-970 is effective January 1, 1980 and applies to each
15annuitant whose status as an employee terminates before or
16after that date.
17    Beginning January 1, 1990 and except as provided in
18subsections (d-1) and (d-2), all automatic annual increases
19payable under this Section shall be calculated as a percentage
20of the total annuity payable at the time of the increase,
21including all increases previously granted under this Article.
22    The change made in this subsection by P.A. 85-1008 is
23effective January 26, 1988, and is applicable without regard to
24whether status as an employee terminated before that date.
25    (d-1) Notwithstanding any other provision of this Article,
26for a Tier I employee or Tier I retiree who made the election

 

 

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1under paragraph (1) of either subsection (a) or (a-5) of
2Section 15-134.6, the amount of each automatic annual increase
3in retirement annuity occurring on or after the effective date
4of that election shall be 3% or one-half of the annual
5unadjusted percentage increase, if any, in the Consumer Price
6Index-U for the 12 months ending with the preceding September,
7whichever is less, of the originally granted retirement
8annuity. For the purposes of this Section, "Consumer Price
9Index-U" means the index published by the Bureau of Labor
10Statistics of the United States Department of Labor that
11measures the average change in prices of goods and services
12purchased by all urban consumers, United States city average,
13all items, 1982-84 = 100.
14    (d-2) Notwithstanding any other provision of this Article,
15for a Tier I employee or Tier I retiree who made the election
16under paragraph (1) of subsection (a) or (a-5) of Section
1715-134.6, the monthly retirement annuity shall first be subject
18to annual increases on the January 1 occurring on or next after
19the attainment of age 67 or the January 1 occurring on or next
20after the fifth anniversary of the annuity start date,
21whichever occurs earlier. If on the effective date of the
22election under paragraph (1) of subsection (a-5) of Section
2315-134.6 a Tier I retiree has already received an annual
24increase under this Section but does not yet meet the new
25eligibility requirements of this subsection, the annual
26increases already received shall continue in force, but no

 

 

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1additional annual increase shall be granted until the Tier I
2retiree meets the new eligibility requirements.
3    (e) If, on January 1, 1987, or the date the retirement
4annuity payment period begins, whichever is later, the sum of
5the retirement annuity provided under Rule 1 or Rule 2 of this
6Section and the automatic annual increases provided under the
7preceding subsection or Section 15-136.1, amounts to less than
8the retirement annuity which would be provided by Rule 3, the
9retirement annuity shall be increased as of January 1, 1987, or
10the date the retirement annuity payment period begins,
11whichever is later, to the amount which would be provided by
12Rule 3 of this Section. Such increased amount shall be
13considered as the retirement annuity in determining benefits
14provided under other Sections of this Article. This paragraph
15applies without regard to whether status as an employee
16terminated before the effective date of this amendatory Act of
171987, provided that the annuitant was employed at least
18one-half time during the period on which the final rate of
19earnings was based.
20    (f) A participant is entitled to such additional annuity as
21may be provided on an actuarially equivalent basis, by any
22accumulated additional contributions to his or her credit.
23However, the additional contributions made by the participant
24toward the automatic increases in annuity provided under this
25Section shall not be taken into account in determining the
26amount of such additional annuity.

 

 

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1    (g) If, (1) by law, a function of a governmental unit, as
2defined by Section 20-107 of this Code, is transferred in whole
3or in part to an employer, and (2) a participant transfers
4employment from such governmental unit to such employer within
56 months after the transfer of the function, and (3) the sum of
6(A) the annuity payable to the participant under Rule 1, 2, or
73 of this Section (B) all proportional annuities payable to the
8participant by all other retirement systems covered by Article
920, and (C) the initial primary insurance amount to which the
10participant is entitled under the Social Security Act, is less
11than the retirement annuity which would have been payable if
12all of the participant's pension credits validated under
13Section 20-109 had been validated under this system, a
14supplemental annuity equal to the difference in such amounts
15shall be payable to the participant.
16    (h) On January 1, 1981, an annuitant who was receiving a
17retirement annuity on or before January 1, 1971 shall have his
18or her retirement annuity then being paid increased $1 per
19month for each year of creditable service. On January 1, 1982,
20an annuitant whose retirement annuity began on or before
21January 1, 1977, shall have his or her retirement annuity then
22being paid increased $1 per month for each year of creditable
23service.
24    (i) On January 1, 1987, any annuitant whose retirement
25annuity began on or before January 1, 1977, shall have the
26monthly retirement annuity increased by an amount equal to 8

 

 

09700SB1673ham003- 161 -LRB097 07605 EFG 70268 a

1per year of creditable service times the number of years that
2have elapsed since the annuity began.
3(Source: P.A. 93-347, eff. 7-24-03; 94-4, eff. 6-1-05.)
 
4    (40 ILCS 5/15-155)  (from Ch. 108 1/2, par. 15-155)
5    Sec. 15-155. State and employer Employer contributions.
6    (a) Except as otherwise provided in this Section, the The
7State of Illinois shall make contributions by appropriations of
8amounts which, together with contributions paid by employers,
9the other employer contributions from trust, federal, and other
10funds, employee contributions, income from investments, and
11other income of this System, will be sufficient to meet the
12cost of maintaining and administering the System on a 90%
13funded basis in accordance with actuarial recommendations.
14    Beginning with State fiscal year 2014, the employers under
15this Article shall be responsible for paying the normal costs
16of the System plus the amounts required to amortize any total
17cost of the benefits of the System arising on or after July 1,
182013.
19    Beginning with State fiscal year 2014, the State's required
20contributions to the System shall be limited to the amounts
21required to amortize the total cost of the benefits of the
22System arising before July 1, 2013, plus any employer
23contributions required from the State as the actual employer of
24participants under this Article.
25    The Board shall determine the amount of State and employer

 

 

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1contributions required for each fiscal year on the basis of the
2actuarial tables and other assumptions adopted by the Board and
3the recommendations of the actuary, using the formulas provided
4in this Section formula in subsection (a-1).
5    (a-1) For State fiscal years 2012 and 2013 through 2045,
6the minimum contribution to the System to be made by the State
7for each fiscal year shall be an amount determined by the
8System to be sufficient to bring the total assets of the System
9up to 90% of the total actuarial liabilities of the System by
10the end of State fiscal year 2045. In making these
11determinations, the required State contribution shall be
12calculated each year as a level percentage of payroll over the
13years remaining to and including fiscal year 2045 and shall be
14determined under the projected unit credit actuarial cost
15method.
16    Except as provided in subsection (a-3), for State fiscal
17years 2014 through 2045 or until the State has amortized 100%
18of the total cost of benefits accrued by July 1, 2013,
19whichever is earlier, in addition to any employer contributions
20required from the State as an employer, the minimum
21contribution to the System to be made by the State for each
22fiscal year shall be an amount determined by the Board to be
23sufficient to amortize, by the end of State fiscal year 2045,
24the total cost of the benefits of the System arising before
25July 1, 2013. In making these determinations, the required
26State contribution shall be calculated each year as a level

 

 

09700SB1673ham003- 163 -LRB097 07605 EFG 70268 a

1percentage of payroll over the years remaining to and including
2fiscal year 2043 and shall be determined under the projected
3unit credit actuarial cost method.
4    Except as provided in subsection (a-3), beginning in State
5fiscal year 2046 or on the date that the State has amortized
6100% of the total cost of benefits accrued by July 1, 2013,
7whichever is earlier, the State has no further obligation to
8make contributions to the System under this subsection (a-1).
9    For State fiscal years 1996 through 2005, the State
10contribution to the System, as a percentage of the applicable
11employee payroll, shall be increased in equal annual increments
12so that by State fiscal year 2011, the State is contributing at
13the rate required under this Section.
14    Notwithstanding any other provision of this Article, the
15total required State contribution for State fiscal year 2006 is
16$166,641,900.
17    Notwithstanding any other provision of this Article, the
18total required State contribution for State fiscal year 2007 is
19$252,064,100.
20    For each of State fiscal years 2008 through 2009, the State
21contribution to the System, as a percentage of the applicable
22employee payroll, shall be increased in equal annual increments
23from the required State contribution for State fiscal year
242007, so that by State fiscal year 2011, the State is
25contributing at the rate otherwise required under this Section.
26    Notwithstanding any other provision of this Article, the

 

 

09700SB1673ham003- 164 -LRB097 07605 EFG 70268 a

1total required State contribution for State fiscal year 2010 is
2$702,514,000 and shall be made from the State Pensions Fund and
3proceeds of bonds sold in fiscal year 2010 pursuant to Section
47.2 of the General Obligation Bond Act, less (i) the pro rata
5share of bond sale expenses determined by the System's share of
6total bond proceeds, (ii) any amounts received from the General
7Revenue Fund in fiscal year 2010, (iii) any reduction in bond
8proceeds due to the issuance of discounted bonds, if
9applicable.
10    Notwithstanding any other provision of this Article, the
11total required State contribution for State fiscal year 2011 is
12the amount recertified by the System on or before April 1, 2011
13pursuant to Section 15-165 and shall be made from the State
14Pensions Fund and proceeds of bonds sold in fiscal year 2011
15pursuant to Section 7.2 of the General Obligation Bond Act,
16less (i) the pro rata share of bond sale expenses determined by
17the System's share of total bond proceeds, (ii) any amounts
18received from the General Revenue Fund in fiscal year 2011, and
19(iii) any reduction in bond proceeds due to the issuance of
20discounted bonds, if applicable.
21    Beginning in State fiscal year 2046, the minimum State
22contribution for each fiscal year shall be the amount needed to
23maintain the total assets of the System at 90% of the total
24actuarial liabilities of the System.
25    Amounts received by the System pursuant to Section 25 of
26the Budget Stabilization Act or Section 8.12 of the State

 

 

09700SB1673ham003- 165 -LRB097 07605 EFG 70268 a

1Finance Act in any fiscal year do not reduce and do not
2constitute payment of any portion of the minimum State
3contribution required under this Article in that fiscal year.
4Such amounts shall not reduce, and shall not be included in the
5calculation of, the required State contributions under this
6Article in any future year until the System has reached a
7funding ratio of at least 90%. A reference in this Article to
8the "required State contribution" or any substantially similar
9term does not include or apply to any amounts payable to the
10System under Section 25 of the Budget Stabilization Act.
11    Notwithstanding any other provision of this Section, the
12required State contribution for State fiscal year 2005 and for
13fiscal year 2008 through and each fiscal year 2013 thereafter,
14as calculated under this Section and certified under Section
1515-165, shall not exceed an amount equal to (i) the amount of
16the required State contribution that would have been calculated
17under this Section for that fiscal year if the System had not
18received any payments under subsection (d) of Section 7.2 of
19the General Obligation Bond Act, minus (ii) the portion of the
20State's total debt service payments for that fiscal year on the
21bonds issued in fiscal year 2003 for the purposes of that
22Section 7.2, as determined and certified by the Comptroller,
23that is the same as the System's portion of the total moneys
24distributed under subsection (d) of Section 7.2 of the General
25Obligation Bond Act. In determining this maximum for State
26fiscal years 2008 through 2010, however, the amount referred to

 

 

09700SB1673ham003- 166 -LRB097 07605 EFG 70268 a

1in item (i) shall be increased, as a percentage of the
2applicable employee payroll, in equal increments calculated
3from the sum of the required State contribution for State
4fiscal year 2007 plus the applicable portion of the State's
5total debt service payments for fiscal year 2007 on the bonds
6issued in fiscal year 2003 for the purposes of Section 7.2 of
7the General Obligation Bond Act, so that, by State fiscal year
82011, the State is contributing at the rate otherwise required
9under this Section.
10    (a-3) If at least 50% of Tier I employees making an
11election under Section 15-134.6 before June 1, 2013 choose the
12option under paragraph (1) of subsection (a) of that Section,
13then beginning in State fiscal year 2014, instead of the
14contributions specified in subsection (a-1) of this Section,
15the State contributions specified in subsection (a-5) of this
16Section shall be paid.
17    In making its initial certification of the annual required
18contribution by the State for State fiscal year 2014, the Board
19shall assume that the new funding formula provided in
20subsection (a-5) of this Section applies. If fewer than 50% of
21Tier I employees making an election under Section 15-134.6
22before June 1, 2013 choose the option under paragraph (1) of
23subsection (a) of that Section, then:
24        (1) instead of the contributions specified in
25    subsection (a-5) of this Section, the State contributions
26    specified in subsection (a-1) shall continue to be paid;

 

 

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1    and
2        (2) as soon as possible after June 1, 2013, the Board
3    shall recertify the annual required contribution by the
4    State for State fiscal year 2014.
5    (a-5) For State fiscal years 2014 through 2043 or until the
6State has amortized 100% of the total cost of benefits accrued
7by July 1, 2013, whichever is earlier, in addition to any
8employer contributions required from the State as an employer,
9the minimum contribution to the System to be made by the State
10for each fiscal year shall be an amount determined by the Board
11to be sufficient to amortize, by the end of State fiscal year
122043, the total cost of the benefits of the System arising
13before July 1, 2013. In making these determinations, the
14required State contribution shall be calculated each year as a
15level percentage of payroll over the years remaining to and
16including fiscal year 2043 and shall be determined under the
17projected unit credit actuarial cost method.
18    Beginning in State fiscal year 2044 or on the date that the
19State has amortized 100% of the total cost of benefits accrued
20by July 1, 2013, whichever is earlier, the State has no further
21obligation to make contributions to the System under this
22subsection (a-5).
23    (a-10) Subject to the limitations provided in subsection
24(a-15), beginning with State fiscal year 2014, the minimum
25required contribution of employers under this Article shall be
26determined as a percentage of projected payroll, and shall be

 

 

09700SB1673ham003- 168 -LRB097 07605 EFG 70268 a

1sufficient to produce an annual amount equal to:
2        (i) the employer's normal cost for that fiscal year for
3    employees who first became participating employees before
4    July 1, 2013; plus
5        (ii) the employer's normal cost for that fiscal year
6    for employees who first become participating employees on
7    or after July 1, 2013; plus
8        (iii) the amount required for that fiscal year to
9    amortize any unfunded actuarial accrued liability arising
10    on or after July 1, 2013 as a level percentage of payroll
11    over a 30-year rolling amortization period.
12    Any contributions required from an employer under
13subsection (g) of this Section are in addition to the
14contributions required under this subsection (a-10).
15    (a-15) For State fiscal year 2014, the required
16contribution of employers under item (i) of subsection (a-10)
17shall be reduced to an amount equal to 1% of payroll.
18    For each fiscal year thereafter, until the Board determines
19and certifies to the Governor that employers are contributing
20under item (i) of subsection (a-10) the full amount actually
21specified by item (i) of subsection (a-10), the required
22contribution of employers under item (i) of subsection (a-10)
23shall be the percentage of payroll required under this
24subsection from the previous fiscal year increased by 1% of
25payroll for each of State fiscal years 2015 through 2019, and
26increased by 0.5% of payroll for each State fiscal year after

 

 

09700SB1673ham003- 169 -LRB097 07605 EFG 70268 a

12019.
2    Contributions required of employers under items (ii) and
3(iii) of subsection (a-10), under subsection (g), and under any
4other applicable provision of this Section are in addition to
5contributions required under item (i) of subsection (a-10).
6    (a-20) Beginning in State fiscal year 2015 and continuing
7until the Board determines and certifies to the Governor that
8employers are contributing under item (i) of subsection (a-10)
9the full amount actually specified by item (i) of subsection
10(a-10), the State shall make an additional contribution to the
11System for each fiscal year, equal to the difference between
12(1) the total contribution calculated under item (i) of
13subsection (a-10) for all employers for that fiscal year, and
14(2) the amount of such total contribution as reduced under
15subsection (a-15).
16    The State contribution under this subsection (a-20) is in
17addition to the State contributions required under subsection
18(a-1) or (a-5) and any contributions required to be paid by the
19State as an employer under subsections (a-10) and (g) of this
20Section.
21    (b) If an employee is paid from trust or federal funds, the
22employer shall pay to the Board contributions from those funds
23which are sufficient to cover the accruing normal costs on
24behalf of the employee. However, universities having employees
25who are compensated out of local auxiliary funds, income funds,
26or service enterprise funds are not required to pay such

 

 

09700SB1673ham003- 170 -LRB097 07605 EFG 70268 a

1contributions on behalf of those employees. The local auxiliary
2funds, income funds, and service enterprise funds of
3universities shall not be considered trust funds for the
4purpose of this Article, but funds of alumni associations,
5foundations, and athletic associations which are affiliated
6with the universities included as employers under this Article
7and other employers which do not receive State appropriations
8are considered to be trust funds for the purpose of this
9Article.
10    (b-1) The City of Urbana and the City of Champaign shall
11each make employer contributions to this System for their
12respective firefighter employees who participate in this
13System pursuant to subsection (h) of Section 15-107. The rate
14of contributions to be made by those municipalities shall be
15determined annually by the Board on the basis of the actuarial
16assumptions adopted by the Board and the recommendations of the
17actuary, and shall be expressed as a percentage of salary for
18each such employee. The Board shall certify the rate to the
19affected municipalities as soon as may be practical. The
20employer contributions required under this subsection shall be
21remitted by the municipality to the System at the same time and
22in the same manner as employee contributions.
23    (c) Through State fiscal year 1995: The total employer
24contribution shall be apportioned among the various funds of
25the State and other employers, whether trust, federal, or other
26funds, in accordance with actuarial procedures approved by the

 

 

09700SB1673ham003- 171 -LRB097 07605 EFG 70268 a

1Board. State of Illinois contributions for employers receiving
2State appropriations for personal services shall be payable
3from appropriations made to the employers or to the System. The
4contributions for Class I community colleges covering earnings
5other than those paid from trust and federal funds, shall be
6payable solely from appropriations to the Illinois Community
7College Board or the System for employer contributions.
8    (d) Beginning in State fiscal year 1996, the required State
9contributions to the System shall be appropriated directly to
10the System and shall be payable through vouchers issued in
11accordance with subsection (c) of Section 15-165, except as
12provided in subsection (g).
13    (e) The State Comptroller shall draw warrants payable to
14the System upon proper certification by the System or by the
15employer in accordance with the appropriation laws and this
16Code.
17    (f) Normal costs under this Section means liability for
18pensions and other benefits which accrues to the System because
19of the credits earned for service rendered by the participants
20during the fiscal year and expenses of administering the
21System, but shall not include the principal of or any
22redemption premium or interest on any bonds issued by the Board
23or any expenses incurred or deposits required in connection
24therewith.
25    (g) The employer contributions under this subsection (g)
26are no longer required after June 30, 2013.

 

 

09700SB1673ham003- 172 -LRB097 07605 EFG 70268 a

1    If the amount of a participant's earnings for any academic
2year used to determine the final rate of earnings, determined
3on a full-time equivalent basis, exceeds the amount of his or
4her earnings with the same employer for the previous academic
5year, determined on a full-time equivalent basis, by more than
66%, the participant's employer shall pay to the System, in
7addition to all other payments required under this Section and
8in accordance with guidelines established by the System, the
9present value of the increase in benefits resulting from the
10portion of the increase in earnings that is in excess of 6%.
11This present value shall be computed by the System on the basis
12of the actuarial assumptions and tables used in the most recent
13actuarial valuation of the System that is available at the time
14of the computation. The System may require the employer to
15provide any pertinent information or documentation.
16    Whenever it determines that a payment is or may be required
17under this subsection (g), the System shall calculate the
18amount of the payment and bill the employer for that amount.
19The bill shall specify the calculations used to determine the
20amount due. If the employer disputes the amount of the bill, it
21may, within 30 days after receipt of the bill, apply to the
22System in writing for a recalculation. The application must
23specify in detail the grounds of the dispute and, if the
24employer asserts that the calculation is subject to subsection
25(h) or (i) of this Section, must include an affidavit setting
26forth and attesting to all facts within the employer's

 

 

09700SB1673ham003- 173 -LRB097 07605 EFG 70268 a

1knowledge that are pertinent to the applicability of subsection
2(h) or (i). Upon receiving a timely application for
3recalculation, the System shall review the application and, if
4appropriate, recalculate the amount due.
5    The employer contributions required under this subsection
6(g) (f) may be paid in the form of a lump sum within 90 days
7after receipt of the bill. If the employer contributions are
8not paid within 90 days after receipt of the bill, then
9interest will be charged at a rate equal to the System's annual
10actuarially assumed rate of return on investment compounded
11annually from the 91st day after receipt of the bill. Payments
12must be concluded within 3 years after the employer's receipt
13of the bill.
14    (h) This subsection (h) applies only to payments made or
15salary increases given on or after June 1, 2005 but before July
161, 2011. The changes made by Public Act 94-1057 shall not
17require the System to refund any payments received before July
1831, 2006 (the effective date of Public Act 94-1057).
19    When assessing payment for any amount due under subsection
20(g), the System shall exclude earnings increases paid to
21participants under contracts or collective bargaining
22agreements entered into, amended, or renewed before June 1,
232005.
24    When assessing payment for any amount due under subsection
25(g), the System shall exclude earnings increases paid to a
26participant at a time when the participant is 10 or more years

 

 

09700SB1673ham003- 174 -LRB097 07605 EFG 70268 a

1from retirement eligibility under Section 15-135.
2    When assessing payment for any amount due under subsection
3(g), the System shall exclude earnings increases resulting from
4overload work, including a contract for summer teaching, or
5overtime when the employer has certified to the System, and the
6System has approved the certification, that: (i) in the case of
7overloads (A) the overload work is for the sole purpose of
8academic instruction in excess of the standard number of
9instruction hours for a full-time employee occurring during the
10academic year that the overload is paid and (B) the earnings
11increases are equal to or less than the rate of pay for
12academic instruction computed using the participant's current
13salary rate and work schedule; and (ii) in the case of
14overtime, the overtime was necessary for the educational
15mission.
16    When assessing payment for any amount due under subsection
17(g), the System shall exclude any earnings increase resulting
18from (i) a promotion for which the employee moves from one
19classification to a higher classification under the State
20Universities Civil Service System, (ii) a promotion in academic
21rank for a tenured or tenure-track faculty position, or (iii) a
22promotion that the Illinois Community College Board has
23recommended in accordance with subsection (k) of this Section.
24These earnings increases shall be excluded only if the
25promotion is to a position that has existed and been filled by
26a member for no less than one complete academic year and the

 

 

09700SB1673ham003- 175 -LRB097 07605 EFG 70268 a

1earnings increase as a result of the promotion is an increase
2that results in an amount no greater than the average salary
3paid for other similar positions.
4    (i) When assessing payment for any amount due under
5subsection (g), the System shall exclude any salary increase
6described in subsection (h) of this Section given on or after
7July 1, 2011 but before July 1, 2014 under a contract or
8collective bargaining agreement entered into, amended, or
9renewed on or after June 1, 2005 but before July 1, 2011.
10Notwithstanding any other provision of this Section, any
11payments made or salary increases given after June 30, 2014
12shall be used in assessing payment for any amount due under
13subsection (g) of this Section.
14    (j) The System shall prepare a report and file copies of
15the report with the Governor and the General Assembly by
16January 1, 2007 that contains all of the following information:
17        (1) The number of recalculations required by the
18    changes made to this Section by Public Act 94-1057 for each
19    employer.
20        (2) The dollar amount by which each employer's
21    contribution to the System was changed due to
22    recalculations required by Public Act 94-1057.
23        (3) The total amount the System received from each
24    employer as a result of the changes made to this Section by
25    Public Act 94-4.
26        (4) The increase in the required State contribution

 

 

09700SB1673ham003- 176 -LRB097 07605 EFG 70268 a

1    resulting from the changes made to this Section by Public
2    Act 94-1057.
3    (k) The Illinois Community College Board shall adopt rules
4for recommending lists of promotional positions submitted to
5the Board by community colleges and for reviewing the
6promotional lists on an annual basis. When recommending
7promotional lists, the Board shall consider the similarity of
8the positions submitted to those positions recognized for State
9universities by the State Universities Civil Service System.
10The Illinois Community College Board shall file a copy of its
11findings with the System. The System shall consider the
12findings of the Illinois Community College Board when making
13determinations under this Section. The System shall not exclude
14any earnings increases resulting from a promotion when the
15promotion was not submitted by a community college. Nothing in
16this subsection (k) shall require any community college to
17submit any information to the Community College Board.
18    (l) For purposes of determining the required State
19contribution to the System, the value of the System's assets
20shall be equal to the actuarial value of the System's assets,
21which shall be calculated as follows:
22    As of June 30, 2008, the actuarial value of the System's
23assets shall be equal to the market value of the assets as of
24that date. In determining the actuarial value of the System's
25assets for fiscal years after June 30, 2008, any actuarial
26gains or losses from investment return incurred in a fiscal

 

 

09700SB1673ham003- 177 -LRB097 07605 EFG 70268 a

1year shall be recognized in equal annual amounts over the
25-year period following that fiscal year.
3    (m) For purposes of determining the required State
4contribution to the system for a particular year, the actuarial
5value of assets shall be assumed to earn a rate of return equal
6to the system's actuarially assumed rate of return.
7    (n) If the System submits a voucher for monthly
8contributions from the State as required by this Section and
9the State fails to pay within 90 days of receipt of such a
10voucher, the Board shall submit a written request to the
11Comptroller seeking payment. A copy of the request shall be
12filed with the Secretary of State, and the Secretary of State
13shall provide copies to the Governor and General Assembly. No
14earlier than the 16th day after filing a request with the
15Secretary of State, the Board shall have the right to commence
16a mandamus action in the Supreme Court of Illinois to compel
17the Comptroller to satisfy the voucher by making payment from
18the General Revenue Fund. This Section constitutes an express
19waiver of the State's sovereign immunity solely to the extent
20it permits the Board to commence a mandamus action in the
21Illinois Supreme Court to compel the Comptroller to pay a
22voucher for monthly contributions from the State as required in
23this Section.
24(Source: P.A. 95-331, eff. 8-21-07; 95-950, eff. 8-29-08;
2596-43, eff. 7-15-09; 96-1497, eff. 1-14-11; 96-1511, eff.
261-27-11; 96-1554, eff. 3-18-11; revised 4-6-11.)
 

 

 

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1    (40 ILCS 5/15-155.1 new)
2    Sec. 15-155.1. Actions to enforce payment by employers.
3    (a) If any employer fails to transmit to the System
4contributions required of it under this Article or
5contributions collected by it from its participating employees
6for the purposes of this Article for more than 90 days after
7the payment of such contributions is due, then the System,
8after giving notice to that employer, may certify to the State
9Comptroller the amounts of the delinquent payments, and the
10Comptroller shall deduct the amounts so certified or any part
11thereof from any payments or grants of State funds to the
12employer and shall pay the amounts so deducted to the System.
13If State funds from which such deductions may be made are not
14available, the System may proceed against the employer to
15recover the amounts of the delinquent payments in the
16appropriate circuit court.
17    (b) If any employer fails to transmit to the System
18contributions required of it under this Article or
19contributions collected by it from its participating employees
20for the purposes of this Article for more than 90 days after
21the payment of the contributions is due, the System, after
22giving notice to the employer, may certify the amounts of the
23delinquent payments to the county treasurer of any county in
24which the employer is located, who shall deduct the amounts so
25certified or any part thereof from the amounts collected from

 

 

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1any tax levied by the employer and shall pay the amount so
2deducted to the System.
3    (c) If reports furnished to the System by the employer
4involved are inadequate for the computation of the amounts of
5any payments, the System may provide for such audit of the
6records of the employer as may be required to establish the
7amounts of the delinquent payments. The employer shall make its
8records available to the System for the purpose of the audit.
9The cost of the audit shall be added to the amount of the
10payments and shall be recovered by the System from the employer
11at the same time and in the same manner as the payments are
12recovered.
 
13    (40 ILCS 5/15-155.2 new)
14    Sec. 15-155.2. Individual employer accounts.
15    (a) The System shall create and maintain individual
16accounts for each employer for the purposes of determining
17employer contributions under subsection (a-10) of Section
1815-155. Each employer's account shall be notionally credited
19with the employer's liabilities accruing after July 1, 2013 and
20assets attributable to the employer's account that include (i)
21employer contributions made pursuant to subsection (a-10) of
22Section 15-155, (ii) other employer contributions from trust,
23federal, and other funds, (iii) employee contributions made
24after July 1, 2013, and (iv) income from investments. The
25System may deduct reasonable administrative expenses from each

 

 

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1employer's account.
2    (b) In determining contributions required under subsection
3(a-10) of Section 15-155, the System shall determine (i) a
4blended rate of total normal cost that is applicable to
5contributions made by the University of Illinois, Southern
6Illinois University, Chicago State University, Eastern
7Illinois University, Governors State University, Illinois
8State University, Northeastern Illinois University, Northern
9Illinois University, and Western Illinois University, (ii) a
10blended rate of total normal cost that is applicable to
11contributions made by each community college board, and (iii) a
12rate equal to the total normal cost of the System that is
13applicable to employers other than those listed under item (i)
14or (ii).
15    (c) An employer may make written application with the Board
16to have a separate rate of total normal cost determined for the
17employer. Upon receiving the written application from an
18employer, the Board may determine a total rate of normal cost
19for the employer. The employer shall be responsible for any
20cost incurred in making the determination of total normal cost.
21    The Board may establish rules for the administration of
22this Section that include but are not limited to the date by
23which an application must be submitted and the fiscal year in
24which the determination will be used to determine the
25employer's contribution required under subsection (a-10) of
26Section 15-155.

 

 

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1    (d) An employer whose determination of total normal cost
2under subsection (c) is used to determine its contributions
3required under subsection (a-10) of Section 15-155 may not be
4included in the determination of a rate of total normal cost
5under subsection (c) of this Section.
 
6    (40 ILCS 5/15-157)  (from Ch. 108 1/2, par. 15-157)
7    Sec. 15-157. Employee Contributions.
8    (a) Each participating employee shall make contributions
9towards the retirement benefits payable under the retirement
10program applicable to the employee from each payment of
11earnings applicable to employment under this system on and
12after the date of becoming a participant as follows: Prior to
13September 1, 1949, 3 1/2% of earnings; from September 1, 1949
14to August 31, 1955, 5%; from September 1, 1955 to August 31,
151969, 6%; from September 1, 1969, 6 1/2%. These contributions
16are to be considered as normal contributions for purposes of
17this Article.
18    Each participant who is a police officer or firefighter
19shall make normal contributions of 8% of each payment of
20earnings applicable to employment as a police officer or
21firefighter under this system on or after September 1, 1981,
22unless he or she files with the board within 60 days after the
23effective date of this amendatory Act of 1991 or 60 days after
24the board receives notice that he or she is employed as a
25police officer or firefighter, whichever is later, a written

 

 

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1notice waiving the retirement formula provided by Rule 4 of
2Section 15-136. This waiver shall be irrevocable. If a
3participant had met the conditions set forth in Section
415-132.1 prior to the effective date of this amendatory Act of
51991 but failed to make the additional normal contributions
6required by this paragraph, he or she may elect to pay the
7additional contributions plus compound interest at the
8effective rate. If such payment is received by the board, the
9service shall be considered as police officer service in
10calculating the retirement annuity under Rule 4 of Section
1115-136. While performing service described in clause (i) or
12(ii) of Rule 4 of Section 15-136, a participating employee
13shall be deemed to be employed as a firefighter for the purpose
14of determining the rate of employee contributions under this
15Section.
16    (a-1) Notwithstanding any other provision of this Section,
17an employee who participates in the cash balance plan under
18Section 1-161 shall pay to the System for the purpose of
19participating in the cash balance plan 8% of each payment of
20earnings while he or she is a participant in the cash balance
21plan. Each participant who is a police officer or firefighter
22who participates in the cash balance plan under Section 1-161
23shall pay to the System for the purpose of participating in the
24cash balance plan 9.5% of each payment of earnings while he or
25she is participant in the cash balance plan. Employee
26contributions required under subsections (a), (b), and (c) of

 

 

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1this Section shall not apply to an employee who participates in
2the cash balance plan under Section 1-161.
3    (a-2) In addition to the contributions required under
4either subsections (a), (b), and (c) or subsection (a-1), an
5employee who elects to participate in the optional cash balance
6plan under Section 1-162 shall pay to the System for the
7purpose of participating in the optional cash balance plan a
8contribution of 2% of each payment of earnings received while
9he or she is a participant in the optional cash balance plan.
10These contributions shall not be used for the purpose of
11determining any benefit under this Article except as provided
12in the optional cash balance plan.
13    (b) Starting September 1, 1969, each participating
14employee shall make additional contributions of 1/2 of 1% of
15earnings to finance a portion of the cost of the annual
16increases in retirement annuity provided under Section 15-136,
17except that with respect to participants in the self-managed
18plan this additional contribution shall be used to finance the
19benefits obtained under that retirement program.
20    (c) In addition to the amounts described in subsections (a)
21and (b) of this Section, each participating employee shall make
22contributions of 1% of earnings applicable under this system on
23and after August 1, 1959. The contributions made under this
24subsection (c) shall be considered as survivor's insurance
25contributions for purposes of this Article if the employee is
26covered under the traditional benefit package, and such

 

 

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1contributions shall be considered as additional contributions
2for purposes of this Article if the employee is participating
3in the self-managed plan or has elected to participate in the
4portable benefit package and has completed the applicable
5one-year waiting period. Contributions in excess of $80 during
6any fiscal year beginning before August 31, 1969 and in excess
7of $120 during any fiscal year thereafter until September 1,
81971 shall be considered as additional contributions for
9purposes of this Article.
10    (d) If the board by board rule so permits and subject to
11such conditions and limitations as may be specified in its
12rules, a participant may make other additional contributions of
13such percentage of earnings or amounts as the participant shall
14elect in a written notice thereof received by the board.
15    (e) That fraction of a participant's total accumulated
16normal contributions, the numerator of which is equal to the
17number of years of service in excess of that which is required
18to qualify for the maximum retirement annuity, and the
19denominator of which is equal to the total service of the
20participant, shall be considered as accumulated additional
21contributions. The determination of the applicable maximum
22annuity and the adjustment in contributions required by this
23provision shall be made as of the date of the participant's
24retirement.
25    (f) Notwithstanding the foregoing, a participating
26employee shall not be required to make contributions under this

 

 

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1Section after the date upon which continuance of such
2contributions would otherwise cause his or her retirement
3annuity to exceed the maximum retirement annuity as specified
4in clause (1) of subsection (c) of Section 15-136.
5    (g) A participating employee may make contributions for the
6purchase of service credit under this Article.
7(Source: P.A. 90-32, eff. 6-27-97; 90-65, eff. 7-7-97; 90-448,
8eff. 8-16-97; 90-511, eff. 8-22-97; 90-576, eff. 3-31-98;
990-655, eff. 7-30-98; 90-766, eff. 8-14-98.)
 
10    (40 ILCS 5/15-158.2)
11    Sec. 15-158.2. Self-managed plan.
12    (a) Purpose. The General Assembly finds that it is
13important for colleges and universities to be able to attract
14and retain the most qualified employees and that in order to
15attract and retain these employees, colleges and universities
16should have the flexibility to provide a defined contribution
17plan as an alternative for eligible employees who elect not to
18participate in a defined benefit retirement program provided
19under this Article. Accordingly, the State Universities
20Retirement System is hereby authorized to establish and
21administer a self-managed plan, which shall offer
22participating employees who became participating employees
23before the effective date of this amendatory Act of the 97th
24General Assembly the opportunity to accumulate assets for
25retirement through a combination of employee and employer

 

 

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1contributions that may be invested in mutual funds, collective
2investment funds, or other investment products and used to
3purchase annuity contracts, either fixed or variable or a
4combination thereof. The plan must be qualified under the
5Internal Revenue Code of 1986.
6    (b) Adoption by employers. Each employer subject to this
7Article may elect to adopt the self-managed plan established
8under this Section until the effective date of this amendatory
9Act of the 97th General Assembly; this election is irrevocable.
10An employer's election to adopt the self-managed plan makes
11available to the eligible employees of that employer the
12elections described in Section 15-134.5.
13    The State Universities Retirement System shall be the plan
14sponsor for the self-managed plan and shall prepare a plan
15document and prescribe such rules and procedures as are
16considered necessary or desirable for the administration of the
17self-managed plan. Consistent with its fiduciary duty to the
18participants and beneficiaries of the self-managed plan, the
19Board of Trustees of the System may delegate aspects of plan
20administration as it sees fit to companies authorized to do
21business in this State, to the employers, or to a combination
22of both.
23    (c) Selection of service providers and funding vehicles.
24The System, in consultation with the employers, shall solicit
25proposals to provide administrative services and funding
26vehicles for the self-managed plan from insurance and annuity

 

 

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1companies and mutual fund companies, banks, trust companies, or
2other financial institutions authorized to do business in this
3State. In reviewing the proposals received and approving and
4contracting with no fewer than 2 and no more than 7 companies,
5the Board of Trustees of the System shall consider, among other
6things, the following criteria:
7        (1) the nature and extent of the benefits that would be
8    provided to the participants;
9        (2) the reasonableness of the benefits in relation to
10    the premium charged;
11        (3) the suitability of the benefits to the needs and
12    interests of the participating employees and the employer;
13        (4) the ability of the company to provide benefits
14    under the contract and the financial stability of the
15    company; and
16        (5) the efficacy of the contract in the recruitment and
17    retention of employees.
18    The System, in consultation with the employers, shall
19periodically review each approved company. A company may
20continue to provide administrative services and funding
21vehicles for the self-managed plan only so long as it continues
22to be an approved company under contract with the Board.
23    (d) Employee Direction. Employees who are participating in
24the program must be allowed to direct the transfer of their
25account balances among the various investment options offered,
26subject to applicable contractual provisions. The participant

 

 

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1shall not be deemed a fiduciary by reason of providing such
2investment direction. A person who is a fiduciary shall not be
3liable for any loss resulting from such investment direction
4and shall not be deemed to have breached any fiduciary duty by
5acting in accordance with that direction. Neither the System
6nor the employer guarantees any of the investments in the
7employee's account balances.
8    (e) Participation. An employee eligible to participate in
9the self-managed plan must make a written election in
10accordance with the provisions of Section 15-134.5 and the
11procedures established by the System. Participation in the
12self-managed plan by an electing employee shall begin on the
13first day of the first pay period following the later of the
14date the employee's election is filed with the System or the
15effective date as of which the employee's employer begins to
16offer participation in the self-managed plan. Employers may not
17make the self-managed plan available earlier than January 1,
181998. An employee's participation in any other retirement
19program administered by the System under this Article shall
20terminate on the date that participation in the self-managed
21plan begins.
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, and may
25not participate in any other retirement program administered by
26the System under this Article while employed by that employer

 

 

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

 

 

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1retirement program administered by the System under this
2Article for any period during which the employee was a
3participant in the self-managed plan established under this
4Section.
5    (h) Contributions. The self-managed plan shall be funded by
6contributions from employees participating in the self-managed
7plan and employer contributions as provided in this Section.
8    The contribution rate for employees participating in the
9self-managed plan under this Section shall be equal to the
10employee contribution rate for other participants in the
11System, as provided in Section 15-157. This required
12contribution shall be made as an "employer pick-up" under
13Section 414(h) of the Internal Revenue Code of 1986 or any
14successor Section thereof. Any employee participating in the
15System's traditional benefit package prior to his or her
16election to participate in the self-managed plan shall continue
17to have the employer pick up the contributions required under
18Section 15-157. However, the amounts picked up after the
19election of the self-managed plan shall be remitted to and
20treated as assets of the self-managed plan. In no event shall
21an employee have an option of receiving these amounts in cash.
22Employees may make additional contributions to the
23self-managed plan in accordance with procedures prescribed by
24the System, to the extent permitted under rules prescribed by
25the System.
26    The program shall provide for employer contributions to be

 

 

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1credited to each self-managed plan participant at a rate of
27.6% of the participating employee's salary, less the amount
3used by the System to provide disability benefits for the
4employee. The amounts so credited shall be paid into the
5participant's self-managed plan accounts in a manner to be
6prescribed by the System.
7    An amount of employer contribution, not exceeding 1% of the
8participating employee's salary, shall be used for the purpose
9of providing the disability benefits of the System to the
10employee. Prior to the beginning of each plan year under the
11self-managed plan, the Board of Trustees shall determine, as a
12percentage of salary, the amount of employer contributions to
13be allocated during that plan year for providing disability
14benefits for employees in the self-managed plan.
15    The State of Illinois shall make contributions by
16appropriations to the System of the employer contributions
17required for employees who participate in the self-managed plan
18under this Section. The amount required shall be certified by
19the Board of Trustees of the System and paid by the State in
20accordance with Section 15-165. The System shall not be
21obligated to remit the required employer contributions to any
22of the insurance and annuity companies, mutual fund companies,
23banks, trust companies, financial institutions, or other
24sponsors of any of the funding vehicles offered under the
25self-managed plan until it has received the required employer
26contributions from the State. In the event of a deficiency in

 

 

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1the amount of State contributions, the System shall implement
2those procedures described in subsection (c) of Section 15-165
3to obtain the required funding from the General Revenue Fund.
4    (i) Termination. The self-managed plan authorized under
5this Section may be terminated by the System, subject to the
6terms of any relevant contracts, and the System shall have no
7obligation to reestablish the self-managed plan under this
8Section. This Section does not create a right to continued
9participation in any self-managed plan set up by the System
10under this Section. If the self-managed plan is terminated, the
11participants shall have the right to participate in one of the
12other retirement programs offered by the System and receive
13service credit in such other retirement program for any years
14of employment following the termination.
15    (j) Vesting; Withdrawal; Return to Service. A participant
16in the self-managed plan becomes vested in the employer
17contributions credited to his or her accounts in the
18self-managed plan on the earliest to occur of the following:
19(1) completion of 5 years of service with an employer described
20in Section 15-106; (2) the death of the participating employee
21while employed by an employer described in Section 15-106, if
22the participant has completed at least 1 1/2 years of service;
23or (3) the participant's election to retire and apply the
24reciprocal provisions of Article 20 of this Code.
25    A participant in the self-managed plan who receives a
26distribution of his or her vested amounts from the self-managed

 

 

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1plan while not yet eligible for retirement under this Article
2(and Article 20, if applicable) shall forfeit all service
3credit and accrued rights in the System; if subsequently
4re-employed, the participant shall be considered a new
5employee. If a former participant again becomes a participating
6employee (or becomes employed by a participating system under
7Article 20 of this Code) and continues as such for at least 2
8years, all such rights, service credits, and previous status as
9a participant shall be restored upon repayment of the amount of
10the distribution, without interest.
11    (k) Benefit amounts. If an employee who is vested in
12employer contributions terminates employment, the employee
13shall be entitled to a benefit which is based on the account
14values attributable to both employer and employee
15contributions and any investment return thereon.
16    If an employee who is not vested in employer contributions
17terminates employment, the employee shall be entitled to a
18benefit based solely on the account values attributable to the
19employee's contributions and any investment return thereon,
20and the employer contributions and any investment return
21thereon shall be forfeited. Any employer contributions which
22are forfeited shall be held in escrow by the company investing
23those contributions and shall be used as directed by the System
24for future allocations of employer contributions or for the
25restoration of amounts previously forfeited by former
26participants who again become participating employees.

 

 

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1(Source: P.A. 93-347, eff. 7-24-03.)
 
2    (40 ILCS 5/15-159)  (from Ch. 108 1/2, par. 15-159)
3    Sec. 15-159. Board created.
4    (a) A board of trustees constituted as provided in this
5Section shall administer this System. The board shall be known
6as the Board of Trustees of the State Universities Retirement
7System.
8    (b) Until July 1, 1995, the Board of Trustees shall be
9constituted as follows:
10    Two trustees shall be members of the Board of Trustees of
11the University of Illinois, one shall be a member of the Board
12of Trustees of Southern Illinois University, one shall be a
13member of the Board of Trustees of Chicago State University,
14one shall be a member of the Board of Trustees of Eastern
15Illinois University, one shall be a member of the Board of
16Trustees of Governors State University, one shall be a member
17of the Board of Trustees of Illinois State University, one
18shall be a member of the Board of Trustees of Northeastern
19Illinois University, one shall be a member of the Board of
20Trustees of Northern Illinois University, one shall be a member
21of the Board of Trustees of Western Illinois University, and
22one shall be a member of the Illinois Community College Board,
23selected in each case by their respective boards, and 2 shall
24be participants of the system appointed by the Governor for a 6
25year term with the first appointment made pursuant to this

 

 

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1amendatory Act of 1984 to be effective September 1, 1985, and
2one shall be a participant appointed by the Illinois Community
3College Board for a 6 year term, and one shall be a participant
4appointed by the Board of Trustees of the University of
5Illinois for a 6 year term, and one shall be a participant or
6annuitant of the system who is a senior citizen age 60 or older
7appointed by the Governor for a 6 year term with the first
8appointment to be effective September 1, 1985.
9    The terms of all trustees holding office under this
10subsection (b) on June 30, 1995 shall terminate at the end of
11that day and the Board shall thereafter be constituted as
12provided in subsection (c).
13    (c) Beginning July 1, 1995, the Board of Trustees shall be
14constituted as follows:
15    The Board shall consist of 9 trustees appointed by the
16Governor. Two of the trustees, designated at the time of
17appointment, shall be participants of the System. Two of the
18trustees, designated at the time of appointment, shall be
19annuitants of the System who are receiving retirement annuities
20under this Article. The 5 remaining trustees may, but need not,
21be participants or annuitants of the System.
22    The term of office of trustees appointed under this
23subsection (c) shall be 6 years, beginning on July 1. However,
24of the initial trustees appointed under this subsection (c), 3
25shall be appointed for terms of 2 years, 3 shall be appointed
26for terms of 4 years, and 3 shall be appointed for terms of 6

 

 

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1years, to be designated by the Governor at the time of
2appointment.
3    The terms of all trustees holding office under this
4subsection (c) on the effective date of this amendatory Act of
5the 96th General Assembly shall terminate on that effective
6date. The Governor shall make nominations for appointment under
7this Section within 60 days after the effective date of this
8amendatory Act of the 96th General Assembly. A trustee sitting
9on the board on the effective date of this amendatory Act of
10the 96th General Assembly may not hold over in office for more
11than 90 days after the effective date of this amendatory Act of
12the 96th General Assembly. Nothing in this Section shall
13prevent the Governor from making a temporary appointment or
14nominating a trustee holding office on the day before the
15effective date of this amendatory Act of the 96th General
16Assembly.
17    (d) Beginning on the 90th day after the effective date of
18this amendatory Act of the 96th General Assembly, the Board of
19Trustees shall be constituted as follows:
20        (1) The Chairperson of the Board of Higher Education,
21    who shall act as chairperson of this Board.
22        (2) Two Four trustees appointed by the Governor with
23    the advice and consent of the Senate who may not be members
24    of the system or hold an elective State office and who
25    shall serve for a term of 6 years, except that the terms of
26    the initial appointees under this subsection (d) shall be

 

 

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1    as follows: 1 2 for a term of 3 years and 1 2 for a term of
2    6 years.
3        (3) Four active participants of the system to be
4    elected from the contributing membership of the system by
5    the contributing members, no more than 2 of which may be
6    from any of the University of Illinois campuses, who shall
7    serve for a term of 6 years, except that the terms of the
8    initial electees shall be as follows: 2 for a term of 3
9    years and 2 for a term of 6 years.
10        (4) Two annuitants of the system who have been
11    annuitants for at least one full year, to be elected from
12    and by the annuitants of the system, no more than one of
13    which may be from any of the University of Illinois
14    campuses, who shall serve for a term of 6 years, except
15    that the terms of the initial electees shall be as follows:
16    one for a term of 3 years and one for a term of 6 years.
17        (5) One trustee to be elected by the trustees of the
18    boards of trustees of community colleges in the State.
19        (6) One trustee who serves as a trustee on the board of
20    trustees of a public institution of higher education, as
21    defined in Section 1 of the Board of Higher Education Act,
22    to be elected by the trustees of public institutions of
23    higher education.
24    The 2 positions created by this amendatory Act of the 97th
25General Assembly shall be filled as soon as practicable by
26appointment of the Board, and the persons so appointed shall

 

 

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1serve until such time as the System can conduct elections to
2fill those positions.
3    For the purposes of this Section, the Governor may make a
4nomination and the Senate may confirm the nominee in advance of
5the commencement of the nominee's term of office.
6    (e) The 6 elected trustees shall be elected within 90 days
7after the effective date of this amendatory Act of the 96th
8General Assembly for a term beginning on the 90th day after the
9effective date of this amendatory Act. Trustees shall be
10elected thereafter as terms expire for a 6-year term beginning
11July 15 next following their election, and such election shall
12be held on May 1, or on May 2 when May 1 falls on a Sunday. The
13board may establish rules for the election of trustees to
14implement the provisions of this amendatory Act of the 96th
15General Assembly and for future elections. Candidates for the
16participating trustee shall be nominated by petitions in
17writing, signed by not less than 400 participants with their
18addresses shown opposite their names. Candidates for the
19annuitant trustee shall be nominated by petitions in writing,
20signed by not less than 100 annuitants with their addresses
21shown opposite their names. If there is more than one qualified
22nominee for each elected trustee, then the board shall conduct
23a secret ballot election by mail for that trustee, in
24accordance with rules as established by the board. If there is
25only one qualified person nominated by petition for each
26elected trustee, then the election as required by this Section

 

 

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1shall not be conducted for that trustee and the board shall
2declare such nominee duly elected. A vacancy occurring in the
3elective membership of the board shall be filled for the
4unexpired term by the elected trustees serving on the board for
5the remainder of the term.
6    (f) A vacancy on the board of trustees caused by
7resignation, death, expiration of term of office, or other
8reason shall be filled by a qualified person appointed by the
9Governor for the remainder of the unexpired term.
10    (g) Trustees (other than the trustees incumbent on June 30,
111995 or as provided in subsection (c) of this Section) shall
12continue in office until their respective successors are
13appointed and have qualified, except that a trustee appointed
14to one of the participant positions shall be disqualified
15immediately upon the termination of his or her status as a
16participant and a trustee appointed to one of the annuitant
17positions shall be disqualified immediately upon the
18termination of his or her status as an annuitant receiving a
19retirement annuity.
20    (h) Each trustee must take an oath of office before a
21notary public of this State and shall qualify as a trustee upon
22the presentation to the board of a certified copy of the oath.
23The oath must state that the person will diligently and
24honestly administer the affairs of the retirement system, and
25will not knowingly violate or wilfully permit to be violated
26any provisions of this Article.

 

 

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1    Each trustee shall serve without compensation but shall be
2reimbursed for expenses necessarily incurred in attending
3board meetings and carrying out his or her duties as a trustee
4or officer of the system.
5    (i) This amendatory Act of 1995 is intended to supersede
6the changes made to this Section by Public Act 89-4.
7(Source: P.A. 96-6, eff. 4-3-09; 96-1000, eff. 7-2-10.)
 
8    (40 ILCS 5/15-163)  (from Ch. 108 1/2, par. 15-163)
9    Sec. 15-163. To consider applications and authorize
10payments.
11    To consider and pass on all certifications of employment
12and applications for annuities and benefits; to authorize the
13granting of annuities and benefits; and to limit or suspend any
14payment or payments, all in accordance with this Article.
15(Source: Laws 1963, p. 161.)
 
16    (40 ILCS 5/15-165)   (from Ch. 108 1/2, par. 15-165)
17    Sec. 15-165. To certify amounts and submit vouchers.
18    (a) The Board shall certify to the Governor on or before
19November 15 of each year until November 15, 2011 the
20appropriation required from State funds for the purposes of
21this System for the following fiscal year. The certification
22under this subsection (a) shall include a copy of the actuarial
23recommendations upon which it is based and shall specifically
24identify the System's projected State normal cost for that

 

 

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1fiscal year and the projected State cost for the self-managed
2plan for that fiscal year.
3    On or before May 1, 2004, the Board shall recalculate and
4recertify to the Governor the amount of the required State
5contribution to the System for State fiscal year 2005, taking
6into account the amounts appropriated to and received by the
7System under subsection (d) of Section 7.2 of the General
8Obligation Bond Act.
9    On or before July 1, 2005, the Board shall recalculate and
10recertify to the Governor the amount of the required State
11contribution to the System for State fiscal year 2006, taking
12into account the changes in required State contributions made
13by this amendatory Act of the 94th General Assembly.
14    On or before April 1, 2011, the Board shall recalculate and
15recertify to the Governor the amount of the required State
16contribution to the System for State fiscal year 2011, applying
17the changes made by Public Act 96-889 to the System's assets
18and liabilities as of June 30, 2009 as though Public Act 96-889
19was approved on that date.
20    (a-5) On or before November 1 of each year, beginning
21November 1, 2012, the Board shall submit to the State Actuary,
22the Governor, and the General Assembly a proposed certification
23of the amount of the required State contribution to the System
24for the next fiscal year, along with all of the actuarial
25assumptions, calculations, and data upon which that proposed
26certification is based. On or before January 1 of each year,

 

 

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1beginning January 1, 2013, the State Actuary shall issue a
2preliminary report concerning the proposed certification and
3identifying, if necessary, recommended changes in actuarial
4assumptions that the Board must consider before finalizing its
5certification of the required State contributions. On or before
6January 15, 2013 and each January 15 thereafter, the Board
7shall certify to the Governor and the General Assembly the
8amount of the required State contribution for the next fiscal
9year. The Board's certification must note, in a written
10response to the State Actuary, any deviations from the State
11Actuary's recommended changes, the reason or reasons for not
12following the State Actuary's recommended changes, and the
13fiscal impact of not following the State Actuary's recommended
14changes on the required State contribution.
15    (b) The Board shall certify to the State Comptroller or
16employer, as the case may be, from time to time, by its
17president and secretary, with its seal attached, the amounts
18payable to the System from the various funds.
19    (c) Beginning in State fiscal year 1996, on or as soon as
20possible after the 15th day of each month the Board shall
21submit vouchers for payment of State contributions to the
22System, in a total monthly amount of one-twelfth of the
23required annual State contribution certified under subsection
24(a). From the effective date of this amendatory Act of the 93rd
25General Assembly through June 30, 2004, the Board shall not
26submit vouchers for the remainder of fiscal year 2004 in excess

 

 

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1of the fiscal year 2004 certified contribution amount
2determined under this Section after taking into consideration
3the transfer to the System under subsection (b) of Section
46z-61 of the State Finance Act. These vouchers shall be paid by
5the State Comptroller and Treasurer by warrants drawn on the
6funds appropriated to the System for that fiscal year.
7    If in any month the amount remaining unexpended from all
8other appropriations to the System for the applicable fiscal
9year (including the appropriations to the System under Section
108.12 of the State Finance Act and Section 1 of the State
11Pension Funds Continuing Appropriation Act) is less than the
12amount lawfully vouchered under this Section, the difference
13shall be paid from the General Revenue Fund under the
14continuing appropriation authority provided in Section 1.1 of
15the State Pension Funds Continuing Appropriation Act.
16    (d) So long as the payments received are the full amount
17lawfully vouchered under this Section, payments received by the
18System under this Section shall be applied first toward the
19employer contribution to the self-managed plan established
20under Section 15-158.2. Payments shall be applied second toward
21the employer's portion of the normal costs of the System, as
22defined in subsection (f) of Section 15-155. The balance shall
23be applied toward the unfunded actuarial liabilities of the
24System.
25    (e) In the event that the System does not receive, as a
26result of legislative enactment or otherwise, payments

 

 

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1sufficient to fully fund the employer contribution to the
2self-managed plan established under Section 15-158.2 and to
3fully fund that portion of the employer's portion of the normal
4costs of the System, as calculated in accordance with Section
515-155(a-1), then any payments received shall be applied
6proportionately to the optional retirement program established
7under Section 15-158.2 and to the employer's portion of the
8normal costs of the System, as calculated in accordance with
9Section 15-155(a-1).
10(Source: P.A. 96-1497, eff. 1-14-11; 96-1511, eff. 1-27-11.)
 
11    (40 ILCS 5/15-198)
12    Sec. 15-198. Application and expiration of new benefit
13increases.
14    (a) As used in this Section, "new benefit increase" means
15an increase in the amount of any benefit provided under this
16Article, or an expansion of the conditions of eligibility for
17any benefit under this Article or Article 1, that results from
18an amendment to this Code that takes effect after the effective
19date of this amendatory Act of the 94th General Assembly. "New
20benefit increase", however, does not include any benefit
21increase resulting from the changes made to this Article or
22Article 1 by this amendatory Act of the 97th General Assembly.
23    (b) Notwithstanding any other provision of this Code or any
24subsequent amendment to this Code, every new benefit increase
25is subject to this Section and shall be deemed to be granted

 

 

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

 

 

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1Assembly from extending or re-creating a new benefit increase
2by law.
3    (e) Except as otherwise provided in the language creating
4the new benefit increase, a new benefit increase that expires
5under this Section continues to apply to persons who applied
6and qualified for the affected benefit while the new benefit
7increase was in effect and to the affected beneficiaries and
8alternate payees of such persons, but does not apply to any
9other person, including without limitation a person who
10continues in service after the expiration date and did not
11apply and qualify for the affected benefit while the new
12benefit increase was in effect.
13(Source: P.A. 94-4, eff. 6-1-05.)
 
14    (40 ILCS 5/16-106)  (from Ch. 108 1/2, par. 16-106)
15    Sec. 16-106. Teacher. "Teacher": The following
16individuals, provided that, for employment prior to July 1,
171990, they are employed on a full-time basis, or if not
18full-time, on a permanent and continuous basis in a position in
19which services are expected to be rendered for at least one
20school term:
21        (1) Any educational, administrative, professional or
22    other staff employed in the public common schools included
23    within this system in a position requiring certification
24    under the law governing the certification of teachers;
25        (2) Any educational, administrative, professional or

 

 

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1    other staff employed in any facility of the Department of
2    Children and Family Services or the Department of Human
3    Services, in a position requiring certification under the
4    law governing the certification of teachers, and any person
5    who (i) works in such a position for the Department of
6    Corrections, (ii) was a member of this System on May 31,
7    1987, and (iii) did not elect to become a member of the
8    State Employees' Retirement System pursuant to Section
9    14-108.2 of this Code; except that "teacher" does not
10    include any person who (A) becomes a security employee of
11    the Department of Human Services, as defined in Section
12    14-110, after June 28, 2001 (the effective date of Public
13    Act 92-14), or (B) becomes a member of the State Employees'
14    Retirement System pursuant to Section 14-108.2c of this
15    Code;
16        (3) Any regional superintendent of schools, assistant
17    regional superintendent of schools, State Superintendent
18    of Education; any person employed by the State Board of
19    Education as an executive; any executive of the boards
20    engaged in the service of public common school education in
21    school districts covered under this system of which the
22    State Superintendent of Education is an ex-officio member;
23        (4) Any employee of a school board association
24    operating in compliance with Article 23 of the School Code
25    who is certificated under the law governing the
26    certification of teachers, provided that he or she becomes

 

 

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1    such an employee before the effective date of this
2    amendatory Act of the 97th General Assembly;
3        (5) Any person employed by the retirement system who:
4            (i) was an employee of and a participant in the
5        system on August 17, 2001 (the effective date of Public
6        Act 92-416), or
7            (ii) becomes an employee of the system on or after
8        August 17, 2001;
9        (6) Any educational, administrative, professional or
10    other staff employed by and under the supervision and
11    control of a regional superintendent of schools, provided
12    such employment position requires the person to be
13    certificated under the law governing the certification of
14    teachers and is in an educational program serving 2 or more
15    districts in accordance with a joint agreement authorized
16    by the School Code or by federal legislation;
17        (7) Any educational, administrative, professional or
18    other staff employed in an educational program serving 2 or
19    more school districts in accordance with a joint agreement
20    authorized by the School Code or by federal legislation and
21    in a position requiring certification under the laws
22    governing the certification of teachers;
23        (8) Any officer or employee of a statewide teacher
24    organization or officer of a national teacher organization
25    who is certified under the law governing certification of
26    teachers, provided: (i) the individual had previously

 

 

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1    established creditable service under this Article, (ii)
2    the individual files with the system an irrevocable
3    election to become a member before the effective date of
4    this amendatory Act of the 97th General Assembly, (iii) the
5    individual does not receive credit for such service under
6    any other Article of this Code, and (iv) the individual
7    first became an officer or employee of the teacher
8    organization and becomes a member before the effective date
9    of this amendatory Act of the 97th General Assembly;
10        (9) Any educational, administrative, professional, or
11    other staff employed in a charter school operating in
12    compliance with the Charter Schools Law who is certificated
13    under the law governing the certification of teachers.
14        (10) Any person employed, on the effective date of this
15    amendatory Act of the 94th General Assembly, by the
16    Macon-Piatt Regional Office of Education in a
17    birth-through-age-three pilot program receiving funds
18    under Section 2-389 of the School Code who is required by
19    the Macon-Piatt Regional Office of Education to hold a
20    teaching certificate, provided that the Macon-Piatt
21    Regional Office of Education makes an election, within 6
22    months after the effective date of this amendatory Act of
23    the 94th General Assembly, to have the person participate
24    in the system. Any service established prior to the
25    effective date of this amendatory Act of the 94th General
26    Assembly for service as an employee of the Macon-Piatt

 

 

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1    Regional Office of Education in a birth-through-age-three
2    pilot program receiving funds under Section 2-389 of the
3    School Code shall be considered service as a teacher if
4    employee and employer contributions have been received by
5    the system and the system has not refunded those
6    contributions.
7    An annuitant receiving a retirement annuity under this
8Article or under Article 17 of this Code who is employed by a
9board of education or other employer as permitted under Section
1016-118 or 16-150.1 is not a "teacher" for purposes of this
11Article. A person who has received a single-sum retirement
12benefit under Section 16-136.4 of this Article is not a
13"teacher" for purposes of this Article.
14(Source: P.A. 97-651, eff. 1-5-12.)
 
15    (40 ILCS 5/16-106.4 new)
16    Sec. 16-106.4. Tier I employee. "Tier I employee": A
17teacher under this Article who first became a member or
18participant before January 1, 2011 under any reciprocal
19retirement system or pension fund established under this Code
20other than a retirement system or pension fund established
21under Article 2, 3, 4, 5, 6, or 18 of this Code.
 
22    (40 ILCS 5/16-106.5 new)
23    Sec. 16-106.5. Tier I retiree. "Tier I retiree": A former
24Tier I employee who is receiving a retirement annuity.
 

 

 

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1    (40 ILCS 5/16-106.6 new)
2    Sec. 16-106.6. Teacher certification. For purposes of this
3Article, a teacher shall be deemed to be certificated if he or
4she is required to be licensed by the Illinois State Board of
5Education.
 
6    (40 ILCS 5/16-121)  (from Ch. 108 1/2, par. 16-121)
7    Sec. 16-121. Salary. "Salary": The actual compensation
8received by a teacher during any school year and recognized by
9the system in accordance with rules of the board. For purposes
10of this Section, "school year" includes the regular school term
11plus any additional period for which a teacher is compensated
12and such compensation is recognized by the rules of the board.
13Notwithstanding any other provision of this Section, "salary"
14does not include any future increase in income offered by an
15employer under this Article pursuant to the requirements of
16subsection (c) of Section 16-131.7 that is accepted by a Tier I
17employee, or a Tier I retiree returning to active service, who
18has made an election under paragraph (2) of subsection (a) or
19(a-5) of Section 16-131.7.
20(Source: P.A. 84-1028.)
 
21    (40 ILCS 5/16-121.1 new)
22    Sec. 16-121.1. Future increase in income. "Future increase
23in income": Any increase in income in any form offered by an

 

 

09700SB1673ham003- 212 -LRB097 07605 EFG 70268 a

1employer to a teacher under this Article after June 30, 2013
2that would qualify as "salary", as defined under Section
314-103.10, but for the fact that the employer offered the
4increase in income to the teacher on the condition that it not
5qualify as salary and the teacher accepted the increase in
6income subject to that condition. The term "future increase in
7income" does not include an increase in income in any form that
8is paid to a Tier I employee under an employment contract or
9collective bargaining agreement that is in effect on the
10effective date of this Section but does include an increase in
11income in any form pursuant to an extension, amendment, or
12renewal of any such employment contract or collective
13bargaining agreement on or after the effective date of this
14amendatory Act of the 97th General Assembly.
 
15    (40 ILCS 5/16-127)  (from Ch. 108 1/2, par. 16-127)
16    Sec. 16-127. Computation of creditable service.
17    (a) Each member shall receive regular credit for all
18service as a teacher from the date membership begins, for which
19satisfactory evidence is supplied and all contributions have
20been paid.
21    (b) The following periods of service shall earn optional
22credit and each member shall receive credit for all such
23service for which satisfactory evidence is supplied and all
24contributions have been paid as of the date specified:
25        (1) Prior service as a teacher.

 

 

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1        (2) Service in a capacity essentially similar or
2    equivalent to that of a teacher, in the public common
3    schools in school districts in this State not included
4    within the provisions of this System, or of any other
5    State, territory, dependency or possession of the United
6    States, or in schools operated by or under the auspices of
7    the United States, or under the auspices of any agency or
8    department of any other State, and service during any
9    period of professional speech correction or special
10    education experience for a public agency within this State
11    or any other State, territory, dependency or possession of
12    the United States, and service prior to February 1, 1951 as
13    a recreation worker for the Illinois Department of Public
14    Safety, for a period not exceeding the lesser of 2/5 of the
15    total creditable service of the member or 10 years. The
16    maximum service of 10 years which is allowable under this
17    paragraph shall be reduced by the service credit which is
18    validated by other retirement systems under paragraph (i)
19    of Section 15-113 and paragraph 1 of Section 17-133. Credit
20    granted under this paragraph may not be used in
21    determination of a retirement annuity or disability
22    benefits unless the member has at least 5 years of
23    creditable service earned subsequent to this employment
24    with one or more of the following systems: Teachers'
25    Retirement System of the State of Illinois, State
26    Universities Retirement System, and the Public School

 

 

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1    Teachers' Pension and Retirement Fund of Chicago. Whenever
2    such service credit exceeds the maximum allowed for all
3    purposes of this Article, the first service rendered in
4    point of time shall be considered. The changes to this
5    subdivision (b)(2) made by Public Act 86-272 shall apply
6    not only to persons who on or after its effective date
7    (August 23, 1989) are in service as a teacher under the
8    System, but also to persons whose status as such a teacher
9    terminated prior to such effective date, whether or not
10    such person is an annuitant on that date.
11        (3) Any periods immediately following teaching
12    service, under this System or under Article 17, (or
13    immediately following service prior to February 1, 1951 as
14    a recreation worker for the Illinois Department of Public
15    Safety) spent in active service with the military forces of
16    the United States; periods spent in educational programs
17    that prepare for return to teaching sponsored by the
18    federal government following such active military service;
19    if a teacher returns to teaching service within one
20    calendar year after discharge or after the completion of
21    the educational program, a further period, not exceeding
22    one calendar year, between time spent in military service
23    or in such educational programs and the return to
24    employment as a teacher under this System; and a period of
25    up to 2 years of active military service not immediately
26    following employment as a teacher.

 

 

09700SB1673ham003- 215 -LRB097 07605 EFG 70268 a

1        The changes to this Section and Section 16-128 relating
2    to military service made by P.A. 87-794 shall apply not
3    only to persons who on or after its effective date are in
4    service as a teacher under the System, but also to persons
5    whose status as a teacher terminated prior to that date,
6    whether or not the person is an annuitant on that date. In
7    the case of an annuitant who applies for credit allowable
8    under this Section for a period of military service that
9    did not immediately follow employment, and who has made the
10    required contributions for such credit, the annuity shall
11    be recalculated to include the additional service credit,
12    with the increase taking effect on the date the System
13    received written notification of the annuitant's intent to
14    purchase the credit, if payment of all the required
15    contributions is made within 60 days of such notice, or
16    else on the first annuity payment date following the date
17    of payment of the required contributions. In calculating
18    the automatic annual increase for an annuity that has been
19    recalculated under this Section, the increase attributable
20    to the additional service allowable under P.A. 87-794 shall
21    be included in the calculation of automatic annual
22    increases accruing after the effective date of the
23    recalculation.
24        Credit for military service shall be determined as
25    follows: if entry occurs during the months of July, August,
26    or September and the member was a teacher at the end of the

 

 

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1    immediately preceding school term, credit shall be granted
2    from July 1 of the year in which he or she entered service;
3    if entry occurs during the school term and the teacher was
4    in teaching service at the beginning of the school term,
5    credit shall be granted from July 1 of such year. In all
6    other cases where credit for military service is allowed,
7    credit shall be granted from the date of entry into the
8    service.
9        The total period of military service for which credit
10    is granted shall not exceed 5 years for any member unless
11    the service: (A) is validated before July 1, 1964, and (B)
12    does not extend beyond July 1, 1963. Credit for military
13    service shall be granted under this Section only if not
14    more than 5 years of the military service for which credit
15    is granted under this Section is used by the member to
16    qualify for a military retirement allotment from any branch
17    of the armed forces of the United States. The changes to
18    this subdivision (b)(3) made by Public Act 86-272 shall
19    apply not only to persons who on or after its effective
20    date (August 23, 1989) are in service as a teacher under
21    the System, but also to persons whose status as such a
22    teacher terminated prior to such effective date, whether or
23    not such person is an annuitant on that date.
24        (4) Any periods served as a member of the General
25    Assembly.
26        (5)(i) Any periods for which a teacher, as defined in

 

 

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1    Section 16-106, is granted a leave of absence, provided he
2    or she returns to teaching service creditable under this
3    System or the State Universities Retirement System
4    following the leave; (ii) periods during which a teacher is
5    involuntarily laid off from teaching, provided he or she
6    returns to teaching following the lay-off; (iii) periods
7    prior to July 1, 1983 during which a teacher ceased covered
8    employment due to pregnancy, provided that the teacher
9    returned to teaching service creditable under this System
10    or the State Universities Retirement System following the
11    pregnancy and submits evidence satisfactory to the Board
12    documenting that the employment ceased due to pregnancy;
13    and (iv) periods prior to July 1, 1983 during which a
14    teacher ceased covered employment for the purpose of
15    adopting an infant under 3 years of age or caring for a
16    newly adopted infant under 3 years of age, provided that
17    the teacher returned to teaching service creditable under
18    this System or the State Universities Retirement System
19    following the adoption and submits evidence satisfactory
20    to the Board documenting that the employment ceased for the
21    purpose of adopting an infant under 3 years of age or
22    caring for a newly adopted infant under 3 years of age.
23    However, total credit under this paragraph (5) may not
24    exceed 3 years.
25        Any qualified member or annuitant may apply for credit
26    under item (iii) or (iv) of this paragraph (5) without

 

 

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1    regard to whether service was terminated before the
2    effective date of this amendatory Act of 1997. In the case
3    of an annuitant who establishes credit under item (iii) or
4    (iv), the annuity shall be recalculated to include the
5    additional service credit. The increase in annuity shall
6    take effect on the date the System receives written
7    notification of the annuitant's intent to purchase the
8    credit, if the required evidence is submitted and the
9    required contribution paid within 60 days of that
10    notification, otherwise on the first annuity payment date
11    following the System's receipt of the required evidence and
12    contribution. The increase in an annuity recalculated
13    under this provision shall be included in the calculation
14    of automatic annual increases in the annuity accruing after
15    the effective date of the recalculation.
16        Optional credit may be purchased under this subsection
17    (b)(5) for periods during which a teacher has been granted
18    a leave of absence pursuant to Section 24-13 of the School
19    Code. A teacher whose service under this Article terminated
20    prior to the effective date of P.A. 86-1488 shall be
21    eligible to purchase such optional credit. If a teacher who
22    purchases this optional credit is already receiving a
23    retirement annuity under this Article, the annuity shall be
24    recalculated as if the annuitant had applied for the leave
25    of absence credit at the time of retirement. The difference
26    between the entitled annuity and the actual annuity shall