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, AS AMENDED,
3by replacing everything after the enacting clause with the
4following:
 
5    "Section 5. The Illinois Public Labor Relations Act is
6amended by changing Sections 4 and 15 as follows:
 
7    (5 ILCS 315/4)  (from Ch. 48, par. 1604)
8    Sec. 4. Management Rights. Employers shall not be required
9to bargain over matters of inherent managerial policy, which
10shall include such areas of discretion or policy as the
11functions of the employer, standards of services, its overall
12budget, the organizational structure and selection of new
13employees, examination techniques and direction of employees.
14Employers, however, shall be required to bargain collectively
15with regard to policy matters directly affecting wages (but
16subject to any applicable restrictions in Section 14-106.5,

 

 

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115-134.6, or 16-131.7 of the Illinois Pension Code), hours and
2terms and conditions of employment as well as the impact
3thereon upon request by employee representatives, but
4excluding the changes, the impact of changes, and the
5implementation of the changes set forth in this amendatory Act
6of the 97th General Assembly.
7    To preserve the rights of employers and exclusive
8representatives which have established collective bargaining
9relationships or negotiated collective bargaining agreements
10prior to the effective date of this Act, employers shall be
11required to bargain collectively with regard to any matter
12concerning wages (but subject to any applicable restrictions in
13Section 14-106.5, 15-134.6, or 16-131.7 of the Illinois Pension
14Code), hours or conditions of employment about which they have
15bargained for and agreed to in a collective bargaining
16agreement prior to the effective date of this Act, but
17excluding the changes, the impact of changes, and the
18implementation of the changes set forth in this amendatory Act
19of the 97th General Assembly.
20    The chief judge of the judicial circuit that employs a
21public employee who is a court reporter, as defined in the
22Court Reporters Act, has the authority to hire, appoint,
23promote, evaluate, discipline, and discharge court reporters
24within that judicial circuit.
25    Nothing in this amendatory Act of the 94th General Assembly
26shall be construed to intrude upon the judicial functions of

 

 

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1any court. This amendatory Act of the 94th General Assembly
2applies only to nonjudicial administrative matters relating to
3the collective bargaining rights of court reporters.
4(Source: P.A. 94-98, eff. 7-1-05.)
 
5    (5 ILCS 315/15)  (from Ch. 48, par. 1615)
6    Sec. 15. Act Takes Precedence.
7    (a) In case of any conflict between the provisions of this
8Act and any other law (other than Section 5 of the State
9Employees Group Insurance Act of 1971 and other than the
10changes made to the Illinois Pension Code by Public Act 96-889
11and the changes, impact of changes, and the implementation of
12the changes made to the Illinois Pension Code and the State
13Employees Group Insurance Act of 1971 by this amendatory Act of
14the 97th 96th General Assembly), executive order or
15administrative regulation relating to wages, hours and
16conditions of employment and employment relations, the
17provisions of this Act or any collective bargaining agreement
18negotiated thereunder shall prevail and control. Nothing in
19this Act shall be construed to replace or diminish the rights
20of employees established by Sections 28 and 28a of the
21Metropolitan Transit Authority Act, Sections 2.15 through 2.19
22of the Regional Transportation Authority Act. The provisions of
23this Act are subject to the changes made by this amendatory Act
24of the 97th General Assembly, including Sections 14-106.5,
2515-134.6, and 16-131.7 of the Illinois Pension Code, and

 

 

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

 

 

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1is amended by changing Sections 6.9 and 6.10 and by adding
2Sections 6.10A and 6.16 as follows:
 
3    (5 ILCS 375/6.9)
4    Sec. 6.9. Health benefits for community college benefit
5recipients and community college dependent beneficiaries.
6    (a) Purpose. It is the purpose of this amendatory Act of
71997 to establish a uniform program of health benefits for
8community college benefit recipients and their dependent
9beneficiaries under the administration of the Department of
10Central Management Services.
11    (b) Creation of program. Beginning July 1, 1999, the
12Department of Central Management Services shall be responsible
13for administering a program of health benefits for community
14college benefit recipients and community college dependent
15beneficiaries under this Section. The State Universities
16Retirement System and the boards of trustees of the various
17community college districts shall cooperate with the
18Department in this endeavor.
19    (c) Eligibility. All community college benefit recipients
20and community college dependent beneficiaries shall be
21eligible to participate in the program established under this
22Section, without any interruption or delay in coverage or
23limitation as to pre-existing medical conditions. Eligibility
24to participate shall be determined by the State Universities
25Retirement System. Eligibility information shall be

 

 

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

 

 

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1    the State to retire unpaid claims of the program up to 75%
2    of the total insurance rate shall be paid from the
3    Community College Health Insurance Security Fund.
4        (2) The balance of the rate of insurance, including the
5    entire premium for any coverage for community college
6    dependent beneficiaries that has been elected, shall be
7    paid by deductions authorized by the community college
8    benefit recipient to be withheld from his or her monthly
9    annuity or benefit payment from the State Universities
10    Retirement System; except that (i) if the balance of the
11    cost of coverage exceeds the amount of the monthly annuity
12    or benefit payment, the difference shall be paid directly
13    to the State Universities Retirement System by the
14    community college benefit recipient, and (ii) all or part
15    of the balance of the cost of coverage may, at the option
16    of the board of trustees of the community college district,
17    be paid to the State Universities Retirement System by the
18    board of the community college district from which the
19    community college benefit recipient retired. The State
20    Universities Retirement System shall promptly deposit all
21    moneys withheld by or paid to it under this subdivision
22    (e)(2) into the Community College Health Insurance
23    Security Fund. These moneys shall not be considered assets
24    of the State Universities Retirement System.
25    (f) Financing. All revenues arising from the
26administration of the health benefit program established under

 

 

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

 

 

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

 

 

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1Insurance Security Fund.
2    (a) Beginning January 1, 1999, every active contributor of
3the State Universities Retirement System (established under
4Article 15 of the Illinois Pension Code) who (1) is a full-time
5employee of a community college district (other than a
6community college district subject to Article VII of the Public
7Community College Act) or an association of community college
8boards and (2) is not an employee as defined in Section 3 of
9this Act shall make contributions toward the cost of community
10college annuitant and survivor health benefits at the rate of
110.50% of salary. Beginning July 1, 2012 and until July 1, 2013,
12the contribution rate under this subsection (a) shall be 1.25%
13of salary. Beginning July 1, 2013, the contribution rate under
14this subsection (a) shall be a percentage of salary determined
15by the Department of Central Management Services, or its
16successor, by rule, which in each fiscal year shall not exceed
17108% of the percentage of salary actually required to be
18contributed in the previous fiscal year. However, the required
19contribution rate determined by the Department or its successor
20under this subsection (a) shall equal the required contribution
21rate determined by the Department or its successor under
22subsection (b) of this Section.
23    These contributions shall be deducted by the employer and
24paid to the State Universities Retirement System as service
25agent for the Department of Central Management Services. The
26System may use the same processes for collecting the

 

 

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1contributions required by this subsection that it uses to
2collect the contributions received from those employees under
3Section 15-157 of the Illinois Pension Code. An employer may
4agree to pick up or pay the contributions required under this
5subsection on behalf of the employee; such contributions shall
6be deemed to have been paid by the employee.
7    The State Universities Retirement System shall promptly
8deposit all moneys collected under this subsection (a) into the
9Community College Health Insurance Security Fund created in
10Section 6.9 of this Act. The moneys collected under this
11Section shall be used only for the purposes authorized in
12Section 6.9 of this Act and shall not be considered to be
13assets of the State Universities Retirement System.
14Contributions made under this Section are not transferable to
15other pension funds or retirement systems and are not
16refundable upon termination of service.
17    (b) Beginning January 1, 1999, every community college
18district (other than a community college district subject to
19Article VII of the Public Community College Act) or association
20of community college boards that is an employer under the State
21Universities Retirement System shall contribute toward the
22cost of the community college health benefits provided under
23Section 6.9 of this Act an amount equal to 0.50% of the salary
24paid to its full-time employees who participate in the State
25Universities Retirement System and are not members as defined
26in Section 3 of this Act. Beginning July 1, 2012 and until July

 

 

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

 

 

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

 

 

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1Universities Retirement System shall certify to the Governor,
2the Director of Central Management Services, and the State
3Comptroller its estimate of the total amount of contributions
4to be paid under subsection (a) of this Section for the next
5fiscal year. Beginning in fiscal year 2008, the amount
6certified shall be decreased or increased each year by the
7amount that the actual active employee contributions either
8fell short of or exceeded the estimate used by the Board in
9making the certification for the previous fiscal year. The
10State Universities Retirement System shall calculate the
11amount of actual active employee contributions in fiscal years
121999 through 2005. Based upon this calculation, the fiscal year
132008 certification shall include an amount equal to the
14cumulative amount that the actual active employee
15contributions either fell short of or exceeded the estimate
16used by the Board in making the certification for those fiscal
17years. The certification shall include a detailed explanation
18of the methods and information that the Board relied upon in
19preparing its estimate. As soon as possible after the effective
20date of this Section, the Board shall submit its estimate for
21fiscal year 1999.
22    (d) Beginning in fiscal year 1999, on the first day of each
23month, or as soon thereafter as may be practical, the State
24Treasurer and the State Comptroller shall transfer from the
25General Revenue Fund to the Community College Health Insurance
26Security Fund 1/12 of the annual amount appropriated for that

 

 

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1fiscal year to the State Comptroller for deposit into the
2Community College Health Insurance Security Fund under Section
31.4 of the State Pension Funds Continuing Appropriation Act.
4    (e) Except where otherwise specified in this Section, the
5definitions that apply to Article 15 of the Illinois Pension
6Code apply to this Section.
7(Source: P.A. 94-839, eff. 6-6-06; 95-632, eff. 9-25-07.)
 
8    (5 ILCS 375/6.10A new)
9    Sec. 6.10A. City colleges; optional participation in
10program of health benefits. Notwithstanding any other
11provision of this Act, the Department of Central Management
12Services shall adopt rules authorizing optional participation
13in the program of health benefits for community college benefit
14recipients and community college dependent beneficiaries by
15any person who is otherwise ineligible to participate in that
16program solely as a result of that or another person's
17employment with a community college district subject to Article
18VII of the Public Community College Act.
 
19    (5 ILCS 375/6.16 new)
20    Sec. 6.16. Health benefit election for Tier I employees and
21Tier I retirees.
22    (a) For purposes of this Section:
23    "Eligible Tier I employee" means an individual who makes or
24is deemed to have made an election under paragraph (1) of

 

 

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1subsection (a) of Section 2-110.3, 14-106.5, 15-134.6, or
216-131.7 of the Illinois Pension Code.
3    "Eligible Tier I retiree" means an individual who makes or
4is deemed to have made an election under paragraph (1) of
5subsection (a-5) of Section 2-110.3, 14-106.5, 15-134.6, or
616-131.7 of the Illinois Pension Code.
7    "Program of health benefits" means (i) a health plan, as
8defined in subsection (o) of Section 3 of this Act, that is
9designed and contracted for by the Director under this Act or
10any successor Act or (ii) if administration of that health plan
11is transferred to a trust established by the State or an
12independent Board in order to provide health benefits to a
13class of a persons that includes eligible Tier I retirees, then
14the plan of health benefits provided through that trust.
15    For persons who receive healthcare benefits under a
16collective bargaining agreement with a community college
17district subject to Article VII of the Public Community College
18Act, the term "program of health benefits" also includes any
19health benefit arrangement provided under such a collective
20bargaining agreement, except that if such an agreement expires
21and if those persons are otherwise eligible to participate in a
22program of health benefits pursuant to item (i) or (ii), then
23"program of health benefits" does not include the health
24benefit arrangements provided under such a collective
25bargaining agreement.
26    For persons who are eligible to receive benefits under a

 

 

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1health plan made available by a community college district
2subject to Article VII of the Public Community College Act and
3who do not receive those benefits pursuant to a collective
4bargaining agreement, "program of health benefits" also
5includes the health plan made available to such persons by the
6community college district, except that if those persons
7otherwise become eligible to participate in a program of health
8benefits pursuant to item (i) or (ii), then "program of health
9benefits" does not include the health plan made available to
10such persons by the community college district.
11    (b) As adequate and legal consideration for making the
12election under paragraph (1) of subsection (a) or (a-5) of
13Section 2-110.3, 14-106.5, 15-134.6, or 16-131.7 of the
14Illinois Pension Code, each eligible Tier I employee and each
15eligible Tier I retiree shall receive a vested and enforceable
16contractual right to participate in a program of health
17benefits while he or she qualifies as an annuitant or retired
18employee, or as a TRS benefit recipient or community college
19benefit recipient receiving a retirement annuity. That right
20also extends to such a person's dependents, survivors, TRS
21dependent beneficiaries, and community college dependent
22beneficiaries who are eligible under the applicable program of
23health benefits.
24    (c) Notwithstanding subsection (b), eligible Tier I
25employees and eligible Tier I retirees may be required to make
26contributions toward the cost of coverage under a program of

 

 

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1health benefits.
2    (d) The vested and enforceable contractual right to a
3program of health benefits is not offered as, and shall not be
4considered, a pension benefit under Article XIII, Section 5 of
5the Illinois Constitution, the Illinois Pension Code, or any
6subsequent or successor enactment providing pension benefits.
7    (e) Notwithstanding any other provision of this Act, a Tier
8I employee or Tier I retiree who has made an election under
9paragraph (2) of subsection (a) or (a-5) of Section 2-110.3,
1014-106.5, 15-134.6, or 16-131.7 of the Illinois Pension Code
11shall not be entitled to participate in the program of health
12benefits as an annuitant or retired employee, or as a TRS
13benefit recipient or community college benefit recipient
14receiving a retirement annuity, regardless of any contrary
15election pursuant to any of those Sections under any other
16retirement system.
17    Notwithstanding any other provision of this Act, a Tier I
18employee who is not entitled to participate in the program of
19health benefits as an annuitant or retired employee, or as a
20TRS benefit recipient or community college benefit recipient
21receiving a retirement annuity, due to an election under
22paragraph (2) of subsection (a) or (a-5) of Section 2-110.3,
2314-106.5, 15-134.6, or 16-131.7 of the Illinois Pension Code
24shall not be required to make contributions toward the program
25of health benefits while he or she is an employee or active
26contributor. However, an active employee may be required to

 

 

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1make contributions toward the health benefits he or she
2receives during active employment.
3    (f) The Department shall coordinate with each retirement
4system administering an election in accordance with this
5amendatory Act of the 97th General Assembly to provide
6information concerning the impact of the election of health
7benefits. Each System shall include information prepared by the
8Department in the required election packet. The Department
9shall make information available to Tier I employees and Tier I
10retirees through video materials, group presentations,
11consultation by telephone or other electronic means, or any
12combination of these methods.
 
13    Section 15. The Governor's Office of Management and Budget
14Act is amended by changing Sections 7 and 8 as follows:
 
15    (20 ILCS 3005/7)  (from Ch. 127, par. 417)
16    Sec. 7. All statements and estimates of expenditures
17submitted to the Office in connection with the preparation of a
18State budget, and any other estimates of expenditures,
19supporting requests for appropriations, shall be formulated
20according to the various functions and activities for which the
21respective department, office or institution of the State
22government (including the elective officers in the executive
23department and including the University of Illinois and the
24judicial department) is responsible. All such statements and

 

 

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1estimates of expenditures relating to a particular function or
2activity shall be further formulated or subject to analysis in
3accordance with the following classification of objects:
4    (1) Personal services
5    (2) State contribution for employee group insurance
6    (3) Contractual services
7    (4) Travel
8    (5) Commodities
9    (6) Equipment
10    (7) Permanent improvements
11    (8) Land
12    (9) Electronic Data Processing
13    (10) Telecommunication services
14    (11) Operation of Automotive Equipment
15    (12) Contingencies
16    (13) Reserve
17    (14) Interest
18    (15) Awards and Grants
19    (16) Debt Retirement
20    (17) Non-cost Charges.
21    (18) State retirement contribution for annual normal cost
22    (19) State retirement contribution for unfunded accrued
23liability.
24(Source: P.A. 93-25, eff. 6-20-03.)
 
25    (20 ILCS 3005/8)  (from Ch. 127, par. 418)

 

 

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1    Sec. 8. When used in connection with a State budget or
2expenditure or estimate, items (1) through (16) in the
3classification of objects stated in Section 7 shall have the
4meanings ascribed to those items in Sections 14 through 24.7,
5respectively, of the State Finance Act. "An Act in relation to
6State finance", approved June 10, 1919, as amended.
7    When used in connection with a State budget or expenditure
8or estimate, items (18) and (19) in the classification of
9objects stated in Section 7 shall have the meanings ascribed to
10those items in Sections 24.12 and 24.13, respectively, of the
11State Finance Act.
12(Source: P.A. 82-325.)
 
13    Section 20. The Illinois State Auditing Act is amended by
14adding Section 2-8.1 as follows:
 
15    (30 ILCS 5/2-8.1 new)
16    Sec. 2-8.1. Actuarial Responsibilities.
17    (a) The Auditor General shall contract with or hire an
18actuary to serve as the State Actuary. The State Actuary shall
19be retained by, serve at the pleasure of, and be under the
20supervision of the Auditor General and shall be paid from
21appropriations to the office of the Auditor General. The State
22Actuary may be selected by the Auditor General without engaging
23in a competitive procurement process.
24    (b) The State Actuary shall:

 

 

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1        (1) review assumptions and valuations prepared by
2    actuaries retained by the boards of trustees of the
3    State-funded retirement systems;
4        (2) issue preliminary reports to the boards of trustees
5    of the State-funded retirement systems concerning proposed
6    certifications of required State contributions submitted
7    to the State Actuary by those boards;
8        (3) cooperate with the boards of trustees of the
9    State-funded retirement systems to identify recommended
10    changes in actuarial assumptions that the boards must
11    consider before finalizing their certifications of the
12    required State contributions;
13        (4) conduct reviews of the actuarial practices of the
14    boards of trustees of the State-funded retirement systems;
15        (5) make additional reports as directed by joint
16    resolution of the General Assembly; and
17        (6) perform any other duties assigned by the Auditor
18    General, including, but not limited to, reviews of the
19    actuarial practices of other entities.
20    (c) On or before January 1, 2013 and each January 1
21thereafter, the Auditor General shall submit a written report
22to the General Assembly and Governor documenting the initial
23assumptions and valuations prepared by actuaries retained by
24the boards of trustees of the State-funded retirement systems,
25any changes recommended by the State Actuary in the actuarial
26assumptions, and the responses of each board to the State

 

 

09700SB1673ham005- 23 -LRB097 07605 JWD 70354 a

1Actuary's recommendations.
2    (d) For the purposes of this Section, "State-funded
3retirement system" means a retirement system established
4pursuant to Article 2, 14, 15, 16, or 18 of the Illinois
5Pension Code.
 
6    Section 25. The State Finance Act is amended by changing
7Section 13 and by adding Sections 24.12 and 24.13 as follows:
 
8    (30 ILCS 105/13)  (from Ch. 127, par. 149)
9    Sec. 13. The objects and purposes for which appropriations
10are made are classified and standardized by items as follows:
11    (1) Personal services;
12    (2) State contribution for employee group insurance;
13    (3) Contractual services;
14    (4) Travel;
15    (5) Commodities;
16    (6) Equipment;
17    (7) Permanent improvements;
18    (8) Land;
19    (9) Electronic Data Processing;
20    (10) Operation of automotive equipment;
21    (11) Telecommunications services;
22    (12) Contingencies;
23    (13) Reserve;
24    (14) Interest;

 

 

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

 

 

09700SB1673ham005- 25 -LRB097 07605 JWD 70354 a

1by the board of trustees of the retirement system in
2conformance with the applicable provisions of the Illinois
3Pension Code.
 
4    (30 ILCS 105/24.13 new)
5    Sec. 24.13. "State retirement contribution for unfunded
6accrued liability" defined. The term "State retirement
7contribution for unfunded accrued liability" means the portion
8of the total required State contribution to a retirement system
9for a fiscal year that is not included in the State retirement
10contribution for annual normal cost.
 
11    Section 30. The Illinois Pension Code is amended by
12changing Sections 1-103.3, 1-160, 2-108, 2-119.1, 2-124,
132-134, 7-109, 14-103.10, 14-106, 14-114, 14-131, 14-132,
1414-133, 14-135.08, 14-152.1, 15-106, 15-107, 15-111, 15-113.2,
1515-113.6, 15-134.5, 15-136, 15-155, 15-157, 15-158.2, 15-159,
1615-163, 15-165, 15-198, 16-106, 16-121, 16-127, 16-133.1,
1716-136.1, 16-152, 16-158, 16-163, 16-165, 16-203, 18-140,
1820-121, 20-123, 20-124, and 20-125 and by adding Sections
191-161, 1-162, 2-105.1, 2-105.2, 2-107.9, 2-110.3, 14-103.40,
2014-103.41, 14-103.42, 14-106.5, 15-107.1, 15-107.2, 15-111.1,
2115-134.6, 15-155.1, 15-155.2, 16-106.4, 16-106.5, 16-106.6,
2216-121.1, 16-131.7, 16-133.6, and 16-158.2 as follows:
 
23    (40 ILCS 5/1-103.3)

 

 

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1    Sec. 1-103.3. Application of 1994 amendment; funding
2standard.
3    (a) The provisions of Public Act 88-593 this amendatory Act
4of 1994 that change the method of calculating, certifying, and
5paying the required State contributions to the retirement
6systems established under Articles 2, 14, 15, 16, and 18 shall
7first apply to the State contributions required for State
8fiscal year 1996.
9    (b) (Blank). The General Assembly declares that a funding
10ratio (the ratio of a retirement system's total assets to its
11total actuarial liabilities) of 90% is an appropriate goal for
12State-funded retirement systems in Illinois, and it finds that
13a funding ratio of 90% is now the generally-recognized norm
14throughout the nation for public employee retirement systems
15that are considered to be financially secure and funded in an
16appropriate and responsible manner.
17    (c) Every 5 years, beginning in 1999, the Commission on
18Government Forecasting and Accountability, in consultation
19with the affected retirement systems and the Governor's Office
20of Management and Budget (formerly Bureau of the Budget), shall
21consider and determine whether the funding goals 90% funding
22ratio adopted in Articles 2, 14, 15, 16, and 18 of this Code
23continue subsection (b) continues to represent an appropriate
24funding goals goal for State-funded retirement systems in
25Illinois, and it shall report its findings and recommendations
26on this subject to the Governor and the General Assembly.

 

 

09700SB1673ham005- 27 -LRB097 07605 JWD 70354 a

1(Source: P.A. 93-1067, eff. 1-15-05.)
 
2    (40 ILCS 5/1-160)
3    Sec. 1-160. Provisions applicable to new hires.
4    (a) The provisions of this Section apply to a person who,
5on or after January 1, 2011, first becomes a member or a
6participant under any reciprocal retirement system or pension
7fund established under this Code, other than a retirement
8system or pension fund established under Article 2, 3, 4, 5, 6,
9or 18 of this Code, notwithstanding any other provision of this
10Code to the contrary, but do not apply (i) to any self-managed
11plan established under this Code, (ii) to any person with
12respect to service as a sheriff's law enforcement employee
13under Article 7, (iii) to any person with respect to service
14for which the person participates in the cash balance plan
15established under Section 1-161, or (iv) to any participant of
16the retirement plan established under Section 22-101.
17    A person subject to this Section with respect to service
18under the State Universities Retirement System may irrevocably
19elect to transfer to the cash balance plan under Section 1-161
20with respect to service under the State Universities Retirement
21System by filing with the State Universities Retirement System
22in the manner required by that System, his or her irrevocable
23written election to transfer to the cash balance plan.
24Participation in the cash balance plan shall begin no earlier
25than July 1, 2013.

 

 

09700SB1673ham005- 28 -LRB097 07605 JWD 70354 a

1    A person subject to this Section with respect to service
2under the Teachers' Retirement System of the State of Illinois
3may irrevocably elect to transfer to the cash balance plan
4under Section 1-161 with respect to service under the Teachers'
5Retirement System of the State of Illinois by filing with the
6Teachers' Retirement System of the State of Illinois in the
7manner required by that System, his or her irrevocable written
8election to transfer to the cash balance plan. Participation in
9the cash balance plan shall begin no earlier than July 1, 2013.
10    (b) "Final average salary" means the average monthly (or
11annual) salary obtained by dividing the total salary or
12earnings calculated under the Article applicable to the member
13or participant during the 96 consecutive months (or 8
14consecutive years) of service within the last 120 months (or 10
15years) of service in which the total salary or earnings
16calculated under the applicable Article was the highest by the
17number of months (or years) of service in that period. For the
18purposes of a person who first becomes a member or participant
19of any retirement system or pension fund to which this Section
20applies on or after January 1, 2011, in this Code, "final
21average salary" shall be substituted for the following:
22        (1) In Articles 7 (except for service as sheriff's law
23    enforcement employees) and 15, "final rate of earnings".
24        (2) In Articles 8, 9, 10, 11, and 12, "highest average
25    annual salary for any 4 consecutive years within the last
26    10 years of service immediately preceding the date of

 

 

09700SB1673ham005- 29 -LRB097 07605 JWD 70354 a

1    withdrawal".
2        (3) In Article 13, "average final salary".
3        (4) In Article 14, "final average compensation".
4        (5) In Article 17, "average salary".
5        (6) In Section 22-207, "wages or salary received by him
6    at the date of retirement or discharge".
7    (b-5) Beginning on January 1, 2011, for all purposes under
8this Code (including without limitation the calculation of
9benefits and employee contributions), the annual earnings,
10salary, or wages (based on the plan year) of a member or
11participant to whom this Section applies shall not exceed
12$106,800; however, that amount shall annually thereafter be
13increased by the lesser of (i) 3% of that amount, including all
14previous adjustments, or (ii) one-half the annual unadjusted
15percentage increase (but not less than zero) in the consumer
16price index-u for the 12 months ending with the September
17preceding each November 1, including all previous adjustments.
18    For the purposes of this Section, "consumer price index-u"
19means the index published by the Bureau of Labor Statistics of
20the United States Department of Labor that measures the average
21change in prices of goods and services purchased by all urban
22consumers, United States city average, all items, 1982-84 =
23100. The new amount resulting from each annual adjustment shall
24be determined by the Public Pension Division of the Department
25of Insurance and made available to the boards of the retirement
26systems and pension funds by November 1 of each year.

 

 

09700SB1673ham005- 30 -LRB097 07605 JWD 70354 a

1    (c) A member or participant is entitled to a retirement
2annuity upon written application if he or she has attained age
367 and has at least 10 years of service credit and is otherwise
4eligible under the requirements of the applicable Article.
5    A member or participant who has attained age 62 and has at
6least 10 years of service credit and is otherwise eligible
7under the requirements of the applicable Article may elect to
8receive the lower retirement annuity provided in subsection (d)
9of this Section.
10    (d) The retirement annuity of a member or participant who
11is retiring after attaining age 62 with at least 10 years of
12service credit shall be reduced by one-half of 1% for each full
13month that the member's age is under age 67.
14    (e) Any retirement annuity or supplemental annuity shall be
15subject to annual increases on the January 1 occurring either
16on or after the attainment of age 67 or the first anniversary
17of the annuity start date, whichever is later. Each annual
18increase shall be calculated at 3% or one-half the annual
19unadjusted percentage increase (but not less than zero) in the
20consumer price index-u for the 12 months ending with the
21September preceding each November 1, whichever is less, of the
22originally granted retirement annuity. If the annual
23unadjusted percentage change in the consumer price index-u for
24the 12 months ending with the September preceding each November
251 is zero or there is a decrease, then the annuity shall not be
26increased.

 

 

09700SB1673ham005- 31 -LRB097 07605 JWD 70354 a

1    (f) The initial survivor's or widow's annuity of an
2otherwise eligible survivor or widow of a retired member or
3participant who first became a member or participant on or
4after January 1, 2011 shall be in the amount of 66 2/3% of the
5retired member's or participant's retirement annuity at the
6date of death. In the case of the death of a member or
7participant who has not retired and who first became a member
8or participant on or after January 1, 2011, eligibility for a
9survivor's or widow's annuity shall be determined by the
10applicable Article of this Code. The initial benefit shall be
1166 2/3% of the earned annuity without a reduction due to age. A
12child's annuity of an otherwise eligible child shall be in the
13amount prescribed under each Article if applicable. Any
14survivor's or widow's annuity shall be increased (1) on each
15January 1 occurring on or after the commencement of the annuity
16if the deceased member died while receiving a retirement
17annuity or (2) in other cases, on each January 1 occurring
18after the first anniversary of the commencement of the annuity.
19Each annual increase shall be calculated at 3% or one-half the
20annual unadjusted percentage increase (but not less than zero)
21in the consumer price index-u for the 12 months ending with the
22September preceding each November 1, whichever is less, of the
23originally granted survivor's annuity. If the annual
24unadjusted percentage change in the consumer price index-u for
25the 12 months ending with the September preceding each November
261 is zero or there is a decrease, then the annuity shall not be

 

 

09700SB1673ham005- 32 -LRB097 07605 JWD 70354 a

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

 

 

09700SB1673ham005- 33 -LRB097 07605 JWD 70354 a

1recalculated if recalculation is provided for under the
2applicable Article of this Code.
3    If a person who first becomes a member of a retirement
4system or pension fund subject to this Section on or after
5January 1, 2012 and is receiving a retirement annuity or
6retirement pension under that system or fund and accepts on a
7contractual basis a position to provide services to a
8governmental entity from which he or she has retired, then that
9person's annuity or retirement pension earned as an active
10employee of the employer shall be suspended during that
11contractual service. A person receiving an annuity or
12retirement pension under this Code shall notify the pension
13fund or retirement system from which he or she is receiving an
14annuity or retirement pension, as well as his or her
15contractual employer, of his or her retirement status before
16accepting contractual employment. A person who fails to submit
17such notification shall be guilty of a Class A misdemeanor and
18required to pay a fine of $1,000. Upon termination of that
19contractual employment, the person's retirement annuity or
20retirement pension payments shall resume and, if appropriate,
21be recalculated under the applicable provisions of this Code.
22    (i) Notwithstanding any other provision of this Section, a
23person who first becomes a participant of the retirement system
24established under Article 15 on or after January 1, 2011 shall
25have the option to enroll in the self-managed plan created
26under Section 15-158.2 of this Code.

 

 

09700SB1673ham005- 34 -LRB097 07605 JWD 70354 a

1    (j) In the case of a conflict between the provisions of
2this Section and any other provision of this Code, the
3provisions of this Section shall control.
4(Source: P.A. 96-889, eff. 1-1-11; 96-1490, eff. 1-1-11;
597-609, eff. 1-1-12.)
 
6    (40 ILCS 5/1-161 new)
7    Sec. 1-161. Cash Balance Plan.
8    (a) Participation and Applicability. This Section applies
9to all new cash balance plan participants and all legacy Tier
10II participants.
11    This Section does not, however, apply to any person with
12respect to service for which the person participates in the
13self-managed plan established under Section 15-158.2 in lieu of
14the retirement benefits otherwise provided by the State
15Universities Retirement System.
16    (b) Title. The package of benefits provided under this
17Section may be referred to as the "cash balance plan". Persons
18subject to the provisions of this Section may be referred to as
19"participants in the cash balance plan".
20    (b-5) Definitions. As used in this Section:
21    "Account" means the notional cash balance account
22established under this Section for a participant in the cash
23balance plan.
24    "Consumer Price Index-U" means the Consumer Price Index
25published by the Bureau of Labor Statistics of the United

 

 

09700SB1673ham005- 35 -LRB097 07605 JWD 70354 a

1States Department of Labor that measures the average change in
2prices of goods and services purchased by all urban consumers,
3United States city average, all items, 1982-84 = 100.
4    "Salary" means "earnings" as defined in Article 15 or
5"salary" as defined in Article 16, whichever is applicable,
6without regard to the limitation in subsection (b-5) of Section
71-160.
8    "Legacy Tier II participant" means a person who was subject
9to Section 1-160 with respect to service under Article 15 or 16
10of this Code and who irrevocably elects to participate in the
11cash balance plan created under this Section. That election
12must be made in writing, in the manner provided by the
13applicable retirement system.
14    "New cash balance plan participant" means a person who, on
15or after July 1, 2013, first begins to participate in the
16retirement system established under Article 15 or 16 of this
17Code.
18    (c) Cash Balance Account. A notional cash balance account
19shall be established by the applicable retirement system for
20each participant in the cash balance plan. The account is
21notional and does not contain any actual money segregated from
22the commingled assets of the retirement system. The cash
23balance in the account is to be used in calculating benefits as
24provided in this Section, but is not to be used in the
25calculation of any refund, transfer, or other benefit under the
26applicable Article of this Code.

 

 

09700SB1673ham005- 36 -LRB097 07605 JWD 70354 a

1    The amounts to be credited to the cash balance account
2shall consist of (i) amounts contributed by or on behalf of the
3participant as employee contributions, (ii) notional employer
4contributions, and (iii) interest credit that is attributable
5to the account, all as provided in this Section.
6    Whenever necessary for the prompt calculation or
7administration, or when the System lacks information necessary
8to the calculation or administration otherwise required of or
9for a benefit under this Section, the applicable retirement
10system may estimate an amount to be credited to or debited from
11a participant's cash balance account and then adjust the amount
12so credited or debited when more accurate information becomes
13available.
14    The applicable retirement system shall give to each
15participant in the cash balance plan who has not yet retired
16annual notice of (1) the balance in the participant's cash
17balance account and (2) an estimate of the retirement annuity
18that will be payable to the participant if he or she retires at
19age 59 1/2.
20    (c-5) Initial Account Balance for Legacy Tier II
21Participants. The applicable retirement system shall establish
22an initial account balance for each legacy Tier II participant
23when he or she begins participation in the cash balance plan.
24The initial account balance shall be an amount equal to the
25employee contribution refund that the participant would be
26eligible to receive under the applicable Article of this Code

 

 

09700SB1673ham005- 37 -LRB097 07605 JWD 70354 a

1if the participant terminated employment on that date and
2elected a refund of contributions, as prescribed by the board
3of the applicable retirement system.
4    (d) Employee Contributions. New cash balance plan
5participants and legacy Tier II participants shall make
6employee contributions to the applicable retirement system at
7the rates required under the applicable Article of this Code.
8The amount of each contribution shall be credited to the
9participant's cash balance account upon receipt and after the
10retirement system's reconciliation of the contribution.
11    (e) Notional Employer Contributions. Upon receipt of each
12employee contribution under subsection (d), an amount
13representing the employer contribution shall be credited to the
14participant's cash balance account. For a participant in the
15cash balance plan under Article 15, the notional employer
16contribution shall be 4.4% of salary. For a participant in the
17cash balance plan under Article 16, the notional employer
18contribution shall be 3.4% of salary.
19    The notional employer contribution to be credited to the
20participant's account is not the same as the actual employer
21contributions required under subsection (p) and the provisions
22of the applicable Article of this Code.
23    (e-1) Optional Employer Contributions. Employers may make
24optional additional contributions to the applicable retirement
25system on behalf of their employees who are participants in the
26cash balance plan in accordance with procedures prescribed by

 

 

09700SB1673ham005- 38 -LRB097 07605 JWD 70354 a

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

 

 

09700SB1673ham005- 39 -LRB097 07605 JWD 70354 a

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

 

 

09700SB1673ham005- 40 -LRB097 07605 JWD 70354 a

1balance in the participant's account in the form of a direct
2rollover to another qualified plan, to the extent allowed by
3federal law. If the participant makes such an election, then
4the amount distributed shall be debited from the participant's
5cash balance account. A participant in the cash balance plan
6shall be allowed only one distribution under this subsection.
7The remaining balance in the participant's account shall be
8used for the determination of other benefits provided under
9this Section.
10    (f-15) Refund. In lieu of receiving a distribution under
11subsection (f-10), at any time after terminating active
12employment under the applicable retirement system, but before
13receiving a retirement annuity under this Section, a
14participant in the cash balance plan may elect to receive a
15refund under this subsection. The refund shall consist of an
16amount equal to the amount of all employee contributions
17credited to the participant's account, but shall not include
18any interest credit or employer contributions. If the
19participant so requests, the refund may be paid in the form of
20a direct rollover to another qualified plan, to the extent
21allowed by federal law and in accordance with the rules of the
22applicable retirement system. Upon payment of the refund, the
23participant's notional cash balance account shall be closed.
24    The participant's credits in the applicable retirement
25system shall be terminated upon payment of a refund under this
26subsection.

 

 

09700SB1673ham005- 41 -LRB097 07605 JWD 70354 a

1    (g) Retirement Annuity. A participant in the cash balance
2plan may begin collecting a retirement annuity at age 59 1/2,
3but no earlier than the date of termination of active
4employment under the applicable retirement system.
5    The amount of the retirement annuity shall be calculated by
6the retirement system, based on the balance in the cash balance
7account, the assumption of future investment returns as
8specified in this subsection, the participant's election to
9have a lifetime survivor's annuity as specified in this
10subsection, the annual increase in retirement annuity as
11specified in subsection (h), the annual increase in survivor's
12annuity as specified in subsection (l), and any actuarial
13assumptions and tables adopted by the board of the retirement
14system for this purpose. The calculation shall determine the
15amount of retirement annuity, on an actuarially equivalent
16basis, that shall be designed to result in the balance in the
17participant's account arriving at zero on the date when the
18last payment of the retirement annuity (or survivor's annuity,
19if the participant elects to provide for a survivor's annuity
20pursuant to this subsection) is anticipated to be paid under
21the relevant actuarial assumptions. A retirement annuity or a
22survivor's annuity provided under this Section shall be a life
23annuity and shall not expire if the account balance equals
24zero.
25    The annuity payment shall begin on the date specified by
26the participant submitting a written application, which date

 

 

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1shall not be prior to termination of employment or more than
2one year before the application is received by the board;
3however, if the participant is not an employee of an employer
4participating in this System or in a participating system as
5defined in Article 20 of this Code on April 1 of the calendar
6year next following the calendar year in which the participant
7attains age 70 1/2, the annuity payment period shall begin on
8that date regardless of whether an application has been filed.
9    The participant may elect, under the participant's written
10application for retirement, to receive a reduced annuity
11payable for his or her life and to have a lifetime survivor's
12annuity in a monthly amount equal to 50%, 75%, or 100% of that
13reduced monthly amount, to be paid after the participant's
14death to his or her eligible survivor. Eligibility for a
15survivor's annuity shall be determined under the applicable
16Article of this Code.
17    For the purpose of calculating retirement annuities,
18future investment returns shall be assumed to be a percentage
19equal to the average yield of the 30-year U.S. Treasury Bond
20over the 5 fiscal years prior to the calculation of the initial
21retirement annuity, plus 250 basis points; but not less than 4%
22nor more than 8%.
23    (h) Annual Increase in Retirement Annuity. The retirement
24annuity shall be subject to an automatic annual increase in an
25amount equal to 3% of the originally granted annuity on each
26January 1 occurring on or after the first anniversary of the

 

 

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1annuity start date.
2    (i) Disability Benefits. The disability benefits provided
3under the applicable retirement system apply to new cash
4balance plan participants and legacy Tier II participants in
5the cash balance plan, subject to and in accordance with the
6eligibility and other provisions of the applicable Article.
7    Retirement due to disability under Section 15-153.2 or
816-149.2 shall be deemed a disability benefit for the purposes
9of this Section and shall apply to new cash balance plan
10participants and legacy Tier II participants.
11    The board of the retirement system shall designate
12annually, as a percentage of salary, an amount representing the
13anticipated average cost of providing disability benefits for
14new cash balance plan participants and legacy Tier II
15participants. The amount so designated shall not exceed 1% of
16the cash balance plan participant's salary and shall be
17deducted annually from the account of each new cash balance
18plan participant and each legacy Tier II participant.
19    (j) Return to Service. Upon a return to service under the
20same retirement system after beginning to receive a retirement
21annuity under the cash balance plan, the retirement annuity
22shall be suspended and active participation in the cash balance
23plan shall resume. Upon termination of the employment, the
24retirement annuity shall resume in an amount to be recalculated
25in accordance with subsection (g), taking into effect the
26changes in the cash balance account. If a retired annuitant

 

 

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1returns to service, his or her notional cash balance account
2shall be decreased by each payment of retirement annuity prior
3to the return to service.
4    (k) Survivor's Annuity - Death before Retirement. In the
5case of the death of a new cash balance plan participant or
6legacy Tier II participant who had less than 5 years of service
7under the applicable Article and had not begun receiving a
8retirement annuity, the eligible survivor shall be entitled
9only to a refund of employee contributions under subsection
10(f-15).
11    In the case of the death of a new cash balance plan
12participant or legacy Tier II participant who had at least 5
13years of service under the applicable Article and had not begun
14receiving a retirement annuity, the eligible survivor shall be
15entitled to receive a survivor's annuity beginning at age 59
161/2 upon written application. The survivor's annuity shall be
17calculated in the same manner as a retirement annuity under
18subsection (g). At any time before receiving a survivor's
19annuity, the eligible survivor may claim a distribution under
20subsection (f-10) or a refund under subsection (f-15). The
21deceased participant's account shall continue to receive
22interest credit until the eligible survivor begins to receive a
23survivor's annuity or receives a refund of employee
24contributions under subsection (f-15).
25    Eligibility for a survivor's annuity shall be determined
26under the applicable Article of this Code. A child's or

 

 

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

 

 

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1    provided in this Section) or any lump-sum payout in lieu of
2    a retirement or survivor's annuity (other than the
3    distribution under subsection (f-10) or the refund under
4    subsection (f-15) of this Section;
5        (7) provisions authorizing optional service credits or
6    the payment of optional additional contributions (other
7    than the optional employer contributions specifically
8    authorized in subsection (e-1)); or
9        (8) a level income option.
10    The Retirement Systems Reciprocal Act applies to
11participants in the cash balance plan who qualify under Article
1220 of this Code, but it does not affect the calculation of
13benefits payable under this Section.
14    The other provisions of this Code continue to apply to
15participants in the cash balance plan, to the extent that they
16do not conflict with this Section. In the case of a conflict
17between the provisions of this Section and any other provision
18of this Code, the provisions of this Section control.
19    (n) Rules. The Board of Trustees of the applicable
20retirement system may adopt rules and procedures for the
21implementation of this Section, including but not limited to
22determinations of how to integrate the administration of this
23Section with the requirements of the applicable Article and any
24other applicable provisions of this Code.
25    (o) Public Pension Division. The Public Pension Division of
26the Department of Insurance shall determine in October of each

 

 

09700SB1673ham005- 47 -LRB097 07605 JWD 70354 a

1year the annual unadjusted percentage increase (but not less
2than zero) in the Consumer Price Index-U for the 12 months
3ending with the preceding September. The Division shall certify
4its determination to the Board of Trustees of the State
5Universities Retirement System by November 1 of each year.
6    (p) Actual Employer Contributions. Payment of employer
7contributions with respect to participants in the cash balance
8plan shall be the responsibility of the actual employer. These
9contributions shall be determined under and paid in accordance
10with the provisions of Sections 15-155. Optional employer
11contributions may be paid by employers in any amount, but must
12be paid in the manner specified by the applicable retirement
13system.
14    (q) Prospective Modification. The provisions set forth in
15this Section are subject to prospective changes made by law
16provided that any such changes shall not apply to any benefits
17accrued under this Section prior to the effective date of any
18amendatory Act of the General Assembly.
19    (r) An employee who participates in the cash balance plan
20under this Section may elect to participate in the optional
21cash balance plan under Section 1-162.
22    (s) Qualified Plan Status. No provision of this Section
23shall be interpreted in a way that would cause the applicable
24retirement system to cease to be a qualified plan under section
25461 (a) of the Internal Revenue Code of 1986.
 

 

 

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1    (40 ILCS 5/1-162 new)
2    Sec. 1-162. Optional cash balance plan.
3    (a) Participation and Applicability. Beginning on July 1,
42013, the following persons may elect to participate in the
5optional cash balance plan created under this Section:
6        (1) any person who participates in the cash balance
7    plan established under Section 1-161; and
8        (2) any Tier I employee who has made the election under
9    paragraph (1) of subsection (a) or (a-5) of Section
10    14-106.5 or paragraph (1) of subsection (a) or (a-5) of
11    Section 15-134.6, or paragraph (1) of subsection (a) or
12    (a-5) of Section 16-131.7.
13    This Section does not, however, apply to any person with
14respect to service for which the person participates in the
15self-managed plan established under Section 15-158.2 in lieu of
16the retirement benefits otherwise provided by the State
17Universities Retirement System.
18    The Board of Trustees of the applicable retirement system
19shall promulgate rules to create an annual election wherein a
20person eligible to participate in the optional cash balance
21plan may elect to participate, and an active employee who is a
22participant in the plan may elect to cease active
23participation. The election to cease active participation
24shall not disqualify the employee from eligibility to receive
25an interest credit under subsection (f), a distribution upon
26termination under subsection (f-10), a refund under subsection

 

 

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1(f-15), a retirement annuity under subsection (f-15), a
2retirement annuity under subsection (g), or a survivor annuity
3under subsection (k), or from eligibility to resume active
4participation in the optional cash balance plan in a subsequent
5year.
6    (b) Title. The package of benefits provided under this
7Section may be referred to as the "optional cash balance plan".
8Persons subject to the provisions of this Section may be
9referred to as "participants in the optional cash balance
10plan".
11    (b-5) Definitions. As used in this Section:
12    "Account" means the notional cash balance account
13established under this Section for a participant in the
14optional cash balance plan.
15    "Consumer Price Index-U" means the Consumer Price Index
16published 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    "Salary" means "compensation" as defined in Article 14,
21"earnings" as defined in Article 15, or "salary" as defined in
22Article 16, whichever is applicable, without regard to the
23limitation in subsection (b-5) of Section 1-160.
24    "Tier I employee" means a person who is a Tier I employee
25under the applicable Article of this Code.
26    (c) Cash Balance Account. A notional cash balance account

 

 

09700SB1673ham005- 50 -LRB097 07605 JWD 70354 a

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

 

 

09700SB1673ham005- 51 -LRB097 07605 JWD 70354 a

1retires at age 59 1/2.
2    (d) Employee Contributions. In addition to the other
3contributions required under the applicable Article, each
4participant shall make contributions to the applicable
5retirement system at the rate of 2% of each payment of salary.
6The amount of each contribution shall be credited to the
7participant's cash balance account upon receipt and after the
8retirement system's reconciliation of the contribution.
9    (e) Optional Employer Contributions. Employers may make
10optional additional contributions to the applicable retirement
11system on behalf of their employees who are participants in the
12optional cash balance plan in accordance with procedures
13prescribed by the retirement system, to the extent permitted by
14federal law and the rules prescribed by the retirement system.
15The optional additional contributions under this subsection
16are actual monetary contributions to the retirement system, and
17the amount of each optional additional contribution shall be
18credited to the participant's cash balance account upon receipt
19and after the retirement system's reconciliation of the
20contribution.
21    (f) Interest Credit. An amount representing earnings on
22investments shall be determined by the retirement system in
23accordance with this Section and credited to the participant's
24cash balance account for each fiscal year in which there is a
25positive balance in that account; except that no additional
26interest credit shall be credited while an annuity based on the

 

 

09700SB1673ham005- 52 -LRB097 07605 JWD 70354 a

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

 

 

09700SB1673ham005- 53 -LRB097 07605 JWD 70354 a

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

 

 

09700SB1673ham005- 54 -LRB097 07605 JWD 70354 a

1participant in the optional cash balance plan may elect to
2receive a refund under this subsection. The refund shall
3consist of an amount equal to the amount of all employee
4contributions credited to the participant's account, but shall
5not include any interest credit or employer contributions. If
6the participant so requests, the refund may be paid in the form
7of a direct rollover to another qualified plan, to the extent
8allowed by federal law and in accordance with the rules of the
9applicable retirement system. Upon payment of the refund, the
10participant's notional cash balance account shall be closed.
11    (g) Retirement Annuity. A participant in the optional cash
12balance plan may begin collecting a retirement annuity at age
1359 1/2, but no earlier than the date of termination of active
14employment under the applicable retirement system.
15    The amount of the retirement annuity shall be calculated by
16the retirement system, based on the balance in the cash balance
17account, the assumption of future investment returns as
18specified in this subsection, the participant's election to
19have a lifetime survivor's annuity as specified in this
20subsection, the annual increase in retirement annuity as
21specified in subsection (h), the annual increase in survivor's
22annuity as specified in subsection (l), and any actuarial
23assumptions and tables adopted by the board of the retirement
24system for this purpose. The calculation shall determine the
25amount of retirement annuity, on an actuarially equivalent
26basis, that shall be designed to result in the balance in the

 

 

09700SB1673ham005- 55 -LRB097 07605 JWD 70354 a

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

 

 

09700SB1673ham005- 56 -LRB097 07605 JWD 70354 a

1    For the purpose of calculating retirement annuities,
2future investment returns shall be assumed to be a percentage
3equal to the average yield of the 30-year U.S. Treasury Bond
4over the 5 fiscal years prior to the calculation of the initial
5retirement annuity, plus 250 basis points; but not less than 4%
6nor more than 8%.
7    (h) Annual Increase in Retirement Annuity. The retirement
8annuity shall be subject to an automatic annual increase in an
9amount equal to 3% of the originally granted annuity on each
10January 1 occurring on or after the first anniversary of the
11annuity start date.
12    (i) Disability Benefits. There are no disability benefits
13provided under the optional cash balance plan, and no amounts
14for disability shall be deducted from the account of a
15participant in the optional cash balance plan. The disability
16benefits provided under the applicable retirement system apply
17to participants in the optional cash balance plan.
18    (j) Return to Service. Upon a return to service under the
19same retirement system after beginning to receive a retirement
20annuity under the optional cash balance plan, the retirement
21annuity shall be suspended and active participation in the
22optional cash balance plan shall resume. Upon termination of
23the employment, the retirement annuity shall resume in an
24amount to be recalculated in accordance with subsection (g),
25taking into effect the changes in the cash balance account. If
26a retired annuitant returns to service, his or her notional

 

 

09700SB1673ham005- 57 -LRB097 07605 JWD 70354 a

1cash balance account shall be decreased by each payment of
2retirement annuity prior to the return to service.
3    (k) Survivor's Annuity - Death before Retirement. In the
4case of a participant in the optional cash balance plan who had
5less than 5 years of service under the applicable Article and
6had not begun receiving a retirement annuity, the eligible
7survivor shall be entitled only to a refund of employee
8contributions under subsection (f-15).
9    In the case of a participant in the optional cash balance
10plan who had at least 5 years of service under the applicable
11Article and had not begun receiving a retirement annuity, the
12eligible survivor shall be entitled to receive a survivor's
13annuity beginning at age 59 1/2 upon written application. The
14survivor's annuity shall be calculated in the same manner as a
15retirement annuity under subsection (g). At any time before
16receiving a survivor's annuity, the eligible survivor may claim
17a distribution under subsection (f-10) or a refund under
18subsection (f-15). The deceased participant's account shall
19continue to receive interest credit until the eligible survivor
20begins to receive a survivor's annuity or receives a refund of
21employee contributions under subsection (f-15).
22    Eligibility for a survivor's annuity shall be determined
23under the applicable Article of this Code. A child's or
24parent's annuity for an otherwise eligible child or dependent
25parent shall be in the same amount, if any, prescribed under
26the applicable Article.

 

 

09700SB1673ham005- 58 -LRB097 07605 JWD 70354 a

1    (l) Annual Increase in Survivor's Annuity. A survivor's
2annuity granted under subsection (g) or (k) shall be subject to
3an automatic annual increase in an amount equal to 3% of the
4originally granted annuity on each January 1 occurring on or
5after the first anniversary of the annuity start date.
6    (m) Applicability of Provisions. The following provisions,
7if and as they exist in this Code, do not apply to participants
8in the optional cash balance plan with respect to participation
9in the optional cash balance plan, except as they are
10specifically provided for in this Section:
11        (1) minimum service or vesting requirements (other
12    than as provided in this Section);
13        (2) provisions limiting a retirement annuity to a
14    specified percentage of salary;
15        (3) provisions authorizing a minimum retirement or
16    survivor's annuity or a supplemental annuity;
17        (4) provisions authorizing any form of retirement
18    annuity or survivor's annuity not authorized under this
19    Section;
20        (5) provisions authorizing a reversionary annuity
21    (other than the survivor's annuity under subsection (g));
22        (6) provisions authorizing a refund of employee
23    contributions upon termination of service (other than upon
24    the death of the participant without an eligible survivor)
25    or any lump-sum payout in lieu of a retirement or
26    survivor's annuity (other than the distribution under

 

 

09700SB1673ham005- 59 -LRB097 07605 JWD 70354 a

1    subsection (f-10) or the refund under subsection (f-15) of
2    this Section;
3        (7) provisions authorizing optional service credits or
4    the payment of optional additional contributions (other
5    than the optional employer contributions specifically
6    authorized in this Section); or
7        (8) a level income option.
8    The Retirement Systems Reciprocal Act (Article 20 of this
9Code) does not apply to participation in the optional cash
10balance plan and does not affect the calculation of benefits
11payable under this Section.
12    The other provisions of this Code continue to apply to
13participants in the optional cash balance plan, to the extent
14that they do not conflict with this Section. In the case of a
15conflict between the provisions of this Section and any other
16provision of this Code, the provisions of this Section control.
17    (n) Rules. The Board of Trustees of the applicable
18retirement system may adopt rules and procedures for the
19implementation of this Section, including but not limited to
20determinations of how to integrate the administration of this
21Section with the requirements of the applicable Article and any
22other applicable provisions of this Code.
23    (o) Public Pension Division. The Public Pension Division of
24the Department of Insurance shall determine in October of each
25year the annual unadjusted percentage increase (but not less
26than zero) in the Consumer Price Index-U for the 12 months

 

 

09700SB1673ham005- 60 -LRB097 07605 JWD 70354 a

1ending with the preceding September. The Division shall certify
2its determination to the Board of Trustees of the State
3Universities Retirement System by November 1 of each year.
4    (p) Actual Employer Contributions. Payment of employer
5contributions with respect to participants in the optional cash
6balance plan shall be the responsibility of the actual
7employer. These contributions shall be determined under and
8paid in accordance with the provisions of Sections 15-155.
9Optional additional contributions by employers may be paid in
10any amount, but must be paid in the manner specified by the
11applicable retirement system.
12    (q) Prospective Modification. The provisions set forth in
13this Section are subject to prospective changes made by law
14provided that any such changes shall not apply to any benefits
15accrued under this Section prior to the effective date of any
16amendatory Act of the General Assembly.
17    (s) Qualified Plan Status. No provision of this Section
18shall be interpreted in a way that would cause the applicable
19retirement system to cease to be a qualified plan under section
20461 (a) of the Internal Revenue Code of 1986.
 
21    (40 ILCS 5/2-105.1 new)
22    Sec. 2-105.1. Tier I employee. "Tier I employee": A
23participant who first became a participant before January 1,
242011.
 

 

 

09700SB1673ham005- 61 -LRB097 07605 JWD 70354 a

1    (40 ILCS 5/2-105.2 new)
2    Sec. 2-105.2. Tier I retiree. "Tier I retiree" means a
3former Tier I employee who is receiving a retirement annuity.
 
4    (40 ILCS 5/2-107.9 new)
5    Sec. 2-107.9. Future increase in income. "Future increase
6in income": Any increase in income in any form offered for
7service as a member under this Article after June 30, 2013 that
8would qualify as "salary", as defined under Section 2-108, but
9for the fact that the increase in income was offered to the
10member on the condition that it not qualify as salary and was
11accepted by the member subject to that condition.
 
12    (40 ILCS 5/2-108)  (from Ch. 108 1/2, par. 2-108)
13    Sec. 2-108. Salary. "Salary": (1) For members of the
14General Assembly, the total compensation paid to the member by
15the State for one year of service, including the additional
16amounts, if any, paid to the member as an officer pursuant to
17Section 1 of "An Act in relation to the compensation and
18emoluments of the members of the General Assembly", approved
19December 6, 1907, as now or hereafter amended.
20    (2) For the State executive officers specified in Section
212-105, the total compensation paid to the member for one year
22of service.
23    (3) For members of the System who are participants under
24Section 2-117.1, or who are serving as Clerk or Assistant Clerk

 

 

09700SB1673ham005- 62 -LRB097 07605 JWD 70354 a

1of the House of Representatives or Secretary or Assistant
2Secretary of the Senate, the total compensation paid to the
3member for one year of service, but not to exceed the salary of
4the highest salaried officer of the General Assembly.
5    However, in the event that federal law results in any
6participant receiving imputed income based on the value of
7group term life insurance provided by the State, such imputed
8income shall not be included in salary for the purposes of this
9Article.
10    Notwithstanding any other provision of this Section,
11"salary" does not include any future increase in income that is
12offered for service as a member under this Article pursuant to
13the requirements of subsection (c) of Section 2-110.3 and
14accepted by a Tier I employee, or a Tier I retiree returning to
15active service, who has made an election under paragraph (2) of
16subsection (a) or (a-5) of Section Section 2-110.3.
17(Source: P.A. 86-27; 86-273; 86-1028; 86-1488.)
 
18    (40 ILCS 5/2-110.3 new)
19    Sec. 2-110.3. Election by Tier I employees and Tier I
20retirees.
21    (a) Each Tier I employee shall make an irrevocable election
22either:
23        (1) to agree to the following:
24            (i) to have the amount of the automatic annual
25        increases in his or her retirement annuity that are

 

 

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1        otherwise provided for in this Article calculated,
2        instead, as provided in subsection (a-1) of Section
3        2-119.1; and
4            (ii) to have his or her eligibility for automatic
5        annual increases in retirement annuity postponed as
6        provided in subsection (a-2) of Section 2-119.1 and to
7        relinquish the additional increases provided in
8        subsection (b) of Section 2-119.1; or
9        (2) to not agree to items (i) and (ii) as set forth in
10    paragraph (1) of this subsection.
11    The election required under this subsection (a) shall be
12made by each Tier I employee no earlier than January 1, 2013
13and no later than May 31, 2013, except that:
14        (i) a person who becomes a Tier I employee under this
15    Article after January 1, 2013 must make the election under
16    this subsection (a) within 60 days after becoming a Tier I
17    employee;
18        (ii) a person who returns to active service as a Tier I
19    employee under this Article after January 1, 2013 and has
20    not yet made an election under this Section must make the
21    election under this subsection (a) within 60 days after
22    returning to active service as a Tier I employee; and
23        (iii) a person who made the election under subsection
24    (a-5) as a Tier I retiree remains bound by that election
25    and shall not make a later election under this subsection
26    (a).

 

 

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1    If a Tier I employee fails for any reason to make a
2required election under this subsection within the time
3specified, then the employee shall be deemed to have made the
4election under paragraph (2) of this subsection.
5    (a-5) Each Tier I retiree shall make an irrevocable
6election either:
7        (1) to agree to the following:
8            (i) to have the amount of the automatic annual
9        increases in his or her retirement annuity that are
10        otherwise provided for in this Article calculated,
11        instead, as provided in subsection (a-1) of Section
12        2-119.1; and
13            (ii) to have his or her eligibility for automatic
14        annual increases in retirement annuity postponed as
15        provided in subsection (a-2) of Section 2-119.1 and to
16        relinquish the additional increases provided in
17        subsection (b) of Section 2-119.1; or
18        (2) to not agree to items (i) and (ii) as set forth in
19    paragraph (1) of this subsection.
20    The election required under this subsection (a-5) shall be
21made by each Tier I retiree no earlier than January 1, 2013 and
22no later than May 31, 2013, except that:
23        (i) a person who becomes a Tier I retiree under this
24    Article on or after January 1, 2013 must make the election
25    under this subsection (a-5) within 60 days after becoming a
26    Tier I retiree; and

 

 

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1        (ii) a person who made the election under subsection
2    (a) as a Tier I employee remains bound by that election and
3    shall not make a later election under this subsection
4    (a-5).
5    If a Tier I retiree fails for any reason to make a required
6election under this subsection within the time specified, then
7the Tier I retiree shall be deemed to have made the election
8under paragraph (2) of this subsection.
9    (a-10) All elections under subsection (a) or (a-5) that are
10made or deemed to be made before June 1, 2013 shall take effect
11on July 1, 2013. Elections that are made or deemed to be made
12on or after June 1, 2013 shall take effect on the first day of
13the month following the month in which the election is made or
14deemed to be made.
15    (b) As adequate and legal consideration provided under this
16amendatory Act of the 97th General Assembly for making the
17election under paragraph (1) of subsection (a) of this Section,
18any future increases in income offered for service as a member
19under this Article to a Tier I employee who has made the
20election under paragraph (1) of subsection (a) of this Section
21shall be offered expressly and irrevocably as constituting
22salary under Section 2-108.
23    As adequate and legal consideration provided under this
24amendatory Act of the 97th General Assembly for making the
25election under paragraph (1) of subsection (a-5) of this
26Section, any future increases in income offered for service as

 

 

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1a member under this Article to a Tier I retiree who returns to
2active service after having made the election under paragraph
3(1) of subsection (a-5) of this Section shall be offered
4expressly and irrevocably as constituting salary under Section
52-108.
6    (c) A Tier I employee who makes the election under
7paragraph (2) of subsection (a) of this Section shall not be
8subject to items (i) and (ii) set forth in paragraph (1) of
9subsection (a) of this Section. However, any future increases
10in income offered for service as a member under this Article to
11a Tier I employee who has made the election under paragraph (2)
12of subsection (a) of this Section shall be offered expressly
13and irrevocably as not constituting salary under Section 2-108,
14and the member may not accept any future increase in income
15that is offered in violation of this requirement.
16    A Tier I retiree who makes the election under paragraph (2)
17of subsection (a-5) of this Section shall not be subject to
18items (i) and (ii) set forth in paragraph (1) of subsection
19(a-5) of this Section. However, any future increases in income
20offered for service as a member under this Article to a Tier I
21retiree who returns to active service and has made the election
22under paragraph (2) of subsection (a-5) of this Section shall
23be offered expressly and irrevocably as not constituting salary
24under Section 2-108, and the member may not accept any future
25increase in income that is offered in violation of this
26requirement.

 

 

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

 

 

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1    The System shall inform Tier I employees and Tier I
2retirees in the election packet required under this subsection
3that the Tier I employee or Tier I retiree may also wish to
4obtain information and counsel relating to the election
5required under this Section from any other available source,
6including but not limited to labor organizations and private
7counsel.
8    The System shall coordinate with the Illinois Department of
9Central Management Services and each other retirement system
10administering an election in accordance with this amendatory
11Act of the 97th General Assembly to provide information
12concerning the impact of the election under this Section.
13    In no event shall the System, its staff, or the Board be
14held liable for any information given to a member, beneficiary,
15or annuitant regarding the elections under this Section.
16    (e) Notwithstanding any other provision of law, any future
17increases in income offered for service as a member must be
18offered expressly and irrevocably as not constituting "salary"
19under Section 2-108 to any Tier I employee, or Tier I retiree
20returning to active service, who has made an election under
21paragraph (2) or subsection (a) or (a-5) of Section 2-110.3. A
22Tier I employee, or Tier I retiree returning to active service,
23who has made an election under paragraph (2) or subsection (a)
24or (a-5) of Section 2-110.3 shall not accept any future
25increase in income that is offered for service as a member
26under this Article in violation of the requirement set forth in

 

 

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1this subsection.
2    (f) A member's election under this Section is not a
3prohibited election under subdivision (j)(1) of Section 1-119
4of this Code.
5    (g) Qualified Plan Status. No provision of this Section
6shall be interpreted in a way that would cause the System to
7cease to be a qualified plan under section 461 (a) of the
8Internal Revenue Code of 1986.
 
9    (40 ILCS 5/2-119.1)  (from Ch. 108 1/2, par. 2-119.1)
10    Sec. 2-119.1. Automatic increase in retirement annuity.
11    (a) Except as provided in subsections (a-1) and (a-2), a A
12participant who retires after June 30, 1967, and who has not
13received an initial increase under this Section before the
14effective date of this amendatory Act of 1991, shall, in
15January or July next following the first anniversary of
16retirement, whichever occurs first, and in the same month of
17each year thereafter, but in no event prior to age 60, have the
18amount of the originally granted retirement annuity increased
19as follows: for each year through 1971, 1 1/2%; for each year
20from 1972 through 1979, 2%; and for 1980 and each year
21thereafter, 3%. Annuitants who have received an initial
22increase under this subsection prior to the effective date of
23this amendatory Act of 1991 shall continue to receive their
24annual increases in the same month as the initial increase.
25    (a-1) Notwithstanding any other provision of this Article,

 

 

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1for a Tier I employee or Tier I retiree who made the election
2under paragraph (1) of subsection (a) or (a-5) of Section
32-110.3, the amount of each automatic annual increase in
4retirement annuity occurring on or after the effective date of
5that election shall be 3% or one-half of the annual unadjusted
6percentage increase, if any, in the Consumer Price Index-U for
7the 12 months ending with the preceding September, whichever is
8less, of the originally granted retirement annuity. For the
9purposes of this Section, "Consumer Price Index-U" means the
10index published by the Bureau of Labor Statistics of the United
11States Department of Labor that measures the average change in
12prices of goods and services purchased by all urban consumers,
13United States city average, all items, 1982-84 = 100.
14    (a-2) For a Tier I employee or Tier I retiree who made the
15election under paragraph (1) of subsection (a) or (a-5) of
16Section 2-110.3, the monthly retirement annuity shall first be
17subject to annual increases on the January 1 occurring on or
18next after the attainment of age 67 or the January 1 occurring
19on or next after the fifth anniversary of the annuity start
20date, whichever occurs earlier. If on the effective date of the
21election under paragraph (1) of subsection (a-5) of Section
222-110.3 a Tier I retiree has already received an annual
23increase under this Section but does not yet meet the new
24eligibility requirements of this subsection, the annual
25increases already received shall continue in force, but no
26additional annual increase shall be granted until the Tier I

 

 

09700SB1673ham005- 71 -LRB097 07605 JWD 70354 a

1retiree meets the new eligibility requirements.
2    (b) Beginning January 1, 1990, for eligible participants
3who remain in service after attaining 20 years of creditable
4service, the 3% increases provided under subsection (a) shall
5begin to accrue on the January 1 next following the date upon
6which the participant (1) attains age 55, or (2) attains 20
7years of creditable service, whichever occurs later, and shall
8continue to accrue while the participant remains in service;
9such increases shall become payable on January 1 or July 1,
10whichever occurs first, next following the first anniversary of
11retirement. For any person who has service credit in the System
12for the entire period from January 15, 1969 through December
1331, 1992, regardless of the date of termination of service, the
14reference to age 55 in clause (1) of this subsection (b) shall
15be deemed to mean age 50.
16    This subsection (b) does not apply to any person who first
17becomes a member of the System after August 8, 2003 (the
18effective date of Public Act 93-494) or (ii) has made the
19election under paragraph (1) of subsection (a) or (a-5) of
20Section 2-110.3; except that if on the effective date of the
21election under paragraph (1) of subsection (a-5) of Section
222-110.3 a Tier I retiree has already received a retirement
23annuity based on any annual increases under this subsection,
24those annual increases under this subsection shall continue in
25force this amendatory Act of the 93rd General Assembly.
26    (b-5) Notwithstanding any other provision of this Article,

 

 

09700SB1673ham005- 72 -LRB097 07605 JWD 70354 a

1a participant who first becomes a participant on or after
2January 1, 2011 (the effective date of Public Act 96-889)
3shall, in January or July next following the first anniversary
4of retirement, whichever occurs first, and in the same month of
5each year thereafter, but in no event prior to age 67, have the
6amount of the retirement annuity then being paid increased by
73% or the annual unadjusted percentage increase in the Consumer
8Price Index for All Urban Consumers as determined by the Public
9Pension Division of the Department of Insurance under
10subsection (a) of Section 2-108.1, whichever is less.
11    (c) The foregoing provisions relating to automatic
12increases are not applicable to a participant who retires
13before having made contributions (at the rate prescribed in
14Section 2-126) for automatic increases for less than the
15equivalent of one full year. However, in order to be eligible
16for the automatic increases, such a participant may make
17arrangements to pay to the system the amount required to bring
18the total contributions for the automatic increase to the
19equivalent of one year's contributions based upon his or her
20last salary.
21    (d) A participant who terminated service prior to July 1,
221967, with at least 14 years of service is entitled to an
23increase in retirement annuity beginning January, 1976, and to
24additional increases in January of each year thereafter.
25    The initial increase shall be 1 1/2% of the originally
26granted retirement annuity multiplied by the number of full

 

 

09700SB1673ham005- 73 -LRB097 07605 JWD 70354 a

1years that the annuitant was in receipt of such annuity prior
2to January 1, 1972, plus 2% of the originally granted
3retirement annuity for each year after that date. The
4subsequent annual increases shall be at the rate of 2% of the
5originally granted retirement annuity for each year through
61979 and at the rate of 3% for 1980 and thereafter.
7    (e) Beginning January 1, 1990, all automatic annual
8increases payable under this Section shall be calculated as a
9percentage of the total annuity payable at the time of the
10increase, including previous increases granted under this
11Article.
12(Source: P.A. 96-889, eff. 1-1-11; 96-1490, eff. 1-1-11.)
 
13    (40 ILCS 5/2-124)  (from Ch. 108 1/2, par. 2-124)
14    Sec. 2-124. Contributions by State.
15    (a) Except as otherwise provided in this Section, the The
16State shall make contributions to the System by appropriations
17of amounts which, together with the contributions of
18participants, interest earned on investments, and other income
19will meet the cost of maintaining and administering the System
20on a 90% funded basis in accordance with actuarial
21recommendations.
22    (b) The Board shall determine the amount of State
23contributions required for each fiscal year on the basis of the
24actuarial tables and other assumptions adopted by the Board and
25the prescribed rate of interest, using the formula in

 

 

09700SB1673ham005- 74 -LRB097 07605 JWD 70354 a

1subsection (c).
2    (c) Except as otherwise provided in this Section, for For
3State fiscal years 2012 through 2045, the minimum contribution
4to the System to be made by the State for each fiscal year
5shall be an amount determined by the System to be sufficient to
6bring the total assets of the System up to 90% of the total
7actuarial liabilities of the System by the end of State fiscal
8year 2045. In making these determinations, the required State
9contribution shall be calculated each year as a level
10percentage of payroll over the years remaining to and including
11fiscal year 2045 and shall be determined under the projected
12unit credit actuarial cost method.
13    For State fiscal years 1996 through 2005, the State
14contribution to the System, as a percentage of the applicable
15employee payroll, shall be increased in equal annual increments
16so that by State fiscal year 2011, the State is contributing at
17the rate required under this Section.
18    Notwithstanding any other provision of this Article, the
19total required State contribution for State fiscal year 2006 is
20$4,157,000.
21    Notwithstanding any other provision of this Article, the
22total required State contribution for State fiscal year 2007 is
23$5,220,300.
24    For each of State fiscal years 2008 through 2009, the State
25contribution to the System, as a percentage of the applicable
26employee payroll, shall be increased in equal annual increments

 

 

09700SB1673ham005- 75 -LRB097 07605 JWD 70354 a

1from the required State contribution for State fiscal year
22007, so that by State fiscal year 2011, the State is
3contributing at the rate otherwise required under this Section.
4    Notwithstanding any other provision of this Article, the
5total required State contribution for State fiscal year 2010 is
6$10,454,000 and shall be made from the proceeds of bonds sold
7in fiscal year 2010 pursuant to Section 7.2 of the General
8Obligation Bond Act, less (i) the pro rata share of bond sale
9expenses determined by the System's share of total bond
10proceeds, (ii) any amounts received from the General Revenue
11Fund in fiscal year 2010, and (iii) any reduction in bond
12proceeds due to the issuance of discounted bonds, if
13applicable.
14    Notwithstanding any other provision of this Article, the
15total required State contribution for State fiscal year 2011 is
16the amount recertified by the System on or before April 1, 2011
17pursuant to Section 2-134 and shall be made from the proceeds
18of bonds sold in fiscal year 2011 pursuant to Section 7.2 of
19the General Obligation Bond Act, less (i) the pro rata share of
20bond sale expenses determined by the System's share of total
21bond proceeds, (ii) any amounts received from the General
22Revenue Fund in fiscal year 2011, and (iii) any reduction in
23bond proceeds due to the issuance of discounted bonds, if
24applicable.
25    Except as otherwise provided in this Section, beginning
26Beginning in State fiscal year 2046, the minimum State

 

 

09700SB1673ham005- 76 -LRB097 07605 JWD 70354 a

1contribution for each fiscal year shall be the amount needed to
2maintain the total assets of the System at 90% of the total
3actuarial liabilities of the System.
4    Amounts received by the System pursuant to Section 25 of
5the Budget Stabilization Act or Section 8.12 of the State
6Finance Act in any fiscal year do not reduce and do not
7constitute payment of any portion of the minimum State
8contribution required under this Article in that fiscal year.
9Such amounts shall not reduce, and shall not be included in the
10calculation of, the required State contributions under this
11Article in any future year until the System has reached a
12funding ratio of at least 90%. A reference in this Article to
13the "required State contribution" or any substantially similar
14term does not include or apply to any amounts payable to the
15System under Section 25 of the Budget Stabilization Act.
16    Notwithstanding any other provision of this Section, the
17required State contribution for State fiscal year 2005 and for
18fiscal year 2008 and each fiscal year thereafter, as calculated
19under this Section and certified under Section 2-134, shall not
20exceed an amount equal to (i) the amount of the required State
21contribution that would have been calculated under this Section
22for that fiscal year if the System had not received any
23payments under subsection (d) of Section 7.2 of the General
24Obligation Bond Act, minus (ii) the portion of the State's
25total debt service payments for that fiscal year on the bonds
26issued in fiscal year 2003 for the purposes of that Section

 

 

09700SB1673ham005- 77 -LRB097 07605 JWD 70354 a

17.2, as determined and certified by the Comptroller, that is
2the same as the System's portion of the total moneys
3distributed under subsection (d) of Section 7.2 of the General
4Obligation Bond Act. In determining this maximum for State
5fiscal years 2008 through 2010, however, the amount referred to
6in item (i) shall be increased, as a percentage of the
7applicable employee payroll, in equal increments calculated
8from the sum of the required State contribution for State
9fiscal year 2007 plus the applicable portion of the State's
10total debt service payments for fiscal year 2007 on the bonds
11issued in fiscal year 2003 for the purposes of Section 7.2 of
12the General Obligation Bond Act, so that, by State fiscal year
132011, the State is contributing at the rate otherwise required
14under this Section.
15    (c-1) If at least 50% of Tier I employees making an
16election under Section 2-110.3 before June 1, 2013 choose the
17option under paragraph (1) of subsection (a) of that Section,
18then:
19        (1) In lieu of the State contributions required under
20    subsection (c), for State fiscal years 2014 through 2043
21    the minimum contribution to the System to be made by the
22    State for each fiscal year shall be an amount determined by
23    the System to be equal to the sum of (1) the State's
24    portion of the projected normal cost for that fiscal year,
25    plus (2) an amount sufficient to bring the total assets of
26    the System up to 100% of the total actuarial liabilities of

 

 

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

 

 

09700SB1673ham005- 79 -LRB097 07605 JWD 70354 a

1year shall be recognized in equal annual amounts over the
25-year period following that fiscal year.
3    (e) 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(Source: P.A. 95-950, eff. 8-29-08; 96-43, eff. 7-15-09;
896-1497, eff. 1-14-11; 96-1511, eff. 1-27-11; 96-1554, eff.
93-18-11; revised 4-6-11.)
 
10    (40 ILCS 5/2-134)   (from Ch. 108 1/2, par. 2-134)
11    Sec. 2-134. To certify required State contributions and
12submit vouchers.
13    (a) The Board shall certify to the Governor on or before
14December 15 of each year until December 15, 2011 the amount of
15the required State contribution to the System for the next
16fiscal year and shall specifically identify the System's
17projected State normal cost for that fiscal year. The
18certification shall include a copy of the actuarial
19recommendations upon which it is based and shall specifically
20identify the System's projected State normal cost for that
21fiscal year.
22    On or before November 1 of each year, beginning November 1,
232012, the Board shall submit to the State Actuary, the
24Governor, and the General Assembly a proposed certification of
25the amount of the required State contribution to the System for

 

 

09700SB1673ham005- 80 -LRB097 07605 JWD 70354 a

1the next fiscal year, along with all of the actuarial
2assumptions, calculations, and data upon which that proposed
3certification is based. On or before January 1 of each year
4beginning January 1, 2013, the State Actuary shall issue a
5preliminary report concerning the proposed certification and
6identifying, if necessary, recommended changes in actuarial
7assumptions that the Board must consider before finalizing its
8certification of the required State contributions. On or before
9January 15, 2013 and every January 15 thereafter, the Board
10shall certify to the Governor and the General Assembly the
11amount of the required State contribution for the next fiscal
12year. The Board's certification must note any deviations from
13the State Actuary's recommended changes, the reason or reasons
14for not following the State Actuary's recommended changes, and
15the fiscal impact of not following the State Actuary's
16recommended changes on the required State contribution.
17    On or before May 1, 2004, the Board shall recalculate and
18recertify to the Governor the amount of the required State
19contribution to the System for State fiscal year 2005, taking
20into account the amounts appropriated to and received by the
21System under subsection (d) of Section 7.2 of the General
22Obligation Bond Act.
23    On or before July 1, 2005, the Board shall recalculate and
24recertify to the Governor the amount of the required State
25contribution to the System for State fiscal year 2006, taking
26into account the changes in required State contributions made

 

 

09700SB1673ham005- 81 -LRB097 07605 JWD 70354 a

1by this amendatory Act of the 94th General Assembly.
2    On or before April 1, 2011, the Board shall recalculate and
3recertify to the Governor the amount of the required State
4contribution to the System for State fiscal year 2011, applying
5the changes made by Public Act 96-889 to the System's assets
6and liabilities as of June 30, 2009 as though Public Act 96-889
7was approved on that date.
8    (b) Beginning in State fiscal year 1996, on or as soon as
9possible after the 15th day of each month the Board shall
10submit vouchers for payment of State contributions to the
11System, in a total monthly amount of one-twelfth of the
12required annual State contribution certified under subsection
13(a). From the effective date of this amendatory Act of the 93rd
14General Assembly through June 30, 2004, the Board shall not
15submit vouchers for the remainder of fiscal year 2004 in excess
16of the fiscal year 2004 certified contribution amount
17determined under this Section after taking into consideration
18the transfer to the System under subsection (d) of Section
196z-61 of the State Finance Act. These vouchers shall be paid by
20the State Comptroller and Treasurer by warrants drawn on the
21funds appropriated to the System for that fiscal year. If in
22any month the amount remaining unexpended from all other
23appropriations to the System for the applicable fiscal year
24(including the appropriations to the System under Section 8.12
25of the State Finance Act and Section 1 of the State Pension
26Funds Continuing Appropriation Act) is less than the amount

 

 

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1lawfully vouchered under this Section, the difference shall be
2paid from the General Revenue Fund under the continuing
3appropriation authority provided in Section 1.1 of the State
4Pension Funds Continuing Appropriation Act.
5    (c) The full amount of any annual appropriation for the
6System for State fiscal year 1995 shall be transferred and made
7available to the System at the beginning of that fiscal year at
8the request of the Board. Any excess funds remaining at the end
9of any fiscal year from appropriations shall be retained by the
10System as a general reserve to meet the System's accrued
11liabilities.
12(Source: P.A. 95-331, eff. 8-21-07; 96-1497, eff. 1-14-11;
1396-1511, eff. 1-27-11.)
 
14    (40 ILCS 5/7-109)  (from Ch. 108 1/2, par. 7-109)
15    Sec. 7-109. Employee.
16    (1) "Employee" means any person who:
17        (a) 1. Receives earnings as payment for the performance
18        of personal services or official duties out of the
19        general fund of a municipality, or out of any special
20        fund or funds controlled by a municipality, or by an
21        instrumentality thereof, or a participating
22        instrumentality, including, in counties, the fees or
23        earnings of any county fee office; and
24            2. Under the usual common law rules applicable in
25        determining the employer-employee relationship, has

 

 

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

 

 

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1        (c) Holds an elective office in a municipality,
2    instrumentality thereof or participating instrumentality.
3    (2) "Employee" does not include persons who:
4        (a) Are eligible for inclusion under any of the
5    following laws:
6            1. "An Act in relation to an Illinois State
7        Teachers' Pension and Retirement Fund", approved May
8        27, 1915, as amended;
9            2. Articles 15 and 16 of this Code.
10        However, such persons shall be included as employees to
11    the extent of earnings that are not eligible for inclusion
12    under the foregoing laws for services not of an
13    instructional nature of any kind.
14        However, any member of the armed forces who is employed
15    as a teacher of subjects in the Reserve Officers Training
16    Corps of any school and who is not certified under the law
17    governing the certification of teachers shall be included
18    as an employee.
19        (b) Are designated by the governing body of a
20    municipality in which a pension fund is required by law to
21    be established for policemen or firemen, respectively, as
22    performing police or fire protection duties, except that
23    when such persons are the heads of the police or fire
24    department and are not eligible to be included within any
25    such pension fund, they shall be included within this
26    Article; provided, that such persons shall not be excluded

 

 

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1    to the extent of concurrent service and earnings not
2    designated as being for police or fire protection duties.
3    However, (i) any head of a police department who was a
4    participant under this Article immediately before October
5    1, 1977 and did not elect, under Section 3-109 of this Act,
6    to participate in a police pension fund shall be an
7    "employee", and (ii) any chief of police who elects to
8    participate in this Fund under Section 3-109.1 of this
9    Code, regardless of whether such person continues to be
10    employed as chief of police or is employed in some other
11    rank or capacity within the police department, shall be an
12    employee under this Article for so long as such person is
13    employed to perform police duties by a participating
14    municipality and has not lawfully rescinded that election.
15        (c) After August 26, 2011 (the effective date of Public
16    Act 97-609) this amendatory Act of the 97th General
17    Assembly, are contributors to or eligible to contribute to
18    a Taft-Hartley pension plan established on or before June
19    1, 2011 and are employees of a theatre, arena, or
20    convention center that is located in a municipality located
21    in a county with a population greater than 5,000,000, and
22    to which the participating municipality is required to
23    contribute as the person's employer based on earnings from
24    the municipality. Nothing in this paragraph shall affect
25    service credit or creditable service for any period of
26    service prior to August 26, 2011 the effective date of this

 

 

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1    amendatory Act of the 97th General Assembly, and this
2    paragraph shall not apply to individuals who are
3    participating in the Fund prior to August 26, 2011 the
4    effective date of this amendatory Act of the 97th General
5    Assembly.
6        (d) Become an employee of any of the following
7    participating instrumentalities on or after the effective
8    date of this amendatory Act of the 97th General Assembly:
9    the Illinois Municipal League; the Illinois Association of
10    Park Districts; the Illinois Supervisors, County
11    Commissioners and Superintendents of Highways Association;
12    the Township School District Trustees; the United Counties
13    Council; or the Will County Governmental League.
14    (3) All persons, including, without limitation, public
15defenders and probation officers, who receive earnings from
16general or special funds of a county for performance of
17personal services or official duties within the territorial
18limits of the county, are employees of the county (unless
19excluded by subsection (2) of this Section) notwithstanding
20that they may be appointed by and are subject to the direction
21of a person or persons other than a county board or a county
22officer. It is hereby established that an employer-employee
23relationship under the usual common law rules exists between
24such employees and the county paying their salaries by reason
25of the fact that the county boards fix their rates of
26compensation, appropriate funds for payment of their earnings

 

 

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1and otherwise exercise control over them. This finding and this
2amendatory Act shall apply to all such employees from the date
3of appointment whether such date is prior to or after the
4effective date of this amendatory Act and is intended to
5clarify existing law pertaining to their status as
6participating employees in the Fund.
7(Source: P.A. 97-429, eff. 8-16-11; 97-609, eff. 8-26-11;
8revised 9-28-11.)
 
9    (40 ILCS 5/14-103.10)  (from Ch. 108 1/2, par. 14-103.10)
10    Sec. 14-103.10. Compensation.
11    (a) For periods of service prior to January 1, 1978, the
12full rate of salary or wages payable to an employee for
13personal services performed if he worked the full normal
14working period for his position, subject to the following
15maximum amounts: (1) prior to July 1, 1951, $400 per month or
16$4,800 per year; (2) between July 1, 1951 and June 30, 1957
17inclusive, $625 per month or $7,500 per year; (3) beginning
18July 1, 1957, no limitation.
19    In the case of service of an employee in a position
20involving part-time employment, compensation shall be
21determined according to the employees' earnings record.
22    (b) For periods of service on and after January 1, 1978,
23all remuneration for personal services performed defined as
24"wages" under the Social Security Enabling Act, including that
25part of such remuneration which is in excess of any maximum

 

 

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

 

 

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1exclude lump sum salary payments:
2        (1) for vacation;
3        (2) for accumulated unused sick leave;
4        (3) upon discharge or dismissal; and
5        (4) for approved holidays.
6    (f) Notwithstanding any other provision of this Section,
7"compensation" does not include any future increase in income
8offered by a department under this Article pursuant to the
9requirements of subsection (c) of Section 14-106.5 that is
10accepted by a Tier I employee, or a Tier I retiree returning to
11active service, who has made an election under paragraph (2) of
12subsection (a) or (a-5) of Section 14-106.5.
13    (g) Notwithstanding the other provisions of this Section,
14for an employee who first becomes a participant on or after the
15effective date of this amendatory Act of the 97th General
16Assembly, "compensation" does not include any payments or
17reimbursements for travel vouchers.
18(Source: P.A. 96-1490, eff. 1-1-11.)
 
19    (40 ILCS 5/14-103.40 new)
20    Sec. 14-103.40. Tier I employee. "Tier I employee": An
21employee under this Article who first became a member or
22participant before January 1, 2011 under any reciprocal
23retirement system or pension fund established under this Code
24other than a retirement system or pension fund established
25under Article 2, 3, 4, 5, 6, or 18 of this Code.
 

 

 

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1    (40 ILCS 5/14-103.41 new)
2    Sec. 14-103.41. Tier I retiree. "Tier I retiree": A former
3Tier I employee who is receiving a retirement annuity.
 
4    (40 ILCS 5/14-103.42 new)
5    Sec. 14-103.42. Future increase in income. "Future
6increase in income": Any increase in income in any form offered
7by a department to an employee under this Article after June
830, 2013 that would qualify as "compensation", as defined under
9Section 14-103.10, but for the fact that the department offered
10the increase in income to the employee on the condition that it
11not qualify as compensation and the employee accepted the
12increase in income subject to that condition. The term "future
13increase in income" does not include an increase in income in
14any form that is paid to a Tier I employee under an employment
15contract or collective bargaining agreement that is in effect
16on the effective date of this Section but does include an
17increase in income in any form pursuant to an extension,
18amendment, or renewal of any such employment contract or
19collective bargaining agreement on or after the effective date
20of this amendatory Act of the 97th General Assembly.
 
21    (40 ILCS 5/14-106)  (from Ch. 108 1/2, par. 14-106)
22    Sec. 14-106. Membership service credit.
23    (a) After January 1, 1944, all service of a member since he

 

 

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1last became a member with respect to which contributions are
2made shall count as membership service; provided, that for
3service on and after July 1, 1950, 12 months of service shall
4constitute a year of membership service, the completion of 15
5days or more of service during any month shall constitute 1
6month of membership service, 8 to 15 days shall constitute 1/2
7month of membership service and less than 8 days shall
8constitute 1/4 month of membership service. The payroll record
9of each department shall constitute conclusive evidence of the
10record of service rendered by a member.
11    (b) For a member who is employed and paid on an
12academic-year basis rather than on a 12-month annual basis,
13employment for a full academic year shall constitute a full
14year of membership service, except that the member shall not
15receive more than one year of membership service credit (plus
16any additional service credit granted for unused sick leave)
17for service during any 12-month period. This subsection (b)
18applies to all such service for which the member has not begun
19to receive a retirement annuity before January 1, 2001.
20    (c) A member who first participated in this System before
21the effective date of this amendatory Act of the 97th General
22Assembly shall be entitled to additional service credit, under
23rules prescribed by the Board, for accumulated unused sick
24leave credited to his account in the last Department on the
25date of withdrawal from service or for any period for which he
26would have been eligible to receive benefits under a sick pay

 

 

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1plan authorized by law, if he had suffered a sickness or
2accident on the date of withdrawal from service. It shall be
3the responsibility of the last Department to certify to the
4Board the length of time salary or benefits would have been
5paid to the member based upon the accumulated unused sick leave
6or the applicable sick pay plan if he had become entitled
7thereto because of sickness on the date that his status as an
8employee terminated. This period of service credit granted
9under this paragraph shall not be considered in determining the
10date the retirement annuity is to begin, or final average
11compensation.
12    Service credit is not available for unused sick leave
13accumulated by a person who first participates in this System
14on or after the effective date of this amendatory Act of the
1597th General Assembly.
16(Source: P.A. 92-14, eff. 6-28-01.)
 
17    (40 ILCS 5/14-106.5 new)
18    Sec. 14-106.5. Election by Tier I employees and Tier I
19retirees.
20    (a) Each Tier I employee shall make an irrevocable election
21either:
22        (1) to agree to the following:
23            (i) to have the amount of the automatic annual
24        increases in his or her retirement annuity that are
25        otherwise provided for in this Article calculated,

 

 

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

 

 

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

 

 

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1election under this subsection within the time specified, then
2the Tier I retiree shall be deemed to have made the election
3under paragraph (2) of this subsection.
4    (a-10) All elections under subsection (a) or (a-5) that are
5made or deemed to be made before June 1, 2013 shall take effect
6on July 1, 2013. Elections that are made or deemed to be made
7on or after June 1, 2013 shall take effect on the first day of
8the month following the month in which the election is made or
9deemed to be made.
10    (b) As adequate and legal consideration provided under this
11amendatory Act of the 97th General Assembly for making the
12election under paragraph (1) of subsection (a) of this Section,
13any future increases in income offered by a department under
14this Article to a Tier I employee who has made the election
15under paragraph (1) of subsection (a) of this Section shall be
16offered expressly and irrevocably as constituting compensation
17under Section 14-103.10. In addition, a Tier I employee who has
18made the election under paragraph (1) of subsection (a) of this
19Section shall receive the right to also participate in the
20optional cash balance plan established under Section 1-162.
21    As adequate and legal consideration provided under this
22amendatory Act of the 97th General Assembly for making the
23election under paragraph (1) of subsection (a-5) of this
24Section, any future increases in income offered by a department
25under this Article to a Tier I retiree who returns to active
26service after having made the election under paragraph (1) of

 

 

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1subsection (a-5) of this Section shall be offered expressly and
2irrevocably as constituting compensation under Section
314-103.10. In addition, a Tier I retiree who returns to active
4service and has made the election under paragraph (1) of
5subsection (a) of this Section shall receive the right to also
6participate in the optional cash balance plan established under
7Section 1-162.
8    (c) A Tier I employee who makes the election under
9paragraph (2) of subsection (a) of this Section shall not be
10subject to items (i) and (ii) set forth in paragraph (1) of
11subsection (a) of this Section. However, any future increases
12in income offered by a department under this Article to a Tier
13I employee who has made the election under paragraph (2) of
14subsection (a) of this Section shall be offered by the
15department expressly and irrevocably as not constituting
16compensation under Section 14-103.10, and the employee may not
17accept any future increase in income that is offered in
18violation of this requirement. In addition, a Tier I employee
19who has made the election under paragraph (2) of subsection (a)
20of this Section shall not receive the right to participate in
21the optional cash balance plan established under Section 1-162.
22    A Tier I retiree who makes the election under paragraph (2)
23of subsection (a-5) of this Section shall not be subject to
24items (i) and (ii) set forth in paragraph (1) of subsection
25(a-5) of this Section. However, any future increases in income
26offered by a department under this Article to a Tier I retiree

 

 

09700SB1673ham005- 97 -LRB097 07605 JWD 70354 a

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

 

 

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

 

 

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1department under this Article is required to offer any future
2increases in income expressly and irrevocably as not
3constituting "compensation" under Section 14-103.10 to any
4Tier I employee, or Tier I retiree returning to active service,
5who has made an election under paragraph (2) of subsection (a)
6or (a-5) of Section 14-106.5. A Tier I employee, or Tier I
7retiree returning to active service, who has made an election
8under paragraph (2) of subsection (a) or (a-5) of Section
914-106.5 shall not accept any future increase in income that is
10offered by an employer under this Article in violation of the
11requirement set forth in this subsection.
12    (f) A member's election under this Section is not a
13prohibited election under subdivision (j)(1) of Section 1-119
14of this Code.
15    (g) An employee who has made the election under paragraph
16(1) of subsection (a) or (a-5) of this Section may elect to
17participate in the optional cash balance plan under Section
181-162.
19    The election to participate in the optional cash balance
20plan shall be made in writing, in the manner provided by the
21applicable retirement system.
22    (h) Qualified Plan Status. No provision of this Section
23shall be interpreted in a way that would cause the System to
24cease to be a qualified plan under section 461 (a) of the
25Internal Revenue Code of 1986.
 

 

 

09700SB1673ham005- 100 -LRB097 07605 JWD 70354 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
26annuity began after January 1, 1992 pursuant to an extension

 

 

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1granted under subsection (e) of that Section, the first
2anniversary of retirement shall be deemed to be January 1,
31993. For a person who retires on or after June 28, 2001 and on
4or before October 1, 2001, and whose retirement annuity is
5calculated, in whole or in part, under Section 14-110 or
6subsection (g) or (h) of Section 14-108, the first anniversary
7of retirement shall be deemed to be January 1, 2002.
8    On each January 1 following the date of the initial
9increase under this subsection, the employee's monthly
10retirement annuity shall be increased by an additional 3%.
11    Beginning January 1, 1990 and except as provided in
12subsections (a-1) and (a-2), all automatic annual increases
13payable under this Section shall be calculated as a percentage
14of the total annuity payable at the time of the increase,
15including previous increases granted under this Article.
16    (a-1) Notwithstanding any other provision of this Article,
17for a Tier I employee or Tier I retiree who made the election
18under paragraph (1) of subsection (a) or (a-5) of Section
1914-106.5, the amount of each automatic annual increase in
20retirement annuity occurring on or after the effective date of
21that election shall be 3% or one-half of the annual unadjusted
22percentage increase, if any, in the Consumer Price Index-U for
23the 12 months ending with the preceding September, whichever is
24less, of the originally granted retirement annuity. For the
25purposes of this Section, "Consumer Price Index-U" means the
26index published by the Bureau of Labor Statistics of the United

 

 

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1States Department of Labor that measures the average change in
2prices of goods and services purchased by all urban consumers,
3United States city average, all items, 1982-84 = 100.
4    (a-2) Notwithstanding any other provision of this Article,
5for a Tier I employee or Tier I retiree who made the election
6under paragraph (1) of subsection (a) or (a-5) of Section
714-106.5, the monthly retirement annuity shall first be subject
8to annual increases on the January 1 occurring on or next after
9either the attainment of age 67 or the January 1 occurring on
10or next after the fifth anniversary of the annuity start date,
11whichever occurs earlier. If on the effective date of the
12election under paragraph (1) of subsection (a-5) of Section
1314-106.5 a Tier I retiree has already received an annual
14increase under this Section but does not yet meet the new
15eligibility requirements of this subsection, the annual
16increases already received shall continue in force, but no
17additional annual increase shall be granted until the Tier I
18retiree meets the new eligibility requirements.
19    (b) The provisions of subsection (a) of this Section shall
20be applicable to an employee only if the employee makes the
21additional contributions required after December 31, 1969 for
22the purpose of the automatic increases for not less than the
23equivalent of one full year. If an employee becomes an
24annuitant before his additional contributions equal one full
25year's contributions based on his salary at the date of
26retirement, the employee may pay the necessary balance of the

 

 

09700SB1673ham005- 103 -LRB097 07605 JWD 70354 a

1contributions to the system, without interest, and be eligible
2for the increasing annuity authorized by this Section.
3    (c) The provisions of subsection (a) of this Section shall
4not be applicable to any annuitant who is on retirement on
5December 31, 1969, and thereafter returns to State service,
6unless the member has established at least one year of
7additional creditable service following reentry into service.
8    (d) In addition to other increases which may be provided by
9this Section, on January 1, 1981 any annuitant who was
10receiving a retirement annuity on or before January 1, 1971
11shall have his retirement annuity then being paid increased $1
12per month for each year of creditable service. On January 1,
131982, any annuitant who began receiving a retirement annuity on
14or before January 1, 1977, shall have his retirement annuity
15then being paid increased $1 per month for each year of
16creditable service.
17    On January 1, 1987, any annuitant who began receiving a
18retirement annuity on or before January 1, 1977, shall have the
19monthly retirement annuity increased by an amount equal to 8
20per year of creditable service times the number of years that
21have elapsed since the annuity began.
22    (e) Every person who receives the alternative retirement
23annuity under Section 14-110 and who is eligible to receive the
243% increase under subsection (a) on January 1, 1986, shall also
25receive on that date a one-time increase in retirement annuity
26equal to the difference between (1) his actual retirement

 

 

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1annuity on that date, including any increases received under
2subsection (a), and (2) the amount of retirement annuity he
3would have received on that date if the amendments to
4subsection (a) made by Public Act 84-162 had been in effect
5since the date of his retirement.
6(Source: P.A. 91-927, eff. 12-14-00; 92-14, eff. 6-28-01;
792-651, eff. 7-11-02.)
 
8    (40 ILCS 5/14-131)
9    Sec. 14-131. Contributions by State.
10    (a) Except as otherwise provided in this Section, the The
11State shall make contributions to the System by appropriations
12of amounts which, together with other employer contributions
13from trust, federal, and other funds, employee contributions,
14investment income, and other income, will be sufficient to meet
15the cost of maintaining and administering the System on a 90%
16funded basis in accordance with actuarial recommendations.
17    For the purposes of this Section and Section 14-135.08,
18references to State contributions refer only to employer
19contributions and do not include employee contributions that
20are picked up or otherwise paid by the State or a department on
21behalf of the employee.
22    (b) The Board shall determine the total amount of State
23contributions required for each fiscal year on the basis of the
24actuarial tables and other assumptions adopted by the Board,
25using the formula in subsection (e).

 

 

09700SB1673ham005- 105 -LRB097 07605 JWD 70354 a

1    The Board shall also determine a State contribution rate
2for each fiscal year, expressed as a percentage of payroll,
3based on the total required State contribution for that fiscal
4year (less the amount received by the System from
5appropriations under Section 8.12 of the State Finance Act and
6Section 1 of the State Pension Funds Continuing Appropriation
7Act, if any, for the fiscal year ending on the June 30
8immediately preceding the applicable November 15 certification
9deadline), the estimated payroll (including all forms of
10compensation) for personal services rendered by eligible
11employees, and the recommendations of the actuary.
12    For the purposes of this Section and Section 14.1 of the
13State Finance Act, the term "eligible employees" includes
14employees who participate in the System, persons who may elect
15to participate in the System but have not so elected, persons
16who are serving a qualifying period that is required for
17participation, and annuitants employed by a department as
18described in subdivision (a)(1) or (a)(2) of Section 14-111.
19    (c) Contributions shall be made by the several departments
20for each pay period by warrants drawn by the State Comptroller
21against their respective funds or appropriations based upon
22vouchers stating the amount to be so contributed. These amounts
23shall be based on the full rate certified by the Board under
24Section 14-135.08 for that fiscal year. From the effective date
25of this amendatory Act of the 93rd General Assembly through the
26payment of the final payroll from fiscal year 2004

 

 

09700SB1673ham005- 106 -LRB097 07605 JWD 70354 a

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

 

 

09700SB1673ham005- 107 -LRB097 07605 JWD 70354 a

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

 

 

09700SB1673ham005- 108 -LRB097 07605 JWD 70354 a

1employee payroll shall be 5.052% for employees earning eligible
2creditable service under Section 14-110 and 6.500% for all
3other employees, notwithstanding any contrary certification
4made under Section 14-135.08 before the effective date of this
5amendatory Act of 1997, and (ii) in the following specified
6State fiscal years, the State contribution to the System shall
7not be less than the following indicated percentages of the
8applicable employee payroll, even if the indicated percentage
9will produce a State contribution in excess of the amount
10otherwise required under this subsection and subsection (a):
119.8% in FY 1999; 10.0% in FY 2000; 10.2% in FY 2001; 10.4% in FY
122002; 10.6% in FY 2003; and 10.8% in FY 2004.
13    Notwithstanding any other provision of this Article, the
14total required State contribution to the System for State
15fiscal year 2006 is $203,783,900.
16    Notwithstanding any other provision of this Article, the
17total required State contribution to the System for State
18fiscal year 2007 is $344,164,400.
19    For each of State fiscal years 2008 through 2009, the State
20contribution to the System, as a percentage of the applicable
21employee payroll, shall be increased in equal annual increments
22from the required State contribution for State fiscal year
232007, so that by State fiscal year 2011, the State is
24contributing at the rate otherwise required under this Section.
25    Notwithstanding any other provision of this Article, the
26total required State General Revenue Fund contribution for

 

 

09700SB1673ham005- 109 -LRB097 07605 JWD 70354 a

1State fiscal year 2010 is $723,703,100 and shall be made from
2the proceeds of bonds sold in fiscal year 2010 pursuant to
3Section 7.2 of the General Obligation Bond Act, less (i) the
4pro rata share of bond sale expenses determined by the System's
5share of total bond proceeds, (ii) any amounts received from
6the General Revenue Fund in fiscal year 2010, and (iii) any
7reduction in bond proceeds due to the issuance of discounted
8bonds, if applicable.
9    Notwithstanding any other provision of this Article, the
10total required State General Revenue Fund contribution for
11State fiscal year 2011 is the amount recertified by the System
12on or before April 1, 2011 pursuant to Section 14-135.08 and
13shall be made from the proceeds of bonds sold in fiscal year
142011 pursuant to Section 7.2 of the General Obligation Bond
15Act, less (i) the pro rata share of bond sale expenses
16determined by the System's share of total bond proceeds, (ii)
17any amounts received from the General Revenue Fund in fiscal
18year 2011, and (iii) any reduction in bond proceeds due to the
19issuance of discounted bonds, if applicable.
20    Except as otherwise provided in this Section, beginning
21Beginning 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

 

 

09700SB1673ham005- 110 -LRB097 07605 JWD 70354 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 and each fiscal year thereafter, as calculated
14under this Section and certified under Section 14-135.08, shall
15not exceed an amount equal to (i) the amount of the required
16State contribution that would have been calculated under this
17Section for that fiscal year if the System had not received any
18payments under subsection (d) of Section 7.2 of the General
19Obligation Bond Act, minus (ii) the portion of the State's
20total debt service payments for that fiscal year on the bonds
21issued in fiscal year 2003 for the purposes of that Section
227.2, as determined and certified by the Comptroller, that is
23the 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

 

 

09700SB1673ham005- 111 -LRB097 07605 JWD 70354 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    (e-1) If at least 50% of Tier I employees making an
11election under Section 14-106.5 before June 1, 2013 choose the
12option under paragraph (1) of subsection (a) of that Section,
13then:
14        (1) In lieu of the State contributions required under
15    subsection (e), for State fiscal years 2014 through 2043
16    the minimum contribution to the System to be made by the
17    State for each fiscal year shall be an amount determined by
18    the System to be equal to the sum of (1) the State's
19    portion of the projected normal cost for that fiscal year,
20    plus (2) an amount sufficient to bring the total assets of
21    the System up to 100% of the total actuarial liabilities of
22    the System by the end of State fiscal year 2043. In making
23    these determinations, the required State contribution
24    shall be calculated each year as a level percentage of
25    payroll over the years remaining to and including fiscal
26    year 2043 and shall be determined under the projected unit

 

 

09700SB1673ham005- 112 -LRB097 07605 JWD 70354 a

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

 

 

09700SB1673ham005- 113 -LRB097 07605 JWD 70354 a

1certified by the Board under Section 14-135.08 for fiscal year
22004 in order to meet the State's obligation under this
3Section. The System shall compare this amount due to the amount
4received by the System in fiscal year 2004 through payments
5under this Section and under Section 6z-61 of the State Finance
6Act. If the amount due is more than the amount received, the
7difference shall be termed the "Fiscal Year 2004 Shortfall" for
8purposes of this Section, and the Fiscal Year 2004 Shortfall
9shall be satisfied under Section 1.2 of the State Pension Funds
10Continuing Appropriation Act. If the amount due is less than
11the amount received, the difference shall be termed the "Fiscal
12Year 2004 Overpayment" for purposes of this Section, and the
13Fiscal Year 2004 Overpayment shall be repaid by the System to
14the Pension Contribution Fund as soon as practicable after the
15certification.
16    (g) For purposes of determining the required State
17contribution to the System, the value of the System's assets
18shall be equal to the actuarial value of the System's assets,
19which shall be calculated as follows:
20    As of June 30, 2008, the actuarial value of the System's
21assets shall be equal to the market value of the assets as of
22that date. In determining the actuarial value of the System's
23assets for fiscal years after June 30, 2008, any actuarial
24gains or losses from investment return incurred in a fiscal
25year shall be recognized in equal annual amounts over the
265-year period following that fiscal year.

 

 

09700SB1673ham005- 114 -LRB097 07605 JWD 70354 a

1    (h) For purposes of determining the required State
2contribution to the System for a particular year, the actuarial
3value of assets shall be assumed to earn a rate of return equal
4to the System's actuarially assumed rate of return.
5    (i) After the submission of all payments for eligible
6employees from personal services line items paid from the
7General Revenue Fund in fiscal year 2010 have been made, the
8Comptroller shall provide to the System a certification of the
9sum of all fiscal year 2010 expenditures for personal services
10that would have been covered by payments to the System under
11this Section if the provisions of this amendatory Act of the
1296th General Assembly had not been enacted. Upon receipt of the
13certification, the System shall determine the amount due to the
14System based on the full rate certified by the Board under
15Section 14-135.08 for fiscal year 2010 in order to meet the
16State's obligation under this Section. The System shall compare
17this amount due to the amount received by the System in fiscal
18year 2010 through payments under this Section. If the amount
19due is more than the amount received, the difference shall be
20termed the "Fiscal Year 2010 Shortfall" for purposes of this
21Section, and the Fiscal Year 2010 Shortfall shall be satisfied
22under Section 1.2 of the State Pension Funds Continuing
23Appropriation Act. If the amount due is less than the amount
24received, the difference shall be termed the "Fiscal Year 2010
25Overpayment" for purposes of this Section, and the Fiscal Year
262010 Overpayment shall be repaid by the System to the General

 

 

09700SB1673ham005- 115 -LRB097 07605 JWD 70354 a

1Revenue Fund as soon as practicable after the certification.
2    (j) After the submission of all payments for eligible
3employees from personal services line items paid from the
4General Revenue Fund in fiscal year 2011 have been made, the
5Comptroller shall provide to the System a certification of the
6sum of all fiscal year 2011 expenditures for personal services
7that would have been covered by payments to the System under
8this Section if the provisions of this amendatory Act of the
996th General Assembly had not been enacted. Upon receipt of the
10certification, the System shall determine the amount due to the
11System based on the full rate certified by the Board under
12Section 14-135.08 for fiscal year 2011 in order to meet the
13State's obligation under this Section. The System shall compare
14this amount due to the amount received by the System in fiscal
15year 2011 through payments under this Section. If the amount
16due is more than the amount received, the difference shall be
17termed the "Fiscal Year 2011 Shortfall" for purposes of this
18Section, and the Fiscal Year 2011 Shortfall shall be satisfied
19under Section 1.2 of the State Pension Funds Continuing
20Appropriation Act. If the amount due is less than the amount
21received, the difference shall be termed the "Fiscal Year 2011
22Overpayment" for purposes of this Section, and the Fiscal Year
232011 Overpayment shall be repaid by the System to the General
24Revenue Fund as soon as practicable after the certification.
25    (k) For fiscal year 2012 only, after the submission of all
26payments for eligible employees from personal services line

 

 

09700SB1673ham005- 116 -LRB097 07605 JWD 70354 a

1items paid from the General Revenue Fund in the fiscal year
2have been made, the Comptroller shall provide to the System a
3certification of the sum of all expenditures in the fiscal year
4for personal services. Upon receipt of the certification, the
5System shall determine the amount due to the System based on
6the full rate certified by the Board under Section 14-135.08
7for the fiscal year in order to meet the State's obligation
8under this Section. The System shall compare this amount due to
9the amount received by the System for the fiscal year. If the
10amount due is more than the amount received, the difference
11shall be termed the "Fiscal Year Shortfall" for purposes of
12this Section, and the Fiscal Year Shortfall shall be satisfied
13under Section 1.2 of the State Pension Funds Continuing
14Appropriation Act. If the amount due is less than the amount
15received, the difference shall be termed the "Fiscal Year
16Overpayment" for purposes of this Section, and the Fiscal Year
17Overpayment shall be repaid by the System to the General
18Revenue Fund as soon as practicable after the certification.
19(Source: P.A. 96-43, eff. 7-15-09; 96-45, eff. 7-15-09;
2096-1000, eff. 7-2-10; 96-1497, eff. 1-14-11; 96-1511, eff.
211-27-11; 96-1554, eff. 3-18-11; 97-72, eff. 7-1-11.)
 
22    (40 ILCS 5/14-132)  (from Ch. 108 1/2, par. 14-132)
23    Sec. 14-132. Obligations of State.
24    (a) The payment of the required department contributions,
25all allowances, annuities, benefits granted under this

 

 

09700SB1673ham005- 117 -LRB097 07605 JWD 70354 a

1Article, and all expenses of administration of the system are
2obligations of the State of Illinois to the extent specified in
3this Article.
4    (b) All income of the system shall be credited to a
5separate account for this system in the State treasury and
6shall be used to pay allowances, annuities, benefits and
7administration expense.
8    (c) If the System submits a voucher for monthly
9contributions as required in Section 14-131 and the State fails
10to pay within 90 days of receipt of such a voucher, the Board
11shall submit a written request to the Comptroller seeking
12payment. A copy of the request shall be filed with the
13Secretary of State, and the Secretary of State shall provide
14copies to the Governor and General Assembly. No earlier than
15the 16th day after filing a request with the Secretary of
16State, the Board shall have the right to commence a mandamus
17action in the Supreme Court of Illinois to compel the
18Comptroller to satisfy the voucher by making payment from the
19General Revenue Fund. This Section constitutes an express
20waiver of the State's sovereign immunity solely to the extent
21it permits the Board to commence a mandamus action in the
22Illinois Supreme Court to compel the Comptroller to pay a
23voucher for monthly contributions as required in Section
2414-131.
25(Source: P.A. 80-841.)
 

 

 

09700SB1673ham005- 118 -LRB097 07605 JWD 70354 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
26    covered employee, 0.5% for a widow or survivors annuity

 

 

09700SB1673ham005- 119 -LRB097 07605 JWD 70354 a

1    plus the following amount for retirement annuity: 5%
2    through December 31, 2001; 6% in 2002; 7% in 2003; and 8%
3    in 2004 and thereafter;
4        (6) Each security employee of the Department of
5    Corrections or of the Department of Human Services who is
6    not a covered employee, 1% for a widow or survivors annuity
7    plus the following amount for retirement annuity: 8.5%
8    through December 31, 2001; 9.5% in 2002; 10.5% in 2003; and
9    11.5% in 2004 and thereafter.
10    (a-1) In addition to the contributions required under
11subsection (a), an employee who elects to participate in the
12optional cash balance plan under Section 1-162 shall pay to the
13System for the purpose of participating in the optional cash
14balance plan an additional contribution of 2% of each payment
15of compensation received while he or she is a participant in
16the optional cash balance plan. These contributions shall not
17be used for the purpose of determining any benefit under this
18Article except as provided in the optional cash balance plan.
19    (b) Contributions shall be in the form of a deduction from
20compensation and shall be made notwithstanding that the
21compensation paid in cash to the employee shall be reduced
22thereby below the minimum prescribed by law or regulation. Each
23member is deemed to consent and agree to the deductions from
24compensation provided for in this Article, and shall receipt in
25full for salary or compensation.
26(Source: P.A. 92-14, eff. 6-28-01.)
 

 

 

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

 

 

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

 

 

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

 

 

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1any benefit under this Article, that results from an amendment
2to this Code that takes effect after June 1, 2005 (the
3effective date of Public Act 94-4). "New benefit increase",
4however, does not include any benefit increase resulting from
5the changes made to this Article or Article 1 by Public Act
696-37 or this amendatory Act of the 97th 96th General Assembly.
7    (b) Notwithstanding any other provision of this Code or any
8subsequent amendment to this Code, every new benefit increase
9is subject to this Section and shall be deemed to be granted
10only in conformance with and contingent upon compliance with
11the provisions of this Section.
12    (c) The Public Act enacting a new benefit increase must
13identify and provide for payment to the System of additional
14funding at least sufficient to fund the resulting annual
15increase in cost to the System as it accrues.
16    Every new benefit increase is contingent upon the General
17Assembly providing the additional funding required under this
18subsection. The Commission on Government Forecasting and
19Accountability shall analyze whether adequate additional
20funding has been provided for the new benefit increase and
21shall report its analysis to the Public Pension Division of the
22Department of Financial and Professional Regulation. A new
23benefit increase created by a Public Act that does not include
24the additional funding required under this subsection is null
25and void. If the Public Pension Division determines that the
26additional funding provided for a new benefit increase under

 

 

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

 

 

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

 

 

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1    Notwithstanding any provision of law to the contrary, an
2individual who begins employment with any of the following
3employers on or after the effective date of this amendatory Act
4of the 97th General Assembly shall not be deemed an employee
5and shall not be eligible to participate in the System with
6respect to that employment: any association of community
7college boards organized under Section 3-55 of the Public
8Community College Act, the Association of Illinois
9Middle-Grade Schools, the Illinois Association of School
10Administrators, the Illinois Association for Supervision and
11Curriculum Development, the Illinois Principals Association,
12the Illinois Association of School Business Officials, or the
13Illinois Special Olympics; provided, however, that those
14individuals who are both employed and already participants in
15the System on the effective date of this amendatory Act of the
1697th General Assembly shall be allowed to continue as
17participants in the System for the duration of that employment.
18    A department as defined in Section 14-103.04 is an employer
19for any person appointed by the Governor under the Civil
20Administrative Code of Illinois who is a participating employee
21as defined in Section 15-109. The Department of Central
22Management Services is an employer with respect to persons
23employed by the State Board of Higher Education in positions
24with the Illinois Century Network as of June 30, 2004 who
25remain continuously employed after that date by the Department
26of Central Management Services in positions with the Illinois

 

 

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1Century Network, the Bureau of Communication and Computer
2Services, or, if applicable, any successor bureau.
3    The cities of Champaign and Urbana shall be considered
4employers, but only during the period for which contributions
5are required to be made under subsection (b-1) of Section
615-155 and only with respect to individuals described in
7subsection (h) of Section 15-107.
8(Source: P.A. 95-369, eff. 8-23-07; 95-728, eff. 7-1-08 - See
9Sec. 999.)
 
10    (40 ILCS 5/15-107)  (from Ch. 108 1/2, par. 15-107)
11    Sec. 15-107. Employee.
12    (a) "Employee" means any member of the educational,
13administrative, secretarial, clerical, mechanical, labor or
14other staff of an employer whose employment is permanent and
15continuous or who is employed in a position in which services
16are expected to be rendered on a continuous basis for at least
174 months or one academic term, whichever is less, who (A)
18receives payment for personal services on a warrant issued
19pursuant to a payroll voucher certified by an employer and
20drawn by the State Comptroller upon the State Treasurer or by
21an employer upon trust, federal or other funds, or (B) is on a
22leave of absence without pay. Employment which is irregular,
23intermittent or temporary shall not be considered continuous
24for purposes of this paragraph.
25    However, a person is not an "employee" if he or she:

 

 

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1        (1) is a student enrolled in and regularly attending
2    classes in a college or university which is an employer,
3    and is employed on a temporary basis at less than full
4    time;
5        (2) is currently receiving a retirement annuity or a
6    disability retirement annuity under Section 15-153.2 from
7    this System;
8        (3) is on a military leave of absence;
9        (4) is eligible to participate in the Federal Civil
10    Service Retirement System and is currently making
11    contributions to that system based upon earnings paid by an
12    employer;
13        (5) is on leave of absence without pay for more than 60
14    days immediately following termination of disability
15    benefits under this Article;
16        (6) is hired after June 30, 1979 as a public service
17    employment program participant under the Federal
18    Comprehensive Employment and Training Act and receives
19    earnings in whole or in part from funds provided under that
20    Act; or
21        (7) is employed on or after July 1, 1991 to perform
22    services that are excluded by subdivision (a)(7)(f) or
23    (a)(19) of Section 210 of the federal Social Security Act
24    from the definition of employment given in that Section (42
25    U.S.C. 410).
26    (b) Any employer may, by filing a written notice with the

 

 

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1board, exclude from the definition of "employee" all persons
2employed pursuant to a federally funded contract entered into
3after July 1, 1982 with a federal military department in a
4program providing training in military courses to federal
5military personnel on a military site owned by the United
6States Government, if this exclusion is not prohibited by the
7federally funded contract or federal laws or rules governing
8the administration of the contract.
9    (c) Any person appointed by the Governor under the Civil
10Administrative Code of the State is an employee, if he or she
11is a participant in this system on the effective date of the
12appointment.
13    (d) A participant on lay-off status under civil service
14rules is considered an employee for not more than 120 days from
15the date of the lay-off.
16    (e) A participant is considered an employee during (1) the
17first 60 days of disability leave, (2) the period, not to
18exceed one year, in which his or her eligibility for disability
19benefits is being considered by the board or reviewed by the
20courts, and (3) the period he or she receives disability
21benefits under the provisions of Section 15-152, workers'
22compensation or occupational disease benefits, or disability
23income under an insurance contract financed wholly or partially
24by the employer.
25    (f) Absences without pay, other than formal leaves of
26absence, of less than 30 calendar days, are not considered as

 

 

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1an interruption of a person's status as an employee. If such
2absences during any period of 12 months exceed 30 work days,
3the employee status of the person is considered as interrupted
4as of the 31st work day.
5    (g) A staff member whose employment contract requires
6services during an academic term is to be considered an
7employee during the summer and other vacation periods, unless
8he or she declines an employment contract for the succeeding
9academic term or his or her employment status is otherwise
10terminated, and he or she receives no earnings during these
11periods.
12    (h) An individual who was a participating employee employed
13in the fire department of the University of Illinois's
14Champaign-Urbana campus immediately prior to the elimination
15of that fire department and who immediately after the
16elimination of that fire department became employed by the fire
17department of the City of Urbana or the City of Champaign shall
18continue to be considered as an employee for purposes of this
19Article for so long as the individual remains employed as a
20firefighter by the City of Urbana or the City of Champaign. The
21individual shall cease to be considered an employee under this
22subsection (h) upon the first termination of the individual's
23employment as a firefighter by the City of Urbana or the City
24of Champaign.
25    (i) An individual who is employed on a full-time basis as
26an officer or employee of a statewide teacher organization that

 

 

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

 

 

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1granted under this subsection for any such prior employment for
2which the applicant received credit under any other provision
3of this Code, or during which the applicant was on a leave of
4absence under Section 15-113.2.
5    (j) A person employed by the State Board of Higher
6Education in a position with the Illinois Century Network as of
7June 30, 2004 shall be considered to be an employee for so long
8as he or she remains continuously employed after that date by
9the Department of Central Management Services in a position
10with the Illinois Century Network, the Bureau of Communication
11and Computer Services, or, if applicable, any successor bureau
12and meets the requirements of subsection (a).
13    (k) In the case of doubt as to whether any person is an
14employee within the meaning of this Section, the decision of
15the Board shall be final.
16(Source: P.A. 97-651, eff. 1-5-12.)
 
17    (40 ILCS 5/15-107.1 new)
18    Sec. 15-107.1. Tier I employee. "Tier I employee": An
19employee under this Article, other than a participant in the
20self-managed plan under Section 15-158.2, who first became a
21member or participant before January 1, 2011 under any
22reciprocal retirement system or pension fund established under
23this Code other than a retirement system or pension fund
24established 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
25    employee on or after the effective date of this amendatory

 

 

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

 

 

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1employer to an employee under this Article after June 30, 2013
2that would qualify as "earnings", as defined under Section
315-111, but for the fact that the employer offered the increase
4in income to the employee on the condition that it not qualify
5as earnings and the employee accepted the increase in income
6subject to that condition. The term "future increase in income"
7does not include an increase in income in any form that is paid
8to a Tier I employee under an employment contract or collective
9bargaining agreement that is in effect on the effective date of
10this Section but does include an increase in income in any form
11pursuant to an extension, amendment, or renewal of any such
12employment contract or collective bargaining agreement on or
13after the effective date of this amendatory Act of the 97th
14General Assembly.
 
15    (40 ILCS 5/15-113.2)  (from Ch. 108 1/2, par. 15-113.2)
16    Sec. 15-113.2. Service for leaves of absence. "Service for
17leaves of absence" includes those periods of leaves of absence
18at less than 50% pay, except military leave and periods of
19disability leave in excess of 60 days, for which the employee
20pays the contributions required under Section 15-157 in
21accordance with rules prescribed by the board based upon the
22employee's basic compensation on the date the leave begins, or
23in the case of leave for service with a teacher organization,
24based upon the actual compensation received by the employee for
25such service after January 26, 1988, if the employee so elects

 

 

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1within 30 days of that date or the date the leave for service
2with a teacher organization begins, whichever is later;
3provided that the employee (1) returns to employment covered by
4this system at the expiration of the leave, or within 30 days
5after the termination of a disability which occurs during the
6leave and continues this employment at a percentage of time
7equal to or greater than the percentage of time immediately
8preceding the leave of absence for at least 8 consecutive
9months or a period equal to the period of the leave, whichever
10is less, or (2) is precluded from meeting the foregoing
11conditions because of disability or death. If service credit is
12denied because the employee fails to meet these conditions, the
13contributions covering the leave of absence shall be refunded
14without interest. The return to employment condition does not
15apply if the leave of absence is for service with a teacher
16organization.
17    Service credit provided under this Section shall not exceed
183 years in any period of 10 years, unless the employee is on
19special leave granted by the employer for service with a
20teacher organization. Commencing with the fourth year in any
21period of 10 years, a participant on such special leave is also
22required to pay employer contributions equal to the normal cost
23as defined in Section 15-155, based upon the employee's basic
24compensation on the date the leave begins, or based upon the
25actual compensation received by the employee for service with a
26teacher organization if the employee has so elected.

 

 

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1    Notwithstanding any other provision of this Article, a
2participant shall not be eligible to make contributions or
3receive service credit for a leave of absence for service with
4a teacher organization if that leave of absence for service
5with a teacher organization begins on or after the effective
6date of this amendatory Act of the 97th General Assembly.
7(Source: P.A. 90-65, eff. 7-7-97; 90-511, eff. 8-22-97.)
 
8    (40 ILCS 5/15-113.6)  (from Ch. 108 1/2, par. 15-113.6)
9    Sec. 15-113.6. Service for employment in public schools.
10"Service for employment in public schools": Includes those
11periods not exceeding the lesser of 10 years or 2/3 of the
12service granted under other Sections of this Article dealing
13with service credit, during which a person who entered the
14system after September 1, 1974 was employed full time by a
15public common school, public college and public university, or
16by an agency or instrumentality of any of the foregoing, of any
17state, territory, dependency or possession of the United States
18of America, including the Philippine Islands, or a school
19operated by or under the auspices of any agency or department
20of any other state, if the person (1) cannot qualify for a
21retirement pension or other benefit based upon employer
22contributions from another retirement system, exclusive of
23federal social security, based in whole or in part upon this
24employment, and (2) pays the lesser of (A) an amount equal to
258% of his or her annual basic compensation on the date of

 

 

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1becoming a participating employee subsequent to this service
2multiplied by the number of years of such service, together
3with compound interest from the date participation begins to
4the date payment is received by the board at the rate of 6% per
5annum through August 31, 1982, and at the effective rates after
6that date, and (B) 50% of the actuarial value of the increase
7in the retirement annuity provided by this service, and (3)
8contributes for at least 5 years subsequent to this employment
9to one or more of the following systems: the State Universities
10Retirement System, the Teachers' Retirement System of the State
11of Illinois, and the Public School Teachers' Pension and
12Retirement Fund of Chicago.
13    The service granted under this Section shall not be
14considered in determining whether the person has the minimum
15number of 8 years of service required to qualify for a
16retirement annuity at age 55 or the 5 years of service required
17to qualify for a retirement annuity at age 62, as provided in
18Section 15-135, or the 10 years required by subsection (c) of
19Section 1-160 for a person subject to that Section who first
20becomes a participant on or after January 1, 2011. The maximum
21allowable service of 10 years for this governmental employment
22shall be reduced by the service credit which is validated under
23paragraph (2) of subsection (b) of Section 16-127 and paragraph
241 of Section 17-133.
25(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,
26by default, participate in the traditional benefit package.

 

 

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1    (b) "Eligible employee" means an employee (as defined in
2Section 15-107) who is either a currently eligible employee or
3a newly eligible employee. For purposes of this Section, a
4"currently eligible employee" is an employee who is employed by
5an employer on the effective date on which the employer offers
6to its employees the portable benefit package and the
7self-managed plan as alternatives to the traditional benefit
8package but not on or after the effective date of this
9amendatory Act of the 97th General Assembly. A "newly eligible
10employee" is an employee who first becomes employed by an
11employer after the effective date on which the employer offers
12its employees the portable benefit package and the self-managed
13plan as alternatives to the traditional benefit package but not
14on or after the effective date of this amendatory Act of the
1597th General Assembly. A newly eligible employee participates
16in the traditional benefit package until he or she makes an
17election to participate in the portable benefit package or the
18self-managed plan. If an employee does not elect to participate
19in the portable benefit package or the self-managed plan, he or
20she shall continue to participate in the traditional benefit
21package by default.
22    (c) An eligible employee who at the time he or she is first
23eligible to make the election described in subsection (a) does
24not have sufficient age and service to qualify for a retirement
25annuity under Section 15-135 may elect to participate in the
26traditional benefit package, the portable benefit package, or

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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1        provided in subsection (d-2) of Section 15-136; or
2        (2) to not agree to items (i) and (ii) as set forth in
3    paragraph (1) of this subsection.
4    The election required under this subsection (a-5) shall be
5made by each Tier I retiree no earlier than January 1, 2013 and
6no later than May 31, 2013, except that:
7        (i) a person who becomes a Tier I retiree under this
8    Article on or after January 1, 2013 must make the election
9    under this subsection (a-5) within 60 days after becoming a
10    Tier I retiree; and
11        (ii) a person who made the election under subsection
12    (a) as a Tier I employee remains bound by that election and
13    shall not make a later election under this subsection
14    (a-5).
15    If a Tier I retiree fails for any reason to make a required
16election under this subsection within the time specified, then
17the Tier I retiree shall be deemed to have made the election
18under paragraph (2) of this subsection.
19    (a-10) All elections under subsection (a) or (a-5) that are
20made or deemed to be made before June 1, 2013 shall take effect
21on July 1, 2013. Elections that are made or deemed to be made
22on or after June 1, 2013 shall take effect on the first day of
23the month following the month in which the election is made or
24deemed to be made.
25    (b) As adequate and legal consideration provided under this
26amendatory Act of the 97th General Assembly for making the

 

 

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

 

 

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

 

 

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

 

 

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1that the Tier I employee or Tier I retiree may also wish to
2obtain information and counsel relating to the election
3required under this Section from any other available source,
4including but not limited to labor organizations and private
5counsel.
6    The System shall coordinate with the Illinois Department of
7Central Management Services and each other retirement system
8administering an election in accordance with this amendatory
9Act of the 97th General Assembly to provide information
10concerning the impact of the election under this Section.
11    In no event shall the System, its staff, or the Board be
12held liable for any information given to a member, beneficiary,
13or annuitant regarding the elections under this Section.
14    (e) Notwithstanding any other provision of law, an employer
15under this Article is required to offer any future increases in
16income expressly and irrevocably as not constituting
17"earnings" under Section 15-111 to any Tier I employee, or Tier
18I retiree returning to active service, who has made an election
19under paragraph (2) or subsection (a) or (a-5) of this Section.
20A Tier I employee, or Tier I retiree returning to active
21service, who has made an election under paragraph (2) of
22subsection (a) or (a-5) of this Section shall not accept any
23future increase in income that is offered by an employer under
24this Article in violation of the requirement set forth in this
25subsection.
26    (f) A member's election under this Section is not a

 

 

09700SB1673ham005- 150 -LRB097 07605 JWD 70354 a

1prohibited election under subdivision (j)(1) of Section 1-119
2of the Illinois Pension Code.
3    (g) An employee who has made the election under paragraph
4(1) of subsection (a) or (a-5) of this Section may elect to
5participate in the optional cash balance plan under Section
61-162.
7    The election to participate in the optional cash balance
8plan shall be made in writing, in the manner provided by the
9applicable retirement system.
10    (h) Qualified Plan Status. No provision of this Section
11shall be interpreted in a way that would cause the System to
12cease to be a qualified plan under Section 461(a) of the
13Internal Revenue Code of 1986.
 
14    (40 ILCS 5/15-136)  (from Ch. 108 1/2, par. 15-136)
15    Sec. 15-136. Retirement annuities - Amount. The provisions
16of this Section 15-136 apply only to those participants who are
17participating in the traditional benefit package or the
18portable benefit package and do not apply to participants who
19are participating in the self-managed plan.
20    (a) The amount of a participant's retirement annuity,
21expressed in the form of a single-life annuity, shall be
22determined by whichever of the following rules is applicable
23and provides the largest annuity:
24    Rule 1: The retirement annuity shall be 1.67% of final rate
25of earnings for each of the first 10 years of service, 1.90%

 

 

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1for each of the next 10 years of service, 2.10% for each year
2of service in excess of 20 but not exceeding 30, and 2.30% for
3each year in excess of 30; or for persons who retire on or
4after January 1, 1998, 2.2% of the final rate of earnings for
5each year of service.
6    Rule 2: The retirement annuity shall be the sum of the
7following, determined from amounts credited to the participant
8in accordance with the actuarial tables and the prescribed rate
9of interest in effect at the time the retirement annuity
10begins:
11        (i) the normal annuity which can be provided on an
12    actuarially equivalent basis, by the accumulated normal
13    contributions as of the date the annuity begins;
14        (ii) an annuity from employer contributions of an
15    amount equal to that which can be provided on an
16    actuarially equivalent basis from the accumulated normal
17    contributions made by the participant under Section
18    15-113.6 and Section 15-113.7 plus 1.4 times all other
19    accumulated normal contributions made by the participant;
20    and
21        (iii) the annuity that can be provided on an
22    actuarially equivalent basis from the entire contribution
23    made by the participant under Section 15-113.3.
24    With respect to a police officer or firefighter who retires
25on or after August 14, 1998, the accumulated normal
26contributions taken into account under clauses (i) and (ii) of

 

 

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1this Rule 2 shall include the additional normal contributions
2made by the police officer or firefighter under Section
315-157(a).
4    The amount of a retirement annuity calculated under this
5Rule 2 shall be computed solely on the basis of the
6participant's accumulated normal contributions, as specified
7in this Rule and defined in Section 15-116. Neither an employee
8or employer contribution for early retirement under Section
915-136.2 nor any other employer contribution shall be used in
10the calculation of the amount of a retirement annuity under
11this Rule 2.
12    This amendatory Act of the 91st General Assembly is a
13clarification of existing law and applies to every participant
14and annuitant without regard to whether status as an employee
15terminates before the effective date of this amendatory Act.
16    This Rule 2 does not apply to a person who first becomes an
17employee under this Article on or after July 1, 2005.
18    Rule 3: The retirement annuity of a participant who is
19employed at least one-half time during the period on which his
20or her final rate of earnings is based, shall be equal to the
21participant's years of service not to exceed 30, multiplied by
22(1) $96 if the participant's final rate of earnings is less
23than $3,500, (2) $108 if the final rate of earnings is at least
24$3,500 but less than $4,500, (3) $120 if the final rate of
25earnings is at least $4,500 but less than $5,500, (4) $132 if
26the final rate of earnings is at least $5,500 but less than

 

 

09700SB1673ham005- 153 -LRB097 07605 JWD 70354 a

1$6,500, (5) $144 if the final rate of earnings is at least
2$6,500 but less than $7,500, (6) $156 if the final rate of
3earnings is at least $7,500 but less than $8,500, (7) $168 if
4the final rate of earnings is at least $8,500 but less than
5$9,500, and (8) $180 if the final rate of earnings is $9,500 or
6more, except that the annuity for those persons having made an
7election under Section 15-154(a-1) shall be calculated and
8payable under the portable retirement benefit program pursuant
9to the provisions of Section 15-136.4.
10    Rule 4: A participant who is at least age 50 and has 25 or
11more years of service as a police officer or firefighter, and a
12participant who is age 55 or over and has at least 20 but less
13than 25 years of service as a police officer or firefighter,
14shall be entitled to a retirement annuity of 2 1/4% of the
15final rate of earnings for each of the first 10 years of
16service as a police officer or firefighter, 2 1/2% for each of
17the next 10 years of service as a police officer or
18firefighter, and 2 3/4% for each year of service as a police
19officer or firefighter in excess of 20. The retirement annuity
20for all other service shall be computed under Rule 1.
21    For purposes of this Rule 4, a participant's service as a
22firefighter shall also include the following:
23        (i) service that is performed while the person is an
24    employee under subsection (h) of Section 15-107; and
25        (ii) in the case of an individual who was a
26    participating employee employed in the fire department of

 

 

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

 

 

09700SB1673ham005- 155 -LRB097 07605 JWD 70354 a

1    accumulated normal contributions made by the participant;
2    and
3        (iii) an annuity which can be provided on an
4    actuarially equivalent basis from the employee
5    contribution for early retirement under Section 15-136.2,
6    and an annuity from employer contributions of an amount
7    equal to that which can be provided on an actuarially
8    equivalent basis from the employee contribution for early
9    retirement under Section 15-136.2.
10    In no event shall a retirement annuity under this Rule 5 be
11lower than the amount obtained by adding (1) the monthly amount
12obtained by dividing the combined employee and employer
13contributions made under Section 15-136.2 by the System's
14annuity factor for the age of the participant at the beginning
15of the annuity payment period and (2) the amount equal to the
16participant's annuity if calculated under Rule 1, reduced under
17Section 15-136(b) as if no contributions had been made under
18Section 15-136.2.
19    With respect to a participant who is qualified for a
20retirement annuity under this Rule 5 whose retirement annuity
21began before the effective date of this amendatory Act of the
2291st General Assembly, and for whom an employee contribution
23was made under Section 15-136.2, the System shall recalculate
24the retirement annuity under this Rule 5 and shall pay any
25additional amounts due in the manner provided in Section
2615-186.1 for benefits mistakenly set too low.

 

 

09700SB1673ham005- 156 -LRB097 07605 JWD 70354 a

1    The amount of a retirement annuity calculated under this
2Rule 5 shall be computed solely on the basis of those
3contributions specifically set forth in this Rule 5. Except as
4provided in clause (iii) of this Rule 5, neither an employee
5nor employer contribution for early retirement under Section
615-136.2, nor any other employer contribution, shall be used in
7the calculation of the amount of a retirement annuity under
8this Rule 5.
9    The General Assembly has adopted the changes set forth in
10Section 25 of this amendatory Act of the 91st General Assembly
11in recognition that the decision of the Appellate Court for the
12Fourth District in Mattis v. State Universities Retirement
13System et al. might be deemed to give some right to the
14plaintiff in that case. The changes made by Section 25 of this
15amendatory Act of the 91st General Assembly are a legislative
16implementation of the decision of the Appellate Court for the
17Fourth District in Mattis v. State Universities Retirement
18System et al. with respect to that plaintiff.
19    The changes made by Section 25 of this amendatory Act of
20the 91st General Assembly apply without regard to whether the
21person is in service as an employee on or after its effective
22date.
23    (b) The retirement annuity provided under Rules 1 and 3
24above shall be reduced by 1/2 of 1% for each month the
25participant is under age 60 at the time of retirement. However,
26this reduction shall not apply in the following cases:

 

 

09700SB1673ham005- 157 -LRB097 07605 JWD 70354 a

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

 

 

09700SB1673ham005- 158 -LRB097 07605 JWD 70354 a

1increase in his or her monthly retirement annuity of 0.125% of
2the monthly retirement annuity provided under Rule 1, Rule 2,
3Rule 3, Rule 4, or Rule 5, contained in this Section,
4multiplied by the number of full months which elapsed from the
5date the retirement annuity payments began to January 1, 1972,
6plus 0.1667% of such annuity, multiplied by the number of full
7months which elapsed from January 1, 1972, or the date the
8retirement annuity payments began, whichever is later, to
9January 1, 1978, plus 0.25% of such annuity multiplied by the
10number of full months which elapsed from January 1, 1978, or
11the date the retirement annuity payments began, whichever is
12later, to the effective date of the increase.
13    The annuitant shall receive an increase in his or her
14monthly retirement annuity on each January 1 thereafter during
15the annuitant's life of 3% of the monthly annuity provided
16under Rule 1, Rule 2, Rule 3, Rule 4, or Rule 5 contained in
17this Section. The change made under this subsection by P.A.
1881-970 is effective January 1, 1980 and applies to each
19annuitant whose status as an employee terminates before or
20after that date.
21    Beginning January 1, 1990 and except as provided in
22subsections (d-1) and (d-2), all automatic annual increases
23payable under this Section shall be calculated as a percentage
24of the total annuity payable at the time of the increase,
25including all increases previously granted under this Article.
26    The change made in this subsection by P.A. 85-1008 is

 

 

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1effective January 26, 1988, and is applicable without regard to
2whether status as an employee terminated before that date.
3    (d-1) Notwithstanding any other provision of this Article,
4for a Tier I employee or Tier I retiree who made the election
5under paragraph (1) of either subsection (a) or (a-5) of
6Section 15-134.6, the amount of each automatic annual increase
7in retirement annuity occurring on or after the effective date
8of that election shall be 3% or one-half of the annual
9unadjusted percentage increase, if any, in the Consumer Price
10Index-U for the 12 months ending with the preceding September,
11whichever is less, of the originally granted retirement
12annuity. For the purposes of this Section, "Consumer Price
13Index-U" means the index published by the Bureau of Labor
14Statistics of the United States Department of Labor that
15measures the average change in prices of goods and services
16purchased by all urban consumers, United States city average,
17all items, 1982-84 = 100.
18    (d-2) Notwithstanding any other provision of this Article,
19for a Tier I employee or Tier I retiree who made the election
20under paragraph (1) of subsection (a) or (a-5) of Section
2115-134.6, the monthly retirement annuity shall first be subject
22to annual increases on the January 1 occurring on or next after
23the attainment of age 67 or the January 1 occurring on or next
24after the fifth anniversary of the annuity start date,
25whichever occurs earlier. If on the effective date of the
26election under paragraph (1) of subsection (a-5) of Section

 

 

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115-134.6 a Tier I retiree has already received an annual
2increase under this Section but does not yet meet the new
3eligibility requirements of this subsection, the annual
4increases already received shall continue in force, but no
5additional annual increase shall be granted until the Tier I
6retiree meets the new eligibility requirements.
7    (e) If, on January 1, 1987, or the date the retirement
8annuity payment period begins, whichever is later, the sum of
9the retirement annuity provided under Rule 1 or Rule 2 of this
10Section and the automatic annual increases provided under the
11preceding subsection or Section 15-136.1, amounts to less than
12the retirement annuity which would be provided by Rule 3, the
13retirement annuity shall be increased as of January 1, 1987, or
14the date the retirement annuity payment period begins,
15whichever is later, to the amount which would be provided by
16Rule 3 of this Section. Such increased amount shall be
17considered as the retirement annuity in determining benefits
18provided under other Sections of this Article. This paragraph
19applies without regard to whether status as an employee
20terminated before the effective date of this amendatory Act of
211987, provided that the annuitant was employed at least
22one-half time during the period on which the final rate of
23earnings was based.
24    (f) A participant is entitled to such additional annuity as
25may be provided on an actuarially equivalent basis, by any
26accumulated additional contributions to his or her credit.

 

 

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1However, the additional contributions made by the participant
2toward the automatic increases in annuity provided under this
3Section shall not be taken into account in determining the
4amount of such additional annuity.
5    (g) If, (1) by law, a function of a governmental unit, as
6defined by Section 20-107 of this Code, is transferred in whole
7or in part to an employer, and (2) a participant transfers
8employment from such governmental unit to such employer within
96 months after the transfer of the function, and (3) the sum of
10(A) the annuity payable to the participant under Rule 1, 2, or
113 of this Section (B) all proportional annuities payable to the
12participant by all other retirement systems covered by Article
1320, and (C) the initial primary insurance amount to which the
14participant is entitled under the Social Security Act, is less
15than the retirement annuity which would have been payable if
16all of the participant's pension credits validated under
17Section 20-109 had been validated under this system, a
18supplemental annuity equal to the difference in such amounts
19shall be payable to the participant.
20    (h) On January 1, 1981, an annuitant who was receiving a
21retirement annuity on or before January 1, 1971 shall have his
22or her retirement annuity then being paid increased $1 per
23month for each year of creditable service. On January 1, 1982,
24an annuitant whose retirement annuity began on or before
25January 1, 1977, shall have his or her retirement annuity then
26being paid increased $1 per month for each year of creditable

 

 

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1service.
2    (i) On January 1, 1987, any annuitant whose retirement
3annuity began on or before January 1, 1977, shall have the
4monthly retirement annuity increased by an amount equal to 8
5per year of creditable service times the number of years that
6have elapsed since the annuity began.
7(Source: P.A. 93-347, eff. 7-24-03; 94-4, eff. 6-1-05.)
 
8    (40 ILCS 5/15-155)  (from Ch. 108 1/2, par. 15-155)
9    Sec. 15-155. State and employer Employer contributions.
10    (a) Except as otherwise provided in this Section, the The
11State of Illinois shall make contributions by appropriations of
12amounts which, together with contributions paid by employers,
13the other employer contributions from trust, federal, and other
14funds, employee contributions, income from investments, and
15other income of this System, will be sufficient to meet the
16cost of maintaining and administering the System on a 90%
17funded basis in accordance with actuarial recommendations.
18    Beginning with State fiscal year 2014, the employers under
19this Article shall be responsible for paying the normal costs
20of the System plus the amounts required to amortize any total
21cost of the benefits of the System arising on or after July 1,
222013.
23    Beginning with State fiscal year 2014, the State's required
24contributions to the System shall be limited to the amounts
25required to amortize the total cost of the benefits of the

 

 

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

 

 

09700SB1673ham005- 164 -LRB097 07605 JWD 70354 a

1sufficient to amortize, by the end of State fiscal year 2045,
2the total cost of the benefits of the System arising before
3July 1, 2013. In making these determinations, the required
4State contribution shall be calculated each year as a level
5percentage of payroll over the years remaining to and including
6fiscal year 2043 and shall be determined under the projected
7unit credit actuarial cost method.
8    Except as provided in subsection (a-3), beginning in State
9fiscal year 2046 or on the date that the State has amortized
10100% of the total cost of benefits accrued by July 1, 2013,
11whichever is earlier, the State has no further obligation to
12make contributions to the System under this subsection (a-1).
13    For State fiscal years 1996 through 2005, the State
14contribution to the System, as a percentage of the applicable
15employee payroll, shall be increased in equal annual increments
16so that by State fiscal year 2011, the State is contributing at
17the rate required under this Section.
18    Notwithstanding any other provision of this Article, the
19total required State contribution for State fiscal year 2006 is
20$166,641,900.
21    Notwithstanding any other provision of this Article, the
22total required State contribution for State fiscal year 2007 is
23$252,064,100.
24    For each of State fiscal years 2008 through 2009, the State
25contribution to the System, as a percentage of the applicable
26employee payroll, shall be increased in equal annual increments

 

 

09700SB1673ham005- 165 -LRB097 07605 JWD 70354 a

1from the required State contribution for State fiscal year
22007, so that by State fiscal year 2011, the State is
3contributing at the rate otherwise required under this Section.
4    Notwithstanding any other provision of this Article, the
5total required State contribution for State fiscal year 2010 is
6$702,514,000 and shall be made from the State Pensions Fund and
7proceeds of bonds sold in fiscal year 2010 pursuant to Section
87.2 of the General Obligation Bond Act, less (i) the pro rata
9share of bond sale expenses determined by the System's share of
10total bond proceeds, (ii) any amounts received from the General
11Revenue Fund in fiscal year 2010, (iii) any reduction in bond
12proceeds due to the issuance of discounted bonds, if
13applicable.
14    Notwithstanding any other provision of this Article, the
15total required State contribution for State fiscal year 2011 is
16the amount recertified by the System on or before April 1, 2011
17pursuant to Section 15-165 and shall be made from the State
18Pensions Fund and proceeds of bonds sold in fiscal year 2011
19pursuant to Section 7.2 of the General Obligation Bond Act,
20less (i) the pro rata share of bond sale expenses determined by
21the System's share of total bond proceeds, (ii) any amounts
22received from the General Revenue Fund in fiscal year 2011, and
23(iii) any reduction in bond proceeds due to the issuance of
24discounted bonds, if applicable.
25    Beginning in State fiscal year 2046, the minimum State
26contribution for each fiscal year shall be the amount needed to

 

 

09700SB1673ham005- 166 -LRB097 07605 JWD 70354 a

1maintain the total assets of the System at 90% of the total
2actuarial liabilities of the System.
3    Amounts received by the System pursuant to Section 25 of
4the Budget Stabilization Act or Section 8.12 of the State
5Finance Act in any fiscal year do not reduce and do not
6constitute payment of any portion of the minimum State
7contribution required under this Article in that fiscal year.
8Such amounts shall not reduce, and shall not be included in the
9calculation of, the required State contributions under this
10Article in any future year until the System has reached a
11funding ratio of at least 90%. A reference in this Article to
12the "required State contribution" or any substantially similar
13term does not include or apply to any amounts payable to the
14System under Section 25 of the Budget Stabilization Act.
15    Notwithstanding any other provision of this Section, the
16required State contribution for State fiscal year 2005 and for
17fiscal year 2008 through and each fiscal year 2013 thereafter,
18as calculated under this Section and certified under Section
1915-165, shall not exceed an amount equal to (i) the amount of
20the required State contribution that would have been calculated
21under this Section for that fiscal year if the System had not
22received any payments under subsection (d) of Section 7.2 of
23the General Obligation Bond Act, minus (ii) the portion of the
24State's total debt service payments for that fiscal year on the
25bonds issued in fiscal year 2003 for the purposes of that
26Section 7.2, as determined and certified by the Comptroller,

 

 

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1that is the same as the System's portion of the total moneys
2distributed under subsection (d) of Section 7.2 of the General
3Obligation Bond Act. In determining this maximum for State
4fiscal years 2008 through 2010, however, the amount referred to
5in item (i) shall be increased, as a percentage of the
6applicable employee payroll, in equal increments calculated
7from the sum of the required State contribution for State
8fiscal year 2007 plus the applicable portion of the State's
9total debt service payments for fiscal year 2007 on the bonds
10issued in fiscal year 2003 for the purposes of Section 7.2 of
11the General Obligation Bond Act, so that, by State fiscal year
122011, the State is contributing at the rate otherwise required
13under this Section.
14    (a-3) If at least 50% of Tier I employees making an
15election under Section 15-134.6 before June 1, 2013 choose the
16option under paragraph (1) of subsection (a) of that Section,
17then beginning in State fiscal year 2014, instead of the
18contributions specified in subsection (a-1) of this Section,
19the State contributions specified in subsection (a-5) of this
20Section shall be paid.
21    In making its initial certification of the annual required
22contribution by the State for State fiscal year 2014, the Board
23shall assume that the new funding formula provided in
24subsection (a-5) of this Section applies. If fewer than 50% of
25Tier I employees making an election under Section 15-134.6
26before June 1, 2013 choose the option under paragraph (1) of

 

 

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1subsection (a) of that Section, then:
2        (1) instead of the contributions specified in
3    subsection (a-5) of this Section, the State contributions
4    specified in subsection (a-1) shall continue to be paid;
5    and
6        (2) as soon as possible after June 1, 2013, the Board
7    shall recertify the annual required contribution by the
8    State for State fiscal year 2014.
9    (a-5) For State fiscal years 2014 through 2043 or until the
10State has amortized 100% of the total cost of benefits accrued
11by July 1, 2013, whichever is earlier, in addition to any
12employer contributions required from the State as an employer,
13the minimum contribution to the System to be made by the State
14for each fiscal year shall be an amount determined by the Board
15to be sufficient to amortize, by the end of State fiscal year
162043, the total cost of the benefits of the System arising
17before July 1, 2013. In making these determinations, the
18required State contribution shall be calculated each year as a
19level percentage of payroll over the years remaining to and
20including fiscal year 2043 and shall be determined under the
21projected unit credit actuarial cost method.
22    Beginning in State fiscal year 2044 or on the date that the
23State has amortized 100% of the total cost of benefits accrued
24by July 1, 2013, whichever is earlier, the State has no further
25obligation to make contributions to the System under this
26subsection (a-5).

 

 

09700SB1673ham005- 169 -LRB097 07605 JWD 70354 a

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

 

 

09700SB1673ham005- 170 -LRB097 07605 JWD 70354 a

1shall be the percentage of payroll required under this
2subsection from the previous fiscal year increased by 1% of
3payroll for each of State fiscal years 2015 through 2019, and
4increased by 0.5% of payroll for each State fiscal year after
52019.
6    Contributions required of employers under items (ii) and
7(iii) of subsection (a-10), under subsection (g), and under any
8other applicable provision of this Section are in addition to
9contributions required under item (i) of subsection (a-10).
10    (a-20) Beginning in State fiscal year 2015 and continuing
11until the Board determines and certifies to the Governor that
12employers are contributing under item (i) of subsection (a-10)
13the full amount actually specified by item (i) of subsection
14(a-10), the State shall make an additional contribution to the
15System for each fiscal year, equal to the difference between
16(1) the total contribution calculated under item (i) of
17subsection (a-10) for all employers for that fiscal year, and
18(2) the amount of such total contribution as reduced under
19subsection (a-15).
20    The State contribution under this subsection (a-20) is in
21addition to the State contributions required under subsection
22(a-1) or (a-5) and any contributions required to be paid by the
23State as an employer under subsections (a-10) and (g) of this
24Section.
25    (b) If an employee is paid from trust or federal funds, the
26employer shall pay to the Board contributions from those funds

 

 

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

 

 

09700SB1673ham005- 172 -LRB097 07605 JWD 70354 a

1    (c) Through State fiscal year 1995: The total employer
2contribution shall be apportioned among the various funds of
3the State and other employers, whether trust, federal, or other
4funds, in accordance with actuarial procedures approved by the
5Board. State of Illinois contributions for employers receiving
6State appropriations for personal services shall be payable
7from appropriations made to the employers or to the System. The
8contributions for Class I community colleges covering earnings
9other than those paid from trust and federal funds, shall be
10payable solely from appropriations to the Illinois Community
11College Board or the System for employer contributions.
12    (d) Beginning in State fiscal year 1996, the required State
13contributions to the System shall be appropriated directly to
14the System and shall be payable through vouchers issued in
15accordance with subsection (c) of Section 15-165, except as
16provided in subsection (g).
17    (e) The State Comptroller shall draw warrants payable to
18the System upon proper certification by the System or by the
19employer in accordance with the appropriation laws and this
20Code.
21    (f) Normal costs under this Section means liability for
22pensions and other benefits which accrues to the System because
23of the credits earned for service rendered by the participants
24during the fiscal year and expenses of administering the
25System, but shall not include the principal of or any
26redemption premium or interest on any bonds issued by the Board

 

 

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1or any expenses incurred or deposits required in connection
2therewith.
3    (g) The employer contributions under this subsection (g)
4are no longer required after June 30, 2013.
5    If the amount of a participant's earnings for any academic
6year used to determine the final rate of earnings, determined
7on a full-time equivalent basis, exceeds the amount of his or
8her earnings with the same employer for the previous academic
9year, determined on a full-time equivalent basis, by more than
106%, the participant's employer shall pay to the System, in
11addition to all other payments required under this Section and
12in accordance with guidelines established by the System, the
13present value of the increase in benefits resulting from the
14portion of the increase in earnings that is in excess of 6%.
15This present value shall be computed by the System on the basis
16of the actuarial assumptions and tables used in the most recent
17actuarial valuation of the System that is available at the time
18of the computation. The System may require the employer to
19provide any pertinent information or documentation.
20    Whenever it determines that a payment is or may be required
21under this subsection (g), the System shall calculate the
22amount of the payment and bill the employer for that amount.
23The bill shall specify the calculations used to determine the
24amount due. If the employer disputes the amount of the bill, it
25may, within 30 days after receipt of the bill, apply to the
26System in writing for a recalculation. The application must

 

 

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1specify in detail the grounds of the dispute and, if the
2employer asserts that the calculation is subject to subsection
3(h) or (i) of this Section, must include an affidavit setting
4forth and attesting to all facts within the employer's
5knowledge that are pertinent to the applicability of subsection
6(h) or (i). Upon receiving a timely application for
7recalculation, the System shall review the application and, if
8appropriate, recalculate the amount due.
9    The employer contributions required under this subsection
10(g) (f) may be paid in the form of a lump sum within 90 days
11after receipt of the bill. If the employer contributions are
12not paid within 90 days after receipt of the bill, then
13interest will be charged at a rate equal to the System's annual
14actuarially assumed rate of return on investment compounded
15annually from the 91st day after receipt of the bill. Payments
16must be concluded within 3 years after the employer's receipt
17of the bill.
18    (h) This subsection (h) applies only to payments made or
19salary increases given on or after June 1, 2005 but before July
201, 2011. The changes made by Public Act 94-1057 shall not
21require the System to refund any payments received before July
2231, 2006 (the effective date of Public Act 94-1057).
23    When assessing payment for any amount due under subsection
24(g), the System shall exclude earnings increases paid to
25participants under contracts or collective bargaining
26agreements entered into, amended, or renewed before June 1,

 

 

09700SB1673ham005- 175 -LRB097 07605 JWD 70354 a

12005.
2    When assessing payment for any amount due under subsection
3(g), the System shall exclude earnings increases paid to a
4participant at a time when the participant is 10 or more years
5from retirement eligibility under Section 15-135.
6    When assessing payment for any amount due under subsection
7(g), the System shall exclude earnings increases resulting from
8overload work, including a contract for summer teaching, or
9overtime when the employer has certified to the System, and the
10System has approved the certification, that: (i) in the case of
11overloads (A) the overload work is for the sole purpose of
12academic instruction in excess of the standard number of
13instruction hours for a full-time employee occurring during the
14academic year that the overload is paid and (B) the earnings
15increases are equal to or less than the rate of pay for
16academic instruction computed using the participant's current
17salary rate and work schedule; and (ii) in the case of
18overtime, the overtime was necessary for the educational
19mission.
20    When assessing payment for any amount due under subsection
21(g), the System shall exclude any earnings increase resulting
22from (i) a promotion for which the employee moves from one
23classification to a higher classification under the State
24Universities Civil Service System, (ii) a promotion in academic
25rank for a tenured or tenure-track faculty position, or (iii) a
26promotion that the Illinois Community College Board has

 

 

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

 

 

09700SB1673ham005- 177 -LRB097 07605 JWD 70354 a

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

 

 

09700SB1673ham005- 178 -LRB097 07605 JWD 70354 a

1assets shall be equal to the market value of the assets as of
2that date. In determining the actuarial value of the System's
3assets for fiscal years after June 30, 2008, any actuarial
4gains or losses from investment return incurred in a fiscal
5year shall be recognized in equal annual amounts over the
65-year period following that fiscal year.
7    (m) For purposes of determining the required State
8contribution to the system for a particular year, the actuarial
9value of assets shall be assumed to earn a rate of return equal
10to the system's actuarially assumed rate of return.
11    (n) If the System submits a voucher for monthly
12contributions from the State as required by this Section and
13the State fails to pay within 90 days of receipt of such a
14voucher, the Board shall submit a written request to the
15Comptroller seeking payment. A copy of the request shall be
16filed with the Secretary of State, and the Secretary of State
17shall provide copies to the Governor and General Assembly. No
18earlier than the 16th day after filing a request with the
19Secretary of State, the Board shall have the right to commence
20a mandamus action in the Supreme Court of Illinois to compel
21the Comptroller to satisfy the voucher by making payment from
22the General Revenue Fund. This Section constitutes an express
23waiver of the State's sovereign immunity solely to the extent
24it permits the Board to commence a mandamus action in the
25Illinois Supreme Court to compel the Comptroller to pay a
26voucher for monthly contributions from the State as required in

 

 

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1this Section.
2(Source: P.A. 95-331, eff. 8-21-07; 95-950, eff. 8-29-08;
396-43, eff. 7-15-09; 96-1497, eff. 1-14-11; 96-1511, eff.
41-27-11; 96-1554, eff. 3-18-11; revised 4-6-11.)
 
5    (40 ILCS 5/15-155.1 new)
6    Sec. 15-155.1. Actions to enforce payment by employers.
7    (a) If any employer fails to transmit to the System
8contributions required of it under this Article or
9contributions collected by it from its participating employees
10for the purposes of this Article for more than 90 days after
11the payment of such contributions is due, then the System,
12after giving notice to that employer, may certify to the State
13Comptroller the amounts of the delinquent payments, and the
14Comptroller shall deduct the amounts so certified or any part
15thereof from any payments or grants of State funds to the
16employer and shall pay the amounts so deducted to the System.
17If State funds from which such deductions may be made are not
18available, the System may proceed against the employer to
19recover the amounts of the delinquent payments in the
20appropriate circuit court.
21    (b) If any employer fails to transmit to the System
22contributions required of it under this Article or
23contributions collected by it from its participating employees
24for the purposes of this Article for more than 90 days after
25the payment of the contributions is due, the System, after

 

 

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1giving notice to the employer, may certify the amounts of the
2delinquent payments to the county treasurer of any county in
3which the employer is located, who shall deduct the amounts so
4certified or any part thereof from the amounts collected from
5any tax levied by the employer and shall pay the amount so
6deducted to the System.
7    (c) If reports furnished to the System by the employer
8involved are inadequate for the computation of the amounts of
9any payments, the System may provide for such audit of the
10records of the employer as may be required to establish the
11amounts of the delinquent payments. The employer shall make its
12records available to the System for the purpose of the audit.
13The cost of the audit shall be added to the amount of the
14payments and shall be recovered by the System from the employer
15at the same time and in the same manner as the payments are
16recovered.
 
17    (40 ILCS 5/15-155.2 new)
18    Sec. 15-155.2. Individual employer accounts.
19    (a) The System shall create and maintain individual
20accounts for each employer for the purposes of determining
21employer contributions under subsection (a-10) of Section
2215-155. Each employer's account shall be notionally credited
23with the employer's liabilities accruing after July 1, 2013 and
24assets attributable to the employer's account that include (i)
25employer contributions made pursuant to subsection (a-10) of

 

 

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1Section 15-155, (ii) other employer contributions from trust,
2federal, and other funds, (iii) employee contributions made
3after July 1, 2013, and (iv) income from investments. The
4System may deduct reasonable administrative expenses from each
5employer's account.
6    (b) In determining contributions required under subsection
7(a-10) of Section 15-155, the System shall determine (i) a
8blended rate of total normal cost that is applicable to
9contributions made by the University of Illinois, Southern
10Illinois University, Chicago State University, Eastern
11Illinois University, Governors State University, Illinois
12State University, Northeastern Illinois University, Northern
13Illinois University, and Western Illinois University, (ii) a
14blended rate of total normal cost that is applicable to
15contributions made by each community college board, and (iii) a
16rate equal to the total normal cost of the System that is
17applicable to employers other than those listed under item (i)
18or (ii).
19    (c) An employer may make written application with the Board
20to have a separate rate of total normal cost determined for the
21employer. Upon receiving the written application from an
22employer, the Board may determine a total rate of normal cost
23for the employer. The employer shall be responsible for any
24cost incurred in making the determination of total normal cost.
25    The Board may establish rules for the administration of
26this Section that include but are not limited to the date by

 

 

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1which an application must be submitted and the fiscal year in
2which the determination will be used to determine the
3employer's contribution required under subsection (a-10) of
4Section 15-155.
5    (d) An employer whose determination of total normal cost
6under subsection (c) is used to determine its contributions
7required under subsection (a-10) of Section 15-155 may not be
8included in the determination of a rate of total normal cost
9under subsection (c) of this Section.
 
10    (40 ILCS 5/15-157)  (from Ch. 108 1/2, par. 15-157)
11    Sec. 15-157. Employee Contributions.
12    (a) Each participating employee shall make contributions
13towards the retirement benefits payable under the retirement
14program applicable to the employee from each payment of
15earnings applicable to employment under this system on and
16after the date of becoming a participant as follows: Prior to
17September 1, 1949, 3 1/2% of earnings; from September 1, 1949
18to August 31, 1955, 5%; from September 1, 1955 to August 31,
191969, 6%; from September 1, 1969, 6 1/2%. These contributions
20are to be considered as normal contributions for purposes of
21this Article.
22    Each participant who is a police officer or firefighter
23shall make normal contributions of 8% of each payment of
24earnings applicable to employment as a police officer or
25firefighter under this system on or after September 1, 1981,

 

 

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1unless he or she files with the board within 60 days after the
2effective date of this amendatory Act of 1991 or 60 days after
3the board receives notice that he or she is employed as a
4police officer or firefighter, whichever is later, a written
5notice waiving the retirement formula provided by Rule 4 of
6Section 15-136. This waiver shall be irrevocable. If a
7participant had met the conditions set forth in Section
815-132.1 prior to the effective date of this amendatory Act of
91991 but failed to make the additional normal contributions
10required by this paragraph, he or she may elect to pay the
11additional contributions plus compound interest at the
12effective rate. If such payment is received by the board, the
13service shall be considered as police officer service in
14calculating the retirement annuity under Rule 4 of Section
1515-136. While performing service described in clause (i) or
16(ii) of Rule 4 of Section 15-136, a participating employee
17shall be deemed to be employed as a firefighter for the purpose
18of determining the rate of employee contributions under this
19Section.
20    (a-1) Notwithstanding any other provision of this Section,
21an employee who participates in the cash balance plan under
22Section 1-161 shall pay to the System for the purpose of
23participating in the cash balance plan 8% of each payment of
24earnings while he or she is a participant in the cash balance
25plan. Each participant who is a police officer or firefighter
26who participates in the cash balance plan under Section 1-161

 

 

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

 

 

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1and after August 1, 1959. The contributions made under this
2subsection (c) shall be considered as survivor's insurance
3contributions for purposes of this Article if the employee is
4covered under the traditional benefit package, and such
5contributions shall be considered as additional contributions
6for purposes of this Article if the employee is participating
7in the self-managed plan or has elected to participate in the
8portable benefit package and has completed the applicable
9one-year waiting period. Contributions in excess of $80 during
10any fiscal year beginning before August 31, 1969 and in excess
11of $120 during any fiscal year thereafter until September 1,
121971 shall be considered as additional contributions for
13purposes of this Article.
14    (d) If the board by board rule so permits and subject to
15such conditions and limitations as may be specified in its
16rules, a participant may make other additional contributions of
17such percentage of earnings or amounts as the participant shall
18elect in a written notice thereof received by the board.
19    (e) That fraction of a participant's total accumulated
20normal contributions, the numerator of which is equal to the
21number of years of service in excess of that which is required
22to qualify for the maximum retirement annuity, and the
23denominator of which is equal to the total service of the
24participant, shall be considered as accumulated additional
25contributions. The determination of the applicable maximum
26annuity and the adjustment in contributions required by this

 

 

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1provision shall be made as of the date of the participant's
2retirement.
3    (f) Notwithstanding the foregoing, a participating
4employee shall not be required to make contributions under this
5Section after the date upon which continuance of such
6contributions would otherwise cause his or her retirement
7annuity to exceed the maximum retirement annuity as specified
8in clause (1) of subsection (c) of Section 15-136.
9    (g) A participating employee may make contributions for the
10purchase of service credit under this Article.
11(Source: P.A. 90-32, eff. 6-27-97; 90-65, eff. 7-7-97; 90-448,
12eff. 8-16-97; 90-511, eff. 8-22-97; 90-576, eff. 3-31-98;
1390-655, eff. 7-30-98; 90-766, eff. 8-14-98.)
 
14    (40 ILCS 5/15-158.2)
15    Sec. 15-158.2. Self-managed plan.
16    (a) Purpose. The General Assembly finds that it is
17important for colleges and universities to be able to attract
18and retain the most qualified employees and that in order to
19attract and retain these employees, colleges and universities
20should have the flexibility to provide a defined contribution
21plan as an alternative for eligible employees who elect not to
22participate in a defined benefit retirement program provided
23under this Article. Accordingly, the State Universities
24Retirement System is hereby authorized to establish and
25administer a self-managed plan, which shall offer

 

 

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

 

 

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

 

 

09700SB1673ham005- 189 -LRB097 07605 JWD 70354 a

1    (d) Employee Direction. Employees who are participating in
2the program must be allowed to direct the transfer of their
3account balances among the various investment options offered,
4subject to applicable contractual provisions. The participant
5shall not be deemed a fiduciary by reason of providing such
6investment direction. A person who is a fiduciary shall not be
7liable for any loss resulting from such investment direction
8and shall not be deemed to have breached any fiduciary duty by
9acting in accordance with that direction. Neither the System
10nor the employer guarantees any of the investments in the
11employee's account balances.
12    (e) Participation. An employee eligible to participate in
13the self-managed plan must make a written election in
14accordance with the provisions of Section 15-134.5 and the
15procedures established by the System. Participation in the
16self-managed plan by an electing employee shall begin on the
17first day of the first pay period following the later of the
18date the employee's election is filed with the System or the
19effective date as of which the employee's employer begins to
20offer participation in the self-managed plan. Employers may not
21make the self-managed plan available earlier than January 1,
221998. An employee's participation in any other retirement
23program administered by the System under this Article shall
24terminate on the date that participation in the self-managed
25plan begins.
26    An employee who has elected to participate in the

 

 

09700SB1673ham005- 190 -LRB097 07605 JWD 70354 a

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

 

 

09700SB1673ham005- 191 -LRB097 07605 JWD 70354 a

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

 

 

09700SB1673ham005- 192 -LRB097 07605 JWD 70354 a

1self-managed plan in accordance with procedures prescribed by
2the System, to the extent permitted under rules prescribed by
3the System.
4    The program shall provide for employer contributions to be
5credited to each self-managed plan participant at a rate of
67.6% of the participating employee's salary, less the amount
7used by the System to provide disability benefits for the
8employee. The amounts so credited shall be paid into the
9participant's self-managed plan accounts in a manner to be
10prescribed by the System.
11    An amount of employer contribution, not exceeding 1% of the
12participating employee's salary, shall be used for the purpose
13of providing the disability benefits of the System to the
14employee. Prior to the beginning of each plan year under the
15self-managed plan, the Board of Trustees shall determine, as a
16percentage of salary, the amount of employer contributions to
17be allocated during that plan year for providing disability
18benefits for employees in the self-managed plan.
19    The State of Illinois shall make contributions by
20appropriations to the System of the employer contributions
21required for employees who participate in the self-managed plan
22under this Section. The amount required shall be certified by
23the Board of Trustees of the System and paid by the State in
24accordance with Section 15-165. The System shall not be
25obligated to remit the required employer contributions to any
26of the insurance and annuity companies, mutual fund companies,

 

 

09700SB1673ham005- 193 -LRB097 07605 JWD 70354 a

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

 

 

09700SB1673ham005- 194 -LRB097 07605 JWD 70354 a

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

 

 

09700SB1673ham005- 195 -LRB097 07605 JWD 70354 a

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

 

 

09700SB1673ham005- 196 -LRB097 07605 JWD 70354 a

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

 

 

09700SB1673ham005- 197 -LRB097 07605 JWD 70354 a

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

 

 

09700SB1673ham005- 198 -LRB097 07605 JWD 70354 a

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

 

 

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1    higher education.
2    The 2 positions created by this amendatory Act of the 97th
3General Assembly shall be filled as soon as practicable by
4appointment of the Board, and the persons so appointed shall
5serve until such time as the System can conduct elections to
6fill those positions.
7    For the purposes of this Section, the Governor may make a
8nomination and the Senate may confirm the nominee in advance of
9the commencement of the nominee's term of office.
10    (e) The 6 elected trustees shall be elected within 90 days
11after the effective date of this amendatory Act of the 96th
12General Assembly for a term beginning on the 90th day after the
13effective date of this amendatory Act. Trustees shall be
14elected thereafter as terms expire for a 6-year term beginning
15July 15 next following their election, and such election shall
16be held on May 1, or on May 2 when May 1 falls on a Sunday. The
17board may establish rules for the election of trustees to
18implement the provisions of this amendatory Act of the 96th
19General Assembly and for future elections. Candidates for the
20participating trustee shall be nominated by petitions in
21writing, signed by not less than 400 participants with their
22addresses shown opposite their names. Candidates for the
23annuitant trustee shall be nominated by petitions in writing,
24signed by not less than 100 annuitants with their addresses
25shown opposite their names. If there is more than one qualified
26nominee for each elected trustee, then the board shall conduct

 

 

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1a secret ballot election by mail for that trustee, in
2accordance with rules as established by the board. If there is
3only one qualified person nominated by petition for each
4elected trustee, then the election as required by this Section
5shall not be conducted for that trustee and the board shall
6declare such nominee duly elected. A vacancy occurring in the
7elective membership of the board shall be filled for the
8unexpired term by the elected trustees serving on the board for
9the remainder of the term.
10    (f) A vacancy on the board of trustees caused by
11resignation, death, expiration of term of office, or other
12reason shall be filled by a qualified person appointed by the
13Governor for the remainder of the unexpired term.
14    (g) Trustees (other than the trustees incumbent on June 30,
151995 or as provided in subsection (c) of this Section) shall
16continue in office until their respective successors are
17appointed and have qualified, except that a trustee appointed
18to one of the participant positions shall be disqualified
19immediately upon the termination of his or her status as a
20participant and a trustee appointed to one of the annuitant
21positions shall be disqualified immediately upon the
22termination of his or her status as an annuitant receiving a
23retirement annuity.
24    (h) Each trustee must take an oath of office before a
25notary public of this State and shall qualify as a trustee upon
26the presentation to the board of a certified copy of the oath.

 

 

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1The oath must state that the person will diligently and
2honestly administer the affairs of the retirement system, and
3will not knowingly violate or wilfully permit to be violated
4any provisions of this Article.
5    Each trustee shall serve without compensation but shall be
6reimbursed for expenses necessarily incurred in attending
7board meetings and carrying out his or her duties as a trustee
8or officer of the system.
9    (i) This amendatory Act of 1995 is intended to supersede
10the changes made to this Section by Public Act 89-4.
11(Source: P.A. 96-6, eff. 4-3-09; 96-1000, eff. 7-2-10.)
 
12    (40 ILCS 5/15-163)  (from Ch. 108 1/2, par. 15-163)
13    Sec. 15-163. To consider applications and authorize
14payments.
15    To consider and pass on all certifications of employment
16and applications for annuities and benefits; to authorize the
17granting of annuities and benefits; and to limit or suspend any
18payment or payments, all in accordance with this Article.
19(Source: Laws 1963, p. 161.)
 
20    (40 ILCS 5/15-165)   (from Ch. 108 1/2, par. 15-165)
21    Sec. 15-165. To certify amounts and submit vouchers.
22    (a) The Board shall certify to the Governor on or before
23November 15 of each year until November 15, 2011 the
24appropriation required from State funds for the purposes of

 

 

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

 

 

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

 

 

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1required annual State contribution certified under subsection
2(a). From the effective date of this amendatory Act of the 93rd
3General Assembly through June 30, 2004, the Board shall not
4submit vouchers for the remainder of fiscal year 2004 in excess
5of the fiscal year 2004 certified contribution amount
6determined under this Section after taking into consideration
7the transfer to the System under subsection (b) of Section
86z-61 of the State Finance Act. These vouchers shall be paid by
9the State Comptroller and Treasurer by warrants drawn on the
10funds appropriated to the System for that fiscal year.
11    If in any month the amount remaining unexpended from all
12other appropriations to the System for the applicable fiscal
13year (including the appropriations to the System under Section
148.12 of the State Finance Act and Section 1 of the State
15Pension Funds Continuing Appropriation Act) is less than the
16amount lawfully vouchered under this Section, the difference
17shall be paid from the General Revenue Fund under the
18continuing appropriation authority provided in Section 1.1 of
19the State Pension Funds Continuing Appropriation Act.
20    (d) So long as the payments received are the full amount
21lawfully vouchered under this Section, payments received by the
22System under this Section shall be applied first toward the
23employer contribution to the self-managed plan established
24under Section 15-158.2. Payments shall be applied second toward
25the employer's portion of the normal costs of the System, as
26defined in subsection (f) of Section 15-155. The balance shall

 

 

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1be applied toward the unfunded actuarial liabilities of the
2System.
3    (e) In the event that the System does not receive, as a
4result of legislative enactment or otherwise, payments
5sufficient to fully fund the employer contribution to the
6self-managed plan established under Section 15-158.2 and to
7fully fund that portion of the employer's portion of the normal
8costs of the System, as calculated in accordance with Section
915-155(a-1), then any payments received shall be applied
10proportionately to the optional retirement program established
11under Section 15-158.2 and to the employer's portion of the
12normal costs of the System, as calculated in accordance with
13Section 15-155(a-1).
14(Source: P.A. 96-1497, eff. 1-14-11; 96-1511, eff. 1-27-11.)
 
15    (40 ILCS 5/15-198)
16    Sec. 15-198. Application and expiration of new benefit
17increases.
18    (a) As used in this Section, "new benefit increase" means
19an increase in the amount of any benefit provided under this
20Article, or an expansion of the conditions of eligibility for
21any benefit under this Article or Article 1, that results from
22an amendment to this Code that takes effect after the effective
23date of this amendatory Act of the 94th General Assembly. "New
24benefit increase", however, does not include any benefit
25increase resulting from the changes made to this Article or

 

 

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1Article 1 by this amendatory Act of the 97th General Assembly.
2    (b) Notwithstanding any other provision of this Code or any
3subsequent amendment to this Code, every new benefit increase
4is subject to this Section and shall be deemed to be granted
5only in conformance with and contingent upon compliance with
6the provisions of this Section.
7    (c) The Public Act enacting a new benefit increase must
8identify and provide for payment to the System of additional
9funding at least sufficient to fund the resulting annual
10increase in cost to the System as it accrues.
11    Every new benefit increase is contingent upon the General
12Assembly providing the additional funding required under this
13subsection. The Commission on Government Forecasting and
14Accountability shall analyze whether adequate additional
15funding has been provided for the new benefit increase and
16shall report its analysis to the Public Pension Division of the
17Department of Financial and Professional Regulation. A new
18benefit increase created by a Public Act that does not include
19the additional funding required under this subsection is null
20and void. If the Public Pension Division determines that the
21additional funding provided for a new benefit increase under
22this subsection is or has become inadequate, it may so certify
23to the Governor and the State Comptroller and, in the absence
24of corrective action by the General Assembly, the new benefit
25increase shall expire at the end of the fiscal year in which
26the certification is made.

 

 

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1    (d) Every new benefit increase shall expire 5 years after
2its effective date or on such earlier date as may be specified
3in the language enacting the new benefit increase or provided
4under subsection (c). This does not prevent the General
5Assembly from extending or re-creating a new benefit increase
6by law.
7    (e) Except as otherwise provided in the language creating
8the new benefit increase, a new benefit increase that expires
9under this Section continues to apply to persons who applied
10and qualified for the affected benefit while the new benefit
11increase was in effect and to the affected beneficiaries and
12alternate payees of such persons, but does not apply to any
13other person, including without limitation a person who
14continues in service after the expiration date and did not
15apply and qualify for the affected benefit while the new
16benefit increase was in effect.
17(Source: P.A. 94-4, eff. 6-1-05.)
 
18    (40 ILCS 5/16-106)  (from Ch. 108 1/2, par. 16-106)
19    Sec. 16-106. Teacher. "Teacher": The following
20individuals, provided that, for employment prior to July 1,
211990, they are employed on a full-time basis, or if not
22full-time, on a permanent and continuous basis in a position in
23which services are expected to be rendered for at least one
24school term:
25        (1) Any educational, administrative, professional or

 

 

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

 

 

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

 

 

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

 

 

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1    the 94th General Assembly, to have the person participate
2    in the system. Any service established prior to the
3    effective date of this amendatory Act of the 94th General
4    Assembly for service as an employee of the Macon-Piatt
5    Regional Office of Education in a birth-through-age-three
6    pilot program receiving funds under Section 2-389 of the
7    School Code shall be considered service as a teacher if
8    employee and employer contributions have been received by
9    the system and the system has not refunded those
10    contributions.
11    An annuitant receiving a retirement annuity under this
12Article or under Article 17 of this Code who is employed by a
13board of education or other employer as permitted under Section
1416-118 or 16-150.1 is not a "teacher" for purposes of this
15Article. A person who has received a single-sum retirement
16benefit under Section 16-136.4 of this Article is not a
17"teacher" for purposes of this Article.
18(Source: P.A. 97-651, eff. 1-5-12.)
 
19    (40 ILCS 5/16-106.4 new)
20    Sec. 16-106.4. Tier I employee. "Tier I employee": A
21teacher under this Article who first became a member or
22participant before January 1, 2011 under any reciprocal
23retirement system or pension fund established under this Code
24other than a retirement system or pension fund established
25under Article 2, 3, 4, 5, 6, or 18 of this Code.
 

 

 

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1    (40 ILCS 5/16-106.5 new)
2    Sec. 16-106.5. Tier I retiree. "Tier I retiree": A former
3Tier I employee who is receiving a retirement annuity.
 
4    (40 ILCS 5/16-106.6 new)
5    Sec. 16-106.6. Teacher certification. For purposes of this
6Article, a teacher shall be deemed to be certificated if he or
7she is required to be licensed by the Illinois State Board of
8Education.
 
9    (40 ILCS 5/16-121)  (from Ch. 108 1/2, par. 16-121)
10    Sec. 16-121. Salary. "Salary": The actual compensation
11received by a teacher during any school year and recognized by
12the system in accordance with rules of the board. For purposes
13of this Section, "school year" includes the regular school term
14plus any additional period for which a teacher is compensated
15and such compensation is recognized by the rules of the board.
16Notwithstanding any other provision of this Section, "salary"
17does not include any future increase in income offered by an
18employer under this Article pursuant to the requirements of
19subsection (c) of Section 16-131.7 that is accepted by a Tier I
20employee, or a Tier I retiree returning to active service, who
21has made an election under paragraph (2) of subsection (a) or
22(a-5) of Section 16-131.7.
23(Source: P.A. 84-1028.)
 

 

 

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1    (40 ILCS 5/16-121.1 new)
2    Sec. 16-121.1. Future increase in income. "Future increase
3in income": Any increase in income in any form offered by an
4employer to a teacher under this Article after June 30, 2013
5that would qualify as "salary", as defined under Section
614-103.10, but for the fact that the employer offered the
7increase in income to the teacher on the condition that it not
8qualify as salary and the teacher accepted the increase in
9income subject to that condition. The term "future increase in
10income" does not include an increase in income in any form that
11is paid to a Tier I employee under an employment contract or
12collective bargaining agreement that is in effect on the
13effective date of this Section but does include an increase in
14income in any form pursuant to an extension, amendment, or
15renewal of any such employment contract or collective
16bargaining agreement on or after the effective date of this
17amendatory Act of the 97th General Assembly.
 
18    (40 ILCS 5/16-127)  (from Ch. 108 1/2, par. 16-127)
19    Sec. 16-127. Computation of creditable service.
20    (a) Each member shall receive regular credit for all
21service as a teacher from the date membership begins, for which
22satisfactory evidence is supplied and all contributions have
23been paid.
24    (b) The following periods of service shall earn optional

 

 

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

 

 

09700SB1673ham005- 215 -LRB097 07605 JWD 70354 a

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

 

 

09700SB1673ham005- 216 -LRB097 07605 JWD 70354 a

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

 

 

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

 

 

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1    not such person is an annuitant on that date.
2        (4) Any periods served as a member of the General
3    Assembly.
4        (5)(i) Any periods for which a teacher, as defined in
5    Section 16-106, is granted a leave of absence, provided he
6    or she returns to teaching service creditable under this
7    System or the State Universities Retirement System
8    following the leave; (ii) periods during which a teacher is
9    involuntarily laid off from teaching, provided he or she
10    returns to teaching following the lay-off; (iii) periods
11    prior to July 1, 1983 during which a teacher ceased covered
12    employment due to pregnancy, provided that the teacher
13    returned to teaching service creditable under this System
14    or the State Universities Retirement System following the
15    pregnancy and submits evidence satisfactory to the Board
16    documenting that the employment ceased due to pregnancy;
17    and (iv) periods prior to July 1, 1983 during which a
18    teacher ceased covered employment for the purpose of
19    adopting an infant under 3 years of age or caring for a
20    newly adopted infant under 3 years of age, provided that
21    the teacher returned to teaching service creditable under
22    this System or the State Universities Retirement System
23    following the adoption and submits evidence satisfactory
24    to the Board documenting that the employment ceased for the
25    purpose of adopting an infant under 3 years of age or
26    caring for a newly adopted infant under 3 years of age.

 

 

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