Rep. Tom Cross

Filed: 5/31/2012

 

 


 

 


 
09700SB1673ham007LRB097 07605 EFG 70502 a

1
AMENDMENT TO SENATE BILL 1673

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

 

 

09700SB1673ham007- 2 -LRB097 07605 EFG 70502 a

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

 

 

09700SB1673ham007- 3 -LRB097 07605 EFG 70502 a

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

 

 

09700SB1673ham007- 4 -LRB097 07605 EFG 70502 a

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

 

 

09700SB1673ham007- 5 -LRB097 07605 EFG 70502 a

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

 

 

09700SB1673ham007- 6 -LRB097 07605 EFG 70502 a

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

 

 

09700SB1673ham007- 7 -LRB097 07605 EFG 70502 a

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

 

 

09700SB1673ham007- 8 -LRB097 07605 EFG 70502 a

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

 

 

09700SB1673ham007- 9 -LRB097 07605 EFG 70502 a

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

 

 

09700SB1673ham007- 10 -LRB097 07605 EFG 70502 a

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

 

 

09700SB1673ham007- 11 -LRB097 07605 EFG 70502 a

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

 

 

09700SB1673ham007- 12 -LRB097 07605 EFG 70502 a

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

 

 

09700SB1673ham007- 13 -LRB097 07605 EFG 70502 a

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

 

 

09700SB1673ham007- 14 -LRB097 07605 EFG 70502 a

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

 

 

09700SB1673ham007- 15 -LRB097 07605 EFG 70502 a

1Community College Health Insurance Security Fund under Section
21.4 of the State Pension Funds Continuing Appropriation Act.
3    (e) Except where otherwise specified in this Section, the
4definitions that apply to Article 15 of the Illinois Pension
5Code apply to this Section.
6(Source: P.A. 94-839, eff. 6-6-06; 95-632, eff. 9-25-07.)
 
7    (5 ILCS 375/6.10A new)
8    Sec. 6.10A. City colleges; optional participation in
9program of health benefits. Notwithstanding any other
10provision of this Act, the Department of Central Management
11Services shall adopt rules authorizing optional participation
12in the program of health benefits for community college benefit
13recipients and community college dependent beneficiaries by
14any person who is otherwise ineligible to participate in that
15program solely as a result of that or another person's
16employment with a community college district subject to Article
17VII of the Public Community College Act.
 
18    (5 ILCS 375/6.16 new)
19    Sec. 6.16. Health benefit election for Tier I employees and
20Tier I retirees.
21    (a) For purposes of this Section:
22    "Eligible Tier I employee" means an individual who makes or
23is deemed to have made an election under paragraph (1) of
24subsection (a) of Section 2-110.3, 14-106.5, 15-134.6, or

 

 

09700SB1673ham007- 16 -LRB097 07605 EFG 70502 a

116-131.7 of the Illinois Pension Code.
2    "Eligible Tier I retiree" means an individual who makes or
3is deemed to have made an election under paragraph (1) of
4subsection (a-5) of Section 2-110.3, 14-106.5, 15-134.6, or
516-131.7 of the Illinois Pension Code.
6    "Program of health benefits" means (i) a health plan, as
7defined in subsection (o) of Section 3 of this Act, that is
8designed and contracted for by the Director under this Act or
9any successor Act or (ii) if administration of that health plan
10is transferred to a trust established by the State or an
11independent Board in order to provide health benefits to a
12class of a persons that includes eligible Tier I retirees, then
13the plan of health benefits provided through that trust.
14    For persons who receive healthcare benefits under a
15collective bargaining agreement with a community college
16district subject to Article VII of the Public Community College
17Act, the term "program of health benefits" also includes any
18health benefit arrangement provided under such a collective
19bargaining agreement, except that if such an agreement expires
20and if those persons are otherwise eligible to participate in a
21program of health benefits pursuant to item (i) or (ii), then
22"program of health benefits" does not include the health
23benefit arrangements provided under such a collective
24bargaining agreement.
25    For persons who are eligible to receive benefits under a
26health plan made available by a community college district

 

 

09700SB1673ham007- 17 -LRB097 07605 EFG 70502 a

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

 

 

09700SB1673ham007- 18 -LRB097 07605 EFG 70502 a

1    (d) The vested and enforceable contractual right to a
2program of health benefits is not offered as, and shall not be
3considered, a pension benefit under Article XIII, Section 5 of
4the Illinois Constitution, the Illinois Pension Code, or any
5subsequent or successor enactment providing pension benefits.
6    (e) Notwithstanding any other provision of this Act, a Tier
7I employee or Tier I retiree who has made an election under
8paragraph (2) of subsection (a) or (a-5) of Section 2-110.3,
914-106.5, 15-134.6, or 16-131.7 of the Illinois Pension Code
10shall not be entitled to participate in the program of health
11benefits as an annuitant or retired employee, or as a TRS
12benefit recipient or community college benefit recipient
13receiving a retirement annuity, regardless of any contrary
14election pursuant to any of those Sections under any other
15retirement system.
16    Notwithstanding any other provision of this Act, a Tier I
17employee who is not entitled to participate in the program of
18health benefits as an annuitant or retired employee, or as a
19TRS benefit recipient or community college benefit recipient
20receiving a retirement annuity, due to an election under
21paragraph (2) of subsection (a) or (a-5) of Section 2-110.3,
2214-106.5, 15-134.6, or 16-131.7 of the Illinois Pension Code
23shall not be required to make contributions toward the program
24of health benefits while he or she is an employee or active
25contributor. However, an active employee may be required to
26make contributions toward the health benefits he or she

 

 

09700SB1673ham007- 19 -LRB097 07605 EFG 70502 a

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

 

 

09700SB1673ham007- 20 -LRB097 07605 EFG 70502 a

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

 

 

09700SB1673ham007- 21 -LRB097 07605 EFG 70502 a

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

 

 

09700SB1673ham007- 22 -LRB097 07605 EFG 70502 a

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

 

 

09700SB1673ham007- 23 -LRB097 07605 EFG 70502 a

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

 

 

09700SB1673ham007- 24 -LRB097 07605 EFG 70502 a

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

 

 

09700SB1673ham007- 25 -LRB097 07605 EFG 70502 a

1conformance with the applicable provisions of the Illinois
2Pension Code.
 
3    (30 ILCS 105/24.13 new)
4    Sec. 24.13. "State retirement contribution for unfunded
5accrued liability" defined. The term "State retirement
6contribution for unfunded accrued liability" means the portion
7of the total required State contribution to a retirement system
8for a fiscal year that is not included in the State retirement
9contribution for annual normal cost.
 
10    Section 30. The Illinois Pension Code is amended by
11changing Sections 1-103.3, 2-108, 2-119.1, 2-124, 2-134,
127-109, 14-103.10, 14-106, 14-114, 14-131, 14-132, 14-135.08,
1314-152.1, 15-106, 15-107, 15-111, 15-113.2, 15-136, 15-155,
1415-163, 15-165, 15-198, 16-106, 16-121, 16-127, 16-133.1,
1516-136.1, 16-158, 16-203, and 18-140 and by adding Sections
162-105.1, 2-105.2, 2-107.9, 2-110.3, 14-103.40, 14-103.41,
1714-103.42, 14-106.5, 15-107.1, 15-107.2, 15-111.1, 15-134.6,
1815-155.1, 16-106.4, 16-106.5, 16-106.6, 16-121.1, 16-131.7,
19and 16-133.6 as follows:
 
20    (40 ILCS 5/1-103.3)
21    Sec. 1-103.3. Application of 1994 amendment; funding
22standard.
23    (a) The provisions of Public Act 88-593 this amendatory Act

 

 

09700SB1673ham007- 26 -LRB097 07605 EFG 70502 a

1of 1994 that change the method of calculating, certifying, and
2paying the required State contributions to the retirement
3systems established under Articles 2, 14, 15, 16, and 18 shall
4first apply to the State contributions required for State
5fiscal year 1996.
6    (b) (Blank). The General Assembly declares that a funding
7ratio (the ratio of a retirement system's total assets to its
8total actuarial liabilities) of 90% is an appropriate goal for
9State-funded retirement systems in Illinois, and it finds that
10a funding ratio of 90% is now the generally-recognized norm
11throughout the nation for public employee retirement systems
12that are considered to be financially secure and funded in an
13appropriate and responsible manner.
14    (c) Every 5 years, beginning in 1999, the Commission on
15Government Forecasting and Accountability, in consultation
16with the affected retirement systems and the Governor's Office
17of Management and Budget (formerly Bureau of the Budget), shall
18consider and determine whether the funding goals 90% funding
19ratio adopted in Articles 2, 14, 15, 16, and 18 of this Code
20continue subsection (b) continues to represent an appropriate
21funding goals goal for State-funded retirement systems in
22Illinois, and it shall report its findings and recommendations
23on this subject to the Governor and the General Assembly.
24(Source: P.A. 93-1067, eff. 1-15-05.)
 
25    (40 ILCS 5/2-105.1 new)

 

 

09700SB1673ham007- 27 -LRB097 07605 EFG 70502 a

1    Sec. 2-105.1. Tier I employee. "Tier I employee": A
2participant who first became a participant before January 1,
32011.
 
4    (40 ILCS 5/2-105.2 new)
5    Sec. 2-105.2. Tier I retiree. "Tier I retiree" means a
6former Tier I employee who is receiving a retirement annuity.
 
7    (40 ILCS 5/2-107.9 new)
8    Sec. 2-107.9. Future increase in income. "Future increase
9in income": Any increase in income in any form offered for
10service as a member under this Article after June 30, 2013 that
11would qualify as "salary", as defined under Section 2-108, but
12for the fact that the increase in income was offered to the
13member on the condition that it not qualify as salary and was
14accepted by the member subject to that condition.
 
15    (40 ILCS 5/2-108)  (from Ch. 108 1/2, par. 2-108)
16    Sec. 2-108. Salary. "Salary": (1) For members of the
17General Assembly, the total compensation paid to the member by
18the State for one year of service, including the additional
19amounts, if any, paid to the member as an officer pursuant to
20Section 1 of "An Act in relation to the compensation and
21emoluments of the members of the General Assembly", approved
22December 6, 1907, as now or hereafter amended.
23    (2) For the State executive officers specified in Section

 

 

09700SB1673ham007- 28 -LRB097 07605 EFG 70502 a

12-105, the total compensation paid to the member for one year
2of service.
3    (3) For members of the System who are participants under
4Section 2-117.1, or who are serving as Clerk or Assistant Clerk
5of the House of Representatives or Secretary or Assistant
6Secretary of the Senate, the total compensation paid to the
7member for one year of service, but not to exceed the salary of
8the highest salaried officer of the General Assembly.
9    However, in the event that federal law results in any
10participant receiving imputed income based on the value of
11group term life insurance provided by the State, such imputed
12income shall not be included in salary for the purposes of this
13Article.
14    Notwithstanding any other provision of this Section,
15"salary" does not include any future increase in income that is
16offered for service as a member under this Article pursuant to
17the requirements of subsection (c) of Section 2-110.3 and
18accepted by a Tier I employee, or a Tier I retiree returning to
19active service, who has made an election under paragraph (2) of
20subsection (a) or (a-5) of Section 2-110.3.
21(Source: P.A. 86-27; 86-273; 86-1028; 86-1488.)
 
22    (40 ILCS 5/2-110.3 new)
23    Sec. 2-110.3. Election by Tier I employees and Tier I
24retirees.
25    (a) Each Tier I employee shall make an irrevocable election

 

 

09700SB1673ham007- 29 -LRB097 07605 EFG 70502 a

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

 

 

09700SB1673ham007- 30 -LRB097 07605 EFG 70502 a

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

 

 

09700SB1673ham007- 31 -LRB097 07605 EFG 70502 a

1        (i) a person who becomes a Tier I retiree under this
2    Article on or after January 1, 2013 must make the election
3    under this subsection (a-5) within 60 days after becoming a
4    Tier I retiree; and
5        (ii) a person who made the election under subsection
6    (a) as a Tier I employee remains bound by that election and
7    shall not make a later election under this subsection
8    (a-5).
9    If a Tier I retiree fails for any reason to make a required
10election under this subsection within the time specified, then
11the Tier I retiree shall be deemed to have made the election
12under paragraph (2) of this subsection.
13    (a-10) All elections under subsection (a) or (a-5) that are
14made or deemed to be made before June 1, 2013 shall take effect
15on July 1, 2013. Elections that are made or deemed to be made
16on or after June 1, 2013 shall take effect on the first day of
17the month following the month in which the election is made or
18deemed to be made.
19    (b) As adequate and legal consideration provided under this
20amendatory Act of the 97th General Assembly for making the
21election under paragraph (1) of subsection (a) of this Section,
22any future increases in income offered for service as a member
23under this Article to a Tier I employee who has made the
24election under paragraph (1) of subsection (a) of this Section
25shall be offered expressly and irrevocably as constituting
26salary under Section 2-108.

 

 

09700SB1673ham007- 32 -LRB097 07605 EFG 70502 a

1    As adequate and legal consideration provided under this
2amendatory Act of the 97th General Assembly for making the
3election under paragraph (1) of subsection (a-5) of this
4Section, any future increases in income offered for service as
5a member under this Article to a Tier I retiree who returns to
6active service after having made the election under paragraph
7(1) of subsection (a-5) of this Section shall be offered
8expressly and irrevocably as constituting salary under Section
92-108.
10    (c) A Tier I employee who makes the election under
11paragraph (2) of subsection (a) of this Section shall not be
12subject to items (i) and (ii) set forth in paragraph (1) of
13subsection (a) of this Section. However, any future increases
14in income offered for service as a member under this Article to
15a Tier I employee who has made the election under paragraph (2)
16of subsection (a) of this Section shall be offered expressly
17and irrevocably as not constituting salary under Section 2-108,
18and the member may not accept any future increase in income
19that is offered in violation of this requirement.
20    A Tier I retiree who makes the election under paragraph (2)
21of subsection (a-5) of this Section shall not be subject to
22items (i) and (ii) set forth in paragraph (1) of subsection
23(a-5) of this Section. However, any future increases in income
24offered for service as a member under this Article to a Tier I
25retiree who returns to active service and has made the election
26under paragraph (2) of subsection (a-5) of this Section shall

 

 

09700SB1673ham007- 33 -LRB097 07605 EFG 70502 a

1be offered expressly and irrevocably as not constituting salary
2under Section 2-108, and the member may not accept any future
3increase in income that is offered in violation of this
4requirement.
5    (d) The System shall make a good faith effort to contact
6each Tier I employee and Tier I retiree subject to this
7Section. The System shall mail information describing the
8required election to each Tier I employee and Tier I retiree by
9United States Postal Service mail to his or her last known
10address on file with the System. If the Tier I employee or Tier
11I retiree is not responsive to other means of contact, it is
12sufficient for the System to publish the details of any
13required elections on its website or to publish those details
14in a regularly published newsletter or other existing public
15forum.
16    Tier I employees and Tier I retirees who are subject to
17this Section shall be provided with an election packet
18containing information regarding their options, as well as the
19forms necessary to make the required election. Upon request,
20the System shall offer Tier I employees and Tier I retirees an
21opportunity to receive information from the System before
22making the required election. The information may be provided
23through video materials, group presentations, individual
24consultation with a member or authorized representative of the
25System in person or by telephone or other electronic means, or
26any combination of those methods. The System shall not provide

 

 

09700SB1673ham007- 34 -LRB097 07605 EFG 70502 a

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

 

 

09700SB1673ham007- 35 -LRB097 07605 EFG 70502 a

1who has made an election under paragraph (2) or subsection (a)
2or (a-5) of Section 2-110.3 shall not accept any future
3increase in income that is offered for service as a member
4under this Article in violation of the requirement set forth in
5this subsection.
6    (f) A member's election under this Section is not a
7prohibited election under subdivision (j)(1) of Section 1-119
8of this Code.
9    (g) No provision of this Section shall be interpreted in a
10way that would cause the System to cease to be a qualified plan
11under section 461 (a) of the Internal Revenue Code of 1986.
 
12    (40 ILCS 5/2-119.1)  (from Ch. 108 1/2, par. 2-119.1)
13    Sec. 2-119.1. Automatic increase in retirement annuity.
14    (a) Except as provided in subsections (a-1) and (a-2), a A
15participant who retires after June 30, 1967, and who has not
16received an initial increase under this Section before the
17effective date of this amendatory Act of 1991, shall, in
18January or July next following the first anniversary of
19retirement, whichever occurs first, and in the same month of
20each year thereafter, but in no event prior to age 60, have the
21amount of the originally granted retirement annuity increased
22as follows: for each year through 1971, 1 1/2%; for each year
23from 1972 through 1979, 2%; and for 1980 and each year
24thereafter, 3%. Annuitants who have received an initial
25increase under this subsection prior to the effective date of

 

 

09700SB1673ham007- 36 -LRB097 07605 EFG 70502 a

1this amendatory Act of 1991 shall continue to receive their
2annual increases in the same month as the initial increase.
3    (a-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 subsection (a) or (a-5) of Section
62-110.3, the amount of each automatic annual increase in
7retirement annuity occurring on or after the effective date of
8that election shall be 3% or one-half of the annual unadjusted
9percentage increase, if any, in the Consumer Price Index-U for
10the 12 months ending with the preceding September, whichever is
11less, of the originally granted retirement annuity. For the
12purposes of this Section, "Consumer Price Index-U" means the
13index published by the Bureau of Labor Statistics of the United
14States Department of Labor that measures the average change in
15prices of goods and services purchased by all urban consumers,
16United States city average, all items, 1982-84 = 100.
17    (a-2) For a Tier I employee or Tier I retiree who made the
18election under paragraph (1) of subsection (a) or (a-5) of
19Section 2-110.3, the monthly retirement annuity shall first be
20subject to annual increases on the January 1 occurring on or
21next after the attainment of age 67 or the January 1 occurring
22on or next after the fifth anniversary of the annuity start
23date, whichever occurs earlier. If on the effective date of the
24election under paragraph (1) of subsection (a-5) of Section
252-110.3 a Tier I retiree has already received an annual
26increase under this Section but does not yet meet the new

 

 

09700SB1673ham007- 37 -LRB097 07605 EFG 70502 a

1eligibility requirements of this subsection, the annual
2increases already received shall continue in force, but no
3additional annual increase shall be granted until the Tier I
4retiree meets the new eligibility requirements.
5    (b) Beginning January 1, 1990, for eligible participants
6who remain in service after attaining 20 years of creditable
7service, the 3% increases provided under subsection (a) shall
8begin to accrue on the January 1 next following the date upon
9which the participant (1) attains age 55, or (2) attains 20
10years of creditable service, whichever occurs later, and shall
11continue to accrue while the participant remains in service;
12such increases shall become payable on January 1 or July 1,
13whichever occurs first, next following the first anniversary of
14retirement. For any person who has service credit in the System
15for the entire period from January 15, 1969 through December
1631, 1992, regardless of the date of termination of service, the
17reference to age 55 in clause (1) of this subsection (b) shall
18be deemed to mean age 50.
19    This subsection (b) does not apply to any person who first
20becomes a member of the System after August 8, 2003 (the
21effective date of Public Act 93-494) or (ii) has made the
22election under paragraph (1) of subsection (a) or (a-5) of
23Section 2-110.3; except that if on the effective date of the
24election under paragraph (1) of subsection (a-5) of Section
252-110.3 a Tier I retiree has already received a retirement
26annuity based on any annual increases under this subsection,

 

 

09700SB1673ham007- 38 -LRB097 07605 EFG 70502 a

1those annual increases under this subsection shall continue in
2force this amendatory Act of the 93rd General Assembly.
3    (b-5) Notwithstanding any other provision of this Article,
4a participant who first becomes a participant on or after
5January 1, 2011 (the effective date of Public Act 96-889)
6shall, in January or July next following the first anniversary
7of retirement, whichever occurs first, and in the same month of
8each year thereafter, but in no event prior to age 67, have the
9amount of the retirement annuity then being paid increased by
103% or the annual unadjusted percentage increase in the Consumer
11Price Index for All Urban Consumers as determined by the Public
12Pension Division of the Department of Insurance under
13subsection (a) of Section 2-108.1, whichever is less.
14    (c) The foregoing provisions relating to automatic
15increases are not applicable to a participant who retires
16before having made contributions (at the rate prescribed in
17Section 2-126) for automatic increases for less than the
18equivalent of one full year. However, in order to be eligible
19for the automatic increases, such a participant may make
20arrangements to pay to the system the amount required to bring
21the total contributions for the automatic increase to the
22equivalent of one year's contributions based upon his or her
23last salary.
24    (d) A participant who terminated service prior to July 1,
251967, with at least 14 years of service is entitled to an
26increase in retirement annuity beginning January, 1976, and to

 

 

09700SB1673ham007- 39 -LRB097 07605 EFG 70502 a

1additional increases in January of each year thereafter.
2    The initial increase shall be 1 1/2% of the originally
3granted retirement annuity multiplied by the number of full
4years that the annuitant was in receipt of such annuity prior
5to January 1, 1972, plus 2% of the originally granted
6retirement annuity for each year after that date. The
7subsequent annual increases shall be at the rate of 2% of the
8originally granted retirement annuity for each year through
91979 and at the rate of 3% for 1980 and thereafter.
10    (e) Beginning January 1, 1990, all automatic annual
11increases payable under this Section shall be calculated as a
12percentage of the total annuity payable at the time of the
13increase, including previous increases granted under this
14Article.
15(Source: P.A. 96-889, eff. 1-1-11; 96-1490, eff. 1-1-11.)
 
16    (40 ILCS 5/2-124)  (from Ch. 108 1/2, par. 2-124)
17    Sec. 2-124. Contributions by State.
18    (a) Except as otherwise provided in this Section, the The
19State shall make contributions to the System by appropriations
20of amounts which, together with the contributions of
21participants, interest earned on investments, and other income
22will meet the cost of maintaining and administering the System
23on a 90% funded basis in accordance with actuarial
24recommendations.
25    (b) The Board shall determine the amount of State

 

 

09700SB1673ham007- 40 -LRB097 07605 EFG 70502 a

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

 

 

09700SB1673ham007- 41 -LRB097 07605 EFG 70502 a

1    For each of State fiscal years 2008 through 2009, the State
2contribution to the System, as a percentage of the applicable
3employee payroll, shall be increased in equal annual increments
4from the required State contribution for State fiscal year
52007, so that by State fiscal year 2011, the State is
6contributing at the rate otherwise required under this Section.
7    Notwithstanding any other provision of this Article, the
8total required State contribution for State fiscal year 2010 is
9$10,454,000 and shall be made from the proceeds of bonds sold
10in fiscal year 2010 pursuant to Section 7.2 of the General
11Obligation Bond Act, less (i) the pro rata share of bond sale
12expenses determined by the System's share of total bond
13proceeds, (ii) any amounts received from the General Revenue
14Fund in fiscal year 2010, and (iii) any reduction in bond
15proceeds due to the issuance of discounted bonds, if
16applicable.
17    Notwithstanding any other provision of this Article, the
18total required State contribution for State fiscal year 2011 is
19the amount recertified by the System on or before April 1, 2011
20pursuant to Section 2-134 and shall be made from the proceeds
21of bonds sold in fiscal year 2011 pursuant to Section 7.2 of
22the General Obligation Bond Act, less (i) the pro rata share of
23bond sale expenses determined by the System's share of total
24bond proceeds, (ii) any amounts received from the General
25Revenue Fund in fiscal year 2011, and (iii) any reduction in
26bond proceeds due to the issuance of discounted bonds, if

 

 

09700SB1673ham007- 42 -LRB097 07605 EFG 70502 a

1applicable.
2    Except as otherwise provided in this Section, beginning
3Beginning in State fiscal year 2046, the minimum State
4contribution for each fiscal year shall be the amount needed to
5maintain the total assets of the System at 90% of the total
6actuarial liabilities of the System.
7    Amounts received by the System pursuant to Section 25 of
8the Budget Stabilization Act or Section 8.12 of the State
9Finance Act in any fiscal year do not reduce and do not
10constitute payment of any portion of the minimum State
11contribution required under this Article in that fiscal year.
12Such amounts shall not reduce, and shall not be included in the
13calculation of, the required State contributions under this
14Article in any future year until the System has reached a
15funding ratio of at least 90%. A reference in this Article to
16the "required State contribution" or any substantially similar
17term does not include or apply to any amounts payable to the
18System under Section 25 of the Budget Stabilization Act.
19    Notwithstanding any other provision of this Section, the
20required State contribution for State fiscal year 2005 and for
21fiscal year 2008 and each fiscal year thereafter, as calculated
22under this Section and certified under Section 2-134, shall not
23exceed an amount equal to (i) the amount of the required State
24contribution that would have been calculated under this Section
25for that fiscal year if the System had not received any
26payments under subsection (d) of Section 7.2 of the General

 

 

09700SB1673ham007- 43 -LRB097 07605 EFG 70502 a

1Obligation Bond Act, minus (ii) the portion of the State's
2total debt service payments for that fiscal year on the bonds
3issued in fiscal year 2003 for the purposes of that Section
47.2, as determined and certified by the Comptroller, that is
5the same as the System's portion of the total moneys
6distributed under subsection (d) of Section 7.2 of the General
7Obligation Bond Act. In determining this maximum for State
8fiscal years 2008 through 2010, however, the amount referred to
9in item (i) shall be increased, as a percentage of the
10applicable employee payroll, in equal increments calculated
11from the sum of the required State contribution for State
12fiscal year 2007 plus the applicable portion of the State's
13total debt service payments for fiscal year 2007 on the bonds
14issued in fiscal year 2003 for the purposes of Section 7.2 of
15the General Obligation Bond Act, so that, by State fiscal year
162011, the State is contributing at the rate otherwise required
17under this Section.
18    (c-1) If at least 50% of Tier I employees making an
19election under Section 2-110.3 before June 1, 2013 choose the
20option under paragraph (1) of subsection (a) of that Section,
21then:
22        (1) In lieu of the State contributions required under
23    subsection (c), for State fiscal years 2014 through 2043
24    the minimum contribution to the System to be made by the
25    State for each fiscal year shall be an amount determined by
26    the System to be equal to the sum of (1) the State's

 

 

09700SB1673ham007- 44 -LRB097 07605 EFG 70502 a

1    portion of the projected normal cost for that fiscal year,
2    plus (2) an amount sufficient to bring the total assets of
3    the System up to 100% of the total actuarial liabilities of
4    the System by the end of State fiscal year 2043. In making
5    these determinations, the required State contribution
6    shall be calculated each year as a level percentage of
7    payroll over the years remaining to and including fiscal
8    year 2043 and shall be determined under the projected unit
9    credit actuarial cost method.
10        (2) Beginning in State fiscal year 2044, the minimum
11    State contribution for each fiscal year shall be the amount
12    needed to maintain the total assets of the System at 100%
13    of the total actuarial liabilities of the System.
14    (c-2) If less than 50% of Tier I employees making an
15election under Section 14-106.5 before June 1, 2013 choose the
16option under paragraph (1) of subsection (a) of that Section,
17then:
18        (1) Instead of the annual required contribution
19    otherwise specified in subsection (c-1) of this Section,
20    the annual required contribution to the System to be made
21    by the State shall be determined under subsection (c) of
22    this Section.
23        (2) As soon as possible after June 1, 2013, the Board
24    shall recertify the annual required contribution by the
25    State for State fiscal year 2014.
26    (d) For purposes of determining the required State

 

 

09700SB1673ham007- 45 -LRB097 07605 EFG 70502 a

1contribution to the System, the value of the System's assets
2shall be equal to the actuarial value of the System's assets,
3which shall be calculated as follows:
4    As of June 30, 2008, the actuarial value of the System's
5assets shall be equal to the market value of the assets as of
6that date. In determining the actuarial value of the System's
7assets for fiscal years after June 30, 2008, any actuarial
8gains or losses from investment return incurred in a fiscal
9year shall be recognized in equal annual amounts over the
105-year period following that fiscal year.
11    (e) For purposes of determining the required State
12contribution to the system for a particular year, the actuarial
13value of assets shall be assumed to earn a rate of return equal
14to the system's actuarially assumed rate of return.
15(Source: P.A. 95-950, eff. 8-29-08; 96-43, eff. 7-15-09;
1696-1497, eff. 1-14-11; 96-1511, eff. 1-27-11; 96-1554, eff.
173-18-11; revised 4-6-11.)
 
18    (40 ILCS 5/2-134)   (from Ch. 108 1/2, par. 2-134)
19    Sec. 2-134. To certify required State contributions and
20submit vouchers.
21    (a) The Board shall certify to the Governor on or before
22December 15 of each year until December 15, 2011 the amount of
23the required State contribution to the System for the next
24fiscal year and shall specifically identify the System's
25projected State normal cost for that fiscal year. The

 

 

09700SB1673ham007- 46 -LRB097 07605 EFG 70502 a

1certification shall include a copy of the actuarial
2recommendations upon which it is based and shall specifically
3identify the System's projected State normal cost for that
4fiscal year.
5    On or before November 1 of each year, beginning November 1,
62012, the Board shall submit to the State Actuary, the
7Governor, and the General Assembly a proposed certification of
8the amount of the required State contribution to the System for
9the next fiscal year, along with all of the actuarial
10assumptions, calculations, and data upon which that proposed
11certification is based. On or before January 1 of each year
12beginning January 1, 2013, the State Actuary shall issue a
13preliminary report concerning the proposed certification and
14identifying, if necessary, recommended changes in actuarial
15assumptions that the Board must consider before finalizing its
16certification of the required State contributions. On or before
17January 15, 2013 and every January 15 thereafter, the Board
18shall certify to the Governor and the General Assembly the
19amount of the required State contribution for the next fiscal
20year. The Board's certification must note any deviations from
21the State Actuary's recommended changes, the reason or reasons
22for not following the State Actuary's recommended changes, and
23the fiscal impact of not following the State Actuary's
24recommended changes on the required State contribution.
25    On or before May 1, 2004, the Board shall recalculate and
26recertify to the Governor the amount of the required State

 

 

09700SB1673ham007- 47 -LRB097 07605 EFG 70502 a

1contribution to the System for State fiscal year 2005, taking
2into account the amounts appropriated to and received by the
3System under subsection (d) of Section 7.2 of the General
4Obligation Bond Act.
5    On or before July 1, 2005, the Board shall recalculate and
6recertify to the Governor the amount of the required State
7contribution to the System for State fiscal year 2006, taking
8into account the changes in required State contributions made
9by this amendatory Act of the 94th General Assembly.
10    On or before April 1, 2011, the Board shall recalculate and
11recertify to the Governor the amount of the required State
12contribution to the System for State fiscal year 2011, applying
13the changes made by Public Act 96-889 to the System's assets
14and liabilities as of June 30, 2009 as though Public Act 96-889
15was approved on that date.
16    (b) Beginning in State fiscal year 1996, on or as soon as
17possible after the 15th day of each month the Board shall
18submit vouchers for payment of State contributions to the
19System, in a total monthly amount of one-twelfth of the
20required annual State contribution certified under subsection
21(a). From the effective date of this amendatory Act of the 93rd
22General Assembly through June 30, 2004, the Board shall not
23submit vouchers for the remainder of fiscal year 2004 in excess
24of the fiscal year 2004 certified contribution amount
25determined under this Section after taking into consideration
26the transfer to the System under subsection (d) of Section

 

 

09700SB1673ham007- 48 -LRB097 07605 EFG 70502 a

16z-61 of the State Finance Act. These vouchers shall be paid by
2the State Comptroller and Treasurer by warrants drawn on the
3funds appropriated to the System for that fiscal year. If in
4any month the amount remaining unexpended from all other
5appropriations to the System for the applicable fiscal year
6(including the appropriations to the System under Section 8.12
7of the State Finance Act and Section 1 of the State Pension
8Funds Continuing Appropriation Act) is less than the amount
9lawfully vouchered under this Section, the difference shall be
10paid from the General Revenue Fund under the continuing
11appropriation authority provided in Section 1.1 of the State
12Pension Funds Continuing Appropriation Act.
13    (c) The full amount of any annual appropriation for the
14System for State fiscal year 1995 shall be transferred and made
15available to the System at the beginning of that fiscal year at
16the request of the Board. Any excess funds remaining at the end
17of any fiscal year from appropriations shall be retained by the
18System as a general reserve to meet the System's accrued
19liabilities.
20(Source: P.A. 95-331, eff. 8-21-07; 96-1497, eff. 1-14-11;
2196-1511, eff. 1-27-11.)
 
22    (40 ILCS 5/7-109)  (from Ch. 108 1/2, par. 7-109)
23    Sec. 7-109. Employee.
24    (1) "Employee" means any person who:
25        (a) 1. Receives earnings as payment for the performance

 

 

09700SB1673ham007- 49 -LRB097 07605 EFG 70502 a

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

 

 

09700SB1673ham007- 50 -LRB097 07605 EFG 70502 a

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

 

 

09700SB1673ham007- 51 -LRB097 07605 EFG 70502 a

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

 

 

09700SB1673ham007- 52 -LRB097 07605 EFG 70502 a

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

 

 

09700SB1673ham007- 53 -LRB097 07605 EFG 70502 a

1excluded by subsection (2) of this Section) notwithstanding
2that they may be appointed by and are subject to the direction
3of a person or persons other than a county board or a county
4officer. It is hereby established that an employer-employee
5relationship under the usual common law rules exists between
6such employees and the county paying their salaries by reason
7of the fact that the county boards fix their rates of
8compensation, appropriate funds for payment of their earnings
9and otherwise exercise control over them. This finding and this
10amendatory Act shall apply to all such employees from the date
11of appointment whether such date is prior to or after the
12effective date of this amendatory Act and is intended to
13clarify existing law pertaining to their status as
14participating employees in the Fund.
15(Source: P.A. 97-429, eff. 8-16-11; 97-609, eff. 8-26-11;
16revised 9-28-11.)
 
17    (40 ILCS 5/14-103.10)  (from Ch. 108 1/2, par. 14-103.10)
18    Sec. 14-103.10. Compensation.
19    (a) For periods of service prior to January 1, 1978, the
20full rate of salary or wages payable to an employee for
21personal services performed if he worked the full normal
22working period for his position, subject to the following
23maximum amounts: (1) prior to July 1, 1951, $400 per month or
24$4,800 per year; (2) between July 1, 1951 and June 30, 1957
25inclusive, $625 per month or $7,500 per year; (3) beginning

 

 

09700SB1673ham007- 54 -LRB097 07605 EFG 70502 a

1July 1, 1957, no limitation.
2    In the case of service of an employee in a position
3involving part-time employment, compensation shall be
4determined according to the employees' earnings record.
5    (b) For periods of service on and after January 1, 1978,
6all remuneration for personal services performed defined as
7"wages" under the Social Security Enabling Act, including that
8part of such remuneration which is in excess of any maximum
9limitation provided in such Act, and including any benefits
10received by an employee under a sick pay plan in effect before
11January 1, 1981, but excluding lump sum salary payments:
12        (1) for vacation,
13        (2) for accumulated unused sick leave,
14        (3) upon discharge or dismissal,
15        (4) for approved holidays.
16    (c) For periods of service on or after December 16, 1978,
17compensation also includes any benefits, other than lump sum
18salary payments made at termination of employment, which an
19employee receives or is eligible to receive under a sick pay
20plan authorized by law.
21    (d) For periods of service after September 30, 1985,
22compensation also includes any remuneration for personal
23services not included as "wages" under the Social Security
24Enabling Act, which is deducted for purposes of participation
25in a program established pursuant to Section 125 of the
26Internal Revenue Code or its successor laws.

 

 

09700SB1673ham007- 55 -LRB097 07605 EFG 70502 a

1    (e) For members for which Section 1-160 applies for periods
2of service on and after January 1, 2011, all remuneration for
3personal services performed defined as "wages" under the Social
4Security Enabling Act, excluding remuneration that is in excess
5of the annual earnings, salary, or wages of a member or
6participant, as provided in subsection (b-5) of Section 1-160,
7but including any benefits received by an employee under a sick
8pay plan in effect before January 1, 1981. Compensation shall
9exclude lump sum salary payments:
10        (1) for vacation;
11        (2) for accumulated unused sick leave;
12        (3) upon discharge or dismissal; and
13        (4) for approved holidays.
14    (f) Notwithstanding any other provision of this Section,
15"compensation" does not include any future increase in income
16offered by a department under this Article pursuant to the
17requirements of subsection (c) of Section 14-106.5 that is
18accepted by a Tier I employee, or a Tier I retiree returning to
19active service, who has made an election under paragraph (2) of
20subsection (a) or (a-5) of Section 14-106.5.
21    (g) Notwithstanding the other provisions of this Section,
22for an employee who first becomes a participant on or after the
23effective date of this amendatory Act of the 97th General
24Assembly, "compensation" does not include any payments or
25reimbursements for travel vouchers.
26(Source: P.A. 96-1490, eff. 1-1-11.)
 

 

 

09700SB1673ham007- 56 -LRB097 07605 EFG 70502 a

1    (40 ILCS 5/14-103.40 new)
2    Sec. 14-103.40. Tier I employee. "Tier I employee": An
3employee under this Article who first became a member or
4participant before January 1, 2011 under any reciprocal
5retirement system or pension fund established under this Code
6other than a retirement system or pension fund established
7under Article 2, 3, 4, 5, 6, or 18 of this Code.
 
8    (40 ILCS 5/14-103.41 new)
9    Sec. 14-103.41. Tier I retiree. "Tier I retiree": A former
10Tier I employee who is receiving a retirement annuity.
 
11    (40 ILCS 5/14-103.42 new)
12    Sec. 14-103.42. Future increase in income. "Future
13increase in income": Any increase in income in any form offered
14by a department to an employee under this Article after June
1530, 2013 that would qualify as "compensation", as defined under
16Section 14-103.10, but for the fact that the department offered
17the increase in income to the employee on the condition that it
18not qualify as compensation and the employee accepted the
19increase in income subject to that condition. The term "future
20increase in income" does not include an increase in income in
21any form that is paid to a Tier I employee under an employment
22contract or collective bargaining agreement that is in effect
23on the effective date of this Section but does include an

 

 

09700SB1673ham007- 57 -LRB097 07605 EFG 70502 a

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

 

 

09700SB1673ham007- 58 -LRB097 07605 EFG 70502 a

1to receive a retirement annuity before January 1, 2001.
2    (c) A member who first participated in this System before
3the effective date of this amendatory Act of the 97th General
4Assembly shall be entitled to additional service credit, under
5rules prescribed by the Board, for accumulated unused sick
6leave credited to his account in the last Department on the
7date of withdrawal from service or for any period for which he
8would have been eligible to receive benefits under a sick pay
9plan authorized by law, if he had suffered a sickness or
10accident on the date of withdrawal from service. It shall be
11the responsibility of the last Department to certify to the
12Board the length of time salary or benefits would have been
13paid to the member based upon the accumulated unused sick leave
14or the applicable sick pay plan if he had become entitled
15thereto because of sickness on the date that his status as an
16employee terminated. This period of service credit granted
17under this paragraph shall not be considered in determining the
18date the retirement annuity is to begin, or final average
19compensation.
20    Service credit is not available for unused sick leave
21accumulated by a person who first participates in this System
22on or after the effective date of this amendatory Act of the
2397th General Assembly.
24(Source: P.A. 92-14, eff. 6-28-01.)
 
25    (40 ILCS 5/14-106.5 new)

 

 

09700SB1673ham007- 59 -LRB097 07605 EFG 70502 a

1    Sec. 14-106.5. Election by Tier I employees and Tier I
2retirees.
3    (a) Each Tier I employee shall make an irrevocable election
4either:
5        (1) to agree to the following:
6            (i) to have the amount of the automatic annual
7        increases in his or her retirement annuity that are
8        otherwise provided for in this Article calculated,
9        instead, as provided in subsection (a-1) of Section
10        14-114; and
11            (ii) to have his or her eligibility for automatic
12        annual increases in retirement annuity postponed as
13        provided in subsection (a-2) of Section 14-114; or
14        (2) to not agree to items (i) and (ii) as set forth in
15    paragraph (1) of this subsection.
16    The election required under this subsection (a) shall be
17made by each Tier I employee no earlier than January 1, 2013
18and no later than May 31, 2013, except that:
19        (i) a person who becomes a Tier I employee under this
20    Article after January 1, 2013 must make the election under
21    this subsection (a) within 60 days after becoming a Tier I
22    employee;
23        (ii) a person who returns to active service as a Tier I
24    employee under this Article after January 1, 2013 and has
25    not yet made an election under this Section must make the
26    election under this subsection (a) within 60 days after

 

 

09700SB1673ham007- 60 -LRB097 07605 EFG 70502 a

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

 

 

09700SB1673ham007- 61 -LRB097 07605 EFG 70502 a

1    Article on or after January 1, 2013 must make the election
2    under this subsection (a-5) within 60 days after becoming a
3    Tier I retiree; and
4        (ii) a person who made the election under subsection
5    (a) as a Tier I employee remains bound by that election and
6    shall not make a later election under this subsection
7    (a-5).
8    If a Tier I retiree fails for any reason to make a required
9election under this subsection within the time specified, then
10the Tier I retiree shall be deemed to have made the election
11under paragraph (2) of this subsection.
12    (a-10) All elections under subsection (a) or (a-5) that are
13made or deemed to be made before June 1, 2013 shall take effect
14on July 1, 2013. Elections that are made or deemed to be made
15on or after June 1, 2013 shall take effect on the first day of
16the month following the month in which the election is made or
17deemed to be made.
18    (b) As adequate and legal consideration provided under this
19amendatory Act of the 97th General Assembly for making the
20election under paragraph (1) of subsection (a) of this Section,
21any future increases in income offered by a department under
22this Article to a Tier I employee who has made the election
23under paragraph (1) of subsection (a) of this Section shall be
24offered expressly and irrevocably as constituting compensation
25under Section 14-103.10.
26    As adequate and legal consideration provided under this

 

 

09700SB1673ham007- 62 -LRB097 07605 EFG 70502 a

1amendatory Act of the 97th General Assembly for making the
2election under paragraph (1) of subsection (a-5) of this
3Section, any future increases in income offered by a department
4under this Article to a Tier I retiree who returns to active
5service after having made the election under paragraph (1) of
6subsection (a-5) of this Section shall be offered expressly and
7irrevocably as constituting compensation under Section
814-103.10.
9    (c) A Tier I employee who makes the election under
10paragraph (2) of subsection (a) of this Section shall not be
11subject to items (i) and (ii) set forth in paragraph (1) of
12subsection (a) of this Section. However, any future increases
13in income offered by a department under this Article to a Tier
14I employee who has made the election under paragraph (2) of
15subsection (a) of this Section shall be offered by the
16department expressly and irrevocably as not constituting
17compensation under Section 14-103.10, and the employee may not
18accept any future increase in income that is offered in
19violation of this requirement.
20    A Tier I retiree who makes the election under paragraph (2)
21of subsection (a-5) of this Section shall not be subject to
22items (i) and (ii) set forth in paragraph (1) of subsection
23(a-5) of this Section. However, any future increases in income
24offered by a department under this Article to a Tier I retiree
25who returns to active service and has made the election under
26paragraph (2) of subsection (a-5) of this Section shall be

 

 

09700SB1673ham007- 63 -LRB097 07605 EFG 70502 a

1offered by the department expressly and irrevocably as not
2constituting compensation under Section 14-103.10, and the
3employee may not accept any future increase in income that is
4offered in violation of this requirement.
5    (d) The System shall make a good faith effort to contact
6each Tier I employee and Tier I retiree subject to this
7Section. The System shall mail information describing the
8required election to each Tier I employee and Tier I retiree by
9United States Postal Service mail to his or her last known
10address on file with the System. If the Tier I employee or Tier
11I retiree is not responsive to other means of contact, it is
12sufficient for the System to publish the details of any
13required elections on its website or to publish those details
14in a regularly published newsletter or other existing public
15forum.
16    Tier I employees and Tier I retirees who are subject to
17this Section shall be provided with an election packet
18containing information regarding their options, as well as the
19forms necessary to make the required election. Upon request,
20the System shall offer Tier I employees and Tier I retirees an
21opportunity to receive information from the System before
22making the required election. The information may consist of
23video materials, group presentations, individual consultation
24with a member or authorized representative of the System in
25person or by telephone or other electronic means, or any
26combination of those methods. The System shall not provide

 

 

09700SB1673ham007- 64 -LRB097 07605 EFG 70502 a

1advice or counseling with respect to which election a Tier I
2employee or Tier I retiree should make or specific to the legal
3or tax circumstances of or consequences to the Tier I employee
4or Tier I retiree.
5    The System shall inform Tier I employees and Tier I
6retirees in the election packet required under this subsection
7that the Tier I employee or Tier I retiree may also wish to
8obtain information and counsel relating to the election
9required under this Section from any other available source,
10including but not limited to labor organizations and private
11counsel.
12    The System shall coordinate with the Illinois Department of
13Central Management Services and each other retirement system
14administering an election in accordance with this amendatory
15Act of the 97th General Assembly to provide information
16concerning the impact of the election under this Section.
17    In no event shall the System, its staff, or the Board be
18held liable for any information given to a member, beneficiary,
19or annuitant regarding the elections under this Section.
20    (e) Notwithstanding any other provision of law, a
21department under this Article is required to offer any future
22increases in income expressly and irrevocably as not
23constituting "compensation" under Section 14-103.10 to any
24Tier I employee, or Tier I retiree returning to active service,
25who has made an election under paragraph (2) of subsection (a)
26or (a-5) of Section 14-106.5. A Tier I employee, or Tier I

 

 

09700SB1673ham007- 65 -LRB097 07605 EFG 70502 a

1retiree returning to active service, who has made an election
2under paragraph (2) of subsection (a) or (a-5) of Section
314-106.5 shall not accept any future increase in income that is
4offered by an employer under this Article in violation of the
5requirement set forth in this subsection.
6    (f) A member's election under this Section is not a
7prohibited election under subdivision (j)(1) of Section 1-119
8of this Code.
9    (g) No provision of this Section shall be interpreted in a
10way that would cause the System to cease to be a qualified plan
11under section 461 (a) of the Internal Revenue Code of 1986.
 
12    (40 ILCS 5/14-114)  (from Ch. 108 1/2, par. 14-114)
13    Sec. 14-114. Automatic increase in retirement annuity.
14    (a) Subject to the provisions of subsections (a-1) and
15(a-2), any Any person receiving a retirement annuity under this
16Article who retires having attained age 60, or who retires
17before age 60 having at least 35 years of creditable service,
18or who retires on or after January 1, 2001 at an age which,
19when added to the number of years of his or her creditable
20service, equals at least 85, shall, on January 1 next following
21the first full year of retirement, have the amount of the then
22fixed and payable monthly retirement annuity increased 3%. Any
23person receiving a retirement annuity under this Article who
24retires before attainment of age 60 and with less than (i) 35
25years of creditable service if retirement is before January 1,

 

 

09700SB1673ham007- 66 -LRB097 07605 EFG 70502 a

12001, or (ii) the number of years of creditable service which,
2when added to the member's age, would equal 85, if retirement
3is on or after January 1, 2001, shall have the amount of the
4fixed and payable retirement annuity increased by 3% on the
5January 1 occurring on or next following (1) attainment of age
660, or (2) the first anniversary of retirement, whichever
7occurs later. However, for persons who receive the alternative
8retirement annuity under Section 14-110, references in this
9subsection (a) to attainment of age 60 shall be deemed to refer
10to attainment of age 55. For a person receiving early
11retirement incentives under Section 14-108.3 whose retirement
12annuity began after January 1, 1992 pursuant to an extension
13granted under subsection (e) of that Section, the first
14anniversary of retirement shall be deemed to be January 1,
151993. For a person who retires on or after June 28, 2001 and on
16or before October 1, 2001, and whose retirement annuity is
17calculated, in whole or in part, under Section 14-110 or
18subsection (g) or (h) of Section 14-108, the first anniversary
19of retirement shall be deemed to be January 1, 2002.
20    On each January 1 following the date of the initial
21increase under this subsection, the employee's monthly
22retirement annuity shall be increased by an additional 3%.
23    Beginning January 1, 1990 and except as provided in
24subsections (a-1) and (a-2), all automatic annual increases
25payable under this Section shall be calculated as a percentage
26of the total annuity payable at the time of the increase,

 

 

09700SB1673ham007- 67 -LRB097 07605 EFG 70502 a

1including previous increases granted under this Article.
2    (a-1) Notwithstanding any other provision of this Article,
3for a Tier I employee or Tier I retiree who made the election
4under paragraph (1) of subsection (a) or (a-5) of Section
514-106.5, the amount of each automatic annual increase in
6retirement annuity occurring on or after the effective date of
7that election shall be 3% or one-half of the annual unadjusted
8percentage increase, if any, in the Consumer Price Index-U for
9the 12 months ending with the preceding September, whichever is
10less, of the originally granted retirement annuity. For the
11purposes of this Section, "Consumer Price Index-U" means the
12index published by the Bureau of Labor Statistics of the United
13States Department of Labor that measures the average change in
14prices of goods and services purchased by all urban consumers,
15United States city average, all items, 1982-84 = 100.
16    (a-2) Notwithstanding any other provision of this Article,
17for a Tier I employee or Tier I retiree who made the election
18under paragraph (1) of subsection (a) or (a-5) of Section
1914-106.5, the monthly retirement annuity shall first be subject
20to annual increases on the January 1 occurring on or next after
21either the attainment of age 67 or the January 1 occurring on
22or next after the fifth anniversary of the annuity start date,
23whichever occurs earlier. If on the effective date of the
24election under paragraph (1) of subsection (a-5) of Section
2514-106.5 a Tier I retiree has already received an annual
26increase under this Section but does not yet meet the new

 

 

09700SB1673ham007- 68 -LRB097 07605 EFG 70502 a

1eligibility requirements of this subsection, the annual
2increases already received shall continue in force, but no
3additional annual increase shall be granted until the Tier I
4retiree meets the new eligibility requirements.
5    (b) The provisions of subsection (a) of this Section shall
6be applicable to an employee only if the employee makes the
7additional contributions required after December 31, 1969 for
8the purpose of the automatic increases for not less than the
9equivalent of one full year. If an employee becomes an
10annuitant before his additional contributions equal one full
11year's contributions based on his salary at the date of
12retirement, the employee may pay the necessary balance of the
13contributions to the system, without interest, and be eligible
14for the increasing annuity authorized by this Section.
15    (c) The provisions of subsection (a) of this Section shall
16not be applicable to any annuitant who is on retirement on
17December 31, 1969, and thereafter returns to State service,
18unless the member has established at least one year of
19additional creditable service following reentry into service.
20    (d) In addition to other increases which may be provided by
21this Section, on January 1, 1981 any annuitant who was
22receiving a retirement annuity on or before January 1, 1971
23shall have his retirement annuity then being paid increased $1
24per month for each year of creditable service. On January 1,
251982, any annuitant who began receiving a retirement annuity on
26or before January 1, 1977, shall have his retirement annuity

 

 

09700SB1673ham007- 69 -LRB097 07605 EFG 70502 a

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

 

 

09700SB1673ham007- 70 -LRB097 07605 EFG 70502 a

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

 

 

09700SB1673ham007- 71 -LRB097 07605 EFG 70502 a

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

 

 

09700SB1673ham007- 72 -LRB097 07605 EFG 70502 a

1soon as possible after the 15th day of each month, the Board
2shall submit vouchers for payment of State contributions to the
3System, in a total monthly amount of one-twelfth of the fiscal
4year General Revenue Fund contribution as certified by the
5System pursuant to Section 14-135.08 of the Illinois Pension
6Code.
7    (d) If an employee is paid from trust funds or federal
8funds, the department or other employer shall pay employer
9contributions from those funds to the System at the certified
10rate, unless the terms of the trust or the federal-State
11agreement preclude the use of the funds for that purpose, in
12which case the required employer contributions shall be paid by
13the State. From the effective date of this amendatory Act of
14the 93rd General Assembly through the payment of the final
15payroll from fiscal year 2004 appropriations, the department or
16other employer shall not pay contributions for the remainder of
17fiscal year 2004 but shall instead make payments as required
18under subsection (a-1) of Section 14.1 of the State Finance
19Act. The department or other employer shall resume payment of
20contributions at the commencement of fiscal year 2005.
21    (e) Except as otherwise provided in this Section, for For
22State fiscal years 2012 through 2045, the minimum contribution
23to the System to be made by the State for each fiscal year
24shall be an amount determined by the System to be sufficient to
25bring the total assets of the System up to 90% of the total
26actuarial liabilities of the System by the end of State fiscal

 

 

09700SB1673ham007- 73 -LRB097 07605 EFG 70502 a

1year 2045. In making these determinations, the required State
2contribution shall be calculated each year as a level
3percentage of payroll over the years remaining to and including
4fiscal year 2045 and shall be determined under the projected
5unit credit actuarial cost method.
6    For State fiscal years 1996 through 2005, the State
7contribution to the System, as a percentage of the applicable
8employee payroll, shall be increased in equal annual increments
9so that by State fiscal year 2011, the State is contributing at
10the rate required under this Section; except that (i) for State
11fiscal year 1998, for all purposes of this Code and any other
12law of this State, the certified percentage of the applicable
13employee payroll shall be 5.052% for employees earning eligible
14creditable service under Section 14-110 and 6.500% for all
15other employees, notwithstanding any contrary certification
16made under Section 14-135.08 before the effective date of this
17amendatory Act of 1997, and (ii) in the following specified
18State fiscal years, the State contribution to the System shall
19not be less than the following indicated percentages of the
20applicable employee payroll, even if the indicated percentage
21will produce a State contribution in excess of the amount
22otherwise required under this subsection and subsection (a):
239.8% in FY 1999; 10.0% in FY 2000; 10.2% in FY 2001; 10.4% in FY
242002; 10.6% in FY 2003; and 10.8% in FY 2004.
25    Notwithstanding any other provision of this Article, the
26total required State contribution to the System for State

 

 

09700SB1673ham007- 74 -LRB097 07605 EFG 70502 a

1fiscal year 2006 is $203,783,900.
2    Notwithstanding any other provision of this Article, the
3total required State contribution to the System for State
4fiscal year 2007 is $344,164,400.
5    For each of State fiscal years 2008 through 2009, the State
6contribution to the System, as a percentage of the applicable
7employee payroll, shall be increased in equal annual increments
8from the required State contribution for State fiscal year
92007, so that by State fiscal year 2011, the State is
10contributing at the rate otherwise required under this Section.
11    Notwithstanding any other provision of this Article, the
12total required State General Revenue Fund contribution for
13State fiscal year 2010 is $723,703,100 and shall be made from
14the proceeds of bonds sold in fiscal year 2010 pursuant to
15Section 7.2 of the General Obligation Bond Act, less (i) the
16pro rata share of bond sale expenses determined by the System's
17share of total bond proceeds, (ii) any amounts received from
18the General Revenue Fund in fiscal year 2010, and (iii) any
19reduction in bond proceeds due to the issuance of discounted
20bonds, if applicable.
21    Notwithstanding any other provision of this Article, the
22total required State General Revenue Fund contribution for
23State fiscal year 2011 is the amount recertified by the System
24on or before April 1, 2011 pursuant to Section 14-135.08 and
25shall be made from the proceeds of bonds sold in fiscal year
262011 pursuant to Section 7.2 of the General Obligation Bond

 

 

09700SB1673ham007- 75 -LRB097 07605 EFG 70502 a

1Act, less (i) the pro rata share of bond sale expenses
2determined by the System's share of total bond proceeds, (ii)
3any amounts received from the General Revenue Fund in fiscal
4year 2011, and (iii) any reduction in bond proceeds due to the
5issuance of discounted bonds, if applicable.
6    Except as otherwise provided in this Section, beginning
7Beginning in State fiscal year 2046, the minimum State
8contribution for each fiscal year shall be the amount needed to
9maintain the total assets of the System at 90% of the total
10actuarial liabilities of the System.
11    Amounts received by the System pursuant to Section 25 of
12the Budget Stabilization Act or Section 8.12 of the State
13Finance Act in any fiscal year do not reduce and do not
14constitute payment of any portion of the minimum State
15contribution required under this Article in that fiscal year.
16Such amounts shall not reduce, and shall not be included in the
17calculation of, the required State contributions under this
18Article in any future year until the System has reached a
19funding ratio of at least 90%. A reference in this Article to
20the "required State contribution" or any substantially similar
21term does not include or apply to any amounts payable to the
22System under Section 25 of the Budget Stabilization Act.
23    Notwithstanding any other provision of this Section, the
24required State contribution for State fiscal year 2005 and for
25fiscal year 2008 and each fiscal year thereafter, as calculated
26under this Section and certified under Section 14-135.08, shall

 

 

09700SB1673ham007- 76 -LRB097 07605 EFG 70502 a

1not exceed an amount equal to (i) the amount of the required
2State contribution that would have been calculated under this
3Section for that fiscal year if the System had not received any
4payments under subsection (d) of Section 7.2 of the General
5Obligation Bond Act, minus (ii) the portion of the State's
6total debt service payments for that fiscal year on the bonds
7issued in fiscal year 2003 for the purposes of that Section
87.2, as determined and certified by the Comptroller, that is
9the same as the System's portion of the total moneys
10distributed under subsection (d) of Section 7.2 of the General
11Obligation Bond Act. In determining this maximum for State
12fiscal years 2008 through 2010, however, the amount referred to
13in item (i) shall be increased, as a percentage of the
14applicable employee payroll, in equal increments calculated
15from the sum of the required State contribution for State
16fiscal year 2007 plus the applicable portion of the State's
17total debt service payments for fiscal year 2007 on the bonds
18issued in fiscal year 2003 for the purposes of Section 7.2 of
19the General Obligation Bond Act, so that, by State fiscal year
202011, the State is contributing at the rate otherwise required
21under this Section.
22    (e-1) If at least 50% of Tier I employees making an
23election under Section 14-106.5 before June 1, 2013 choose the
24option under paragraph (1) of subsection (a) of that Section,
25then:
26        (1) In lieu of the State contributions required under

 

 

09700SB1673ham007- 77 -LRB097 07605 EFG 70502 a

1    subsection (e), for State fiscal years 2014 through 2043
2    the minimum contribution to the System to be made by the
3    State for each fiscal year shall be an amount determined by
4    the System to be equal to the sum of (1) the State's
5    portion of the projected normal cost for that fiscal year,
6    plus (2) an amount sufficient to bring the total assets of
7    the System up to 100% of the total actuarial liabilities of
8    the System by the end of State fiscal year 2043. In making
9    these determinations, the required State contribution
10    shall be calculated each year as a level percentage of
11    payroll over the years remaining to and including fiscal
12    year 2043 and shall be determined under the projected unit
13    credit actuarial cost method.
14        (2) Beginning in State fiscal year 2044, the minimum
15    State contribution for each fiscal year shall be the amount
16    needed to maintain the total assets of the System at 100%
17    of the total actuarial liabilities of the System.
18    (e-2) If less than 50% of Tier I employees making an
19election under Section 14-106.5 before June 1, 2013 choose the
20option under paragraph (1) of subsection (a) of that Section,
21then:
22        (1) Instead of the annual required contribution
23    otherwise specified in subsection (e-1) of this Section,
24    the annual required contribution to the System to be made
25    by the State shall be determined under subsection (e) of
26    this Section.

 

 

09700SB1673ham007- 78 -LRB097 07605 EFG 70502 a

1        (2) As soon as possible after June 1, 2013, the Board
2    shall recertify the annual required contribution by the
3    State for State fiscal year 2014.
4    (f) After the submission of all payments for eligible
5employees from personal services line items in fiscal year 2004
6have been made, the Comptroller shall provide to the System a
7certification of the sum of all fiscal year 2004 expenditures
8for personal services that would have been covered by payments
9to the System under this Section if the provisions of this
10amendatory Act of the 93rd General Assembly had not been
11enacted. Upon receipt of the certification, the System shall
12determine the amount due to the System based on the full rate
13certified by the Board under Section 14-135.08 for fiscal year
142004 in order to meet the State's obligation under this
15Section. The System shall compare this amount due to the amount
16received by the System in fiscal year 2004 through payments
17under this Section and under Section 6z-61 of the State Finance
18Act. If the amount due is more than the amount received, the
19difference shall be termed the "Fiscal Year 2004 Shortfall" for
20purposes of this Section, and the Fiscal Year 2004 Shortfall
21shall be satisfied under Section 1.2 of the State Pension Funds
22Continuing Appropriation Act. If the amount due is less than
23the amount received, the difference shall be termed the "Fiscal
24Year 2004 Overpayment" for purposes of this Section, and the
25Fiscal Year 2004 Overpayment shall be repaid by the System to
26the Pension Contribution Fund as soon as practicable after the

 

 

09700SB1673ham007- 79 -LRB097 07605 EFG 70502 a

1certification.
2    (g) For purposes of determining the required State
3contribution to the System, the value of the System's assets
4shall be equal to the actuarial value of the System's assets,
5which shall be calculated as follows:
6    As of June 30, 2008, the actuarial value of the System's
7assets shall be equal to the market value of the assets as of
8that date. In determining the actuarial value of the System's
9assets for fiscal years after June 30, 2008, any actuarial
10gains or losses from investment return incurred in a fiscal
11year shall be recognized in equal annual amounts over the
125-year period following that fiscal year.
13    (h) For purposes of determining the required State
14contribution to the System for a particular year, the actuarial
15value of assets shall be assumed to earn a rate of return equal
16to the System's actuarially assumed rate of return.
17    (i) After the submission of all payments for eligible
18employees from personal services line items paid from the
19General Revenue Fund in fiscal year 2010 have been made, the
20Comptroller shall provide to the System a certification of the
21sum of all fiscal year 2010 expenditures for personal services
22that would have been covered by payments to the System under
23this Section if the provisions of this amendatory Act of the
2496th General Assembly had not been enacted. Upon receipt of the
25certification, the System shall determine the amount due to the
26System based on the full rate certified by the Board under

 

 

09700SB1673ham007- 80 -LRB097 07605 EFG 70502 a

1Section 14-135.08 for fiscal year 2010 in order to meet the
2State's obligation under this Section. The System shall compare
3this amount due to the amount received by the System in fiscal
4year 2010 through payments under this Section. If the amount
5due is more than the amount received, the difference shall be
6termed the "Fiscal Year 2010 Shortfall" for purposes of this
7Section, and the Fiscal Year 2010 Shortfall shall be satisfied
8under Section 1.2 of the State Pension Funds Continuing
9Appropriation Act. If the amount due is less than the amount
10received, the difference shall be termed the "Fiscal Year 2010
11Overpayment" for purposes of this Section, and the Fiscal Year
122010 Overpayment shall be repaid by the System to the General
13Revenue Fund as soon as practicable after the certification.
14    (j) After the submission of all payments for eligible
15employees from personal services line items paid from the
16General Revenue Fund in fiscal year 2011 have been made, the
17Comptroller shall provide to the System a certification of the
18sum of all fiscal year 2011 expenditures for personal services
19that would have been covered by payments to the System under
20this Section if the provisions of this amendatory Act of the
2196th General Assembly had not been enacted. Upon receipt of the
22certification, the System shall determine the amount due to the
23System based on the full rate certified by the Board under
24Section 14-135.08 for fiscal year 2011 in order to meet the
25State's obligation under this Section. The System shall compare
26this amount due to the amount received by the System in fiscal

 

 

09700SB1673ham007- 81 -LRB097 07605 EFG 70502 a

1year 2011 through payments under this Section. If the amount
2due is more than the amount received, the difference shall be
3termed the "Fiscal Year 2011 Shortfall" for purposes of this
4Section, and the Fiscal Year 2011 Shortfall shall be satisfied
5under Section 1.2 of the State Pension Funds Continuing
6Appropriation Act. If the amount due is less than the amount
7received, the difference shall be termed the "Fiscal Year 2011
8Overpayment" for purposes of this Section, and the Fiscal Year
92011 Overpayment shall be repaid by the System to the General
10Revenue Fund as soon as practicable after the certification.
11    (k) For fiscal year 2012 only, after the submission of all
12payments for eligible employees from personal services line
13items paid from the General Revenue Fund in the fiscal year
14have been made, the Comptroller shall provide to the System a
15certification of the sum of all expenditures in the fiscal year
16for personal services. Upon receipt of the certification, the
17System shall determine the amount due to the System based on
18the full rate certified by the Board under Section 14-135.08
19for the fiscal year in order to meet the State's obligation
20under this Section. The System shall compare this amount due to
21the amount received by the System for the fiscal year. If the
22amount due is more than the amount received, the difference
23shall be termed the "Fiscal Year Shortfall" for purposes of
24this Section, and the Fiscal Year Shortfall shall be satisfied
25under Section 1.2 of the State Pension Funds Continuing
26Appropriation Act. If the amount due is less than the amount

 

 

09700SB1673ham007- 82 -LRB097 07605 EFG 70502 a

1received, the difference shall be termed the "Fiscal Year
2Overpayment" for purposes of this Section, and the Fiscal Year
3Overpayment shall be repaid by the System to the General
4Revenue Fund as soon as practicable after the certification.
5(Source: P.A. 96-43, eff. 7-15-09; 96-45, eff. 7-15-09;
696-1000, eff. 7-2-10; 96-1497, eff. 1-14-11; 96-1511, eff.
71-27-11; 96-1554, eff. 3-18-11; 97-72, eff. 7-1-11.)
 
8    (40 ILCS 5/14-132)  (from Ch. 108 1/2, par. 14-132)
9    Sec. 14-132. Obligations of State.
10    (a) The payment of the required department contributions,
11all allowances, annuities, benefits granted under this
12Article, and all expenses of administration of the system are
13obligations of the State of Illinois to the extent specified in
14this Article.
15    (b) All income of the system shall be credited to a
16separate account for this system in the State treasury and
17shall be used to pay allowances, annuities, benefits and
18administration expense.
19    (c) If the System submits a voucher for monthly
20contributions as required in Section 14-131 and the State fails
21to pay within 90 days of receipt of such a voucher, the Board
22shall submit a written request to the Comptroller seeking
23payment. A copy of the request shall be filed with the
24Secretary of State, and the Secretary of State shall provide
25copies to the Governor and General Assembly. No earlier than

 

 

09700SB1673ham007- 83 -LRB097 07605 EFG 70502 a

1the 16th day after filing a request with the Secretary of
2State, the Board shall have the right to commence a mandamus
3action in the Supreme Court of Illinois to compel the
4Comptroller to satisfy the voucher by making payment from the
5General Revenue Fund. This Section constitutes an express
6waiver of the State's sovereign immunity solely to the extent
7it permits the Board to commence a mandamus action in the
8Illinois Supreme Court to compel the Comptroller to pay a
9voucher for monthly contributions as required in Section
1014-131.
11(Source: P.A. 80-841.)
 
12    (40 ILCS 5/14-135.08)  (from Ch. 108 1/2, par. 14-135.08)
13    Sec. 14-135.08. To certify required State contributions.
14    (a) To certify to the Governor and to each department, on
15or before November 15 of each year until November 15, 2011, the
16required rate for State contributions to the System for the
17next State fiscal year, as determined under subsection (b) of
18Section 14-131. The certification to the Governor under this
19subsection (a) shall include a copy of the actuarial
20recommendations upon which the rate is based and shall
21specifically identify the System's projected State normal cost
22for that fiscal year.
23    (a-5) On or before November 1 of each year, beginning
24November 1, 2012, the Board shall submit to the State Actuary,
25the Governor, and the General Assembly a proposed certification

 

 

09700SB1673ham007- 84 -LRB097 07605 EFG 70502 a

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 any deviations from
14the State Actuary's recommended changes, the reason or reasons
15for not following the State Actuary's recommended changes, and
16the fiscal impact of not following the State Actuary's
17recommended changes on the required State contribution.
18    (b) The certifications under subsections (a) and (a-5)
19certification shall include an additional amount necessary to
20pay all principal of and interest on those general obligation
21bonds due the next fiscal year authorized by Section 7.2(a) of
22the General Obligation Bond Act and issued to provide the
23proceeds deposited by the State with the System in July 2003,
24representing deposits other than amounts reserved under
25Section 7.2(c) of the General Obligation Bond Act. For State
26fiscal year 2005, the Board shall make a supplemental

 

 

09700SB1673ham007- 85 -LRB097 07605 EFG 70502 a

1certification of the additional amount necessary to pay all
2principal of and interest on those general obligation bonds due
3in State fiscal years 2004 and 2005 authorized by Section
47.2(a) of the General Obligation Bond Act and issued to provide
5the proceeds deposited by the State with the System in July
62003, representing deposits other than amounts reserved under
7Section 7.2(c) of the General Obligation Bond Act, as soon as
8practical after the effective date of this amendatory Act of
9the 93rd General Assembly.
10    On or before May 1, 2004, the Board shall recalculate and
11recertify to the Governor and to each department the amount of
12the required State contribution to the System and the required
13rates for State contributions to the System for State fiscal
14year 2005, taking into account the amounts appropriated to and
15received by the System under subsection (d) of Section 7.2 of
16the General Obligation Bond Act.
17    On or before July 1, 2005, the Board shall recalculate and
18recertify to the Governor and to each department the amount of
19the required State contribution to the System and the required
20rates for State contributions to the System for State fiscal
21year 2006, taking into account the changes in required State
22contributions made by this amendatory Act of the 94th General
23Assembly.
24    On or before April 1, 2011, the Board shall recalculate and
25recertify to the Governor and to each department the amount of
26the required State contribution to the System for State fiscal

 

 

09700SB1673ham007- 86 -LRB097 07605 EFG 70502 a

1year 2011, applying the changes made by Public Act 96-889 to
2the System's assets and liabilities as of June 30, 2009 as
3though Public Act 96-889 was approved on that date.
4(Source: P.A. 96-1497, eff. 1-14-11; 96-1511, eff. 1-27-11.)
 
5    (40 ILCS 5/14-152.1)
6    Sec. 14-152.1. Application and expiration of new benefit
7increases.
8    (a) As used in this Section, "new benefit increase" means
9an increase in the amount of any benefit provided under this
10Article, or an expansion of the conditions of eligibility for
11any benefit under this Article, that results from an amendment
12to this Code that takes effect after June 1, 2005 (the
13effective date of Public Act 94-4). "New benefit increase",
14however, does not include any benefit increase resulting from
15the changes made to this Article or Article 1 by Public Act
1696-37 or this amendatory Act of the 97th 96th General Assembly.
17    (b) Notwithstanding any other provision of this Code or any
18subsequent amendment to this Code, every new benefit increase
19is subject to this Section and shall be deemed to be granted
20only in conformance with and contingent upon compliance with
21the provisions of this Section.
22    (c) The Public Act enacting a new benefit increase must
23identify and provide for payment to the System of additional
24funding at least sufficient to fund the resulting annual
25increase in cost to the System as it accrues.

 

 

09700SB1673ham007- 87 -LRB097 07605 EFG 70502 a

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

 

 

09700SB1673ham007- 88 -LRB097 07605 EFG 70502 a

1increase was in effect and to the affected beneficiaries and
2alternate payees of such persons, but does not apply to any
3other person, including without limitation a person who
4continues in service after the expiration date and did not
5apply and qualify for the affected benefit while the new
6benefit increase was in effect.
7(Source: P.A. 96-37, eff. 7-13-09.)
 
8    (40 ILCS 5/15-106)  (from Ch. 108 1/2, par. 15-106)
9    Sec. 15-106. Employer. "Employer": The University of
10Illinois, Southern Illinois University, Chicago State
11University, Eastern Illinois University, Governors State
12University, Illinois State University, Northeastern Illinois
13University, Northern Illinois University, Western Illinois
14University, the State Board of Higher Education, the Illinois
15Mathematics and Science Academy, the University Civil Service
16Merit Board, the Board of Trustees of the State Universities
17Retirement System, the Illinois Community College Board,
18community college boards, any association of community college
19boards organized under Section 3-55 of the Public Community
20College Act, the Board of Examiners established under the
21Illinois Public Accounting Act, and, only during the period for
22which employer contributions required under Section 15-155 are
23paid, the following organizations: the alumni associations,
24the foundations and the athletic associations which are
25affiliated with the universities and colleges included in this

 

 

09700SB1673ham007- 89 -LRB097 07605 EFG 70502 a

1Section as employers. An individual that begins employment
2after the effective date of this amendatory Act of the 97th
3General Assembly with an entity not defined as an employer in
4this Section shall not be deemed an employee for the purposes
5of this Article with respect to that employment and shall not
6be eligible to participate in the System with respect to that
7employment; provided, however, that those individuals who are
8both employed and already participants in the System on the
9effective date of this amendatory Act of the 97th General
10Assembly shall be allowed to continue as participants in the
11System for the duration of that employment.
12    Notwithstanding any provision of law to the contrary, an
13individual who begins employment with any of the following
14employers on or after the effective date of this amendatory Act
15of the 97th General Assembly shall not be deemed an employee
16and shall not be eligible to participate in the System with
17respect to that employment: any association of community
18college boards organized under Section 3-55 of the Public
19Community College Act, the Association of Illinois
20Middle-Grade Schools, the Illinois Association of School
21Administrators, the Illinois Association for Supervision and
22Curriculum Development, the Illinois Principals Association,
23the Illinois Association of School Business Officials, or the
24Illinois Special Olympics; provided, however, that those
25individuals who are both employed and already participants in
26the System on the effective date of this amendatory Act of the

 

 

09700SB1673ham007- 90 -LRB097 07605 EFG 70502 a

197th General Assembly shall be allowed to continue as
2participants in the System for the duration of that employment.
3    A department as defined in Section 14-103.04 is an employer
4for any person appointed by the Governor under the Civil
5Administrative Code of Illinois who is a participating employee
6as defined in Section 15-109. The Department of Central
7Management Services is an employer with respect to persons
8employed by the State Board of Higher Education in positions
9with the Illinois Century Network as of June 30, 2004 who
10remain continuously employed after that date by the Department
11of Central Management Services in positions with the Illinois
12Century Network, the Bureau of Communication and Computer
13Services, or, if applicable, any successor bureau.
14    The cities of Champaign and Urbana shall be considered
15employers, but only during the period for which contributions
16are required to be made under subsection (b-1) of Section
1715-155 and only with respect to individuals described in
18subsection (h) of Section 15-107.
19(Source: P.A. 95-369, eff. 8-23-07; 95-728, eff. 7-1-08 - See
20Sec. 999.)
 
21    (40 ILCS 5/15-107)  (from Ch. 108 1/2, par. 15-107)
22    Sec. 15-107. Employee.
23    (a) "Employee" means any member of the educational,
24administrative, secretarial, clerical, mechanical, labor or
25other staff of an employer whose employment is permanent and

 

 

09700SB1673ham007- 91 -LRB097 07605 EFG 70502 a

1continuous or who is employed in a position in which services
2are expected to be rendered on a continuous basis for at least
34 months or one academic term, whichever is less, who (A)
4receives payment for personal services on a warrant issued
5pursuant to a payroll voucher certified by an employer and
6drawn by the State Comptroller upon the State Treasurer or by
7an employer upon trust, federal or other funds, or (B) is on a
8leave of absence without pay. Employment which is irregular,
9intermittent or temporary shall not be considered continuous
10for purposes of this paragraph.
11    However, a person is not an "employee" if he or she:
12        (1) is a student enrolled in and regularly attending
13    classes in a college or university which is an employer,
14    and is employed on a temporary basis at less than full
15    time;
16        (2) is currently receiving a retirement annuity or a
17    disability retirement annuity under Section 15-153.2 from
18    this System;
19        (3) is on a military leave of absence;
20        (4) is eligible to participate in the Federal Civil
21    Service Retirement System and is currently making
22    contributions to that system based upon earnings paid by an
23    employer;
24        (5) is on leave of absence without pay for more than 60
25    days immediately following termination of disability
26    benefits under this Article;

 

 

09700SB1673ham007- 92 -LRB097 07605 EFG 70502 a

1        (6) is hired after June 30, 1979 as a public service
2    employment program participant under the Federal
3    Comprehensive Employment and Training Act and receives
4    earnings in whole or in part from funds provided under that
5    Act; or
6        (7) is employed on or after July 1, 1991 to perform
7    services that are excluded by subdivision (a)(7)(f) or
8    (a)(19) of Section 210 of the federal Social Security Act
9    from the definition of employment given in that Section (42
10    U.S.C. 410).
11    (b) Any employer may, by filing a written notice with the
12board, exclude from the definition of "employee" all persons
13employed pursuant to a federally funded contract entered into
14after July 1, 1982 with a federal military department in a
15program providing training in military courses to federal
16military personnel on a military site owned by the United
17States Government, if this exclusion is not prohibited by the
18federally funded contract or federal laws or rules governing
19the administration of the contract.
20    (c) Any person appointed by the Governor under the Civil
21Administrative Code of the State is an employee, if he or she
22is a participant in this system on the effective date of the
23appointment.
24    (d) A participant on lay-off status under civil service
25rules is considered an employee for not more than 120 days from
26the date of the lay-off.

 

 

09700SB1673ham007- 93 -LRB097 07605 EFG 70502 a

1    (e) A participant is considered an employee during (1) the
2first 60 days of disability leave, (2) the period, not to
3exceed one year, in which his or her eligibility for disability
4benefits is being considered by the board or reviewed by the
5courts, and (3) the period he or she receives disability
6benefits under the provisions of Section 15-152, workers'
7compensation or occupational disease benefits, or disability
8income under an insurance contract financed wholly or partially
9by the employer.
10    (f) Absences without pay, other than formal leaves of
11absence, of less than 30 calendar days, are not considered as
12an interruption of a person's status as an employee. If such
13absences during any period of 12 months exceed 30 work days,
14the employee status of the person is considered as interrupted
15as of the 31st work day.
16    (g) A staff member whose employment contract requires
17services during an academic term is to be considered an
18employee during the summer and other vacation periods, unless
19he or she declines an employment contract for the succeeding
20academic term or his or her employment status is otherwise
21terminated, and he or she receives no earnings during these
22periods.
23    (h) An individual who was a participating employee employed
24in the fire department of the University of Illinois's
25Champaign-Urbana campus immediately prior to the elimination
26of that fire department and who immediately after the

 

 

09700SB1673ham007- 94 -LRB097 07605 EFG 70502 a

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

 

 

09700SB1673ham007- 95 -LRB097 07605 EFG 70502 a

1organization and (B) employer contributions equal to the normal
2costs (as defined in Section 15-155) resulting from that
3service; all or any part of these contributions may be paid on
4the employee's behalf or picked up for tax purposes (if
5authorized under federal law) by the teacher organization.
6    A person who is an employee as defined in this subsection
7(i) may establish service credit for similar employment prior
8to becoming an employee under this subsection by paying to the
9System for that employment the contributions specified in this
10subsection, plus interest at the effective rate from the date
11of service to the date of payment. However, credit shall not be
12granted under this subsection for any such prior employment for
13which the applicant received credit under any other provision
14of this Code, or during which the applicant was on a leave of
15absence under Section 15-113.2.
16    (j) A person employed by the State Board of Higher
17Education in a position with the Illinois Century Network as of
18June 30, 2004 shall be considered to be an employee for so long
19as he or she remains continuously employed after that date by
20the Department of Central Management Services in a position
21with the Illinois Century Network, the Bureau of Communication
22and Computer Services, or, if applicable, any successor bureau
23and meets the requirements of subsection (a).
24    (k) In the case of doubt as to whether any person is an
25employee within the meaning of this Section, the decision of
26the Board shall be final.

 

 

09700SB1673ham007- 96 -LRB097 07605 EFG 70502 a

1(Source: P.A. 97-651, eff. 1-5-12.)
 
2    (40 ILCS 5/15-107.1 new)
3    Sec. 15-107.1. Tier I employee. "Tier I employee": An
4employee under this Article, other than a participant in the
5self-managed plan under Section 15-158.2, who first became a
6member or participant before January 1, 2011 under any
7reciprocal retirement system or pension fund established under
8this Code other than a retirement system or pension fund
9established under Article 2, 3, 4, 5, 6, or 18 of this Code.
 
10    (40 ILCS 5/15-107.2 new)
11    Sec. 15-107.2. Tier I retiree. "Tier I retiree": A former
12Tier I employee who is receiving a retirement annuity.
13    A person does not become a Tier I retiree by virtue of
14receiving a reversionary, survivors, beneficiary, or
15disability annuity.
 
16    (40 ILCS 5/15-111)  (from Ch. 108 1/2, par. 15-111)
17    Sec. 15-111. Earnings. "Earnings": An amount paid for
18personal services equal to the sum of the basic compensation
19plus extra compensation for summer teaching, overtime or other
20extra service. For periods for which an employee receives
21service credit under subsection (c) of Section 15-113.1 or
22Section 15-113.2, earnings are equal to the basic compensation
23on which contributions are paid by the employee during such

 

 

09700SB1673ham007- 97 -LRB097 07605 EFG 70502 a

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

 

 

09700SB1673ham007- 98 -LRB097 07605 EFG 70502 a

1"earnings" does not include any future increase in income
2offered by an employer under this Article pursuant to the
3requirements of subsection (c) of Section 15-134.6 that is
4accepted by a Tier I employee, or a Tier I retiree returning to
5active service, who has made an election under paragraph (2) of
6subsection (a) or (a-5) of Section 15-134.6.
7(Source: P.A. 91-887, eff. 7-6-00.)
 
8    (40 ILCS 5/15-111.1 new)
9    Sec. 15-111.1. Future increase in income. "Future increase
10in income": Any increase in income in any form offered by an
11employer to an employee under this Article after June 30, 2013
12that would qualify as "earnings", as defined under Section
1315-111, but for the fact that the employer offered the increase
14in income to the employee on the condition that it not qualify
15as earnings and the employee accepted the increase in income
16subject to that condition. The term "future increase in income"
17does not include an increase in income in any form that is paid
18to a Tier I employee under an employment contract or collective
19bargaining agreement that is in effect on the effective date of
20this Section but does include an increase in income in any form
21pursuant to an extension, amendment, or renewal of any such
22employment contract or collective bargaining agreement on or
23after the effective date of this amendatory Act of the 97th
24General Assembly.
 

 

 

09700SB1673ham007- 99 -LRB097 07605 EFG 70502 a

1    (40 ILCS 5/15-113.2)  (from Ch. 108 1/2, par. 15-113.2)
2    Sec. 15-113.2. Service for leaves of absence. "Service for
3leaves of absence" includes those periods of leaves of absence
4at less than 50% pay, except military leave and periods of
5disability leave in excess of 60 days, for which the employee
6pays the contributions required under Section 15-157 in
7accordance with rules prescribed by the board based upon the
8employee's basic compensation on the date the leave begins, or
9in the case of leave for service with a teacher organization,
10based upon the actual compensation received by the employee for
11such service after January 26, 1988, if the employee so elects
12within 30 days of that date or the date the leave for service
13with a teacher organization begins, whichever is later;
14provided that the employee (1) returns to employment covered by
15this system at the expiration of the leave, or within 30 days
16after the termination of a disability which occurs during the
17leave and continues this employment at a percentage of time
18equal to or greater than the percentage of time immediately
19preceding the leave of absence for at least 8 consecutive
20months or a period equal to the period of the leave, whichever
21is less, or (2) is precluded from meeting the foregoing
22conditions because of disability or death. If service credit is
23denied because the employee fails to meet these conditions, the
24contributions covering the leave of absence shall be refunded
25without interest. The return to employment condition does not
26apply if the leave of absence is for service with a teacher

 

 

09700SB1673ham007- 100 -LRB097 07605 EFG 70502 a

1organization.
2    Service credit provided under this Section shall not exceed
33 years in any period of 10 years, unless the employee is on
4special leave granted by the employer for service with a
5teacher organization. Commencing with the fourth year in any
6period of 10 years, a participant on such special leave is also
7required to pay employer contributions equal to the normal cost
8as defined in Section 15-155, based upon the employee's basic
9compensation on the date the leave begins, or based upon the
10actual compensation received by the employee for service with a
11teacher organization if the employee has so elected.
12    Notwithstanding any other provision of this Article, a
13participant shall not be eligible to make contributions or
14receive service credit for a leave of absence for service with
15a teacher organization if that leave of absence for service
16with a teacher organization begins on or after the effective
17date of this amendatory Act of the 97th General Assembly.
18(Source: P.A. 90-65, eff. 7-7-97; 90-511, eff. 8-22-97.)
 
19    (40 ILCS 5/15-134.6 new)
20    Sec. 15-134.6. Election by Tier I employees and Tier I
21retirees.
22    (a) Each Tier I employee shall make an irrevocable election
23either:
24        (1) to agree to the following:
25            (i) to have the amount of the automatic annual

 

 

09700SB1673ham007- 101 -LRB097 07605 EFG 70502 a

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

 

 

09700SB1673ham007- 102 -LRB097 07605 EFG 70502 a

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

 

 

09700SB1673ham007- 103 -LRB097 07605 EFG 70502 a

1    (a-5).
2    If a Tier I retiree fails for any reason to make a required
3election under this subsection within the time specified, then
4the Tier I retiree shall be deemed to have made the election
5under paragraph (2) of this subsection.
6    (a-10) All elections under subsection (a) or (a-5) that are
7made or deemed to be made before June 1, 2013 shall take effect
8on July 1, 2013. Elections that are made or deemed to be made
9on or after June 1, 2013 shall take effect on the first day of
10the month following the month in which the election is made or
11deemed to be made.
12    (b) As adequate and legal consideration provided under this
13amendatory Act of the 97th General Assembly for making the
14election under paragraph (1) of subsection (a) of this Section,
15any future increases in income offered by an employer under
16this Article to a Tier I employee who has made the election
17under paragraph (1) of subsection (a) of this Section shall be
18offered expressly and irrevocably as constituting earnings
19under Section 15-111.
20    As adequate and legal consideration provided under this
21amendatory Act of the 97th General Assembly for making the
22election under paragraph (1) of subsection (a-5) of this
23Section, any future increases in income offered by an employer
24under this Article to a Tier I retiree who returns to active
25service after having made the election under paragraph (1) of
26subsection (a-5) of this Section shall be offered expressly and

 

 

09700SB1673ham007- 104 -LRB097 07605 EFG 70502 a

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

 

 

09700SB1673ham007- 105 -LRB097 07605 EFG 70502 a

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

 

 

09700SB1673ham007- 106 -LRB097 07605 EFG 70502 a

1required under this Section from any other available source,
2including but not limited to labor organizations and private
3counsel.
4    The System shall coordinate with the Illinois Department of
5Central Management Services and each other retirement system
6administering an election in accordance with this amendatory
7Act of the 97th General Assembly to provide information
8concerning the impact of the election under this Section.
9    In no event shall the System, its staff, or the Board be
10held liable for any information given to a member, beneficiary,
11or annuitant regarding the elections under this Section.
12    (e) Notwithstanding any other provision of law, an employer
13under this Article is required to offer any future increases in
14income expressly and irrevocably as not constituting
15"earnings" under Section 15-111 to any Tier I employee, or Tier
16I retiree returning to active service, who has made an election
17under paragraph (2) or subsection (a) or (a-5) of this Section.
18A Tier I employee, or Tier I retiree returning to active
19service, who has made an election under paragraph (2) of
20subsection (a) or (a-5) of this Section shall not accept any
21future increase in income that is offered by an employer under
22this Article in violation of the requirement set forth in this
23subsection.
24    (f) A member's election under this Section is not a
25prohibited election under subdivision (j)(1) of Section 1-119
26of the Illinois Pension Code.

 

 

09700SB1673ham007- 107 -LRB097 07605 EFG 70502 a

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

 

 

09700SB1673ham007- 108 -LRB097 07605 EFG 70502 a

1        (i) the normal annuity which can be provided on an
2    actuarially equivalent basis, by the accumulated normal
3    contributions as of the date the annuity begins;
4        (ii) an annuity from employer contributions of an
5    amount equal to that which can be provided on an
6    actuarially equivalent basis from the accumulated normal
7    contributions made by the participant under Section
8    15-113.6 and Section 15-113.7 plus 1.4 times all other
9    accumulated normal contributions made by the participant;
10    and
11        (iii) the annuity that can be provided on an
12    actuarially equivalent basis from the entire contribution
13    made by the participant under Section 15-113.3.
14    With respect to a police officer or firefighter who retires
15on or after August 14, 1998, the accumulated normal
16contributions taken into account under clauses (i) and (ii) of
17this Rule 2 shall include the additional normal contributions
18made by the police officer or firefighter under Section
1915-157(a).
20    The amount of a retirement annuity calculated under this
21Rule 2 shall be computed solely on the basis of the
22participant's accumulated normal contributions, as specified
23in this Rule and defined in Section 15-116. Neither an employee
24or employer contribution for early retirement under Section
2515-136.2 nor any other employer contribution shall be used in
26the calculation of the amount of a retirement annuity under

 

 

09700SB1673ham007- 109 -LRB097 07605 EFG 70502 a

1this Rule 2.
2    This amendatory Act of the 91st General Assembly is a
3clarification of existing law and applies to every participant
4and annuitant without regard to whether status as an employee
5terminates before the effective date of this amendatory Act.
6    This Rule 2 does not apply to a person who first becomes an
7employee under this Article on or after July 1, 2005.
8    Rule 3: The retirement annuity of a participant who is
9employed at least one-half time during the period on which his
10or her final rate of earnings is based, shall be equal to the
11participant's years of service not to exceed 30, multiplied by
12(1) $96 if the participant's final rate of earnings is less
13than $3,500, (2) $108 if the final rate of earnings is at least
14$3,500 but less than $4,500, (3) $120 if the final rate of
15earnings is at least $4,500 but less than $5,500, (4) $132 if
16the final rate of earnings is at least $5,500 but less than
17$6,500, (5) $144 if the final rate of earnings is at least
18$6,500 but less than $7,500, (6) $156 if the final rate of
19earnings is at least $7,500 but less than $8,500, (7) $168 if
20the final rate of earnings is at least $8,500 but less than
21$9,500, and (8) $180 if the final rate of earnings is $9,500 or
22more, except that the annuity for those persons having made an
23election under Section 15-154(a-1) shall be calculated and
24payable under the portable retirement benefit program pursuant
25to the provisions of Section 15-136.4.
26    Rule 4: A participant who is at least age 50 and has 25 or

 

 

09700SB1673ham007- 110 -LRB097 07605 EFG 70502 a

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

 

 

09700SB1673ham007- 111 -LRB097 07605 EFG 70502 a

1early retirement under the provisions of Section 15-136.2 and
2who, on or before February 16, 1995, brought administrative
3proceedings pursuant to the administrative rules adopted by the
4System to challenge the calculation of his or her retirement
5annuity shall be the sum of the following, determined from
6amounts credited to the participant in accordance with the
7actuarial tables and the prescribed rate of interest in effect
8at the time the retirement annuity begins:
9        (i) the normal annuity which can be provided on an
10    actuarially equivalent basis, by the accumulated normal
11    contributions as of the date the annuity begins; and
12        (ii) an annuity from employer contributions of an
13    amount equal to that which can be provided on an
14    actuarially equivalent basis from the accumulated normal
15    contributions made by the participant under Section
16    15-113.6 and Section 15-113.7 plus 1.4 times all other
17    accumulated normal contributions made by the participant;
18    and
19        (iii) an annuity which can be provided on an
20    actuarially equivalent basis from the employee
21    contribution for early retirement under Section 15-136.2,
22    and an annuity from employer contributions of an amount
23    equal to that which can be provided on an actuarially
24    equivalent basis from the employee contribution for early
25    retirement under Section 15-136.2.
26    In no event shall a retirement annuity under this Rule 5 be

 

 

09700SB1673ham007- 112 -LRB097 07605 EFG 70502 a

1lower than the amount obtained by adding (1) the monthly amount
2obtained by dividing the combined employee and employer
3contributions made under Section 15-136.2 by the System's
4annuity factor for the age of the participant at the beginning
5of the annuity payment period and (2) the amount equal to the
6participant's annuity if calculated under Rule 1, reduced under
7Section 15-136(b) as if no contributions had been made under
8Section 15-136.2.
9    With respect to a participant who is qualified for a
10retirement annuity under this Rule 5 whose retirement annuity
11began before the effective date of this amendatory Act of the
1291st General Assembly, and for whom an employee contribution
13was made under Section 15-136.2, the System shall recalculate
14the retirement annuity under this Rule 5 and shall pay any
15additional amounts due in the manner provided in Section
1615-186.1 for benefits mistakenly set too low.
17    The amount of a retirement annuity calculated under this
18Rule 5 shall be computed solely on the basis of those
19contributions specifically set forth in this Rule 5. Except as
20provided in clause (iii) of this Rule 5, neither an employee
21nor employer contribution for early retirement under Section
2215-136.2, nor any other employer contribution, shall be used in
23the calculation of the amount of a retirement annuity under
24this Rule 5.
25    The General Assembly has adopted the changes set forth in
26Section 25 of this amendatory Act of the 91st General Assembly

 

 

09700SB1673ham007- 113 -LRB097 07605 EFG 70502 a

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

 

 

09700SB1673ham007- 114 -LRB097 07605 EFG 70502 a

1    police officer or firefighter, if these duties were
2    performed for at least 5 years immediately preceding the
3    date the retirement annuity is to begin.
4    (c) The maximum retirement annuity provided under Rules 1,
52, 4, and 5 shall be the lesser of (1) the annual limit of
6benefits as specified in Section 415 of the Internal Revenue
7Code of 1986, as such Section may be amended from time to time
8and as such benefit limits shall be adjusted by the
9Commissioner of Internal Revenue, and (2) 80% of final rate of
10earnings.
11    (d) Subject to the provisions of subsections (d-1) and
12(d-2), an An annuitant whose status as an employee terminates
13after August 14, 1969 shall receive automatic increases in his
14or her retirement annuity as follows:
15    Effective January 1 immediately following the date the
16retirement annuity begins, the annuitant shall receive an
17increase in his or her monthly retirement annuity of 0.125% of
18the monthly retirement annuity provided under Rule 1, Rule 2,
19Rule 3, Rule 4, or Rule 5, contained in this Section,
20multiplied by the number of full months which elapsed from the
21date the retirement annuity payments began to January 1, 1972,
22plus 0.1667% of such annuity, multiplied by the number of full
23months which elapsed from January 1, 1972, or the date the
24retirement annuity payments began, whichever is later, to
25January 1, 1978, plus 0.25% of such annuity multiplied by the
26number of full months which elapsed from January 1, 1978, or

 

 

09700SB1673ham007- 115 -LRB097 07605 EFG 70502 a

1the date the retirement annuity payments began, whichever is
2later, to the effective date of the increase.
3    The annuitant shall receive an increase in his or her
4monthly retirement annuity on each January 1 thereafter during
5the annuitant's life of 3% of the monthly annuity provided
6under Rule 1, Rule 2, Rule 3, Rule 4, or Rule 5 contained in
7this Section. The change made under this subsection by P.A.
881-970 is effective January 1, 1980 and applies to each
9annuitant whose status as an employee terminates before or
10after that date.
11    Beginning January 1, 1990 and except as provided in
12subsections (d-1) and (d-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 all increases previously granted under this Article.
16    The change made in this subsection by P.A. 85-1008 is
17effective January 26, 1988, and is applicable without regard to
18whether status as an employee terminated before that date.
19    (d-1) Notwithstanding any other provision of this Article,
20for a Tier I employee or Tier I retiree who made the election
21under paragraph (1) of either subsection (a) or (a-5) of
22Section 15-134.6, the amount of each automatic annual increase
23in retirement annuity occurring on or after the effective date
24of that election shall be 3% or one-half of the annual
25unadjusted percentage increase, if any, in the Consumer Price
26Index-U for the 12 months ending with the preceding September,

 

 

09700SB1673ham007- 116 -LRB097 07605 EFG 70502 a

1whichever is less, of the originally granted retirement
2annuity. For the purposes of this Section, "Consumer Price
3Index-U" means the index published by the Bureau of Labor
4Statistics of the United States Department of Labor that
5measures the average change in prices of goods and services
6purchased by all urban consumers, United States city average,
7all items, 1982-84 = 100.
8    (d-2) Notwithstanding any other provision of this Article,
9for a Tier I employee or Tier I retiree who made the election
10under paragraph (1) of subsection (a) or (a-5) of Section
1115-134.6, the monthly retirement annuity shall first be subject
12to annual increases on the January 1 occurring on or next after
13the attainment of age 67 or the January 1 occurring on or next
14after the fifth anniversary of the annuity start date,
15whichever occurs earlier. If on the effective date of the
16election under paragraph (1) of subsection (a-5) of Section
1715-134.6 a Tier I retiree has already received an annual
18increase under this Section but does not yet meet the new
19eligibility requirements of this subsection, the annual
20increases already received shall continue in force, but no
21additional annual increase shall be granted until the Tier I
22retiree meets the new eligibility requirements.
23    (e) If, on January 1, 1987, or the date the retirement
24annuity payment period begins, whichever is later, the sum of
25the retirement annuity provided under Rule 1 or Rule 2 of this
26Section and the automatic annual increases provided under the

 

 

09700SB1673ham007- 117 -LRB097 07605 EFG 70502 a

1preceding subsection or Section 15-136.1, amounts to less than
2the retirement annuity which would be provided by Rule 3, the
3retirement annuity shall be increased as of January 1, 1987, or
4the date the retirement annuity payment period begins,
5whichever is later, to the amount which would be provided by
6Rule 3 of this Section. Such increased amount shall be
7considered as the retirement annuity in determining benefits
8provided under other Sections of this Article. This paragraph
9applies without regard to whether status as an employee
10terminated before the effective date of this amendatory Act of
111987, provided that the annuitant was employed at least
12one-half time during the period on which the final rate of
13earnings was based.
14    (f) A participant is entitled to such additional annuity as
15may be provided on an actuarially equivalent basis, by any
16accumulated additional contributions to his or her credit.
17However, the additional contributions made by the participant
18toward the automatic increases in annuity provided under this
19Section shall not be taken into account in determining the
20amount of such additional annuity.
21    (g) If, (1) by law, a function of a governmental unit, as
22defined by Section 20-107 of this Code, is transferred in whole
23or in part to an employer, and (2) a participant transfers
24employment from such governmental unit to such employer within
256 months after the transfer of the function, and (3) the sum of
26(A) the annuity payable to the participant under Rule 1, 2, or

 

 

09700SB1673ham007- 118 -LRB097 07605 EFG 70502 a

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

 

 

09700SB1673ham007- 119 -LRB097 07605 EFG 70502 a

1    (a) Except as otherwise provided in this Section, the The
2State of Illinois shall make contributions by appropriations of
3amounts which, together with the other employer contributions
4from trust, federal, and other funds, employee contributions,
5income from investments, and other income of this System, will
6be sufficient to meet the cost of maintaining and administering
7the System on a 90% funded basis in accordance with actuarial
8recommendations.
9    The Board shall determine the amount of State contributions
10required for each fiscal year on the basis of the actuarial
11tables and other assumptions adopted by the Board and the
12recommendations of the actuary, using the formula in subsection
13(a-1).
14    (a-1) Except as otherwise provided in this Section, for For
15State fiscal years 2012 through 2045, the minimum contribution
16to the System to be made by the State for each fiscal year
17shall be an amount determined by the System to be sufficient to
18bring the total assets of the System up to 90% of the total
19actuarial liabilities of the System by the end of State fiscal
20year 2045. In making these determinations, the required State
21contribution shall be calculated each year as a level
22percentage of payroll over the years remaining to and including
23fiscal year 2045 and shall be determined under the projected
24unit credit actuarial cost method.
25    For State fiscal years 1996 through 2005, the State
26contribution to the System, as a percentage of the applicable

 

 

09700SB1673ham007- 120 -LRB097 07605 EFG 70502 a

1employee payroll, shall be increased in equal annual increments
2so that by State fiscal year 2011, the State is contributing at
3the rate required under this Section.
4    Notwithstanding any other provision of this Article, the
5total required State contribution for State fiscal year 2006 is
6$166,641,900.
7    Notwithstanding any other provision of this Article, the
8total required State contribution for State fiscal year 2007 is
9$252,064,100.
10    For each of State fiscal years 2008 through 2009, the State
11contribution to the System, as a percentage of the applicable
12employee payroll, shall be increased in equal annual increments
13from the required State contribution for State fiscal year
142007, so that by State fiscal year 2011, the State is
15contributing at the rate otherwise required under this Section.
16    Notwithstanding any other provision of this Article, the
17total required State contribution for State fiscal year 2010 is
18$702,514,000 and shall be made from the State Pensions Fund and
19proceeds of bonds sold in fiscal year 2010 pursuant to Section
207.2 of the General Obligation Bond Act, less (i) the pro rata
21share of bond sale expenses determined by the System's share of
22total bond proceeds, (ii) any amounts received from the General
23Revenue Fund in fiscal year 2010, (iii) any reduction in bond
24proceeds due to the issuance of discounted bonds, if
25applicable.
26    Notwithstanding any other provision of this Article, the

 

 

09700SB1673ham007- 121 -LRB097 07605 EFG 70502 a

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

 

 

09700SB1673ham007- 122 -LRB097 07605 EFG 70502 a

1System under Section 25 of the Budget Stabilization Act.
2    Notwithstanding any other provision of this Section, the
3required State contribution for State fiscal year 2005 and for
4fiscal year 2008 and each fiscal year thereafter, as calculated
5under this Section and certified under Section 15-165, shall
6not exceed an amount equal to (i) the amount of the required
7State contribution that would have been calculated under this
8Section for that fiscal year if the System had not received any
9payments under subsection (d) of Section 7.2 of the General
10Obligation Bond Act, minus (ii) the portion of the State's
11total debt service payments for that fiscal year on the bonds
12issued in fiscal year 2003 for the purposes of that Section
137.2, as determined and certified by the Comptroller, that is
14the same as the System's portion of the total moneys
15distributed under subsection (d) of Section 7.2 of the General
16Obligation Bond Act. In determining this maximum for State
17fiscal years 2008 through 2010, however, the amount referred to
18in item (i) shall be increased, as a percentage of the
19applicable employee payroll, in equal increments calculated
20from the sum of the required State contribution for State
21fiscal year 2007 plus the applicable portion of the State's
22total debt service payments for fiscal year 2007 on the bonds
23issued in fiscal year 2003 for the purposes of Section 7.2 of
24the General Obligation Bond Act, so that, by State fiscal year
252011, the State is contributing at the rate otherwise required
26under this Section.

 

 

09700SB1673ham007- 123 -LRB097 07605 EFG 70502 a

1    (a-5) If at least 50% of the Tier I employees making an
2election under Section 15-134.6 before June 1, 2013 choose the
3option under paragraph (1) of subsection (a) of that Section,
4then:
5        (1) In lieu of the State contributions required under
6    subsection (a-1), for State fiscal years 2014 through 2043
7    the minimum contribution to the System to be made by the
8    State for each fiscal year shall be an amount determined by
9    the System to be equal to the sum of (1) the State's
10    portion of the projected normal cost for that fiscal year,
11    plus (2) an amount sufficient to bring the total assets of
12    the System up to 100% of the total actuarial liabilities of
13    the System by the end of State fiscal year 2043. In making
14    these determinations, the required State contribution
15    shall be calculated each year as a level percentage of
16    payroll over the years remaining to and including fiscal
17    year 2043 and shall be determined under the projected unit
18    credit actuarial cost method.
19        (2) Beginning in State fiscal year 2044, the minimum
20    State contribution for each fiscal year shall be the amount
21    needed to maintain the total assets of the System at 100%
22    of the total actuarial liabilities of the System.
23    (a-6) If less than 50% of the Tier I employees making an
24election under Section 15-134.6 before June 1, 2013 choose the
25option under paragraph (1) of subsection (a) of that Section,
26then:

 

 

09700SB1673ham007- 124 -LRB097 07605 EFG 70502 a

1        (1) Instead of the annual required contribution
2    otherwise specified in subsection (a-5) of this Section,
3    the annual required contribution to the System to be made
4    by the State shall be determined under subsection (a-1) of
5    this Section.
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    (b) If an employee is paid from trust or federal funds, the
10employer shall pay to the Board contributions from those funds
11which are sufficient to cover the accruing normal costs on
12behalf of the employee. However, universities having employees
13who are compensated out of local auxiliary funds, income funds,
14or service enterprise funds are not required to pay such
15contributions on behalf of those employees. The local auxiliary
16funds, income funds, and service enterprise funds of
17universities shall not be considered trust funds for the
18purpose of this Article, but funds of alumni associations,
19foundations, and athletic associations which are affiliated
20with the universities included as employers under this Article
21and other employers which do not receive State appropriations
22are considered to be trust funds for the purpose of this
23Article.
24    (b-1) The City of Urbana and the City of Champaign shall
25each make employer contributions to this System for their
26respective firefighter employees who participate in this

 

 

09700SB1673ham007- 125 -LRB097 07605 EFG 70502 a

1System pursuant to subsection (h) of Section 15-107. The rate
2of contributions to be made by those municipalities shall be
3determined annually by the Board on the basis of the actuarial
4assumptions adopted by the Board and the recommendations of the
5actuary, and shall be expressed as a percentage of salary for
6each such employee. The Board shall certify the rate to the
7affected municipalities as soon as may be practical. The
8employer contributions required under this subsection shall be
9remitted by the municipality to the System at the same time and
10in the same manner as employee contributions.
11    (c) Through State fiscal year 1995: The total employer
12contribution shall be apportioned among the various funds of
13the State and other employers, whether trust, federal, or other
14funds, in accordance with actuarial procedures approved by the
15Board. State of Illinois contributions for employers receiving
16State appropriations for personal services shall be payable
17from appropriations made to the employers or to the System. The
18contributions for Class I community colleges covering earnings
19other than those paid from trust and federal funds, shall be
20payable solely from appropriations to the Illinois Community
21College Board or the System for employer contributions.
22    (d) Beginning in State fiscal year 1996, the required State
23contributions to the System shall be appropriated directly to
24the System and shall be payable through vouchers issued in
25accordance with subsection (c) of Section 15-165, except as
26provided in subsection (g).

 

 

09700SB1673ham007- 126 -LRB097 07605 EFG 70502 a

1    (e) The State Comptroller shall draw warrants payable to
2the System upon proper certification by the System or by the
3employer in accordance with the appropriation laws and this
4Code.
5    (f) Normal costs under this Section means liability for
6pensions and other benefits which accrues to the System because
7of the credits earned for service rendered by the participants
8during the fiscal year and expenses of administering the
9System, but shall not include the principal of or any
10redemption premium or interest on any bonds issued by the Board
11or any expenses incurred or deposits required in connection
12therewith.
13    (g) If the amount of a participant's earnings for any
14academic year used to determine the final rate of earnings,
15determined on a full-time equivalent basis, exceeds the amount
16of his or her earnings with the same employer for the previous
17academic year, determined on a full-time equivalent basis, by
18more than 6%, the participant's employer shall pay to the
19System, in addition to all other payments required under this
20Section and in accordance with guidelines established by the
21System, the present value of the increase in benefits resulting
22from the portion of the increase in earnings that is in excess
23of 6%. This present value shall be computed by the System on
24the basis of the actuarial assumptions and tables used in the
25most recent actuarial valuation of the System that is available
26at the time of the computation. The System may require the

 

 

09700SB1673ham007- 127 -LRB097 07605 EFG 70502 a

1employer to provide any pertinent information or
2documentation. The changes to this subsection (removing the 6%
3increase permitted without payment to the System by the
4employer) made by this amendatory Act of the 97th General
5Assembly do not apply to an employee who is covered by a
6collective bargaining agreement or employment contract in
7effect on the effective date of this amendatory Act that
8provides for such increases, until such time as that agreement
9or contract expires or is amended or renewed.
10    Whenever it determines that a payment is or may be required
11under this subsection (g), the System shall calculate the
12amount of the payment and bill the employer for that amount.
13The bill shall specify the calculations used to determine the
14amount due. If the employer disputes the amount of the bill, it
15may, within 30 days after receipt of the bill, apply to the
16System in writing for a recalculation. The application must
17specify in detail the grounds of the dispute and, if the
18employer asserts that the calculation is subject to subsection
19(h) or (i) of this Section, must include an affidavit setting
20forth and attesting to all facts within the employer's
21knowledge that are pertinent to the applicability of subsection
22(h) or (i). Upon receiving a timely application for
23recalculation, the System shall review the application and, if
24appropriate, recalculate the amount due.
25    The employer contributions required under this subsection
26(g) (f) may be paid in the form of a lump sum within 90 days

 

 

09700SB1673ham007- 128 -LRB097 07605 EFG 70502 a

1after receipt of the bill. If the employer contributions are
2not paid within 90 days after receipt of the bill, then
3interest will be charged at a rate equal to the System's annual
4actuarially assumed rate of return on investment compounded
5annually from the 91st day after receipt of the bill. Payments
6must be concluded within 3 years after the employer's receipt
7of the bill.
8    (h) This subsection (h) applies only to payments made or
9salary increases given on or after June 1, 2005 but before July
101, 2011. The changes made by Public Act 94-1057 shall not
11require the System to refund any payments received before July
1231, 2006 (the effective date of Public Act 94-1057).
13    When assessing payment for any amount due under subsection
14(g), the System shall exclude earnings increases paid to
15participants under contracts or collective bargaining
16agreements entered into, amended, or renewed before June 1,
172005.
18    When assessing payment for any amount due under subsection
19(g), the System shall exclude earnings increases paid to a
20participant at a time when the participant is 10 or more years
21from retirement eligibility under Section 15-135.
22    When assessing payment for any amount due under subsection
23(g), the System shall exclude earnings increases resulting from
24overload work, including a contract for summer teaching, or
25overtime when the employer has certified to the System, and the
26System has approved the certification, that: (i) in the case of

 

 

09700SB1673ham007- 129 -LRB097 07605 EFG 70502 a

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

 

 

09700SB1673ham007- 130 -LRB097 07605 EFG 70502 a

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

 

 

09700SB1673ham007- 131 -LRB097 07605 EFG 70502 a

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

 

 

09700SB1673ham007- 132 -LRB097 07605 EFG 70502 a

1    (n) If the System submits a voucher for monthly
2contributions from the State as required by this Section and
3the State fails to pay within 90 days of receipt of such a
4voucher, the Board shall submit a written request to the
5Comptroller seeking payment. A copy of the request shall be
6filed with the Secretary of State, and the Secretary of State
7shall provide copies to the Governor and General Assembly. No
8earlier than the 16th day after filing a request with the
9Secretary of State, the Board shall have the right to commence
10a mandamus action in the Supreme Court of Illinois to compel
11the Comptroller to satisfy the voucher by making payment from
12the General Revenue Fund. This Section constitutes an express
13waiver of the State's sovereign immunity solely to the extent
14it permits the Board to commence a mandamus action in the
15Illinois Supreme Court to compel the Comptroller to pay a
16voucher for monthly contributions from the State as required in
17this Section.
18(Source: P.A. 95-331, eff. 8-21-07; 95-950, eff. 8-29-08;
1996-43, eff. 7-15-09; 96-1497, eff. 1-14-11; 96-1511, eff.
201-27-11; 96-1554, eff. 3-18-11; revised 4-6-11.)
 
21    (40 ILCS 5/15-155.1 new)
22    Sec. 15-155.1. Actions to enforce payment by employers. If
23reports furnished to the System by the employer involved are
24inadequate for the computation of the amounts of any payments,
25the System may provide for such audit of the records of the

 

 

09700SB1673ham007- 133 -LRB097 07605 EFG 70502 a

1employer as may be required to establish the amounts of the
2delinquent payments. The employer shall make its records
3available to the System for the purpose of the audit. The cost
4of the audit shall be added to the amount of the payments and
5shall be recovered by the System from the employer at the same
6time and in the same manner as the payments are recovered.
 
7    (40 ILCS 5/15-163)  (from Ch. 108 1/2, par. 15-163)
8    Sec. 15-163. To consider applications and authorize
9payments.
10    To consider and pass on all certifications of employment
11and applications for annuities and benefits; to authorize the
12granting of annuities and benefits; and to limit or suspend any
13payment or payments, all in accordance with this Article.
14(Source: Laws 1963, p. 161.)
 
15    (40 ILCS 5/15-165)   (from Ch. 108 1/2, par. 15-165)
16    Sec. 15-165. To certify amounts and submit vouchers.
17    (a) The Board shall certify to the Governor on or before
18November 15 of each year until November 15, 2011 the
19appropriation required from State funds for the purposes of
20this System for the following fiscal year. The certification
21under this subsection (a) shall include a copy of the actuarial
22recommendations upon which it is based and shall specifically
23identify the System's projected State normal cost for that
24fiscal year and the projected State cost for the self-managed

 

 

09700SB1673ham007- 134 -LRB097 07605 EFG 70502 a

1plan for that fiscal year.
2    On or before May 1, 2004, the Board shall recalculate and
3recertify to the Governor the amount of the required State
4contribution to the System for State fiscal year 2005, taking
5into account the amounts appropriated to and received by the
6System under subsection (d) of Section 7.2 of the General
7Obligation Bond Act.
8    On or before July 1, 2005, the Board shall recalculate and
9recertify to the Governor the amount of the required State
10contribution to the System for State fiscal year 2006, taking
11into account the changes in required State contributions made
12by this amendatory Act of the 94th General Assembly.
13    On or before April 1, 2011, the Board shall recalculate and
14recertify to the Governor the amount of the required State
15contribution to the System for State fiscal year 2011, applying
16the changes made by Public Act 96-889 to the System's assets
17and liabilities as of June 30, 2009 as though Public Act 96-889
18was approved on that date.
19    (a-5) On or before November 1 of each year, beginning
20November 1, 2012, the Board shall submit to the State Actuary,
21the Governor, and the General Assembly a proposed certification
22of the amount of the required State contribution to the System
23for the next fiscal year, along with all of the actuarial
24assumptions, calculations, and data upon which that proposed
25certification is based. On or before January 1 of each year,
26beginning January 1, 2013, the State Actuary shall issue a

 

 

09700SB1673ham007- 135 -LRB097 07605 EFG 70502 a

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

 

 

09700SB1673ham007- 136 -LRB097 07605 EFG 70502 a

1determined under this Section after taking into consideration
2the transfer to the System under subsection (b) of Section
36z-61 of the State Finance Act. These vouchers shall be paid by
4the State Comptroller and Treasurer by warrants drawn on the
5funds appropriated to the System for that fiscal year.
6    If in any month the amount remaining unexpended from all
7other appropriations to the System for the applicable fiscal
8year (including the appropriations to the System under Section
98.12 of the State Finance Act and Section 1 of the State
10Pension Funds Continuing Appropriation Act) is less than the
11amount lawfully vouchered under this Section, the difference
12shall be paid from the General Revenue Fund under the
13continuing appropriation authority provided in Section 1.1 of
14the State Pension Funds Continuing Appropriation Act.
15    (d) So long as the payments received are the full amount
16lawfully vouchered under this Section, payments received by the
17System under this Section shall be applied first toward the
18employer contribution to the self-managed plan established
19under Section 15-158.2. Payments shall be applied second toward
20the employer's portion of the normal costs of the System, as
21defined in subsection (f) of Section 15-155. The balance shall
22be applied toward the unfunded actuarial liabilities of the
23System.
24    (e) In the event that the System does not receive, as a
25result of legislative enactment or otherwise, payments
26sufficient to fully fund the employer contribution to the

 

 

09700SB1673ham007- 137 -LRB097 07605 EFG 70502 a

1self-managed plan established under Section 15-158.2 and to
2fully fund that portion of the employer's portion of the normal
3costs of the System, as calculated in accordance with Section
415-155(a-1), then any payments received shall be applied
5proportionately to the optional retirement program established
6under Section 15-158.2 and to the employer's portion of the
7normal costs of the System, as calculated in accordance with
8Section 15-155(a-1).
9(Source: P.A. 96-1497, eff. 1-14-11; 96-1511, eff. 1-27-11.)
 
10    (40 ILCS 5/15-198)
11    Sec. 15-198. Application and expiration of new benefit
12increases.
13    (a) As used in this Section, "new benefit increase" means
14an increase in the amount of any benefit provided under this
15Article, or an expansion of the conditions of eligibility for
16any benefit under this Article or Article 1, that results from
17an amendment to this Code that takes effect after the effective
18date of this amendatory Act of the 94th General Assembly. "New
19benefit increase", however, does not include any benefit
20increase resulting from the changes made to this Article or
21Article 1 by this amendatory Act of the 97th General Assembly.
22    (b) Notwithstanding any other provision of this Code or any
23subsequent amendment to this Code, every new benefit increase
24is subject to this Section and shall be deemed to be granted
25only in conformance with and contingent upon compliance with

 

 

09700SB1673ham007- 138 -LRB097 07605 EFG 70502 a

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

 

 

09700SB1673ham007- 139 -LRB097 07605 EFG 70502 a

1by law.
2    (e) Except as otherwise provided in the language creating
3the new benefit increase, a new benefit increase that expires
4under this Section continues to apply to persons who applied
5and qualified for the affected benefit while the new benefit
6increase was in effect and to the affected beneficiaries and
7alternate payees of such persons, but does not apply to any
8other person, including without limitation a person who
9continues in service after the expiration date and did not
10apply and qualify for the affected benefit while the new
11benefit increase was in effect.
12(Source: P.A. 94-4, eff. 6-1-05.)
 
13    (40 ILCS 5/16-106)  (from Ch. 108 1/2, par. 16-106)
14    Sec. 16-106. Teacher. "Teacher": The following
15individuals, provided that, for employment prior to July 1,
161990, they are employed on a full-time basis, or if not
17full-time, on a permanent and continuous basis in a position in
18which services are expected to be rendered for at least one
19school term:
20        (1) Any educational, administrative, professional or
21    other staff employed in the public common schools included
22    within this system in a position requiring certification
23    under the law governing the certification of teachers;
24        (2) Any educational, administrative, professional or
25    other staff employed in any facility of the Department of

 

 

09700SB1673ham007- 140 -LRB097 07605 EFG 70502 a

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

 

 

09700SB1673ham007- 141 -LRB097 07605 EFG 70502 a

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

 

 

09700SB1673ham007- 142 -LRB097 07605 EFG 70502 a

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

 

 

09700SB1673ham007- 143 -LRB097 07605 EFG 70502 a

1    pilot program receiving funds under Section 2-389 of the
2    School Code shall be considered service as a teacher if
3    employee and employer contributions have been received by
4    the system and the system has not refunded those
5    contributions.
6    An annuitant receiving a retirement annuity under this
7Article or under Article 17 of this Code who is employed by a
8board of education or other employer as permitted under Section
916-118 or 16-150.1 is not a "teacher" for purposes of this
10Article. A person who has received a single-sum retirement
11benefit under Section 16-136.4 of this Article is not a
12"teacher" for purposes of this Article.
13(Source: P.A. 97-651, eff. 1-5-12.)
 
14    (40 ILCS 5/16-106.4 new)
15    Sec. 16-106.4. Tier I employee. "Tier I employee": A
16teacher under this Article who first became a member or
17participant before January 1, 2011 under any reciprocal
18retirement system or pension fund established under this Code
19other than a retirement system or pension fund established
20under Article 2, 3, 4, 5, 6, or 18 of this Code.
 
21    (40 ILCS 5/16-106.5 new)
22    Sec. 16-106.5. Tier I retiree. "Tier I retiree": A former
23Tier I employee who is receiving a retirement annuity.
 

 

 

09700SB1673ham007- 144 -LRB097 07605 EFG 70502 a

1    (40 ILCS 5/16-106.6 new)
2    Sec. 16-106.6. Teacher certification. For purposes of this
3Article, a teacher shall be deemed to be certificated if he or
4she is required to be licensed by the Illinois State Board of
5Education.
 
6    (40 ILCS 5/16-121)  (from Ch. 108 1/2, par. 16-121)
7    Sec. 16-121. Salary. "Salary": The actual compensation
8received by a teacher during any school year and recognized by
9the system in accordance with rules of the board. For purposes
10of this Section, "school year" includes the regular school term
11plus any additional period for which a teacher is compensated
12and such compensation is recognized by the rules of the board.
13Notwithstanding any other provision of this Section, "salary"
14does not include any future increase in income offered by an
15employer under this Article pursuant to the requirements of
16subsection (c) of Section 16-131.7 that is accepted by a Tier I
17employee, or a Tier I retiree returning to active service, who
18has made an election under paragraph (2) of subsection (a) or
19(a-5) of Section 16-131.7.
20(Source: P.A. 84-1028.)
 
21    (40 ILCS 5/16-121.1 new)
22    Sec. 16-121.1. Future increase in income. "Future increase
23in income": Any increase in income in any form offered by an
24employer to a teacher under this Article after June 30, 2013

 

 

09700SB1673ham007- 145 -LRB097 07605 EFG 70502 a

1that would qualify as "salary", as defined under Section
214-103.10, but for the fact that the employer offered the
3increase in income to the teacher on the condition that it not
4qualify as salary and the teacher accepted the increase in
5income subject to that condition. The term "future increase in
6income" does not include an increase in income in any form that
7is paid to a Tier I employee under an employment contract or
8collective bargaining agreement that is in effect on the
9effective date of this Section but does include an increase in
10income in any form pursuant to an extension, amendment, or
11renewal of any such employment contract or collective
12bargaining agreement on or after the effective date of this
13amendatory Act of the 97th General Assembly.
 
14    (40 ILCS 5/16-127)  (from Ch. 108 1/2, par. 16-127)
15    Sec. 16-127. Computation of creditable service.
16    (a) Each member shall receive regular credit for all
17service as a teacher from the date membership begins, for which
18satisfactory evidence is supplied and all contributions have
19been paid.
20    (b) The following periods of service shall earn optional
21credit and each member shall receive credit for all such
22service for which satisfactory evidence is supplied and all
23contributions have been paid as of the date specified:
24        (1) Prior service as a teacher.
25        (2) Service in a capacity essentially similar or

 

 

09700SB1673ham007- 146 -LRB097 07605 EFG 70502 a

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

 

 

09700SB1673ham007- 147 -LRB097 07605 EFG 70502 a

1    such service credit exceeds the maximum allowed for all
2    purposes of this Article, the first service rendered in
3    point of time shall be considered. The changes to this
4    subdivision (b)(2) made by Public Act 86-272 shall apply
5    not only to persons who on or after its effective date
6    (August 23, 1989) are in service as a teacher under the
7    System, but also to persons whose status as such a teacher
8    terminated prior to such effective date, whether or not
9    such person is an annuitant on that date.
10        (3) Any periods immediately following teaching
11    service, under this System or under Article 17, (or
12    immediately following service prior to February 1, 1951 as
13    a recreation worker for the Illinois Department of Public
14    Safety) spent in active service with the military forces of
15    the United States; periods spent in educational programs
16    that prepare for return to teaching sponsored by the
17    federal government following such active military service;
18    if a teacher returns to teaching service within one
19    calendar year after discharge or after the completion of
20    the educational program, a further period, not exceeding
21    one calendar year, between time spent in military service
22    or in such educational programs and the return to
23    employment as a teacher under this System; and a period of
24    up to 2 years of active military service not immediately
25    following employment as a teacher.
26        The changes to this Section and Section 16-128 relating

 

 

09700SB1673ham007- 148 -LRB097 07605 EFG 70502 a

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

 

 

09700SB1673ham007- 149 -LRB097 07605 EFG 70502 a

1    from July 1 of the year in which he or she entered service;
2    if entry occurs during the school term and the teacher was
3    in teaching service at the beginning of the school term,
4    credit shall be granted from July 1 of such year. In all
5    other cases where credit for military service is allowed,
6    credit shall be granted from the date of entry into the
7    service.
8        The total period of military service for which credit
9    is granted shall not exceed 5 years for any member unless
10    the service: (A) is validated before July 1, 1964, and (B)
11    does not extend beyond July 1, 1963. Credit for military
12    service shall be granted under this Section only if not
13    more than 5 years of the military service for which credit
14    is granted under this Section is used by the member to
15    qualify for a military retirement allotment from any branch
16    of the armed forces of the United States. The changes to
17    this subdivision (b)(3) made by Public Act 86-272 shall
18    apply not only to persons who on or after its effective
19    date (August 23, 1989) are in service as a teacher under
20    the System, but also to persons whose status as such a
21    teacher terminated prior to such effective date, whether or
22    not such person is an annuitant on that date.
23        (4) Any periods served as a member of the General
24    Assembly.
25        (5)(i) Any periods for which a teacher, as defined in
26    Section 16-106, is granted a leave of absence, provided he

 

 

09700SB1673ham007- 150 -LRB097 07605 EFG 70502 a

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

 

 

09700SB1673ham007- 151 -LRB097 07605 EFG 70502 a

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

 

 

09700SB1673ham007- 152 -LRB097 07605 EFG 70502 a

1    remainder of the purchase cost of the optional credit shall
2    be paid on or before April 1, 1992.
3        The change in this paragraph made by Public Act 86-273
4    shall be applicable to teachers who retire after June 1,
5    1989, as well as to teachers who are in service on that
6    date.
7        (6) Any days of unused and uncompensated accumulated
8    sick leave earned by a teacher who first became a
9    participant in the System before the effective date of this
10    amendatory Act of the 97th General Assembly. The service
11    credit granted under this paragraph shall be the ratio of
12    the number of unused and uncompensated accumulated sick
13    leave days to 170 days, subject to a maximum of 2 years of
14    service credit. Prior to the member's retirement, each
15    former employer shall certify to the System the number of
16    unused and uncompensated accumulated sick leave days
17    credited to the member at the time of termination of
18    service. The period of unused sick leave shall not be
19    considered in determining the effective date of
20    retirement. A member is not required to make contributions
21    in order to obtain service credit for unused sick leave.
22        Credit for sick leave shall, at retirement, be granted
23    by the System for any retiring regional or assistant
24    regional superintendent of schools who first became a
25    participant in this System before the effective date of
26    this amendatory Act of the 97th General Assembly at the

 

 

09700SB1673ham007- 153 -LRB097 07605 EFG 70502 a

1    rate of 6 days per year of creditable service or portion
2    thereof established while serving as such superintendent
3    or assistant superintendent.
4    Service credit is not available for unused sick leave
5accumulated by a teacher who first becomes a participant in
6this System on or after the effective date of this amendatory
7Act of the 97th General Assembly.
8        (7) Periods prior to February 1, 1987 served as an
9    employee of the Illinois Mathematics and Science Academy
10    for which credit has not been terminated under Section
11    15-113.9 of this Code.
12        (8) Service as a substitute teacher for work performed
13    prior to July 1, 1990.
14        (9) Service as a part-time teacher for work performed
15    prior to July 1, 1990.
16        (10) Up to 2 years of employment with Southern Illinois
17    University - Carbondale from September 1, 1959 to August
18    31, 1961, or with Governors State University from September
19    1, 1972 to August 31, 1974, for which the teacher has no
20    credit under Article 15. To receive credit under this item
21    (10), a teacher must apply in writing to the Board and pay
22    the required contributions before May 1, 1993 and have at
23    least 12 years of service credit under this Article.
24    (b-1) A member may establish optional credit for up to 2
25years of service as a teacher or administrator employed by a
26private school recognized by the Illinois State Board of

 

 

09700SB1673ham007- 154 -LRB097 07605 EFG 70502 a

1Education, provided that the teacher (i) was certified under
2the law governing the certification of teachers at the time the
3service was rendered, (ii) applies in writing on or after
4August 1, 2009 and on or before August 1, 2012, (iii) supplies
5satisfactory evidence of the employment, (iv) completes at
6least 10 years of contributing service as a teacher as defined
7in Section 16-106, and (v) pays the contribution required in
8subsection (d-5) of Section 16-128. The member may apply for
9credit under this subsection and pay the required contribution
10before completing the 10 years of contributing service required
11under item (iv), but the credit may not be used until the item
12(iv) contributing service requirement has been met.
13    (c) The service credits specified in this Section shall be
14granted only if: (1) such service credits are not used for
15credit in any other statutory tax-supported public employee
16retirement system other than the federal Social Security
17program; and (2) the member makes the required contributions as
18specified in Section 16-128. Except as provided in subsection
19(b-1) of this Section, the service credit shall be effective as
20of the date the required contributions are completed.
21    Any service credits granted under this Section shall
22terminate upon cessation of membership for any cause.
23    Credit may not be granted under this Section covering any
24period for which an age retirement or disability retirement
25allowance has been paid.
26(Source: P.A. 96-546, eff. 8-17-09.)
 

 

 

09700SB1673ham007- 155 -LRB097 07605 EFG 70502 a

1    (40 ILCS 5/16-131.7 new)
2    Sec. 16-131.7. Election by Tier I employees and Tier I
3retirees.
4    (a) Each Tier I employee shall make an irrevocable election
5either:
6        (1) to agree to the following:
7            (i) to have the amount of the automatic annual
8        increases in his or her retirement annuity that are
9        otherwise provided for in this Article calculated,
10        instead, as provided in subsection (a-1) of Section
11        16-133.1 or subsection (b-1) of Section 16-136.1,
12        whichever is applicable; 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 16-133.1 or
16        subsection (b-2) of Section 16-136.1, whichever is
17        applicable; or
18        (2) to not agree to items (i) and (ii) as set forth in
19    paragraph (1) of this subsection and to be subject to
20    subsection (c) of this Section.
21    The election required under this subsection (a) shall be
22made by each Tier I employee no earlier than January 1, 2013
23and no later than May 31, 2013, except that:
24        (i) a person who becomes a Tier I employee under this
25    Article after January 1, 2013 must make the election under

 

 

09700SB1673ham007- 156 -LRB097 07605 EFG 70502 a

1    this subsection (a) within 60 days after becoming a Tier I
2    employee;
3        (ii) a person who returns to active service as a Tier I
4    employee under this Article after January 1, 2013 and has
5    not yet made an election under this Section must make the
6    election under this subsection (a) within 60 days after
7    returning to active service as a Tier I employee; and
8        (iii) a person who made the election under subsection
9    (a-5) as a Tier I retiree remains bound by that election
10    and shall not make a later election under this subsection
11    (a).
12    If a Tier I employee fails for any reason to make a
13required election under this subsection within the time
14specified, then the employee shall be deemed to have made the
15election under paragraph (2) of this subsection.
16    (a-5) Each Tier I retiree shall make an irrevocable
17election either:
18        (1) to agree to the following:
19            (i) to have the amount of the automatic annual
20        increases in his or her retirement annuity that are
21        otherwise provided for in this Article calculated,
22        instead, as provided in subsection (a-1) of Section
23        16-133.1 or subsection (b-1) of Section 16-136.1,
24        whichever is applicable; and
25            (ii) to have his or her eligibility for automatic
26        annual increases in retirement annuity postponed as

 

 

09700SB1673ham007- 157 -LRB097 07605 EFG 70502 a

1        provided in subsection (a-2) of Section 16-133.1 or
2        subsection (b-2) of Section 16-136.1, whichever is
3        applicable; or
4        (2) to not agree to items (i) and (ii) as set forth in
5    paragraph (1) of this subsection and to be subject to
6    subsection (c) of this Section.
7    The election required under this subsection (a-5) shall be
8made by each Tier I retiree no earlier than January 1, 2013 and
9no later than May 31, 2013, except that:
10        (i) a person who becomes a Tier I retiree under this
11    Article on or after January 1, 2013 must make the election
12    under this subsection (a-5) within 60 days after becoming a
13    Tier I retiree; and
14        (ii) a person who made the election under subsection
15    (a) as a Tier I employee remains bound by that election and
16    shall not make a later election under this subsection
17    (a-5).
18    If a Tier I retiree fails for any reason to make a required
19election under this subsection within the time specified, then
20the Tier I retiree shall be deemed to have made the election
21under paragraph (2) of this subsection.
22    (a-10) All elections under subsection (a) or (a-5) that are
23made or deemed to be made before June 1, 2013 shall take effect
24on July 1, 2013. Elections that are made or deemed to be made
25on or after June 1, 2013 shall take effect on the first day of
26the month following the month in which the election is made or

 

 

09700SB1673ham007- 158 -LRB097 07605 EFG 70502 a

1deemed to be made.
2    (b) As adequate and legal consideration provided under this
3amendatory Act of the 97th General Assembly for making the
4election under paragraph (1) of subsection (a) of this Section,
5any future increases in income offered by an employer under
6this Article to a Tier I employee who has made the election
7under paragraph (1) of subsection (a) of this Section shall be
8offered expressly and irrevocably as constituting salary under
9Section 16-121.
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 salary under Section 16-121.
18    (c) A Tier I employee who makes the election under
19paragraph (2) of subsection (a) of this Section shall not be
20subject to items (i) and (ii) set forth in paragraph (1) of
21subsection (a) of this Section. However, any future increases
22in income offered by an employer under this Article to a Tier I
23employee who has made the election under paragraph (2) of
24subsection (a) of this Section shall be offered expressly and
25irrevocably as not constituting salary under Section 16-121,
26and the employee may not accept any future increase in income

 

 

09700SB1673ham007- 159 -LRB097 07605 EFG 70502 a

1that is offered in violation of this requirement.
2    A Tier I retiree who makes the election under paragraph (2)
3of subsection (a-5) of this Section shall not be subject to
4items (i) and (ii) set forth in paragraph (1) of subsection
5(a-5) of this Section. However, any future increases in income
6offered by an employer under this Article to a Tier I retiree
7who returns to active service and has made the election under
8paragraph (2) of subsection (a-5) of this Section shall be
9offered expressly and irrevocably as not constituting salary
10under Section 16-121, and the employee may not accept any
11future increase in income that is offered in violation of this
12requirement.
13    (d) The System shall make a good faith effort to contact
14each Tier I employee and Tier I retiree subject to this
15Section. The System shall mail information describing the
16required election to each Tier I employee and Tier I retiree by
17United States Postal Service mail to his or her last known
18address on file with the System. If the Tier I employee or Tier
19I retiree is not responsive to other means of contact, it is
20sufficient for the System to publish the details of any
21required elections on its website or to publish those details
22in a regularly published newsletter or other existing public
23forum.
24    Tier I employees and Tier I retirees who are subject to
25this Section shall be provided with an election packet
26containing information regarding their options, as well as the

 

 

09700SB1673ham007- 160 -LRB097 07605 EFG 70502 a

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

 

 

09700SB1673ham007- 161 -LRB097 07605 EFG 70502 a

1or annuitant regarding the elections under this Section.
2    (e) Notwithstanding any other provision of law, an employer
3under this Article is required to offer any future increases in
4income expressly and irrevocably as not constituting "salary"
5under Section 16-121 to any Tier I employee, or Tier I retiree
6returning to active service, who has made an election under
7paragraph (2) or subsection (a) or (a-5) of Section 16-131.7. A
8Tier I employee, or Tier I retiree returning to active service,
9who has made an election under paragraph (2) or subsection (a)
10or (a-5) of Section 16-131.7 shall not accept any future
11increase in income that is offered by an employer under this
12Article in violation of the requirement set forth in this
13subsection.
14    (f) A member's election under this Section is not a
15prohibited election under subdivision (j)(1) of Section 1-119
16of this Code.
17    (g) No provision of this Section shall be interpreted in a
18way that would cause the System to cease to be a qualified plan
19under section 461 (a) of the Internal Revenue Code of 1986.
 
20    (40 ILCS 5/16-133.1)  (from Ch. 108 1/2, par. 16-133.1)
21    Sec. 16-133.1. Automatic annual increase in annuity.
22    (a) Each member with creditable service and retiring on or
23after August 26, 1969 is entitled to the automatic annual
24increases in annuity provided under this Section while
25receiving a retirement annuity or disability retirement

 

 

09700SB1673ham007- 162 -LRB097 07605 EFG 70502 a

1annuity from the system.
2    An annuitant shall first be entitled to an initial increase
3under this Section on the January 1 next following the first
4anniversary of retirement, or January 1 of the year next
5following attainment of age 61, whichever is later. At such
6time, the system shall pay an initial increase determined as
7follows or as provided in subsections (a-1) and (a-2):
8        (1) 1.5% of the originally granted retirement annuity
9    or disability retirement annuity multiplied by the number
10    of years elapsed, if any, from the date of retirement until
11    January 1, 1972, plus
12        (2) 2% of the originally granted annuity multiplied by
13    the number of years elapsed, if any, from the date of
14    retirement or January 1, 1972, whichever is later, until
15    January 1, 1978, plus
16        (3) 3% of the originally granted annuity multiplied by
17    the number of years elapsed from the date of retirement or
18    January 1, 1978, whichever is later, until the effective
19    date of the initial increase.
20However, the initial annual increase calculated under this
21Section for the recipient of a disability retirement annuity
22granted under Section 16-149.2 shall be reduced by an amount
23equal to the total of all increases in that annuity received
24under Section 16-149.5 (but not exceeding 100% of the amount of
25the initial increase otherwise provided under this Section).
26    Following the initial increase, automatic annual increases

 

 

09700SB1673ham007- 163 -LRB097 07605 EFG 70502 a

1in annuity shall be payable on each January 1 thereafter during
2the lifetime of the annuitant, determined as a percentage of
3the originally granted retirement annuity or disability
4retirement annuity for increases granted prior to January 1,
51990, and calculated as a percentage of the total amount of
6annuity, including previous increases under this Section, for
7increases granted on or after January 1, 1990, as follows: 1.5%
8for periods prior to January 1, 1972, 2% for periods after
9December 31, 1971 and prior to January 1, 1978, and 3% for
10periods after December 31, 1977, or as provided in subsections
11(a-1) and (a-2).
12    (a-1) Notwithstanding any other provision of this Article,
13for a Tier I employee or Tier I retiree who made the election
14under paragraph (1) of either subsection (a) or (a-5) of
15Section 16-131.7, the amount of each automatic annual increase
16in retirement annuity occurring on or after the effective date
17of that election shall be 3% or one-half of the annual
18unadjusted percentage increase, if any, in the Consumer Price
19Index-U for the 12 months ending with the preceding September,
20whichever is less, of the originally granted retirement
21annuity. For the purposes of this Section, "Consumer Price
22Index-U" means the index published by the Bureau of Labor
23Statistics of the United States Department of Labor that
24measures the average change in prices of goods and services
25purchased by all urban consumers, United States city average,
26all items, 1982-84 = 100.

 

 

09700SB1673ham007- 164 -LRB097 07605 EFG 70502 a

1    (a-2) Notwithstanding any other provision of this Article,
2for a Tier I employee or Tier I retiree who made the election
3under paragraph (1) of subsection (a) or (a-5) of Section
416-131.7, the monthly retirement annuity shall first be subject
5to annual increases on the January 1 occurring on or next after
6the attainment of age 67 or the January 1 occurring on or next
7after the fifth anniversary of the annuity start date,
8whichever occurs earlier. If on the effective date of the
9election under paragraph (1) of subsection (a-5) of Section
1016-131.7 a Tier I retiree has already received an annual
11increase under this Section but does not yet meet the new
12eligibility requirements of this subsection, the annual
13increases already received shall continue in force, but no
14additional annual increase shall be granted until the Tier I
15retiree meets the new eligibility requirements.
16    (b) The automatic annual increases in annuity provided
17under this Section shall not be applicable unless a member has
18made contributions toward such increases for a period
19equivalent to one full year of creditable service. If a member
20contributes for service performed after August 26, 1969 but the
21member becomes an annuitant before such contributions amount to
22one full year's contributions based on the salary at the date
23of retirement, he or she may pay the necessary balance of the
24contributions to the system and be eligible for the automatic
25annual increases in annuity provided under this Section.
26    (c) Each member shall make contributions toward the cost of

 

 

09700SB1673ham007- 165 -LRB097 07605 EFG 70502 a

1the automatic annual increases in annuity as provided under
2Section 16-152.
3    (d) An annuitant receiving a retirement annuity or
4disability retirement annuity on July 1, 1969, who subsequently
5re-enters service as a teacher is eligible for the automatic
6annual increases in annuity provided under this Section if he
7or she renders at least one year of creditable service
8following the latest re-entry.
9    (e) In addition to the automatic annual increases in
10annuity provided under this Section, an annuitant who meets the
11service requirements of this Section and whose retirement
12annuity or disability retirement annuity began on or before
13January 1, 1971 shall receive, on January 1, 1981, an increase
14in the annuity then being paid of one dollar per month for each
15year of creditable service. On January 1, 1982, an annuitant
16whose retirement annuity or disability retirement annuity
17began on or before January 1, 1977 shall receive an increase in
18the annuity then being paid of one dollar per month for each
19year of creditable service.
20    On January 1, 1987, any annuitant whose retirement annuity
21began on or before January 1, 1977, shall receive an increase
22in the monthly retirement annuity equal to 8 per year of
23creditable service times the number of years that have elapsed
24since the annuity began.
25(Source: P.A. 91-927, eff. 12-14-00.)
 

 

 

09700SB1673ham007- 166 -LRB097 07605 EFG 70502 a

1    (40 ILCS 5/16-133.6 new)
2    Sec. 16-133.6. Optional teacher early retirement without
3discount. A Tier I employee or Tier I retiree who makes an
4election under paragraph (1) of subsection (a) or (a-5) of
5Section 16-131.7, retires on or after July 1, 2013, and applies
6for a retirement annuity within 6 months of the last day of
7teaching for which retirement contributions were required may
8elect, at the time of application for a retirement annuity, to
9make a one-time member contribution to the System and, thereby,
10avoid the reduction in the retirement annuity for retirement
11before age 60 specified in paragraph (B) of Section 16-133. The
12exercise of the election shall also obligate the last employer
13to make a one-time nonrefundable contribution to the System.
14Substitute teachers wishing to exercise this election must
15teach 85 or more days in one school term with one employer, who
16shall be deemed the last employer for purposes of this Section.
17The last day of teaching with that employer must be within 6
18months of the date of application for retirement. All
19substitute teaching credit applied toward the required 85 days
20must be earned after June 30, 1990.
21    The one-time member and employer contributions shall be a
22percentage of the cost of this benefit as determined by the
23System. However, when determining the one-time member and
24employer contributions, that part of a member's salary with the
25same employer which exceeds the annual salary rate for the
26preceding year by more than 20% shall be excluded. The member

 

 

09700SB1673ham007- 167 -LRB097 07605 EFG 70502 a

1contribution shall be at the rate of 50% of the cost of the
2benefits as determined by the System. The employer contribution
3shall be at the rate of 50% of the cost of the benefits as
4determined by the System.
5    Upon receipt of the application and election, the System
6shall determine the one-time employee and employer
7contributions required. The member contribution shall be
8credited to the individual account of the member and the
9employer contribution shall be credited to the Benefit Trust
10Reserve. The avoidance of the reduction in retirement annuity
11provided under this Section is not applicable until the
12member's contribution, if any, has been received by the System;
13however, the date that contribution is received shall not be
14considered in determining the effective date of retirement.
15    The number of members working for a single employer who may
16retire under this Section in any year may be limited at the
17option of the employer to a specified percentage of those
18eligible, not less than 10%, with the right to participate to
19be allocated among those applying on the basis of seniority in
20the service of the employer.
 
21    (40 ILCS 5/16-136.1)  (from Ch. 108 1/2, par. 16-136.1)
22    Sec. 16-136.1. Annual increase for certain annuitants.
23    (a) Any annuitant receiving a retirement annuity on June
2430, 1969 and any member retiring after June 30, 1969 shall be
25eligible for the annual increases provided under this Section

 

 

09700SB1673ham007- 168 -LRB097 07605 EFG 70502 a

1provided the annuitant is ineligible for the automatic annual
2increase in annuity provided under Section 16-133.1, and
3provided further that (1) retirement occurred at age 55 or over
4and was based on 5 or more years of creditable service or (2)
5if retirement occurred prior to age 55, the retirement annuity
6was based on 20 or more years of creditable service.
7    (b) Subject to the provisions of subsections (b-1) and
8(b-2), an An annuitant entitled to increases under this Section
9shall be entitled to the initial increase as of the later of:
10(1) January 1 following attainment of age 65, (2) January 1
11following the first anniversary of retirement, or (3) the first
12day of the month following receipt of the required qualifying
13contribution from the annuitant. The initial monthly increase
14shall be computed on the basis of the period elapsed between
15the later of the date of last retirement or attainment of age
1650 and the date of qualification for the initial increase, at
17the rate of 1 1/2% of the original monthly retirement annuity
18per year for periods prior to September 1, 1971, and at the
19rate of 2% per year for periods between September 1, 1971 and
20September 1, 1978, and at the rate of 3% per year for periods
21thereafter.
22    Subject to the provisions of subsections (b-1) and (b-2),
23an An annuitant who has received an initial increase under this
24Section, shall be entitled, on each January 1 following the
25granting of the initial increase, to an increase of 3% of the
26original monthly retirement annuity for increases granted

 

 

09700SB1673ham007- 169 -LRB097 07605 EFG 70502 a

1prior to January 1, 1990, and equal to 3% of the total annuity,
2including previous increases under this Section, for increases
3granted on or after January 1, 1990. The original monthly
4retirement annuity for computations under this subsection (b)
5shall be considered to be $83.34 for any annuitant entitled to
6benefits under Section 16-134. The minimum original disability
7retirement annuity for computations under this subsection (b)
8shall be considered to be $33.34 per month for any annuitant
9retired on account of disability.
10    (b-1) Notwithstanding any other provision of this Article,
11for a Tier I employee or Tier I retiree who made the election
12under paragraph (1) of either subsection (a) or (a-5) of
13Section 16-131.7, the amount of each automatic annual increase
14in retirement annuity occurring on or after the effective date
15of that election shall be 3% or one-half of the annual
16unadjusted percentage increase, if any, in the Consumer Price
17Index-U for the 12 months ending with the preceding September,
18whichever is less, of the originally granted retirement
19annuity. For the purposes of this Section, "Consumer Price
20Index-U" means the index published by the Bureau of Labor
21Statistics of the United States Department of Labor that
22measures the average change in prices of goods and services
23purchased by all urban consumers, United States city average,
24all items, 1982-84 = 100.
25    (b-2) Notwithstanding any other provision of this Article,
26for a Tier I employee or Tier I retiree who made the election

 

 

09700SB1673ham007- 170 -LRB097 07605 EFG 70502 a

1under paragraph (1) of subsection (a) or (a-5) of Section
216-131.7, the monthly retirement annuity shall first be subject
3to annual increases on the January 1 occurring on or next after
4the attainment of age 67 or the January 1 occurring on or next
5after the fifth anniversary of the annuity start date,
6whichever occurs earlier. If on the effective date of the
7election under paragraph (1) of subsection (a-5) of Section
816-131.7 a Tier I retiree has already received an annual
9increase under this Section but does not yet meet the new
10eligibility requirements of this subsection, the annual
11increases already received shall continue in force, but no
12additional annual increase shall be granted until the Tier I
13retiree meets the new eligibility requirements.
14    (c) An annuitant who otherwise qualifies for annual
15increases under this Section must make a one-time payment of 1%
16of the monthly final average salary for each full year of the
17creditable service forming the basis of the retirement annuity
18or, if the retirement annuity was not computed using final
19average salary, 1% of the original monthly retirement annuity
20for each full year of service forming the basis of the
21retirement annuity.
22    (d) In addition to other increases which may be provided by
23this Section, regardless of creditable service, annuitants not
24meeting the service requirements of Section 16-133.1 and whose
25retirement annuity began on or before January 1, 1971 shall
26receive, on January 1, 1981, an increase in the retirement

 

 

09700SB1673ham007- 171 -LRB097 07605 EFG 70502 a

1annuity then being paid of one dollar per month for each year
2of creditable service forming the basis of the retirement
3allowance. On January 1, 1982, annuitants whose retirement
4annuity began on or before January 1, 1977, shall receive an
5increase in the retirement annuity then being paid of one
6dollar per month for each year of creditable service.
7    On January 1, 1987, any annuitant whose retirement annuity
8began on or before January 1, 1977, shall receive an increase
9in the monthly retirement annuity equal to 8 per year of
10creditable service times the number of years that have elapsed
11since the annuity began.
12(Source: P.A. 86-273.)
 
13    (40 ILCS 5/16-158)   (from Ch. 108 1/2, par. 16-158)
14    Sec. 16-158. Contributions by State and other employing
15units.
16    (a) Except as otherwise provided in this Section, the The
17State shall make contributions to the System by means of
18appropriations from the Common School Fund and other State
19funds of amounts which, together with other employer
20contributions, employee contributions, investment income, and
21other income, will be sufficient to meet the cost of
22maintaining and administering the System on a 90% funded basis
23in accordance with actuarial recommendations.
24    The Board shall determine the amount of State contributions
25required for each fiscal year on the basis of the actuarial

 

 

09700SB1673ham007- 172 -LRB097 07605 EFG 70502 a

1tables and other assumptions adopted by the Board and the
2recommendations of the actuary, using the formula in subsection
3(b-3).
4    (a-1) Annually, on or before November 15, the Board shall
5certify to the Governor the amount of the required State
6contribution for the coming fiscal year. The certification
7shall include a copy of the actuarial recommendations upon
8which it is based.
9    On or before May 1, 2004, the Board shall recalculate and
10recertify to the Governor the amount of the required State
11contribution to the System for State fiscal year 2005, taking
12into account the amounts appropriated to and received by the
13System under subsection (d) of Section 7.2 of the General
14Obligation Bond Act.
15    On or before July 1, 2005 April 1, 2011, the Board shall
16recalculate and recertify to the Governor the amount of the
17required State contribution to the System for State fiscal year
182006, taking into account the changes in required State
19contributions made by this amendatory Act of the 94th General
20Assembly.
21    On or before April 1, 2011 June 15, 2010, the Board shall
22recalculate and recertify to the Governor the amount of the
23required State contribution to the System for State fiscal year
242011, applying the changes made by Public Act 96-889 to the
25System's assets and liabilities as of June 30, 2009 as though
26Public Act 96-889 was approved on that date.

 

 

09700SB1673ham007- 173 -LRB097 07605 EFG 70502 a

1    (a-5) On or before November 1 of each year, beginning
2November 1, 2012, the Board shall submit to the State Actuary a
3proposed certification of the amount of the required State
4contribution to the System for the next fiscal year, along with
5all of the actuarial assumptions, calculations, and data upon
6which that proposed certification is based. On or before
7January 1 of each year beginning January 1, 2013, the State
8Actuary shall issue a preliminary report concerning the
9proposed certification and identifying, if necessary,
10recommended changes in actuarial assumptions that the Board
11must consider before finalizing its certification of the
12required State contributions. On or before January 15, 2013 and
13each January 15 thereafter, the Board shall certify to the
14Governor and the General Assembly the amount of the required
15State contribution for the next fiscal year. The Board's
16certification must note any deviations from the State Actuary's
17recommended changes, the reason or reasons for not following
18the State Actuary's recommended changes, and the fiscal impact
19of not following the State Actuary's recommended changes on the
20required State contribution.
21    (b) Through State fiscal year 1995, the State contributions
22shall be paid to the System in accordance with Section 18-7 of
23the School Code.
24    (b-1) Beginning in State fiscal year 1996, on the 15th day
25of each month, or as soon thereafter as may be practicable, the
26Board shall submit vouchers for payment of State contributions

 

 

09700SB1673ham007- 174 -LRB097 07605 EFG 70502 a

1to the System, in a total monthly amount of one-twelfth of the
2required annual State contribution certified under subsection
3(a-1). From the effective date of this amendatory Act of the
493rd General Assembly through June 30, 2004, the Board shall
5not submit vouchers for the remainder of fiscal year 2004 in
6excess of the fiscal year 2004 certified contribution amount
7determined under this Section after taking into consideration
8the transfer to the System under subsection (a) of Section
96z-61 of the State Finance Act. These vouchers shall be paid by
10the State Comptroller and Treasurer by warrants drawn on the
11funds appropriated to the System for that fiscal year.
12    If in any month the amount remaining unexpended from all
13other appropriations to the System for the applicable fiscal
14year (including the appropriations to the System under Section
158.12 of the State Finance Act and Section 1 of the State
16Pension Funds Continuing Appropriation Act) is less than the
17amount lawfully vouchered under this subsection, the
18difference shall be paid from the Common School Fund under the
19continuing appropriation authority provided in Section 1.1 of
20the State Pension Funds Continuing Appropriation Act.
21    (b-2) Allocations from the Common School Fund apportioned
22to school districts not coming under this System shall not be
23diminished or affected by the provisions of this Article.
24    (b-3) Except as otherwise provided in this Section, for For
25State fiscal years 2012 through 2045, the minimum contribution
26to the System to be made by the State for each fiscal year

 

 

09700SB1673ham007- 175 -LRB097 07605 EFG 70502 a

1shall be an amount determined by the System to be sufficient to
2bring the total assets of the System up to 90% of the total
3actuarial liabilities of the System by the end of State fiscal
4year 2045. In making these determinations, the required State
5contribution shall be calculated each year as a level
6percentage of payroll over the years remaining to and including
7fiscal year 2045 and shall be determined under the projected
8unit credit actuarial cost method.
9    For State fiscal years 1996 through 2005, the State
10contribution to the System, as a percentage of the applicable
11employee payroll, shall be increased in equal annual increments
12so that by State fiscal year 2011, the State is contributing at
13the rate required under this Section; except that in the
14following specified State fiscal years, the State contribution
15to the System shall not be less than the following indicated
16percentages of the applicable employee payroll, even if the
17indicated percentage will produce a State contribution in
18excess of the amount otherwise required under this subsection
19and subsection (a), and notwithstanding any contrary
20certification made under subsection (a-1) before the effective
21date of this amendatory Act of 1998: 10.02% in FY 1999; 10.77%
22in FY 2000; 11.47% in FY 2001; 12.16% in FY 2002; 12.86% in FY
232003; and 13.56% in FY 2004.
24    Notwithstanding any other provision of this Article, the
25total required State contribution for State fiscal year 2006 is
26$534,627,700.

 

 

09700SB1673ham007- 176 -LRB097 07605 EFG 70502 a

1    Notwithstanding any other provision of this Article, the
2total required State contribution for State fiscal year 2007 is
3$738,014,500.
4    For each of State fiscal years 2008 through 2009, the State
5contribution to the System, as a percentage of the applicable
6employee payroll, shall be increased in equal annual increments
7from the required State contribution for State fiscal year
82007, so that by State fiscal year 2011, the State is
9contributing at the rate otherwise required under this Section.
10    Notwithstanding any other provision of this Article, the
11total required State contribution for State fiscal year 2010 is
12$2,089,268,000 and shall be made from the proceeds of bonds
13sold in fiscal year 2010 pursuant to Section 7.2 of the General
14Obligation Bond Act, less (i) the pro rata share of bond sale
15expenses determined by the System's share of total bond
16proceeds, (ii) any amounts received from the Common School Fund
17in fiscal year 2010, and (iii) any reduction in bond proceeds
18due to the issuance of discounted bonds, if applicable.
19    Notwithstanding any other provision of this Article, the
20total required State contribution for State fiscal year 2011 is
21the amount recertified by the System on or before April 1, 2011
22pursuant to subsection (a-1) of this Section and shall be made
23from the proceeds of bonds sold in fiscal year 2011 pursuant to
24Section 7.2 of the General Obligation Bond Act, less (i) the
25pro rata share of bond sale expenses determined by the System's
26share of total bond proceeds, (ii) any amounts received from

 

 

09700SB1673ham007- 177 -LRB097 07605 EFG 70502 a

1the Common School Fund in fiscal year 2011, and (iii) any
2reduction in bond proceeds due to the issuance of discounted
3bonds, if applicable. This amount shall include, in addition to
4the amount certified by the System, an amount necessary to meet
5employer contributions required by the State as an employer
6under paragraph (e) of this Section, which may also be used by
7the System for contributions required by paragraph (a) of
8Section 16-127.
9    Except as otherwise provided in this Section, beginning
10Beginning in State fiscal year 2046, the minimum State
11contribution for each fiscal year shall be the amount needed to
12maintain the total assets of the System at 90% of the total
13actuarial liabilities of the System.
14    Amounts received by the System pursuant to Section 25 of
15the Budget Stabilization Act or Section 8.12 of the State
16Finance Act in any fiscal year do not reduce and do not
17constitute payment of any portion of the minimum State
18contribution required under this Article in that fiscal year.
19Such amounts shall not reduce, and shall not be included in the
20calculation of, the required State contributions under this
21Article in any future year until the System has reached a
22funding ratio of at least 90%. A reference in this Article to
23the "required State contribution" or any substantially similar
24term does not include or apply to any amounts payable to the
25System under Section 25 of the Budget Stabilization Act.
26    Notwithstanding any other provision of this Section, the

 

 

09700SB1673ham007- 178 -LRB097 07605 EFG 70502 a

1required State contribution for State fiscal year 2005 and for
2fiscal year 2008 and each fiscal year thereafter, as calculated
3under this Section and certified under subsection (a-1), shall
4not exceed an amount equal to (i) the amount of the required
5State contribution that would have been calculated under this
6Section for that fiscal year if the System had not received any
7payments under subsection (d) of Section 7.2 of the General
8Obligation Bond Act, minus (ii) the portion of the State's
9total debt service payments for that fiscal year on the bonds
10issued in fiscal year 2003 for the purposes of that Section
117.2, as determined and certified by the Comptroller, that is
12the same as the System's portion of the total moneys
13distributed under subsection (d) of Section 7.2 of the General
14Obligation Bond Act. In determining this maximum for State
15fiscal years 2008 through 2010, however, the amount referred to
16in item (i) shall be increased, as a percentage of the
17applicable employee payroll, in equal increments calculated
18from the sum of the required State contribution for State
19fiscal year 2007 plus the applicable portion of the State's
20total debt service payments for fiscal year 2007 on the bonds
21issued in fiscal year 2003 for the purposes of Section 7.2 of
22the General Obligation Bond Act, so that, by State fiscal year
232011, the State is contributing at the rate otherwise required
24under this Section.
25    (b-5) If at least 50% of the Tier I employees making an
26election under Section 16-131.7 before June 1, 2013 choose the

 

 

09700SB1673ham007- 179 -LRB097 07605 EFG 70502 a

1option under paragraph (1) of subsection (a) of that Section,
2then:
3        (1) In lieu of the State contributions required under
4    subsection (b-3), for State fiscal years 2014 through 2043
5    the minimum contribution to the System to be made by the
6    State for each fiscal year shall be an amount determined by
7    the System to be equal to the sum of (1) the State's
8    portion of the projected normal cost for that fiscal year,
9    plus (2) an amount sufficient to bring the total assets of
10    the System up to 100% of the total actuarial liabilities of
11    the System by the end of State fiscal year 2043. In making
12    these determinations, the required State contribution
13    shall be calculated each year as a level percentage of
14    payroll over the years remaining to and including fiscal
15    year 2043 and shall be determined under the projected unit
16    credit actuarial cost method.
17        (2) Beginning in State fiscal year 2044, the minimum
18    State contribution for each fiscal year shall be the amount
19    needed to maintain the total assets of the System at 100%
20    of the total actuarial liabilities of the System.
21    (b-6) If less than 50% of the Tier I employees making an
22election under Section 16-131.7 before June 1, 2013 choose the
23option under paragraph (1) of subsection (a) of that Section,
24then:
25        (1) Instead of the annual required contribution
26    otherwise specified in subsection (b-5) of this Section,

 

 

09700SB1673ham007- 180 -LRB097 07605 EFG 70502 a

1    the annual required contribution to the System to be made
2    by the State shall be determined under subsection (b-3) of
3    this Section.
4        (2) As soon as possible after June 1, 2013, the Board
5    shall recertify the annual required contribution by the
6    State for State fiscal year 2014.
7    (c) Payment of the required State contributions and of all
8pensions, retirement annuities, death benefits, refunds, and
9other benefits granted under or assumed by this System, and all
10expenses in connection with the administration and operation
11thereof, are obligations of the State.
12    If members are paid from special trust or federal funds
13which are administered by the employing unit, whether school
14district or other unit, the employing unit shall pay to the
15System from such funds the full accruing retirement costs based
16upon that service, as determined by the System. Employer
17contributions, based on salary paid to members from federal
18funds, may be forwarded by the distributing agency of the State
19of Illinois to the System prior to allocation, in an amount
20determined in accordance with guidelines established by such
21agency and the System.
22    (d) Effective July 1, 1986, any employer of a teacher as
23defined in paragraph (8) of Section 16-106 shall pay the
24employer's normal cost of benefits based upon the teacher's
25service, in addition to employee contributions, as determined
26by the System. Such employer contributions shall be forwarded

 

 

09700SB1673ham007- 181 -LRB097 07605 EFG 70502 a

1monthly in accordance with guidelines established by the
2System.
3    However, with respect to benefits granted under Section
416-133.4 or 16-133.5 to a teacher as defined in paragraph (8)
5of Section 16-106, the employer's contribution shall be 12%
6(rather than 20%) of the member's highest annual salary rate
7for each year of creditable service granted, and the employer
8shall also pay the required employee contribution on behalf of
9the teacher. For the purposes of Sections 16-133.4 and
1016-133.5, a teacher as defined in paragraph (8) of Section
1116-106 who is serving in that capacity while on leave of
12absence from another employer under this Article shall not be
13considered an employee of the employer from which the teacher
14is on leave.
15    (e) Beginning July 1, 1998, every employer of a teacher
16shall pay to the System an employer contribution computed as
17follows:
18        (1) Beginning July 1, 1998 through June 30, 1999, the
19    employer contribution shall be equal to 0.3% of each
20    teacher's salary.
21        (2) Beginning July 1, 1999 and thereafter, the employer
22    contribution shall be equal to 0.58% of each teacher's
23    salary.
24The school district or other employing unit may pay these
25employer contributions out of any source of funding available
26for that purpose and shall forward the contributions to the

 

 

09700SB1673ham007- 182 -LRB097 07605 EFG 70502 a

1System on the schedule established for the payment of member
2contributions.
3    These employer contributions are intended to offset a
4portion of the cost to the System of the increases in
5retirement benefits resulting from this amendatory Act of 1998.
6    Each employer of teachers is entitled to a credit against
7the contributions required under this subsection (e) with
8respect to salaries paid to teachers for the period January 1,
92002 through June 30, 2003, equal to the amount paid by that
10employer under subsection (a-5) of Section 6.6 of the State
11Employees Group Insurance Act of 1971 with respect to salaries
12paid to teachers for that period.
13    The additional 1% employee contribution required under
14Section 16-152 by this amendatory Act of 1998 is the
15responsibility of the teacher and not the teacher's employer,
16unless the employer agrees, through collective bargaining or
17otherwise, to make the contribution on behalf of the teacher.
18    If an employer is required by a contract in effect on May
191, 1998 between the employer and an employee organization to
20pay, on behalf of all its full-time employees covered by this
21Article, all mandatory employee contributions required under
22this Article, then the employer shall be excused from paying
23the employer contribution required under this subsection (e)
24for the balance of the term of that contract. The employer and
25the employee organization shall jointly certify to the System
26the existence of the contractual requirement, in such form as

 

 

09700SB1673ham007- 183 -LRB097 07605 EFG 70502 a

1the System may prescribe. This exclusion shall cease upon the
2termination, extension, or renewal of the contract at any time
3after May 1, 1998.
4    (f) If the amount of a teacher's salary for any school year
5used to determine final average salary exceeds the member's
6annual full-time salary rate with the same employer for the
7previous school year by more than 6%, the teacher's employer
8shall pay to the System, in addition to all other payments
9required under this Section and in accordance with guidelines
10established by the System, the present value of the increase in
11benefits resulting from the portion of the increase in salary
12that is in excess of 6%. This present value shall be computed
13by the System on the basis of the actuarial assumptions and
14tables used in the most recent actuarial valuation of the
15System that is available at the time of the computation. If a
16teacher's salary for the 2005-2006 school year is used to
17determine final average salary under this subsection (f), then
18the changes made to this subsection (f) by Public Act 94-1057
19shall apply in calculating whether the increase in his or her
20salary is in excess of 6%. For the purposes of this Section,
21change in employment under Section 10-21.12 of the School Code
22on or after June 1, 2005 shall constitute a change in employer.
23The System may require the employer to provide any pertinent
24information or documentation. The changes made to this
25subsection (f) by this amendatory Act of the 94th General
26Assembly apply without regard to whether the teacher was in

 

 

09700SB1673ham007- 184 -LRB097 07605 EFG 70502 a

1service on or after its effective date. The changes to this
2subsection (removing the 6% increase permitted without payment
3to the System by the employer) made by this amendatory Act of
4the 97th General Assembly do not apply to a teacher who is
5covered by a collective bargaining agreement or employment
6contract in effect on the effective date of this amendatory Act
7that provides for such increases, until such time as that
8agreement or contract expires or is amended or renewed.
9    Whenever it determines that a payment is or may be required
10under this subsection, the System shall calculate the amount of
11the payment and bill the employer for that amount. The bill
12shall specify the calculations used to determine the amount
13due. If the employer disputes the amount of the bill, it may,
14within 30 days after receipt of the bill, apply to the System
15in writing for a recalculation. The application must specify in
16detail the grounds of the dispute and, if the employer asserts
17that the calculation is subject to subsection (g) or (h) of
18this Section, must include an affidavit setting forth and
19attesting to all facts within the employer's knowledge that are
20pertinent to the applicability of that subsection. Upon
21receiving a timely application for recalculation, the System
22shall review the application and, if appropriate, recalculate
23the amount due.
24    The employer contributions required under this subsection
25(f) may be paid in the form of a lump sum within 90 days after
26receipt of the bill. If the employer contributions are not paid

 

 

09700SB1673ham007- 185 -LRB097 07605 EFG 70502 a

1within 90 days after receipt of the bill, then interest will be
2charged at a rate equal to the System's annual actuarially
3assumed rate of return on investment compounded annually from
4the 91st day after receipt of the bill. Payments must be
5concluded within 3 years after the employer's receipt of the
6bill.
7    (g) This subsection (g) applies only to payments made or
8salary increases given on or after June 1, 2005 but before July
91, 2011. The changes made by Public Act 94-1057 shall not
10require the System to refund any payments received before July
1131, 2006 (the effective date of Public Act 94-1057).
12    When assessing payment for any amount due under subsection
13(f), the System shall exclude salary increases paid to teachers
14under contracts or collective bargaining agreements entered
15into, amended, or renewed before June 1, 2005.
16    When assessing payment for any amount due under subsection
17(f), the System shall exclude salary increases paid to a
18teacher at a time when the teacher is 10 or more years from
19retirement eligibility under Section 16-132 or 16-133.2.
20    When assessing payment for any amount due under subsection
21(f), the System shall exclude salary increases resulting from
22overload work, including summer school, when the school
23district has certified to the System, and the System has
24approved the certification, that (i) the overload work is for
25the sole purpose of classroom instruction in excess of the
26standard number of classes for a full-time teacher in a school

 

 

09700SB1673ham007- 186 -LRB097 07605 EFG 70502 a

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

 

 

09700SB1673ham007- 187 -LRB097 07605 EFG 70502 a

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

 

 

09700SB1673ham007- 188 -LRB097 07605 EFG 70502 a

1    As of June 30, 2008, the actuarial value of the System's
2assets shall be equal to the market value of the assets as of
3that date. In determining the actuarial value of the System's
4assets for fiscal years after June 30, 2008, any actuarial
5gains or losses from investment return incurred in a fiscal
6year shall be recognized in equal annual amounts over the
75-year period following that fiscal year.
8    (k) For purposes of determining the required State
9contribution to the system for a particular year, the actuarial
10value of assets shall be assumed to earn a rate of return equal
11to the system's actuarially assumed rate of return.
12    (l) If the System submits a voucher for monthly
13contributions from the State as required by this Section and
14the State fails to pay within 90 days of receipt of such a
15voucher, the Board shall submit a written request to the
16Comptroller seeking payment. A copy of the request shall be
17filed with the Secretary of State, and the Secretary of State
18shall provide copies to the Governor and General Assembly. No
19earlier than the 16th day after filing a request with the
20Secretary of State, the Board shall have the right to commence
21a mandamus action in the Supreme Court of Illinois to compel
22the Comptroller to satisfy the voucher by making payment from
23the General Revenue Fund. This Section constitutes an express
24waiver of the State's sovereign immunity solely to the extent
25it permits the Board to commence a mandamus action in the
26Illinois Supreme Court to compel the Comptroller to pay a

 

 

09700SB1673ham007- 189 -LRB097 07605 EFG 70502 a

1voucher for monthly contributions from the State as required in
2this Section.
3(Source: P.A. 95-331, eff. 8-21-07; 95-950, eff. 8-29-08;
496-43, eff. 7-15-09; 96-1497, eff. 1-14-11; 96-1511, eff.
51-27-11; 96-1554, eff. 3-18-11; revised 4-6-11.)
 
6    (40 ILCS 5/16-203)
7    Sec. 16-203. Application and expiration of new benefit
8increases.
9    (a) As used in this Section, "new benefit increase" means
10an increase in the amount of any benefit provided under this
11Article, or an expansion of the conditions of eligibility for
12any benefit under this Article, that results from an amendment
13to this Code that takes effect after June 1, 2005 (the
14effective date of Public Act 94-4). "New benefit increase",
15however, does not include any benefit increase resulting from
16the changes made to this Article or Article 1 by Public Act
1795-910 or this amendatory Act of the 97th 95th General
18Assembly.
19    (b) Notwithstanding any other provision of this Code or any
20subsequent amendment to this Code, every new benefit increase
21is subject to this Section and shall be deemed to be granted
22only in conformance with and contingent upon compliance with
23the provisions of this Section.
24    (c) The Public Act enacting a new benefit increase must
25identify and provide for payment to the System of additional

 

 

09700SB1673ham007- 190 -LRB097 07605 EFG 70502 a

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

 

 

09700SB1673ham007- 191 -LRB097 07605 EFG 70502 a

1under this Section continues to apply to persons who applied
2and qualified for the affected benefit while the new benefit
3increase was in effect and to the affected beneficiaries and
4alternate payees of such persons, but does not apply to any
5other person, including without limitation a person who
6continues in service after the expiration date and did not
7apply and qualify for the affected benefit while the new
8benefit increase was in effect.
9(Source: P.A. 94-4, eff. 6-1-05; 95-910, eff. 8-26-08.)
 
10    (40 ILCS 5/18-140)   (from Ch. 108 1/2, par. 18-140)
11    Sec. 18-140. To certify required State contributions and
12submit vouchers.
13    (a) The Board shall certify to the Governor, on or before
14November 15 of each year until November 15, 2011, the amount of
15the required State contribution to the System for the following
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

 

 

09700SB1673ham007- 192 -LRB097 07605 EFG 70502 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

 

 

09700SB1673ham007- 193 -LRB097 07605 EFG 70502 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 (c) 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.
22    If in any month the amount remaining unexpended from all
23other appropriations to the System for the applicable fiscal
24year (including the appropriations to the System under Section
258.12 of the State Finance Act and Section 1 of the State
26Pension Funds Continuing Appropriation Act) is less than the

 

 

09700SB1673ham007- 194 -LRB097 07605 EFG 70502 a

1amount lawfully vouchered under this Section, the difference
2shall be paid from the General Revenue Fund under the
3continuing appropriation authority provided in Section 1.1 of
4the State Pension Funds Continuing Appropriation Act.
5(Source: P.A. 96-1497, eff. 1-14-11; 96-1511, eff. 1-27-11.)
 
6    Section 35. The School Code is amended by changing Sections
724-1 and 24-8 as follows:
 
8    (105 ILCS 5/24-1)  (from Ch. 122, par. 24-1)
9    Sec. 24-1. Appointment - Salaries - Payment - School month -
10 School term.) School boards shall appoint all teachers,
11determine qualifications of employment and fix the amount of
12their salaries subject to any limitation set forth in this Act
13and subject to any applicable restrictions in Section 14-106.5,
1415-134.6, or 16-131.7 of the Illinois Pension Code. They shall
15pay the wages of teachers monthly, subject, however, to the
16provisions of Section 24-21. The school month shall be the same
17as the calendar month but by resolution the school board may
18adopt for its use a month of 20 days, including holidays. The
19school term shall consist of at least the minimum number of
20pupil attendance days required by Section 10-19, any additional
21legal school holidays, days of teachers' institutes, or
22equivalent professional educational experiences, and one or
23two days at the beginning of the school term when used as a
24teachers' workshop.

 

 

09700SB1673ham007- 195 -LRB097 07605 EFG 70502 a

1(Source: P.A. 80-249.)
 
2    (105 ILCS 5/24-8)  (from Ch. 122, par. 24-8)
3    Sec. 24-8. Minimum salary. In fixing the salaries of
4teachers, school boards shall pay those who serve on a
5full-time basis not less than a rate for the school year that
6is based upon training completed in a recognized institution of
7higher learning, as follows: for the school year beginning July
81, 1980 and thereafter, less than a bachelor's degree, $9,000;
9120 semester hours or more and a bachelor's degree, $10,000;
10150 semester hours or more and a master's degree, $11,000.
11    Based upon previous public school experience in this State
12or any other State, territory, dependency or possession of the
13United States, or in schools operated by or under the auspices
14of the United States, teachers who serve on a full-time basis
15shall have their salaries increased to at least the following
16amounts above the starting salary for a teacher in such
17district in the same classification: with less than a
18bachelor's degree, $750 after 5 years; with 120 semester hours
19or more and a bachelor's degree, $1,000 after 5 years and
20$1,600 after 8 years; with 150 semester hours or more and a
21master's degree, $1,250 after 5 years, $2,000 after 8 years and
22$2,750 after 13 years. However, any salary increase is subject
23to any applicable restrictions in Section 14-106.5, 15-134.6,
24or 16-131.7 of the Illinois Pension Code.
25    For the purpose of this Section a teacher's salary shall

 

 

09700SB1673ham007- 196 -LRB097 07605 EFG 70502 a

1include any amount paid by the school district on behalf of the
2teacher, as teacher contributions, to the Teachers' Retirement
3System of the State of Illinois.
4    If a school board establishes a schedule for teachers'
5salaries based on education and experience, not inconsistent
6with this Section, all certificated nurses employed by that
7board shall be paid in accordance with the provisions of such
8schedule (subject to any applicable restrictions in Section
914-106.5, 15-134.6, or 16-131.7 of the Illinois Pension Code).
10    For purposes of this Section, a teacher who submits a
11certificate of completion to the school office prior to the
12first day of the school term shall be considered to have the
13degree stated in such certificate.
14(Source: P.A. 83-913.)
 
15    Section 40. The State Universities Civil Service Act is
16amended by changing Section 36d as follows:
 
17    (110 ILCS 70/36d)  (from Ch. 24 1/2, par. 38b3)
18    Sec. 36d. Powers and duties of the Merit Board.
19    The Merit Board shall have the power and duty-
20    (1) To approve a classification plan prepared under its
21direction, assigning to each class positions of substantially
22similar duties. The Merit Board shall have power to delegate to
23its Director the duty of assigning each position in the
24classified service to the appropriate class in the

 

 

09700SB1673ham007- 197 -LRB097 07605 EFG 70502 a

1classification plan approved by the Merit Board.
2    (2) To prescribe the duties of each class of positions and
3the qualifications required by employment in that class.
4    (3) To prescribe the range of compensation for each class
5or to fix a single rate of compensation for employees in a
6particular class; and to establish other conditions of
7employment which an employer and employee representatives have
8agreed upon as fair and equitable. The Merit Board shall direct
9the payment of the "prevailing rate of wages" in those
10classifications in which, on January 1, 1952, any employer is
11paying such prevailing rate and in such other classes as the
12Merit Board may thereafter determine. "Prevailing rate of
13wages" as used herein shall be the wages paid generally in the
14locality in which the work is being performed to employees
15engaged in work of a similar character. Subject to any
16applicable restrictions in Section 14-106.5, 15-134.6, or
1716-131.7 of the Illinois Pension Code, each Each employer
18covered by the University System shall be authorized to
19negotiate with representatives of employees to determine
20appropriate ranges or rates of compensation or other conditions
21of employment and may recommend to the Merit Board for
22establishment the rates or ranges or other conditions of
23employment which the employer and employee representatives
24have agreed upon as fair and equitable. Any rates or ranges
25established prior to January 1, 1952, and hereafter, shall not
26be changed except in accordance with the procedures herein

 

 

09700SB1673ham007- 198 -LRB097 07605 EFG 70502 a

1provided.
2    (4) To recommend to the institutions and agencies specified
3in Section 36e standards for hours of work, holidays, sick
4leave, overtime compensation and vacation for the purpose of
5improving conditions of employment covered therein and for the
6purpose of insuring conformity with the prevailing rate
7principal.
8    (5) To prescribe standards of examination for each class,
9the examinations to be related to the duties of such class. The
10Merit Board shall have power to delegate to the Director and
11his staff the preparation, conduct and grading of examinations.
12Examinations may be written, oral, by statement of training and
13experience, in the form of tests of knowledge, skill, capacity,
14intellect, aptitude; or, by any other method, which in the
15judgment of the Merit Board is reasonable and practical for any
16particular classification. Different examining procedures may
17be determined for the examinations in different
18classifications but all examinations in the same
19classification shall be uniform.
20    (6) To authorize the continuous recruitment of personnel
21and to that end, to delegate to the Director and his staff the
22power and the duty to conduct open and continuous competitive
23examinations for all classifications of employment.
24    (7) To cause to be established from the results of
25examinations registers for each class of positions in the
26classified service of the State Universities Civil Service

 

 

09700SB1673ham007- 199 -LRB097 07605 EFG 70502 a

1System, of the persons who shall attain the minimum mark fixed
2by the Merit Board for the examination; and such persons shall
3take rank upon the registers as candidates in the order of
4their relative excellence as determined by examination,
5without reference to priority of time of examination.
6    (8) To provide by its rules for promotions in the
7classified service. Vacancies shall be filled by promotion
8whenever practicable. For the purpose of this paragraph, an
9advancement in class shall constitute a promotion.
10    (9) To set a probationary period of employment of no less
11than 6 months and no longer than 12 months for each class of
12positions in the classification plan, the length of the
13probationary period for each class to be determined by the
14Director.
15    (10) To provide by its rules for employment at regular
16rates of compensation of physically handicapped persons in
17positions in which the handicap does not prevent the individual
18from furnishing satisfactory service.
19    (11) To make and publish rules, to carry out the purpose of
20the State Universities Civil Service System and for
21examination, appointments, transfers and removals and for
22maintaining and keeping records of the efficiency of officers
23and employees and groups of officers and employees in
24accordance with the provisions of Sections 36b to 36q,
25inclusive, and said Merit Board may from time to time make
26changes in such rules.

 

 

09700SB1673ham007- 200 -LRB097 07605 EFG 70502 a

1    (12) To appoint a Director and such assistants and other
2clerical and technical help as may be necessary efficiently to
3administer Sections 36b to 36q, inclusive. To authorize the
4Director to appoint an assistant resident at the place of
5employment of each employer specified in Section 36e and this
6assistant may be authorized to give examinations and to certify
7names from the regional registers provided in Section 36k.
8    (13) To submit to the Governor of this state on or before
9November 1 of each year prior to the regular session of the
10General Assembly a report of the University System's business
11and an estimate of the amount of appropriation from state funds
12required for the purpose of administering the University
13System.
14(Source: P.A. 82-524.)
 
15    Section 45. The University of Illinois Act is amended by
16adding Section 80 as follows:
 
17    (110 ILCS 305/80 new)
18    Sec. 80. Future increases in income. The University of
19Illinois must not pay, offer, or agree to pay any future
20increase in income, as that term is defined in Section
2114-106.5, 15-134.6, or 16-131.7 of the Illinois Pension Code,
22to any person in a manner that violates any of those Sections.
 
23    Section 50. The Southern Illinois University Management

 

 

09700SB1673ham007- 201 -LRB097 07605 EFG 70502 a

1Act is amended by adding Section 65 as follows:
 
2    (110 ILCS 520/65 new)
3    Sec. 65. Future increases in income. Southern Illinois
4University must not pay, offer, or agree to pay any future
5increase in income, as that term is defined in Section
614-106.5, 15-134.6, or 16-131.7 of the Illinois Pension Code,
7to any person in a manner that violates any of those Sections.
 
8    Section 55. The Chicago State University Law is amended by
9adding Section 5-175 as follows:
 
10    (110 ILCS 660/5-175 new)
11    Sec. 5-175. Future increases in income. Chicago State
12University must not pay, offer, or agree to pay any future
13increase in income, as that term is defined in Section
1414-106.5, 15-134.6, or 16-131.7 of the Illinois Pension Code,
15to any person in a manner that violates any of those Sections.
 
16    Section 60. The Eastern Illinois University Law is amended
17by adding Section 10-175 as follows:
 
18    (110 ILCS 665/10-175 new)
19    Sec. 10-175. Future increases in income. Eastern Illinois
20University must not pay, offer, or agree to pay any future
21increase in income, as that term is defined in Section

 

 

09700SB1673ham007- 202 -LRB097 07605 EFG 70502 a

114-106.5, 15-134.6, or 16-131.7 of the Illinois Pension Code,
2to any person in a manner that violates any of those Sections.
 
3    Section 65. The Governors State University Law is amended
4by adding Section 15-175 as follows:
 
5    (110 ILCS 670/15-175 new)
6    Sec. 15-175. Future increases in income. Governors State
7University must not pay, offer, or agree to pay any future
8increase in income, as that term is defined in Section
914-106.5, 15-134.6, or 16-131.7 of the Illinois Pension Code,
10to any person in a manner that violates any of those Sections.
 
11    Section 70. The Illinois State University Law is amended by
12adding Section 20-180 as follows:
 
13    (110 ILCS 675/20-180 new)
14    Sec. 20-180. Future increases in income. Illinois State
15University must not pay, offer, or agree to pay any future
16increase in income, as that term is defined in Section
1714-106.5, 15-134.6, or 16-131.7 of the Illinois Pension Code,
18to any person in a manner that violates any of those Sections.
 
19    Section 75. The Northeastern Illinois University Law is
20amended by adding Section 25-175 as follows:
 

 

 

09700SB1673ham007- 203 -LRB097 07605 EFG 70502 a

1    (110 ILCS 680/25-175 new)
2    Sec. 25-175. Future increases in income. Northeastern
3Illinois University must not pay, offer, or agree to pay any
4future increase in income, as that term is defined in Section
514-106.5, 15-134.6, or 16-131.7 of the Illinois Pension Code,
6to any person in a manner that violates any of those Sections.
 
7    Section 80. The Northern Illinois University Law is amended
8by adding Section 30-185 as follows:
 
9    (110 ILCS 685/30-185 new)
10    Sec. 30-185. Future increases in income. Northern Illinois
11University must not pay, offer, or agree to pay any future
12increase in income, as that term is defined in Section
1314-106.5, 15-134.6, or 16-131.7 of the Illinois Pension Code,
14to any person in a manner that violates any of those Sections.
 
15    Section 85. The Western Illinois University Law is amended
16by adding Section 35-180 as follows:
 
17    (110 ILCS 690/35-180 new)
18    Sec. 35-180. Future increases in income. Western Illinois
19University must not pay, offer, or agree to pay any future
20increase in income, as that term is defined in Section
2114-106.5, 15-134.6, or 16-131.7 of the Illinois Pension Code,
22to any person in a manner that violates any of those Sections.
 

 

 

09700SB1673ham007- 204 -LRB097 07605 EFG 70502 a

1    Section 90. The Public Community College Act is amended by
2changing Sections 3-26 and 3-42 as follows:
 
3    (110 ILCS 805/3-26)  (from Ch. 122, par. 103-26)
4    Sec. 3-26. (a) To make appointments and fix the salaries of
5a chief administrative officer, who shall be the executive
6officer of the board, other administrative personnel, and all
7teachers, but subject to any applicable restrictions in Section
814-106.5, 15-134.6, or 16-131.7 of the Illinois Pension Code.
9In making these appointments and fixing the salaries, the board
10may make no discrimination on account of sex, race, creed,
11color or national origin.
12    (b) Upon the written request of an employee, to withhold
13from the compensation of that employee the membership dues of
14such employee payable to any specified labor organization as
15defined in the Illinois Educational Labor Relations Act. Under
16such arrangement, an amount shall be withheld for each regular
17payroll period which is equal to the prorata share of the
18annual membership dues plus any payments or contributions and
19the board shall pay such withholding to the specified labor
20organization within 10 working days from the time of the
21withholding.
22(Source: P.A. 83-1014.)
 
23    (110 ILCS 805/3-42)  (from Ch. 122, par. 103-42)

 

 

09700SB1673ham007- 205 -LRB097 07605 EFG 70502 a

1    Sec. 3-42. To employ such personnel as may be needed, to
2establish policies governing their employment and dismissal,
3and to fix the amount of their compensation, subject to any
4applicable restrictions in Section 14-106.5, 15-134.6, or
516-131.7 of the Illinois Pension Code. In the employment,
6establishment of policies and fixing of compensation the board
7may make no discrimination on account of sex, race, creed,
8color or national origin.
9    Residence within any community college district or outside
10any community college district shall not be considered:
11        (a) in determining whether to retain or not retain any
12    employee of a community college employed prior to July 1,
13    1977 or prior to the adoption by the community college
14    board of a resolution making residency within the community
15    college district of some or all employees a condition of
16    employment, whichever is later;
17        (b) in assigning, promoting or transferring any
18    employee of a community college to an office or position
19    employed prior to July 1, 1977 or prior to the adoption by
20    the community college board of a resolution making
21    residency within the community college district of some or
22    all employees a condition of employment, whichever is
23    later; or
24        (c) in determining the salary or other compensation of
25    any employee of a community college.
26(Source: P.A. 80-248.)
 

 

 

09700SB1673ham007- 206 -LRB097 07605 EFG 70502 a

1    Section 95. The Illinois Educational Labor Relations Act is
2amended by changing Sections 4 and 17 as follows:
 
3    (115 ILCS 5/4)  (from Ch. 48, par. 1704)
4    Sec. 4. Employer rights. Employers shall not be required to
5bargain over matters of inherent managerial policy, which shall
6include such areas of discretion or policy as the functions of
7the employer, standards of services, its overall budget, the
8organizational structure and selection of new employees and
9direction of employees. Employers, however, shall be required
10to bargain collectively with regard to policy matters directly
11affecting wages (but subject to any applicable restrictions in
12Section 14-106.5, 15-134.6, or 16-131.7 of the Illinois Pension
13Code), hours and terms and conditions of employment as well as
14the impact thereon upon request by employee representatives,
15but excluding the changes, the impact of changes, and the
16implementation of the changes set forth in this amendatory Act
17of the 97th General Assembly. To preserve the rights of
18employers and exclusive representatives which have established
19collective bargaining relationships or negotiated collective
20bargaining agreements prior to the effective date of this Act,
21employers shall be required to bargain collectively with regard
22to any matter concerning wages (but subject to any applicable
23restrictions in Section 14-106.5, 15-134.6, or 16-131.7 of the
24Illinois Pension Code), hours or conditions of employment about

 

 

09700SB1673ham007- 207 -LRB097 07605 EFG 70502 a

1which they have bargained for and agreed to in a collective
2bargaining agreement prior to the effective date of this Act,
3but excluding the changes, the impact of changes, and the
4implementation of the changes set forth in this amendatory Act
5of the 97th General Assembly.
6(Source: P.A. 83-1014.)
 
7    (115 ILCS 5/17)  (from Ch. 48, par. 1717)
8    Sec. 17. Effect on other laws. In case of any conflict
9between the provisions of this Act and any other law (other
10than Sections 14-106.5, 15-134.6, and 16-131.7 of the Illinois
11Pension Code), executive order or administrative regulation,
12the provisions of this Act shall prevail and control. The
13provisions of this Act are subject to any applicable
14restrictions in Section 14-106.5, 15-134.6, or 16-131.7 of the
15Illinois Pension Code, as well as the changes, impact of
16changes, and implementation of changes set forth in this
17amendatory Act of the 97th General Assembly. Nothing in this
18Act shall be construed to replace or diminish the rights of
19employees established by Section 36d of "An Act to create the
20State Universities Civil Service System", approved May 11,
211905, as amended or modified.
22(Source: P.A. 83-1014.)
 
23    Section 100. The State Mandates Act is amended by adding
24Section 8.36 as follows:
 

 

 

09700SB1673ham007- 208 -LRB097 07605 EFG 70502 a

1    (30 ILCS 805/8.36 new)
2    Sec. 8.36. Exempt mandate. Notwithstanding Sections 6 and 8
3of this Act, no reimbursement by the State is required for the
4implementation of any mandate created by this amendatory Act of
5the 97th General Assembly.
 
6    Section 105. Severability and inseverability. The
7provisions set forth in Sections 5, 15, 20, 25, 95, 100, and
8999 of this Act, as well as Sections 2-134, 7-109, 14-135.08,
915-106, 15-107, 15-163, 15-165, and 16-106, subsection (a-5) of
10Section 16-158, and Section 18-140 of the Illinois Pension
11Code, as set forth in Section 30 of this Act, are severable
12pursuant to Section 1.31 of the Statute on Statutes, and are
13not mutually dependent upon the provisions set forth in any
14other Section of this Act.
15    Section 10 of this Act, the other provisions of Section 30
16of this Act, and Sections 35 through 90 of this Act are
17mutually dependent and inseverable. If any of those provisions
18is held invalid other than as applied to a particular person or
19circumstance, then all of those provisions are invalid.".
 
20    Section 999. Effective date. This Act takes effect upon
21becoming law.".