Rep. Elaine Nekritz

Filed: 1/4/2013

 

 


 

 


 
09700SB1673ham009LRB097 07605 JDS 72879 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 Governor's Office of Management and Budget
5Act is amended by changing Sections 7 and 8 as follows:
 
6    (20 ILCS 3005/7)  (from Ch. 127, par. 417)
7    Sec. 7. All statements and estimates of expenditures
8submitted to the Office in connection with the preparation of a
9State budget, and any other estimates of expenditures,
10supporting requests for appropriations, shall be formulated
11according to the various functions and activities for which the
12respective department, office or institution of the State
13government (including the elective officers in the executive
14department and including the University of Illinois and the
15judicial department) is responsible. All such statements and
16estimates of expenditures relating to a particular function or

 

 

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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

 

 

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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 10. The State Finance Act is amended by changing
13Section 13 and by adding Sections 24.12 and 24.13 as follows:
 
14    (30 ILCS 105/13)  (from Ch. 127, par. 149)
15    Sec. 13. The objects and purposes for which appropriations
16are made are classified and standardized by items as follows:
17    (1) Personal services;
18    (2) State contribution for employee group insurance;
19    (3) Contractual services;
20    (4) Travel;
21    (5) Commodities;
22    (6) Equipment;
23    (7) Permanent improvements;
24    (8) Land;

 

 

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

 

 

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1    Sec. 24.12. "State retirement contribution for annual
2normal cost" defined. The term "State retirement contribution
3for annual normal cost" means the portion of the total required
4State contribution to a retirement system for a fiscal year
5that represents the State's portion of the System's projected
6normal cost for that fiscal year, as determined and certified
7by the board of trustees of the retirement system in
8conformance with the applicable provisions of the Illinois
9Pension Code.
 
10    (30 ILCS 105/24.13 new)
11    Sec. 24.13. "State retirement contribution for unfunded
12accrued liability" defined. The term "State retirement
13contribution for unfunded accrued liability" means the portion
14of the total required State contribution to a retirement system
15for a fiscal year that is not included in the State retirement
16contribution for annual normal cost.
 
17    Section 15. The Budget Stabilization Act is amended by
18changing Section 20 as follows:
 
19    (30 ILCS 122/20)
20    Sec. 20. Pension Stabilization Fund.
21    (a) The Pension Stabilization Fund is hereby created as a
22special fund in the State treasury. Moneys in the fund shall be
23used for the sole purpose of making payments to the designated

 

 

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1retirement systems as provided in Section 25.
2    (b) For each fiscal year when the General Assembly's
3appropriations and transfers or diversions as required by law
4from general funds do not exceed 99% of the estimated general
5funds revenues pursuant to subsection (a) of Section 10, the
6Comptroller shall transfer from the General Revenue Fund as
7provided by this Section a total amount equal to 0.5% of the
8estimated general funds revenues to the Pension Stabilization
9Fund.
10    (c) For each fiscal year through State fiscal year 2013,
11when the General Assembly's appropriations and transfers or
12diversions as required by law from general funds do not exceed
1398% of the estimated general funds revenues pursuant to
14subsection (b) of Section 10, the Comptroller shall transfer
15from the General Revenue Fund as provided by this Section a
16total amount equal to 1.0% of the estimated general funds
17revenues to the Pension Stabilization Fund.
18    (c-10) In State fiscal year 2016 and each fiscal year
19thereafter, the State Comptroller shall order transferred and
20the State Treasurer shall transfer $693,500,000 from the
21General Revenue Fund to the Pension Stabilization Fund.
22    (c-15) In addition, in State fiscal year 2020 and each
23fiscal year thereafter, the State Comptroller shall order
24transferred and the State Treasurer shall transfer
25$900,000,000 from the General Revenue Fund to the Pension
26Stabilization Fund.

 

 

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1    (c-20) In addition, in State fiscal year 2034 and each
2fiscal year thereafter, the State Comptroller shall order
3transferred and the State Treasurer shall transfer
4$1,100,000,000 from the General Revenue Fund to the Pension
5Stabilization Fund.
6    (c-25) The transfers made pursuant to subsections (c-10)
7through (c-20) of this Section shall continue through State
8fiscal year 2045 or until each of the designated retirement
9systems, as defined in Section 25, has achieved a funding ratio
10of at least 100%, whichever occurs first.
11    (d) The Comptroller shall transfer 1/12 of the total amount
12to be transferred each fiscal year under this Section into the
13Pension Stabilization Fund on the first day of each month of
14that fiscal year or as soon thereafter as possible; except that
15the final transfer of the fiscal year shall be made as soon as
16practical after the August 31 following the end of the fiscal
17year.
18    Until State fiscal year 2014, before Before the final
19transfer for a fiscal year is made, the Comptroller shall
20reconcile the estimated general funds revenues used in
21calculating the other transfers under this Section for that
22fiscal year with the actual general funds revenues for that
23fiscal year. The final transfer for the fiscal year shall be
24adjusted so that the total amount transferred under this
25Section for that fiscal year is equal to the percentage
26specified in subsection (b) or (c) of this Section, whichever

 

 

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1is applicable, of the actual general funds revenues for that
2fiscal year. The actual general funds revenues for the fiscal
3year shall be calculated in a manner consistent with subsection
4(c) of Section 10 of this Act.
5(Source: P.A. 94-839, eff. 6-6-06.)
 
6    Section 20. The Illinois Pension Code is amended by
7changing Sections 1-103.3, 1-160, 2-108, 2-119, 2-119.1,
82-121.1, 2-124, 2-125, 2-126, 2-134, 2-162, 14-103.10, 14-107,
914-108, 14-110, 14-114, 14-131, 14-132, 14-133, 14-135.08,
1014-152.1, 15-111, 15-113.6, 15-113.7, 15-134.5, 15-135,
1115-136, 15-155, 15-156, 15-157, 15-158.2, 15-165, 15-198,
1216-121, 16-132, 16-133, 16-133.1, 16-152, 16-158, 16-158.1,
1316-203, 20-121, 20-123, 20-124, and 20-125 and by adding
14Sections 1-161, 2-105.1, 2-105.2, 14-103.40, 14-103.41,
1515-107.1, 15-107.2, 15-155.1, 16-106.4, 16-106.5, and 16-158.2
16as follows:
 
17    (40 ILCS 5/1-103.3)
18    Sec. 1-103.3. Application of 1994 amendment; funding
19standard.
20    (a) The provisions of Public Act 88-593 this amendatory Act
21of 1994 that change the method of calculating, certifying, and
22paying the required State contributions to the retirement
23systems established under Articles 2, 14, 15, 16, and 18 shall
24first apply to the State contributions required for State

 

 

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1fiscal year 1996.
2    (b) (Blank) The General Assembly declares that a funding
3ratio (the ratio of a retirement system's total assets to its
4total actuarial liabilities) of 90% is an appropriate goal for
5State-funded retirement systems in Illinois, and it finds that
6a funding ratio of 90% is now the generally-recognized norm
7throughout the nation for public employee retirement systems
8that are considered to be financially secure and funded in an
9appropriate and responsible manner.
10    (c) Every 5 years, beginning in 1999, the Commission on
11Government Forecasting and Accountability, in consultation
12with the affected retirement systems and the Governor's Office
13of Management and Budget (formerly Bureau of the Budget), shall
14consider and determine whether the funding goals 90% funding
15ratio adopted in Articles 2, 14, 15, 16, and 18 of this Code
16continue subsection (b) continues to represent an appropriate
17funding goals goal for those State-funded retirement systems in
18Illinois, and it shall report its findings and recommendations
19on this subject to the Governor and the General Assembly.
20(Source: P.A. 93-1067, eff. 1-15-05.)
 
21    (40 ILCS 5/1-160)
22    Sec. 1-160. Provisions applicable to new hires.
23    (a) The provisions of this Section apply to a person who,
24on or after January 1, 2011, first becomes a member or a
25participant under any reciprocal retirement system or pension

 

 

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1fund established under this Code, other than a retirement
2system or pension fund established under Article 2, 3, 4, 5, 6,
3or 18 of this Code, notwithstanding any other provision of this
4Code to the contrary, but do not apply (i) to any self-managed
5plan established under this Code, (ii) to any person with
6respect to service as a sheriff's law enforcement employee
7under Article 7, (iii) to any person with respect to service
8for which the person participates in the cash balance plan
9established under Section 1-161, or (iv) to any participant of
10the retirement plan established under Section 22-101.
11    A person subject to this Section with respect to service
12under the State Universities Retirement System may irrevocably
13elect to transfer to the cash balance plan under Section 1-161
14with respect to service under the State Universities Retirement
15System by filing with the State Universities Retirement System
16by December 31, 2013, in the manner required by that System,
17his or her irrevocable written election to transfer to the cash
18balance plan. A person subject to this Section who returns to
19active service under Article 15 after November 1, 2013 shall
20have 60 days after returning to active service to make this
21election. Participation in the cash balance plan shall begin no
22earlier than July 1, 2013. For a person who transfers to the
23cash balance plan, the benefits that would otherwise be payable
24under this Section with respect to service in the State
25Universities Retirement System shall instead be payable as
26provided in the cash balance plan.

 

 

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1    A person subject to this Section with respect to service
2under the Teachers' Retirement System of the State of Illinois
3may irrevocably elect to transfer to the cash balance plan
4under Section 1-161 with respect to service under the Teachers'
5Retirement System of the State of Illinois by filing with the
6Teachers' Retirement System of the State of Illinois by
7December 31, 2013, in the manner required by that System, his
8or her irrevocable written election to transfer to the cash
9balance plan. A person subject to this Section who returns to
10active service under Article 16 after November 1, 2013 shall
11have 60 days after returning to active service to make this
12election. Participation in the cash balance plan shall begin no
13earlier than July 1, 2013. For a person who transfers to the
14cash balance plan, the benefits that would otherwise be payable
15under this Section with respect to service in the Teachers'
16Retirement System of the State of Illinois shall instead be
17payable as provided in the cash balance plan.
18    (b) "Final average salary" means the average monthly (or
19annual) salary obtained by dividing the total salary or
20earnings calculated under the Article applicable to the member
21or participant during the 96 consecutive months (or 8
22consecutive years) of service within the last 120 months (or 10
23years) of service in which the total salary or earnings
24calculated under the applicable Article was the highest by the
25number of months (or years) of service in that period. For the
26purposes of a person who first becomes a member or participant

 

 

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

 

 

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1means the index published by the Bureau of Labor Statistics of
2the United States Department of Labor that measures the average
3change in prices of goods and services purchased by all urban
4consumers, United States city average, all items, 1982-84 =
5100. The new amount resulting from each annual adjustment shall
6be determined by the Public Pension Division of the Department
7of Insurance and made available to the boards of the retirement
8systems and pension funds by November 1 of each year.
9    (c) A member or participant is entitled to a retirement
10annuity upon written application if he or she has attained age
1167 and has at least 10 years of service credit and is otherwise
12eligible under the requirements of the applicable Article.
13    A member or participant who has attained age 62 and has at
14least 10 years of service credit and is otherwise eligible
15under the requirements of the applicable Article may elect to
16receive the lower retirement annuity provided in subsection (d)
17of this Section.
18    (d) The retirement annuity of a member or participant who
19is retiring after attaining age 62 with at least 10 years of
20service credit shall be reduced by one-half of 1% for each full
21month that the member's age is under age 67.
22    (e) Any retirement annuity or supplemental annuity shall be
23subject to annual increases on the January 1 occurring either
24on or after the attainment of age 67 or the first anniversary
25of the annuity start date, whichever is later. Each annual
26increase shall be calculated at 3% or one-half the annual

 

 

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1unadjusted percentage increase (but not less than zero) in the
2consumer price index-u for the 12 months ending with the
3September preceding each November 1, whichever is less, of the
4originally granted retirement annuity. If the annual
5unadjusted percentage change in the consumer price index-u for
6the 12 months ending with the September preceding each November
71 is zero or there is a decrease, then the annuity shall not be
8increased.
9    (f) The initial survivor's or widow's annuity of an
10otherwise eligible survivor or widow of a retired member or
11participant who first became a member or participant on or
12after January 1, 2011 shall be in the amount of 66 2/3% of the
13retired member's or participant's retirement annuity at the
14date of death. In the case of the death of a member or
15participant who has not retired and who first became a member
16or participant on or after January 1, 2011, eligibility for a
17survivor's or widow's annuity shall be determined by the
18applicable Article of this Code. The initial benefit shall be
1966 2/3% of the earned annuity without a reduction due to age. A
20child's annuity of an otherwise eligible child shall be in the
21amount prescribed under each Article if applicable. Any
22survivor's or widow's annuity shall be increased (1) on each
23January 1 occurring on or after the commencement of the annuity
24if the deceased member died while receiving a retirement
25annuity or (2) in other cases, on each January 1 occurring
26after the first anniversary of the commencement of the annuity.

 

 

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1Each annual increase shall be calculated at 3% or one-half the
2annual unadjusted percentage increase (but not less than zero)
3in the consumer price index-u for the 12 months ending with the
4September preceding each November 1, whichever is less, of the
5originally granted survivor's annuity. If the annual
6unadjusted percentage change in the consumer price index-u for
7the 12 months ending with the September preceding each November
81 is zero or there is a decrease, then the annuity shall not be
9increased.
10    (g) The benefits in Section 14-110 apply only if the person
11is a State policeman, a fire fighter in the fire protection
12service of a department, or a security employee of the
13Department of Corrections or the Department of Juvenile
14Justice, as those terms are defined in subsection (c) (b) of
15Section 14-110. A person who meets the requirements of this
16Section is entitled to an annuity calculated under the
17provisions of Section 14-110, in lieu of the regular or minimum
18retirement annuity, only if the person has withdrawn from
19service with not less than 20 years of eligible creditable
20service and has attained age 60, regardless of whether the
21attainment of age 60 occurs while the person is still in
22service.
23    (h) If a person who first becomes a member or a participant
24of a retirement system or pension fund subject to this Section
25on or after January 1, 2011 is receiving a retirement annuity
26or retirement pension under that system or fund and becomes a

 

 

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

 

 

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1contractual employment, the person's retirement annuity or
2retirement pension payments shall resume and, if appropriate,
3be recalculated under the applicable provisions of this Code.
4    (i) Notwithstanding any other provision of this Section, a
5person who first becomes a participant of the retirement system
6established under Article 15 on or after January 1, 2011 but
7before the effective date of this amendatory Act of the 97th
8General Assembly shall have the option to enroll in the
9self-managed plan created under Section 15-158.2 of this Code.
10    (j) In the case of a conflict between the provisions of
11this Section and any other provision of this Code, the
12provisions of this Section shall control.
13(Source: P.A. 96-889, eff. 1-1-11; 96-1490, eff. 1-1-11;
1497-609, eff. 1-1-12.)
 
15    (40 ILCS 5/1-161 new)
16    Sec. 1-161. Cash Balance Plan.
17    (a) Participation and Applicability. This Section applies
18to all new cash balance plan participants and all legacy Tier
19II participants.
20    (b) Title. The package of benefits provided under this
21Section may be referred to as the "cash balance plan". Persons
22subject to the provisions of this Section may be referred to as
23"participants in the cash balance plan" or, in this Section,
24simply as "participants".
25    (b-5) Definitions. As used in this Section:

 

 

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

 

 

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1    deceased participant had not been subject to this Section.
2    "Eligible surviving spouse" means:
3        (1) with respect to a participant in the retirement
4    system established under Article 15 of this Code, a person
5    who would be eligible for a survivors annuity as a
6    surviving spouse under Article 15 of this Code if the
7    deceased participant had been a participant in the
8    traditional benefit package; or
9        (2) with respect to a participant in the retirement
10    system established under Article 16, a dependent
11    beneficiary as defined in subdivision (a)(3)(A) or
12    (a)(3)(A-1) of Section 16-140 of this Code who would be
13    eligible for survivors' benefits payable in the form of an
14    annuity if the deceased participant had not been subject to
15    this Section.
16    "Eligible survivor" means:
17        (1) with respect to a participant in the retirement
18    system established under Article 15 of this Code, a person
19    who would be eligible for survivors insurance benefits as a
20    survivors insurance beneficiary (as defined in Section
21    15-131 of this Code) if the deceased participant had been a
22    participant in the traditional benefit package; or
23        (2) with respect to a participant in the retirement
24    system established under Article 16, a person who would be
25    eligible for survivors' benefits under Article 16 of this
26    Code if the deceased participant had not been subject to

 

 

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1    this Section.
2    "Salary" means "earnings" as defined in Article 15 or
3"salary" as defined in Article 16, whichever is applicable.
4    "Legacy Tier II participant" means a person who was subject
5to Section 1-160 with respect to service under Article 15 or 16
6of this Code and who irrevocably elects to participate in the
7cash balance plan created under this Section. That election
8must be made in writing, in the manner provided by the
9applicable retirement system.
10    "New cash balance plan participant" means a person who, on
11or after July 1, 2013, first begins to participate in the
12retirement system established under Article 15 or 16 of this
13Code.
14    (c) Cash Balance Account. A notional cash balance account
15shall be established by the applicable retirement system for
16each participant in the cash balance plan. The account is
17notional and does not contain any actual money segregated from
18the commingled assets of the retirement system. The cash
19balance in the account is to be used in calculating benefits as
20provided in this Section, but is not to be used in the
21calculation of any refund, transfer, or other benefit under the
22applicable Article of this Code.
23    If a person participates in the cash balance plan with
24respect to service under more than one retirement system, each
25retirement system shall establish a separate cash balance
26account for the participant, and the participant shall be

 

 

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1entitled to separate benefits from each retirement system based
2upon the participant's service and cash balance account under
3that retirement system. References in this Section to a
4participant's account mean the account established by, and
5related to his or her service under, the applicable retirement
6system.
7    The amounts to be credited to the cash balance account
8shall include (i) amounts contributed by or on behalf of the
9participant as employee contributions, (ii) notional employer
10contributions and notional amounts based on optional employer
11contributions, and (iii) interest credit that is attributable
12to the account, all as provided in this Section.
13    The amounts to be debited from the cash balance account
14shall include (i) amounts representing contributions for
15disability benefits, (ii) amounts representing contributions
16for survivor benefits not based on the cash balance account,
17and (iii) upon a return to service after retirement, amounts
18representing each payment of retirement annuity following the
19latest retirement and preceding the return to service, all as
20provided in this Section.
21    The applicable retirement system shall give to each
22participant in the cash balance plan who has not yet retired
23annual notice of the balance in the participant's cash balance
24account.
25    (c-5) Initial Account Balance for Legacy Tier II
26Participants. The applicable retirement system shall establish

 

 

09700SB1673ham009- 22 -LRB097 07605 JDS 72879 a

1an initial account balance for each legacy Tier II participant
2when he or she begins participation in the cash balance plan.
3The initial account balance shall be an amount equal to the
4refund that the participant would be eligible to receive under
5the applicable Article of this Code if the participant
6terminated employment on that date and elected a refund of
7contributions. If a legacy Tier II participant has purchased
8service credit prior to irrevocably electing to participate in
9the cash balance plan created under this Section, then the
10initial account balance shall include an amount equal to the
11contributions made by the participant to purchase that service
12credit.
13    By accepting the initial account balance, the participant
14relinquishes the right to any benefits (including survivor
15benefits) that would otherwise be payable under Section 1-160
16with respect to service in the applicable retirement system,
17but does not forfeit any service credit earned with respect to
18such service.
19    (d) Employee Contributions. New cash balance plan
20participants and legacy Tier II participants shall make
21employee contributions to the applicable retirement system at
22the rates required under the applicable Article of this Code.
23The amount of each contribution shall be credited to the
24participant's cash balance account after the retirement
25system's receipt and reconciliation of the contribution.
26    (e) Notional Employer Contributions. Upon crediting each

 

 

09700SB1673ham009- 23 -LRB097 07605 JDS 72879 a

1employee contribution under subsection (d), an amount
2representing the corresponding employer contribution shall be
3credited to the participant's cash balance account. Notional
4employer contributions shall be 6.2% of salary.
5    The notional employer contribution to be credited to the
6participant's account is not the same as the actual employer
7contributions required under subsection (o) and the provisions
8of the applicable Article of this Code.
9    (e-1) Notional Amount Based on Optional Employer
10Contributions. If an employer agrees to make optional employer
11contributions under subsection (p), then, for the period
12specified in the agreement, an amount representing the
13percentage of salary specified in the agreement shall be
14credited to the cash balance account of each affected
15participant after receipt and reconciliation of the
16corresponding employee contribution under subsection (d).
17    The notional amount to be credited to the participant's
18account is not the same amount as the actual optional employer
19contribution required under subsection (p) and the provisions
20of the applicable Article of this Code.
21    (f) Interest Credit. An interest credit shall be determined
22by the retirement system in accordance with this Section and
23credited to the participant's cash balance account for each
24fiscal year in which there is a positive balance in that
25account; except that no additional interest credit shall be
26credited while an annuity based on the account is being paid.

 

 

09700SB1673ham009- 24 -LRB097 07605 JDS 72879 a

1The interest credit amount shall be a percentage of the average
2balance in the cash balance account during that fiscal year,
3and shall be calculated on June 30.
4    The percentage shall be the assumed treasury rate for the
5previous fiscal year, unless neither the retirement system's
6actual rate of investment earnings for the previous fiscal year
7nor the retirement system's actual rate of investment earnings
8for the five-year period ending at the end of the previous
9fiscal year is less than the assumed treasury rate.
10    If both the retirement system's actual rate of investment
11earnings for the previous fiscal year and the actual rate of
12investment earnings for the five-year period ending at the end
13of the previous fiscal year are at least the assumed treasury
14rate, then the percentage shall be:
15        (i) the assumed treasury rate, plus
16        (ii) two-thirds of the amount of the actual rate of
17    investment earnings for the previous fiscal year that
18    exceeds the assumed treasury rate.
19However, in no event shall the percentage applied under this
20subsection exceed 10%.
21    For the purposes of this subsection only, "previous fiscal
22year" means the fiscal year ending one year before the interest
23rate is calculated.
24    For the purposes of this subsection only, "assumed treasury
25rate" means the average annual yield of the 30-year U.S.
26Treasury Bond over the previous fiscal year, but not less than

 

 

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14%.
2    When a person applies for a retirement annuity under
3subsection (g) or a surviving spouse's annuity under subsection
4(k), the retirement system shall calculate the initial annuity
5without applying an interest credit for the portion of the
6fiscal year before the initial annuity payment date. On the
7first June 30 occurring on or after the initial annuity payment
8date, the retirement system shall (1) calculate a prorated
9interest credit for the portion of the fiscal year before the
10initial annuity payment date, (2) credit the prorated amount to
11the participant's account, and (3) recalculate the amount of
12the annuity from the initial annuity payment date. The
13retirement system shall pay to the annuitant in a lump-sum,
14without interest, the difference, for the portion of the fiscal
15year on and after the initial annuity payment, between the
16original annuity amount and the annuity amount as recalculated
17under this subsection.
18    (f-10) Distribution after Termination of Employment. After
19termination of the participant's active employment with at
20least 5 years of service credit under the applicable retirement
21system but prior to applying for an annuity under this Section,
22a participant in the cash balance plan or an eligible surviving
23spouse under subsection (k) may make an irrevocable election to
24receive a distribution from the applicable retirement system in
25an amount not to exceed 40% of the balance in the participant's
26account in the form of a direct rollover to another qualified

 

 

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

 

 

09700SB1673ham009- 27 -LRB097 07605 JDS 72879 a

1applicable retirement system are terminated. A person who
2receives a refund under this subsection forfeits all rights
3under the applicable retirement system, including any right to
4repay refunded amounts and to reinstate any benefit under that
5retirement system.
6    An eligible surviving spouse under subsection (k) may elect
7to receive a refund under this subsection in lieu of a
8survivor's annuity unless a distribution has been made under
9subsection (f-10) with respect to the participant's cash
10balance account.
11    (g) Retirement Annuity. A participant in the cash balance
12plan may begin collecting a retirement annuity at age 59 1/2,
13but not before reaching the age of 59 1/2 and not before the
14date of termination of active employment under the applicable
15retirement system.
16    The amount of the retirement annuity shall be calculated by
17the retirement system, based on the balance in the cash balance
18account, the assumption of future investment returns as
19specified in this subsection, the participant's election to
20have a lifetime surviving spouse's annuity as specified in this
21subsection, the annual increase in retirement annuity as
22specified in subsection (h), the annual increase in survivor's
23annuity as specified in subsection (l), and any actuarial
24assumptions and tables adopted by the board of the retirement
25system for this purpose. The calculation shall be designed to
26determine, on an actuarially equivalent basis, the amount of

 

 

09700SB1673ham009- 28 -LRB097 07605 JDS 72879 a

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

 

 

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1payment period shall begin on that date regardless of whether
2an application has been filed.
3    The participant may elect, in the participant's written
4application for retirement, to receive a reduced retirement
5annuity payable for his or her life and to have a surviving
6spouse's annuity in a monthly amount equal to 50%, 75%, or 100%
7of that reduced monthly amount, to be paid to his or her
8eligible surviving spouse, commencing upon the participant's
9death.
10    When the final payment of the retirement annuity (or
11surviving spouse's annuity, if the participant elects to
12provide for a surviving spouse's annuity pursuant to this
13subsection) has been paid, the account shall be closed. When
14the participant has died and there are no longer any eligible
15survivors, any unused employee contributions shall be
16forfeited to the applicable retirement system.
17    (h) Annual Increase in Retirement Annuity. The retirement
18annuity shall be subject to an automatic annual increase in an
19amount equal to 3% of the originally granted annuity on each
20January 1 occurring on or after the first anniversary of the
21annuity start date. Automatic annual increases in a surviving
22spouse's annuity provided under subsection (g) shall be in
23accordance with subsection (k-5) of this Section.
24    (i) Disability Benefits. The disability benefits provided
25under the applicable retirement system apply to new cash
26balance plan participants and legacy Tier II participants in

 

 

09700SB1673ham009- 30 -LRB097 07605 JDS 72879 a

1the cash balance plan, subject to and in accordance with the
2eligibility and other provisions of the applicable Article.
3    Retirement due to disability under Section 15-153.2 or
416-149.2 shall be deemed a disability benefit for the purposes
5of this Section and shall apply to new cash balance plan
6participants and legacy Tier II participants.
7    The board of the retirement system shall designate
8annually, as a percentage of salary, an amount representing the
9anticipated average cost of providing disability benefits for
10participants. The amount so designated shall not exceed 1% of
11the participant's salary and shall be deducted annually from
12the account of each participant receiving salary.
13    (j) Return to Service. Upon a return to service under the
14same retirement system after beginning to receive a retirement
15annuity under the cash balance plan, the retirement annuity
16shall be suspended and active participation in the cash balance
17plan shall resume. Upon termination of the employment, the
18retirement annuity shall resume in an amount to be recalculated
19in accordance with subsection (g), taking into effect the
20changes in the cash balance account. If a retired annuitant
21returns to service, his or her notional cash balance account
22shall thereupon be decreased by amounts representing each
23payment of retirement annuity following the latest retirement
24and preceding the return to service.
25    (k) Surviving Spouse's Annuity - Death before Retirement.
26In the case of the death of a new cash balance plan participant

 

 

09700SB1673ham009- 31 -LRB097 07605 JDS 72879 a

1or legacy Tier II participant who had less than 5 years of
2service under the applicable Article and had not begun
3receiving a retirement annuity or taken a refund under
4subsection (f-15), the eligible surviving spouse shall be
5entitled only to a refund of employee contributions under
6subsection (f-15).
7    In the case of the death of a new cash balance plan
8participant or legacy Tier II participant who had at least 5
9years of service under the applicable Article and had not begun
10receiving a retirement annuity or taken a refund under
11subsection (f-15), the eligible surviving spouse shall, upon
12written application, be entitled to receive a surviving
13spouse's annuity beginning at age 59 1/2 (regardless of the
14existence of dependent eligible children). The surviving
15spouse's annuity shall be equal to 66 2/3% of the amount of
16retirement annuity that the deceased participant would have
17been entitled to if he or she had retired on the date of death
18having attained age 59 1/2 and without having elected to take a
19reduced annuity to provide a surviving spouse's annuity.
20    At any time before beginning to receive a surviving
21spouse's annuity under this subsection, the eligible surviving
22spouse may claim a distribution under subsection (f-10) or a
23refund under subsection (f-15). The deceased participant's
24account shall continue to receive interest credit until the
25eligible surviving spouse begins to receive a surviving
26spouse's annuity or receives a refund of employee contributions

 

 

09700SB1673ham009- 32 -LRB097 07605 JDS 72879 a

1under subsection (f-15).
2    A surviving spouse's annuity provided under this
3subsection shall be a life annuity and shall not expire for the
4reason that the amount paid has reached or exceeded the account
5balance. When the final payment of the surviving spouse's
6annuity has been paid, the account shall be closed. When the
7participant has died and there are no longer any eligible
8survivors, any unused employee contributions shall be
9forfeited to the applicable retirement system.
10    (k-5) Annual Increase in Surviving Spouse's Annuity. A
11surviving spouse's annuity granted under subsection (g) or (k)
12shall be subject to an automatic annual increase in an amount
13equal to 3% of the originally granted annuity on each January 1
14occurring on or after the first anniversary of the annuity
15start date.
16    (l) Benefits for Eligible Children and Eligible Parents.
17Upon the death of a participant in the cash balance plan, an
18eligible child or eligible parent may be entitled to receive
19death benefits and survivors insurance benefits under Article
2015 or survivors' benefits under Article 16 of this Code. These
21benefits shall be deemed to be "survivor benefits not based on
22the cash balance account" for the purposes of this Section.
23    Eligibility for these benefits shall be determined under
24this Section and the applicable Article of this Code, including
25without limitation any provision restricting eligibility on
26the basis of (i) an election to receive a lump-sum death

 

 

09700SB1673ham009- 33 -LRB097 07605 JDS 72879 a

1benefit or (ii) a permitted designation of a different or
2alternate beneficiary.
3    The amount of these benefits shall be determined under this
4Section and the applicable Article of this Code, including
5without limitation any limitation on the minimum or maximum
6amount of such benefits, individually or in combination. In
7applying any limitation on the minimum or maximum amount of
8such benefits that depends on the existence or amount of a
9benefit payable to the surviving spouse, the retirement system
10shall use the amount of surviving spouse annuity payable by the
11retirement system under this Section rather than the amount
12otherwise provided under the applicable Article. Under no
13circumstance shall the sum of the benefits payable to all
14eligible survivors of a particular deceased participant by the
15applicable retirement system in accordance with this Section
16exceed the sum of the benefits that would be payable to all
17eligible survivors if the deceased participant had not been
18subject to this Section.
19The board of the retirement system shall designate annually, as
20a percentage of salary, an amount representing the anticipated
21average cost of providing survivor benefits not based on the
22cash balance account for dependent children and dependent
23parents of deceased participants in the cash balance plan. The
24amount so designated shall not exceed XXX% of the cash balance
25plan participant's salary and shall be deducted annually from
26the account of each participant receiving salary.

 

 

09700SB1673ham009- 34 -LRB097 07605 JDS 72879 a

1    (m) Applicability of Provisions. The following provisions,
2if and as they exist in this Code, do not apply to participants
3in the cash balance plan with respect to participation in the
4cash balance plan, except as they are specifically provided for
5in this Section:
6        (1) minimum service or vesting requirements (other
7    than as provided in this Section);
8        (2) provisions limiting a retirement annuity to a
9    specified percentage of salary;
10        (3) provisions authorizing a minimum retirement or
11    survivor's annuity or a supplemental annuity (except as
12    provided in subsection (l) of this Section with respect to
13    eligible children and eligible parents);
14        (4) provisions authorizing any form of annuity not
15    authorized under this Section;
16        (5) provisions authorizing a reversionary annuity
17    (other than a surviving spouse's annuity under subsection
18    (g));
19        (6) provisions authorizing a refund of employee
20    contributions upon termination of service (except as
21    provided in this Section) or any lump-sum payout in lieu of
22    a retirement annuity or survivor's benefit (other than
23    lump-sum death benefits and other than the distribution
24    under subsection (f-10) and the refund under subsection
25    (f-15) of this Section);
26        (7) provisions authorizing optional service credits or

 

 

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1    the payment of optional additional contributions (other
2    than the optional employer contributions specifically
3    authorized in subsection (e-1)); or
4        (8) a level income option.
5    The Retirement Systems Reciprocal Act applies to
6participants in the cash balance plan who qualify under Article
720 of this Code, but it does not affect the calculation of
8benefits payable under this Section.
9    The other provisions of this Code continue to apply to
10participants in the cash balance plan, to the extent that they
11do not conflict with this Section. In the case of a conflict
12between the provisions of this Section and any other provision
13of this Code, the provisions of this Section control.
14    (n) Rules. The Board of Trustees of the applicable
15retirement system may adopt rules and procedures for the
16implementation of this Section, including but not limited to
17determinations of how to integrate the administration of this
18Section with the requirements of the applicable Article and any
19other applicable provisions of this Code.
20    (o) Actual Employer Contributions. Payment of employer
21contributions with respect to participants in the cash balance
22plan shall be the responsibility of the actual employer. These
23contributions shall be determined under and paid in accordance
24with the provisions of Sections 15-155 and 16-158.
25    (p) Actual Optional Employer Contributions. An employer
26may agree with the applicable retirement system to make

 

 

09700SB1673ham009- 36 -LRB097 07605 JDS 72879 a

1optional employer contributions to the system on behalf of
2employees who are participants in the cash balance plan, to the
3extent permitted by federal law and in accordance with the
4rules and procedures of the system.
5    Any such agreement must apply to all employees of the
6employer who are participants in the cash balance plan. The
7agreement shall be filed in writing with the applicable
8retirement system, and shall specify (i) the additional
9percentage of salary to be credited to the accounts of the
10employees, (ii) the period during which the optional employer
11contributions will apply, and (iii) that the employer agrees to
12pay to the applicable retirement system the employer's normal
13cost of the benefits resulting from those credited amounts, as
14well as any unfunded accrued liability resulting from the cost
15of those benefits, all as determined by the system in
16accordance with the applicable Article.
17    (q) Prospective Modification. The provisions set forth in
18this Section are subject to prospective changes made by law
19provided that any such changes shall not apply to any benefits
20accrued under this Section prior to the effective date of any
21amendatory Act of the General Assembly.
22    (r) Qualified Plan Status. No provision of this Section
23shall be interpreted in a way that would cause the applicable
24retirement system to cease to be a qualified plan under the
25Internal Revenue Code of 1986.
 

 

 

09700SB1673ham009- 37 -LRB097 07605 JDS 72879 a

1    (40 ILCS 5/2-105.1 new)
2    Sec. 2-105.1. Tier I participant."Tier I participant": A
3participant who first became a participant before January 1,
42011.
 
5    (40 ILCS 5/2-105.2 new)
6    Sec. 2-105.2. Tier I retiree. "Tier I retiree" means a
7former Tier I participant who is receiving a retirement
8annuity.
 
9    (40 ILCS 5/2-108)  (from Ch. 108 1/2, par. 2-108)
10    Sec. 2-108. Salary. "Salary": (1) For members of the
11General Assembly, the total compensation paid to the member by
12the State for one year of service, including the additional
13amounts, if any, paid to the member as an officer pursuant to
14Section 1 of "An Act in relation to the compensation and
15emoluments of the members of the General Assembly", approved
16December 6, 1907, as now or hereafter amended.
17    (2) For the State executive officers specified in Section
182-105, the total compensation paid to the member for one year
19of service.
20    (3) For members of the System who are participants under
21Section 2-117.1, or who are serving as Clerk or Assistant Clerk
22of the House of Representatives or Secretary or Assistant
23Secretary of the Senate, the total compensation paid to the
24member for one year of service, but not to exceed the salary of

 

 

09700SB1673ham009- 38 -LRB097 07605 JDS 72879 a

1the highest salaried officer of the General Assembly.
2    However, in the event that federal law results in any
3participant receiving imputed income based on the value of
4group term life insurance provided by the State, such imputed
5income shall not be included in salary for the purposes of this
6Article.
7    Notwithstanding any other provision of this Code, the
8salary of a Tier I participant for the purposes of this Code
9shall not exceed, for periods of service in a term of office
10beginning on or after the effective date of this amendatory Act
11of the 97th General Assembly, the annual contribution and
12benefit base established for the applicable year by the
13Commissioner of Social Security under the federal Social
14Security Act.
15(Source: P.A. 86-27; 86-273; 86-1028; 86-1488.)
 
16    (40 ILCS 5/2-119)  (from Ch. 108 1/2, par. 2-119)
17    Sec. 2-119. Retirement annuity - conditions for
18eligibility.
19    (a) A participant whose service as a member is terminated,
20regardless of age or cause, is entitled to a retirement annuity
21beginning on the date specified by the participant in a written
22application subject to the following conditions:
23        1. The date the annuity begins does not precede the
24    date of final termination of service, or is not more than
25    30 days before the receipt of the application by the board

 

 

09700SB1673ham009- 39 -LRB097 07605 JDS 72879 a

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

 

 

09700SB1673ham009- 40 -LRB097 07605 JDS 72879 a

1    subsection (a) of this Section remain unchanged.
2        (2) If the Tier I participant is at least 40 but less
3    than 45 years old on the effective date of this amendatory
4    Act of the 97th General Assembly, then the references to
5    age 55 and 62 in subsection (a) of this Section are
6    increased by one year.
7        (3) If the Tier I participant is at least 35 but less
8    than 40 years old on the effective date of this amendatory
9    Act of the 97th General Assembly, then the references to
10    age 55 and 62 in subsection (a) of this Section are
11    increased by 3 years.
12        (4) If the Tier I participant is less than 35 years old
13    on the effective date of this amendatory Act of the 97th
14    General Assembly, then the references to age 55 and 62 in
15    subsection (a) of this Section are increased by 5 years.
16    Notwithstanding Section 1-103.1, this subsection (a-5)
17applies without regard to whether or not the Tier I member is
18in active service under this Article on or after the effective
19date of this amendatory Act of the 97th General Assembly.
20    (a-5) A participant who first becomes a participant of this
21System on or after January 1, 2011 (the effective date of
22Public Act 96-889) who has attained age 62 and has at least 8
23years of service credit may elect to receive the lower
24retirement annuity provided in paragraph (c) of Section
252-119.01 of this Code.
26    (b) A participant shall be considered permanently disabled

 

 

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1only if: (1) disability occurs while in service and is of such
2a nature as to prevent him or her from reasonably performing
3the duties of his or her office at the time; and (2) the board
4has received a written certificate by at least 2 licensed
5physicians appointed by the board stating that the member is
6disabled and that the disability is likely to be permanent.
7(Source: P.A. 96-889, eff. 1-1-11; 96-1490, eff. 1-1-11.)
 
8    (40 ILCS 5/2-119.1)  (from Ch. 108 1/2, par. 2-119.1)
9    Sec. 2-119.1. Automatic increase in retirement annuity.
10    (a) Except as provided in subsections (a-1) and (a-2), a A
11participant who retires after June 30, 1967, and who has not
12received an initial increase under this Section before the
13effective date of this amendatory Act of 1991, shall, in
14January or July next following the first anniversary of
15retirement, whichever occurs first, and in the same month of
16each year thereafter, but in no event prior to age 60, have the
17amount of the originally granted retirement annuity increased
18as follows: for each year through 1971, 1 1/2%; for each year
19from 1972 through 1979, 2%; and for 1980 and each year
20thereafter, 3%. Annuitants who have received an initial
21increase under this subsection prior to the effective date of
22this amendatory Act of 1991 shall continue to receive their
23annual increases in the same month as the initial increase.
24    (a-1) Notwithstanding any other provision of this Article,
25for a Tier I retiree, the amount of each automatic annual

 

 

09700SB1673ham009- 42 -LRB097 07605 JDS 72879 a

1increase in retirement annuity occurring on or after the
2effective date of this amendatory Act of the 97th General
3Assembly shall be the lesser of $750 or 3% of the total annuity
4payable at the time of the increase, including previous
5increases granted.
6    (a-2) Notwithstanding any other provision of this Article,
7for a Tier I retiree, the monthly retirement annuity shall
8first be subject to annual increases on the January 1 occurring
9on or next after the attainment of age 67 or the January 1
10occurring on or next after the fifth anniversary of the annuity
11start date, whichever occurs earlier. If on the effective date
12of this amendatory Act of the 97th General Assembly a Tier I
13retiree has already received an annual increase under this
14Section but does not yet meet the new eligibility requirements
15of this subsection, the annual increases already received shall
16continue in force, but no additional annual increase shall be
17granted until the Tier I retiree meets the new eligibility
18requirements.
19    (a-3) Notwithstanding Section 1-103.1, subsections (a-1)
20and (a-2) apply without regard to whether or not the Tier I
21retiree is in active service under this Article on or after the
22effective date of this amendatory Act of the 97th General
23Assembly.
24    (b) Beginning January 1, 1990, for eligible participants
25who remain in service after attaining 20 years of creditable
26service, the 3% increases provided under subsection (a) shall

 

 

09700SB1673ham009- 43 -LRB097 07605 JDS 72879 a

1begin to accrue on the January 1 next following the date upon
2which the participant (1) attains age 55, or (2) attains 20
3years of creditable service, whichever occurs later, and shall
4continue to accrue while the participant remains in service;
5such increases shall become payable on January 1 or July 1,
6whichever occurs first, next following the first anniversary of
7retirement. For any person who has service credit in the System
8for the entire period from January 15, 1969 through December
931, 1992, regardless of the date of termination of service, the
10reference to age 55 in clause (1) of this subsection (b) shall
11be deemed to mean age 50.
12    This subsection (b) does not apply to any person who first
13becomes a member of the System after August 8, 2003 (the
14effective date of Public Act 93-494) this amendatory Act of the
1593rd General Assembly.
16    (b-5) Notwithstanding any other provision of this Article,
17a participant who first becomes a participant on or after
18January 1, 2011 (the effective date of Public Act 96-889)
19shall, in January or July next following the first anniversary
20of retirement, whichever occurs first, and in the same month of
21each year thereafter, but in no event prior to age 67, have the
22amount of the originally granted retirement annuity then being
23paid increased by 3% or one-half the annual unadjusted
24percentage increase in the Consumer Price Index for All Urban
25Consumers as determined by the Public Pension Division of the
26Department of Insurance under subsection (a) of Section

 

 

09700SB1673ham009- 44 -LRB097 07605 JDS 72879 a

12-108.1, whichever is less. The changes made to this subsection
2by this amendatory Act of the 97th General Assembly do not
3apply to any automatic annual increase granted under this
4subsection before the effective date of this amendatory Act.
5    (c) The foregoing provisions relating to automatic
6increases are not applicable to a participant who retires
7before having made contributions (at the rate prescribed in
8Section 2-126) for automatic increases for less than the
9equivalent of one full year. However, in order to be eligible
10for the automatic increases, such a participant may make
11arrangements to pay to the system the amount required to bring
12the total contributions for the automatic increase to the
13equivalent of one year's contributions based upon his or her
14last salary.
15    (d) A participant who terminated service prior to July 1,
161967, with at least 14 years of service is entitled to an
17increase in retirement annuity beginning January, 1976, and to
18additional increases in January of each year thereafter.
19    The initial increase shall be 1 1/2% of the originally
20granted retirement annuity multiplied by the number of full
21years that the annuitant was in receipt of such annuity prior
22to January 1, 1972, plus 2% of the originally granted
23retirement annuity for each year after that date. The
24subsequent annual increases shall be at the rate of 2% of the
25originally granted retirement annuity for each year through
261979 and at the rate of 3% for 1980 and thereafter.

 

 

09700SB1673ham009- 45 -LRB097 07605 JDS 72879 a

1    (e) Beginning January 1, 1990, all automatic annual
2increases payable under this Section shall be calculated as a
3percentage of the total annuity payable at the time of the
4increase, including previous increases granted under this
5Article.
6(Source: P.A. 96-889, eff. 1-1-11; 96-1490, eff. 1-1-11.)
 
7    (40 ILCS 5/2-121.1)  (from Ch. 108 1/2, par. 2-121.1)
8    Sec. 2-121.1. Survivor's annuity - amount.
9    (a) A surviving spouse shall be entitled to 66 2/3% of the
10amount of retirement annuity to which the participant or
11annuitant was entitled on the date of death, without regard to
12whether the participant had attained age 55 prior to his or her
13death, subject to a minimum payment of 10% of salary. If a
14surviving spouse, regardless of age, has in his or her care at
15the date of death any eligible child or children of the
16participant, the survivor's annuity shall be the greater of the
17following: (1) 66 2/3% of the amount of retirement annuity to
18which the participant or annuitant was entitled on the date of
19death, or (2) 30% of the participant's salary increased by 10%
20of salary on account of each such child, subject to a total
21payment for the surviving spouse and children of 50% of salary.
22If eligible children survive but there is no surviving spouse,
23or if the surviving spouse dies or becomes disqualified by
24remarriage while eligible children survive, each eligible
25child shall be entitled to an annuity of 20% of salary, subject

 

 

09700SB1673ham009- 46 -LRB097 07605 JDS 72879 a

1to a maximum total payment for all such children of 50% of
2salary.
3    However, the survivor's annuity payable under this Section
4shall not be less than 100% of the amount of retirement annuity
5to which the participant or annuitant was entitled on the date
6of death, if he or she is survived by a dependent disabled
7child.
8    The salary to be used for determining these benefits shall
9be the salary used for determining the amount of retirement
10annuity as provided in Section 2-119.01.
11    (b) Upon the death of a participant after the termination
12of service or upon death of an annuitant, the maximum total
13payment to a surviving spouse and eligible children, or to
14eligible children alone if there is no surviving spouse, shall
15be 75% of the retirement annuity to which the participant or
16annuitant was entitled, unless there is a dependent disabled
17child among the survivors.
18    (c) When a child ceases to be an eligible child, the
19annuity to that child, or to the surviving spouse on account of
20that child, shall thereupon cease, and the annuity payable to
21the surviving spouse or other eligible children shall be
22recalculated if necessary.
23    Upon the ineligibility of the last eligible child, the
24annuity shall immediately revert to the amount payable upon
25death of a participant or annuitant who leaves no eligible
26children. If the surviving spouse is then under age 50, the

 

 

09700SB1673ham009- 47 -LRB097 07605 JDS 72879 a

1annuity as revised shall be deferred until the attainment of
2age 50.
3    (d) Beginning January 1, 1990, every survivor's annuity
4shall be increased (1) on each January 1 occurring on or after
5the commencement of the annuity if the deceased member died
6while receiving a retirement annuity, or (2) in other cases, on
7each January 1 occurring on or after the first anniversary of
8the commencement of the annuity, by an amount equal to 3% of
9the current amount of the annuity, including any previous
10increases under this Article. Such increases shall apply
11without regard to whether the deceased member was in service on
12or after the effective date of this amendatory Act of 1991, but
13shall not accrue for any period prior to January 1, 1990.
14    (d-5) Notwithstanding any other provision of this Article,
15the initial survivor's annuity of a survivor of a participant
16who first becomes a participant on or after January 1, 2011
17(the effective date of Public Act 96-889) shall be in the
18amount of 66 2/3% of the amount of the retirement annuity to
19which the participant or annuitant was entitled on the date of
20death and shall be increased (1) on each January 1 occurring on
21or after the commencement of the annuity if the deceased member
22died while receiving a retirement annuity or (2) in other
23cases, on each January 1 occurring on or after the first
24anniversary of the commencement of the annuity, by an amount
25equal to 3% or one-half the annual unadjusted percentage
26increase in the Consumer Price Index for All Urban Consumers as

 

 

09700SB1673ham009- 48 -LRB097 07605 JDS 72879 a

1determined by the Public Pension Division of the Department of
2Insurance under subsection (a) of Section 2-108.1, whichever is
3less, of the originally granted survivor's annuity then being
4paid. The changes made to this subsection by this amendatory
5Act of the 97th General Assembly do not apply to any automatic
6annual increase granted under this subsection before the
7effective date of this amendatory Act.
8    (e) Notwithstanding any other provision of this Article,
9beginning January 1, 1990, the minimum survivor's annuity
10payable to any person who is entitled to receive a survivor's
11annuity under this Article shall be $300 per month, without
12regard to whether or not the deceased participant was in
13service on the effective date of this amendatory Act of 1989.
14    (f) In the case of a proportional survivor's annuity
15arising under the Retirement Systems Reciprocal Act where the
16amount payable by the System on January 1, 1993 is less than
17$300 per month, the amount payable by the System shall be
18increased beginning on that date by a monthly amount equal to
19$2 for each full year that has expired since the annuity began.
20(Source: P.A. 96-889, eff. 1-1-11; 96-1490, eff. 1-1-11.)
 
21    (40 ILCS 5/2-124)  (from Ch. 108 1/2, par. 2-124)
22    Sec. 2-124. Contributions by State.
23    (a) The State shall make contributions to the System by
24appropriations of amounts which, together with the
25contributions of participants, interest earned on investments,

 

 

09700SB1673ham009- 49 -LRB097 07605 JDS 72879 a

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

 

 

09700SB1673ham009- 50 -LRB097 07605 JDS 72879 a

1State fiscal year 2045. In making these determinations, the
2required State contribution shall be calculated each year as a
3level percentage of payroll over the years remaining to and
4including fiscal year 2045 and shall be determined under the
5projected unit 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.
11    Notwithstanding any other provision of this Article, the
12total required State contribution for State fiscal year 2006 is
13$4,157,000.
14    Notwithstanding any other provision of this Article, the
15total required State contribution for State fiscal year 2007 is
16$5,220,300.
17    For each of State fiscal years 2008 through 2009, the State
18contribution to the System, as a percentage of the applicable
19employee payroll, shall be increased in equal annual increments
20from the required State contribution for State fiscal year
212007, so that by State fiscal year 2011, the State is
22contributing at the rate otherwise required under this Section.
23    Notwithstanding any other provision of this Article, the
24total required State contribution for State fiscal year 2010 is
25$10,454,000 and shall be made from the proceeds of bonds sold
26in fiscal year 2010 pursuant to Section 7.2 of the General

 

 

09700SB1673ham009- 51 -LRB097 07605 JDS 72879 a

1Obligation Bond Act, less (i) the pro rata share of bond sale
2expenses determined by the System's share of total bond
3proceeds, (ii) any amounts received from the General Revenue
4Fund in fiscal year 2010, and (iii) any reduction in bond
5proceeds due to the issuance of discounted bonds, if
6applicable.
7    Notwithstanding any other provision of this Article, the
8total required State contribution for State fiscal year 2011 is
9the amount recertified by the System on or before April 1, 2011
10pursuant to Section 2-134 and shall be made from the proceeds
11of bonds sold in fiscal year 2011 pursuant to Section 7.2 of
12the General Obligation Bond Act, less (i) the pro rata share of
13bond sale expenses determined by the System's share of total
14bond proceeds, (ii) any amounts received from the General
15Revenue Fund in fiscal year 2011, and (iii) any reduction in
16bond proceeds due to the issuance of discounted bonds, if
17applicable.
18    Beginning in State fiscal year 2044, the minimum State
19contribution for each fiscal year shall be the amount needed to
20maintain the total assets of the System at 100% of the total
21actuarial liabilities of the System.
22    Beginning in State fiscal year 2046, the minimum State
23contribution for each fiscal year shall be the amount needed to
24maintain the total assets of the System at 90% of the total
25actuarial liabilities of the System.
26    Amounts received by the System pursuant to Section 25 of

 

 

09700SB1673ham009- 52 -LRB097 07605 JDS 72879 a

1the Budget Stabilization Act or Section 8.12 of the State
2Finance Act in any fiscal year do not reduce and do not
3constitute payment of any portion of the minimum State
4contribution required under this Article in that fiscal year.
5Such amounts shall not reduce, and shall not be included in the
6calculation of, the required State contributions under this
7Article in any future year until the System has reached a
8funding ratio of at least 100% 90%. A reference in this Article
9to the "required State contribution" or any substantially
10similar term does not include or apply to any amounts payable
11to the System under Section 25 of the Budget Stabilization Act.
12    Notwithstanding any other provision of this Section, the
13required State contribution for State fiscal year 2005 and for
14fiscal year 2008 and each fiscal year thereafter through State
15fiscal year 2013, as calculated under this Section and
16certified under Section 2-134, shall not exceed an amount equal
17to (i) the amount of the required State contribution that would
18have been calculated under this Section for that fiscal year if
19the System had not received any payments under subsection (d)
20of Section 7.2 of the General Obligation Bond Act, minus (ii)
21the portion of the State's total debt service payments for that
22fiscal year on the bonds issued in fiscal year 2003 for the
23purposes of that Section 7.2, as determined and certified by
24the Comptroller, that is the same as the System's portion of
25the total moneys distributed under subsection (d) of Section
267.2 of the General Obligation Bond Act. In determining this

 

 

09700SB1673ham009- 53 -LRB097 07605 JDS 72879 a

1maximum for State fiscal years 2008 through 2010, however, the
2amount referred to in item (i) shall be increased, as a
3percentage of the applicable employee payroll, in equal
4increments calculated from the sum of the required State
5contribution for State fiscal year 2007 plus the applicable
6portion of the State's total debt service payments for fiscal
7year 2007 on the bonds issued in fiscal year 2003 for the
8purposes of Section 7.2 of the General Obligation Bond Act, so
9that, by State fiscal year 2011, the State is contributing at
10the rate otherwise required under this Section.
11    (d) For purposes of determining the required State
12contribution to the System, the value of the System's assets
13shall be equal to the actuarial value of the System's assets,
14which shall be calculated as follows:
15    As of June 30, 2008, the actuarial value of the System's
16assets shall be equal to the market value of the assets as of
17that date. In determining the actuarial value of the System's
18assets for fiscal years after June 30, 2008, any actuarial
19gains or losses from investment return incurred in a fiscal
20year shall be recognized in equal annual amounts over the
215-year period following that fiscal year.
22    (e) For purposes of determining the required State
23contribution to the system for a particular year, the actuarial
24value of assets shall be assumed to earn a rate of return equal
25to the system's actuarially assumed rate of return.
26(Source: P.A. 96-43, eff. 7-15-09; 96-1497, eff. 1-14-11;

 

 

09700SB1673ham009- 54 -LRB097 07605 JDS 72879 a

196-1511, eff. 1-27-11; 96-1554, eff. 3-18-11; 97-813, eff.
27-13-12.)
 
3    (40 ILCS 5/2-125)  (from Ch. 108 1/2, par. 2-125)
4    Sec. 2-125. Obligations of State; funding guarantee.
5    (a) The payment of (1) the required State contributions,
6(2) all benefits granted under this system and (3) all expenses
7of administration and operation are obligations of the State to
8the extent specified in this Article.
9    (b) All income, interest and dividends derived from
10deposits and investments shall be credited to the account of
11the system in the State Treasury and used to pay benefits under
12this Article.
13    (c) Beginning July 1, 2013, the State shall be
14contractually obligated to contribute to the System under
15Section 2-124 in each State fiscal year an amount not less than
16the sum of (i) the State's normal cost for that year and (ii)
17the portion of the unfunded accrued liability assigned to that
18year by law in accordance with a schedule that distributes
19payments equitably over a reasonable period of time and in
20accordance with accepted actuarial practices. The obligations
21created under this subsection (c) are contractual obligations
22protected and enforceable under Article I, Section 16 and
23Article XIII, Section 5 of the Illinois Constitution.
24    Notwithstanding any other provision of law, if the State
25fails to pay in a State fiscal year the amount guaranteed under

 

 

09700SB1673ham009- 55 -LRB097 07605 JDS 72879 a

1this subsection, the System may bring a mandamus action in the
2Circuit Court of Sangamon County to compel the State to make
3that payment, irrespective of other remedies that may be
4available to the System. In ordering the State to make the
5required payment, the court may order a reasonable payment
6schedule to enable the State to make the required payment
7without significantly imperiling the public health, safety, or
8welfare.
9(Source: P.A. 83-1440.)
 
10    (40 ILCS 5/2-126)  (from Ch. 108 1/2, par. 2-126)
11    Sec. 2-126. Contributions by participants.
12    (a) Each participant shall contribute toward the cost of
13his or her retirement annuity a percentage of each payment of
14salary received by him or her for service as a member as
15follows: for service between October 31, 1947 and January 1,
161959, 5%; for service between January 1, 1959 and June 30,
171969, 6%; for service between July 1, 1969 and January 10,
181973, 6 1/2%; for service after January 10, 1973, 7%; for
19service after December 31, 1981, 8 1/2%.
20    (a-5) In addition to the contributions otherwise required
21under this Article, each Tier I participant shall also make the
22following contributions toward the cost of his or her
23retirement annuity from each payment of salary received by him
24or her for service as a member:
25        (1) beginning July 1, 2013 and through June 30, 2014,

 

 

09700SB1673ham009- 56 -LRB097 07605 JDS 72879 a

1    1% of salary; and
2        (2) beginning on July 1, 2014, 2% of salary.
3    (b) Beginning August 2, 1949, each male participant, and
4from July 1, 1971, each female participant shall contribute
5towards the cost of the survivor's annuity 2% of salary.
6    A participant who has no eligible survivor's annuity
7beneficiary may elect to cease making contributions for
8survivor's annuity under this subsection. A survivor's annuity
9shall not be payable upon the death of a person who has made
10this election, unless prior to that death the election has been
11revoked and the amount of the contributions that would have
12been paid under this subsection in the absence of the election
13is paid to the System, together with interest at the rate of 4%
14per year from the date the contributions would have been made
15to the date of payment.
16    (c) Beginning July 1, 1967, each participant shall
17contribute 1% of salary towards the cost of automatic increase
18in annuity provided in Section 2-119.1. These contributions
19shall be made concurrently with contributions for retirement
20annuity purposes.
21    (d) In addition, each participant serving as an officer of
22the General Assembly shall contribute, for the same purposes
23and at the same rates as are required of a regular participant,
24on each additional payment received as an officer. If the
25participant serves as an officer for at least 2 but less than 4
26years, he or she shall contribute an amount equal to the amount

 

 

09700SB1673ham009- 57 -LRB097 07605 JDS 72879 a

1that would have been contributed had the participant served as
2an officer for 4 years. Persons who serve as officers in the
387th General Assembly but cannot receive the additional payment
4to officers because of the ban on increases in salary during
5their terms may nonetheless make contributions based on those
6additional payments for the purpose of having the additional
7payments included in their highest salary for annuity purposes;
8however, persons electing to make these additional
9contributions must also pay an amount representing the
10corresponding employer contributions, as calculated by the
11System.
12    (e) Notwithstanding any other provision of this Article,
13the required contribution of a participant who first becomes a
14participant on or after January 1, 2011 shall not exceed the
15contribution that would be due under this Article if that
16participant's highest salary for annuity purposes were
17$106,800, plus any increases in that amount under Section
182-108.1.
19(Source: P.A. 96-1490, eff. 1-1-11.)
 
20    (40 ILCS 5/2-134)   (from Ch. 108 1/2, par. 2-134)
21    Sec. 2-134. To certify required State contributions and
22submit vouchers.
23    (a) The Board shall certify to the Governor on or before
24December 15 of each year through until December 15, 2011 the
25amount of the required State contribution to the System for the

 

 

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1next fiscal year and shall specifically identify the System's
2projected State normal cost for that fiscal year. The
3certification shall include a copy of the actuarial
4recommendations upon which it is based and shall specifically
5identify the System's projected State normal cost for that
6fiscal year.
7    (a-5) On or before November 1 of each year, beginning
8November 1, 2012, the Board shall submit to the State Actuary,
9the Governor, and the General Assembly a proposed certification
10of the amount of the required State contribution to the System
11for the next fiscal year, along with all of the actuarial
12assumptions, calculations, and data upon which that proposed
13certification is based. On or before January 1 of each year,
14beginning January 1, 2013, the State Actuary shall issue a
15preliminary report concerning the proposed certification and
16identifying, if necessary, recommended changes in actuarial
17assumptions that the Board must consider before finalizing its
18certification of the required State contributions.
19    On or before January 15, 2013 and every January 15
20thereafter, the Board shall certify to the Governor and the
21General Assembly the amount of the required State contribution
22for the next fiscal year. The Board's certification shall
23include a copy of the actuarial recommendations upon which it
24is based and shall specifically identify the System's projected
25State normal cost for that fiscal year. The Board's
26certification must note any deviations from the State Actuary's

 

 

09700SB1673ham009- 59 -LRB097 07605 JDS 72879 a

1recommended changes, the reason or reasons for not following
2the State Actuary's recommended changes, and the fiscal impact
3of not following the State Actuary's recommended changes on the
4required State contribution.
5    (a-7) On or before May 1, 2004, the Board shall recalculate
6and recertify to the Governor the amount of the required State
7contribution to the System for State fiscal year 2005, taking
8into account the amounts appropriated to and received by the
9System under subsection (d) of Section 7.2 of the General
10Obligation Bond Act.
11    On or before July 1, 2005, the Board shall recalculate and
12recertify to the Governor the amount of the required State
13contribution to the System for State fiscal year 2006, taking
14into account the changes in required State contributions made
15by this amendatory Act of the 94th General Assembly.
16    On or before April 1, 2011, the Board shall recalculate and
17recertify to the Governor the amount of the required State
18contribution to the System for State fiscal year 2011, applying
19the changes made by Public Act 96-889 to the System's assets
20and liabilities as of June 30, 2009 as though Public Act 96-889
21was approved on that date.
22    On or before July 1, 2013, the Board shall, if necessary,
23recalculate and recertify to the Governor the amount of the
24required State contribution to the System for State fiscal year
252014, taking into account the changes in required State
26contributions made by this amendatory Act of the 97th General

 

 

09700SB1673ham009- 60 -LRB097 07605 JDS 72879 a

1Assembly.
2    (b) Beginning in State fiscal year 1996, on or as soon as
3possible after the 15th day of each month the Board shall
4submit vouchers for payment of State contributions to the
5System, in a total monthly amount of one-twelfth of the
6required annual State contribution certified under subsection
7(a). From the effective date of this amendatory Act of the 93rd
8General Assembly through June 30, 2004, the Board shall not
9submit vouchers for the remainder of fiscal year 2004 in excess
10of the fiscal year 2004 certified contribution amount
11determined under this Section after taking into consideration
12the transfer to the System under subsection (d) of Section
136z-61 of the State Finance Act. These vouchers shall be paid by
14the State Comptroller and Treasurer by warrants drawn on the
15funds appropriated to the System for that fiscal year. If in
16any month the amount remaining unexpended from all other
17appropriations to the System for the applicable fiscal year
18(including the appropriations to the System under Section 8.12
19of the State Finance Act and Section 1 of the State Pension
20Funds Continuing Appropriation Act) is less than the amount
21lawfully vouchered under this Section, the difference shall be
22paid from the General Revenue Fund under the continuing
23appropriation authority provided in Section 1.1 of the State
24Pension Funds Continuing Appropriation Act.
25    (c) The full amount of any annual appropriation for the
26System for State fiscal year 1995 shall be transferred and made

 

 

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1available to the System at the beginning of that fiscal year at
2the request of the Board. Any excess funds remaining at the end
3of any fiscal year from appropriations shall be retained by the
4System as a general reserve to meet the System's accrued
5liabilities.
6(Source: P.A. 96-1497, eff. 1-14-11; 96-1511, eff. 1-27-11;
797-694, eff. 6-18-12.)
 
8    (40 ILCS 5/2-162)
9    Sec. 2-162. Application and expiration of new benefit
10increases.
11    (a) As used in this Section, "new benefit increase" means
12an increase in the amount of any benefit provided under this
13Article, or an expansion of the conditions of eligibility for
14any benefit under this Article, that results from an amendment
15to this Code that takes effect after the effective date of this
16amendatory Act of the 94th General Assembly. "New benefit
17increase", however, does not include any benefit increase
18resulting from the changes made to this Article by this
19amendatory Act of the 97th General Assembly.
20    (b) Notwithstanding any other provision of this Code or any
21subsequent amendment to this Code, every new benefit increase
22is subject to this Section and shall be deemed to be granted
23only in conformance with and contingent upon compliance with
24the provisions of this Section.
25    (c) The Public Act enacting a new benefit increase must

 

 

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

 

 

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1the new benefit increase, a new benefit increase that expires
2under this Section continues to apply to persons who applied
3and qualified for the affected benefit while the new benefit
4increase was in effect and to the affected beneficiaries and
5alternate payees of such persons, but does not apply to any
6other person, including without limitation a person who
7continues in service after the expiration date and did not
8apply and qualify for the affected benefit while the new
9benefit increase was in effect.
10(Source: P.A. 94-4, eff. 6-1-05.)
 
11    (40 ILCS 5/14-103.10)  (from Ch. 108 1/2, par. 14-103.10)
12    Sec. 14-103.10. Compensation.
13    (a) For periods of service prior to January 1, 1978, the
14full rate of salary or wages payable to an employee for
15personal services performed if he worked the full normal
16working period for his position, subject to the following
17maximum amounts: (1) prior to July 1, 1951, $400 per month or
18$4,800 per year; (2) between July 1, 1951 and June 30, 1957
19inclusive, $625 per month or $7,500 per year; (3) beginning
20July 1, 1957, no limitation.
21    In the case of service of an employee in a position
22involving part-time employment, compensation shall be
23determined according to the employees' earnings record.
24    (b) For periods of service on and after January 1, 1978,
25all remuneration for personal services performed defined as

 

 

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

 

 

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1but including any benefits received by an employee under a sick
2pay plan in effect before January 1, 1981. Compensation shall
3exclude lump sum salary payments:
4        (1) for vacation;
5        (2) for accumulated unused sick leave;
6        (3) upon discharge or dismissal; and
7        (4) for approved holidays.
8    (f) Notwithstanding any other provision of this Code, the
9compensation of a Tier I member for the purposes of this Code
10shall not exceed, for periods of service on or after the
11effective date of this amendatory Act of the 97th General
12Assembly, the annual contribution and benefit base established
13for the applicable year by the Commissioner of Social Security
14under the federal Social Security Act; except that this
15limitation does not apply to a member's compensation that is
16determined under an employment contract or collective
17bargaining agreement that is in effect on the effective date of
18this amendatory Act of the 97th General Assembly and has not
19been amended or renewed after that date.
20(Source: P.A. 96-1490, eff. 1-1-11.)
 
21    (40 ILCS 5/14-103.40 new)
22    Sec. 14-103.40. Tier I member. "Tier I member": A member of
23this System who first became a member or participant before
24January 1, 2011 under any reciprocal retirement system or
25pension fund established under this Code other than a

 

 

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1retirement system or pension fund established under Article 2,
23, 4, 5, 6, or 18 of this Code.
 
3    (40 ILCS 5/14-103.41 new)
4    Sec. 14-103.41. Tier I retiree. "Tier I retiree": A former
5Tier I member who is receiving a retirement annuity.
 
6    (40 ILCS 5/14-107)  (from Ch. 108 1/2, par. 14-107)
7    Sec. 14-107. Retirement annuity - service and age -
8conditions.
9    (a) A member is entitled to a retirement annuity after
10having at least 8 years of creditable service.
11    (b) A member who has at least 35 years of creditable
12service may claim his or her retirement annuity at any age. A
13member having at least 8 years of creditable service but less
14than 35 may claim his or her retirement annuity upon or after
15attainment of age 60 or, beginning January 1, 2001, any lesser
16age which, when added to the number of years of his or her
17creditable service, equals at least 85. A member upon or after
18attainment of age 55 having at least 25 years of creditable
19service (30 years if retirement is before January 1, 2001) may
20elect to receive the lower retirement annuity provided in
21paragraph (c) of Section 14-108 of this Code. For purposes of
22the rule of 85, portions of years shall be counted in whole
23months.
24    (c) Notwithstanding subsection (b) of this Section, for a

 

 

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1Tier I member who begins receiving a retirement annuity under
2this Article after July 1, 2013:
3        (1) If the Tier I member is at least 45 years old on
4    the effective date of this amendatory Act of the 97th
5    General Assembly, then the references to age 55 and 60 in
6    subsection (b) of this Section remain unchanged and the
7    references to 85 in subsection (b) of this Section remain
8    unchanged.
9        (2) If the Tier I member is at least 40 but less than
10    45 years old on the effective date of this amendatory Act
11    of the 97th General Assembly, then the references to age 55
12    and 60 in subsection (b) of this Section are increased by
13    one year and the references to 85 in subsection (b) are
14    increased to 87.
15        (3) If the Tier I member is at least 35 but less than
16    40 years old on the effective date of this amendatory Act
17    of the 97th General Assembly, then the references to age 55
18    and 60 in subsection (b) of this Section are increased by 3
19    years and the references to 85 in subsection (b) are
20    increased to 91.
21        (4) If the Tier I member is less than 35 years old on
22    the effective date of this amendatory Act of the 97th
23    General Assembly, then the references to age 55 and 60 in
24    subsection (b) of this Section are increased by 5 years and
25    the references to 85 in subsection (b) are increased to 95.
26    Notwithstanding Section 1-103.1, this subsection (c)

 

 

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1applies without regard to whether or not the Tier I member is
2in active service under this Article on or after the effective
3date of this amendatory Act of the 97th General Assembly.
4    (d) The allowance shall begin with the first full calendar
5month specified in the member's application therefor, the first
6day of which shall not be before the date of withdrawal as
7approved by the board. Regardless of the date of withdrawal,
8the allowance need not begin within one year of application
9therefor.
10(Source: P.A. 91-927, eff. 12-14-00.)
 
11    (40 ILCS 5/14-108)  (from Ch. 108 1/2, par. 14-108)
12    Sec. 14-108. Amount of retirement annuity. A member who has
13contributed to the System for at least 12 months shall be
14entitled to a prior service annuity for each year of certified
15prior service credited to him, except that a member shall
16receive 1/3 of the prior service annuity for each year of
17service for which contributions have been made and all of such
18annuity shall be payable after the member has made
19contributions for a period of 3 years. Proportionate amounts
20shall be payable for service of less than a full year after
21completion of at least 12 months.
22    The total period of service to be considered in
23establishing the measure of prior service annuity shall include
24service credited in the Teachers' Retirement System of the
25State of Illinois and the State Universities Retirement System

 

 

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1for which contributions have been made by the member to such
2systems; provided that at least 1 year of the total period of 3
3years prescribed for the allowance of a full measure of prior
4service annuity shall consist of membership service in this
5system for which credit has been granted.
6    (a) In the case of a member who retires on or after January
71, 1998 and is a noncovered employee, the retirement annuity
8for membership service and prior service shall be 2.2% of final
9average compensation for each year of service. Any service
10credit established as a covered employee shall be computed as
11stated in paragraph (b).
12    (b) In the case of a member who retires on or after January
131, 1998 and is a covered employee, the retirement annuity for
14membership service and prior service shall be computed as
15stated in paragraph (a) for all service credit established as a
16noncovered employee; for service credit established as a
17covered employee it shall be 1.67% of final average
18compensation for each year of service.
19    (c) For a member retiring after attaining age 55 but before
20age 60 with at least 30 but less than 35 years of creditable
21service if retirement is before January 1, 2001, or with at
22least 25 but less than 30 years of creditable service if
23retirement is on or after January 1, 2001, the retirement
24annuity shall be reduced by 1/2 of 1% for each month that the
25member's age is under age 60 at the time of retirement. For
26members to whom subsection (c) of Section 14-107 applies, the

 

 

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1references to age 55 and 60 in this subsection (c) are
2increased as provided in subsection (c) of Section 14-107.
3    (d) A retirement annuity shall not exceed 75% of final
4average compensation, subject to such extension as may result
5from the application of Section 14-114 or Section 14-115.
6    (e) The retirement annuity payable to any covered employee
7who is a member of the System and in service on January 1,
81969, or in service thereafter in 1969 as a result of
9legislation enacted by the Illinois General Assembly
10transferring the member to State employment from county
11employment in a county Department of Public Aid in counties of
123,000,000 or more population, under a plan of coordination with
13the Old Age, Survivors and Disability provisions thereof, if
14not fully insured for Old Age Insurance payments under the
15Federal Old Age, Survivors and Disability Insurance provisions
16at the date of acceptance of a retirement annuity, shall not be
17less than the amount for which the member would have been
18eligible if coordination were not applicable.
19    (f) The retirement annuity payable to any covered employee
20who is a member of the System and in service on January 1,
211969, or in service thereafter in 1969 as a result of the
22legislation designated in the immediately preceding paragraph,
23if fully insured for Old Age Insurance payments under the
24Federal Social Security Act at the date of acceptance of a
25retirement annuity, shall not be less than an amount which when
26added to the Primary Insurance Benefit payable to the member

 

 

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1upon attainment of age 65 under such Federal Act, will equal
2the annuity which would otherwise be payable if the coordinated
3plan of coverage were not applicable.
4    (g) In the case of a member who is a noncovered employee,
5the retirement annuity for membership service as a security
6employee of the Department of Corrections or security employee
7of the Department of Human Services shall be: if retirement
8occurs on or after January 1, 2001, 3% of final average
9compensation for each year of creditable service; or if
10retirement occurs before January 1, 2001, 1.9% of final average
11compensation for each of the first 10 years of service, 2.1%
12for each of the next 10 years of service, 2.25% for each year
13of service in excess of 20 but not exceeding 30, and 2.5% for
14each year in excess of 30; except that the annuity may be
15calculated under subsection (a) rather than this subsection (g)
16if the resulting annuity is greater.
17    (h) In the case of a member who is a covered employee, the
18retirement annuity for membership service as a security
19employee of the Department of Corrections or security employee
20of the Department of Human Services shall be: if retirement
21occurs on or after January 1, 2001, 2.5% of final average
22compensation for each year of creditable service; if retirement
23occurs before January 1, 2001, 1.67% of final average
24compensation for each of the first 10 years of service, 1.90%
25for each of the next 10 years of service, 2.10% for each year
26of service in excess of 20 but not exceeding 30, and 2.30% for

 

 

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1each year in excess of 30.
2    (i) For the purposes of this Section and Section 14-133 of
3this Act, the term "security employee of the Department of
4Corrections" and the term "security employee of the Department
5of Human Services" shall have the meanings ascribed to them in
6subsection (c) of Section 14-110.
7    (j) The retirement annuity computed pursuant to paragraphs
8(g) or (h) shall be applicable only to those security employees
9of the Department of Corrections and security employees of the
10Department of Human Services who have at least 20 years of
11membership service and who are not eligible for the alternative
12retirement annuity provided under Section 14-110. However,
13persons transferring to this System under Section 14-108.2 or
1414-108.2c who have service credit under Article 16 of this Code
15may count such service toward establishing their eligibility
16under the 20-year service requirement of this subsection; but
17such service may be used only for establishing such
18eligibility, and not for the purpose of increasing or
19calculating any benefit.
20    (k) (Blank).
21    (l) The changes to this Section made by this amendatory Act
22of 1997 (changing certain retirement annuity formulas from a
23stepped rate to a flat rate) apply to members who retire on or
24after January 1, 1998, without regard to whether employment
25terminated before the effective date of this amendatory Act of
261997. An annuity shall not be calculated in steps by using the

 

 

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1new flat rate for some steps and the superseded stepped rate
2for other steps of the same type of service.
3(Source: P.A. 91-927, eff. 12-14-00; 92-14, eff. 6-28-01.)
 
4    (40 ILCS 5/14-110)  (from Ch. 108 1/2, par. 14-110)
5    Sec. 14-110. Alternative retirement annuity.
6    (a) Any member who has withdrawn from service with not less
7than 20 years of eligible creditable service and has attained
8age 55, and any member who has withdrawn from service with not
9less than 25 years of eligible creditable service and has
10attained age 50, regardless of whether the attainment of either
11of the specified ages occurs while the member is still in
12service, shall be entitled to receive at the option of the
13member, in lieu of the regular or minimum retirement annuity, a
14retirement annuity computed as follows:
15        (i) for periods of service as a noncovered employee: if
16    retirement occurs on or after January 1, 2001, 3% of final
17    average compensation for each year of creditable service;
18    if retirement occurs before January 1, 2001, 2 1/4% of
19    final average compensation for each of the first 10 years
20    of creditable service, 2 1/2% for each year above 10 years
21    to and including 20 years of creditable service, and 2 3/4%
22    for each year of creditable service above 20 years; and
23        (ii) for periods of eligible creditable service as a
24    covered employee: if retirement occurs on or after January
25    1, 2001, 2.5% of final average compensation for each year

 

 

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1    of creditable service; if retirement occurs before January
2    1, 2001, 1.67% of final average compensation for each of
3    the first 10 years of such service, 1.90% for each of the
4    next 10 years of such service, 2.10% for each year of such
5    service in excess of 20 but not exceeding 30, and 2.30% for
6    each year in excess of 30.
7    Such annuity shall be subject to a maximum of 75% of final
8average compensation if retirement occurs before January 1,
92001 or to a maximum of 80% of final average compensation if
10retirement occurs on or after January 1, 2001.
11    These rates shall not be applicable to any service
12performed by a member as a covered employee which is not
13eligible creditable service. Service as a covered employee
14which is not eligible creditable service shall be subject to
15the rates and provisions of Section 14-108.
16    (a-5) Notwithstanding subsection (a) of this Section, for a
17Tier I member who begins receiving a retirement annuity under
18this Section after July 1, 2013:
19        (1) If the Tier I member is at least 45 years old on
20    the effective date of this amendatory Act of the 97th
21    General Assembly, then the references to age 50 and 55 in
22    subsection (a) of this Section remain unchanged.
23        (2) If the Tier I member is at least 40 but less than
24    45 years old on the effective date of this amendatory Act
25    of the 97th General Assembly, then the references to age 50
26    and 55 in subsection (a) of this Section are increased by

 

 

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1    one year.
2        (3) If the Tier I member is at least 35 but less than
3    40 years old on the effective date of this amendatory Act
4    of the 97th General Assembly, then the references to age 50
5    and 55 in subsection (a) of this Section are increased by 3
6    years.
7        (4) If the Tier I member is less than 35 years old on
8    the effective date of this amendatory Act of the 97th
9    General Assembly, then the references to age 50 and 55 in
10    subsection (a) of this Section are increased by 5 years.
11    Notwithstanding Section 1-103.1, this subsection (a-5)
12applies without regard to whether or not the Tier I member is
13in active service under this Article on or after the effective
14date of this amendatory Act of the 97th General Assembly.
15    (b) For the purpose of this Section, "eligible creditable
16service" means creditable service resulting from service in one
17or more of the following positions:
18        (1) State policeman;
19        (2) fire fighter in the fire protection service of a
20    department;
21        (3) air pilot;
22        (4) special agent;
23        (5) investigator for the Secretary of State;
24        (6) conservation police officer;
25        (7) investigator for the Department of Revenue or the
26    Illinois Gaming Board;

 

 

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1        (8) security employee of the Department of Human
2    Services;
3        (9) Central Management Services security police
4    officer;
5        (10) security employee of the Department of
6    Corrections or the Department of Juvenile Justice;
7        (11) dangerous drugs investigator;
8        (12) investigator for the Department of State Police;
9        (13) investigator for the Office of the Attorney
10    General;
11        (14) controlled substance inspector;
12        (15) investigator for the Office of the State's
13    Attorneys Appellate Prosecutor;
14        (16) Commerce Commission police officer;
15        (17) arson investigator;
16        (18) State highway maintenance worker.
17    A person employed in one of the positions specified in this
18subsection is entitled to eligible creditable service for
19service credit earned under this Article while undergoing the
20basic police training course approved by the Illinois Law
21Enforcement Training Standards Board, if completion of that
22training is required of persons serving in that position. For
23the purposes of this Code, service during the required basic
24police training course shall be deemed performance of the
25duties of the specified position, even though the person is not
26a sworn peace officer at the time of the training.

 

 

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

 

 

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

 

 

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

 

 

09700SB1673ham009- 80 -LRB097 07605 JDS 72879 a

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

 

 

09700SB1673ham009- 81 -LRB097 07605 JDS 72879 a

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

 

 

09700SB1673ham009- 82 -LRB097 07605 JDS 72879 a

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

 

 

09700SB1673ham009- 83 -LRB097 07605 JDS 72879 a

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

 

 

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1        of highway maintainer, highway maintenance lead
2        worker, highway maintenance lead/lead worker, heavy
3        construction equipment operator, power shovel
4        operator, or bridge mechanic; and whose principal
5        responsibility is to perform, on the roadway, the
6        actual maintenance necessary to keep the highways that
7        form a part of the State highway system in serviceable
8        condition for vehicular traffic.
9            (ii) A person employed on a full-time basis by the
10        Illinois State Toll Highway Authority in the position
11        of equipment operator/laborer H-4, equipment
12        operator/laborer H-6, welder H-4, welder H-6,
13        mechanical/electrical H-4, mechanical/electrical H-6,
14        water/sewer H-4, water/sewer H-6, sign maker/hanger
15        H-4, sign maker/hanger H-6, roadway lighting H-4,
16        roadway lighting H-6, structural H-4, structural H-6,
17        painter H-4, or painter H-6; and whose principal
18        responsibility is to perform, on the roadway, the
19        actual maintenance necessary to keep the Authority's
20        tollways in serviceable condition for vehicular
21        traffic.
22    (d) A security employee of the Department of Corrections or
23the Department of Juvenile Justice, and a security employee of
24the Department of Human Services who is not a mental health
25police officer, shall not be eligible for the alternative
26retirement annuity provided by this Section unless he or she

 

 

09700SB1673ham009- 85 -LRB097 07605 JDS 72879 a

1meets the following minimum age and service requirements at the
2time of retirement:
3        (i) 25 years of eligible creditable service and age 55;
4    or
5        (ii) beginning January 1, 1987, 25 years of eligible
6    creditable service and age 54, or 24 years of eligible
7    creditable service and age 55; or
8        (iii) beginning January 1, 1988, 25 years of eligible
9    creditable service and age 53, or 23 years of eligible
10    creditable service and age 55; or
11        (iv) beginning January 1, 1989, 25 years of eligible
12    creditable service and age 52, or 22 years of eligible
13    creditable service and age 55; or
14        (v) beginning January 1, 1990, 25 years of eligible
15    creditable service and age 51, or 21 years of eligible
16    creditable service and age 55; or
17        (vi) beginning January 1, 1991, 25 years of eligible
18    creditable service and age 50, or 20 years of eligible
19    creditable service and age 55.
20    For members to whom subsection (a-5) of this Section
21applies, the references to age 50 and 55 in item (vi) of this
22subsection are increased as provided in subsection (a-5).
23    Persons who have service credit under Article 16 of this
24Code for service as a security employee of the Department of
25Corrections or the Department of Juvenile Justice, or the
26Department of Human Services in a position requiring

 

 

09700SB1673ham009- 86 -LRB097 07605 JDS 72879 a

1certification as a teacher may count such service toward
2establishing their eligibility under the service requirements
3of this Section; but such service may be used only for
4establishing such eligibility, and not for the purpose of
5increasing or calculating any benefit.
6    (e) If a member enters military service while working in a
7position in which eligible creditable service may be earned,
8and returns to State service in the same or another such
9position, and fulfills in all other respects the conditions
10prescribed in this Article for credit for military service,
11such military service shall be credited as eligible creditable
12service for the purposes of the retirement annuity prescribed
13in this Section.
14    (f) For purposes of calculating retirement annuities under
15this Section, periods of service rendered after December 31,
161968 and before October 1, 1975 as a covered employee in the
17position of special agent, conservation police officer, mental
18health police officer, or investigator for the Secretary of
19State, shall be deemed to have been service as a noncovered
20employee, provided that the employee pays to the System prior
21to retirement an amount equal to (1) the difference between the
22employee contributions that would have been required for such
23service as a noncovered employee, and the amount of employee
24contributions actually paid, plus (2) if payment is made after
25July 31, 1987, regular interest on the amount specified in item
26(1) from the date of service to the date of payment.

 

 

09700SB1673ham009- 87 -LRB097 07605 JDS 72879 a

1    For purposes of calculating retirement annuities under
2this Section, periods of service rendered after December 31,
31968 and before January 1, 1982 as a covered employee in the
4position of investigator for the Department of Revenue shall be
5deemed to have been service as a noncovered employee, provided
6that the employee pays to the System prior to retirement an
7amount equal to (1) the difference between the employee
8contributions that would have been required for such service as
9a noncovered employee, and the amount of employee contributions
10actually paid, plus (2) if payment is made after January 1,
111990, regular interest on the amount specified in item (1) from
12the date of service to the date of payment.
13    (g) A State policeman may elect, not later than January 1,
141990, to establish eligible creditable service for up to 10
15years of his service as a policeman under Article 3, by filing
16a written election with the Board, accompanied by payment of an
17amount to be determined by the Board, equal to (i) the
18difference between the amount of employee and employer
19contributions transferred to the System under Section 3-110.5,
20and the amounts that would have been contributed had such
21contributions been made at the rates applicable to State
22policemen, plus (ii) interest thereon at the effective rate for
23each year, compounded annually, from the date of service to the
24date of payment.
25    Subject to the limitation in subsection (i), a State
26policeman may elect, not later than July 1, 1993, to establish

 

 

09700SB1673ham009- 88 -LRB097 07605 JDS 72879 a

1eligible creditable service for up to 10 years of his service
2as a member of the County Police Department under Article 9, by
3filing a written election with the Board, accompanied by
4payment of an amount to be determined by the Board, equal to
5(i) the difference between the amount of employee and employer
6contributions transferred to the System under Section 9-121.10
7and the amounts that would have been contributed had those
8contributions been made at the rates applicable to State
9policemen, plus (ii) interest thereon at the effective rate for
10each year, compounded annually, from the date of service to the
11date of payment.
12    (h) Subject to the limitation in subsection (i), a State
13policeman or investigator for the Secretary of State may elect
14to establish eligible creditable service for up to 12 years of
15his service as a policeman under Article 5, by filing a written
16election with the Board on or before January 31, 1992, and
17paying to the System by January 31, 1994 an amount to be
18determined by the Board, equal to (i) the difference between
19the amount of employee and employer contributions transferred
20to the System under Section 5-236, and the amounts that would
21have been contributed had such contributions been made at the
22rates applicable to State policemen, plus (ii) interest thereon
23at the effective rate for each year, compounded annually, from
24the date of service to the date of payment.
25    Subject to the limitation in subsection (i), a State
26policeman, conservation police officer, or investigator for

 

 

09700SB1673ham009- 89 -LRB097 07605 JDS 72879 a

1the Secretary of State may elect to establish eligible
2creditable service for up to 10 years of service as a sheriff's
3law enforcement employee under Article 7, by filing a written
4election with the Board on or before January 31, 1993, and
5paying to the System by January 31, 1994 an amount to be
6determined by the Board, equal to (i) the difference between
7the amount of employee and employer contributions transferred
8to the System under Section 7-139.7, and the amounts that would
9have been contributed had such contributions been made at the
10rates applicable to State policemen, plus (ii) interest thereon
11at the effective rate for each year, compounded annually, from
12the date of service to the date of payment.
13    Subject to the limitation in subsection (i), a State
14policeman, conservation police officer, or investigator for
15the Secretary of State may elect to establish eligible
16creditable service for up to 5 years of service as a police
17officer under Article 3, a policeman under Article 5, a
18sheriff's law enforcement employee under Article 7, a member of
19the county police department under Article 9, or a police
20officer under Article 15 by filing a written election with the
21Board and paying to the System an amount to be determined by
22the Board, equal to (i) the difference between the amount of
23employee and employer contributions transferred to the System
24under Section 3-110.6, 5-236, 7-139.8, 9-121.10, or 15-134.4
25and the amounts that would have been contributed had such
26contributions been made at the rates applicable to State

 

 

09700SB1673ham009- 90 -LRB097 07605 JDS 72879 a

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

 

 

09700SB1673ham009- 91 -LRB097 07605 JDS 72879 a

1to 5 years of service as a person employed by a participating
2municipality to perform police duties, or law enforcement
3officer employed on a full-time basis by a forest preserve
4district under Article 7, a county corrections officer, or a
5court services officer under Article 9, by filing a written
6election with the Board within 6 months after August 25, 2009
7(the effective date of Public Act 96-745) and paying to the
8System an amount to be determined by the Board, equal to (i)
9the difference between the amount of employee and employer
10contributions transferred to the System under Sections 7-139.8
11and 9-121.10 and the amounts that would have been contributed
12had such contributions been made at the rates applicable to
13State policemen, plus (ii) interest thereon at the actuarially
14assumed rate for each year, compounded annually, from the date
15of service to the date of payment.
16    (i) The total amount of eligible creditable service
17established by any person under subsections (g), (h), (j), (k),
18and (l) of this Section shall not exceed 12 years.
19    (j) Subject to the limitation in subsection (i), an
20investigator for the Office of the State's Attorneys Appellate
21Prosecutor or a controlled substance inspector may elect to
22establish eligible creditable service for up to 10 years of his
23service as a policeman under Article 3 or a sheriff's law
24enforcement employee under Article 7, by filing a written
25election with the Board, accompanied by payment of an amount to
26be determined by the Board, equal to (1) the difference between

 

 

09700SB1673ham009- 92 -LRB097 07605 JDS 72879 a

1the amount of employee and employer contributions transferred
2to the System under Section 3-110.6 or 7-139.8, and the amounts
3that would have been contributed had such contributions been
4made at the rates applicable to State policemen, plus (2)
5interest thereon at the effective rate for each year,
6compounded annually, from the date of service to the date of
7payment.
8    (k) Subject to the limitation in subsection (i) of this
9Section, an alternative formula employee may elect to establish
10eligible creditable service for periods spent as a full-time
11law enforcement officer or full-time corrections officer
12employed by the federal government or by a state or local
13government located outside of Illinois, for which credit is not
14held in any other public employee pension fund or retirement
15system. To obtain this credit, the applicant must file a
16written application with the Board by March 31, 1998,
17accompanied by evidence of eligibility acceptable to the Board
18and payment of an amount to be determined by the Board, equal
19to (1) employee contributions for the credit being established,
20based upon the applicant's salary on the first day as an
21alternative formula employee after the employment for which
22credit is being established and the rates then applicable to
23alternative formula employees, plus (2) an amount determined by
24the Board to be the employer's normal cost of the benefits
25accrued for the credit being established, plus (3) regular
26interest on the amounts in items (1) and (2) from the first day

 

 

09700SB1673ham009- 93 -LRB097 07605 JDS 72879 a

1as an alternative formula employee after the employment for
2which credit is being established to the date of payment.
3    (l) Subject to the limitation in subsection (i), a security
4employee of the Department of Corrections may elect, not later
5than July 1, 1998, to establish eligible creditable service for
6up to 10 years of his or her service as a policeman under
7Article 3, by filing a written election with the Board,
8accompanied by payment of an amount to be determined by the
9Board, equal to (i) the difference between the amount of
10employee and employer contributions transferred to the System
11under Section 3-110.5, and the amounts that would have been
12contributed had such contributions been made at the rates
13applicable to security employees of the Department of
14Corrections, plus (ii) interest thereon at the effective rate
15for each year, compounded annually, from the date of service to
16the date of payment.
17    (m) The amendatory changes to this Section made by this
18amendatory Act of the 94th General Assembly apply only to: (1)
19security employees of the Department of Juvenile Justice
20employed by the Department of Corrections before the effective
21date of this amendatory Act of the 94th General Assembly and
22transferred to the Department of Juvenile Justice by this
23amendatory Act of the 94th General Assembly; and (2) persons
24employed by the Department of Juvenile Justice on or after the
25effective date of this amendatory Act of the 94th General
26Assembly who are required by subsection (b) of Section 3-2.5-15

 

 

09700SB1673ham009- 94 -LRB097 07605 JDS 72879 a

1of the Unified Code of Corrections to have a bachelor's or
2advanced degree from an accredited college or university with a
3specialization in criminal justice, education, psychology,
4social work, or a closely related social science or, in the
5case of persons who provide vocational training, who are
6required to have adequate knowledge in the skill for which they
7are providing the vocational training.
8    (n) A person employed in a position under subsection (b) of
9this Section who has purchased service credit under subsection
10(j) of Section 14-104 or subsection (b) of Section 14-105 in
11any other capacity under this Article may convert up to 5 years
12of that service credit into service credit covered under this
13Section by paying to the Fund an amount equal to (1) the
14additional employee contribution required under Section
1514-133, plus (2) the additional employer contribution required
16under Section 14-131, plus (3) interest on items (1) and (2) at
17the actuarially assumed rate from the date of the service to
18the date of payment.
19(Source: P.A. 95-530, eff. 8-28-07; 95-1036, eff. 2-17-09;
2096-37, eff. 7-13-09; 96-745, eff. 8-25-09; 96-1000, eff.
217-2-10.)
 
22    (40 ILCS 5/14-114)  (from Ch. 108 1/2, par. 14-114)
23    Sec. 14-114. Automatic increase in retirement annuity.
24    (a) Except as provided in subsections (a-1) and (a-2), any
25Any person receiving a retirement annuity under this Article

 

 

09700SB1673ham009- 95 -LRB097 07605 JDS 72879 a

1who retires having attained age 60, or who retires before age
260 having at least 35 years of creditable service, or who
3retires on or after January 1, 2001 at an age which, when added
4to the number of years of his or her creditable service, equals
5at least 85, shall, on January 1 next following the first full
6year of retirement, have the amount of the then fixed and
7payable monthly retirement annuity increased 3%. Any person
8receiving a retirement annuity under this Article who retires
9before attainment of age 60 and with less than (i) 35 years of
10creditable service if retirement is before January 1, 2001, or
11(ii) the number of years of creditable service which, when
12added to the member's age, would equal 85, if retirement is on
13or after January 1, 2001, shall have the amount of the fixed
14and payable retirement annuity increased by 3% on the January 1
15occurring on or next following (1) attainment of age 60, or (2)
16the first anniversary of retirement, whichever occurs later.
17However, for persons who receive the alternative retirement
18annuity under Section 14-110, references in this subsection (a)
19to attainment of age 60 shall be deemed to refer to attainment
20of age 55. For a person receiving early retirement incentives
21under Section 14-108.3 whose retirement annuity began after
22January 1, 1992 pursuant to an extension granted under
23subsection (e) of that Section, the first anniversary of
24retirement shall be deemed to be January 1, 1993. For a person
25who retires on or after June 28, 2001 and on or before October
261, 2001, and whose retirement annuity is calculated, in whole

 

 

09700SB1673ham009- 96 -LRB097 07605 JDS 72879 a

1or in part, under Section 14-110 or subsection (g) or (h) of
2Section 14-108, the first anniversary of retirement shall be
3deemed to be January 1, 2002.
4    On each January 1 following the date of the initial
5increase under this subsection, the employee's monthly
6retirement annuity shall be increased by an additional 3%.
7    Beginning January 1, 1990 and except as provided in
8subsections (a-1) and (a-2), all automatic annual increases
9payable under this Section shall be calculated as a percentage
10of the total annuity payable at the time of the increase,
11including previous increases granted under this Article.
12    (a-1) Notwithstanding any other provision of this Article,
13for a Tier I retiree, the amount of each automatic annual
14increase in retirement annuity occurring on or after the
15effective date of this amendatory Act of the 97th General
16Assembly shall be the lesser of $600 ($750 if the annuity is
17based primarily upon service as a noncovered employee) or 3% of
18the total annuity payable at the time of the increase,
19including previous increases granted.
20    (a-2) Notwithstanding any other provision of this Article,
21for a Tier I retiree, the monthly retirement annuity shall
22first be subject to annual increases on the January 1 occurring
23on or next after the attainment of age 67 or the January 1
24occurring on or next after the fifth anniversary of the annuity
25start date, whichever occurs earlier. If on the effective date
26of this amendatory Act of the 97th General Assembly a Tier I

 

 

09700SB1673ham009- 97 -LRB097 07605 JDS 72879 a

1retiree has already received an annual increase under this
2Section but does not yet meet the new eligibility requirements
3of this subsection, the annual increases already received shall
4continue in force, but no additional annual increase shall be
5granted until the Tier I retiree meets the new eligibility
6requirements.
7    (a-3) Notwithstanding Section 1-103.1, subsections (a-1)
8and (a-2) apply without regard to whether or not the Tier I
9retiree is in active service under this Article on or after the
10effective date of this amendatory Act of the 97th General
11Assembly.
12    (b) The provisions of subsection (a) of this Section shall
13be applicable to an employee only if the employee makes the
14additional contributions required after December 31, 1969 for
15the purpose of the automatic increases for not less than the
16equivalent of one full year. If an employee becomes an
17annuitant before his additional contributions equal one full
18year's contributions based on his salary at the date of
19retirement, the employee may pay the necessary balance of the
20contributions to the system, without interest, and be eligible
21for the increasing annuity authorized by this Section.
22    (c) The provisions of subsection (a) of this Section shall
23not be applicable to any annuitant who is on retirement on
24December 31, 1969, and thereafter returns to State service,
25unless the member has established at least one year of
26additional creditable service following reentry into service.

 

 

09700SB1673ham009- 98 -LRB097 07605 JDS 72879 a

1    (d) In addition to other increases which may be provided by
2this Section, on January 1, 1981 any annuitant who was
3receiving a retirement annuity on or before January 1, 1971
4shall have his retirement annuity then being paid increased $1
5per month for each year of creditable service. On January 1,
61982, any annuitant who began receiving a retirement annuity on
7or before January 1, 1977, shall have his retirement annuity
8then being paid increased $1 per month for each year of
9creditable service.
10    On January 1, 1987, any annuitant who began receiving a
11retirement annuity on or before January 1, 1977, shall have the
12monthly retirement annuity increased by an amount equal to 8
13per year of creditable service times the number of years that
14have elapsed since the annuity began.
15    (e) Every person who receives the alternative retirement
16annuity under Section 14-110 and who is eligible to receive the
173% increase under subsection (a) on January 1, 1986, shall also
18receive on that date a one-time increase in retirement annuity
19equal to the difference between (1) his actual retirement
20annuity on that date, including any increases received under
21subsection (a), and (2) the amount of retirement annuity he
22would have received on that date if the amendments to
23subsection (a) made by Public Act 84-162 had been in effect
24since the date of his retirement.
25(Source: P.A. 91-927, eff. 12-14-00; 92-14, eff. 6-28-01;
2692-651, eff. 7-11-02.)
 

 

 

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1    (40 ILCS 5/14-131)
2    Sec. 14-131. Contributions by State.
3    (a) The State shall make contributions to the System by
4appropriations of amounts which, together with other employer
5contributions from trust, federal, and other funds, employee
6contributions, investment income, and other income, will be
7sufficient to meet the cost of maintaining and administering
8the System on a 100% 90% funded basis in accordance with
9actuarial recommendations by the end of State fiscal year 2043.
10    For the purposes of this Section and Section 14-135.08,
11references to State contributions refer only to employer
12contributions and do not include employee contributions that
13are picked up or otherwise paid by the State or a department on
14behalf of the employee.
15    (b) The Board shall determine the total amount of State
16contributions required for each fiscal year on the basis of the
17actuarial tables and other assumptions adopted by the Board,
18using the formula in subsection (e).
19    The Board shall also determine a State contribution rate
20for each fiscal year, expressed as a percentage of payroll,
21based on the total required State contribution for that fiscal
22year (less the amount received by the System from
23appropriations under Section 8.12 of the State Finance Act and
24Section 1 of the State Pension Funds Continuing Appropriation
25Act, if any, for the fiscal year ending on the June 30

 

 

09700SB1673ham009- 100 -LRB097 07605 JDS 72879 a

1immediately preceding the applicable November 15 certification
2deadline), the estimated payroll (including all forms of
3compensation) for personal services rendered by eligible
4employees, and the recommendations of the actuary.
5    For the purposes of this Section and Section 14.1 of the
6State Finance Act, the term "eligible employees" includes
7employees who participate in the System, persons who may elect
8to participate in the System but have not so elected, persons
9who are serving a qualifying period that is required for
10participation, and annuitants employed by a department as
11described in subdivision (a)(1) or (a)(2) of Section 14-111.
12    (c) Contributions shall be made by the several departments
13for each pay period by warrants drawn by the State Comptroller
14against their respective funds or appropriations based upon
15vouchers stating the amount to be so contributed. These amounts
16shall be based on the full rate certified by the Board under
17Section 14-135.08 for that fiscal year. From the effective date
18of this amendatory Act of the 93rd General Assembly through the
19payment of the final payroll from fiscal year 2004
20appropriations, the several departments shall not make
21contributions for the remainder of fiscal year 2004 but shall
22instead make payments as required under subsection (a-1) of
23Section 14.1 of the State Finance Act. The several departments
24shall resume those contributions at the commencement of fiscal
25year 2005.
26    (c-1) Notwithstanding subsection (c) of this Section, for

 

 

09700SB1673ham009- 101 -LRB097 07605 JDS 72879 a

1fiscal years 2010, 2012, and 2013 only, contributions by the
2several departments are not required to be made for General
3Revenue Funds payrolls processed by the Comptroller. Payrolls
4paid by the several departments from all other State funds must
5continue to be processed pursuant to subsection (c) of this
6Section.
7    (c-2) For State fiscal years 2010, 2012, and 2013 only, on
8or as soon as possible after the 15th day of each month, the
9Board shall submit vouchers for payment of State contributions
10to the System, in a total monthly amount of one-twelfth of the
11fiscal year General Revenue Fund contribution as certified by
12the System pursuant to Section 14-135.08 of the Illinois
13Pension Code.
14    (d) If an employee is paid from trust funds or federal
15funds, the department or other employer shall pay employer
16contributions from those funds to the System at the certified
17rate, unless the terms of the trust or the federal-State
18agreement preclude the use of the funds for that purpose, in
19which case the required employer contributions shall be paid by
20the State. From the effective date of this amendatory Act of
21the 93rd General Assembly through the payment of the final
22payroll from fiscal year 2004 appropriations, the department or
23other employer shall not pay contributions for the remainder of
24fiscal year 2004 but shall instead make payments as required
25under subsection (a-1) of Section 14.1 of the State Finance
26Act. The department or other employer shall resume payment of

 

 

09700SB1673ham009- 102 -LRB097 07605 JDS 72879 a

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

 

 

09700SB1673ham009- 103 -LRB097 07605 JDS 72879 a

1so that by State fiscal year 2011, the State is contributing at
2the rate required under this Section; except that (i) for State
3fiscal year 1998, for all purposes of this Code and any other
4law of this State, the certified percentage of the applicable
5employee payroll shall be 5.052% for employees earning eligible
6creditable service under Section 14-110 and 6.500% for all
7other employees, notwithstanding any contrary certification
8made under Section 14-135.08 before the effective date of this
9amendatory Act of 1997, and (ii) in the following specified
10State fiscal years, the State contribution to the System shall
11not be less than the following indicated percentages of the
12applicable employee payroll, even if the indicated percentage
13will produce a State contribution in excess of the amount
14otherwise required under this subsection and subsection (a):
159.8% in FY 1999; 10.0% in FY 2000; 10.2% in FY 2001; 10.4% in FY
162002; 10.6% in FY 2003; and 10.8% in FY 2004.
17    Notwithstanding any other provision of this Article, the
18total required State contribution to the System for State
19fiscal year 2006 is $203,783,900.
20    Notwithstanding any other provision of this Article, the
21total required State contribution to the System for State
22fiscal year 2007 is $344,164,400.
23    For each of State fiscal years 2008 through 2009, the State
24contribution to the System, as a percentage of the applicable
25employee payroll, shall be increased in equal annual increments
26from the required State contribution for State fiscal year

 

 

09700SB1673ham009- 104 -LRB097 07605 JDS 72879 a

12007, so that by State fiscal year 2011, the State is
2contributing at the rate otherwise required under this Section.
3    Notwithstanding any other provision of this Article, the
4total required State General Revenue Fund contribution for
5State fiscal year 2010 is $723,703,100 and shall be made from
6the proceeds of bonds sold in fiscal year 2010 pursuant to
7Section 7.2 of the General Obligation Bond Act, less (i) the
8pro rata share of bond sale expenses determined by the System's
9share of total bond proceeds, (ii) any amounts received from
10the General Revenue Fund in fiscal year 2010, and (iii) any
11reduction in bond proceeds due to the issuance of discounted
12bonds, if applicable.
13    Notwithstanding any other provision of this Article, the
14total required State General Revenue Fund contribution for
15State fiscal year 2011 is the amount recertified by the System
16on or before April 1, 2011 pursuant to Section 14-135.08 and
17shall be made from the proceeds of bonds sold in fiscal year
182011 pursuant to Section 7.2 of the General Obligation Bond
19Act, less (i) the pro rata share of bond sale expenses
20determined by the System's share of total bond proceeds, (ii)
21any amounts received from the General Revenue Fund in fiscal
22year 2011, and (iii) any reduction in bond proceeds due to the
23issuance of discounted bonds, if applicable.
24    Beginning in State fiscal year 2044, the minimum State
25contribution for each fiscal year shall be the amount needed to
26maintain the total assets of the System at 100% of the total

 

 

09700SB1673ham009- 105 -LRB097 07605 JDS 72879 a

1actuarial liabilities of the System.
2    Beginning in State fiscal year 2046, the minimum State
3contribution for each fiscal year shall be the amount needed to
4maintain the total assets of the System at 90% of the total
5actuarial liabilities of the System.
6    Amounts received by the System pursuant to Section 25 of
7the Budget Stabilization Act or Section 8.12 of the State
8Finance Act in any fiscal year do not reduce and do not
9constitute payment of any portion of the minimum State
10contribution required under this Article in that fiscal year.
11Such amounts shall not reduce, and shall not be included in the
12calculation of, the required State contributions under this
13Article in any future year until the System has reached a
14funding ratio of at least 100% 90%. A reference in this Article
15to the "required State contribution" or any substantially
16similar term does not include or apply to any amounts payable
17to the System under Section 25 of the Budget Stabilization Act.
18    Notwithstanding any other provision of this Section, the
19required State contribution for State fiscal year 2005 and for
20fiscal year 2008 and each fiscal year thereafter through State
21fiscal year 2013, as calculated under this Section and
22certified under Section 14-135.08, shall not exceed an amount
23equal to (i) the amount of the required State contribution that
24would have been calculated under this Section for that fiscal
25year if the System had not received any payments under
26subsection (d) of Section 7.2 of the General Obligation Bond

 

 

09700SB1673ham009- 106 -LRB097 07605 JDS 72879 a

1Act, minus (ii) the portion of the State's total debt service
2payments for that fiscal year on the bonds issued in fiscal
3year 2003 for the purposes of that Section 7.2, as determined
4and certified by the Comptroller, that is the same as the
5System's portion of the total moneys distributed under
6subsection (d) of Section 7.2 of the General Obligation Bond
7Act. In determining this maximum for State fiscal years 2008
8through 2010, however, the amount referred to in item (i) shall
9be increased, as a percentage of the applicable employee
10payroll, in equal increments calculated from the sum of the
11required State contribution for State fiscal year 2007 plus the
12applicable portion of the State's total debt service payments
13for fiscal year 2007 on the bonds issued in fiscal year 2003
14for the purposes of Section 7.2 of the General Obligation Bond
15Act, so that, by State fiscal year 2011, the State is
16contributing at the rate otherwise required under this Section.
17    (f) After the submission of all payments for eligible
18employees from personal services line items in fiscal year 2004
19have been made, the Comptroller shall provide to the System a
20certification of the sum of all fiscal year 2004 expenditures
21for personal services that would have been covered by payments
22to the System under this Section if the provisions of this
23amendatory Act of the 93rd General Assembly had not been
24enacted. Upon receipt of the certification, the System shall
25determine the amount due to the System based on the full rate
26certified by the Board under Section 14-135.08 for fiscal year

 

 

09700SB1673ham009- 107 -LRB097 07605 JDS 72879 a

12004 in order to meet the State's obligation under this
2Section. The System shall compare this amount due to the amount
3received by the System in fiscal year 2004 through payments
4under this Section and under Section 6z-61 of the State Finance
5Act. If the amount due is more than the amount received, the
6difference shall be termed the "Fiscal Year 2004 Shortfall" for
7purposes of this Section, and the Fiscal Year 2004 Shortfall
8shall be satisfied under Section 1.2 of the State Pension Funds
9Continuing Appropriation Act. If the amount due is less than
10the amount received, the difference shall be termed the "Fiscal
11Year 2004 Overpayment" for purposes of this Section, and the
12Fiscal Year 2004 Overpayment shall be repaid by the System to
13the Pension Contribution Fund as soon as practicable after the
14certification.
15    (g) For purposes of determining the required State
16contribution to the System, the value of the System's assets
17shall be equal to the actuarial value of the System's assets,
18which shall be calculated as follows:
19    As of June 30, 2008, the actuarial value of the System's
20assets shall be equal to the market value of the assets as of
21that date. In determining the actuarial value of the System's
22assets for fiscal years after June 30, 2008, any actuarial
23gains or losses from investment return incurred in a fiscal
24year shall be recognized in equal annual amounts over the
255-year period following that fiscal year.
26    (h) For purposes of determining the required State

 

 

09700SB1673ham009- 108 -LRB097 07605 JDS 72879 a

1contribution to the System for a particular year, the actuarial
2value of assets shall be assumed to earn a rate of return equal
3to the System's actuarially assumed rate of return.
4    (i) After the submission of all payments for eligible
5employees from personal services line items paid from the
6General Revenue Fund in fiscal year 2010 have been made, the
7Comptroller shall provide to the System a certification of the
8sum of all fiscal year 2010 expenditures for personal services
9that would have been covered by payments to the System under
10this Section if the provisions of this amendatory Act of the
1196th General Assembly had not been enacted. Upon receipt of the
12certification, the System shall determine the amount due to the
13System based on the full rate certified by the Board under
14Section 14-135.08 for fiscal year 2010 in order to meet the
15State's obligation under this Section. The System shall compare
16this amount due to the amount received by the System in fiscal
17year 2010 through payments under this Section. If the amount
18due is more than the amount received, the difference shall be
19termed the "Fiscal Year 2010 Shortfall" for purposes of this
20Section, and the Fiscal Year 2010 Shortfall shall be satisfied
21under Section 1.2 of the State Pension Funds Continuing
22Appropriation Act. If the amount due is less than the amount
23received, the difference shall be termed the "Fiscal Year 2010
24Overpayment" for purposes of this Section, and the Fiscal Year
252010 Overpayment shall be repaid by the System to the General
26Revenue Fund as soon as practicable after the certification.

 

 

09700SB1673ham009- 109 -LRB097 07605 JDS 72879 a

1    (j) After the submission of all payments for eligible
2employees from personal services line items paid from the
3General Revenue Fund in fiscal year 2011 have been made, the
4Comptroller shall provide to the System a certification of the
5sum of all fiscal year 2011 expenditures for personal services
6that would have been covered by payments to the System under
7this Section if the provisions of this amendatory Act of the
896th General Assembly had not been enacted. Upon receipt of the
9certification, the System shall determine the amount due to the
10System based on the full rate certified by the Board under
11Section 14-135.08 for fiscal year 2011 in order to meet the
12State's obligation under this Section. The System shall compare
13this amount due to the amount received by the System in fiscal
14year 2011 through payments under this Section. If the amount
15due is more than the amount received, the difference shall be
16termed the "Fiscal Year 2011 Shortfall" for purposes of this
17Section, and the Fiscal Year 2011 Shortfall shall be satisfied
18under Section 1.2 of the State Pension Funds Continuing
19Appropriation Act. If the amount due is less than the amount
20received, the difference shall be termed the "Fiscal Year 2011
21Overpayment" for purposes of this Section, and the Fiscal Year
222011 Overpayment shall be repaid by the System to the General
23Revenue Fund as soon as practicable after the certification.
24    (k) For fiscal years 2012 and 2013 only, after the
25submission of all payments for eligible employees from personal
26services line items paid from the General Revenue Fund in the

 

 

09700SB1673ham009- 110 -LRB097 07605 JDS 72879 a

1fiscal year have been made, the Comptroller shall provide to
2the System a certification of the sum of all expenditures in
3the fiscal year for personal services. Upon receipt of the
4certification, the System shall determine the amount due to the
5System based on the full rate certified by the Board under
6Section 14-135.08 for the fiscal year in order to meet the
7State's obligation under this Section. The System shall compare
8this amount due to the amount received by the System for the
9fiscal year. If the amount due is more than the amount
10received, the difference shall be termed the "Prior Fiscal Year
11Shortfall" for purposes of this Section, and the Prior Fiscal
12Year Shortfall shall be satisfied under Section 1.2 of the
13State Pension Funds Continuing Appropriation Act. If the amount
14due is less than the amount received, the difference shall be
15termed the "Prior Fiscal Year Overpayment" for purposes of this
16Section, and the Prior Fiscal Year Overpayment shall be repaid
17by the System to the General Revenue Fund as soon as
18practicable after the certification.
19(Source: P.A. 96-43, eff. 7-15-09; 96-45, eff. 7-15-09;
2096-1000, eff. 7-2-10; 96-1497, eff. 1-14-11; 96-1511, eff.
211-27-11; 96-1554, eff. 3-18-11; 97-72, eff. 7-1-11; 97-732,
22eff. 6-30-12.)
 
23    (40 ILCS 5/14-132)  (from Ch. 108 1/2, par. 14-132)
24    Sec. 14-132. Obligations of State; funding guarantee.
25    (a) The payment of the required department contributions,

 

 

09700SB1673ham009- 111 -LRB097 07605 JDS 72879 a

1all allowances, annuities, benefits granted under this
2Article, and all expenses of administration of the system are
3obligations of the State of Illinois to the extent specified in
4this Article.
5    (b) All income of the system shall be credited to a
6separate account for this system in the State treasury and
7shall be used to pay allowances, annuities, benefits and
8administration expense.
9    (c) Beginning July 1, 2013, the State shall be
10contractually obligated to contribute to the System under
11Section 14-131 in each State fiscal year an amount not less
12than the sum of (i) the State's normal cost for that year and
13(ii) the portion of the unfunded accrued liability assigned to
14that year by law in accordance with a schedule that distributes
15payments equitably over a reasonable period of time and in
16accordance with accepted actuarial practices. The obligations
17created under this subsection (c) are contractual obligations
18protected and enforceable under Article I, Section 16 and
19Article XIII, Section 5 of the Illinois Constitution.
20    Notwithstanding any other provision of law, if the State
21fails to pay in a State fiscal year the amount guaranteed under
22this subsection, the System may bring a mandamus action in the
23Circuit Court of Sangamon County to compel the State to make
24that payment, irrespective of other remedies that may be
25available to the System. In ordering the State to make the
26required payment, the court may order a reasonable payment

 

 

09700SB1673ham009- 112 -LRB097 07605 JDS 72879 a

1schedule to enable the State to make the required payment
2without significantly imperiling the public health, safety, or
3welfare.
4(Source: P.A. 80-841.)
 
5    (40 ILCS 5/14-133)  (from Ch. 108 1/2, par. 14-133)
6    Sec. 14-133. Contributions on behalf of members.
7    (a) Each participating employee shall make contributions
8to the System, based on the employee's compensation, as
9follows:
10        (1) Covered employees, except as indicated below, 3.5%
11    for retirement annuity, and 0.5% for a widow or survivors
12    annuity;
13        (2) Noncovered employees, except as indicated below,
14    7% for retirement annuity and 1% for a widow or survivors
15    annuity;
16        (3) Noncovered employees serving in a position in which
17    "eligible creditable service" as defined in Section 14-110
18    may be earned, 1% for a widow or survivors annuity plus the
19    following amount for retirement annuity: 8.5% through
20    December 31, 2001; 9.5% in 2002; 10.5% in 2003; and 11.5%
21    in 2004 and thereafter;
22        (4) Covered employees serving in a position in which
23    "eligible creditable service" as defined in Section 14-110
24    may be earned, 0.5% for a widow or survivors annuity plus
25    the following amount for retirement annuity: 5% through

 

 

09700SB1673ham009- 113 -LRB097 07605 JDS 72879 a

1    December 31, 2001; 6% in 2002; 7% in 2003; and 8% in 2004
2    and thereafter;
3        (5) Each security employee of the Department of
4    Corrections or of the Department of Human Services who is a
5    covered employee, 0.5% for a widow or survivors annuity
6    plus the following amount for retirement annuity: 5%
7    through December 31, 2001; 6% in 2002; 7% in 2003; and 8%
8    in 2004 and thereafter;
9        (6) Each security employee of the Department of
10    Corrections or of the Department of Human Services who is
11    not a covered employee, 1% for a widow or survivors annuity
12    plus the following amount for retirement annuity: 8.5%
13    through December 31, 2001; 9.5% in 2002; 10.5% in 2003; and
14    11.5% in 2004 and thereafter.
15    (a-5) In addition to the contributions otherwise required
16under this Article, each Tier I member shall also make the
17following contributions for retirement annuity from each
18payment of compensation:
19        (1) beginning July 1, 2013 and through June 30, 2014,
20    1% of compensation; and
21        (2) beginning on July 1, 2014, 2% of compensation.
22    (b) Contributions shall be in the form of a deduction from
23compensation and shall be made notwithstanding that the
24compensation paid in cash to the employee shall be reduced
25thereby below the minimum prescribed by law or regulation. Each
26member is deemed to consent and agree to the deductions from

 

 

09700SB1673ham009- 114 -LRB097 07605 JDS 72879 a

1compensation provided for in this Article, and shall receipt in
2full for salary or compensation.
3(Source: P.A. 92-14, eff. 6-28-01.)
 
4    (40 ILCS 5/14-135.08)  (from Ch. 108 1/2, par. 14-135.08)
5    Sec. 14-135.08. To certify required State contributions.
6    (a) To certify to the Governor and to each department, on
7or before November 15 of each year through until November 15,
82011, the required rate for State contributions to the System
9for the next State fiscal year, as determined under subsection
10(b) of Section 14-131. The certification to the Governor under
11this subsection (a) shall include a copy of the actuarial
12recommendations upon which the rate is based and shall
13specifically identify the System's projected State normal cost
14for that fiscal year.
15    (a-5) On or before November 1 of each year, beginning
16November 1, 2012, the Board shall submit to the State Actuary,
17the Governor, and the General Assembly a proposed certification
18of the amount of the required State contribution to the System
19for the next fiscal year, along with all of the actuarial
20assumptions, calculations, and data upon which that proposed
21certification is based. On or before January 1 of each year,
22beginning January 1, 2013, the State Actuary shall issue a
23preliminary report concerning the proposed certification and
24identifying, if necessary, recommended changes in actuarial
25assumptions that the Board must consider before finalizing its

 

 

09700SB1673ham009- 115 -LRB097 07605 JDS 72879 a

1certification of the required State contributions.
2    On or before January 15, 2013 and each January 15
3thereafter, the Board shall certify to the Governor and the
4General Assembly the amount of the required State contribution
5for the next fiscal year. The certification shall include a
6copy of the actuarial recommendations upon which it is based
7and shall specifically identify the System's projected State
8normal cost for that fiscal year. The Board's certification
9must note any deviations from the State Actuary's recommended
10changes, the reason or reasons for not following the State
11Actuary's recommended changes, and the fiscal impact of not
12following the State Actuary's recommended changes on the
13required State contribution.
14    (b) The certifications under subsections (a) and (a-5)
15shall include an additional amount necessary to pay all
16principal of and interest on those general obligation bonds due
17the next fiscal year authorized by Section 7.2(a) of the
18General Obligation Bond Act and issued to provide the proceeds
19deposited by the State with the System in July 2003,
20representing deposits other than amounts reserved under
21Section 7.2(c) of the General Obligation Bond Act. For State
22fiscal year 2005, the Board shall make a supplemental
23certification of the additional amount necessary to pay all
24principal of and interest on those general obligation bonds due
25in State fiscal years 2004 and 2005 authorized by Section
267.2(a) of the General Obligation Bond Act and issued to provide

 

 

09700SB1673ham009- 116 -LRB097 07605 JDS 72879 a

1the proceeds deposited by the State with the System in July
22003, representing deposits other than amounts reserved under
3Section 7.2(c) of the General Obligation Bond Act, as soon as
4practical after the effective date of this amendatory Act of
5the 93rd General Assembly.
6    On or before May 1, 2004, the Board shall recalculate and
7recertify to the Governor and to each department the amount of
8the required State contribution to the System and the required
9rates for State contributions to the System for State fiscal
10year 2005, taking into account the amounts appropriated to and
11received by the System under subsection (d) of Section 7.2 of
12the General Obligation Bond Act.
13    On or before July 1, 2005, the Board shall recalculate and
14recertify to the Governor and to each department the amount of
15the required State contribution to the System and the required
16rates for State contributions to the System for State fiscal
17year 2006, taking into account the changes in required State
18contributions made by this amendatory Act of the 94th General
19Assembly.
20    On or before April 1, 2011, the Board shall recalculate and
21recertify to the Governor and to each department the amount of
22the required State contribution to the System for State fiscal
23year 2011, applying the changes made by Public Act 96-889 to
24the System's assets and liabilities as of June 30, 2009 as
25though Public Act 96-889 was approved on that date.
26    On or before July 1, 2013, the Board shall, if necessary,

 

 

09700SB1673ham009- 117 -LRB097 07605 JDS 72879 a

1recalculate and recertify to the Governor the amount of the
2required State contribution to the System for State fiscal year
32014, taking into account the changes in required State
4contributions made by this amendatory Act of the 97th General
5Assembly.
6(Source: P.A. 96-1497, eff. 1-14-11; 96-1511, eff. 1-27-11;
797-694, eff. 6-18-12.)
 
8    (40 ILCS 5/14-152.1)
9    Sec. 14-152.1. Application and expiration of new benefit
10increases.
11    (a) As used in this Section, "new benefit increase" means
12an increase in the amount of any benefit provided under this
13Article, or an expansion of the conditions of eligibility for
14any benefit under this Article, that results from an amendment
15to this Code that takes effect after June 1, 2005 (the
16effective date of Public Act 94-4). "New benefit increase",
17however, does not include any benefit increase resulting from
18the changes made to this Article by Public Act 96-37 or by this
19amendatory Act of the 97th 96th General Assembly.
20    (b) Notwithstanding any other provision of this Code or any
21subsequent amendment to this Code, every new benefit increase
22is subject to this Section and shall be deemed to be granted
23only in conformance with and contingent upon compliance with
24the provisions of this Section.
25    (c) The Public Act enacting a new benefit increase must

 

 

09700SB1673ham009- 118 -LRB097 07605 JDS 72879 a

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

 

 

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1the new benefit increase, a new benefit increase that expires
2under this Section continues to apply to persons who applied
3and qualified for the affected benefit while the new benefit
4increase was in effect and to the affected beneficiaries and
5alternate payees of such persons, but does not apply to any
6other person, including without limitation a person who
7continues in service after the expiration date and did not
8apply and qualify for the affected benefit while the new
9benefit increase was in effect.
10(Source: P.A. 96-37, eff. 7-13-09.)
 
11    (40 ILCS 5/15-107.1 new)
12    Sec. 15-107.1. Tier I participant. "Tier I participant": A
13participant under this Article, other than a participant in the
14self-managed plan under Section 15-158.2, who first became a
15member or participant before January 1, 2011 under any
16reciprocal retirement system or pension fund established under
17this Code other than a retirement system or pension fund
18established under Article 2, 3, 4, 5, 6, or 18 of this Code.
 
19    (40 ILCS 5/15-107.2 new)
20    Sec. 15-107.2. Tier I retiree. "Tier I retiree": A former
21Tier I participant who is receiving a retirement annuity.
22    A person does not become a Tier I retiree by virtue of
23receiving a reversionary, survivors, beneficiary, or
24disability annuity.
 

 

 

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1    (40 ILCS 5/15-111)  (from Ch. 108 1/2, par. 15-111)
2    Sec. 15-111. Earnings. "Earnings": An amount paid for
3personal services equal to the sum of the basic compensation
4plus extra compensation for summer teaching, overtime or other
5extra service. For periods for which an employee receives
6service credit under subsection (c) of Section 15-113.1 or
7Section 15-113.2, earnings are equal to the basic compensation
8on which contributions are paid by the employee during such
9periods. Compensation for employment which is irregular,
10intermittent and temporary shall not be considered earnings,
11unless the participant is also receiving earnings from the
12employer as an employee under Section 15-107.
13    With respect to transition pay paid by the University of
14Illinois to a person who was a participating employee employed
15in the fire department of the University of Illinois's
16Champaign-Urbana campus immediately prior to the elimination
17of that fire department:
18        (1) "Earnings" includes transition pay paid to the
19    employee on or after the effective date of this amendatory
20    Act of the 91st General Assembly.
21        (2) "Earnings" includes transition pay paid to the
22    employee before the effective date of this amendatory Act
23    of the 91st General Assembly only if (i) employee
24    contributions under Section 15-157 have been withheld from
25    that transition pay or (ii) the employee pays to the System

 

 

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1    before January 1, 2001 an amount representing employee
2    contributions under Section 15-157 on that transition pay.
3    Employee contributions under item (ii) may be paid in a
4    lump sum, by withholding from additional transition pay
5    accruing before January 1, 2001, or in any other manner
6    approved by the System. Upon payment of the employee
7    contributions on transition pay, the corresponding
8    employer contributions become an obligation of the State.
9    Notwithstanding any other provision of this Code, the
10earnings of a Tier I participant for the purposes of this Code
11shall not exceed, for periods of service on or after the
12effective date of this amendatory Act of the 97th General
13Assembly, the annual contribution and benefit base established
14for the applicable year by the Commissioner of Social Security
15under the federal Social Security Act; except that this
16limitation does not apply to a participant's earnings that are
17determined under an employment contract or collective
18bargaining agreement that is in effect on the effective date of
19this amendatory Act of the 97th General Assembly and has not
20been amended or renewed after that date.
21(Source: P.A. 91-887, eff. 7-6-00.)
 
22    (40 ILCS 5/15-113.6)  (from Ch. 108 1/2, par. 15-113.6)
23    Sec. 15-113.6. Service for employment in public schools.
24"Service for employment in public schools": Includes those
25periods not exceeding the lesser of 10 years or 2/3 of the

 

 

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1service granted under other Sections of this Article dealing
2with service credit, during which a person who entered the
3system after September 1, 1974 was employed full time by a
4public common school, public college and public university, or
5by an agency or instrumentality of any of the foregoing, of any
6state, territory, dependency or possession of the United States
7of America, including the Philippine Islands, or a school
8operated by or under the auspices of any agency or department
9of any other state, if the person (1) cannot qualify for a
10retirement pension or other benefit based upon employer
11contributions from another retirement system, exclusive of
12federal social security, based in whole or in part upon this
13employment, and (2) pays the lesser of (A) an amount equal to
148% of his or her annual basic compensation on the date of
15becoming a participating employee subsequent to this service
16multiplied by the number of years of such service, together
17with compound interest from the date participation begins to
18the date payment is received by the board at the rate of 6% per
19annum through August 31, 1982, and at the effective rates after
20that date, and (B) 50% of the actuarial value of the increase
21in the retirement annuity provided by this service, and (3)
22contributes for at least 5 years subsequent to this employment
23to one or more of the following systems: the State Universities
24Retirement System, the Teachers' Retirement System of the State
25of Illinois, and the Public School Teachers' Pension and
26Retirement Fund of Chicago.

 

 

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1    The service granted under this Section shall not be
2considered in determining whether the person has the minimum
3number of 8 years of service required to qualify for a
4retirement annuity at age 55 or the 5 years of service required
5to qualify for a retirement annuity at age 62, as provided in
6Section 15-135, or the 10 years required by subsection (c) of
7Section 1-160 for a person who first becomes a participant on
8or after January 1, 2011. The maximum allowable service of 10
9years for this governmental employment shall be reduced by the
10service credit which is validated under paragraph (2) of
11subsection (b) of Section 16-127 and paragraph 1 of Section
1217-133.
13(Source: P.A. 95-83, eff. 8-13-07; 96-1490, eff. 1-1-11.)
 
14    (40 ILCS 5/15-113.7)  (from Ch. 108 1/2, par. 15-113.7)
15    Sec. 15-113.7. Service for other public employment.
16"Service for other public employment": Includes those periods
17not exceeding the lesser of 10 years or 2/3 of the service
18granted under other Sections of this Article dealing with
19service credit, during which a person was employed full time by
20the United States government, or by the government of a state,
21or by a political subdivision of a state, or by an agency or
22instrumentality of any of the foregoing, if the person (1)
23cannot qualify for a retirement pension or other benefit based
24upon employer contributions from another retirement system,
25exclusive of federal social security, based in whole or in part

 

 

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1upon this employment, and (2) pays the lesser of (A) an amount
2equal to 8% of his or her annual basic compensation on the date
3of becoming a participating employee subsequent to this service
4multiplied by the number of years of such service, together
5with compound interest from the date participation begins to
6the date payment is received by the board at the rate of 6% per
7annum through August 31, 1982, and at the effective rates after
8that date, and (B) 50% of the actuarial value of the increase
9in the retirement annuity provided by this service, and (3)
10contributes for at least 5 years subsequent to this employment
11to one or more of the following systems: the State Universities
12Retirement System, the Teachers' Retirement System of the State
13of Illinois, and the Public School Teachers' Pension and
14Retirement Fund of Chicago. If a function of a governmental
15unit as defined by Section 20-107 is transferred by law, in
16whole or in part to an employer, and an employee transfers
17employment from this governmental unit to such employer within
186 months of the transfer of the function, the payment for
19service authorized under this Section shall not exceed the
20amount which would have been payable for this service to the
21retirement system covering the governmental unit from which the
22function was transferred.
23    The service granted under this Section shall not be
24considered in determining whether the person has the minimum
25number of 8 years of service required to qualify for a
26retirement annuity at age 55 or the 5 years of service required

 

 

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1to qualify for a retirement annuity at age 62, as provided in
2Section 15-135. The maximum allowable service of 10 years for
3this governmental employment shall be reduced by the service
4credit which is validated under paragraph (2) of subsection (b)
5of Section 16-127 and paragraph one of Section 17-133.
6    Except as hereinafter provided, this Section shall not
7apply to persons who become participants in the system after
8September 1, 1974.
9(Source: P.A. 95-83, eff. 8-13-07.)
 
10    (40 ILCS 5/15-134.5)
11    Sec. 15-134.5. Retirement program elections.
12    (a) All participating employees are participants under the
13traditional benefit package prior to January 1, 1998.
14    Effective as of the date that an employer elects, as
15described in Section 15-158.2, to offer to its employees the
16portable benefit package and the self-managed plan as
17alternatives to the traditional benefit package, each of that
18employer's eligible employees (as defined in subsection (b))
19shall be given the choice to elect which retirement program he
20or she wishes to participate in with respect to all periods of
21covered employment occurring on and after the effective date of
22the employee's election. The retirement program election made
23by an eligible employee must be made in writing, in the manner
24prescribed by the System, and within the time period described
25in subsection (d) or (d-1).

 

 

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1    The employee election authorized by this Section is a
2one-time, irrevocable election. If an employee terminates
3employment after making the election provided under this
4subsection (a), then upon his or her subsequent re-employment
5with an employer the original election shall automatically
6apply to him or her, provided that the employer is then a
7participating employer as described in Section 15-158.2.
8    An eligible employee who fails to make this election shall,
9by default, participate in the traditional benefit package.
10    (b) "Eligible employee" means an employee (as defined in
11Section 15-107) who is either a currently eligible employee or
12a newly eligible employee. For purposes of this Section, a
13"currently eligible employee" is an employee who is employed by
14an employer on the effective date on which the employer offers
15to its employees the portable benefit package and the
16self-managed plan as alternatives to the traditional benefit
17package. A "newly eligible employee" is an employee who first
18becomes employed by an employer after the effective date on
19which the employer offers its employees the portable benefit
20package and the self-managed plan as alternatives to the
21traditional benefit package. A newly eligible employee
22participates in the traditional benefit package until he or she
23makes an election to participate in the portable benefit
24package or the self-managed plan. If an employee does not elect
25to participate in the portable benefit package or the
26self-managed plan, he or she shall continue to participate in

 

 

09700SB1673ham009- 127 -LRB097 07605 JDS 72879 a

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

 

 

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1date of this amendatory Act of the 91st General Assembly, fails
2to make the election within the period provided under
3subsection (d) and participates by default in the traditional
4benefit package may make a late election to participate in the
5portable benefit package or the self-managed plan instead of
6the traditional benefit package at any time within 6 months
7after the effective date of this amendatory Act of the 91st
8General Assembly.
9    (e) If a currently eligible employee elects the portable
10benefit package, that election shall not become effective until
11the one-year anniversary of the date on which the election is
12filed with the System, provided the employee remains
13continuously employed by the employer throughout the one-year
14waiting period, and any benefits payable to or on account of
15the employee before such one-year waiting period has ended
16shall not be determined under the provisions applicable to the
17portable benefit package but shall instead be determined in
18accordance with the traditional benefit package. If a currently
19eligible employee who has elected the portable benefit package
20terminates employment covered by the System before the one-year
21waiting period has ended, then no benefits shall be determined
22under the portable benefit package provisions while he or she
23is inactive in the System and upon re-employment with an
24employer covered by the System he or she shall begin a new
25one-year waiting period before the provisions of the portable
26benefit package become effective.

 

 

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1    (f) An eligible employee shall be provided with written
2information prepared or prescribed by the System which
3describes the employee's retirement program choices. The
4eligible employee shall be offered an opportunity to receive
5counseling from the System prior to making his or her election.
6This counseling may consist of videotaped materials, group
7presentations, individual consultation with an employee or
8authorized representative of the System in person or by
9telephone or other electronic means, or any combination of
10these methods.
11    (g) Notwithstanding any other provision of this Section, a
12person may not elect to participate or begin participation in
13the self-managed plan established under Section 15-158.2 on or
14after the effective date of this amendatory Act of the 97th
15General Assembly.
16(Source: P.A. 90-766, eff. 8-14-98; 91-887, eff. 7-6-00.)
 
17    (40 ILCS 5/15-135)  (from Ch. 108 1/2, par. 15-135)
18    Sec. 15-135. Retirement annuities - Conditions.
19    (a) A participant who retires in one of the following
20specified years with the specified amount of service is
21entitled to a retirement annuity at any age under the
22retirement program applicable to the participant:
23        35 years if retirement is in 1997 or before;
24        34 years if retirement is in 1998;
25        33 years if retirement is in 1999;

 

 

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1        32 years if retirement is in 2000;
2        31 years if retirement is in 2001;
3        30 years if retirement is in 2002 or later.
4    A participant with 8 or more years of service after
5September 1, 1941, is entitled to a retirement annuity on or
6after attainment of age 55.
7    A participant with at least 5 but less than 8 years of
8service after September 1, 1941, is entitled to a retirement
9annuity on or after attainment of age 62.
10    A participant who has at least 25 years of service in this
11system as a police officer or firefighter is entitled to a
12retirement annuity on or after the attainment of age 50, if
13Rule 4 of Section 15-136 is applicable to the participant.
14    (a-5) Notwithstanding subsection (a) of this Section, for a
15Tier I participant who begins receiving a retirement annuity
16under this Article after July 1, 2013:
17        (1) If the Tier I participant is at least 45 years old
18    on the effective date of this amendatory Act of the 97th
19    General Assembly, then the references to age 50, 55, and 62
20    in subsection (a) of this Section remain unchanged.
21        (2) If the Tier I participant is at least 40 but less
22    than 45 years old on the effective date of this amendatory
23    Act of the 97th General Assembly, then the references to
24    age 50, 55, and 62 in subsection (a) of this Section are
25    increased by one year.
26        (3) If the Tier I participant is at least 35 but less

 

 

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1    than 40 years old on the effective date of this amendatory
2    Act of the 97th General Assembly, then the references to
3    age 50, 55, and 62 in subsection (a) of this Section are
4    increased by 3 years.
5        (4) If the Tier I participant is less than 35 years old
6    on the effective date of this amendatory Act of the 97th
7    General Assembly, then the references to age 50, 55, and 62
8    in subsection (a) of this Section are increased by 5 years.
9    Notwithstanding Section 1-103.1, this subsection (a-5)
10applies without regard to whether or not the Tier I participant
11is in active service under this Article on or after the
12effective date of this amendatory Act of the 97th General
13Assembly.
14    (b) The annuity payment period shall begin on the date
15specified by the participant or the recipient of a disability
16retirement annuity submitting a written application, which
17date shall not be prior to termination of employment or more
18than one year before the application is received by the board;
19however, if the participant is not an employee of an employer
20participating in this System or in a participating system as
21defined in Article 20 of this Code on April 1 of the calendar
22year next following the calendar year in which the participant
23attains age 70 1/2, the annuity payment period shall begin on
24that date regardless of whether an application has been filed.
25    (c) An annuity is not payable if the amount provided under
26Section 15-136 is less than $10 per month.

 

 

09700SB1673ham009- 132 -LRB097 07605 JDS 72879 a

1(Source: P.A. 97-933, eff. 8-10-12; 97-968, eff. 8-16-12.)
 
2    (40 ILCS 5/15-136)  (from Ch. 108 1/2, par. 15-136)
3    Sec. 15-136. Retirement annuities - Amount. The provisions
4of this Section 15-136 apply only to those participants who are
5participating in the traditional benefit package or the
6portable benefit package and do not apply to participants who
7are participating in the self-managed plan.
8    (a) The amount of a participant's retirement annuity,
9expressed in the form of a single-life annuity, shall be
10determined by whichever of the following rules is applicable
11and provides the largest annuity:
12    Rule 1: The retirement annuity shall be 1.67% of final rate
13of earnings for each of the first 10 years of service, 1.90%
14for each of the next 10 years of service, 2.10% for each year
15of service in excess of 20 but not exceeding 30, and 2.30% for
16each year in excess of 30; or for persons who retire on or
17after January 1, 1998, 2.2% of the final rate of earnings for
18each year of service.
19    Rule 2: The retirement annuity shall be the sum of the
20following, determined from amounts credited to the participant
21in accordance with the actuarial tables and the effective rate
22of interest in effect at the time the retirement annuity
23begins:
24        (i) the normal annuity which can be provided on an
25    actuarially equivalent basis, by the accumulated normal

 

 

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1    contributions as of the date the annuity begins;
2        (ii) an annuity from employer contributions of an
3    amount equal to that which can be provided on an
4    actuarially equivalent basis from the accumulated normal
5    contributions made by the participant under Section
6    15-113.6 and Section 15-113.7 plus 1.4 times all other
7    accumulated normal contributions made by the participant;
8    and
9        (iii) the annuity that can be provided on an
10    actuarially equivalent basis from the entire contribution
11    made by the participant under Section 15-113.3.
12    For the purpose of calculating an annuity under this Rule
132, the contribution required under subsection (c-5) of Section
1415-157 shall not be considered when determining the
15participant's accumulated normal contributions under clause
16(i) or the employer contribution under clause (ii).
17    With respect to a police officer or firefighter who retires
18on or after August 14, 1998, the accumulated normal
19contributions taken into account under clauses (i) and (ii) of
20this Rule 2 shall include the additional normal contributions
21made by the police officer or firefighter under Section
2215-157(a).
23    The amount of a retirement annuity calculated under this
24Rule 2 shall be computed solely on the basis of the
25participant's accumulated normal contributions, as specified
26in this Rule and defined in Section 15-116. Neither an employee

 

 

09700SB1673ham009- 134 -LRB097 07605 JDS 72879 a

1or employer contribution for early retirement under Section
215-136.2 nor any other employer contribution shall be used in
3the calculation of the amount of a retirement annuity under
4this Rule 2.
5    This amendatory Act of the 91st General Assembly is a
6clarification of existing law and applies to every participant
7and annuitant without regard to whether status as an employee
8terminates before the effective date of this amendatory Act.
9    This Rule 2 does not apply to a person who first becomes an
10employee under this Article on or after July 1, 2005.
11    Rule 3: The retirement annuity of a participant who is
12employed at least one-half time during the period on which his
13or her final rate of earnings is based, shall be equal to the
14participant's years of service not to exceed 30, multiplied by
15(1) $96 if the participant's final rate of earnings is less
16than $3,500, (2) $108 if the final rate of earnings is at least
17$3,500 but less than $4,500, (3) $120 if the final rate of
18earnings is at least $4,500 but less than $5,500, (4) $132 if
19the final rate of earnings is at least $5,500 but less than
20$6,500, (5) $144 if the final rate of earnings is at least
21$6,500 but less than $7,500, (6) $156 if the final rate of
22earnings is at least $7,500 but less than $8,500, (7) $168 if
23the final rate of earnings is at least $8,500 but less than
24$9,500, and (8) $180 if the final rate of earnings is $9,500 or
25more, except that the annuity for those persons having made an
26election under Section 15-154(a-1) shall be calculated and

 

 

09700SB1673ham009- 135 -LRB097 07605 JDS 72879 a

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

 

 

09700SB1673ham009- 136 -LRB097 07605 JDS 72879 a

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

 

 

09700SB1673ham009- 137 -LRB097 07605 JDS 72879 a

1    equivalent basis from the employee contribution for early
2    retirement under Section 15-136.2.
3    In no event shall a retirement annuity under this Rule 5 be
4lower than the amount obtained by adding (1) the monthly amount
5obtained by dividing the combined employee and employer
6contributions made under Section 15-136.2 by the System's
7annuity factor for the age of the participant at the beginning
8of the annuity payment period and (2) the amount equal to the
9participant's annuity if calculated under Rule 1, reduced under
10Section 15-136(b) as if no contributions had been made under
11Section 15-136.2.
12    With respect to a participant who is qualified for a
13retirement annuity under this Rule 5 whose retirement annuity
14began before the effective date of this amendatory Act of the
1591st General Assembly, and for whom an employee contribution
16was made under Section 15-136.2, the System shall recalculate
17the retirement annuity under this Rule 5 and shall pay any
18additional amounts due in the manner provided in Section
1915-186.1 for benefits mistakenly set too low.
20    The amount of a retirement annuity calculated under this
21Rule 5 shall be computed solely on the basis of those
22contributions specifically set forth in this Rule 5. Except as
23provided in clause (iii) of this Rule 5, neither an employee
24nor 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

 

 

09700SB1673ham009- 138 -LRB097 07605 JDS 72879 a

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

 

 

09700SB1673ham009- 139 -LRB097 07605 JDS 72879 a

1        (3) For that portion of a retirement annuity which has
2    been provided on account of service of the participant
3    during periods when he or she performed the duties of a
4    police officer or firefighter, if these duties were
5    performed for at least 5 years immediately preceding the
6    date the retirement annuity is to begin.
7    (c) The maximum retirement annuity provided under Rules 1,
82, 4, and 5 shall be the lesser of (1) the annual limit of
9benefits as specified in Section 415 of the Internal Revenue
10Code of 1986, as such Section may be amended from time to time
11and as such benefit limits shall be adjusted by the
12Commissioner of Internal Revenue, and (2) 80% of final rate of
13earnings.
14    (d) Subject to the provisions of subsections (d-1) and
15(d-2), an An annuitant whose status as an employee terminates
16after August 14, 1969 shall receive automatic increases in his
17or her retirement annuity as follows:
18    Effective January 1 immediately following the date the
19retirement annuity begins, the annuitant shall receive an
20increase in his or her monthly retirement annuity of 0.125% of
21the monthly retirement annuity provided under Rule 1, Rule 2,
22Rule 3, Rule 4, or Rule 5, contained in this Section,
23multiplied by the number of full months which elapsed from the
24date the retirement annuity payments began to January 1, 1972,
25plus 0.1667% of such annuity, multiplied by the number of full
26months which elapsed from January 1, 1972, or the date the

 

 

09700SB1673ham009- 140 -LRB097 07605 JDS 72879 a

1retirement annuity payments began, whichever is later, to
2January 1, 1978, plus 0.25% of such annuity multiplied by the
3number of full months which elapsed from January 1, 1978, or
4the date the retirement annuity payments began, whichever is
5later, to the effective date of the increase.
6    The annuitant shall receive an increase in his or her
7monthly retirement annuity on each January 1 thereafter during
8the annuitant's life of 3% of the monthly annuity provided
9under Rule 1, Rule 2, Rule 3, Rule 4, or Rule 5 contained in
10this Section. The change made under this subsection by P.A.
1181-970 is effective January 1, 1980 and applies to each
12annuitant whose status as an employee terminates before or
13after that date.
14    Beginning January 1, 1990 and except as provided in
15subsections (d-1) and (d-2), all automatic annual increases
16payable under this Section shall be calculated as a percentage
17of the total annuity payable at the time of the increase,
18including all increases previously granted under this Article.
19    The change made in this subsection by P.A. 85-1008 is
20effective January 26, 1988, and is applicable without regard to
21whether status as an employee terminated before that date.
22    (d-1) Notwithstanding any other provision of this Article,
23for a Tier I retiree, the amount of each automatic annual
24increase in retirement annuity occurring on or after the
25effective date of this amendatory Act of the 97th General
26Assembly shall be the lesser of $750 or 3% of the total annuity

 

 

09700SB1673ham009- 141 -LRB097 07605 JDS 72879 a

1payable at the time of the increase, including previous
2increases granted.
3    (d-2) Notwithstanding any other provision of this Article,
4for a Tier I retiree, the monthly retirement annuity shall
5first be subject to annual increases on the January 1 occurring
6on or next after the attainment of age 67 or the January 1
7occurring on or next after the fifth anniversary of the annuity
8start date, whichever occurs earlier. If on the effective date
9of this amendatory Act of the 97th General Assembly a Tier I
10retiree has already received an annual increase under this
11Section but does not yet meet the new eligibility requirements
12of this subsection, the annual increases already received shall
13continue in force, but no additional annual increase shall be
14granted until the Tier I retiree meets the new eligibility
15requirements.
16    (d-3) Notwithstanding Section 1-103.1, subsections (d-1)
17and (d-2) apply without regard to whether or not the Tier I
18retiree is in active service under this Article on or after the
19effective date of this amendatory Act of the 97th General
20Assembly.
21    (e) If, on January 1, 1987, or the date the retirement
22annuity payment period begins, whichever is later, the sum of
23the retirement annuity provided under Rule 1 or Rule 2 of this
24Section and the automatic annual increases provided under the
25preceding subsection or Section 15-136.1, amounts to less than
26the retirement annuity which would be provided by Rule 3, the

 

 

09700SB1673ham009- 142 -LRB097 07605 JDS 72879 a

1retirement annuity shall be increased as of January 1, 1987, or
2the date the retirement annuity payment period begins,
3whichever is later, to the amount which would be provided by
4Rule 3 of this Section. Such increased amount shall be
5considered as the retirement annuity in determining benefits
6provided under other Sections of this Article. This paragraph
7applies without regard to whether status as an employee
8terminated before the effective date of this amendatory Act of
91987, provided that the annuitant was employed at least
10one-half time during the period on which the final rate of
11earnings was based.
12    (f) A participant is entitled to such additional annuity as
13may be provided on an actuarially equivalent basis, by any
14accumulated additional contributions to his or her credit.
15However, the additional contributions made by the participant
16toward the automatic increases in annuity provided under this
17Section and the contributions made under subsection (c-5) of
18Section 15-157 by this amendatory Act of the 97th General
19Assembly 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

 

 

09700SB1673ham009- 143 -LRB097 07605 JDS 72879 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    (j) For participants to whom subsection (a-5) of Section
2415-135 applies, the references to age 50, 55, and 62 in this
25Section are increased as provided in subsection (a-5) of
26Section 15-135.

 

 

09700SB1673ham009- 144 -LRB097 07605 JDS 72879 a

1(Source: P.A. 97-933, eff. 8-10-12; 97-968, eff. 8-16-12.)
 
2    (40 ILCS 5/15-155)  (from Ch. 108 1/2, par. 15-155)
3    Sec. 15-155. Employer contributions.
4    (a) The State of Illinois shall make contributions by
5appropriations of amounts which, together with the other
6employer contributions from trust, federal, and other funds,
7employee contributions, income from investments, and other
8income of this System, will be sufficient to meet the cost of
9maintaining and administering the System on a 100% 90% funded
10basis in accordance with actuarial recommendations by the end
11of State fiscal year 2043.
12    Beginning with State fiscal year 2014, the State's required
13contributions to the System under subsection (a-1) shall be
14limited to the amounts required to amortize the total cost of
15the benefits of the System arising before July 1, 2013. The
16State shall also pay any employer contributions required from
17the State as the actual employer of participants under this
18Article and any contribution required under subsection (a-20).
19    The Board shall determine the amount of State and employer
20contributions required for each fiscal year on the basis of the
21actuarial tables and other assumptions adopted by the Board and
22the recommendations of the actuary, using the formulas provided
23in this Section formula in subsection (a-1).
24    (a-1) For State fiscal years 2014 through 2043, the minimum
25contribution to the System to be made by the State under this

 

 

09700SB1673ham009- 145 -LRB097 07605 JDS 72879 a

1subsection (a-1) for each fiscal year shall be an amount
2determined by the Board to be sufficient to amortize the
3unfunded accrued liability that is attributable to benefits
4that accrued before July 1, 2013 as a level percentage of
5payroll over the years remaining to and including fiscal year
62043, determined under the projected unit credit actuarial cost
7method.
8    For State fiscal year 2044 and thereafter, the minimum
9contribution to the System to be made by the State under this
10subsection (a-1) for each fiscal year shall be an amount
11determined by the Board to be sufficient to amortize, over a
1230-year rolling amortization period, any unfunded liability
13arising on or after July 1, 2043 that is attributable to
14benefits that accrued before July 1, 2013.
15    For State fiscal years 2012 and 2013 through 2045, the
16minimum contribution to the System to be made by the State for
17each fiscal year shall be an amount determined by the System to
18be sufficient to bring the total assets of the System up to 90%
19of the total actuarial liabilities of the System by the end of
20State fiscal year 2045. In making these determinations, the
21required State contribution shall be calculated each year as a
22level percentage of payroll over the years remaining to and
23including fiscal year 2045 and shall be determined under the
24projected unit credit actuarial cost method.
25    For State fiscal years 1996 through 2005, the State
26contribution to the System, as a percentage of the applicable

 

 

09700SB1673ham009- 146 -LRB097 07605 JDS 72879 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

 

 

09700SB1673ham009- 147 -LRB097 07605 JDS 72879 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    Beginning in State fiscal year 2046, the minimum State
12contribution for each fiscal year shall be the amount needed to
13maintain the total assets of the System at 90% of the total
14actuarial liabilities of the System.
15    Amounts received by the System pursuant to Section 25 of
16the Budget Stabilization Act or Section 8.12 of the State
17Finance Act in any fiscal year do not reduce and do not
18constitute payment of any portion of the minimum State
19contribution required under this Article in that fiscal year.
20Such amounts shall not reduce, and shall not be included in the
21calculation of, the required State contributions under this
22Article in any future year until the System has reached a
23funding ratio of at least 100% 90%. A reference in this Article
24to the "required State contribution" or any substantially
25similar term does not include or apply to any amounts payable
26to the System under Section 25 of the Budget Stabilization Act.

 

 

09700SB1673ham009- 148 -LRB097 07605 JDS 72879 a

1    Notwithstanding any other provision of this Section, the
2required State contribution for State fiscal year 2005 and for
3fiscal year 2008 and each fiscal year thereafter through State
4fiscal year 2013, as calculated under this Section and
5certified under Section 15-165, shall not exceed an amount
6equal to (i) the amount of the required State contribution that
7would have been calculated under this Section for that fiscal
8year if the System had not received any payments under
9subsection (d) of Section 7.2 of the General Obligation Bond
10Act, minus (ii) the portion of the State's total debt service
11payments for that fiscal year on the bonds issued in fiscal
12year 2003 for the purposes of that Section 7.2, as determined
13and certified by the Comptroller, that is the same as the
14System's portion of the total moneys distributed under
15subsection (d) of Section 7.2 of the General Obligation Bond
16Act. In determining this maximum for State fiscal years 2008
17through 2010, however, the amount referred to in item (i) shall
18be increased, as a percentage of the applicable employee
19payroll, in equal increments calculated from the sum of the
20required State contribution for State fiscal year 2007 plus the
21applicable portion of the State's total debt service payments
22for fiscal year 2007 on the bonds issued in fiscal year 2003
23for the purposes of Section 7.2 of the General Obligation Bond
24Act, so that, by State fiscal year 2011, the State is
25contributing at the rate otherwise required under this Section.
26    (a-10) Subject to the limitations provided in subsection

 

 

09700SB1673ham009- 149 -LRB097 07605 JDS 72879 a

1(a-15), beginning with State fiscal year 2014, the minimum
2required contribution of each employer under this Article shall
3be sufficient to produce an annual amount equal to:
4        (i) the employer's normal cost for that fiscal year,
5    exclusive of the employer's normal cost that arises from
6    optional employer contributions agreed to by that employer
7    for that fiscal year under Section 1-161; plus
8        (ii) the employer's normal cost for that fiscal year
9    that arises from optional employer contributions agreed to
10    by that employer for that fiscal year under Section 1-161;
11    plus
12        (iii) the amount required for that fiscal year to
13    amortize that employer's portion of the unfunded accrued
14    liability associated with the cost of benefits accrued on
15    or after July 1, 2013 as a level percentage of payroll over
16    a 30-year rolling amortization period, as determined for
17    each employer by the Board.
18    Each employer under this Article shall make these
19contributions in the amounts determined and the manner
20prescribed from time to time by the Board.
21    (a-15) The System shall determine the employer's normal
22cost under item (i) of subsection (a-10) as a percentage of
23projected payroll applicable to all employers, based on
24actuarial assumptions applicable to the System as a whole. The
25required employer contribution under item (i) in a fiscal year
26shall not exceed a percentage of payroll determined by

 

 

09700SB1673ham009- 150 -LRB097 07605 JDS 72879 a

1subtracting 2013 from the applicable fiscal year and
2multiplying the result by 0.5%.
3    The System shall determine the employer's normal cost under
4item (ii) of subsection (a-10) as an additional percentage of
5projected payroll payable by a specific employer, based on the
6optional employer contributions agreed to by that employer for
7that fiscal year under Section 1-161 and the actuarial
8assumptions applicable to the System as a whole.
9    The System shall determine the employer's portion of the
10unfunded accrued liability under item (iii) of subsection
11(a-10) separately for each employer, as a percentage of that
12employer's projected payroll, based on the liabilities
13attributable to that employer arising on or after July 1, 2013
14and the actuarial assumptions applicable to the System as a
15whole.
16    For use in determining the employer's contribution for
17unfunded accrued liability under item (iii), the System shall
18maintain a separate account for each employer. The separate
19account shall be maintained in such form and detail as the
20System determines to be appropriate. The separate account shall
21reflect the following items to the extent that they are
22attributable to that employer and arise on or after July 1,
232013: employer contributions, State contributions under
24subsection (a-20), employee contributions, investment returns,
25payments of benefits, and that employer's proportionate share
26of the System's administrative expenses.

 

 

09700SB1673ham009- 151 -LRB097 07605 JDS 72879 a

1    In the event that the Board determines that there is a
2deficiency or surplus in the account of an employer with
3respect to the , the Board shall determine the employer's
4contribution rate under item (iii) of subsection (a-10) so as
5to address that deficiency or surplus over a reasonable period
6of time as determined by the Board.
7    (a-20) Beginning in State fiscal year 2014, for any fiscal
8year in which (1) the System's normal cost for all employers
9for that fiscal year, exclusive of the normal cost that arises
10from optional employer contributions agreed to by employers for
11that fiscal year under Section 1-161, exceeds (2) the total
12contribution calculated under item (i) of subsection (a-10) for
13all employers for that fiscal year, the State shall make an
14additional contribution to the System for that fiscal year
15equal to the difference.
16    The State contribution under this subsection (a-20) is in
17addition to the State contributions required under subsection
18(a-1) and any contributions required to be paid by the State as
19an employer under subsection (a-10) of this Section.
20    (b) If an employee is paid from trust or federal funds, the
21employer shall pay to the Board contributions from those funds
22which are sufficient to cover the accruing normal costs on
23behalf of the employee. However, universities having employees
24who are compensated out of local auxiliary funds, income funds,
25or service enterprise funds are not required to pay such
26contributions on behalf of those employees. The local auxiliary

 

 

09700SB1673ham009- 152 -LRB097 07605 JDS 72879 a

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

 

 

09700SB1673ham009- 153 -LRB097 07605 JDS 72879 a

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

 

 

09700SB1673ham009- 154 -LRB097 07605 JDS 72879 a

1year used to determine the final rate of earnings, determined
2on a full-time equivalent basis, exceeds the amount of his or
3her earnings with the same employer for the previous academic
4year, determined on a full-time equivalent basis, by more than
56%, the participant's employer shall pay to the System, in
6addition to all other payments required under this Section and
7in accordance with guidelines established by the System, the
8present value of the increase in benefits resulting from the
9portion of the increase in earnings that is in excess of 6%.
10This present value shall be computed by the System on the basis
11of the actuarial assumptions and tables used in the most recent
12actuarial valuation of the System that is available at the time
13of the computation. The System may require the employer to
14provide any pertinent information or documentation.
15    Whenever it determines that a payment is or may be required
16under this subsection (g), the System shall calculate the
17amount of the payment and bill the employer for that amount.
18The bill shall specify the calculations used to determine the
19amount due. If the employer disputes the amount of the bill, it
20may, within 30 days after receipt of the bill, apply to the
21System in writing for a recalculation. The application must
22specify in detail the grounds of the dispute and, if the
23employer asserts that the calculation is subject to subsection
24(h) or (i) of this Section, must include an affidavit setting
25forth and attesting to all facts within the employer's
26knowledge that are pertinent to the applicability of subsection

 

 

09700SB1673ham009- 155 -LRB097 07605 JDS 72879 a

1(h) or (i). Upon receiving a timely application for
2recalculation, the System shall review the application and, if
3appropriate, recalculate the amount due.
4    The employer contributions required under this subsection
5(g) (f) may be paid in the form of a lump sum within 90 days
6after receipt of the bill. If the employer contributions are
7not paid within 90 days after receipt of the bill, then
8interest will be charged at a rate equal to the System's annual
9actuarially assumed rate of return on investment compounded
10annually from the 91st day after receipt of the bill. Payments
11must be concluded within 3 years after the employer's receipt
12of the bill.
13    (h) This subsection (h) applies only to payments made or
14salary increases given on or after June 1, 2005 but before July
151, 2011. The changes made by Public Act 94-1057 shall not
16require the System to refund any payments received before July
1731, 2006 (the effective date of Public Act 94-1057).
18    When assessing payment for any amount due under subsection
19(g), the System shall exclude earnings increases paid to
20participants under contracts or collective bargaining
21agreements entered into, amended, or renewed before June 1,
222005.
23    When assessing payment for any amount due under subsection
24(g), the System shall exclude earnings increases paid to a
25participant at a time when the participant is 10 or more years
26from retirement eligibility under Section 15-135.

 

 

09700SB1673ham009- 156 -LRB097 07605 JDS 72879 a

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

 

 

09700SB1673ham009- 157 -LRB097 07605 JDS 72879 a

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

 

 

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

 

 

09700SB1673ham009- 159 -LRB097 07605 JDS 72879 a

15-year period following that fiscal year.
2    (m) For purposes of determining the required State
3contribution to the system for a particular year, the actuarial
4value of assets shall be assumed to earn a rate of return equal
5to the system's actuarially assumed rate of return.
6(Source: P.A. 96-43, eff. 7-15-09; 96-1497, eff. 1-14-11;
796-1511, eff. 1-27-11; 96-1554, eff. 3-18-11; 97-813, eff.
87-13-12; revised 10-17-12.)
 
9    (40 ILCS 5/15-155.1 new)
10    Sec. 15-155.1. Actions to enforce payments by employers
11other than the State. Any employer, other than the State, that
12fails to transmit to the System contributions required of it
13under this Article or contributions required of employees, for
14more than 90 days after such contributions are due, is subject
15to the following: after giving notice to the employer, the
16System may certify to the State Comptroller or the Illinois
17Community College Board, whichever is applicable, the amounts
18of such delinquent payments and the State Comptroller or the
19Illinois Community College Board, whichever is applicable,
20shall deduct the amounts so certified or any part thereof from
21any State funds to be remitted to the employer and shall pay
22the amount so deducted to the System. If State funds from which
23such deductions may be made are not available, the System may
24proceed against the employer to recover the amounts of such
25delinquent payments in the appropriate circuit court.

 

 

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1    The System may provide for an audit of the records of an
2employer, other than the State, as may be required to establish
3the amounts of required contributions. The employer shall make
4its records available to the System for the purpose of such
5audit. The cost of such audit shall be added to the amount of
6the delinquent payments and may be recovered by the System from
7the employer at the same time and in the same manner as the
8delinquent payments are recovered.
 
9    (40 ILCS 5/15-156)  (from Ch. 108 1/2, par. 15-156)
10    Sec. 15-156. Obligations of State; funding guarantees.
11    (a) The payment of (1) the required State contributions,
12(2) all benefits granted under this system and (3) all expenses
13in connection with the administration and operation thereof are
14obligations of the State of Illinois to the extent specified in
15this Article. The accumulated employee normal, additional and
16survivors insurance contributions credited to the accounts of
17active and inactive participants shall not be used to pay the
18State's share of the obligations.
19    (b) Beginning July 1, 2013, the State shall be
20contractually obligated to contribute to the System under
21Section 15-155 in each State fiscal year an amount not less
22than the sum of (i) the State's required contribution under
23subsections (a-10) and (a-20) of Section 15-155 and (ii) the
24portion of the total cost of the benefits of the System arising
25before July 1, 2013 assigned to that State fiscal year by law

 

 

09700SB1673ham009- 161 -LRB097 07605 JDS 72879 a

1in accordance with a schedule that distributes payments
2equitably over a reasonable period of time and in accordance
3with accepted actuarial practices. The obligations created
4under this subsection (b) are contractual obligations
5protected and enforceable under Article I, Section 16 and
6Article XIII, Section 5 of the Illinois Constitution.
7    Notwithstanding any other provision of law, if the State
8fails to pay in a State fiscal year the amount guaranteed under
9this subsection, the System may bring a mandamus action in the
10circuit court of Champaign or Sangamon County to compel the
11State to make that payment, irrespective of other remedies that
12may be available to the System. In ordering the State to make
13the required payment, the court may order a reasonable payment
14schedule to enable the State to make the required payment
15without significantly imperiling the public health, safety, or
16welfare.
17(Source: P.A. 83-1440.)
 
18    (40 ILCS 5/15-157)  (from Ch. 108 1/2, par. 15-157)
19    Sec. 15-157. Employee Contributions.
20    (a) Each participating employee shall make contributions
21towards the retirement benefits payable under the retirement
22program applicable to the employee from each payment of
23earnings applicable to employment under this system on and
24after the date of becoming a participant as follows: Prior to
25September 1, 1949, 3 1/2% of earnings; from September 1, 1949

 

 

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1to August 31, 1955, 5%; from September 1, 1955 to August 31,
21969, 6%; from September 1, 1969, 6 1/2%. These contributions
3are to be considered as normal contributions for purposes of
4this Article.
5    Each participant who is a police officer or firefighter
6shall make normal contributions of 8% of each payment of
7earnings applicable to employment as a police officer or
8firefighter under this system on or after September 1, 1981,
9unless he or she files with the board within 60 days after the
10effective date of this amendatory Act of 1991 or 60 days after
11the board receives notice that he or she is employed as a
12police officer or firefighter, whichever is later, a written
13notice waiving the retirement formula provided by Rule 4 of
14Section 15-136. This waiver shall be irrevocable. If a
15participant had met the conditions set forth in Section
1615-132.1 prior to the effective date of this amendatory Act of
171991 but failed to make the additional normal contributions
18required by this paragraph, he or she may elect to pay the
19additional contributions plus compound interest at the
20effective rate. If such payment is received by the board, the
21service shall be considered as police officer service in
22calculating the retirement annuity under Rule 4 of Section
2315-136. While performing service described in clause (i) or
24(ii) of Rule 4 of Section 15-136, a participating employee
25shall be deemed to be employed as a firefighter for the purpose
26of determining the rate of employee contributions under this

 

 

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1Section.
2    (b) Starting September 1, 1969, each participating
3employee shall make additional contributions of 1/2 of 1% of
4earnings to finance a portion of the cost of the annual
5increases in retirement annuity provided under Section 15-136,
6except that with respect to participants in the self-managed
7plan this additional contribution shall be used to finance the
8benefits obtained under that retirement program.
9    (c) In addition to the amounts described in subsections (a)
10and (b) of this Section, each participating employee shall make
11contributions of 1% of earnings applicable under this system on
12and after August 1, 1959. The contributions made under this
13subsection (c) shall be considered as survivor's insurance
14contributions for purposes of this Article if the employee is
15covered under the traditional benefit package, and such
16contributions shall be considered as additional contributions
17for purposes of this Article if the employee is participating
18in the self-managed plan or has elected to participate in the
19portable benefit package and has completed the applicable
20one-year waiting period. Contributions in excess of $80 during
21any fiscal year beginning before August 31, 1969 and in excess
22of $120 during any fiscal year thereafter until September 1,
231971 shall be considered as additional contributions for
24purposes of this Article.
25    (c-5) In addition to the contributions otherwise required
26under this Article, each Tier I participant shall also make the

 

 

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1following contributions toward the retirement benefits payable
2under the retirement program applicable to the employee from
3each payment of earnings applicable to employment under this
4system:
5        (1) beginning July 1, 2013 and through June 30, 2014,
6    1% of earnings; and
7        (2) beginning on July 1, 2014, 2% of earnings.
8    Except as otherwise specified, these contributions are to
9be considered as normal contributions for purposes of this
10Article.
11    (d) If the board by board rule so permits and subject to
12such conditions and limitations as may be specified in its
13rules, a participant may make other additional contributions of
14such percentage of earnings or amounts as the participant shall
15elect in a written notice thereof received by the board.
16    (e) That fraction of a participant's total accumulated
17normal contributions, the numerator of which is equal to the
18number of years of service in excess of that which is required
19to qualify for the maximum retirement annuity, and the
20denominator of which is equal to the total service of the
21participant, shall be considered as accumulated additional
22contributions. The determination of the applicable maximum
23annuity and the adjustment in contributions required by this
24provision shall be made as of the date of the participant's
25retirement.
26    (f) Notwithstanding the foregoing, a participating

 

 

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1employee shall not be required to make contributions under this
2Section after the date upon which continuance of such
3contributions would otherwise cause his or her retirement
4annuity to exceed the maximum retirement annuity as specified
5in clause (1) of subsection (c) of Section 15-136.
6    (g) A participating employee may make contributions for the
7purchase of service credit under this Article.
8(Source: P.A. 90-32, eff. 6-27-97; 90-65, eff. 7-7-97; 90-448,
9eff. 8-16-97; 90-511, eff. 8-22-97; 90-576, eff. 3-31-98;
1090-655, eff. 7-30-98; 90-766, eff. 8-14-98.)
 
11    (40 ILCS 5/15-158.2)
12    Sec. 15-158.2. Self-managed plan.
13    (a) Purpose. The General Assembly finds that it is
14important for colleges and universities to be able to attract
15and retain the most qualified employees and that in order to
16attract and retain these employees, colleges and universities
17should have the flexibility to provide a defined contribution
18plan as an alternative for eligible employees who elect not to
19participate in a defined benefit retirement program provided
20under this Article. Accordingly, the State Universities
21Retirement System is hereby authorized to establish and
22administer a self-managed plan, which shall offer
23participating employees who became participating employees
24before the effective date of this amendatory Act of the 97th
25General Assembly the opportunity to accumulate assets for

 

 

09700SB1673ham009- 166 -LRB097 07605 JDS 72879 a

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

 

 

09700SB1673ham009- 167 -LRB097 07605 JDS 72879 a

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

 

 

09700SB1673ham009- 168 -LRB097 07605 JDS 72879 a

1subject to applicable contractual provisions. The participant
2shall not be deemed a fiduciary by reason of providing such
3investment direction. A person who is a fiduciary shall not be
4liable for any loss resulting from such investment direction
5and shall not be deemed to have breached any fiduciary duty by
6acting in accordance with that direction. Neither the System
7nor the employer guarantees any of the investments in the
8employee's account balances.
9    (e) Participation. An employee eligible to participate in
10the self-managed plan must make a written election in
11accordance with the provisions of Section 15-134.5 and the
12procedures established by the System. Participation in the
13self-managed plan by an electing employee shall begin on the
14first day of the first pay period following the later of the
15date the employee's election is filed with the System or the
16effective date as of which the employee's employer begins to
17offer participation in the self-managed plan. Employers may not
18make the self-managed plan available earlier than January 1,
191998. An employee's participation in any other retirement
20program administered by the System under this Article shall
21terminate on the date that participation in the self-managed
22plan begins.
23    An employee who has elected to participate in the
24self-managed plan under this Section must continue
25participation while employed in an eligible position, and may
26not participate in any other retirement program administered by

 

 

09700SB1673ham009- 169 -LRB097 07605 JDS 72879 a

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

 

 

09700SB1673ham009- 170 -LRB097 07605 JDS 72879 a

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

 

 

09700SB1673ham009- 171 -LRB097 07605 JDS 72879 a

1    The program shall provide for employer contributions to be
2credited to each self-managed plan participant at a rate of
37.6% of the participating employee's salary, less the amount
4used by the System to provide disability benefits for the
5employee. The amounts so credited shall be paid into the
6participant's self-managed plan accounts in a manner to be
7prescribed by the System.
8    An amount of employer contribution, not exceeding 1% of the
9participating employee's salary, shall be used for the purpose
10of providing the disability benefits of the System to the
11employee. Prior to the beginning of each plan year under the
12self-managed plan, the Board of Trustees shall determine, as a
13percentage of salary, the amount of employer contributions to
14be allocated during that plan year for providing disability
15benefits for employees in the self-managed plan.
16    The State of Illinois shall make contributions by
17appropriations to the System of the employer contributions
18required for employees who participate in the self-managed plan
19under this Section. The amount required shall be certified by
20the Board of Trustees of the System and paid by the State in
21accordance with Section 15-165. The System shall not be
22obligated to remit the required employer contributions to any
23of the insurance and annuity companies, mutual fund companies,
24banks, trust companies, financial institutions, or other
25sponsors of any of the funding vehicles offered under the
26self-managed plan until it has received the required employer

 

 

09700SB1673ham009- 172 -LRB097 07605 JDS 72879 a

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

 

 

09700SB1673ham009- 173 -LRB097 07605 JDS 72879 a

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

 

 

09700SB1673ham009- 174 -LRB097 07605 JDS 72879 a

1participants who again become participating employees.
2    (l) Notwithstanding any other provision of this Section, a
3person may not elect to participate or begin participation in
4the self-managed plan established under this Section on or
5after the effective date of this amendatory Act of the 97th
6General Assembly.
7(Source: P.A. 93-347, eff. 7-24-03.)
 
8    (40 ILCS 5/15-165)   (from Ch. 108 1/2, par. 15-165)
9    Sec. 15-165. To certify amounts and submit vouchers.
10    (a) The Board shall certify to the Governor on or before
11November 15 of each year through until November 15, 2011 the
12appropriation required from State funds for the purposes of
13this System for the following fiscal year. The certification
14under this subsection (a) shall include a copy of the actuarial
15recommendations upon which it is based and shall specifically
16identify the System's projected State normal cost for that
17fiscal year and the projected State cost for the self-managed
18plan for that fiscal year.
19    On or before May 1, 2004, the Board shall recalculate and
20recertify to the Governor the amount of the required State
21contribution to the System for State fiscal year 2005, taking
22into account the amounts appropriated to and received by the
23System under subsection (d) of Section 7.2 of the General
24Obligation Bond Act.
25    On or before July 1, 2005, the Board shall recalculate and

 

 

09700SB1673ham009- 175 -LRB097 07605 JDS 72879 a

1recertify to the Governor the amount of the required State
2contribution to the System for State fiscal year 2006, taking
3into account the changes in required State contributions made
4by this amendatory Act of the 94th General Assembly.
5    On or before April 1, 2011, the Board shall recalculate and
6recertify to the Governor the amount of the required State
7contribution to the System for State fiscal year 2011, applying
8the changes made by Public Act 96-889 to the System's assets
9and liabilities as of June 30, 2009 as though Public Act 96-889
10was approved on that date.
11    On or before July 1, 2013, the Board shall, if necessary,
12recalculate and recertify to the Governor the amount of the
13required State contribution to the System for State fiscal year
142014, taking into account the changes in required State
15contributions made by this amendatory Act of the 97th General
16Assembly.
17    (a-5) On or before November 1 of each year, beginning
18November 1, 2012, the Board shall submit to the State Actuary,
19the Governor, and the General Assembly a proposed certification
20of the amount of the required State contribution to the System
21for the next fiscal year, along with all of the actuarial
22assumptions, calculations, and data upon which that proposed
23certification is based. On or before January 1 of each year,
24beginning January 1, 2013, the State Actuary shall issue a
25preliminary report concerning the proposed certification and
26identifying, if necessary, recommended changes in actuarial

 

 

09700SB1673ham009- 176 -LRB097 07605 JDS 72879 a

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

 

 

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1General Assembly through June 30, 2004, the Board shall not
2submit vouchers for the remainder of fiscal year 2004 in excess
3of the fiscal year 2004 certified contribution amount
4determined under this Section after taking into consideration
5the transfer to the System under subsection (b) of Section
66z-61 of the State Finance Act. These vouchers shall be paid by
7the State Comptroller and Treasurer by warrants drawn on the
8funds appropriated to the System for that fiscal year.
9    If in any month the amount remaining unexpended from all
10other appropriations to the System for the applicable fiscal
11year (including the appropriations to the System under Section
128.12 of the State Finance Act and Section 1 of the State
13Pension Funds Continuing Appropriation Act) is less than the
14amount lawfully vouchered under this Section, the difference
15shall be paid from the General Revenue Fund under the
16continuing appropriation authority provided in Section 1.1 of
17the State Pension Funds Continuing Appropriation Act.
18    (d) So long as the payments received are the full amount
19lawfully vouchered under this Section, payments received by the
20System under this Section shall be applied first toward the
21employer contribution to the self-managed plan established
22under Section 15-158.2. Payments shall be applied second toward
23the employer's portion of the normal costs of the System, as
24defined in subsection (f) of Section 15-155. The balance shall
25be applied toward the unfunded actuarial liabilities of the
26System.

 

 

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1    (e) In the event that the System does not receive, as a
2result of legislative enactment or otherwise, payments
3sufficient to fully fund the employer contribution to the
4self-managed plan established under Section 15-158.2 and to
5fully fund that portion of the employer's portion of the normal
6costs of the System, as calculated in accordance with Section
715-155(a-1), then any payments received shall be applied
8proportionately to the optional retirement program established
9under Section 15-158.2 and to the employer's portion of the
10normal costs of the System, as calculated in accordance with
11Section 15-155(a-1).
12(Source: P.A. 96-1497, eff. 1-14-11; 96-1511, eff. 1-27-11;
1397-694, eff. 6-18-12.)
 
14    (40 ILCS 5/15-198)
15    Sec. 15-198. Application and expiration of new benefit
16increases.
17    (a) As used in this Section, "new benefit increase" means
18an increase in the amount of any benefit provided under this
19Article, or an expansion of the conditions of eligibility for
20any benefit under this Article or Article 1, that results from
21an amendment to this Code that takes effect after the effective
22date of this amendatory Act of the 94th General Assembly. "New
23benefit increase", however, does not include any benefit
24increase resulting from the changes made to this Article or
25Article 1 by this amendatory Act of the 97th General Assembly.

 

 

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

 

 

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1its effective date or on such earlier date as may be specified
2in the language enacting the new benefit increase or provided
3under subsection (c). This does not prevent the General
4Assembly from extending or re-creating a new benefit increase
5by law.
6    (e) Except as otherwise provided in the language creating
7the new benefit increase, a new benefit increase that expires
8under this Section continues to apply to persons who applied
9and qualified for the affected benefit while the new benefit
10increase was in effect and to the affected beneficiaries and
11alternate payees of such persons, but does not apply to any
12other person, including without limitation a person who
13continues in service after the expiration date and did not
14apply and qualify for the affected benefit while the new
15benefit increase was in effect.
16(Source: P.A. 94-4, eff. 6-1-05.)
 
17    (40 ILCS 5/16-106.4 new)
18    Sec. 16-106.4. Tier I member. "Tier I member": A member
19under this Article who first became a member or participant
20before January 1, 2011 under any reciprocal retirement system
21or pension fund established under this Code other than a
22retirement system or pension fund established under Article 2,
233, 4, 5, 6, or 18 of this Code.
 
24    (40 ILCS 5/16-106.5 new)

 

 

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1    Sec. 16-106.5. Tier I retiree. "Tier I retiree": A former
2Tier I member who is receiving a retirement annuity.
 
3    (40 ILCS 5/16-121)  (from Ch. 108 1/2, par. 16-121)
4    Sec. 16-121. Salary. "Salary": The actual compensation
5received by a teacher during any school year and recognized by
6the system in accordance with rules of the board. For purposes
7of this Section, "school year" includes the regular school term
8plus any additional period for which a teacher is compensated
9and such compensation is recognized by the rules of the board.
10    Notwithstanding any other provision of this Code, the
11salary of a Tier I member for the purposes of this Code shall
12not exceed, for periods of service on or after the effective
13date of this amendatory Act of the 97th General Assembly, the
14annual contribution and benefit base established for the
15applicable year by the Commissioner of Social Security under
16the federal Social Security Act; except that this limitation
17does not apply to a member's salary that is determined under an
18employment contract or collective bargaining agreement that is
19in effect on the effective date of this amendatory Act of the
2097th General Assembly and has not been amended or renewed after
21that date.
22(Source: P.A. 84-1028.)
 
23    (40 ILCS 5/16-132)  (from Ch. 108 1/2, par. 16-132)
24    Sec. 16-132. Retirement annuity eligibility.

 

 

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1    (a) A member who has at least 20 years of creditable
2service is entitled to a retirement annuity upon or after
3attainment of age 55. A member who has at least 10 but less
4than 20 years of creditable service is entitled to a retirement
5annuity upon or after attainment of age 60. A member who has at
6least 5 but less than 10 years of creditable service is
7entitled to a retirement annuity upon or after attainment of
8age 62. A member who (i) has earned during the period
9immediately preceding the last day of service at least one year
10of contributing creditable service as an employee of a
11department as defined in Section 14-103.04, (ii) has earned at
12least 5 years of contributing creditable service as an employee
13of a department as defined in Section 14-103.04, and (iii)
14retires on or after January 1, 2001 is entitled to a retirement
15annuity upon or after attainment of an age which, when added to
16the number of years of his or her total creditable service,
17equals at least 85. Portions of years shall be counted as
18decimal equivalents.
19    A member who is eligible to receive a retirement annuity of
20at least 74.6% of final average salary and will attain age 55
21on or before December 31 during the year which commences on
22July 1 shall be deemed to attain age 55 on the preceding June
231.
24    (b) Notwithstanding subsection (a) of this Section, for a
25Tier I member who begins receiving a retirement annuity under
26this Article after July 1, 2013:

 

 

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1        (1) If the Tier I member is at least 45 years old on
2    the effective date of this amendatory Act of the 97th
3    General Assembly, then the references to age 55, 60, and 62
4    in subsection (a) of this Section remain unchanged and the
5    reference to 85 in subsection (a) of this Section remains
6    unchanged.
7        (2) If the Tier I member is at least 40 but less than
8    45 years old on the effective date of this amendatory Act
9    of the 97th General Assembly, then the references to age
10    55, 60, and 62 in subsection (a) of this Section are
11    increased by one year and the reference to 85 in subsection
12    (a) is increased to 87.
13        (3) If the Tier I member is at least 35 but less than
14    40 years old on the effective date of this amendatory Act
15    of the 97th General Assembly, then the references to age
16    55, 60, and 62 in subsection (a) of this Section are
17    increased by 3 years and the reference to 85 in subsection
18    (a) is increased to 91.
19        (4) If the Tier I member is less than 35 years old on
20    the effective date of this amendatory Act of the 97th
21    General Assembly, then the references to age 55, 60, and 62
22    in subsection (a) of this Section are increased by 5 years
23    and the reference to 85 in subsection (a) is increased to
24    95.
25    Notwithstanding Section 1-103.1, this subsection (b)
26applies without regard to whether or not the Tier I member is

 

 

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1in active service under this Article on or after the effective
2date of this amendatory Act of the 97th General Assembly.
3    (c) A member meeting the above eligibility conditions is
4entitled to a retirement annuity upon written application to
5the board setting forth the date the member wishes the
6retirement annuity to commence. However, the effective date of
7the retirement annuity shall be no earlier than the day
8following the last day of creditable service, regardless of the
9date of official termination of employment.
10    (d) To be eligible for a retirement annuity, a member shall
11not be employed as a teacher in the schools included under this
12System or under Article 17, except (i) as provided in Section
1316-118 or 16-150.1, (ii) if the member is disabled (in which
14event, eligibility for salary must cease), or (iii) if the
15System is required by federal law to commence payment due to
16the member's age; the changes to this sentence made by Public
17Act 93-320 this amendatory Act of the 93rd General Assembly
18apply without regard to whether the member terminated
19employment before or after its effective date.
20(Source: P.A. 93-320, eff. 7-23-03.)
 
21    (40 ILCS 5/16-133)  (from Ch. 108 1/2, par. 16-133)
22    Sec. 16-133. Retirement annuity; amount.
23    (a) The amount of the retirement annuity shall be (i) in
24the case of a person who first became a teacher under this
25Article before July 1, 2005, the larger of the amounts

 

 

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1determined under paragraphs (A) and (B) below, or (ii) in the
2case of a person who first becomes a teacher under this Article
3on or after July 1, 2005, the amount determined under the
4applicable provisions of paragraph (B):
5        (A) An amount consisting of the sum of the following:
6            (1) An amount that can be provided on an
7        actuarially equivalent basis by the member's
8        accumulated contributions at the time of retirement;
9        and
10            (2) The sum of (i) the amount that can be provided
11        on an actuarially equivalent basis by the member's
12        accumulated contributions representing service prior
13        to July 1, 1947, and (ii) the amount that can be
14        provided on an actuarially equivalent basis by the
15        amount obtained by multiplying 1.4 times the member's
16        accumulated contributions covering service subsequent
17        to June 30, 1947; and
18            (3) If there is prior service, 2 times the amount
19        that would have been determined under subparagraph (2)
20        of paragraph (A) above on account of contributions
21        which would have been made during the period of prior
22        service creditable to the member had the System been in
23        operation and had the member made contributions at the
24        contribution rate in effect prior to July 1, 1947.
25        For the purpose of calculating the sum provided under
26    this paragraph (A), the contribution required under

 

 

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1    subsection (a-5) of Section 16-152 shall not be considered
2    when determining the amount of the member's accumulated
3    contributions under subparagraph (1) or (2).
4        This paragraph (A) does not apply to a person who first
5    becomes a teacher under this Article on or after July 1,
6    2005.
7        (B) An amount consisting of the greater of the
8    following:
9            (1) For creditable service earned before July 1,
10        1998 that has not been augmented under Section
11        16-129.1: 1.67% of final average salary for each of the
12        first 10 years of creditable service, 1.90% of final
13        average salary for each year in excess of 10 but not
14        exceeding 20, 2.10% of final average salary for each
15        year in excess of 20 but not exceeding 30, and 2.30% of
16        final average salary for each year in excess of 30; and
17            For creditable service earned on or after July 1,
18        1998 by a member who has at least 24 years of
19        creditable service on July 1, 1998 and who does not
20        elect to augment service under Section 16-129.1: 2.2%
21        of final average salary for each year of creditable
22        service earned on or after July 1, 1998 but before the
23        member reaches a total of 30 years of creditable
24        service and 2.3% of final average salary for each year
25        of creditable service earned on or after July 1, 1998
26        and after the member reaches a total of 30 years of

 

 

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1        creditable service; and
2            For all other creditable service: 2.2% of final
3        average salary for each year of creditable service; or
4            (2) 1.5% of final average salary for each year of
5        creditable service plus the sum $7.50 for each of the
6        first 20 years of creditable service.
7    The amount of the retirement annuity determined under this
8    paragraph (B) shall be reduced by 1/2 of 1% for each month
9    that the member is less than age 60 at the time the
10    retirement annuity begins. However, this reduction shall
11    not apply (i) if the member has at least 35 years of
12    creditable service, or (ii) if the member retires on
13    account of disability under Section 16-149.2 of this
14    Article with at least 20 years of creditable service, or
15    (iii) if the member (1) has earned during the period
16    immediately preceding the last day of service at least one
17    year of contributing creditable service as an employee of a
18    department as defined in Section 14-103.04, (2) has earned
19    at least 5 years of contributing creditable service as an
20    employee of a department as defined in Section 14-103.04,
21    (3) retires on or after January 1, 2001, and (4) retires
22    having attained an age which, when added to the number of
23    years of his or her total creditable service, equals at
24    least 85. Portions of years shall be counted as decimal
25    equivalents. For participants to whom subsection (b) of
26    Section 16-132 applies, the reference to age 60 in this

 

 

09700SB1673ham009- 188 -LRB097 07605 JDS 72879 a

1    paragraph and the reference to 85 in this paragraph are
2    increased as provided in subsection (b) of Section 16-132.
3    (b) For purposes of this Section, final average salary
4shall be the average salary for the highest 4 consecutive years
5within the last 10 years of creditable service as determined
6under rules of the board. The minimum final average salary
7shall be considered to be $2,400 per year.
8    In the determination of final average salary for members
9other than elected officials and their appointees when such
10appointees are allowed by statute, that part of a member's
11salary for any year beginning after June 30, 1979 which exceeds
12the member's annual full-time salary rate with the same
13employer for the preceding year by more than 20% shall be
14excluded. The exclusion shall not apply in any year in which
15the member's creditable earnings are less than 50% of the
16preceding year's mean salary for downstate teachers as
17determined by the survey of school district salaries provided
18in Section 2-3.103 of the School Code.
19    (c) In determining the amount of the retirement annuity
20under paragraph (B) of this Section, a fractional year shall be
21granted proportional credit.
22    (d) The retirement annuity determined under paragraph (B)
23of this Section shall be available only to members who render
24teaching service after July 1, 1947 for which member
25contributions are required, and to annuitants who re-enter
26under the provisions of Section 16-150.

 

 

09700SB1673ham009- 189 -LRB097 07605 JDS 72879 a

1    (e) The maximum retirement annuity provided under
2paragraph (B) of this Section shall be 75% of final average
3salary.
4    (f) A member retiring after the effective date of this
5amendatory Act of 1998 shall receive a pension equal to 75% of
6final average salary if the member is qualified to receive a
7retirement annuity equal to at least 74.6% of final average
8salary under this Article or as proportional annuities under
9Article 20 of this Code.
10(Source: P.A. 94-4, eff. 6-1-05.)
 
11    (40 ILCS 5/16-133.1)  (from Ch. 108 1/2, par. 16-133.1)
12    Sec. 16-133.1. Automatic annual increase in annuity.
13    (a) Each member with creditable service and retiring on or
14after August 26, 1969 is entitled to the automatic annual
15increases in annuity provided under this Section while
16receiving a retirement annuity or disability retirement
17annuity from the system.
18    An annuitant shall first be entitled to an initial increase
19under this Section on the January 1 next following the first
20anniversary of retirement, or January 1 of the year next
21following attainment of age 61, whichever is later. At such
22time, the system shall pay an initial increase determined as
23follows or as provided in subsections (a-1) and (a-2):
24        (1) 1.5% of the originally granted retirement annuity
25    or disability retirement annuity multiplied by the number

 

 

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1    of years elapsed, if any, from the date of retirement until
2    January 1, 1972, plus
3        (2) 2% of the originally granted annuity multiplied by
4    the number of years elapsed, if any, from the date of
5    retirement or January 1, 1972, whichever is later, until
6    January 1, 1978, plus
7        (3) 3% of the originally granted annuity multiplied by
8    the number of years elapsed from the date of retirement or
9    January 1, 1978, whichever is later, until the effective
10    date of the initial increase.
11However, the initial annual increase calculated under this
12Section for the recipient of a disability retirement annuity
13granted under Section 16-149.2 shall be reduced by an amount
14equal to the total of all increases in that annuity received
15under Section 16-149.5 (but not exceeding 100% of the amount of
16the initial increase otherwise provided under this Section).
17    Following the initial increase, automatic annual increases
18in annuity shall be payable on each January 1 thereafter during
19the lifetime of the annuitant, determined as a percentage of
20the originally granted retirement annuity or disability
21retirement annuity for increases granted prior to January 1,
221990, and calculated as a percentage of the total amount of
23annuity, including previous increases under this Section, for
24increases granted on or after January 1, 1990, as follows: 1.5%
25for periods prior to January 1, 1972, 2% for periods after
26December 31, 1971 and prior to January 1, 1978, and 3% for

 

 

09700SB1673ham009- 191 -LRB097 07605 JDS 72879 a

1periods after December 31, 1977, or as provided in subsections
2(a-1) and (a-2).
3    (a-1) Notwithstanding any other provision of this Article,
4for a Tier I retiree, the amount of each automatic annual
5increase in retirement annuity occurring on or after the
6effective date of this amendatory Act of the 97th General
7Assembly shall be the lesser of $750 or 3% of the total annuity
8payable at the time of the increase, including previous
9increases granted.
10    (a-2) Notwithstanding any other provision of this Article,
11for a Tier I retiree, the monthly retirement annuity shall
12first be subject to annual increases on the January 1 occurring
13on or next after the attainment of age 67 or the January 1
14occurring on or next after the fifth anniversary of the annuity
15start date, whichever occurs earlier. If on the effective date
16of this amendatory Act of the 97th General Assembly a Tier I
17retiree has already received an annual increase under this
18Section but does not yet meet the new eligibility requirements
19of this subsection, the annual increases already received shall
20continue in force, but no additional annual increase shall be
21granted until the Tier I retiree meets the new eligibility
22requirements.
23    (a-3) Notwithstanding Section 1-103.1, subsections (a-1)
24and (a-2) apply without regard to whether or not the Tier I
25retiree is in active service under this Article on or after the
26effective date of this amendatory Act of the 97th General

 

 

09700SB1673ham009- 192 -LRB097 07605 JDS 72879 a

1Assembly.
2    (b) The automatic annual increases in annuity provided
3under this Section shall not be applicable unless a member has
4made contributions toward such increases for a period
5equivalent to one full year of creditable service. If a member
6contributes for service performed after August 26, 1969 but the
7member becomes an annuitant before such contributions amount to
8one full year's contributions based on the salary at the date
9of retirement, he or she may pay the necessary balance of the
10contributions to the system and be eligible for the automatic
11annual increases in annuity provided under this Section.
12    (c) Each member shall make contributions toward the cost of
13the automatic annual increases in annuity as provided under
14Section 16-152.
15    (d) An annuitant receiving a retirement annuity or
16disability retirement annuity on July 1, 1969, who subsequently
17re-enters service as a teacher is eligible for the automatic
18annual increases in annuity provided under this Section if he
19or she renders at least one year of creditable service
20following the latest re-entry.
21    (e) In addition to the automatic annual increases in
22annuity provided under this Section, an annuitant who meets the
23service requirements of this Section and whose retirement
24annuity or disability retirement annuity began on or before
25January 1, 1971 shall receive, on January 1, 1981, an increase
26in the annuity then being paid of one dollar per month for each

 

 

09700SB1673ham009- 193 -LRB097 07605 JDS 72879 a

1year of creditable service. On January 1, 1982, an annuitant
2whose retirement annuity or disability retirement annuity
3began on or before January 1, 1977 shall receive an increase in
4the annuity then being paid of one dollar per month for each
5year of creditable service.
6    On January 1, 1987, any annuitant whose retirement annuity
7began on or before January 1, 1977, shall receive an increase
8in the monthly retirement annuity equal to 8 per year of
9creditable service times the number of years that have elapsed
10since the annuity began.
11(Source: P.A. 91-927, eff. 12-14-00.)
 
12    (40 ILCS 5/16-152)  (from Ch. 108 1/2, par. 16-152)
13    Sec. 16-152. Contributions by members.
14    (a) Each member shall make contributions for membership
15service to this System as follows:
16        (1) Effective July 1, 1998, contributions of 7.50% of
17    salary towards the cost of the retirement annuity. Such
18    contributions shall be deemed "normal contributions".
19        (2) Effective July 1, 1969, contributions of 1/2 of 1%
20    of salary toward the cost of the automatic annual increase
21    in retirement annuity provided under Section 16-133.1.
22        (3) Effective July 24, 1959, contributions of 1% of
23    salary towards the cost of survivor benefits. Such
24    contributions shall not be credited to the individual
25    account of the member and shall not be subject to refund

 

 

09700SB1673ham009- 194 -LRB097 07605 JDS 72879 a

1    except as provided under Section 16-143.2.
2        (4) Effective July 1, 2005, contributions of 0.40% of
3    salary toward the cost of the early retirement without
4    discount option provided under Section 16-133.2. This
5    contribution shall cease upon termination of the early
6    retirement without discount option as provided in Section
7    16-176.
8    (a-5) In addition to the contributions otherwise required
9under this Article, each Tier I member shall also make the
10following contributions toward the cost of the retirement
11annuity from each payment of salary:
12        (1) beginning July 1, 2013 and through June 30, 2014,
13    1% of salary; and
14        (2) beginning on July 1, 2014, 2% of salary.
15    Except as otherwise specified, these contributions are to
16be considered as normal contributions for purposes of this
17Article.
18    (b) The minimum required contribution for any year of
19full-time teaching service shall be $192.
20    (c) Contributions shall not be required of any annuitant
21receiving a retirement annuity who is given employment as
22permitted under Section 16-118 or 16-150.1.
23    (d) A person who (i) was a member before July 1, 1998, (ii)
24retires with more than 34 years of creditable service, and
25(iii) does not elect to qualify for the augmented rate under
26Section 16-129.1 shall be entitled, at the time of retirement,

 

 

09700SB1673ham009- 195 -LRB097 07605 JDS 72879 a

1to receive a partial refund of contributions made under this
2Section for service occurring after the later of June 30, 1998
3or attainment of 34 years of creditable service, in an amount
4equal to 1.00% of the salary upon which those contributions
5were based.
6    (e) A member's contributions toward the cost of early
7retirement without discount made under item (a)(4) of this
8Section shall not be refunded if the member has elected early
9retirement without discount under Section 16-133.2 and has
10begun to receive a retirement annuity under this Article
11calculated in accordance with that election. Otherwise, a
12member's contributions toward the cost of early retirement
13without discount made under item (a)(4) of this Section shall
14be refunded according to whichever one of the following
15circumstances occurs first:
16        (1) The contributions shall be refunded to the member,
17    without interest, within 120 days after the member's
18    retirement annuity commences, if the member does not elect
19    early retirement without discount under Section 16-133.2.
20        (2) The contributions shall be included, without
21    interest, in any refund claimed by the member under Section
22    16-151.
23        (3) The contributions shall be refunded to the member's
24    designated beneficiary (or if there is no beneficiary, to
25    the member's estate), without interest, if the member dies
26    without having begun to receive a retirement annuity under

 

 

09700SB1673ham009- 196 -LRB097 07605 JDS 72879 a

1    this Article.
2        (4) The contributions shall be refunded to the member,
3    without interest, within 120 days after the early
4    retirement without discount option provided under Section
5    16-133.2 is terminated under Section 16-176.
6(Source: P.A. 93-320, eff. 7-23-03; 94-4, eff. 6-1-05.)
 
7    (40 ILCS 5/16-158)   (from Ch. 108 1/2, par. 16-158)
8    Sec. 16-158. Contributions by State and other employing
9units; funding guarantee.
10    (a) The State shall make contributions to the System by
11means of appropriations from the Common School Fund and other
12State funds of amounts which, together with other employer
13contributions, employee contributions, investment income, and
14other income, will be sufficient to meet the cost of
15maintaining and administering the System on a 100% 90% funded
16basis in accordance with actuarial recommendations by the end
17of State fiscal year 2043.
18    Beginning with State fiscal year 2014, the State's required
19contributions to the System under subsection (b-3) shall be
20limited to the amounts required to amortize the total cost of
21the benefits of the System arising before July 1, 2013. The
22State shall also pay any employer contributions required from
23the State as the actual employer of participants under this
24Article and any contribution required under subsection (b-20).
25    The Board shall determine the amount of State and employer

 

 

09700SB1673ham009- 197 -LRB097 07605 JDS 72879 a

1contributions required for each fiscal year on the basis of the
2actuarial tables and other assumptions adopted by the Board and
3the recommendations of the actuary, using the formulas provided
4in this Section formula in subsection (b-3).
5    (a-1) Annually, on or before November 15 through until
6November 15, 2011, the Board shall certify to the Governor the
7amount of the required State contribution for the coming fiscal
8year. The certification under this subsection (a-1) shall
9include a copy of the actuarial recommendations upon which it
10is based and shall specifically identify the System's projected
11State normal cost for that fiscal year.
12    On or before May 1, 2004, the Board shall recalculate and
13recertify to the Governor the amount of the required State
14contribution to the System for State fiscal year 2005, taking
15into account the amounts appropriated to and received by the
16System under subsection (d) of Section 7.2 of the General
17Obligation Bond Act.
18    On or before July 1, 2005, the Board shall recalculate and
19recertify to the Governor the amount of the required State
20contribution to the System for State fiscal year 2006, taking
21into account the changes in required State contributions made
22by this amendatory Act of the 94th General Assembly.
23    On or before April 1, 2011, the Board shall recalculate and
24recertify to the Governor the amount of the required State
25contribution to the System for State fiscal year 2011, applying
26the changes made by Public Act 96-889 to the System's assets

 

 

09700SB1673ham009- 198 -LRB097 07605 JDS 72879 a

1and liabilities as of June 30, 2009 as though Public Act 96-889
2was approved on that date.
3    On or before July 1, 2013, the Board shall, if necessary,
4recalculate and recertify to the Governor the amount of the
5required State contribution to the System for State fiscal year
62014, taking into account the changes in required State
7contributions made by this amendatory Act of the 97th General
8Assembly.
9    (a-5) On or before November 1 of each year, beginning
10November 1, 2012, the Board shall submit to the State Actuary,
11the Governor, and the General Assembly a proposed certification
12of the amount of the required State contribution to the System
13for the next fiscal year, along with all of the actuarial
14assumptions, calculations, and data upon which that proposed
15certification is based. On or before January 1 of each year,
16beginning January 1, 2013, the State Actuary shall issue a
17preliminary report concerning the proposed certification and
18identifying, if necessary, recommended changes in actuarial
19assumptions that the Board must consider before finalizing its
20certification of the required State contributions.
21    On or before January 15, 2013 and each January 15
22thereafter, the Board shall certify to the Governor and the
23General Assembly the amount of the required State contribution
24for the next fiscal year. The certification shall include a
25copy of the actuarial recommendations upon which it is based
26and shall specifically identify the System's projected State

 

 

09700SB1673ham009- 199 -LRB097 07605 JDS 72879 a

1normal cost for that fiscal year. The Board's certification
2must note any deviations from the State Actuary's recommended
3changes, the reason or reasons for not following the State
4Actuary's recommended changes, and the fiscal impact of not
5following the State Actuary's recommended changes on the
6required State contribution.
7    (b) Through State fiscal year 1995, the State contributions
8shall be paid to the System in accordance with Section 18-7 of
9the School Code.
10    (b-1) Beginning in State fiscal year 1996, on the 15th day
11of each month, or as soon thereafter as may be practicable, the
12Board shall submit vouchers for payment of State contributions
13to the System, in a total monthly amount of one-twelfth of the
14required annual State contribution certified under subsection
15(a-1). From the effective date of this amendatory Act of the
1693rd General Assembly through June 30, 2004, the Board shall
17not submit vouchers for the remainder of fiscal year 2004 in
18excess of the fiscal year 2004 certified contribution amount
19determined under this Section after taking into consideration
20the transfer to the System under subsection (a) of Section
216z-61 of the State Finance Act. These vouchers shall be paid by
22the State Comptroller and Treasurer by warrants drawn on the
23funds appropriated to the System for that fiscal year.
24    If in any month the amount remaining unexpended from all
25other appropriations to the System for the applicable fiscal
26year (including the appropriations to the System under Section

 

 

09700SB1673ham009- 200 -LRB097 07605 JDS 72879 a

18.12 of the State Finance Act and Section 1 of the State
2Pension Funds Continuing Appropriation Act) is less than the
3amount lawfully vouchered under this subsection, the
4difference shall be paid from the Common School Fund under the
5continuing appropriation authority provided in Section 1.1 of
6the State Pension Funds Continuing Appropriation Act.
7    (b-2) Allocations from the Common School Fund apportioned
8to school districts not coming under this System shall not be
9diminished or affected by the provisions of this Article.
10    (b-3) For State fiscal years 2014 through 2043, the minimum
11contribution to the System to be made by the State under this
12subsection (b-3) for each fiscal year shall be an amount
13determined by the Board to be sufficient to amortize the
14unfunded accrued liability that is attributable to benefits
15that accrued before July 1, 2013 as a level percentage of
16payroll over the years remaining to and including fiscal year
172043, determined under the projected unit credit actuarial cost
18method.
19    For State fiscal year 2044 and thereafter, the minimum
20contribution to the System to be made by the State under this
21subsection (b-3) for each fiscal year shall be an amount
22determined by the Board to be sufficient to amortize, over a
2330-year rolling amortization period, any unfunded liability
24arising on or after July 1, 2043 that is attributable to
25benefits that accrued before July 1, 2013.
26    For State fiscal years 2012 and 2013 through 2045, the

 

 

09700SB1673ham009- 201 -LRB097 07605 JDS 72879 a

1minimum contribution to the System to be made by the State for
2each fiscal year shall be an amount determined by the System to
3be sufficient to bring the total assets of the System up to 90%
4of the total actuarial liabilities of the System by the end of
5State fiscal year 2045. In making these determinations, the
6required State contribution shall be calculated each year as a
7level percentage of payroll over the years remaining to and
8including fiscal year 2045 and shall be determined under the
9projected unit credit actuarial cost method.
10    For State fiscal years 1996 through 2005, the State
11contribution to the System, as a percentage of the applicable
12employee payroll, shall be increased in equal annual increments
13so that by State fiscal year 2011, the State is contributing at
14the rate required under this Section; except that in the
15following specified State fiscal years, the State contribution
16to the System shall not be less than the following indicated
17percentages of the applicable employee payroll, even if the
18indicated percentage will produce a State contribution in
19excess of the amount otherwise required under this subsection
20and subsection (a), and notwithstanding any contrary
21certification made under subsection (a-1) before the effective
22date of this amendatory Act of 1998: 10.02% in FY 1999; 10.77%
23in FY 2000; 11.47% in FY 2001; 12.16% in FY 2002; 12.86% in FY
242003; and 13.56% in FY 2004.
25    Notwithstanding any other provision of this Article, the
26total required State contribution for State fiscal year 2006 is

 

 

09700SB1673ham009- 202 -LRB097 07605 JDS 72879 a

1$534,627,700.
2    Notwithstanding any other provision of this Article, the
3total required State contribution for State fiscal year 2007 is
4$738,014,500.
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 contribution for State fiscal year 2010 is
13$2,089,268,000 and shall be made from the proceeds of bonds
14sold in fiscal year 2010 pursuant to Section 7.2 of the General
15Obligation Bond Act, less (i) the pro rata share of bond sale
16expenses determined by the System's share of total bond
17proceeds, (ii) any amounts received from the Common School Fund
18in fiscal year 2010, and (iii) any reduction in bond proceeds
19due to the issuance of discounted bonds, if applicable.
20    Notwithstanding any other provision of this Article, the
21total required State contribution for State fiscal year 2011 is
22the amount recertified by the System on or before April 1, 2011
23pursuant to subsection (a-1) of this Section and shall be made
24from the proceeds of bonds sold in fiscal year 2011 pursuant to
25Section 7.2 of the General Obligation Bond Act, less (i) the
26pro rata share of bond sale expenses determined by the System's

 

 

09700SB1673ham009- 203 -LRB097 07605 JDS 72879 a

1share of total bond proceeds, (ii) any amounts received from
2the Common School Fund in fiscal year 2011, and (iii) any
3reduction in bond proceeds due to the issuance of discounted
4bonds, if applicable. This amount shall include, in addition to
5the amount certified by the System, an amount necessary to meet
6employer contributions required by the State as an employer
7under paragraph (e) of this Section, which may also be used by
8the System for contributions required by paragraph (a) of
9Section 16-127.
10    Beginning 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 100% 90%. A reference in this Article
23to the "required State contribution" or any substantially
24similar term does not include or apply to any amounts payable
25to the System under Section 25 of the Budget Stabilization Act.
26    Notwithstanding any other provision of this Section, the

 

 

09700SB1673ham009- 204 -LRB097 07605 JDS 72879 a

1required State contribution for State fiscal year 2005 and for
2fiscal year 2008 and each fiscal year thereafter through State
3fiscal year 2013, as calculated under this Section and
4certified under subsection (a-1), shall not exceed an amount
5equal to (i) the amount of the required State contribution that
6would have been calculated under this Section for that fiscal
7year if the System had not received any payments under
8subsection (d) of Section 7.2 of the General Obligation Bond
9Act, minus (ii) the portion of the State's total debt service
10payments for that fiscal year on the bonds issued in fiscal
11year 2003 for the purposes of that Section 7.2, as determined
12and certified by the Comptroller, that is the same as the
13System's portion of the total moneys distributed under
14subsection (d) of Section 7.2 of the General Obligation Bond
15Act. In determining this maximum for State fiscal years 2008
16through 2010, however, the amount referred to in item (i) shall
17be increased, as a percentage of the applicable employee
18payroll, in equal increments calculated from the sum of the
19required State contribution for State fiscal year 2007 plus the
20applicable portion of the State's total debt service payments
21for fiscal year 2007 on the bonds issued in fiscal year 2003
22for the purposes of Section 7.2 of the General Obligation Bond
23Act, so that, by State fiscal year 2011, the State is
24contributing at the rate otherwise required under this Section.
25    (b-10) Subject to the limitations provided in subsection
26(b-15), beginning with State fiscal year 2014, the minimum

 

 

09700SB1673ham009- 205 -LRB097 07605 JDS 72879 a

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

 

 

09700SB1673ham009- 206 -LRB097 07605 JDS 72879 a

1multiplying the result by 0.5%.
2    The System shall determine the employer's normal cost under
3item (ii) of subsection (b-10) as an additional percentage of
4projected payroll payable by a specific employer, based on the
5optional employer contributions agreed to by that employer for
6that fiscal year under Section 1-161 and the actuarial
7assumptions applicable to the System as a whole.
8    The System shall determine the employer's portion of the
9unfunded accrued liability under item (iii) of subsection
10(b-10) separately for each employer, as a percentage of that
11employer's projected payroll, based on the liabilities
12attributable to that employer and the actuarial assumptions
13applicable to the System as a whole.
14    For use in determining the employer's contribution for
15unfunded accrued liability under item (iii), the System shall
16maintain a separate account for each employer. The separate
17account shall be maintained in such form and detail as the
18System determines to be appropriate. The separate account shall
19reflect the following items to the extent that they are
20attributable to that employer and arise on or after July 1,
212013: employer contributions, State contributions under
22subsection (b-20), employee contributions, investment returns,
23payments of benefits, and that employer's proportionate share
24of the System's administrative expenses.
25    In the event that the Board determines that there is a
26deficiency or surplus in the account of an employer with

 

 

09700SB1673ham009- 207 -LRB097 07605 JDS 72879 a

1respect to the projected liabilities attributable to that
2employer arising on or after July 1, 2013, the Board shall
3determine the employer's contribution rate under item (iii) of
4subsection (b-10) so as to address that deficiency or surplus
5over a reasonable period of time as determined by the Board.
6    (b-20) Beginning in State fiscal year 2014, for any fiscal
7year in which (1) the System's normal cost for all employers
8for that fiscal year, exclusive of the normal cost that arises
9from optional employer contributions agreed to by employers for
10that fiscal year under Section 1-161, exceeds (2) the total
11contribution calculated under item (i) of subsection (b-10) for
12all employers for that fiscal year, the State shall make an
13additional contribution to the System for that fiscal year
14equal to the difference.
15    The State contribution under this subsection (b-20) is in
16addition to the State contributions required under subsection
17(b-1) and any contributions required to be paid by the State as
18an employer under subsection (b-10) of this Section.
19    (c) Payment of the required State contributions and of all
20pensions, retirement annuities, death benefits, refunds, and
21other benefits granted under or assumed by this System, and all
22expenses in connection with the administration and operation
23thereof, are obligations of the State.
24    If members are paid from special trust or federal funds
25which are administered by the employing unit, whether school
26district or other unit, the employing unit shall pay to the

 

 

09700SB1673ham009- 208 -LRB097 07605 JDS 72879 a

1System from such funds the full accruing retirement costs based
2upon that service, as determined by the System. Employer
3contributions, based on salary paid to members from federal
4funds, may be forwarded by the distributing agency of the State
5of Illinois to the System prior to allocation, in an amount
6determined in accordance with guidelines established by such
7agency and the System.
8    (d) Effective July 1, 1986, any employer of a teacher as
9defined in paragraph (8) of Section 16-106 shall pay the
10employer's normal cost of benefits based upon the teacher's
11service, in addition to employee contributions, as determined
12by the System. Such employer contributions shall be forwarded
13monthly in accordance with guidelines established by the
14System.
15    However, with respect to benefits granted under Section
1616-133.4 or 16-133.5 to a teacher as defined in paragraph (8)
17of Section 16-106, the employer's contribution shall be 12%
18(rather than 20%) of the member's highest annual salary rate
19for each year of creditable service granted, and the employer
20shall also pay the required employee contribution on behalf of
21the teacher. For the purposes of Sections 16-133.4 and
2216-133.5, a teacher as defined in paragraph (8) of Section
2316-106 who is serving in that capacity while on leave of
24absence from another employer under this Article shall not be
25considered an employee of the employer from which the teacher
26is on leave.

 

 

09700SB1673ham009- 209 -LRB097 07605 JDS 72879 a

1    (e) Beginning July 1, 1998, every employer of a teacher
2shall pay to the System an employer contribution computed as
3follows:
4        (1) Beginning July 1, 1998 through June 30, 1999, the
5    employer contribution shall be equal to 0.3% of each
6    teacher's salary.
7        (2) Beginning July 1, 1999 and thereafter, the employer
8    contribution shall be equal to 0.58% of each teacher's
9    salary.
10The school district or other employing unit may pay these
11employer contributions out of any source of funding available
12for that purpose and shall forward the contributions to the
13System on the schedule established for the payment of member
14contributions.
15    These employer contributions are intended to offset a
16portion of the cost to the System of the increases in
17retirement benefits resulting from this amendatory Act of 1998.
18    Each employer of teachers is entitled to a credit against
19the contributions required under this subsection (e) with
20respect to salaries paid to teachers for the period January 1,
212002 through June 30, 2003, equal to the amount paid by that
22employer under subsection (a-5) of Section 6.6 of the State
23Employees Group Insurance Act of 1971 with respect to salaries
24paid to teachers for that period.
25    The additional 1% employee contribution required under
26Section 16-152 by this amendatory Act of 1998 is the

 

 

09700SB1673ham009- 210 -LRB097 07605 JDS 72879 a

1responsibility of the teacher and not the teacher's employer,
2unless the employer agrees, through collective bargaining or
3otherwise, to make the contribution on behalf of the teacher.
4    If an employer is required by a contract in effect on May
51, 1998 between the employer and an employee organization to
6pay, on behalf of all its full-time employees covered by this
7Article, all mandatory employee contributions required under
8this Article, then the employer shall be excused from paying
9the employer contribution required under this subsection (e)
10for the balance of the term of that contract. The employer and
11the employee organization shall jointly certify to the System
12the existence of the contractual requirement, in such form as
13the System may prescribe. This exclusion shall cease upon the
14termination, extension, or renewal of the contract at any time
15after May 1, 1998.
16    (f) The employer contributions under this subsection (f)
17are no longer required after June 30, 2013.
18    If the amount of a teacher's salary for any school year
19used to determine final average salary exceeds the member's
20annual full-time salary rate with the same employer for the
21previous school year by more than 6%, the teacher's employer
22shall pay to the System, in addition to all other payments
23required under this Section and in accordance with guidelines
24established by the System, the present value of the increase in
25benefits resulting from the portion of the increase in salary
26that is in excess of 6%. This present value shall be computed

 

 

09700SB1673ham009- 211 -LRB097 07605 JDS 72879 a

1by the System on the basis of the actuarial assumptions and
2tables used in the most recent actuarial valuation of the
3System that is available at the time of the computation. If a
4teacher's salary for the 2005-2006 school year is used to
5determine final average salary under this subsection (f), then
6the changes made to this subsection (f) by Public Act 94-1057
7shall apply in calculating whether the increase in his or her
8salary is in excess of 6%. For the purposes of this Section,
9change in employment under Section 10-21.12 of the School Code
10on or after June 1, 2005 shall constitute a change in employer.
11The System may require the employer to provide any pertinent
12information or documentation. The changes made to this
13subsection (f) by this amendatory Act of the 94th General
14Assembly apply without regard to whether the teacher was in
15service on or after its effective date.
16    Whenever it determines that a payment is or may be required
17under this subsection, the System shall calculate the amount of
18the payment and bill the employer for that amount. The bill
19shall specify the calculations used to determine the amount
20due. If the employer disputes the amount of the bill, it may,
21within 30 days after receipt of the bill, apply to the System
22in writing for a recalculation. The application must specify in
23detail the grounds of the dispute and, if the employer asserts
24that the calculation is subject to subsection (g) or (h) of
25this Section, must include an affidavit setting forth and
26attesting to all facts within the employer's knowledge that are

 

 

09700SB1673ham009- 212 -LRB097 07605 JDS 72879 a

1pertinent to the applicability of that subsection. Upon
2receiving a timely application for recalculation, the System
3shall review the application and, if appropriate, recalculate
4the amount due.
5    The employer contributions required under this subsection
6(f) may be paid in the form of a lump sum within 90 days after
7receipt of the bill. If the employer contributions are not paid
8within 90 days after receipt of the bill, then interest will be
9charged at a rate equal to the System's annual actuarially
10assumed rate of return on investment compounded annually from
11the 91st day after receipt of the bill. Payments must be
12concluded within 3 years after the employer's receipt of the
13bill.
14    (g) This subsection (g) applies only to payments made or
15salary increases given on or after June 1, 2005 but before July
161, 2011. The changes made by Public Act 94-1057 shall not
17require the System to refund any payments received before July
1831, 2006 (the effective date of Public Act 94-1057).
19    When assessing payment for any amount due under subsection
20(f), the System shall exclude salary increases paid to teachers
21under contracts or collective bargaining agreements entered
22into, amended, or renewed before June 1, 2005.
23    When assessing payment for any amount due under subsection
24(f), the System shall exclude salary increases paid to a
25teacher at a time when the teacher is 10 or more years from
26retirement eligibility under Section 16-132 or 16-133.2.

 

 

09700SB1673ham009- 213 -LRB097 07605 JDS 72879 a

1    When assessing payment for any amount due under subsection
2(f), the System shall exclude salary increases resulting from
3overload work, including summer school, when the school
4district has certified to the System, and the System has
5approved the certification, that (i) the overload work is for
6the sole purpose of classroom instruction in excess of the
7standard number of classes for a full-time teacher in a school
8district during a school year and (ii) the salary increases are
9equal to or less than the rate of pay for classroom instruction
10computed on the teacher's current salary and work schedule.
11    When assessing payment for any amount due under subsection
12(f), the System shall exclude a salary increase resulting from
13a promotion (i) for which the employee is required to hold a
14certificate or supervisory endorsement issued by the State
15Teacher Certification Board that is a different certification
16or supervisory endorsement than is required for the teacher's
17previous position and (ii) to a position that has existed and
18been filled by a member for no less than one complete academic
19year and the salary increase from the promotion is an increase
20that results in an amount no greater than the lesser of the
21average salary paid for other similar positions in the district
22requiring the same certification or the amount stipulated in
23the collective bargaining agreement for a similar position
24requiring the same certification.
25    When assessing payment for any amount due under subsection
26(f), the System shall exclude any payment to the teacher from

 

 

09700SB1673ham009- 214 -LRB097 07605 JDS 72879 a

1the State of Illinois or the State Board of Education over
2which the employer does not have discretion, notwithstanding
3that the payment is included in the computation of final
4average salary.
5    (h) When assessing payment for any amount due under
6subsection (f), the System shall exclude any salary increase
7described in subsection (g) of this Section given on or after
8July 1, 2011 but before July 1, 2014 under a contract or
9collective bargaining agreement entered into, amended, or
10renewed on or after June 1, 2005 but before July 1, 2011.
11Notwithstanding any other provision of this Section, any
12payments made or salary increases given after June 30, 2014
13shall be used in assessing payment for any amount due under
14subsection (f) of this Section.
15    (i) The System shall prepare a report and file copies of
16the report with the Governor and the General Assembly by
17January 1, 2007 that contains all of the following information:
18        (1) The number of recalculations required by the
19    changes made to this Section by Public Act 94-1057 for each
20    employer.
21        (2) The dollar amount by which each employer's
22    contribution to the System was changed due to
23    recalculations required by Public Act 94-1057.
24        (3) The total amount the System received from each
25    employer as a result of the changes made to this Section by
26    Public Act 94-4.

 

 

09700SB1673ham009- 215 -LRB097 07605 JDS 72879 a

1        (4) The increase in the required State contribution
2    resulting from the changes made to this Section by Public
3    Act 94-1057.
4    (j) For purposes of determining the required State
5contribution to the System, the value of the System's assets
6shall be equal to the actuarial value of the System's assets,
7which shall be calculated as follows:
8    As of June 30, 2008, the actuarial value of the System's
9assets shall be equal to the market value of the assets as of
10that date. In determining the actuarial value of the System's
11assets for fiscal years after June 30, 2008, any actuarial
12gains or losses from investment return incurred in a fiscal
13year shall be recognized in equal annual amounts over the
145-year period following that fiscal year.
15    (k) For purposes of determining the required State
16contribution to the system for a particular year, the actuarial
17value of assets shall be assumed to earn a rate of return equal
18to the system's actuarially assumed rate of return.
19(Source: P.A. 96-43, eff. 7-15-09; 96-1497, eff. 1-14-11;
2096-1511, eff. 1-27-11; 96-1554, eff. 3-18-11; 97-694, eff.
216-18-12; 97-813, eff. 7-13-12.)
 
22    (40 ILCS 5/16-158.1)  (from Ch. 108 1/2, par. 16-158.1)
23    Sec. 16-158.1. Actions to enforce payments by school
24districts and other employing units other than the State. Any
25school district or other employing unit, other than the State,

 

 

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1that fails failing to transmit to the System contributions
2required of it under this Article or contributions required of
3teachers, for more than 90 days after such contributions are
4due is subject to the following: after giving notice to the
5district or other unit, the System may certify to the State
6Comptroller or the Regional Superintendent of Schools the
7amounts of such delinquent payments and the State Comptroller
8or the Regional Superintendent of Schools shall deduct the
9amounts so certified or any part thereof from any State funds
10to be remitted to the school district or other employing unit
11involved and shall pay the amount so deducted to the System. If
12State funds from which such deductions may be made are not
13available, the System may proceed against the school district
14or other employing unit to recover the amounts of such
15delinquent payments in the appropriate circuit court.
16    The System may provide for an audit of the records of a
17school district or other employing unit, other than the State,
18as may be required to establish the amounts of required
19contributions. The school district or other employing unit
20shall make its records available to the System for the purpose
21of such audit. The cost of such audit shall be added to the
22amount of the delinquent payments and shall be recovered by the
23System from the school district or other employing unit at the
24same time and in the same manner as the delinquent payments are
25recovered.
26(Source: P.A. 90-448, eff. 8-16-97.)
 

 

 

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1    (40 ILCS 5/16-158.2 new)
2    Sec. 16-158.2. Obligations of State; funding guarantee.
3    (a) Payment of the required State contributions and of all
4pensions, retirement annuities, death benefits, refunds, and
5other benefits granted under or assumed by this System, and all
6expenses in connection with the administration and operation
7thereof, are obligations of the State.
8    (b) Beginning July 1, 2013, the State shall be
9contractually obligated to contribute to the System under
10Section 16-158 in each State fiscal year an amount not less
11than the sum of (i) the State's required contribution under
12subsections (b-10) and (b-20) of Section 16-158 and (ii) the
13portion of the total cost of the benefits of the System arising
14before July 1, 2013 assigned to that State fiscal year by law
15in accordance with a schedule that distributes payments
16equitably over a reasonable period of time and in accordance
17with accepted actuarial practices. The obligations created
18under this subsection (b) are contractual obligations
19protected and enforceable under Article I, Section 16 and
20Article XIII, Section 5 of the Illinois Constitution.
21    Notwithstanding any other provision of law, if the State
22fails to pay in a State fiscal year the amount guaranteed under
23this subsection, the System may bring a mandamus action in the
24circuit court of Sangamon County to compel the State to make
25that payment, irrespective of other remedies that may be

 

 

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1available to the System. In ordering the State to make the
2required payment, the court may order a reasonable payment
3schedule to enable the State to make the required payment
4without significantly imperiling the public health, safety, or
5welfare.
 
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