98TH GENERAL ASSEMBLY
State of Illinois
2013 and 2014
HB1259

 

Introduced , by Rep. Mike Fortner

 

SYNOPSIS AS INTRODUCED:
 
40 ILCS 5/1-160
40 ILCS 5/7-130.1 new
40 ILCS 5/7-130.2 new
40 ILCS 5/7-140.5 new
40 ILCS 5/7-173  from Ch. 108 1/2, par. 7-173
40 ILCS 5/7-173.3 new
40 ILCS 5/20-121  from Ch. 108 1/2, par. 20-121
40 ILCS 5/20-123  from Ch. 108 1/2, par. 20-123
40 ILCS 5/20-124  from Ch. 108 1/2, par. 20-124
30 ILCS 805/8.37 new

    Amends the Illinois Pension Code. Allows participants in the Illinois Municipal Retirement Fund (IMRF) to elect to participate in a self-managed program of retirement benefits instead of the program of traditional or reformed retirement benefits currently offered. Provides that the self-managed plan shall authorize a participant to accumulate assets for retirement through a combination of employer and employee contributions that may be invested at the participant's direction in mutual funds, collective investment funds, or other investment products and used to purchase annuity contracts. Requires the Fund to make the self-managed plan available within 6 months after the effective date of the amendatory Act. Makes conforming changes in the Retirement Systems Reciprocal Act. Amends the State Mandates Act to require implementation without reimbursement. Effective immediately.


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FISCAL NOTE ACT MAY APPLY
PENSION IMPACT NOTE ACT MAY APPLY
STATE MANDATES ACT MAY REQUIRE REIMBURSEMENT

 

 

A BILL FOR

 

HB1259LRB098 07417 EFG 37484 b

1    AN ACT concerning public employee benefits.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Pension Code is amended by changing
5Sections 1-160, 7-173, 20-121, 20-123, and 20-124 and adding
6Sections 7-130.1, 7-130.2, 7-140.5, and 7-173.3 as follows:
 
7    (40 ILCS 5/1-160)
8    Sec. 1-160. Provisions applicable to new hires.
9    (a) The provisions of this Section apply to a person who,
10on or after January 1, 2011, first becomes a member or a
11participant under any reciprocal retirement system or pension
12fund established under this Code, other than a retirement
13system or pension fund established under Article 2, 3, 4, 5, 6,
14or 18 of this Code, notwithstanding any other provision of this
15Code to the contrary, but do not apply to any self-managed plan
16established under this Code, to any person with respect to
17service as a sheriff's law enforcement employee under Article
187, or to any participant of the retirement plan established
19under Section 22-101.
20    (b) "Final average salary" means the average monthly (or
21annual) salary obtained by dividing the total salary or
22earnings calculated under the Article applicable to the member
23or participant during the 96 consecutive months (or 8

 

 

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1consecutive years) of service within the last 120 months (or 10
2years) of service in which the total salary or earnings
3calculated under the applicable Article was the highest by the
4number of months (or years) of service in that period. For the
5purposes of a person who first becomes a member or participant
6of any retirement system or pension fund to which this Section
7applies on or after January 1, 2011, in this Code, "final
8average salary" shall be substituted for the following:
9        (1) In Articles 7 (except for service as sheriff's law
10    enforcement employees) and 15, "final rate of earnings".
11        (2) In Articles 8, 9, 10, 11, and 12, "highest average
12    annual salary for any 4 consecutive years within the last
13    10 years of service immediately preceding the date of
14    withdrawal".
15        (3) In Article 13, "average final salary".
16        (4) In Article 14, "final average compensation".
17        (5) In Article 17, "average salary".
18        (6) In Section 22-207, "wages or salary received by him
19    at the date of retirement or discharge".
20    (b-5) Beginning on January 1, 2011, for all purposes under
21this Code (including without limitation the calculation of
22benefits and employee contributions), the annual earnings,
23salary, or wages (based on the plan year) of a member or
24participant to whom this Section applies shall not exceed
25$106,800; however, that amount shall annually thereafter be
26increased by the lesser of (i) 3% of that amount, including all

 

 

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1previous adjustments, or (ii) one-half the annual unadjusted
2percentage increase (but not less than zero) in the consumer
3price index-u for the 12 months ending with the September
4preceding each November 1, including all previous adjustments.
5    For the purposes of this Section, "consumer price index-u"
6means the index published by the Bureau of Labor Statistics of
7the United States Department of Labor that measures the average
8change in prices of goods and services purchased by all urban
9consumers, United States city average, all items, 1982-84 =
10100. The new amount resulting from each annual adjustment shall
11be determined by the Public Pension Division of the Department
12of Insurance and made available to the boards of the retirement
13systems and pension funds by November 1 of each year.
14    (c) A member or participant is entitled to a retirement
15annuity upon written application if he or she has attained age
1667 and has at least 10 years of service credit and is otherwise
17eligible under the requirements of the applicable Article.
18    A member or participant who has attained age 62 and has at
19least 10 years of service credit and is otherwise eligible
20under the requirements of the applicable Article may elect to
21receive the lower retirement annuity provided in subsection (d)
22of this Section.
23    (d) The retirement annuity of a member or participant who
24is retiring after attaining age 62 with at least 10 years of
25service credit shall be reduced by one-half of 1% for each full
26month that the member's age is under age 67.

 

 

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1    (e) Any retirement annuity or supplemental annuity shall be
2subject to annual increases on the January 1 occurring either
3on or after the attainment of age 67 or the first anniversary
4of the annuity start date, whichever is later. Each annual
5increase shall be calculated at 3% or one-half the annual
6unadjusted percentage increase (but not less than zero) in the
7consumer price index-u for the 12 months ending with the
8September preceding each November 1, whichever is less, of the
9originally granted retirement annuity. If the annual
10unadjusted percentage change in the consumer price index-u for
11the 12 months ending with the September preceding each November
121 is zero or there is a decrease, then the annuity shall not be
13increased.
14    (f) The initial survivor's or widow's annuity of an
15otherwise eligible survivor or widow of a retired member or
16participant who first became a member or participant on or
17after January 1, 2011 shall be in the amount of 66 2/3% of the
18retired member's or participant's retirement annuity at the
19date of death. In the case of the death of a member or
20participant who has not retired and who first became a member
21or participant on or after January 1, 2011, eligibility for a
22survivor's or widow's annuity shall be determined by the
23applicable Article of this Code. The initial benefit shall be
2466 2/3% of the earned annuity without a reduction due to age. A
25child's annuity of an otherwise eligible child shall be in the
26amount prescribed under each Article if applicable. Any

 

 

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

 

 

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

 

 

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1annuity or retirement pension, as well as his or her
2contractual employer, of his or her retirement status before
3accepting contractual employment. A person who fails to submit
4such notification shall be guilty of a Class A misdemeanor and
5required to pay a fine of $1,000. Upon termination of that
6contractual employment, the person's retirement annuity or
7retirement pension payments shall resume and, if appropriate,
8be recalculated under the applicable provisions of this Code.
9    (i) Notwithstanding any other provision of this Section, a
10person who first becomes a participant of the retirement system
11established under Article 15 on or after January 1, 2011 shall
12have the option to enroll in the self-managed plan created
13under Section 15-158.2 of this Code.
14    Notwithstanding any other provision of this Section, a
15person who first becomes a participant of the retirement fund
16established under Article 7 on or after January 1, 2011 shall
17have the option to enroll in the self-managed plan created
18under Section 7-173.3 of this Code.
19    (j) In the case of a conflict between the provisions of
20this Section and any other provision of this Code, the
21provisions of this Section shall control.
22(Source: P.A. 96-889, eff. 1-1-11; 96-1490, eff. 1-1-11;
2397-609, eff. 1-1-12.)
 
24    (40 ILCS 5/7-130.1 new)
25    Sec. 7-130.1. Regular benefit package.

 

 

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1    "Regular benefit package" means either the traditional
2benefit package or the reformed benefit package, whichever
3would apply to an employee if he or she does not participate in
4the self-managed plan.
5    "Traditional benefit package" means the benefits provided
6under this Article, other than the self-managed plan, without
7modification by Section 1-160 of this Code. It includes, but is
8not limited to: retirement annuities payable directly from the
9Fund; surviving spouse annuities payable directly from the
10Fund; child annuities payable directly from the Fund;
11contribution refunds; and separation benefits.
12    "Reformed benefit package" means the traditional benefit
13package as modified by Section 1-160 of this Code for certain
14persons who first become participants of the Fund on or after
15January 1, 2011.
 
16    (40 ILCS 5/7-130.2 new)
17    Sec. 7-130.2. Self-managed plan. "Self-managed plan" means
18the defined contribution retirement program maintained by the
19Fund, created under Section 7-173.3. The self-managed plan does
20not include retirement, surviving spouse, or child annuities
21payable directly from the Fund, contribution refunds, or
22separation benefits.
 
23    (40 ILCS 5/7-140.5 new)
24    Sec. 7-140.5. Retirement program elections.

 

 

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1    (a) For the purposes of this Article:
2    "Currently eligible participant" means a person who is a
3participant under this Article before the day on which the Fund
4first offers the self-managed plan as an alternative to the
5regular benefit package.
6    "Eligible participant" means either a currently eligible
7participant or a newly eligible participant of the Fund
8    "Newly eligible participant" means a person who first
9becomes a participant under this Article on or after the date
10on which the Fund first offers the self-managed plan as an
11alternative to the regular benefit package.
12    (b) When the Fund offers to participants under this Article
13a self-managed plan as an alternative to the regular benefit
14package, each eligible participant shall be given the choice to
15elect which retirement program he or she wishes to participate
16in with respect to all periods of covered employment occurring
17on, before, and after the effective date of the participant's
18election. The retirement program election made by an eligible
19participant must be made in writing, in the manner prescribed
20by the Fund, and within the time period described in this
21Section.
22    If an eligible participant elects the self-managed plan,
23then that election is irrevocable. If an eligible participant
24who elected to participate or participated by default in the
25regular benefit package terminates employment under this
26Article, then the participant, upon his or her subsequent

 

 

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1re-employment under this Article, may make an election under
2this Section.
3    An eligible participant who fails to make an election under
4this Section shall, by default, participate in the regular
5benefit package.
6    (c) An eligible participant may elect to participate in the
7regular benefit package or the self-managed plan. An eligible
8participant must make this election within one year after the
9effective date of the adoption of the self-managed plan under
10Section 7-173.3 or 60 days after first becoming a participant
11under this Article, whichever is later, or, in the case of a
12currently eligible participant who terminates employment under
13this Article, within one year after his or her re-employment
14under this Article.
15    (d) If the eligible participant elects to participate in
16the self-managed plan, the Fund shall fund his or her account
17as stated in subsection (f) of Section 7-173.3.
18    (e) An eligible participant shall be provided with written
19information prepared or prescribed by the Fund that describes
20the participant's retirement program choices. The eligible
21participant shall be offered an opportunity to receive
22counseling from the Fund before making his or her election.
23This counseling may consist of videotaped materials, group
24presentations, individual consultation with an employee or
25authorized representative of the Fund in person or by telephone
26or other electronic means, or any combination of these methods.
 

 

 

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1    (40 ILCS 5/7-173)  (from Ch. 108 1/2, par. 7-173)
2    Sec. 7-173. Contributions by employees.
3    (a) Each participating employee shall make contributions
4to the fund as follows:
5        1. For retirement annuity purposes, normal
6    contributions of 3 3/4% of earnings.
7        2. Additional contributions of such percentages of
8    each payment of earnings, as shall be elected by the
9    employee for retirement annuity purposes, but not in excess
10    of 10%. The selected rate shall be applicable to all
11    earnings paid following receipt by the Board of written
12    notice of election to make such contributions. Additional
13    contributions at the selected rate shall be made
14    concurrently with normal contributions.
15        3. Survivor contributions, by each participating
16    employee, of 3/4% of each payment of earnings; except that
17    in the case of an employee who participates in the
18    self-managed plan under Section 7-173.3, these survivor
19    contributions shall instead be used to finance the benefits
20    available under Section 7-173.3.
21    (b) Each employee shall make contributions for Federal
22Social Security taxes, for periods during which he is a covered
23employee, as required by the Social Security Enabling Act and
24State and federal law. For participating employees, such
25contributions shall be in addition to those required under

 

 

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1paragraph (a) of this Section.
2    (c) Contributions shall be deducted from each
3corresponding payment of earnings paid to each employee and
4shall be remitted to the board by the participating
5municipality or participating instrumentality making such
6payment. The remittance, together with a report of the earnings
7and contributions shall be made as directed by the board. For
8township treasurers and employees of township treasurers
9qualifying as employees hereunder, the contributions herein
10required as deductions from salary shall be withheld by the
11school township trustees from funds available for the payment
12of the compensation of such treasurers and employees as
13provided in the School Code and remitted to the board.
14    (d) An employee who has made additional contributions under
15paragraph (a)2 of this Section may upon retirement or at any
16time prior thereto, elect to withdraw the total of such
17additional contributions including interest credited thereon
18to the end of the preceding calendar year.
19    (e) Failure to make the deductions for employee
20contributions provided in paragraph (c) of this Section shall
21not relieve the employee from liability for such contributions.
22The amount of such liability may be deducted, with interest
23charged under Section 7-209, from any annuities or benefits
24payable hereunder to the employee or any other person receiving
25an annuity or benefit by reason of such employee's
26participation.

 

 

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1    (f) A participating employee who has at least 40 years of
2creditable service in the Fund may elect to cease making the
3contributions required under this Section. The status of the
4employee under this Article shall be unaffected by this
5election, except that the employee shall not receive any
6additional creditable service for the periods of employment
7following the election. An election under this subsection
8relieves the employer from making additional employer
9contributions in relation to that employee.
10(Source: P.A. 96-1084, eff. 7-16-10; 96-1258, eff. 7-23-10;
1197-333, eff. 8-12-11.)
 
12    (40 ILCS 5/7-173.3 new)
13    Sec. 7-173.3. Self-managed plan.
14    (a) The General Assembly finds that the Illinois Municipal
15Retirement Fund should provide a defined contribution
16(self-managed) plan for eligible participants. Accordingly,
17the Illinois Municipal Retirement Fund is hereby directed to
18establish and administer a self-managed plan, which shall offer
19participants the opportunity to accumulate assets for
20retirement through a combination of participant and employer
21contributions that may be invested in mutual funds, collective
22investment funds, or other investment products and used to
23purchase annuity contracts that are fixed, variable, or a
24combination of fixed and variable. The plan must be qualified
25under the Internal Revenue Code of 1986.

 

 

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1    (b) The Board shall make the self-managed plan established
2under this Section available to eligible participants under
3this Article within 6 months after the effective date of this
4amendatory Act of the 98th General Assembly. The adoption of
5the self-managed plan makes available to the eligible
6participants under this Article the elections described in
7Section 7-140.5.
8    The Illinois Municipal Retirement Fund shall be the plan
9sponsor for the self-managed plan and shall prepare a plan
10document and adopt any rules and procedures that are considered
11necessary or desirable for the administration of the
12self-managed plan. Consistent with its fiduciary duty to the
13participants and beneficiaries of the self-managed plan, the
14Board of Trustees of the Fund may delegate aspects of plan
15administration as it sees fit to companies authorized to do
16business in this State.
17    (c) The Fund shall solicit proposals to provide
18administrative services and funding vehicles for the
19self-managed plan from insurance and annuity companies and
20mutual fund companies, banks, trust companies, or other
21financial institutions authorized to do business in this State.
22In reviewing the proposals received and approving and
23contracting with no fewer than 2 and no more than 7 companies,
24the Board of Trustees of the Fund shall consider, among other
25things, the following criteria:
26        (1) the nature and extent of the benefits that would be

 

 

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1    provided to the participants;
2        (2) the reasonableness of the benefits in relation to
3    the premium charged;
4        (3) the suitability of the benefits to the needs and
5    interests of the participants and the employers; and
6        (4) the ability of the company to provide benefits
7    under the contract and the financial stability of the
8    company.
9    The Fund shall periodically review each approved company. A
10company may continue to provide administrative services and
11funding vehicles for the self-managed plan only so long as it
12continues to be an approved company under contract with the
13Board.
14    In addition to the companies approved by the Fund under
15this subsection (c), the Fund may offer its participants an
16investment fund managed by the Illinois State Board of
17Investment.
18    (d) Participants in the program must be allowed to direct
19the transfer of their account balances among the various
20investment options offered, subject to applicable contractual
21provisions. The participant shall not be deemed a fiduciary by
22reason of providing such investment direction. A person who is
23a fiduciary shall not be liable for any loss resulting from
24that investment direction and shall not be deemed to have
25breached any fiduciary duty by acting in accordance with that
26direction. Neither the Fund nor the employer shall guarantee

 

 

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1any of the investments in the participant's account balances.
2    (e) In order to participate in the self-managed plan, an
3eligible participant, as defined in Section 7-140.5, must make
4a written election in accordance with the provisions of that
5Section and the procedures established by the Fund.
6Participation in the self-managed plan shall begin on the first
7day of the month immediately following the month in which the
8participant's election is filed with the Fund, but not sooner
9than the effective date of the self-managed plan. A person's
10participation in the regular benefit package under this Article
11shall terminate on the date that participation in the
12self-managed plan begins.
13    A person who has elected to participate in the self-managed
14plan under this Section must continue participation while he or
15she remains a participant under this Article, and may not
16participate in the regular benefit package.
17    Participation in the self-managed plan under this Section
18shall constitute participation in the Illinois Municipal
19Retirement Fund.
20    A participant under this Section shall be entitled to the
21benefits of Article 20 of this Code.
22    (f) If, at the time a participant elects to participate in
23the self-managed plan, the participant has rights and credits
24in the Fund due to previous participation in the regular
25benefit package, the Fund shall establish for the participant
26an opening account balance in the self-managed plan, equal to

 

 

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1(1) the amount of the separation benefit that the participant
2would be eligible to receive if the participant terminated
3employment on that date and elected a separation benefit and
4(2) an amount, representing employer contributions, equal to
5the amount of employee contributions, plus interest. The
6interest used in this subsection (f) shall be calculated using
7the actual annual rates of return that the Fund has earned
8during the time period corresponding to the actual investment
9of the contributions being transferred. The Fund shall transfer
10assets from the regular benefit package to the self-managed
11plan as a tax-free transfer in accordance with Internal Revenue
12Service guidelines, for purposes of funding the participant's
13opening account balance.
14    (g) Notwithstanding any other provision of this Article, a
15participant may not purchase or receive service credit
16applicable to the regular benefit package under this Article
17for any period during which the employee was a participant in
18the self-managed plan established under this Section.
19    (h) The self-managed plan shall be funded by contributions
20from participants in the self-managed plan and employer
21contributions as provided in this Section.
22    The contribution rate for participants in the self-managed
23plan under this Section shall be equal to the member
24contribution rate for other participants in the Fund, as
25provided in Section 7-173. This required contribution shall be
26made as an employer pick-up under Section 414(h) of the

 

 

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1Internal Revenue Code of 1986 or any successor Section thereof.
2Any participant in the Fund's regular benefit package before
3his or her election to participate in the self-managed plan
4shall continue to have the employer pick up the contributions
5required under Section 7-173. However, the amounts picked up
6after the election of the self-managed plan shall be remitted
7to and treated as assets of the self-managed plan. In no event
8shall a participant have the option of receiving these amounts
9in cash. Participants may make additional contributions to the
10self-managed plan in accordance with procedures prescribed by
11the Fund, to the extent permitted under rules adopted by the
12Fund.
13    The program shall provide for employer contributions to be
14credited to each self-managed plan participant in an amount
15equal to the employee contributions, notwithstanding Section
167-172.
17    Each employer shall make contributions by appropriations
18to the Fund for participants in the self-managed plan under
19this Section. The amount required shall be certified by the
20Board of Trustees of the Fund and paid by the employer in
21accordance with Section 7-172. The Fund shall not be obligated
22to remit the required employer contributions to any of the
23insurance and annuity companies, mutual fund companies, banks,
24trust companies, financial institutions, or other sponsors of
25any of the funding vehicles offered under the self-managed plan
26until it has received the required employer contributions from

 

 

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1the employer.
2    (i) A participant in the self-managed plan becomes vested
3in the employer contributions credited to his or her accounts
4in the self-managed plan on the earliest to occur of the
5following: (1) attainment of 5 years of service credit; (2) the
6death of the participating member while employed under this
7Article, if the member has completed at least 1.5 years of
8service; or (3) the member's election to retire and apply the
9reciprocal provisions of Article 20 of this Code.
10    A participant in the self-managed plan who receives a
11distribution of his or her vested amounts from the self-managed
12plan while not yet eligible for retirement under this Article
13(and Article 20, if applicable) shall forfeit all service
14credit and accrued rights in the Fund; if he or she
15subsequently becomes a participant under this Article again, he
16or she shall be considered a new participant. If a former
17participant again becomes a participant (or becomes employed by
18a participating system under Article 20 of this Code) and
19continues as such for at least 2 years, all rights, service
20credits, and previous status as a participant shall be restored
21upon repayment of the amount of the distribution, with interest
22at the actuarially assumed rate from the date of distribution
23to the date of payment.
24    (j) If a participant in the self-managed plan who is vested
25in employer contributions terminates employment, the
26participant shall be entitled to a benefit that is based on the

 

 

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1account values attributable to both employer and employee
2contributions and any investment return thereon.
3    If a participant in the self-managed plan who is not vested
4in employer contributions terminates employment, the
5participant shall be entitled to a benefit based solely on the
6account values attributable to the participant's contributions
7and any investment return thereon, and the employer
8contributions and any investment return thereon shall be
9forfeited. Any employer contributions that are forfeited shall
10be held in escrow by the company investing those contributions
11and shall be used, as directed by the Fund, for future
12allocations of employer contributions or for the restoration of
13amounts previously forfeited by former participants who again
14become participating members.
 
15    (40 ILCS 5/20-121)  (from Ch. 108 1/2, par. 20-121)
16    Sec. 20-121. Calculation of proportional retirement
17annuities. Upon retirement of the employee, a proportional
18retirement annuity shall be computed by each participating
19system in which pension credit has been established on the
20basis of pension credits under each system. The computation
21shall be in accordance with the formula or method prescribed by
22each participating system which is in effect at the date of the
23employee's latest withdrawal from service covered by any of the
24systems in which he has pension credits which he elects to have
25considered under this Article. However, the amount of any

 

 

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1retirement annuity payable under the self-managed plan
2established under Section 7-173.3 or 15-158.2 of this Code
3depends solely on the value of the participant's vested account
4balances and is not subject to any proportional adjustment
5under this Section.
6    Combined pension credit under all retirement systems
7subject to this Article shall be considered in determining
8whether the minimum qualification has been met and the formula
9or method of computation which shall be applied. If a system
10has a step-rate formula for calculation of the retirement
11annuity, pension credits covering previous service which have
12been established under another system shall be considered in
13determining which range or ranges of the step-rate formula are
14to be applicable to the employee.
15    Interest on pension credit shall continue to accumulate in
16accordance with the provisions of the law governing the
17retirement system in which the same has been established during
18the time an employee is in the service of another employer, on
19the assumption such employee, for interest purposes for pension
20credit, is continuing in the service covered by such retirement
21system.
22(Source: P.A. 91-887, eff. 7-6-00.)
 
23    (40 ILCS 5/20-123)  (from Ch. 108 1/2, par. 20-123)
24    Sec. 20-123. Survivor's annuity. The provisions governing
25a retirement annuity shall be applicable to a survivor's

 

 

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1annuity. Appropriate credits shall be established for
2survivor's annuity purposes in those participating systems
3which provide survivor's annuities, according to the same
4conditions and subject to the same limitations and restrictions
5herein prescribed for a retirement annuity. If a participating
6system has no survivor's annuity benefit, or if the survivor's
7annuity benefit under that system is waived, pension credit
8established in that system shall not be considered in
9determining eligibility for or the amount of the survivor's
10annuity which may be payable by any other participating system.
11    For persons who participate in the self-managed plan
12established under Section 7-173.3, pension credit established
13under Article 7 may be considered in determining eligibility
14for or the amount of the survivor's annuity that is payable by
15any other participating system, but pension credit established
16in any other system shall not result in any right to a
17survivor's annuity under the Article 7 system.
18    For persons who participate in the self-managed plan
19established under Section 15-158.2 or the portable benefit
20package established under Section 15-136.4, pension credit
21established under Article 15 may be considered in determining
22eligibility for or the amount of the survivor's annuity that is
23payable by any other participating system, but pension credit
24established in any other system shall not result in any right
25to a survivor's annuity under the Article 15 system.
26(Source: P.A. 91-887, eff. 7-6-00.)
 

 

 

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1    (40 ILCS 5/20-124)  (from Ch. 108 1/2, par. 20-124)
2    Sec. 20-124. Maximum benefits.
3    (a) In no event shall the combined retirement or survivors
4annuities exceed the highest annuity which would have been
5payable by any participating system in which the employee has
6pension credits, if all of his pension credits had been
7validated in that system.
8    If the combined annuities should exceed the highest maximum
9as determined in accordance with this Section, the respective
10annuities shall be reduced proportionately according to the
11ratio which the amount of each proportional annuity bears to
12the aggregate of all such annuities.
13    (b) In the case of a participant in the self-managed plan
14established under Section 7-173.3 of this Code to whom the
15provisions of this Article apply:
16        (i) For purposes of calculating the combined
17    retirement annuity and the proportionate reduction, if
18    any, in a retirement annuity other than one payable under a
19    self-managed plan, the amount of the Article 7 retirement
20    annuity shall be deemed to be the highest annuity to which
21    the annuitant would have been entitled if he or she had
22    participated in the regular benefit package as defined in
23    Article 7 instead of in the self-managed plan.
24        (ii) For purposes of calculating the combined
25    survivor's annuity and the proportionate reduction, if

 

 

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1    any, in a survivor's annuity other than one payable under a
2    self-managed plan, the amount of the Article 7 survivor's
3    annuity shall be deemed to be the highest survivor's
4    annuity to which the survivor would have been entitled if
5    the deceased person had participated in the regular benefit
6    package as defined in Article 7 instead of in the
7    self-managed plan.
8        (iii) Benefits payable under the self-managed plan are
9    not subject to proportionate reduction under this Section.
10    (c) In the case of a participant in the self-managed plan
11established under Section 15-158.2 of this Code to whom the
12provisions of this Article apply:
13        (i) For purposes of calculating the combined
14    retirement annuity and the proportionate reduction, if
15    any, in a retirement annuity other than one payable under
16    the self-managed plan, the amount of the Article 15
17    retirement annuity shall be deemed to be the highest
18    annuity to which the annuitant would have been entitled if
19    he or she had participated in the traditional benefit
20    package as defined in Section 15-103.1 rather than the
21    self-managed plan.
22        (ii) For purposes of calculating the combined
23    survivor's annuity and the proportionate reduction, if
24    any, in a survivor's annuity other than one payable under
25    the self-managed plan, the amount of the Article 15
26    survivor's annuity shall be deemed to be the highest

 

 

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1    survivor's annuity to which the survivor would have been
2    entitled if the deceased employee had participated in the
3    traditional benefit package as defined in Section 15-103.1
4    rather than the self-managed plan.
5        (iii) Benefits payable under the self-managed plan are
6    not subject to proportionate reduction under this Section.
7(Source: P.A. 91-887, eff. 7-6-00.)
 
8    Section 90. The State Mandates Act is amended by adding
9Section 8.37 as follows:
 
10    (30 ILCS 805/8.37 new)
11    Sec. 8.37. Exempt mandate. Notwithstanding Sections 6 and 8
12of this Act, no reimbursement by the State is required for the
13implementation of any mandate created by this amendatory Act of
14the 98th General Assembly.
 
15    Section 99. Effective date. This Act takes effect upon
16becoming law.