98TH GENERAL ASSEMBLY
State of Illinois
2013 and 2014
HB1266

 

Introduced , by Rep. Joe Sosnowski

 

SYNOPSIS AS INTRODUCED:
 
40 ILCS 5/1-103.3
40 ILCS 5/2-124  from Ch. 108 1/2, par. 2-124
40 ILCS 5/14-131
40 ILCS 5/15-155  from Ch. 108 1/2, par. 15-155
40 ILCS 5/16-158  from Ch. 108 1/2, par. 16-158
40 ILCS 5/18-131  from Ch. 108 1/2, par. 18-131

    Amends the Illinois Pension Code. Increases the prescribed funding ratio for the 5 State-funded retirement systems from 90% to 100%. Makes corresponding changes in the funding formula for each system. Effective immediately.


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FISCAL NOTE ACT MAY APPLY
PENSION IMPACT NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB1266LRB098 08105 EFG 38196 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 1-103.3, 2-124, 14-131, 15-155, 16-158, and 18-131 as
6follows:
 
7    (40 ILCS 5/1-103.3)
8    Sec. 1-103.3. Application of 1994 amendment; funding
9standard.
10    (a) The provisions of this amendatory Act of 1994 that
11change the method of calculating, certifying, and paying the
12required State contributions to the retirement systems
13established under Articles 2, 14, 15, 16, and 18 shall first
14apply to the State contributions required for State fiscal year
151996.
16    (b) The General Assembly declares that a funding ratio (the
17ratio of a retirement system's total assets to its total
18actuarial liabilities) of 100% 90% is an appropriate goal for
19State-funded retirement systems in Illinois, and it finds that
20a funding ratio of 100% 90% is now the generally-recognized
21norm throughout the nation for public employee retirement
22systems that are considered to be financially secure and funded
23in an appropriate and responsible manner.

 

 

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1    (c) Every 5 years, beginning in 1999, the Commission on
2Government Forecasting and Accountability, in consultation
3with the affected retirement systems and the Governor's Office
4of Management and Budget (formerly Bureau of the Budget), shall
5consider and determine whether the 100% 90% funding ratio
6adopted in subsection (b) continues to represent an appropriate
7goal for State-funded retirement systems in Illinois, and it
8shall report its findings and recommendations on this subject
9to the Governor and the General Assembly.
10(Source: P.A. 93-1067, eff. 1-15-05.)
 
11    (40 ILCS 5/2-124)  (from Ch. 108 1/2, par. 2-124)
12    Sec. 2-124. Contributions by State.
13    (a) The State shall make contributions to the System by
14appropriations of amounts which, together with the
15contributions of participants, interest earned on investments,
16and other income will meet the cost of maintaining and
17administering the System on a 100% 90% funded basis in
18accordance with actuarial recommendations.
19    (b) The Board shall determine the amount of State
20contributions required for each fiscal year on the basis of the
21actuarial tables and other assumptions adopted by the Board and
22the prescribed rate of interest, using the formula in
23subsection (c).
24    (c) For State fiscal years 2012 through 2045, the minimum
25contribution to the System to be made by the State for each

 

 

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1fiscal year shall be an amount determined by the System to be
2sufficient to bring the total assets of the System up to 100%
390% of the total actuarial liabilities of the System by the end
4of State fiscal year 2045. In making these determinations, the
5required State contribution shall be calculated each year as a
6level percentage of payroll over the years remaining to and
7including fiscal year 2045 and shall be determined under the
8projected unit credit actuarial cost method.
9    For State fiscal years 1996 through 2005, the State
10contribution to the System, as a percentage of the applicable
11employee payroll, shall be increased in equal annual increments
12so that by State fiscal year 2011, the State is contributing at
13the rate required under this Section.
14    Notwithstanding any other provision of this Article, the
15total required State contribution for State fiscal year 2006 is
16$4,157,000.
17    Notwithstanding any other provision of this Article, the
18total required State contribution for State fiscal year 2007 is
19$5,220,300.
20    For each of State fiscal years 2008 through 2009, the State
21contribution to the System, as a percentage of the applicable
22employee payroll, shall be increased in equal annual increments
23from the required State contribution for State fiscal year
242007, so that by State fiscal year 2011, the State is
25contributing at the rate otherwise required under this Section.
26    Notwithstanding any other provision of this Article, the

 

 

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1total required State contribution for State fiscal year 2010 is
2$10,454,000 and shall be made from the proceeds of bonds sold
3in fiscal year 2010 pursuant to Section 7.2 of the General
4Obligation Bond Act, less (i) the pro rata share of bond sale
5expenses determined by the System's share of total bond
6proceeds, (ii) any amounts received from the General Revenue
7Fund in fiscal year 2010, and (iii) any reduction in bond
8proceeds due to the issuance of discounted bonds, if
9applicable.
10    Notwithstanding any other provision of this Article, the
11total required State contribution for State fiscal year 2011 is
12the amount recertified by the System on or before April 1, 2011
13pursuant to Section 2-134 and shall be made from the proceeds
14of bonds sold in fiscal year 2011 pursuant to Section 7.2 of
15the General Obligation Bond Act, less (i) the pro rata share of
16bond sale expenses determined by the System's share of total
17bond proceeds, (ii) any amounts received from the General
18Revenue Fund in fiscal year 2011, and (iii) any reduction in
19bond proceeds due to the issuance of discounted bonds, if
20applicable.
21    Beginning in State fiscal year 2046, the minimum State
22contribution for each fiscal year shall be the amount needed to
23maintain the total assets of the System at 100% 90% of the
24total actuarial liabilities of the System.
25    Amounts received by the System pursuant to Section 25 of
26the Budget Stabilization Act or Section 8.12 of the State

 

 

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1Finance Act in any fiscal year do not reduce and do not
2constitute payment of any portion of the minimum State
3contribution required under this Article in that fiscal year.
4Such amounts shall not reduce, and shall not be included in the
5calculation of, the required State contributions under this
6Article in any future year until the System has reached a
7funding ratio of at least 100% 90%. A reference in this Article
8to the "required State contribution" or any substantially
9similar term does not include or apply to any amounts payable
10to the System under Section 25 of the Budget Stabilization Act.
11    Notwithstanding any other provision of this Section, the
12required State contribution for State fiscal year 2005 and for
13fiscal year 2008 and each fiscal year thereafter, as calculated
14under this Section and certified under Section 2-134, shall not
15exceed an amount equal to (i) the amount of the required State
16contribution that would have been calculated under this Section
17for that fiscal year if the System had not received any
18payments under subsection (d) of Section 7.2 of the General
19Obligation Bond Act, minus (ii) the portion of the State's
20total debt service payments for that fiscal year on the bonds
21issued in fiscal year 2003 for the purposes of that Section
227.2, as determined and certified by the Comptroller, that is
23the same as the System's portion of the total moneys
24distributed under subsection (d) of Section 7.2 of the General
25Obligation Bond Act. In determining this maximum for State
26fiscal years 2008 through 2010, however, the amount referred to

 

 

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1in item (i) shall be increased, as a percentage of the
2applicable employee payroll, in equal increments calculated
3from the sum of the required State contribution for State
4fiscal year 2007 plus the applicable portion of the State's
5total debt service payments for fiscal year 2007 on the bonds
6issued in fiscal year 2003 for the purposes of Section 7.2 of
7the General Obligation Bond Act, so that, by State fiscal year
82011, the State is contributing at the rate otherwise required
9under this Section.
10    (d) For purposes of determining the required State
11contribution to the System, the value of the System's assets
12shall be equal to the actuarial value of the System's assets,
13which shall be calculated as follows:
14    As of June 30, 2008, the actuarial value of the System's
15assets shall be equal to the market value of the assets as of
16that date. In determining the actuarial value of the System's
17assets for fiscal years after June 30, 2008, any actuarial
18gains or losses from investment return incurred in a fiscal
19year shall be recognized in equal annual amounts over the
205-year period following that fiscal year.
21    (e) For purposes of determining the required State
22contribution to the system for a particular year, the actuarial
23value of assets shall be assumed to earn a rate of return equal
24to the system's actuarially assumed rate of return.
25(Source: P.A. 96-43, eff. 7-15-09; 96-1497, eff. 1-14-11;
2696-1511, eff. 1-27-11; 96-1554, eff. 3-18-11; 97-813, eff.

 

 

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

 

 

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1Act, if any, for the fiscal year ending on the June 30
2immediately preceding the applicable November 15 certification
3deadline), the estimated payroll (including all forms of
4compensation) for personal services rendered by eligible
5employees, and the recommendations of the actuary.
6    For the purposes of this Section and Section 14.1 of the
7State Finance Act, the term "eligible employees" includes
8employees who participate in the System, persons who may elect
9to participate in the System but have not so elected, persons
10who are serving a qualifying period that is required for
11participation, and annuitants employed by a department as
12described in subdivision (a)(1) or (a)(2) of Section 14-111.
13    (c) Contributions shall be made by the several departments
14for each pay period by warrants drawn by the State Comptroller
15against their respective funds or appropriations based upon
16vouchers stating the amount to be so contributed. These amounts
17shall be based on the full rate certified by the Board under
18Section 14-135.08 for that fiscal year. From the effective date
19of this amendatory Act of the 93rd General Assembly through the
20payment of the final payroll from fiscal year 2004
21appropriations, the several departments shall not make
22contributions for the remainder of fiscal year 2004 but shall
23instead make payments as required under subsection (a-1) of
24Section 14.1 of the State Finance Act. The several departments
25shall resume those contributions at the commencement of fiscal
26year 2005.

 

 

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

 

 

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1Act. The department or other employer shall resume payment of
2contributions at the commencement of fiscal year 2005.
3    (e) For State fiscal years 2012 through 2045, the minimum
4contribution to the System to be made by the State for each
5fiscal year shall be an amount determined by the System to be
6sufficient to bring the total assets of the System up to 100%
790% of the total actuarial liabilities of the System by the end
8of State fiscal year 2045. In making these determinations, the
9required State contribution shall be calculated each year as a
10level percentage of payroll over the years remaining to and
11including fiscal year 2045 and shall be determined under the
12projected unit credit actuarial cost method.
13    For State fiscal years 1996 through 2005, the State
14contribution to the System, as a percentage of the applicable
15employee payroll, shall be increased in equal annual increments
16so that by State fiscal year 2011, the State is contributing at
17the rate required under this Section; except that (i) for State
18fiscal year 1998, for all purposes of this Code and any other
19law of this State, the certified percentage of the applicable
20employee payroll shall be 5.052% for employees earning eligible
21creditable service under Section 14-110 and 6.500% for all
22other employees, notwithstanding any contrary certification
23made under Section 14-135.08 before the effective date of this
24amendatory Act of 1997, and (ii) in the following specified
25State fiscal years, the State contribution to the System shall
26not be less than the following indicated percentages of the

 

 

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1applicable employee payroll, even if the indicated percentage
2will produce a State contribution in excess of the amount
3otherwise required under this subsection and subsection (a):
49.8% in FY 1999; 10.0% in FY 2000; 10.2% in FY 2001; 10.4% in FY
52002; 10.6% in FY 2003; and 10.8% in FY 2004.
6    Notwithstanding any other provision of this Article, the
7total required State contribution to the System for State
8fiscal year 2006 is $203,783,900.
9    Notwithstanding any other provision of this Article, the
10total required State contribution to the System for State
11fiscal year 2007 is $344,164,400.
12    For each of State fiscal years 2008 through 2009, the State
13contribution to the System, as a percentage of the applicable
14employee payroll, shall be increased in equal annual increments
15from the required State contribution for State fiscal year
162007, so that by State fiscal year 2011, the State is
17contributing at the rate otherwise required under this Section.
18    Notwithstanding any other provision of this Article, the
19total required State General Revenue Fund contribution for
20State fiscal year 2010 is $723,703,100 and shall be made from
21the proceeds of bonds sold in fiscal year 2010 pursuant to
22Section 7.2 of the General Obligation Bond Act, less (i) the
23pro rata share of bond sale expenses determined by the System's
24share of total bond proceeds, (ii) any amounts received from
25the General Revenue Fund in fiscal year 2010, and (iii) any
26reduction in bond proceeds due to the issuance of discounted

 

 

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1bonds, if applicable.
2    Notwithstanding any other provision of this Article, the
3total required State General Revenue Fund contribution for
4State fiscal year 2011 is the amount recertified by the System
5on or before April 1, 2011 pursuant to Section 14-135.08 and
6shall be made from the proceeds of bonds sold in fiscal year
72011 pursuant to Section 7.2 of the General Obligation Bond
8Act, less (i) the pro rata share of bond sale expenses
9determined by the System's share of total bond proceeds, (ii)
10any amounts received from the General Revenue Fund in fiscal
11year 2011, and (iii) any reduction in bond proceeds due to the
12issuance of discounted bonds, if applicable.
13    Beginning in State fiscal year 2046, the minimum State
14contribution for each fiscal year shall be the amount needed to
15maintain the total assets of the System at 100% 90% of the
16total actuarial liabilities of the System.
17    Amounts received by the System pursuant to Section 25 of
18the Budget Stabilization Act or Section 8.12 of the State
19Finance Act in any fiscal year do not reduce and do not
20constitute payment of any portion of the minimum State
21contribution required under this Article in that fiscal year.
22Such amounts shall not reduce, and shall not be included in the
23calculation of, the required State contributions under this
24Article in any future year until the System has reached a
25funding ratio of at least 100% 90%. A reference in this Article
26to the "required State contribution" or any substantially

 

 

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1similar term does not include or apply to any amounts payable
2to the System under Section 25 of the Budget Stabilization Act.
3    Notwithstanding any other provision of this Section, the
4required State contribution for State fiscal year 2005 and for
5fiscal year 2008 and each fiscal year thereafter, as calculated
6under this Section and certified under Section 14-135.08, shall
7not exceed an amount equal to (i) the amount of the required
8State contribution that would have been calculated under this
9Section for that fiscal year if the System had not received any
10payments under subsection (d) of Section 7.2 of the General
11Obligation Bond Act, minus (ii) the portion of the State's
12total debt service payments for that fiscal year on the bonds
13issued in fiscal year 2003 for the purposes of that Section
147.2, as determined and certified by the Comptroller, that is
15the same as the System's portion of the total moneys
16distributed under subsection (d) of Section 7.2 of the General
17Obligation Bond Act. In determining this maximum for State
18fiscal years 2008 through 2010, however, the amount referred to
19in item (i) shall be increased, as a percentage of the
20applicable employee payroll, in equal increments calculated
21from the sum of the required State contribution for State
22fiscal year 2007 plus the applicable portion of the State's
23total debt service payments for fiscal year 2007 on the bonds
24issued in fiscal year 2003 for the purposes of Section 7.2 of
25the General Obligation Bond Act, so that, by State fiscal year
262011, the State is contributing at the rate otherwise required

 

 

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1under this Section.
2    (f) After the submission of all payments for eligible
3employees from personal services line items in fiscal year 2004
4have been made, the Comptroller shall provide to the System a
5certification of the sum of all fiscal year 2004 expenditures
6for personal services that would have been covered by payments
7to the System under this Section if the provisions of this
8amendatory Act of the 93rd General Assembly had not been
9enacted. Upon receipt of the certification, the System shall
10determine the amount due to the System based on the full rate
11certified by the Board under Section 14-135.08 for fiscal year
122004 in order to meet the State's obligation under this
13Section. The System shall compare this amount due to the amount
14received by the System in fiscal year 2004 through payments
15under this Section and under Section 6z-61 of the State Finance
16Act. If the amount due is more than the amount received, the
17difference shall be termed the "Fiscal Year 2004 Shortfall" for
18purposes of this Section, and the Fiscal Year 2004 Shortfall
19shall be satisfied under Section 1.2 of the State Pension Funds
20Continuing Appropriation Act. If the amount due is less than
21the amount received, the difference shall be termed the "Fiscal
22Year 2004 Overpayment" for purposes of this Section, and the
23Fiscal Year 2004 Overpayment shall be repaid by the System to
24the Pension Contribution Fund as soon as practicable after the
25certification.
26    (g) For purposes of determining the required State

 

 

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1contribution to the System, the value of the System's assets
2shall be equal to the actuarial value of the System's assets,
3which shall be calculated as follows:
4    As of June 30, 2008, the actuarial value of the System's
5assets shall be equal to the market value of the assets as of
6that date. In determining the actuarial value of the System's
7assets for fiscal years after June 30, 2008, any actuarial
8gains or losses from investment return incurred in a fiscal
9year shall be recognized in equal annual amounts over the
105-year period following that fiscal year.
11    (h) For purposes of determining the required State
12contribution to the System for a particular year, the actuarial
13value of assets shall be assumed to earn a rate of return equal
14to the System's actuarially assumed rate of return.
15    (i) After the submission of all payments for eligible
16employees from personal services line items paid from the
17General Revenue Fund in fiscal year 2010 have been made, the
18Comptroller shall provide to the System a certification of the
19sum of all fiscal year 2010 expenditures for personal services
20that would have been covered by payments to the System under
21this Section if the provisions of this amendatory Act of the
2296th General Assembly had not been enacted. Upon receipt of the
23certification, the System shall determine the amount due to the
24System based on the full rate certified by the Board under
25Section 14-135.08 for fiscal year 2010 in order to meet the
26State's obligation under this Section. The System shall compare

 

 

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1this amount due to the amount received by the System in fiscal
2year 2010 through payments under this Section. If the amount
3due is more than the amount received, the difference shall be
4termed the "Fiscal Year 2010 Shortfall" for purposes of this
5Section, and the Fiscal Year 2010 Shortfall shall be satisfied
6under Section 1.2 of the State Pension Funds Continuing
7Appropriation Act. If the amount due is less than the amount
8received, the difference shall be termed the "Fiscal Year 2010
9Overpayment" for purposes of this Section, and the Fiscal Year
102010 Overpayment shall be repaid by the System to the General
11Revenue Fund as soon as practicable after the certification.
12    (j) After the submission of all payments for eligible
13employees from personal services line items paid from the
14General Revenue Fund in fiscal year 2011 have been made, the
15Comptroller shall provide to the System a certification of the
16sum of all fiscal year 2011 expenditures for personal services
17that would have been covered by payments to the System under
18this Section if the provisions of this amendatory Act of the
1996th General Assembly had not been enacted. Upon receipt of the
20certification, the System shall determine the amount due to the
21System based on the full rate certified by the Board under
22Section 14-135.08 for fiscal year 2011 in order to meet the
23State's obligation under this Section. The System shall compare
24this amount due to the amount received by the System in fiscal
25year 2011 through payments under this Section. If the amount
26due is more than the amount received, the difference shall be

 

 

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1termed the "Fiscal Year 2011 Shortfall" for purposes of this
2Section, and the Fiscal Year 2011 Shortfall shall be satisfied
3under Section 1.2 of the State Pension Funds Continuing
4Appropriation Act. If the amount due is less than the amount
5received, the difference shall be termed the "Fiscal Year 2011
6Overpayment" for purposes of this Section, and the Fiscal Year
72011 Overpayment shall be repaid by the System to the General
8Revenue Fund as soon as practicable after the certification.
9    (k) For fiscal years 2012 and 2013 only, after the
10submission of all payments for eligible employees from personal
11services line items paid from the General Revenue Fund in the
12fiscal year have been made, the Comptroller shall provide to
13the System a certification of the sum of all expenditures in
14the fiscal year for personal services. Upon receipt of the
15certification, the System shall determine the amount due to the
16System based on the full rate certified by the Board under
17Section 14-135.08 for the fiscal year in order to meet the
18State's obligation under this Section. The System shall compare
19this amount due to the amount received by the System for the
20fiscal year. If the amount due is more than the amount
21received, the difference shall be termed the "Prior Fiscal Year
22Shortfall" for purposes of this Section, and the Prior Fiscal
23Year Shortfall shall be satisfied under Section 1.2 of the
24State Pension Funds Continuing Appropriation Act. If the amount
25due is less than the amount received, the difference shall be
26termed the "Prior Fiscal Year Overpayment" for purposes of this

 

 

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1Section, and the Prior Fiscal Year Overpayment shall be repaid
2by the System to the General Revenue Fund as soon as
3practicable after the certification.
4(Source: P.A. 96-43, eff. 7-15-09; 96-45, eff. 7-15-09;
596-1000, eff. 7-2-10; 96-1497, eff. 1-14-11; 96-1511, eff.
61-27-11; 96-1554, eff. 3-18-11; 97-72, eff. 7-1-11; 97-732,
7eff. 6-30-12.)
 
8    (40 ILCS 5/15-155)  (from Ch. 108 1/2, par. 15-155)
9    Sec. 15-155. Employer contributions.
10    (a) The State of Illinois shall make contributions by
11appropriations of amounts which, together with the other
12employer contributions from trust, federal, and other funds,
13employee contributions, income from investments, and other
14income of this System, will be sufficient to meet the cost of
15maintaining and administering the System on a 100% 90% funded
16basis in accordance with actuarial recommendations.
17    The Board shall determine the amount of State contributions
18required for each fiscal year on the basis of the actuarial
19tables and other assumptions adopted by the Board and the
20recommendations of the actuary, using the formula in subsection
21(a-1).
22    (a-1) For State fiscal years 2012 through 2045, the minimum
23contribution to the System to be made by the State for each
24fiscal year shall be an amount determined by the System to be
25sufficient to bring the total assets of the System up to 100%

 

 

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190% of the total actuarial liabilities of the System by the end
2of State fiscal year 2045. In making these determinations, the
3required State contribution shall be calculated each year as a
4level percentage of payroll over the years remaining to and
5including fiscal year 2045 and shall be determined under the
6projected unit credit actuarial cost method.
7    For State fiscal years 1996 through 2005, the State
8contribution to the System, as a percentage of the applicable
9employee payroll, shall be increased in equal annual increments
10so that by State fiscal year 2011, the State is contributing at
11the rate required under this Section.
12    Notwithstanding any other provision of this Article, the
13total required State contribution for State fiscal year 2006 is
14$166,641,900.
15    Notwithstanding any other provision of this Article, the
16total required State contribution for State fiscal year 2007 is
17$252,064,100.
18    For each of State fiscal years 2008 through 2009, the State
19contribution to the System, as a percentage of the applicable
20employee payroll, shall be increased in equal annual increments
21from the required State contribution for State fiscal year
222007, so that by State fiscal year 2011, the State is
23contributing at the rate otherwise required under this Section.
24    Notwithstanding any other provision of this Article, the
25total required State contribution for State fiscal year 2010 is
26$702,514,000 and shall be made from the State Pensions Fund and

 

 

HB1266- 20 -LRB098 08105 EFG 38196 b

1proceeds of bonds sold in fiscal year 2010 pursuant to Section
27.2 of the General Obligation Bond Act, less (i) the pro rata
3share of bond sale expenses determined by the System's share of
4total bond proceeds, (ii) any amounts received from the General
5Revenue Fund in fiscal year 2010, (iii) any reduction in bond
6proceeds due to the issuance of discounted bonds, if
7applicable.
8    Notwithstanding any other provision of this Article, the
9total required State contribution for State fiscal year 2011 is
10the amount recertified by the System on or before April 1, 2011
11pursuant to Section 15-165 and shall be made from the State
12Pensions Fund and proceeds of bonds sold in fiscal year 2011
13pursuant to Section 7.2 of the General Obligation Bond Act,
14less (i) the pro rata share of bond sale expenses determined by
15the System's share of total bond proceeds, (ii) any amounts
16received from the General Revenue Fund in fiscal year 2011, and
17(iii) any reduction in bond proceeds due to the issuance of
18discounted bonds, if applicable.
19    Beginning in State fiscal year 2046, the minimum State
20contribution for each fiscal year shall be the amount needed to
21maintain the total assets of the System at 100% 90% of the
22total actuarial liabilities of the System.
23    Amounts received by the System pursuant to Section 25 of
24the Budget Stabilization Act or Section 8.12 of the State
25Finance Act in any fiscal year do not reduce and do not
26constitute payment of any portion of the minimum State

 

 

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1contribution required under this Article in that fiscal year.
2Such amounts shall not reduce, and shall not be included in the
3calculation of, the required State contributions under this
4Article in any future year until the System has reached a
5funding ratio of at least 100% 90%. A reference in this Article
6to the "required State contribution" or any substantially
7similar term does not include or apply to any amounts payable
8to the System under Section 25 of the Budget Stabilization Act.
9    Notwithstanding any other provision of this Section, the
10required State contribution for State fiscal year 2005 and for
11fiscal year 2008 and each fiscal year thereafter, as calculated
12under this Section and certified under Section 15-165, shall
13not exceed an amount equal to (i) the amount of the required
14State contribution that would have been calculated under this
15Section for that fiscal year if the System had not received any
16payments under subsection (d) of Section 7.2 of the General
17Obligation Bond Act, minus (ii) the portion of the State's
18total debt service payments for that fiscal year on the bonds
19issued in fiscal year 2003 for the purposes of that Section
207.2, as determined and certified by the Comptroller, that is
21the same as the System's portion of the total moneys
22distributed under subsection (d) of Section 7.2 of the General
23Obligation Bond Act. In determining this maximum for State
24fiscal years 2008 through 2010, however, the amount referred to
25in item (i) shall be increased, as a percentage of the
26applicable employee payroll, in equal increments calculated

 

 

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1from the sum of the required State contribution for State
2fiscal year 2007 plus the applicable portion of the State's
3total debt service payments for fiscal year 2007 on the bonds
4issued in fiscal year 2003 for the purposes of Section 7.2 of
5the General Obligation Bond Act, so that, by State fiscal year
62011, the State is contributing at the rate otherwise required
7under this Section.
8    (b) If an employee is paid from trust or federal funds, the
9employer shall pay to the Board contributions from those funds
10which are sufficient to cover the accruing normal costs on
11behalf of the employee. However, universities having employees
12who are compensated out of local auxiliary funds, income funds,
13or service enterprise funds are not required to pay such
14contributions on behalf of those employees. The local auxiliary
15funds, income funds, and service enterprise funds of
16universities shall not be considered trust funds for the
17purpose of this Article, but funds of alumni associations,
18foundations, and athletic associations which are affiliated
19with the universities included as employers under this Article
20and other employers which do not receive State appropriations
21are considered to be trust funds for the purpose of this
22Article.
23    (b-1) The City of Urbana and the City of Champaign shall
24each make employer contributions to this System for their
25respective firefighter employees who participate in this
26System pursuant to subsection (h) of Section 15-107. The rate

 

 

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

 

 

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

 

 

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1documentation.
2    Whenever it determines that a payment is or may be required
3under this subsection (g), the System shall calculate the
4amount of the payment and bill the employer for that amount.
5The bill shall specify the calculations used to determine the
6amount due. If the employer disputes the amount of the bill, it
7may, within 30 days after receipt of the bill, apply to the
8System in writing for a recalculation. The application must
9specify in detail the grounds of the dispute and, if the
10employer asserts that the calculation is subject to subsection
11(h) or (i) of this Section, must include an affidavit setting
12forth and attesting to all facts within the employer's
13knowledge that are pertinent to the applicability of subsection
14(h) or (i). Upon receiving a timely application for
15recalculation, the System shall review the application and, if
16appropriate, recalculate the amount due.
17    The employer contributions required under this subsection
18(g) (f) may be paid in the form of a lump sum within 90 days
19after receipt of the bill. If the employer contributions are
20not paid within 90 days after receipt of the bill, then
21interest will be charged at a rate equal to the System's annual
22actuarially assumed rate of return on investment compounded
23annually from the 91st day after receipt of the bill. Payments
24must be concluded within 3 years after the employer's receipt
25of the bill.
26    (h) This subsection (h) applies only to payments made or

 

 

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1salary increases given on or after June 1, 2005 but before July
21, 2011. The changes made by Public Act 94-1057 shall not
3require the System to refund any payments received before July
431, 2006 (the effective date of Public Act 94-1057).
5    When assessing payment for any amount due under subsection
6(g), the System shall exclude earnings increases paid to
7participants under contracts or collective bargaining
8agreements entered into, amended, or renewed before June 1,
92005.
10    When assessing payment for any amount due under subsection
11(g), the System shall exclude earnings increases paid to a
12participant at a time when the participant is 10 or more years
13from retirement eligibility under Section 15-135.
14    When assessing payment for any amount due under subsection
15(g), the System shall exclude earnings increases resulting from
16overload work, including a contract for summer teaching, or
17overtime when the employer has certified to the System, and the
18System has approved the certification, that: (i) in the case of
19overloads (A) the overload work is for the sole purpose of
20academic instruction in excess of the standard number of
21instruction hours for a full-time employee occurring during the
22academic year that the overload is paid and (B) the earnings
23increases are equal to or less than the rate of pay for
24academic instruction computed using the participant's current
25salary rate and work schedule; and (ii) in the case of
26overtime, the overtime was necessary for the educational

 

 

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1mission.
2    When assessing payment for any amount due under subsection
3(g), the System shall exclude any earnings increase resulting
4from (i) a promotion for which the employee moves from one
5classification to a higher classification under the State
6Universities Civil Service System, (ii) a promotion in academic
7rank for a tenured or tenure-track faculty position, or (iii) a
8promotion that the Illinois Community College Board has
9recommended in accordance with subsection (k) of this Section.
10These earnings increases shall be excluded only if the
11promotion is to a position that has existed and been filled by
12a member for no less than one complete academic year and the
13earnings increase as a result of the promotion is an increase
14that results in an amount no greater than the average salary
15paid for other similar positions.
16    (i) When assessing payment for any amount due under
17subsection (g), the System shall exclude any salary increase
18described in subsection (h) of this Section given on or after
19July 1, 2011 but before July 1, 2014 under a contract or
20collective bargaining agreement entered into, amended, or
21renewed on or after June 1, 2005 but before July 1, 2011.
22Notwithstanding any other provision of this Section, any
23payments made or salary increases given after June 30, 2014
24shall be used in assessing payment for any amount due under
25subsection (g) of this Section.
26    (j) The System shall prepare a report and file copies of

 

 

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1the report with the Governor and the General Assembly by
2January 1, 2007 that contains all of the following information:
3        (1) The number of recalculations required by the
4    changes made to this Section by Public Act 94-1057 for each
5    employer.
6        (2) The dollar amount by which each employer's
7    contribution to the System was changed due to
8    recalculations required by Public Act 94-1057.
9        (3) The total amount the System received from each
10    employer as a result of the changes made to this Section by
11    Public Act 94-4.
12        (4) The increase in the required State contribution
13    resulting from the changes made to this Section by Public
14    Act 94-1057.
15    (k) The Illinois Community College Board shall adopt rules
16for recommending lists of promotional positions submitted to
17the Board by community colleges and for reviewing the
18promotional lists on an annual basis. When recommending
19promotional lists, the Board shall consider the similarity of
20the positions submitted to those positions recognized for State
21universities by the State Universities Civil Service System.
22The Illinois Community College Board shall file a copy of its
23findings with the System. The System shall consider the
24findings of the Illinois Community College Board when making
25determinations under this Section. The System shall not exclude
26any earnings increases resulting from a promotion when the

 

 

HB1266- 29 -LRB098 08105 EFG 38196 b

1promotion was not submitted by a community college. Nothing in
2this subsection (k) shall require any community college to
3submit any information to the Community College Board.
4    (l) 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    (m) 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; 97-813, eff.
217-13-12; revised 10-17-12.)
 
22    (40 ILCS 5/16-158)   (from Ch. 108 1/2, par. 16-158)
23    Sec. 16-158. Contributions by State and other employing
24units.
25    (a) The State shall make contributions to the System by

 

 

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1means of appropriations from the Common School Fund and other
2State funds of amounts which, together with other employer
3contributions, employee contributions, investment income, and
4other income, will be sufficient to meet the cost of
5maintaining and administering the System on a 100% 90% funded
6basis in accordance with actuarial recommendations.
7    The Board shall determine the amount of State contributions
8required for each fiscal year on the basis of the actuarial
9tables and other assumptions adopted by the Board and the
10recommendations of the actuary, using the formula in subsection
11(b-3).
12    (a-1) Annually, on or before November 15 until November 15,
132011, the Board shall certify to the Governor the amount of the
14required State contribution for the coming fiscal year. The
15certification under this subsection (a-1) shall include a copy
16of the actuarial recommendations upon which it is based and
17shall specifically identify the System's projected State
18normal cost 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
26recertify to the Governor the amount of the required State

 

 

HB1266- 31 -LRB098 08105 EFG 38196 b

1contribution to the System for State fiscal year 2006, taking
2into account the changes in required State contributions made
3by this amendatory Act of the 94th General Assembly.
4    On or before April 1, 2011, the Board shall recalculate and
5recertify to the Governor the amount of the required State
6contribution to the System for State fiscal year 2011, applying
7the changes made by Public Act 96-889 to the System's assets
8and liabilities as of June 30, 2009 as though Public Act 96-889
9was approved on that date.
10    (a-5) On or before November 1 of each year, beginning
11November 1, 2012, the Board shall submit to the State Actuary,
12the Governor, and the General Assembly a proposed certification
13of the amount of the required State contribution to the System
14for the next fiscal year, along with all of the actuarial
15assumptions, calculations, and data upon which that proposed
16certification is based. On or before January 1 of each year,
17beginning January 1, 2013, the State Actuary shall issue a
18preliminary report concerning the proposed certification and
19identifying, if necessary, recommended changes in actuarial
20assumptions that the Board must consider before finalizing its
21certification of the required State contributions. On or before
22January 15, 2013 and each January 15 thereafter, the Board
23shall certify to the Governor and the General Assembly the
24amount of the required State contribution for the next fiscal
25year. The Board's certification must note any deviations from
26the State Actuary's recommended changes, the reason or reasons

 

 

HB1266- 32 -LRB098 08105 EFG 38196 b

1for not following the State Actuary's recommended changes, and
2the fiscal impact of not following the State Actuary's
3recommended changes on the required State contribution.
4    (b) Through State fiscal year 1995, the State contributions
5shall be paid to the System in accordance with Section 18-7 of
6the School Code.
7    (b-1) Beginning in State fiscal year 1996, on the 15th day
8of each month, or as soon thereafter as may be practicable, the
9Board shall submit vouchers for payment of State contributions
10to the System, in a total monthly amount of one-twelfth of the
11required annual State contribution certified under subsection
12(a-1). From the effective date of this amendatory Act of the
1393rd General Assembly through June 30, 2004, the Board shall
14not submit vouchers for the remainder of fiscal year 2004 in
15excess of the fiscal year 2004 certified contribution amount
16determined under this Section after taking into consideration
17the transfer to the System under subsection (a) of Section
186z-61 of the State Finance Act. These vouchers shall be paid by
19the State Comptroller and Treasurer by warrants drawn on the
20funds appropriated to the System for that fiscal year.
21    If in any month the amount remaining unexpended from all
22other appropriations to the System for the applicable fiscal
23year (including the appropriations to the System under Section
248.12 of the State Finance Act and Section 1 of the State
25Pension Funds Continuing Appropriation Act) is less than the
26amount lawfully vouchered under this subsection, the

 

 

HB1266- 33 -LRB098 08105 EFG 38196 b

1difference shall be paid from the Common School Fund under the
2continuing appropriation authority provided in Section 1.1 of
3the State Pension Funds Continuing Appropriation Act.
4    (b-2) Allocations from the Common School Fund apportioned
5to school districts not coming under this System shall not be
6diminished or affected by the provisions of this Article.
7    (b-3) For State fiscal years 2012 through 2045, the minimum
8contribution to the System to be made by the State for each
9fiscal year shall be an amount determined by the System to be
10sufficient to bring the total assets of the System up to 100%
1190% of the total actuarial liabilities of the System by the end
12of State fiscal year 2045. In making these determinations, the
13required State contribution shall be calculated each year as a
14level percentage of payroll over the years remaining to and
15including fiscal year 2045 and shall be determined under the
16projected unit credit actuarial cost method.
17    For State fiscal years 1996 through 2005, the State
18contribution to the System, as a percentage of the applicable
19employee payroll, shall be increased in equal annual increments
20so that by State fiscal year 2011, the State is contributing at
21the rate required under this Section; except that in the
22following specified State fiscal years, the State contribution
23to the System shall not be less than the following indicated
24percentages of the applicable employee payroll, even if the
25indicated percentage will produce a State contribution in
26excess of the amount otherwise required under this subsection

 

 

HB1266- 34 -LRB098 08105 EFG 38196 b

1and subsection (a), and notwithstanding any contrary
2certification made under subsection (a-1) before the effective
3date of this amendatory Act of 1998: 10.02% in FY 1999; 10.77%
4in FY 2000; 11.47% in FY 2001; 12.16% in FY 2002; 12.86% in FY
52003; and 13.56% in FY 2004.
6    Notwithstanding any other provision of this Article, the
7total required State contribution for State fiscal year 2006 is
8$534,627,700.
9    Notwithstanding any other provision of this Article, the
10total required State contribution for State fiscal year 2007 is
11$738,014,500.
12    For each of State fiscal years 2008 through 2009, the State
13contribution to the System, as a percentage of the applicable
14employee payroll, shall be increased in equal annual increments
15from the required State contribution for State fiscal year
162007, so that by State fiscal year 2011, the State is
17contributing at the rate otherwise required under this Section.
18    Notwithstanding any other provision of this Article, the
19total required State contribution for State fiscal year 2010 is
20$2,089,268,000 and shall be made from the proceeds of bonds
21sold in fiscal year 2010 pursuant to Section 7.2 of the General
22Obligation Bond Act, less (i) the pro rata share of bond sale
23expenses determined by the System's share of total bond
24proceeds, (ii) any amounts received from the Common School Fund
25in fiscal year 2010, and (iii) any reduction in bond proceeds
26due to the issuance of discounted bonds, if applicable.

 

 

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1    Notwithstanding any other provision of this Article, the
2total required State contribution for State fiscal year 2011 is
3the amount recertified by the System on or before April 1, 2011
4pursuant to subsection (a-1) of this Section and shall be made
5from the proceeds of bonds sold in fiscal year 2011 pursuant to
6Section 7.2 of the General Obligation Bond Act, less (i) the
7pro rata share of bond sale expenses determined by the System's
8share of total bond proceeds, (ii) any amounts received from
9the Common School Fund in fiscal year 2011, and (iii) any
10reduction in bond proceeds due to the issuance of discounted
11bonds, if applicable. This amount shall include, in addition to
12the amount certified by the System, an amount necessary to meet
13employer contributions required by the State as an employer
14under paragraph (e) of this Section, which may also be used by
15the System for contributions required by paragraph (a) of
16Section 16-127.
17    Beginning in State fiscal year 2046, the minimum State
18contribution for each fiscal year shall be the amount needed to
19maintain the total assets of the System at 100% 90% of the
20total actuarial liabilities of the System.
21    Amounts received by the System pursuant to Section 25 of
22the Budget Stabilization Act or Section 8.12 of the State
23Finance Act in any fiscal year do not reduce and do not
24constitute payment of any portion of the minimum State
25contribution required under this Article in that fiscal year.
26Such amounts shall not reduce, and shall not be included in the

 

 

HB1266- 36 -LRB098 08105 EFG 38196 b

1calculation of, the required State contributions under this
2Article in any future year until the System has reached a
3funding ratio of at least 100% 90%. A reference in this Article
4to the "required State contribution" or any substantially
5similar term does not include or apply to any amounts payable
6to the System under Section 25 of the Budget Stabilization Act.
7    Notwithstanding any other provision of this Section, the
8required State contribution for State fiscal year 2005 and for
9fiscal year 2008 and each fiscal year thereafter, as calculated
10under this Section and certified under subsection (a-1), shall
11not exceed an amount equal to (i) the amount of the required
12State contribution that would have been calculated under this
13Section for that fiscal year if the System had not received any
14payments under subsection (d) of Section 7.2 of the General
15Obligation Bond Act, minus (ii) the portion of the State's
16total debt service payments for that fiscal year on the bonds
17issued in fiscal year 2003 for the purposes of that Section
187.2, as determined and certified by the Comptroller, that is
19the same as the System's portion of the total moneys
20distributed under subsection (d) of Section 7.2 of the General
21Obligation Bond Act. In determining this maximum for State
22fiscal years 2008 through 2010, however, the amount referred to
23in item (i) shall be increased, as a percentage of the
24applicable employee payroll, in equal increments calculated
25from the sum of the required State contribution for State
26fiscal year 2007 plus the applicable portion of the State's

 

 

HB1266- 37 -LRB098 08105 EFG 38196 b

1total debt service payments for fiscal year 2007 on the bonds
2issued in fiscal year 2003 for the purposes of Section 7.2 of
3the General Obligation Bond Act, so that, by State fiscal year
42011, the State is contributing at the rate otherwise required
5under this Section.
6    (c) Payment of the required State contributions and of all
7pensions, retirement annuities, death benefits, refunds, and
8other benefits granted under or assumed by this System, and all
9expenses in connection with the administration and operation
10thereof, are obligations of the State.
11    If members are paid from special trust or federal funds
12which are administered by the employing unit, whether school
13district or other unit, the employing unit shall pay to the
14System from such funds the full accruing retirement costs based
15upon that service, as determined by the System. Employer
16contributions, based on salary paid to members from federal
17funds, may be forwarded by the distributing agency of the State
18of Illinois to the System prior to allocation, in an amount
19determined in accordance with guidelines established by such
20agency and the System.
21    (d) Effective July 1, 1986, any employer of a teacher as
22defined in paragraph (8) of Section 16-106 shall pay the
23employer's normal cost of benefits based upon the teacher's
24service, in addition to employee contributions, as determined
25by the System. Such employer contributions shall be forwarded
26monthly in accordance with guidelines established by the

 

 

HB1266- 38 -LRB098 08105 EFG 38196 b

1System.
2    However, with respect to benefits granted under Section
316-133.4 or 16-133.5 to a teacher as defined in paragraph (8)
4of Section 16-106, the employer's contribution shall be 12%
5(rather than 20%) of the member's highest annual salary rate
6for each year of creditable service granted, and the employer
7shall also pay the required employee contribution on behalf of
8the teacher. For the purposes of Sections 16-133.4 and
916-133.5, a teacher as defined in paragraph (8) of Section
1016-106 who is serving in that capacity while on leave of
11absence from another employer under this Article shall not be
12considered an employee of the employer from which the teacher
13is on leave.
14    (e) Beginning July 1, 1998, every employer of a teacher
15shall pay to the System an employer contribution computed as
16follows:
17        (1) Beginning July 1, 1998 through June 30, 1999, the
18    employer contribution shall be equal to 0.3% of each
19    teacher's salary.
20        (2) Beginning July 1, 1999 and thereafter, the employer
21    contribution shall be equal to 0.58% of each teacher's
22    salary.
23The school district or other employing unit may pay these
24employer contributions out of any source of funding available
25for that purpose and shall forward the contributions to the
26System on the schedule established for the payment of member

 

 

HB1266- 39 -LRB098 08105 EFG 38196 b

1contributions.
2    These employer contributions are intended to offset a
3portion of the cost to the System of the increases in
4retirement benefits resulting from this amendatory Act of 1998.
5    Each employer of teachers is entitled to a credit against
6the contributions required under this subsection (e) with
7respect to salaries paid to teachers for the period January 1,
82002 through June 30, 2003, equal to the amount paid by that
9employer under subsection (a-5) of Section 6.6 of the State
10Employees Group Insurance Act of 1971 with respect to salaries
11paid to teachers for that period.
12    The additional 1% employee contribution required under
13Section 16-152 by this amendatory Act of 1998 is the
14responsibility of the teacher and not the teacher's employer,
15unless the employer agrees, through collective bargaining or
16otherwise, to make the contribution on behalf of the teacher.
17    If an employer is required by a contract in effect on May
181, 1998 between the employer and an employee organization to
19pay, on behalf of all its full-time employees covered by this
20Article, all mandatory employee contributions required under
21this Article, then the employer shall be excused from paying
22the employer contribution required under this subsection (e)
23for the balance of the term of that contract. The employer and
24the employee organization shall jointly certify to the System
25the existence of the contractual requirement, in such form as
26the System may prescribe. This exclusion shall cease upon the

 

 

HB1266- 40 -LRB098 08105 EFG 38196 b

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

 

 

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1    Whenever it determines that a payment is or may be required
2under this subsection, the System shall calculate the amount of
3the payment and bill the employer for that amount. The bill
4shall specify the calculations used to determine the amount
5due. If the employer disputes the amount of the bill, it may,
6within 30 days after receipt of the bill, apply to the System
7in writing for a recalculation. The application must specify in
8detail the grounds of the dispute and, if the employer asserts
9that the calculation is subject to subsection (g) or (h) of
10this Section, must include an affidavit setting forth and
11attesting to all facts within the employer's knowledge that are
12pertinent to the applicability of that subsection. Upon
13receiving a timely application for recalculation, the System
14shall review the application and, if appropriate, recalculate
15the amount due.
16    The employer contributions required under this subsection
17(f) may be paid in the form of a lump sum within 90 days after
18receipt of the bill. If the employer contributions are not paid
19within 90 days after receipt of the bill, then interest will be
20charged at a rate equal to the System's annual actuarially
21assumed rate of return on investment compounded annually from
22the 91st day after receipt of the bill. Payments must be
23concluded within 3 years after the employer's receipt of the
24bill.
25    (g) This subsection (g) applies only to payments made or
26salary increases given on or after June 1, 2005 but before July

 

 

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11, 2011. The changes made by Public Act 94-1057 shall not
2require the System to refund any payments received before July
331, 2006 (the effective date of Public Act 94-1057).
4    When assessing payment for any amount due under subsection
5(f), the System shall exclude salary increases paid to teachers
6under contracts or collective bargaining agreements entered
7into, amended, or renewed before June 1, 2005.
8    When assessing payment for any amount due under subsection
9(f), the System shall exclude salary increases paid to a
10teacher at a time when the teacher is 10 or more years from
11retirement eligibility under Section 16-132 or 16-133.2.
12    When assessing payment for any amount due under subsection
13(f), the System shall exclude salary increases resulting from
14overload work, including summer school, when the school
15district has certified to the System, and the System has
16approved the certification, that (i) the overload work is for
17the sole purpose of classroom instruction in excess of the
18standard number of classes for a full-time teacher in a school
19district during a school year and (ii) the salary increases are
20equal to or less than the rate of pay for classroom instruction
21computed on the teacher's current salary and work schedule.
22    When assessing payment for any amount due under subsection
23(f), the System shall exclude a salary increase resulting from
24a promotion (i) for which the employee is required to hold a
25certificate or supervisory endorsement issued by the State
26Teacher Certification Board that is a different certification

 

 

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1or supervisory endorsement than is required for the teacher's
2previous position and (ii) to a position that has existed and
3been filled by a member for no less than one complete academic
4year and the salary increase from the promotion is an increase
5that results in an amount no greater than the lesser of the
6average salary paid for other similar positions in the district
7requiring the same certification or the amount stipulated in
8the collective bargaining agreement for a similar position
9requiring the same certification.
10    When assessing payment for any amount due under subsection
11(f), the System shall exclude any payment to the teacher from
12the State of Illinois or the State Board of Education over
13which the employer does not have discretion, notwithstanding
14that the payment is included in the computation of final
15average salary.
16    (h) When assessing payment for any amount due under
17subsection (f), the System shall exclude any salary increase
18described in subsection (g) of this Section given on or after
19July 1, 2011 but before July 1, 2014 under a contract or
20collective bargaining agreement entered into, amended, or
21renewed on or after June 1, 2005 but before July 1, 2011.
22Notwithstanding any other provision of this Section, any
23payments made or salary increases given after June 30, 2014
24shall be used in assessing payment for any amount due under
25subsection (f) of this Section.
26    (i) The System shall prepare a report and file copies of

 

 

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1the report with the Governor and the General Assembly by
2January 1, 2007 that contains all of the following information:
3        (1) The number of recalculations required by the
4    changes made to this Section by Public Act 94-1057 for each
5    employer.
6        (2) The dollar amount by which each employer's
7    contribution to the System was changed due to
8    recalculations required by Public Act 94-1057.
9        (3) The total amount the System received from each
10    employer as a result of the changes made to this Section by
11    Public Act 94-4.
12        (4) The increase in the required State contribution
13    resulting from the changes made to this Section by Public
14    Act 94-1057.
15    (j) 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    (k) For purposes of determining the required State

 

 

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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(Source: P.A. 96-43, eff. 7-15-09; 96-1497, eff. 1-14-11;
596-1511, eff. 1-27-11; 96-1554, eff. 3-18-11; 97-694, eff.
66-18-12; 97-813, eff. 7-13-12.)
 
7    (40 ILCS 5/18-131)  (from Ch. 108 1/2, par. 18-131)
8    Sec. 18-131. Financing; employer contributions.
9    (a) The State of Illinois shall make contributions to this
10System by appropriations of the amounts which, together with
11the contributions of participants, net earnings on
12investments, and other income, will meet the costs of
13maintaining and administering this System on a 100% 90% funded
14basis in accordance with actuarial recommendations.
15    (b) The Board shall determine the amount of State
16contributions required for each fiscal year on the basis of the
17actuarial tables and other assumptions adopted by the Board and
18the prescribed rate of interest, using the formula in
19subsection (c).
20    (c) For State fiscal years 2012 through 2045, the minimum
21contribution to the System to be made by the State for each
22fiscal year shall be an amount determined by the System to be
23sufficient to bring the total assets of the System up to 100%
2490% of the total actuarial liabilities of the System by the end
25of State fiscal year 2045. In making these determinations, the

 

 

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1required State contribution shall be calculated each year as a
2level percentage of payroll over the years remaining to and
3including fiscal year 2045 and shall be determined under the
4projected unit credit actuarial cost method.
5    For State fiscal years 1996 through 2005, the State
6contribution to the System, as a percentage of the applicable
7employee payroll, shall be increased in equal annual increments
8so that by State fiscal year 2011, the State is contributing at
9the rate required under this Section.
10    Notwithstanding any other provision of this Article, the
11total required State contribution for State fiscal year 2006 is
12$29,189,400.
13    Notwithstanding any other provision of this Article, the
14total required State contribution for State fiscal year 2007 is
15$35,236,800.
16    For each of State fiscal years 2008 through 2009, the State
17contribution to the System, as a percentage of the applicable
18employee payroll, shall be increased in equal annual increments
19from the required State contribution for State fiscal year
202007, so that by State fiscal year 2011, the State is
21contributing at the rate otherwise required under this Section.
22    Notwithstanding any other provision of this Article, the
23total required State contribution for State fiscal year 2010 is
24$78,832,000 and shall be made from the proceeds of bonds sold
25in fiscal year 2010 pursuant to Section 7.2 of the General
26Obligation Bond Act, less (i) the pro rata share of bond sale

 

 

HB1266- 47 -LRB098 08105 EFG 38196 b

1expenses determined by the System's share of total bond
2proceeds, (ii) any amounts received from the General Revenue
3Fund in fiscal year 2010, and (iii) any reduction in bond
4proceeds due to the issuance of discounted bonds, if
5applicable.
6    Notwithstanding any other provision of this Article, the
7total required State contribution for State fiscal year 2011 is
8the amount recertified by the System on or before April 1, 2011
9pursuant to Section 18-140 and shall be made from the proceeds
10of bonds sold in fiscal year 2011 pursuant to Section 7.2 of
11the General Obligation Bond Act, less (i) the pro rata share of
12bond sale expenses determined by the System's share of total
13bond proceeds, (ii) any amounts received from the General
14Revenue Fund in fiscal year 2011, and (iii) any reduction in
15bond proceeds due to the issuance of discounted bonds, if
16applicable.
17    Beginning in State fiscal year 2046, the minimum State
18contribution for each fiscal year shall be the amount needed to
19maintain the total assets of the System at 100% 90% of the
20total actuarial liabilities of the System.
21    Amounts received by the System pursuant to Section 25 of
22the Budget Stabilization Act or Section 8.12 of the State
23Finance Act in any fiscal year do not reduce and do not
24constitute payment of any portion of the minimum State
25contribution required under this Article in that fiscal year.
26Such amounts shall not reduce, and shall not be included in the

 

 

HB1266- 48 -LRB098 08105 EFG 38196 b

1calculation of, the required State contributions under this
2Article in any future year until the System has reached a
3funding ratio of at least 100% 90%. A reference in this Article
4to the "required State contribution" or any substantially
5similar term does not include or apply to any amounts payable
6to the System under Section 25 of the Budget Stabilization Act.
7    Notwithstanding any other provision of this Section, the
8required State contribution for State fiscal year 2005 and for
9fiscal year 2008 and each fiscal year thereafter, as calculated
10under this Section and certified under Section 18-140, shall
11not exceed an amount equal to (i) the amount of the required
12State contribution that would have been calculated under this
13Section for that fiscal year if the System had not received any
14payments under subsection (d) of Section 7.2 of the General
15Obligation Bond Act, minus (ii) the portion of the State's
16total debt service payments for that fiscal year on the bonds
17issued in fiscal year 2003 for the purposes of that Section
187.2, as determined and certified by the Comptroller, that is
19the same as the System's portion of the total moneys
20distributed under subsection (d) of Section 7.2 of the General
21Obligation Bond Act. In determining this maximum for State
22fiscal years 2008 through 2010, however, the amount referred to
23in item (i) shall be increased, as a percentage of the
24applicable employee payroll, in equal increments calculated
25from the sum of the required State contribution for State
26fiscal year 2007 plus the applicable portion of the State's

 

 

HB1266- 49 -LRB098 08105 EFG 38196 b

1total debt service payments for fiscal year 2007 on the bonds
2issued in fiscal year 2003 for the purposes of Section 7.2 of
3the General Obligation Bond Act, so that, by State fiscal year
42011, the State is contributing at the rate otherwise required
5under this Section.
6    (d) For purposes of determining the required State
7contribution to the System, the value of the System's assets
8shall be equal to the actuarial value of the System's assets,
9which shall be calculated as follows:
10    As of June 30, 2008, the actuarial value of the System's
11assets shall be equal to the market value of the assets as of
12that date. In determining the actuarial value of the System's
13assets for fiscal years after June 30, 2008, any actuarial
14gains or losses from investment return incurred in a fiscal
15year shall be recognized in equal annual amounts over the
165-year period following that fiscal year.
17    (e) For purposes of determining the required State
18contribution to the system for a particular year, the actuarial
19value of assets shall be assumed to earn a rate of return equal
20to the system's actuarially assumed rate of return.
21(Source: P.A. 96-43, eff. 7-15-09; 96-1497, eff. 1-14-11;
2296-1511, eff. 1-27-11; 96-1554, eff. 3-18-11; 97-813, eff.
237-13-12.)
 
24    Section 99. Effective date. This Act takes effect upon
25becoming law.