98TH GENERAL ASSEMBLY
State of Illinois
2013 and 2014
HB1280

 

Introduced , by Rep. Darlene J. Senger

 

SYNOPSIS AS INTRODUCED:
 
40 ILCS 5/4-106  from Ch. 108 1/2, par. 4-106
40 ILCS 5/4-106.2 new
40 ILCS 5/7-109  from Ch. 108 1/2, par. 7-109
40 ILCS 5/7-172  from Ch. 108 1/2, par. 7-172
30 ILCS 805/8.37 new

    Amends the Downstate Firefighter and Illinois Municipal Retirement Fund (IMRF) Articles of the Illinois Pension Code. Allows the chief of certain municipal fire departments to elect to participate in IMRF rather than in the municipality's firefighter pension fund. Makes related changes. 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

 

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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 4-106, 7-109, and 7-172 and by adding Section 4-106.2
6as follows:
 
7    (40 ILCS 5/4-106)  (from Ch. 108 1/2, par. 4-106)
8    Sec. 4-106. Firefighter, firefighters. "Firefighter,
9firefighters":
10    (a) In municipalities which have adopted Division 1 of
11Article 10 of the Illinois Municipal Code, any person employed
12in the municipality's fire service as a firefighter, fire
13engineer, marine engineer, fire pilot, bomb technician or scuba
14diver; and in any of these positions where such person's duties
15also include those of a firefighter as classified by the Civil
16Service Commission of that city, and whose duty is to
17participate in the work of controlling and extinguishing fires
18at the location of any such fires.
19    (b) In municipalities which are subject to Division 2.1 of
20Article 10 of the Illinois Municipal Code, any person employed
21by a city in its fire service as a firefighter, fire engineer,
22marine engineer, fire pilot, bomb technician, or scuba diver;
23and, in any of these positions whose duties also include those

 

 

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1of a firefighter and are certified in the same manner as a
2firefighter in that city.
3    (c) In municipalities which are subject to neither Division
41 nor Division 2.1 of Article 10 of the Illinois Municipal
5Code, any person who would have been included as a firefighter
6under sub-paragraph (a) or (b) above except that he served as a
7de facto and not as a de jure firefighter.
8    (d) Notwithstanding the other provisions of this Section,
9"firefighter" does not include any person who is actively
10participating in the State Universities Retirement System
11under subsection (h) of Section 15-107 with respect to the
12employment for which he or she is a participating employee in
13that System.
14    Notwithstanding the other provisions of this Section,
15"firefighter" does not include any person who has elected under
16Section 4-106.2 to participate in the Illinois Municipal
17Retirement Fund rather than in a fund established under this
18Article, with respect to the employment for which he or she is
19a participating employee in the Illinois Municipal Retirement
20Fund.
21    (e) This amendatory Act of 1977 does not affect persons
22covered by this Article prior to September 22, 1977.
23(Source: P.A. 90-576, eff. 3-31-98.)
 
24    (40 ILCS 5/4-106.2 new)
25    Sec. 4-106.2. Participation by chief. Any person who is

 

 

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1employed as chief of the fire department of a "participating
2municipality" as defined in Section 7-106 of this Code may
3elect to participate in the Illinois Municipal Retirement Fund
4rather than in a fund created under this Article. The election
5shall be filed in writing with the Board of the Illinois
6Municipal Retirement Fund.
7    An election under this Section is irrevocable with respect
8to the person's employment within that fire department, without
9regard to whether the person continues to be employed as chief
10of the fire department or is employed in some other rank or
11capacity within the fire department.
 
12    (40 ILCS 5/7-109)  (from Ch. 108 1/2, par. 7-109)
13    Sec. 7-109. Employee.
14    (1) "Employee" means any person who:
15        (a) 1. Receives earnings as payment for the performance
16        of personal services or official duties out of the
17        general fund of a municipality, or out of any special
18        fund or funds controlled by a municipality, or by an
19        instrumentality thereof, or a participating
20        instrumentality, including, in counties, the fees or
21        earnings of any county fee office; and
22            2. Under the usual common law rules applicable in
23        determining the employer-employee relationship, has
24        the status of an employee with a municipality, or any
25        instrumentality thereof, or a participating

 

 

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

 

 

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

 

 

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1    However, (i) any head of a police department who was a
2    participant under this Article immediately before October
3    1, 1977 and did not elect, under Section 3-109 of this Act,
4    to participate in a police pension fund shall be an
5    "employee", and (ii) any chief of police who elects to
6    participate in this Fund under Section 3-109.1 of this
7    Code, regardless of whether such person continues to be
8    employed as chief of police or is employed in some other
9    rank or capacity within the police department, shall be an
10    employee under this Article for so long as such person is
11    employed to perform police duties by a participating
12    municipality and has not lawfully rescinded that election,
13    and (iii) any chief of a fire department who elects to
14    participate in this Fund under Section 4-106.2 of this
15    Code, regardless of whether the person continues to be
16    employed as chief of the fire department or is employed in
17    some other rank or capacity within the fire department,
18    shall be an employee under this Article for so long as the
19    person is employed within the fire department by the
20    participating municipality.
21        (c) After August 26, 2011 (the effective date of Public
22    Act 97-609), are contributors to or eligible to contribute
23    to a Taft-Hartley pension plan established on or before
24    June 1, 2011 and are employees of a theatre, arena, or
25    convention center that is located in a municipality located
26    in a county with a population greater than 5,000,000, and

 

 

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1    to which the participating municipality is required to
2    contribute as the person's employer based on earnings from
3    the municipality. Nothing in this paragraph shall affect
4    service credit or creditable service for any period of
5    service prior to August 26, 2011, and this paragraph shall
6    not apply to individuals who are participating in the Fund
7    prior to August 26, 2011.
8    (3) All persons, including, without limitation, public
9defenders and probation officers, who receive earnings from
10general or special funds of a county for performance of
11personal services or official duties within the territorial
12limits of the county, are employees of the county (unless
13excluded by subsection (2) of this Section) notwithstanding
14that they may be appointed by and are subject to the direction
15of a person or persons other than a county board or a county
16officer. It is hereby established that an employer-employee
17relationship under the usual common law rules exists between
18such employees and the county paying their salaries by reason
19of the fact that the county boards fix their rates of
20compensation, appropriate funds for payment of their earnings
21and otherwise exercise control over them. This finding and this
22amendatory Act shall apply to all such employees from the date
23of appointment whether such date is prior to or after the
24effective date of this amendatory Act and is intended to
25clarify existing law pertaining to their status as
26participating employees in the Fund.

 

 

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1(Source: P.A. 97-429, eff. 8-16-11; 97-609, eff. 8-26-11;
297-813, eff. 7-13-12.)
 
3    (40 ILCS 5/7-172)  (from Ch. 108 1/2, par. 7-172)
4    Sec. 7-172. Contributions by participating municipalities
5and participating instrumentalities.
6    (a) Each participating municipality and each participating
7instrumentality shall make payment to the fund as follows:
8        1. municipality contributions in an amount determined
9    by applying the municipality contribution rate to each
10    payment of earnings paid to each of its participating
11    employees;
12        2. an amount equal to the employee contributions
13    provided by paragraph (a) of Section 7-173, whether or not
14    the employee contributions are withheld as permitted by
15    that Section;
16        3. all accounts receivable, together with interest
17    charged thereon, as provided in Section 7-209;
18        4. if it has no participating employees with current
19    earnings, an amount payable which, over a closed period of
20    20 years for participating municipalities and 10 years for
21    participating instrumentalities, will amortize, at the
22    effective rate for that year, any unfunded obligation. The
23    unfunded obligation shall be computed as provided in
24    paragraph 2 of subsection (b);
25        5. if it has fewer than 7 participating employees or a

 

 

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1    negative balance in its municipality reserve, the greater
2    of (A) an amount payable that, over a period of 20 years,
3    will amortize at the effective rate for that year any
4    unfunded obligation, computed as provided in paragraph 2 of
5    subsection (b) or (B) the amount required by paragraph 1 of
6    this subsection (a).
7    (b) A separate municipality contribution rate shall be
8determined for each calendar year for all participating
9municipalities together with all instrumentalities thereof.
10The municipality contribution rate shall be determined for
11participating instrumentalities as if they were participating
12municipalities. The municipality contribution rate shall be
13the sum of the following percentages:
14        1. The percentage of earnings of all the participating
15    employees of all participating municipalities and
16    participating instrumentalities which, if paid over the
17    entire period of their service, will be sufficient when
18    combined with all employee contributions available for the
19    payment of benefits, to provide all annuities for
20    participating employees, and the $3,000 death benefit
21    payable under Sections 7-158 and 7-164, such percentage to
22    be known as the normal cost rate.
23        2. The percentage of earnings of the participating
24    employees of each participating municipality and
25    participating instrumentalities necessary to adjust for
26    the difference between the present value of all benefits,

 

 

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1    excluding temporary and total and permanent disability and
2    death benefits, to be provided for its participating
3    employees and the sum of its accumulated municipality
4    contributions and the accumulated employee contributions
5    and the present value of expected future employee and
6    municipality contributions pursuant to subparagraph 1 of
7    this paragraph (b). This adjustment shall be spread over
8    the remainder of the period that is allowable under
9    generally accepted accounting principles.
10        3. The percentage of earnings of the participating
11    employees of all municipalities and participating
12    instrumentalities necessary to provide the present value
13    of all temporary and total and permanent disability
14    benefits granted during the most recent year for which
15    information is available.
16        4. The percentage of earnings of the participating
17    employees of all participating municipalities and
18    participating instrumentalities necessary to provide the
19    present value of the net single sum death benefits expected
20    to become payable from the reserve established under
21    Section 7-206 during the year for which this rate is fixed.
22        5. The percentage of earnings necessary to meet any
23    deficiency arising in the Terminated Municipality Reserve.
24    (c) A separate municipality contribution rate shall be
25computed for each participating municipality or participating
26instrumentality for its sheriff's law enforcement employees.

 

 

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1    A separate municipality contribution rate shall be
2computed for the sheriff's law enforcement employees of each
3forest preserve district that elects to have such employees.
4For the period from January 1, 1986 to December 31, 1986, such
5rate shall be the forest preserve district's regular rate plus
62%.
7    In the event that the Board determines that there is an
8actuarial deficiency in the account of any municipality with
9respect to a person who has elected to participate in the Fund
10under Section 3-109.1 of this Code, the Board may adjust the
11municipality's contribution rate so as to make up that
12deficiency over such reasonable period of time as the Board may
13determine.
14    (c-5) In the event that the Board determines that there is
15an actuarial deficiency in the account of any municipality with
16respect to a person who has elected to participate in the Fund
17under Section 4-106.2 of this Code, the Board may adjust the
18municipality's contribution rate so as to make up that
19deficiency over such reasonable period of time as the Board may
20determine.
21    (d) The Board may establish a separate municipality
22contribution rate for all employees who are program
23participants employed under the federal Comprehensive
24Employment Training Act by all of the participating
25municipalities and instrumentalities. The Board may also
26provide that, in lieu of a separate municipality rate for these

 

 

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1employees, a portion of the municipality contributions for such
2program participants shall be refunded or an extra charge
3assessed so that the amount of municipality contributions
4retained or received by the fund for all CETA program
5participants shall be an amount equal to that which would be
6provided by the separate municipality contribution rate for all
7such program participants. Refunds shall be made to prime
8sponsors of programs upon submission of a claim therefor and
9extra charges shall be assessed to participating
10municipalities and instrumentalities. In establishing the
11municipality contribution rate as provided in paragraph (b) of
12this Section, the use of a separate municipality contribution
13rate for program participants or the refund of a portion of the
14municipality contributions, as the case may be, may be
15considered.
16    (e) Computations of municipality contribution rates for
17the following calendar year shall be made prior to the
18beginning of each year, from the information available at the
19time the computations are made, and on the assumption that the
20employees in each participating municipality or participating
21instrumentality at such time will continue in service until the
22end of such calendar year at their respective rates of earnings
23at such time.
24    (f) Any municipality which is the recipient of State
25allocations representing that municipality's contributions for
26retirement annuity purposes on behalf of its employees as

 

 

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1provided in Section 12-21.16 of the Illinois Public Aid Code
2shall pay the allocations so received to the Board for such
3purpose. Estimates of State allocations to be received during
4any taxable year shall be considered in the determination of
5the municipality's tax rate for that year under Section 7-171.
6If a special tax is levied under Section 7-171, none of the
7proceeds may be used to reimburse the municipality for the
8amount of State allocations received and paid to the Board. Any
9multiple-county or consolidated health department which
10receives contributions from a county under Section 11.2 of "An
11Act in relation to establishment and maintenance of county and
12multiple-county health departments", approved July 9, 1943, as
13amended, or distributions under Section 3 of the Department of
14Public Health Act, shall use these only for municipality
15contributions by the health department.
16    (g) Municipality contributions for the several purposes
17specified shall, for township treasurers and employees in the
18offices of the township treasurers who meet the qualifying
19conditions for coverage hereunder, be allocated among the
20several school districts and parts of school districts serviced
21by such treasurers and employees in the proportion which the
22amount of school funds of each district or part of a district
23handled by the treasurer bears to the total amount of all
24school funds handled by the treasurer.
25    From the funds subject to allocation among districts and
26parts of districts pursuant to the School Code, the trustees

 

 

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1shall withhold the proportionate share of the liability for
2municipality contributions imposed upon such districts by this
3Section, in respect to such township treasurers and employees
4and remit the same to the Board.
5    The municipality contribution rate for an educational
6service center shall initially be the same rate for each year
7as the regional office of education or school district which
8serves as its administrative agent. When actuarial data become
9available, a separate rate shall be established as provided in
10subparagraph (i) of this Section.
11    The municipality contribution rate for a public agency,
12other than a vocational education cooperative, formed under the
13Intergovernmental Cooperation Act shall initially be the
14average rate for the municipalities which are parties to the
15intergovernmental agreement. When actuarial data become
16available, a separate rate shall be established as provided in
17subparagraph (i) of this Section.
18    (h) Each participating municipality and participating
19instrumentality shall make the contributions in the amounts
20provided in this Section in the manner prescribed from time to
21time by the Board and all such contributions shall be
22obligations of the respective participating municipalities and
23participating instrumentalities to this fund. The failure to
24deduct any employee contributions shall not relieve the
25participating municipality or participating instrumentality of
26its obligation to this fund. Delinquent payments of

 

 

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1contributions due under this Section may, with interest, be
2recovered by civil action against the participating
3municipalities or participating instrumentalities.
4Municipality contributions, other than the amount necessary
5for employee contributions, for periods of service by employees
6from whose earnings no deductions were made for employee
7contributions to the fund, may be charged to the municipality
8reserve for the municipality or participating instrumentality.
9    (i) Contributions by participating instrumentalities shall
10be determined as provided herein except that the percentage
11derived under subparagraph 2 of paragraph (b) of this Section,
12and the amount payable under subparagraph 4 of paragraph (a) of
13this Section, shall be based on an amortization period of 10
14years.
15    (j) Notwithstanding the other provisions of this Section,
16the additional unfunded liability accruing as a result of this
17amendatory Act of the 94th General Assembly shall be amortized
18over a period of 30 years beginning on January 1 of the second
19calendar year following the calendar year in which this
20amendatory Act takes effect, except that the employer may
21provide for a longer amortization period by adopting a
22resolution or ordinance specifying a 35-year or 40-year period
23and submitting a certified copy of the ordinance or resolution
24to the fund no later than June 1 of the calendar year following
25the calendar year in which this amendatory Act takes effect.
26    (k) If the amount of a participating employee's reported

 

 

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1earnings for any of the 12-month periods used to determine the
2final rate of earnings exceeds the employee's 12 month reported
3earnings with the same employer for the previous year by the
4greater of 6% or 1.5 times the annual increase in the Consumer
5Price Index-U, as established by the United States Department
6of Labor for the preceding September, the participating
7municipality or participating instrumentality that paid those
8earnings shall pay to the Fund, in addition to any other
9contributions required under this Article, the present value of
10the increase in the pension resulting from the portion of the
11increase in salary that is in excess of the greater of 6% or
121.5 times the annual increase in the Consumer Price Index-U, as
13determined by the Fund. This present value shall be computed on
14the basis of the actuarial assumptions and tables used in the
15most recent actuarial valuation of the Fund that is available
16at the time of the computation.
17    Whenever it determines that a payment is or may be required
18under this subsection (k), the fund shall calculate the amount
19of the payment and bill the participating municipality or
20participating instrumentality for that amount. The bill shall
21specify the calculations used to determine the amount due. If
22the participating municipality or participating
23instrumentality disputes the amount of the bill, it may, within
2430 days after receipt of the bill, apply to the fund in writing
25for a recalculation. The application must specify in detail the
26grounds of the dispute. Upon receiving a timely application for

 

 

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1recalculation, the fund shall review the application and, if
2appropriate, recalculate the amount due. The participating
3municipality and participating instrumentality contributions
4required under this subsection (k) may be paid in the form of a
5lump sum within 90 days after receipt of the bill. If the
6participating municipality and participating instrumentality
7contributions are not paid within 90 days after receipt of the
8bill, then interest will be charged at a rate equal to the
9fund's annual actuarially assumed rate of return on investment
10compounded annually from the 91st day after receipt of the
11bill. Payments must be concluded within 3 years after receipt
12of the bill by the participating municipality or participating
13instrumentality.
14    When assessing payment for any amount due under this
15subsection (k), the fund shall exclude earnings increases
16resulting from overload or overtime earnings.
17    When assessing payment for any amount due under this
18subsection (k), the fund shall also exclude earnings increases
19attributable to standard employment promotions resulting in
20increased responsibility and workload.
21    This subsection (k) does not apply to earnings increases
22paid to individuals under contracts or collective bargaining
23agreements entered into, amended, or renewed before January 1,
242012 (the effective date of Public Act 97-609), earnings
25increases paid to members who are 10 years or more from
26retirement eligibility, or earnings increases resulting from

 

 

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1an increase in the number of hours required to be worked.
2    When assessing payment for any amount due under this
3subsection (k), the fund shall also exclude earnings
4attributable to personnel policies adopted before January 1,
52012 (the effective date of Public Act 97-609) as long as those
6policies are not applicable to employees who begin service on
7or after January 1, 2012 (the effective date of Public Act
897-609).
9(Source: P.A. 96-1084, eff. 7-16-10; 96-1140, eff. 7-21-10;
1097-333, eff. 8-12-11; 97-609, eff. 1-1-12; 97-933, eff.
118-10-12.)
 
12    Section 90. The State Mandates Act is amended by adding
13Section 8.37 as follows:
 
14    (30 ILCS 805/8.37 new)
15    Sec. 8.37. Exempt mandate. Notwithstanding Sections 6 and 8
16of this Act, no reimbursement by the State is required for the
17implementation of any mandate created by this amendatory Act of
18the 98th General Assembly.
 
19    Section 99. Effective date. This Act takes effect upon
20becoming law.