98TH GENERAL ASSEMBLY
State of Illinois
2013 and 2014
HB3411

 

Introduced , by Rep. Tom Cross - Elaine Nekritz

 

SYNOPSIS AS INTRODUCED:
 
See Index

    Amends the General Provisions, General Assembly, State Employee, State Universities, and Downstate Teacher Articles of the Illinois Pension Code. In the Downstate Teacher and State Universities Articles, creates a Tier 3 composite defined-benefit, defined-contribution retirement plan for employees hired on or after January 1, 2014 and certain others. Makes corresponding changes in other parts of those Articles and in the Retirement Systems Reciprocal Act. Increases the retirement age for certain Tier I members and participants. Changes the conditions of eligibility for, and the amount of, automatic annual increases for Tier I retirees. Increases required employee contributions for Tier I members and participants. Limits pensionable salary for Tier I and Tier 3 participants. Changes the required State contribution to each of the affected retirement systems so that those systems are 100% funded by 2043. Adds State funding guarantees. Makes other changes. Amends the Illinois Public Labor Relations Act to provide that this amendatory Act takes precedence. Amends the State Finance Act. To the list of standardized items of appropriation, adds "State retirement contribution for annual normal cost" and "State retirement contribution for unfunded accrued liability". Defines those terms. Amends the Governor's Office of Management and Budget Act. Adds those terms to a list of classifications to be used in statements and estimates of expenditures submitted to the Office in connection with the preparation of a State budget. Amends the State Mandates Act to require implementation without reimbursement. Includes an inseverability provision. Makes other changes. Effective immediately.


LRB098 10767 EFG 41183 b

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

 

 

A BILL FOR

 

HB3411LRB098 10767 EFG 41183 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 3. The Illinois Public Labor Relations Act is
5amended by changing Sections 4 and 15 as follows:
 
6    (5 ILCS 315/4)  (from Ch. 48, par. 1604)
7    Sec. 4. Management Rights. Employers shall not be required
8to bargain over matters of inherent managerial policy, which
9shall include such areas of discretion or policy as the
10functions of the employer, standards of services, its overall
11budget, the organizational structure and selection of new
12employees, examination techniques and direction of employees.
13Employers, however, shall be required to bargain collectively
14with regard to policy matters directly affecting wages, hours
15and terms and conditions of employment as well as the impact
16thereon upon request by employee representatives, but
17excluding the changes, the impact of changes, and the
18implementation of the changes set forth in this amendatory Act
19of the 98th General Assembly.
20    To preserve the rights of employers and exclusive
21representatives which have established collective bargaining
22relationships or negotiated collective bargaining agreements
23prior to the effective date of this Act, employers shall be

 

 

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1required to bargain collectively with regard to any matter
2concerning wages, hours or conditions of employment about which
3they have bargained for and agreed to in a collective
4bargaining agreement prior to the effective date of this Act,
5but excluding the changes, the impact of changes, and the
6implementation of the changes set forth in this amendatory Act
7of the 98th General Assembly.
8    The chief judge of the judicial circuit that employs a
9public employee who is a court reporter, as defined in the
10Court Reporters Act, has the authority to hire, appoint,
11promote, evaluate, discipline, and discharge court reporters
12within that judicial circuit.
13    Nothing in this amendatory Act of the 94th General Assembly
14shall be construed to intrude upon the judicial functions of
15any court. This amendatory Act of the 94th General Assembly
16applies only to nonjudicial administrative matters relating to
17the collective bargaining rights of court reporters.
18(Source: P.A. 94-98, eff. 7-1-05.)
 
19    (5 ILCS 315/15)  (from Ch. 48, par. 1615)
20    Sec. 15. Act Takes Precedence.
21    (a) In case of any conflict between the provisions of this
22Act and any other law (other than Section 5 of the State
23Employees Group Insurance Act of 1971 and other than the
24changes made to the Illinois Pension Code by Public Act 96-889
25and the changes, impact of changes, and the implementation of

 

 

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1the changes made to the Illinois Pension Code by this
2amendatory Act of the 98th 96th General Assembly), executive
3order or administrative regulation relating to wages, hours and
4conditions of employment and employment relations, the
5provisions of this Act or any collective bargaining agreement
6negotiated thereunder shall prevail and control. Nothing in
7this Act shall be construed to replace or diminish the rights
8of employees established by Sections 28 and 28a of the
9Metropolitan Transit Authority Act, Sections 2.15 through 2.19
10of the Regional Transportation Authority Act. The provisions of
11this Act are subject to the changes made by this amendatory Act
12of the 98th General Assembly and Section 5 of the State
13Employees Group Insurance Act of 1971. Nothing in this Act
14shall be construed to replace the necessity of complaints
15against a sworn peace officer, as defined in Section 2(a) of
16the Uniform Peace Officer Disciplinary Act, from having a
17complaint supported by a sworn affidavit.
18    (b) Except as provided in subsection (a) above, any
19collective bargaining contract between a public employer and a
20labor organization executed pursuant to this Act shall
21supersede any contrary statutes, charters, ordinances, rules
22or regulations relating to wages, hours and conditions of
23employment and employment relations adopted by the public
24employer or its agents. Any collective bargaining agreement
25entered into prior to the effective date of this Act shall
26remain in full force during its duration.

 

 

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1    (c) It is the public policy of this State, pursuant to
2paragraphs (h) and (i) of Section 6 of Article VII of the
3Illinois Constitution, that the provisions of this Act are the
4exclusive exercise by the State of powers and functions which
5might otherwise be exercised by home rule units. Such powers
6and functions may not be exercised concurrently, either
7directly or indirectly, by any unit of local government,
8including any home rule unit, except as otherwise authorized by
9this Act.
10(Source: P.A. 95-331, eff. 8-21-07; 96-889, eff. 1-1-11.)
 
11    Section 5. The Governor's Office of Management and Budget
12Act is amended by changing Sections 7 and 8 as follows:
 
13    (20 ILCS 3005/7)  (from Ch. 127, par. 417)
14    Sec. 7. All statements and estimates of expenditures
15submitted to the Office in connection with the preparation of a
16State budget, and any other estimates of expenditures,
17supporting requests for appropriations, shall be formulated
18according to the various functions and activities for which the
19respective department, office or institution of the State
20government (including the elective officers in the executive
21department and including the University of Illinois and the
22judicial department) is responsible. All such statements and
23estimates of expenditures relating to a particular function or
24activity shall be further formulated or subject to analysis in

 

 

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

 

 

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1classification of objects stated in Section 7 shall have the
2meanings ascribed to those items in Sections 14 through 24.7,
3respectively, of the State Finance Act. "An Act in relation to
4State finance", approved June 10, 1919, as amended.
5    When used in connection with a State budget or expenditure
6or estimate, items (18) and (19) in the classification of
7objects stated in Section 7 shall have the meanings ascribed to
8those items in Sections 24.12 and 24.13, respectively, of the
9State Finance Act.
10(Source: P.A. 82-325.)
 
11    Section 10. The State Finance Act is amended by changing
12Section 13 and by adding Sections 24.12 and 24.13 as follows:
 
13    (30 ILCS 105/13)  (from Ch. 127, par. 149)
14    Sec. 13. The objects and purposes for which appropriations
15are made are classified and standardized by items as follows:
16    (1) Personal services;
17    (2) State contribution for employee group insurance;
18    (3) Contractual services;
19    (4) Travel;
20    (5) Commodities;
21    (6) Equipment;
22    (7) Permanent improvements;
23    (8) Land;
24    (9) Electronic Data Processing;

 

 

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

 

 

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1normal cost" defined. The term "State retirement contribution
2for annual normal cost" means the portion of the total required
3State contribution to a retirement system for a fiscal year
4that represents the State's portion of the System's projected
5normal cost for that fiscal year, as determined and certified
6by the board of trustees of the retirement system in
7conformance with the applicable provisions of the Illinois
8Pension Code.
 
9    (30 ILCS 105/24.13 new)
10    Sec. 24.13. "State retirement contribution for unfunded
11accrued liability" defined. The term "State retirement
12contribution for unfunded accrued liability" means the portion
13of the total required State contribution to a retirement system
14for a fiscal year that is not included in the State retirement
15contribution for annual normal cost.
 
16    Section 15. The Budget Stabilization Act is amended by
17changing Sections 20 and 25 as follows:
 
18    (30 ILCS 122/20)
19    Sec. 20. Pension Stabilization Fund.
20    (a) The Pension Stabilization Fund is hereby created as a
21special fund in the State treasury. Moneys in the fund shall be
22used for the sole purpose of making payments to the designated
23retirement systems as provided in Section 25.

 

 

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1    (b) For each fiscal year when the General Assembly's
2appropriations and transfers or diversions as required by law
3from general funds do not exceed 99% of the estimated general
4funds revenues pursuant to subsection (a) of Section 10, the
5Comptroller shall transfer from the General Revenue Fund as
6provided by this Section a total amount equal to 0.5% of the
7estimated general funds revenues to the Pension Stabilization
8Fund.
9    (c) For each fiscal year through State fiscal year 2013,
10when the General Assembly's appropriations and transfers or
11diversions as required by law from general funds do not exceed
1298% of the estimated general funds revenues pursuant to
13subsection (b) of Section 10, the Comptroller shall transfer
14from the General Revenue Fund as provided by this Section a
15total amount equal to 1.0% of the estimated general funds
16revenues to the Pension Stabilization Fund.
17    (c-10) In State fiscal year 2020 and each fiscal year
18thereafter, the State Comptroller shall order transferred and
19the State Treasurer shall transfer $1,000,000,000 from the
20General Revenue Fund to the Pension Stabilization Fund.
21    (c-15) The transfers made pursuant to subsection (c-10) of
22this Section shall continue through State fiscal year 2045 or
23until each of the designated retirement systems, as defined in
24Section 25, has achieved the funding ratio prescribed by law
25for that retirement system, whichever occurs first; provided
26that those transfers shall not be made after any provision of

 

 

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1this Act that is designated as inseverable in Section 97 of
2this Act is declared to be unconstitutional or invalid other
3than as applied.
4    (d) The Comptroller shall transfer 1/12 of the total amount
5to be transferred each fiscal year under this Section into the
6Pension Stabilization Fund on the first day of each month of
7that fiscal year or as soon thereafter as possible; except that
8the final transfer of the fiscal year shall be made as soon as
9practical after the August 31 following the end of the fiscal
10year.
11    Until State fiscal year 2014, before Before the final
12transfer for a fiscal year is made, the Comptroller shall
13reconcile the estimated general funds revenues used in
14calculating the other transfers under this Section for that
15fiscal year with the actual general funds revenues for that
16fiscal year. The final transfer for the fiscal year shall be
17adjusted so that the total amount transferred under this
18Section for that fiscal year is equal to the percentage
19specified in subsection (b) or (c) of this Section, whichever
20is applicable, of the actual general funds revenues for that
21fiscal year. The actual general funds revenues for the fiscal
22year shall be calculated in a manner consistent with subsection
23(c) of Section 10 of this Act.
24(Source: P.A. 94-839, eff. 6-6-06.)
 
25    (30 ILCS 122/25)

 

 

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1    Sec. 25. Transfers from the Pension Stabilization Fund.
2    (a) As used in this Section, "designated retirement
3systems" means:
4        (1) the State Employees' Retirement System of
5    Illinois;
6        (2) the Teachers' Retirement System of the State of
7    Illinois;
8        (3) the State Universities Retirement System;
9        (4) the Judges Retirement System of Illinois; and
10        (5) the General Assembly Retirement System.
11    (b) As soon as may be practical after any money is
12deposited into the Pension Stabilization Fund, the State
13Comptroller shall apportion the deposited amount among the
14designated retirement systems and the State Comptroller and
15State Treasurer shall pay the apportioned amounts to the
16designated retirement systems. The amount deposited shall be
17apportioned among the designated retirement systems in the same
18proportion as their respective portions of the total actuarial
19reserve deficiency of the designated retirement systems, as
20most recently determined by the Governor's Office of Management
21and Budget. Amounts received by a designated retirement system
22under this Section shall be used for funding the unfunded
23liabilities of the retirement system. Payments under this
24Section are authorized by the continuing appropriation under
25Section 1.7 of the State Pension Funds Continuing Appropriation
26Act.

 

 

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1    (c) At the request of the State Comptroller, the Governor's
2Office of Management and Budget shall determine the individual
3and total actuarial reserve deficiencies of the designated
4retirement systems. For this purpose, the Governor's Office of
5Management and Budget shall consider the latest available audit
6and actuarial reports of each of the retirement systems and the
7relevant reports and statistics of the Public Pension Division
8of the Department of Financial and Professional Regulation.
9    (d) Payments to the designated retirement systems under
10this Section shall be in addition to, and not in lieu of, any
11State contributions required under Section 2-124, 14-131,
1215-155, 16-158, or 18-131 of the Illinois Pension Code.
13    Payments to the designated retirement systems under this
14Section, transferred after the effective date of this
15amendatory Act of the 98th General Assembly, do not reduce and
16do not constitute payment of any portion of the required State
17contribution under Article 2, 14, 15, 16, or 18 of the Illinois
18Pension Code in that fiscal year. Such amounts shall not
19reduce, and shall not be included in the calculation of, the
20required State contribution under Article 2, 14, 15, 16, or 18
21of the Illinois Pension Code in any future year, until the
22designated retirement system has received payment of
23contributions pursuant to this Act.
24(Source: P.A. 94-839, eff. 6-6-06.)
 
25    Section 20. The Illinois Pension Code is amended by

 

 

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1changing Sections 1-103.3, 1-160, 2-108, 2-119, 2-119.1,
22-121.1, 2-124, 2-125, 2-126, 2-134, 2-162, 14-103.10, 14-107,
314-108, 14-110, 14-114, 14-131, 14-132, 14-133, 14-135.08,
414-152.1, 15-111, 15-113.6, 15-113.7, 15-135, 15-136, 15-139,
515-153.2, 15-155, 15-156, 15-157, 15-165, 15-198, 16-121,
616-132, 16-133, 16-133.1, 16-152, 16-158, 16-158.1, 16-203,
720-121, 20-123, 20-124, and 20-125 and by adding Sections
82-105.1, 2-105.2, 14-103.40, 14-103.41, 15-103.4, 15-107.1,
915-107.2, 15-107.3, 15-155.1, 15-158.5, 16-106.4, 16-106.5,
1016-106.6, 16-152.8, and 16-158.2 as follows:
 
11    (40 ILCS 5/1-103.3)
12    Sec. 1-103.3. Application of 1994 amendment; funding
13standard.
14    (a) The provisions of Public Act 88-593 this amendatory Act
15of 1994 that change the method of calculating, certifying, and
16paying the required State contributions to the retirement
17systems established under Articles 2, 14, 15, 16, and 18 shall
18first apply to the State contributions required for State
19fiscal year 1996.
20    (b) (Blank) The General Assembly declares that a funding
21ratio (the ratio of a retirement system's total assets to its
22total actuarial liabilities) of 90% is an appropriate goal for
23State-funded retirement systems in Illinois, and it finds that
24a funding ratio of 90% is now the generally-recognized norm
25throughout the nation for public employee retirement systems

 

 

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1that are considered to be financially secure and funded in an
2appropriate and responsible manner.
3    (c) Every 5 years, beginning in 1999, the Commission on
4Government Forecasting and Accountability, in consultation
5with the affected retirement systems and the Governor's Office
6of Management and Budget (formerly Bureau of the Budget), shall
7consider and determine whether the funding goals 90% funding
8ratio adopted in Articles 2, 14, 15, 16, and 18 of this Code
9continue subsection (b) continues to represent an appropriate
10funding goals goal for those State-funded retirement systems in
11Illinois, and it shall report its findings and recommendations
12on this subject to the Governor and the General Assembly.
13(Source: P.A. 93-1067, eff. 1-15-05.)
 
14    (40 ILCS 5/1-160)
15    Sec. 1-160. Provisions applicable to new hires.
16    (a) The provisions of this Section apply to a person who,
17on or after January 1, 2011, first becomes a member or a
18participant under any reciprocal retirement system or pension
19fund established under this Code, other than a retirement
20system or pension fund established under Article 2, 3, 4, 5, 6,
21or 18 of this Code, notwithstanding any other provision of this
22Code to the contrary, but do not apply (i) to any self-managed
23plan established under this Code, (ii) to any person with
24respect to service as a sheriff's law enforcement employee
25under Article 7, (iii) or to any participant of the retirement

 

 

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1plan established under Section 22-101, or (iv) to any person
2who first becomes, on or after January 1, 2014, a Tier 3
3employee in a retirement system established under Article 15 or
416 of this Code.
5    (b) "Final average salary" means the average monthly (or
6annual) salary obtained by dividing the total salary or
7earnings calculated under the Article applicable to the member
8or participant during the 96 consecutive months (or 8
9consecutive years) of service within the last 120 months (or 10
10years) of service in which the total salary or earnings
11calculated under the applicable Article was the highest by the
12number of months (or years) of service in that period. For the
13purposes of a person who first becomes a member or participant
14of any retirement system or pension fund to which this Section
15applies on or after January 1, 2011, in this Code, "final
16average salary" shall be substituted for the following:
17        (1) In Articles 7 (except for service as sheriff's law
18    enforcement employees) and 15, "final rate of earnings".
19        (2) In Articles 8, 9, 10, 11, and 12, "highest average
20    annual salary for any 4 consecutive years within the last
21    10 years of service immediately preceding the date of
22    withdrawal".
23        (3) In Article 13, "average final salary".
24        (4) In Article 14, "final average compensation".
25        (5) In Article 17, "average salary".
26        (6) In Section 22-207, "wages or salary received by him

 

 

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1    at the date of retirement or discharge".
2    (b-5) Beginning on January 1, 2011, for all purposes under
3this Code (including without limitation the calculation of
4benefits and employee contributions), the annual earnings,
5salary, or wages (based on the plan year) of a member or
6participant to whom this Section applies shall not exceed
7$106,800; however, that amount shall annually thereafter be
8increased by the lesser of (i) 3% of that amount, including all
9previous adjustments, or (ii) one-half the annual unadjusted
10percentage increase (but not less than zero) in the consumer
11price index-u for the 12 months ending with the September
12preceding each November 1, including all previous adjustments.
13    For the purposes of this Section, "consumer price index-u"
14means the index published by the Bureau of Labor Statistics of
15the United States Department of Labor that measures the average
16change in prices of goods and services purchased by all urban
17consumers, United States city average, all items, 1982-84 =
18100. The new amount resulting from each annual adjustment shall
19be determined by the Public Pension Division of the Department
20of Insurance and made available to the boards of the retirement
21systems and pension funds by November 1 of each year.
22    (c) A member or participant is entitled to a retirement
23annuity upon written application if he or she has attained age
2467 and has at least 10 years of service credit and is otherwise
25eligible under the requirements of the applicable Article.
26    A member or participant who has attained age 62 and has at

 

 

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1least 10 years of service credit and is otherwise eligible
2under the requirements of the applicable Article may elect to
3receive the lower retirement annuity provided in subsection (d)
4of this Section.
5    (d) The retirement annuity of a member or participant who
6is retiring after attaining age 62 with at least 10 years of
7service credit shall be reduced by one-half of 1% for each full
8month that the member's age is under age 67.
9    (e) Any retirement annuity or supplemental annuity shall be
10subject to annual increases on the January 1 occurring either
11on or after the attainment of age 67 or the first anniversary
12of the annuity start date, whichever is later. Each annual
13increase shall be calculated at 3% or one-half the annual
14unadjusted percentage increase (but not less than zero) in the
15consumer price index-u for the 12 months ending with the
16September preceding each November 1, whichever is less, of the
17originally granted retirement annuity. If the annual
18unadjusted percentage change in the consumer price index-u for
19the 12 months ending with the September preceding each November
201 is zero or there is a decrease, then the annuity shall not be
21increased.
22    (f) The initial survivor's or widow's annuity of an
23otherwise eligible survivor or widow of a retired member or
24participant who first became a member or participant on or
25after January 1, 2011 shall be in the amount of 66 2/3% of the
26retired member's or participant's retirement annuity at the

 

 

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1date of death. In the case of the death of a member or
2participant who has not retired and who first became a member
3or participant on or after January 1, 2011, eligibility for a
4survivor's or widow's annuity shall be determined by the
5applicable Article of this Code. The initial benefit shall be
666 2/3% of the earned annuity without a reduction due to age. A
7child's annuity of an otherwise eligible child shall be in the
8amount prescribed under each Article if applicable. Any
9survivor's or widow's annuity shall be increased (1) on each
10January 1 occurring on or after the commencement of the annuity
11if the deceased member died while receiving a retirement
12annuity or (2) in other cases, on each January 1 occurring
13after the first anniversary of the commencement of the annuity.
14Each annual increase shall be calculated at 3% or one-half the
15annual unadjusted percentage increase (but not less than zero)
16in the consumer price index-u for the 12 months ending with the
17September preceding each November 1, whichever is less, of the
18originally granted survivor's annuity. If the annual
19unadjusted percentage change in the consumer price index-u for
20the 12 months ending with the September preceding each November
211 is zero or there is a decrease, then the annuity shall not be
22increased.
23    (g) The benefits in Section 14-110 apply only if the person
24is a State policeman, a fire fighter in the fire protection
25service of a department, or a security employee of the
26Department of Corrections or the Department of Juvenile

 

 

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1Justice, as those terms are defined in subsection (b) of
2Section 14-110. A person who meets the requirements of this
3Section is entitled to an annuity calculated under the
4provisions of Section 14-110, in lieu of the regular or minimum
5retirement annuity, only if the person has withdrawn from
6service with not less than 20 years of eligible creditable
7service and has attained age 60, regardless of whether the
8attainment of age 60 occurs while the person is still in
9service.
10    (h) If a person who first becomes a member or a participant
11of a retirement system or pension fund subject to this Section
12on or after January 1, 2011 is receiving a retirement annuity
13or retirement pension under that system or fund and becomes a
14member or participant under any other system or fund created by
15this Code and is employed on a full-time basis, except for
16those members or participants exempted from the provisions of
17this Section under subsection (a) of this Section, then the
18person's retirement annuity or retirement pension under that
19system or fund shall be suspended during that employment. Upon
20termination of that employment, the person's retirement
21annuity or retirement pension payments shall resume and be
22recalculated if recalculation is provided for under the
23applicable Article of this Code.
24    If a person who first becomes a member of a retirement
25system or pension fund subject to this Section on or after
26January 1, 2012 and is receiving a retirement annuity or

 

 

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1retirement pension under that system or fund and accepts on a
2contractual basis a position to provide services to a
3governmental entity from which he or she has retired, then that
4person's annuity or retirement pension earned as an active
5employee of the employer shall be suspended during that
6contractual service. A person receiving an annuity or
7retirement pension under this Code shall notify the pension
8fund or retirement system from which he or she is receiving an
9annuity or retirement pension, as well as his or her
10contractual employer, of his or her retirement status before
11accepting contractual employment. A person who fails to submit
12such notification shall be guilty of a Class A misdemeanor and
13required to pay a fine of $1,000. Upon termination of that
14contractual employment, the person's retirement annuity or
15retirement pension payments shall resume and, if appropriate,
16be recalculated under the applicable provisions of this Code.
17    (i) Notwithstanding any other provision of this Section, a
18person who first becomes a participant of the retirement system
19established under Article 15 on or after January 1, 2011 shall
20have the option to enroll in the self-managed plan created
21under Section 15-158.2 of this Code.
22    (j) In the case of a conflict between the provisions of
23this Section and any other provision of this Code, the
24provisions of this Section shall control.
25(Source: P.A. 96-889, eff. 1-1-11; 96-1490, eff. 1-1-11;
2697-609, eff. 1-1-12.)
 

 

 

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1    (40 ILCS 5/2-105.1 new)
2    Sec. 2-105.1. Tier I participant. "Tier I participant": A
3participant who first became a participant before January 1,
42011.
 
5    (40 ILCS 5/2-105.2 new)
6    Sec. 2-105.2. Tier I retiree. "Tier I retiree" means a
7former Tier I participant who is receiving a retirement
8annuity.
 
9    (40 ILCS 5/2-108)  (from Ch. 108 1/2, par. 2-108)
10    Sec. 2-108. Salary. "Salary": (1) For members of the
11General Assembly, the total compensation paid to the member by
12the State for one year of service, including the additional
13amounts, if any, paid to the member as an officer pursuant to
14Section 1 of "An Act in relation to the compensation and
15emoluments of the members of the General Assembly", approved
16December 6, 1907, as now or hereafter amended.
17    (2) For the State executive officers specified in Section
182-105, the total compensation paid to the member for one year
19of service.
20    (3) For members of the System who are participants under
21Section 2-117.1, or who are serving as Clerk or Assistant Clerk
22of the House of Representatives or Secretary or Assistant
23Secretary of the Senate, the total compensation paid to the

 

 

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1member for one year of service, but not to exceed the salary of
2the highest salaried officer of the General Assembly.
3    However, in the event that federal law results in any
4participant receiving imputed income based on the value of
5group term life insurance provided by the State, such imputed
6income shall not be included in salary for the purposes of this
7Article.
8    Notwithstanding any other provision of this Code, the
9salary of a Tier I participant for the purposes of this Code
10shall not exceed, for periods of service in a term of office
11beginning on or after the effective date of this amendatory Act
12of the 98th General Assembly, the greater of (i) the annual
13contribution and benefit base established for the applicable
14year by the Commissioner of Social Security under the federal
15Social Security Act or (ii) the annual salary of the
16participant during the 365 days immediately preceding that
17effective date.
18(Source: P.A. 86-27; 86-273; 86-1028; 86-1488.)
 
19    (40 ILCS 5/2-119)  (from Ch. 108 1/2, par. 2-119)
20    Sec. 2-119. Retirement annuity - conditions for
21eligibility.
22    (a) A participant whose service as a member is terminated,
23regardless of age or cause, is entitled to a retirement annuity
24beginning on the date specified by the participant in a written
25application subject to the following conditions:

 

 

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1        1. The date the annuity begins does not precede the
2    date of final termination of service, or is not more than
3    30 days before the receipt of the application by the board
4    in the case of annuities based on disability or one year
5    before the receipt of the application in the case of
6    annuities based on attained age;
7        2. The participant meets one of the following
8    eligibility requirements:
9        For a participant who first becomes a participant of
10    this System before January 1, 2011 (the effective date of
11    Public Act 96-889):
12            (A) He or she has attained age 55 and has at least
13        8 years of service credit;
14            (B) He or she has attained age 62 and terminated
15        service after July 1, 1971 with at least 4 years of
16        service credit; or
17            (C) He or she has completed 8 years of service and
18        has become permanently disabled and as a consequence,
19        is unable to perform the duties of his or her office.
20        For a participant who first becomes a participant of
21    this System on or after January 1, 2011 (the effective date
22    of Public Act 96-889), he or she has attained age 67 and
23    has at least 8 years of service credit.
24    (a-5) Notwithstanding subsection (a) of this Section, for a
25Tier I participant who begins receiving a retirement annuity
26under this Section after July 1, 2013:

 

 

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1        (1) If the Tier I participant is at least 45 years old
2    on the effective date of this amendatory Act of the 98th
3    General Assembly, then the references to age 55 and 62 in
4    subsection (a) of this Section remain unchanged.
5        (2) If the Tier I participant is at least 40 but less
6    than 45 years old on the effective date of this amendatory
7    Act of the 98th General Assembly, then the references to
8    age 55 and 62 in subsection (a) of this Section are
9    increased by one year.
10        (3) If the Tier I participant is at least 35 but less
11    than 40 years old on the effective date of this amendatory
12    Act of the 98th General Assembly, then the references to
13    age 55 and 62 in subsection (a) of this Section are
14    increased by 3 years.
15        (4) If the Tier I participant is less than 35 years old
16    on the effective date of this amendatory Act of the 98th
17    General Assembly, then the references to age 55 and 62 in
18    subsection (a) of this Section are increased by 5 years.
19    Notwithstanding Section 1-103.1, this subsection (a-5)
20applies without regard to whether or not the Tier I member is
21in active service under this Article on or after the effective
22date of this amendatory Act of the 98th General Assembly.
23    (a-5) A participant who first becomes a participant of this
24System on or after January 1, 2011 (the effective date of
25Public Act 96-889) who has attained age 62 and has at least 8
26years of service credit may elect to receive the lower

 

 

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1retirement annuity provided in paragraph (c) of Section
22-119.01 of this Code.
3    (b) A participant shall be considered permanently disabled
4only if: (1) disability occurs while in service and is of such
5a nature as to prevent him or her from reasonably performing
6the duties of his or her office at the time; and (2) the board
7has received a written certificate by at least 2 licensed
8physicians appointed by the board stating that the member is
9disabled and that the disability is likely to be permanent.
10(Source: P.A. 96-889, eff. 1-1-11; 96-1490, eff. 1-1-11.)
 
11    (40 ILCS 5/2-119.1)  (from Ch. 108 1/2, par. 2-119.1)
12    Sec. 2-119.1. Automatic increase in retirement annuity.
13    (a) Except as provided in subsections (a-1) and (a-2), a A
14participant who retires after June 30, 1967, and who has not
15received an initial increase under this Section before the
16effective date of this amendatory Act of 1991, shall, in
17January or July next following the first anniversary of
18retirement, whichever occurs first, and in the same month of
19each year thereafter, but in no event prior to age 60, have the
20amount of the originally granted retirement annuity increased
21as follows: for each year through 1971, 1 1/2%; for each year
22from 1972 through 1979, 2%; and for 1980 and each year
23thereafter, 3%. Annuitants who have received an initial
24increase under this subsection prior to the effective date of
25this amendatory Act of 1991 shall continue to receive their

 

 

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1annual increases in the same month as the initial increase.
2    (a-1) Notwithstanding any other provision of this Article,
3for a Tier I retiree, the amount of each automatic annual
4increase in retirement annuity occurring on or after the
5effective date of this amendatory Act of the 98th General
6Assembly shall be the lesser of $750 or 3% of the total annuity
7payable at the time of the increase, including previous
8increases granted.
9    (a-2) Notwithstanding any other provision of this Article,
10for a Tier I retiree, the monthly retirement annuity shall
11first be subject to annual increases on the January 1 occurring
12on or next after the attainment of age 67 or the January 1
13occurring on or next after the fifth anniversary of the annuity
14start date, whichever occurs earlier. If on the effective date
15of this amendatory Act of the 98th General Assembly a Tier I
16retiree has already received an annual increase under this
17Section but does not yet meet the new eligibility requirements
18of this subsection, the annual increases already received shall
19continue in force, but no additional annual increase shall be
20granted until the Tier I retiree meets the new eligibility
21requirements.
22    (a-3) Notwithstanding Section 1-103.1, subsections (a-1)
23and (a-2) apply without regard to whether or not the Tier I
24retiree is in active service under this Article on or after the
25effective date of this amendatory Act of the 98th General
26Assembly.

 

 

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1    (b) Beginning January 1, 1990, for eligible participants
2who remain in service after attaining 20 years of creditable
3service, the 3% increases provided under subsection (a) shall
4begin to accrue on the January 1 next following the date upon
5which the participant (1) attains age 55, or (2) attains 20
6years of creditable service, whichever occurs later, and shall
7continue to accrue while the participant remains in service;
8such increases shall become payable on January 1 or July 1,
9whichever occurs first, next following the first anniversary of
10retirement. For any person who has service credit in the System
11for the entire period from January 15, 1969 through December
1231, 1992, regardless of the date of termination of service, the
13reference to age 55 in clause (1) of this subsection (b) shall
14be deemed to mean age 50.
15    This subsection (b) does not apply to any person who first
16becomes a member of the System after August 8, 2003 (the
17effective date of Public Act 93-494) this amendatory Act of the
1893rd General Assembly.
19    (b-5) Notwithstanding any other provision of this Article,
20a participant who first becomes a participant on or after
21January 1, 2011 (the effective date of Public Act 96-889)
22shall, in January or July next following the first anniversary
23of retirement, whichever occurs first, and in the same month of
24each year thereafter, but in no event prior to age 67, have the
25amount of the originally granted retirement annuity then being
26paid increased by 3% or one-half the annual unadjusted

 

 

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1percentage increase in the Consumer Price Index for All Urban
2Consumers as determined by the Public Pension Division of the
3Department of Insurance under subsection (a) of Section
42-108.1, whichever is less. The changes made to this subsection
5by this amendatory Act of the 98th General Assembly do not
6apply to any automatic annual increase granted under this
7subsection before the effective date of this amendatory Act.
8    (c) The foregoing provisions relating to automatic
9increases are not applicable to a participant who retires
10before having made contributions (at the rate prescribed in
11Section 2-126) for automatic increases for less than the
12equivalent of one full year. However, in order to be eligible
13for the automatic increases, such a participant may make
14arrangements to pay to the system the amount required to bring
15the total contributions for the automatic increase to the
16equivalent of one year's contributions based upon his or her
17last salary.
18    (d) A participant who terminated service prior to July 1,
191967, with at least 14 years of service is entitled to an
20increase in retirement annuity beginning January, 1976, and to
21additional increases in January of each year thereafter.
22    The initial increase shall be 1 1/2% of the originally
23granted retirement annuity multiplied by the number of full
24years that the annuitant was in receipt of such annuity prior
25to January 1, 1972, plus 2% of the originally granted
26retirement annuity for each year after that date. The

 

 

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1subsequent annual increases shall be at the rate of 2% of the
2originally granted retirement annuity for each year through
31979 and at the rate of 3% for 1980 and thereafter.
4    (e) Beginning January 1, 1990, all automatic annual
5increases payable under this Section shall be calculated as a
6percentage of the total annuity payable at the time of the
7increase, including previous increases granted under this
8Article.
9(Source: P.A. 96-889, eff. 1-1-11; 96-1490, eff. 1-1-11.)
 
10    (40 ILCS 5/2-121.1)  (from Ch. 108 1/2, par. 2-121.1)
11    Sec. 2-121.1. Survivor's annuity - amount.
12    (a) A surviving spouse shall be entitled to 66 2/3% of the
13amount of retirement annuity to which the participant or
14annuitant was entitled on the date of death, without regard to
15whether the participant had attained age 55 prior to his or her
16death, subject to a minimum payment of 10% of salary. If a
17surviving spouse, regardless of age, has in his or her care at
18the date of death any eligible child or children of the
19participant, the survivor's annuity shall be the greater of the
20following: (1) 66 2/3% of the amount of retirement annuity to
21which the participant or annuitant was entitled on the date of
22death, or (2) 30% of the participant's salary increased by 10%
23of salary on account of each such child, subject to a total
24payment for the surviving spouse and children of 50% of salary.
25If eligible children survive but there is no surviving spouse,

 

 

HB3411- 30 -LRB098 10767 EFG 41183 b

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

 

 

HB3411- 31 -LRB098 10767 EFG 41183 b

1annuity shall immediately revert to the amount payable upon
2death of a participant or annuitant who leaves no eligible
3children. If the surviving spouse is then under age 50, the
4annuity as revised shall be deferred until the attainment of
5age 50.
6    (d) Beginning January 1, 1990, every survivor's annuity
7shall be increased (1) on each January 1 occurring on or after
8the commencement of the annuity if the deceased member died
9while receiving a retirement annuity, or (2) in other cases, on
10each January 1 occurring on or after the first anniversary of
11the commencement of the annuity, by an amount equal to 3% of
12the current amount of the annuity, including any previous
13increases under this Article. Such increases shall apply
14without regard to whether the deceased member was in service on
15or after the effective date of this amendatory Act of 1991, but
16shall not accrue for any period prior to January 1, 1990.
17    (d-5) Notwithstanding any other provision of this Article,
18the initial survivor's annuity of a survivor of a participant
19who first becomes a participant on or after January 1, 2011
20(the effective date of Public Act 96-889) shall be in the
21amount of 66 2/3% of the amount of the retirement annuity to
22which the participant or annuitant was entitled on the date of
23death and shall be increased (1) on each January 1 occurring on
24or after the commencement of the annuity if the deceased member
25died while receiving a retirement annuity or (2) in other
26cases, on each January 1 occurring on or after the first

 

 

HB3411- 32 -LRB098 10767 EFG 41183 b

1anniversary of the commencement of the annuity, by an amount
2equal to 3% or one-half the annual unadjusted percentage
3increase in the Consumer Price Index for All Urban Consumers as
4determined by the Public Pension Division of the Department of
5Insurance under subsection (a) of Section 2-108.1, whichever is
6less, of the originally granted survivor's annuity then being
7paid. The changes made to this subsection by this amendatory
8Act of the 98th General Assembly do not apply to any automatic
9annual increase granted under this subsection before the
10effective date of this amendatory Act.
11    (e) Notwithstanding any other provision of this Article,
12beginning January 1, 1990, the minimum survivor's annuity
13payable to any person who is entitled to receive a survivor's
14annuity under this Article shall be $300 per month, without
15regard to whether or not the deceased participant was in
16service on the effective date of this amendatory Act of 1989.
17    (f) In the case of a proportional survivor's annuity
18arising under the Retirement Systems Reciprocal Act where the
19amount payable by the System on January 1, 1993 is less than
20$300 per month, the amount payable by the System shall be
21increased beginning on that date by a monthly amount equal to
22$2 for each full year that has expired since the annuity began.
23(Source: P.A. 96-889, eff. 1-1-11; 96-1490, eff. 1-1-11.)
 
24    (40 ILCS 5/2-124)  (from Ch. 108 1/2, par. 2-124)
25    Sec. 2-124. Contributions by State.

 

 

HB3411- 33 -LRB098 10767 EFG 41183 b

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

 

 

HB3411- 34 -LRB098 10767 EFG 41183 b

1each fiscal year shall be an amount determined by the System to
2be sufficient to bring the total assets of the System up to 90%
3of the total actuarial liabilities of the System by the end of
4State 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

 

 

HB3411- 35 -LRB098 10767 EFG 41183 b

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 2044, the minimum State
22contribution for each fiscal year shall be the amount needed to
23maintain the total assets of the System at 100% of the total
24actuarial liabilities of the System.
25    Beginning in State fiscal year 2046, the minimum State
26contribution for each fiscal year shall be the amount needed to

 

 

HB3411- 36 -LRB098 10767 EFG 41183 b

1maintain the total assets of the System at 90% of the total
2actuarial liabilities of the System.
3    Amounts received by the System pursuant to Section 25 of
4the Budget Stabilization Act or Section 8.12 of the State
5Finance Act in any fiscal year do not reduce and do not
6constitute payment of any portion of the minimum State
7contribution required under this Article in that fiscal year.
8Such amounts shall not reduce, and shall not be included in the
9calculation of, the required State contributions under this
10Article in any future year until the System has reached a
11funding ratio of at least 100% 90%. A reference in this Article
12to the "required State contribution" or any substantially
13similar term does not include or apply to any amounts payable
14to the System under Section 25 of the Budget Stabilization Act.
15    Notwithstanding any other provision of this Section, the
16required State contribution for State fiscal year 2005 and for
17fiscal year 2008 and each fiscal year thereafter through State
18fiscal year 2013, as calculated under this Section and
19certified under Section 2-134, shall not exceed an amount equal
20to (i) the amount of the required State contribution that would
21have been calculated under this Section for that fiscal year if
22the System had not received any payments under subsection (d)
23of Section 7.2 of the General Obligation Bond Act, minus (ii)
24the portion of the State's total debt service payments for that
25fiscal year on the bonds issued in fiscal year 2003 for the
26purposes of that Section 7.2, as determined and certified by

 

 

HB3411- 37 -LRB098 10767 EFG 41183 b

1the Comptroller, that is the same as the System's portion of
2the total moneys distributed under subsection (d) of Section
37.2 of the General Obligation Bond Act. In determining this
4maximum for State fiscal years 2008 through 2010, however, the
5amount referred to in item (i) shall be increased, as a
6percentage of the applicable employee payroll, in equal
7increments calculated from the sum of the required State
8contribution for State fiscal year 2007 plus the applicable
9portion of the State's total debt service payments for fiscal
10year 2007 on the bonds issued in fiscal year 2003 for the
11purposes of Section 7.2 of the General Obligation Bond Act, so
12that, by State fiscal year 2011, the State is contributing at
13the rate otherwise required under this Section.
14    (d) For purposes of determining the required State
15contribution to the System, the value of the System's assets
16shall be equal to the actuarial value of the System's assets,
17which shall be calculated as follows:
18    As of June 30, 2008, the actuarial value of the System's
19assets shall be equal to the market value of the assets as of
20that date. In determining the actuarial value of the System's
21assets for fiscal years after June 30, 2008, any actuarial
22gains or losses from investment return incurred in a fiscal
23year shall be recognized in equal annual amounts over the
245-year period following that fiscal year.
25    (e) For purposes of determining the required State
26contribution to the system for a particular year, the actuarial

 

 

HB3411- 38 -LRB098 10767 EFG 41183 b

1value of assets shall be assumed to earn a rate of return equal
2to the system's actuarially assumed rate of return.
3(Source: P.A. 96-43, eff. 7-15-09; 96-1497, eff. 1-14-11;
496-1511, eff. 1-27-11; 96-1554, eff. 3-18-11; 97-813, eff.
57-13-12.)
 
6    (40 ILCS 5/2-125)  (from Ch. 108 1/2, par. 2-125)
7    Sec. 2-125. Obligations of State; funding guarantee.
8    (a) The payment of (1) the required State contributions,
9(2) all benefits granted under this system and (3) all expenses
10of administration and operation are obligations of the State to
11the extent specified in this Article.
12    (b) All income, interest and dividends derived from
13deposits and investments shall be credited to the account of
14the system in the State Treasury and used to pay benefits under
15this Article.
16    (c) Beginning July 1, 2013, the State shall be
17contractually obligated to contribute to the System under
18Section 2-124 in each State fiscal year an amount not less than
19the sum of (i) the State's normal cost for that year and (ii)
20the portion of the unfunded accrued liability assigned to that
21year by law in accordance with a schedule that distributes
22payments equitably over a reasonable period of time and in
23accordance with accepted actuarial practices. The obligations
24created under this subsection (c) are contractual obligations
25protected and enforceable under Article I, Section 16 and

 

 

HB3411- 39 -LRB098 10767 EFG 41183 b

1Article XIII, Section 5 of the Illinois Constitution.
2    Notwithstanding any other provision of law, if the State
3fails to pay in a State fiscal year the amount guaranteed under
4this subsection, the System may bring a mandamus action in the
5Circuit Court of Sangamon County to compel the State to make
6that payment, irrespective of other remedies that may be
7available to the System. In ordering the State to make the
8required payment, the court may order a reasonable payment
9schedule to enable the State to make the required payment
10without significantly imperiling the public health, safety, or
11welfare.
12    Any payments required to be made by the State pursuant to
13this subsection (c) are expressly subordinated to the payment
14of the principal, interest, and premium, if any, on any bonded
15debt obligation of the State or any other State-created entity,
16either currently outstanding or to be issued, for which the
17source of repayment or security thereon is derived directly or
18indirectly from tax revenues collected by the State or any
19other State-created entity. Payments on such bonded
20obligations include any statutory fund transfers or other
21prefunding mechanisms or formulas set forth, now or hereafter,
22in State law or bond indentures, into debt service funds or
23accounts of the State related to such bonded obligations,
24consistent with the payment schedules associated with such
25obligations.
26(Source: P.A. 83-1440.)
 

 

 

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1    (40 ILCS 5/2-126)  (from Ch. 108 1/2, par. 2-126)
2    Sec. 2-126. Contributions by participants.
3    (a) Each participant shall contribute toward the cost of
4his or her retirement annuity a percentage of each payment of
5salary received by him or her for service as a member as
6follows: for service between October 31, 1947 and January 1,
71959, 5%; for service between January 1, 1959 and June 30,
81969, 6%; for service between July 1, 1969 and January 10,
91973, 6 1/2%; for service after January 10, 1973, 7%; for
10service after December 31, 1981, 8 1/2%.
11    (a-5) In addition to the contributions otherwise required
12under this Article, each Tier I participant shall also make the
13following contributions toward the cost of his or her
14retirement annuity from each payment of salary received by him
15or her for service as a member:
16        (1) beginning July 1, 2013 and through June 30, 2014,
17    1% of salary; and
18        (2) beginning on July 1, 2014, 2% of salary.
19    (b) Beginning August 2, 1949, each male participant, and
20from July 1, 1971, each female participant shall contribute
21towards the cost of the survivor's annuity 2% of salary.
22    A participant who has no eligible survivor's annuity
23beneficiary may elect to cease making contributions for
24survivor's annuity under this subsection. A survivor's annuity
25shall not be payable upon the death of a person who has made

 

 

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1this election, unless prior to that death the election has been
2revoked and the amount of the contributions that would have
3been paid under this subsection in the absence of the election
4is paid to the System, together with interest at the rate of 4%
5per year from the date the contributions would have been made
6to the date of payment.
7    (c) Beginning July 1, 1967, each participant shall
8contribute 1% of salary towards the cost of automatic increase
9in annuity provided in Section 2-119.1. These contributions
10shall be made concurrently with contributions for retirement
11annuity purposes.
12    (d) In addition, each participant serving as an officer of
13the General Assembly shall contribute, for the same purposes
14and at the same rates as are required of a regular participant,
15on each additional payment received as an officer. If the
16participant serves as an officer for at least 2 but less than 4
17years, he or she shall contribute an amount equal to the amount
18that would have been contributed had the participant served as
19an officer for 4 years. Persons who serve as officers in the
2087th General Assembly but cannot receive the additional payment
21to officers because of the ban on increases in salary during
22their terms may nonetheless make contributions based on those
23additional payments for the purpose of having the additional
24payments included in their highest salary for annuity purposes;
25however, persons electing to make these additional
26contributions must also pay an amount representing the

 

 

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1corresponding employer contributions, as calculated by the
2System.
3    (e) Notwithstanding any other provision of this Article,
4the required contribution of a participant who first becomes a
5participant on or after January 1, 2011 shall not exceed the
6contribution that would be due under this Article if that
7participant's highest salary for annuity purposes were
8$106,800, plus any increases in that amount under Section
92-108.1.
10(Source: P.A. 96-1490, eff. 1-1-11.)
 
11    (40 ILCS 5/2-134)   (from Ch. 108 1/2, par. 2-134)
12    Sec. 2-134. To certify required State contributions and
13submit vouchers.
14    (a) The Board shall certify to the Governor on or before
15December 15 of each year through until December 15, 2011 the
16amount of the required State contribution to the System for the
17next fiscal year and shall specifically identify the System's
18projected State normal cost for that fiscal year. The
19certification shall include a copy of the actuarial
20recommendations upon which it is based and shall specifically
21identify the System's projected State normal cost for that
22fiscal year.
23    (a-5) On or before November 1 of each year, beginning
24November 1, 2012, the Board shall submit to the State Actuary,
25the Governor, and the General Assembly a proposed certification

 

 

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1of the amount of the required State contribution to the System
2for the next fiscal year, along with all of the actuarial
3assumptions, calculations, and data upon which that proposed
4certification is based. On or before January 1 of each year,
5beginning January 1, 2013, the State Actuary shall issue a
6preliminary report concerning the proposed certification and
7identifying, if necessary, recommended changes in actuarial
8assumptions that the Board must consider before finalizing its
9certification of the required State contributions.
10    On or before January 15, 2013 and every January 15
11thereafter, the Board shall certify to the Governor and the
12General Assembly the amount of the required State contribution
13for the next fiscal year. The Board's certification shall
14include a copy of the actuarial recommendations upon which it
15is based and shall specifically identify the System's projected
16State normal cost for that fiscal year. The Board's
17certification must note any deviations from the State Actuary's
18recommended changes, the reason or reasons for not following
19the State Actuary's recommended changes, and the fiscal impact
20of not following the State Actuary's recommended changes on the
21required State contribution.
22    (a-7) On or before May 1, 2004, the Board shall recalculate
23and recertify to the Governor the amount of the required State
24contribution to the System for State fiscal year 2005, taking
25into account the amounts appropriated to and received by the
26System under subsection (d) of Section 7.2 of the General

 

 

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1Obligation Bond Act.
2    On or before July 1, 2005, the Board shall recalculate and
3recertify to the Governor the amount of the required State
4contribution to the System for State fiscal year 2006, taking
5into account the changes in required State contributions made
6by this amendatory Act of the 94th General Assembly.
7    On or before April 1, 2011, the Board shall recalculate and
8recertify to the Governor the amount of the required State
9contribution to the System for State fiscal year 2011, applying
10the changes made by Public Act 96-889 to the System's assets
11and liabilities as of June 30, 2009 as though Public Act 96-889
12was approved on that date.
13    (b) Beginning in State fiscal year 1996, on or as soon as
14possible after the 15th day of each month the Board shall
15submit vouchers for payment of State contributions to the
16System, in a total monthly amount of one-twelfth of the
17required annual State contribution certified under subsection
18(a). From the effective date of this amendatory Act of the 93rd
19General Assembly through June 30, 2004, the Board shall not
20submit vouchers for the remainder of fiscal year 2004 in excess
21of the fiscal year 2004 certified contribution amount
22determined under this Section after taking into consideration
23the transfer to the System under subsection (d) of Section
246z-61 of the State Finance Act. These vouchers shall be paid by
25the State Comptroller and Treasurer by warrants drawn on the
26funds appropriated to the System for that fiscal year. If in

 

 

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1any month the amount remaining unexpended from all other
2appropriations to the System for the applicable fiscal year
3(including the appropriations to the System under Section 8.12
4of the State Finance Act and Section 1 of the State Pension
5Funds Continuing Appropriation Act) is less than the amount
6lawfully vouchered under this Section, the difference shall be
7paid from the General Revenue Fund under the continuing
8appropriation authority provided in Section 1.1 of the State
9Pension Funds Continuing Appropriation Act.
10    (c) The full amount of any annual appropriation for the
11System for State fiscal year 1995 shall be transferred and made
12available to the System at the beginning of that fiscal year at
13the request of the Board. Any excess funds remaining at the end
14of any fiscal year from appropriations shall be retained by the
15System as a general reserve to meet the System's accrued
16liabilities.
17(Source: P.A. 96-1497, eff. 1-14-11; 96-1511, eff. 1-27-11;
1897-694, eff. 6-18-12.)
 
19    (40 ILCS 5/2-162)
20    Sec. 2-162. Application and expiration of new benefit
21increases.
22    (a) As used in this Section, "new benefit increase" means
23an increase in the amount of any benefit provided under this
24Article, or an expansion of the conditions of eligibility for
25any benefit under this Article, that results from an amendment

 

 

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1to this Code that takes effect after the effective date of this
2amendatory Act of the 94th General Assembly. "New benefit
3increase", however, does not include any benefit increase
4resulting from the changes made to this Article by this
5amendatory Act of the 98th General Assembly.
6    (b) Notwithstanding any other provision of this Code or any
7subsequent amendment to this Code, every new benefit increase
8is subject to this Section and shall be deemed to be granted
9only in conformance with and contingent upon compliance with
10the provisions of this Section.
11    (c) The Public Act enacting a new benefit increase must
12identify and provide for payment to the System of additional
13funding at least sufficient to fund the resulting annual
14increase in cost to the System as it accrues.
15    Every new benefit increase is contingent upon the General
16Assembly providing the additional funding required under this
17subsection. The Commission on Government Forecasting and
18Accountability shall analyze whether adequate additional
19funding has been provided for the new benefit increase and
20shall report its analysis to the Public Pension Division of the
21Department of Financial and Professional Regulation. A new
22benefit increase created by a Public Act that does not include
23the additional funding required under this subsection is null
24and void. If the Public Pension Division determines that the
25additional funding provided for a new benefit increase under
26this subsection is or has become inadequate, it may so certify

 

 

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1to the Governor and the State Comptroller and, in the absence
2of corrective action by the General Assembly, the new benefit
3increase shall expire at the end of the fiscal year in which
4the certification is made.
5    (d) Every new benefit increase shall expire 5 years after
6its effective date or on such earlier date as may be specified
7in the language enacting the new benefit increase or provided
8under subsection (c). This does not prevent the General
9Assembly from extending or re-creating a new benefit increase
10by law.
11    (e) Except as otherwise provided in the language creating
12the new benefit increase, a new benefit increase that expires
13under this Section continues to apply to persons who applied
14and qualified for the affected benefit while the new benefit
15increase was in effect and to the affected beneficiaries and
16alternate payees of such persons, but does not apply to any
17other person, including without limitation a person who
18continues in service after the expiration date and did not
19apply and qualify for the affected benefit while the new
20benefit increase was in effect.
21(Source: P.A. 94-4, eff. 6-1-05.)
 
22    (40 ILCS 5/14-103.10)  (from Ch. 108 1/2, par. 14-103.10)
23    Sec. 14-103.10. Compensation.
24    (a) For periods of service prior to January 1, 1978, the
25full rate of salary or wages payable to an employee for

 

 

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1personal services performed if he worked the full normal
2working period for his position, subject to the following
3maximum amounts: (1) prior to July 1, 1951, $400 per month or
4$4,800 per year; (2) between July 1, 1951 and June 30, 1957
5inclusive, $625 per month or $7,500 per year; (3) beginning
6July 1, 1957, no limitation.
7    In the case of service of an employee in a position
8involving part-time employment, compensation shall be
9determined according to the employees' earnings record.
10    (b) For periods of service on and after January 1, 1978,
11all remuneration for personal services performed defined as
12"wages" under the Social Security Enabling Act, including that
13part of such remuneration which is in excess of any maximum
14limitation provided in such Act, and including any benefits
15received by an employee under a sick pay plan in effect before
16January 1, 1981, but excluding lump sum salary payments:
17        (1) for vacation,
18        (2) for accumulated unused sick leave,
19        (3) upon discharge or dismissal,
20        (4) for approved holidays.
21    (c) For periods of service on or after December 16, 1978,
22compensation also includes any benefits, other than lump sum
23salary payments made at termination of employment, which an
24employee receives or is eligible to receive under a sick pay
25plan authorized by law.
26    (d) For periods of service after September 30, 1985,

 

 

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1compensation also includes any remuneration for personal
2services not included as "wages" under the Social Security
3Enabling Act, which is deducted for purposes of participation
4in a program established pursuant to Section 125 of the
5Internal Revenue Code or its successor laws.
6    (e) For members for which Section 1-160 applies for periods
7of service on and after January 1, 2011, all remuneration for
8personal services performed defined as "wages" under the Social
9Security Enabling Act, excluding remuneration that is in excess
10of the annual earnings, salary, or wages of a member or
11participant, as provided in subsection (b-5) of Section 1-160,
12but including any benefits received by an employee under a sick
13pay plan in effect before January 1, 1981. Compensation shall
14exclude lump sum salary payments:
15        (1) for vacation;
16        (2) for accumulated unused sick leave;
17        (3) upon discharge or dismissal; and
18        (4) for approved holidays.
19    (f) Notwithstanding any other provision of this Code, the
20compensation of a Tier I member for the purposes of this Code
21shall not exceed, for periods of service on or after the
22effective date of this amendatory Act of the 98th General
23Assembly, the greater of (i) the annual contribution and
24benefit base established for the applicable year by the
25Commissioner of Social Security under the federal Social
26Security Act or (ii) the annual compensation of the member

 

 

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1during the 365 days immediately preceding that effective date;
2except that this limitation does not apply to a member's
3compensation that is determined under an employment contract or
4collective bargaining agreement that is in effect on the
5effective date of this amendatory Act of the 98th General
6Assembly and has not been amended or renewed after that date.
7(Source: P.A. 96-1490, eff. 1-1-11.)
 
8    (40 ILCS 5/14-103.40 new)
9    Sec. 14-103.40. Tier I member. "Tier I member": A member of
10this System who first became a member or participant before
11January 1, 2011 under any reciprocal retirement system or
12pension fund established under this Code other than a
13retirement system or pension fund established under Article 2,
143, 4, 5, 6, or 18 of this Code.
 
15    (40 ILCS 5/14-103.41 new)
16    Sec. 14-103.41. Tier I retiree. "Tier I retiree": A former
17Tier I member who is receiving a retirement annuity.
 
18    (40 ILCS 5/14-107)  (from Ch. 108 1/2, par. 14-107)
19    Sec. 14-107. Retirement annuity - service and age -
20conditions.
21    (a) A member is entitled to a retirement annuity after
22having at least 8 years of creditable service.
23    (b) A member who has at least 35 years of creditable

 

 

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1service may claim his or her retirement annuity at any age. A
2member having at least 8 years of creditable service but less
3than 35 may claim his or her retirement annuity upon or after
4attainment of age 60 or, beginning January 1, 2001, any lesser
5age which, when added to the number of years of his or her
6creditable service, equals at least 85. A member upon or after
7attainment of age 55 having at least 25 years of creditable
8service (30 years if retirement is before January 1, 2001) may
9elect to receive the lower retirement annuity provided in
10paragraph (c) of Section 14-108 of this Code. For purposes of
11the rule of 85, portions of years shall be counted in whole
12months.
13    (c) Notwithstanding subsection (b) of this Section, for a
14Tier I member who begins receiving a retirement annuity under
15this Article after July 1, 2013:
16        (1) If the Tier I member is at least 45 years old on
17    the effective date of this amendatory Act of the 98th
18    General Assembly, then the references to age 55 and 60 in
19    subsection (b) of this Section remain unchanged and the
20    references to 85 in subsection (b) of this Section remain
21    unchanged.
22        (2) If the Tier I member is at least 40 but less than
23    45 years old on the effective date of this amendatory Act
24    of the 98th General Assembly, then the references to age 55
25    and 60 in subsection (b) of this Section are increased by
26    one year and the references to 85 in subsection (b) are

 

 

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1    increased to 87.
2        (3) If the Tier I member is at least 35 but less than
3    40 years old on the effective date of this amendatory Act
4    of the 98th General Assembly, then the references to age 55
5    and 60 in subsection (b) of this Section are increased by 3
6    years and the references to 85 in subsection (b) are
7    increased to 91.
8        (4) If the Tier I member is less than 35 years old on
9    the effective date of this amendatory Act of the 98th
10    General Assembly, then the references to age 55 and 60 in
11    subsection (b) of this Section are increased by 5 years and
12    the references to 85 in subsection (b) are increased to 95.
13    Notwithstanding Section 1-103.1, this subsection (c)
14applies without regard to whether or not the Tier I member is
15in active service under this Article on or after the effective
16date of this amendatory Act of the 98th General Assembly.
17    (d) The allowance shall begin with the first full calendar
18month specified in the member's application therefor, the first
19day of which shall not be before the date of withdrawal as
20approved by the board. Regardless of the date of withdrawal,
21the allowance need not begin within one year of application
22therefor.
23(Source: P.A. 91-927, eff. 12-14-00.)
 
24    (40 ILCS 5/14-108)  (from Ch. 108 1/2, par. 14-108)
25    Sec. 14-108. Amount of retirement annuity. A member who has

 

 

HB3411- 53 -LRB098 10767 EFG 41183 b

1contributed to the System for at least 12 months shall be
2entitled to a prior service annuity for each year of certified
3prior service credited to him, except that a member shall
4receive 1/3 of the prior service annuity for each year of
5service for which contributions have been made and all of such
6annuity shall be payable after the member has made
7contributions for a period of 3 years. Proportionate amounts
8shall be payable for service of less than a full year after
9completion of at least 12 months.
10    The total period of service to be considered in
11establishing the measure of prior service annuity shall include
12service credited in the Teachers' Retirement System of the
13State of Illinois and the State Universities Retirement System
14for which contributions have been made by the member to such
15systems; provided that at least 1 year of the total period of 3
16years prescribed for the allowance of a full measure of prior
17service annuity shall consist of membership service in this
18system for which credit has been granted.
19    (a) In the case of a member who retires on or after January
201, 1998 and is a noncovered employee, the retirement annuity
21for membership service and prior service shall be 2.2% of final
22average compensation for each year of service. Any service
23credit established as a covered employee shall be computed as
24stated in paragraph (b).
25    (b) In the case of a member who retires on or after January
261, 1998 and is a covered employee, the retirement annuity for

 

 

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1membership service and prior service shall be computed as
2stated in paragraph (a) for all service credit established as a
3noncovered employee; for service credit established as a
4covered employee it shall be 1.67% of final average
5compensation for each year of service.
6    (c) For a member retiring after attaining age 55 but before
7age 60 with at least 30 but less than 35 years of creditable
8service if retirement is before January 1, 2001, or with at
9least 25 but less than 30 years of creditable service if
10retirement is on or after January 1, 2001, the retirement
11annuity shall be reduced by 1/2 of 1% for each month that the
12member's age is under age 60 at the time of retirement. For
13members to whom subsection (c) of Section 14-107 applies, the
14references to age 55 and 60 in this subsection (c) are
15increased as provided in subsection (c) of Section 14-107.
16    (d) A retirement annuity shall not exceed 75% of final
17average compensation, subject to such extension as may result
18from the application of Section 14-114 or Section 14-115.
19    (e) The retirement annuity payable to any covered employee
20who is a member of the System and in service on January 1,
211969, or in service thereafter in 1969 as a result of
22legislation enacted by the Illinois General Assembly
23transferring the member to State employment from county
24employment in a county Department of Public Aid in counties of
253,000,000 or more population, under a plan of coordination with
26the Old Age, Survivors and Disability provisions thereof, if

 

 

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1not fully insured for Old Age Insurance payments under the
2Federal Old Age, Survivors and Disability Insurance provisions
3at the date of acceptance of a retirement annuity, shall not be
4less than the amount for which the member would have been
5eligible if coordination were not applicable.
6    (f) The retirement annuity payable to any covered employee
7who is a member of the System and in service on January 1,
81969, or in service thereafter in 1969 as a result of the
9legislation designated in the immediately preceding paragraph,
10if fully insured for Old Age Insurance payments under the
11Federal Social Security Act at the date of acceptance of a
12retirement annuity, shall not be less than an amount which when
13added to the Primary Insurance Benefit payable to the member
14upon attainment of age 65 under such Federal Act, will equal
15the annuity which would otherwise be payable if the coordinated
16plan of coverage were not applicable.
17    (g) In the case of a member who is a noncovered employee,
18the retirement annuity for membership service as a security
19employee of the Department of Corrections or security employee
20of the Department of Human Services shall be: if retirement
21occurs on or after January 1, 2001, 3% of final average
22compensation for each year of creditable service; or if
23retirement occurs before January 1, 2001, 1.9% of final average
24compensation for each of the first 10 years of service, 2.1%
25for each of the next 10 years of service, 2.25% for each year
26of service in excess of 20 but not exceeding 30, and 2.5% for

 

 

HB3411- 56 -LRB098 10767 EFG 41183 b

1each year in excess of 30; except that the annuity may be
2calculated under subsection (a) rather than this subsection (g)
3if the resulting annuity is greater.
4    (h) In the case of a member who is a covered employee, the
5retirement annuity for membership service as a security
6employee of the Department of Corrections or security employee
7of the Department of Human Services shall be: if retirement
8occurs on or after January 1, 2001, 2.5% of final average
9compensation for each year of creditable service; if retirement
10occurs before January 1, 2001, 1.67% of final average
11compensation for each of the first 10 years of service, 1.90%
12for each of the next 10 years of service, 2.10% for each year
13of service in excess of 20 but not exceeding 30, and 2.30% for
14each year in excess of 30.
15    (i) For the purposes of this Section and Section 14-133 of
16this Act, the term "security employee of the Department of
17Corrections" and the term "security employee of the Department
18of Human Services" shall have the meanings ascribed to them in
19subsection (c) of Section 14-110.
20    (j) The retirement annuity computed pursuant to paragraphs
21(g) or (h) shall be applicable only to those security employees
22of the Department of Corrections and security employees of the
23Department of Human Services who have at least 20 years of
24membership service and who are not eligible for the alternative
25retirement annuity provided under Section 14-110. However,
26persons transferring to this System under Section 14-108.2 or

 

 

HB3411- 57 -LRB098 10767 EFG 41183 b

114-108.2c who have service credit under Article 16 of this Code
2may count such service toward establishing their eligibility
3under the 20-year service requirement of this subsection; but
4such service may be used only for establishing such
5eligibility, and not for the purpose of increasing or
6calculating any benefit.
7    (k) (Blank).
8    (l) The changes to this Section made by this amendatory Act
9of 1997 (changing certain retirement annuity formulas from a
10stepped rate to a flat rate) apply to members who retire on or
11after January 1, 1998, without regard to whether employment
12terminated before the effective date of this amendatory Act of
131997. An annuity shall not be calculated in steps by using the
14new flat rate for some steps and the superseded stepped rate
15for other steps of the same type of service.
16(Source: P.A. 91-927, eff. 12-14-00; 92-14, eff. 6-28-01.)
 
17    (40 ILCS 5/14-110)  (from Ch. 108 1/2, par. 14-110)
18    Sec. 14-110. Alternative retirement annuity.
19    (a) Any member who has withdrawn from service with not less
20than 20 years of eligible creditable service and has attained
21age 55, and any member who has withdrawn from service with not
22less than 25 years of eligible creditable service and has
23attained age 50, regardless of whether the attainment of either
24of the specified ages occurs while the member is still in
25service, shall be entitled to receive at the option of the

 

 

HB3411- 58 -LRB098 10767 EFG 41183 b

1member, in lieu of the regular or minimum retirement annuity, a
2retirement annuity computed as follows:
3        (i) for periods of service as a noncovered employee: if
4    retirement occurs on or after January 1, 2001, 3% of final
5    average compensation for each year of creditable service;
6    if retirement occurs before January 1, 2001, 2 1/4% of
7    final average compensation for each of the first 10 years
8    of creditable service, 2 1/2% for each year above 10 years
9    to and including 20 years of creditable service, and 2 3/4%
10    for each year of creditable service above 20 years; and
11        (ii) for periods of eligible creditable service as a
12    covered employee: if retirement occurs on or after January
13    1, 2001, 2.5% of final average compensation for each year
14    of creditable service; if retirement occurs before January
15    1, 2001, 1.67% of final average compensation for each of
16    the first 10 years of such service, 1.90% for each of the
17    next 10 years of such service, 2.10% for each year of such
18    service in excess of 20 but not exceeding 30, and 2.30% for
19    each year in excess of 30.
20    Such annuity shall be subject to a maximum of 75% of final
21average compensation if retirement occurs before January 1,
222001 or to a maximum of 80% of final average compensation if
23retirement occurs on or after January 1, 2001.
24    These rates shall not be applicable to any service
25performed by a member as a covered employee which is not
26eligible creditable service. Service as a covered employee

 

 

HB3411- 59 -LRB098 10767 EFG 41183 b

1which is not eligible creditable service shall be subject to
2the rates and provisions of Section 14-108.
3    (a-5) Notwithstanding subsection (a) of this Section, for a
4Tier I member who begins receiving a retirement annuity under
5this Section after July 1, 2013:
6        (1) If the Tier I member is at least 45 years old on
7    the effective date of this amendatory Act of the 98th
8    General Assembly, then the references to age 50 and 55 in
9    subsection (a) of this Section remain unchanged.
10        (2) If the Tier I member is at least 40 but less than
11    45 years old on the effective date of this amendatory Act
12    of the 98th General Assembly, then the references to age 50
13    and 55 in subsection (a) of this Section are increased by
14    one year.
15        (3) If the Tier I member is at least 35 but less than
16    40 years old on the effective date of this amendatory Act
17    of the 98th General Assembly, then the references to age 50
18    and 55 in subsection (a) of this Section are increased by 3
19    years.
20        (4) If the Tier I member is less than 35 years old on
21    the effective date of this amendatory Act of the 98th
22    General Assembly, then the references to age 50 and 55 in
23    subsection (a) of this Section are increased by 5 years.
24    Notwithstanding Section 1-103.1, this subsection (a-5)
25applies without regard to whether or not the Tier I member is
26in active service under this Article on or after the effective

 

 

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1date of this amendatory Act of the 98th General Assembly.
2    (b) For the purpose of this Section, "eligible creditable
3service" means creditable service resulting from service in one
4or more of the following positions:
5        (1) State policeman;
6        (2) fire fighter in the fire protection service of a
7    department;
8        (3) air pilot;
9        (4) special agent;
10        (5) investigator for the Secretary of State;
11        (6) conservation police officer;
12        (7) investigator for the Department of Revenue or the
13    Illinois Gaming Board;
14        (8) security employee of the Department of Human
15    Services;
16        (9) Central Management Services security police
17    officer;
18        (10) security employee of the Department of
19    Corrections or the Department of Juvenile Justice;
20        (11) dangerous drugs investigator;
21        (12) investigator for the Department of State Police;
22        (13) investigator for the Office of the Attorney
23    General;
24        (14) controlled substance inspector;
25        (15) investigator for the Office of the State's
26    Attorneys Appellate Prosecutor;

 

 

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1        (16) Commerce Commission police officer;
2        (17) arson investigator;
3        (18) State highway maintenance worker.
4    A person employed in one of the positions specified in this
5subsection is entitled to eligible creditable service for
6service credit earned under this Article while undergoing the
7basic police training course approved by the Illinois Law
8Enforcement Training Standards Board, if completion of that
9training is required of persons serving in that position. For
10the purposes of this Code, service during the required basic
11police training course shall be deemed performance of the
12duties of the specified position, even though the person is not
13a sworn peace officer at the time of the training.
14    (c) For the purposes of this Section:
15        (1) The term "state policeman" includes any title or
16    position in the Department of State Police that is held by
17    an individual employed under the State Police Act.
18        (2) The term "fire fighter in the fire protection
19    service of a department" includes all officers in such fire
20    protection service including fire chiefs and assistant
21    fire chiefs.
22        (3) The term "air pilot" includes any employee whose
23    official job description on file in the Department of
24    Central Management Services, or in the department by which
25    he is employed if that department is not covered by the
26    Personnel Code, states that his principal duty is the

 

 

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1    operation of aircraft, and who possesses a pilot's license;
2    however, the change in this definition made by this
3    amendatory Act of 1983 shall not operate to exclude any
4    noncovered employee who was an "air pilot" for the purposes
5    of this Section on January 1, 1984.
6        (4) The term "special agent" means any person who by
7    reason of employment by the Division of Narcotic Control,
8    the Bureau of Investigation or, after July 1, 1977, the
9    Division of Criminal Investigation, the Division of
10    Internal Investigation, the Division of Operations, or any
11    other Division or organizational entity in the Department
12    of State Police is vested by law with duties to maintain
13    public order, investigate violations of the criminal law of
14    this State, enforce the laws of this State, make arrests
15    and recover property. The term "special agent" includes any
16    title or position in the Department of State Police that is
17    held by an individual employed under the State Police Act.
18        (5) The term "investigator for the Secretary of State"
19    means any person employed by the Office of the Secretary of
20    State and vested with such investigative duties as render
21    him ineligible for coverage under the Social Security Act
22    by reason of Sections 218(d)(5)(A), 218(d)(8)(D) and
23    218(l)(1) of that Act.
24        A person who became employed as an investigator for the
25    Secretary of State between January 1, 1967 and December 31,
26    1975, and who has served as such until attainment of age

 

 

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1    60, either continuously or with a single break in service
2    of not more than 3 years duration, which break terminated
3    before January 1, 1976, shall be entitled to have his
4    retirement annuity calculated in accordance with
5    subsection (a), notwithstanding that he has less than 20
6    years of credit for such service.
7        (6) The term "Conservation Police Officer" means any
8    person employed by the Division of Law Enforcement of the
9    Department of Natural Resources and vested with such law
10    enforcement duties as render him ineligible for coverage
11    under the Social Security Act by reason of Sections
12    218(d)(5)(A), 218(d)(8)(D), and 218(l)(1) of that Act. The
13    term "Conservation Police Officer" includes the positions
14    of Chief Conservation Police Administrator and Assistant
15    Conservation Police Administrator.
16        (7) The term "investigator for the Department of
17    Revenue" means any person employed by the Department of
18    Revenue and vested with such investigative duties as render
19    him ineligible for coverage under the Social Security Act
20    by reason of Sections 218(d)(5)(A), 218(d)(8)(D) and
21    218(l)(1) of that Act.
22        The term "investigator for the Illinois Gaming Board"
23    means any person employed as such by the Illinois Gaming
24    Board and vested with such peace officer duties as render
25    the person ineligible for coverage under the Social
26    Security Act by reason of Sections 218(d)(5)(A),

 

 

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1    218(d)(8)(D), and 218(l)(1) of that Act.
2        (8) The term "security employee of the Department of
3    Human Services" means any person employed by the Department
4    of Human Services who (i) is employed at the Chester Mental
5    Health Center and has daily contact with the residents
6    thereof, (ii) is employed within a security unit at a
7    facility operated by the Department and has daily contact
8    with the residents of the security unit, (iii) is employed
9    at a facility operated by the Department that includes a
10    security unit and is regularly scheduled to work at least
11    50% of his or her working hours within that security unit,
12    or (iv) is a mental health police officer. "Mental health
13    police officer" means any person employed by the Department
14    of Human Services in a position pertaining to the
15    Department's mental health and developmental disabilities
16    functions who is vested with such law enforcement duties as
17    render the person ineligible for coverage under the Social
18    Security Act by reason of Sections 218(d)(5)(A),
19    218(d)(8)(D) and 218(l)(1) of that Act. "Security unit"
20    means that portion of a facility that is devoted to the
21    care, containment, and treatment of persons committed to
22    the Department of Human Services as sexually violent
23    persons, persons unfit to stand trial, or persons not
24    guilty by reason of insanity. With respect to past
25    employment, references to the Department of Human Services
26    include its predecessor, the Department of Mental Health

 

 

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1    and Developmental Disabilities.
2        The changes made to this subdivision (c)(8) by Public
3    Act 92-14 apply to persons who retire on or after January
4    1, 2001, notwithstanding Section 1-103.1.
5        (9) "Central Management Services security police
6    officer" means any person employed by the Department of
7    Central Management Services who is vested with such law
8    enforcement duties as render him ineligible for coverage
9    under the Social Security Act by reason of Sections
10    218(d)(5)(A), 218(d)(8)(D) and 218(l)(1) of that Act.
11        (10) For a member who first became an employee under
12    this Article before July 1, 2005, the term "security
13    employee of the Department of Corrections or the Department
14    of Juvenile Justice" means any employee of the Department
15    of Corrections or the Department of Juvenile Justice or the
16    former Department of Personnel, and any member or employee
17    of the Prisoner Review Board, who has daily contact with
18    inmates or youth by working within a correctional facility
19    or Juvenile facility operated by the Department of Juvenile
20    Justice or who is a parole officer or an employee who has
21    direct contact with committed persons in the performance of
22    his or her job duties. For a member who first becomes an
23    employee under this Article on or after July 1, 2005, the
24    term means an employee of the Department of Corrections or
25    the Department of Juvenile Justice who is any of the
26    following: (i) officially headquartered at a correctional

 

 

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1    facility or Juvenile facility operated by the Department of
2    Juvenile Justice, (ii) a parole officer, (iii) a member of
3    the apprehension unit, (iv) a member of the intelligence
4    unit, (v) a member of the sort team, or (vi) an
5    investigator.
6        (11) The term "dangerous drugs investigator" means any
7    person who is employed as such by the Department of Human
8    Services.
9        (12) The term "investigator for the Department of State
10    Police" means a person employed by the Department of State
11    Police who is vested under Section 4 of the Narcotic
12    Control Division Abolition Act with such law enforcement
13    powers as render him ineligible for coverage under the
14    Social Security Act by reason of Sections 218(d)(5)(A),
15    218(d)(8)(D) and 218(l)(1) of that Act.
16        (13) "Investigator for the Office of the Attorney
17    General" means any person who is employed as such by the
18    Office of the Attorney General and is vested with such
19    investigative duties as render him ineligible for coverage
20    under the Social Security Act by reason of Sections
21    218(d)(5)(A), 218(d)(8)(D) and 218(l)(1) of that Act. For
22    the period before January 1, 1989, the term includes all
23    persons who were employed as investigators by the Office of
24    the Attorney General, without regard to social security
25    status.
26        (14) "Controlled substance inspector" means any person

 

 

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1    who is employed as such by the Department of Professional
2    Regulation and is vested with such law enforcement duties
3    as render him ineligible for coverage under the Social
4    Security Act by reason of Sections 218(d)(5)(A),
5    218(d)(8)(D) and 218(l)(1) of that Act. The term
6    "controlled substance inspector" includes the Program
7    Executive of Enforcement and the Assistant Program
8    Executive of Enforcement.
9        (15) The term "investigator for the Office of the
10    State's Attorneys Appellate Prosecutor" means a person
11    employed in that capacity on a full time basis under the
12    authority of Section 7.06 of the State's Attorneys
13    Appellate Prosecutor's Act.
14        (16) "Commerce Commission police officer" means any
15    person employed by the Illinois Commerce Commission who is
16    vested with such law enforcement duties as render him
17    ineligible for coverage under the Social Security Act by
18    reason of Sections 218(d)(5)(A), 218(d)(8)(D), and
19    218(l)(1) of that Act.
20        (17) "Arson investigator" means any person who is
21    employed as such by the Office of the State Fire Marshal
22    and is vested with such law enforcement duties as render
23    the person ineligible for coverage under the Social
24    Security Act by reason of Sections 218(d)(5)(A),
25    218(d)(8)(D), and 218(l)(1) of that Act. A person who was
26    employed as an arson investigator on January 1, 1995 and is

 

 

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1    no longer in service but not yet receiving a retirement
2    annuity may convert his or her creditable service for
3    employment as an arson investigator into eligible
4    creditable service by paying to the System the difference
5    between the employee contributions actually paid for that
6    service and the amounts that would have been contributed if
7    the applicant were contributing at the rate applicable to
8    persons with the same social security status earning
9    eligible creditable service on the date of application.
10        (18) The term "State highway maintenance worker" means
11    a person who is either of the following:
12            (i) A person employed on a full-time basis by the
13        Illinois Department of Transportation in the position
14        of highway maintainer, highway maintenance lead
15        worker, highway maintenance lead/lead worker, heavy
16        construction equipment operator, power shovel
17        operator, or bridge mechanic; and whose principal
18        responsibility is to perform, on the roadway, the
19        actual maintenance necessary to keep the highways that
20        form a part of the State highway system in serviceable
21        condition for vehicular traffic.
22            (ii) A person employed on a full-time basis by the
23        Illinois State Toll Highway Authority in the position
24        of equipment operator/laborer H-4, equipment
25        operator/laborer H-6, welder H-4, welder H-6,
26        mechanical/electrical H-4, mechanical/electrical H-6,

 

 

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1        water/sewer H-4, water/sewer H-6, sign maker/hanger
2        H-4, sign maker/hanger H-6, roadway lighting H-4,
3        roadway lighting H-6, structural H-4, structural H-6,
4        painter H-4, or painter H-6; and whose principal
5        responsibility is to perform, on the roadway, the
6        actual maintenance necessary to keep the Authority's
7        tollways in serviceable condition for vehicular
8        traffic.
9    (d) A security employee of the Department of Corrections or
10the Department of Juvenile Justice, and a security employee of
11the Department of Human Services who is not a mental health
12police officer, shall not be eligible for the alternative
13retirement annuity provided by this Section unless he or she
14meets the following minimum age and service requirements at the
15time of retirement:
16        (i) 25 years of eligible creditable service and age 55;
17    or
18        (ii) beginning January 1, 1987, 25 years of eligible
19    creditable service and age 54, or 24 years of eligible
20    creditable service and age 55; or
21        (iii) beginning January 1, 1988, 25 years of eligible
22    creditable service and age 53, or 23 years of eligible
23    creditable service and age 55; or
24        (iv) beginning January 1, 1989, 25 years of eligible
25    creditable service and age 52, or 22 years of eligible
26    creditable service and age 55; or

 

 

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1        (v) beginning January 1, 1990, 25 years of eligible
2    creditable service and age 51, or 21 years of eligible
3    creditable service and age 55; or
4        (vi) beginning January 1, 1991, 25 years of eligible
5    creditable service and age 50, or 20 years of eligible
6    creditable service and age 55.
7    For members to whom subsection (a-5) of this Section
8applies, the references to age 50 and 55 in item (vi) of this
9subsection are increased as provided in subsection (a-5).
10    Persons who have service credit under Article 16 of this
11Code for service as a security employee of the Department of
12Corrections or the Department of Juvenile Justice, or the
13Department of Human Services in a position requiring
14certification as a teacher may count such service toward
15establishing their eligibility under the service requirements
16of this Section; but such service may be used only for
17establishing such eligibility, and not for the purpose of
18increasing or calculating any benefit.
19    (e) If a member enters military service while working in a
20position in which eligible creditable service may be earned,
21and returns to State service in the same or another such
22position, and fulfills in all other respects the conditions
23prescribed in this Article for credit for military service,
24such military service shall be credited as eligible creditable
25service for the purposes of the retirement annuity prescribed
26in this Section.

 

 

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1    (f) For purposes of calculating retirement annuities under
2this Section, periods of service rendered after December 31,
31968 and before October 1, 1975 as a covered employee in the
4position of special agent, conservation police officer, mental
5health police officer, or investigator for the Secretary of
6State, shall be deemed to have been service as a noncovered
7employee, provided that the employee pays to the System prior
8to retirement an amount equal to (1) the difference between the
9employee contributions that would have been required for such
10service as a noncovered employee, and the amount of employee
11contributions actually paid, plus (2) if payment is made after
12July 31, 1987, regular interest on the amount specified in item
13(1) from the date of service to the date of payment.
14    For purposes of calculating retirement annuities under
15this Section, periods of service rendered after December 31,
161968 and before January 1, 1982 as a covered employee in the
17position of investigator for the Department of Revenue shall be
18deemed to have been service as a noncovered employee, provided
19that the employee pays to the System prior to retirement an
20amount equal to (1) the difference between the employee
21contributions that would have been required for such service as
22a noncovered employee, and the amount of employee contributions
23actually paid, plus (2) if payment is made after January 1,
241990, regular interest on the amount specified in item (1) from
25the date of service to the date of payment.
26    (g) A State policeman may elect, not later than January 1,

 

 

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11990, to establish eligible creditable service for up to 10
2years of his service as a policeman under Article 3, by filing
3a written election with the Board, accompanied by payment of an
4amount to be determined by the Board, equal to (i) the
5difference between the amount of employee and employer
6contributions transferred to the System under Section 3-110.5,
7and the amounts that would have been contributed had such
8contributions been made at the rates applicable to State
9policemen, plus (ii) interest thereon at the effective rate for
10each year, compounded annually, from the date of service to the
11date of payment.
12    Subject to the limitation in subsection (i), a State
13policeman may elect, not later than July 1, 1993, to establish
14eligible creditable service for up to 10 years of his service
15as a member of the County Police Department under Article 9, by
16filing a written election with the Board, accompanied by
17payment of an amount to be determined by the Board, equal to
18(i) the difference between the amount of employee and employer
19contributions transferred to the System under Section 9-121.10
20and the amounts that would have been contributed had those
21contributions been made at the rates applicable to State
22policemen, plus (ii) interest thereon at the effective rate for
23each year, compounded annually, from the date of service to the
24date of payment.
25    (h) Subject to the limitation in subsection (i), a State
26policeman or investigator for the Secretary of State may elect

 

 

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1to establish eligible creditable service for up to 12 years of
2his service as a policeman under Article 5, by filing a written
3election with the Board on or before January 31, 1992, and
4paying to the System by January 31, 1994 an amount to be
5determined by the Board, equal to (i) the difference between
6the amount of employee and employer contributions transferred
7to the System under Section 5-236, and the amounts that would
8have been contributed had such contributions been made at the
9rates applicable to State policemen, plus (ii) interest thereon
10at the effective rate for each year, compounded annually, from
11the date of service to the date of payment.
12    Subject to the limitation in subsection (i), a State
13policeman, conservation police officer, or investigator for
14the Secretary of State may elect to establish eligible
15creditable service for up to 10 years of service as a sheriff's
16law enforcement employee under Article 7, by filing a written
17election with the Board on or before January 31, 1993, and
18paying to the System by January 31, 1994 an amount to be
19determined by the Board, equal to (i) the difference between
20the amount of employee and employer contributions transferred
21to the System under Section 7-139.7, and the amounts that would
22have been contributed had such contributions been made at the
23rates applicable to State policemen, plus (ii) interest thereon
24at the effective rate for each year, compounded annually, from
25the date of service to the date of payment.
26    Subject to the limitation in subsection (i), a State

 

 

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1policeman, conservation police officer, or investigator for
2the Secretary of State may elect to establish eligible
3creditable service for up to 5 years of service as a police
4officer under Article 3, a policeman under Article 5, a
5sheriff's law enforcement employee under Article 7, a member of
6the county police department under Article 9, or a police
7officer under Article 15 by filing a written election with the
8Board and paying to the System an amount to be determined by
9the Board, equal to (i) the difference between the amount of
10employee and employer contributions transferred to the System
11under Section 3-110.6, 5-236, 7-139.8, 9-121.10, or 15-134.4
12and the amounts that would have been contributed had such
13contributions been made at the rates applicable to State
14policemen, plus (ii) interest thereon at the effective rate for
15each year, compounded annually, from the date of service to the
16date of payment.
17    Subject to the limitation in subsection (i), an
18investigator for the Office of the Attorney General, or an
19investigator for the Department of Revenue, may elect to
20establish eligible creditable service for up to 5 years of
21service as a police officer under Article 3, a policeman under
22Article 5, a sheriff's law enforcement employee under Article
237, or a member of the county police department under Article 9
24by filing a written election with the Board within 6 months
25after August 25, 2009 (the effective date of Public Act 96-745)
26and paying to the System an amount to be determined by the

 

 

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1Board, equal to (i) the difference between the amount of
2employee and employer contributions transferred to the System
3under Section 3-110.6, 5-236, 7-139.8, or 9-121.10 and the
4amounts that would have been contributed had such contributions
5been made at the rates applicable to State policemen, plus (ii)
6interest thereon at the actuarially assumed rate for each year,
7compounded annually, from the date of service to the date of
8payment.
9    Subject to the limitation in subsection (i), a State
10policeman, conservation police officer, investigator for the
11Office of the Attorney General, an investigator for the
12Department of Revenue, or investigator for the Secretary of
13State may elect to establish eligible creditable service for up
14to 5 years of service as a person employed by a participating
15municipality to perform police duties, or law enforcement
16officer employed on a full-time basis by a forest preserve
17district under Article 7, a county corrections officer, or a
18court services officer under Article 9, by filing a written
19election with the Board within 6 months after August 25, 2009
20(the effective date of Public Act 96-745) and paying to the
21System an amount to be determined by the Board, equal to (i)
22the difference between the amount of employee and employer
23contributions transferred to the System under Sections 7-139.8
24and 9-121.10 and the amounts that would have been contributed
25had such contributions been made at the rates applicable to
26State policemen, plus (ii) interest thereon at the actuarially

 

 

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1assumed rate for each year, compounded annually, from the date
2of service to the date of payment.
3    (i) The total amount of eligible creditable service
4established by any person under subsections (g), (h), (j), (k),
5and (l) of this Section shall not exceed 12 years.
6    (j) Subject to the limitation in subsection (i), an
7investigator for the Office of the State's Attorneys Appellate
8Prosecutor or a controlled substance inspector may elect to
9establish eligible creditable service for up to 10 years of his
10service as a policeman under Article 3 or a sheriff's law
11enforcement employee under Article 7, by filing a written
12election with the Board, accompanied by payment of an amount to
13be determined by the Board, equal to (1) the difference between
14the amount of employee and employer contributions transferred
15to the System under Section 3-110.6 or 7-139.8, and the amounts
16that would have been contributed had such contributions been
17made at the rates applicable to State policemen, plus (2)
18interest thereon at the effective rate for each year,
19compounded annually, from the date of service to the date of
20payment.
21    (k) Subject to the limitation in subsection (i) of this
22Section, an alternative formula employee may elect to establish
23eligible creditable service for periods spent as a full-time
24law enforcement officer or full-time corrections officer
25employed by the federal government or by a state or local
26government located outside of Illinois, for which credit is not

 

 

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1held in any other public employee pension fund or retirement
2system. To obtain this credit, the applicant must file a
3written application with the Board by March 31, 1998,
4accompanied by evidence of eligibility acceptable to the Board
5and payment of an amount to be determined by the Board, equal
6to (1) employee contributions for the credit being established,
7based upon the applicant's salary on the first day as an
8alternative formula employee after the employment for which
9credit is being established and the rates then applicable to
10alternative formula employees, plus (2) an amount determined by
11the Board to be the employer's normal cost of the benefits
12accrued for the credit being established, plus (3) regular
13interest on the amounts in items (1) and (2) from the first day
14as an alternative formula employee after the employment for
15which credit is being established to the date of payment.
16    (l) Subject to the limitation in subsection (i), a security
17employee of the Department of Corrections may elect, not later
18than July 1, 1998, to establish eligible creditable service for
19up to 10 years of his or her service as a policeman under
20Article 3, by filing a written election with the Board,
21accompanied by payment of an amount to be determined by the
22Board, equal to (i) the difference between the amount of
23employee and employer contributions transferred to the System
24under Section 3-110.5, and the amounts that would have been
25contributed had such contributions been made at the rates
26applicable to security employees of the Department of

 

 

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1Corrections, plus (ii) interest thereon at the effective rate
2for each year, compounded annually, from the date of service to
3the date of payment.
4    (m) The amendatory changes to this Section made by this
5amendatory Act of the 94th General Assembly apply only to: (1)
6security employees of the Department of Juvenile Justice
7employed by the Department of Corrections before the effective
8date of this amendatory Act of the 94th General Assembly and
9transferred to the Department of Juvenile Justice by this
10amendatory Act of the 94th General Assembly; and (2) persons
11employed by the Department of Juvenile Justice on or after the
12effective date of this amendatory Act of the 94th General
13Assembly who are required by subsection (b) of Section 3-2.5-15
14of the Unified Code of Corrections to have a bachelor's or
15advanced degree from an accredited college or university with a
16specialization in criminal justice, education, psychology,
17social work, or a closely related social science or, in the
18case of persons who provide vocational training, who are
19required to have adequate knowledge in the skill for which they
20are providing the vocational training.
21    (n) A person employed in a position under subsection (b) of
22this Section who has purchased service credit under subsection
23(j) of Section 14-104 or subsection (b) of Section 14-105 in
24any other capacity under this Article may convert up to 5 years
25of that service credit into service credit covered under this
26Section by paying to the Fund an amount equal to (1) the

 

 

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1additional employee contribution required under Section
214-133, plus (2) the additional employer contribution required
3under Section 14-131, plus (3) interest on items (1) and (2) at
4the actuarially assumed rate from the date of the service to
5the date of payment.
6(Source: P.A. 95-530, eff. 8-28-07; 95-1036, eff. 2-17-09;
796-37, eff. 7-13-09; 96-745, eff. 8-25-09; 96-1000, eff.
87-2-10.)
 
9    (40 ILCS 5/14-114)  (from Ch. 108 1/2, par. 14-114)
10    Sec. 14-114. Automatic increase in retirement annuity.
11    (a) Except as provided in subsections (a-1) and (a-2), any
12Any person receiving a retirement annuity under this Article
13who retires having attained age 60, or who retires before age
1460 having at least 35 years of creditable service, or who
15retires on or after January 1, 2001 at an age which, when added
16to the number of years of his or her creditable service, equals
17at least 85, shall, on January 1 next following the first full
18year of retirement, have the amount of the then fixed and
19payable monthly retirement annuity increased 3%. Any person
20receiving a retirement annuity under this Article who retires
21before attainment of age 60 and with less than (i) 35 years of
22creditable service if retirement is before January 1, 2001, or
23(ii) the number of years of creditable service which, when
24added to the member's age, would equal 85, if retirement is on
25or after January 1, 2001, shall have the amount of the fixed

 

 

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1and payable retirement annuity increased by 3% on the January 1
2occurring on or next following (1) attainment of age 60, or (2)
3the first anniversary of retirement, whichever occurs later.
4However, for persons who receive the alternative retirement
5annuity under Section 14-110, references in this subsection (a)
6to attainment of age 60 shall be deemed to refer to attainment
7of age 55. For a person receiving early retirement incentives
8under Section 14-108.3 whose retirement annuity began after
9January 1, 1992 pursuant to an extension granted under
10subsection (e) of that Section, the first anniversary of
11retirement shall be deemed to be January 1, 1993. For a person
12who retires on or after June 28, 2001 and on or before October
131, 2001, and whose retirement annuity is calculated, in whole
14or in part, under Section 14-110 or subsection (g) or (h) of
15Section 14-108, the first anniversary of retirement shall be
16deemed to be January 1, 2002.
17    On each January 1 following the date of the initial
18increase under this subsection, the employee's monthly
19retirement annuity shall be increased by an additional 3%.
20    Beginning January 1, 1990 and except as provided in
21subsections (a-1) and (a-2), all automatic annual increases
22payable under this Section shall be calculated as a percentage
23of the total annuity payable at the time of the increase,
24including previous increases granted under this Article.
25    (a-1) Notwithstanding any other provision of this Article,
26for a Tier I retiree, the amount of each automatic annual

 

 

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1increase in retirement annuity occurring on or after the
2effective date of this amendatory Act of the 98th General
3Assembly shall be the lesser of $600 ($750 if the annuity is
4based primarily upon service as a noncovered employee) or 3% of
5the total annuity payable at the time of the increase,
6including previous increases granted.
7    (a-2) Notwithstanding any other provision of this Article,
8for a Tier I retiree, the monthly retirement annuity shall
9first be subject to annual increases on the January 1 occurring
10on or next after the attainment of age 67 or the January 1
11occurring on or next after the fifth anniversary of the annuity
12start date, whichever occurs earlier. If on the effective date
13of this amendatory Act of the 98th General Assembly a Tier I
14retiree has already received an annual increase under this
15Section but does not yet meet the new eligibility requirements
16of this subsection, the annual increases already received shall
17continue in force, but no additional annual increase shall be
18granted until the Tier I retiree meets the new eligibility
19requirements.
20    (a-3) Notwithstanding Section 1-103.1, subsections (a-1)
21and (a-2) apply without regard to whether or not the Tier I
22retiree is in active service under this Article on or after the
23effective date of this amendatory Act of the 98th General
24Assembly.
25    (b) The provisions of subsection (a) of this Section shall
26be applicable to an employee only if the employee makes the

 

 

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1additional contributions required after December 31, 1969 for
2the purpose of the automatic increases for not less than the
3equivalent of one full year. If an employee becomes an
4annuitant before his additional contributions equal one full
5year's contributions based on his salary at the date of
6retirement, the employee may pay the necessary balance of the
7contributions to the system, without interest, and be eligible
8for the increasing annuity authorized by this Section.
9    (c) The provisions of subsection (a) of this Section shall
10not be applicable to any annuitant who is on retirement on
11December 31, 1969, and thereafter returns to State service,
12unless the member has established at least one year of
13additional creditable service following reentry into service.
14    (d) In addition to other increases which may be provided by
15this Section, on January 1, 1981 any annuitant who was
16receiving a retirement annuity on or before January 1, 1971
17shall have his retirement annuity then being paid increased $1
18per month for each year of creditable service. On January 1,
191982, any annuitant who began receiving a retirement annuity on
20or before January 1, 1977, shall have his retirement annuity
21then being paid increased $1 per month for each year of
22creditable service.
23    On January 1, 1987, any annuitant who began receiving a
24retirement annuity on or before January 1, 1977, shall have the
25monthly retirement annuity increased by an amount equal to 8
26per year of creditable service times the number of years that

 

 

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1have elapsed since the annuity began.
2    (e) Every person who receives the alternative retirement
3annuity under Section 14-110 and who is eligible to receive the
43% increase under subsection (a) on January 1, 1986, shall also
5receive on that date a one-time increase in retirement annuity
6equal to the difference between (1) his actual retirement
7annuity on that date, including any increases received under
8subsection (a), and (2) the amount of retirement annuity he
9would have received on that date if the amendments to
10subsection (a) made by Public Act 84-162 had been in effect
11since the date of his retirement.
12(Source: P.A. 91-927, eff. 12-14-00; 92-14, eff. 6-28-01;
1392-651, eff. 7-11-02.)
 
14    (40 ILCS 5/14-131)
15    Sec. 14-131. Contributions by State.
16    (a) The State shall make contributions to the System by
17appropriations of amounts which, together with other employer
18contributions from trust, federal, and other funds, employee
19contributions, investment income, and other income, will be
20sufficient to meet the cost of maintaining and administering
21the System on a 100% 90% funded basis in accordance with
22actuarial recommendations by the end of State fiscal year 2043.
23    For the purposes of this Section and Section 14-135.08,
24references to State contributions refer only to employer
25contributions and do not include employee contributions that

 

 

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1are picked up or otherwise paid by the State or a department on
2behalf of the employee.
3    (b) The Board shall determine the total amount of State
4contributions required for each fiscal year on the basis of the
5actuarial tables and other assumptions adopted by the Board,
6using the formula in subsection (e).
7    The Board shall also determine a State contribution rate
8for each fiscal year, expressed as a percentage of payroll,
9based on the total required State contribution for that fiscal
10year (less the amount received by the System from
11appropriations under Section 8.12 of the State Finance Act and
12Section 1 of the State Pension Funds Continuing Appropriation
13Act, if any, for the fiscal year ending on the June 30
14immediately preceding the applicable November 15 certification
15deadline), the estimated payroll (including all forms of
16compensation) for personal services rendered by eligible
17employees, and the recommendations of the actuary.
18    For the purposes of this Section and Section 14.1 of the
19State Finance Act, the term "eligible employees" includes
20employees who participate in the System, persons who may elect
21to participate in the System but have not so elected, persons
22who are serving a qualifying period that is required for
23participation, and annuitants employed by a department as
24described in subdivision (a)(1) or (a)(2) of Section 14-111.
25    (c) Contributions shall be made by the several departments
26for each pay period by warrants drawn by the State Comptroller

 

 

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1against their respective funds or appropriations based upon
2vouchers stating the amount to be so contributed. These amounts
3shall be based on the full rate certified by the Board under
4Section 14-135.08 for that fiscal year. From the effective date
5of this amendatory Act of the 93rd General Assembly through the
6payment of the final payroll from fiscal year 2004
7appropriations, the several departments shall not make
8contributions for the remainder of fiscal year 2004 but shall
9instead make payments as required under subsection (a-1) of
10Section 14.1 of the State Finance Act. The several departments
11shall resume those contributions at the commencement of fiscal
12year 2005.
13    (c-1) Notwithstanding subsection (c) of this Section, for
14fiscal years 2010, 2012, and 2013 only, contributions by the
15several departments are not required to be made for General
16Revenue Funds payrolls processed by the Comptroller. Payrolls
17paid by the several departments from all other State funds must
18continue to be processed pursuant to subsection (c) of this
19Section.
20    (c-2) For State fiscal years 2010, 2012, and 2013 only, on
21or as soon as possible after the 15th day of each month, the
22Board shall submit vouchers for payment of State contributions
23to the System, in a total monthly amount of one-twelfth of the
24fiscal year General Revenue Fund contribution as certified by
25the System pursuant to Section 14-135.08 of the Illinois
26Pension Code.

 

 

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1    (d) If an employee is paid from trust funds or federal
2funds, the department or other employer shall pay employer
3contributions from those funds to the System at the certified
4rate, unless the terms of the trust or the federal-State
5agreement preclude the use of the funds for that purpose, in
6which case the required employer contributions shall be paid by
7the State. From the effective date of this amendatory Act of
8the 93rd General Assembly through the payment of the final
9payroll from fiscal year 2004 appropriations, the department or
10other employer shall not pay contributions for the remainder of
11fiscal year 2004 but shall instead make payments as required
12under subsection (a-1) of Section 14.1 of the State Finance
13Act. The department or other employer shall resume payment of
14contributions at the commencement of fiscal year 2005.
15    (e) For State fiscal years 2014 through 2043, the minimum
16contribution to the System to be made by the State for each
17fiscal year shall be an amount determined by the System to be
18equal to the sum of (1) the State's portion of the projected
19normal cost for that fiscal year, plus (2) an amount sufficient
20to bring the total assets of the System up to 100% of the total
21actuarial liabilities of the System by the end of State fiscal
22year 2043. In making these determinations, the required State
23contribution shall be calculated each year as a level
24percentage of payroll over the years remaining to and including
25fiscal year 2043 and shall be determined under the projected
26unit credit actuarial cost method.

 

 

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1For State fiscal years 2012 and 2013 through 2045, the minimum
2contribution to the System to be made by the State for each
3fiscal year shall be an amount determined by the System to be
4sufficient to bring the total assets of the System up to 90% of
5the total actuarial liabilities of the System by the end of
6State fiscal year 2045. In making these determinations, the
7required State contribution shall be calculated each year as a
8level percentage of payroll over the years remaining to and
9including fiscal year 2045 and shall be determined under the
10projected unit credit actuarial cost method.
11    For State fiscal years 1996 through 2005, the State
12contribution to the System, as a percentage of the applicable
13employee payroll, shall be increased in equal annual increments
14so that by State fiscal year 2011, the State is contributing at
15the rate required under this Section; except that (i) for State
16fiscal year 1998, for all purposes of this Code and any other
17law of this State, the certified percentage of the applicable
18employee payroll shall be 5.052% for employees earning eligible
19creditable service under Section 14-110 and 6.500% for all
20other employees, notwithstanding any contrary certification
21made under Section 14-135.08 before the effective date of this
22amendatory Act of 1997, and (ii) in the following specified
23State fiscal years, the State contribution to the System shall
24not be less than the following indicated percentages of the
25applicable employee payroll, even if the indicated percentage
26will produce a State contribution in excess of the amount

 

 

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1otherwise required under this subsection and subsection (a):
29.8% in FY 1999; 10.0% in FY 2000; 10.2% in FY 2001; 10.4% in FY
32002; 10.6% in FY 2003; and 10.8% in FY 2004.
4    Notwithstanding any other provision of this Article, the
5total required State contribution to the System for State
6fiscal year 2006 is $203,783,900.
7    Notwithstanding any other provision of this Article, the
8total required State contribution to the System for State
9fiscal year 2007 is $344,164,400.
10    For each of State fiscal years 2008 through 2009, the State
11contribution to the System, as a percentage of the applicable
12employee payroll, shall be increased in equal annual increments
13from the required State contribution for State fiscal year
142007, so that by State fiscal year 2011, the State is
15contributing at the rate otherwise required under this Section.
16    Notwithstanding any other provision of this Article, the
17total required State General Revenue Fund contribution for
18State fiscal year 2010 is $723,703,100 and shall be made from
19the proceeds of bonds sold in fiscal year 2010 pursuant to
20Section 7.2 of the General Obligation Bond Act, less (i) the
21pro rata share of bond sale expenses determined by the System's
22share of total bond proceeds, (ii) any amounts received from
23the General Revenue Fund in fiscal year 2010, and (iii) any
24reduction in bond proceeds due to the issuance of discounted
25bonds, if applicable.
26    Notwithstanding any other provision of this Article, the

 

 

HB3411- 89 -LRB098 10767 EFG 41183 b

1total required State General Revenue Fund contribution for
2State fiscal year 2011 is the amount recertified by the System
3on or before April 1, 2011 pursuant to Section 14-135.08 and
4shall be made from the proceeds of bonds sold in fiscal year
52011 pursuant to Section 7.2 of the General Obligation Bond
6Act, less (i) the pro rata share of bond sale expenses
7determined by the System's share of total bond proceeds, (ii)
8any amounts received from the General Revenue Fund in fiscal
9year 2011, and (iii) any reduction in bond proceeds due to the
10issuance of discounted bonds, if applicable.
11    Beginning in State fiscal year 2044, the minimum State
12contribution for each fiscal year shall be the amount needed to
13maintain the total assets of the System at 100% of the total
14actuarial liabilities of the System.
15    Beginning in State fiscal year 2046, the minimum State
16contribution for each fiscal year shall be the amount needed to
17maintain the total assets of the System at 90% of the total
18actuarial liabilities of the System.
19    Amounts received by the System pursuant to Section 25 of
20the Budget Stabilization Act or Section 8.12 of the State
21Finance Act in any fiscal year do not reduce and do not
22constitute payment of any portion of the minimum State
23contribution required under this Article in that fiscal year.
24Such amounts shall not reduce, and shall not be included in the
25calculation of, the required State contributions under this
26Article in any future year until the System has reached a

 

 

HB3411- 90 -LRB098 10767 EFG 41183 b

1funding ratio of at least 100% 90%. A reference in this Article
2to the "required State contribution" or any substantially
3similar term does not include or apply to any amounts payable
4to the System under Section 25 of the Budget Stabilization Act.
5    Notwithstanding any other provision of this Section, the
6required State contribution for State fiscal year 2005 and for
7fiscal year 2008 and each fiscal year thereafter through State
8fiscal year 2013, as calculated under this Section and
9certified under Section 14-135.08, shall not exceed an amount
10equal to (i) the amount of the required State contribution that
11would have been calculated under this Section for that fiscal
12year if the System had not received any payments under
13subsection (d) of Section 7.2 of the General Obligation Bond
14Act, minus (ii) the portion of the State's total debt service
15payments for that fiscal year on the bonds issued in fiscal
16year 2003 for the purposes of that Section 7.2, as determined
17and certified by the Comptroller, that is the same as the
18System's portion of the total moneys distributed under
19subsection (d) of Section 7.2 of the General Obligation Bond
20Act. In determining this maximum for State fiscal years 2008
21through 2010, however, the amount referred to in item (i) shall
22be increased, as a percentage of the applicable employee
23payroll, in equal increments calculated from the sum of the
24required State contribution for State fiscal year 2007 plus the
25applicable portion of the State's total debt service payments
26for fiscal year 2007 on the bonds issued in fiscal year 2003

 

 

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1for the purposes of Section 7.2 of the General Obligation Bond
2Act, so that, by State fiscal year 2011, the State is
3contributing at the rate otherwise required under this Section.
4    (f) After the submission of all payments for eligible
5employees from personal services line items in fiscal year 2004
6have been made, the Comptroller shall provide to the System a
7certification of the sum of all fiscal year 2004 expenditures
8for personal services that would have been covered by payments
9to the System under this Section if the provisions of this
10amendatory Act of the 93rd General Assembly had not been
11enacted. Upon receipt of the certification, the System shall
12determine the amount due to the System based on the full rate
13certified by the Board under Section 14-135.08 for fiscal year
142004 in order to meet the State's obligation under this
15Section. The System shall compare this amount due to the amount
16received by the System in fiscal year 2004 through payments
17under this Section and under Section 6z-61 of the State Finance
18Act. If the amount due is more than the amount received, the
19difference shall be termed the "Fiscal Year 2004 Shortfall" for
20purposes of this Section, and the Fiscal Year 2004 Shortfall
21shall be satisfied under Section 1.2 of the State Pension Funds
22Continuing Appropriation Act. If the amount due is less than
23the amount received, the difference shall be termed the "Fiscal
24Year 2004 Overpayment" for purposes of this Section, and the
25Fiscal Year 2004 Overpayment shall be repaid by the System to
26the Pension Contribution Fund as soon as practicable after the

 

 

HB3411- 92 -LRB098 10767 EFG 41183 b

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

 

 

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

 

 

HB3411- 94 -LRB098 10767 EFG 41183 b

1year 2011 through payments under this Section. If the amount
2due is more than the amount received, the difference shall be
3termed the "Fiscal Year 2011 Shortfall" for purposes of this
4Section, and the Fiscal Year 2011 Shortfall shall be satisfied
5under Section 1.2 of the State Pension Funds Continuing
6Appropriation Act. If the amount due is less than the amount
7received, the difference shall be termed the "Fiscal Year 2011
8Overpayment" for purposes of this Section, and the Fiscal Year
92011 Overpayment shall be repaid by the System to the General
10Revenue Fund as soon as practicable after the certification.
11    (k) For fiscal years 2012 and 2013 only, after the
12submission of all payments for eligible employees from personal
13services line items paid from the General Revenue Fund in the
14fiscal year have been made, the Comptroller shall provide to
15the System a certification of the sum of all expenditures in
16the fiscal year for personal services. Upon receipt of the
17certification, the System shall determine the amount due to the
18System based on the full rate certified by the Board under
19Section 14-135.08 for the fiscal year in order to meet the
20State's obligation under this Section. The System shall compare
21this amount due to the amount received by the System for the
22fiscal year. If the amount due is more than the amount
23received, the difference shall be termed the "Prior Fiscal Year
24Shortfall" for purposes of this Section, and the Prior Fiscal
25Year Shortfall shall be satisfied under Section 1.2 of the
26State Pension Funds Continuing Appropriation Act. If the amount

 

 

HB3411- 95 -LRB098 10767 EFG 41183 b

1due is less than the amount received, the difference shall be
2termed the "Prior Fiscal Year Overpayment" for purposes of this
3Section, and the Prior Fiscal Year Overpayment shall be repaid
4by the System to the General Revenue Fund as soon as
5practicable after the certification.
6(Source: P.A. 96-43, eff. 7-15-09; 96-45, eff. 7-15-09;
796-1000, eff. 7-2-10; 96-1497, eff. 1-14-11; 96-1511, eff.
81-27-11; 96-1554, eff. 3-18-11; 97-72, eff. 7-1-11; 97-732,
9eff. 6-30-12.)
 
10    (40 ILCS 5/14-132)  (from Ch. 108 1/2, par. 14-132)
11    Sec. 14-132. Obligations of State; funding guarantee.
12    (a) The payment of the required department contributions,
13all allowances, annuities, benefits granted under this
14Article, and all expenses of administration of the system are
15obligations of the State of Illinois to the extent specified in
16this Article.
17    (b) All income of the system shall be credited to a
18separate account for this system in the State treasury and
19shall be used to pay allowances, annuities, benefits and
20administration expense.
21    (c) Beginning July 1, 2013, the State shall be
22contractually obligated to contribute to the System under
23Section 14-131 in each State fiscal year an amount not less
24than the sum of (i) the State's normal cost for that year and
25(ii) the portion of the unfunded accrued liability assigned to

 

 

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1that year by law in accordance with a schedule that distributes
2payments equitably over a reasonable period of time and in
3accordance with accepted actuarial practices. The obligations
4created under this subsection (c) are contractual obligations
5protected and enforceable under Article I, Section 16 and
6Article XIII, Section 5 of the Illinois Constitution.
7    Notwithstanding any other provision of law, if the State
8fails to pay in a State fiscal year the amount guaranteed under
9this subsection, the System may bring a mandamus action in the
10Circuit Court of Sangamon County to compel the State to make
11that payment, irrespective of other remedies that may be
12available to the System. In ordering the State to make the
13required payment, the court may order a reasonable payment
14schedule to enable the State to make the required payment
15without significantly imperiling the public health, safety, or
16welfare.
17    Any payments required to be made by the State pursuant to
18this subsection (c) are expressly subordinated to the payment
19of the principal, interest, and premium, if any, on any bonded
20debt obligation of the State or any other State-created entity,
21either currently outstanding or to be issued, for which the
22source of repayment or security thereon is derived directly or
23indirectly from tax revenues collected by the State or any
24other State-created entity. Payments on such bonded
25obligations include any statutory fund transfers or other
26prefunding mechanisms or formulas set forth, now or hereafter,

 

 

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1in State law or bond indentures, into debt service funds or
2accounts of the State related to such bonded obligations,
3consistent with the payment schedules associated with such
4obligations.
5(Source: P.A. 80-841.)
 
6    (40 ILCS 5/14-133)  (from Ch. 108 1/2, par. 14-133)
7    Sec. 14-133. Contributions on behalf of members.
8    (a) Each participating employee shall make contributions
9to the System, based on the employee's compensation, as
10follows:
11        (1) Covered employees, except as indicated below, 3.5%
12    for retirement annuity, and 0.5% for a widow or survivors
13    annuity;
14        (2) Noncovered employees, except as indicated below,
15    7% for retirement annuity and 1% for a widow or survivors
16    annuity;
17        (3) Noncovered employees serving in a position in which
18    "eligible creditable service" as defined in Section 14-110
19    may be earned, 1% for a widow or survivors annuity plus the
20    following amount for retirement annuity: 8.5% through
21    December 31, 2001; 9.5% in 2002; 10.5% in 2003; and 11.5%
22    in 2004 and thereafter;
23        (4) Covered employees serving in a position in which
24    "eligible creditable service" as defined in Section 14-110
25    may be earned, 0.5% for a widow or survivors annuity plus

 

 

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

 

 

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1member is deemed to consent and agree to the deductions from
2compensation provided for in this Article, and shall receipt in
3full for salary or compensation.
4(Source: P.A. 92-14, eff. 6-28-01.)
 
5    (40 ILCS 5/14-135.08)  (from Ch. 108 1/2, par. 14-135.08)
6    Sec. 14-135.08. To certify required State contributions.
7    (a) To certify to the Governor and to each department, on
8or before November 15 of each year through until November 15,
92011, the required rate for State contributions to the System
10for the next State fiscal year, as determined under subsection
11(b) of Section 14-131. The certification to the Governor under
12this subsection (a) shall include a copy of the actuarial
13recommendations upon which the rate is based and shall
14specifically identify the System's projected State normal cost
15for that fiscal year.
16    (a-5) On or before November 1 of each year, beginning
17November 1, 2012, the Board shall submit to the State Actuary,
18the Governor, and the General Assembly a proposed certification
19of the amount of the required State contribution to the System
20for the next fiscal year, along with all of the actuarial
21assumptions, calculations, and data upon which that proposed
22certification is based. On or before January 1 of each year,
23beginning January 1, 2013, the State Actuary shall issue a
24preliminary report concerning the proposed certification and
25identifying, if necessary, recommended changes in actuarial

 

 

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1assumptions that the Board must consider before finalizing its
2certification of the required State contributions.
3    On or before January 15, 2013 and each January 15
4thereafter, the Board shall certify to the Governor and the
5General Assembly the amount of the required State contribution
6for the next fiscal year. The certification shall include a
7copy of the actuarial recommendations upon which it is based
8and shall specifically identify the System's projected State
9normal cost for that fiscal year. The Board's certification
10must note any deviations from the State Actuary's recommended
11changes, the reason or reasons for not following the State
12Actuary's recommended changes, and the fiscal impact of not
13following the State Actuary's recommended changes on the
14required State contribution.
15    (b) The certifications under subsections (a) and (a-5)
16shall include an additional amount necessary to pay all
17principal of and interest on those general obligation bonds due
18the next fiscal year authorized by Section 7.2(a) of the
19General Obligation Bond Act and issued to provide the proceeds
20deposited by the State with the System in July 2003,
21representing deposits other than amounts reserved under
22Section 7.2(c) of the General Obligation Bond Act. For State
23fiscal year 2005, the Board shall make a supplemental
24certification of the additional amount necessary to pay all
25principal of and interest on those general obligation bonds due
26in State fiscal years 2004 and 2005 authorized by Section

 

 

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17.2(a) of the General Obligation Bond Act and issued to provide
2the proceeds deposited by the State with the System in July
32003, representing deposits other than amounts reserved under
4Section 7.2(c) of the General Obligation Bond Act, as soon as
5practical after the effective date of this amendatory Act of
6the 93rd General Assembly.
7    On or before May 1, 2004, the Board shall recalculate and
8recertify to the Governor and to each department the amount of
9the required State contribution to the System and the required
10rates for State contributions to the System for State fiscal
11year 2005, taking into account the amounts appropriated to and
12received by the System under subsection (d) of Section 7.2 of
13the General Obligation Bond Act.
14    On or before July 1, 2005, the Board shall recalculate and
15recertify to the Governor and to each department the amount of
16the required State contribution to the System and the required
17rates for State contributions to the System for State fiscal
18year 2006, taking into account the changes in required State
19contributions made by this amendatory Act of the 94th General
20Assembly.
21    On or before April 1, 2011, the Board shall recalculate and
22recertify to the Governor and to each department the amount of
23the required State contribution to the System for State fiscal
24year 2011, applying the changes made by Public Act 96-889 to
25the System's assets and liabilities as of June 30, 2009 as
26though Public Act 96-889 was approved on that date.

 

 

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1(Source: P.A. 96-1497, eff. 1-14-11; 96-1511, eff. 1-27-11;
297-694, eff. 6-18-12.)
 
3    (40 ILCS 5/14-152.1)
4    Sec. 14-152.1. Application and expiration of new benefit
5increases.
6    (a) As used in this Section, "new benefit increase" means
7an increase in the amount of any benefit provided under this
8Article, or an expansion of the conditions of eligibility for
9any benefit under this Article, that results from an amendment
10to this Code that takes effect after June 1, 2005 (the
11effective date of Public Act 94-4). "New benefit increase",
12however, does not include any benefit increase resulting from
13the changes made to this Article by Public Act 96-37 or by this
14amendatory Act of the 98th 96th General Assembly.
15    (b) Notwithstanding any other provision of this Code or any
16subsequent amendment to this Code, every new benefit increase
17is subject to this Section and shall be deemed to be granted
18only in conformance with and contingent upon compliance with
19the provisions of this Section.
20    (c) The Public Act enacting a new benefit increase must
21identify and provide for payment to the System of additional
22funding at least sufficient to fund the resulting annual
23increase in cost to the System as it accrues.
24    Every new benefit increase is contingent upon the General
25Assembly providing the additional funding required under this

 

 

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

 

 

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1other person, including without limitation a person who
2continues in service after the expiration date and did not
3apply and qualify for the affected benefit while the new
4benefit increase was in effect.
5(Source: P.A. 96-37, eff. 7-13-09.)
 
6    (40 ILCS 5/15-103.4 new)
7    Sec. 15-103.4. Tier 3 retirement plan. "Tier 3 retirement
8plan": The composite defined-contribution, defined-benefit
9retirement program maintained under the System as described in
10Section 15-158.5.
11    The Tier 3 retirement plan consists of a defined-benefit
12component and a defined-contribution component; both
13components apply to all participants in the Tier 3 retirement
14plan.
 
15    (40 ILCS 5/15-107.1 new)
16    Sec. 15-107.1. Tier I participant. "Tier I participant": A
17participant under this Article, other than a participant in the
18self-managed plan under Section 15-158.2, who first became a
19member or participant before January 1, 2011 under any
20reciprocal retirement system or pension fund established under
21this Code other than a retirement system or pension fund
22established under Article 2, 3, 4, 5, 6, or 18 of this Code.
 
23    (40 ILCS 5/15-107.2 new)

 

 

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1    Sec. 15-107.2. Tier I retiree. "Tier I retiree": A former
2Tier I participant who is receiving a retirement annuity.
3    A person does not become a Tier I retiree by virtue of
4receiving a reversionary, survivors, beneficiary, or
5disability annuity.
 
6    (40 ILCS 5/15-107.3 new)
7    Sec. 15-107.3. Tier 3 employee. "Tier 3 employee": An
8employee, other than a participant in the self-managed plan
9under Section 15-158.2, who first becomes a participant on or
10after January 1, 2014; and an employee who first became a
11participant on or after January 1, 2011 but before January 1,
122014 and has elected to transfer his or her pension credits to
13the Tier 3 retirement plan.
 
14    (40 ILCS 5/15-111)  (from Ch. 108 1/2, par. 15-111)
15    Sec. 15-111. Earnings. "Earnings": An amount paid for
16personal services equal to the sum of the basic compensation
17plus extra compensation for summer teaching, overtime or other
18extra service. For periods for which an employee receives
19service credit under subsection (c) of Section 15-113.1 or
20Section 15-113.2, earnings are equal to the basic compensation
21on which contributions are paid by the employee during such
22periods. Compensation for employment which is irregular,
23intermittent and temporary shall not be considered earnings,
24unless the participant is also receiving earnings from the

 

 

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

 

 

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198th General Assembly, the greater of (i) the annual
2contribution and benefit base established for the applicable
3year by the Commissioner of Social Security under the federal
4Social Security Act or (ii) the annual earnings of the
5participant during the 365 days immediately preceding that
6effective date; except that this limitation does not apply to a
7participant's earnings that are determined under an employment
8contract or collective bargaining agreement that is in effect
9on the effective date of this amendatory Act of the 98th
10General Assembly and has not been amended or renewed after that
11date.
12(Source: P.A. 91-887, eff. 7-6-00.)
 
13    (40 ILCS 5/15-113.6)  (from Ch. 108 1/2, par. 15-113.6)
14    Sec. 15-113.6. Service for employment in public schools.
15"Service for employment in public schools": Includes those
16periods not exceeding the lesser of 10 years or 2/3 of the
17service granted under other Sections of this Article dealing
18with service credit, during which a person who entered the
19system after September 1, 1974 was employed full time by a
20public common school, public college and public university, or
21by an agency or instrumentality of any of the foregoing, of any
22state, territory, dependency or possession of the United States
23of America, including the Philippine Islands, or a school
24operated by or under the auspices of any agency or department
25of any other state, if the person (1) cannot qualify for a

 

 

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1retirement pension or other benefit based upon employer
2contributions from another retirement system, exclusive of
3federal social security, based in whole or in part upon this
4employment, and (2) pays the lesser of (A) an amount equal to
58% of his or her annual basic compensation on the date of
6becoming a participating employee subsequent to this service
7multiplied by the number of years of such service, together
8with compound interest from the date participation begins to
9the date payment is received by the board at the rate of 6% per
10annum through August 31, 1982, and at the effective rates after
11that date, and (B) 50% of the actuarial value of the increase
12in the retirement annuity provided by this service, and (3)
13contributes for at least 5 years subsequent to this employment
14to one or more of the following systems: the State Universities
15Retirement System, the Teachers' Retirement System of the State
16of Illinois, and the Public School Teachers' Pension and
17Retirement Fund of Chicago.
18    The service granted under this Section shall not be
19considered in determining whether the person has the minimum of
208 years of service required to qualify for a retirement annuity
21at age 55 or the 5 years of service required to qualify for a
22retirement annuity at age 62, as provided in Section 15-135, or
23the 10 years required by subsection (c) of Section 1-160, or
24the 5 years of service required by Section 15-158.5 for a
25person who first becomes a participant on or after January 1,
262011. The maximum allowable service of 10 years for this

 

 

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1governmental employment shall be reduced by the service credit
2which is validated under paragraph (2) of subsection (b) of
3Section 16-127 and paragraph 1 of Section 17-133.
4(Source: P.A. 95-83, eff. 8-13-07; 96-1490, eff. 1-1-11.)
 
5    (40 ILCS 5/15-113.7)  (from Ch. 108 1/2, par. 15-113.7)
6    Sec. 15-113.7. Service for other public employment.
7"Service for other public employment": Includes those periods
8not exceeding the lesser of 10 years or 2/3 of the service
9granted under other Sections of this Article dealing with
10service credit, during which a person was employed full time by
11the United States government, or by the government of a state,
12or by a political subdivision of a state, or by an agency or
13instrumentality of any of the foregoing, if the person (1)
14cannot qualify for a retirement pension or other benefit based
15upon employer contributions from another retirement system,
16exclusive of federal social security, based in whole or in part
17upon this employment, and (2) pays the lesser of (A) an amount
18equal to 8% of his or her annual basic compensation on the date
19of becoming a participating employee subsequent to this service
20multiplied by the number of years of such service, together
21with compound interest from the date participation begins to
22the date payment is received by the board at the rate of 6% per
23annum through August 31, 1982, and at the effective rates after
24that date, and (B) 50% of the actuarial value of the increase
25in the retirement annuity provided by this service, and (3)

 

 

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1contributes for at least 5 years subsequent to this employment
2to one or more of the following systems: the State Universities
3Retirement System, the Teachers' Retirement System of the State
4of Illinois, and the Public School Teachers' Pension and
5Retirement Fund of Chicago. If a function of a governmental
6unit as defined by Section 20-107 is transferred by law, in
7whole or in part to an employer, and an employee transfers
8employment from this governmental unit to such employer within
96 months of the transfer of the function, the payment for
10service authorized under this Section shall not exceed the
11amount which would have been payable for this service to the
12retirement system covering the governmental unit from which the
13function was transferred.
14    The service granted under this Section shall not be
15considered in determining whether the person has the minimum of
168 years of service required to qualify for a retirement annuity
17at age 55 or the 5 years of service required to qualify for a
18retirement annuity at age 62, as provided in Section 15-135,
19the 10 years required by subsection (c) of Section 1-160, or
20the 5 years of service required by Section 15-158.5. The
21maximum allowable service of 10 years for this governmental
22employment shall be reduced by the service credit which is
23validated under paragraph (2) of subsection (b) of Section
2416-127 and paragraph one of Section 17-133.
25    Except as hereinafter provided, this Section shall not
26apply to persons who become participants in the system after

 

 

HB3411- 111 -LRB098 10767 EFG 41183 b

1September 1, 1974.
2(Source: P.A. 95-83, eff. 8-13-07.)
 
3    (40 ILCS 5/15-135)  (from Ch. 108 1/2, par. 15-135)
4    Sec. 15-135. Retirement annuities - Conditions.
5    (a) A participant who retires in one of the following
6specified years with the specified amount of service is
7entitled to a retirement annuity at any age under the
8retirement program applicable to the participant:
9        35 years if retirement is in 1997 or before;
10        34 years if retirement is in 1998;
11        33 years if retirement is in 1999;
12        32 years if retirement is in 2000;
13        31 years if retirement is in 2001;
14        30 years if retirement is in 2002 or later.
15    A participant with 8 or more years of service after
16September 1, 1941, is entitled to a retirement annuity on or
17after attainment of age 55.
18    A participant with at least 5 but less than 8 years of
19service after September 1, 1941, is entitled to a retirement
20annuity on or after attainment of age 62.
21    A participant who has at least 25 years of service in this
22system as a police officer or firefighter is entitled to a
23retirement annuity on or after the attainment of age 50, if
24Rule 4 of Section 15-136 is applicable to the participant.
25    (a-5) Notwithstanding subsection (a) of this Section, for a

 

 

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1Tier I participant who begins receiving a retirement annuity
2under this Article after July 1, 2013:
3        (1) If the Tier I participant is at least 45 years old
4    on the effective date of this amendatory Act of the 98th
5    General Assembly, then the reference to retirement with 30
6    years of service as well as the references to age 50, 55,
7    and 62 in subsection (a) of this Section remain unchanged.
8        (2) If the Tier I participant is at least 40 but less
9    than 45 years old on the effective date of this amendatory
10    Act of the 98th General Assembly, then the reference to
11    retirement with 30 years of service as well as the
12    references to age 50, 55, and 62 in subsection (a) of this
13    Section shall be increased by one year.
14        (3) If the Tier I participant is at least 35 but less
15    than 40 years old on the effective date of this amendatory
16    Act of the 98th General Assembly, then the reference to
17    retirement with 30 years of service as well as the
18    references to age 50, 55, and 62 in subsection (a) of this
19    Section shall be increased by 3 years.
20        (4) If the Tier I participant is less than 35 years old
21    on the effective date of this amendatory Act of the 98th
22    General Assembly, then the reference to retirement with 30
23    years of service as well as the references to age 50, 55,
24    and 62 in subsection (a) of this Section shall be increased
25    by 5 years.
26    Notwithstanding Section 1-103.1, this subsection (a-5)

 

 

HB3411- 113 -LRB098 10767 EFG 41183 b

1applies without regard to whether or not the Tier I participant
2is in active service under this Article on or after the
3effective date of this amendatory Act of the 98th General
4Assembly.
5    (b) The annuity payment period shall begin on the date
6specified by the participant or the recipient of a disability
7retirement annuity submitting a written application, which
8date shall not be prior to termination of employment or more
9than one year before the application is received by the board;
10however, if the participant is not an employee of an employer
11participating in this System or in a participating system as
12defined in Article 20 of this Code on April 1 of the calendar
13year next following the calendar year in which the participant
14attains age 70 1/2, the annuity payment period shall begin on
15that date regardless of whether an application has been filed.
16    (c) An annuity is not payable if the amount provided under
17Section 15-136 is less than $10 per month.
18(Source: P.A. 97-933, eff. 8-10-12; 97-968, eff. 8-16-12.)
 
19    (40 ILCS 5/15-136)  (from Ch. 108 1/2, par. 15-136)
20    Sec. 15-136. Retirement annuities - Amount. The provisions
21of this Section 15-136 apply only to those participants who are
22participating in the traditional benefit package or the
23portable benefit package and do not apply to participants who
24are participating in the self-managed plan.
25    (a) The amount of a participant's retirement annuity,

 

 

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1expressed in the form of a single-life annuity, shall be
2determined by whichever of the following rules is applicable
3and provides the largest annuity:
4    Rule 1: The retirement annuity shall be 1.67% of final rate
5of earnings for each of the first 10 years of service, 1.90%
6for each of the next 10 years of service, 2.10% for each year
7of service in excess of 20 but not exceeding 30, and 2.30% for
8each year in excess of 30; or for persons who retire on or
9after January 1, 1998, 2.2% of the final rate of earnings for
10each year of service.
11    Rule 2: The retirement annuity shall be the sum of the
12following, determined from amounts credited to the participant
13in accordance with the actuarial tables and the effective rate
14of interest in effect at the time the retirement annuity
15begins:
16        (i) the normal annuity which can be provided on an
17    actuarially equivalent basis, by the accumulated normal
18    contributions as of the date the annuity begins;
19        (ii) an annuity from employer contributions of an
20    amount equal to that which can be provided on an
21    actuarially equivalent basis from the accumulated normal
22    contributions made by the participant under Section
23    15-113.6 and Section 15-113.7 plus 1.4 times all other
24    accumulated normal contributions made by the participant;
25    and
26        (iii) the annuity that can be provided on an

 

 

HB3411- 115 -LRB098 10767 EFG 41183 b

1    actuarially equivalent basis from the entire contribution
2    made by the participant under Section 15-113.3.
3    For the purpose of calculating an annuity under this Rule
42, the contribution required under subsection (c-5) of Section
515-157 shall not be considered when determining the
6participant's accumulated normal contributions under clause
7(i) or the employer contribution under clause (ii).
8    With respect to a police officer or firefighter who retires
9on or after August 14, 1998, the accumulated normal
10contributions taken into account under clauses (i) and (ii) of
11this Rule 2 shall include the additional normal contributions
12made by the police officer or firefighter under Section
1315-157(a).
14    The amount of a retirement annuity calculated under this
15Rule 2 shall be computed solely on the basis of the
16participant's accumulated normal contributions, as specified
17in this Rule and defined in Section 15-116. Neither an employee
18or employer contribution for early retirement under Section
1915-136.2 nor any other employer contribution shall be used in
20the calculation of the amount of a retirement annuity under
21this Rule 2.
22    This amendatory Act of the 91st General Assembly is a
23clarification of existing law and applies to every participant
24and annuitant without regard to whether status as an employee
25terminates before the effective date of this amendatory Act.
26    This Rule 2 does not apply to a person who first becomes an

 

 

HB3411- 116 -LRB098 10767 EFG 41183 b

1employee under this Article on or after July 1, 2005.
2    Rule 3: The retirement annuity of a participant who is
3employed at least one-half time during the period on which his
4or her final rate of earnings is based, shall be equal to the
5participant's years of service not to exceed 30, multiplied by
6(1) $96 if the participant's final rate of earnings is less
7than $3,500, (2) $108 if the final rate of earnings is at least
8$3,500 but less than $4,500, (3) $120 if the final rate of
9earnings is at least $4,500 but less than $5,500, (4) $132 if
10the final rate of earnings is at least $5,500 but less than
11$6,500, (5) $144 if the final rate of earnings is at least
12$6,500 but less than $7,500, (6) $156 if the final rate of
13earnings is at least $7,500 but less than $8,500, (7) $168 if
14the final rate of earnings is at least $8,500 but less than
15$9,500, and (8) $180 if the final rate of earnings is $9,500 or
16more, except that the annuity for those persons having made an
17election under Section 15-154(a-1) shall be calculated and
18payable under the portable retirement benefit program pursuant
19to the provisions of Section 15-136.4.
20    Rule 4: A participant who is at least age 50 and has 25 or
21more years of service as a police officer or firefighter, and a
22participant who is age 55 or over and has at least 20 but less
23than 25 years of service as a police officer or firefighter,
24shall be entitled to a retirement annuity of 2 1/4% of the
25final rate of earnings for each of the first 10 years of
26service as a police officer or firefighter, 2 1/2% for each of

 

 

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1the next 10 years of service as a police officer or
2firefighter, and 2 3/4% for each year of service as a police
3officer or firefighter in excess of 20. The retirement annuity
4for all other service shall be computed under Rule 1.
5    For purposes of this Rule 4, a participant's service as a
6firefighter shall also include the following:
7        (i) service that is performed while the person is an
8    employee under subsection (h) of Section 15-107; and
9        (ii) in the case of an individual who was a
10    participating employee employed in the fire department of
11    the University of Illinois's Champaign-Urbana campus
12    immediately prior to the elimination of that fire
13    department and who immediately after the elimination of
14    that fire department transferred to another job with the
15    University of Illinois, service performed as an employee of
16    the University of Illinois in a position other than police
17    officer or firefighter, from the date of that transfer
18    until the employee's next termination of service with the
19    University of Illinois.
20    Rule 5: The retirement annuity of a participant who elected
21early retirement under the provisions of Section 15-136.2 and
22who, on or before February 16, 1995, brought administrative
23proceedings pursuant to the administrative rules adopted by the
24System to challenge the calculation of his or her retirement
25annuity shall be the sum of the following, determined from
26amounts credited to the participant in accordance with the

 

 

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1actuarial tables and the prescribed rate of interest in effect
2at the time the retirement annuity begins:
3        (i) the normal annuity which can be provided on an
4    actuarially equivalent basis, by the accumulated normal
5    contributions as of the date the annuity begins; and
6        (ii) an annuity from employer contributions of an
7    amount equal to that which can be provided on an
8    actuarially equivalent basis from the accumulated normal
9    contributions made by the participant under Section
10    15-113.6 and Section 15-113.7 plus 1.4 times all other
11    accumulated normal contributions made by the participant;
12    and
13        (iii) an annuity which can be provided on an
14    actuarially equivalent basis from the employee
15    contribution for early retirement under Section 15-136.2,
16    and an annuity from employer contributions of an amount
17    equal to that which can be provided on an actuarially
18    equivalent basis from the employee contribution for early
19    retirement under Section 15-136.2.
20    In no event shall a retirement annuity under this Rule 5 be
21lower than the amount obtained by adding (1) the monthly amount
22obtained by dividing the combined employee and employer
23contributions made under Section 15-136.2 by the System's
24annuity factor for the age of the participant at the beginning
25of the annuity payment period and (2) the amount equal to the
26participant's annuity if calculated under Rule 1, reduced under

 

 

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1Section 15-136(b) as if no contributions had been made under
2Section 15-136.2.
3    With respect to a participant who is qualified for a
4retirement annuity under this Rule 5 whose retirement annuity
5began before the effective date of this amendatory Act of the
691st General Assembly, and for whom an employee contribution
7was made under Section 15-136.2, the System shall recalculate
8the retirement annuity under this Rule 5 and shall pay any
9additional amounts due in the manner provided in Section
1015-186.1 for benefits mistakenly set too low.
11    The amount of a retirement annuity calculated under this
12Rule 5 shall be computed solely on the basis of those
13contributions specifically set forth in this Rule 5. Except as
14provided in clause (iii) of this Rule 5, neither an employee
15nor employer contribution for early retirement under Section
1615-136.2, nor any other employer contribution, shall be used in
17the calculation of the amount of a retirement annuity under
18this Rule 5.
19    The General Assembly has adopted the changes set forth in
20Section 25 of this amendatory Act of the 91st General Assembly
21in recognition that the decision of the Appellate Court for the
22Fourth District in Mattis v. State Universities Retirement
23System et al. might be deemed to give some right to the
24plaintiff in that case. The changes made by Section 25 of this
25amendatory Act of the 91st General Assembly are a legislative
26implementation of the decision of the Appellate Court for the

 

 

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1Fourth District in Mattis v. State Universities Retirement
2System et al. with respect to that plaintiff.
3    The changes made by Section 25 of this amendatory Act of
4the 91st General Assembly apply without regard to whether the
5person is in service as an employee on or after its effective
6date.
7    (b) The retirement annuity provided under Rules 1 and 3
8above shall be reduced by 1/2 of 1% for each month the
9participant is under age 60 at the time of retirement. However,
10this reduction shall not apply in the following cases:
11        (1) For a disabled participant whose disability
12    benefits have been discontinued because he or she has
13    exhausted eligibility for disability benefits under clause
14    (6) of Section 15-152;
15        (2) For a participant who has at least the number of
16    years of service required to retire at any age under
17    subsection (a) of Section 15-135; or
18        (3) For that portion of a retirement annuity which has
19    been provided on account of service of the participant
20    during periods when he or she performed the duties of a
21    police officer or firefighter, if these duties were
22    performed for at least 5 years immediately preceding the
23    date the retirement annuity is to begin.
24    (c) The maximum retirement annuity provided under Rules 1,
252, 4, and 5 shall be the lesser of (1) the annual limit of
26benefits as specified in Section 415 of the Internal Revenue

 

 

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1Code of 1986, as such Section may be amended from time to time
2and as such benefit limits shall be adjusted by the
3Commissioner of Internal Revenue, and (2) 80% of final rate of
4earnings.
5    (d) Subject to the provisions of subsections (d-1) and
6(d-2), an An annuitant whose status as an employee terminates
7after August 14, 1969 shall receive automatic increases in his
8or her retirement annuity as follows:
9    Effective January 1 immediately following the date the
10retirement annuity begins, the annuitant shall receive an
11increase in his or her monthly retirement annuity of 0.125% of
12the monthly retirement annuity provided under Rule 1, Rule 2,
13Rule 3, Rule 4, or Rule 5, contained in this Section,
14multiplied by the number of full months which elapsed from the
15date the retirement annuity payments began to January 1, 1972,
16plus 0.1667% of such annuity, multiplied by the number of full
17months which elapsed from January 1, 1972, or the date the
18retirement annuity payments began, whichever is later, to
19January 1, 1978, plus 0.25% of such annuity multiplied by the
20number of full months which elapsed from January 1, 1978, or
21the date the retirement annuity payments began, whichever is
22later, to the effective date of the increase.
23    The annuitant shall receive an increase in his or her
24monthly retirement annuity on each January 1 thereafter during
25the annuitant's life of 3% of the monthly annuity provided
26under Rule 1, Rule 2, Rule 3, Rule 4, or Rule 5 contained in

 

 

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1this Section. The change made under this subsection by P.A.
281-970 is effective January 1, 1980 and applies to each
3annuitant whose status as an employee terminates before or
4after that date.
5    Beginning January 1, 1990 and except as provided in
6subsections (d-1) and (d-2), all automatic annual increases
7payable under this Section shall be calculated as a percentage
8of the total annuity payable at the time of the increase,
9including all increases previously granted under this Article.
10    The change made in this subsection by P.A. 85-1008 is
11effective January 26, 1988, and is applicable without regard to
12whether status as an employee terminated before that date.
13    (d-1) Notwithstanding any other provision of this Article,
14for a Tier I retiree, the amount of each automatic annual
15increase in retirement annuity occurring on or after the
16effective date of this amendatory Act of the 98th General
17Assembly shall be the lesser of $750 or 3% of the total annuity
18payable at the time of the increase, including previous
19increases granted.
20    (d-2) Notwithstanding any other provision of this Article,
21for a Tier I retiree, the monthly retirement annuity shall
22first be subject to annual increases on the January 1 occurring
23on or next after the attainment of age 67 or the January 1
24occurring on or next after the fifth anniversary of the annuity
25start date, whichever occurs earlier. If on the effective date
26of this amendatory Act of the 98th General Assembly a Tier I

 

 

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1retiree has already received an annual increase under this
2Section but does not yet meet the new eligibility requirements
3of this subsection, the annual increases already received shall
4continue in force, but no additional annual increase shall be
5granted until the Tier I retiree meets the new eligibility
6requirements.
7    (d-3) Notwithstanding Section 1-103.1, subsections (d-1)
8and (d-2) apply without regard to whether or not the Tier I
9retiree is in active service under this Article on or after the
10effective date of this amendatory Act of the 98th General
11Assembly.
12    (e) If, on January 1, 1987, or the date the retirement
13annuity payment period begins, whichever is later, the sum of
14the retirement annuity provided under Rule 1 or Rule 2 of this
15Section and the automatic annual increases provided under the
16preceding subsection or Section 15-136.1, amounts to less than
17the retirement annuity which would be provided by Rule 3, the
18retirement annuity shall be increased as of January 1, 1987, or
19the date the retirement annuity payment period begins,
20whichever is later, to the amount which would be provided by
21Rule 3 of this Section. Such increased amount shall be
22considered as the retirement annuity in determining benefits
23provided under other Sections of this Article. This paragraph
24applies without regard to whether status as an employee
25terminated before the effective date of this amendatory Act of
261987, provided that the annuitant was employed at least

 

 

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1one-half time during the period on which the final rate of
2earnings was based.
3    (f) A participant is entitled to such additional annuity as
4may be provided on an actuarially equivalent basis, by any
5accumulated additional contributions to his or her credit.
6However, the additional contributions made by the participant
7toward the automatic increases in annuity provided under this
8Section and the contributions made under subsection (c-5) of
9Section 15-157 by this amendatory Act of the 98th General
10Assembly shall not be taken into account in determining the
11amount of such additional annuity.
12    (g) If, (1) by law, a function of a governmental unit, as
13defined by Section 20-107 of this Code, is transferred in whole
14or in part to an employer, and (2) a participant transfers
15employment from such governmental unit to such employer within
166 months after the transfer of the function, and (3) the sum of
17(A) the annuity payable to the participant under Rule 1, 2, or
183 of this Section (B) all proportional annuities payable to the
19participant by all other retirement systems covered by Article
2020, and (C) the initial primary insurance amount to which the
21participant is entitled under the Social Security Act, is less
22than the retirement annuity which would have been payable if
23all of the participant's pension credits validated under
24Section 20-109 had been validated under this system, a
25supplemental annuity equal to the difference in such amounts
26shall be payable to the participant.

 

 

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1    (h) On January 1, 1981, an annuitant who was receiving a
2retirement annuity on or before January 1, 1971 shall have his
3or her retirement annuity then being paid increased $1 per
4month for each year of creditable service. On January 1, 1982,
5an annuitant whose retirement annuity began on or before
6January 1, 1977, shall have his or her retirement annuity then
7being paid increased $1 per month for each year of creditable
8service.
9    (i) On January 1, 1987, any annuitant whose retirement
10annuity began on or before January 1, 1977, shall have the
11monthly retirement annuity increased by an amount equal to 8
12per year of creditable service times the number of years that
13have elapsed since the annuity began.
14    (j) For participants to whom subsection (a-5) of Section
1515-135 applies, the references to age 50, 55, and 62 in this
16Section are increased as provided in subsection (a-5) of
17Section 15-135.
18(Source: P.A. 97-933, eff. 8-10-12; 97-968, eff. 8-16-12.)
 
19    (40 ILCS 5/15-139)  (from Ch. 108 1/2, par. 15-139)
20    Sec. 15-139. Retirement annuities; cancellation; suspended
21during employment.
22    (a) If an annuitant returns to employment for an employer
23within 60 days after the beginning of the retirement annuity
24payment period, the retirement annuity shall be cancelled, and
25the annuitant shall refund to the System the total amount of

 

 

HB3411- 126 -LRB098 10767 EFG 41183 b

1the retirement annuity payments which he or she received. If
2the retirement annuity is cancelled, the participant shall
3continue to participate in the System.
4    (b) If an annuitant retires prior to age 60 and receives or
5becomes entitled to receive during any month compensation in
6excess of the monthly retirement annuity (including any
7automatic annual increases) for services performed after the
8date of retirement for any employer under this System, that
9portion of the monthly retirement annuity provided by employer
10contributions shall not be payable.
11    If an annuitant retires at age 60 or over and receives or
12becomes entitled to receive during any academic year
13compensation in excess of the difference between his or her
14highest annual earnings prior to retirement and his or her
15annual retirement annuity computed under Rule 1, Rule 2, Rule
163, Rule 4, or Rule 5 of Section 15-136, or under Section
1715-136.4 or 15-158.5, for services performed after the date of
18retirement for any employer under this System, that portion of
19the monthly retirement annuity provided by employer
20contributions shall be reduced by an amount equal to the
21compensation that exceeds such difference.
22    However, any remuneration received for serving as a member
23of the Illinois Educational Labor Relations Board shall be
24excluded from "compensation" for the purposes of this
25subsection (b), and serving as a member of the Illinois
26Educational Labor Relations Board shall not be deemed to be a

 

 

HB3411- 127 -LRB098 10767 EFG 41183 b

1return to employment for the purposes of this Section. This
2provision applies without regard to whether service was
3terminated prior to the effective date of this amendatory Act
4of 1991.
5    (c) If an employer certifies that an annuitant has been
6reemployed on a permanent and continuous basis or in a position
7in which the annuitant is expected to serve for at least 9
8months, the annuitant shall resume his or her status as a
9participating employee and shall be entitled to all rights
10applicable to participating employees upon filing with the
11board an election to forgo all annuity payments during the
12period of reemployment. Upon subsequent retirement, the
13retirement annuity shall consist of the annuity which was
14terminated by the reemployment, plus the additional retirement
15annuity based upon service granted during the period of
16reemployment, but the combined retirement annuity shall not
17exceed the maximum annuity applicable on the date of the last
18retirement.
19    The total service and earnings credited before and after
20the initial date of retirement shall be considered in
21determining eligibility of the employee or the employee's
22beneficiary to benefits under this Article, and in calculating
23final rate of earnings.
24    In determining the death benefit payable to a beneficiary
25of an annuitant who again becomes a participating employee
26under this Section, accumulated normal and additional

 

 

HB3411- 128 -LRB098 10767 EFG 41183 b

1contributions shall be considered as the sum of the accumulated
2normal and additional contributions at the date of initial
3retirement and the accumulated normal and additional
4contributions credited after that date, less the sum of the
5annuity payments received by the annuitant.
6    The survivors insurance benefits provided under Section
715-145 shall not be applicable to an annuitant who resumes his
8or her status as a participating employee, unless the
9annuitant, at the time of initial retirement, has a survivors
10insurance beneficiary who could qualify for such benefits.
11    If the participant's employment is terminated because of
12circumstances other than death before 9 months from the date of
13reemployment, the provisions of this Section regarding
14resumption of status as a participating employee shall not
15apply. The normal and survivors insurance contributions which
16are deducted during this period shall be refunded to the
17annuitant without interest, and subsequent benefits under this
18Article shall be the same as those which were applicable prior
19to the date the annuitant resumed employment.
20    The amendments made to this Section by this amendatory Act
21of the 91st General Assembly apply without regard to whether
22the annuitant was in service on or after the effective date of
23this amendatory Act.
24    This Section also applies to retirement annuities under the
25Tier 3 retirement plan established under Section 15-158.5.
26(Source: P.A. 97-933, eff. 8-10-12; 97-968, eff. 8-16-12.)
 

 

 

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1    (40 ILCS 5/15-153.2)  (from Ch. 108 1/2, par. 15-153.2)
2    Sec. 15-153.2. Disability retirement annuity. A
3participant whose disability benefits are discontinued under
4the provisions of clause (6) of Section 15-152 and who is not a
5participant in the optional retirement plan established under
6Section 15-158.2 is entitled to a disability retirement annuity
7of 35% of the basic compensation which was payable to the
8participant at the time that disability began, provided that
9the board determines that the participant has a medically
10determinable physical or mental impairment that prevents him or
11her from engaging in any substantial gainful activity, and
12which can be expected to result in death or which has lasted or
13can be expected to last for a continuous period of not less
14than 12 months.
15    The board's determination of whether a participant is
16disabled shall be based upon:
17        (i) a written certificate from one or more licensed and
18    practicing physicians appointed by or acceptable to the
19    board, stating that the participant is unable to engage in
20    any substantial gainful activity; and
21        (ii) any other medical examinations, hospital records,
22    laboratory results, or other information necessary for
23    determining the employment capacity and condition of the
24    participant.
25    The terms "medically determinable physical or mental

 

 

HB3411- 130 -LRB098 10767 EFG 41183 b

1impairment" and "substantial gainful activity" shall have the
2meanings ascribed to them in the federal Social Security Act,
3as now or hereafter amended, and the regulations issued
4thereunder.
5    The disability retirement annuity payment period shall
6begin immediately following the expiration of the disability
7benefit payments under clause (6) of Section 15-152 and shall
8be discontinued for a recipient of a disability retirement
9annuity when (1) the physical or mental impairment no longer
10prevents the participant from engaging in any substantial
11gainful activity, (2) the participant dies or (3) the
12participant elects to receive a retirement annuity under
13Sections 15-135 and 15-136 or Section 15-158.5. If a person's
14disability retirement annuity is discontinued under clause
15(1), all rights and credits accrued in the system on the date
16that the disability retirement annuity began shall be restored,
17and the disability retirement annuity paid shall be considered
18as disability payments under clause (6) of Section 15-152.
19(Source: P.A. 97-933, eff. 8-10-12; 97-968, eff. 8-16-12.)
 
20    (40 ILCS 5/15-155)  (from Ch. 108 1/2, par. 15-155)
21    Sec. 15-155. Employer contributions.
22    (a) The State of Illinois shall make contributions by
23appropriations of amounts which, together with the other
24employer contributions from trust, federal, and other funds,
25employee contributions, income from investments, and other

 

 

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1income of this System, will be sufficient to meet the cost of
2maintaining and administering the System on a 100% 90% funded
3basis in accordance with actuarial recommendations by the end
4of State fiscal year 2043.
5    The Board shall determine the amount of State contributions
6required for each fiscal year on the basis of the actuarial
7tables and other assumptions adopted by the Board and the
8recommendations of the actuary, using the formula in subsection
9(a-1).
10    (a-1) For State fiscal years 2014 through 2043, the minimum
11contribution to the System to be made by the State for each
12fiscal year shall be an amount determined by the System to be
13equal to the sum of (1) the State's portion of the projected
14normal cost for that fiscal year, plus (2) an amount sufficient
15to bring the total assets of the System up to 100% of the total
16actuarial liabilities of the System by the end of State fiscal
17year 2043. In making these determinations, the required State
18contribution shall be calculated each year as a level
19percentage of payroll over the years remaining to and including
20fiscal year 2043 and shall be determined under the projected
21unit credit actuarial cost method.
22    Beginning in State fiscal year 2044, the minimum State
23contribution for each fiscal year shall be the amount needed to
24maintain the total assets of the System at 100% of the total
25actuarial liabilities of the System.
26    For State fiscal years 2012 and 2013 through 2045, the

 

 

HB3411- 132 -LRB098 10767 EFG 41183 b

1minimum contribution to the System to be made by the State for
2each fiscal year shall be an amount determined by the System to
3be sufficient to bring the total assets of the System up to 90%
4of the total actuarial liabilities of the System by the end of
5State fiscal year 2045. In making these determinations, the
6required State contribution shall be calculated each year as a
7level percentage of payroll over the years remaining to and
8including fiscal year 2045 and shall be determined under the
9projected unit credit actuarial cost method.
10    For State fiscal years 1996 through 2005, the State
11contribution to the System, as a percentage of the applicable
12employee payroll, shall be increased in equal annual increments
13so that by State fiscal year 2011, the State is contributing at
14the rate required under this Section.
15    Notwithstanding any other provision of this Article, the
16total required State contribution for State fiscal year 2006 is
17$166,641,900.
18    Notwithstanding any other provision of this Article, the
19total required State contribution for State fiscal year 2007 is
20$252,064,100.
21    For each of State fiscal years 2008 through 2009, the State
22contribution to the System, as a percentage of the applicable
23employee payroll, shall be increased in equal annual increments
24from the required State contribution for State fiscal year
252007, so that by State fiscal year 2011, the State is
26contributing at the rate otherwise required under this Section.

 

 

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1    Notwithstanding any other provision of this Article, the
2total required State contribution for State fiscal year 2010 is
3$702,514,000 and shall be made from the State Pensions Fund and
4proceeds of bonds sold in fiscal year 2010 pursuant to Section
57.2 of the General Obligation Bond Act, less (i) the pro rata
6share of bond sale expenses determined by the System's share of
7total bond proceeds, (ii) any amounts received from the General
8Revenue Fund in fiscal year 2010, (iii) any reduction in bond
9proceeds due to the issuance of discounted bonds, if
10applicable.
11    Notwithstanding any other provision of this Article, the
12total required State contribution for State fiscal year 2011 is
13the amount recertified by the System on or before April 1, 2011
14pursuant to Section 15-165 and shall be made from the State
15Pensions Fund and proceeds of bonds sold in fiscal year 2011
16pursuant to Section 7.2 of the General Obligation Bond Act,
17less (i) the pro rata share of bond sale expenses determined by
18the System's share of total bond proceeds, (ii) any amounts
19received from the General Revenue Fund in fiscal year 2011, and
20(iii) any reduction in bond proceeds due to the issuance of
21discounted bonds, if applicable.
22    Beginning in State fiscal year 2046, the minimum State
23contribution for each fiscal year shall be the amount needed to
24maintain the total assets of the System at 90% of the total
25actuarial liabilities of the System.
26    Amounts received by the System pursuant to Section 25 of

 

 

HB3411- 134 -LRB098 10767 EFG 41183 b

1the Budget Stabilization Act or Section 8.12 of the State
2Finance Act in any fiscal year do not reduce and do not
3constitute payment of any portion of the minimum State
4contribution required under this Article in that fiscal year.
5Such amounts shall not reduce, and shall not be included in the
6calculation of, the required State contributions under this
7Article in any future year until the System has reached a
8funding ratio of at least 100% 90%. A reference in this Article
9to the "required State contribution" or any substantially
10similar term does not include or apply to any amounts payable
11to the System under Section 25 of the Budget Stabilization Act.
12    Notwithstanding any other provision of this Section, the
13required State contribution for State fiscal year 2005 and for
14fiscal year 2008 and each fiscal year thereafter through State
15fiscal year 2013, as calculated under this Section and
16certified under Section 15-165, shall not exceed an amount
17equal to (i) the amount of the required State contribution that
18would have been calculated under this Section for that fiscal
19year if the System had not received any payments under
20subsection (d) of Section 7.2 of the General Obligation Bond
21Act, minus (ii) the portion of the State's total debt service
22payments for that fiscal year on the bonds issued in fiscal
23year 2003 for the purposes of that Section 7.2, as determined
24and certified by the Comptroller, that is the same as the
25System's portion of the total moneys distributed under
26subsection (d) of Section 7.2 of the General Obligation Bond

 

 

HB3411- 135 -LRB098 10767 EFG 41183 b

1Act. In determining this maximum for State fiscal years 2008
2through 2010, however, the amount referred to in item (i) shall
3be increased, as a percentage of the applicable employee
4payroll, in equal increments calculated from the sum of the
5required State contribution for State fiscal year 2007 plus the
6applicable portion of the State's total debt service payments
7for fiscal year 2007 on the bonds issued in fiscal year 2003
8for the purposes of Section 7.2 of the General Obligation Bond
9Act, so that, by State fiscal year 2011, the State is
10contributing at the rate otherwise required under this Section.
11    (b) If an employee is paid from trust or federal funds, the
12employer shall pay to the Board contributions from those funds
13which are sufficient to cover the accruing normal costs on
14behalf of the employee. However, universities having employees
15who are compensated out of local auxiliary funds, income funds,
16or service enterprise funds are not required to pay such
17contributions on behalf of those employees. The local auxiliary
18funds, income funds, and service enterprise funds of
19universities shall not be considered trust funds for the
20purpose of this Article, but funds of alumni associations,
21foundations, and athletic associations which are affiliated
22with the universities included as employers under this Article
23and other employers which do not receive State appropriations
24are considered to be trust funds for the purpose of this
25Article.
26    (b-1) The City of Urbana and the City of Champaign shall

 

 

HB3411- 136 -LRB098 10767 EFG 41183 b

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

 

 

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1accordance with subsection (c) of Section 15-165, except as
2provided in subsection (g).
3    (e) The State Comptroller shall draw warrants payable to
4the System upon proper certification by the System or by the
5employer in accordance with the appropriation laws and this
6Code.
7    (f) Normal costs under this Section means liability for
8pensions and other benefits which accrues to the System because
9of the credits earned for service rendered by the participants
10during the fiscal year and expenses of administering the
11System, but shall not include the principal of or any
12redemption premium or interest on any bonds issued by the Board
13or any expenses incurred or deposits required in connection
14therewith.
15    (g) If the amount of a participant's earnings for any
16academic year used to determine the final rate of earnings,
17determined on a full-time equivalent basis, exceeds the amount
18of his or her earnings with the same employer for the previous
19academic year, determined on a full-time equivalent basis, by
20more than 6%, the participant's employer shall pay to the
21System, in addition to all other payments required under this
22Section and in accordance with guidelines established by the
23System, the present value of the increase in benefits resulting
24from the portion of the increase in earnings that is in excess
25of 6%. This present value shall be computed by the System on
26the basis of the actuarial assumptions and tables used in the

 

 

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

 

 

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1must be concluded within 3 years after the employer's receipt
2of the bill.
3    (h) This subsection (h) applies only to payments made or
4salary increases given on or after June 1, 2005 but before July
51, 2011. The changes made by Public Act 94-1057 shall not
6require the System to refund any payments received before July
731, 2006 (the effective date of Public Act 94-1057).
8    When assessing payment for any amount due under subsection
9(g), the System shall exclude earnings increases paid to
10participants under contracts or collective bargaining
11agreements entered into, amended, or renewed before June 1,
122005.
13    When assessing payment for any amount due under subsection
14(g), the System shall exclude earnings increases paid to a
15participant at a time when the participant is 10 or more years
16from retirement eligibility under Section 15-135.
17    When assessing payment for any amount due under subsection
18(g), the System shall exclude earnings increases resulting from
19overload work, including a contract for summer teaching, or
20overtime when the employer has certified to the System, and the
21System has approved the certification, that: (i) in the case of
22overloads (A) the overload work is for the sole purpose of
23academic instruction in excess of the standard number of
24instruction hours for a full-time employee occurring during the
25academic year that the overload is paid and (B) the earnings
26increases are equal to or less than the rate of pay for

 

 

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

 

 

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1shall be used in assessing payment for any amount due under
2subsection (g) of this Section.
3    (j) The System shall prepare a report and file copies of
4the report with the Governor and the General Assembly by
5January 1, 2007 that contains all of the following information:
6        (1) The number of recalculations required by the
7    changes made to this Section by Public Act 94-1057 for each
8    employer.
9        (2) The dollar amount by which each employer's
10    contribution to the System was changed due to
11    recalculations required by Public Act 94-1057.
12        (3) The total amount the System received from each
13    employer as a result of the changes made to this Section by
14    Public Act 94-4.
15        (4) The increase in the required State contribution
16    resulting from the changes made to this Section by Public
17    Act 94-1057.
18    (k) The Illinois Community College Board shall adopt rules
19for recommending lists of promotional positions submitted to
20the Board by community colleges and for reviewing the
21promotional lists on an annual basis. When recommending
22promotional lists, the Board shall consider the similarity of
23the positions submitted to those positions recognized for State
24universities by the State Universities Civil Service System.
25The Illinois Community College Board shall file a copy of its
26findings with the System. The System shall consider the

 

 

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1findings of the Illinois Community College Board when making
2determinations under this Section. The System shall not exclude
3any earnings increases resulting from a promotion when the
4promotion was not submitted by a community college. Nothing in
5this subsection (k) shall require any community college to
6submit any information to the Community College Board.
7    (l) For purposes of determining the required State
8contribution to the System, the value of the System's assets
9shall be equal to the actuarial value of the System's assets,
10which shall be calculated as follows:
11    As of June 30, 2008, the actuarial value of the System's
12assets shall be equal to the market value of the assets as of
13that date. In determining the actuarial value of the System's
14assets for fiscal years after June 30, 2008, any actuarial
15gains or losses from investment return incurred in a fiscal
16year shall be recognized in equal annual amounts over the
175-year period following that fiscal year.
18    (m) For purposes of determining the required State
19contribution to the system for a particular year, the actuarial
20value of assets shall be assumed to earn a rate of return equal
21to the system's actuarially assumed rate of return.
22(Source: P.A. 96-43, eff. 7-15-09; 96-1497, eff. 1-14-11;
2396-1511, eff. 1-27-11; 96-1554, eff. 3-18-11; 97-813, eff.
247-13-12; revised 10-17-12.)
 
25    (40 ILCS 5/15-155.1 new)

 

 

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1    Sec. 15-155.1. Actions to enforce payments by employers
2other than the State. Any employer, other than the State, that
3fails to transmit to the System contributions required of it
4under this Article or contributions required of employees, for
5more than 90 days after such contributions are due, is subject
6to the following: after giving notice to the employer, the
7System may certify to the State Comptroller or the Illinois
8Community College Board, whichever is applicable, the amounts
9of such delinquent payments and the State Comptroller or the
10Illinois Community College Board, whichever is applicable,
11shall deduct the amounts so certified or any part thereof from
12any State funds to be remitted to the employer and shall pay
13the amount so deducted to the System. If State funds from which
14such deductions may be made are not available, the System may
15proceed against the employer to recover the amounts of such
16delinquent payments in the appropriate circuit court.
17    The System may provide for an audit of the records of an
18employer, other than the State, as may be required to establish
19the amounts of required contributions. The employer shall make
20its records available to the System for the purpose of such
21audit. The cost of such audit shall be added to the amount of
22the delinquent payments and may be recovered by the System from
23the employer at the same time and in the same manner as the
24delinquent payments are recovered.
 
25    (40 ILCS 5/15-156)  (from Ch. 108 1/2, par. 15-156)

 

 

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1    Sec. 15-156. Obligations of State; funding guarantees.
2    (a) The payment of (1) the required State contributions,
3(2) all benefits granted under this system and (3) all expenses
4in connection with the administration and operation thereof are
5obligations of the State of Illinois to the extent specified in
6this Article. The accumulated employee normal, additional and
7survivors insurance contributions credited to the accounts of
8active and inactive participants shall not be used to pay the
9State's share of the obligations.
10    (b) Beginning July 1, 2013, the State shall be
11contractually obligated to contribute to the System under
12Section 15-155 in each State fiscal year an amount not less
13than the sum of (i) the State's normal cost for that year and
14(ii) the portion of the unfunded accrued liability assigned to
15that year by law in accordance with a schedule that distributes
16payments equitably over a reasonable period of time and in
17accordance with accepted actuarial practices. The obligations
18created under this subsection (b) are contractual obligations
19protected and enforceable under Article I, Section 16 and
20Article XIII, Section 5 of the Illinois Constitution.
21    Notwithstanding any other provision of law, if the State
22fails to pay in a State fiscal year the amount guaranteed under
23this subsection, the System may bring a mandamus action in the
24Circuit Court of Sangamon or Champaign County to compel the
25State to make that payment, irrespective of other remedies that
26may be available to the System. In ordering the State to make

 

 

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1the required payment, the court may order a reasonable payment
2schedule to enable the State to make the required payment
3without significantly imperiling the public health, safety, or
4welfare.
5    Any payments required to be made by the State pursuant to
6this subsection (b) are expressly subordinated to the payment
7of the principal, interest, and premium, if any, on any bonded
8debt obligation of the State or any other State-created entity,
9either currently outstanding or to be issued, for which the
10source of repayment or security thereon is derived directly or
11indirectly from tax revenues collected by the State or any
12other State-created entity. Payments on such bonded
13obligations include any statutory fund transfers or other
14prefunding mechanisms or formulas set forth, now or hereafter,
15in State law or bond indentures, into debt service funds or
16accounts of the State related to such bonded obligations,
17consistent with the payment schedules associated with such
18obligations.
19(Source: P.A. 83-1440.)
 
20    (40 ILCS 5/15-157)  (from Ch. 108 1/2, par. 15-157)
21    Sec. 15-157. Employee Contributions.
22    (a) Each participating employee shall make contributions
23towards the retirement benefits payable under the retirement
24program applicable to the employee from each payment of
25earnings applicable to employment under this system on and

 

 

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1after the date of becoming a participant as follows: Prior to
2September 1, 1949, 3 1/2% of earnings; from September 1, 1949
3to August 31, 1955, 5%; from September 1, 1955 to August 31,
41969, 6%; from September 1, 1969, 6 1/2%. These contributions
5are to be considered as normal contributions for purposes of
6this Article.
7    Each participant who is a police officer or firefighter
8shall make normal contributions of 8% of each payment of
9earnings applicable to employment as a police officer or
10firefighter under this system on or after September 1, 1981,
11unless he or she files with the board within 60 days after the
12effective date of this amendatory Act of 1991 or 60 days after
13the board receives notice that he or she is employed as a
14police officer or firefighter, whichever is later, a written
15notice waiving the retirement formula provided by Rule 4 of
16Section 15-136. This waiver shall be irrevocable. If a
17participant had met the conditions set forth in Section
1815-132.1 prior to the effective date of this amendatory Act of
191991 but failed to make the additional normal contributions
20required by this paragraph, he or she may elect to pay the
21additional contributions plus compound interest at the
22effective rate. If such payment is received by the board, the
23service shall be considered as police officer service in
24calculating the retirement annuity under Rule 4 of Section
2515-136. While performing service described in clause (i) or
26(ii) of Rule 4 of Section 15-136, a participating employee

 

 

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1shall be deemed to be employed as a firefighter for the purpose
2of determining the rate of employee contributions under this
3Section.
4    (b) Starting September 1, 1969, each participating
5employee shall make additional contributions of 1/2 of 1% of
6earnings to finance a portion of the cost of the annual
7increases in retirement annuity provided under Section 15-136,
8except that with respect to participants in the self-managed
9plan this additional contribution shall be used to finance the
10benefits obtained under that retirement program.
11    (c) In addition to the amounts described in subsections (a)
12and (b) of this Section, each participating employee shall make
13contributions of 1% of earnings applicable under this system on
14and after August 1, 1959. The contributions made under this
15subsection (c) shall be considered as survivor's insurance
16contributions for purposes of this Article if the employee is
17covered under the traditional benefit package, and such
18contributions shall be considered as additional contributions
19for purposes of this Article if the employee is participating
20in the self-managed plan or has elected to participate in the
21portable benefit package and has completed the applicable
22one-year waiting period. Contributions in excess of $80 during
23any fiscal year beginning before August 31, 1969 and in excess
24of $120 during any fiscal year thereafter until September 1,
251971 shall be considered as additional contributions for
26purposes of this Article.

 

 

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

 

 

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1retirement.
2    (f) Notwithstanding the foregoing, a participating
3employee shall not be required to make contributions under this
4Section after the date upon which continuance of such
5contributions would otherwise cause his or her retirement
6annuity to exceed the maximum retirement annuity as specified
7in clause (1) of subsection (c) of Section 15-136.
8    (g) A participating employee may make contributions for the
9purchase of service credit under this Article.
10(Source: P.A. 90-32, eff. 6-27-97; 90-65, eff. 7-7-97; 90-448,
11eff. 8-16-97; 90-511, eff. 8-22-97; 90-576, eff. 3-31-98;
1290-655, eff. 7-30-98; 90-766, eff. 8-14-98.)
 
13    (40 ILCS 5/15-158.5 new)
14    Sec. 15-158.5. Tier 3 retirement plan.
15    (a) Contents of Tier 3 retirement plan. The Tier 3
16retirement plan consists of a defined-benefit component and a
17defined-contribution component; both components apply to all
18participants in the Tier 3 retirement plan. The plan also
19includes provisions relating to contributions and refunds.
20    The defined-benefit component includes a retirement
21annuity as provided under this Section, a surviving spouse
22annuity as provided under this Section, and a disability
23benefit as provided in this Section.
24    The defined-contribution component shall be a defined
25contribution plan that shall be established by the System. Each

 

 

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1participant shall have an individual account whose assets are
2managed by the System, which shall design a target-date or
3life-cycle investment allocation mechanism for this plan. This
4mechanism shall invest all assets in participants' defined
5contribution accounts in vehicles already in use by the
6System's defined-benefit Fund, but the specific allocation
7will vary with the participant's age, with more aggressive
8investments for younger participants and more conservative
9investments for older participants.
10    The balance in a participant's defined-contribution
11account shall be a function exclusively of employee
12contributions as described in subsection (g), employer
13contributions as described in subsection (h), and actual
14investment returns net of fees and administrative costs as
15certified by the System.
16    Subsequent to retirement, a participant may access the
17assets in his or her defined-contribution account by taking
18lump-sum disbursements, rolling over the balance into another
19qualified plan, or purchasing an annuity or other insurance
20product to the extent allowable under federal law. Under no
21circumstances shall the State or employer be exposed to any
22investment or actuarial risk in the determination of benefit
23levels.
24    The defined-contribution component of the Tier 3
25retirement plan does not include any of the following with
26respect to service performed while participating in the Tier 3

 

 

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1retirement plan: retirement annuities, death benefits,
2survivors insurance, or disability benefits payable directly
3from the System as provided in Sections 15-135 through 15-153.3
4(except Section 15-139) or Section 1-160; refunds determined
5under Section 15-154; or participation in the self-managed plan
6under Section 15-158.2, except as provided in subsection (c) of
7this Section.
8    Participation in the Tier 3 retirement plan under this
9Section constitutes membership in the State Universities
10Retirement System. Participants in the Tier 3 retirement plan
11remain subject to the provisions of this Article that apply to
12participants generally and that do not depend upon the benefit
13package or plan. A participant in the Tier 3 retirement plan is
14entitled to the applicable benefits of Article 20 of this Code.
15    The Tier 3 retirement plan is subject to the provisions of
16Article 1 of this Code that apply to retirement systems
17generally and must be qualified under the Internal Revenue Code
18of 1986.
19    (b) Definitions. As used in this Section:
20    "Consumer Price Index-U" means the Consumer Price Index
21published by the Bureau of Labor Statistics of the United
22States Department of Labor that measures the average change in
23prices of goods and services purchased by all urban consumers,
24United States city average, all items, 1982-84 = 100.
25    "Final rate of earnings" means:
26        (1) for an employee who is paid on an hourly basis or

 

 

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1    who receives an annual salary in installments during 12
2    months of each academic year, the average annual earnings
3    obtained by dividing by 8 the total earnings of the
4    employee during the 96 consecutive months in which the
5    total earnings were the highest within the last 120 months
6    prior to termination;
7        (2) for any other employee, the average annual earnings
8    during the 8 consecutive academic years within the 10 years
9    prior to termination in which the employee's earnings were
10    the highest; and
11        (3) for an employee with less than 96 consecutive
12    months or 8 consecutive academic years of service,
13    whichever is necessary, the average earnings during his or
14    her entire period of service.
15    (c) Participation. An employee who first becomes a
16participant of the System on or after January 1, 2014 shall
17participate in the Tier 3 retirement plan in lieu of
18participation in the traditional benefit package or the
19portable benefit package. However, an employee who first
20becomes a participant of the System on or after January 1, 2014
21shall have the option to elect to participate in the
22self-managed plan established under Section 15-158.2 in lieu of
23participating in the Tier 3 retirement plan.
24    An employee who first became a participant of this System
25on or after January 1, 2011 and before January 1, 2014 may
26choose to transfer his or her pension credits into the Tier 3

 

 

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1retirement plan by making, on or before June 1, 2014, an
2irrevocable election to transfer his or her pension credits
3into the Tier 3 retirement plan. An employee so electing will
4be credited with employee contributions and employer normal
5cost contributions plus interest at the actual rate of return.
6The System shall calculate the total cost of transferring an
7equal amount of service credit into the Tier 3 defined benefit
8plan and use the credited contributions to cover the cost of
9the transfer. Any unused contributions shall be deposited into
10the employee's defined contribution account.
11    (d) Retirement annuity.
12        (1) A participant in the Tier 3 retirement plan is
13    entitled to a retirement annuity under this Section upon
14    written application if he or she has attained age 67, has
15    at least 5 years of service credit, and has terminated
16    employment under this Article.
17        A participant in the Tier 3 retirement plan is entitled
18    to a reduced retirement annuity upon written application if
19    he or she has attained age 62 but is below age 67 at the
20    time of retirement, has at least 10 years of service
21    credit, and has terminated employment under this Article.
22        (2) The retirement annuity shall be 1.1% of the final
23    rate of earnings for each year of creditable service. If
24    the participant has not attained age 67 at the time of
25    retirement, the retirement annuity shall be reduced by
26    one-half of 1% for each full month by which the age at

 

 

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1    retirement is less than age 67.
2        (3) An eligible person may elect to have his or her
3    retirement annuity under this Section determined in
4    accordance with Article 20 of this Code.
5        (4) A retirement annuity under this Section is subject
6    to the provisions of Section 15-139.
7        (5) A retirement annuity under this Section shall be
8    subject to annual increases on each January 1 occurring on
9    or after the attainment of age 67 or the first anniversary
10    of the annuity start date, whichever is later. Each annual
11    increase shall be a percentage of the originally granted
12    retirement annuity equal to 3% or one-half of the annual
13    unadjusted percentage increase in the Consumer Price
14    Index-U for the 12 months ending with the preceding
15    September, whichever is less. If that annual unadjusted
16    percentage change is zero or there is a decrease, then the
17    annuity shall not be increased.
18    (e) Survivor's annuity.
19        (1) Eligibility for and the duration of a survivor's
20    annuity under this Section shall be determined in the same
21    manner as eligibility for survivor's insurance benefits
22    under Section 15-145.
23        (2) The initial survivor's annuity of an eligible
24    survivor of a retired participant in the Tier 3 retirement
25    plan shall be in the amount of 66 2/3% of the retired
26    participant's retirement annuity at the date of death.

 

 

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1        The initial survivor's annuity of an eligible survivor
2    of a participant in the Tier 3 retirement plan who was not
3    retired shall be 66 2/3% of the retirement annuity that
4    would have been payable under this Section if the deceased
5    participant had retired on the date of death, disregarding
6    the minimum age required for retirement.
7        (3) A survivor's annuity shall be increased on each
8    January 1 occurring on or after the first anniversary of
9    the commencement of the annuity. Each annual increase shall
10    be a percentage of the originally granted survivor's
11    annuity equal to 3% or one-half of the annual unadjusted
12    percentage increase in the Consumer Price Index-U for the
13    12 months ending with the preceding September, whichever is
14    less. If that annual unadjusted percentage change is zero
15    or there is a decrease, then the annuity shall not be
16    increased.
17    (f) Disability benefit.
18        (1) A participant in the Tier 3 retirement plan is
19    eligible for the disability benefit provided under this
20    subsection subject to the conditions of eligibility
21    specified in Section 15-150.
22        (2) The disability benefit provided under this
23    subsection shall begin to accrue as specified in Section
24    15-151.
25        (3) The disability benefit provided under this
26    subsection shall be discontinued in accordance with

 

 

HB3411- 156 -LRB098 10767 EFG 41183 b

1    Section 15-152.
2        (4) The disability benefit provided under this
3    subsection shall be an amount determined as specified in
4    Section 15-153.
5        (5) The disability benefit provided under this
6    subsection shall be reduced in accordance with Section
7    15-153.1.
8        (6) The provisions of Section 15-153.2 apply to any
9    participant whose disability benefit under this subsection
10    is discontinued by the operation of clause (6) of Section
11    15-152 and who is not a participant in the self-managed
12    plan.
13        (7) The disability benefit provided under this Section
14    shall be increased on each January 1 occurring on or after
15    the first anniversary of the commencement of that benefit.
16    Each annual increase shall be a percentage of the
17    disability benefit then payable, including any previous
18    increases, equal to 3% or one-half of the annual unadjusted
19    percentage increase in the Consumer Price Index-U for the
20    12 months ending with the preceding September, whichever is
21    less. If that annual unadjusted percentage change is zero
22    or there is a decrease, then the disability benefit shall
23    not be increased.
24    An amount of employer contributions shall be used for the
25purpose of providing the disability benefit under this
26subsection to the participant. Prior to the beginning of each

 

 

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1plan year under the Tier 3 retirement plan, the Board of
2Trustees shall determine, as a percentage of earnings, the
3amount of employer contributions to be allocated during that
4plan year for providing a disability benefit for employees in
5the Tier 3 retirement plan.
6    (g) Employee contributions. In lieu of the employee
7contributions required under Section 15-157, each employee who
8is a participant in the Tier 3 retirement plan shall contribute
9to the System an amount equal to 4% of each payment of earnings
10to fund the defined-benefit component of the Tier 3 retirement
11plan and an amount equal to 5% of each payment of earnings to
12fund the defined-contribution component of the Tier 3
13retirement plan. These contributions shall be deducted from the
14employee's earnings and may be picked up by the employer for
15federal tax purposes under Section 15-157.1. These
16contributions are a condition of employment.
17    A Tier 3 employee may make additional contributions to the
18defined-contribution component of the Tier 3 retirement plan in
19accordance with the procedures prescribed by the System, to the
20extent permitted under the rules of the plan.
21    (h) Actual employer contributions.
22        (1) To fund the Tier 3 retirement plan, the actual
23    employer of an employee who participates in the Tier 3
24    retirement plan shall annually contribute to the System an
25    amount determined by the System equal to the sum of: (i)
26    the annual employer's normal cost of the defined-benefit

 

 

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1    component of the Tier 3 retirement plan for employees of
2    that employer, (ii) any unfunded accrued liability arising
3    from the Tier 3 retirement plan assigned to the employer
4    that year in accordance with subsection (h-5), and (iii)
5    any optional matching contribution to be made for that year
6    to the defined-contribution accounts of the local
7    employers' employees by the local employer pursuant to a
8    collective bargaining agreement or other employment
9    contract, provided that the optional matching contribution
10    shall not be less than 3% or greater than 10% of the
11    applicable employee salary.
12        (2) Each year, the retirement system shall obtain an
13    actuarial estimate of the annual normal cost of the
14    defined-benefit component of the Tier 3 retirement plan.
15        (3) The contributions required under this subsection
16    (h) are in addition to the contributions required under
17    Section 15-155 and any other contributions required under
18    this Article.
19        (4) In no event shall a participant have an option of
20    receiving any portion of the local employer contributions
21    to the defined-benefit plan in cash.
22    (h-5) For use in determining the employer's contribution
23for unfunded accrued liability under item (ii) of paragraph (1)
24of subsection (h), the System shall maintain a separate account
25for each employer. The separate account shall be maintained in
26such form and detail as the System determines to be

 

 

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1appropriate. The separate account shall reflect the following
2items to the extent that they are attributable to that employer
3and arise on or after the effective date of this amendatory Act
4of the 98th General Assembly: employer contributions, employee
5contributions, investment returns, payments of benefits, and
6that employer's proportionate share of the System's
7administrative expenses.
8    In the event that the Board determines that there is a
9deficiency or surplus in the account of an employer, the Board
10shall determine the employer's contribution rate as required by
11item (ii) of paragraph (1) of subsection (h) so as to address
12that deficiency or surplus over a reasonable period of time as
13determined by the Board, which shall be no more than 10 years.
14    (i) Refunds. Refunds of employee contributions to the
15defined-benefit component of the Tier 3 retirement plan and
16vested employer contributions to the defined-benefit component
17of the Tier 3 retirement plan shall be calculated in accordance
18with Section 15-154.
 
19    (40 ILCS 5/15-165)   (from Ch. 108 1/2, par. 15-165)
20    Sec. 15-165. To certify amounts and submit vouchers.
21    (a) The Board shall certify to the Governor on or before
22November 15 of each year through until November 15, 2011 the
23appropriation required from State funds for the purposes of
24this System for the following fiscal year. The certification
25under this subsection (a) shall include a copy of the actuarial

 

 

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

 

 

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1assumptions, calculations, and data upon which that proposed
2certification is based. On or before January 1 of each year,
3beginning January 1, 2013, the State Actuary shall issue a
4preliminary report concerning the proposed certification and
5identifying, if necessary, recommended changes in actuarial
6assumptions that the Board must consider before finalizing its
7certification of the required State contributions.
8    On or before January 15, 2013 and each January 15
9thereafter, the Board shall certify to the Governor and the
10General Assembly the amount of the required State contribution
11for the next fiscal year. The certification shall include a
12copy of the actuarial recommendations upon which it is based
13and shall specifically identify the System's projected State
14normal cost for that fiscal year and the projected State cost
15for the self-managed plan for that fiscal year. The Board's
16certification must note, in a written response to the State
17Actuary, any deviations from the State Actuary's recommended
18changes, the reason or reasons for not following the State
19Actuary's recommended changes, and the fiscal impact of not
20following the State Actuary's recommended changes on the
21required State contribution.
22    (b) The Board shall certify to the State Comptroller or
23employer, as the case may be, from time to time, by its
24president and secretary, with its seal attached, the amounts
25payable to the System from the various funds.
26    (c) Beginning in State fiscal year 1996, on or as soon as

 

 

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1possible after the 15th day of each month the Board shall
2submit vouchers for payment of State contributions to the
3System, in a total monthly amount of one-twelfth of the
4required annual State contribution certified under subsection
5(a). From the effective date of this amendatory Act of the 93rd
6General Assembly through June 30, 2004, the Board shall not
7submit vouchers for the remainder of fiscal year 2004 in excess
8of the fiscal year 2004 certified contribution amount
9determined under this Section after taking into consideration
10the transfer to the System under subsection (b) of Section
116z-61 of the State Finance Act. These vouchers shall be paid by
12the State Comptroller and Treasurer by warrants drawn on the
13funds appropriated to the System for that fiscal year.
14    If in any month the amount remaining unexpended from all
15other appropriations to the System for the applicable fiscal
16year (including the appropriations to the System under Section
178.12 of the State Finance Act and Section 1 of the State
18Pension Funds Continuing Appropriation Act) is less than the
19amount lawfully vouchered under this Section, the difference
20shall be paid from the General Revenue Fund under the
21continuing appropriation authority provided in Section 1.1 of
22the State Pension Funds Continuing Appropriation Act.
23    (d) So long as the payments received are the full amount
24lawfully vouchered under this Section, payments received by the
25System under this Section shall be applied first toward the
26employer contribution to the self-managed plan established

 

 

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1under Section 15-158.2. Payments shall be applied second toward
2the employer's portion of the normal costs of the System, as
3defined in subsection (f) of Section 15-155. The balance shall
4be applied toward the unfunded actuarial liabilities of the
5System.
6    (e) In the event that the System does not receive, as a
7result of legislative enactment or otherwise, payments
8sufficient to fully fund the employer contribution to the
9self-managed plan established under Section 15-158.2 and to
10fully fund that portion of the employer's portion of the normal
11costs of the System, as calculated in accordance with Section
1215-155(a-1), then any payments received shall be applied
13proportionately to the optional retirement program established
14under Section 15-158.2 and to the employer's portion of the
15normal costs of the System, as calculated in accordance with
16Section 15-155(a-1).
17(Source: P.A. 96-1497, eff. 1-14-11; 96-1511, eff. 1-27-11;
1897-694, eff. 6-18-12.)
 
19    (40 ILCS 5/15-198)
20    Sec. 15-198. Application and expiration of new benefit
21increases.
22    (a) As used in this Section, "new benefit increase" means
23an increase in the amount of any benefit provided under this
24Article, or an expansion of the conditions of eligibility for
25any benefit under this Article or Article 1, that results from

 

 

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1an amendment to this Code that takes effect after the effective
2date of this amendatory Act of the 94th General Assembly. "New
3benefit increase", however, does not include any benefit
4increase resulting from the changes made to this Article or
5Article 1 by this amendatory Act of the 98th General Assembly.
6    (b) Notwithstanding any other provision of this Code or any
7subsequent amendment to this Code, every new benefit increase
8is subject to this Section and shall be deemed to be granted
9only in conformance with and contingent upon compliance with
10the provisions of this Section.
11    (c) The Public Act enacting a new benefit increase must
12identify and provide for payment to the System of additional
13funding at least sufficient to fund the resulting annual
14increase in cost to the System as it accrues.
15    Every new benefit increase is contingent upon the General
16Assembly providing the additional funding required under this
17subsection. The Commission on Government Forecasting and
18Accountability shall analyze whether adequate additional
19funding has been provided for the new benefit increase and
20shall report its analysis to the Public Pension Division of the
21Department of Financial and Professional Regulation. A new
22benefit increase created by a Public Act that does not include
23the additional funding required under this subsection is null
24and void. If the Public Pension Division determines that the
25additional funding provided for a new benefit increase under
26this subsection is or has become inadequate, it may so certify

 

 

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1to the Governor and the State Comptroller and, in the absence
2of corrective action by the General Assembly, the new benefit
3increase shall expire at the end of the fiscal year in which
4the certification is made.
5    (d) Every new benefit increase shall expire 5 years after
6its effective date or on such earlier date as may be specified
7in the language enacting the new benefit increase or provided
8under subsection (c). This does not prevent the General
9Assembly from extending or re-creating a new benefit increase
10by law.
11    (e) Except as otherwise provided in the language creating
12the new benefit increase, a new benefit increase that expires
13under this Section continues to apply to persons who applied
14and qualified for the affected benefit while the new benefit
15increase was in effect and to the affected beneficiaries and
16alternate payees of such persons, but does not apply to any
17other person, including without limitation a person who
18continues in service after the expiration date and did not
19apply and qualify for the affected benefit while the new
20benefit increase was in effect.
21(Source: P.A. 94-4, eff. 6-1-05.)
 
22    (40 ILCS 5/16-106.4 new)
23    Sec. 16-106.4. Tier I member. "Tier I member": A member
24under this Article who first became a member or participant
25before January 1, 2011 under any reciprocal retirement system

 

 

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1or pension fund established under this Code other than a
2retirement system or pension fund established under Article 2,
33, 4, 5, 6, or 18 of this Code.
 
4    (40 ILCS 5/16-106.5 new)
5    Sec. 16-106.5. Tier I retiree. "Tier I retiree": A former
6Tier I member who is receiving a retirement annuity.
 
7    (40 ILCS 5/16-106.6 new)
8    Sec. 16-106.6. Tier 3 employee. "Tier 3 employee": A
9teacher who first becomes a member on or after January 1, 2014
10and is subject to Section 16-152.8 of this Article; and a
11teacher who first became a member on or after January 1, 2011
12but before January 1, 2014 and has elected to transfer his or
13her pension credits to the Tier 3 retirement plan.
 
14    (40 ILCS 5/16-121)  (from Ch. 108 1/2, par. 16-121)
15    Sec. 16-121. Salary. "Salary": The actual compensation
16received by a teacher during any school year and recognized by
17the system in accordance with rules of the board. For purposes
18of this Section, "school year" includes the regular school term
19plus any additional period for which a teacher is compensated
20and such compensation is recognized by the rules of the board.
21    Notwithstanding any other provision of this Code, the
22salary of a Tier I member or Tier 3 employee for the purposes
23of this Code shall not exceed, for periods of service on or

 

 

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1after the effective date of this amendatory Act of the 98th
2General Assembly, the greater of (i) the annual contribution
3and benefit base established for the applicable year by the
4Commissioner of Social Security under the federal Social
5Security Act or (ii) the annual salary of the member during the
6365 days immediately preceding that effective date; except that
7this limitation does not apply to a member's salary that is
8determined under an employment contract or collective
9bargaining agreement that is in effect on the effective date of
10this amendatory Act of the 98th General Assembly and has not
11been amended or renewed after that date.
12(Source: P.A. 84-1028.)
 
13    (40 ILCS 5/16-132)  (from Ch. 108 1/2, par. 16-132)
14    Sec. 16-132. Retirement annuity eligibility.
15    (a) A member who has at least 20 years of creditable
16service is entitled to a retirement annuity upon or after
17attainment of age 55. A member who has at least 10 but less
18than 20 years of creditable service is entitled to a retirement
19annuity upon or after attainment of age 60. A member who has at
20least 5 but less than 10 years of creditable service is
21entitled to a retirement annuity upon or after attainment of
22age 62. A member who (i) has earned during the period
23immediately preceding the last day of service at least one year
24of contributing creditable service as an employee of a
25department as defined in Section 14-103.04, (ii) has earned at

 

 

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1least 5 years of contributing creditable service as an employee
2of a department as defined in Section 14-103.04, and (iii)
3retires on or after January 1, 2001 is entitled to a retirement
4annuity upon or after attainment of an age which, when added to
5the number of years of his or her total creditable service,
6equals at least 85. Portions of years shall be counted as
7decimal equivalents.
8    A member who is eligible to receive a retirement annuity of
9at least 74.6% of final average salary and will attain age 55
10on or before December 31 during the year which commences on
11July 1 shall be deemed to attain age 55 on the preceding June
121.
13    (b) Notwithstanding subsection (a) of this Section, for a
14Tier I member who begins receiving a retirement annuity under
15this Article after July 1, 2013:
16        (1) If the Tier I member is at least 45 years old on
17    the effective date of this amendatory Act of the 98th
18    General Assembly, then the references to age 55, 60, and 62
19    in subsection (a) of this Section remain unchanged and the
20    reference to 85 in subsection (a) of this Section remains
21    unchanged.
22        (2) If the Tier I member is at least 40 but less than
23    45 years old on the effective date of this amendatory Act
24    of the 98th General Assembly, then the references to age
25    55, 60, and 62 in subsection (a) of this Section are
26    increased by one year and the reference to 85 in subsection

 

 

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1    (a) is increased to 87.
2        (3) If the Tier I member is at least 35 but less than
3    40 years old on the effective date of this amendatory Act
4    of the 98th General Assembly, then the references to age
5    55, 60, and 62 in subsection (a) of this Section are
6    increased by 3 years and the reference to 85 in subsection
7    (a) is increased to 91.
8        (4) If the Tier I member is less than 35 years old on
9    the effective date of this amendatory Act of the 98th
10    General Assembly, then the references to age 55, 60, and 62
11    in subsection (a) of this Section are increased by 5 years
12    and the reference to 85 in subsection (a) is increased to
13    95.
14    Notwithstanding Section 1-103.1, this subsection (b)
15applies without regard to whether or not the Tier I member is
16in active service under this Article on or after the effective
17date of this amendatory Act of the 98th General Assembly.
18    (c) A member meeting the above eligibility conditions is
19entitled to a retirement annuity upon written application to
20the board setting forth the date the member wishes the
21retirement annuity to commence. However, the effective date of
22the retirement annuity shall be no earlier than the day
23following the last day of creditable service, regardless of the
24date of official termination of employment.
25    (d) To be eligible for a retirement annuity, a member shall
26not be employed as a teacher in the schools included under this

 

 

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1System or under Article 17, except (i) as provided in Section
216-118 or 16-150.1, (ii) if the member is disabled (in which
3event, eligibility for salary must cease), or (iii) if the
4System is required by federal law to commence payment due to
5the member's age; the changes to this sentence made by Public
6Act 93-320 this amendatory Act of the 93rd General Assembly
7apply without regard to whether the member terminated
8employment before or after its effective date.
9(Source: P.A. 93-320, eff. 7-23-03.)
 
10    (40 ILCS 5/16-133)  (from Ch. 108 1/2, par. 16-133)
11    Sec. 16-133. Retirement annuity; amount.
12    (a) The amount of the retirement annuity shall be (i) in
13the case of a person who first became a teacher under this
14Article before July 1, 2005, the larger of the amounts
15determined under paragraphs (A) and (B) below, or (ii) in the
16case of a person who first becomes a teacher under this Article
17on or after July 1, 2005, the amount determined under the
18applicable provisions of paragraph (B):
19        (A) An amount consisting of the sum of the following:
20            (1) An amount that can be provided on an
21        actuarially equivalent basis by the member's
22        accumulated contributions at the time of retirement;
23        and
24            (2) The sum of (i) the amount that can be provided
25        on an actuarially equivalent basis by the member's

 

 

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1        accumulated contributions representing service prior
2        to July 1, 1947, and (ii) the amount that can be
3        provided on an actuarially equivalent basis by the
4        amount obtained by multiplying 1.4 times the member's
5        accumulated contributions covering service subsequent
6        to June 30, 1947; and
7            (3) If there is prior service, 2 times the amount
8        that would have been determined under subparagraph (2)
9        of paragraph (A) above on account of contributions
10        which would have been made during the period of prior
11        service creditable to the member had the System been in
12        operation and had the member made contributions at the
13        contribution rate in effect prior to July 1, 1947.
14        For the purpose of calculating the sum provided under
15    this paragraph (A), the contribution required under
16    subsection (a-5) of Section 16-152 shall not be considered
17    when determining the amount of the member's accumulated
18    contributions under subparagraph (1) or (2).
19        This paragraph (A) does not apply to a person who first
20    becomes a teacher under this Article on or after July 1,
21    2005.
22        (B) An amount consisting of the greater of the
23    following:
24            (1) For creditable service earned before July 1,
25        1998 that has not been augmented under Section
26        16-129.1: 1.67% of final average salary for each of the

 

 

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1        first 10 years of creditable service, 1.90% of final
2        average salary for each year in excess of 10 but not
3        exceeding 20, 2.10% of final average salary for each
4        year in excess of 20 but not exceeding 30, and 2.30% of
5        final average salary for each year in excess of 30; and
6            For creditable service earned on or after July 1,
7        1998 by a member who has at least 24 years of
8        creditable service on July 1, 1998 and who does not
9        elect to augment service under Section 16-129.1: 2.2%
10        of final average salary for each year of creditable
11        service earned on or after July 1, 1998 but before the
12        member reaches a total of 30 years of creditable
13        service and 2.3% of final average salary for each year
14        of creditable service earned on or after July 1, 1998
15        and after the member reaches a total of 30 years of
16        creditable service; and
17            For all other creditable service: 2.2% of final
18        average salary for each year of creditable service; or
19            (2) 1.5% of final average salary for each year of
20        creditable service plus the sum $7.50 for each of the
21        first 20 years of creditable service.
22    The amount of the retirement annuity determined under this
23    paragraph (B) shall be reduced by 1/2 of 1% for each month
24    that the member is less than age 60 at the time the
25    retirement annuity begins. However, this reduction shall
26    not apply (i) if the member has at least 35 years of

 

 

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1    creditable service, or (ii) if the member retires on
2    account of disability under Section 16-149.2 of this
3    Article with at least 20 years of creditable service, or
4    (iii) if the member (1) has earned during the period
5    immediately preceding the last day of service at least one
6    year of contributing creditable service as an employee of a
7    department as defined in Section 14-103.04, (2) has earned
8    at least 5 years of contributing creditable service as an
9    employee of a department as defined in Section 14-103.04,
10    (3) retires on or after January 1, 2001, and (4) retires
11    having attained an age which, when added to the number of
12    years of his or her total creditable service, equals at
13    least 85. Portions of years shall be counted as decimal
14    equivalents. For participants to whom subsection (b) of
15    Section 16-132 applies, the reference to age 60 in this
16    paragraph and the reference to 85 in this paragraph are
17    increased as provided in subsection (b) of Section 16-132.
18    (b) For purposes of this Section, final average salary
19shall be the average salary for the highest 4 consecutive years
20within the last 10 years of creditable service as determined
21under rules of the board. The minimum final average salary
22shall be considered to be $2,400 per year.
23    In the determination of final average salary for members
24other than elected officials and their appointees when such
25appointees are allowed by statute, that part of a member's
26salary for any year beginning after June 30, 1979 which exceeds

 

 

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1the member's annual full-time salary rate with the same
2employer for the preceding year by more than 20% shall be
3excluded. The exclusion shall not apply in any year in which
4the member's creditable earnings are less than 50% of the
5preceding year's mean salary for downstate teachers as
6determined by the survey of school district salaries provided
7in Section 2-3.103 of the School Code.
8    (c) In determining the amount of the retirement annuity
9under paragraph (B) of this Section, a fractional year shall be
10granted proportional credit.
11    (d) The retirement annuity determined under paragraph (B)
12of this Section shall be available only to members who render
13teaching service after July 1, 1947 for which member
14contributions are required, and to annuitants who re-enter
15under the provisions of Section 16-150.
16    (e) The maximum retirement annuity provided under
17paragraph (B) of this Section shall be 75% of final average
18salary.
19    (f) A member retiring after the effective date of this
20amendatory Act of 1998 shall receive a pension equal to 75% of
21final average salary if the member is qualified to receive a
22retirement annuity equal to at least 74.6% of final average
23salary under this Article or as proportional annuities under
24Article 20 of this Code.
25(Source: P.A. 94-4, eff. 6-1-05.)
 

 

 

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1    (40 ILCS 5/16-133.1)  (from Ch. 108 1/2, par. 16-133.1)
2    Sec. 16-133.1. Automatic annual increase in annuity.
3    (a) Each member with creditable service and retiring on or
4after August 26, 1969 is entitled to the automatic annual
5increases in annuity provided under this Section while
6receiving a retirement annuity or disability retirement
7annuity from the system.
8    An annuitant shall first be entitled to an initial increase
9under this Section on the January 1 next following the first
10anniversary of retirement, or January 1 of the year next
11following attainment of age 61, whichever is later. At such
12time, the system shall pay an initial increase determined as
13follows or as provided in subsections (a-1) and (a-2):
14        (1) 1.5% of the originally granted retirement annuity
15    or disability retirement annuity multiplied by the number
16    of years elapsed, if any, from the date of retirement until
17    January 1, 1972, plus
18        (2) 2% of the originally granted annuity multiplied by
19    the number of years elapsed, if any, from the date of
20    retirement or January 1, 1972, whichever is later, until
21    January 1, 1978, plus
22        (3) 3% of the originally granted annuity multiplied by
23    the number of years elapsed from the date of retirement or
24    January 1, 1978, whichever is later, until the effective
25    date of the initial increase.
26However, the initial annual increase calculated under this

 

 

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1Section for the recipient of a disability retirement annuity
2granted under Section 16-149.2 shall be reduced by an amount
3equal to the total of all increases in that annuity received
4under Section 16-149.5 (but not exceeding 100% of the amount of
5the initial increase otherwise provided under this Section).
6    Following the initial increase, automatic annual increases
7in annuity shall be payable on each January 1 thereafter during
8the lifetime of the annuitant, determined as a percentage of
9the originally granted retirement annuity or disability
10retirement annuity for increases granted prior to January 1,
111990, and calculated as a percentage of the total amount of
12annuity, including previous increases under this Section, for
13increases granted on or after January 1, 1990, as follows: 1.5%
14for periods prior to January 1, 1972, 2% for periods after
15December 31, 1971 and prior to January 1, 1978, and 3% for
16periods after December 31, 1977, or as provided in subsections
17(a-1) and (a-2).
18    (a-1) Notwithstanding any other provision of this Article,
19for a Tier I retiree, the amount of each automatic annual
20increase in retirement annuity occurring on or after the
21effective date of this amendatory Act of the 98th General
22Assembly shall be the lesser of $750 or 3% of the total annuity
23payable at the time of the increase, including previous
24increases granted.
25    (a-2) Notwithstanding any other provision of this Article,
26for a Tier I retiree, the monthly retirement annuity shall

 

 

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1first be subject to annual increases on the January 1 occurring
2on or next after the attainment of age 67 or the January 1
3occurring on or next after the fifth anniversary of the annuity
4start date, whichever occurs earlier. If on the effective date
5of this amendatory Act of the 98th General Assembly a Tier I
6retiree has already received an annual increase under this
7Section but does not yet meet the new eligibility requirements
8of this subsection, the annual increases already received shall
9continue in force, but no additional annual increase shall be
10granted until the Tier I retiree meets the new eligibility
11requirements.
12    (a-3) Notwithstanding Section 1-103.1, subsections (a-1)
13and (a-2) apply without regard to whether or not the Tier I
14retiree is in active service under this Article on or after the
15effective date of this amendatory Act of the 98th General
16Assembly.
17    (b) The automatic annual increases in annuity provided
18under this Section shall not be applicable unless a member has
19made contributions toward such increases for a period
20equivalent to one full year of creditable service. If a member
21contributes for service performed after August 26, 1969 but the
22member becomes an annuitant before such contributions amount to
23one full year's contributions based on the salary at the date
24of retirement, he or she may pay the necessary balance of the
25contributions to the system and be eligible for the automatic
26annual increases in annuity provided under this Section.

 

 

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

 

 

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1    (40 ILCS 5/16-152)  (from Ch. 108 1/2, par. 16-152)
2    Sec. 16-152. Contributions by members.
3    (a) Each member shall make contributions for membership
4service to this System as follows:
5        (1) Effective July 1, 1998, contributions of 7.50% of
6    salary towards the cost of the retirement annuity. Such
7    contributions shall be deemed "normal contributions".
8        (2) Effective July 1, 1969, contributions of 1/2 of 1%
9    of salary toward the cost of the automatic annual increase
10    in retirement annuity provided under Section 16-133.1.
11        (3) Effective July 24, 1959, contributions of 1% of
12    salary towards the cost of survivor benefits. Such
13    contributions shall not be credited to the individual
14    account of the member and shall not be subject to refund
15    except as provided under Section 16-143.2.
16        (4) Effective July 1, 2005, contributions of 0.40% of
17    salary toward the cost of the early retirement without
18    discount option provided under Section 16-133.2. This
19    contribution shall cease upon termination of the early
20    retirement without discount option as provided in Section
21    16-176.
22    (a-5) In addition to the contributions otherwise required
23under this Article, each Tier I member shall also make the
24following contributions toward the cost of the retirement
25annuity from each payment of salary:

 

 

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1        (1) beginning July 1, 2013 and through June 30, 2014,
2    1% of salary; and
3        (2) beginning on July 1, 2014, 2% of salary.
4    Except as otherwise specified, these contributions are to
5be considered as normal contributions for purposes of this
6Article.
7    (b) The minimum required contribution for any year of
8full-time teaching service shall be $192.
9    (c) Contributions shall not be required of any annuitant
10receiving a retirement annuity who is given employment as
11permitted under Section 16-118 or 16-150.1.
12    (d) A person who (i) was a member before July 1, 1998, (ii)
13retires with more than 34 years of creditable service, and
14(iii) does not elect to qualify for the augmented rate under
15Section 16-129.1 shall be entitled, at the time of retirement,
16to receive a partial refund of contributions made under this
17Section for service occurring after the later of June 30, 1998
18or attainment of 34 years of creditable service, in an amount
19equal to 1.00% of the salary upon which those contributions
20were based.
21    (e) A member's contributions toward the cost of early
22retirement without discount made under item (a)(4) of this
23Section shall not be refunded if the member has elected early
24retirement without discount under Section 16-133.2 and has
25begun to receive a retirement annuity under this Article
26calculated in accordance with that election. Otherwise, a

 

 

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1member's contributions toward the cost of early retirement
2without discount made under item (a)(4) of this Section shall
3be refunded according to whichever one of the following
4circumstances occurs first:
5        (1) The contributions shall be refunded to the member,
6    without interest, within 120 days after the member's
7    retirement annuity commences, if the member does not elect
8    early retirement without discount under Section 16-133.2.
9        (2) The contributions shall be included, without
10    interest, in any refund claimed by the member under Section
11    16-151.
12        (3) The contributions shall be refunded to the member's
13    designated beneficiary (or if there is no beneficiary, to
14    the member's estate), without interest, if the member dies
15    without having begun to receive a retirement annuity under
16    this Article.
17        (4) The contributions shall be refunded to the member,
18    without interest, within 120 days after the early
19    retirement without discount option provided under Section
20    16-133.2 is terminated under Section 16-176.
21(Source: P.A. 93-320, eff. 7-23-03; 94-4, eff. 6-1-05.)
 
22    (40 ILCS 5/16-152.8 new)
23    Sec. 16-152.8. Tier 3 retirement plan.
24    (a) Contents of Tier 3 retirement plan. The Tier 3
25retirement plan consists of a defined-benefit component and a

 

 

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1defined-contribution component; both components apply to all
2participants in the Tier 3 retirement plan. The plan also
3includes provisions relating to contributions and refunds.
4    The defined-benefit component includes a retirement
5annuity as provided under this Section, a surviving spouse
6annuity as provided under this Section, and a disability
7benefit as provided in this Section.
8    The defined-contribution component shall be a defined
9contribution plan that shall be established by the System. Each
10participant shall have an individual account whose assets are
11managed by the System, which shall design a target-date or
12life-cycle investment allocation mechanism for this plan. This
13mechanism shall invest all assets in participants' defined
14contribution accounts in vehicles already in use by the
15System's defined-benefit Fund, but the specific allocation
16will vary with the participant's age, with more aggressive
17investments for younger participants and more conservative
18investments for older participants.
19    The balance in a participant's defined-contribution
20account shall be a function exclusively of employee
21contributions as described in subsection (g), employer
22contributions as described in subsection (h), and actual
23investment returns net of fees and administrative costs as
24certified by the System.
25    Subsequent to retirement, a participant may access the
26assets in his or her defined-contribution account by taking

 

 

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1lump-sum disbursements, rolling over the balance into another
2qualified plan, or purchasing an annuity or other insurance
3product to the extent allowable under federal law. Under no
4circumstances shall the State or employer be exposed to any
5investment or actuarial risk in the determination of benefit
6levels.
7    The defined-contribution component of the Tier 3
8retirement plan does not include any of the following with
9respect to service performed while participating in the Tier 3
10retirement plan: retirement annuities, reversionary annuities,
11death benefits, survivors' benefits, or disability benefits
12payable directly from the System as provided in Sections 16-132
13through 16-149.6 (except Section 16-149.2) or Section 1-160; or
14refunds determined under Section 16-151.
15    Participation in the Tier 3 retirement plan under this
16Section constitutes membership in the Teachers' Retirement
17System of the State of Illinois. Participants in the Tier 3
18retirement plan remain subject to the provisions of this
19Article that apply to participants generally and that do not
20depend upon the benefit package or plan. A participant in the
21Tier 3 retirement plan is entitled to the applicable benefits
22of Article 20 of this Code.
23    The Tier 3 retirement plan is subject to the provisions of
24Article 1 of this Code that apply to retirement systems
25generally and must be qualified under the Internal Revenue Code
26of 1986.

 

 

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1    (b) Definitions. As used in this Section:
2    "Consumer Price Index-U" means the Consumer Price Index
3published by the Bureau of Labor Statistics of the United
4States Department of Labor that measures the average change in
5prices of goods and services purchased by all urban consumers,
6United States city average, all items, 1982-84 = 100.
7    "Final average salary" means:
8        (1) for a teacher who is paid on an hourly basis or who
9    receives an annual salary in installments during 12 months
10    of each school year, the average annual salary obtained by
11    dividing by 8 the total salary of the teacher during the 96
12    consecutive months in which the total salary was the
13    highest within the last 120 months prior to termination;
14        (2) for any other teacher, the average annual salary
15    during the 8 consecutive school years within the 10 years
16    prior to termination in which the teacher's salary was the
17    highest; and
18        (3) for a teacher with less than 96 consecutive months
19    or 8 consecutive school years of service, whichever is
20    necessary, the average salary during his or her entire
21    period of service.
22    (c) Participation. A teacher who first becomes a member of
23the System on or after January 1, 2014 shall, with respect to
24service under this Article, participate in the Tier 3
25retirement plan only and not, except as specified in this
26Section, any other benefit package provided under this Article

 

 

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1or Section 1-160.
2    A teacher who first became a member of this System on or
3after January 1, 2011 and before January 1, 2014 may choose to
4transfer his or her pension credits into the Tier 3 retirement
5plan by making, on or before June 1, 2014, an irrevocable
6election to transfer his or her pension credits into the Tier 3
7retirement plan. A teacher so electing will be credited with
8employee contributions and employer normal cost contributions
9plus interest at the actual rate of return. The System shall
10calculate the total cost of transferring an equal amount of
11service credit into the Tier 3 defined benefit plan and use the
12credited contributions to cover the cost of the transfer. Any
13unused contributions shall be deposited into the member's
14defined contribution account.
15    (d) Retirement annuity.
16        (1) A participant in the Tier 3 retirement plan is
17    entitled to a retirement annuity under this Section upon
18    written application if he or she has attained age 67, has
19    at least 5 years of service credit, and has terminated
20    employment under this Article.
21        A participant in the Tier 3 retirement plan is entitled
22    to a reduced retirement annuity upon written application if
23    he or she has attained age 62 but is below age 67 at the
24    time of retirement, has at least 10 years of service
25    credit, and has terminated employment under this Article.
26        (2) The retirement annuity shall be 1.1% of the final

 

 

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1    average salary for each year of creditable service. If the
2    participant has not attained age 67 at the time of
3    retirement, the retirement annuity shall be reduced by
4    one-half of 1% for each full month by which the age at
5    retirement is less than age 67.
6        (3) An eligible person may elect to have his or her
7    retirement annuity under this Section determined in
8    accordance with Article 20 of this Code.
9        (4) A retirement annuity under this Section shall be
10    subject to annual increases on each January 1 occurring on
11    or after the attainment of age 67 or the first anniversary
12    of the annuity start date, whichever is later. Each annual
13    increase shall be a percentage of the originally granted
14    retirement annuity equal to 3% or one-half of the annual
15    unadjusted percentage increase in the Consumer Price
16    Index-U for the 12 months ending with the preceding
17    September, whichever is less. If that annual unadjusted
18    percentage change is zero or there is a decrease, then the
19    annuity shall not be increased.
20    (e) Survivor's annuity.
21        (1) Eligibility for and the duration of a survivor's
22    annuity under this Section shall be determined in the same
23    manner as eligibility for survivors' benefits under this
24    Article.
25        (2) The initial survivor's annuity of an eligible
26    survivor of a retired participant in the Tier 3 retirement

 

 

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1    plan shall be in the amount of 66 2/3% of the retired
2    participant's retirement annuity at the date of death.
3        The initial survivor's annuity of an eligible survivor
4    of a participant in the Tier 3 retirement plan who was not
5    retired shall be 66 2/3% of the retirement annuity that
6    would have been payable under this Section if the deceased
7    participant had retired on the date of death, disregarding
8    the minimum age required for retirement.
9        (3) A survivor's annuity shall be increased on each
10    January 1 occurring on or after the first anniversary of
11    the commencement of the annuity. Each annual increase shall
12    be a percentage of the originally granted survivor's
13    annuity equal to 3% or one-half of the annual unadjusted
14    percentage increase in the Consumer Price Index-U for the
15    12 months ending with the preceding September, whichever is
16    less. If that annual unadjusted percentage change is zero
17    or there is a decrease, then the annuity shall not be
18    increased.
19    (f) Disability benefit.
20        (1) A participant in the Tier 3 retirement plan is
21    eligible for the disability benefit provided under this
22    subsection subject to the conditions of eligibility
23    specified in Section 16-149.
24        (2) The disability benefit provided under this
25    subsection shall begin to accrue as specified in Section
26    16-149.

 

 

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1        (3) The disability benefit provided under this
2    subsection shall be discontinued in accordance with
3    Section 16-149.
4        (4) The disability benefit provided under this
5    subsection shall be an amount determined as specified in
6    Section 16-149.
7        (5) The provisions of Section 16-149.2 apply to any
8    participant whose disability benefit under this subsection
9    is discontinued by the operation of Section 16-149 and who
10    is not a participant in the self-managed plan.
11        (6) The disability benefit provided under this Section
12    shall be increased on each January 1 occurring on or after
13    the first anniversary of the commencement of that benefit.
14    Each annual increase shall be a percentage of the
15    disability benefit then payable, including any previous
16    increases, equal to 3% or one-half of the annual unadjusted
17    percentage increase in the Consumer Price Index-U for the
18    12 months ending with the preceding September, whichever is
19    less. If that annual unadjusted percentage change is zero
20    or there is a decrease, then the disability benefit shall
21    not be increased.
22    An amount of employer contributions shall be used for the
23purpose of providing the disability benefit under this
24subsection to the participant. Prior to the beginning of each
25plan year under the Tier 3 retirement plan, the Board of
26Trustees shall determine, as a percentage of salary, the amount

 

 

HB3411- 189 -LRB098 10767 EFG 41183 b

1of employer contributions to be allocated during that plan year
2for providing a disability benefit for teachers in the Tier 3
3retirement plan.
4    (g) Teacher contributions. In lieu of the member
5contributions required under Section 16-152, each teacher who
6is a participant in the Tier 3 retirement plan shall contribute
7to the System an amount equal to 4% of each payment of salary
8to fund the defined-benefit component of the Tier 3 retirement
9plan and an amount equal to 5% of each payment of salary to
10fund the defined-contribution component of the Tier 3
11retirement plan. These contributions shall be deducted from the
12teacher's salary and may be picked up by the employer for
13federal tax purposes under Section 16-152.1. These
14contributions are a condition of employment.
15    A Tier 3 employee may make additional contributions to the
16defined-contribution component of the Tier 3 retirement plan in
17accordance with the procedures prescribed by the System, to the
18extent permitted under the rules of the plan.
19    (h) Actual employer contributions.
20        (1) To fund the Tier 3 retirement plan, the actual
21    employer of a teacher who participates in the Tier 3
22    retirement plan shall annually contribute to the System an
23    amount determined by the System equal to the sum of: (i)
24    the annual employer's normal cost of the defined-benefit
25    component of the Tier 3 retirement plan for teachers of
26    that employer, (ii) any unfunded accrued liability arising

 

 

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1    from the Tier 3 retirement plan assigned to the employer
2    that year in accordance with subsection (h-5), and (iii)
3    any optional matching contribution to be made for that year
4    to the defined-contribution accounts of the local
5    employers' teachers by the local employer pursuant to a
6    collective bargaining agreement or other employment
7    contract, provided that the optional matching contribution
8    shall not be less than 3% or greater than 10% of the
9    applicable teacher salary.
10        (2) Each year, the retirement system shall obtain an
11    actuarial estimate of the annual normal cost of the
12    defined-benefit component of the Tier 3 retirement plan.
13        (3) The contributions required under this subsection
14    (h) are in addition to the contributions required under
15    Section 16-158 and any other contributions required under
16    this Article.
17        (4) In no event shall a participant have an option of
18    receiving any portion of the local employer contributions
19    to the defined-benefit plan in cash.
20    (h-5) For use in determining the employer's contribution
21for unfunded accrued liability under item (ii) of paragraph (1)
22of subsection (h), the System shall maintain a separate account
23for each employer. The separate account shall be maintained in
24such form and detail as the System determines to be
25appropriate. The separate account shall reflect the following
26items to the extent that they are attributable to that employer

 

 

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1and arise on or after the effective date of this amendatory Act
2of the 98th General Assembly: employer contributions, employee
3contributions, investment returns, payments of benefits, and
4that employer's proportionate share of the System's
5administrative expenses.
6    In the event that the Board determines that there is a
7deficiency or surplus in the account of an employer, the Board
8shall determine the employer's contribution rate as required by
9item (ii) of paragraph (1) of subsection (h) so as to address
10that deficiency or surplus over a reasonable period of time as
11determined by the Board, which shall be no more than 10 years.
12    (i) Refunds. Refunds of teacher contributions to the
13defined-benefit component of the Tier 3 retirement plan and
14vested employer contributions to the defined-benefit component
15of the Tier 3 retirement plan shall be calculated in accordance
16with Section 16-138.
 
17    (40 ILCS 5/16-158)   (from Ch. 108 1/2, par. 16-158)
18    Sec. 16-158. Contributions by State and other employing
19units.
20    (a) The State shall make contributions to the System by
21means of appropriations from the Common School Fund and other
22State funds of amounts which, together with other employer
23contributions, employee contributions, investment income, and
24other income, will be sufficient to meet the cost of
25maintaining and administering the System on a 100% 90% funded

 

 

HB3411- 192 -LRB098 10767 EFG 41183 b

1basis in accordance with actuarial recommendations by the end
2of State fiscal year 2043.
3    The Board shall determine the amount of State contributions
4required for each fiscal year on the basis of the actuarial
5tables and other assumptions adopted by the Board and the
6recommendations of the actuary, using the formula in subsection
7(b-3).
8    (a-1) Annually, on or before November 15 through until
9November 15, 2011, the Board shall certify to the Governor the
10amount of the required State contribution for the coming fiscal
11year. The certification under this subsection (a-1) shall
12include a copy of the actuarial recommendations upon which it
13is based and shall specifically identify the System's projected
14State normal cost for that fiscal year.
15    On or before May 1, 2004, the Board shall recalculate and
16recertify to the Governor the amount of the required State
17contribution to the System for State fiscal year 2005, taking
18into account the amounts appropriated to and received by the
19System under subsection (d) of Section 7.2 of the General
20Obligation Bond Act.
21    On or before July 1, 2005, the Board shall recalculate and
22recertify to the Governor the amount of the required State
23contribution to the System for State fiscal year 2006, taking
24into account the changes in required State contributions made
25by this amendatory Act of the 94th General Assembly.
26    On or before April 1, 2011, the Board shall recalculate and

 

 

HB3411- 193 -LRB098 10767 EFG 41183 b

1recertify to the Governor the amount of the required State
2contribution to the System for State fiscal year 2011, applying
3the changes made by Public Act 96-889 to the System's assets
4and liabilities as of June 30, 2009 as though Public Act 96-889
5was approved on that date.
6    (a-5) On or before November 1 of each year, beginning
7November 1, 2012, the Board shall submit to the State Actuary,
8the Governor, and the General Assembly a proposed certification
9of the amount of the required State contribution to the System
10for the next fiscal year, along with all of the actuarial
11assumptions, calculations, and data upon which that proposed
12certification is based. On or before January 1 of each year,
13beginning January 1, 2013, the State Actuary shall issue a
14preliminary report concerning the proposed certification and
15identifying, if necessary, recommended changes in actuarial
16assumptions that the Board must consider before finalizing its
17certification of the required State contributions.
18    On or before January 15, 2013 and each January 15
19thereafter, the Board shall certify to the Governor and the
20General Assembly the amount of the required State contribution
21for the next fiscal year. The certification shall include a
22copy of the actuarial recommendations upon which it is based
23and shall specifically identify the System's projected State
24normal cost for that fiscal year. The Board's certification
25must note any deviations from the State Actuary's recommended
26changes, the reason or reasons for not following the State

 

 

HB3411- 194 -LRB098 10767 EFG 41183 b

1Actuary's recommended changes, and the fiscal impact of not
2following the State Actuary's recommended changes on the
3required 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

 

 

HB3411- 195 -LRB098 10767 EFG 41183 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 2014 through 2043, 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
10equal to the sum of (1) the State's portion of the projected
11normal cost for that fiscal year, plus (2) an amount sufficient
12to bring the total assets of the System up to 100% of the total
13actuarial liabilities of the System by the end of State fiscal
14year 2043. In making these determinations, the required State
15contribution shall be calculated each year as a level
16percentage of payroll over the years remaining to and including
17fiscal year 2043 and shall be determined under the projected
18unit credit actuarial cost method.
19    Beginning in State fiscal year 2044, the minimum State
20contribution for each fiscal year shall be the amount needed to
21maintain the total assets of the System at 100% of the total
22actuarial liabilities of the System.
23    For State fiscal years 2012 and 2013 through 2045, the
24minimum contribution to the System to be made by the State for
25each fiscal year shall be an amount determined by the System to
26be sufficient to bring the total assets of the System up to 90%

 

 

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1of the total actuarial liabilities of the System by the end of
2State 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; except that in the
12following specified State fiscal years, the State contribution
13to the System shall not be less than the following indicated
14percentages of the applicable employee payroll, even if the
15indicated percentage will produce a State contribution in
16excess of the amount otherwise required under this subsection
17and subsection (a), and notwithstanding any contrary
18certification made under subsection (a-1) before the effective
19date of this amendatory Act of 1998: 10.02% in FY 1999; 10.77%
20in FY 2000; 11.47% in FY 2001; 12.16% in FY 2002; 12.86% in FY
212003; and 13.56% in FY 2004.
22    Notwithstanding any other provision of this Article, the
23total required State contribution for State fiscal year 2006 is
24$534,627,700.
25    Notwithstanding any other provision of this Article, the
26total required State contribution for State fiscal year 2007 is

 

 

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1$738,014,500.
2    For each of State fiscal years 2008 through 2009, the State
3contribution to the System, as a percentage of the applicable
4employee payroll, shall be increased in equal annual increments
5from the required State contribution for State fiscal year
62007, so that by State fiscal year 2011, the State is
7contributing at the rate otherwise required under this Section.
8    Notwithstanding any other provision of this Article, the
9total required State contribution for State fiscal year 2010 is
10$2,089,268,000 and shall be made from the proceeds of bonds
11sold in fiscal year 2010 pursuant to Section 7.2 of the General
12Obligation Bond Act, less (i) the pro rata share of bond sale
13expenses determined by the System's share of total bond
14proceeds, (ii) any amounts received from the Common School Fund
15in fiscal year 2010, and (iii) any reduction in bond proceeds
16due to the issuance of discounted bonds, if applicable.
17    Notwithstanding any other provision of this Article, the
18total required State contribution for State fiscal year 2011 is
19the amount recertified by the System on or before April 1, 2011
20pursuant to subsection (a-1) of this Section and shall be made
21from the proceeds of bonds sold in fiscal year 2011 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 Common School Fund in fiscal year 2011, and (iii) any
26reduction in bond proceeds due to the issuance of discounted

 

 

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1bonds, if applicable. This amount shall include, in addition to
2the amount certified by the System, an amount necessary to meet
3employer contributions required by the State as an employer
4under paragraph (e) of this Section, which may also be used by
5the System for contributions required by paragraph (a) of
6Section 16-127.
7    Beginning in State fiscal year 2046, the minimum State
8contribution for each fiscal year shall be the amount needed to
9maintain the total assets of the System at 90% of the total
10actuarial liabilities of the System.
11    Amounts received by the System pursuant to Section 25 of
12the Budget Stabilization Act or Section 8.12 of the State
13Finance Act in any fiscal year do not reduce and do not
14constitute payment of any portion of the minimum State
15contribution required under this Article in that fiscal year.
16Such amounts shall not reduce, and shall not be included in the
17calculation of, the required State contributions under this
18Article in any future year until the System has reached a
19funding ratio of at least 100% 90%. A reference in this Article
20to the "required State contribution" or any substantially
21similar term does not include or apply to any amounts payable
22to the System under Section 25 of the Budget Stabilization Act.
23    Notwithstanding any other provision of this Section, the
24required State contribution for State fiscal year 2005 and for
25fiscal year 2008 and each fiscal year thereafter through State
26fiscal year 2013, as calculated under this Section and

 

 

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1certified under subsection (a-1), shall not exceed an amount
2equal to (i) the amount of the required State contribution that
3would have been calculated under this Section for that fiscal
4year if the System had not received any payments under
5subsection (d) of Section 7.2 of the General Obligation Bond
6Act, minus (ii) the portion of the State's total debt service
7payments for that fiscal year on the bonds issued in fiscal
8year 2003 for the purposes of that Section 7.2, as determined
9and certified by the Comptroller, that is the same as the
10System's portion of the total moneys distributed under
11subsection (d) of Section 7.2 of the General Obligation Bond
12Act. In determining this maximum for State fiscal years 2008
13through 2010, however, the amount referred to in item (i) shall
14be increased, as a percentage of the applicable employee
15payroll, in equal increments calculated from the sum of the
16required State contribution for State fiscal year 2007 plus the
17applicable portion of the State's total debt service payments
18for fiscal year 2007 on the bonds issued in fiscal year 2003
19for the purposes of Section 7.2 of the General Obligation Bond
20Act, so that, by State fiscal year 2011, the State is
21contributing at the rate otherwise required under this Section.
22    (c) Payment of the required State contributions and of all
23pensions, retirement annuities, death benefits, refunds, and
24other benefits granted under or assumed by this System, and all
25expenses in connection with the administration and operation
26thereof, are obligations of the State.

 

 

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1    If members are paid from special trust or federal funds
2which are administered by the employing unit, whether school
3district or other unit, the employing unit shall pay to the
4System from such funds the full accruing retirement costs based
5upon that service, as determined by the System. Employer
6contributions, based on salary paid to members from federal
7funds, may be forwarded by the distributing agency of the State
8of Illinois to the System prior to allocation, in an amount
9determined in accordance with guidelines established by such
10agency and the System.
11    (d) Effective July 1, 1986, any employer of a teacher as
12defined in paragraph (8) of Section 16-106 shall pay the
13employer's normal cost of benefits based upon the teacher's
14service, in addition to employee contributions, as determined
15by the System. Such employer contributions shall be forwarded
16monthly in accordance with guidelines established by the
17System.
18    However, with respect to benefits granted under Section
1916-133.4 or 16-133.5 to a teacher as defined in paragraph (8)
20of Section 16-106, the employer's contribution shall be 12%
21(rather than 20%) of the member's highest annual salary rate
22for each year of creditable service granted, and the employer
23shall also pay the required employee contribution on behalf of
24the teacher. For the purposes of Sections 16-133.4 and
2516-133.5, a teacher as defined in paragraph (8) of Section
2616-106 who is serving in that capacity while on leave of

 

 

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1absence from another employer under this Article shall not be
2considered an employee of the employer from which the teacher
3is on leave.
4    (e) Beginning July 1, 1998, every employer of a teacher
5shall pay to the System an employer contribution computed as
6follows:
7        (1) Beginning July 1, 1998 through June 30, 1999, the
8    employer contribution shall be equal to 0.3% of each
9    teacher's salary.
10        (2) Beginning July 1, 1999 and thereafter, the employer
11    contribution shall be equal to 0.58% of each teacher's
12    salary.
13The school district or other employing unit may pay these
14employer contributions out of any source of funding available
15for that purpose and shall forward the contributions to the
16System on the schedule established for the payment of member
17contributions.
18    These employer contributions are intended to offset a
19portion of the cost to the System of the increases in
20retirement benefits resulting from this amendatory Act of 1998.
21    Each employer of teachers is entitled to a credit against
22the contributions required under this subsection (e) with
23respect to salaries paid to teachers for the period January 1,
242002 through June 30, 2003, equal to the amount paid by that
25employer under subsection (a-5) of Section 6.6 of the State
26Employees Group Insurance Act of 1971 with respect to salaries

 

 

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1paid to teachers for that period.
2    The additional 1% employee contribution required under
3Section 16-152 by this amendatory Act of 1998 is the
4responsibility of the teacher and not the teacher's employer,
5unless the employer agrees, through collective bargaining or
6otherwise, to make the contribution on behalf of the teacher.
7    If an employer is required by a contract in effect on May
81, 1998 between the employer and an employee organization to
9pay, on behalf of all its full-time employees covered by this
10Article, all mandatory employee contributions required under
11this Article, then the employer shall be excused from paying
12the employer contribution required under this subsection (e)
13for the balance of the term of that contract. The employer and
14the employee organization shall jointly certify to the System
15the existence of the contractual requirement, in such form as
16the System may prescribe. This exclusion shall cease upon the
17termination, extension, or renewal of the contract at any time
18after May 1, 1998.
19    (f) If the amount of a teacher's salary for any school year
20used to determine final average salary exceeds the member's
21annual full-time salary rate with the same employer for the
22previous school year by more than 6%, the teacher's employer
23shall pay to the System, in addition to all other payments
24required under this Section and in accordance with guidelines
25established by the System, the present value of the increase in
26benefits resulting from the portion of the increase in salary

 

 

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

 

 

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1attesting to all facts within the employer's knowledge that are
2pertinent to the applicability of that subsection. Upon
3receiving a timely application for recalculation, the System
4shall review the application and, if appropriate, recalculate
5the amount due.
6    The employer contributions required under this subsection
7(f) may be paid in the form of a lump sum within 90 days after
8receipt of the bill. If the employer contributions are not paid
9within 90 days after receipt of the bill, then interest will be
10charged at a rate equal to the System's annual actuarially
11assumed rate of return on investment compounded annually from
12the 91st day after receipt of the bill. Payments must be
13concluded within 3 years after the employer's receipt of the
14bill.
15    (g) This subsection (g) applies only to payments made or
16salary increases given on or after June 1, 2005 but before July
171, 2011. The changes made by Public Act 94-1057 shall not
18require the System to refund any payments received before July
1931, 2006 (the effective date of Public Act 94-1057).
20    When assessing payment for any amount due under subsection
21(f), the System shall exclude salary increases paid to teachers
22under contracts or collective bargaining agreements entered
23into, amended, or renewed before June 1, 2005.
24    When assessing payment for any amount due under subsection
25(f), the System shall exclude salary increases paid to a
26teacher at a time when the teacher is 10 or more years from

 

 

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1retirement eligibility under Section 16-132 or 16-133.2.
2    When assessing payment for any amount due under subsection
3(f), the System shall exclude salary increases resulting from
4overload work, including summer school, when the school
5district has certified to the System, and the System has
6approved the certification, that (i) the overload work is for
7the sole purpose of classroom instruction in excess of the
8standard number of classes for a full-time teacher in a school
9district during a school year and (ii) the salary increases are
10equal to or less than the rate of pay for classroom instruction
11computed on the teacher's current salary and work schedule.
12    When assessing payment for any amount due under subsection
13(f), the System shall exclude a salary increase resulting from
14a promotion (i) for which the employee is required to hold a
15certificate or supervisory endorsement issued by the State
16Teacher Certification Board that is a different certification
17or supervisory endorsement than is required for the teacher's
18previous position and (ii) to a position that has existed and
19been filled by a member for no less than one complete academic
20year and the salary increase from the promotion is an increase
21that results in an amount no greater than the lesser of the
22average salary paid for other similar positions in the district
23requiring the same certification or the amount stipulated in
24the collective bargaining agreement for a similar position
25requiring the same certification.
26    When assessing payment for any amount due under subsection

 

 

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

 

 

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1    Public Act 94-4.
2        (4) The increase in the required State contribution
3    resulting from the changes made to this Section by Public
4    Act 94-1057.
5    (j) For purposes of determining the required State
6contribution to the System, the value of the System's assets
7shall be equal to the actuarial value of the System's assets,
8which shall be calculated as follows:
9    As of June 30, 2008, the actuarial value of the System's
10assets shall be equal to the market value of the assets as of
11that date. In determining the actuarial value of the System's
12assets for fiscal years after June 30, 2008, any actuarial
13gains or losses from investment return incurred in a fiscal
14year shall be recognized in equal annual amounts over the
155-year period following that fiscal year.
16    (k) For purposes of determining the required State
17contribution to the system for a particular year, the actuarial
18value of assets shall be assumed to earn a rate of return equal
19to the system's actuarially assumed rate of return.
20(Source: P.A. 96-43, eff. 7-15-09; 96-1497, eff. 1-14-11;
2196-1511, eff. 1-27-11; 96-1554, eff. 3-18-11; 97-694, eff.
226-18-12; 97-813, eff. 7-13-12.)
 
23    (40 ILCS 5/16-158.1)  (from Ch. 108 1/2, par. 16-158.1)
24    Sec. 16-158.1. Actions to enforce payments by school
25districts and other employing units other than the State. Any

 

 

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

 

 

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1(Source: P.A. 90-448, eff. 8-16-97.)
 
2    (40 ILCS 5/16-158.2 new)
3    Sec. 16-158.2. Obligations of State; funding guarantee.
4Beginning July 1, 2013, the State shall be contractually
5obligated to contribute to the System under Section 16-158 in
6each State fiscal year an amount not less than the sum of (i)
7the State's normal cost for that year and (ii) the portion of
8the unfunded accrued liability assigned to that year by law in
9accordance with a schedule that distributes payments equitably
10over a reasonable period of time and in accordance with
11accepted actuarial practices. The obligations created under
12this Section are contractual obligations protected and
13enforceable under Article I, Section 16 and Article XIII,
14Section 5 of the Illinois Constitution.
15    Notwithstanding any other provision of law, if the State
16fails to pay in a State fiscal year the amount guaranteed under
17this Section, the System may bring a mandamus action in the
18Circuit Court of Sangamon County to compel the State to make
19that payment, irrespective of other remedies that may be
20available to the System. In ordering the State to make the
21required payment, the court may order a reasonable payment
22schedule to enable the State to make the required payment
23without significantly imperiling the public health, safety, or
24welfare.
25    Any payments required to be made by the State pursuant to

 

 

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1this Section are expressly subordinated to the payment of the
2principal, interest, and premium, if any, on any bonded debt
3obligation of the State or any other State-created entity,
4either currently outstanding or to be issued, for which the
5source of repayment or security thereon is derived directly or
6indirectly from tax revenues collected by the State or any
7other State-created entity. Payments on such bonded
8obligations include any statutory fund transfers or other
9prefunding mechanisms or formulas set forth, now or hereafter,
10in State law or bond indentures, into debt service funds or
11accounts of the State related to such bonded obligations,
12consistent with the payment schedules associated with such
13obligations.
 
14    (40 ILCS 5/16-203)
15    Sec. 16-203. Application and expiration of new benefit
16increases.
17    (a) As used in this Section, "new benefit increase" means
18an increase in the amount of any benefit provided under this
19Article, or an expansion of the conditions of eligibility for
20any benefit under this Article, that results from an amendment
21to this Code that takes effect after June 1, 2005 (the
22effective date of Public Act 94-4). "New benefit increase",
23however, does not include any benefit increase resulting from
24the changes made to this Article or Article 1 by Public Act
2595-910 or this amendatory Act of the 98th 95th General

 

 

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

 

 

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1    (d) Every new benefit increase shall expire 5 years after
2its effective date or on such earlier date as may be specified
3in the language enacting the new benefit increase or provided
4under subsection (c). This does not prevent the General
5Assembly from extending or re-creating a new benefit increase
6by law.
7    (e) Except as otherwise provided in the language creating
8the new benefit increase, a new benefit increase that expires
9under this Section continues to apply to persons who applied
10and qualified for the affected benefit while the new benefit
11increase was in effect and to the affected beneficiaries and
12alternate payees of such persons, but does not apply to any
13other person, including without limitation a person who
14continues in service after the expiration date and did not
15apply and qualify for the affected benefit while the new
16benefit increase was in effect.
17(Source: P.A. 94-4, eff. 6-1-05; 95-910, eff. 8-26-08.)
 
18    (40 ILCS 5/20-121)  (from Ch. 108 1/2, par. 20-121)
19    Sec. 20-121. Calculation of proportional retirement
20annuities. Upon retirement of the employee, a proportional
21retirement annuity shall be computed by each participating
22system in which pension credit has been established on the
23basis of pension credits under each system. The computation
24shall be in accordance with the formula or method prescribed by
25each participating system which is in effect at the date of the

 

 

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1employee's latest withdrawal from service covered by any of the
2systems in which he has pension credits which he elects to have
3considered under this Article. However, the amount of any
4retirement annuity payable under the self-managed plan
5established under Section 15-158.2 of this Code or under the
6defined-contribution component of a Tier 3 retirement plan
7established under Section 15-158.5 or 16-152.8 depends solely
8on the value of the participant's vested account balances and
9is not subject to any proportional adjustment under this
10Section.
11    Combined pension credit under all retirement systems
12subject to this Article shall be considered in determining
13whether the minimum qualification has been met and the formula
14or method of computation which shall be applied. If a system
15has a step-rate formula for calculation of the retirement
16annuity, pension credits covering previous service which have
17been established under another system shall be considered in
18determining which range or ranges of the step-rate formula are
19to be applicable to the employee.
20    Interest on pension credit shall continue to accumulate in
21accordance with the provisions of the law governing the
22retirement system in which the same has been established during
23the time an employee is in the service of another employer, on
24the assumption such employee, for interest purposes for pension
25credit, is continuing in the service covered by such retirement
26system.

 

 

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1(Source: P.A. 91-887, eff. 7-6-00.)
 
2    (40 ILCS 5/20-123)  (from Ch. 108 1/2, par. 20-123)
3    Sec. 20-123. Survivor's annuity. The provisions governing
4a retirement annuity shall be applicable to a survivor's
5annuity. Appropriate credits shall be established for
6survivor's annuity purposes in those participating systems
7which provide survivor's annuities, according to the same
8conditions and subject to the same limitations and restrictions
9herein prescribed for a retirement annuity. If a participating
10system has no survivor's annuity benefit, or if the survivor's
11annuity benefit under that system is waived, pension credit
12established in that system shall not be considered in
13determining eligibility for or the amount of the survivor's
14annuity which may be payable by any other participating system.
15    For persons who participate in the self-managed plan
16established under Section 15-158.2 or the portable benefit
17package established under Section 15-136.4, or in a Tier 3
18retirement plan established under Section 15-158.5, pension
19credit established under Article 15 may be considered in
20determining eligibility for or the amount of the survivor's
21annuity that is payable by any other participating system, but
22pension credit established in any other system shall not result
23in any right to a survivor's annuity under the Article 15
24system.
25    For persons who participate in the Tier 3 retirement plan

 

 

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1established under Section 16-152.8, pension credit established
2under Article 16 may be considered in determining eligibility
3for or the amount of the survivor's annuity that is payable by
4any other participating system, but pension credit established
5in any other system shall not result in any right to a
6survivor's annuity under the Article 16 system.
7(Source: P.A. 91-887, eff. 7-6-00.)
 
8    (40 ILCS 5/20-124)  (from Ch. 108 1/2, par. 20-124)
9    Sec. 20-124. Maximum benefits.
10    (a) In no event shall the combined retirement or survivors
11annuities exceed the highest annuity which would have been
12payable by any participating system in which the employee has
13pension credits, if all of his pension credits had been
14validated in that system.
15    If the combined annuities should exceed the highest maximum
16as determined in accordance with this Section, the respective
17annuities shall be reduced proportionately according to the
18ratio which the amount of each proportional annuity bears to
19the aggregate of all such annuities.
20    (b) In the case of a participant in the self-managed plan
21established under Section 15-158.2 of this Code to whom the
22provisions of this Article apply:
23        (i) For purposes of calculating the combined
24    retirement annuity and the proportionate reduction, if
25    any, in a retirement annuity other than one payable under

 

 

HB3411- 216 -LRB098 10767 EFG 41183 b

1    the self-managed plan, the amount of the Article 15
2    retirement annuity shall be deemed to be the highest
3    annuity to which the annuitant would have been entitled if
4    he or she had participated in the traditional benefit
5    package as defined in Section 15-103.1 rather than the
6    self-managed plan.
7        (ii) For purposes of calculating the combined
8    survivor's annuity and the proportionate reduction, if
9    any, in a survivor's annuity other than one payable under
10    the self-managed plan, the amount of the Article 15
11    survivor's annuity shall be deemed to be the highest
12    survivor's annuity to which the survivor would have been
13    entitled if the deceased employee had participated in the
14    traditional benefit package as defined in Section 15-103.1
15    rather than the self-managed plan.
16        (iii) Benefits payable under the self-managed plan are
17    not subject to proportionate reduction under this Section.
18    (c) In the case of a participant in a Tier 3 retirement
19plan established under Section 15-158.5 of this Code to whom
20the provisions of this Article apply:
21        (i) For purposes of calculating the combined
22    retirement annuity and the proportionate reduction, if
23    any, in a retirement annuity other than one payable under
24    Article 15 of this Code, the amount of the Article 15
25    retirement annuity shall be deemed to be the amount of the
26    retirement annuity payable under the defined-benefit
<

 

 

HB3411- 217 -LRB098 10767 EFG 41183 b

1    component of the Tier 3 retirement plan, but shall not
2    include any benefit payable under the defined-contribution
3    component of the Tier 3 retirement plan.
4        (ii) For purposes of calculating the combined
5    survivor's annuity and the proportionate reduction, if
6    any, in a survivor's annuity other than one payable under
7    Article 15 of this Code, the amount of the Article 15
8    survivor's annuity shall be deemed to be the amount of the
9    survivor's annuity payable under the defined benefit
10    portion of the Tier 3 retirement plan, but shall not
11