093_HB3094

                                     LRB093 11019 EFG 11686 b

 1        AN ACT in relation to public employee benefits.

 2        Be it enacted by the People of  the  State  of  Illinois,
 3    represented in the General Assembly:

 4        Section  5.   The  Illinois  Pension  Code  is amended by
 5    changing  Sections  17-119  and  17-122  and  adding  Section
 6    17-119.2 as follows:

 7        (40 ILCS 5/17-119) (from Ch. 108 1/2, par. 17-119)
 8        Sec. 17-119.  Automatic annual increase in pension.
 9        (a)  Each teacher retiring on or after September 1, 1959,
10    is entitled  to  the  annual  increase  in  pension,  defined
11    herein, while he is receiving a pension from the Fund.
12             1.  The   term   "base   pension"  means  a  service
13        retirement or disability retirement pension in the amount
14        fixed and payable at the date of retirement of a teacher.
15             2.  The annual increase in pension shall be  at  the
16        rate of 1 1/2% of base pension. This increase shall first
17        occur  in  January  of  the year next following the first
18        anniversary of retirement. At such time  the  Fund  shall
19        pay the pro rata part of the increase for the period from
20        the  first  anniversary  date  to  the  date of the first
21        increase in pension. Beginning January 1, 1972, the  rate
22        of  annual  increase  in  pension shall be 2% of the base
23        pension. Beginning January 1, 1979, the  rate  of  annual
24        increase  in  pension  shall  be  3% of the base pension.
25        Beginning January 1, 1990, all automatic annual increases
26        payable under this  Section  shall  be  calculated  as  a
27        percentage  of  the  total pension payable at the time of
28        the increase, including all increases previously  granted
29        under this Article, notwithstanding Section 17-157.
30             3.  An  increase in pension shall be granted only if
31        the retired teacher is age 60 or  over.  If  the  teacher
 
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 1        attains  age 60 after retirement, the increase in pension
 2        shall begin in January of the  year  following  the  61st
 3        birthday.  At  such  time the Fund also shall pay the pro
 4        rata part of the increase from the 61st birthday  to  the
 5        date of first increase in pension.
 6        (b)  In addition to other increases which may be provided
 7    by  this  Section,  on  January  1,  1981 any teacher who was
 8    receiving a retirement pension on or before January  1,  1971
 9    shall  have  his retirement pension then being paid increased
10    $1 per month for each year of creditable service.  On January
11    1, 1982, any teacher whose retirement  pension  began  on  or
12    before  January  1,  1977,  shall have his retirement pension
13    then being paid increased $1  per  month  for  each  year  of
14    creditable service.
15        On  January 1, 1987, any teacher whose retirement pension
16    began on or before January 1, 1977, shall  have  the  monthly
17    retirement  pension  increased  by  an amount equal to 8¢ per
18    year of creditable service times the  number  of  years  that
19    have elapsed since the retirement pension began.
20        (c)  On  January  1,  2004,  every  pensioner  who  began
21    receiving  a  retirement pension before January 1, 1980 shall
22    have the monthly retirement pension increased by whichever of
23    the following percentages is applicable:
24              5% if the annuity began in 1979;
25             10% if the annuity began in 1978;
26             14% if the annuity began in 1977;
27             14% if the annuity began in 1976;
28             18% if the annuity began in 1975;
29             23% if the annuity began in 1974;
30             32% if the annuity began in 1973 or before.
31        The increase under this subsection shall be calculated as
32    a percentage of the amount of the retirement pension  payable
33    on  December  31,  2003,  including  any increases previously
34    received under this Article, and shall  be  included  in  the
 
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 1    calculation  of increases granted thereafter under subsection
 2    (a).  Section 17-157 does not apply to the increase  provided
 3    under this subsection.
 4    (Source: P.A. 90-566, eff. 1-2-98.)

 5        (40 ILCS 5/17-119.2 new)
 6        Sec.  17-119.2.  Reduction  of  purchasing power; policy;
 7    report; increase.
 8        (a)  The General Assembly finds and declares that:
 9             (1)  The purchasing power of a fixed annuity can  be
10        eroded   over  time  by  the  effects  of  inflation  and
11        increases in the general cost of living.
12             (2)  For a person whose income consists primarily of
13        a  fixed  annuity,  the  reduction  in  purchasing  power
14        resulting from increases in the cost of living can become
15        catastrophic over time, transforming  a  once-comfortable
16        retirement into a time of poverty and need.
17             (3)  The  State  of  Illinois is concerned about the
18        effects that a significant reduction in purchasing  power
19        can  have on the quality of life of retired employees and
20        their survivors.
21             (4)  The General Assembly has  previously  addressed
22        this  concern by providing for automatic annual increases
23        in retirement and survivor's pensions under this Article.
24        Recognizing that these  automatic  annual  increases,  by
25        themselves,  are  not  a complete answer in times of high
26        inflation, the General Assembly has also,  from  time  to
27        time,  provided  specific  one-time increases in pensions
28        for certain categories of pensioners.
29        (b)  It is the  public  policy  of  this  State  and  the
30    intention  of  the  General  Assembly  to  protect pensioners
31    against significant decreases in the purchasing power of  the
32    retirement   and   survivor's  pensions  granted  under  this
33    Article.
 
                            -4-      LRB093 11019 EFG 11686 b
 1        (c)  The Fund shall regularly  review  the  changes  that
 2    have  occurred  in the purchasing power of the retirement and
 3    survivor's pensions being paid under  this  Article,  and  it
 4    shall  report  to the General Assembly, the Governor, and the
 5    Pension Laws  Commission  whenever  it  determines  that  the
 6    original  purchasing power of those pensions has been reduced
 7    by 20% or more for any category or group of pensioners.   The
 8    Fund  may  include in the report its recommendations, if any,
 9    for legislative action to address its findings.
10        (d)  As used in this Section, the  term  "retirement  and
11    survivor's  pensions"  means all service retirement pensions,
12    disability  retirement  pensions,  survivor's  pensions,  and
13    children's pensions.

14        (40 ILCS 5/17-122) (from Ch. 108 1/2, par. 17-122)
15        Sec. 17-122. Survivor's and children's pensions - Amount.
16        (a)  Upon the death of a teacher  who  has  completed  at
17    least  1 1/2  years  of contributing service with either this
18    Fund or the  State  Universities  Retirement  System  or  the
19    Teachers'   Retirement  System  of  the  State  of  Illinois,
20    provided his death  occurred  while  (a)  in  active  service
21    covered  by  the  Fund  or  during  his  first  18  months of
22    continuous employment without a break in  service  under  any
23    other   participating  system  as  defined  in  the  Illinois
24    Retirement  Systems   Reciprocal   Act   except   the   State
25    Universities  Retirement  System and the Teachers' Retirement
26    System of the State of Illinois, (b) on a creditable leave of
27    absence, (c) on a noncreditable leave of absence of  no  more
28    than  one  year,  or  (d)  a  pension was deferred or pending
29    provided the teacher had  at  least  10  years  of  validated
30    service  credit,  or  upon the death of a pensioner otherwise
31    qualified  for  such  benefit,  the  surviving   spouse   and
32    unmarried minor children of the deceased teacher under age 18
33    shall  be  entitled  to pensions, under the conditions stated
 
                            -5-      LRB093 11019 EFG 11686 b
 1    hereinafter.  Such survivor's and children's  pensions  shall
 2    be based on the average of the 4 highest consecutive years of
 3    salary  in  the  last  10  years of service or on the average
 4    salary for total service, if total service has been less than
 5    4 years, according to the following percentages:
 6             30% of average  salary  or  50%  of  the  retirement
 7        pension  earned  by  the  teacher,  whichever  is larger,
 8        subject to the prescribed maximum monthly payment, for  a
 9        surviving spouse alone on attainment of age 50;
10             60%  of  average  salary  for a surviving spouse and
11        eligible minor children of the deceased teacher.
12        If no eligible spouse survives, or the  surviving  spouse
13    remarries,  or  the  parent  of  the children of the deceased
14    member is otherwise ineligible for a  survivor's  pension,  a
15    children's  pension  for eligible minor children under age 18
16    shall be paid to their parent or  legal  guardian  for  their
17    benefit according to the following percentages:
18             30% of average salary for one child;
19             60% of average salary for 2 or more children.
20        (b)  On  January  1,  1981, any survivor or child who was
21    receiving a survivor's or children's  pension  on  or  before
22    January  1,  1971,  shall  have  his survivor's or children's
23    pension then being paid increased by 1% for  each  full  year
24    which  has  elapsed  from  the  date  the  pension began.  On
25    January 1, 1982, any survivor or child  whose  pension  began
26    after January 1, 1971, but before January 1, 1981, shall have
27    his   survivor's   or  children's  pension  then  being  paid
28    increased 1% for each full year which has  elapsed  from  the
29    date  the pension began.  On January 1, 1987, any survivor or
30    child whose pension began on or before January 1, 1977, shall
31    have the monthly survivor's or children's  pension  increased
32    by  $1 for each full year which has elapsed since the pension
33    began.
34        (c)  On January 1, 2004,  every  survivor  or  child  who
 
                            -6-      LRB093 11019 EFG 11686 b
 1    began  receiving  a  survivor's  or children's pension before
 2    January 1, 1980 shall have the monthly pension  increased  by
 3    whichever of the following percentages is applicable:
 4              5% if the original annuity began in 1979;
 5             10% if the original annuity began in 1978;
 6             14% if the original annuity began in 1977;
 7             14% if the original annuity began in 1976;
 8             18% if the original annuity began in 1975;
 9             23% if the original annuity began in 1974;
10             32% if the original annuity began in 1973 or before.
11        In  the  case of the survivor of a deceased annuitant who
12    died while receiving a retirement annuity, "original annuity"
13    means the deceased annuitant's  retirement  pension;  in  all
14    other  cases,  "original  annuity"  means  the  survivor's or
15    children's pension.
16        The increase under this subsection shall be calculated as
17    a percentage of the amount of the  survivor's  or  children's
18    pension payable on December 31, 2003, including any increases
19    previously received under this Article, and shall be included
20    in  the  calculation  of  increases  granted thereafter under
21    subsection  (d).   Section  17-157  does  not  apply  to  the
22    increase provided under this subsection.
23        (d)  Beginning January  1,  1990,  every  survivor's  and
24    children's  pension  shall be increased (1) on each January 1
25    occurring on or after the commencement of the pension if  the
26    deceased  teacher  died while receiving a retirement pension,
27    or (2) in other cases, on each  January  1  occurring  on  or
28    after  the  first  anniversary  of  the  commencement  of the
29    pension, by an amount equal to 3% of the  current  amount  of
30    the pension, including all increases previously granted under
31    this Article, notwithstanding Section 17-157.  Such increases
32    shall  apply  without  regard to whether the deceased teacher
33    was in service  on  or  after  the  effective  date  of  this
34    amendatory  Act  of 1991, but shall not accrue for any period
 
                            -7-      LRB093 11019 EFG 11686 b
 1    prior to January 1, 1990.
 2        (e)  Subject  to  the  minimum  established  below,   the
 3    maximum amount of pension for a surviving spouse alone or one
 4    minor child shall be $400 per month, and the maximum combined
 5    pensions  for a surviving spouse and children of the deceased
 6    teacher shall be $600 per  month,  with  individual  pensions
 7    adjusted  for all beneficiaries pro rata to conform with this
 8    limitation.   If  proration  is   unnecessary   the   minimum
 9    survivor's  and  children's  pensions shall be $40 per month.
10    The minimum total survivor's and children's  pension  payable
11    upon  the  death  of  a contributor or annuitant which occurs
12    after  December  31,  1986,  shall  be  50%  of  the   earned
13    retirement   pension   of   such  contributor  or  annuitant,
14    calculated without early retirement discount in the  case  of
15    death in service.
16        On  death  after  retirement,  the  total  survivor's and
17    children's pensions shall not exceed the  monthly  retirement
18    or   disability   pension  paid  to  the  deceased  retirant.
19    Survivor's and children's benefits described in this  Section
20    shall apply to all service and disability pensioners eligible
21    for a pension as of July 1, 1981.
22    (Source: P.A. 90-32, eff. 6-27-97; 90-566, eff. 1-2-98.)

23        Section  90.  The State Mandates Act is amended by adding
24    Section 8.27 as follows:

25        (30 ILCS 805/8.27 new)
26        Sec. 8.27. Exempt mandate.   Notwithstanding  Sections  6
27    and  8 of this Act, no reimbursement by the State is required
28    for  the  implementation  of  any  mandate  created  by  this
29    amendatory Act of the 93rd General Assembly.

30        Section 99. Effective date.  This Act takes  effect  upon
31    becoming law.