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Full Text of HB3303  98th General Assembly

HB3303 98TH GENERAL ASSEMBLY

  
  

 


 
98TH GENERAL ASSEMBLY
State of Illinois
2013 and 2014
HB3303

 

Introduced , by Rep. Thomas Morrison

 

SYNOPSIS AS INTRODUCED:
 
40 ILCS 5/1-161 new
40 ILCS 5/2-124  from Ch. 108 1/2, par. 2-124
40 ILCS 5/14-131
40 ILCS 5/15-155  from Ch. 108 1/2, par. 15-155
40 ILCS 5/16-158  from Ch. 108 1/2, par. 16-158
40 ILCS 5/18-131  from Ch. 108 1/2, par. 18-131

    Amends the Illinois Pension Code. With respect to the 5 State-funded retirement systems: Provides a new funding formula for State contributions, with a 100% funding goal and amortization calculated on a level dollar amount. Provides that no additional service credit may be accrued and no automatic increase in a retirement annuity shall be received. Provides that the pensionable salary of an active participant may not exceed that individual's pensionable salary as of the effective date. Provides that State-funded retirement systems shall establish self-directed retirement plans for all active participants and all employees hired on or after the effective date. Provides that all active participants shall have the option of participating in a self-directed retirement plan. Provides that these changes are controlling over any other law. Effective immediately.


LRB098 11034 EFG 41719 b

FISCAL NOTE ACT MAY APPLY
PENSION IMPACT NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB3303LRB098 11034 EFG 41719 b

1    AN ACT concerning public employee benefits.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Pension Code is amended by changing
5Sections 2-124, 14-131, 15-155, 16-158, and 18-131 and by
6adding Section 1-161 as follows:
 
7    (40 ILCS 5/1-161 new)
8    Sec. 1-161. Pension benefits, end of service credit;
9self-directed retirement plans.
10    (a) For the purposes of this Section:
11        "Active participant" means a participant in a
12    State-funded retirement system who does not receive an
13    annuity from a State-funded retirement system.
14        "Annuitant" means a participant in a State-funded
15    retirement system who receives an annuity from a
16    State-funded retirement system.
17        "Automatic increase in retirement annuity" means an
18    automatic increase in retirement annuity granted under
19    Section 1-160 or Article 2, 14, 15, 16, or 18 of this Code.
20        "Consumer price index-u" means the index published by
21    the Bureau of Labor Statistics of the United States
22    Department of Labor that measures the average change in
23    prices of goods and services purchased by all urban

 

 

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1    consumers, United States city average, all items, 1982-84 =
2    100.
3        "Pensionable salary" means the amount of salary,
4    compensation, or earnings used by the applicable
5    State-funded retirement system to calculate the amount of
6    an individual's retirement annuity.
7        "State-funded retirement system" means a retirement
8    system established under Article 2, 14, 15, 16, or 18 of
9    this Code.
10    (b) No active participant may accrue service credit in a
11State-funded retirement system on or after the effective date
12of this amendatory Act of the 98th General Assembly.
13    (c) The pensionable salary of an active participant shall
14not exceed the pensionable salary of that participant as of the
15effective date of this amendatory Act of the 98th General
16Assembly.
17    (d) An annuitant shall not receive an automatic increase in
18retirement annuity on or after the effective date of this
19Section.
20    (e) The retirement age of active participants who are
21ineligible to retire as of the effective date of this
22amendatory Act of the 98th General Assembly shall be increased
23according to a schedule developed by the Public Pension
24Division of the Department of Insurance as soon as practicable
25after the effective date of this amendatory Act of the 98th
26General Assembly. The schedule of retirement ages adopted by

 

 

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1administrative rule of the Division shall, at a minimum, ensure
2(i) that persons who first become active participants on or
3after the effective date of this amendatory Act of the 98th
4General Assembly are not eligible to retire until reaching the
5Social Security Normal Retirement Age and (ii) that persons who
6are active participants but ineligible to retire as of the
7effective date of this amendatory Act of the 98th General
8Assembly remain ineligible to retire until reaching age 59. The
9Division's schedule shall also provide for the adjustment of
10retirement ages using a matrix that accounts for the current
11statutory retirement age for various classes of persons and
12service credit accrued by those persons as of the effective
13date of this amendatory Act of the 98th General Assembly.
14    (f) As soon as practicable after the effective date of this
15amendatory Act of the 98th General Assembly, each State-funded
16retirement system shall establish a self-directed retirement
17plan that allows individuals who are active participants and
18individuals who become active participants on or after the
19effective date of this amendatory Act of the 98th General
20Assembly the opportunity to accumulate assets for retirement
21through a combination of employee and employer contributions
22that may be invested in mutual funds, collective investment
23funds, or other investment products and used to purchase
24annuity contracts, either fixed or variable or a combination
25thereof. The plan must be qualified under the Internal Revenue
26Code of 1986. Participants in the retirement system established

 

 

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1under Article 15 may participate in the self-managed plan
2established under Section 15-158.2 in lieu of participating in
3a self-directed retirement plan created under this subsection
4(f).
5    (g) Each active participant in the retirement system
6established under Article 14 of this Code who is a noncovered
7employee and each active participant in a retirement system
8established under Article 15, 16, or 18 of this Code, except
9for a participant in the self-managed plan established under
10Section 15-158.2, shall participate in the self-directed
11retirement plan established under subsection (f) and
12contribute 8% of his or her salary, earnings, or compensation,
13whichever is applicable, to the plan. The employer of each of
14those active participants shall contribute 7% of salary,
15earnings, or compensation, whichever is applicable, to that
16plan on behalf of the participant.
17    Each active participant in the retirement system
18established under Article 14 who is a covered employee shall
19participate in the self-directed retirement plan established
20under subsection (f) and shall contribute 3% of compensation to
21the plan. The employer of each of those participants shall
22contribute 3% of compensation to the self-directed retirement
23plan on behalf of the participant.
24    Each active participant in the retirement system
25established under Article 2 of this Code shall have the option
26of participating in the self-directed retirement plan

 

 

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1established under subsection (f) and shall be entitled to
2contribute as much to the plan as is authorized by federal law.
3However, no employer contribution to the self-directed plan
4shall be made on behalf of active participants in the
5retirement system established under Article 2 of this Code.
6    For the purposes of this subsection (g), salary, earnings,
7or compensation shall not exceed $110,100. However, that amount
8shall be increased on January 1, 2015 and each January 1
9thereafter by the lesser of (i) 3% of that amount or (ii)
10one-half the annual unadjusted percentage increase (but not
11less than zero) in the consumer price index-u for the 12 months
12ending with the September preceding each November 1, as
13calculated by the Public Pension Division of the Department of
14Insurance and made available to the boards of the State-funded
15retirement systems by November 1, 2013 and each November 1
16thereafter.
17    (h) The provisions of this amendatory Act of the 98th
18General Assembly apply notwithstanding any other law,
19including Section 1-160 of this Code. If there is a conflict
20between the provisions of this amendatory Act of the 98th
21General Assembly and any other law, the provisions of this
22Section shall control.
 
23    (40 ILCS 5/2-124)  (from Ch. 108 1/2, par. 2-124)
24    Sec. 2-124. Contributions by State.
25    (a) The State shall make contributions to the System by

 

 

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

 

 

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1required State contribution shall be calculated each year as a
2level dollar amount over the years remaining to and including
3fiscal year 2045 and shall be determined under the projected
4unit credit actuarial cost method.
5    For State fiscal years 1996 through 2005, the State
6contribution to the System, as a percentage of the applicable
7employee payroll, shall be increased in equal annual increments
8so that by State fiscal year 2011, the State is contributing at
9the rate required under this Section.
10    Notwithstanding any other provision of this Article, the
11total required State contribution for State fiscal year 2006 is
12$4,157,000.
13    Notwithstanding any other provision of this Article, the
14total required State contribution for State fiscal year 2007 is
15$5,220,300.
16    For each of State fiscal years 2008 through 2009, the State
17contribution to the System, as a percentage of the applicable
18employee payroll, shall be increased in equal annual increments
19from the required State contribution for State fiscal year
202007, so that by State fiscal year 2011, the State is
21contributing at the rate otherwise required under this Section.
22    Notwithstanding any other provision of this Article, the
23total required State contribution for State fiscal year 2010 is
24$10,454,000 and shall be made from the proceeds of bonds sold
25in fiscal year 2010 pursuant to Section 7.2 of the General
26Obligation Bond Act, less (i) the pro rata share of bond sale

 

 

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1expenses determined by the System's share of total bond
2proceeds, (ii) any amounts received from the General Revenue
3Fund in fiscal year 2010, and (iii) any reduction in bond
4proceeds due to the issuance of discounted bonds, if
5applicable.
6    Notwithstanding any other provision of this Article, the
7total required State contribution for State fiscal year 2011 is
8the amount recertified by the System on or before April 1, 2011
9pursuant to Section 2-134 and shall be made from the proceeds
10of bonds sold in fiscal year 2011 pursuant to Section 7.2 of
11the General Obligation Bond Act, less (i) the pro rata share of
12bond sale expenses determined by the System's share of total
13bond proceeds, (ii) any amounts received from the General
14Revenue Fund in fiscal year 2011, and (iii) any reduction in
15bond proceeds due to the issuance of discounted bonds, if
16applicable.
17    Beginning in State fiscal year 2046, the minimum State
18contribution for each fiscal year shall be the amount needed to
19maintain the total assets of the System at 90% of the total
20actuarial liabilities of the System.
21    Amounts received by the System pursuant to Section 25 of
22the Budget Stabilization Act or Section 8.12 of the State
23Finance Act in any fiscal year do not reduce and do not
24constitute payment of any portion of the minimum State
25contribution required under this Article in that fiscal year.
26Such amounts shall not reduce, and shall not be included in the

 

 

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1calculation of, the required State contributions under this
2Article in any future year until the System has reached a
3funding ratio of at least 90%. A reference in this Article to
4the "required State contribution" or any substantially similar
5term does not include or apply to any amounts payable to the
6System under Section 25 of the Budget Stabilization Act.
7    Notwithstanding any other provision of this Section, the
8required State contribution for State fiscal year 2005 and for
9fiscal year 2008 and each fiscal year thereafter, as calculated
10under this Section and certified under Section 2-134, shall not
11exceed an amount equal to (i) the amount of the required State
12contribution that would have been calculated under this Section
13for that fiscal year if the System had not received any
14payments under subsection (d) of Section 7.2 of the General
15Obligation Bond Act, minus (ii) the portion of the State's
16total debt service payments for that fiscal year on the bonds
17issued in fiscal year 2003 for the purposes of that Section
187.2, as determined and certified by the Comptroller, that is
19the same as the System's portion of the total moneys
20distributed under subsection (d) of Section 7.2 of the General
21Obligation Bond Act. In determining this maximum for State
22fiscal years 2008 through 2010, however, the amount referred to
23in item (i) shall be increased, as a percentage of the
24applicable employee payroll, in equal increments calculated
25from the sum of the required State contribution for State
26fiscal year 2007 plus the applicable portion of the State's

 

 

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1total debt service payments for fiscal year 2007 on the bonds
2issued in fiscal year 2003 for the purposes of Section 7.2 of
3the General Obligation Bond Act, so that, by State fiscal year
42011, the State is contributing at the rate otherwise required
5under this Section.
6    (d) For purposes of determining the required State
7contribution to the System, the value of the System's assets
8shall be equal to the actuarial value of the System's assets,
9which shall be calculated as follows:
10    As of June 30, 2008, the actuarial value of the System's
11assets shall be equal to the market value of the assets as of
12that date. In determining the actuarial value of the System's
13assets for fiscal years after June 30, 2008, any actuarial
14gains or losses from investment return incurred in a fiscal
15year shall be recognized in equal annual amounts over the
165-year period following that fiscal year.
17    (e) For purposes of determining the required State
18contribution to the system for a particular year, the actuarial
19value of assets shall be assumed to earn a rate of return equal
20to the system's actuarially assumed rate of return.
21(Source: P.A. 96-43, eff. 7-15-09; 96-1497, eff. 1-14-11;
2296-1511, eff. 1-27-11; 96-1554, eff. 3-18-11; 97-813, eff.
237-13-12.)
 
24    (40 ILCS 5/14-131)
25    Sec. 14-131. Contributions by State.

 

 

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1    (a) The State shall make contributions to the System by
2appropriations of amounts which, together with other employer
3contributions from trust, federal, and other funds, employee
4contributions, investment income, and other income, will be
5sufficient to meet the cost of maintaining and administering
6the System on a 90% funded basis in accordance with actuarial
7recommendations.
8    For the purposes of this Section and Section 14-135.08,
9references to State contributions refer only to employer
10contributions and do not include employee contributions that
11are picked up or otherwise paid by the State or a department on
12behalf of the employee.
13    (b) The Board shall determine the total amount of State
14contributions required for each fiscal year on the basis of the
15actuarial tables and other assumptions adopted by the Board,
16using the formula in subsection (e).
17    The Board shall also determine a State contribution rate
18for each fiscal year, expressed as a percentage of payroll,
19based on the total required State contribution for that fiscal
20year (less the amount received by the System from
21appropriations under Section 8.12 of the State Finance Act and
22Section 1 of the State Pension Funds Continuing Appropriation
23Act, if any, for the fiscal year ending on the June 30
24immediately preceding the applicable November 15 certification
25deadline), the estimated payroll (including all forms of
26compensation) for personal services rendered by eligible

 

 

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1employees, and the recommendations of the actuary.
2    For the purposes of this Section and Section 14.1 of the
3State Finance Act, the term "eligible employees" includes
4employees who participate in the System, persons who may elect
5to participate in the System but have not so elected, persons
6who are serving a qualifying period that is required for
7participation, and annuitants employed by a department as
8described in subdivision (a)(1) or (a)(2) of Section 14-111.
9    (c) Contributions shall be made by the several departments
10for each pay period by warrants drawn by the State Comptroller
11against their respective funds or appropriations based upon
12vouchers stating the amount to be so contributed. These amounts
13shall be based on the full rate certified by the Board under
14Section 14-135.08 for that fiscal year. From the effective date
15of this amendatory Act of the 93rd General Assembly through the
16payment of the final payroll from fiscal year 2004
17appropriations, the several departments shall not make
18contributions for the remainder of fiscal year 2004 but shall
19instead make payments as required under subsection (a-1) of
20Section 14.1 of the State Finance Act. The several departments
21shall resume those contributions at the commencement of fiscal
22year 2005.
23    (c-1) Notwithstanding subsection (c) of this Section, for
24fiscal years 2010, 2012, and 2013 only, contributions by the
25several departments are not required to be made for General
26Revenue Funds payrolls processed by the Comptroller. Payrolls

 

 

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1paid by the several departments from all other State funds must
2continue to be processed pursuant to subsection (c) of this
3Section.
4    (c-2) For State fiscal years 2010, 2012, and 2013 only, on
5or as soon as possible after the 15th day of each month, the
6Board shall submit vouchers for payment of State contributions
7to the System, in a total monthly amount of one-twelfth of the
8fiscal year General Revenue Fund contribution as certified by
9the System pursuant to Section 14-135.08 of the Illinois
10Pension Code.
11    (d) If an employee is paid from trust funds or federal
12funds, the department or other employer shall pay employer
13contributions from those funds to the System at the certified
14rate, unless the terms of the trust or the federal-State
15agreement preclude the use of the funds for that purpose, in
16which case the required employer contributions shall be paid by
17the State. From the effective date of this amendatory Act of
18the 93rd General Assembly through the payment of the final
19payroll from fiscal year 2004 appropriations, the department or
20other employer shall not pay contributions for the remainder of
21fiscal year 2004 but shall instead make payments as required
22under subsection (a-1) of Section 14.1 of the State Finance
23Act. The department or other employer shall resume payment of
24contributions at the commencement of fiscal year 2005.
25    (e) For State fiscal years 2012 and 2013 through 2045, the
26minimum contribution to the System to be made by the State for

 

 

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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 2014 through 2045, the minimum
10contribution to the System to be made by the State for each
11fiscal year shall be an amount determined by the System to be
12sufficient to bring the total assets of the System up to 100%
13of the total actuarial liabilities of the System by the end of
14State fiscal year 2045. In making these determinations, the
15required State contribution shall be calculated each year as a
16level dollar amount over the years remaining to and including
17fiscal year 2045 and shall be determined under the projected
18unit credit actuarial cost method.
19    For State fiscal years 1996 through 2005, the State
20contribution to the System, as a percentage of the applicable
21employee payroll, shall be increased in equal annual increments
22so that by State fiscal year 2011, the State is contributing at
23the rate required under this Section; except that (i) for State
24fiscal year 1998, for all purposes of this Code and any other
25law of this State, the certified percentage of the applicable
26employee payroll shall be 5.052% for employees earning eligible

 

 

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1creditable service under Section 14-110 and 6.500% for all
2other employees, notwithstanding any contrary certification
3made under Section 14-135.08 before the effective date of this
4amendatory Act of 1997, and (ii) in the following specified
5State fiscal years, the State contribution to the System shall
6not be less than the following indicated percentages of the
7applicable employee payroll, even if the indicated percentage
8will produce a State contribution in excess of the amount
9otherwise required under this subsection and subsection (a):
109.8% in FY 1999; 10.0% in FY 2000; 10.2% in FY 2001; 10.4% in FY
112002; 10.6% in FY 2003; and 10.8% in FY 2004.
12    Notwithstanding any other provision of this Article, the
13total required State contribution to the System for State
14fiscal year 2006 is $203,783,900.
15    Notwithstanding any other provision of this Article, the
16total required State contribution to the System for State
17fiscal year 2007 is $344,164,400.
18    For each of State fiscal years 2008 through 2009, the State
19contribution to the System, as a percentage of the applicable
20employee payroll, shall be increased in equal annual increments
21from the required State contribution for State fiscal year
222007, so that by State fiscal year 2011, the State is
23contributing at the rate otherwise required under this Section.
24    Notwithstanding any other provision of this Article, the
25total required State General Revenue Fund contribution for
26State fiscal year 2010 is $723,703,100 and shall be made from

 

 

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1the proceeds of bonds sold in fiscal year 2010 pursuant to
2Section 7.2 of the General Obligation Bond Act, less (i) the
3pro rata share of bond sale expenses determined by the System's
4share of total bond proceeds, (ii) any amounts received from
5the General Revenue Fund in fiscal year 2010, and (iii) any
6reduction in bond proceeds due to the issuance of discounted
7bonds, if applicable.
8    Notwithstanding any other provision of this Article, the
9total required State General Revenue Fund contribution for
10State fiscal year 2011 is the amount recertified by the System
11on or before April 1, 2011 pursuant to Section 14-135.08 and
12shall be made from the proceeds of bonds sold in fiscal year
132011 pursuant to Section 7.2 of the General Obligation Bond
14Act, less (i) the pro rata share of bond sale expenses
15determined by the System's share of total bond proceeds, (ii)
16any amounts received from the General Revenue Fund in fiscal
17year 2011, and (iii) any reduction in bond proceeds due to the
18issuance of discounted bonds, if applicable.
19    Beginning in State fiscal year 2046, the minimum State
20contribution for each fiscal year shall be the amount needed to
21maintain the total assets of the System at 90% of the total
22actuarial liabilities of the System.
23    Amounts received by the System pursuant to Section 25 of
24the Budget Stabilization Act or Section 8.12 of the State
25Finance Act in any fiscal year do not reduce and do not
26constitute payment of any portion of the minimum State

 

 

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

 

 

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1from the sum of the required State contribution for State
2fiscal year 2007 plus the applicable portion of the State's
3total debt service payments for fiscal year 2007 on the bonds
4issued in fiscal year 2003 for the purposes of Section 7.2 of
5the General Obligation Bond Act, so that, by State fiscal year
62011, the State is contributing at the rate otherwise required
7under this Section.
8    (f) After the submission of all payments for eligible
9employees from personal services line items in fiscal year 2004
10have been made, the Comptroller shall provide to the System a
11certification of the sum of all fiscal year 2004 expenditures
12for personal services that would have been covered by payments
13to the System under this Section if the provisions of this
14amendatory Act of the 93rd General Assembly had not been
15enacted. Upon receipt of the certification, the System shall
16determine the amount due to the System based on the full rate
17certified by the Board under Section 14-135.08 for fiscal year
182004 in order to meet the State's obligation under this
19Section. The System shall compare this amount due to the amount
20received by the System in fiscal year 2004 through payments
21under this Section and under Section 6z-61 of the State Finance
22Act. If the amount due is more than the amount received, the
23difference shall be termed the "Fiscal Year 2004 Shortfall" for
24purposes of this Section, and the Fiscal Year 2004 Shortfall
25shall be satisfied under Section 1.2 of the State Pension Funds
26Continuing Appropriation Act. If the amount due is less than

 

 

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1the amount received, the difference shall be termed the "Fiscal
2Year 2004 Overpayment" for purposes of this Section, and the
3Fiscal Year 2004 Overpayment shall be repaid by the System to
4the Pension Contribution Fund as soon as practicable after the
5certification.
6    (g) For purposes of determining the required State
7contribution to the System, the value of the System's assets
8shall be equal to the actuarial value of the System's assets,
9which shall be calculated as follows:
10    As of June 30, 2008, the actuarial value of the System's
11assets shall be equal to the market value of the assets as of
12that date. In determining the actuarial value of the System's
13assets for fiscal years after June 30, 2008, any actuarial
14gains or losses from investment return incurred in a fiscal
15year shall be recognized in equal annual amounts over the
165-year period following that fiscal year.
17    (h) For purposes of determining the required State
18contribution to the System for a particular year, the actuarial
19value of assets shall be assumed to earn a rate of return equal
20to the System's actuarially assumed rate of return.
21    (i) After the submission of all payments for eligible
22employees from personal services line items paid from the
23General Revenue Fund in fiscal year 2010 have been made, the
24Comptroller shall provide to the System a certification of the
25sum of all fiscal year 2010 expenditures for personal services
26that would have been covered by payments to the System under

 

 

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1this Section if the provisions of this amendatory Act of the
296th General Assembly had not been enacted. Upon receipt of the
3certification, the System shall determine the amount due to the
4System based on the full rate certified by the Board under
5Section 14-135.08 for fiscal year 2010 in order to meet the
6State's obligation under this Section. The System shall compare
7this amount due to the amount received by the System in fiscal
8year 2010 through payments under this Section. If the amount
9due is more than the amount received, the difference shall be
10termed the "Fiscal Year 2010 Shortfall" for purposes of this
11Section, and the Fiscal Year 2010 Shortfall shall be satisfied
12under Section 1.2 of the State Pension Funds Continuing
13Appropriation Act. If the amount due is less than the amount
14received, the difference shall be termed the "Fiscal Year 2010
15Overpayment" for purposes of this Section, and the Fiscal Year
162010 Overpayment shall be repaid by the System to the General
17Revenue Fund as soon as practicable after the certification.
18    (j) After the submission of all payments for eligible
19employees from personal services line items paid from the
20General Revenue Fund in fiscal year 2011 have been made, the
21Comptroller shall provide to the System a certification of the
22sum of all fiscal year 2011 expenditures for personal services
23that would have been covered by payments to the System under
24this Section if the provisions of this amendatory Act of the
2596th General Assembly had not been enacted. Upon receipt of the
26certification, the System shall determine the amount due to the

 

 

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1System based on the full rate certified by the Board under
2Section 14-135.08 for fiscal year 2011 in order to meet the
3State's obligation under this Section. The System shall compare
4this amount due to the amount received by the System in fiscal
5year 2011 through payments under this Section. If the amount
6due is more than the amount received, the difference shall be
7termed the "Fiscal Year 2011 Shortfall" for purposes of this
8Section, and the Fiscal Year 2011 Shortfall shall be satisfied
9under Section 1.2 of the State Pension Funds Continuing
10Appropriation Act. If the amount due is less than the amount
11received, the difference shall be termed the "Fiscal Year 2011
12Overpayment" for purposes of this Section, and the Fiscal Year
132011 Overpayment shall be repaid by the System to the General
14Revenue Fund as soon as practicable after the certification.
15    (k) For fiscal years 2012 and 2013 only, after the
16submission of all payments for eligible employees from personal
17services line items paid from the General Revenue Fund in the
18fiscal year have been made, the Comptroller shall provide to
19the System a certification of the sum of all expenditures in
20the fiscal year for personal services. Upon receipt of the
21certification, the System shall determine the amount due to the
22System based on the full rate certified by the Board under
23Section 14-135.08 for the fiscal year in order to meet the
24State's obligation under this Section. The System shall compare
25this amount due to the amount received by the System for the
26fiscal year. If the amount due is more than the amount

 

 

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1received, the difference shall be termed the "Prior Fiscal Year
2Shortfall" for purposes of this Section, and the Prior Fiscal
3Year Shortfall shall be satisfied under Section 1.2 of the
4State Pension Funds Continuing Appropriation Act. If the amount
5due is less than the amount received, the difference shall be
6termed the "Prior Fiscal Year Overpayment" for purposes of this
7Section, and the Prior Fiscal Year Overpayment shall be repaid
8by the System to the General Revenue Fund as soon as
9practicable after the certification.
10(Source: P.A. 96-43, eff. 7-15-09; 96-45, eff. 7-15-09;
1196-1000, eff. 7-2-10; 96-1497, eff. 1-14-11; 96-1511, eff.
121-27-11; 96-1554, eff. 3-18-11; 97-72, eff. 7-1-11; 97-732,
13eff. 6-30-12.)
 
14    (40 ILCS 5/15-155)  (from Ch. 108 1/2, par. 15-155)
15    Sec. 15-155. Employer contributions.
16    (a) The State of Illinois shall make contributions by
17appropriations of amounts which, together with the other
18employer contributions from trust, federal, and other funds,
19employee contributions, income from investments, and other
20income of this System, will be sufficient to meet the cost of
21maintaining and administering the System on a 90% funded basis
22in accordance with actuarial recommendations.
23    The Board shall determine the amount of State contributions
24required for each fiscal year on the basis of the actuarial
25tables and other assumptions adopted by the Board and the

 

 

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1recommendations of the actuary, using the formula in subsection
2(a-1).
3    (a-1) For State fiscal years 2012 and 2013 through 2045,
4the minimum contribution to the System to be made by the State
5for each fiscal year shall be an amount determined by the
6System to be sufficient to bring the total assets of the System
7up to 90% of the total actuarial liabilities of the System by
8the end of State fiscal year 2045. In making these
9determinations, the required State contribution shall be
10calculated each year as a level percentage of payroll over the
11years remaining to and including fiscal year 2045 and shall be
12determined under the projected unit credit actuarial cost
13method.
14    For State fiscal years 2014 through 2045, the minimum
15contribution to the System to be made by the State for each
16fiscal year shall be an amount determined by the System to be
17sufficient to bring the total assets of the System up to 100%
18of the total actuarial liabilities of the System by the end of
19State fiscal year 2045. In making these determinations, the
20required State contribution shall be calculated each year as a
21level dollar amount over the years remaining to and including
22fiscal year 2045 and shall be determined under the projected
23unit credit actuarial cost method.
24    For State fiscal years 1996 through 2005, the State
25contribution to the System, as a percentage of the applicable
26employee payroll, shall be increased in equal annual increments

 

 

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1so that by State fiscal year 2011, the State is contributing at
2the rate required under this Section.
3    Notwithstanding any other provision of this Article, the
4total required State contribution for State fiscal year 2006 is
5$166,641,900.
6    Notwithstanding any other provision of this Article, the
7total required State contribution for State fiscal year 2007 is
8$252,064,100.
9    For each of State fiscal years 2008 through 2009, the State
10contribution to the System, as a percentage of the applicable
11employee payroll, shall be increased in equal annual increments
12from the required State contribution for State fiscal year
132007, so that by State fiscal year 2011, the State is
14contributing at the rate otherwise required under this Section.
15    Notwithstanding any other provision of this Article, the
16total required State contribution for State fiscal year 2010 is
17$702,514,000 and shall be made from the State Pensions Fund and
18proceeds of bonds sold in fiscal year 2010 pursuant to Section
197.2 of the General Obligation Bond Act, less (i) the pro rata
20share of bond sale expenses determined by the System's share of
21total bond proceeds, (ii) any amounts received from the General
22Revenue Fund in fiscal year 2010, (iii) any reduction in bond
23proceeds due to the issuance of discounted bonds, if
24applicable.
25    Notwithstanding any other provision of this Article, the
26total required State contribution for State fiscal year 2011 is

 

 

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1the amount recertified by the System on or before April 1, 2011
2pursuant to Section 15-165 and shall be made from the State
3Pensions Fund and proceeds of bonds sold in fiscal year 2011
4pursuant to Section 7.2 of the General Obligation Bond Act,
5less (i) the pro rata share of bond sale expenses determined by
6the System's share of total bond proceeds, (ii) any amounts
7received from the General Revenue Fund in fiscal year 2011, and
8(iii) any reduction in bond proceeds due to the issuance of
9discounted bonds, if applicable.
10    Beginning in State fiscal year 2046, the minimum State
11contribution for each fiscal year shall be the amount needed to
12maintain the total assets of the System at 90% of the total
13actuarial liabilities of the System.
14    Amounts received by the System pursuant to Section 25 of
15the Budget Stabilization Act or Section 8.12 of the State
16Finance Act in any fiscal year do not reduce and do not
17constitute payment of any portion of the minimum State
18contribution required under this Article in that fiscal year.
19Such amounts shall not reduce, and shall not be included in the
20calculation of, the required State contributions under this
21Article in any future year until the System has reached a
22funding ratio of at least 90%. A reference in this Article to
23the "required State contribution" or any substantially similar
24term does not include or apply to any amounts payable to the
25System under Section 25 of the Budget Stabilization Act.
26    Notwithstanding any other provision of this Section, the

 

 

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1required State contribution for State fiscal year 2005 and for
2fiscal year 2008 and each fiscal year thereafter, as calculated
3under this Section and certified under Section 15-165, shall
4not exceed an amount equal to (i) the amount of the required
5State contribution that would have been calculated under this
6Section for that fiscal year if the System had not received any
7payments under subsection (d) of Section 7.2 of the General
8Obligation Bond Act, minus (ii) the portion of the State's
9total debt service payments for that fiscal year on the bonds
10issued in fiscal year 2003 for the purposes of that Section
117.2, as determined and certified by the Comptroller, that is
12the same as the System's portion of the total moneys
13distributed under subsection (d) of Section 7.2 of the General
14Obligation Bond Act. In determining this maximum for State
15fiscal years 2008 through 2010, however, the amount referred to
16in item (i) shall be increased, as a percentage of the
17applicable employee payroll, in equal increments calculated
18from the sum of the required State contribution for State
19fiscal year 2007 plus the applicable portion of the State's
20total debt service payments for fiscal year 2007 on the bonds
21issued in fiscal year 2003 for the purposes of Section 7.2 of
22the General Obligation Bond Act, so that, by State fiscal year
232011, the State is contributing at the rate otherwise required
24under this Section.
25    (b) If an employee is paid from trust or federal funds, the
26employer shall pay to the Board contributions from those funds

 

 

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1which are sufficient to cover the accruing normal costs on
2behalf of the employee. However, universities having employees
3who are compensated out of local auxiliary funds, income funds,
4or service enterprise funds are not required to pay such
5contributions on behalf of those employees. The local auxiliary
6funds, income funds, and service enterprise funds of
7universities shall not be considered trust funds for the
8purpose of this Article, but funds of alumni associations,
9foundations, and athletic associations which are affiliated
10with the universities included as employers under this Article
11and other employers which do not receive State appropriations
12are considered to be trust funds for the purpose of this
13Article.
14    (b-1) The City of Urbana and the City of Champaign shall
15each make employer contributions to this System for their
16respective firefighter employees who participate in this
17System pursuant to subsection (h) of Section 15-107. The rate
18of contributions to be made by those municipalities shall be
19determined annually by the Board on the basis of the actuarial
20assumptions adopted by the Board and the recommendations of the
21actuary, and shall be expressed as a percentage of salary for
22each such employee. The Board shall certify the rate to the
23affected municipalities as soon as may be practical. The
24employer contributions required under this subsection shall be
25remitted by the municipality to the System at the same time and
26in the same manner as employee contributions.

 

 

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1    (c) Through State fiscal year 1995: The total employer
2contribution shall be apportioned among the various funds of
3the State and other employers, whether trust, federal, or other
4funds, in accordance with actuarial procedures approved by the
5Board. State of Illinois contributions for employers receiving
6State appropriations for personal services shall be payable
7from appropriations made to the employers or to the System. The
8contributions for Class I community colleges covering earnings
9other than those paid from trust and federal funds, shall be
10payable solely from appropriations to the Illinois Community
11College Board or the System for employer contributions.
12    (d) Beginning in State fiscal year 1996, the required State
13contributions to the System shall be appropriated directly to
14the System and shall be payable through vouchers issued in
15accordance with subsection (c) of Section 15-165, except as
16provided in subsection (g).
17    (e) The State Comptroller shall draw warrants payable to
18the System upon proper certification by the System or by the
19employer in accordance with the appropriation laws and this
20Code.
21    (f) Normal costs under this Section means liability for
22pensions and other benefits which accrues to the System because
23of the credits earned for service rendered by the participants
24during the fiscal year and expenses of administering the
25System, but shall not include the principal of or any
26redemption premium or interest on any bonds issued by the Board

 

 

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1or any expenses incurred or deposits required in connection
2therewith.
3    (g) If the amount of a participant's earnings for any
4academic year used to determine the final rate of earnings,
5determined on a full-time equivalent basis, exceeds the amount
6of his or her earnings with the same employer for the previous
7academic year, determined on a full-time equivalent basis, by
8more than 6%, the participant's employer shall pay to the
9System, in addition to all other payments required under this
10Section and in accordance with guidelines established by the
11System, the present value of the increase in benefits resulting
12from the portion of the increase in earnings that is in excess
13of 6%. This present value shall be computed by the System on
14the basis of the actuarial assumptions and tables used in the
15most recent actuarial valuation of the System that is available
16at the time of the computation. The System may require the
17employer to provide any pertinent information or
18documentation.
19    Whenever it determines that a payment is or may be required
20under this subsection (g), the System shall calculate the
21amount of the payment and bill the employer for that amount.
22The bill shall specify the calculations used to determine the
23amount due. If the employer disputes the amount of the bill, it
24may, within 30 days after receipt of the bill, apply to the
25System in writing for a recalculation. The application must
26specify in detail the grounds of the dispute and, if the

 

 

HB3303- 30 -LRB098 11034 EFG 41719 b

1employer asserts that the calculation is subject to subsection
2(h) or (i) of this Section, must include an affidavit setting
3forth and attesting to all facts within the employer's
4knowledge that are pertinent to the applicability of subsection
5(h) or (i). Upon receiving a timely application for
6recalculation, the System shall review the application and, if
7appropriate, recalculate the amount due.
8    The employer contributions required under this subsection
9(g) (f) may be paid in the form of a lump sum within 90 days
10after receipt of the bill. If the employer contributions are
11not paid within 90 days after receipt of the bill, then
12interest will be charged at a rate equal to the System's annual
13actuarially assumed rate of return on investment compounded
14annually from the 91st day after receipt of the bill. Payments
15must be concluded within 3 years after the employer's receipt
16of the bill.
17    (h) This subsection (h) applies only to payments made or
18salary increases given on or after June 1, 2005 but before July
191, 2011. The changes made by Public Act 94-1057 shall not
20require the System to refund any payments received before July
2131, 2006 (the effective date of Public Act 94-1057).
22    When assessing payment for any amount due under subsection
23(g), the System shall exclude earnings increases paid to
24participants under contracts or collective bargaining
25agreements entered into, amended, or renewed before June 1,
262005.

 

 

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1    When assessing payment for any amount due under subsection
2(g), the System shall exclude earnings increases paid to a
3participant at a time when the participant is 10 or more years
4from retirement eligibility under Section 15-135.
5    When assessing payment for any amount due under subsection
6(g), the System shall exclude earnings increases resulting from
7overload work, including a contract for summer teaching, or
8overtime when the employer has certified to the System, and the
9System has approved the certification, that: (i) in the case of
10overloads (A) the overload work is for the sole purpose of
11academic instruction in excess of the standard number of
12instruction hours for a full-time employee occurring during the
13academic year that the overload is paid and (B) the earnings
14increases are equal to or less than the rate of pay for
15academic instruction computed using the participant's current
16salary rate and work schedule; and (ii) in the case of
17overtime, the overtime was necessary for the educational
18mission.
19    When assessing payment for any amount due under subsection
20(g), the System shall exclude any earnings increase resulting
21from (i) a promotion for which the employee moves from one
22classification to a higher classification under the State
23Universities Civil Service System, (ii) a promotion in academic
24rank for a tenured or tenure-track faculty position, or (iii) a
25promotion that the Illinois Community College Board has
26recommended in accordance with subsection (k) of this Section.

 

 

HB3303- 32 -LRB098 11034 EFG 41719 b

1These earnings increases shall be excluded only if the
2promotion is to a position that has existed and been filled by
3a member for no less than one complete academic year and the
4earnings increase as a result of the promotion is an increase
5that results in an amount no greater than the average salary
6paid for other similar positions.
7    (i) When assessing payment for any amount due under
8subsection (g), the System shall exclude any salary increase
9described in subsection (h) of this Section given on or after
10July 1, 2011 but before July 1, 2014 under a contract or
11collective bargaining agreement entered into, amended, or
12renewed on or after June 1, 2005 but before July 1, 2011.
13Notwithstanding any other provision of this Section, any
14payments made or salary increases given after June 30, 2014
15shall be used in assessing payment for any amount due under
16subsection (g) of this Section.
17    (j) The System shall prepare a report and file copies of
18the report with the Governor and the General Assembly by
19January 1, 2007 that contains all of the following information:
20        (1) The number of recalculations required by the
21    changes made to this Section by Public Act 94-1057 for each
22    employer.
23        (2) The dollar amount by which each employer's
24    contribution to the System was changed due to
25    recalculations required by Public Act 94-1057.
26        (3) The total amount the System received from each

 

 

HB3303- 33 -LRB098 11034 EFG 41719 b

1    employer as a result of the changes made to this Section by
2    Public Act 94-4.
3        (4) The increase in the required State contribution
4    resulting from the changes made to this Section by Public
5    Act 94-1057.
6    (k) The Illinois Community College Board shall adopt rules
7for recommending lists of promotional positions submitted to
8the Board by community colleges and for reviewing the
9promotional lists on an annual basis. When recommending
10promotional lists, the Board shall consider the similarity of
11the positions submitted to those positions recognized for State
12universities by the State Universities Civil Service System.
13The Illinois Community College Board shall file a copy of its
14findings with the System. The System shall consider the
15findings of the Illinois Community College Board when making
16determinations under this Section. The System shall not exclude
17any earnings increases resulting from a promotion when the
18promotion was not submitted by a community college. Nothing in
19this subsection (k) shall require any community college to
20submit any information to the Community College Board.
21    (l) For purposes of determining the required State
22contribution to the System, the value of the System's assets
23shall be equal to the actuarial value of the System's assets,
24which shall be calculated as follows:
25    As of June 30, 2008, the actuarial value of the System's
26assets shall be equal to the market value of the assets as of

 

 

HB3303- 34 -LRB098 11034 EFG 41719 b

1that date. In determining the actuarial value of the System's
2assets for fiscal years after June 30, 2008, any actuarial
3gains or losses from investment return incurred in a fiscal
4year shall be recognized in equal annual amounts over the
55-year period following that fiscal year.
6    (m) For purposes of determining the required State
7contribution to the system for a particular year, the actuarial
8value of assets shall be assumed to earn a rate of return equal
9to the system's actuarially assumed rate of return.
10(Source: P.A. 96-43, eff. 7-15-09; 96-1497, eff. 1-14-11;
1196-1511, eff. 1-27-11; 96-1554, eff. 3-18-11; 97-813, eff.
127-13-12; revised 10-17-12.)
 
13    (40 ILCS 5/16-158)   (from Ch. 108 1/2, par. 16-158)
14    Sec. 16-158. Contributions by State and other employing
15units.
16    (a) The State shall make contributions to the System by
17means of appropriations from the Common School Fund and other
18State funds of amounts which, together with other employer
19contributions, employee contributions, investment income, and
20other income, will be sufficient to meet the cost of
21maintaining and administering the System on a 90% funded basis
22in accordance with actuarial recommendations.
23    The Board shall determine the amount of State contributions
24required for each fiscal year on the basis of the actuarial
25tables and other assumptions adopted by the Board and the

 

 

HB3303- 35 -LRB098 11034 EFG 41719 b

1recommendations of the actuary, using the formula in subsection
2(b-3).
3    (a-1) Annually, on or before November 15 until November 15,
42011, the Board shall certify to the Governor the amount of the
5required State contribution for the coming fiscal year. The
6certification under this subsection (a-1) shall include a copy
7of the actuarial recommendations upon which it is based and
8shall specifically identify the System's projected State
9normal cost for that fiscal year.
10    On or before May 1, 2004, the Board shall recalculate and
11recertify to the Governor the amount of the required State
12contribution to the System for State fiscal year 2005, taking
13into account the amounts appropriated to and received by the
14System under subsection (d) of Section 7.2 of the General
15Obligation Bond Act.
16    On or before July 1, 2005, the Board shall recalculate and
17recertify to the Governor the amount of the required State
18contribution to the System for State fiscal year 2006, taking
19into account the changes in required State contributions made
20by this amendatory Act of the 94th General Assembly.
21    On or before April 1, 2011, the Board shall recalculate and
22recertify to the Governor the amount of the required State
23contribution to the System for State fiscal year 2011, applying
24the changes made by Public Act 96-889 to the System's assets
25and liabilities as of June 30, 2009 as though Public Act 96-889
26was approved on that date.

 

 

HB3303- 36 -LRB098 11034 EFG 41719 b

1    (a-5) On or before November 1 of each year, beginning
2November 1, 2012, the Board shall submit to the State Actuary,
3the Governor, and the General Assembly a proposed certification
4of the amount of the required State contribution to the System
5for the next fiscal year, along with all of the actuarial
6assumptions, calculations, and data upon which that proposed
7certification is based. On or before January 1 of each year,
8beginning January 1, 2013, the State Actuary shall issue a
9preliminary report concerning the proposed certification and
10identifying, if necessary, recommended changes in actuarial
11assumptions that the Board must consider before finalizing its
12certification of the required State contributions. On or before
13January 15, 2013 and each January 15 thereafter, the Board
14shall certify to the Governor and the General Assembly the
15amount of the required State contribution for the next fiscal
16year. The Board's certification must note any deviations from
17the State Actuary's recommended changes, the reason or reasons
18for not following the State Actuary's recommended changes, and
19the fiscal impact of not following the State Actuary's
20recommended changes on the required State contribution.
21    (b) Through State fiscal year 1995, the State contributions
22shall be paid to the System in accordance with Section 18-7 of
23the School Code.
24    (b-1) Beginning in State fiscal year 1996, on the 15th day
25of each month, or as soon thereafter as may be practicable, the
26Board shall submit vouchers for payment of State contributions

 

 

HB3303- 37 -LRB098 11034 EFG 41719 b

1to the System, in a total monthly amount of one-twelfth of the
2required annual State contribution certified under subsection
3(a-1). From the effective date of this amendatory Act of the
493rd General Assembly through June 30, 2004, the Board shall
5not submit vouchers for the remainder of fiscal year 2004 in
6excess of the fiscal year 2004 certified contribution amount
7determined under this Section after taking into consideration
8the transfer to the System under subsection (a) of Section
96z-61 of the State Finance Act. These vouchers shall be paid by
10the State Comptroller and Treasurer by warrants drawn on the
11funds appropriated to the System for that fiscal year.
12    If in any month the amount remaining unexpended from all
13other appropriations to the System for the applicable fiscal
14year (including the appropriations to the System under Section
158.12 of the State Finance Act and Section 1 of the State
16Pension Funds Continuing Appropriation Act) is less than the
17amount lawfully vouchered under this subsection, the
18difference shall be paid from the Common School Fund under the
19continuing appropriation authority provided in Section 1.1 of
20the State Pension Funds Continuing Appropriation Act.
21    (b-2) Allocations from the Common School Fund apportioned
22to school districts not coming under this System shall not be
23diminished or affected by the provisions of this Article.
24    (b-3) For State fiscal years 2012 2013 through 2045, the
25minimum contribution to the System to be made by the State for
26each fiscal year shall be an amount determined by the System to

 

 

HB3303- 38 -LRB098 11034 EFG 41719 b

1be sufficient to bring the total assets of the System up to 90%
2of the total actuarial liabilities of the System by the end of
3State fiscal year 2045. In making these determinations, the
4required State contribution shall be calculated each year as a
5level percentage of payroll over the years remaining to and
6including fiscal year 2045 and shall be determined under the
7projected unit credit actuarial cost method.
8    For State fiscal years 2014 through 2045, the minimum
9contribution to the System to be made by the State for each
10fiscal year shall be an amount determined by the System to be
11sufficient to bring the total assets of the System up to 100%
12of the total actuarial liabilities of the System by the end of
13State fiscal year 2045. In making these determinations, the
14required State contribution shall be calculated each year as a
15level dollar amount over the years remaining to and including
16fiscal year 2045 and shall be determined under the projected
17unit credit actuarial cost method.
18    For State fiscal years 1996 through 2005, the State
19contribution to the System, as a percentage of the applicable
20employee payroll, shall be increased in equal annual increments
21so that by State fiscal year 2011, the State is contributing at
22the rate required under this Section; except that in the
23following specified State fiscal years, the State contribution
24to the System shall not be less than the following indicated
25percentages of the applicable employee payroll, even if the
26indicated percentage will produce a State contribution in

 

 

HB3303- 39 -LRB098 11034 EFG 41719 b

1excess of the amount otherwise required under this subsection
2and subsection (a), and notwithstanding any contrary
3certification made under subsection (a-1) before the effective
4date of this amendatory Act of 1998: 10.02% in FY 1999; 10.77%
5in FY 2000; 11.47% in FY 2001; 12.16% in FY 2002; 12.86% in FY
62003; and 13.56% in FY 2004.
7    Notwithstanding any other provision of this Article, the
8total required State contribution for State fiscal year 2006 is
9$534,627,700.
10    Notwithstanding any other provision of this Article, the
11total required State contribution for State fiscal year 2007 is
12$738,014,500.
13    For each of State fiscal years 2008 through 2009, the State
14contribution to the System, as a percentage of the applicable
15employee payroll, shall be increased in equal annual increments
16from the required State contribution for State fiscal year
172007, so that by State fiscal year 2011, the State is
18contributing at the rate otherwise required under this Section.
19    Notwithstanding any other provision of this Article, the
20total required State contribution for State fiscal year 2010 is
21$2,089,268,000 and shall be made from the proceeds of bonds
22sold in fiscal year 2010 pursuant to Section 7.2 of the General
23Obligation Bond Act, less (i) the pro rata share of bond sale
24expenses determined by the System's share of total bond
25proceeds, (ii) any amounts received from the Common School Fund
26in fiscal year 2010, and (iii) any reduction in bond proceeds

 

 

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

 

 

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

 

 

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1fiscal year 2007 plus the applicable portion of the State's
2total debt service payments for fiscal year 2007 on the bonds
3issued in fiscal year 2003 for the purposes of Section 7.2 of
4the General Obligation Bond Act, so that, by State fiscal year
52011, the State is contributing at the rate otherwise required
6under this Section.
7    (c) Payment of the required State contributions and of all
8pensions, retirement annuities, death benefits, refunds, and
9other benefits granted under or assumed by this System, and all
10expenses in connection with the administration and operation
11thereof, are obligations of the State.
12    If members are paid from special trust or federal funds
13which are administered by the employing unit, whether school
14district or other unit, the employing unit shall pay to the
15System from such funds the full accruing retirement costs based
16upon that service, as determined by the System. Employer
17contributions, based on salary paid to members from federal
18funds, may be forwarded by the distributing agency of the State
19of Illinois to the System prior to allocation, in an amount
20determined in accordance with guidelines established by such
21agency and the System.
22    (d) Effective July 1, 1986, any employer of a teacher as
23defined in paragraph (8) of Section 16-106 shall pay the
24employer's normal cost of benefits based upon the teacher's
25service, in addition to employee contributions, as determined
26by the System. Such employer contributions shall be forwarded

 

 

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1monthly in accordance with guidelines established by the
2System.
3    However, with respect to benefits granted under Section
416-133.4 or 16-133.5 to a teacher as defined in paragraph (8)
5of Section 16-106, the employer's contribution shall be 12%
6(rather than 20%) of the member's highest annual salary rate
7for each year of creditable service granted, and the employer
8shall also pay the required employee contribution on behalf of
9the teacher. For the purposes of Sections 16-133.4 and
1016-133.5, a teacher as defined in paragraph (8) of Section
1116-106 who is serving in that capacity while on leave of
12absence from another employer under this Article shall not be
13considered an employee of the employer from which the teacher
14is on leave.
15    (e) Beginning July 1, 1998, every employer of a teacher
16shall pay to the System an employer contribution computed as
17follows:
18        (1) Beginning July 1, 1998 through June 30, 1999, the
19    employer contribution shall be equal to 0.3% of each
20    teacher's salary.
21        (2) Beginning July 1, 1999 and thereafter, the employer
22    contribution shall be equal to 0.58% of each teacher's
23    salary.
24The school district or other employing unit may pay these
25employer contributions out of any source of funding available
26for that purpose and shall forward the contributions to the

 

 

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1System on the schedule established for the payment of member
2contributions.
3    These employer contributions are intended to offset a
4portion of the cost to the System of the increases in
5retirement benefits resulting from this amendatory Act of 1998.
6    Each employer of teachers is entitled to a credit against
7the contributions required under this subsection (e) with
8respect to salaries paid to teachers for the period January 1,
92002 through June 30, 2003, equal to the amount paid by that
10employer under subsection (a-5) of Section 6.6 of the State
11Employees Group Insurance Act of 1971 with respect to salaries
12paid to teachers for that period.
13    The additional 1% employee contribution required under
14Section 16-152 by this amendatory Act of 1998 is the
15responsibility of the teacher and not the teacher's employer,
16unless the employer agrees, through collective bargaining or
17otherwise, to make the contribution on behalf of the teacher.
18    If an employer is required by a contract in effect on May
191, 1998 between the employer and an employee organization to
20pay, on behalf of all its full-time employees covered by this
21Article, all mandatory employee contributions required under
22this Article, then the employer shall be excused from paying
23the employer contribution required under this subsection (e)
24for the balance of the term of that contract. The employer and
25the employee organization shall jointly certify to the System
26the existence of the contractual requirement, in such form as

 

 

HB3303- 45 -LRB098 11034 EFG 41719 b

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

 

 

HB3303- 46 -LRB098 11034 EFG 41719 b

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

 

 

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1salary increases given on or after June 1, 2005 but before July
21, 2011. The changes made by Public Act 94-1057 shall not
3require the System to refund any payments received before July
431, 2006 (the effective date of Public Act 94-1057).
5    When assessing payment for any amount due under subsection
6(f), the System shall exclude salary increases paid to teachers
7under contracts or collective bargaining agreements entered
8into, amended, or renewed before June 1, 2005.
9    When assessing payment for any amount due under subsection
10(f), the System shall exclude salary increases paid to a
11teacher at a time when the teacher is 10 or more years from
12retirement eligibility under Section 16-132 or 16-133.2.
13    When assessing payment for any amount due under subsection
14(f), the System shall exclude salary increases resulting from
15overload work, including summer school, when the school
16district has certified to the System, and the System has
17approved the certification, that (i) the overload work is for
18the sole purpose of classroom instruction in excess of the
19standard number of classes for a full-time teacher in a school
20district during a school year and (ii) the salary increases are
21equal to or less than the rate of pay for classroom instruction
22computed on the teacher's current salary and work schedule.
23    When assessing payment for any amount due under subsection
24(f), the System shall exclude a salary increase resulting from
25a promotion (i) for which the employee is required to hold a
26certificate or supervisory endorsement issued by the State

 

 

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

 

 

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1    (i) The System shall prepare a report and file copies of
2the report with the Governor and the General Assembly by
3January 1, 2007 that contains all of the following information:
4        (1) The number of recalculations required by the
5    changes made to this Section by Public Act 94-1057 for each
6    employer.
7        (2) The dollar amount by which each employer's
8    contribution to the System was changed due to
9    recalculations required by Public Act 94-1057.
10        (3) The total amount the System received from each
11    employer as a result of the changes made to this Section by
12    Public Act 94-4.
13        (4) The increase in the required State contribution
14    resulting from the changes made to this Section by Public
15    Act 94-1057.
16    (j) For purposes of determining the required State
17contribution to the System, the value of the System's assets
18shall be equal to the actuarial value of the System's assets,
19which shall be calculated as follows:
20    As of June 30, 2008, the actuarial value of the System's
21assets shall be equal to the market value of the assets as of
22that date. In determining the actuarial value of the System's
23assets for fiscal years after June 30, 2008, any actuarial
24gains or losses from investment return incurred in a fiscal
25year shall be recognized in equal annual amounts over the
265-year period following that fiscal year.

 

 

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1    (k) For purposes of determining the required State
2contribution to the system for a particular year, the actuarial
3value of assets shall be assumed to earn a rate of return equal
4to the system's actuarially assumed rate of return.
5(Source: P.A. 96-43, eff. 7-15-09; 96-1497, eff. 1-14-11;
696-1511, eff. 1-27-11; 96-1554, eff. 3-18-11; 97-694, eff.
76-18-12; 97-813, eff. 7-13-12.)
 
8    (40 ILCS 5/18-131)  (from Ch. 108 1/2, par. 18-131)
9    Sec. 18-131. Financing; employer contributions.
10    (a) The State of Illinois shall make contributions to this
11System by appropriations of the amounts which, together with
12the contributions of participants, net earnings on
13investments, and other income, will meet the costs of
14maintaining and administering this System on a 90% funded basis
15in accordance with actuarial recommendations.
16    (b) The Board shall determine the amount of State
17contributions required for each fiscal year on the basis of the
18actuarial tables and other assumptions adopted by the Board and
19the prescribed rate of interest, using the formula in
20subsection (c).
21    (c) For State fiscal years 2012 and 2013 through 2045, the
22minimum contribution to the System to be made by the State for
23each fiscal year shall be an amount determined by the System to
24be sufficient to bring the total assets of the System up to 90%
25of the total actuarial liabilities of the System by the end of

 

 

HB3303- 51 -LRB098 11034 EFG 41719 b

1State fiscal year 2045. In making these determinations, the
2required State contribution shall be calculated each year as a
3level percentage of payroll over the years remaining to and
4including fiscal year 2045 and shall be determined under the
5projected unit credit actuarial cost method.
6    For State fiscal years 2014 through 2045, the minimum
7contribution to the System to be made by the State for each
8fiscal year shall be an amount determined by the System to be
9sufficient to bring the total assets of the System up to 100%
10of the total actuarial liabilities of the System by the end of
11State fiscal year 2045. In making these determinations, the
12required State contribution shall be calculated each year as a
13level dollar amount over the years remaining to and including
14fiscal year 2045 and shall be determined under the projected
15unit credit actuarial cost method.
16    For State fiscal years 1996 through 2005, the State
17contribution to the System, as a percentage of the applicable
18employee payroll, shall be increased in equal annual increments
19so that by State fiscal year 2011, the State is contributing at
20the rate required under this Section.
21    Notwithstanding any other provision of this Article, the
22total required State contribution for State fiscal year 2006 is
23$29,189,400.
24    Notwithstanding any other provision of this Article, the
25total required State contribution for State fiscal year 2007 is
26$35,236,800.

 

 

HB3303- 52 -LRB098 11034 EFG 41719 b

1    For each of State fiscal years 2008 through 2009, the State
2contribution to the System, as a percentage of the applicable
3employee payroll, shall be increased in equal annual increments
4from the required State contribution for State fiscal year
52007, so that by State fiscal year 2011, the State is
6contributing at the rate otherwise required under this Section.
7    Notwithstanding any other provision of this Article, the
8total required State contribution for State fiscal year 2010 is
9$78,832,000 and shall be made from the proceeds of bonds sold
10in fiscal year 2010 pursuant to Section 7.2 of the General
11Obligation Bond Act, less (i) the pro rata share of bond sale
12expenses determined by the System's share of total bond
13proceeds, (ii) any amounts received from the General Revenue
14Fund in fiscal year 2010, and (iii) any reduction in bond
15proceeds due to the issuance of discounted bonds, if
16applicable.
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 Section 18-140 and shall be made from the proceeds
21of bonds sold in fiscal year 2011 pursuant to Section 7.2 of
22the General Obligation Bond Act, less (i) the pro rata share of
23bond sale expenses determined by the System's share of total
24bond proceeds, (ii) any amounts received from the General
25Revenue Fund in fiscal year 2011, and (iii) any reduction in
26bond proceeds due to the issuance of discounted bonds, if

 

 

HB3303- 53 -LRB098 11034 EFG 41719 b

1applicable.
2    Beginning in State fiscal year 2046, the minimum State
3contribution for each fiscal year shall be the amount needed to
4maintain the total assets of the System at 90% of the total
5actuarial liabilities of the System.
6    Amounts received by the System pursuant to Section 25 of
7the Budget Stabilization Act or Section 8.12 of the State
8Finance Act in any fiscal year do not reduce and do not
9constitute payment of any portion of the minimum State
10contribution required under this Article in that fiscal year.
11Such amounts shall not reduce, and shall not be included in the
12calculation of, the required State contributions under this
13Article in any future year until the System has reached a
14funding ratio of at least 90%. A reference in this Article to
15the "required State contribution" or any substantially similar
16term does not include or apply to any amounts payable to the
17System under Section 25 of the Budget Stabilization Act.
18    Notwithstanding any other provision of this Section, the
19required State contribution for State fiscal year 2005 and for
20fiscal year 2008 and each fiscal year thereafter, as calculated
21under this Section and certified under Section 18-140, shall
22not exceed an amount equal to (i) the amount of the required
23State contribution that would have been calculated under this
24Section for that fiscal year if the System had not received any
25payments under subsection (d) of Section 7.2 of the General
26Obligation Bond Act, minus (ii) the portion of the State's

 

 

HB3303- 54 -LRB098 11034 EFG 41719 b

1total debt service payments for that fiscal year on the bonds
2issued in fiscal year 2003 for the purposes of that Section
37.2, as determined and certified by the Comptroller, that is
4the same as the System's portion of the total moneys
5distributed under subsection (d) of Section 7.2 of the General
6Obligation Bond Act. In determining this maximum for State
7fiscal years 2008 through 2010, however, the amount referred to
8in item (i) shall be increased, as a percentage of the
9applicable employee payroll, in equal increments calculated
10from the sum of the required State contribution for State
11fiscal year 2007 plus the applicable portion of the State's
12total debt service payments for fiscal year 2007 on the bonds
13issued in fiscal year 2003 for the purposes of Section 7.2 of
14the General Obligation Bond Act, so that, by State fiscal year
152011, the State is contributing at the rate otherwise required
16under this Section.
17    (d) For purposes of determining the required State
18contribution to the System, the value of the System's assets
19shall be equal to the actuarial value of the System's assets,
20which shall be calculated as follows:
21    As of June 30, 2008, the actuarial value of the System's
22assets shall be equal to the market value of the assets as of
23that date. In determining the actuarial value of the System's
24assets for fiscal years after June 30, 2008, any actuarial
25gains or losses from investment return incurred in a fiscal
26year shall be recognized in equal annual amounts over the

 

 

HB3303- 55 -LRB098 11034 EFG 41719 b

15-year period following that fiscal year.
2    (e) For purposes of determining the required State
3contribution to the system for a particular year, the actuarial
4value of assets shall be assumed to earn a rate of return equal
5to the system's actuarially assumed rate of return.
6(Source: P.A. 96-43, eff. 7-15-09; 96-1497, eff. 1-14-11;
796-1511, eff. 1-27-11; 96-1554, eff. 3-18-11; 97-813, eff.
87-13-12.)
 
9    Section 99. Effective date. This Act takes effect upon
10becoming law.