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Full Text of SB0662  100th General Assembly

SB0662 100TH GENERAL ASSEMBLY

  
  

 


 
100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018
SB0662

 

Introduced 1/25/2017, by Sen. Michael E. Hastings

 

SYNOPSIS AS INTRODUCED:
 
See Index

    Creates the Pension Buyout Act. Authorizes the Department of Central Management Services to enter into contracts with approved vendors to provide pension buyout payments to eligible retirees in the General Assembly, State Employee, State Universities, and Judges Retirement Systems. Requires the Illinois Finance Authority to issue bonds if the amount appropriated to implement the pension buyout option is less than the amount necessary for the Department to pay the approved vendor the amount required under a contract between the Department and the approved vendor for any fiscal year. Provides that the contract entered into by the Department shall be subject to the applicable requirements of the Illinois Procurement Code. Amends the General Assembly, State Employee, State Universities, and Judges Articles of the Illinois Pension Code. Provides that an eligible retiree may relinquish his or her right to receive any benefits from the system in exchange for a lump sum payment made by an approved vendor that is equal to the present value of the retirement annuity. Provides that a person who participates in the pension buyout option shall be entitled to any benefits under the State Employees Group Insurance Act of 1971 that he or she would have otherwise been entitled to. Contains provisions concerning the form of the contract; rulemaking; notice to the System; certification to the Department of the amount of lump sum payments made; and qualified plan status. Amends the State Employees Group Insurance Act of 1971, the Department of Central Management Services Law of the Civil Administrative Code of Illinois, the Illinois Procurement Code, and the Illinois Finance Authority Act to make related changes. Effective July 1, 2018.


LRB100 06396 RPS 16435 b

FISCAL NOTE ACT MAY APPLY
PENSION IMPACT NOTE ACT MAY APPLY
STATE DEBT IMPACT NOTE ACT MAY APPLY

 

 

A BILL FOR

 

SB0662LRB100 06396 RPS 16435 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 1. Short title. This Act may be cited as the
5Pension Buyout Act.
 
6    Section 5. Definitions. As used in this Act:
7    "Approved vendor" means a vendor who has entered into a
8contract with the Department to provide lump sum payments to
9eligible retirees pursuant to a pension buyout option.
10    "Authority" means the Illinois Finance Authority.
11    "Chief procurement officer" means the chief procurement
12officer appointed under paragraph (4) of subsection (a) of
13Section 10-20 of the Illinois Procurement Code.
14    "Department" means the Department of Central Management
15Services.
16    "Director" means the Director of Central Management
17Services.
18    "Pension buyout option" means a plan under Section 2-154.5,
1914-147.5, 15-185.5, 16-190.5, or 18-161.5 of the Illinois
20Pension Code.
21    "Retirement system" means a retirement system established
22under Article 2, 14, 15, 16, or 18 of the Illinois Pension
23Code.
 

 

 

SB0662- 2 -LRB100 06396 RPS 16435 b

1    Section 10. Pension buyout option administration.
2    (a) The Department, on behalf of the State, may enter into
3contracts with approved vendors who will provide lump sum
4payments to eligible retirees pursuant to a pension buyout
5option. The contract shall be subject to the applicable
6requirements of the Illinois Procurement Code. The Department
7shall only enter into the contract after an open and
8competitive bidding process and the process shall comply with
9the procedures established by the chief procurement officer
10pursuant to Section 45-32 of the Illinois Procurement Code.
11    The contract entered into by the Department shall:
12         (1) not interfere with the ability of each retirement
13    system to include any safeguards or other provisions that
14    the retirement system may require to be included in the
15    standardized form contract approved by the retirement
16    system; and
17        (2) require the approved vendor to provide, at no cost
18    to the eligible retiree, a minimum amount of certified
19    financial planning services to the eligible retiree before
20    he or she makes an election pursuant to a pension buyout
21    option.
22    (b) The Department shall establish by rule dates by which
23the Board of Trustees of each retirement system must certify
24the amount of lump sum payments made under the pension buyout
25option for that retirement system. The Department shall

 

 

SB0662- 3 -LRB100 06396 RPS 16435 b

1establish by rule the minimum amount of certified financial
2planning services that the approved vendor must provide to each
3eligible retiree at no cost to the eligible retiree.
4    (c) If in any fiscal year the amount appropriated for all
5pension buyout options is less than the amount necessary for
6the Department to pay the amount required for that fiscal year
7under a contract between the Department and an approved vendor,
8the Director shall certify to the Authority the additional
9amount required for that fiscal year. The Authority shall issue
10bonds in the amount certified by the Director. The proceeds
11from the bonds issued under this Act shall only be used by the
12Department to pay an approved vendor the amount required for
13that fiscal year.
 
14    Section 15. Bond authorization. The Authority shall not
15have outstanding at any one time bonds for any of the purposes
16of this Act in an aggregate principal amount exceeding
17$500,000,000, excluding bonds issued to refund outstanding
18bonds.
 
19    Section 900. The State Employees Group Insurance Act of
201971 is amended by changing Sections 3 and 10 as follows:
 
21    (5 ILCS 375/3)  (from Ch. 127, par. 523)
22    Sec. 3. Definitions. Unless the context otherwise
23requires, the following words and phrases as used in this Act

 

 

SB0662- 4 -LRB100 06396 RPS 16435 b

1shall have the following meanings. The Department may define
2these and other words and phrases separately for the purpose of
3implementing specific programs providing benefits under this
4Act.
5    (a) "Administrative service organization" means any
6person, firm or corporation experienced in the handling of
7claims which is fully qualified, financially sound and capable
8of meeting the service requirements of a contract of
9administration executed with the Department.
10    (b) "Annuitant" means (1) an employee who retires, or has
11retired, on or after January 1, 1966 on an immediate annuity
12under the provisions of Articles 2 (including an employee who,
13in lieu of receiving an annuity under that Article, has elected
14to participate in the pension buyout option under Section
152-154.5 of that Article), 14 (including an employee who has
16elected to receive an alternative retirement cancellation
17payment under Section 14-108.5 of the Illinois Pension Code in
18lieu of an annuity or who, in lieu of receiving an annuity
19under that Article, has elected to participate in the pension
20buyout option under Section 14-147.5 of that Article), 15
21(including an employee who has retired under the optional
22retirement program established under Section 15-158.2 or who,
23in lieu of receiving an annuity under that Article, has elected
24to participate in the pension buyout option under Section
2515-185.5 of the Article), paragraphs (2), (3), or (5) of
26Section 16-106 (including an employee who, in lieu of receiving

 

 

SB0662- 5 -LRB100 06396 RPS 16435 b

1an annuity under that Article, has elected to participate in
2the pension buyout option under Section 16-190.5 of the
3Illinois Pension Code), or Article 18 (including an employee
4who, in lieu of receiving an annuity under that Article, has
5elected to participate in the pension buyout option under
6Section 18-161.5 of that Article) of the Illinois Pension Code;
7(2) any person who was receiving group insurance coverage under
8this Act as of March 31, 1978 by reason of his status as an
9annuitant, even though the annuity in relation to which such
10coverage was provided is a proportional annuity based on less
11than the minimum period of service required for a retirement
12annuity in the system involved; (3) any person not otherwise
13covered by this Act who has retired as a participating member
14under Article 2 of the Illinois Pension Code but is ineligible
15for the retirement annuity under Section 2-119 of the Illinois
16Pension Code; (4) the spouse of any person who is receiving a
17retirement annuity under Article 18 of the Illinois Pension
18Code and who is covered under a group health insurance program
19sponsored by a governmental employer other than the State of
20Illinois and who has irrevocably elected to waive his or her
21coverage under this Act and to have his or her spouse
22considered as the "annuitant" under this Act and not as a
23"dependent"; or (5) an employee who retires, or has retired,
24from a qualified position, as determined according to rules
25promulgated by the Director, under a qualified local
26government, a qualified rehabilitation facility, a qualified

 

 

SB0662- 6 -LRB100 06396 RPS 16435 b

1domestic violence shelter or service, or a qualified child
2advocacy center. (For definition of "retired employee", see (p)
3post).
4    (b-5) (Blank).
5    (b-6) (Blank).
6    (b-7) (Blank).
7    (c) "Carrier" means (1) an insurance company, a corporation
8organized under the Limited Health Service Organization Act or
9the Voluntary Health Services Plan Act, a partnership, or other
10nongovernmental organization, which is authorized to do group
11life or group health insurance business in Illinois, or (2) the
12State of Illinois as a self-insurer.
13    (d) "Compensation" means salary or wages payable on a
14regular payroll by the State Treasurer on a warrant of the
15State Comptroller out of any State, trust or federal fund, or
16by the Governor of the State through a disbursing officer of
17the State out of a trust or out of federal funds, or by any
18Department out of State, trust, federal or other funds held by
19the State Treasurer or the Department, to any person for
20personal services currently performed, and ordinary or
21accidental disability benefits under Articles 2, 14, 15
22(including ordinary or accidental disability benefits under
23the optional retirement program established under Section
2415-158.2), paragraphs (2), (3), or (5) of Section 16-106, or
25Article 18 of the Illinois Pension Code, for disability
26incurred after January 1, 1966, or benefits payable under the

 

 

SB0662- 7 -LRB100 06396 RPS 16435 b

1Workers' Compensation or Occupational Diseases Act or benefits
2payable under a sick pay plan established in accordance with
3Section 36 of the State Finance Act. "Compensation" also means
4salary or wages paid to an employee of any qualified local
5government, qualified rehabilitation facility, qualified
6domestic violence shelter or service, or qualified child
7advocacy center.
8    (e) "Commission" means the State Employees Group Insurance
9Advisory Commission authorized by this Act. Commencing July 1,
101984, "Commission" as used in this Act means the Commission on
11Government Forecasting and Accountability as established by
12the Legislative Commission Reorganization Act of 1984.
13    (f) "Contributory", when referred to as contributory
14coverage, shall mean optional coverages or benefits elected by
15the member toward the cost of which such member makes
16contribution, or which are funded in whole or in part through
17the acceptance of a reduction in earnings or the foregoing of
18an increase in earnings by an employee, as distinguished from
19noncontributory coverage or benefits which are paid entirely by
20the State of Illinois without reduction of the member's salary.
21    (g) "Department" means any department, institution, board,
22commission, officer, court or any agency of the State
23government receiving appropriations and having power to
24certify payrolls to the Comptroller authorizing payments of
25salary and wages against such appropriations as are made by the
26General Assembly from any State fund, or against trust funds

 

 

SB0662- 8 -LRB100 06396 RPS 16435 b

1held by the State Treasurer and includes boards of trustees of
2the retirement systems created by Articles 2, 14, 15, 16 and 18
3of the Illinois Pension Code. "Department" also includes the
4Illinois Comprehensive Health Insurance Board, the Board of
5Examiners established under the Illinois Public Accounting
6Act, and the Illinois Finance Authority.
7    (h) "Dependent", when the term is used in the context of
8the health and life plan, means a member's spouse and any child
9(1) from birth to age 26 including an adopted child, a child
10who lives with the member from the time of the filing of a
11petition for adoption until entry of an order of adoption, a
12stepchild or adjudicated child, or a child who lives with the
13member if such member is a court appointed guardian of the
14child or (2) age 19 or over who has a mental or physical
15disability from a cause originating prior to the age of 19 (age
1626 if enrolled as an adult child dependent). For the health
17plan only, the term "dependent" also includes (1) any person
18enrolled prior to the effective date of this Section who is
19dependent upon the member to the extent that the member may
20claim such person as a dependent for income tax deduction
21purposes and (2) any person who has received after June 30,
222000 an organ transplant and who is financially dependent upon
23the member and eligible to be claimed as a dependent for income
24tax purposes. A member requesting to cover any dependent must
25provide documentation as requested by the Department of Central
26Management Services and file with the Department any and all

 

 

SB0662- 9 -LRB100 06396 RPS 16435 b

1forms required by the Department.
2    (i) "Director" means the Director of the Illinois
3Department of Central Management Services.
4    (j) "Eligibility period" means the period of time a member
5has to elect enrollment in programs or to select benefits
6without regard to age, sex or health.
7    (k) "Employee" means and includes each officer or employee
8in the service of a department who (1) receives his
9compensation for service rendered to the department on a
10warrant issued pursuant to a payroll certified by a department
11or on a warrant or check issued and drawn by a department upon
12a trust, federal or other fund or on a warrant issued pursuant
13to a payroll certified by an elected or duly appointed officer
14of the State or who receives payment of the performance of
15personal services on a warrant issued pursuant to a payroll
16certified by a Department and drawn by the Comptroller upon the
17State Treasurer against appropriations made by the General
18Assembly from any fund or against trust funds held by the State
19Treasurer, and (2) is employed full-time or part-time in a
20position normally requiring actual performance of duty during
21not less than 1/2 of a normal work period, as established by
22the Director in cooperation with each department, except that
23persons elected by popular vote will be considered employees
24during the entire term for which they are elected regardless of
25hours devoted to the service of the State, and (3) except that
26"employee" does not include any person who is not eligible by

 

 

SB0662- 10 -LRB100 06396 RPS 16435 b

1reason of such person's employment to participate in one of the
2State retirement systems under Articles 2, 14, 15 (either the
3regular Article 15 system or the optional retirement program
4established under Section 15-158.2) or 18, or under paragraph
5(2), (3), or (5) of Section 16-106, of the Illinois Pension
6Code, but such term does include persons who are employed
7during the 6 month qualifying period under Article 14 of the
8Illinois Pension Code. Such term also includes any person who
9(1) after January 1, 1966, is receiving ordinary or accidental
10disability benefits under Articles 2, 14, 15 (including
11ordinary or accidental disability benefits under the optional
12retirement program established under Section 15-158.2),
13paragraphs (2), (3), or (5) of Section 16-106, or Article 18 of
14the Illinois Pension Code, for disability incurred after
15January 1, 1966, (2) receives total permanent or total
16temporary disability under the Workers' Compensation Act or
17Occupational Disease Act as a result of injuries sustained or
18illness contracted in the course of employment with the State
19of Illinois, or (3) is not otherwise covered under this Act and
20has retired as a participating member under Article 2 of the
21Illinois Pension Code but is ineligible for the retirement
22annuity under Section 2-119 of the Illinois Pension Code.
23However, a person who satisfies the criteria of the foregoing
24definition of "employee" except that such person is made
25ineligible to participate in the State Universities Retirement
26System by clause (4) of subsection (a) of Section 15-107 of the

 

 

SB0662- 11 -LRB100 06396 RPS 16435 b

1Illinois Pension Code is also an "employee" for the purposes of
2this Act. "Employee" also includes any person receiving or
3eligible for benefits under a sick pay plan established in
4accordance with Section 36 of the State Finance Act. "Employee"
5also includes (i) each officer or employee in the service of a
6qualified local government, including persons appointed as
7trustees of sanitary districts regardless of hours devoted to
8the service of the sanitary district, (ii) each employee in the
9service of a qualified rehabilitation facility, (iii) each
10full-time employee in the service of a qualified domestic
11violence shelter or service, and (iv) each full-time employee
12in the service of a qualified child advocacy center, as
13determined according to rules promulgated by the Director.
14    (l) "Member" means an employee, annuitant, retired
15employee or survivor. In the case of an annuitant or retired
16employee who first becomes an annuitant or retired employee on
17or after the effective date of this amendatory Act of the 97th
18General Assembly, the individual must meet the minimum vesting
19requirements of the applicable retirement system in order to be
20eligible for group insurance benefits under that system. In the
21case of a survivor who first becomes a survivor on or after the
22effective date of this amendatory Act of the 97th General
23Assembly, the deceased employee, annuitant, or retired
24employee upon whom the annuity is based must have been eligible
25to participate in the group insurance system under the
26applicable retirement system in order for the survivor to be

 

 

SB0662- 12 -LRB100 06396 RPS 16435 b

1eligible for group insurance benefits under that system.
2    (m) "Optional coverages or benefits" means those coverages
3or benefits available to the member on his or her voluntary
4election, and at his or her own expense.
5    (n) "Program" means the group life insurance, health
6benefits and other employee benefits designed and contracted
7for by the Director under this Act.
8    (o) "Health plan" means a health benefits program offered
9by the State of Illinois for persons eligible for the plan.
10    (p) "Retired employee" means any person who would be an
11annuitant as that term is defined herein but for the fact that
12such person retired prior to January 1, 1966. Such term also
13includes any person formerly employed by the University of
14Illinois in the Cooperative Extension Service who would be an
15annuitant but for the fact that such person was made ineligible
16to participate in the State Universities Retirement System by
17clause (4) of subsection (a) of Section 15-107 of the Illinois
18Pension Code.
19    (q) "Survivor" means a person receiving an annuity as a
20survivor of an employee or of an annuitant. "Survivor" also
21includes: (1) the surviving dependent of a person who satisfies
22the definition of "employee" except that such person is made
23ineligible to participate in the State Universities Retirement
24System by clause (4) of subsection (a) of Section 15-107 of the
25Illinois Pension Code; (2) the surviving dependent of any
26person formerly employed by the University of Illinois in the

 

 

SB0662- 13 -LRB100 06396 RPS 16435 b

1Cooperative Extension Service who would be an annuitant except
2for the fact that such person was made ineligible to
3participate in the State Universities Retirement System by
4clause (4) of subsection (a) of Section 15-107 of the Illinois
5Pension Code; and (3) the surviving dependent of a person who
6was an annuitant under this Act by virtue of receiving an
7alternative retirement cancellation payment under Section
814-108.5 of the Illinois Pension Code.
9    (q-2) "SERS" means the State Employees' Retirement System
10of Illinois, created under Article 14 of the Illinois Pension
11Code.
12    (q-3) "SURS" means the State Universities Retirement
13System, created under Article 15 of the Illinois Pension Code.
14    (q-4) "TRS" means the Teachers' Retirement System of the
15State of Illinois, created under Article 16 of the Illinois
16Pension Code.
17    (q-5) (Blank).
18    (q-6) (Blank).
19    (q-7) (Blank).
20    (r) "Medical services" means the services provided within
21the scope of their licenses by practitioners in all categories
22licensed under the Medical Practice Act of 1987.
23    (s) "Unit of local government" means any county,
24municipality, township, school district (including a
25combination of school districts under the Intergovernmental
26Cooperation Act), special district or other unit, designated as

 

 

SB0662- 14 -LRB100 06396 RPS 16435 b

1a unit of local government by law, which exercises limited
2governmental powers or powers in respect to limited
3governmental subjects, any not-for-profit association with a
4membership that primarily includes townships and township
5officials, that has duties that include provision of research
6service, dissemination of information, and other acts for the
7purpose of improving township government, and that is funded
8wholly or partly in accordance with Section 85-15 of the
9Township Code; any not-for-profit corporation or association,
10with a membership consisting primarily of municipalities, that
11operates its own utility system, and provides research,
12training, dissemination of information, or other acts to
13promote cooperation between and among municipalities that
14provide utility services and for the advancement of the goals
15and purposes of its membership; the Southern Illinois
16Collegiate Common Market, which is a consortium of higher
17education institutions in Southern Illinois; the Illinois
18Association of Park Districts; and any hospital provider that
19is owned by a county that has 100 or fewer hospital beds and
20has not already joined the program. "Qualified local
21government" means a unit of local government approved by the
22Director and participating in a program created under
23subsection (i) of Section 10 of this Act.
24    (t) "Qualified rehabilitation facility" means any
25not-for-profit organization that is accredited by the
26Commission on Accreditation of Rehabilitation Facilities or

 

 

SB0662- 15 -LRB100 06396 RPS 16435 b

1certified by the Department of Human Services (as successor to
2the Department of Mental Health and Developmental
3Disabilities) to provide services to persons with disabilities
4and which receives funds from the State of Illinois for
5providing those services, approved by the Director and
6participating in a program created under subsection (j) of
7Section 10 of this Act.
8    (u) "Qualified domestic violence shelter or service" means
9any Illinois domestic violence shelter or service and its
10administrative offices funded by the Department of Human
11Services (as successor to the Illinois Department of Public
12Aid), approved by the Director and participating in a program
13created under subsection (k) of Section 10.
14    (v) "TRS benefit recipient" means a person who:
15        (1) is not a "member" as defined in this Section; and
16        (2) is receiving a monthly benefit or retirement
17    annuity under Article 16 of the Illinois Pension Code; and
18        (3) either (i) has at least 8 years of creditable
19    service under Article 16 of the Illinois Pension Code, or
20    (ii) was enrolled in the health insurance program offered
21    under that Article on January 1, 1996, or (iii) is the
22    survivor of a benefit recipient who had at least 8 years of
23    creditable service under Article 16 of the Illinois Pension
24    Code or was enrolled in the health insurance program
25    offered under that Article on the effective date of this
26    amendatory Act of 1995, or (iv) is a recipient or survivor

 

 

SB0662- 16 -LRB100 06396 RPS 16435 b

1    of a recipient of a disability benefit under Article 16 of
2    the Illinois Pension Code.
3    (w) "TRS dependent beneficiary" means a person who:
4        (1) is not a "member" or "dependent" as defined in this
5    Section; and
6        (2) is a TRS benefit recipient's: (A) spouse, (B)
7    dependent parent who is receiving at least half of his or
8    her support from the TRS benefit recipient, or (C) natural,
9    step, adjudicated, or adopted child who is (i) under age
10    26, (ii) was, on January 1, 1996, participating as a
11    dependent beneficiary in the health insurance program
12    offered under Article 16 of the Illinois Pension Code, or
13    (iii) age 19 or over who has a mental or physical
14    disability from a cause originating prior to the age of 19
15    (age 26 if enrolled as an adult child).
16    "TRS dependent beneficiary" does not include, as indicated
17under paragraph (2) of this subsection (w), a dependent of the
18survivor of a TRS benefit recipient who first becomes a
19dependent of a survivor of a TRS benefit recipient on or after
20the effective date of this amendatory Act of the 97th General
21Assembly unless that dependent would have been eligible for
22coverage as a dependent of the deceased TRS benefit recipient
23upon whom the survivor benefit is based.
24    (x) "Military leave" refers to individuals in basic
25training for reserves, special/advanced training, annual
26training, emergency call up, activation by the President of the

 

 

SB0662- 17 -LRB100 06396 RPS 16435 b

1United States, or any other training or duty in service to the
2United States Armed Forces.
3    (y) (Blank).
4    (z) "Community college benefit recipient" means a person
5who:
6        (1) is not a "member" as defined in this Section; and
7        (2) is receiving a monthly survivor's annuity or
8    retirement annuity under Article 15 of the Illinois Pension
9    Code; and
10        (3) either (i) was a full-time employee of a community
11    college district or an association of community college
12    boards created under the Public Community College Act
13    (other than an employee whose last employer under Article
14    15 of the Illinois Pension Code was a community college
15    district subject to Article VII of the Public Community
16    College Act) and was eligible to participate in a group
17    health benefit plan as an employee during the time of
18    employment with a community college district (other than a
19    community college district subject to Article VII of the
20    Public Community College Act) or an association of
21    community college boards, or (ii) is the survivor of a
22    person described in item (i).
23    (aa) "Community college dependent beneficiary" means a
24person who:
25        (1) is not a "member" or "dependent" as defined in this
26    Section; and

 

 

SB0662- 18 -LRB100 06396 RPS 16435 b

1        (2) is a community college benefit recipient's: (A)
2    spouse, (B) dependent parent who is receiving at least half
3    of his or her support from the community college benefit
4    recipient, or (C) natural, step, adjudicated, or adopted
5    child who is (i) under age 26, or (ii) age 19 or over and
6    has a mental or physical disability from a cause
7    originating prior to the age of 19 (age 26 if enrolled as
8    an adult child).
9    "Community college dependent beneficiary" does not
10include, as indicated under paragraph (2) of this subsection
11(aa), a dependent of the survivor of a community college
12benefit recipient who first becomes a dependent of a survivor
13of a community college benefit recipient on or after the
14effective date of this amendatory Act of the 97th General
15Assembly unless that dependent would have been eligible for
16coverage as a dependent of the deceased community college
17benefit recipient upon whom the survivor annuity is based.
18    (bb) "Qualified child advocacy center" means any Illinois
19child advocacy center and its administrative offices funded by
20the Department of Children and Family Services, as defined by
21the Children's Advocacy Center Act (55 ILCS 80/), approved by
22the Director and participating in a program created under
23subsection (n) of Section 10.
24(Source: P.A. 98-488, eff. 8-16-13; 99-143, eff. 7-27-15.)
 
25    (5 ILCS 375/10)  (from Ch. 127, par. 530)

 

 

SB0662- 19 -LRB100 06396 RPS 16435 b

1    Sec. 10. Contributions by the State and members.
2    (a) The State shall pay the cost of basic non-contributory
3group life insurance and, subject to member paid contributions
4set by the Department or required by this Section and except as
5provided in this Section, the basic program of group health
6benefits on each eligible member, except a member, not
7otherwise covered by this Act, who has retired as a
8participating member under Article 2 of the Illinois Pension
9Code but is ineligible for the retirement annuity under Section
102-119 of the Illinois Pension Code, and part of each eligible
11member's and retired member's premiums for health insurance
12coverage for enrolled dependents as provided by Section 9. The
13State shall pay the cost of the basic program of group health
14benefits only after benefits are reduced by the amount of
15benefits covered by Medicare for all members and dependents who
16are eligible for benefits under Social Security or the Railroad
17Retirement system or who had sufficient Medicare-covered
18government employment, except that such reduction in benefits
19shall apply only to those members and dependents who (1) first
20become eligible for such Medicare coverage on or after July 1,
211992; or (2) are Medicare-eligible members or dependents of a
22local government unit which began participation in the program
23on or after July 1, 1992; or (3) remain eligible for, but no
24longer receive Medicare coverage which they had been receiving
25on or after July 1, 1992. The Department may determine the
26aggregate level of the State's contribution on the basis of

 

 

SB0662- 20 -LRB100 06396 RPS 16435 b

1actual cost of medical services adjusted for age, sex or
2geographic or other demographic characteristics which affect
3the costs of such programs.
4    The cost of participation in the basic program of group
5health benefits for the dependent or survivor of a living or
6deceased retired employee who was formerly employed by the
7University of Illinois in the Cooperative Extension Service and
8would be an annuitant but for the fact that he or she was made
9ineligible to participate in the State Universities Retirement
10System by clause (4) of subsection (a) of Section 15-107 of the
11Illinois Pension Code shall not be greater than the cost of
12participation that would otherwise apply to that dependent or
13survivor if he or she were the dependent or survivor of an
14annuitant under the State Universities Retirement System.
15    (a-1) (Blank).
16    (a-2) (Blank).
17    (a-3) (Blank).
18    (a-4) (Blank).
19    (a-5) (Blank).
20    (a-6) (Blank).
21    (a-7) (Blank).
22    (a-8) Any annuitant, survivor, or retired employee may
23waive or terminate coverage in the program of group health
24benefits. Any such annuitant, survivor, or retired employee who
25has waived or terminated coverage may enroll or re-enroll in
26the program of group health benefits only during the annual

 

 

SB0662- 21 -LRB100 06396 RPS 16435 b

1benefit choice period, as determined by the Director; except
2that in the event of termination of coverage due to nonpayment
3of premiums, the annuitant, survivor, or retired employee may
4not re-enroll in the program.
5    (a-8.5) Beginning on the effective date of this amendatory
6Act of the 97th General Assembly, the Director of Central
7Management Services shall, on an annual basis, determine the
8amount that the State shall contribute toward the basic program
9of group health benefits on behalf of annuitants (including
10individuals who (i) participated in the General Assembly
11Retirement System, the State Employees' Retirement System of
12Illinois, the State Universities Retirement System, the
13Teachers' Retirement System of the State of Illinois, or the
14Judges Retirement System of Illinois and (ii) qualify as
15annuitants under subsection (b) of Section 3 of this Act),
16survivors (including individuals who (i) receive an annuity as
17a survivor of an individual who participated in the General
18Assembly Retirement System, the State Employees' Retirement
19System of Illinois, the State Universities Retirement System,
20the Teachers' Retirement System of the State of Illinois, or
21the Judges Retirement System of Illinois and (ii) qualify as
22survivors under subsection (q) of Section 3 of this Act), and
23retired employees (as defined in subsection (p) of Section 3 of
24this Act). The remainder of the cost of coverage for each
25annuitant, survivor, or retired employee, as determined by the
26Director of Central Management Services, shall be the

 

 

SB0662- 22 -LRB100 06396 RPS 16435 b

1responsibility of that annuitant, survivor, or retired
2employee.
3    Contributions required of annuitants, survivors, and
4retired employees shall be the same for all retirement systems
5and shall also be based on whether an individual has made an
6election under Section 15-135.1 of the Illinois Pension Code.
7Contributions may be based on annuitants', survivors', or
8retired employees' Medicare eligibility, but may not be based
9on Social Security eligibility.
10    (a-9) No later than May 1 of each calendar year, the
11Director of Central Management Services shall certify in
12writing to the Executive Secretary of the State Employees'
13Retirement System of Illinois the amounts of the Medicare
14supplement health care premiums and the amounts of the health
15care premiums for all other retirees who are not Medicare
16eligible.
17    A separate calculation of the premiums based upon the
18actual cost of each health care plan shall be so certified.
19    The Director of Central Management Services shall provide
20to the Executive Secretary of the State Employees' Retirement
21System of Illinois such information, statistics, and other data
22as he or she may require to review the premium amounts
23certified by the Director of Central Management Services.
24    The Department of Central Management Services, or any
25successor agency designated to procure healthcare contracts
26pursuant to this Act, is authorized to establish funds,

 

 

SB0662- 23 -LRB100 06396 RPS 16435 b

1separate accounts provided by any bank or banks as defined by
2the Illinois Banking Act, or separate accounts provided by any
3savings and loan association or associations as defined by the
4Illinois Savings and Loan Act of 1985 to be held by the
5Director, outside the State treasury, for the purpose of
6receiving the transfer of moneys from the Local Government
7Health Insurance Reserve Fund. The Department may promulgate
8rules further defining the methodology for the transfers. Any
9interest earned by moneys in the funds or accounts shall inure
10to the Local Government Health Insurance Reserve Fund. The
11transferred moneys, and interest accrued thereon, shall be used
12exclusively for transfers to administrative service
13organizations or their financial institutions for payments of
14claims to claimants and providers under the self-insurance
15health plan. The transferred moneys, and interest accrued
16thereon, shall not be used for any other purpose including, but
17not limited to, reimbursement of administration fees due the
18administrative service organization pursuant to its contract
19or contracts with the Department.
20    (a-10) Any credit terminated as part of a pension buyout
21option under Article 2, 14, 15, 16, or 18 shall be included in
22determining an employee's creditable service for the purposes
23of this Act.
24    (b) State employees who become eligible for this program on
25or after January 1, 1980 in positions normally requiring actual
26performance of duty not less than 1/2 of a normal work period

 

 

SB0662- 24 -LRB100 06396 RPS 16435 b

1but not equal to that of a normal work period, shall be given
2the option of participating in the available program. If the
3employee elects coverage, the State shall contribute on behalf
4of such employee to the cost of the employee's benefit and any
5applicable dependent supplement, that sum which bears the same
6percentage as that percentage of time the employee regularly
7works when compared to normal work period.
8    (c) The basic non-contributory coverage from the basic
9program of group health benefits shall be continued for each
10employee not in pay status or on active service by reason of
11(1) leave of absence due to illness or injury, (2) authorized
12educational leave of absence or sabbatical leave, or (3)
13military leave. This coverage shall continue until expiration
14of authorized leave and return to active service, but not to
15exceed 24 months for leaves under item (1) or (2). This
1624-month limitation and the requirement of returning to active
17service shall not apply to persons receiving ordinary or
18accidental disability benefits or retirement benefits through
19the appropriate State retirement system or benefits under the
20Workers' Compensation or Occupational Disease Act.
21    (d) The basic group life insurance coverage shall continue,
22with full State contribution, where such person is (1) absent
23from active service by reason of disability arising from any
24cause other than self-inflicted, (2) on authorized educational
25leave of absence or sabbatical leave, or (3) on military leave.
26    (e) Where the person is in non-pay status for a period in

 

 

SB0662- 25 -LRB100 06396 RPS 16435 b

1excess of 30 days or on leave of absence, other than by reason
2of disability, educational or sabbatical leave, or military
3leave, such person may continue coverage only by making
4personal payment equal to the amount normally contributed by
5the State on such person's behalf. Such payments and coverage
6may be continued: (1) until such time as the person returns to
7a status eligible for coverage at State expense, but not to
8exceed 24 months or (2) until such person's employment or
9annuitant status with the State is terminated (exclusive of any
10additional service imposed pursuant to law).
11    (f) The Department shall establish by rule the extent to
12which other employee benefits will continue for persons in
13non-pay status or who are not in active service.
14    (g) The State shall not pay the cost of the basic
15non-contributory group life insurance, program of health
16benefits and other employee benefits for members who are
17survivors as defined by paragraphs (1) and (2) of subsection
18(q) of Section 3 of this Act. The costs of benefits for these
19survivors shall be paid by the survivors or by the University
20of Illinois Cooperative Extension Service, or any combination
21thereof. However, the State shall pay the amount of the
22reduction in the cost of participation, if any, resulting from
23the amendment to subsection (a) made by this amendatory Act of
24the 91st General Assembly.
25    (h) Those persons occupying positions with any department
26as a result of emergency appointments pursuant to Section 8b.8

 

 

SB0662- 26 -LRB100 06396 RPS 16435 b

1of the Personnel Code who are not considered employees under
2this Act shall be given the option of participating in the
3programs of group life insurance, health benefits and other
4employee benefits. Such persons electing coverage may
5participate only by making payment equal to the amount normally
6contributed by the State for similarly situated employees. Such
7amounts shall be determined by the Director. Such payments and
8coverage may be continued until such time as the person becomes
9an employee pursuant to this Act or such person's appointment
10is terminated.
11    (i) Any unit of local government within the State of
12Illinois may apply to the Director to have its employees,
13annuitants, and their dependents provided group health
14coverage under this Act on a non-insured basis. To participate,
15a unit of local government must agree to enroll all of its
16employees, who may select coverage under either the State group
17health benefits plan or a health maintenance organization that
18has contracted with the State to be available as a health care
19provider for employees as defined in this Act. A unit of local
20government must remit the entire cost of providing coverage
21under the State group health benefits plan or, for coverage
22under a health maintenance organization, an amount determined
23by the Director based on an analysis of the sex, age,
24geographic location, or other relevant demographic variables
25for its employees, except that the unit of local government
26shall not be required to enroll those of its employees who are

 

 

SB0662- 27 -LRB100 06396 RPS 16435 b

1covered spouses or dependents under this plan or another group
2policy or plan providing health benefits as long as (1) an
3appropriate official from the unit of local government attests
4that each employee not enrolled is a covered spouse or
5dependent under this plan or another group policy or plan, and
6(2) at least 50% of the employees are enrolled and the unit of
7local government remits the entire cost of providing coverage
8to those employees, except that a participating school district
9must have enrolled at least 50% of its full-time employees who
10have not waived coverage under the district's group health plan
11by participating in a component of the district's cafeteria
12plan. A participating school district is not required to enroll
13a full-time employee who has waived coverage under the
14district's health plan, provided that an appropriate official
15from the participating school district attests that the
16full-time employee has waived coverage by participating in a
17component of the district's cafeteria plan. For the purposes of
18this subsection, "participating school district" includes a
19unit of local government whose primary purpose is education as
20defined by the Department's rules.
21    Employees of a participating unit of local government who
22are not enrolled due to coverage under another group health
23policy or plan may enroll in the event of a qualifying change
24in status, special enrollment, special circumstance as defined
25by the Director, or during the annual Benefit Choice Period. A
26participating unit of local government may also elect to cover

 

 

SB0662- 28 -LRB100 06396 RPS 16435 b

1its annuitants. Dependent coverage shall be offered on an
2optional basis, with the costs paid by the unit of local
3government, its employees, or some combination of the two as
4determined by the unit of local government. The unit of local
5government shall be responsible for timely collection and
6transmission of dependent premiums.
7    The Director shall annually determine monthly rates of
8payment, subject to the following constraints:
9        (1) In the first year of coverage, the rates shall be
10    equal to the amount normally charged to State employees for
11    elected optional coverages or for enrolled dependents
12    coverages or other contributory coverages, or contributed
13    by the State for basic insurance coverages on behalf of its
14    employees, adjusted for differences between State
15    employees and employees of the local government in age,
16    sex, geographic location or other relevant demographic
17    variables, plus an amount sufficient to pay for the
18    additional administrative costs of providing coverage to
19    employees of the unit of local government and their
20    dependents.
21        (2) In subsequent years, a further adjustment shall be
22    made to reflect the actual prior years' claims experience
23    of the employees of the unit of local government.
24    In the case of coverage of local government employees under
25a health maintenance organization, the Director shall annually
26determine for each participating unit of local government the

 

 

SB0662- 29 -LRB100 06396 RPS 16435 b

1maximum monthly amount the unit may contribute toward that
2coverage, based on an analysis of (i) the age, sex, geographic
3location, and other relevant demographic variables of the
4unit's employees and (ii) the cost to cover those employees
5under the State group health benefits plan. The Director may
6similarly determine the maximum monthly amount each unit of
7local government may contribute toward coverage of its
8employees' dependents under a health maintenance organization.
9    Monthly payments by the unit of local government or its
10employees for group health benefits plan or health maintenance
11organization coverage shall be deposited in the Local
12Government Health Insurance Reserve Fund.
13    The Local Government Health Insurance Reserve Fund is
14hereby created as a nonappropriated trust fund to be held
15outside the State Treasury, with the State Treasurer as
16custodian. The Local Government Health Insurance Reserve Fund
17shall be a continuing fund not subject to fiscal year
18limitations. The Local Government Health Insurance Reserve
19Fund is not subject to administrative charges or charge-backs,
20including but not limited to those authorized under Section 8h
21of the State Finance Act. All revenues arising from the
22administration of the health benefits program established
23under this Section shall be deposited into the Local Government
24Health Insurance Reserve Fund. Any interest earned on moneys in
25the Local Government Health Insurance Reserve Fund shall be
26deposited into the Fund. All expenditures from this Fund shall

 

 

SB0662- 30 -LRB100 06396 RPS 16435 b

1be used for payments for health care benefits for local
2government and rehabilitation facility employees, annuitants,
3and dependents, and to reimburse the Department or its
4administrative service organization for all expenses incurred
5in the administration of benefits. No other State funds may be
6used for these purposes.
7    A local government employer's participation or desire to
8participate in a program created under this subsection shall
9not limit that employer's duty to bargain with the
10representative of any collective bargaining unit of its
11employees.
12    (j) Any rehabilitation facility within the State of
13Illinois may apply to the Director to have its employees,
14annuitants, and their eligible dependents provided group
15health coverage under this Act on a non-insured basis. To
16participate, a rehabilitation facility must agree to enroll all
17of its employees and remit the entire cost of providing such
18coverage for its employees, except that the rehabilitation
19facility shall not be required to enroll those of its employees
20who are covered spouses or dependents under this plan or
21another group policy or plan providing health benefits as long
22as (1) an appropriate official from the rehabilitation facility
23attests that each employee not enrolled is a covered spouse or
24dependent under this plan or another group policy or plan, and
25(2) at least 50% of the employees are enrolled and the
26rehabilitation facility remits the entire cost of providing

 

 

SB0662- 31 -LRB100 06396 RPS 16435 b

1coverage to those employees. Employees of a participating
2rehabilitation facility who are not enrolled due to coverage
3under another group health policy or plan may enroll in the
4event of a qualifying change in status, special enrollment,
5special circumstance as defined by the Director, or during the
6annual Benefit Choice Period. A participating rehabilitation
7facility may also elect to cover its annuitants. Dependent
8coverage shall be offered on an optional basis, with the costs
9paid by the rehabilitation facility, its employees, or some
10combination of the 2 as determined by the rehabilitation
11facility. The rehabilitation facility shall be responsible for
12timely collection and transmission of dependent premiums.
13    The Director shall annually determine quarterly rates of
14payment, subject to the following constraints:
15        (1) In the first year of coverage, the rates shall be
16    equal to the amount normally charged to State employees for
17    elected optional coverages or for enrolled dependents
18    coverages or other contributory coverages on behalf of its
19    employees, adjusted for differences between State
20    employees and employees of the rehabilitation facility in
21    age, sex, geographic location or other relevant
22    demographic variables, plus an amount sufficient to pay for
23    the additional administrative costs of providing coverage
24    to employees of the rehabilitation facility and their
25    dependents.
26        (2) In subsequent years, a further adjustment shall be

 

 

SB0662- 32 -LRB100 06396 RPS 16435 b

1    made to reflect the actual prior years' claims experience
2    of the employees of the rehabilitation facility.
3    Monthly payments by the rehabilitation facility or its
4employees for group health benefits shall be deposited in the
5Local Government Health Insurance Reserve Fund.
6    (k) Any domestic violence shelter or service within the
7State of Illinois may apply to the Director to have its
8employees, annuitants, and their dependents provided group
9health coverage under this Act on a non-insured basis. To
10participate, a domestic violence shelter or service must agree
11to enroll all of its employees and pay the entire cost of
12providing such coverage for its employees. The domestic
13violence shelter shall not be required to enroll those of its
14employees who are covered spouses or dependents under this plan
15or another group policy or plan providing health benefits as
16long as (1) an appropriate official from the domestic violence
17shelter attests that each employee not enrolled is a covered
18spouse or dependent under this plan or another group policy or
19plan and (2) at least 50% of the employees are enrolled and the
20domestic violence shelter remits the entire cost of providing
21coverage to those employees. Employees of a participating
22domestic violence shelter who are not enrolled due to coverage
23under another group health policy or plan may enroll in the
24event of a qualifying change in status, special enrollment, or
25special circumstance as defined by the Director or during the
26annual Benefit Choice Period. A participating domestic

 

 

SB0662- 33 -LRB100 06396 RPS 16435 b

1violence shelter may also elect to cover its annuitants.
2Dependent coverage shall be offered on an optional basis, with
3employees, or some combination of the 2 as determined by the
4domestic violence shelter or service. The domestic violence
5shelter or service shall be responsible for timely collection
6and transmission of dependent premiums.
7    The Director shall annually determine rates of payment,
8subject to the following constraints:
9        (1) In the first year of coverage, the rates shall be
10    equal to the amount normally charged to State employees for
11    elected optional coverages or for enrolled dependents
12    coverages or other contributory coverages on behalf of its
13    employees, adjusted for differences between State
14    employees and employees of the domestic violence shelter or
15    service in age, sex, geographic location or other relevant
16    demographic variables, plus an amount sufficient to pay for
17    the additional administrative costs of providing coverage
18    to employees of the domestic violence shelter or service
19    and their dependents.
20        (2) In subsequent years, a further adjustment shall be
21    made to reflect the actual prior years' claims experience
22    of the employees of the domestic violence shelter or
23    service.
24    Monthly payments by the domestic violence shelter or
25service or its employees for group health insurance shall be
26deposited in the Local Government Health Insurance Reserve

 

 

SB0662- 34 -LRB100 06396 RPS 16435 b

1Fund.
2    (l) A public community college or entity organized pursuant
3to the Public Community College Act may apply to the Director
4initially to have only annuitants not covered prior to July 1,
51992 by the district's health plan provided health coverage
6under this Act on a non-insured basis. The community college
7must execute a 2-year contract to participate in the Local
8Government Health Plan. Any annuitant may enroll in the event
9of a qualifying change in status, special enrollment, special
10circumstance as defined by the Director, or during the annual
11Benefit Choice Period.
12    The Director shall annually determine monthly rates of
13payment subject to the following constraints: for those
14community colleges with annuitants only enrolled, first year
15rates shall be equal to the average cost to cover claims for a
16State member adjusted for demographics, Medicare
17participation, and other factors; and in the second year, a
18further adjustment of rates shall be made to reflect the actual
19first year's claims experience of the covered annuitants.
20    (l-5) The provisions of subsection (l) become inoperative
21on July 1, 1999.
22    (m) The Director shall adopt any rules deemed necessary for
23implementation of this amendatory Act of 1989 (Public Act
2486-978).
25    (n) Any child advocacy center within the State of Illinois
26may apply to the Director to have its employees, annuitants,

 

 

SB0662- 35 -LRB100 06396 RPS 16435 b

1and their dependents provided group health coverage under this
2Act on a non-insured basis. To participate, a child advocacy
3center must agree to enroll all of its employees and pay the
4entire cost of providing coverage for its employees. The child
5advocacy center shall not be required to enroll those of its
6employees who are covered spouses or dependents under this plan
7or another group policy or plan providing health benefits as
8long as (1) an appropriate official from the child advocacy
9center attests that each employee not enrolled is a covered
10spouse or dependent under this plan or another group policy or
11plan and (2) at least 50% of the employees are enrolled and the
12child advocacy center remits the entire cost of providing
13coverage to those employees. Employees of a participating child
14advocacy center who are not enrolled due to coverage under
15another group health policy or plan may enroll in the event of
16a qualifying change in status, special enrollment, or special
17circumstance as defined by the Director or during the annual
18Benefit Choice Period. A participating child advocacy center
19may also elect to cover its annuitants. Dependent coverage
20shall be offered on an optional basis, with the costs paid by
21the child advocacy center, its employees, or some combination
22of the 2 as determined by the child advocacy center. The child
23advocacy center shall be responsible for timely collection and
24transmission of dependent premiums.
25    The Director shall annually determine rates of payment,
26subject to the following constraints:

 

 

SB0662- 36 -LRB100 06396 RPS 16435 b

1        (1) In the first year of coverage, the rates shall be
2    equal to the amount normally charged to State employees for
3    elected optional coverages or for enrolled dependents
4    coverages or other contributory coverages on behalf of its
5    employees, adjusted for differences between State
6    employees and employees of the child advocacy center in
7    age, sex, geographic location, or other relevant
8    demographic variables, plus an amount sufficient to pay for
9    the additional administrative costs of providing coverage
10    to employees of the child advocacy center and their
11    dependents.
12        (2) In subsequent years, a further adjustment shall be
13    made to reflect the actual prior years' claims experience
14    of the employees of the child advocacy center.
15    Monthly payments by the child advocacy center or its
16employees for group health insurance shall be deposited into
17the Local Government Health Insurance Reserve Fund.
18(Source: P.A. 97-695, eff. 7-1-12; 98-488, eff. 8-16-13.)
 
19    Section 905. The Department of Central Management Services
20Law of the Civil Administrative Code of Illinois is amended by
21adding Section 405-298 as follows:
 
22    (20 ILCS 405/405-298 new)
23    Sec. 405-298. Pension buyout option. To enter into
24contracts with approved vendors under the Pension Buyout Act

 

 

SB0662- 37 -LRB100 06396 RPS 16435 b

1and to adopt those rules needed to implement the provisions of
2the Pension Buyout Act.
 
3    Section 910. The Illinois Finance Authority Act is amended
4by changing Section 801-40 as follows:
 
5    (20 ILCS 3501/801-40)
6    Sec. 801-40. In addition to the powers otherwise authorized
7by law and in addition to the foregoing general corporate
8powers, the Authority shall also have the following additional
9specific powers to be exercised in furtherance of the purposes
10of this Act.
11    (a) The Authority shall have power (i) to accept grants,
12loans or appropriations from the federal government or the
13State, or any agency or instrumentality thereof, to be used for
14the operating expenses of the Authority, or for any purposes of
15the Authority, including the making of direct loans of such
16funds with respect to projects, and (ii) to enter into any
17agreement with the federal government or the State, or any
18agency or instrumentality thereof, in relationship to such
19grants, loans or appropriations.
20    (b) The Authority shall have power to procure and enter
21into contracts for any type of insurance and indemnity
22agreements covering loss or damage to property from any cause,
23including loss of use and occupancy, or covering any other
24insurable risk.

 

 

SB0662- 38 -LRB100 06396 RPS 16435 b

1    (c) The Authority shall have the continuing power to issue
2bonds for its corporate purposes. Bonds may be issued by the
3Authority in one or more series and may provide for the payment
4of any interest deemed necessary on such bonds, of the costs of
5issuance of such bonds, of any premium on any insurance, or of
6the cost of any guarantees, letters of credit or other similar
7documents, may provide for the funding of the reserves deemed
8necessary in connection with such bonds, and may provide for
9the refunding or advance refunding of any bonds or for accounts
10deemed necessary in connection with any purpose of the
11Authority. The bonds may bear interest payable at any time or
12times and at any rate or rates, notwithstanding any other
13provision of law to the contrary, and such rate or rates may be
14established by an index or formula which may be implemented or
15established by persons appointed or retained therefor by the
16Authority, or may bear no interest or may bear interest payable
17at maturity or upon redemption prior to maturity, may bear such
18date or dates, may be payable at such time or times and at such
19place or places, may mature at any time or times not later than
2040 years from the date of issuance, may be sold at public or
21private sale at such time or times and at such price or prices,
22may be secured by such pledges, reserves, guarantees, letters
23of credit, insurance contracts or other similar credit support
24or liquidity instruments, may be executed in such manner, may
25be subject to redemption prior to maturity, may provide for the
26registration of the bonds, and may be subject to such other

 

 

SB0662- 39 -LRB100 06396 RPS 16435 b

1terms and conditions all as may be provided by the resolution
2or indenture authorizing the issuance of such bonds. The holder
3or holders of any bonds issued by the Authority may bring suits
4at law or proceedings in equity to compel the performance and
5observance by any person or by the Authority or any of its
6agents or employees of any contract or covenant made with the
7holders of such bonds and to compel such person or the
8Authority and any of its agents or employees to perform any
9duties required to be performed for the benefit of the holders
10of any such bonds by the provision of the resolution
11authorizing their issuance, and to enjoin such person or the
12Authority and any of its agents or employees from taking any
13action in conflict with any such contract or covenant.
14Notwithstanding the form and tenor of any such bonds and in the
15absence of any express recital on the face thereof that it is
16non-negotiable, all such bonds shall be negotiable
17instruments. Pending the preparation and execution of any such
18bonds, temporary bonds may be issued as provided by the
19resolution. The bonds shall be sold by the Authority in such
20manner as it shall determine. The bonds may be secured as
21provided in the authorizing resolution by the receipts,
22revenues, income and other available funds of the Authority and
23by any amounts derived by the Authority from the loan agreement
24or lease agreement with respect to the project or projects; and
25bonds may be issued as general obligations of the Authority
26payable from such revenues, funds and obligations of the

 

 

SB0662- 40 -LRB100 06396 RPS 16435 b

1Authority as the bond resolution shall provide, or may be
2issued as limited obligations with a claim for payment solely
3from such revenues, funds and obligations as the bond
4resolution shall provide. The Authority may grant a specific
5pledge or assignment of and lien on or security interest in
6such rights, revenues, income, or amounts and may grant a
7specific pledge or assignment of and lien on or security
8interest in any reserves, funds or accounts established in the
9resolution authorizing the issuance of bonds. Any such pledge,
10assignment, lien or security interest for the benefit of the
11holders of the Authority's bonds shall be valid and binding
12from the time the bonds are issued without any physical
13delivery or further act, and shall be valid and binding as
14against and prior to the claims of all other parties having
15claims against the Authority or any other person irrespective
16of whether the other parties have notice of the pledge,
17assignment, lien or security interest. As evidence of such
18pledge, assignment, lien and security interest, the Authority
19may execute and deliver a mortgage, trust agreement, indenture
20or security agreement or an assignment thereof. A remedy for
21any breach or default of the terms of any such agreement by the
22Authority may be by mandamus proceedings in any court of
23competent jurisdiction to compel the performance and
24compliance therewith, but the agreement may prescribe by whom
25or on whose behalf such action may be instituted. It is
26expressly understood that the Authority may, but need not,

 

 

SB0662- 41 -LRB100 06396 RPS 16435 b

1acquire title to any project with respect to which it exercises
2its authority.
3    (c-5) The Authority shall have the power to issue bonds
4under subsection (c) of Section 10 of the Pension Buyout Act
5and to adopt those rules needed to implement the provisions of
6the Pension Buyout Act.
7    (d) With respect to the powers granted by this Act, the
8Authority may adopt rules and regulations prescribing the
9procedures by which persons may apply for assistance under this
10Act. Nothing herein shall be deemed to preclude the Authority,
11prior to the filing of any formal application, from conducting
12preliminary discussions and investigations with respect to the
13subject matter of any prospective application.
14    (e) The Authority shall have power to acquire by purchase,
15lease, gift or otherwise any property or rights therein from
16any person useful for its purposes, whether improved for the
17purposes of any prospective project, or unimproved. The
18Authority may also accept any donation of funds for its
19purposes from any such source. The Authority shall have no
20independent power of condemnation but may acquire any property
21or rights therein obtained upon condemnation by any other
22authority, governmental entity or unit of local government with
23such power.
24    (f) The Authority shall have power to develop, construct
25and improve either under its own direction, or through
26collaboration with any approved applicant, or to acquire

 

 

SB0662- 42 -LRB100 06396 RPS 16435 b

1through purchase or otherwise, any project, using for such
2purpose the proceeds derived from the sale of its bonds or from
3governmental loans or grants, and to hold title in the name of
4the Authority to such projects.
5    (g) The Authority shall have power to lease pursuant to a
6lease agreement any project so developed and constructed or
7acquired to the approved tenant on such terms and conditions as
8may be appropriate to further the purposes of this Act and to
9maintain the credit of the Authority. Any such lease may
10provide for either the Authority or the approved tenant to
11assume initially, in whole or in part, the costs of
12maintenance, repair and improvements during the leasehold
13period. In no case, however, shall the total rentals from any
14project during any initial leasehold period or the total loan
15repayments to be made pursuant to any loan agreement, be less
16than an amount necessary to return over such lease or loan
17period (1) all costs incurred in connection with the
18development, construction, acquisition or improvement of the
19project and for repair, maintenance and improvements thereto
20during the period of the lease or loan; provided, however, that
21the rentals or loan repayments need not include costs met
22through the use of funds other than those obtained by the
23Authority through the issuance of its bonds or governmental
24loans; (2) a reasonable percentage additive to be agreed upon
25by the Authority and the borrower or tenant to cover a properly
26allocable portion of the Authority's general expenses,

 

 

SB0662- 43 -LRB100 06396 RPS 16435 b

1including, but not limited to, administrative expenses,
2salaries and general insurance, and (3) an amount sufficient to
3pay when due all principal of, interest and premium, if any on,
4any bonds issued by the Authority with respect to the project.
5The portion of total rentals payable under clause (3) of this
6subsection (g) shall be deposited in such special accounts,
7including all sinking funds, acquisition or construction
8funds, debt service and other funds as provided by any
9resolution, mortgage or trust agreement of the Authority
10pursuant to which any bond is issued.
11    (h) The Authority has the power, upon the termination of
12any leasehold period of any project, to sell or lease for a
13further term or terms such project on such terms and conditions
14as the Authority shall deem reasonable and consistent with the
15purposes of the Act. The net proceeds from all such sales and
16the revenues or income from such leases shall be used to
17satisfy any indebtedness of the Authority with respect to such
18project and any balance may be used to pay any expenses of the
19Authority or be used for the further development, construction,
20acquisition or improvement of projects. In the event any
21project is vacated by a tenant prior to the termination of the
22initial leasehold period, the Authority shall sell or lease the
23facilities of the project on the most advantageous terms
24available. The net proceeds of any such disposition shall be
25treated in the same manner as the proceeds from sales or the
26revenues or income from leases subsequent to the termination of

 

 

SB0662- 44 -LRB100 06396 RPS 16435 b

1any initial leasehold period.
2    (i) The Authority shall have the power to make loans to
3persons to finance a project, to enter into loan agreements
4with respect thereto, and to accept guarantees from persons of
5its loans or the resultant evidences of obligations of the
6Authority.
7    (j) The Authority may fix, determine, charge and collect
8any premiums, fees, charges, costs and expenses, including,
9without limitation, any application fees, commitment fees,
10program fees, financing charges or publication fees from any
11person in connection with its activities under this Act.
12    (k) In addition to the funds established as provided
13herein, the Authority shall have the power to create and
14establish such reserve funds and accounts as may be necessary
15or desirable to accomplish its purposes under this Act and to
16deposit its available monies into the funds and accounts.
17    (l) At the request of the governing body of any unit of
18local government, the Authority is authorized to market such
19local government's revenue bond offerings by preparing bond
20issues for sale, advertising for sealed bids, receiving bids at
21its offices, making the award to the bidder that offers the
22most favorable terms or arranging for negotiated placements or
23underwritings of such securities. The Authority may, at its
24discretion, offer for concurrent sale the revenue bonds of
25several local governments. Sales by the Authority of revenue
26bonds under this Section shall in no way imply State guarantee

 

 

SB0662- 45 -LRB100 06396 RPS 16435 b

1of such debt issue. The Authority may require such financial
2information from participating local governments as it deems
3necessary in order to carry out the purposes of this subsection
4(1).
5    (m) The Authority may make grants to any county to which
6Division 5-37 of the Counties Code is applicable to assist in
7the financing of capital development, construction and
8renovation of new or existing facilities for hospitals and
9health care facilities under that Act. Such grants may only be
10made from funds appropriated for such purposes from the Build
11Illinois Bond Fund.
12    (n) The Authority may establish an urban development action
13grant program for the purpose of assisting municipalities in
14Illinois which are experiencing severe economic distress to
15help stimulate economic development activities needed to aid in
16economic recovery. The Authority shall determine the types of
17activities and projects for which the urban development action
18grants may be used, provided that such projects and activities
19are broadly defined to include all reasonable projects and
20activities the primary objectives of which are the development
21of viable urban communities, including decent housing and a
22suitable living environment, and expansion of economic
23opportunity, principally for persons of low and moderate
24incomes. The Authority shall enter into grant agreements from
25monies appropriated for such purposes from the Build Illinois
26Bond Fund. The Authority shall monitor the use of the grants,

 

 

SB0662- 46 -LRB100 06396 RPS 16435 b

1and shall provide for audits of the funds as well as recovery
2by the Authority of any funds determined to have been spent in
3violation of this subsection (n) or any rule or regulation
4promulgated hereunder. The Authority shall provide technical
5assistance with regard to the effective use of the urban
6development action grants. The Authority shall file an annual
7report to the General Assembly concerning the progress of the
8grant program.
9    (o) The Authority may establish a Housing Partnership
10Program whereby the Authority provides zero-interest loans to
11municipalities for the purpose of assisting in the financing of
12projects for the rehabilitation of affordable multi-family
13housing for low and moderate income residents. The Authority
14may provide such loans only upon a municipality's providing
15evidence that it has obtained private funding for the
16rehabilitation project. The Authority shall provide 3 State
17dollars for every 7 dollars obtained by the municipality from
18sources other than the State of Illinois. The loans shall be
19made from monies appropriated for such purpose from the Build
20Illinois Bond Fund. The total amount of loans available under
21the Housing Partnership Program shall not exceed $30,000,000.
22State loan monies under this subsection shall be used only for
23the acquisition and rehabilitation of existing buildings
24containing 4 or more dwelling units. The terms of any loan made
25by the municipality under this subsection shall require
26repayment of the loan to the municipality upon any sale or

 

 

SB0662- 47 -LRB100 06396 RPS 16435 b

1other transfer of the project.
2    (p) The Authority may award grants to universities and
3research institutions, research consortiums and other
4not-for-profit entities for the purposes of: remodeling or
5otherwise physically altering existing laboratory or research
6facilities, expansion or physical additions to existing
7laboratory or research facilities, construction of new
8laboratory or research facilities or acquisition of modern
9equipment to support laboratory or research operations
10provided that such grants (i) be used solely in support of
11project and equipment acquisitions which enhance technology
12transfer, and (ii) not constitute more than 60 percent of the
13total project or acquisition cost.
14    (q) Grants may be awarded by the Authority to units of
15local government for the purpose of developing the appropriate
16infrastructure or defraying other costs to the local government
17in support of laboratory or research facilities provided that
18such grants may not exceed 40% of the cost to the unit of local
19government.
20    (r) The Authority may establish a Direct Loan Program to
21make loans to individuals, partnerships or corporations for the
22purpose of an industrial project, as defined in Section 801-10
23of this Act. For the purposes of such program and not by way of
24limitation on any other program of the Authority, the Authority
25shall have the power to issue bonds, notes, or other evidences
26of indebtedness including commercial paper for purposes of

 

 

SB0662- 48 -LRB100 06396 RPS 16435 b

1providing a fund of capital from which it may make such loans.
2The Authority shall have the power to use any appropriations
3from the State made especially for the Authority's Direct Loan
4Program for additional capital to make such loans or for the
5purposes of reserve funds or pledged funds which secure the
6Authority's obligations of repayment of any bond, note or other
7form of indebtedness established for the purpose of providing
8capital for which it intends to make such loans under the
9Direct Loan Program. For the purpose of obtaining such capital,
10the Authority may also enter into agreements with financial
11institutions and other persons for the purpose of selling loans
12and developing a secondary market for such loans. Loans made
13under the Direct Loan Program may be in an amount not to exceed
14$300,000 and shall be made for a portion of an industrial
15project which does not exceed 50% of the total project. No loan
16may be made by the Authority unless approved by the affirmative
17vote of at least 8 members of the board. The Authority shall
18establish procedures and publish rules which shall provide for
19the submission, review, and analysis of each direct loan
20application and which shall preserve the ability of each board
21member to reach an individual business judgment regarding the
22propriety of making each direct loan. The collective discretion
23of the board to approve or disapprove each loan shall be
24unencumbered. The Authority may establish and collect such fees
25and charges, determine and enforce such terms and conditions,
26and charge such interest rates as it determines to be necessary

 

 

SB0662- 49 -LRB100 06396 RPS 16435 b

1and appropriate to the successful administration of the Direct
2Loan Program. The Authority may require such interests in
3collateral and such guarantees as it determines are necessary
4to project the Authority's interest in the repayment of the
5principal and interest of each loan made under the Direct Loan
6Program.
7    (s) The Authority may guarantee private loans to third
8parties up to a specified dollar amount in order to promote
9economic development in this State.
10    (t) The Authority may adopt rules and regulations as may be
11necessary or advisable to implement the powers conferred by
12this Act.
13    (u) The Authority shall have the power to issue bonds,
14notes or other evidences of indebtedness, which may be used to
15make loans to units of local government which are authorized to
16enter into loan agreements and other documents and to issue
17bonds, notes and other evidences of indebtedness for the
18purpose of financing the protection of storm sewer outfalls,
19the construction of adequate storm sewer outfalls, and the
20provision for flood protection of sanitary sewage treatment
21plans, in counties that have established a stormwater
22management planning committee in accordance with Section
235-1062 of the Counties Code. Any such loan shall be made by the
24Authority pursuant to the provisions of Section 820-5 to 820-60
25of this Act. The unit of local government shall pay back to the
26Authority the principal amount of the loan, plus annual

 

 

SB0662- 50 -LRB100 06396 RPS 16435 b

1interest as determined by the Authority. The Authority shall
2have the power, subject to appropriations by the General
3Assembly, to subsidize or buy down a portion of the interest on
4such loans, up to 4% per annum.
5    (v) The Authority may accept security interests as provided
6in Sections 11-3 and 11-3.3 of the Illinois Public Aid Code.
7    (w) Moral Obligation. In the event that the Authority
8determines that monies of the Authority will not be sufficient
9for the payment of the principal of and interest on its bonds
10during the next State fiscal year, the Chairperson, as soon as
11practicable, shall certify to the Governor the amount required
12by the Authority to enable it to pay such principal of and
13interest on the bonds. The Governor shall submit the amount so
14certified to the General Assembly as soon as practicable, but
15no later than the end of the current State fiscal year. This
16subsection shall apply only to any bonds or notes as to which
17the Authority shall have determined, in the resolution
18authorizing the issuance of the bonds or notes, that this
19subsection shall apply. Whenever the Authority makes such a
20determination, that fact shall be plainly stated on the face of
21the bonds or notes and that fact shall also be reported to the
22Governor. In the event of a withdrawal of moneys from a reserve
23fund established with respect to any issue or issues of bonds
24of the Authority to pay principal or interest on those bonds,
25the Chairperson of the Authority, as soon as practicable, shall
26certify to the Governor the amount required to restore the

 

 

SB0662- 51 -LRB100 06396 RPS 16435 b

1reserve fund to the level required in the resolution or
2indenture securing those bonds. The Governor shall submit the
3amount so certified to the General Assembly as soon as
4practicable, but no later than the end of the current State
5fiscal year. The Authority shall obtain written approval from
6the Governor for any bonds and notes to be issued under this
7Section. In addition to any other bonds authorized to be issued
8under Sections 825-60, 825-65(e), 830-25 and 845-5, the
9principal amount of Authority bonds outstanding issued under
10this Section 801-40(w) or under 20 ILCS 3850/1-80 or 30 ILCS
11360/2-6(c), which have been assumed by the Authority, shall not
12exceed $150,000,000. This subsection (w) shall in no way be
13applied to any bonds issued by the Authority on behalf of the
14Illinois Power Agency under Section 825-90 of this Act.
15    (x) The Authority may enter into agreements or contracts
16with any person necessary or appropriate to place the payment
17obligations of the Authority under any of its bonds in whole or
18in part on any interest rate basis, cash flow basis, or other
19basis desired by the Authority, including without limitation
20agreements or contracts commonly known as "interest rate swap
21agreements", "forward payment conversion agreements", and
22"futures", or agreements or contracts to exchange cash flows or
23a series of payments, or agreements or contracts, including
24without limitation agreements or contracts commonly known as
25"options", "puts", or "calls", to hedge payment, rate spread,
26or similar exposure; provided that any such agreement or

 

 

SB0662- 52 -LRB100 06396 RPS 16435 b

1contract shall not constitute an obligation for borrowed money
2and shall not be taken into account under Section 845-5 of this
3Act or any other debt limit of the Authority or the State of
4Illinois.
5    (y) The Authority shall publish summaries of projects and
6actions approved by the members of the Authority on its
7website. These summaries shall include, but not be limited to,
8information regarding the:
9        (1) project;
10        (2) Board's action or actions;
11        (3) purpose of the project;
12        (4) Authority's program and contribution;
13        (5) volume cap;
14        (6) jobs retained;
15        (7) projected new jobs;
16        (8) construction jobs created;
17        (9) estimated sources and uses of funds;
18        (10) financing summary;
19        (11) project summary;
20        (12) business summary;
21        (13) ownership or economic disclosure statement;
22        (14) professional and financial information;
23        (15) service area; and
24        (16) legislative district.
25    The disclosure of information pursuant to this subsection
26shall comply with the Freedom of Information Act.

 

 

SB0662- 53 -LRB100 06396 RPS 16435 b

1(Source: P.A. 95-470, eff. 8-27-07; 95-481, eff. 8-28-07;
295-876, eff. 8-21-08; 96-795, eff. 7-1-10 (see Section 5 of
3P.A. 96-793 for the effective date of changes made by P.A.
496-795).)
 
5    Section 915. The Illinois Procurement Code is amended by
6adding Section 45-32 as follows:
 
7    (30 ILCS 500/45-32 new)
8    Sec. 45-32. Pension buyout option. The chief procurement
9officer appointed pursuant to paragraph (4) of subsection (a)
10of Section 10-20 shall determine for the Department of Central
11Management Services which vendors are approved to provide lump
12sum payments pursuant to a pension buyout option under Article
132, 14, 15, 16, or 18 of the Illinois Pension Code and the
14Pension Buyout Act. The chief procurement officer appointed
15pursuant to paragraph (4) of subsection (a) of Section 10-20
16shall develop and distribute to the Department of Central
17Management Services a listing of all procedures for
18implementing this Section.
 
19    Section 920. The Illinois Pension Code is amended by
20changing Sections 2-154, 14-147, 15-185, 16-190, and 18-161 and
21by adding Sections 2-154.5, 14-147.5, 15-185.5, 16-190.5, and
2218-161.5 as follows:
 

 

 

SB0662- 54 -LRB100 06396 RPS 16435 b

1    (40 ILCS 5/2-154)  (from Ch. 108 1/2, par. 2-154)
2    Sec. 2-154. Assignment. Except as provided in this Article,
3all moneys in the fund created by this Article, and all
4securities and other property of the System, and all annuities
5and other benefits payable under this Article, and all
6accumulated contributions and other credits of participants in
7this system, and the right of any person to receive an annuity
8or other benefit under this Article, or a refund or return of
9contributions, shall not be subject to judgment, execution,
10garnishment, attachment or other seizure by process, in
11bankruptcy or otherwise, nor to sale, pledge, mortgage or other
12alienation, and shall not be assignable. However, a person may
13relinquish his or her creditable service under this Article and
14all rights arising from his or her service under this Article
15in accordance with Section 2-154.5. However, a person receiving
16an annuity or benefit, or refund or return of contributions,
17may authorize withholding from such annuity, benefit, refund or
18return of contributions in accordance with the provisions of
19the "State Salary and Annuity Withholding Act", approved August
2021, 1961, as now or hereafter amended.
21    The General Assembly finds and declares that the amendment
22to this Section made by this amendatory Act of 1989 is a
23clarification of existing law, and an indication of its
24previous intent in enacting and amending this Section.
25Notwithstanding Section 1-103.1, application of this amendment
26shall not be limited to persons in service on or after the

 

 

SB0662- 55 -LRB100 06396 RPS 16435 b

1effective date of this amendatory Act of 1989.
2(Source: P.A. 86-273.)
 
3    (40 ILCS 5/2-154.5 new)
4    Sec. 2-154.5. Pension buyout option.
5    (a) As used in this Section:
6        "Approved vendor" means a vendor that has entered into
7    a contract with the Department of Central Management
8    Services to provide lump sum payments under this Section.
9        "Eligible retiree" means a person who (i) has made the
10    election to receive a retirement annuity; (ii) is eligible
11    to receive a retirement annuity; (iii) has terminated
12    service; (iv) is not subject to a QILDRO under this
13    Article; and (v) has received at least the minimum amount
14    of certified financial planning services, in accordance
15    with rules adopted by the Department of Central Management
16    Services, provided by the approved vendor.
17        "Pension buyout option" means a plan that authorizes an
18    eligible retiree to relinquish all rights and benefits
19    under this Article and this Code (to the extent that the
20    provisions of this Code relate to benefits under this
21    Article), including, but not limited to, a survivor's
22    annuity, a retirement annuity, and a refund of
23    contributions, and shall be deemed to have no service
24    credit established under this Article in exchange for a
25    lump sum payment equal to the present value of the

 

 

SB0662- 56 -LRB100 06396 RPS 16435 b

1    retirement annuity as calculated by the System using the
2    actuarial tables and other assumptions adopted by the
3    Board.
4        "Standardized form contract" means the contract
5    approved by the System in accordance with subsection (c).
6    (b) In the event that the Department of Central Management
7Services enters into a contract with an approved vendor and
8implements a pension buyout option:
9        (1) An eligible retiree may make the election
10    authorized under this Section at any time after he or she
11    has elected to retire and has terminated service. However,
12    a retiree who has elected to proceed under the Retirement
13    Systems Reciprocal Act is not eligible to elect the pension
14    buyout option under this Section.
15        (2) An eligible retiree who wishes to participate in
16    the pension buyout option may request that the System
17    determine the dollar amount that the eligible retiree would
18    receive under the pension buyout option.
19        (3) After the System determines the dollar amount that
20    the eligible retiree would receive under the pension buyout
21    option, an eligible retiree who wishes to participate in
22    the pension buyout option shall do so by (i) notifying the
23    approved vendor and the System and (ii) executing the
24    standardized form contract with the approved vendor. As
25    soon as practical after the execution of the standardized
26    form contract, the approved vendor shall notify the System

 

 

SB0662- 57 -LRB100 06396 RPS 16435 b

1    that the eligible retiree executed the standardized form
2    contract. The System shall adopt rules concerning the
3    notice requirements.
4        (4) On the first day of the month following the
5    execution of the standardized form contract between the
6    approved vendor and the eligible retiree, the eligible
7    retiree shall have no rights or benefits under this Article
8    and this Code (to the extent that the provisions of this
9    Code relate to the eligible retiree's rights under this
10    Article) and shall be deemed to have no service credit
11    established under this Article. However, an eligible
12    retiree who receives a pension buyout payment under this
13    Section shall be deemed to be an annuitant for the purposes
14    of the State Employees Group Insurance Act of 1971 and
15    shall be entitled to any benefits under the State Employees
16    Group Insurance Act of 1971 that he or she would have
17    otherwise been entitled to.
18    (c) The System shall approve a standardized form contract.
19The System may by rule specify provisions that must be included
20in the standardized form contract.
21    (d) Any reduction in the System's liability arising from
22the pension buyout option shall not be included in the
23calculation or certification of required State contributions
24sooner than the next certification following the exercise of
25the pension buyout option. The calculation of required State
26contributions under this Article shall not include any

 

 

SB0662- 58 -LRB100 06396 RPS 16435 b

1reduction in the System's liability due to anticipated pension
2buyout under this Section that has not yet been made.
3    (e) In accordance with rules adopted by the Department of
4Central Management Services, the Board shall certify to the
5Department of Central Management Services the amount of lump
6sum payments made under this Section by an approved vendor.
7    (f) The Board shall adopt rules necessary to implement this
8Section.
9    (g) No provision of this Section shall be interpreted in a
10way that would cause the applicable System to cease to be a
11qualified plan under the Internal Revenue Code of 1986.
 
12    (40 ILCS 5/14-147)  (from Ch. 108 1/2, par. 14-147)
13    Sec. 14-147. Annuities, etc. - Exempt. Except as provided
14in this Article, all moneys in the fund created by this
15Article, and all securities and other property of the System,
16and all annuities and other benefits payable under this
17Article, and all accumulated contributions and other credits of
18employees in this System, and the right of any person to
19receive an annuity or other benefit under this Article, or a
20refund or return of contributions, shall not be subject to
21judgment, execution, garnishment, attachment, or other seizure
22by process, in bankruptcy or otherwise, nor to sale, pledge,
23mortgage or other alienation, and shall not be assignable.
24However, a person may relinquish his or her creditable service
25under this Article and all rights arising from his or her

 

 

SB0662- 59 -LRB100 06396 RPS 16435 b

1service under this Article in accordance with Section 14-147.5.
2A person receiving an annuity or benefit, or refund or return
3of contributions, may authorize withholding from such annuity,
4benefit, refund or return of contributions in accordance with
5the provisions of the "State Salary and Annuity Withholding
6Act", approved August 21, 1961, as now or hereafter amended.
7    The General Assembly finds and declares that the amendment
8to this Section made by this amendatory Act of 1989 is a
9clarification of existing law, and an indication of its
10previous intent in enacting and amending this Section.
11Notwithstanding Section 1-103.1, application of this amendment
12shall not be limited to persons in service on or after the
13effective date of this amendatory Act of 1989.
14(Source: P.A. 86-273.)
 
15    (40 ILCS 5/14-147.5 new)
16    Sec. 14-147.5. Pension buyout option.
17    (a) As used in this Section:
18        "Approved vendor" means a vendor that has entered into
19    a contract with the Department of Central Management
20    Services to provide lump sum payments under this Section.
21        "Eligible retiree" means a person who (i) has made the
22    election to receive a retirement annuity; (ii) is eligible
23    to receive a retirement annuity; (iii) has terminated
24    service; (iv) is not subject to a QILDRO under this
25    Article; and (v) has received at least the minimum amount

 

 

SB0662- 60 -LRB100 06396 RPS 16435 b

1    of certified financial planning services, in accordance
2    with rules adopted by the Department of Central Management
3    Services, provided by the approved vendor.
4        "Pension buyout option" means a plan that authorizes an
5    eligible retiree to relinquish all rights and benefits
6    under this Article and this Code (to the extent that the
7    provisions of this Code relate to benefits under this
8    Article), including, but not limited to, a survivor's
9    annuity, a retirement annuity, and a refund of
10    contributions, and shall be deemed to have no service
11    credit established under this Article in exchange for a
12    lump sum payment equal to the present value of the
13    retirement annuity as calculated by the System using the
14    actuarial tables and other assumptions adopted by the
15    Board.
16        "Standardized form contract" means the contract
17    approved by the System in accordance with subsection (c).
18    (b) In the event that the Department of Central Management
19Services enters into a contract with an approved vendor and
20implements a pension buyout option:
21        (1) An eligible retiree may make the election
22    authorized under this Section at any time after he or she
23    has elected to retire and has terminated service. However,
24    a retiree who has elected to proceed under the Retirement
25    Systems Reciprocal Act is not eligible to elect the pension
26    buyout option under this Section.

 

 

SB0662- 61 -LRB100 06396 RPS 16435 b

1        (2) An eligible retiree who wishes to participate in
2    the pension buyout option may request that the System
3    determine the dollar amount that the eligible retiree would
4    receive under the pension buyout option.
5        (3) After the System determines the dollar amount that
6    the eligible retiree would receive under the pension buyout
7    option, an eligible retiree who wishes to participate in
8    the pension buyout option shall do so by (i) notifying the
9    approved vendor and the System and (ii) executing the
10    standardized form contract with the approved vendor. As
11    soon as practical after the execution of the standardized
12    form contract, the approved vendor shall notify the System
13    that the eligible retiree executed the standardized form
14    contract. The System shall adopt rules concerning the
15    notice requirements.
16        (4) On the first day of the month following the
17    execution of the standardized form contract between the
18    approved vendor and the eligible retiree, the eligible
19    retiree shall have no rights or benefits under this Article
20    and this Code (to the extent that the provisions of this
21    Code relate to the eligible retiree's rights under this
22    Article) and shall be deemed to have no service credit
23    established under this Article. However, an eligible
24    retiree who receives a pension buyout payment under this
25    Section shall be deemed to be an annuitant for the purposes
26    of the State Employees Group Insurance Act of 1971 and

 

 

SB0662- 62 -LRB100 06396 RPS 16435 b

1    shall be entitled to any benefits under the State Employees
2    Group Insurance Act of 1971 that he or she would have
3    otherwise been entitled to.
4    (c) The System shall approve a standardized form contract.
5The System may by rule specify provisions that must be included
6in the standardized form contract.
7    (d) Any reduction in the System's liability arising from
8the pension buyout option shall not be included in the
9calculation or certification of required State contributions
10sooner than the next certification following the exercise of
11the pension buyout option. The calculation of required State
12contributions under this Article shall not include any
13reduction in the System's liability due to any anticipated
14pension buyout under this Section that has not yet been made.
15    (e) In accordance with rules adopted by the Department of
16Central Management Services, the Board shall certify to the
17Department of Central Management Services the amount of lump
18sum payments made under this Section by an approved vendor.
19    (f) The Board shall adopt rules necessary to implement this
20Section.
21    (g) No provision of this Section shall be interpreted in a
22way that would cause the System to cease to be a qualified plan
23under the Internal Revenue Code of 1986.
 
24    (40 ILCS 5/15-185)  (from Ch. 108 1/2, par. 15-185)
25    Sec. 15-185. Annuities, etc., exempt. The accumulated

 

 

SB0662- 63 -LRB100 06396 RPS 16435 b

1employee and employer contributions shall be held in trust for
2each participant and annuitant, and this trust shall be treated
3as a spendthrift trust. Except as provided in this Article, all
4cash, securities and other property of this system, all
5annuities and other benefits payable under this Article and all
6accumulated credits of participants and annuitants in this
7system and the right of any person to receive an annuity or
8other benefit under this Article, or a refund of contributions,
9shall not be subject to judgment, execution, garnishment,
10attachment, or other seizure by process, in bankruptcy or
11otherwise, nor to sale, pledge, mortgage or other alienation,
12and shall not be assignable. However, a person may relinquish
13his or her creditable service under this Article and all rights
14arising from his or her service under this Article in
15accordance with Section 15-185.5. The board, however, may
16deduct from the benefits, refunds and credits payable to the
17participant, annuitant or beneficiary, amounts owed by the
18participant or annuitant to the system. No attempted sale,
19transfer or assignment of any benefit, refund or credit shall
20prevent the right of the board to make the deduction and offset
21authorized in this Section. Any participant or annuitant may
22authorize the board to deduct from disability benefits or
23annuities, premiums due under any group hospital-surgical
24insurance program which is sponsored or approved by any
25employer; however, the deductions from disability benefits may
26not begin prior to 6 months after the disability occurs.

 

 

SB0662- 64 -LRB100 06396 RPS 16435 b

1    A person receiving an annuity or benefit under this Article
2may also authorize withholding from that annuity or benefit for
3the purposes enumerated in and in accordance with the
4provisions of the State Salary and Annuity Withholding Act.
5    This Section is not intended to, and does not, affect the
6calculation of any benefit under this Article or dictate how or
7to what extent employee or employer contributions are to be
8taken into account in calculating benefits. This amendatory Act
9of the 91st General Assembly is a clarification of existing law
10and applies to every participant and annuitant without regard
11to whether status as an employee terminates before the
12effective date of this amendatory Act.
13    Public Act 86-273 is a clarification of existing law and
14shall be applicable to every participant and annuitant without
15regard to whether status as an employee terminates before the
16effective date of that Act.
17(Source: P.A. 90-65, eff. 7-7-97; 90-448, eff. 8-16-97; 90-511,
18eff. 8-22-97; 90-655, eff. 7-30-98; 91-887, eff. 7-6-00.)
 
19    (40 ILCS 5/15-185.5 new)
20    Sec. 15-185.5. Pension buyout option.
21    (a) As used in this Section:
22        "Approved vendor" means a vendor that has entered into
23    a contract with the Department of Central Management
24    Services to provide lump sum payments under this Section.
25        "Eligible retiree" means a person who (i) has made the

 

 

SB0662- 65 -LRB100 06396 RPS 16435 b

1    election to receive a retirement annuity; (ii) is eligible
2    to receive a retirement annuity; (iii) has terminated
3    service; (iv) is not subject to a QILDRO under this
4    Article; (v) is not a participant in the self-managed plan;
5    and (vi) has received at least the minimum amount of
6    certified financial planning services, in accordance with
7    rules adopted by the Department of Central Management
8    Services, provided by the approved vendor.
9        "Pension buyout option" means a plan that authorizes an
10    eligible retiree to relinquish all rights and benefits
11    under this Article and this Code (to the extent that the
12    provisions of this Code relate to benefits under this
13    Article), including, but not limited to, a survivor's
14    annuity, a retirement annuity, and a refund of
15    contributions, and shall be deemed to have no service
16    credit established under this Article in exchange for a
17    lump sum payment equal to the present value of the
18    retirement annuity as calculated by the System using the
19    actuarial tables and other assumptions adopted by the
20    Board.
21        "Standardized form contract" means the contract
22    approved by the System in accordance with subsection (c).
23    (b) In the event that the Department of Central Management
24Services enters into a contract with an approved vendor and
25implements a pension buyout option:
26        (1) An eligible retiree may make the election

 

 

SB0662- 66 -LRB100 06396 RPS 16435 b

1    authorized under this Section at any time after he or she
2    has elected to retire and has terminated service. However,
3    a retiree who has elected to proceed under the Retirement
4    Systems Reciprocal Act is not eligible to elect the pension
5    buyout option under this Section.
6        (2) An eligible retiree who wishes to participate in
7    the pension buyout option may request that the System
8    determine the dollar amount that the eligible retiree would
9    receive under the pension buyout option.
10        (3) After the System determines the dollar amount that
11    the eligible retiree would receive under the pension buyout
12    option, an eligible retiree who wishes to participate in
13    the pension buyout option shall do so by (i) notifying the
14    approved vendor and the System and (ii) executing the
15    standardized form contract with the approved vendor. As
16    soon as practical after the execution of the standardized
17    form contract, the approved vendor shall notify the System
18    that the eligible retiree executed the standardized form
19    contract. The System shall adopt rules concerning the
20    notice requirements.
21        (4) On the first day of the month following the
22    execution of the standardized form contract between the
23    approved vendor and the eligible retiree, the eligible
24    retiree shall have no rights or benefits under this Article
25    and this Code (to the extent that the provisions of this
26    Code relate to the eligible retiree's rights under this

 

 

SB0662- 67 -LRB100 06396 RPS 16435 b

1    Article) and shall be deemed to have no service credit
2    established under this Article. However, an eligible
3    retiree who receives a pension buyout payment under this
4    Section shall be deemed to be an annuitant for the purposes
5    of the State Employees Group Insurance Act of 1971 and
6    shall be entitled to any benefits under the State Employees
7    Group Insurance Act of 1971 that he or she would have
8    otherwise been entitled to.
9    (c) The System shall approve a standardized form contract.
10The System may by rule specify provisions that must be included
11in the standardized form contract.
12    (d) Any reduction in the System's liability arising from
13the pension buyout option shall not be included in the
14calculation or certification of required State contributions
15sooner than the next certification following the exercise of
16the pension buyout option. The calculation of required State
17contributions under this Article shall not include any
18reduction in the System's liability due to any anticipated
19pension buyout under this Section that have not yet been made.
20    (e) In accordance with rules adopted by the Department of
21Central Management Services, the Board shall certify to the
22Department of Central Management Services the amount of lump
23sum payments made under this Section by an approved vendor.
24    (f) The Board shall adopt rules necessary to implement this
25Section.
26    (g) No provision of this Section shall be interpreted in a

 

 

SB0662- 68 -LRB100 06396 RPS 16435 b

1way that would cause the applicable System to cease to be a
2qualified plan under the Internal Revenue Code of 1986.
 
3    (40 ILCS 5/16-190)  (from Ch. 108 1/2, par. 16-190)
4    Sec. 16-190. Annuities, etc., - exempt. The right of a
5person to a retirement annuity or other benefit, to the return
6of contributions, the retirement annuity or other benefit
7itself, any optional benefit, any other right accrued or
8accruing to any person under the provisions of this Article,
9and the moneys in the fund created by this Article, shall be
10subject neither to attachment, garnishment, execution, or
11other seizure by process, nor to sale, pledge, mortgage or
12other alienation, and shall not be assignable except as in this
13Article provided. However, a person may relinquish his or her
14creditable service under this Article and all rights arising
15from his or her service under this Article in accordance with
16Section 16-190.5. A person receiving an annuity or benefit may
17authorize withholding from such annuity or benefit for the
18purposes enumerated in the "State Salary and Annuity
19Withholding Act", approved August 21, 1961, as now or hereafter
20amended. The moneys in the fund are exempt from any state or
21municipal tax.
22(Source: P.A. 83-1440.)
 
23    (40 ILCS 5/16-190.5 new)
24    Sec. 16-190.5. Pension buyout option.

 

 

SB0662- 69 -LRB100 06396 RPS 16435 b

1    (a) As used in this Section:
2        "Approved vendor" means a vendor that has entered into
3    a contract with the Department of Central Management
4    Services to provide lump sum payments under this Section.
5        "Eligible retiree" means a person who (i) has made the
6    election to receive a retirement annuity; (ii) is eligible
7    to receive a retirement annuity; (iii) has terminated
8    service; (iv) is not subject to a QILDRO under this
9    Article; and (v) has received at least the minimum amount
10    of certified financial planning services, in accordance
11    with rules adopted by the Department of Central Management
12    Services, provided by the approved vendor.
13        "Pension buyout option" means a plan that authorizes an
14    eligible retiree to relinquish all rights and benefits
15    under this Article and this Code (to the extent that the
16    provisions of this Code relate to benefits under this
17    Article), including, but not limited to, a survivor's
18    annuity, a retirement annuity, and a refund of
19    contributions, and shall be deemed to have no service
20    credit established under this Article in exchange for a
21    lump sum payment equal to the present value of the
22    retirement annuity as calculated by the System using the
23    actuarial tables and other assumptions adopted by the
24    Board.
25        "Standardized form contract" means the contract
26    approved by the System in accordance with subsection (c).

 

 

SB0662- 70 -LRB100 06396 RPS 16435 b

1    (b) In the event that the Department of Central Management
2Services enters into a contract with an approved vendor and
3implements a pension buyout option:
4        (1) An eligible retiree may make the election
5    authorized under this Section at any time after he or she
6    has elected to retire and has terminated service. However,
7    a retiree who has elected to proceed under the Retirement
8    Systems Reciprocal Act is not eligible to elect the pension
9    buyout option under this Section.
10        (2) An eligible retiree who wishes to participate in
11    the pension buyout option may request that the System
12    determine the dollar amount that the eligible retiree would
13    receive under the pension buyout option.
14        (3) After the System determines the dollar amount that
15    the eligible retiree would receive under the pension buyout
16    option, an eligible retiree who wishes to participate in
17    the pension buyout option shall do so by (i) notifying the
18    approved vendor and the System and (ii) executing the
19    standardized form contract with the approved vendor. As
20    soon as practical after the execution of the standardized
21    form contract, the approved vendor shall notify the System
22    that the eligible retiree executed the standardized form
23    contract. The System shall adopt rules concerning the
24    notice requirements.
25        (4) On the first day of the month following the
26    execution of the standardized form contract between the

 

 

SB0662- 71 -LRB100 06396 RPS 16435 b

1    approved vendor and the eligible retiree, the eligible
2    retiree shall have no rights or benefits under this Article
3    and this Code (to the extent that the provisions of this
4    Code relate to the eligible retiree's rights under this
5    Article) and shall be deemed to have no service credit
6    established under this Article. However, an eligible
7    retiree who receives a pension buyout payment under this
8    Section shall be deemed to be an annuitant for the purposes
9    of the State Employees Group Insurance Act of 1971 and
10    shall be entitled to any benefits under the State Employees
11    Group Insurance Act of 1971 that he or she would have
12    otherwise been entitled to.
13    (c) The System shall approve a standardized form contract.
14The System may by rule specify provisions that must be included
15in the standardized form contract.
16    (d) Any reduction in the System's liability arising from
17the pension buyout option shall not be included in the
18calculation or certification of required State contributions
19sooner than the next certification following the exercise of
20the pension buyout option. The calculation of required State
21contributions under this Article shall not include any
22reduction in the System's liability due to any anticipated
23pension buyout under this Section that has not yet been made.
24    (e) In accordance with rules adopted by the Department of
25Central Management Services, the Board shall certify to the
26Department of Central Management Services the amount of lump

 

 

SB0662- 72 -LRB100 06396 RPS 16435 b

1sum payments made under this Section by an approved vendor.
2    (f) The Board shall adopt rules necessary to implement this
3Section.
4    (g) No provision of this Section shall be interpreted in a
5way that would cause the System to cease to be a qualified plan
6under the Internal Revenue Code of 1986.
 
7    (40 ILCS 5/18-161)  (from Ch. 108 1/2, par. 18-161)
8    Sec. 18-161. Annuities, etc. - exempt. Except as provided
9in this Article, all moneys in the fund created by this
10Article, and all securities and other property of the System,
11and all annuities and other benefits payable under this
12Article, and all accumulated contributions and other credits of
13participants in this System, and the right of any person to
14receive an annuity or other benefit under this Article, or a
15refund or return of contributions, shall not be subject to
16judgment, execution, garnishment, attachment, or other seizure
17by process, in bankruptcy or otherwise, nor to sale, pledge,
18mortgage or other alienation, and shall not be assignable.
19However, a person may relinquish his or her creditable service
20under this Article and all rights arising from his or her
21service under this Article in accordance with Section 18-161.5.
22A person receiving an annuity or benefit, or refund or return
23of contributions, may authorize withholding from such annuity,
24benefit, refund or return of contributions in accordance with
25the provisions of the "State Salary and Annuity Withholding

 

 

SB0662- 73 -LRB100 06396 RPS 16435 b

1Act", approved August 21, 1961, as now or hereafter amended.
2    The General Assembly finds and declares that the amendment
3to this Section made by this amendatory Act of 1989 is a
4clarification of existing law, and an indication of its
5previous intent in enacting and amending this Section.
6Notwithstanding Section 1-103.1, application of this amendment
7shall not be limited to persons in service on or after the
8effective date of this amendatory Act of 1989.
9(Source: P.A. 86-273.)
 
10    (40 ILCS 5/18-161.5 new)
11    Sec. 18-161.5. Pension buyout option.
12    (a) As used in this Section:
13        "Approved vendor" means a vendor that has entered into
14    a contract with the Department of Central Management
15    Services to provide lump sum payments under this Section.
16        "Eligible retiree" means a person who (i) has made the
17    election to receive a retirement annuity; (ii) is eligible
18    to receive a retirement annuity; (iii) has terminated
19    service; (iv) is not subject to a QILDRO under this
20    Article; and (v) has received at least the minimum amount
21    of certified financial planning services, in accordance
22    with rules adopted by the Department of Central Management
23    Services, provided by the approved vendor.
24        "Pension buyout option" means a plan that authorizes an
25    eligible retiree to relinquish all rights and benefits

 

 

SB0662- 74 -LRB100 06396 RPS 16435 b

1    under this Article and this Code (to the extent that the
2    provisions of this Code relate to benefits under this
3    Article), including, but not limited to, a survivor's
4    annuity, a retirement annuity, and a refund of
5    contributions, and shall be deemed to have no service
6    credit established under this Article in exchange for a
7    lump sum payment equal to the present value of the
8    retirement annuity as calculated by the System using the
9    actuarial tables and other assumptions adopted by the
10    Board.
11        "Standardized form contract" means the contract
12    approved by the System in accordance with subsection (c).
13    (b) In the event that the Department of Central Management
14Services enters into a contract with an approved vendor and
15implements a pension buyout option:
16        (1) An eligible retiree may make the election
17    authorized under this Section at any time after he or she
18    has elected to retire and has terminated service. However,
19    a retiree who has elected to proceed under the Retirement
20    Systems Reciprocal Act is not eligible to elect the pension
21    buyout option under this Section.
22        (2) An eligible retiree who wishes to participate in
23    the pension buyout option may request that the System
24    determine the dollar amount that the eligible retiree would
25    receive under the pension buyout option.
26        (3) After the System determines the dollar amount that

 

 

SB0662- 75 -LRB100 06396 RPS 16435 b

1    the eligible retiree would receive under the pension buyout
2    option, an eligible retiree who wishes to participate in
3    the pension buyout option shall do so by (i) notifying the
4    approved vendor and the System and (ii) executing the
5    standardized form contract with the approved vendor. As
6    soon as practical after the execution of the standardized
7    form contract, the approved vendor shall notify the System
8    that the eligible retiree executed the standardized form
9    contract. The System shall adopt rules concerning the
10    notice requirements.
11        (4) On the first day of the month following the
12    execution of the standardized form contract between the
13    approved vendor and the eligible retiree, the eligible
14    retiree shall have no rights or benefits under this Article
15    and this Code (to the extent that the provisions of this
16    Code relate to the eligible retiree's rights under this
17    Article) and shall be deemed to have no service credit
18    established under this Article. However, an eligible
19    retiree who receives a pension buyout payment under this
20    Section shall be deemed to be an annuitant for the purposes
21    of the State Employees Group Insurance Act of 1971 and
22    shall be entitled to any benefits under the State Employees
23    Group Insurance Act of 1971 that he or she would have
24    otherwise been entitled to.
25    (c) The System shall approve a standardized form contract.
26The System may by rule specify provisions that must be included

 

 

SB0662- 76 -LRB100 06396 RPS 16435 b

1in the standardized form contract.
2    (d) Any reduction in the System's liability arising from
3the pension buyout option shall not be included in the
4calculation or certification of required State contributions
5sooner than the next certification following the exercise of
6the pension buyout option. The calculation of required State
7contributions under this Article shall not include any
8reduction in the System's liability due to any anticipated
9pension buyout under this Section that has not yet been made.
10    (e) In accordance with rules adopted by the Department of
11Central Management Services, the Board shall certify to the
12Department of Central Management Services the amount of lump
13sum payments made under this Section by an approved vendor.
14    (f) The Board shall adopt rules necessary to implement this
15Section.
16    (g) No provision of this Section shall be interpreted in a
17way that would cause the System to cease to be a qualified plan
18under the Internal Revenue Code of 1986.
 
19    Section 999. Effective date. This Act takes effect July 1,
202018.

 

 

SB0662- 77 -LRB100 06396 RPS 16435 b

1 INDEX
2 Statutes amended in order of appearance
3    New Act
4    5 ILCS 375/3from Ch. 127, par. 523
5    5 ILCS 375/10from Ch. 127, par. 530
6    20 ILCS 405/405-298 new
7    20 ILCS 3501/801-40
8    30 ILCS 500/45-32 new
9    40 ILCS 5/2-154from Ch. 108 1/2, par. 2-154
10    40 ILCS 5/2-154.5 new
11    40 ILCS 5/14-147from Ch. 108 1/2, par. 14-147
12    40 ILCS 5/14-147.5 new
13    40 ILCS 5/15-185from Ch. 108 1/2, par. 15-185
14    40 ILCS 5/15-185.5 new
15    40 ILCS 5/16-190from Ch. 108 1/2, par. 16-190
16    40 ILCS 5/16-190.5 new
17    40 ILCS 5/18-161from Ch. 108 1/2, par. 18-161
18    40 ILCS 5/18-161.5 new