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Full Text of HB3076  97th General Assembly

HB3076sam004 97TH GENERAL ASSEMBLY

Sen. Christine Radogno

Filed: 5/30/2012

 

 


 

 


 
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1
AMENDMENT TO HOUSE BILL 3076

2    AMENDMENT NO. ______. Amend House Bill 3076, AS AMENDED,
3with reference to page and line numbers of House Amendment No.
42, as follows:
 
5on page 25, line 13, by changing "15-155.1, 15-155.2," to "and
615-155.1,"; and
 
7on page 25, line 14, by deleting "and"; and
 
8by replacing page 125, line 21, through page 142, line 17, with
9the following:
 
10    "(40 ILCS 5/15-155)  (from Ch. 108 1/2, par. 15-155)
11    Sec. 15-155. Employer contributions.
12    (a) Except as otherwise provided in this Section, the The
13State of Illinois shall make contributions by appropriations of
14amounts which, together with the other employer contributions

 

 

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1from trust, federal, and other funds, employee contributions,
2income from investments, and other income of this System, will
3be sufficient to meet the cost of maintaining and administering
4the System on a 90% funded basis in accordance with actuarial
5recommendations.
6    The Board shall determine the amount of State contributions
7required for each fiscal year on the basis of the actuarial
8tables and other assumptions adopted by the Board and the
9recommendations of the actuary, using the formula in subsection
10(a-1).
11    (a-1) Except as provided in subsection (b-5), for For State
12fiscal years 2012 through 2045, the minimum contribution to the
13System to be made by the State for each fiscal year shall be an
14amount determined by the System to be sufficient to bring the
15total assets of the System up to 90% of the total actuarial
16liabilities of the System by the end of State fiscal year 2045.
17In making these determinations, the required State
18contribution shall be calculated each year as a level
19percentage of payroll over the years remaining to and including
20fiscal year 2045 and shall be determined under the projected
21unit credit actuarial cost method.
22    For State fiscal years 1996 through 2005, the State
23contribution to the System, as a percentage of the applicable
24employee payroll, shall be increased in equal annual increments
25so that by State fiscal year 2011, the State is contributing at
26the rate required under this Section.

 

 

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1    Notwithstanding any other provision of this Article, the
2total required State contribution for State fiscal year 2006 is
3$166,641,900.
4    Notwithstanding any other provision of this Article, the
5total required State contribution for State fiscal year 2007 is
6$252,064,100.
7    For each of State fiscal years 2008 through 2009, the State
8contribution to the System, as a percentage of the applicable
9employee payroll, shall be increased in equal annual increments
10from the required State contribution for State fiscal year
112007, so that by State fiscal year 2011, the State is
12contributing at the rate otherwise required under this Section.
13    Notwithstanding any other provision of this Article, the
14total required State contribution for State fiscal year 2010 is
15$702,514,000 and shall be made from the State Pensions Fund and
16proceeds of bonds sold in fiscal year 2010 pursuant to Section
177.2 of the General Obligation Bond Act, less (i) the pro rata
18share of bond sale expenses determined by the System's share of
19total bond proceeds, (ii) any amounts received from the General
20Revenue Fund in fiscal year 2010, (iii) any reduction in bond
21proceeds due to the issuance of discounted bonds, if
22applicable.
23    Notwithstanding any other provision of this Article, the
24total required State contribution for State fiscal year 2011 is
25the amount recertified by the System on or before April 1, 2011
26pursuant to Section 15-165 and shall be made from the State

 

 

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1Pensions Fund and proceeds of bonds sold in fiscal year 2011
2pursuant to Section 7.2 of the General Obligation Bond Act,
3less (i) the pro rata share of bond sale expenses determined by
4the System's share of total bond proceeds, (ii) any amounts
5received from the General Revenue Fund in fiscal year 2011, and
6(iii) any reduction in bond proceeds due to the issuance of
7discounted bonds, if applicable.
8    Except as provided in subsection (b-5), beginning
9Beginning in State fiscal year 2046, the minimum State
10contribution for each fiscal year shall be the amount needed to
11maintain the total assets of the System at 90% of the total
12actuarial liabilities of the System.
13    Amounts received by the System pursuant to Section 25 of
14the Budget Stabilization Act or Section 8.12 of the State
15Finance Act in any fiscal year do not reduce and do not
16constitute payment of any portion of the minimum State
17contribution required under this Article in that fiscal year.
18Such amounts shall not reduce, and shall not be included in the
19calculation of, the required State contributions under this
20Article in any future year until the System has reached a
21funding ratio of at least 90%. A reference in this Article to
22the "required State contribution" or any substantially similar
23term does not include or apply to any amounts payable to the
24System under Section 25 of the Budget Stabilization Act.
25    Notwithstanding any other provision of this Section, the
26required State contribution for State fiscal year 2005 and for

 

 

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1fiscal year 2008 and each fiscal year thereafter, as calculated
2under this Section and certified under Section 15-165, shall
3not exceed an amount equal to (i) the amount of the required
4State contribution that would have been calculated under this
5Section for that fiscal year if the System had not received any
6payments under subsection (d) of Section 7.2 of the General
7Obligation Bond Act, minus (ii) the portion of the State's
8total debt service payments for that fiscal year on the bonds
9issued in fiscal year 2003 for the purposes of that Section
107.2, as determined and certified by the Comptroller, that is
11the same as the System's portion of the total moneys
12distributed under subsection (d) of Section 7.2 of the General
13Obligation Bond Act. In determining this maximum for State
14fiscal years 2008 through 2010, however, the amount referred to
15in item (i) shall be increased, as a percentage of the
16applicable employee payroll, in equal increments calculated
17from the sum of the required State contribution for State
18fiscal year 2007 plus the applicable portion of the State's
19total debt service payments for fiscal year 2007 on the bonds
20issued in fiscal year 2003 for the purposes of Section 7.2 of
21the General Obligation Bond Act, so that, by State fiscal year
222011, the State is contributing at the rate otherwise required
23under this Section.
24    (a-5) On or before November 1 of each year, beginning
25November 1, 2012, the Board shall submit to the State Actuary a
26proposed certification of the amount of the required State

 

 

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1contribution to the System for the next fiscal year, along with
2all of the actuarial assumptions, calculations, and data upon
3which that proposed certification is based. On or before
4January 1 of each year beginning January 1, 2013, the State
5Actuary shall issue a preliminary report concerning the
6proposed certification and identifying, if necessary,
7recommended changes in actuarial assumptions that the Board
8must consider before finalizing its certification of the
9required State contributions. On or before January 15, 2013 and
10each January 15 thereafter, the Board shall certify to the
11Governor and the General Assembly the amount of the required
12State contribution for the next fiscal year. The Board's
13certification must note any deviations from the State Actuary's
14recommended changes, the reason or reasons for not following
15the State Actuary's recommended changes, and the fiscal impact
16of not following the State Actuary's recommended changes on the
17required State contribution.
18    (b) If an employee is paid from trust or federal funds, the
19employer shall pay to the Board contributions from those funds
20which are sufficient to cover the accruing normal costs on
21behalf of the employee. However, universities having employees
22who are compensated out of local auxiliary funds, income funds,
23or service enterprise funds are not required to pay such
24contributions on behalf of those employees. The local auxiliary
25funds, income funds, and service enterprise funds of
26universities shall not be considered trust funds for the

 

 

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1purpose of this Article, but funds of alumni associations,
2foundations, and athletic associations which are affiliated
3with the universities included as employers under this Article
4and other employers which do not receive State appropriations
5are considered to be trust funds for the purpose of this
6Article.
7    (b-1) The City of Urbana and the City of Champaign shall
8each make employer contributions to this System for their
9respective firefighter employees who participate in this
10System pursuant to subsection (h) of Section 15-107. The rate
11of contributions to be made by those municipalities shall be
12determined annually by the Board on the basis of the actuarial
13assumptions adopted by the Board and the recommendations of the
14actuary, and shall be expressed as a percentage of salary for
15each such employee. The Board shall certify the rate to the
16affected municipalities as soon as may be practical. The
17employer contributions required under this subsection shall be
18remitted by the municipality to the System at the same time and
19in the same manner as employee contributions.
20    (b-5) If at least 50% of Tier I employees making an
21election under Section 15-134.6 before June 1, 2013 choose the
22option under paragraph (1) of subsection (a) of that Section,
23then:
24        (1) In lieu of the State contributions required under
25    subsection (a-1), for State fiscal years 2014 through 2043
26    the minimum contribution to the System to be made by the

 

 

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1    State for each fiscal year shall be an amount determined by
2    the System to be equal to the sum of (1) the State's
3    portion of the projected normal cost for that fiscal year,
4    plus (2) an amount sufficient to bring the total assets of
5    the System up to 100% of the total actuarial liabilities of
6    the System by the end of State fiscal year 2043. In making
7    these determinations, the required State contribution
8    shall be calculated each year as a level percentage of
9    payroll over the years remaining to and including fiscal
10    year 2043 and shall be determined under the projected unit
11    credit actuarial cost method.
12        (2) Beginning in State fiscal year 2044, the minimum
13    State contribution for each fiscal year shall be the amount
14    needed to maintain the total assets of the System at 100%
15    of the total actuarial liabilities of the System.
16    (b-6) If less than 50% of Tier I employees making an
17election under Section 15-134.6 before June 1, 2013 choose the
18option under paragraph (1) of subsection (a) of that Section,
19then:
20        (1) Instead of the annual required contribution
21    otherwise specified in subsection (b-5) of this Section,
22    the annual required contribution to the System to be made
23    by the State shall be determined under subsection (a-1) of
24    this Section.
25        (2) As soon as possible after June 1, 2014, the Board
26    shall recertify the annual required contribution by the

 

 

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1    State for State fiscal year 2015.
2    (c) Through State fiscal year 1995: The total employer
3contribution shall be apportioned among the various funds of
4the State and other employers, whether trust, federal, or other
5funds, in accordance with actuarial procedures approved by the
6Board. State of Illinois contributions for employers receiving
7State appropriations for personal services shall be payable
8from appropriations made to the employers or to the System. The
9contributions for Class I community colleges covering earnings
10other than those paid from trust and federal funds, shall be
11payable solely from appropriations to the Illinois Community
12College Board or the System for employer contributions.
13    (d) Beginning in State fiscal year 1996, the required State
14contributions to the System shall be appropriated directly to
15the System and shall be payable through vouchers issued in
16accordance with subsection (c) of Section 15-165, except as
17provided in subsection (g).
18    (e) The State Comptroller shall draw warrants payable to
19the System upon proper certification by the System or by the
20employer in accordance with the appropriation laws and this
21Code.
22    (f) Normal costs under this Section means liability for
23pensions and other benefits which accrues to the System because
24of the credits earned for service rendered by the participants
25during the fiscal year and expenses of administering the
26System, but shall not include the principal of or any

 

 

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

 

 

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1specify in detail the grounds of the dispute and, if the
2employer asserts that the calculation is subject to subsection
3(h) or (i) of this Section, must include an affidavit setting
4forth and attesting to all facts within the employer's
5knowledge that are pertinent to the applicability of subsection
6(h) or (i). Upon receiving a timely application for
7recalculation, the System shall review the application and, if
8appropriate, recalculate the amount due.
9    The employer contributions required under this subsection
10(g) (f) may be paid in the form of a lump sum within 90 days
11after receipt of the bill. If the employer contributions are
12not paid within 90 days after receipt of the bill, then
13interest will be charged at a rate equal to the System's annual
14actuarially assumed rate of return on investment compounded
15annually from the 91st day after receipt of the bill. Payments
16must be concluded within 3 years after the employer's receipt
17of the bill.
18    (h) This subsection (h) applies only to payments made or
19salary increases given on or after June 1, 2005 but before July
201, 2011. The changes made by Public Act 94-1057 shall not
21require the System to refund any payments received before July
2231, 2006 (the effective date of Public Act 94-1057).
23    When assessing payment for any amount due under subsection
24(g), the System shall exclude earnings increases paid to
25participants under contracts or collective bargaining
26agreements entered into, amended, or renewed before June 1,

 

 

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12005.
2    When assessing payment for any amount due under subsection
3(g), the System shall exclude earnings increases paid to a
4participant at a time when the participant is 10 or more years
5from retirement eligibility under Section 15-135.
6    When assessing payment for any amount due under subsection
7(g), the System shall exclude earnings increases resulting from
8overload work, including a contract for summer teaching, or
9overtime when the employer has certified to the System, and the
10System has approved the certification, that: (i) in the case of
11overloads (A) the overload work is for the sole purpose of
12academic instruction in excess of the standard number of
13instruction hours for a full-time employee occurring during the
14academic year that the overload is paid and (B) the earnings
15increases are equal to or less than the rate of pay for
16academic instruction computed using the participant's current
17salary rate and work schedule; and (ii) in the case of
18overtime, the overtime was necessary for the educational
19mission.
20    When assessing payment for any amount due under subsection
21(g), the System shall exclude any earnings increase resulting
22from (i) a promotion for which the employee moves from one
23classification to a higher classification under the State
24Universities Civil Service System, (ii) a promotion in academic
25rank for a tenured or tenure-track faculty position, or (iii) a
26promotion that the Illinois Community College Board has

 

 

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

 

 

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

 

 

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1assets shall be equal to the market value of the assets as of
2that date. In determining the actuarial value of the System's
3assets for fiscal years after June 30, 2008, any actuarial
4gains or losses from investment return incurred in a fiscal
5year shall be recognized in equal annual amounts over the
65-year period following that fiscal year.
7    (m) For purposes of determining the required State
8contribution to the system for a particular year, the actuarial
9value of assets shall be assumed to earn a rate of return equal
10to the system's actuarially assumed rate of return.
11(Source: P.A. 95-331, eff. 8-21-07; 95-950, eff. 8-29-08;
1296-43, eff. 7-15-09; 96-1497, eff. 1-14-11; 96-1511, eff.
131-27-11; 96-1554, eff. 3-18-11; revised 4-6-11.)"; and
 
14by deleting page 144, line 4, through page 145, line 22; and
 
15by replacing page 180, line 25, through page 201, line 20, with
16the following:
 
17    "(40 ILCS 5/16-158)   (from Ch. 108 1/2, par. 16-158)
18    Sec. 16-158. Contributions by State and other employing
19units.
20    (a) The State shall make contributions to the System by
21means of appropriations from the Common School Fund and other
22State funds of amounts which, together with other employer
23contributions, employee contributions, investment income, and

 

 

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1other income, will be sufficient to meet the cost of
2maintaining and administering the System on a 90% funded basis
3in accordance with actuarial recommendations.
4    The Board shall determine the amount of State contributions
5required for each fiscal year on the basis of the actuarial
6tables and other assumptions adopted by the Board and the
7recommendations of the actuary, using the formula in subsection
8(b-3).
9    (a-1) Annually, on or before November 15 until November 15,
102011, the Board shall certify to the Governor the amount of the
11required State contribution for the coming fiscal year. The
12certification under this subsection (a-1) shall include a copy
13of the actuarial recommendations upon which it is based.
14    On or before May 1, 2004, the Board shall recalculate and
15recertify to the Governor the amount of the required State
16contribution to the System for State fiscal year 2005, taking
17into account the amounts appropriated to and received by the
18System under subsection (d) of Section 7.2 of the General
19Obligation Bond Act.
20    On or before July 1, 2005 April 1, 2011, the Board shall
21recalculate and recertify to the Governor the amount of the
22required State contribution to the System for State fiscal year
232006, taking into account the changes in required State
24contributions made by this amendatory Act of the 94th General
25Assembly.
26    On or before April 1, 2011 June 15, 2010, the Board shall

 

 

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1recalculate and recertify to the Governor the amount of the
2required State contribution to the System for State fiscal year
32011, applying the changes made by Public Act 96-889 to the
4System's assets and liabilities as of June 30, 2009 as though
5Public Act 96-889 was approved on that date.
6    (a-5) On or before November 1 of each year, beginning
7November 1, 2012, the Board shall submit to the State Actuary,
8the Governor, and the General Assembly a proposed certification
9of the amount of the required State contribution to the System
10for the next fiscal year, along with all of the actuarial
11assumptions, calculations, and data upon which that proposed
12certification is based. On or before January 1 of each year,
13beginning January 1, 2013, the State Actuary shall issue a
14preliminary report concerning the proposed certification and
15identifying, if necessary, recommended changes in actuarial
16assumptions that the Board must consider before finalizing its
17certification of the required State contributions. On or before
18January 15, 2013 and each January 15 thereafter, the Board
19shall certify to the Governor and the General Assembly the
20amount of the required State contribution for the next fiscal
21year. The Board's certification must note any deviations from
22the State Actuary's recommended changes, the reason or reasons
23for not following the State Actuary's recommended changes, and
24the fiscal impact of not following the State Actuary's
25recommended changes on the required State contribution.
26    (b) Through State fiscal year 1995, the State contributions

 

 

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1shall be paid to the System in accordance with Section 18-7 of
2the School Code.
3    (b-1) Beginning in State fiscal year 1996, on the 15th day
4of each month, or as soon thereafter as may be practicable, the
5Board shall submit vouchers for payment of State contributions
6to the System, in a total monthly amount of one-twelfth of the
7required annual State contribution certified under subsection
8(a-1). From the effective date of this amendatory Act of the
993rd General Assembly through June 30, 2004, the Board shall
10not submit vouchers for the remainder of fiscal year 2004 in
11excess of the fiscal year 2004 certified contribution amount
12determined under this Section after taking into consideration
13the transfer to the System under subsection (a) of Section
146z-61 of the State Finance Act. These vouchers shall be paid by
15the State Comptroller and Treasurer by warrants drawn on the
16funds appropriated to the System for that fiscal year.
17    If in any month the amount remaining unexpended from all
18other appropriations to the System for the applicable fiscal
19year (including the appropriations to the System under Section
208.12 of the State Finance Act and Section 1 of the State
21Pension Funds Continuing Appropriation Act) is less than the
22amount lawfully vouchered under this subsection, the
23difference shall be paid from the Common School Fund under the
24continuing appropriation authority provided in Section 1.1 of
25the State Pension Funds Continuing Appropriation Act.
26    (b-2) Allocations from the Common School Fund apportioned

 

 

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1to school districts not coming under this System shall not be
2diminished or affected by the provisions of this Article.
3    (b-3) For State fiscal years 2012 through 2045, the minimum
4contribution to the System to be made by the State for each
5fiscal year shall be an amount determined by the System to be
6sufficient to bring the total assets of the System up to 90% of
7the total actuarial liabilities of the System by the end of
8State fiscal year 2045. In making these determinations, the
9required State contribution shall be calculated each year as a
10level percentage of payroll over the years remaining to and
11including fiscal year 2045 and shall be determined under the
12projected unit credit actuarial cost method.
13    For State fiscal years 1996 through 2005, the State
14contribution to the System, as a percentage of the applicable
15employee payroll, shall be increased in equal annual increments
16so that by State fiscal year 2011, the State is contributing at
17the rate required under this Section; except that in the
18following specified State fiscal years, the State contribution
19to the System shall not be less than the following indicated
20percentages of the applicable employee payroll, even if the
21indicated percentage will produce a State contribution in
22excess of the amount otherwise required under this subsection
23and subsection (a), and notwithstanding any contrary
24certification made under subsection (a-1) before the effective
25date of this amendatory Act of 1998: 10.02% in FY 1999; 10.77%
26in FY 2000; 11.47% in FY 2001; 12.16% in FY 2002; 12.86% in FY

 

 

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12003; and 13.56% in FY 2004.
2    Notwithstanding any other provision of this Article, the
3total required State contribution for State fiscal year 2006 is
4$534,627,700.
5    Notwithstanding any other provision of this Article, the
6total required State contribution for State fiscal year 2007 is
7$738,014,500.
8    For each of State fiscal years 2008 through 2009, the State
9contribution to the System, as a percentage of the applicable
10employee payroll, shall be increased in equal annual increments
11from the required State contribution for State fiscal year
122007, so that by State fiscal year 2011, the State is
13contributing at the rate otherwise required under this Section.
14    Notwithstanding any other provision of this Article, the
15total required State contribution for State fiscal year 2010 is
16$2,089,268,000 and shall be made from the proceeds of bonds
17sold in fiscal year 2010 pursuant to Section 7.2 of the General
18Obligation Bond Act, less (i) the pro rata share of bond sale
19expenses determined by the System's share of total bond
20proceeds, (ii) any amounts received from the Common School Fund
21in fiscal year 2010, and (iii) any reduction in bond proceeds
22due to the issuance of discounted bonds, if applicable.
23    Notwithstanding any other provision of this Article, the
24total required State contribution for State fiscal year 2011 is
25the amount recertified by the System on or before April 1, 2011
26pursuant to subsection (a-1) of this Section and shall be made

 

 

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

 

 

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1term does not include or apply to any amounts payable to the
2System under Section 25 of the Budget Stabilization Act.
3    Notwithstanding any other provision of this Section, the
4required State contribution for State fiscal year 2005 and for
5fiscal year 2008 and each fiscal year thereafter, as calculated
6under this Section and certified under subsection (a-1), shall
7not exceed an amount equal to (i) the amount of the required
8State contribution that would have been calculated under this
9Section for that fiscal year if the System had not received any
10payments under subsection (d) of Section 7.2 of the General
11Obligation Bond Act, minus (ii) the portion of the State's
12total debt service payments for that fiscal year on the bonds
13issued in fiscal year 2003 for the purposes of that Section
147.2, as determined and certified by the Comptroller, that is
15the same as the System's portion of the total moneys
16distributed under subsection (d) of Section 7.2 of the General
17Obligation Bond Act. In determining this maximum for State
18fiscal years 2008 through 2010, however, the amount referred to
19in item (i) shall be increased, as a percentage of the
20applicable employee payroll, in equal increments calculated
21from the sum of the required State contribution for State
22fiscal year 2007 plus the applicable portion of the State's
23total debt service payments for fiscal year 2007 on the bonds
24issued in fiscal year 2003 for the purposes of Section 7.2 of
25the General Obligation Bond Act, so that, by State fiscal year
262011, the State is contributing at the rate otherwise required

 

 

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1under this Section.
2    (c) Payment of the required State contributions and of all
3pensions, retirement annuities, death benefits, refunds, and
4other benefits granted under or assumed by this System, and all
5expenses in connection with the administration and operation
6thereof, are obligations of the State.
7    If members are paid from special trust or federal funds
8which are administered by the employing unit, whether school
9district or other unit, the employing unit shall pay to the
10System from such funds the full accruing retirement costs based
11upon that service, as determined by the System. Employer
12contributions, based on salary paid to members from federal
13funds, may be forwarded by the distributing agency of the State
14of Illinois to the System prior to allocation, in an amount
15determined in accordance with guidelines established by such
16agency and the System.
17    (d) Effective July 1, 1986, any employer of a teacher as
18defined in paragraph (8) of Section 16-106 shall pay the
19employer's normal cost of benefits based upon the teacher's
20service, in addition to employee contributions, as determined
21by the System. Such employer contributions shall be forwarded
22monthly in accordance with guidelines established by the
23System.
24    However, with respect to benefits granted under Section
2516-133.4 or 16-133.5 to a teacher as defined in paragraph (8)
26of Section 16-106, the employer's contribution shall be 12%

 

 

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1(rather than 20%) of the member's highest annual salary rate
2for each year of creditable service granted, and the employer
3shall also pay the required employee contribution on behalf of
4the teacher. For the purposes of Sections 16-133.4 and
516-133.5, a teacher as defined in paragraph (8) of Section
616-106 who is serving in that capacity while on leave of
7absence from another employer under this Article shall not be
8considered an employee of the employer from which the teacher
9is on leave.
10    (e) Beginning July 1, 1998, every employer of a teacher
11shall pay to the System an employer contribution computed as
12follows:
13        (1) Beginning July 1, 1998 through June 30, 1999, the
14    employer contribution shall be equal to 0.3% of each
15    teacher's salary.
16        (2) Beginning July 1, 1999 and thereafter, the employer
17    contribution shall be equal to 0.58% of each teacher's
18    salary.
19The school district or other employing unit may pay these
20employer contributions out of any source of funding available
21for that purpose and shall forward the contributions to the
22System on the schedule established for the payment of member
23contributions.
24    These employer contributions are intended to offset a
25portion of the cost to the System of the increases in
26retirement benefits resulting from this amendatory Act of 1998.

 

 

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1    Each employer of teachers is entitled to a credit against
2the contributions required under this subsection (e) with
3respect to salaries paid to teachers for the period January 1,
42002 through June 30, 2003, equal to the amount paid by that
5employer under subsection (a-5) of Section 6.6 of the State
6Employees Group Insurance Act of 1971 with respect to salaries
7paid to teachers for that period.
8    The additional 1% employee contribution required under
9Section 16-152 by this amendatory Act of 1998 is the
10responsibility of the teacher and not the teacher's employer,
11unless the employer agrees, through collective bargaining or
12otherwise, to make the contribution on behalf of the teacher.
13    If an employer is required by a contract in effect on May
141, 1998 between the employer and an employee organization to
15pay, on behalf of all its full-time employees covered by this
16Article, all mandatory employee contributions required under
17this Article, then the employer shall be excused from paying
18the employer contribution required under this subsection (e)
19for the balance of the term of that contract. The employer and
20the employee organization shall jointly certify to the System
21the existence of the contractual requirement, in such form as
22the System may prescribe. This exclusion shall cease upon the
23termination, extension, or renewal of the contract at any time
24after May 1, 1998.
25    (f) If the amount of a teacher's salary for any school year
26used to determine final average salary exceeds the member's

 

 

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

 

 

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1due. If the employer disputes the amount of the bill, it may,
2within 30 days after receipt of the bill, apply to the System
3in writing for a recalculation. The application must specify in
4detail the grounds of the dispute and, if the employer asserts
5that the calculation is subject to subsection (g) or (h) of
6this Section, must include an affidavit setting forth and
7attesting to all facts within the employer's knowledge that are
8pertinent to the applicability of that subsection. Upon
9receiving a timely application for recalculation, the System
10shall review the application and, if appropriate, recalculate
11the amount due.
12    The employer contributions required under this subsection
13(f) may be paid in the form of a lump sum within 90 days after
14receipt of the bill. If the employer contributions are not paid
15within 90 days after receipt of the bill, then interest will be
16charged at a rate equal to the System's annual actuarially
17assumed rate of return on investment compounded annually from
18the 91st day after receipt of the bill. Payments must be
19concluded within 3 years after the employer's receipt of the
20bill.
21    (g) This subsection (g) applies only to payments made or
22salary increases given on or after June 1, 2005 but before July
231, 2011. The changes made by Public Act 94-1057 shall not
24require the System to refund any payments received before July
2531, 2006 (the effective date of Public Act 94-1057).
26    When assessing payment for any amount due under subsection

 

 

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1(f), the System shall exclude salary increases paid to teachers
2under contracts or collective bargaining agreements entered
3into, amended, or renewed before June 1, 2005.
4    When assessing payment for any amount due under subsection
5(f), the System shall exclude salary increases paid to a
6teacher at a time when the teacher is 10 or more years from
7retirement eligibility under Section 16-132 or 16-133.2.
8    When assessing payment for any amount due under subsection
9(f), the System shall exclude salary increases resulting from
10overload work, including summer school, when the school
11district has certified to the System, and the System has
12approved the certification, that (i) the overload work is for
13the sole purpose of classroom instruction in excess of the
14standard number of classes for a full-time teacher in a school
15district during a school year and (ii) the salary increases are
16equal to or less than the rate of pay for classroom instruction
17computed on the teacher's current salary and work schedule.
18    When assessing payment for any amount due under subsection
19(f), the System shall exclude a salary increase resulting from
20a promotion (i) for which the employee is required to hold a
21certificate or supervisory endorsement issued by the State
22Teacher Certification Board that is a different certification
23or supervisory endorsement than is required for the teacher's
24previous position and (ii) to a position that has existed and
25been filled by a member for no less than one complete academic
26year and the salary increase from the promotion is an increase

 

 

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1that results in an amount no greater than the lesser of the
2average salary paid for other similar positions in the district
3requiring the same certification or the amount stipulated in
4the collective bargaining agreement for a similar position
5requiring the same certification.
6    When assessing payment for any amount due under subsection
7(f), the System shall exclude any payment to the teacher from
8the State of Illinois or the State Board of Education over
9which the employer does not have discretion, notwithstanding
10that the payment is included in the computation of final
11average salary.
12    (h) When assessing payment for any amount due under
13subsection (f), the System shall exclude any salary increase
14described in subsection (g) of this Section given on or after
15July 1, 2011 but before July 1, 2014 under a contract or
16collective bargaining agreement entered into, amended, or
17renewed on or after June 1, 2005 but before July 1, 2011.
18Notwithstanding any other provision of this Section, any
19payments made or salary increases given after June 30, 2014
20shall be used in assessing payment for any amount due under
21subsection (f) of this Section.
22    (i) The System shall prepare a report and file copies of
23the report with the Governor and the General Assembly by
24January 1, 2007 that contains all of the following information:
25        (1) The number of recalculations required by the
26    changes made to this Section by Public Act 94-1057 for each

 

 

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1    employer.
2        (2) The dollar amount by which each employer's
3    contribution to the System was changed due to
4    recalculations required by Public Act 94-1057.
5        (3) The total amount the System received from each
6    employer as a result of the changes made to this Section by
7    Public Act 94-4.
8        (4) The increase in the required State contribution
9    resulting from the changes made to this Section by Public
10    Act 94-1057.
11    (j) For purposes of determining the required State
12contribution to the System, the value of the System's assets
13shall be equal to the actuarial value of the System's assets,
14which shall be calculated as follows:
15    As of June 30, 2008, the actuarial value of the System's
16assets shall be equal to the market value of the assets as of
17that date. In determining the actuarial value of the System's
18assets for fiscal years after June 30, 2008, any actuarial
19gains or losses from investment return incurred in a fiscal
20year shall be recognized in equal annual amounts over the
215-year period following that fiscal year.
22    (k) For purposes of determining the required State
23contribution to the system for a particular year, the actuarial
24value of assets shall be assumed to earn a rate of return equal
25to the system's actuarially assumed rate of return.
26(Source: P.A. 95-331, eff. 8-21-07; 95-950, eff. 8-29-08;

 

 

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196-43, eff. 7-15-09; 96-1497, eff. 1-14-11; 96-1511, eff.
21-27-11; 96-1554, eff. 3-18-11; revised 4-6-11.)".