Illinois General Assembly - Full Text of HB3474
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Full Text of HB3474  97th General Assembly

HB3474ham001 97TH GENERAL ASSEMBLY

Rep. Karen May

Filed: 3/9/2011

 

 


 

 


 
09700HB3474ham001LRB097 10961 JDS 52490 a

1
AMENDMENT TO HOUSE BILL 3474

2    AMENDMENT NO. ______. Amend House Bill 3474 by replacing
3everything after the enacting clause with the following:
 
4    "Section 5. The Illinois Pension Code is amended by
5changing Sections 7-116, 7-172, 7-205, 14-103.05, 22-101, and
622-103 and by adding Sections 1-160 and 1-161 as follows:
 
7    (40 ILCS 5/1-160)
8    Sec. 1-160. Provisions applicable to new hires.
9    (a) The provisions of this Section apply to a person who,
10on or after January 1, 2011, first becomes a member or a
11participant under any reciprocal retirement system or pension
12fund established under this Code, other than a retirement
13system or pension fund established under Article 2, 3, 4, 5, 6,
14or 18 of this Code, notwithstanding any other provision of this
15Code to the contrary, but do not apply to any self-managed plan
16established under this Code, to any person with respect to

 

 

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

 

 

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1    (b-5) Beginning on January 1, 2011, for all purposes under
2this Code (including without limitation the calculation of
3benefits and employee contributions), the annual earnings,
4salary, or wages (based on the plan year) of a member or
5participant to whom this Section applies shall not exceed
6$106,800; however, that amount shall annually thereafter be
7increased by the lesser of (i) 3% of that amount, including all
8previous adjustments, or (ii) one-half the annual unadjusted
9percentage increase (but not less than zero) in the consumer
10price index-u for the 12 months ending with the September
11preceding each November 1, including all previous adjustments.
12    For the purposes of this Section, "consumer price index-u"
13means the index published by the Bureau of Labor Statistics of
14the United States Department of Labor that measures the average
15change in prices of goods and services purchased by all urban
16consumers, United States city average, all items, 1982-84 =
17100. The new amount resulting from each annual adjustment shall
18be determined by the Public Pension Division of the Department
19of Insurance and made available to the boards of the retirement
20systems and pension funds by November 1 of each year.
21    (c) A member or participant is entitled to a retirement
22annuity upon written application if he or she has attained age
2367 and has at least 10 years of service credit and is otherwise
24eligible under the requirements of the applicable Article.
25    A member or participant who has attained age 62 and has at
26least 10 years of service credit and is otherwise eligible

 

 

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1under the requirements of the applicable Article may elect to
2receive the lower retirement annuity provided in subsection (d)
3of this Section.
4    (d) The retirement annuity of a member or participant who
5is retiring after attaining age 62 with at least 10 years of
6service credit shall be reduced by one-half of 1% for each full
7month that the member's age is under age 67.
8    (e) Any retirement annuity or supplemental annuity shall be
9subject to annual increases on the January 1 occurring either
10on or after the attainment of age 67 or the first anniversary
11of the annuity start date, whichever is later. Each annual
12increase shall be calculated at 3% or one-half the annual
13unadjusted percentage increase (but not less than zero) in the
14consumer price index-u for the 12 months ending with the
15September preceding each November 1, whichever is less, of the
16originally granted retirement annuity. If the annual
17unadjusted percentage change in the consumer price index-u for
18the 12 months ending with the September preceding each November
191 is zero or there is a decrease, then the annuity shall not be
20increased.
21    (f) The initial survivor's or widow's annuity of an
22otherwise eligible survivor or widow of a retired member or
23participant who first became a member or participant on or
24after January 1, 2011 shall be in the amount of 66 2/3% of the
25retired member's or participant's retirement annuity at the
26date of death. In the case of the death of a member or

 

 

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1participant who has not retired and who first became a member
2or participant on or after January 1, 2011, eligibility for a
3survivor's or widow's annuity shall be determined by the
4applicable Article of this Code. The initial benefit shall be
566 2/3% of the earned annuity without a reduction due to age. A
6child's annuity of an otherwise eligible child shall be in the
7amount prescribed under each Article if applicable. Any
8survivor's or widow's annuity shall be increased (1) on each
9January 1 occurring on or after the commencement of the annuity
10if the deceased member died while receiving a retirement
11annuity or (2) in other cases, on each January 1 occurring
12after the first anniversary of the commencement of the annuity.
13Each annual increase shall be calculated at 3% or one-half the
14annual unadjusted percentage increase (but not less than zero)
15in the consumer price index-u for the 12 months ending with the
16September preceding each November 1, whichever is less, of the
17originally granted survivor's annuity. If the annual
18unadjusted percentage change in the consumer price index-u for
19the 12 months ending with the September preceding each November
201 is zero or there is a decrease, then the annuity shall not be
21increased.
22    (g) The benefits in Section 14-110 apply only if the person
23is a State policeman, a fire fighter in the fire protection
24service of a department, or a security employee of the
25Department of Corrections or the Department of Juvenile
26Justice, as those terms are defined in subsection (b) of

 

 

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1Section 14-110. A person who meets the requirements of this
2Section is entitled to an annuity calculated under the
3provisions of Section 14-110, in lieu of the regular or minimum
4retirement annuity, only if the person has withdrawn from
5service with not less than 20 years of eligible creditable
6service and has attained age 60, regardless of whether the
7attainment of age 60 occurs while the person is still in
8service.
9    (h) If a person who first becomes a member or a participant
10of a retirement system or pension fund subject to this Section
11on or after January 1, 2011 is receiving a retirement annuity
12or retirement pension under that system or fund and becomes a
13member or participant under any other system or fund created by
14this Code and is employed on a full-time basis, except for
15those members or participants exempted from the provisions of
16this Section under subsection (a) of this Section, then the
17person's retirement annuity or retirement pension under that
18system or fund shall be suspended during that employment. Upon
19termination of that employment, the person's retirement
20annuity or retirement pension payments shall resume and be
21recalculated if recalculation is provided for under the
22applicable Article of this Code.
23    If a person who first becomes a member of a retirement
24system or pension fund subject to this Section on or after the
25effective date of this amendatory Act of the 97th General
26Assembly is receiving a retirement annuity or retirement

 

 

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1pension under that system or fund and accepts on a contractual
2basis a position to provide services to a governmental entity
3from which he or she has retired, then that person's annuity or
4retirement pension earned as an active employee of the employer
5shall be suspended during that contractual service. Persons
6receiving an annuity or retirement pension shall notify their
7contractual employer of their retirement status before
8accepting contractual employment. A person who fails to submit
9such notification shall be a guilty of a Class A misdemeanor
10and required to pay a fine of $1,000. Upon termination of that
11contractual employment, the person's retirement annuity or
12retirement pension payments shall resume and, if appropriate,
13be recalculated under the applicable provisions of this Code.
14    (i) Notwithstanding any other provision of this Section, a
15person who first becomes a participant of the retirement system
16established under Article 15 on or after January 1, 2011 shall
17have the option to enroll in the self-managed plan created
18under Section 15-158.2 of this Code.
19    (j) In the case of a conflict between the provisions of
20this Section and any other provision of this Code, the
21provisions of this Section shall control.
22(Source: P.A. 96-889, eff. 1-1-11; 96-1490, eff. 1-1-11.)
 
23    (40 ILCS 5/1-161 new)
24    Sec. 1-161. Provisions applicable to new hires.
25    (a) The provisions of this Section apply to a person who,

 

 

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1on or after the effective date of this amendatory Act of the
297th General Assembly, first becomes a member or a participant
3under any retirement system or pension fund established under
4this Code.
5    (b) "Final average salary" means the average monthly (or
6annual) salary obtained by dividing the total salary or
7earnings calculated under the Article applicable to the member
8or participant during the 96 consecutive months (or 8
9consecutive years) of service within the last 120 months (or 10
10years) of service in which the total salary or earnings
11calculated under the applicable Article was the highest by the
12number of months (or years) of service in that period, except
13that the salary shall be limited to the base salary or other
14base compensation paid to the member or participant for
15employment by the employer, and shall not include, without
16limitation: overtime; commissions; bonuses; payment of any
17type in anticipation of retirement; termination or severance
18pay; lump sum payments for sick, compensatory, vacation time,
19or other benefits; indirect or in-kind payments for items such
20as housing, vehicles, lodging, travel, or clothing allowances;
21or any other type of payment that is a divergence from the
22normal progression patterns on which an individual's benefits
23should be based. For the purposes of a person who first becomes
24a member or participant of any retirement system or pension
25fund to which this Section applies on or after the effective
26date of this amendatory Act of the 97th General Assembly, in

 

 

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1this Code, "final average salary" shall be substituted for the
2following:
3        (1) In Articles 7 (except for service as sheriff's law
4    enforcement employees) and 15, "final rate of earnings".
5        (2) In Articles 8, 9, 10, 11, and 12, "highest average
6    annual salary for any 4 consecutive years within the last
7    10 years of service immediately preceding the date of
8    withdrawal".
9        (3) In Article 13, "average final salary".
10        (4) In Article 14, "final average compensation".
11        (5) In Article 17, "average salary".
12        (6) In Section 22-207, "wages or salary received by him
13    at the date of retirement or discharge".
 
14    (40 ILCS 5/7-116)  (from Ch. 108 1/2, par. 7-116)
15    Sec. 7-116. "Final rate of earnings":
16    (a) For retirement and survivor annuities, the monthly
17earnings obtained by dividing the total earnings received by
18the employee during the period of either (1) the 48 consecutive
19months of service within the last 120 months of service in
20which his total earnings were the highest or (2) the employee's
21total period of service, by the number of months of service in
22such period.
23    (b) For death benefits, the higher of the rate determined
24under paragraph (a) of this Section or total earnings received
25in the last 12 months of service divided by twelve. If the

 

 

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1deceased employee has less than 12 months of service, the
2monthly final rate shall be the monthly rate of pay the
3employee was receiving when he began service.
4    (c) For disability benefits, the total earnings of a
5participating employee in the last 12 calendar months of
6service prior to the date he becomes disabled divided by 12.
7    (d) In computing the final rate of earnings: (1) the
8earnings rate for all periods of prior service shall be
9considered equal to the average earnings rate for the last 3
10calendar years of prior service for which creditable service is
11received under Section 7-139 or, if there is less than 3 years
12of creditable prior service, the average for the total prior
13service period for which creditable service is received under
14Section 7-139; (2) for out of state service and authorized
15leave, the earnings rate shall be the rate upon which service
16credits are granted; (3) periods of military leave shall not be
17considered; (4) the earnings rate for all periods of disability
18shall be considered equal to the rate of earnings upon which
19the employee's disability benefits are computed for such
20periods; (5) the earnings to be considered for each of the
21final three months of the final earnings period for persons who
22were participants before the effective date of this amendatory
23Act of the 97th General Assembly and the earnings to be
24considered for each of the final 24 months for participants who
25first become participants on or after the effective date of the
26this amendatory Act of the 97th General Assembly shall not

 

 

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1exceed 125% of the highest earnings of any other month in the
2final earnings period; and (6) the annual amount of final rate
3of earnings shall be the monthly amount multiplied by the
4number of months of service normally required by the position
5in a year.
6(Source: P.A. 90-448, eff. 8-16-97.)
 
7    (40 ILCS 5/7-172)  (from Ch. 108 1/2, par. 7-172)
8    Sec. 7-172. Contributions by participating municipalities
9and participating instrumentalities.
10    (a) Each participating municipality and each participating
11instrumentality shall make payment to the fund as follows:
12        1. municipality contributions in an amount determined
13    by applying the municipality contribution rate to each
14    payment of earnings paid to each of its participating
15    employees;
16        2. an amount equal to the employee contributions
17    provided by paragraphs (a) and (b) of Section 7-173,
18    whether or not the employee contributions are withheld as
19    permitted by that Section;
20        3. all accounts receivable, together with interest
21    charged thereon, as provided in Section 7-209;
22        4. if it has no participating employees with current
23    earnings, an amount payable which, over a closed period of
24    20 years for participating municipalities and 10 years for
25    participating instrumentalities, will amortize, at the

 

 

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1    effective rate for that year, any unfunded obligation. The
2    unfunded obligation shall be computed as provided in
3    paragraph 2 of subsection (b);
4        5. if it has fewer than 7 participating employees or a
5    negative balance in its municipality reserve, the greater
6    of (A) an amount payable that, over a period of 20 years,
7    will amortize at the effective rate for that year any
8    unfunded obligation, computed as provided in paragraph 2 of
9    subsection (b) or (B) the amount required by paragraph 1 of
10    this subsection (a).
11    (b) A separate municipality contribution rate shall be
12determined for each calendar year for all participating
13municipalities together with all instrumentalities thereof.
14The municipality contribution rate shall be determined for
15participating instrumentalities as if they were participating
16municipalities. The municipality contribution rate shall be
17the sum of the following percentages:
18        1. The percentage of earnings of all the participating
19    employees of all participating municipalities and
20    participating instrumentalities which, if paid over the
21    entire period of their service, will be sufficient when
22    combined with all employee contributions available for the
23    payment of benefits, to provide all annuities for
24    participating employees, and the $3,000 death benefit
25    payable under Sections 7-158 and 7-164, such percentage to
26    be known as the normal cost rate.

 

 

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1        2. The percentage of earnings of the participating
2    employees of each participating municipality and
3    participating instrumentalities necessary to adjust for
4    the difference between the present value of all benefits,
5    excluding temporary and total and permanent disability and
6    death benefits, to be provided for its participating
7    employees and the sum of its accumulated municipality
8    contributions and the accumulated employee contributions
9    and the present value of expected future employee and
10    municipality contributions pursuant to subparagraph 1 of
11    this paragraph (b). This adjustment shall be spread over
12    the remainder of the period that is allowable under
13    generally accepted accounting principles.
14        3. The percentage of earnings of the participating
15    employees of all municipalities and participating
16    instrumentalities necessary to provide the present value
17    of all temporary and total and permanent disability
18    benefits granted during the most recent year for which
19    information is available.
20        4. The percentage of earnings of the participating
21    employees of all participating municipalities and
22    participating instrumentalities necessary to provide the
23    present value of the net single sum death benefits expected
24    to become payable from the reserve established under
25    Section 7-206 during the year for which this rate is fixed.
26        5. The percentage of earnings necessary to meet any

 

 

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1    deficiency arising in the Terminated Municipality Reserve.
2    (c) A separate municipality contribution rate shall be
3computed for each participating municipality or participating
4instrumentality for its sheriff's law enforcement employees.
5    A separate municipality contribution rate shall be
6computed for the sheriff's law enforcement employees of each
7forest preserve district that elects to have such employees.
8For the period from January 1, 1986 to December 31, 1986, such
9rate shall be the forest preserve district's regular rate plus
102%.
11    In the event that the Board determines that there is an
12actuarial deficiency in the account of any municipality with
13respect to a person who has elected to participate in the Fund
14under Section 3-109.1 of this Code, the Board may adjust the
15municipality's contribution rate so as to make up that
16deficiency over such reasonable period of time as the Board may
17determine.
18    (d) The Board may establish a separate municipality
19contribution rate for all employees who are program
20participants employed under the federal Comprehensive
21Employment Training Act by all of the participating
22municipalities and instrumentalities. The Board may also
23provide that, in lieu of a separate municipality rate for these
24employees, a portion of the municipality contributions for such
25program participants shall be refunded or an extra charge
26assessed so that the amount of municipality contributions

 

 

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1retained or received by the fund for all CETA program
2participants shall be an amount equal to that which would be
3provided by the separate municipality contribution rate for all
4such program participants. Refunds shall be made to prime
5sponsors of programs upon submission of a claim therefor and
6extra charges shall be assessed to participating
7municipalities and instrumentalities. In establishing the
8municipality contribution rate as provided in paragraph (b) of
9this Section, the use of a separate municipality contribution
10rate for program participants or the refund of a portion of the
11municipality contributions, as the case may be, may be
12considered.
13    (e) Computations of municipality contribution rates for
14the following calendar year shall be made prior to the
15beginning of each year, from the information available at the
16time the computations are made, and on the assumption that the
17employees in each participating municipality or participating
18instrumentality at such time will continue in service until the
19end of such calendar year at their respective rates of earnings
20at such time.
21    (f) Any municipality which is the recipient of State
22allocations representing that municipality's contributions for
23retirement annuity purposes on behalf of its employees as
24provided in Section 12-21.16 of the Illinois Public Aid Code
25shall pay the allocations so received to the Board for such
26purpose. Estimates of State allocations to be received during

 

 

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1any taxable year shall be considered in the determination of
2the municipality's tax rate for that year under Section 7-171.
3If a special tax is levied under Section 7-171, none of the
4proceeds may be used to reimburse the municipality for the
5amount of State allocations received and paid to the Board. Any
6multiple-county or consolidated health department which
7receives contributions from a county under Section 11.2 of "An
8Act in relation to establishment and maintenance of county and
9multiple-county health departments", approved July 9, 1943, as
10amended, or distributions under Section 3 of the Department of
11Public Health Act, shall use these only for municipality
12contributions by the health department.
13    (g) Municipality contributions for the several purposes
14specified shall, for township treasurers and employees in the
15offices of the township treasurers who meet the qualifying
16conditions for coverage hereunder, be allocated among the
17several school districts and parts of school districts serviced
18by such treasurers and employees in the proportion which the
19amount of school funds of each district or part of a district
20handled by the treasurer bears to the total amount of all
21school funds handled by the treasurer.
22    From the funds subject to allocation among districts and
23parts of districts pursuant to the School Code, the trustees
24shall withhold the proportionate share of the liability for
25municipality contributions imposed upon such districts by this
26Section, in respect to such township treasurers and employees

 

 

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1and remit the same to the Board.
2    The municipality contribution rate for an educational
3service center shall initially be the same rate for each year
4as the regional office of education or school district which
5serves as its administrative agent. When actuarial data become
6available, a separate rate shall be established as provided in
7subparagraph (i) of this Section.
8    The municipality contribution rate for a public agency,
9other than a vocational education cooperative, formed under the
10Intergovernmental Cooperation Act shall initially be the
11average rate for the municipalities which are parties to the
12intergovernmental agreement. When actuarial data become
13available, a separate rate shall be established as provided in
14subparagraph (i) of this Section.
15    (h) Each participating municipality and participating
16instrumentality shall make the contributions in the amounts
17provided in this Section in the manner prescribed from time to
18time by the Board and all such contributions shall be
19obligations of the respective participating municipalities and
20participating instrumentalities to this fund. The failure to
21deduct any employee contributions shall not relieve the
22participating municipality or participating instrumentality of
23its obligation to this fund. Delinquent payments of
24contributions due under this Section may, with interest, be
25recovered by civil action against the participating
26municipalities or participating instrumentalities.

 

 

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1Municipality contributions, other than the amount necessary
2for employee contributions and Social Security contributions,
3for periods of service by employees from whose earnings no
4deductions were made for employee contributions to the fund,
5may be charged to the municipality reserve for the municipality
6or participating instrumentality.
7    (i) Contributions by participating instrumentalities shall
8be determined as provided herein except that the percentage
9derived under subparagraph 2 of paragraph (b) of this Section,
10and the amount payable under subparagraph 4 of paragraph (a) of
11this Section, shall be based on an amortization period of 10
12years.
13    (j) Notwithstanding the other provisions of this Section,
14the additional unfunded liability accruing as a result of this
15amendatory Act of the 94th General Assembly shall be amortized
16over a period of 30 years beginning on January 1 of the second
17calendar year following the calendar year in which this
18amendatory Act takes effect, except that the employer may
19provide for a longer amortization period by adopting a
20resolution or ordinance specifying a 35-year or 40-year period
21and submitting a certified copy of the ordinance or resolution
22to the fund no later than June 1 of the calendar year following
23the calendar year in which this amendatory Act takes effect.
24    (k) If the amount of a participating employee's earnings
25for any calendar year used to determine the participating
26employee's retirement annuity, determined on a full-time

 

 

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1equivalent basis, exceeds the amount of his or her earnings
2with the same participating municipality or participating
3instrumentality for the previous calendar year, determined on a
4full-time equivalent basis, by more than 6%, then the
5participating municipality or participating instrumentality
6shall pay to the fund, in addition to all other payments
7required under this Article and in accordance with guidelines
8established by the fund, the present value of the increase in
9benefits resulting from the portion of the increase in earnings
10that is in excess of 6%. This present value shall be computed
11by the fund on the basis of the actuarial assumptions and
12tables used in the most recent actuarial valuation of the fund
13that is available at the time of the computation. The fund may
14require the participating municipality or participating
15instrumentality to provide any pertinent information or
16documentation.
17    Whenever it determines that a payment is or may be required
18under this subsection (k), the fund shall calculate the amount
19of the payment and bill the participating municipality or
20participating instrumentality for that amount. The bill shall
21specify the calculations used to determine the amount due. If
22the participating municipality or participating
23instrumentality disputes the amount of the bill, it may, within
2430 days after receipt of the bill, apply to the fund in writing
25for a recalculation. The application must specify in detail the
26grounds of the dispute. Upon receiving a timely application for

 

 

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1recalculation, the fund shall review the application and, if
2appropriate, recalculate the amount due. The participating
3municipality and participating instrumentality contributions
4required under this subsection (k) may be paid in the form of a
5lump sum within 90 days after receipt of the bill. If the
6participating municipality and participating instrumentality
7contributions are not paid within 90 days after receipt of the
8bill, then interest will be charged at a rate equal to the
9fund's annual actuarially assumed rate of return on investment
10compounded annually from the 91st day after receipt of the
11bill. Payments must be concluded within 3 years after receipt
12of the bill by the participating municipality or participating
13instrumentality.
14    When assessing payment for any amount due under this
15subsection (k), the fund shall exclude earnings increases
16resulting from overload or overtime earnings.
17    When assessing payment for any amount due under this
18subsection (k), the fund shall also exclude earnings increases
19attributable to standard employment promotions resulting in
20increased responsibility and workload.
21(Source: P.A. 96-1084, eff. 7-16-10; 96-1140, eff. 7-21-10;
22revised 9-16-10.)
 
23    (40 ILCS 5/7-205)  (from Ch. 108 1/2, par. 7-205)
24    Sec. 7-205. Reserves for annuities. Appropriate reserves
25shall be created for payment of all annuities granted under

 

 

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1this Article at the time such annuities are granted and in
2amounts determined to be necessary under actuarial tables
3adopted by the Board upon recommendation of the actuary of the
4fund. All annuities payable shall be charged to the annuity
5reserve.
6    1. Amounts credited to annuity reserves shall be derived by
7transfer of all the employee credits from the appropriate
8employee reserves and by charges to the municipality reserve of
9those municipalities in which the retiring employee has
10accumulated service. If a retiring employee has accumulated
11service in more than one participating municipality or
12participating instrumentality, the aggregate municipality
13charges for non-concurrent service shall be calculated as
14follows:
15        (A) for purposes of calculating the annuity reserve, an
16    annuity will be calculated based on service and adjusted
17    earnings with each employer (without regard to the vesting
18    requirement contained in subsection (a) of Section 7-142);
19    and
20        (B) the difference between the municipality charges
21    for the actual annuity granted and the aggregation of the
22    municipality charges based upon the ratio of each from
23    those calculations to the aggregated total from paragraph
24    (A) of this item 1.
25    Aggregate municipality charges for concurrent service
26shall be prorated based on the employee's earnings. The

 

 

09700HB3474ham001- 22 -LRB097 10961 JDS 52490 a

1municipality charges for retirement annuities calculated under
2subparagraph a of subparagraph 1 of subsection (a) of Section
37-142 shall be prorated based on actual contributions prorated
4on a basis of the employee's earnings in case of concurrent
5service and creditable service in other cases.
6    2. Supplemental annuities shall be handled as a separate
7annuity and amounts to be credited to the annuity reserve
8therefor shall be derived in the same manner as a regular
9annuity.
10    3. When a retirement annuity is granted to an employee with
11a spouse eligible for a surviving spouse annuity, there shall
12be credited to the annuity reserve an amount to fund the cost
13of both the retirement and surviving spouse annuity as a joint
14and survivors annuity.
15    4. Beginning January 1, 1989, when a retirement annuity is
16awarded, an amount equal to the present value of the $3,000
17death benefit payable upon the death of the annuitant shall be
18transferred to the annuity reserve from the appropriate
19municipality reserves in the same manner as the transfer for
20annuities.
21    5. All annuity reserves shall be revalued annually as of
22December 31. Beginning as of December 31, 1973, adjustment
23required therein by such revaluation shall be charged or
24credited to the earnings and experience variation reserve.
25    6. There shall be credited to the annuity reserve all of
26the payments made by annuitants under Section 7-144.2, plus an

 

 

09700HB3474ham001- 23 -LRB097 10961 JDS 52490 a

1additional amount from the earnings and experience variation
2reserve to fund the cost of the incremental annuities granted
3to annuitants making these payments.
4    7. As of December 31, 1972, the excess in the annuity
5reserve shall be transferred to the municipality reserves. An
6amount equal to the deficiency in the reserve of participating
7municipalities and participating instrumentalities which have
8no participating employees shall be allocated to their
9reserves. The remainder shall be allocated in amounts
10proportionate to the present value, as of January 1, 1972, of
11annuities of annuitants of the remaining participating
12municipalities and participating instrumentalities.
13(Source: P.A. 89-136, eff. 7-14-95.)
 
14    (40 ILCS 5/14-103.05)  (from Ch. 108 1/2, par. 14-103.05)
15    Sec. 14-103.05. Employee.
16    (a) Any person employed by a Department who receives salary
17for personal services rendered to the Department on a warrant
18issued pursuant to a payroll voucher certified by a Department
19and drawn by the State Comptroller upon the State Treasurer,
20including an elected official described in subparagraph (d) of
21Section 14-104, shall become an employee for purpose of
22membership in the Retirement System on the first day of such
23employment.
24    A person entering service on or after January 1, 1972 and
25prior to January 1, 1984 shall become a member as a condition

 

 

09700HB3474ham001- 24 -LRB097 10961 JDS 52490 a

1of employment and shall begin making contributions as of the
2first day of employment.
3    A person entering service on or after January 1, 1984
4shall, upon completion of 6 months of continuous service which
5is not interrupted by a break of more than 2 months, become a
6member as a condition of employment. Contributions shall begin
7the first of the month after completion of the qualifying
8period.
9    A person employed by the Chicago Metropolitan Agency for
10Planning on the effective date of this amendatory Act of the
1195th General Assembly who was a member of this System as an
12employee of the Chicago Area Transportation Study and makes an
13election under Section 14-104.13 to participate in this System
14for his or her employment with the Chicago Metropolitan Agency
15for Planning.
16    The qualifying period of 6 months of service is not
17applicable to: (1) a person who has been granted credit for
18service in a position covered by the State Universities
19Retirement System, the Teachers' Retirement System of the State
20of Illinois, the General Assembly Retirement System, or the
21Judges Retirement System of Illinois unless that service has
22been forfeited under the laws of those systems; (2) a person
23entering service on or after July 1, 1991 in a noncovered
24position; (3) a person to whom Section 14-108.2a or 14-108.2b
25applies; or (4) a person to whom subsection (a-5) of this
26Section applies.

 

 

09700HB3474ham001- 25 -LRB097 10961 JDS 52490 a

1    (a-5) A person entering service on or after December 1,
22010 shall become a member as a condition of employment and
3shall begin making contributions as of the first day of
4employment. A person serving in the qualifying period on
5December 1, 2010 will become a member on December 1, 2010 and
6shall begin making contributions as of December 1, 2010.
7    (b) The term "employee" does not include the following:
8        (1) members of the State Legislature, and persons
9    electing to become members of the General Assembly
10    Retirement System pursuant to Section 2-105;
11        (2) incumbents of offices normally filled by vote of
12    the people;
13        (3) except as otherwise provided in this Section, any
14    person appointed by the Governor with the advice and
15    consent of the Senate unless that person elects to
16    participate in this system;
17        (3.1) any person serving as a commissioner of an ethics
18    commission created under the State Officials and Employees
19    Ethics Act unless that person elects to participate in this
20    system with respect to that service as a commissioner;
21        (3.2) any person serving as a part-time employee in any
22    of the following positions: Legislative Inspector General,
23    Special Legislative Inspector General, employee of the
24    Office of the Legislative Inspector General, Executive
25    Director of the Legislative Ethics Commission, or staff of
26    the Legislative Ethics Commission, regardless of whether

 

 

09700HB3474ham001- 26 -LRB097 10961 JDS 52490 a

1    he or she is in active service on or after July 8, 2004
2    (the effective date of Public Act 93-685), unless that
3    person elects to participate in this System with respect to
4    that service; in this item (3.2), a "part-time employee" is
5    a person who is not required to work at least 35 hours per
6    week;
7        (3.3) any person who has made an election under Section
8    1-123 and who is serving either as legal counsel in the
9    Office of the Governor or as Chief Deputy Attorney General;
10        (4) except as provided in Section 14-108.2 or
11    14-108.2c, any person who is covered or eligible to be
12    covered by the Teachers' Retirement System of the State of
13    Illinois, the State Universities Retirement System, or the
14    Judges Retirement System of Illinois;
15        (5) an employee of a municipality or any other
16    political subdivision of the State;
17        (6) any person who becomes an employee after June 30,
18    1979 as a public service employment program participant
19    under the Federal Comprehensive Employment and Training
20    Act and whose wages or fringe benefits are paid in whole or
21    in part by funds provided under such Act;
22        (7) enrollees of the Illinois Young Adult Conservation
23    Corps program, administered by the Department of Natural
24    Resources, authorized grantee pursuant to Title VIII of the
25    "Comprehensive Employment and Training Act of 1973", 29 USC
26    993, as now or hereafter amended;

 

 

09700HB3474ham001- 27 -LRB097 10961 JDS 52490 a

1        (8) enrollees and temporary staff of programs
2    administered by the Department of Natural Resources under
3    the Youth Conservation Corps Act of 1970;
4        (9) any person who is a member of any professional
5    licensing or disciplinary board created under an Act
6    administered by the Department of Professional Regulation
7    or a successor agency or created or re-created after the
8    effective date of this amendatory Act of 1997, and who
9    receives per diem compensation rather than a salary,
10    notwithstanding that such per diem compensation is paid by
11    warrant issued pursuant to a payroll voucher; such persons
12    have never been included in the membership of this System,
13    and this amendatory Act of 1987 (P.A. 84-1472) is not
14    intended to effect any change in the status of such
15    persons;
16        (10) any person who is a member of the Illinois Health
17    Care Cost Containment Council, and receives per diem
18    compensation rather than a salary, notwithstanding that
19    such per diem compensation is paid by warrant issued
20    pursuant to a payroll voucher; such persons have never been
21    included in the membership of this System, and this
22    amendatory Act of 1987 is not intended to effect any change
23    in the status of such persons;
24        (11) any person who is a member of the Oil and Gas
25    Board created by Section 1.2 of the Illinois Oil and Gas
26    Act, and receives per diem compensation rather than a

 

 

09700HB3474ham001- 28 -LRB097 10961 JDS 52490 a

1    salary, notwithstanding that such per diem compensation is
2    paid by warrant issued pursuant to a payroll voucher; or
3        (12) a person employed by the State Board of Higher
4    Education in a position with the Illinois Century Network
5    as of June 30, 2004, who remains continuously employed
6    after that date by the Department of Central Management
7    Services in a position with the Illinois Century Network
8    and participates in the Article 15 system with respect to
9    that employment; .
10        (13) any person who first becomes a member of the Civil
11    Service Commission on or after the effective date of this
12    amendatory Act of the 97th General Assembly;
13        (14) any person, other than the Director of Employment
14    Security, who first becomes a member of the Board of Review
15    of the Department of Employment Security on or after the
16    effective date of this amendatory Act of the 97th General
17    Assembly;
18        (15) any person who first becomes a member of the Civil
19    Service Commission on or after the effective date of this
20    amendatory Act of the 97th General Assembly;
21        (16) any person who first becomes a member of the
22    Illinois Liquor Control Commission on or after the
23    effective date of this amendatory Act of the 97th General
24    Assembly;
25        (17) any person who first becomes a member of the
26    Secretary of State Merit Commission on or after the

 

 

09700HB3474ham001- 29 -LRB097 10961 JDS 52490 a

1    effective date of this amendatory Act of the 97th General
2    Assembly;
3        (18) any person who first becomes a member of the Human
4    Rights Commission on or after the effective date of this
5    amendatory Act of the 97th General Assembly;
6        (19) any person who first becomes a member of the State
7    Mining Board on or after the effective date of this
8    amendatory Act of the 97th General Assembly;
9        (20) any person who first becomes a member of the
10    Property Tax Appeal Board on or after the effective date of
11    this amendatory Act of the 97th General Assembly;
12        (21) any person who first becomes a member of the
13    Illinois Racing Board on or after the effective date of
14    this amendatory Act of the 97th General Assembly;
15        (22) any person who first becomes a member of the
16    Department of State Police Merit Board on or after the
17    effective date of this amendatory Act of the 97th General
18    Assembly;
19        (23) any person who first becomes a member of the
20    Illinois State Toll Highway Authority on or after the
21    effective date of this amendatory Act of the 97th General
22    Assembly; or
23        (24) any person who first becomes a member of the
24    Illinois State Board of Elections on or after the effective
25    date of this amendatory Act of the 97th General Assembly.
26    (c) An individual who represents or is employed as an

 

 

09700HB3474ham001- 30 -LRB097 10961 JDS 52490 a

1officer or employee of a statewide labor organization that
2represents members of this System may participate in the System
3and shall be deemed an employee, provided that (1) the
4individual has previously earned creditable service under this
5Article, (2) the individual files with the System an
6irrevocable election to become a participant within 6 months
7after the effective date of this amendatory Act of the 94th
8General Assembly, and (3) the individual does not receive
9credit for that employment under any other provisions of this
10Code. An employee under this subsection (c) is responsible for
11paying to the System both (i) employee contributions based on
12the actual compensation received for service with the labor
13organization and (ii) employer contributions based on the
14percentage of payroll certified by the board; all or any part
15of these contributions may be paid on the employee's behalf or
16picked up for tax purposes (if authorized under federal law) by
17the labor organization.
18    A person who is an employee as defined in this subsection
19(c) may establish service credit for similar employment prior
20to becoming an employee under this subsection by paying to the
21System for that employment the contributions specified in this
22subsection, plus interest at the effective rate from the date
23of service to the date of payment. However, credit shall not be
24granted under this subsection (c) for any such prior employment
25for which the applicant received credit under any other
26provision of this Code or during which the applicant was on a

 

 

09700HB3474ham001- 31 -LRB097 10961 JDS 52490 a

1leave of absence.
2(Source: P.A. 95-677, eff. 10-11-07; 96-1490, eff. 1-1-11.)
 
3    (40 ILCS 5/22-101)  (from Ch. 108 1/2, par. 22-101)
4    Sec. 22-101. Retirement Plan for Chicago Transit Authority
5Employees.
6    (a) There shall be established and maintained by the
7Authority created by the "Metropolitan Transit Authority Act",
8approved April 12, 1945, as amended, (referred to in this
9Section as the "Authority") a financially sound pension and
10retirement system adequate to provide for all payments when due
11under such established system or as modified from time to time
12by ordinance of the Chicago Transit Board or collective
13bargaining agreement. For this purpose, the Board must make
14contributions to the established system as required under this
15Section and may make any additional contributions provided for
16by Board ordinance or collective bargaining agreement. The
17participating employees shall make such periodic payments to
18the established system as required under this Section and may
19make any additional contributions provided for by Board
20ordinance or collective bargaining agreement.
21    Provisions shall be made by the Board for all officers,
22except trustees who first become members on after the effective
23date of this amendatory Act of the 97th General Assembly, and
24employees of the Authority appointed pursuant to the
25"Metropolitan Transit Authority Act" to become, subject to

 

 

09700HB3474ham001- 32 -LRB097 10961 JDS 52490 a

1reasonable rules and regulations, participants of the pension
2or retirement system with uniform rights, privileges,
3obligations and status as to the class in which such officers
4and employees belong. The terms, conditions and provisions of
5any pension or retirement system or of any amendment or
6modification thereof affecting employees who are members of any
7labor organization may be established, amended or modified by
8agreement with such labor organization, provided the terms,
9conditions and provisions must be consistent with this Act, the
10annual funding levels for the retirement system established by
11law must be met and the benefits paid to future participants in
12the system may not exceed the benefit ceilings set for future
13participants under this Act and the contribution levels
14required by the Authority and its employees may not be less
15than the contribution levels established under this Act.
16    (b) The Board of Trustees shall consist of 11 members
17appointed as follows: (i) 5 trustees shall be appointed by the
18Chicago Transit Board; (ii) 3 trustees shall be appointed by an
19organization representing the highest number of Chicago
20Transit Authority participants; (iii) one trustee shall be
21appointed by an organization representing the second-highest
22number of Chicago Transit Authority participants; (iv) one
23trustee shall be appointed by the recognized coalition
24representatives of participants who are not represented by an
25organization with the highest or second-highest number of
26Chicago Transit Authority participants; and (v) one trustee

 

 

09700HB3474ham001- 33 -LRB097 10961 JDS 52490 a

1shall be selected by the Regional Transportation Authority
2Board of Directors, and the trustee shall be a professional
3fiduciary who has experience in the area of collectively
4bargained pension plans. Trustees shall serve until a successor
5has been appointed and qualified, or until resignation, death,
6incapacity, or disqualification.
7    Any person appointed as a trustee of the board shall
8qualify by taking an oath of office that he or she will
9diligently and honestly administer the affairs of the system
10and will not knowingly violate or willfully permit the
11violation of any of the provisions of law applicable to the
12Plan, including Sections 1-109, 1-109.1, 1-109.2, 1-110,
131-111, 1-114, and 1-115 of the Illinois Pension Code.
14    Each trustee shall cast individual votes, and a majority
15vote shall be final and binding upon all interested parties,
16provided that the Board of Trustees may require a supermajority
17vote with respect to the investment of the assets of the
18Retirement Plan, and may set forth that requirement in the
19Retirement Plan documents, by-laws, or rules of the Board of
20Trustees. Each trustee shall have the rights, privileges,
21authority, and obligations as are usual and customary for such
22fiduciaries.
23    The Board of Trustees may cause amounts on deposit in the
24Retirement Plan to be invested in those investments that are
25permitted investments for the investment of moneys held under
26any one or more of the pension or retirement systems of the

 

 

09700HB3474ham001- 34 -LRB097 10961 JDS 52490 a

1State, any unit of local government or school district, or any
2agency or instrumentality thereof. The Board, by a vote of at
3least two-thirds of the trustees, may transfer investment
4management to the Illinois State Board of Investment, which is
5hereby authorized to manage these investments when so requested
6by the Board of Trustees.
7    Notwithstanding any other provision of this Article or any
8law to the contrary, any person who first becomes a trustee on
9or after the effective date of this Act shall not be eligible
10to participate in this Retirement Plan.
11    (c) All individuals who were previously participants in the
12Retirement Plan for Chicago Transit Authority Employees shall
13remain participants, and shall receive the same benefits
14established by the Retirement Plan for Chicago Transit
15Authority Employees, except as provided in this amendatory Act
16or by subsequent legislative enactment or amendment to the
17Retirement Plan. For Authority employees hired on or after the
18effective date of this amendatory Act of the 95th General
19Assembly, the Retirement Plan for Chicago Transit Authority
20Employees shall be the exclusive retirement plan and such
21employees shall not be eligible for any supplemental plan,
22except for a deferred compensation plan funded only by employee
23contributions.
24    For all Authority employees who are first hired on or after
25the effective date of this amendatory Act of the 95th General
26Assembly and are participants in the Retirement Plan for

 

 

09700HB3474ham001- 35 -LRB097 10961 JDS 52490 a

1Chicago Transit Authority Employees, the following terms,
2conditions and provisions with respect to retirement shall be
3applicable:
4        (1) Such participant shall be eligible for an unreduced
5    retirement allowance for life upon the attainment of age 64
6    with 25 years of continuous service.
7        (2) Such participant shall be eligible for a reduced
8    retirement allowance for life upon the attainment of age 55
9    with 10 years of continuous service.
10        (3) For the purpose of determining the retirement
11    allowance to be paid to a retiring employee, the term
12    "Continuous Service" as used in the Retirement Plan for
13    Chicago Transit Authority Employees shall also be deemed to
14    include all pension credit for service with any retirement
15    system established under Article 8 or Article 11 of this
16    Code, provided that the employee forfeits and relinquishes
17    all pension credit under Article 8 or Article 11 of this
18    Code, and the contribution required under this subsection
19    is made by the employee. The Retirement Plan's actuary
20    shall determine the contribution paid by the employee as an
21    amount equal to the normal cost of the benefit accrued, had
22    the service been rendered as an employee, plus interest per
23    annum from the time such service was rendered until the
24    date the payment is made.
25    (d) From the effective date of this amendatory Act through
26December 31, 2008, all participating employees shall

 

 

09700HB3474ham001- 36 -LRB097 10961 JDS 52490 a

1contribute to the Retirement Plan in an amount not less than 6%
2of compensation, and the Authority shall contribute to the
3Retirement Plan in an amount not less than 12% of compensation.
4    (e)(1) Beginning January 1, 2009 the Authority shall make
5contributions to the Retirement Plan in an amount equal to
6twelve percent (12%) of compensation and participating
7employees shall make contributions to the Retirement Plan in an
8amount equal to six percent (6%) of compensation. These
9contributions may be paid by the Authority and participating
10employees on a payroll or other periodic basis, but shall in
11any case be paid to the Retirement Plan at least monthly.
12    (2) For the period ending December 31, 2040, the amount
13paid by the Authority in any year with respect to debt service
14on bonds issued for the purposes of funding a contribution to
15the Retirement Plan under Section 12c of the Metropolitan
16Transit Authority Act, other than debt service paid with the
17proceeds of bonds or notes issued by the Authority for any year
18after calendar year 2008, shall be treated as a credit against
19the amount of required contribution to the Retirement Plan by
20the Authority under subsection (e)(1) for the following year up
21to an amount not to exceed 6% of compensation paid by the
22Authority in that following year.
23    (3) By September 15 of each year beginning in 2009 and
24ending on December 31, 2039, on the basis of a report prepared
25by an enrolled actuary retained by the Plan, the Board of
26Trustees of the Retirement Plan shall determine the estimated

 

 

09700HB3474ham001- 37 -LRB097 10961 JDS 52490 a

1funded ratio of the total assets of the Retirement Plan to its
2total actuarially determined liabilities. A report containing
3that determination and the actuarial assumptions on which it is
4based shall be filed with the Authority, the representatives of
5its participating employees, the Auditor General of the State
6of Illinois, and the Regional Transportation Authority. If the
7funded ratio is projected to decline below 60% in any year
8before 2040, the Board of Trustees shall also determine the
9increased contribution required each year as a level percentage
10of payroll over the years remaining until 2040 using the
11projected unit credit actuarial cost method so the funded ratio
12does not decline below 60% and include that determination in
13its report. If the actual funded ratio declines below 60% in
14any year prior to 2040, the Board of Trustees shall also
15determine the increased contribution required each year as a
16level percentage of payroll during the years after the then
17current year using the projected unit credit actuarial cost
18method so the funded ratio is projected to reach at least 60%
19no later than 10 years after the then current year and include
20that determination in its report. Within 60 days after
21receiving the report, the Auditor General shall review the
22determination and the assumptions on which it is based, and if
23he finds that the determination and the assumptions on which it
24is based are unreasonable in the aggregate, he shall issue a
25new determination of the funded ratio, the assumptions on which
26it is based and the increased contribution required each year

 

 

09700HB3474ham001- 38 -LRB097 10961 JDS 52490 a

1as a level percentage of payroll over the years remaining until
22040 using the projected unit credit actuarial cost method so
3the funded ratio does not decline below 60%, or, in the event
4of an actual decline below 60%, so the funded ratio is
5projected to reach 60% by no later than 10 years after the then
6current year. If the Board of Trustees or the Auditor General
7determine that an increased contribution is required to meet
8the funded ratio required by the subsection, effective January
91 following the determination or 30 days after such
10determination, whichever is later, one-third of the increased
11contribution shall be paid by participating employees and
12two-thirds by the Authority, in addition to the contributions
13required by this subsection (1).
14    (4) For the period beginning 2040, the minimum contribution
15to the Retirement Plan for each fiscal year shall be an amount
16determined by the Board of Trustees of the Retirement Plan to
17be sufficient to bring the total assets of the Retirement Plan
18up to 90% of its total actuarial liabilities by the end of
192059. Participating employees shall be responsible for
20one-third of the required contribution and the Authority shall
21be responsible for two-thirds of the required contribution. In
22making these determinations, the Board of Trustees shall
23calculate the required contribution each year as a level
24percentage of payroll over the years remaining to and including
25fiscal year 2059 using the projected unit credit actuarial cost
26method. A report containing that determination and the

 

 

09700HB3474ham001- 39 -LRB097 10961 JDS 52490 a

1actuarial assumptions on which it is based shall be filed by
2September 15 of each year with the Authority, the
3representatives of its participating employees, the Auditor
4General of the State of Illinois and the Regional
5Transportation Authority. If the funded ratio is projected to
6fail to reach 90% by December 31, 2059, the Board of Trustees
7shall also determine the increased contribution required each
8year as a level percentage of payroll over the years remaining
9until December 31, 2059 using the projected unit credit
10actuarial cost method so the funded ratio will meet 90% by
11December 31, 2059 and include that determination in its report.
12Within 60 days after receiving the report, the Auditor General
13shall review the determination and the assumptions on which it
14is based and if he finds that the determination and the
15assumptions on which it is based are unreasonable in the
16aggregate, he shall issue a new determination of the funded
17ratio, the assumptions on which it is based and the increased
18contribution required each year as a level percentage of
19payroll over the years remaining until December 31, 2059 using
20the projected unit credit actuarial cost method so the funded
21ratio reaches no less than 90% by December 31, 2059. If the
22Board of Trustees or the Auditor General determine that an
23increased contribution is required to meet the funded ratio
24required by this subsection, effective January 1 following the
25determination or 30 days after such determination, whichever is
26later, one-third of the increased contribution shall be paid by

 

 

09700HB3474ham001- 40 -LRB097 10961 JDS 52490 a

1participating employees and two-thirds by the Authority, in
2addition to the contributions required by subsection (e)(1).
3    (5) Beginning in 2060, the minimum contribution for each
4year shall be the amount needed to maintain the total assets of
5the Retirement Plan at 90% of the total actuarial liabilities
6of the Plan, and the contribution shall be funded two-thirds by
7the Authority and one-third by the participating employees in
8accordance with this subsection.
9    (f) The Authority shall take the steps necessary to comply
10with Section 414(h)(2) of the Internal Revenue Code of 1986, as
11amended, to permit the pick-up of employee contributions under
12subsections (d) and (e) on a tax-deferred basis.
13    (g) The Board of Trustees shall certify to the Governor,
14the General Assembly, the Auditor General, the Board of the
15Regional Transportation Authority, and the Authority at least
1690 days prior to the end of each fiscal year the amount of the
17required contributions to the retirement system for the next
18retirement system fiscal year under this Section. The
19certification shall include a copy of the actuarial
20recommendations upon which it is based. In addition, copies of
21the certification shall be sent to the Commission on Government
22Forecasting and Accountability and the Mayor of Chicago.
23    (h)(1) As to an employee who first becomes entitled to a
24retirement allowance commencing on or after November 30, 1989,
25the retirement allowance shall be the amount determined in
26accordance with the following formula:

 

 

09700HB3474ham001- 41 -LRB097 10961 JDS 52490 a

1        (A) One percent (1%) of his "Average Annual
2    Compensation in the highest four (4) completed Plan Years"
3    for each full year of continuous service from the date of
4    original employment to the effective date of the Plan; plus
5        (B) One and seventy-five hundredths percent (1.75%) of
6    his "Average Annual Compensation in the highest four (4)
7    completed Plan Years" for each year (including fractions
8    thereof to completed calendar months) of continuous
9    service as provided for in the Retirement Plan for Chicago
10    Transit Authority Employees.
11Provided, however that:
12    (2) As to an employee who first becomes entitled to a
13retirement allowance commencing on or after January 1, 1993,
14the retirement allowance shall be the amount determined in
15accordance with the following formula:
16        (A) One percent (1%) of his "Average Annual
17    Compensation in the highest four (4) completed Plan Years"
18    for each full year of continuous service from the date of
19    original employment to the effective date of the Plan; plus
20        (B) One and eighty hundredths percent (1.80%) of his
21    "Average Annual Compensation in the highest four (4)
22    completed Plan Years" for each year (including fractions
23    thereof to completed calendar months) of continuous
24    service as provided for in the Retirement Plan for Chicago
25    Transit Authority Employees.
26Provided, however that:

 

 

09700HB3474ham001- 42 -LRB097 10961 JDS 52490 a

1    (3) As to an employee who first becomes entitled to a
2retirement allowance commencing on or after January 1, 1994,
3the retirement allowance shall be the amount determined in
4accordance with the following formula:
5        (A) One percent (1%) of his "Average Annual
6    Compensation in the highest four (4) completed Plan Years"
7    for each full year of continuous service from the date of
8    original employment to the effective date of the Plan; plus
9        (B) One and eighty-five hundredths percent (1.85%) of
10    his "Average Annual Compensation in the highest four (4)
11    completed Plan Years" for each year (including fractions
12    thereof to completed calendar months) of continuous
13    service as provided for in the Retirement Plan for Chicago
14    Transit Authority Employees.
15Provided, however that:
16    (4) As to an employee who first becomes entitled to a
17retirement allowance commencing on or after January 1, 2000,
18the retirement allowance shall be the amount determined in
19accordance with the following formula:
20        (A) One percent (1%) of his "Average Annual
21    Compensation in the highest four (4) completed Plan Years"
22    for each full year of continuous service from the date of
23    original employment to the effective date of the Plan; plus
24        (B) Two percent (2%) of his "Average Annual
25    Compensation in the highest four (4) completed Plan Years"
26    for each year (including fractions thereof to completed

 

 

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1    calendar months) of continuous service as provided for in
2    the Retirement Plan for Chicago Transit Authority
3    Employees.
4Provided, however that:
5    (5) As to an employee who first becomes entitled to a
6retirement allowance commencing on or after January 1, 2001,
7the retirement allowance shall be the amount determined in
8accordance with the following formula:
9        (A) One percent (1%) of his "Average Annual
10    Compensation in the highest four (4) completed Plan Years"
11    for each full year of continuous service from the date of
12    original employment to the effective date of the Plan; plus
13        (B) Two and fifteen hundredths percent (2.15%) of his
14    "Average Annual Compensation in the highest four (4)
15    completed Plan Years" for each year (including fractions
16    thereof to completed calendar months) of continuous
17    service as provided for in the Retirement Plan for Chicago
18    Transit Authority Employees.
19    The changes made by this amendatory Act of the 95th General
20Assembly, to the extent that they affect the rights or
21privileges of Authority employees that are currently the
22subject of collective bargaining, have been agreed to between
23the authorized representatives of these employees and of the
24Authority prior to enactment of this amendatory Act, as
25evidenced by a Memorandum of Understanding between these
26representatives that will be filed with the Secretary of State

 

 

09700HB3474ham001- 44 -LRB097 10961 JDS 52490 a

1Index Department and designated as "95-GA-C05". The General
2Assembly finds and declares that those changes are consistent
3with 49 U.S.C. 5333(b) (also known as Section 13(c) of the
4Federal Transit Act) because of this agreement between
5authorized representatives of these employees and of the
6Authority, and that any future amendments to the provisions of
7this amendatory Act of the 95th General Assembly, to the extent
8those amendments would affect the rights and privileges of
9Authority employees that are currently the subject of
10collective bargaining, would be consistent with 49 U.S.C.
115333(b) if and only if those amendments were agreed to between
12these authorized representatives prior to enactment.
13    (i) Early retirement incentive plan; funded ratio.
14        (1) Beginning on the effective date of this Section, no
15    early retirement incentive shall be offered to
16    participants of the Plan unless the Funded Ratio of the
17    Plan is at least 80% or more.
18        (2) For the purposes of this Section, the Funded Ratio
19    shall be the Adjusted Assets divided by the Actuarial
20    Accrued Liability developed in accordance with Statement
21    #25 promulgated by the Government Accounting Standards
22    Board and the actuarial assumptions described in the Plan.
23    The Adjusted Assets shall be calculated based on the
24    methodology described in the Plan.
25    (j) Nothing in this amendatory Act of the 95th General
26Assembly shall impair the rights or privileges of Authority

 

 

09700HB3474ham001- 45 -LRB097 10961 JDS 52490 a

1employees under any other law.
2(Source: P.A. 94-839, eff. 6-6-06; 95-708, eff. 1-18-08.)
 
3    (40 ILCS 5/22-103)
4    Sec. 22-103. Regional Transportation Authority and related
5pension plans.
6    (a) As used in this Section:
7    "Affected pension plan" means a defined-benefit pension
8plan supported in whole or in part by employer contributions
9and maintained by the Regional Transportation Authority, the
10Suburban Bus Division, or the Commuter Rail Division, or any
11combination thereof, under the general authority of the
12Regional Transportation Authority Act, including but not
13limited to any such plan that has been established under or is
14subject to a collective bargaining agreement or is limited to
15employees covered by a collective bargaining agreement.
16"Affected pension plan" does not include any pension fund or
17retirement system subject to Section 22-101 of this Section.
18    "Authority" means the Regional Transportation Authority
19created under the Regional Transportation Authority Act.
20    "Contributing employer" means an employer that is required
21to make contributions to an affected pension plan under the
22terms of that plan.
23    "Funding ratio" means the ratio of an affected pension
24plan's assets to the present value of its actuarial
25liabilities, as determined at its latest actuarial valuation in

 

 

09700HB3474ham001- 46 -LRB097 10961 JDS 52490 a

1accordance with applicable actuarial assumptions and
2recommendations.
3    "Under-funded pension plan" or "under-funded" means an
4affected pension plan that, at the time of its last actuarial
5valuation, has a funding ratio of less than 90%.
6    (b) The contributing employers of each affected pension
7plan have a general duty to make the required employer
8contributions to the affected pension plan in a timely manner
9in accordance with the terms of the plan. A contributing
10employer must make contributions to the affected pension plan
11as required under this subsection and, if applicable,
12subsection (c); a contributing employer may make any additional
13contributions provided for by the board of the employer or
14collective bargaining agreement.
15    (c) In the case of an affected pension plan that is
16under-funded on January 1, 2009 or becomes under-funded at any
17time after that date, the contributing employers shall
18contribute to the affected pension plan, in addition to all
19amounts otherwise required, amounts sufficient to bring the
20funding ratio of the affected pension plan up to 90% in
21accordance with an amortization schedule adopted jointly by the
22contributing employers and the trustee of the affected pension
23plan. The amortization schedule may extend for any period up to
24a maximum of 50 years and shall provide for additional employer
25contributions in substantially equal annual amounts over the
26selected period. If the contributing employers and the trustee

 

 

09700HB3474ham001- 47 -LRB097 10961 JDS 52490 a

1of the affected pension plan do not agree on an appropriate
2period for the amortization schedule within 6 months of the
3date of determination that the plan is under-funded, then the
4amortization schedule shall be based on a period of 50 years.
5    In the case of an affected pension plan that has more than
6one contributing employer, each contributing employer's share
7of the total additional employer contributions required under
8this subsection shall be determined: (i) in proportion to the
9amounts, if any, by which the respective contributing employers
10have failed to meet their contribution obligations under the
11terms of the affected pension plan; or (ii) if all of the
12contributing employers have met their contribution obligations
13under the terms of the affected pension plan, then in the same
14proportion as they are required to contribute under the terms
15of that plan. In the case of an affected pension plan that has
16only one contributing employer, that contributing employer is
17responsible for all of the additional employer contributions
18required under this subsection.
19    If an under-funded pension plan is determined to have
20achieved a funding ratio of at least 90% during the period when
21an amortization schedule is in force under this Section, the
22contributing employers and the trustee of the affected pension
23plan, acting jointly, may cancel the amortization schedule and
24the contributing employers may cease making additional
25contributions under this subsection for as long as the affected
26pension plan retains a funding ratio of at least 90%.

 

 

09700HB3474ham001- 48 -LRB097 10961 JDS 52490 a

1    (d) Beginning January 1, 2009, if the Authority fails to
2pay to an affected pension fund within 30 days after it is due
3(i) any employer contribution that it is required to make as a
4contributing employer, (ii) any additional employer
5contribution that it is required to pay under subsection (c),
6or (iii) any payment that it is required to make under Section
74.02a or 4.02b of the Regional Transportation Authority Act,
8the trustee of the affected pension fund shall promptly so
9notify the Commission on Government Forecasting and
10Accountability, the Mayor of Chicago, the Governor, and the
11General Assembly.
12    (e) For purposes of determining employer contributions,
13assets, and actuarial liabilities under this subsection,
14contributions, assets, and liabilities relating to health care
15benefits shall not be included.
16    (f) This amendatory Act of the 94th General Assembly does
17not affect or impair the right of any contributing employer or
18its employees to collectively bargain the amount or level of
19employee contributions to an affected pension plan, to the
20extent that the plan includes employees subject to collective
21bargaining.
22    (g) Notwithstanding any other provision of this Article or
23any law to the contrary, a person who, on or after the
24effective date of this amendatory Act of the 97th General
25Assembly, first becomes a director on the Suburban Bus Board,
26the Commuter Rail Board, or the Board of Directors of the

 

 

09700HB3474ham001- 49 -LRB097 10961 JDS 52490 a

1Regional Transportation Authority shall not be eligible to
2participate in an affected pension plan.
3(Source: P.A. 94-839, eff. 6-6-06.)
 
4    Section 10. The Illinois Municipal Code is amended by
5adding Section 3.1-50-30 as follows:
 
6    (65 ILCS 5/3.1-50-30 new)
7    Sec. 3.1-50-30. Increases in salary; pension impact
8statement. Before increasing the salary of a municipal officer,
9executive, or manager:
10        (1) the authorities of the respective municipality who
11    are authorizing the increase must contact the Illinois
12    Municipal Retirement Fund as to the effect of that increase
13    in salary on the pension benefits of that participant;
14        (2) the Illinois Municipal Retirement Fund must
15    respond with a written "Pension Impact Statement" stating
16    the effect of that increase in salary on the pension
17    benefits of that participant, and any other relevant effect
18    of the increase, including payment of the present value of
19    the increase in benefits resulting from the portion of any
20    increase in salary that is in excess of 6% as provided
21    under subsection (k) of Section 7-172, if applicable; and
22        (3) the authorities authorizing this increase must
23    sign the Pension Impact Statement, acknowledging receipt
24    and understanding of the effects of the increase.
 

 

 

09700HB3474ham001- 50 -LRB097 10961 JDS 52490 a

1    Section 15. The State Mandates Act is amended by adding
2Section 8.35 as follows:
 
3    (30 ILCS 805/8.35 new)
4    Sec. 8.35. Exempt mandate. Notwithstanding Sections 6 and 8
5of this Act, no reimbursement by the State is required for the
6implementation of any mandate created by this amendatory Act of
7the 97th General Assembly.".