Illinois General Assembly - Full Text of SB0179
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Full Text of SB0179  97th General Assembly

SB0179ham002 97TH GENERAL ASSEMBLY

Rep. Michael J. Madigan

Filed: 5/30/2012

 

 


 

 


 
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1
AMENDMENT TO SENATE BILL 179

2    AMENDMENT NO. ______. Amend Senate Bill 179, AS AMENDED, by
3replacing everything after the enacting clause with the
4following:
 
5    "Section 5. The Illinois State Auditing Act is amended by
6adding Section 2-8.1 as follows:
 
7    (30 ILCS 5/2-8.1 new)
8    Sec. 2-8.1. Actuarial Responsibilities.
9    (a) The Auditor General shall contract with or hire an
10actuary to serve as the State Actuary. The State Actuary shall
11be retained by, serve at the pleasure of, and be under the
12supervision of the Auditor General and shall be paid from
13appropriations to the office of the Auditor General. The State
14Actuary may be selected by the Auditor General without engaging
15in a competitive procurement process.
16    (b) The State Actuary shall:

 

 

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1        (1) review assumptions and valuations prepared by
2    actuaries retained by the boards of trustees of the
3    State-funded retirement systems;
4        (2) issue preliminary reports to the boards of trustees
5    of the State-funded retirement systems concerning proposed
6    certifications of required State contributions submitted
7    to the State Actuary by those boards;
8        (3) cooperate with the boards of trustees of the
9    State-funded retirement systems to identify recommended
10    changes in actuarial assumptions that the boards must
11    consider before finalizing their certifications of the
12    required State contributions;
13        (4) conduct reviews of the actuarial practices of the
14    boards of trustees of the State-funded retirement systems;
15        (5) make additional reports as directed by joint
16    resolution of the General Assembly; and
17        (6) perform any other duties assigned by the Auditor
18    General, including, but not limited to, reviews of the
19    actuarial practices of other entities.
20    (c) On or before January 1, 2013 and each January 1
21thereafter, the Auditor General shall submit a written report
22to the General Assembly and Governor documenting the initial
23assumptions and valuations prepared by actuaries retained by
24the boards of trustees of the State-funded retirement systems,
25any changes recommended by the State Actuary in the actuarial
26assumptions, and the responses of each board to the State

 

 

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1Actuary's recommendations.
2    (d) For the purposes of this Section, "State-funded
3retirement system" means a retirement system established
4pursuant to Article 2, 14, 15, 16, or 18 of the Illinois
5Pension Code.
 
6    Section 10. The Illinois Pension Code is amended by
7changing Sections 2-134, 14-135.08, 15-165, 16-158, and 18-140
8as follows:
 
9    (40 ILCS 5/2-134)   (from Ch. 108 1/2, par. 2-134)
10    Sec. 2-134. To certify required State contributions and
11submit vouchers.
12    (a) The Board shall certify to the Governor on or before
13December 15 of each year until December 15, 2011 the amount of
14the required State contribution to the System for the next
15fiscal year and shall specifically identify the System's
16projected State normal cost for that fiscal year. The
17certification shall include a copy of the actuarial
18recommendations upon which it is based and shall specifically
19identify the System's projected State normal cost for that
20fiscal year.
21    On or before November 1 of each year, beginning November 1,
222012, the Board shall submit to the State Actuary, the
23Governor, and the General Assembly a proposed certification of
24the amount of the required State contribution to the System for

 

 

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1the next fiscal year, along with all of the actuarial
2assumptions, calculations, and data upon which that proposed
3certification is based. On or before January 1 of each year
4beginning January 1, 2013, the State Actuary shall issue a
5preliminary report concerning the proposed certification and
6identifying, if necessary, recommended changes in actuarial
7assumptions that the Board must consider before finalizing its
8certification of the required State contributions. On or before
9January 15, 2013 and every January 15 thereafter, the Board
10shall certify to the Governor and the General Assembly the
11amount of the required State contribution for the next fiscal
12year. The Board's certification must note any deviations from
13the State Actuary's recommended changes, the reason or reasons
14for not following the State Actuary's recommended changes, and
15the fiscal impact of not following the State Actuary's
16recommended changes on the required State contribution.
17    On or before May 1, 2004, the Board shall recalculate and
18recertify to the Governor the amount of the required State
19contribution to the System for State fiscal year 2005, taking
20into account the amounts appropriated to and received by the
21System under subsection (d) of Section 7.2 of the General
22Obligation Bond Act.
23    On or before July 1, 2005, the Board shall recalculate and
24recertify to the Governor the amount of the required State
25contribution to the System for State fiscal year 2006, taking
26into account the changes in required State contributions made

 

 

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1by this amendatory Act of the 94th General Assembly.
2    On or before April 1, 2011, the Board shall recalculate and
3recertify to the Governor the amount of the required State
4contribution to the System for State fiscal year 2011, applying
5the changes made by Public Act 96-889 to the System's assets
6and liabilities as of June 30, 2009 as though Public Act 96-889
7was approved on that date.
8    (b) Beginning in State fiscal year 1996, on or as soon as
9possible after the 15th day of each month the Board shall
10submit vouchers for payment of State contributions to the
11System, in a total monthly amount of one-twelfth of the
12required annual State contribution certified under subsection
13(a). From the effective date of this amendatory Act of the 93rd
14General Assembly through June 30, 2004, the Board shall not
15submit vouchers for the remainder of fiscal year 2004 in excess
16of the fiscal year 2004 certified contribution amount
17determined under this Section after taking into consideration
18the transfer to the System under subsection (d) of Section
196z-61 of the State Finance Act. These vouchers shall be paid by
20the State Comptroller and Treasurer by warrants drawn on the
21funds appropriated to the System for that fiscal year. If in
22any month the amount remaining unexpended from all other
23appropriations to the System for the applicable fiscal year
24(including the appropriations to the System under Section 8.12
25of the State Finance Act and Section 1 of the State Pension
26Funds Continuing Appropriation Act) is less than the amount

 

 

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1lawfully vouchered under this Section, the difference shall be
2paid from the General Revenue Fund under the continuing
3appropriation authority provided in Section 1.1 of the State
4Pension Funds Continuing Appropriation Act.
5    (c) The full amount of any annual appropriation for the
6System for State fiscal year 1995 shall be transferred and made
7available to the System at the beginning of that fiscal year at
8the request of the Board. Any excess funds remaining at the end
9of any fiscal year from appropriations shall be retained by the
10System as a general reserve to meet the System's accrued
11liabilities.
12(Source: P.A. 95-331, eff. 8-21-07; 96-1497, eff. 1-14-11;
1396-1511, eff. 1-27-11.)
 
14    (40 ILCS 5/14-135.08)  (from Ch. 108 1/2, par. 14-135.08)
15    Sec. 14-135.08. To certify required State contributions.
16    (a) To certify to the Governor and to each department, on
17or before November 15 of each year until November 15, 2011, the
18required rate for State contributions to the System for the
19next State fiscal year, as determined under subsection (b) of
20Section 14-131. The certification to the Governor under this
21subsection (a) shall include a copy of the actuarial
22recommendations upon which the rate is based and shall
23specifically identify the System's projected State normal cost
24for that fiscal year.
25    (a-5) On or before November 1 of each year, beginning

 

 

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1November 1, 2012, the Board shall submit to the State Actuary,
2the Governor, and the General Assembly a proposed certification
3of the amount of the required State contribution to the System
4for the next fiscal year, along with all of the actuarial
5assumptions, calculations, and data upon which that proposed
6certification is based. On or before January 1 of each year
7beginning January 1, 2013, the State Actuary shall issue a
8preliminary report concerning the proposed certification and
9identifying, if necessary, recommended changes in actuarial
10assumptions that the Board must consider before finalizing its
11certification of the required State contributions. On or before
12January 15, 2013 and each January 15 thereafter, the Board
13shall certify to the Governor and the General Assembly the
14amount of the required State contribution for the next fiscal
15year. The Board's certification must note any deviations from
16the State Actuary's recommended changes, the reason or reasons
17for not following the State Actuary's recommended changes, and
18the fiscal impact of not following the State Actuary's
19recommended changes on the required State contribution.
20    (b) The certifications under subsections (a) and (a-5)
21certification shall include an additional amount necessary to
22pay all principal of and interest on those general obligation
23bonds due the next fiscal year authorized by Section 7.2(a) of
24the General Obligation Bond Act and issued to provide the
25proceeds deposited by the State with the System in July 2003,
26representing deposits other than amounts reserved under

 

 

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1Section 7.2(c) of the General Obligation Bond Act. For State
2fiscal year 2005, the Board shall make a supplemental
3certification of the additional amount necessary to pay all
4principal of and interest on those general obligation bonds due
5in State fiscal years 2004 and 2005 authorized by Section
67.2(a) of the General Obligation Bond Act and issued to provide
7the proceeds deposited by the State with the System in July
82003, representing deposits other than amounts reserved under
9Section 7.2(c) of the General Obligation Bond Act, as soon as
10practical after the effective date of this amendatory Act of
11the 93rd General Assembly.
12    On or before May 1, 2004, the Board shall recalculate and
13recertify to the Governor and to each department the amount of
14the required State contribution to the System and the required
15rates for State contributions to the System for State fiscal
16year 2005, taking into account the amounts appropriated to and
17received by the System under subsection (d) of Section 7.2 of
18the General Obligation Bond Act.
19    On or before July 1, 2005, the Board shall recalculate and
20recertify to the Governor and to each department the amount of
21the required State contribution to the System and the required
22rates for State contributions to the System for State fiscal
23year 2006, 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, the Board shall recalculate and

 

 

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1recertify to the Governor and to each department the amount of
2the required State contribution to the System for State fiscal
3year 2011, applying the changes made by Public Act 96-889 to
4the System's assets and liabilities as of June 30, 2009 as
5though Public Act 96-889 was approved on that date.
6(Source: P.A. 96-1497, eff. 1-14-11; 96-1511, eff. 1-27-11.)
 
7    (40 ILCS 5/15-165)   (from Ch. 108 1/2, par. 15-165)
8    Sec. 15-165. To certify amounts and submit vouchers.
9    (a) The Board shall certify to the Governor on or before
10November 15 of each year until November 15, 2011 the
11appropriation required from State funds for the purposes of
12this System for the following fiscal year. The certification
13under this subsection (a) shall include a copy of the actuarial
14recommendations upon which it is based and shall specifically
15identify the System's projected State normal cost for that
16fiscal year and the projected State cost for the self-managed
17plan for that fiscal year.
18    On or before May 1, 2004, the Board shall recalculate and
19recertify to the Governor the amount of the required State
20contribution to the System for State fiscal year 2005, taking
21into account the amounts appropriated to and received by the
22System under subsection (d) of Section 7.2 of the General
23Obligation Bond Act.
24    On or before July 1, 2005, the Board shall recalculate and
25recertify to the Governor the amount of the required State

 

 

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1contribution to the System for State fiscal year 2006, taking
2into account the changes in required State contributions made
3by this amendatory Act of the 94th General Assembly.
4    On or before April 1, 2011, the Board shall recalculate and
5recertify to the Governor the amount of the required State
6contribution to the System for State fiscal year 2011, applying
7the changes made by Public Act 96-889 to the System's assets
8and liabilities as of June 30, 2009 as though Public Act 96-889
9was approved on that date.
10    (a-5) On or before November 1 of each year, beginning
11November 1, 2012, the Board shall submit to the State Actuary,
12the Governor, and the General Assembly a proposed certification
13of the amount of the required State contribution to the System
14for the next fiscal year, along with all of the actuarial
15assumptions, calculations, and data upon which that proposed
16certification is based. On or before January 1 of each year,
17beginning January 1, 2013, the State Actuary shall issue a
18preliminary report concerning the proposed certification and
19identifying, if necessary, recommended changes in actuarial
20assumptions that the Board must consider before finalizing its
21certification of the required State contributions. On or before
22January 15, 2013 and each January 15 thereafter, the Board
23shall certify to the Governor and the General Assembly the
24amount of the required State contribution for the next fiscal
25year. The Board's certification must note, in a written
26response to the State Actuary, any deviations from the State

 

 

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1Actuary's recommended changes, the reason or reasons for not
2following the State Actuary's recommended changes, and the
3fiscal impact of not following the State Actuary's recommended
4changes on the required State contribution.
5    (b) The Board shall certify to the State Comptroller or
6employer, as the case may be, from time to time, by its
7president and secretary, with its seal attached, the amounts
8payable to the System from the various funds.
9    (c) Beginning in State fiscal year 1996, on or as soon as
10possible after the 15th day of each month the Board shall
11submit vouchers for payment of State contributions to the
12System, in a total monthly amount of one-twelfth of the
13required annual State contribution certified under subsection
14(a). From the effective date of this amendatory Act of the 93rd
15General Assembly through June 30, 2004, the Board shall not
16submit vouchers for the remainder of fiscal year 2004 in excess
17of the fiscal year 2004 certified contribution amount
18determined under this Section after taking into consideration
19the transfer to the System under subsection (b) of Section
206z-61 of the State Finance Act. These vouchers shall be paid by
21the State Comptroller and Treasurer by warrants drawn on the
22funds appropriated to the System for that fiscal year.
23    If in any month the amount remaining unexpended from all
24other appropriations to the System for the applicable fiscal
25year (including the appropriations to the System under Section
268.12 of the State Finance Act and Section 1 of the State

 

 

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1Pension Funds Continuing Appropriation Act) is less than the
2amount lawfully vouchered under this Section, the difference
3shall be paid from the General Revenue Fund under the
4continuing appropriation authority provided in Section 1.1 of
5the State Pension Funds Continuing Appropriation Act.
6    (d) So long as the payments received are the full amount
7lawfully vouchered under this Section, payments received by the
8System under this Section shall be applied first toward the
9employer contribution to the self-managed plan established
10under Section 15-158.2. Payments shall be applied second toward
11the employer's portion of the normal costs of the System, as
12defined in subsection (f) of Section 15-155. The balance shall
13be applied toward the unfunded actuarial liabilities of the
14System.
15    (e) In the event that the System does not receive, as a
16result of legislative enactment or otherwise, payments
17sufficient to fully fund the employer contribution to the
18self-managed plan established under Section 15-158.2 and to
19fully fund that portion of the employer's portion of the normal
20costs of the System, as calculated in accordance with Section
2115-155(a-1), then any payments received shall be applied
22proportionately to the optional retirement program established
23under Section 15-158.2 and to the employer's portion of the
24normal costs of the System, as calculated in accordance with
25Section 15-155(a-1).
26(Source: P.A. 96-1497, eff. 1-14-11; 96-1511, eff. 1-27-11.)
 

 

 

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1    (40 ILCS 5/16-158)   (from Ch. 108 1/2, par. 16-158)
2    Sec. 16-158. Contributions by State and other employing
3units.
4    (a) The State shall make contributions to the System by
5means of appropriations from the Common School Fund and other
6State funds of amounts which, together with other employer
7contributions, employee contributions, investment income, and
8other income, will be sufficient to meet the cost of
9maintaining and administering the System on a 90% funded basis
10in accordance with actuarial recommendations.
11    The Board shall determine the amount of State contributions
12required for each fiscal year on the basis of the actuarial
13tables and other assumptions adopted by the Board and the
14recommendations of the actuary, using the formula in subsection
15(b-3).
16    (a-1) Annually, on or before November 15 until November 15,
172011, the Board shall certify to the Governor the amount of the
18required State contribution for the coming fiscal year. The
19certification under this subsection (a-1) shall include a copy
20of the actuarial recommendations upon which it is based and
21shall specifically identify the System's projected State
22normal cost for that fiscal year.
23    On or before May 1, 2004, the Board shall recalculate and
24recertify to the Governor the amount of the required State
25contribution to the System for State fiscal year 2005, taking

 

 

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1into account the amounts appropriated to and received by the
2System under subsection (d) of Section 7.2 of the General
3Obligation Bond Act.
4    On or before July 1, 2005 April 1, 2011, the Board shall
5recalculate and recertify to the Governor the amount of the
6required State contribution to the System for State fiscal year
72006, taking into account the changes in required State
8contributions made by this amendatory Act of the 94th General
9Assembly.
10    On or before April 1, 2011 June 15, 2010, the Board shall
11recalculate and recertify to the Governor the amount of the
12required State contribution to the System for State fiscal year
132011, applying the changes made by Public Act 96-889 to the
14System's assets and liabilities as of June 30, 2009 as though
15Public Act 96-889 was approved on that date.
16    (a-5) On or before November 1 of each year, beginning
17November 1, 2012, the Board shall submit to the State Actuary,
18the Governor, and the General Assembly a proposed certification
19of the amount of the required State contribution to the System
20for the next fiscal year, along with all of the actuarial
21assumptions, calculations, and data upon which that proposed
22certification is based. On or before January 1 of each year,
23beginning January 1, 2013, the State Actuary shall issue a
24preliminary report concerning the proposed certification and
25identifying, if necessary, recommended changes in actuarial
26assumptions that the Board must consider before finalizing its

 

 

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1certification of the required State contributions. On or before
2January 15, 2013 and each January 15 thereafter, the Board
3shall certify to the Governor and the General Assembly the
4amount of the required State contribution for the next fiscal
5year. The Board's certification must note any deviations from
6the State Actuary's recommended changes, the reason or reasons
7for not following the State Actuary's recommended changes, and
8the fiscal impact of not following the State Actuary's
9recommended changes on the required State contribution.
10    (b) Through State fiscal year 1995, the State contributions
11shall be paid to the System in accordance with Section 18-7 of
12the School Code.
13    (b-1) Beginning in State fiscal year 1996, on the 15th day
14of each month, or as soon thereafter as may be practicable, the
15Board shall submit vouchers for payment of State contributions
16to the System, in a total monthly amount of one-twelfth of the
17required annual State contribution certified under subsection
18(a-1). From the effective date of this amendatory Act of the
1993rd General Assembly through June 30, 2004, the Board shall
20not submit vouchers for the remainder of fiscal year 2004 in
21excess of the fiscal year 2004 certified contribution amount
22determined under this Section after taking into consideration
23the transfer to the System under subsection (a) of Section
246z-61 of the State Finance Act. These vouchers shall be paid by
25the State Comptroller and Treasurer by warrants drawn on the
26funds appropriated to the System for that fiscal year.

 

 

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1    If in any month the amount remaining unexpended from all
2other appropriations to the System for the applicable fiscal
3year (including the appropriations to the System under Section
48.12 of the State Finance Act and Section 1 of the State
5Pension Funds Continuing Appropriation Act) is less than the
6amount lawfully vouchered under this subsection, the
7difference shall be paid from the Common School Fund under the
8continuing appropriation authority provided in Section 1.1 of
9the State Pension Funds Continuing Appropriation Act.
10    (b-2) Allocations from the Common School Fund apportioned
11to school districts not coming under this System shall not be
12diminished or affected by the provisions of this Article.
13    (b-3) For State fiscal years 2012 through 2045, the minimum
14contribution to the System to be made by the State for each
15fiscal year shall be an amount determined by the System to be
16sufficient to bring the total assets of the System up to 90% of
17the total actuarial liabilities of the System by the end of
18State fiscal year 2045. In making these determinations, the
19required State contribution shall be calculated each year as a
20level percentage of payroll over the years remaining to and
21including fiscal year 2045 and shall be determined under the
22projected unit credit actuarial cost method.
23    For State fiscal years 1996 through 2005, the State
24contribution to the System, as a percentage of the applicable
25employee payroll, shall be increased in equal annual increments
26so that by State fiscal year 2011, the State is contributing at

 

 

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1the rate required under this Section; except that in the
2following specified State fiscal years, the State contribution
3to the System shall not be less than the following indicated
4percentages of the applicable employee payroll, even if the
5indicated percentage will produce a State contribution in
6excess of the amount otherwise required under this subsection
7and subsection (a), and notwithstanding any contrary
8certification made under subsection (a-1) before the effective
9date of this amendatory Act of 1998: 10.02% in FY 1999; 10.77%
10in FY 2000; 11.47% in FY 2001; 12.16% in FY 2002; 12.86% in FY
112003; and 13.56% in FY 2004.
12    Notwithstanding any other provision of this Article, the
13total required State contribution for State fiscal year 2006 is
14$534,627,700.
15    Notwithstanding any other provision of this Article, the
16total required State contribution for State fiscal year 2007 is
17$738,014,500.
18    For each of State fiscal years 2008 through 2009, the State
19contribution to the System, as a percentage of the applicable
20employee payroll, shall be increased in equal annual increments
21from the required State contribution for State fiscal year
222007, so that by State fiscal year 2011, the State is
23contributing at the rate otherwise required under this Section.
24    Notwithstanding any other provision of this Article, the
25total required State contribution for State fiscal year 2010 is
26$2,089,268,000 and shall be made from the proceeds of bonds

 

 

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1sold in fiscal year 2010 pursuant to Section 7.2 of the General
2Obligation Bond Act, less (i) the pro rata share of bond sale
3expenses determined by the System's share of total bond
4proceeds, (ii) any amounts received from the Common School Fund
5in fiscal year 2010, and (iii) any reduction in bond proceeds
6due to the issuance of discounted bonds, if applicable.
7    Notwithstanding any other provision of this Article, the
8total required State contribution for State fiscal year 2011 is
9the amount recertified by the System on or before April 1, 2011
10pursuant to subsection (a-1) of this Section and shall be made
11from the proceeds of bonds sold in fiscal year 2011 pursuant to
12Section 7.2 of the General Obligation Bond Act, less (i) the
13pro rata share of bond sale expenses determined by the System's
14share of total bond proceeds, (ii) any amounts received from
15the Common School Fund in fiscal year 2011, and (iii) any
16reduction in bond proceeds due to the issuance of discounted
17bonds, if applicable. This amount shall include, in addition to
18the amount certified by the System, an amount necessary to meet
19employer contributions required by the State as an employer
20under paragraph (e) of this Section, which may also be used by
21the System for contributions required by paragraph (a) of
22Section 16-127.
23    Beginning in State fiscal year 2046, the minimum State
24contribution for each fiscal year shall be the amount needed to
25maintain the total assets of the System at 90% of the total
26actuarial liabilities of the System.

 

 

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1    Amounts received by the System pursuant to Section 25 of
2the Budget Stabilization Act or Section 8.12 of the State
3Finance Act in any fiscal year do not reduce and do not
4constitute payment of any portion of the minimum State
5contribution required under this Article in that fiscal year.
6Such amounts shall not reduce, and shall not be included in the
7calculation of, the required State contributions under this
8Article in any future year until the System has reached a
9funding ratio of at least 90%. A reference in this Article to
10the "required State contribution" or any substantially similar
11term does not include or apply to any amounts payable to the
12System under Section 25 of the Budget Stabilization Act.
13    Notwithstanding any other provision of this Section, the
14required State contribution for State fiscal year 2005 and for
15fiscal year 2008 and each fiscal year thereafter, as calculated
16under this Section and certified under subsection (a-1), shall
17not exceed an amount equal to (i) the amount of the required
18State contribution that would have been calculated under this
19Section for that fiscal year if the System had not received any
20payments under subsection (d) of Section 7.2 of the General
21Obligation Bond Act, minus (ii) the portion of the State's
22total debt service payments for that fiscal year on the bonds
23issued in fiscal year 2003 for the purposes of that Section
247.2, as determined and certified by the Comptroller, that is
25the same as the System's portion of the total moneys
26distributed under subsection (d) of Section 7.2 of the General

 

 

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1Obligation Bond Act. In determining this maximum for State
2fiscal years 2008 through 2010, however, the amount referred to
3in item (i) shall be increased, as a percentage of the
4applicable employee payroll, in equal increments calculated
5from the sum of the required State contribution for State
6fiscal year 2007 plus the applicable portion of the State's
7total debt service payments for fiscal year 2007 on the bonds
8issued in fiscal year 2003 for the purposes of Section 7.2 of
9the General Obligation Bond Act, so that, by State fiscal year
102011, the State is contributing at the rate otherwise required
11under this Section.
12    (c) Payment of the required State contributions and of all
13pensions, retirement annuities, death benefits, refunds, and
14other benefits granted under or assumed by this System, and all
15expenses in connection with the administration and operation
16thereof, are obligations of the State.
17    If members are paid from special trust or federal funds
18which are administered by the employing unit, whether school
19district or other unit, the employing unit shall pay to the
20System from such funds the full accruing retirement costs based
21upon that service, as determined by the System. Employer
22contributions, based on salary paid to members from federal
23funds, may be forwarded by the distributing agency of the State
24of Illinois to the System prior to allocation, in an amount
25determined in accordance with guidelines established by such
26agency and the System.

 

 

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1    (d) Effective July 1, 1986, any employer of a teacher as
2defined in paragraph (8) of Section 16-106 shall pay the
3employer's normal cost of benefits based upon the teacher's
4service, in addition to employee contributions, as determined
5by the System. Such employer contributions shall be forwarded
6monthly in accordance with guidelines established by the
7System.
8    However, with respect to benefits granted under Section
916-133.4 or 16-133.5 to a teacher as defined in paragraph (8)
10of Section 16-106, the employer's contribution shall be 12%
11(rather than 20%) of the member's highest annual salary rate
12for each year of creditable service granted, and the employer
13shall also pay the required employee contribution on behalf of
14the teacher. For the purposes of Sections 16-133.4 and
1516-133.5, a teacher as defined in paragraph (8) of Section
1616-106 who is serving in that capacity while on leave of
17absence from another employer under this Article shall not be
18considered an employee of the employer from which the teacher
19is on leave.
20    (e) Beginning July 1, 1998, every employer of a teacher
21shall pay to the System an employer contribution computed as
22follows:
23        (1) Beginning July 1, 1998 through June 30, 1999, the
24    employer contribution shall be equal to 0.3% of each
25    teacher's salary.
26        (2) Beginning July 1, 1999 and thereafter, the employer

 

 

09700SB0179ham002- 22 -LRB097 04009 JDS 70431 a

1    contribution shall be equal to 0.58% of each teacher's
2    salary.
3The school district or other employing unit may pay these
4employer contributions out of any source of funding available
5for that purpose and shall forward the contributions to the
6System on the schedule established for the payment of member
7contributions.
8    These employer contributions are intended to offset a
9portion of the cost to the System of the increases in
10retirement benefits resulting from this amendatory Act of 1998.
11    Each employer of teachers is entitled to a credit against
12the contributions required under this subsection (e) with
13respect to salaries paid to teachers for the period January 1,
142002 through June 30, 2003, equal to the amount paid by that
15employer under subsection (a-5) of Section 6.6 of the State
16Employees Group Insurance Act of 1971 with respect to salaries
17paid to teachers for that period.
18    The additional 1% employee contribution required under
19Section 16-152 by this amendatory Act of 1998 is the
20responsibility of the teacher and not the teacher's employer,
21unless the employer agrees, through collective bargaining or
22otherwise, to make the contribution on behalf of the teacher.
23    If an employer is required by a contract in effect on May
241, 1998 between the employer and an employee organization to
25pay, on behalf of all its full-time employees covered by this
26Article, all mandatory employee contributions required under

 

 

09700SB0179ham002- 23 -LRB097 04009 JDS 70431 a

1this Article, then the employer shall be excused from paying
2the employer contribution required under this subsection (e)
3for the balance of the term of that contract. The employer and
4the employee organization shall jointly certify to the System
5the existence of the contractual requirement, in such form as
6the System may prescribe. This exclusion shall cease upon the
7termination, extension, or renewal of the contract at any time
8after May 1, 1998.
9    (f) If the amount of a teacher's salary for any school year
10used to determine final average salary exceeds the member's
11annual full-time salary rate with the same employer for the
12previous school year by more than 6%, the teacher's employer
13shall pay to the System, in addition to all other payments
14required under this Section and in accordance with guidelines
15established by the System, the present value of the increase in
16benefits resulting from the portion of the increase in salary
17that is in excess of 6%. This present value shall be computed
18by the System on the basis of the actuarial assumptions and
19tables used in the most recent actuarial valuation of the
20System that is available at the time of the computation. If a
21teacher's salary for the 2005-2006 school year is used to
22determine final average salary under this subsection (f), then
23the changes made to this subsection (f) by Public Act 94-1057
24shall apply in calculating whether the increase in his or her
25salary is in excess of 6%. For the purposes of this Section,
26change in employment under Section 10-21.12 of the School Code

 

 

09700SB0179ham002- 24 -LRB097 04009 JDS 70431 a

1on or after June 1, 2005 shall constitute a change in employer.
2The System may require the employer to provide any pertinent
3information or documentation. The changes made to this
4subsection (f) by this amendatory Act of the 94th General
5Assembly apply without regard to whether the teacher was in
6service on or after its effective date.
7    Whenever it determines that a payment is or may be required
8under this subsection, the System shall calculate the amount of
9the payment and bill the employer for that amount. The bill
10shall specify the calculations used to determine the amount
11due. If the employer disputes the amount of the bill, it may,
12within 30 days after receipt of the bill, apply to the System
13in writing for a recalculation. The application must specify in
14detail the grounds of the dispute and, if the employer asserts
15that the calculation is subject to subsection (g) or (h) of
16this Section, must include an affidavit setting forth and
17attesting to all facts within the employer's knowledge that are
18pertinent to the applicability of that subsection. Upon
19receiving a timely application for recalculation, the System
20shall review the application and, if appropriate, recalculate
21the amount due.
22    The employer contributions required under this subsection
23(f) may be paid in the form of a lump sum within 90 days after
24receipt of the bill. If the employer contributions are not paid
25within 90 days after receipt of the bill, then interest will be
26charged at a rate equal to the System's annual actuarially

 

 

09700SB0179ham002- 25 -LRB097 04009 JDS 70431 a

1assumed rate of return on investment compounded annually from
2the 91st day after receipt of the bill. Payments must be
3concluded within 3 years after the employer's receipt of the
4bill.
5    (g) This subsection (g) applies only to payments made or
6salary increases given on or after June 1, 2005 but before July
71, 2011. The changes made by Public Act 94-1057 shall not
8require the System to refund any payments received before July
931, 2006 (the effective date of Public Act 94-1057).
10    When assessing payment for any amount due under subsection
11(f), the System shall exclude salary increases paid to teachers
12under contracts or collective bargaining agreements entered
13into, amended, or renewed before June 1, 2005.
14    When assessing payment for any amount due under subsection
15(f), the System shall exclude salary increases paid to a
16teacher at a time when the teacher is 10 or more years from
17retirement eligibility under Section 16-132 or 16-133.2.
18    When assessing payment for any amount due under subsection
19(f), the System shall exclude salary increases resulting from
20overload work, including summer school, when the school
21district has certified to the System, and the System has
22approved the certification, that (i) the overload work is for
23the sole purpose of classroom instruction in excess of the
24standard number of classes for a full-time teacher in a school
25district during a school year and (ii) the salary increases are
26equal to or less than the rate of pay for classroom instruction

 

 

09700SB0179ham002- 26 -LRB097 04009 JDS 70431 a

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

 

 

09700SB0179ham002- 27 -LRB097 04009 JDS 70431 a

1renewed on or after June 1, 2005 but before July 1, 2011.
2Notwithstanding any other provision of this Section, any
3payments made or salary increases given after June 30, 2014
4shall be used in assessing payment for any amount due under
5subsection (f) of this Section.
6    (i) The System shall prepare a report and file copies of
7the report with the Governor and the General Assembly by
8January 1, 2007 that contains all of the following information:
9        (1) The number of recalculations required by the
10    changes made to this Section by Public Act 94-1057 for each
11    employer.
12        (2) The dollar amount by which each employer's
13    contribution to the System was changed due to
14    recalculations required by Public Act 94-1057.
15        (3) The total amount the System received from each
16    employer as a result of the changes made to this Section by
17    Public Act 94-4.
18        (4) The increase in the required State contribution
19    resulting from the changes made to this Section by Public
20    Act 94-1057.
21    (j) For purposes of determining the required State
22contribution to the System, the value of the System's assets
23shall be equal to the actuarial value of the System's assets,
24which shall be calculated as follows:
25    As of June 30, 2008, the actuarial value of the System's
26assets shall be equal to the market value of the assets as of

 

 

09700SB0179ham002- 28 -LRB097 04009 JDS 70431 a

1that date. In determining the actuarial value of the System's
2assets for fiscal years after June 30, 2008, any actuarial
3gains or losses from investment return incurred in a fiscal
4year shall be recognized in equal annual amounts over the
55-year period following that fiscal year.
6    (k) For purposes of determining the required State
7contribution to the system for a particular year, the actuarial
8value of assets shall be assumed to earn a rate of return equal
9to the system's actuarially assumed rate of return.
10(Source: P.A. 95-331, eff. 8-21-07; 95-950, eff. 8-29-08;
1196-43, eff. 7-15-09; 96-1497, eff. 1-14-11; 96-1511, eff.
121-27-11; 96-1554, eff. 3-18-11; revised 4-6-11.)
 
13    (40 ILCS 5/18-140)   (from Ch. 108 1/2, par. 18-140)
14    Sec. 18-140. To certify required State contributions and
15submit vouchers.
16    (a) The Board shall certify to the Governor, on or before
17November 15 of each year until November 15, 2011, the amount of
18the required State contribution to the System for the following
19fiscal year and shall specifically identify the System's
20projected State normal cost for that fiscal year. The
21certification shall include a copy of the actuarial
22recommendations upon which it is based and shall specifically
23identify the System's projected State normal cost for that
24fiscal year.
25    On or before November 1 of each year, beginning November 1,

 

 

09700SB0179ham002- 29 -LRB097 04009 JDS 70431 a

12012, the Board shall submit to the State Actuary, the
2Governor, and the General Assembly a proposed certification of
3the amount of the required State contribution to the System for
4the next fiscal year, along with all of the actuarial
5assumptions, calculations, and data upon which that proposed
6certification is based. On or before January 1 of each year
7beginning January 1, 2013, the State Actuary shall issue a
8preliminary report concerning the proposed certification and
9identifying, if necessary, recommended changes in actuarial
10assumptions that the Board must consider before finalizing its
11certification of the required State contributions. On or before
12January 15, 2013 and every January 15 thereafter, the Board
13shall certify to the Governor and the General Assembly the
14amount of the required State contribution for the next fiscal
15year. The Board's certification must note any deviations from
16the State Actuary's recommended changes, the reason or reasons
17for not following the State Actuary's recommended changes, and
18the fiscal impact of not following the State Actuary's
19recommended changes on the required State contribution.
20    On or before May 1, 2004, the Board shall recalculate and
21recertify to the Governor the amount of the required State
22contribution to the System for State fiscal year 2005, taking
23into account the amounts appropriated to and received by the
24System under subsection (d) of Section 7.2 of the General
25Obligation Bond Act.
26    On or before July 1, 2005, the Board shall recalculate and

 

 

09700SB0179ham002- 30 -LRB097 04009 JDS 70431 a

1recertify to the Governor the amount of the required State
2contribution to the System for State fiscal year 2006, taking
3into account the changes in required State contributions made
4by this amendatory Act of the 94th General Assembly.
5    On or before April 1, 2011, the Board shall recalculate and
6recertify to the Governor the amount of the required State
7contribution to the System for State fiscal year 2011, applying
8the changes made by Public Act 96-889 to the System's assets
9and liabilities as of June 30, 2009 as though Public Act 96-889
10was approved on that date.
11    (b) Beginning in State fiscal year 1996, on or as soon as
12possible after the 15th day of each month the Board shall
13submit vouchers for payment of State contributions to the
14System, in a total monthly amount of one-twelfth of the
15required annual State contribution certified under subsection
16(a). From the effective date of this amendatory Act of the 93rd
17General Assembly through June 30, 2004, the Board shall not
18submit vouchers for the remainder of fiscal year 2004 in excess
19of the fiscal year 2004 certified contribution amount
20determined under this Section after taking into consideration
21the transfer to the System under subsection (c) of Section
226z-61 of the State Finance Act. These vouchers shall be paid by
23the State Comptroller and Treasurer by warrants drawn on the
24funds appropriated to the System for that fiscal year.
25    If in any month the amount remaining unexpended from all
26other appropriations to the System for the applicable fiscal

 

 

09700SB0179ham002- 31 -LRB097 04009 JDS 70431 a

1year (including the appropriations to the System under Section
28.12 of the State Finance Act and Section 1 of the State
3Pension Funds Continuing Appropriation Act) is less than the
4amount lawfully vouchered under this Section, the difference
5shall be paid from the General Revenue Fund under the
6continuing appropriation authority provided in Section 1.1 of
7the State Pension Funds Continuing Appropriation Act.
8(Source: P.A. 96-1497, eff. 1-14-11; 96-1511, eff. 1-27-11.)
 
9    Section 99. Effective date. This Act takes effect upon
10becoming law.".