40 ILCS 5/16-158

(40 ILCS 5/16-158)

(from Ch. 108 1/2, par. 16-158)

Sec. 16-158. Contributions by State and other employing units.

(a) The State shall make contributions to the System by means of
appropriations from the Common School Fund and other State funds of amounts
which, together with other employer contributions, employee contributions,
investment income, and other income, will be sufficient to meet the cost of
maintaining and administering the System on a 90% funded basis in accordance
with actuarial recommendations.

The Board shall determine the amount of State contributions required for
each fiscal year on the basis of the actuarial tables and other assumptions
adopted by the Board and the recommendations of the actuary, using the formula
in subsection (b-3).

(a-1) Annually, on or before November 15  until November 15, 2011, the Board shall certify to the
Governor the amount of the required State contribution for the coming fiscal
year.  The certification under this subsection (a-1) shall include a copy of the actuarial recommendations
upon which it is based and shall specifically identify the System's projected State normal cost for that fiscal year.

On or before May 1, 2004, the Board shall recalculate and recertify to
the Governor the amount of the required State contribution to the System for
State fiscal year 2005, taking into account the amounts appropriated to and
received by the System under subsection (d) of Section 7.2 of the General
Obligation Bond Act.

On or before July 1, 2005, the Board shall recalculate and recertify
to the Governor the amount of the required State
contribution to the System for State fiscal year 2006, taking into account the changes in required State contributions made by this amendatory Act of the 94th General Assembly.

On or before April 1, 2011, the Board shall recalculate and recertify to the Governor the amount of the required State contribution to the System for State fiscal year 2011, applying the changes made by Public Act 96-889 to the System's assets and liabilities as of June 30, 2009 as though Public Act 96-889 was approved on that date.

(a-5) On or before November 1 of each year, beginning November 1, 2012, the Board shall submit to the State Actuary, the Governor, and the General Assembly a proposed certification of the amount of the required State contribution to the System for the next fiscal year, along with all of the actuarial assumptions, calculations, and data upon which that proposed certification is based. On or before January 1 of each year, beginning January 1, 2013, the State Actuary shall issue a preliminary report concerning the proposed certification and identifying, if necessary, recommended changes in actuarial assumptions that the Board must consider before finalizing its certification of the required State contributions. On or before January 15, 2013 and each January 15 thereafter, the Board shall certify to the Governor and the General Assembly the amount of the required State contribution for the next fiscal year. The Board's certification must note any deviations from the State Actuary's recommended changes, the reason or reasons for not following the State Actuary's recommended changes, and the fiscal impact of not following the State Actuary's recommended changes on the required State contribution.

(b) Through State fiscal year 1995, the State contributions shall be
paid to the System in accordance with Section 18-7 of the School Code.

(b-1) Beginning in State fiscal year 1996, on the 15th day of each month,
or as soon thereafter as may be practicable, the Board shall submit vouchers
for payment of State contributions to the System, in a total monthly amount of
one-twelfth of the required annual State contribution certified under
subsection (a-1).
From the
effective date of this amendatory Act of the 93rd General Assembly
through June 30, 2004, the Board shall not submit vouchers for the
remainder of fiscal year 2004 in excess of the fiscal year 2004
certified contribution amount determined under this Section
after taking into consideration the transfer to the System
under subsection (a) of Section 6z-61 of the State Finance Act.
These vouchers shall be paid by the State Comptroller and
Treasurer by warrants drawn on the funds appropriated to the System for that
fiscal year.

If in any month the amount remaining unexpended from all other appropriations
to the System for the applicable fiscal year (including the appropriations to
the System under Section 8.12 of the State Finance Act and Section 1 of the
State Pension Funds Continuing Appropriation Act) is less than the amount
lawfully vouchered under this subsection, the difference shall be paid from the
Common School Fund under the continuing appropriation authority provided in
Section 1.1 of the State Pension Funds Continuing Appropriation Act.

(b-2) Allocations from the Common School Fund apportioned to school
districts not coming under this System shall not be diminished or affected by
the provisions of this Article.

(b-3) For State fiscal years 2012 through 2045, the minimum contribution
to the System to be made by the State for each fiscal year shall be an amount
determined by the System to be sufficient to bring the total assets of the
System up to 90% of the total actuarial liabilities of the System by the end of
State fiscal year 2045.  In making these determinations, the required State
contribution shall be calculated each year as a level percentage of payroll
over the years remaining to and including fiscal year 2045 and shall be
determined under the projected unit credit actuarial cost method.

For State fiscal years 1996 through 2005, the State contribution to the
System, as a percentage of the applicable employee payroll, shall be increased
in equal annual increments so that by State fiscal year 2011, the State is
contributing at the rate required under this Section; except that in the
following specified State fiscal years, the State contribution to the System
shall not be less than the following indicated percentages of the applicable
employee payroll, even if the indicated percentage will produce a State
contribution in excess of the amount otherwise required under this subsection
and subsection (a), and notwithstanding any contrary certification made under
subsection (a-1) before the effective date of this amendatory Act of 1998:
10.02% in FY 1999;
10.77% in FY 2000;
11.47% in FY 2001;
12.16% in FY 2002;
12.86% in FY 2003; and
13.56% in FY 2004.

Notwithstanding any other provision of this Article, the total required State
contribution for State fiscal year 2006 is $534,627,700.

Notwithstanding any other provision of this Article, the total required State
contribution for State fiscal year 2007 is $738,014,500.

For each of State fiscal years 2008 through 2009, the State contribution to
the System, as a percentage of the applicable employee payroll, shall be
increased in equal annual increments from the required State contribution for State fiscal year 2007, so that by State fiscal year 2011, the
State is contributing at the rate otherwise required under this Section.

Notwithstanding any other provision of this Article, the total required State contribution for State fiscal year 2010 is $2,089,268,000 and shall be made from the proceeds of bonds sold in fiscal year 2010 pursuant to Section 7.2 of the General Obligation Bond Act, less (i) the pro rata share of bond sale expenses determined by the System's share of total bond proceeds, (ii) any amounts received from the Common School Fund in fiscal year 2010, and (iii) any reduction in bond proceeds due to the issuance of discounted bonds, if applicable.

Notwithstanding any other provision of this Article, the
total required State contribution for State fiscal year 2011 is
the amount recertified by the System on or before April 1, 2011 pursuant to subsection (a-1) of this Section and shall be made from the proceeds of bonds
sold in fiscal year 2011 pursuant to Section 7.2 of the General
Obligation Bond Act, less (i) the pro rata share of bond sale
expenses determined by the System's share of total bond
proceeds, (ii) any amounts received from the Common School Fund
in fiscal year 2011, and (iii) any reduction in bond proceeds
due to the issuance of discounted bonds, if applicable.  This amount shall include, in addition to the amount certified by the System, an amount necessary to meet employer contributions required by the State as an employer under paragraph (e) of this Section, which may also be used by the System for contributions required by paragraph (a) of Section 16-127.

Beginning in State fiscal year 2046, the minimum State contribution for
each fiscal year shall be the amount needed to maintain the total assets of
the System at 90% of the total actuarial liabilities of the System.

Amounts received by the System pursuant to Section 25 of the Budget Stabilization Act or Section 8.12 of the State Finance Act in any fiscal year do not reduce and do not constitute payment of any portion of the minimum State contribution required under this Article in that fiscal year.  Such amounts shall not reduce, and shall not be included in the calculation of, the required State contributions under this Article in any future year until the System has reached a funding ratio of at least 90%.  A reference in this Article to the "required State contribution" or any substantially similar term does not include or apply to any amounts payable to the System under  Section 25 of the Budget Stabilization Act.

Notwithstanding any other provision of this Section, the required State
contribution for State fiscal year 2005 and for fiscal year 2008 and each fiscal year thereafter, as
calculated under this Section and
certified under subsection (a-1), shall not exceed an amount equal to (i) the
amount of the required State contribution that would have been calculated under
this Section for that fiscal year if the System had not received any payments
under subsection (d) of Section 7.2 of the General Obligation Bond Act, minus
(ii) the portion of the State's total debt service payments for that fiscal
year on the bonds issued in fiscal year 2003 for the purposes of that Section 7.2, as determined
and certified by the Comptroller, that is the same as the System's portion of
the total moneys distributed under subsection (d) of Section 7.2 of the General
Obligation Bond Act. In determining this maximum for State fiscal years 2008 through 2010, however, the amount referred to in item (i) shall be increased, as a percentage of the applicable employee payroll, in equal increments calculated from the sum of the required State contribution for State fiscal year 2007 plus the applicable portion of the State's total debt service payments for fiscal year 2007  on the bonds issued in fiscal year 2003 for the purposes of Section 7.2 of the General
Obligation Bond Act, so that, by State fiscal year 2011, the
State is contributing at the rate otherwise required under this Section.

(c) Payment of the required State contributions and of all pensions,
retirement annuities, death benefits, refunds, and other benefits granted
under or assumed by this System, and all expenses in connection with the
administration and operation thereof, are obligations of the State.

If members are paid from special trust or federal funds which are
administered by the employing unit, whether school district or other
unit, the employing unit shall pay to the System from such
funds the full accruing retirement costs based upon that
service, as determined by the System.  Employer contributions, based on
salary paid to members from federal funds, may be forwarded by the distributing
agency of the State of Illinois to the System prior to allocation, in an
amount determined in accordance with guidelines established by such
agency and the System.

(d) Effective July 1, 1986, any employer of a teacher as defined in
paragraph (8) of Section 16-106 shall pay the employer's normal cost
of benefits based upon the teacher's service, in addition to
employee contributions, as determined by the System.  Such employer
contributions shall be forwarded monthly in accordance with guidelines
established by the System.

However, with respect to benefits granted under Section 16-133.4 or
16-133.5 to a teacher as defined in paragraph (8) of Section 16-106, the
employer's contribution shall be 12% (rather than 20%) of the member's
highest annual salary rate for each year of creditable service granted, and
the employer shall also pay the required employee contribution on behalf of
the teacher.  For the purposes of Sections 16-133.4 and 16-133.5, a teacher
as defined in paragraph (8) of Section 16-106 who is serving in that capacity
while on leave of absence from another employer under this Article shall not
be considered an employee of the employer from which the teacher is on leave.

(e) Beginning July 1, 1998, every employer of a teacher
shall pay to the System an employer contribution computed as follows:

(1) Beginning July 1, 1998 through June 30, 1999, the

The school district or other employing unit may pay these employer
contributions out of any source of funding available for that purpose and
shall forward the contributions to the System on the schedule established
for the payment of member contributions.

These employer contributions are intended to offset a portion of the cost
to the System of the increases in retirement benefits resulting from this
amendatory Act of 1998.

Each employer of teachers is entitled to a credit against the contributions
required under this subsection (e) with respect to salaries paid to teachers
for the period January 1, 2002 through June 30, 2003, equal to the amount paid
by that employer under subsection (a-5) of Section 6.6 of the State Employees
Group Insurance Act of 1971 with respect to salaries paid to teachers for that
period.

The additional 1% employee contribution required under Section 16-152 by
this amendatory Act of 1998 is the responsibility of the teacher and not the
teacher's employer, unless the employer agrees, through collective bargaining
or otherwise, to make the contribution on behalf of the teacher.

If an employer is required by a contract in effect on May 1, 1998 between the
employer and an employee organization to pay, on behalf of all its full-time
employees
covered by this Article, all mandatory employee contributions required under
this Article, then the employer shall be excused from paying the employer
contribution required under this subsection (e) for the balance of the term
of that contract.  The employer and the employee organization shall jointly
certify to the System the existence of the contractual requirement, in such
form as the System may prescribe.  This exclusion shall cease upon the
termination, extension, or renewal of the contract at any time after May 1,
1998.

(f) If the amount of a teacher's salary for any school year used to determine final average salary exceeds the member's annual full-time salary rate with the same employer for the previous school year by more than 6%, the teacher's employer shall pay to the System, in addition to all other payments required under this Section and in accordance with guidelines established by the System, the present value of the increase in benefits resulting from the portion of the increase in salary that is in excess of 6%.  This present value shall be computed by the System on the basis of the actuarial assumptions and tables used in the most recent actuarial valuation of the System that is available at the time of the computation. If a teacher's salary for the 2005-2006 school year is used to determine final average salary under this subsection (f), then the changes made to this subsection (f) by Public Act 94-1057 shall apply in calculating whether the increase in his or her salary is in excess of 6%. For the purposes of this Section, change in employment under Section 10-21.12 of the School Code on or after June 1, 2005 shall constitute a change in employer. The System may require the employer to provide any pertinent information or documentation.
The changes made to this subsection (f) by this amendatory Act of the 94th General Assembly apply without regard to whether the teacher was in service on or after its effective date.

Whenever it determines that a payment is or may be required under this subsection, the System shall calculate the amount of the payment  and bill the employer for that amount.  The bill shall specify the calculations used to determine the amount due. If the employer disputes the amount of the bill, it may, within 30 days after receipt of the bill, apply to the System in writing  for a recalculation. The application must specify in detail the grounds of the dispute and, if the employer asserts that the calculation is subject to subsection (g) or (h) of this Section, must include an affidavit setting forth and attesting to all facts within the employer's knowledge that are pertinent to the applicability of that subsection. Upon receiving a timely application for recalculation,  the System shall review the application and, if appropriate, recalculate the amount due.

The employer contributions required under this subsection (f) may be paid in the form of a lump sum within 90 days after receipt of the bill. If the employer contributions are not paid within 90 days after receipt of the bill, then interest will be charged at a rate equal to the System's annual actuarially assumed rate of return on investment compounded annually from the 91st day after receipt of the bill. Payments must be concluded within 3 years after the employer's receipt of the bill.

(g) This subsection (g) applies only to payments made or salary increases given on or after June 1, 2005 but before July 1, 2011.  The changes made by Public Act 94-1057 shall not require the System to refund any payments received before
July 31, 2006 (the effective date of Public Act 94-1057).

When assessing payment for any amount due under subsection (f), the System shall exclude salary increases paid to teachers under contracts or collective bargaining agreements entered into, amended, or renewed before June 1, 2005.

When assessing payment for any amount due under subsection (f), the System shall exclude salary increases paid to a teacher at a time when the teacher is 10 or more years from retirement eligibility under Section 16-132 or 16-133.2.

When assessing payment for any amount due under subsection (f), the System shall exclude salary increases resulting from overload work, including summer school, when the school district has certified to the System, and the System  has approved the certification, that (i) the overload work is for the sole purpose of classroom instruction in excess of the standard number of classes for a full-time teacher in a school district during a school year and (ii) the salary increases are equal to or less than the rate of pay for classroom instruction computed on the teacher's current salary and work schedule.

When assessing payment for any amount due under subsection (f), the System shall exclude a salary increase resulting from a promotion (i) for which the employee is required to hold a certificate or supervisory endorsement issued by the State Teacher Certification Board that is a different certification or supervisory endorsement than is required for the teacher's previous position and (ii) to a position that has existed and been filled by a member for no less than one complete academic year and the salary increase from the promotion is an increase that results in an amount no greater than the lesser of the average salary paid for other similar positions in the district requiring the same certification or the amount stipulated in the collective bargaining agreement for a similar position requiring the same certification.

When assessing payment for any amount due under subsection (f), the System shall exclude any payment to the teacher from the State of Illinois or the State Board of Education over which the employer does not have discretion, notwithstanding that the payment is included in the computation of final average salary.

(h) When assessing payment for any amount due under subsection (f), the System shall exclude any salary increase  described in subsection (g) of this Section given on or after  July 1, 2011 but before July 1, 2014 under a contract or collective bargaining agreement entered into, amended, or renewed on or after June 1, 2005 but before July 1, 2011. Notwithstanding any other provision of this Section, any payments made or salary increases given after June 30, 2014 shall be used in assessing payment for any amount due under subsection (f) of this Section.

(i) The System shall prepare a report and file copies of the report with the Governor and the General Assembly by January 1, 2007 that contains all of the following information:

(1) The number of recalculations required by the