State of Illinois
91st General Assembly
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91_HB1253

 
                                               LRB9101879EGfg

 1        AN  ACT  to  amend  the Illinois Pension Code by changing
 2    Sections 15-136, 15-136.3, and 15-145.

 3        Be it enacted by the People of  the  State  of  Illinois,
 4    represented in the General Assembly:

 5        Section  5.   The  Illinois  Pension  Code  is amended by
 6    changing Sections 15-136, 15-136.3, and 15-145 as follows:

 7        (40 ILCS 5/15-136) (from Ch. 108 1/2, par. 15-136)
 8        Sec.  15-136.   Retirement  annuities  -   Amount.    The
 9    provisions  of  this  Section  15-136  apply  only  to  those
10    participants who are participating in the traditional benefit
11    package  or  the portable benefit package and do not apply to
12    participants who are participating in the self-managed plan.
13        (a)  The amount of a  participant's  retirement  annuity,
14    expressed  in  the  form  of  a single-life annuity, shall be
15    determined by whichever of the following rules is  applicable
16    and provides the largest annuity:
17        Rule  1:  The  retirement annuity shall be 1.67% of final
18    rate of earnings for each of the first 10 years  of  service,
19    1.90%  for  each  of  the next 10 years of service, 2.10% for
20    each year of service in excess of 20 but  not  exceeding  30,
21    and  2.30%  for each year in excess of 30; or for persons who
22    retire on or after January 1, 1998, 2.2% of the final rate of
23    earnings for each year of service.
24        Rule 2:  The retirement annuity shall be the sum  of  the
25    following,   determined   from   amounts   credited   to  the
26    participant in accordance with the actuarial tables  and  the
27    prescribed  rate  of  interest  in  effect  at  the  time the
28    retirement annuity begins:
29             (i)  the normal annuity which can be provided on  an
30        actuarially  equivalent  basis, by the accumulated normal
31        contributions as of the date the annuity begins; and
 
                            -2-                LRB9101879EGfg
 1             (ii)  an annuity from employer contributions  of  an
 2        amount which can be provided on an actuarially equivalent
 3        basis  from  the accumulated normal contributions made by
 4        the  participant  under  Section  15-113.6  and   Section
 5        15-113.7  plus  1.4  times  all  other accumulated normal
 6        contributions made by the participant.
 7    With respect to a police officer or firefighter  who  retires
 8    on  or  after  the  effective  date of this amendatory Act of
 9    1998, the accumulated normal contributions taken into account
10    under clauses (i) and (ii) of this Rule 2 shall  include  the
11    additional normal contributions made by the police officer or
12    firefighter under Section 15-157(a).
13        Rule  3:  The  retirement annuity of a participant who is
14    employed at least one-half time during the  period  on  which
15    his or her final rate of earnings is based, shall be equal to
16    the   participant's  years  of  service  not  to  exceed  30,
17    multiplied by (1) $96 if  the  participant's  final  rate  of
18    earnings  is  less than $3,500, (2) $108 if the final rate of
19    earnings is at least $3,500 but less than $4,500, (3) $120 if
20    the final rate of earnings is at least $4,500 but  less  than
21    $5,500,  (4)  $132  if the final rate of earnings is at least
22    $5,500 but less than $6,500, (5) $144 if the  final  rate  of
23    earnings is at least $6,500 but less than $7,500, (6) $156 if
24    the  final  rate of earnings is at least $7,500 but less than
25    $8,500, (7) $168 if the final rate of earnings  is  at  least
26    $8,500  but  less than $9,500, and (8) $180 if the final rate
27    of earnings is $9,500 or more, except that  the  annuity  for
28    those   persons   having   made  an  election  under  Section
29    15-154(a-1)  shall  be  calculated  and  payable  under   the
30    portable   retirement   benefit   program   pursuant  to  the
31    provisions of Section 15-136.4.
32        Rule 4:  A participant who is at least age 50 and has  25
33    or  more years of service as a police officer or firefighter,
34    and a participant who is age 55 or over and has at  least  20
 
                            -3-                LRB9101879EGfg
 1    but  less  than  25  years  of service as a police officer or
 2    firefighter, shall be entitled to  a  retirement  annuity  of
 3    2 1/4% of the final rate of earnings for each of the first 10
 4    years  of  service as a police officer or firefighter, 2 1/2%
 5    for each of the next 10 years of service as a police  officer
 6    or  firefighter,  and  2 3/4%  for  each year of service as a
 7    police  officer  or  firefighter  in  excess  of   20.    The
 8    retirement  annuity  for  all other service shall be computed
 9    under Rule 1.
10        For purposes of this Rule 4, a participant's service as a
11    firefighter shall also include the following:
12             (i)  service that is performed while the  person  is
13        an employee under subsection (h) of Section 15-107; and
14             (ii)  in  the  case  of  an  individual  who  was  a
15        participating employee employed in the fire department of
16        the  University  of  Illinois's  Champaign-Urbana  campus
17        immediately   prior  to  the  elimination  of  that  fire
18        department and who immediately after the  elimination  of
19        that  fire department transferred to another job with the
20        University of Illinois, service performed as an  employee
21        of  the  University  of Illinois in a position other than
22        police officer or firefighter,  from  the  date  of  that
23        transfer until the employee's next termination of service
24        with the University of Illinois.
25        (b)  The  retirement annuity provided under Rules 1 and 3
26    above shall be reduced by  1/2  of  1%  for  each  month  the
27    participant  is  under  age  60  at  the  time of retirement.
28    However, this reduction shall  not  apply  in  the  following
29    cases:
30             (1)  For  a  disabled  participant  whose disability
31        benefits have been discontinued because  he  or  she  has
32        exhausted   eligibility  for  disability  benefits  under
33        clause (6) of Section 15-152;
34             (2)  For a participant who has at least  the  number
 
                            -4-                LRB9101879EGfg
 1        of  years  of service required to retire at any age under
 2        subsection (a) of Section 15-135; or
 3             (3)  For that portion of a retirement annuity  which
 4        has   been   provided   on  account  of  service  of  the
 5        participant during periods when he or she  performed  the
 6        duties  of  a  police  officer  or  firefighter, if these
 7        duties were performed for at least  5  years  immediately
 8        preceding the date the retirement annuity is to begin.
 9        (c)  The  maximum retirement annuity provided under Rules
10    1, 2, and 4 shall be the lesser of (1) the  annual  limit  of
11    benefits  as specified in Section 415 of the Internal Revenue
12    Code of 1986, as such Section may be  amended  from  time  to
13    time  and  as  such  benefit  limits shall be adjusted by the
14    Commissioner of Internal Revenue, and (2) 80% of  final  rate
15    of earnings.
16        (d)  An  annuitant whose status as an employee terminates
17    after August 14, 1969 shall receive  automatic  increases  in
18    his or her retirement annuity as follows:
19        Effective  January  1  immediately following the date the
20    retirement annuity begins, the  annuitant  shall  receive  an
21    increase  in  his or her monthly retirement annuity of 0.125%
22    of the monthly retirement annuity provided under Rule 1, Rule
23    2, Rule 3, or Rule 4, contained in this  Section,  multiplied
24    by  the number of full months which elapsed from the date the
25    retirement annuity payments began to January  1,  1972,  plus
26    0.1667%  of  such  annuity,  multiplied by the number of full
27    months which elapsed from January 1, 1972, or  the  date  the
28    retirement  annuity  payments  began,  whichever is later, to
29    January 1, 1978, plus 0.25% of such annuity multiplied by the
30    number of full months which elapsed from January 1, 1978,  or
31    the  date the retirement annuity payments began, whichever is
32    later, to the effective date of the increase.
33        The annuitant shall receive an increase  in  his  or  her
34    monthly  retirement  annuity  on  each  January  1 thereafter
 
                            -5-                LRB9101879EGfg
 1    during the annuitant's life of  3%  of  the  monthly  annuity
 2    provided under Rule 1, Rule 2, Rule 3, or Rule 4 contained in
 3    this  Section.  The change made under this subsection by P.A.
 4    81-970 is effective January  1,  1980  and  applies  to  each
 5    annuitant  whose  status  as an employee terminates before or
 6    after that date.
 7        Beginning January 1, 1990, all automatic annual increases
 8    payable  under  this  Section  shall  be  calculated   as   a
 9    percentage  of  the  total annuity payable at the time of the
10    increase, including all increases  previously  granted  under
11    this Article.
12        The  change  made  in  this subsection by P.A. 85-1008 is
13    effective January 26, 1988, and is applicable without  regard
14    to whether status as an employee terminated before that date.
15        (e)  If,  on  January 1, 1987, or the date the retirement
16    annuity payment period begins, whichever is later, the sum of
17    the retirement annuity provided under Rule 1  or  Rule  2  of
18    this  Section  and  the  automatic  annual increases provided
19    under the preceding subsection or Section  15-136.1,  amounts
20    to  less  than the retirement annuity which would be provided
21    by Rule 3, the retirement annuity shall be  increased  as  of
22    January  1,  1987, or the date the retirement annuity payment
23    period begins, whichever is later, to the amount which  would
24    be  provided by Rule 3 of this Section. Such increased amount
25    shall be considered as the retirement annuity in  determining
26    benefits  provided under other Sections of this Article. This
27    paragraph applies without regard  to  whether  status  as  an
28    employee   terminated  before  the  effective  date  of  this
29    amendatory Act of  1987,  provided  that  the  annuitant  was
30    employed  at  least  one-half time during the period on which
31    the final rate of earnings was based.
32        (f)  A participant is entitled to such additional annuity
33    as may be provided on an actuarially equivalent basis, by any
34    accumulated additional contributions to his  or  her  credit.
 
                            -6-                LRB9101879EGfg
 1    However, the additional contributions made by the participant
 2    toward the automatic increases in annuity provided under this
 3    Section  shall  not  be taken into account in determining the
 4    amount of such additional annuity.
 5        (g)  If, (1) by law, a function of a  governmental  unit,
 6    as  defined by Section 20-107 of this Code, is transferred in
 7    whole or in part  to  an  employer,  and  (2)  a  participant
 8    transfers  employment  from  such  governmental  unit to such
 9    employer within 6 months after the transfer of the  function,
10    and (3) the sum of (A) the annuity payable to the participant
11    under  Rule  1,  2, or 3 of this Section (B) all proportional
12    annuities payable to the participant by all other  retirement
13    systems  covered  by  Article 20, and (C) the initial primary
14    insurance amount to which the participant is  entitled  under
15    the  Social Security Act, is less than the retirement annuity
16    which would have been payable if  all  of  the  participant's
17    pension  credits  validated  under  Section  20-109  had been
18    validated under this system, a supplemental annuity equal  to
19    the  difference  in  such  amounts  shall  be  payable to the
20    participant.
21        (h)  On January 1, 1981, an annuitant who was receiving a
22    retirement annuity on or before January 1,  1971  shall  have
23    his  or  her  retirement annuity then being paid increased $1
24    per month for each year of creditable service. On January  1,
25    1982,  an  annuitant  whose  retirement  annuity  began on or
26    before January 1, 1977, shall  have  his  or  her  retirement
27    annuity  then being paid increased $1 per month for each year
28    of creditable service.
29        (i)  On January 1, 1987, any annuitant  whose  retirement
30    annuity  began  on  or before January 1, 1977, shall have the
31    monthly retirement annuity increased by an amount equal to 8¢
32    per year of creditable service times the number of years that
33    have elapsed since the annuity began.
34        (j)  On  January  1,  2000,  every  annuitant  who  began
 
                            -7-                LRB9101879EGfg
 1    receiving a retirement annuity before January 1,  1980  shall
 2    have the monthly retirement annuity increased by whichever of
 3    the following percentages is applicable:
 4              5% if the annuity began in 1979;
 5             10% if the annuity began in 1978;
 6             14% if the annuity began in 1977;
 7             14% if the annuity began in 1976;
 8             18% if the annuity began in 1975;
 9             23% if the annuity began in 1974;
10             32% if the annuity began in 1973 or before.
11        The increase under this subsection shall be calculated as
12    a  percentage of the amount of the retirement annuity payable
13    on December 31,  1999,  including  any  increases  previously
14    received  under  this  Article,  and shall be included in the
15    calculation of  increases  granted  on  January  1,  2000  or
16    thereafter under subsection (d).
17    (Source: P.A. 90-14, eff. 7-1-97; 90-65, eff. 7-7-97; 90-448,
18    eff.  8-16-97;  90-576,  eff.  3-31-98; 90-655, eff. 7-30-98;
19    90-766, eff. 8-14-98.)

20        (40 ILCS 5/15-136.3)
21        Sec. 15-136.3. Minimum retirement annuity.
22        (a)  Beginning  January  1,  1997,  any  person  who   is
23    receiving  a  monthly  retirement  annuity under this Article
24    which, after inclusion of  (1)  all  one-time  and  automatic
25    annual  increases  to  which  the person is entitled, (2) any
26    supplemental annuity payable under Section 15-136.1, and  (3)
27    any amount deducted under Section 15-138 or 15-140 to provide
28    a  reversionary  annuity,  is  less  than the minimum monthly
29    retirement benefit amount specified in subsection (b) of this
30    Section, shall be entitled to a monthly supplemental  payment
31    equal to the difference.
32        (b)  For  purposes  of the calculation in subsection (a),
33    the minimum monthly retirement benefit amount is the  sum  of
 
                            -8-                LRB9101879EGfg
 1    $25  for  each  year of service credit, up to a maximum of 30
 2    years of service, plus the amount of the increase received by
 3    the annuitant under subsection (j) of Section 15-136, if any.
 4        (c)  This Section applies  to  all  persons  receiving  a
 5    retirement  annuity  under  this  Article,  without regard to
 6    whether or not employment terminated prior to  the  effective
 7    date of this Section.
 8    (Source: P.A. 89-616, eff. 8-9-96.)

 9        (40 ILCS 5/15-145) (from Ch. 108 1/2, par. 15-145)
10        Sec.  15-145.   Survivors  insurance benefits; conditions
11    and amounts.
12        (a)  The survivors insurance benefits provided under this
13    Section shall be payable  to  the  eligible  survivors  of  a
14    participant  covered  under  the  traditional benefit package
15    upon the death of (1) a participating employee with at  least
16    1 1/2  years  of  service,  (2)  a participant who terminated
17    employment with at least 10 years  of  service,  and  (3)  an
18    annuitant  in  receipt  of a retirement annuity or disability
19    retirement annuity under this Article.
20        Service under the State Employees' Retirement  System  of
21    Illinois,  the  Teachers'  Retirement  System of the State of
22    Illinois  and  the  Public  School  Teachers'   Pension   and
23    Retirement Fund of Chicago shall be considered in determining
24    eligibility for survivors benefits under this Section.
25        If  by law, a function of a governmental unit, as defined
26    by Section 20-107, is transferred in whole or in part  to  an
27    employer,  and  an  employee  transfers  employment from this
28    governmental unit to such employer within 6 months after  the
29    transfer  of  this  function,  the  service  credits  in  the
30    governmental   unit's   retirement  system  which  have  been
31    validated  under  Section  20-109  shall  be  considered   in
32    determining  eligibility  for  survivors  benefits under this
33    Section.
 
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 1        (b)  A surviving spouse of a deceased participant, or  of
 2    a   deceased   annuitant   who   had  a  survivors  insurance
 3    beneficiary at  the  time  of  retirement,  shall  receive  a
 4    survivors  annuity  of  30%  of  the  final rate of earnings.
 5    Payments shall begin on the day following  the  participant's
 6    or annuitant's death or the date the surviving spouse attains
 7    age  50,  whichever is later, and continue until the death of
 8    the surviving spouse.  The annuity shall be  payable  to  the
 9    surviving  spouse  prior  to  attainment  of  age  50  if the
10    surviving  spouse  has  in  his  or  her  care   a   deceased
11    participant's  or annuitant's dependent unmarried child under
12    age 18 (under age 22 if a full-time student) who is  eligible
13    for  a  survivors  annuity.  Remarriage of a surviving spouse
14    prior to attainment of age 55 shall disqualify him or her for
15    the receipt of a survivors annuity.
16        (c)  Each dependent unmarried child under age  18  (under
17    age  22 if a full-time student) of a deceased participant, or
18    of  a  deceased  annuitant  who  had  a  survivors  insurance
19    beneficiary at the time  of  his  or  her  retirement,  shall
20    receive  a  survivors  annuity equal to the sum of (1) 20% of
21    the final rate of earnings, and (2) 10% of the final rate  of
22    earnings  divided  by the number of children entitled to this
23    benefit.  Payments shall  begin  on  the  day  following  the
24    participant's  or  annuitant's  death  and continue until the
25    child marries, dies, or attains age 18 (age 22 if a full-time
26    student).  If the child is in the care of a surviving  spouse
27    who is eligible for survivors insurance benefits, the child's
28    benefit shall be paid to the surviving spouse.
29        Each   unmarried   child   over  age  18  of  a  deceased
30    participant or of a deceased annuitant who had  a  survivor's
31    insurance  beneficiary  at the time of his or her retirement,
32    and who was dependent upon the participant  or  annuitant  by
33    reason  of  a physical or mental disability which began prior
34    to the date the child attained age 18 (age 22 if a  full-time
 
                            -10-               LRB9101879EGfg
 1    student), shall receive a survivor's annuity equal to the sum
 2    of  (1) 20% of the final rate of earnings, and (2) 10% of the
 3    final rate of earnings divided  by  the  number  of  children
 4    entitled  to survivors benefits.  Payments shall begin on the
 5    day following the  participant's  or  annuitant's  death  and
 6    continue  until  the  child  marries,  dies,  or is no longer
 7    disabled.  If the child is in the care of a surviving  spouse
 8    who is eligible for survivors insurance benefits, the child's
 9    benefit  may  be  paid  to  the  surviving  spouse.   For the
10    purposes of  this  Section,  disability  means  inability  to
11    engage  in  any substantial gainful activity by reason of any
12    medically determinable physical or mental impairment that can
13    be expected to result in death or that has lasted or  can  be
14    expected  to  last  for  a  continuous period of at least one
15    year.
16        (d)  Each dependent parent of a deceased participant,  or
17    of  a  deceased  annuitant  who  had  a  survivors  insurance
18    beneficiary  at  the  time  of  his  or her retirement, shall
19    receive a survivors annuity equal to the sum of  (1)  20%  of
20    final rate of earnings, and (2) 10% of final rate of earnings
21    divided by the number of parents who qualify for the benefit.
22    Payments  shall  begin  when the parent reaches age 55 or the
23    day  following  the  participant's  or   annuitant's   death,
24    whichever  is  later,  and  continue  until  the parent dies.
25    Remarriage of a parent prior to attainment of  age  55  shall
26    disqualify the parent for the receipt of a survivors annuity.
27        (e)  In addition to the survivors annuity provided above,
28    each survivors insurance beneficiary shall, upon death of the
29    participant  or  annuitant,  receive  a  lump  sum payment of
30    $1,000 divided by the number of such beneficiaries.
31        (f)  The changes made  in  this  Section  by  Public  Act
32    81-712   pertaining   to  survivors  annuities  in  cases  of
33    remarriage prior to age 55  shall  apply  to  each  survivors
34    insurance  beneficiary  who  remarries  after  June 30, 1979,
 
                            -11-               LRB9101879EGfg
 1    regardless of the date  that  the  participant  or  annuitant
 2    terminated his employment or died.
 3        (g)  On  January  1, 1981, any person who was receiving a
 4    survivors annuity on or before January 1, 1971 shall have the
 5    survivors annuity then being paid increased by  1%  for  each
 6    full  year which has elapsed from the date the annuity began.
 7    On January 1, 1982, any survivor whose  annuity  began  after
 8    January  1,  1971, but before January 1, 1981, shall have the
 9    survivor's annuity then being paid increased by 1%  for  each
10    year  which  has elapsed from the date the survivor's annuity
11    began. On January 1, 1987, any survivor who began receiving a
12    survivor's annuity on or before January 1, 1977,  shall  have
13    the  monthly survivor's annuity increased by $1 for each full
14    year which has elapsed since the date the survivor's  annuity
15    began.
16        (g-1)  On   January   1,   2000,  every  recipient  of  a
17    survivor's  annuity  whose  original  annuity  began   before
18    January  1,  1980  shall  have the monthly survivor's annuity
19    increased  by  whichever  of  the  following  percentages  is
20    applicable:
21              5% if the original annuity began in 1979;
22             10% if the original annuity began in 1978;
23             14% if the original annuity began in 1977;
24             14% if the original annuity began in 1976;
25             18% if the original annuity began in 1975;
26             23% if the original annuity began in 1974;
27             32% if the original annuity began in 1973 or before.
28        In the case of the survivor of a deceased  annuitant  who
29    died while receiving a retirement annuity, "original annuity"
30    means  the  deceased  annuitant's  retirement annuity; in all
31    other cases, "original annuity" means the survivor's annuity.
32        The increase under this subsection shall be calculated as
33    a percentage of the amount of the survivor's annuity  payable
34    on  December  31,  1999,  including  any increases previously
 
                            -12-               LRB9101879EGfg
 1    received under this Article, and shall  be  included  in  the
 2    calculation  of  increases  granted  on  January  1,  2000 or
 3    thereafter under subsection (j).
 4        (h)  If the  sum  of  the  lump  sum  and  total  monthly
 5    survivor  benefits  payable under this Section upon the death
 6    of a participant amounts to less than the sum  of  the  death
 7    benefits  payable  under items (2) and (3) of Section 15-141,
 8    the difference shall be paid in a lump sum to the beneficiary
 9    of the participant who  is  living  on  the  date  that  this
10    additional amount becomes payable.
11        (i)  If  the  sum  of  the  lump  sum  and  total monthly
12    survivor benefits payable under this Section upon  the  death
13    of  an annuitant receiving a retirement annuity or disability
14    retirement annuity amounts to less  than  the  death  benefit
15    payable under Section 15-142, the difference shall be paid to
16    the  beneficiary  of  the annuitant who is living on the date
17    that this additional amount becomes payable.
18        (j)  Effective on the later of (1) January  1,  1990,  or
19    (2)  the  January  1  on  or next after the date on which the
20    survivor annuity begins, if the deceased  member  died  while
21    receiving  a  retirement  annuity,  or in all other cases the
22    January 1 nearest the  first  anniversary  of  the  date  the
23    survivor  annuity  payments  begin, every survivors insurance
24    beneficiary shall receive an increase in his or  her  monthly
25    survivors annuity of 3%.  On each January 1 after the initial
26    increase, the monthly survivors annuity shall be increased by
27    3%  of  the  total  survivors  annuity  provided  under  this
28    Article,   including  previous  increases  provided  by  this
29    subsection.  Such increases  shall  apply  to  the  survivors
30    insurance  beneficiaries  of  each participant and annuitant,
31    whether or not the employment status of  the  participant  or
32    annuitant  terminates  before  the  effective  date  of  this
33    amendatory Act of 1990.
34        (k)  If  the  Internal  Revenue Code of 1986, as amended,
 
                            -13-               LRB9101879EGfg
 1    requires that the survivors benefits be  payable  at  an  age
 2    earlier  than  that  specified  in  this Section the benefits
 3    shall  begin  at  the  earlier  age,  in  which  event,   the
 4    survivor's  beneficiary shall be entitled only to that amount
 5    which is equal to the actuarial equivalent  of  the  benefits
 6    provided by this Section.
 7        (l)  The  changes made to this Section and Section 15-131
 8    by this amendatory Act of  1997,  relating  to  benefits  for
 9    certain  unmarried  children who are full-time students under
10    age 22, apply without regard to whether the  deceased  member
11    was  in  service  on  or  after  the  effective  date of this
12    amendatory Act of 1997.  These changes do not  authorize  the
13    repayment  of  a refund or a re-election of benefits, and any
14    benefit or increase in benefits resulting from these  changes
15    is  not  payable  retroactively  for  any  period  before the
16    effective date of this amendatory Act of 1997.
17    (Source: P.A. 90-448, eff. 8-16-97; 90-766, eff. 8-14-98.)

18        Section 99. Effective date.  This Act takes  effect  upon
19    becoming law.

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