State of Illinois
91st General Assembly
Legislation

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91_HB1263

 
                                               LRB9104341EGfg

 1        AN ACT to amend the Illinois  Pension  Code  by  changing
 2    Sections  3-110  and  3-110.7 and to amend the State Mandates
 3    Act.

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

 6        Section  5.   The  Illinois  Pension  Code  is amended by
 7    changing Sections 3-110 and 3-110.7 as follows:

 8        (40 ILCS 5/3-110) (from Ch. 108 1/2, par. 3-110)
 9        Sec. 3-110.  Creditable service.
10        (a)  "Creditable service" is the time served by a  police
11    officer  as  a member of a regularly constituted police force
12    of a municipality. In computing creditable service  furloughs
13    without  pay  exceeding 30 days shall not be counted, but all
14    leaves of absence for  illness  or  accident,  regardless  of
15    length,  and all periods of disability retirement for which a
16    police officer has received no  disability  pension  payments
17    under this Article shall be counted.
18        (b)  Creditable  service  includes all periods of service
19    in the military, naval or air forces  of  the  United  States
20    entered   upon   while   an   active   police  officer  of  a
21    municipality, provided that upon  applying  for  a  permanent
22    pension,  and  in accordance with the rules of the board, the
23    police officer pays into the  fund  the  amount  the  officer
24    would  have  contributed  if  he  or  she  had been a regular
25    contributor during  such  period,  to  the  extent  that  the
26    municipality  which  the  police  officer served has not made
27    such contributions in the officer's behalf.  The total amount
28    of such creditable service shall not exceed 5  years,  except
29    that  any  police officer who on July 1, 1973 had more than 5
30    years of such creditable  service  shall  receive  the  total
31    amount thereof.
 
                            -2-                LRB9104341EGfg
 1        (c)  Creditable service also includes service rendered by
 2    a  police  officer  while  on  leave of absence from a police
 3    department to serve as an executive of an organization  whose
 4    membership  consists  of  members  of  a  police  department,
 5    subject  to the following conditions:  (i) the police officer
 6    is a participant of a fund  established  under  this  Article
 7    with  at  least 10 years of service as a police officer; (ii)
 8    the police officer received no credit for such service  under
 9    any  other  retirement  system,  pension fund, or annuity and
10    benefit fund included in this Code;  (iii)  pursuant  to  the
11    rules  of  the  board the police officer pays to the fund the
12    amount he or she would have contributed had the officer  been
13    an  active  member  of  the  police  department; and (iv) the
14    organization pays a contribution equal to the  municipality's
15    normal cost for that period of service.
16        (d)(1)  Creditable   service  also  includes  periods  of
17    service originally established in another police pension fund
18    under this Article or in the Fund established under Article 7
19    of this Code  for  which  (i)  the  contributions  have  been
20    transferred under Section 3-110.7 or Section 7-139.9 and (ii)
21    any  additional  contribution required under paragraph (2) of
22    this subsection has been paid in full in accordance with  the
23    requirements of this subsection (d).
24        (2)  With  respect to transfers occurring on or after the
25    effective date of this amendatory Act  of  the  91st  General
26    Assembly,  no  additional contribution is required under this
27    paragraph (2).  This  amendatory  Act  does  not  affect  the
28    additional  contribution  required  under  this paragraph (2)
29    with respect to transfers occurring before the effective date
30    of this amendatory Act of the 91st General Assembly, and does
31    not entitle any person to a refund of  contributions  already
32    paid.    If the board of the pension fund to which creditable
33    service  and  related  contributions  are  transferred  under
34    Section  3-110.7  or  7-139.9  determines  that  the   amount
 
                            -3-                LRB9104341EGfg
 1    transferred is less than the true cost to the pension fund of
 2    allowing  that  creditable service to be established, then in
 3    order to establish that creditable service the police officer
 4    must pay to the  pension  fund,  within  the  payment  period
 5    specified  in paragraph (3) of this subsection, an additional
 6    contribution equal to the difference, as  determined  by  the
 7    board  in  accordance  with  the rules and procedures adopted
 8    under paragraph (6) of this subsection.
 9        (3)  Except as provided in paragraph (4), the  additional
10    contribution  must  be  paid  to the board (i) within 5 years
11    from the date of the transfer of contributions under  Section
12    3-110.7  or  7-139.9  and  (ii)  before  the  police  officer
13    terminates   service   with   the   fund.    The   additional
14    contribution  may be paid in a lump sum or in accordance with
15    a schedule of installment payments authorized by the board.
16        (4)  If the police officer dies in service before payment
17    in full has been made and before the expiration of the 5-year
18    payment period, the surviving spouse of the officer may elect
19    to pay the unpaid amount on the  officer's  behalf  within  6
20    months  after the date of death, in which case the creditable
21    service shall  be  granted  as  though  the  deceased  police
22    officer  had paid the remaining balance on the day before the
23    date of death.
24        (5)  If the additional contribution is not paid  in  full
25    within the required time, the creditable service shall not be
26    granted  and  the  police officer (or the officer's surviving
27    spouse or estate) shall be entitled to receive  a  refund  of
28    (i)  any  partial payment of the additional contribution that
29    has been made by the police officer and (ii)  those  portions
30    of  the  amounts  transferred  under  subdivision  (a)(1)  of
31    Section  3-110.7 or subdivisions (a)(1) and (a)(3) of Section
32    7-139.9 that represent employee  contributions  paid  by  the
33    police  officer  (but  not  the accumulated interest on those
34    contributions) and interest paid by the police officer to the
 
                            -4-                LRB9104341EGfg
 1    prior pension fund in order to reinstate  service  terminated
 2    by acceptance of a refund.
 3        Transferred  credit that is not granted due to failure to
 4    pay the additional contribution within the required  time  is
 5    lost;  it  may not be transferred to another pension fund and
 6    may not be reinstated in the pension fund from which  it  was
 7    transferred.
 8        (6)  The  Public  Employee  Pension  Fund Division of the
 9    Department of Insurance shall establish by rule the manner of
10    making the calculation required under paragraph (2)  of  this
11    subsection,  taking  into  account  the appropriate actuarial
12    assumptions; the police officer's service,  age,  and  salary
13    history;  the  level  of funding of the pension fund to which
14    the credits are being transferred; and any other factors that
15    the Division  determines  to  be  relevant.   The  rules  may
16    require  that  all  calculations  made under paragraph (2) be
17    reported  to  the  Division  by  the  board  performing   the
18    calculation,  together  with  documentation of the creditable
19    service to be transferred, the amounts of  contributions  and
20    interest   to   be  transferred,  the  manner  in  which  the
21    calculation was performed, the numbers relied upon in  making
22    the  calculation,  the  results  of  the calculation, and any
23    other information the Division may deem useful.
24    (Source: P.A. 89-52, eff. 6-30-95; 90-460, eff. 8-17-97.)

25        (40 ILCS 5/3-110.7)
26        Sec. 3-110.7. Transfer between Article 3 funds.
27        (a)  An active member of a pension fund established under
28    this Article may apply for transfer to that fund  of  his  or
29    her  creditable service and related contributions accumulated
30    in any other  police  pension  fund  established  under  this
31    Article,  except  that  a  police  officer  may  not transfer
32    creditable service under this Section  from  a  pension  fund
33    unless  (i)  the police officer actively served in the police
 
                            -5-                LRB9104341EGfg
 1    department under that fund for at least  2  years,  (ii)  the
 2    police officer actively served in the police department under
 3    that fund for less than 2 years but was laid off or otherwise
 4    involuntarily terminated for a reason other than the fault of
 5    the  officer,  or (iii) the police officer was not in service
 6    in the police department under that  fund  on  or  after  the
 7    effective   date   of   this  Section.   Upon  receiving  the
 8    application, that other pension fund shall  transfer  to  the
 9    pension fund in which the applicant currently participates an
10    amount equal to:
11             (1)  the  amounts  actually  contributed  by  or  on
12        behalf   of   the  applicant  to  the  fund  as  employee
13        contributions  (including  any  interest  paid   by   the
14        applicant  in  order to reinstate service), plus interest
15        on those amounts at the rate of 6% per  year,  compounded
16        annually,   from   the   last  day  of  service  date  of
17        contribution to the date of transfer; plus
18             (2)  an amount representing employer  contributions,
19        equal  to  the  total amount determined under subdivision
20        (1).
21    Participation in that other pension fund shall  terminate  on
22    the date of transfer.
23        (b)  An active member of a pension fund established under
24    this  Article may reinstate service in any other pension fund
25    established under this Article that was terminated by receipt
26    of a refund, by paying to that other pension fund the  amount
27    of  the  refund  plus  interest thereon at the rate of 6% per
28    year, compounded annually, from the date  of  refund  to  the
29    date of payment.
30    (Source: P.A. 90-460, eff. 8-17-97.)

31        Section  90.  The State Mandates Act is amended by adding
32    Section 8.23 as follows:
 
                            -6-                LRB9104341EGfg
 1        (30 ILCS 805/8.23 new)
 2        Sec. 8.23. Exempt mandate.   Notwithstanding  Sections  6
 3    and  8 of this Act, no reimbursement by the State is required
 4    for  the  implementation  of  any  mandate  created  by  this
 5    amendatory Act of the 91st General Assembly.

 6        Section 99. Effective date.  This Act takes  effect  upon
 7    becoming law.

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