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91_HB1583enr HB1583 Enrolled LRB9101658EGfg 1 AN ACT in relation to public employee benefits. 2 Be it enacted by the People of the State of Illinois, 3 represented in the General Assembly: 4 Section 5. The State Employees Group Insurance Act of 5 1971 is amended by changing Section 6.10 as follows: 6 (5 ILCS 375/6.10) 7 Sec. 6.10. Contributions to the Community College Health 8 Insurance Security Fund. 9 (a) Beginning January 1, 1999, every active contributor 10 of the State Universities Retirement System (established 11 under Article 15 of the Illinois Pension Code) who (1) is a 12 full-time employee of a community college district (other 13 than a community college district subject to Article VII of 14 the Public Community College Act) or an association of 15 community college boards and (2) is not an employee as 16 defined in Section 3 of this Act shall make contributions 17 toward the cost of community college annuitant and survivor 18 health benefits at the rate of 0.50% of salary. 19 These contributions shall be deducted by the employer and 20 paid to the State Universities Retirement System as service 21 agent for the Department of Central Management Services. The 22 System may use the same processes for collecting the 23 contributions required by this subsection that it uses to 24 collect the contributions received from those employees under 25 Section 15-157 of the Illinois Pension Code. An employer may 26 agree to pick up or pay the contributions required under this 27 subsection on behalf of the employee; such contributions 28 shall be deemed to have been paid by the employee. 29A person required to make contributions under this30subsection (a) who purchases optional service credit under31Article 15 of the Illinois Pension Code must also pay theHB1583 Enrolled -2- LRB9101658EGfg 1contribution required under this subsection (a) with respect2to that optional service credit. This contribution must be3received by the System before that optional service credit is4granted.5 The State Universities Retirement System shall promptly 6 deposit all moneys collected under this subsection (a) into 7 the Community College Health Insurance Security Fund created 8 in Section 6.9 of this Act. The moneys collected under this 9 Section shall be used only for the purposes authorized in 10 Section 6.9 of this Act and shall not be considered to be 11 assets of the State Universities Retirement System. 12 Contributions made under this Section are not transferable to 13 other pension funds or retirement systems and are not 14 refundable upon termination of service. 15 (b) Beginning January 1, 1999, every community college 16 district (other than a community college district subject to 17 Article VII of the Public Community College Act) or 18 association of community college boards that is an employer 19 under the State Universities Retirement System shall 20 contribute toward the cost of the community college health 21 benefits provided under Section 6.9 of this Act an amount 22 equal to 0.50% of the salary paid to its full-time employees 23 who participate in the State Universities Retirement System 24 and are not members as defined in Section 3 of this Act. 25 These contributions shall be paid by the employer to the 26 State Universities Retirement System as service agent for the 27 Department of Central Management Services. The System may 28 use the same processes for collecting the contributions 29 required by this subsection that it uses to collect the 30 contributions received from those employers under Section 31 15-155 of the Illinois Pension Code. 32 The State Universities Retirement System shall promptly 33 deposit all moneys collected under this subsection (b) into 34 the Community College Health Insurance Security Fund created HB1583 Enrolled -3- LRB9101658EGfg 1 in Section 6.9 of this Act. The moneys collected under this 2 Section shall be used only for the purposes authorized in 3 Section 6.9 of this Act and shall not be considered to be 4 assets of the State Universities Retirement System. 5 Contributions made under this Section are not transferable to 6 other pension funds or retirement systems and are not 7 refundable upon termination of service. 8 (c) On or before November 15 of each year, the Board of 9 Trustees of the State Universities Retirement System shall 10 certify to the Governor, the Director of Central Management 11 Services, and the State Comptroller its estimate of the total 12 amount of contributions to be paid under subsection (a) of 13 this Section for the next fiscal year. The certification 14 shall include a detailed explanation of the methods and 15 information that the Board relied upon in preparing its 16 estimate. As soon as possible after the effective date of 17 this Section, the Board shall submit its estimate for fiscal 18 year 1999. 19 (d) Beginning in fiscal year 1999, on the first day of 20 each month, or as soon thereafter as may be practical, the 21 State Treasurer and the State Comptroller shall transfer from 22 the General Revenue Fund to the Community College Health 23 Insurance Security Fund 1/12 of the annual amount 24 appropriated for that fiscal year to the State Comptroller 25 for deposit into the Community College Health Insurance 26 Security Fund under Section 1.4 of the State Pension Funds 27 Continuing Appropriation Act. 28 (e) Except where otherwise specified in this Section, 29 the definitions that apply to Article 15 of the Illinois 30 Pension Code apply to this Section. 31 (Source: P.A. 90-497, eff. 8-18-97.) 32 Section 10. The Illinois Pension Code is amended by 33 changing Sections 1-113.2, 1-116, 2-121, 2-121.1, 3-110, HB1583 Enrolled -4- LRB9101658EGfg 1 7-139, 7-141, 7-141.1, 7-145.1, 7-157, 7-164, 7-166, 7-167, 2 7-184, 7-211, 8-125, 8-139, 8-153, 8-171, 8-244, 9-149, 3 9-194, 11-124, 11-134.2, 11-148, 11-167, 11-181, 11-182, 4 11-223, 13-303, 13-309, 13-310, 13-311, 13-314, 13-603, 5 14-118, 14-120, 14-128, 14-130, 15-107, 15-111, 15-112, 6 15-120, 15-134.5, 15-136.4, 15-139, 15-140, 15-141, 15-142, 7 15-144, 15-145, 15-154, 15-158.2, 15-181, 16-133, 16-135, 8 16-136.4, 16-138, 16-140, 16-143, 16-149.4, 16-184, 17-106, 9 17-117, 17-133, 17-150, 18-128, 20-121, 20-123, 20-124, 10 20-125, and 20-131 and adding Sections 1-120, 7-224, and 11 15-132.2 as follows: 12 (40 ILCS 5/1-113.2) 13 Sec. 1-113.2. List of permitted investments for all 14 Article 3 or 4 pension funds. Any pension fund established 15 under Article 3 or 4 may invest in the following items: 16 (1) Interest bearing direct obligations of the United 17 States of America. 18 (2) Interest bearing obligations to the extent that they 19 are fully guaranteed or insured as to payment of principal 20 and interest by the United States of America. 21 (3) Interest bearing bonds, notes, debentures, or other 22 similar obligations of agencies of the United States of 23 America. For the purposes of this Section, "agencies of the 24 United States of America" includes: (i) the Federal National 25 Mortgage Association and the Student Loan Marketing 26 Association; (ii) federal land banks, federal intermediate 27 credit banks, federal farm credit banks, and any other entity 28 authorized to issue direct debt obligations of the United 29 States of America under the Farm Credit Act of 1971 or 30 amendments to that Act; (iii) federal home loan banks and the 31 Federal Home Loan Mortgage Corporation; and (iv) any agency 32 created by Act of Congress that is authorized to issue direct 33 debt obligations of the United States of America. HB1583 Enrolled -5- LRB9101658EGfg 1 (4) Interest bearing savings accounts or certificates of 2 deposit, issued by federally chartered banks or savings and 3 loan associations, to the extent that the deposits are 4 insured by agencies or instrumentalities of the federal 5 government. 6 (5) Interest bearing savings accounts or certificates of 7 deposit, issued by State of Illinois chartered banks or 8 savings and loan associations, to the extent that the 9 deposits are insured by agencies or instrumentalities of the 10 federal government. 11 (6) Investments in credit unions, to the extent that the 12 investments are insured by agencies or instrumentalities of 13 the federal government. 14 (7) Interest bearing bonds of the State of Illinois. 15 (8) Pooled interest bearing accounts managed by the 16 Illinois Public Treasurer's Investment Pool in accordance 17 with the Deposit of State Moneys Act and interest bearing 18 funds or pooled accounts managed, operated, and administered 19 by banks, subsidiaries of banks, or subsidiaries of bank 20 holding companies in accordance with the laws of the State of 21 Illinois. 22 (9) Interest bearing bonds or tax anticipation warrants 23 of any county, township, or municipal corporation of the 24 State of Illinois. 25 (10) Direct obligations of the State of Israel, subject 26 to the conditions and limitations of item (5.1) of Section 27 1-113. 28 (11) Money market mutual funds managed by investment 29 companies that are registered under the federal Investment 30 Company Act of 1940 and the Illinois Securities Law of 1953 31 and are diversified, open-ended management investment 32 companies; provided that the portfolio of the money market 33 mutual fund is limited to the following: 34 (i) bonds, notes, certificates of indebtedness, HB1583 Enrolled -6- LRB9101658EGfg 1 treasury bills, or other securities that are guaranteed 2 by the full faith and credit of the United States of 3 America as to principal and interest; 4 (ii) bonds, notes, debentures, or other similar 5 obligations of the United States of America or its 6 agencies; and 7 (iii) short term obligations of corporations 8 organized in the United States with assets exceeding 9 $400,000,000, provided that (A) the obligations mature no 10 later than 180 days from the date of purchase, (B) at the 11 time of purchase, the obligations are rated by at least 2 12 standard national rating services at one of their 3 13 highest classifications, and (C) the obligations held by 14 the mutual fund do not exceed 10% of the corporation's 15 outstanding obligations. 16 (12) General accounts of life insurance companies 17 authorized to transact business in Illinois. 18 (13) Any combination of the following, not to exceed 10% 19 of the pension fund's net assets: 20 (i) separate accounts that are managed by life 21 insurance companies authorized to transact business in 22 Illinois and are comprised of diversified portfolios 23 consisting of common or preferred stocks, bonds, or money 24 market instruments;and25 (ii) separate accounts that are managed by 26 insurance companies authorized to transact business in 27 Illinois, and are comprised of real estate or loans upon 28 real estate secured by first or second mortgages; and 29 (iii) mutual funds that meet the following 30 requirements: 31 (A) the mutual fund is managed by an 32 investment company as defined and registered under 33 the federal Investment Company Act of 1940 and 34 registered under the Illinois Securities Law of HB1583 Enrolled -7- LRB9101658EGfg 1 1953; 2 (B) the mutual fund has been in operation for 3 at least 5 years; 4 (C) the mutual fund has total net assets of 5 $250 million or more; and 6 (D) the mutual fund is comprised of 7 diversified portfolios of common or preferred 8 stocks, bonds, or money market instruments. 9 (Source: P.A. 90-507, eff. 8-22-97.) 10 (40 ILCS 5/1-116) (from Ch. 108 1/2, par. 1-116) 11 Sec. 1-116. Federal contribution and benefit limitations 12limitation. 13 (a) This Section applies to all pension funds and 14 retirement systems established under this Code. 15 (a-5) All pension funds and retirement systems 16 established under this Code shall comply with the applicable 17 contribution and benefit limitations imposed by Section 415 18 of the U.S. Internal Revenue Code of 1986 for tax qualified 19 plans under Section 401(a) of that Code. 20 (b) If any benefit payable by a pension fund or 21 retirement system subject to this Section exceeds the 22 applicable benefit limits set by Section 415 of the U.S. 23 Internal Revenue Code of 1986 for tax qualified plans under 24 Section 401(a) of that Code, the excess shall be payable only 25 from an excess benefit fund established under this Section in 26 accordance with federal law. 27 (c) An excess benefit fund shall be established by any 28 pension fund or retirement system subject to this Section 29 that has any member eligible to receive a benefit that 30 exceeds the applicable benefit limits set by Section 415 of 31 the U.S. Internal Revenue Code of 1986 for tax qualified 32 plans under Section 401(a) of that Code. Amounts shall be 33 credited to the excess benefit fund, and payments for excess HB1583 Enrolled -8- LRB9101658EGfg 1 benefits made from the excess benefit fund, in a manner 2 consistent with the applicable federal law. 3 (d) For purposes of matters relating to the benefit 4 limits set by Section 415 of the U.S. Internal Revenue Code 5 of 1986, the limitation year may be defined by each affected 6 pension fund or retirement system for that fund or system. 7 (Source: P.A. 90-19, eff. 6-20-97.) 8 (40 ILCS 5/1-120 new) 9 Sec. 1-120. Payment to trust. 10 (a) If a person is a minor or has been determined by a 11 court to be under a legal disability, any benefits payable to 12 that person under this Code may be paid to the trustee of a 13 trust created for the sole benefit of that person while the 14 person is living, if the trustee of the trust has advised the 15 board of trustees of the pension fund or retirement system in 16 writing that the benefits will be held or used for the sole 17 benefit of that person. The pension fund or retirement 18 system shall not be required to determine the validity of the 19 trust or of any of the terms of the trust. The 20 representation of the trustee that the trust meets the 21 requirements of this Section shall be conclusive as to the 22 pension fund or retirement system. Payment of benefits to 23 the trust shall be an absolute discharge of the pension fund 24 or retirement system's liability with respect to the amounts 25 so paid. 26 (b) For purposes of this Section, "minor" means an 27 unmarried person under the age of 18. 28 (c) This Section is not a limitation on any other power 29 to pay benefits to or on behalf of a minor or person under 30 legal disability that is granted under this Code or other 31 applicable law. 32 (40 ILCS 5/2-121) (from Ch. 108 1/2, par. 2-121) HB1583 Enrolled -9- LRB9101658EGfg 1 Sec. 2-121. Survivor's annuity - conditions for payment. 2 (a) A survivor's annuity shall be payable to a surviving 3 spouse or eligible child (1) upon the death in service of a 4 participant with at least 2 years of service credit, or (2) 5 upon the death of an annuitant in receipt of a retirement 6 annuity, or (3) upon the death of a participant who 7 terminated service with at least 4 years of service credit. 8 The change in this subsection (a) made by this amendatory 9 Act of 1995 applies to survivors of participants who die on 10 or after December 1, 1994, without regard to whether or not 11 the participant was in service on or after the effective date 12 of this amendatory Act of 1995. 13 (b) To be eligible for the survivor's annuity, the 14 spouse and the participant or annuitant must have been 15 married for a continuous period of at least one year 16 immediately preceding the date of death, but need not have 17 been married on the day of the participant's last termination 18 of service, regardless of whether such termination occurred 19 prior to the effective date of this amendatory Act of 1985. 20 (c) The annuity shall be payable beginning on the date 21 of a participant's death, or the first of the month following 22 an annuitant's death, if the spouse is then age 50 or over, 23 or beginning at age 50 if the spouse is then under age 50. 24 If an eligible child or children of the participant or 25 annuitant (or a child or children of the eligible spouse 26 meeting the criteria of item (1), (2), or (3) of subsection 27 (d) of this Section) also survive, and the child or children 28 are under the care of the eligible spouse, the annuity shall 29 begin as of the date of a participant's death, or the first 30 of the month following an annuitant's death, without regard 31 to the spouse's age. 32 The change to this subsection made by this amendatory Act 33 of 1998 (relating to children of an eligible spouse) applies 34 to the eligible spouse of a participant or annuitant who dies HB1583 Enrolled -10- LRB9101658EGfg 1 on or after the effective date of this amendatory Act, 2 without regard to whether the participant or annuitant is in 3 service on or after that effective date. 4 (d) For the purposes of this Section and Section 5 2-121.1, "eligible child" means a child of the deceased 6 participant or annuitant who is at least one of the 7 following: 8 (1) unmarried and under the age of 18; 9 (2) unmarried, a full-time student, and under the 10 age of 22; 11 (3) dependent by reason of physical or mental 12 disability. 13 The inclusion of unmarried students under age 22 in the 14 calculation of survivor's annuities by this amendatory Act of 15 1991 shall apply to all eligible students beginning January 16 1, 1992, without regard to whether the deceased participant 17 or annuitant was in service on or after the effective date of 18 this amendatory Act of 1991. 19 Adopted children shall have the same status as children 20 of the participant or annuitant, but only if the proceedings 21 for adoption are commenced at least one year prior to the 22 date of the participant's or annuitant's death. 23 (e) Remarriage of a surviving spouse prior to attainment 24 of age 55 shall disqualify the surviving spouse from the 25 receipt of a survivor's annuity, if the remarriage occurs 26 before the effective date of this amendatory Act of the 91st 27 General Assembly. 28 The changes made to this subsection by this amendatory 29 Act of the 91st General Assembly (pertaining to remarriage 30 prior to age 55) apply without regard to whether the deceased 31 participant or annuitant was in service on or after the 32 effective date of this amendatory Act. 33 (Source: P.A. 89-136, eff. 7-14-95; 90-766, eff. 8-14-98.) HB1583 Enrolled -11- LRB9101658EGfg 1 (40 ILCS 5/2-121.1) (from Ch. 108 1/2, par. 2-121.1) 2 Sec. 2-121.1. Survivor's annuity - amount. 3 (a) A surviving spouse shall be entitled to 66 2/3% of 4 the amount of retirement annuity to which the participant or 5 annuitant was entitled on the date of death, without regard 6 to whether the participant had attained age 55 prior to his 7 or her death, subject to a minimum payment of 10% of salary. 8 If a surviving spouse, regardless of age, has in his or her 9 care at the date of death any eligible child or children of 10 the participant, the survivor's annuity shall be the greater 11 of the following: (1) 66 2/3% of the amount of retirement 12 annuity to which the participant or annuitant was entitled on 13 the date of death, or (2) 30% of the participant's salary 14 increased by 10% of salary on account of each such child, 15 subject to a total payment for the surviving spouse and 16 children of 50% of salary. If eligible children survive but 17 there is no surviving spouse, or if the surviving spouse 18remarries ordies or becomes disqualified by remarriage while 19 eligible children survive, each eligible child shall be 20 entitled to an annuity of 20% of salary, subject to a maximum 21 total payment for all such children of 50% of salary. 22 However, the survivor's annuity payable under this 23 Section shall not be less than 100% of the amount of 24 retirement annuity to which the participant or annuitant was 25 entitled on the date of death, if he or she is survived by a 26 dependent disabled child. 27 The salary to be used for determining these benefits 28 shall be the salary used for determining the amount of 29 retirement annuity as provided in Section 2-119.01. 30 (b) Upon the death of a participant after the 31 termination of service or upon death of an annuitant, the 32 maximum total payment to a surviving spouse and eligible 33 children, or to eligible children alone if there is no 34 surviving spouse, shall be 75% of the retirement annuity to HB1583 Enrolled -12- LRB9101658EGfg 1 which the participant or annuitant was entitled, unless there 2 is a dependent disabled child among the survivors. 3 (c) When a child ceases to be an eligible child, the 4 annuity to that child, or to the surviving spouse on account 5 of that child, shall thereupon cease, and the annuity payable 6 to the surviving spouse or other eligible children shall be 7 recalculated if necessary. 8 Upon the ineligibility of the last eligible child, the 9 annuity shall immediately revert to the amount payable upon 10 death of a participant or annuitant who leaves no eligible 11 children. If the surviving spouse is then under age 50, the 12 annuity as revised shall be deferred until the attainment of 13 age 50. 14 (d) Beginning January 1, 1990, every survivor's annuity 15 shall be increased (1) on each January 1 occurring on or 16 after the commencement of the annuity if the deceased member 17 died while receiving a retirement annuity, or (2) in other 18 cases, on each January 1 occurring on or after the first 19 anniversary of the commencement of the annuity, by an amount 20 equal to 3% of the current amount of the annuity, including 21 any previous increases under this Article. Such increases 22 shall apply without regard to whether the deceased member was 23 in service on or after the effective date of this amendatory 24 Act of 1991, but shall not accrue for any period prior to 25 January 1, 1990. 26 (e) Notwithstanding any other provision of this Article, 27 beginning January 1, 1990, the minimum survivor's annuity 28 payable to any person who is entitled to receive a survivor's 29 annuity under this Article shall be $300 per month, without 30 regard to whether or not the deceased participant was in 31 service on the effective date of this amendatory Act of 1989. 32 (f) In the case of a proportional survivor's annuity 33 arising under the Retirement Systems Reciprocal Act where the 34 amount payable by the System on January 1, 1993 is less than HB1583 Enrolled -13- LRB9101658EGfg 1 $300 per month, the amount payable by the System shall be 2 increased beginning on that date by a monthly amount equal to 3 $2 for each full year that has expired since the annuity 4 began. 5 (Source: P.A. 86-273; 86-1488; 87-794; 87-1265.) 6 (40 ILCS 5/3-110) (from Ch. 108 1/2, par. 3-110) 7 Sec. 3-110. Creditable service. 8 (a) "Creditable service" is the time served by a police 9 officer as a member of a regularly constituted police force 10 of a municipality. In computing creditable service furloughs 11 without pay exceeding 30 days shall not be counted, but all 12 leaves of absence for illness or accident, regardless of 13 length, and all periods of disability retirement for which a 14 police officer has received no disability pension payments 15 under this Article shall be counted. 16 (b) Creditable service includes all periods of service 17 in the military, naval or air forces of the United States 18 entered upon while an active police officer of a 19 municipality, provided that upon applying for a permanent 20 pension, and in accordance with the rules of the board, the 21 police officer pays into the fund the amount the officer 22 would have contributed if he or she had been a regular 23 contributor during such period, to the extent that the 24 municipality which the police officer served has not made 25 such contributions in the officer's behalf. The total amount 26 of such creditable service shall not exceed 5 years, except 27 that any police officer who on July 1, 1973 had more than 5 28 years of such creditable service shall receive the total 29 amount thereof. 30 (c) Creditable service also includes service rendered by 31 a police officer while on leave of absence from a police 32 department to serve as an executive of an organization whose 33 membership consists of members of a police department, HB1583 Enrolled -14- LRB9101658EGfg 1 subject to the following conditions: (i) the police officer 2 is a participant of a fund established under this Article 3 with at least 10 years of service as a police officer; (ii) 4 the police officer received no credit for such service under 5 any other retirement system, pension fund, or annuity and 6 benefit fund included in this Code; (iii) pursuant to the 7 rules of the board the police officer pays to the fund the 8 amount he or she would have contributed had the officer been 9 an active member of the police department; and (iv) the 10 organization pays a contribution equal to the municipality's 11 normal cost for that period of service. 12 (d)(1) Creditable service also includes periods of 13 service originally established in another police pension fund 14 under this Article or in the Fund established under Article 7 15 of this Code for which (i) the contributions have been 16 transferred under Section 3-110.7 or Section 7-139.9 and (ii) 17 any additional contribution required under paragraph (2) of 18 this subsection has been paid in full in accordance with the 19 requirements of this subsection (d). 20 (2) If the board of the pension fund to which creditable 21 service and related contributions are transferred under 22 Section 3-110.7 or 7-139.9 determines that the amount 23 transferred is less than the true cost to the pension fund of 24 allowing that creditable service to be established, then in 25 order to establish that creditable service the police officer 26 must pay to the pension fund, within the payment period 27 specified in paragraph (3) of this subsection, an additional 28 contribution equal to the difference, as determined by the 29 board in accordance with the rules and procedures adopted 30 under paragraph (6) of this subsection. 31 (3) Except as provided in paragraph (4), the additional 32 contribution must be paid to the board (i) within 5 years 33 from the date of the transfer of contributions under Section 34 3-110.7 or 7-139.9 and (ii) before the police officer HB1583 Enrolled -15- LRB9101658EGfg 1 terminates service with the fund. The additional 2 contribution may be paid in a lump sum or in accordance with 3 a schedule of installment payments authorized by the board. 4 (4) If the police officer dies in service before payment 5 in full has been made and before the expiration of the 5-year 6 payment period, the surviving spouse of the officer may elect 7 to pay the unpaid amount on the officer's behalf within 6 8 months after the date of death, in which case the creditable 9 service shall be granted as though the deceased police 10 officer had paid the remaining balance on the day before the 11 date of death. 12 (5) If the additional contribution is not paid in full 13 within the required time, the creditable service shall not be 14 granted and the police officer (or the officer's surviving 15 spouse or estate) shall be entitled to receive a refund of 16 (i) any partial payment of the additional contribution that 17 has been made by the police officer and (ii) those portions 18 of the amounts transferred under subdivision (a)(1) of 19 Section 3-110.7 or subdivisions (a)(1) and (a)(3) of Section 20 7-139.9 that represent employee contributions paid by the 21 police officer (but not the accumulated interest on those 22 contributions) and interest paid by the police officer to the 23 prior pension fund in order to reinstate service terminated 24 by acceptance of a refund. 25 At the time of paying a refund under this item (5), the 26 pension fund shall also repay to the pension fund from which 27 the contributions were transferred under Section 3-110.7 or 28 7-139.9 the amount originally transferred under subdivision 29 (a)(2) of that Section, plus interest at the rate of 6% per 30 year, compounded annually, from the date of the original 31 transfer to the date of repayment. Amounts repaid to the 32 Article 7 fund under this provision shall be credited to the 33 appropriate municipality. 34 Transferred credit that is not granted due to failure to HB1583 Enrolled -16- LRB9101658EGfg 1 pay the additional contribution within the required time is 2 lost; it may not be transferred to another pension fund and 3 may not be reinstated in the pension fund from which it was 4 transferred. 5 (6) The Public Employee Pension Fund Division of the 6 Department of Insurance shall establish by rule the manner of 7 making the calculation required under paragraph (2) of this 8 subsection, taking into account the appropriate actuarial 9 assumptions; the police officer's service, age, and salary 10 history; the level of funding of the pension fund to which 11 the credits are being transferred; and any other factors that 12 the Division determines to be relevant. The rules may 13 require that all calculations made under paragraph (2) be 14 reported to the Division by the board performing the 15 calculation, together with documentation of the creditable 16 service to be transferred, the amounts of contributions and 17 interest to be transferred, the manner in which the 18 calculation was performed, the numbers relied upon in making 19 the calculation, the results of the calculation, and any 20 other information the Division may deem useful. 21 (Source: P.A. 89-52, eff. 6-30-95; 90-460, eff. 8-17-97.) 22 (40 ILCS 5/7-139) (from Ch. 108 1/2, par. 7-139) 23 Sec. 7-139. Credits and creditable service to employees. 24 (a) Each participating employee shall be granted credits 25 and creditable service, for purposes of determining the 26 amount of any annuity or benefit to which he or a beneficiary 27 is entitled, as follows: 28 1. For prior service: Each participating employee 29 who is an employee of a participating municipality or 30 participating instrumentality on the effective date shall 31 be granted creditable service, but no credits under 32 paragraph 2 of this subsection (a), for periods of prior 33 service for which credit has not been received under any HB1583 Enrolled -17- LRB9101658EGfg 1 other pension fund or retirement system established under 2 this Code, as follows: 3 If the effective date of participation for the 4 participating municipality or participating 5 instrumentality is on or before January 1, 1998, 6 creditable service shall be granted for the entire period 7 of prior service with that employer without any employee 8 contribution. 9 If the effective date of participation for the 10 participating municipality or participating 11 instrumentality is after January 1, 1998, creditable 12 service shall be granted for the last 20% of the period 13 of prior service with that employer, but no more than 5 14 years, without any employee contribution. A 15 participating employee may establish creditable service 16 for the remainder of the period of prior service with 17 that employer by making an application in writing, 18 accompanied by payment of an employee contribution in an 19 amount determined by the Fund, based on the employee 20 contribution rates in effect at the time of application 21 for the creditable service and the employee's salary rate 22 on the effective date of participation for that employer, 23 plus interest at the effective rate from the date of the 24 prior service to the date of payment. Application for 25 this creditable service may be made at any time while the 26 employee is still in service. 27 Any person who has withdrawn from the service of a 28 participating municipality or participating 29 instrumentality prior to the effective date, who reenters 30 the service of the same municipality or participating 31 instrumentality after the effective date and becomes a 32 participating employee is entitled to creditable service 33 for prior service as otherwise provided in this 34 subdivision (a)(1) only if he or she renders 2 years of HB1583 Enrolled -18- LRB9101658EGfg 1 service as a participating employee after the effective 2 date. Application for such service must be made while in 3 a participating status. The salary rate to be used in 4 the calculation of the required employee contribution, if 5 any, shall be the employee's salary rate at the time of 6 first reentering service with the employer after the 7 employer's effective date of participation. 8 2. For current service, each participating employee 9 shall be credited with: 10 a. Additional credits of amounts equal to each 11 payment of additional contributions received from 12 him under Section 7-173, as of the date the 13 corresponding payment of earnings is payable to him. 14 b. Normal credits of amounts equal to each 15 payment of normal contributions received from him, 16 as of the date the corresponding payment of earnings 17 is payable to him, and normal contributions made for 18 the purpose of establishing out-of-state service 19 credits as permitted under the conditions set forth 20 in paragraph 6 of this subsection (a). 21 c. Municipality credits in an amount equal to 22 1.4 times the normal credits, except those 23 established by out-of-state service credits, as of 24 the date of computation of any benefit if these 25 credits would increase the benefit. 26 d. Survivor credits equal to each payment of 27 survivor contributions received from the 28 participating employee as of the date the 29 corresponding payment of earnings is payable, and 30 survivor contributions made for the purpose of 31 establishing out-of-state service credits. 32 3. For periods of temporary and total and permanent 33 disability benefits, each employee receiving disability 34 benefits shall be granted creditable service for the HB1583 Enrolled -19- LRB9101658EGfg 1 period during which disability benefits are payable. 2 Normal and survivor credits, based upon the rate of 3 earnings applied for disability benefits, shall also be 4 granted if such credits would result in a higher benefit 5 to any such employee or his beneficiary. 6 4. For authorized leave of absence without pay: A 7 participating employee shall be granted credits and 8 creditable service for periods of authorized leave of 9 absence without pay under the following conditions: 10 a. An application for credits and creditable 11 service is submitted to the board while the employee 12 is in a status of active employment, and within 2 13 years after termination of the leave of absence 14 period for which credits and creditable service are 15 sought. 16 b. Not more than 12 complete months of 17 creditable service for authorized leave of absence 18 without pay shall be counted for purposes of 19 determining any benefits payable under this Article. 20 c. Credits and creditable service shall be 21 granted for leave of absence only if such leave is 22 approved by the governing body of the municipality, 23 including approval of the estimated cost thereof to 24 the municipality as determined by the fund, and 25 employee contributions, plus interest at the 26 effective rate applicable for each year from the end 27 of the period of leave to date of payment, have been 28 paid to the fund in accordance with Section 7-173. 29 The contributions shall be computed upon the 30 assumption earnings continued during the period of 31 leave at the rate in effect when the leave began. 32 d. Benefits under the provisions of Sections 33 7-141, 7-146, 7-150 and 7-163 shall become payable 34 to employees on authorized leave of absence, or HB1583 Enrolled -20- LRB9101658EGfg 1 their designated beneficiary, only if such leave of 2 absence is creditable hereunder, and if the employee 3 has at least one year of creditable service other 4 than the service granted for leave of absence. Any 5 employee contributions due may be deducted from any 6 benefits payable. 7 e. No credits or creditable service shall be 8 allowed for leave of absence without pay during any 9 period of prior service. 10 5. For military service: The governing body of a 11 municipality or participating instrumentality may elect 12 to allow creditable service to participating employees 13 who leave their employment to serve in the armed forces 14 of the United States for all periods of such service, 15 provided that the person returns to active employment 16 within 90 days after completion of full time active duty, 17 but no creditable service shall be allowed such person 18 for any period that can be used in the computation of a 19 pension or any other pay or benefit, other than pay for 20 active duty, for service in any branch of the armed 21 forces of the United States. If necessary to the 22 computation of any benefit, the board shall establish 23 municipality credits for participating employees under 24 this paragraph on the assumption that the employee 25 received earnings at the rate received at the time he 26 left the employment to enter the armed forces. A 27 participating employee in the armed forces shall not be 28 considered an employee during such period of service and 29 no additional death and no disability benefits are 30 payable for death or disability during such period. 31 Any participating employee who left his employment 32 with a municipality or participating instrumentality to 33 serve in the armed forces of the United States and who 34 again became a participating employee within 90 days HB1583 Enrolled -21- LRB9101658EGfg 1 after completion of full time active duty by entering the 2 service of a different municipality or participating 3 instrumentality, which has elected to allow creditable 4 service for periods of military service under the 5 preceding paragraph, shall also be allowed creditable 6 service for his period of military service on the same 7 terms that would apply if he had been employed, before 8 entering military service, by the municipality or 9 instrumentality which employed him after he left the 10 military service and the employer costs arising in 11 relation to such grant of creditable service shall be 12 charged to and paid by that municipality or 13 instrumentality. 14 Notwithstanding the foregoing, any participating 15 employee shall be entitled to creditable service as 16 required by any federal law relating to re-employment 17 rights of persons who served in the United States Armed 18 Services. Such creditable service shall be granted upon 19 payment by the member of an amount equal to the employee 20 contributions which would have been required had the 21 employee continued in service at the same rate of 22 earnings during the military leave period, plus interest 23 at the effective rate. 24 5.1. In addition to any creditable service 25 established under paragraph 5 of this subsection (a), 26 creditable service may be granted for up to 24 months of 27 service in the armed forces of the United States. 28 In order to receive creditable service for military 29 service under this paragraph 5.1, a participating 30 employee must (1) apply to the Fund in writing and 31 provide evidence of the military service that is 32 satisfactory to the Board; (2) obtain the written 33 approval of the current employer; and (3) make 34 contributions to the Fund equal to (i) the employee HB1583 Enrolled -22- LRB9101658EGfg 1 contributions that would have been required had the 2 service been rendered as a member, plus (ii) an amount 3 determined by the board to be equal to the employer's 4 normal cost of the benefits accrued for that military 5 service, plus (iii) interest on items (i) and (ii) from 6 the date of first membership in the Fund to the date of 7 payment. If payment is made during the 6-month period 8 that begins 3 months after the effective date of this 9 amendatory Act of 1997, the required interest shall be at 10 the rate of 2.5% per year, compounded annually; 11 otherwise, the required interest shall be calculated at 12 the regular interest rate. 13 6. For out-of-state service: Creditable service 14 shall be granted for service rendered to an out-of-state 15 local governmental body under the following conditions: 16 The employee had participated and has irrevocably 17 forfeited all rights to benefits in the out-of-state 18 public employees pension system; the governing body of 19 his participating municipality or instrumentality 20 authorizes the employee to establish such service; the 21 employee has 2 years current service with this 22 municipality or participating instrumentality; the 23 employee makes a payment of contributions, which shall be 24 computed at 8% (normal) plus 2% (survivor) times length 25 of service purchased times the average rate of earnings 26 for the first 2 years of service with the municipality or 27 participating instrumentality whose governing body 28 authorizes the service established plus interest at the 29 effective rate on the date such credits are established, 30 payable from the date the employee completes the required 31 2 years of current service to date of payment. In no 32 case shall more than 120 months of creditable service be 33 granted under this provision. 34 7. For retroactive service: Any employee who could HB1583 Enrolled -23- LRB9101658EGfg 1 have but did not elect to become a participating 2 employee, or who should have been a participant in the 3 Municipal Public Utilities Annuity and Benefit Fund 4 before that fund was superseded, may receive creditable 5 service for the period of service not to exceed 50 6 months; however, a current or former county board member 7 may establish credit under this paragraph 7 for more than 8 50 months of service as a member of the county board if 9 the excess over 50 months is approved by resolution of 10 the affected county board filed with the Fund before 11 January 1, 1999. 12 Any employee who is a participating employee on or 13 after September 24, 1981 and who was excluded from 14 participation by the age restrictions removed by Public 15 Act 82-596 may receive creditable service for the period, 16 on or after January 1, 1979, excluded by the age 17 restriction and, in addition, if the governing body of 18 the participating municipality or participating 19 instrumentality elects to allow creditable service for 20 all employees excluded by the age restriction prior to 21 January 1, 1979, for service during the period prior to 22 that date excluded by the age restriction. Any employee 23 who was excluded from participation by the age 24 restriction removed by Public Act 82-596 and who is not a 25 participating employee on or after September 24, 1981 may 26 receive creditable service for service after January 1, 27 1979. Creditable service under this paragraph shall be 28 granted upon payment of the employee contributions which 29 would have been required had he participated, with 30 interest at the effective rate for each year from the end 31 of the period of service established to date of payment. 32 8. For accumulated unused sick leave: A 33 participating employee who is applying for a retirement 34 annuity shall be entitled to creditable service for that HB1583 Enrolled -24- LRB9101658EGfg 1 portion of the employee's accumulated unused sick leave 2 for which payment is not received, as follows: 3 a. Sick leave days shall be limited to those 4 accumulated under a sick leave plan established by a 5 participating municipality or participating 6 instrumentality which is available to all employees 7 or a class of employees. 8 b. Only sick leave days accumulated with a 9 participating municipality or participating 10 instrumentality with which the employee was in 11 service within 60 days of the effective date of his 12 retirement annuity shall be credited; If the 13 employee was in service with more than one employer 14 during this period only the sick leave days with the 15 employer with which the employee has the greatest 16 number of unpaid sick leave days shall be 17 considered. 18 c. The creditable service granted shall be 19 considered solely for the purpose of computing the 20 amount of the retirement annuity and shall not be 21 used to establish any minimum service period 22 required by any provision of the Illinois Pension 23 Code, the effective date of the retirement annuity, 24 or the final rate of earnings. 25 d. The creditable service shall be at the rate 26 of 1/20 of a month for each full sick day, provided 27 that no more than 12 months may be credited under 28 this subdivision 8. 29 e. Employee contributions shall not be 30 required for creditable service under this 31 subdivision 8. 32 f. Each participating municipality and 33 participating instrumentality with which an employee 34 has service within 60 days of the effective date of HB1583 Enrolled -25- LRB9101658EGfg 1 his retirement annuity shall certify to the board 2 the number of accumulated unpaid sick leave days 3 credited to the employee at the time of termination 4 of service. 5 9. For service transferred from another system: 6 Credits and creditable service shall be granted for 7 service under Article 3, 4, 5, 14 or 16 of this Act, to 8 any active member of this Fund, and to any inactive 9 member who has been a county sheriff, upon transfer of 10 such credits pursuant to Section 3-110.3, 4-108.3, 5-235, 11 14-105.6 or 16-131.4, and payment by the member of the 12 amount by which (1) the employer and employee 13 contributions that would have been required if he had 14 participated in this Fund as a sheriff's law enforcement 15 employee during the period for which credit is being 16 transferred, plus interest thereon at the effective rate 17 for each year, compounded annually, from the date of 18 termination of the service for which credit is being 19 transferred to the date of payment, exceeds (2) the 20 amount actually transferred to the Fund. Such transferred 21 service shall be deemed to be service as a sheriff's law 22 enforcement employee for the purposes of Section 7-142.1. 23 (b) Creditable service - amount: 24 1. One month of creditable service shall be allowed 25 for each month for which a participating employee made 26 contributions as required under Section 7-173, or for 27 which creditable service is otherwise granted hereunder. 28 Not more than 1 month of service shall be credited and 29 counted for 1 calendar month, and not more than 1 year of 30 service shall be credited and counted for any calendar 31 year. A calendar month means a nominal month beginning 32 on the first day thereof, and a calendar year means a 33 year beginning January 1 and ending December 31. 34 2. A seasonal employee shall be given 12 months of HB1583 Enrolled -26- LRB9101658EGfg 1 creditable service if he renders the number of months of 2 service normally required by the position in a 12-month 3 period and he remains in service for the entire 12-month 4 period. Otherwise a fractional year of service in the 5 number of months of service rendered shall be credited. 6 3. An intermittent employee shall be given 7 creditable service for only those months in which a 8 contribution is made under Section 7-173. 9 (c) No application for correction of credits or 10 creditable service shall be considered unless the board 11 receives an application for correction while (1) the 12 applicant is a participating employee and in active 13 employment with a participating municipality or 14 instrumentality, or (2) while the applicant is actively 15 participating in a pension fund or retirement system which is 16 a participating system under the Retirement Systems 17 Reciprocal Act. A participating employee or other applicant 18 shall not be entitled to credits or creditable service unless 19 the required employee contributions are made in a lump sum or 20 in installments made in accordance with board rule. 21 (d) Upon the granting of a retirement, surviving spouse 22 or child annuity, a death benefit or a separation benefit, on 23 account of any employee, all individual accumulated credits 24 shall thereupon terminate. Upon the withdrawal of additional 25 contributions, the credits applicable thereto shall thereupon 26 terminate. Terminated credits shall not be applied to 27 increase the benefits any remaining employee would otherwise 28 receive under this Article. 29 (Source: P.A. 90-448, eff. 8-16-97.) 30 (40 ILCS 5/7-141) (from Ch. 108 1/2, par. 7-141) 31 Sec. 7-141. Retirement annuities - Conditions. 32 Retirement annuities shall be payable as hereinafter set 33 forth: HB1583 Enrolled -27- LRB9101658EGfg 1 (a) A participating employee who, regardless of cause, 2 is separated from the service of all participating 3 municipalities and instrumentalities thereof and 4 participating instrumentalities shall be entitled to a 5 retirement annuity provided: 6 1. He is at least age 55, or in the case of a person who 7 is eligible to have his annuity calculated under Section 8 7-142.1, he is at least age 50; 9 2. He is (i) an employee who was employed by any 10 participating municipality or participating instrumentality 11 which had not elected to exclude persons employed in 12 positions normally requiring performance of duty for less 13 than 1000 hours per year or was employed in a position 14 normally requiring performance of duty for 600 hours or more 15 per year prior to such election by any participating 16 municipality or participating instrumentality included in and 17 subject to this Article on or before the effective date of 18 this amendatory Act of 1981 which made such election and is 19 not entitled to receive earnings for employment in a position 20 normally requiring performance of duty for 600 hours or more 21 per year for any participating municipality and 22 instrumentalities thereof and participating instrumentality; 23 or (ii) an employee who was employed only by a participating 24 municipality or participating instrumentality, or 25 participating municipalities or participating 26 instrumentalities, which have elected to exclude persons in 27 positions normally requiring performance of duty for less 28 than 1000 hours per year after the effective date of such 29 exclusion or which are included under and subject to the 30 Article after the effective date of this amendatory Act of 31 1981 and elects to exclude persons in such positions, and is 32 not entitled to receive earnings for employment in a position 33 normally requiring performance of duty for 1000 hours or more 34 per year by such a participating municipality or HB1583 Enrolled -28- LRB9101658EGfg 1 participating instrumentality; 2 3. The amount of his annuity, before the application of 3 paragraph (b) of Section 7-142 is at least $10 per month; 4 4. If he first became a participating employee after 5 December 31, 1961, he has at least 8 years of service. This 6 service requirement shall not apply to any participating 7 employee, regardless of participation date, if the General 8 Assembly terminates the Fund. 9 (b) Retirement annuities shall be payable: 10 1. As provided in Section 7-119; 11 2. Except as provided in item 3, upon receipt by the 12 fund of a written applicationby the board. The effective 13 date may be not more than one year prior to the date of the 14 receipt by the fund of the application; 15 3. Upon attainment of age 70 1/2 if(i)the member (i) 16has not submitted an application for the annuity, (ii) the17member has at least 8 years of service credit andis no 18 longer in service, and (ii) is otherwise entitled to an 19 annuity under this Article(iii) the pension amount is at20least $30 per month, and (iv) the Fund is able to locate the21member; 22 4. To the beneficiary of the deceased annuitant for the 23 unpaid amount accrued to date of death, if any. 24 (Source: P.A. 87-740.) 25 (40 ILCS 5/7-141.1) 26 Sec. 7-141.1. Early retirement incentive. 27 (a) The General Assembly finds and declares that: 28 (1) Units of local government across the State have 29 been functioning under a financial crisis. 30 (2) This financial crisis is expected to continue. 31 (3) Units of local government must depend on 32 additional sources of revenue and, when those sources are 33 not forthcoming, must establish cost-saving programs. HB1583 Enrolled -29- LRB9101658EGfg 1 (4) An early retirement incentive designed 2 specifically to target highly-paid senior employees could 3 result in significant annual cost savings. 4 (5) The early retirement incentive should be made 5 available only to those units of local government that 6 determine that an early retirement incentive is in their 7 best interest. 8 (6) A unit of local government adopting a program 9 of early retirement incentives under this Section is 10 encouraged to implement personnel procedures to prohibit, 11 for at least 5 years, the rehiring (whether on payroll or 12 by independent contract) of employees who receive early 13 retirement incentives. 14 (7) A unit of local government adopting a program 15 of early retirement incentives under this Section is also 16 encouraged to replace as few of the participating 17 employees as possible and to hire replacement employees 18 for salaries totaling no more than 80% of the total 19 salaries formerly paid to the employees who participate 20 in the early retirement program. 21 It is the primary purpose of this Section to encourage 22 units of local government that can realize true cost savings, 23 or have determined that an early retirement program is in 24 their best interest, to implement an early retirement 25 program. 26 (b) Until the effective date of this amendatory Act of 27 1997, this Section does not apply to any employer that is a 28 city, village, or incorporated town, nor to the employees of 29 any such employer. Beginning on the effective date of this 30 amendatory Act of 1997, any employer under this Article, 31 including an employer that is a city, village, or 32 incorporated town, may establish an early retirement 33 incentive program for its employees under this Section. The 34 decision of a city, village, or incorporated town to consider HB1583 Enrolled -30- LRB9101658EGfg 1 or establish an early retirement program is at the sole 2 discretion of that city, village, or incorporated town, and 3 nothing in this amendatory Act of 1997 limits or otherwise 4 diminishes this discretion. Nothing contained in this 5 Section shall be construed to require a city, village, or 6 incorporated town to establish an early retirement program 7 and no city, village, or incorporated town may be compelled 8 to implement such a program. 9 The benefits provided in this Section are available only 10 to members employed by a participating employer that has 11 filed with the Board of the Fund a resolution or ordinance 12 expressly providing for the creation of an early retirement 13 incentive program under this Section for its employees and 14 specifying the effective date of the early retirement 15 incentive program. Subject to the limitation in subsection 16 (h), an employer may adopt a resolution or ordinance 17 providing a program of early retirement incentives under this 18 Section at any time. 19 The resolution or ordinance shall be in substantially the 20 following form: 21 RESOLUTION (ORDINANCE) NO. .... 22 A RESOLUTION (ORDINANCE) ADOPTING AN EARLY 23 RETIREMENT INCENTIVE PROGRAM FOR EMPLOYEES 24 IN THE ILLINOIS MUNICIPAL RETIREMENT FUND 25 WHEREAS, Section 7-141.1 of the Illinois Pension Code 26 provides that a participating employer may elect to adopt an 27 early retirement incentive program offered by the Illinois 28 Municipal Retirement Fund by adopting a resolution or 29 ordinance; and 30 WHEREAS, The goal of adopting an early retirement program 31 is to realize a substantial savings in personnel costs by 32 offering early retirement incentives to employees who have 33 accumulated many years of service credit; and 34 WHEREAS, Implementation of the early retirement program HB1583 Enrolled -31- LRB9101658EGfg 1 will provide a budgeting tool to aid in controlling payroll 2 costs; and 3 WHEREAS, The (name of governing body) has determined that 4 the adoption of an early retirement incentive program is in 5 the best interests of the (name of participating employer); 6 therefore be it 7 RESOLVED (ORDAINED) by the (name of governing body) of 8 (name of participating employer) that: 9 (1) The (name of participating employer) does hereby 10 adopt the Illinois Municipal Retirement Fund early retirement 11 incentive program as provided in Section 7-141.1 of the 12 Illinois Pension Code. The early retirement incentive 13 program shall take effect on (date). 14 (2) In order to help achieve a true cost savings, a 15 person who retires under the early retirement incentive 16 program shall lose those incentives if he or she later 17 accepts employment with any IMRF employer in a position for 18 which participation in IMRF is required or is elected by the 19 employee. 20 (3) In order to utilize an early retirement incentive as 21 a budgeting tool, the (name of participating employer) will 22 use its best efforts either to limit the number of employees 23 who replace the employees who retire under the early 24 retirement program or to limit the salaries paid to the 25 employees who replace the employees who retire under the 26 early retirement program. 27 (4) The effective date of each employee's retirement 28 under this early retirement program shall be set by (name of 29 employer) and shall be no earlier than the effective date of 30 the program and no later than one year after that effective 31 date; except that the employee may require that the 32 retirement date set by the employer be no later than the June 33 30 next occurring after the effective date of the program and 34 no earlier than the date upon which the employee qualifies HB1583 Enrolled -32- LRB9101658EGfg 1 for retirement. 2 (5) To be eligible for the early retirement incentive 3 under this Section, the employee must have attained age 50 4 and have at least 20 years of creditable service by his or 5 her retirement date. 6 (6) The (clerk or secretary) shall promptly file a 7 certified copy of this resolution (ordinance) with the Board 8 of Trustees of the Illinois Municipal Retirement Fund. 9 CERTIFICATION 10 I, (name), the (clerk or secretary) of the (name of 11 participating employer) of the County of (name), State of 12 Illinois, do hereby certify that I am the keeper of the books 13 and records of the (name of employer) and that the foregoing 14 is a true and correct copy of a resolution (ordinance) duly 15 adopted by the (governing body) at a meeting duly convened 16 and held on (date). 17 SEAL 18 (Signature of clerk or secretary) 19 (c) To be eligible for the benefits provided under an 20 early retirement incentive program adopted under this 21 Section, a member must: 22 (1) be a participating employee of this Fund who, 23 on the effective date of the program, (i) is in active 24 payroll status as an employee of a participating employer 25 that has filed the required ordinance or resolution with 26 the Board, (ii) is on layoff status from such a position 27 with a right of re-employment or recall to service, (iii) 28 is on a leave of absence from such a position, or (iv) is 29 on disability but has not been receiving benefits under 30 Section 7-146 or 7-150 for a period of more than 2 years 31 from the date of application; 32 (2) have never previously received a retirement 33 annuity under this Article or under the Retirement 34 Systems Reciprocal Act using service credit established HB1583 Enrolled -33- LRB9101658EGfg 1 under this Article; 2 (3) (blank);file with the Board within 60 days of3the effective date of the program an application4requesting the benefits provided in this Section;5 (4) have at least 20 years of creditable service in 6 the Fund by the date of retirement, without the use of 7 any creditable service established under this Section; 8 (5) have attained age 50 by the date of retirement, 9 without the use of any age enhancement received under 10 this Section; and 11 (6) be eligible to receive a retirement annuity 12 under this Article by the date of retirement, for which 13 purpose the age enhancement and creditable service 14 established under this Section may be considered. 15 (d) The employer shall determine the retirement date for 16 each employee participating in the early retirement program 17 adopted under this Section. The retirement date shall be no 18 earlier than the effective date of the program and no later 19 than one year after that effective date, except that the 20 employee may require that the retirement date set by the 21 employer be no later than the June 30 next occurring after 22 the effective date of the program and no earlier than the 23 date upon which the employee qualifies for retirement. The 24 employer shall give each employee participating in the early 25 retirement program at least 30 days written notice of the 26 employee's designated retirement date, unless the employee 27 waives this notice requirement. 28 (e) An eligible person may establish up to 5 years of 29 creditable service under this Section. In addition, for each 30 period of creditable service established under this Section, 31 a person shall have his or her age at retirement deemed 32 enhanced by an equivalent period. 33 The creditable service established under this Section may 34 be used for all purposes under this Article and the HB1583 Enrolled -34- LRB9101658EGfg 1 Retirement Systems Reciprocal Act, except for the computation 2 of final rate of earnings and the determination of earnings, 3 salary, or compensation under this or any other Article of 4 the Code. 5 The age enhancement established under this Section may be 6 used for all purposes under this Article (including 7 calculation of the reduction imposed under subdivision 8 (a)1b(iv) of Section 7-142), except for purposes of a 9 reversionary annuity under Section 7-145 and any 10 distributions required because of age. The age enhancement 11 established under this Section may be used in calculating a 12 proportionate annuity payable by this Fund under the 13 Retirement Systems Reciprocal Act, but shall not be used in 14 determining benefits payable under other Articles of this 15 Code under the Retirement Systems Reciprocal Act. 16 (f) For all creditable service established under this 17 Section, the member must pay to the Fund an employee 18 contribution consisting of 4.5% of the member's highest 19 annual salary rate used in the determination of the final 20 rate of earnings for retirement annuity purposes for each 21 year of creditable service granted under this Section. For 22 creditable service established under this Section by a person 23 who is a sheriff's law enforcement employee to be deemed 24 service as a sheriff's law enforcement employee, the employee 25 contribution shall be at the rate of 6.5% of highest annual 26 salary per year of creditable service granted. Contributions 27 for fractions of a year of service shall be prorated. Any 28 amounts that are disregarded in determining the final rate of 29 earnings under subdivision (d)(5) of Section 7-116 (the 125% 30 rule) shall also be disregarded in determining the required 31 contribution under this subsection (f). 32 The employee contribution shall be paid to the Fund as 33 follows: If the member is entitled to a lump sum payment for 34 accumulated vacation, sick leave, or personal leave upon HB1583 Enrolled -35- LRB9101658EGfg 1 withdrawal from service, the employer shall deduct the 2 employee contribution from that lump sum and pay the deducted 3 amount directly to the Fund. If there is no such lump sum 4 payment or the required employee contribution exceeds the net 5 amount of the lump sum payment, then the remaining amount 6 due, at the option of the employee, may either be paid to the 7 Fund before the annuity commences or deducted from the 8 retirement annuity in 24 equal monthly installments. 9 (g) An annuitant who has received any age enhancement or 10 creditable service under this Section and thereafter accepts 11 employment with or enters into a personal services contract 12 with an employer under this Article thereby forfeits that age 13 enhancement and creditable service. A person forfeiting 14 early retirement incentives under this subsection (i) must 15 repay to the Fund that portion of the retirement annuity 16 already received which is attributable to the early 17 retirement incentives that are being forfeited, (ii) shall 18 not be eligible to participate in any future early retirement 19 program adopted under this Section, and (iii) is entitled to 20 a refund of the employee contribution paid under subsection 21 (f). The Board shall deduct the required repayment from the 22 refund and may impose a reasonable payment schedule for 23 repaying the amount, if any, by which the required repayment 24 exceeds the refund amount. 25 (h) The additional unfunded liability accruing as a 26 result of the adoption of a program of early retirement 27 incentives under this Section by an employer shall be 28 amortized over a period of 10 years beginning on January 1 of 29 the second calendar year following the calendar year in which 30 the latest date for beginning to receive a retirement annuity 31 under the program (as determined by the employer under 32 subsection (d) of this Section) occurs; except that the 33 employer may provide for a shorter amortization period (of no 34 less than 5 years) by adopting an ordinance or resolution HB1583 Enrolled -36- LRB9101658EGfg 1 specifying the length of the amortization period and 2 submitting a certified copy of the ordinance or resolution to 3 the Fund no later than 6 months after the effective date of 4 the program. An employer, at its discretion, may accelerate 5 payments to the Fund. 6 An employer may provide more than one early retirement 7 incentive program for its employees under this Section. 8 However, an employer that has provided an early retirement 9 incentive program for its employees under this Section may 10 not provide another early retirement incentive program under 11 this Section until the liability arising from the earlier 12 program has been fully paid to the Fund. 13 (Source: P.A. 89-329, eff. 8-17-95; 90-32, eff. 6-27-97.) 14 (40 ILCS 5/7-145.1) 15 Sec. 7-145.1. Alternative annuity for county officers. 16 (a) The benefits provided in this Section and Section 17 7-145.2 are available only if the county board has filed with 18 the Board of the Fund a resolution or ordinance expressly 19 consenting to the availability of these benefits for its 20 elected county officers. The county board's consent is 21 irrevocable with respect to persons participating in the 22 program, but may be revoked at any time with respect to 23 persons who have not paid an additional optional contribution 24 under this Section before the date of revocation. 25 An elected county officer may elect to establish 26 alternative credits for an alternative annuity by electing in 27 writing to make additional optional contributions in 28 accordance with this Section and procedures established by 29 the board. These alternative credits are available only for 30 periods of service as an elected county officer. The elected 31 county officer may discontinue making the additional optional 32 contributions by notifying the Fund in writing in accordance 33 with this Section and procedures established by the board. HB1583 Enrolled -37- LRB9101658EGfg 1 Additional optional contributions for the alternative 2 annuity shall be as follows: 3 (1) For service as an elected county officer after 4 the option is elected, an additional contribution of 3% 5 of salary shall be contributed to the Fund on the same 6 basis and under the same conditions as contributions 7 required under Section 7-173. 8 (2) For service as an elected county officer before 9 the option is elected, an additional contribution of 3% 10 of the salary for the applicable period of service, plus 11 interest at the effective rate from the date of service 12 to the date of payment, plus any additional amount 13 required by the county board under paragraph (3). All 14 payments for past service must be paid in full before 15 credit is given. 16 (3) With respect to service as an elected county 17 officer before the option is elected, if payment is made 18 after the county board has filed with the Board of the 19 Fund a resolution or ordinance requiring an additional 20 contribution under this paragraph, then the contribution 21 required under paragraph (2) shall include an amount to 22 be determined by the Fund, equal to the actuarial present 23 value of the additional employer cost that would 24 otherwise result from the alternative credits being 25 established for that service. A county board's 26 resolution or ordinance requiring additional 27 contributions under this paragraph (3) is irrevocable. 28 No additional optional contributions may be made for any 29 period of service for which credit has been previously 30 forfeited by acceptance of a refund, unless the refund is 31 repaid in full with interest at the effective rate from the 32 date of refund to the date of repayment. 33 (b) In lieu of the retirement annuity otherwise payable 34 under this Article, an elected county officer who (1) has HB1583 Enrolled -38- LRB9101658EGfg 1 elected to participate in the Fund and make additional 2 optional contributions in accordance with this Section, (2) 3 has held and made additional optional contributions with 4 respect to the same elected county office for at least 8 5 years, and (3) has attained age 55 with at least 8 years of 6 service credit (or has attained age 50 with at least 20 years 7 of service as a sheriff's law enforcement employee) may elect 8 to have his retirement annuity computed as follows: 3% of 9 the participant's salary for each of the first 8 years of 10 service credit, plus 4% of that salary for each of the next 4 11 years of service credit, plus 5% of that salary for each year 12 of service credit in excess of 12 years, subject to a maximum 13 of 80% of that salary. 14 This formula applies only to service in an elected county 15 office that the officer held for at least 8 years, and only 16 to service for which additional optional contributions have 17 been paid under this Section. If an elected county officer 18 qualifies to have this formula applied to service in more 19 than one elected county office, the qualifying service shall 20 be accumulated for purposes of determining the applicable 21 accrual percentages, but the salary used for each office 22 shall be the separate salary calculated for that office, as 23 defined in subsection (g). 24 To the extent that the elected county officer has service 25 credit that does not qualify for this formula, his retirement 26 annuity will first be determined in accordance with this 27 formula with respect to the service to which this formula 28 applies, and then in accordance with the remaining Sections 29 of this Article with respect to the service to which this 30 formula does not apply. 31 (c) In lieu of the disability benefits otherwise payable 32 under this Article, an elected county officer who (1) has 33 elected to participate in the Fund, and (2) has become 34 permanently disabled and as a consequence is unable to HB1583 Enrolled -39- LRB9101658EGfg 1 perform the duties of his office, and (3) was making optional 2 contributions in accordance with this Section at the time the 3 disability was incurred, may elect to receive a disability 4 annuity calculated in accordance with the formula in 5 subsection (b). For the purposes of this subsection, an 6 elected county officer shall be considered permanently 7 disabled only if: (i) disability occurs while in service as 8 an elected county officer and is of such a nature as to 9 prevent him from reasonably performing the duties of his 10 office at the time; and (ii) the board has received a written 11 certification by at least 2 licensed physicians appointed by 12 it stating that the officer is disabled and that the 13 disability is likely to be permanent. 14 (d) Refunds of additional optional contributions shall 15 be made on the same basis and under the same conditions as 16 provided under Section 7-166, 7-167 and 7-168. Interest 17 shall be credited at the effective rate on the same basis and 18 under the same conditions as for other contributions. 19 If an elected county officer fails to hold that same 20 elected county office for at least 8 years, he or she shall 21 be entitled after leaving office to receive a refund of the 22 additional optional contributions made with respect to that 23 office, plus interest at the effective rate. 24 (e) The plan of optional alternative benefits and 25 contributions shall be available to persons who are elected 26 county officers and active contributors to the Fund on or 27 after November 15, 1994. A person who was an elected county 28 officer and an active contributor to the Fund on November 15, 29 1994 but is no longer an active contributor may apply to make 30 additional optional contributions under this Section at any 31 time within 90 days after the effective date of this 32 amendatory Act of 1997; if the person is an annuitant, the 33 resulting increase in annuity shall begin to accrue on the 34 first day of the month following the month in which the HB1583 Enrolled -40- LRB9101658EGfg 1 required payment is received by the Fund. 2 (f) For the purposes of this Section and Section 3 7-145.2, the terms "elected county officer" and "elected 4 county office" include, but are not limited to: (1) the 5 county clerk, recorder, treasurer, coroner, assessor (if 6 elected), auditor, sheriff, and State's Attorney; members of 7 the county board; and the clerk of the circuit court; and (2) 8 a person who has been appointed to fill a vacancy in an 9 office that is normally filled by election on a countywide 10 basis, for the duration of his or her service in that office. 11 The terms "elected county officer" and "elected county 12 office" do not include any officer or office of a county that 13 has not consented to the availability of benefits under this 14 Section and Section 7-145.2. 15 (g) For the purposes of this Section and Section 16 7-145.2, the term "salary" means the final rate of earnings 17 for the elected county office held, calculated in a manner 18 consistent with Section 7-116, but for that office only. If 19 an elected county officer qualifies to have the formula in 20 subsection (b) applied to service in more than one elected 21 county office, a separate salary shall be calculated and 22 applied with respect to each such office. 23 (h) The changes to this Section made by this amendatory 24 Act of the 91st General Assembly apply to persons who first 25 make an additional optional contribution under this Section 26 on or after the effective date of this amendatory Act. 27 (Source: P.A. 90-32, eff. 6-27-97; 91-685, eff. 1-26-00.) 28 (40 ILCS 5/7-157) (from Ch. 108 1/2, par. 7-157) 29 Sec. 7-157. Surviving spouse annuities - marriage to 30 terminate. If aanysurviving spouse annuitant marries,31 before reaching age 55, the annuity shall be terminated as of 32 the end of the calendar month following the month in which 33 the marriage occurs, unless the marriage occurs after HB1583 Enrolled -41- LRB9101658EGfg 1 December 31, 2000. 2 (Source: P.A. 81-618.) 3 (40 ILCS 5/7-164) (from Ch. 108 1/2, par. 7-164) 4 Sec. 7-164. Death benefits - Amount. The amount of the 5 death benefit shall be: 6 1. Upon the death of an employee with at least one year 7 of service occurring while in an employment relationship 8 (including employees drawing disability benefits) with a 9 participating municipality or participating instrumentality, 10 an amount equal to the sum of: 11 (a) The employee's normal, additional and survivor 12 credits, including interest credited thereto through the 13 end of the preceding calendar year, but excluding credits 14 and interest thereon allowed for periods of disability. 15 (b) An amount equal to the employee's annual final 16 rate of earnings. An employee who dies as a result of 17 injuries connected with his duties shall be considered to 18 have a year of service for purposes of this benefit. 19 2. Upon the death of an employee with less than 1 year 20 of service occurring while in the service of any 21 participating municipality or instrumentality, an amount 22 equal to the sum of his accumulated normal, additional and 23 survivor credits on the date of death, excluding those 24 credits and interest thereon allowed during periods of 25 disability. 26 3. Upon the death of an employee who has separated from 27 service and was not entitled to a retirement annuity on the 28 date of death, an amount equal to the sum of his accumulated 29 normal, survivor and additional credits on the date of death 30 excluding those credits and interest thereon allowed during 31 periods of disability. 32 4. Upon the death of an employee in an employment 33 relationship, or an employee who has service and was entitled HB1583 Enrolled -42- LRB9101658EGfg 1 to a retirement annuity on the date of death, when a 2 surviving spouse or child annuity is awarded, $3,000. 3 5. Upon the death of an employee, who has separated from 4 service and was entitled to a retirement annuity on the date 5 of death, and no surviving spouse or child annuity is 6 awarded, $3,000 plus an amount equal to his accumulated 7 normal, survivor and additional credits on the date of death, 8 excluding those credits and interest earned thereon allowed 9 during periods of disability. 10 6. Upon the death of an employee annuitant, $3,000 and, 11 unless a surviving spouse, child or reversionary annuity is 12 payable, the sum of (i) the excess of the normal and survivor 13 credits, excluding those allowed during periods of 14 disability, which the annuitant had as of the effective date 15 of his annuity over the total annuities paid pursuant to 16 paragraph (a) 1 of Section 7-142 to the date of death, plus 17 (ii) the excess of the additional credits, excluding any such 18 credits used to create a reversionary annuity, used to 19 provide the annuity granted pursuant to paragraph (a) 2 of 20 Section 7-142 over the total annuity payments made pursuant 21 thereto to the time of death. 22 7. Upon the death of an annuitant receiving a 23 reversionary annuity or of a person designated to receive a 24 reversionary annuity prior to the receipt of such annuity the 25 sum of the additional credits of the person creating the 26 reversionary annuity as of the effective date of his own 27 retirement annuity over the reversionary annuity payments, if 28 any, made prior to the date of death of such annuitant or 29 person designated to receive the reversionary annuity. 30 8. Upon the death of an annuitant receiving a 31 beneficiary annuity which was effective before January 1, 32 1986, the excess of the death benefit which was used to 33 provide the annuity, over the sum of all annuity payments 34 made to the beneficiary. Upon the death of an annuitant HB1583 Enrolled -43- LRB9101658EGfg 1 receiving a beneficiary annuity effective January 1, 1986 or 2 thereafter, the sum of (i) the excess of the normal and 3 survivor credits, excluding those allowed during periods of 4 disability, which the annuitant had as of the effective date 5 of his annuity over the total annuities paid pursuant to 6 paragraph (c) of Section 7-165, to date of death, plus (ii) 7 the excess of the additional credits, excluding any such 8 credits used to create a reversionary annuity, used to 9 provide the annuity granted pursuant to paragraph (d) of 10 Section 7-165 over the total annuity payments made pursuant 11 thereto to the time of death. 12 9. Upon the marriage prior to reaching age 55 (except 13 for a surviving spouse who remarries after December 31, 2000) 14 or death of a person receiving a surviving spouse annuity, 15 unless a child annuity is payable, the sum of (i) the excess 16 of the normal and survivor credits, excluding those credits 17 and interest thereon allowed during periods of disability, 18 attributable to the employee at the effective date of the 19 annuity or date of death, whichever first occurred, over the 20 total of all annuity payments attributable to paragraph (a) 1 21 of Section 7-142 made to the employee or surviving spouse 22 plus (ii) the excess of the additional credits, excluding any 23 such credits used to create a reversionary annuity or used to 24 provide the annuity attributable to paragraph (a) 2 of 25 Section 7-142 over the total of such payments. 26 10. Upon the marriage, death or attainment of age 18 of 27 a child receiving a child annuity, if no other child 28 annuities are payable, the sum of (i) the excess of the 29 normal and survivor credits excluding those credits and 30 interest thereon allowed during periods of disability, of the 31 employee at the effective date of the annuity or date of 32 death, whichever first occurred, over the total annuity 33 payments attributable to paragraph (a) 1 of Section 7-142 34 made to the employee, surviving spouse and children plus (ii) HB1583 Enrolled -44- LRB9101658EGfg 1 the excess of the additional credits, excluding any such 2 credits used to create a reversionary annuity, used to 3 provide the annuity attributable to paragraph (a) 2 of 4 Section 7-142 over the total annuity payments made to the 5 employee, surviving spouse and children, pursuant thereto. 6 11. Upon the death of the participating employee whose 7 annuity was suspended upon his return to employment: 8 a. If a surviving spouse or child annuity is 9 awarded, $3,000; 10 b. If no surviving spouse or child annuity is 11 awarded and he had less than one year's service upon 12 return, $3,000 plus the excess of the normal, survivor 13 and additional credits, including interest thereon, but 14 excluding those allowed during a period of disability, at 15 the effective date of the suspended annuity, plus those 16 allowed after his return, over all annuity payments made 17 to the employee; 18 c. If no surviving spouse or child annuity is 19 awarded and he has one year or more of service upon 20 return, the higher of (a) the payment under subparagraph 21 b of this paragraph or (b) the payment under paragraph 1 22 of this Section, taking into consideration only the 23 service and credits allowed after his return, plus the 24 excess of the normal, survivor and additional credits, 25 including interest thereon, excluding those allowed 26 during periods of disability, at the effective date of 27 his suspended annuity over all annuity payments made to 28 the employee. 29 12. The $3,000 death benefit provided in paragraphs 4 30 and 6 shall not be payable to beneficiaries of persons who 31 terminated service prior to September 8, 1971, unless the 32 payment or agreement for payment provided by Section 7-144.2 33 of this Article is made prior to the date of death. 34 13. The increase in certain death benefits from $1,000 HB1583 Enrolled -45- LRB9101658EGfg 1 to $3,000 provided by this amendatory Act of 1987 shall apply 2 only to deaths occurring on or after January 1, 1988. 3 (Source: P.A. 85-941.) 4 (40 ILCS 5/7-166) (from Ch. 108 1/2, par. 7-166) 5 Sec. 7-166. Separation benefits - Eligibility. 6 Separation benefits shall be payable as hereinafter set 7 forth: 8 1. Upon separation from the service of all participating 9 municipalities and instrumentalities thereof and 10 participating instrumentalities, any participating employee 11upon the termination of his participation as a participating12employeewho, on the date of application for such benefit, is 13 not entitled to a retirement annuity shall be entitled to a 14 separation benefit; 15 2. Upon separation from the service of all participating 16 municipalities and instrumentalities thereof and 17 participating instrumentalities, any participating employee 18upon the termination of his participation as a participating19employeewho, on the date of application for such benefit, is 20 entitled to a retirement annuity of less than $30 per month 21 for life may elect to take a separation benefit in lieu of 22 the retirement annuity. 23 (Source: Laws 1963, p. 161.) 24 (40 ILCS 5/7-167) (from Ch. 108 1/2, par. 7-167) 25 Sec. 7-167. Separation benefits - Payment. Separation 26 benefits shall be paid in the form of a single cash sum as 27 soon as practicable after receipt by the board of: 28 1. a written application by the employee for such 29 benefits; and 30 2. written notice from the last employing 31 participating municipality or instrumentality thereof or 32 participating instrumentality, certifying that such HB1583 Enrolled -46- LRB9101658EGfg 1 participating employee has separated from service 2terminated his participation. 3 (Source: Laws 1963, p. 161.) 4 (40 ILCS 5/7-184) (from Ch. 108 1/2, par. 7-184) 5 Sec. 7-184. To determine prior service. 6 To determine the length of prior service from such 7 information as is available. Any such determination shall be 8 conclusive as to any such period of service, unlesswithin 29years of the issuance of the first individual statement to an10employee,the board reconsiders the case and changes the 11 determination. 12 The change to this Section made by this amendatory Act of 13 the 91st General Assembly applies without regard to whether 14 the individual is in service on or after the effective date 15 of this amendatory Act. 16 (Source: Laws 1963, p. 161.) 17 (40 ILCS 5/7-211) (from Ch. 108 1/2, par. 7-211) 18 Sec. 7-211. Authorizations. 19 (a) Each participating municipality and instrumentality 20 thereof and each participating instrumentality shall: 21 1. Deduct all normal and additional contributions 22 and contributions for federal Social Security taxes as 23 required by the Social Security Enabling Act from each 24 payment of earnings payable to each participating 25 employee who is entitled to any earnings from such 26 municipality or instrumentality thereof or participating 27 instrumentality, andtoremit all such contributions 28 immediately to the board; and 29 2. Pay to the board contributions required by this 30 Article. 31 (b) Each participating employee shall, by virtue of the 32 payment of contributions to this fund, receive a vested HB1583 Enrolled -47- LRB9101658EGfg 1 interest in the annuities and benefits provided in this 2 Article and in consideration of such vested interest shall be 3 deemed to have agreed and authorized the deduction from 4 earnings of all contributions payable to this fund in 5 accordance with this Article. 6 (c) Payment of earnings less the amounts of 7 contributions provided in this Article and in the Social 8 Security Enabling Act shall be a full and complete discharge 9 of all claims for payment for services rendered by any 10 employee during the period covered by any such payment. 11 (d) Any covered annuitant may authorize the withholding 12 of all or a portion of his or her annuity, for the payment of 13 premiums on group accident and health insurance provided 14 pursuant to Section 7-199.1. The annuitant may revoke this 15 authorization at any time. 16 (Source: P.A. 84-812.) 17 (40 ILCS 5/7-224 new) 18 Sec. 7-224. Section 415 limitations. Notwithstanding 19 any other provisions of this Article, the combined benefits 20 and contributions provided to any participating employee by 21 all plans of any participating municipality and its 22 instrumentalities and any participating instrumentality shall 23 not exceed the limitations specified in Section 415(b), (c), 24 and (e) of the Internal Revenue Code of 1986. If a 25 participating employee's benefits or contributions under this 26 Article, combined with those under any other plan of the 27 participating municipality and its instrumentalities or 28 participating instrumentality, would otherwise violate those 29 limitations, the benefits and contributions under the other 30 plan shall be reduced, rather than the benefits and 31 contributions provided under this Article. To the extent 32 that the other plan fails to limit such benefits and 33 contributions, that plan shall be disqualified. HB1583 Enrolled -48- LRB9101658EGfg 1 (40 ILCS 5/8-125) (from Ch. 108 1/2, par. 8-125) 2 Sec. 8-125. Annuity. 3 "Annuity": Equal monthly payments for life, unless 4 otherwise specified. 5 For annuities taking effect before January 1, 1998, the 6 first payment shall be due and payable one month after the 7 occurrence of the event upon which payment of the annuity 8 depends, and the last payment shall be due and payable as of 9 the date of the annuitant's death and shall be prorated from 10 the date of the last preceding payment to the date of death 11 for deaths that occur on or before March 31, 2000. All 12 payments made on or after April 1, 2000 shall be made on the 13 first day of the calendar month and the last payment shall be 14 made on the first day of the calendar month in which the 15 annuity payment period ends. All payments for months 16 beginning with April of 2000 shall be for the entire calendar 17 month, without proration. A pro rata amount shall be paid for 18 that part of the month from the March 2000 annuity payment 19 date through March 31, 2000. 20 For annuities taking effect on or after January 1, 1998, 21 payments shall be made as of the first day of the calendar 22 month, with the first payment to be made as of the first day 23 of the calendar month coincidental with or next following the 24 first day of the annuity payment period, and the last payment 25 to be made as of the first day of the calendar month in which 26 the annuity payment period ends. For annuities taking effect 27 on or after January 1, 1998, all payments shall be for the 28 entire calendar month, without proration. 29 For the purposes of this Section, the "annuity payment 30 period" means the period beginning on the day after the 31 occurrence of the event upon which payment of the annuity 32 depends, and ending on the day upon which the death of the 33 annuitant or other event terminating the annuity occurs. 34 (Source: P.A. 90-31, eff. 6-27-97.) HB1583 Enrolled -49- LRB9101658EGfg 1 (40 ILCS 5/8-139) (from Ch. 108 1/2, par. 8-139) 2 Sec. 8-139. Reversionary annuity. 3 (a) An employee, prior to retirement on annuity, may 4 elect to take a lesser amount of annuity and provide, with 5 the actuarial value of the amount by which his annuity is 6 reduced, a reversionary annuity for a wife, husband, parent, 7 child, brother or sister. The option shall be exercised by 8 filing a written designation with the board prior to 9 retirement, and may be revoked by the employee at any time 10 before retirement. The death of the employee prior to his 11 retirement shall automatically void the option. 12 (b) The death of the designated reversionary annuitant 13 prior to the employee's retirement shall automatically void 14 the option. If the reversionary annuitant dies after the 15 employee's retirement, and before the death of the employee 16 annuitant, the reduced annuity being paid to the retired 17 employee annuitant shall be increased to the amount of 18 annuity before reduction for the reversionary annuity and no 19 reversionary annuity shall be payable. 20 The option is subject to the further condition that no 21 reversionary annuity shall be paid to a parent, child, 22 brother, or sister if the employee dies before the expiration 23 of 365 days from the date his written designation was filed 24 with the board, even though he has retired and is receiving a 25 reduced annuity. 26 (c) The employee exercising this option shall not reduce 27 his retirement annuity by more than $400 a month, or elect to 28 provide a reversionary annuity of less than $50 per month. 29 No option shall be permitted if the reversionary annuity for 30 a widow, when added to the widow's annuity payable under this 31 Article, exceeds 100% of the reduced annuity payable to the 32 employee. 33 (d) A reversionary annuity shall begin on the day 34 following the death of the annuitant and shall be paid as HB1583 Enrolled -50- LRB9101658EGfg 1 provided in Section 8-125. 2 (e) The increases in annuity provided in Section 8-137 3 of this Article shall, as to an employee so electing a 4 reduced annuity relate to the amount of the original annuity, 5 and such amount shall constitute the annuity on which such 6 automatic increases shall be based. 7 (f) For annuities elected after June 30, 1983, the 8 amount of the monthly reversionary annuity shall be 9 determined by multiplying the amount of the monthly reduction 10 in the employee's annuity by the factor in the following 11 table based on the age of the employee and the difference in 12 the age of the employee and the age of the reversionary 13 annuitant at the starting date of the employee's annuity: 14 Employee's Age 15 Reversionary 16 Annuitant's 17 Age 50-51 52-54 55-57 58-60 61-63 64-66 67-69 70 & 18 Over 19 30 or 20 more 21 years 22 younger 3.03 2.56 2.18 1.84 1.55 1.29 1.08 0.91 23 25-29 24 years 25 younger 3.16 2.68 2.29 1.94 1.63 1.37 1.15 0.97 26 20-24 27 years 28 younger 3.35 2.85 2.44 2.07 1.75 1.48 1.25 1.06 29 15-19 30 years 31 younger 3.60 3.08 2.65 2.26 1.92 1.63 1.39 1.19 32 10-14 33 years 34 younger 3.96 3.40 2.94 2.53 2.16 1.85 1.59 1.37 HB1583 Enrolled -51- LRB9101658EGfg 1 5-9 2 years 3 younger 4.46 3.84 3.35 2.90 2.51 2.16 1.88 1.64 4 0-4 5 years 6 younger 5.15 4.47 3.93 3.44 3.00 2.61 2.29 2.02 7 1-5 8 years 9 older 6.12 5.36 4.76 4.21 3.71 3.26 2.88 2.56 10 6-10 11 years 12 older 7.48 6.61 5.93 5.30 4.71 4.16 3.70 3.29 13 11-15 14 years 15 older 9.37 8.35 7.58 6.83 6.11 5.40 4.82 4.32 16 16-20 17 years 18 older 11.99 10.78 9.84 8.93 8.02 7.13 6.43 5.87 19 21-25 20 years 21 older 15.59 14.06 12.91 11.82 10.73 9.66 8.88 8.35 22 26-30 23 years 24 older 20.42 18.49 17.15 15.96 14.80 13.65 12.97 12.82 25 31 or 26 more 27 years 28 older 27.07 24.72 23.34 22.32 21.45 20.62 20.85 23.28 29 (Source: P.A. 90-31, eff. 6-27-97; 90-766, eff. 8-14-98.) 30 (40 ILCS 5/8-153) (from Ch. 108 1/2, par. 8-153) 31 Sec. 8-153. Widow's remarriagemarriage to terminate32annuity. A widow's annuity shall terminate when she remarries 33 if the marriage takes place before the date 60 days after the HB1583 Enrolled -52- LRB9101658EGfg 1 effective date of this amendatory Act of the 91st General 2 Assembly. If a widow remarries 60 or more days after the 3 effective date of this amendatory Act of the 91st General 4 Assembly, the widow's annuity shall continue without 5 interruption. 6 When a widow dies, if she has not received, in the form 7 of an annuity, an amount equal to the total credited from 8 employee's contributions and applied for the widow's annuity, 9 the difference between such annuity credits and the amount 10 received by her shall be refunded to her, provided, that if a 11 reversionary annuity is payable to her, or to any other 12 person designated by the employee, such amount shall not be 13 refunded but the reversionary annuity shall be payable. If 14 there is any child of the employee who is under 18 years of 15 age, the part of any such amount that is required to pay an 16 annuity to the child shall be transferred to the child's 17 annuity reserve. In making refunds under this Section, no 18 interest shall be paid upon either the total of annuity 19 payments made or the amounts subject to refund. Any refund 20 shall be paid according to the provisions of Section 8-170. 21A subsequent change in marital status of the widow shall22not effect any restoration of any rights under this Article23except in the case of declaration of invalidity of a24subsequent marriage wherein the declaration of invalidity is25based upon charges of bigamy by the subsequent husband or the26legal disability of the subsequent husband to enter into a27marriage.28 (Source: P.A. 83-706.) 29 (40 ILCS 5/8-171) (from Ch. 108 1/2, par. 8-171) 30 Sec. 8-171. Refund in lieu of annuity. In lieu of an 31 annuity, an employee who withdraws and whose annuity would 32 amount to less than $800$300a month for life, may elect to 33 receive a refund of his accumulated contributions for annuity HB1583 Enrolled -53- LRB9101658EGfg 1 purposes, based on the amounts contributed by him. 2 The widow of any employee, eligible for annuity upon the 3 death of her husband, whose widow's annuity would amount to 4 less than $800$300a month for life, may, in lieu of widow's 5 annuity, elect to receive a refund of the accumulated 6 contributions for annuity purposes, based on the amounts 7 contributed by her deceased employee husband, but reduced by 8 any amounts theretofore paid to him in the form of an annuity 9 or refund out of such accumulated contributions. 10 Accumulated contributions shall mean the amounts - 11 including the interest credited thereon - contributed by the 12 employee for age and service and widow's annuity to the date 13 of his withdrawal or death, whichever first occurs, including 14 any amounts contributed for him as salary deductions while 15 receiving duty disability benefits, and, if not otherwise 16 included, any accumulations from sums contributed by him and 17 applied to any pension fund superseded by this fund. 18 The acceptance of such refund in lieu of widow's annuity, 19 on the part of a widow, shall not deprive a child or children 20 of the right to receive a child's annuity as provided for in 21 Sections 8-158 and 8-159 of this Article, and neither shall 22 the payment of a child's annuity in the case of such refund 23 to a widow reduce the amount herein set forth as refundable 24 to such widow electing a refund in lieu of widow's annuity. 25 (Source: P.A. 86-1488.) 26 (40 ILCS 5/8-244) (from Ch. 108 1/2, par. 8-244) 27 Sec. 8-244. Annuities, etc., exempt. 28 (a) All annuities, refunds, pensions, and disability 29 benefits granted under this Article, shall be exempt from 30 attachment or garnishment process and shall not be seized, 31 taken, subjected to, detained, or levied upon by virtue of 32 any judgment, or any process or proceeding whatsoever issued 33 out of or by any court in this State, for the payment and HB1583 Enrolled -54- LRB9101658EGfg 1 satisfaction in whole or in part of any debt, damage, claim, 2 demand, or judgment against any annuitant, pensioner, 3 participant, refund applicant, or other beneficiary 4 hereunder. 5 (b) No annuitant, pensioner, refund applicant, or other 6 beneficiary shall have any right to transfer or assign his 7 annuity, refund, or disability benefit or any part thereof by 8 way of mortgage or otherwise, except that: 9 (1) an annuitant or pensioner who elects or has 10 elected to participate in a non-profit group hospital 11 care plan or group medical surgical plan may with the 12 approval of the board and in conformity with its 13 regulations authorize the board to withhold from the 14 pension or annuity the current premium for such coverage 15 and pay such premium to the organization underwriting 16 such plan; 17 (2) in the case of refunds, a participant may 18 pledge by assignment, power of attorney, or otherwise, as 19 security for a loan from a legally operating credit union 20 making loans only to participants in certain public 21 employee pension funds described in the Illinois Pension 22 Code, all or part of any refund which may become payable 23 to him in the event of his separation from service; and 24 (3) the board, in its discretion, may pay to the 25 wife of any annuitant, pensioner, refund applicant, or 26 disability beneficiary, such an amount out of her 27 husband's annuity pension, refund, or disability benefit 28 as any court of competent jurisdiction may order, or such 29 an amount as the board may consider necessary for the 30 support of his wife or children, or both in the event of 31 his disappearance or unexplained absence or of his 32 failure to support such wife or children. 33 (c) The board may retain out of any future annuity, 34 pension, refund or disability benefit payments, such amount, HB1583 Enrolled -55- LRB9101658EGfg 1 or amounts, as it may require for the repayment of any moneys 2 paid to any annuitant, pensioner, refund applicant, or 3 disability beneficiary through misrepresentation, fraud or 4 error. Any such action of the board shall relieve and 5 release the board and the fund from any liability for any 6 moneys so withheld. 7 (d) Whenever an annuity or disability benefit is payable 8 to a minor or to a person certified by a medical doctor 9adjudgedto be under legal disability, the board, in its 10 discretion and when it is intothe best interest of the 11 person concerned, may waive guardianship proceedings and pay 12 the annuity or benefit to the person providing or caring for 13 the minor orand to the wife, parent or blood relative14providing or caring for theperson under legal disability. 15 In the event that a person certified by a medical doctor 16 to be under legal disability (i) has no spouse, blood 17 relative, or other person providing or caring for him or 18 her, (ii) has no guardian of his or her estate, and (iii) is 19 confined to a Medicare approved, State certified nursing home 20 or to a publicly owned and operated nursing home, hospital, 21 or mental institution, the Board may pay any benefit due that 22 person to the nursing home, hospital, or mental institution, 23 to be used for the sole benefit of the person under legal 24 disability. 25 Payment in accordance with this subsection to a person, 26 nursing home, hospital, or mental institution for the benefit 27 of a minor or person under legal disability shall be an 28 absolute discharge of the Fund's liability with respect to 29 the amount so paid. Any person, nursing home, hospital, or 30 mental institution accepting payment under this subsection 31 shall notify the Fund of the death or any other relevant 32 change in the status of the minor or person under legal 33 disability. 34 (Source: P.A. 86-1488.) HB1583 Enrolled -56- LRB9101658EGfg 1 (40 ILCS 5/9-149) (from Ch. 108 1/2, par. 9-149) 2 Sec. 9-149. Widow's remarriagemarriageto terminate 3 annuity. A widow's annuity shall terminate when she 4 remarries if the marriage takes place before the date 60 days 5 after the effective date of this amendatory Act of the 91st 6 General Assembly. If a widow remarries 60 or more days after 7 the effective date of this amendatory Act of the 91st General 8 Assembly, the widow's annuity shall continue without 9 interruption. 10 When a widow dies, if she has not received, in the form 11 of an annuity, an amount equal to the total sums accumulated 12 and credited from the employee's contributions and applied 13 for the widow's annuity, the difference between such 14 accumulated annuity credits and the amount received by her in 15 annuity payments shall be refunded to her; provided that if a 16 reversionary annuity is payable to her or to any other person 17 designated by the employee, thissuch aforesaidamount shall 18 not be refunded, but the reversionary annuity shall be 19 payable. 20 (Source: P.A. 81-1536.) 21 (40 ILCS 5/9-194) (from Ch. 108 1/2, par. 9-194) 22 Sec. 9-194. To invest the reserves. To invest the 23 reserves of the fund in accordance with Sections 1-109, 24 1-109.1, 1-109.2, 1-110, 1-111, 1-114, and 1-115 of this Act. 25 Investments made in accordance with Section 1-113 shall be 26 deemed to be prudentthe provisions set forth in Section271-113 of this Act. 28 The retirement board may sell any security held by it at 29 any time it deems it desirable. 30 The board may enter into agreements and execute documents 31 that it determines to be necessary to complete any investment 32 transaction. 33 All investments shall be clearly held and accounted for HB1583 Enrolled -57- LRB9101658EGfg 1 to indicate ownership by the board. The board may direct the 2 registration of securities in its own name or in the name of 3 a nominee created for the express purpose of registration of 4 securities by a savings and loan association or national or 5 State bank or trust company authorized to conduct a trust 6 business in the State of Illinois. 7 Investments shall be carried at cost or at a value 8 determined in accordance with generally accepted accounting 9 principles. 10 (Source: P.A. 82-960.) 11 (40 ILCS 5/11-124) (from Ch. 108 1/2, par. 11-124) 12 Sec. 11-124. Annuity. 13 "Annuity": Equal monthly payments for life, unless 14 terminated earlier under Section 11-148, 11-152, 11-153, or 15 11-230. 16 For annuities taking effect before January 1, 1998, the 17 first payment shall be due and payable one month after the 18 occurrence of the event upon which payment of the annuity 19 depends. Until August 1, 1999,andpayment shall be made 20 for any part of a monthly period in which death of the 21 annuitant occurs. Beginning August 1, 1999, all payments 22 shall be made on the first day of the calendar month and 23 shall be for the entire calendar month, without proration. 24 The last payment shall be made on the first day of the 25 calendar month in which the annuity payment period ends. A 26 pro rata amount shall be paid for that part of the month from 27 the July 1999 annuity payment date through July 31, 1999. 28 For annuities taking effect on or after January 1, 1998, 29 payments shall be made as of the first day of the calendar 30 month, with the first payment to be made as of the first day 31 of the calendar month coincidental with or next following the 32 first day of the annuity payment period, and the last payment 33 to be made as of the first day of the calendar month in which HB1583 Enrolled -58- LRB9101658EGfg 1 the annuity payment period ends. For annuities taking effect 2 on or after January 1, 1998, all payments shall be for the 3 entire calendar month, without proration. 4 For the purposes of this Section, the "annuity payment 5 period" means the period beginning on the day after the 6 occurrence of the event upon which payment of the annuity 7 depends, and ending on the day upon which the death of the 8 annuitant or other event terminating the annuity occurs. 9 (Source: P.A. 90-31, eff. 6-27-97.) 10 (40 ILCS 5/11-134.2) (from Ch. 108 1/2, par. 11-134.2) 11 Sec. 11-134.2. Reversionary annuity. 12 (a) An employee, prior to retirement on annuity, may 13 elect to take a lesser amount of annuity and provide, with 14 the actuarial value of the amount by which his annuity is 15 reduced, a reversionary annuity for a wife, husband, parent, 16 child, brother or sister. The option shall be exercised by 17 filing a written designation with the board prior to 18 retirement, and may be revoked by the employee at any time 19 before retirement. The death of the employee prior to his 20 retirement shall automatically void the option. 21 (b) The death of the designated reversionary annuitant 22 prior to the employee's retirement shall automatically void 23 the option. If the reversionary annuitant dies after the 24 employee's retirement, and before the death of the employee 25 annuitant, the reduced annuity being paid to the retired 26 employee annuitant shall be increased to the amount of 27 annuity before reduction for the reversionary annuity and no 28 reversionary annuity shall be payable. 29 The option is subject to the further condition that no 30 reversionary annuity shall be paid to a parent, child, 31 brother, or sister if the employee dies before the expiration 32 of 365 days from the date his written designation was filed 33 with the board, even though he has retired and is receiving a HB1583