State of Illinois
91st General Assembly
Legislation

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91_HB2918

 
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 1        AN ACT to amend the Illinois  Pension  Code  by  changing
 2    Sections  15-136 and 15-136.2 and amending the State Mandates
 3    Act.

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

 6        Section  5.   The  Illinois  Pension  Code  is amended by
 7    changing Sections 15-136 and 15-136.2 as follows:

 8        (40 ILCS 5/15-136) (from Ch. 108 1/2, par. 15-136)
 9        Sec.  15-136.   Retirement  annuities  -   Amount.    The
10    provisions  of  this  Section  15-136  apply  only  to  those
11    participants who are participating in the traditional benefit
12    package  or  the portable benefit package and do not apply to
13    participants who are participating in the self-managed plan.
14        (a)  The amount of a  participant's  retirement  annuity,
15    expressed  in  the  form  of  a single-life annuity, shall be
16    determined by whichever of the following rules is  applicable
17    and provides the largest annuity:
18        Rule  1:  The  retirement annuity shall be 1.67% of final
19    rate of earnings for each of the first 10 years  of  service,
20    1.90%  for  each  of  the next 10 years of service, 2.10% for
21    each year of service in excess of 20 but  not  exceeding  30,
22    and  2.30%  for each year in excess of 30; or for persons who
23    retire on or after January 1, 1998, 2.2% of the final rate of
24    earnings for each year of service.
25        Rule 2:  The retirement annuity shall be the sum  of  the
26    following,   determined   from   amounts   credited   to  the
27    participant in accordance with the actuarial tables  and  the
28    prescribed  rate  of  interest  in  effect  at  the  time the
29    retirement annuity begins:
30             (i)  the normal annuity which can be provided on  an
31        actuarially  equivalent  basis, by the accumulated normal
 
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 1        contributions as of the date the annuity begins; and
 2             (ii)  an annuity from employer contributions  of  an
 3        amount  equal  to  that  which  can  be  provided  on  an
 4        actuarially  equivalent basis from the accumulated normal
 5        contributions  made  by  the  participant  under  Section
 6        15-113.6  and   Section   15-113.7   and   the   employee
 7        contribution made under Section 15-136.2; and
 8             (iii)  an  annuity from employer contributions of an
 9        amount  equal  to  that  which  can  be  provided  on  an
10        actuarially equivalent basis  from  plus  1.4  times  all
11        other   accumulated  normal  contributions  made  by  the
12        participant other than contributions made  under  Section
13        15-113.6, 15-113.7, or 15-136.2 and multiplied by 1.4.
14    The  employee  contribution made under Section 15-136.2 shall
15    be treated as a normal contribution for purposes of this Rule
16    2 only (regardless of whether that employee contribution  was
17    paid by the employer on behalf of the participant).
18        With  respect to any retirement annuity that began before
19    the effective date of this amendatory Act of the 91st General
20    Assembly and for which  an  employee  contribution  was  made
21    under  Section  15-136.2,  the  System  shall recalculate the
22    retirement annuity and shall pay the amounts thus due in  the
23    manner  provided  in Section 15-186.1 for benefits mistakenly
24    set too low.
25        In no event shall an increased Rule 2 retirement  annuity
26    otherwise  resulting  from  this  amendatory  Act of the 91st
27    General Assembly be lower than the amount obtained by  adding
28    (1)  the  monthly  amount  obtained  by dividing the combined
29    employee  and  employer  contributions  made  under   Section
30    15-136.2  by  the  System's annuity factor for the age of the
31    participant at the beginning of the  annuity  payment  period
32    and  (2)  the  amount  equal  to the participant's annuity if
33    calculated under Rule 1, reduced under Section  15-136(b)  as
34    if no contributions had been made under Section 15-136.2.
 
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 1        The  changes  made  by  this  amendatory  Act of the 91st
 2    General  Assembly  are  a   legislative   response   to   and
 3    implementation   of   the  Fourth  District  Appellate  Court
 4    decision in Mattis v. State Universities Retirement System et
 5    al.  The changes made by this  amendatory  Act  of  the  91st
 6    General  Assembly  apply without regard to whether the person
 7    is in service as an employee on or after its effective date.
 8    With respect to a police officer or firefighter  who  retires
 9    on  or after August 14, the effective date of this amendatory
10    Act of 1998, the accumulated normal contributions taken  into
11    account  under  clauses  (i)  and  (ii)  of this Rule 2 shall
12    include the  additional  normal  contributions  made  by  the
13    police officer or firefighter under Section 15-157(a).
14        Rule  3:  The  retirement annuity of a participant who is
15    employed at least one-half time during the  period  on  which
16    his or her final rate of earnings is based, shall be equal to
17    the   participant's  years  of  service  not  to  exceed  30,
18    multiplied by (1) $96 if  the  participant's  final  rate  of
19    earnings  is  less than $3,500, (2) $108 if the final rate of
20    earnings is at least $3,500 but less than $4,500, (3) $120 if
21    the final rate of earnings is at least $4,500 but  less  than
22    $5,500,  (4)  $132  if the final rate of earnings is at least
23    $5,500 but less than $6,500, (5) $144 if the  final  rate  of
24    earnings is at least $6,500 but less than $7,500, (6) $156 if
25    the  final  rate of earnings is at least $7,500 but less than
26    $8,500, (7) $168 if the final rate of earnings  is  at  least
27    $8,500  but  less than $9,500, and (8) $180 if the final rate
28    of earnings is $9,500 or more, except that  the  annuity  for
29    those   persons   having   made  an  election  under  Section
30    15-154(a-1)  shall  be  calculated  and  payable  under   the
31    portable   retirement   benefit   program   pursuant  to  the
32    provisions of Section 15-136.4.
33        Rule 4:  A participant who is at least age 50 and has  25
34    or  more years of service as a police officer or firefighter,
 
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 1    and a participant who is age 55 or over and has at  least  20
 2    but  less  than  25  years  of service as a police officer or
 3    firefighter, shall be entitled to  a  retirement  annuity  of
 4    2 1/4% of the final rate of earnings for each of the first 10
 5    years  of  service as a police officer or firefighter, 2 1/2%
 6    for each of the next 10 years of service as a police  officer
 7    or  firefighter,  and  2 3/4%  for  each year of service as a
 8    police  officer  or  firefighter  in  excess  of   20.    The
 9    retirement  annuity  for  all other service shall be computed
10    under Rule 1.
11        For purposes of this Rule 4, a participant's service as a
12    firefighter shall also include the following:
13             (i)  service that is performed while the  person  is
14        an employee under subsection (h) of Section 15-107; and
15             (ii)  in  the  case  of  an  individual  who  was  a
16        participating employee employed in the fire department of
17        the  University  of  Illinois's  Champaign-Urbana  campus
18        immediately   prior  to  the  elimination  of  that  fire
19        department and who immediately after the  elimination  of
20        that  fire department transferred to another job with the
21        University of Illinois, service performed as an  employee
22        of  the  University  of Illinois in a position other than
23        police officer or firefighter,  from  the  date  of  that
24        transfer until the employee's next termination of service
25        with the University of Illinois.
26        (b)  The  retirement annuity provided under Rules 1 and 3
27    above shall be reduced by  1/2  of  1%  for  each  month  the
28    participant  is  under  age  60  at  the  time of retirement.
29    However, this reduction shall  not  apply  in  the  following
30    cases:
31             (1)  For  a  disabled  participant  whose disability
32        benefits have been discontinued because  he  or  she  has
33        exhausted   eligibility  for  disability  benefits  under
34        clause (6) of Section 15-152;
 
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 1             (2)  For a participant who has at least  the  number
 2        of  years  of service required to retire at any age under
 3        subsection (a) of Section 15-135; or
 4             (3)  For that portion of a retirement annuity  which
 5        has   been   provided   on  account  of  service  of  the
 6        participant during periods when he or she  performed  the
 7        duties  of  a  police  officer  or  firefighter, if these
 8        duties were performed for at least  5  years  immediately
 9        preceding the date the retirement annuity is to begin.
10        (c)  The  maximum retirement annuity provided under Rules
11    1, 2, and 4 shall be the lesser of (1) the  annual  limit  of
12    benefits  as specified in Section 415 of the Internal Revenue
13    Code of 1986, as such Section may be  amended  from  time  to
14    time  and  as  such  benefit  limits shall be adjusted by the
15    Commissioner of Internal Revenue, and (2) 80% of  final  rate
16    of earnings.
17        (d)  An  annuitant whose status as an employee terminates
18    after August 14, 1969 shall receive  automatic  increases  in
19    his or her retirement annuity as follows:
20        Effective  January  1  immediately following the date the
21    retirement annuity begins, the  annuitant  shall  receive  an
22    increase  in  his or her monthly retirement annuity of 0.125%
23    of the monthly retirement annuity provided under Rule 1, Rule
24    2, Rule 3, or Rule 4, contained in this  Section,  multiplied
25    by  the number of full months which elapsed from the date the
26    retirement annuity payments began to January  1,  1972,  plus
27    0.1667%  of  such  annuity,  multiplied by the number of full
28    months which elapsed from January 1, 1972, or  the  date  the
29    retirement  annuity  payments  began,  whichever is later, to
30    January 1, 1978, plus 0.25% of such annuity multiplied by the
31    number of full months which elapsed from January 1, 1978,  or
32    the  date the retirement annuity payments began, whichever is
33    later, to the effective date of the increase.
34        The annuitant shall receive an increase  in  his  or  her
 
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 1    monthly  retirement  annuity  on  each  January  1 thereafter
 2    during the annuitant's life of  3%  of  the  monthly  annuity
 3    provided under Rule 1, Rule 2, Rule 3, or Rule 4 contained in
 4    this  Section.  The change made under this subsection by P.A.
 5    81-970 is effective January  1,  1980  and  applies  to  each
 6    annuitant  whose  status  as an employee terminates before or
 7    after that date.
 8        Beginning January 1, 1990, all automatic annual increases
 9    payable  under  this  Section  shall  be  calculated   as   a
10    percentage  of  the  total annuity payable at the time of the
11    increase, including all increases  previously  granted  under
12    this Article.
13        The  change  made  in  this subsection by P.A. 85-1008 is
14    effective January 26, 1988, and is applicable without  regard
15    to whether status as an employee terminated before that date.
16        (e)  If,  on  January 1, 1987, or the date the retirement
17    annuity payment period begins, whichever is later, the sum of
18    the retirement annuity provided under Rule 1  or  Rule  2  of
19    this  Section  and  the  automatic  annual increases provided
20    under the preceding subsection or Section  15-136.1,  amounts
21    to  less  than the retirement annuity which would be provided
22    by Rule 3, the retirement annuity shall be  increased  as  of
23    January  1,  1987, or the date the retirement annuity payment
24    period begins, whichever is later, to the amount which  would
25    be  provided by Rule 3 of this Section. Such increased amount
26    shall be considered as the retirement annuity in  determining
27    benefits  provided under other Sections of this Article. This
28    paragraph applies without regard  to  whether  status  as  an
29    employee   terminated  before  the  effective  date  of  this
30    amendatory Act of  1987,  provided  that  the  annuitant  was
31    employed  at  least  one-half time during the period on which
32    the final rate of earnings was based.
33        (f)  A participant is entitled to such additional annuity
34    as may be provided on an actuarially equivalent basis, by any
 
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 1    accumulated additional contributions to his  or  her  credit.
 2    However, the additional contributions made by the participant
 3    toward the automatic increases in annuity provided under this
 4    Section  shall  not  be taken into account in determining the
 5    amount of such additional annuity.
 6        (g)  If, (1) by law, a function of a  governmental  unit,
 7    as  defined by Section 20-107 of this Code, is transferred in
 8    whole or in part  to  an  employer,  and  (2)  a  participant
 9    transfers  employment  from  such  governmental  unit to such
10    employer within 6 months after the transfer of the  function,
11    and (3) the sum of (A) the annuity payable to the participant
12    under  Rule  1,  2, or 3 of this Section (B) all proportional
13    annuities payable to the participant by all other  retirement
14    systems  covered  by  Article 20, and (C) the initial primary
15    insurance amount to which the participant is  entitled  under
16    the  Social Security Act, is less than the retirement annuity
17    which would have been payable if  all  of  the  participant's
18    pension  credits  validated  under  Section  20-109  had been
19    validated under this system, a supplemental annuity equal  to
20    the  difference  in  such  amounts  shall  be  payable to the
21    participant.
22        (h)  On January 1, 1981, an annuitant who was receiving a
23    retirement annuity on or before January 1,  1971  shall  have
24    his  or  her  retirement annuity then being paid increased $1
25    per month for each year of creditable service. On January  1,
26    1982,  an  annuitant  whose  retirement  annuity  began on or
27    before January 1, 1977, shall  have  his  or  her  retirement
28    annuity  then being paid increased $1 per month for each year
29    of creditable service.
30        (i)  On January 1, 1987, any annuitant  whose  retirement
31    annuity  began  on  or before January 1, 1977, shall have the
32    monthly retirement annuity increased by an amount equal to 8¢
33    per year of creditable service times the number of years that
34    have elapsed since the annuity began.
 
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 1    (Source: P.A. 90-14, eff. 7-1-97; 90-65, eff. 7-7-97; 90-448,
 2    eff. 8-16-97; 90-576, eff.  3-31-98;  90-655,  eff.  7-30-98;
 3    90-766, eff. 8-14-98.)

 4        (40 ILCS 5/15-136.2) (from Ch. 108 1/2, par. 15-136.2)
 5        Sec. 15-136.2.  Early retirement without discount.
 6        (a)  A  participant whose retirement annuity begins after
 7    June 1, 1981 and on or before September 1,  2002  and  within
 8    six months of the last day of employment for which retirement
 9    contributions  were  required,  may  elect  at  the  time  of
10    application  to  make a one time employee contribution to the
11    System and thereby avoid the early  retirement  reduction  in
12    retirement  annuity specified under subsection (b) of Section
13    15-136.  The exercise of the election shall obligate the last
14    employer to also make a one time non-refundable  contribution
15    to the System.
16        Unless  otherwise  contractually waived by agreement with
17    the employer, any person who began to  receive  a  retirement
18    annuity  on  or  after  October  6,  1998 and such retirement
19    annuity (i)  began  within  6  months  of  the  last  day  of
20    employment  for  which retirement contributions were required
21    and  (ii)  was  reduced  under  Section  15-136(b)   due   to
22    retirement below age 60, may elect, within 6 months after the
23    effective  date  of  this  amendatory Act of the 91st General
24    Assembly, to make a one-time  employee  contribution  to  the
25    System  under  this  Section  and have the retirement annuity
26    recalculated in accordance with Rule  2  of  Section  15-136.
27    The  exercise of this election obligates the last employer to
28    also make a one-time contribution to the System.
29        (b)  The one time  employee  and  employer  contributions
30    shall  be  a percentage of the retiring participant's highest
31    full time annual salary rate during the academic years  which
32    were  considered  in  determining  his  or  her final rate of
33    earnings, or if not full time then the full time  equivalent.
 
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 1    The  employee contribution rate shall be 7% multiplied by the
 2    lesser of the following 2 sums: (1) the number of years  that
 3    the  participant  is  less  than age 60; or (2) the number of
 4    years that the participant's creditable service is less  than
 5    35  years.  The employer contribution shall be at the rate of
 6    20% for each year the participant is less than age  60.   The
 7    employer  shall  pay  the employer contribution from the same
 8    source  of  funds  which  is  used  in  paying  earnings   to
 9    employees.
10        Upon  receipt of the application and election, the System
11    shall  determine  the  one   time   employee   and   employer
12    contributions.   The  provisions of this Section shall not be
13    applicable until all the above  outlined  contributions  have
14    been   received   by  the  System;  however,  the  date  such
15    contributions  are  received  shall  not  be  considered   in
16    determining the effective date of retirement.
17        For  persons  who  apply to the Board after the effective
18    date of this amendatory Act of 1993 and before July 1,  1993,
19    requesting a retirement annuity to begin no earlier than July
20    1,  1993  and no later than June 30, 1994, the employer shall
21    pay both the employee  and  employer  contributions  required
22    under this Section.
23        (c)  The   number  of  employees  making  a  contribution
24    retiring under this Section in any fiscal year may be limited
25    at the option of the employer to no less than  15%  of  those
26    eligible.   The  right  to elect to make a contribution under
27    this Section  early  retirement  without  discount  shall  be
28    allocated  among  those applying on the basis of seniority in
29    the service of the last employer.
30    (Source: P.A. 90-65, eff. 7-7-97; 90-511, eff. 8-22-97.)

31        Section 10.  The State Mandates Act is amended by  adding
32    Section 8.24 as follows:
 
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 1        (30 ILCS 805/8.24 new)
 2        Sec.  8.24.  Exempt  mandate.  Notwithstanding Sections 6
 3    and 8 of this Act, no reimbursement by the State is  required
 4    for  the  implementation  of  any  mandate  created  by  this
 5    amendatory Act of the 91st General Assembly.

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

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