State of Illinois
91st General Assembly
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91_HB4084

 
                                               LRB9110542EGfg

 1        AN  ACT  to  amend  the  Illinois  Pension Code and State
 2    Mandates Act.

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

 5        Section  5.   The  Illinois  Pension  Code  is amended by
 6    changing Sections 7-109.3,  7-142,  and  7-142.1  and  adding
 7    Sections 7-109.4 and 7-142.2 as follows:

 8        (40 ILCS 5/7-109.3) (from Ch. 108 1/2, par. 7-109.3)
 9        Sec. 7-109.3.  "Sheriff's Law Enforcement Employees".
10        (a)  "Sheriff's   law  enforcement  employee"  or  "SLEP"
11    means:
12             (1)  A county sheriff and all deputies,  other  than
13        special  deputies,  employed  on a full time basis in the
14        office of the sheriff.
15             (2)  A person who has elected to participate in this
16        Fund under Section 3-109.1  of  this  Code,  and  who  is
17        employed  by  a  participating  municipality  to  perform
18        police duties.
19             (3)  A  law  enforcement  officer employed on a full
20        time basis by a Forest Preserve District,  provided  that
21        such officer shall be deemed a "sheriff's law enforcement
22        employee"  for  the purposes of this Article, and service
23        in that capacity shall be  deemed  to  be  service  as  a
24        sheriff's  law enforcement employee, only if the board of
25        commissioners of the District have so elected by adoption
26        of an affirmative resolution.  Such election, once  made,
27        may not be rescinded.
28             (4)  A  person not eligible to participate in a fund
29        established under Article 3 of this Code who is  employed
30        on  a  full-time basis by a participating municipality or
31        participating instrumentality to perform police duties at
 
                            -2-                LRB9110542EGfg
 1        an airport, but only if the governing  authority  of  the
 2        employer  has approved sheriff's law enforcement employee
 3        status for its airport police employees by adoption of an
 4        affirmative resolution.  Such approval, once  given,  may
 5        not be rescinded.
 6        (b)  An  employee  who  is  a  sheriff's  law enforcement
 7    employee and is granted military leave or authorized leave of
 8    absence  shall  receive  service  credit  in  that  capacity.
 9    Sheriff's law enforcement employees shall not be entitled  to
10    out of State service credit under Section 7-139.
11    (Source: P.A. 90-448, eff. 8-16-97.)

12        (40 ILCS 5/7-109.4 new)
13        Sec.   7-109.4.    Deferred   Retirement   Option   Plan.
14    "Deferred  Retirement  Option  Plan" or "DROP plan" means the
15    Deferred Retirement Option  Plan  established  under  Section
16    7-142.2.

17        (40 ILCS 5/7-142) (from Ch. 108 1/2, par. 7-142)
18        Sec. 7-142.  Retirement annuities - Amount.
19        (a)  The  amount of a retirement annuity shall be the sum
20    of the following, determined in accordance with the actuarial
21    tables in effect at the time of the grant of the annuity:
22             1.  For employees with 8 or more years  of  service,
23        an  annuity  computed pursuant to subparagraphs a or b of
24        this subparagraph 1, whichever is  the  higher,  and  for
25        employees  with  less than 8 years of service the annuity
26        computed pursuant to subparagraph a:
27                  a.  The monthly annuity which can  be  provided
28             from  the total accumulated normal, municipality and
29             prior service credits, as of the attained age of the
30             employee on the date  the  annuity  begins  provided
31             that  such annuity shall not exceed 75% of the final
32             rate of earnings of the employee.
 
                            -3-                LRB9110542EGfg
 1                  b.  (i) The monthly annuity  amount  determined
 2             as  follows by multiplying (a) 1 2/3% for annuitants
 3             with not more than 15 years or (b) 1  2/3%  for  the
 4             first  15 years and 2% for each year in excess of 15
 5             years for annuitants with more than 15 years by  the
 6             number of years plus fractional years, prorated on a
 7             basis  of months, of creditable service and multiply
 8             the product thereof by the employee's final rate  of
 9             earnings.
10                  (ii)  For  the  sole  purpose  of computing the
11             formula (and not for the purposes of the limitations
12             hereinafter stated) $125  shall  be  considered  the
13             final  rate of earnings in all cases where the final
14             rate of earnings is less than such amount.
15                  (iii)  The   monthly   annuity   computed    in
16             accordance  with  this  subparagraph  b,  shall  not
17             exceed  an  amount equal to 75% of the final rate of
18             earnings.
19                  (iv)  For employees who have less than 35 years
20             of service, the annuity computed in accordance  with
21             this  subparagraph  b  (as reduced by application of
22             subparagraph (iii) above) shall be reduced by  0.25%
23             thereof  (0.5%  if  service  was  terminated  before
24             January  1, 1988) for each month or fraction thereof
25             (1) that the employee's age is less than  60  years,
26             or  (2)  if  the  employee  has at least 30 years of
27             service credit, that the employee's  service  credit
28             is  less  than  35  years, whichever is less, on the
29             date the annuity begins.
30             2.  The annuity which can be provided from the total
31        accumulated additional credits as of the attained age  of
32        the employee on the date the annuity begins.
33        (b)  If  payment  of  an  annuity  begins  prior  to  the
34    earliest  age  at which the employee will become eligible for
 
                            -4-                LRB9110542EGfg
 1    an  old  age  insurance  benefit  under  the  Federal  Social
 2    Security Act, he may elect that  the  annuity  payments  from
 3    this fund shall exceed those payable after his attaining such
 4    age  by  an  amount,  computed  as determined by rules of the
 5    Board, but not in excess of  his  estimated  Social  Security
 6    Benefit,  determined as of the effective date of the annuity,
 7    provided that in no case shall  the  total  annuity  payments
 8    made by this fund exceed in actuarial value the annuity which
 9    would have been payable had no such election been made.
10        (c)  The  retirement annuity shall be increased each year
11    by 2%, not compounded, of  the  monthly  amount  of  annuity,
12    taking  into consideration any adjustment under paragraph (b)
13    of this  Section.  This  increase  shall  be  effective  each
14    January  1  and  computed  from  the  effective  date  of the
15    retirement annuity, the first increase  being  .167%  of  the
16    monthly  amount times the number of months from the effective
17    date to January 1. Beginning January 1, 1984 and  thereafter,
18    the  retirement  annuity  shall be increased by 3% each year,
19    not compounded. This increase  shall  not  be  applicable  to
20    annuitants  who  are  not in service on or after September 8,
21    1971.
22        For the purpose of calculating eligibility for  increases
23    under  this  subsection, the date of retirement of a SLEP who
24    retires at the conclusion of participation in the  DROP  plan
25    shall  be  deemed  to  be  the  date on which he or she began
26    participation in the DROP plan.
27    (Source: P.A. 91-357, eff. 7-29-99.)

28        (40 ILCS 5/7-142.1) (from Ch. 108 1/2, par. 7-142.1)
29        Sec. 7-142.1.  Sheriff's law enforcement employees.
30        (a)  In  lieu  of  the  retirement  annuity  provided  by
31    subparagraph 1 of paragraph (a) of Section 7-142:
32        Any sheriff's law enforcement employee who has 20 or more
33    years of service in that capacity and who terminates  service
 
                            -5-                LRB9110542EGfg
 1    prior  to  January 1, 1988 shall be entitled at his option to
 2    receive a monthly retirement annuity for  his  service  as  a
 3    sheriff's law enforcement employee computed by multiplying 2%
 4    for each year of such service up to 10 years, 2 1/4% for each
 5    year of such service above 10 years and up to 20 years, and 2
 6    1/2%  for  each  year  of such service above 20 years, by his
 7    annual final rate of earnings and dividing by 12.
 8        Any sheriff's law enforcement employee who has 20 or more
 9    years of service in that capacity and who terminates  service
10    on  or  after January 1, 1988 shall be entitled at his option
11    to receive a monthly retirement annuity for his service as  a
12    sheriff's  law  enforcement  employee computed by multiplying
13    2.5% for each year of such service up to  20  years,  2%  for
14    each  year of such service above 20 years and up to 30 years,
15    and 1% for each year of such service above 30 years,  by  his
16    annual final rate of earnings and dividing by 12.
17        If  a  sheriff's  law enforcement employee has service in
18    any other capacity, his retirement annuity for service  as  a
19    sheriff's law enforcement employee may be computed under this
20    Section  and  the  retirement  annuity  for his other service
21    under Section 7-142.
22        For a SLEP who retires at the conclusion of participation
23    in the DROP plan, calculation of the amount of the retirement
24    annuity shall be based on the SLEP's earnings and accumulated
25    service on the date he or she began participation in the DROP
26    plan and shall include any annual increases that  would  have
27    accrued  under  Section  7-142(c)  if the SLEP had retired on
28    that date.
29        In no case shall the  total  monthly  retirement  annuity
30    exceed 75% of the monthly final rate of earnings.
31        (b)  Whenever   continued  group  insurance  coverage  is
32    elected in accordance with the provisions of Section 367h  of
33    the Illinois Insurance Code, as now or hereafter amended, the
34    total  monthly  premium  for  such  continued group insurance
 
                            -6-                LRB9110542EGfg
 1    coverage or such portion  thereof  as  is  not  paid  by  the
 2    municipality  shall, upon request of the person electing such
 3    continued group insurance  coverage,  be  deducted  from  any
 4    monthly  pension  benefit  otherwise  payable  to such person
 5    pursuant to this Section, to be remitted by the Fund  to  the
 6    insurance   company  or  other  entity  providing  the  group
 7    insurance coverage.
 8    (Source: P.A. 85-941.)

 9        (40 ILCS 5/7-142.2 new)
10        Sec. 7-142.2.  Deferred Retirement Option Plan for SLEPs.
11        (a)  The Deferred Retirement Option Plan created by  this
12    Section  applies  only to sheriff's law enforcement employees
13    (SLEPs) and shall first become available to eligible SLEPs on
14    January 1, 2001.
15        (b)  To be eligible to participate in the  DROP  plan,  a
16    SLEP  must  (i)  be  in  active  service as a SLEP, (ii) have
17    attained age  50,  and  (iii)  have  at  least  20  years  of
18    creditable  service as a SLEP.  A SLEP may participate in the
19    DROP plan only once.
20        (c)  An election to participate in the DROP plan must  be
21    made  within 3 years after becoming eligible under subsection
22    (b) or by January 1, 2004, whichever is later.  The election,
23    once made, is irrevocable.
24        The election to participate in the DROP plan must be made
25    in writing on forms provided for that purpose  by  the  Board
26    and  must  be  filed  with  the  Board.  The application must
27    indicate the date upon which participation in the  DROP  plan
28    is  to begin, which must be the first day of a calendar month
29    and not less than 30 days nor more than  90  days  after  the
30    date of filing the application.
31        As a part of the application, the SLEP must file with the
32    Board  and  with his or her employer an irrevocable letter of
33    resignation  from  employment,  effective  on  the  date   of
 
                            -7-                LRB9110542EGfg
 1    termination  of  the  SLEP's  participation  in the DROP plan
 2    (unless  that  termination  results  from  acceptance  of   a
 3    disability benefit).
 4        (d)  A  SLEP's  participation  in  the  DROP  plan  shall
 5    commence  on  the date specified in the application and shall
 6    end upon (i) termination of service, (ii) death of the  SLEP,
 7    (iii)  disability for which the SLEP receives a benefit under
 8    this Article, or (iv) expiration of 3 years from the date the
 9    SLEP's participation in the DROP plan began, whichever occurs
10    first.
11        (e)  A SLEP who is participating in the DROP  plan  shall
12    be  considered  an  active  SLEP  for  the  purposes  of this
13    Article, including Section 7-174, but shall be subject to the
14    special conditions of the DROP plan.
15        A SLEP shall continue to make the contributions that  are
16    required  for active SLEPs during his or her participation in
17    the DROP plan.  These contributions shall be  accumulated  in
18    the SLEP's DROP account and shall be treated as being "picked
19    up"  within  the  meaning of Section 7-173.2 of this Code and
20    Section 414(h)(2) of the Internal Revenue Code  of  1986,  as
21    amended.
22        A  SLEP  who  is participating in the DROP plan shall not
23    receive service credit for the period of that  participation,
24    and  the  earnings  received  during  that  period  shall  be
25    disregarded  in  calculating  the  SLEP's benefits under this
26    Article.
27        (f)  A  SLEP  who  participates  in  the  DROP  plan  may
28    terminate service at any time  during  participation  in  the
29    DROP  plan.   A  SLEP  who participates in the DROP plan must
30    terminate service on the last day  of  participation  in  the
31    DROP plan, unless participation in the DROP plan is ended due
32    to acceptance of a disability benefit.
33        (g)  A SLEP who is participating in the DROP plan remains
34    eligible  to  apply  for  a  disability  benefit  under  this
 
                            -8-                LRB9110542EGfg
 1    Article,  but  participation  in  the  DROP  plan ceases upon
 2    acceptance of the disability benefit.   If  participation  in
 3    the  DROP  plan  is  ended  due to acceptance of a disability
 4    benefit,  (1)  the  disabled  SLEP  shall  be  credited  with
 5    employee contributions and creditable service for the  period
 6    of  participation  in the DROP plan, (2) the SLEP's letter of
 7    resignation from service that is required to be filed at  the
 8    time  of application to participate in the DROP plan is void,
 9    and (3) the amounts in the disabled SLEP's DROP  account  are
10    forfeited to the Fund.
11        (h)  The  Fund shall maintain a separate DROP account for
12    the benefit of each SLEP who becomes  a  participant  in  the
13    DROP plan.  The Fund shall pay into the SLEP's DROP account:
14             (1)  for  each  month of the SLEP's participation in
15        the DROP plan, an amount equal to the monthly  retirement
16        annuity that the SLEP would have been eligible to receive
17        if the SLEP had terminated service and taken a retirement
18        annuity  on the date his or her participation in the DROP
19        plan began, including any increases in that  annuity  for
20        which  the  SLEP  would  have been eligible under Section
21        7-142(c);
22             (2)  an amount equal  to  any  supplemental  benefit
23        payment that the SLEP would have been eligible to receive
24        under  Section 7-144.3 if the SLEP had terminated service
25        and taken a retirement annuity on the  date  his  or  her
26        participation in the DROP plan began;
27             (3)  the  employee  contributions  paid  by the SLEP
28        during the period of participation in the DROP plan; and
29             (4)  interest on the balance in the DROP account, at
30        the rate of 7% per annum, paid  and  compounded  monthly,
31        throughout  the period of participation in the DROP plan.
32        The DROP account shall cease earning  interest  when  the
33        SLEP's participation in the DROP plan ends.
34        (i)  In addition to his or her retirement annuity, a SLEP
 
                            -9-                LRB9110542EGfg
 1    who  terminates  service and retires at the conclusion of his
 2    or her participation in the DROP  plan  shall  receive,  upon
 3    retirement, a DROP benefit equal to the balance in the SLEP's
 4    DROP account at the time of retirement.
 5        At  the time of application for a retirement annuity, the
 6    SLEP shall elect to receive the DROP benefit in the  form  of
 7    either  a  lump  sum or an actuarially equivalent annuity for
 8    life.  If a lump sum payment is elected, it may be  taken  in
 9    the  form of cash or a cash equivalent or be rolled over into
10    an  individual  retirement  account  (IRA)  or  a   qualified
11    retirement  plan.   A  DROP benefit payable in the form of an
12    annuity shall be in a fixed amount not subject to  annual  or
13    other  increases.   A  DROP  benefit  shall  be  treated as a
14    retirement  benefit  for  the  purposes  of   Section   1-119
15    (QILDROs).
16        (j)  If a SLEP receiving a DROP benefit in the form of an
17    annuity  re-enters service, the DROP benefit annuity payments
18    shall be suspended until the SLEP's subsequent retirement.
19        (k)  If a SLEP dies while participating in the DROP plan,
20    the DROP benefit shall be paid as a lump sum to the surviving
21    spouse or other survivor of the SLEP entitled to  an  annuity
22    under  this Article or, if there is no such survivor, then to
23    the deceased SLEP's estate.
24        (l)  If a  retired  SLEP  dies  while  receiving  a  DROP
25    benefit  in  the  form  of  an  annuity, and the DROP account
26    balance at the time of retirement exceeds the total amount of
27    DROP benefit annuity payments received, the excess  shall  be
28    refunded  to  the  surviving  spouse or other survivor of the
29    SLEP entitled to an annuity under this Article or,  if  there
30    is no such survivor, then to the deceased SLEP's estate.

31        Section  90.  The State Mandates Act is amended by adding
32    Section 8.24 as follows:
 
                            -10-               LRB9110542EGfg
 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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