State of Illinois
91st General Assembly
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Public Act 91-0887

HB1583 Enrolled                                LRB9101658EGfg

    AN ACT in relation to public employee benefits.

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

    Section  5.   The  State Employees Group Insurance Act of
1971 is amended by changing Section 6.10 as follows:

    (5 ILCS 375/6.10)
    Sec. 6.10.  Contributions to the Community College Health
Insurance Security Fund.
    (a)  Beginning January 1, 1999, every active  contributor
of  the  State  Universities  Retirement  System (established
under Article 15 of the Illinois Pension Code) who (1)  is  a
full-time  employee  of  a  community college district (other
than a community college district subject to Article  VII  of
the  Public  Community  College  Act)  or  an  association of
community college boards  and  (2)  is  not  an  employee  as
defined  in  Section  3  of this Act shall make contributions
toward the cost of community college annuitant  and  survivor
health benefits at the rate of 0.50% of salary.
    These contributions shall be deducted by the employer and
paid  to  the State Universities Retirement System as service
agent for the Department of Central Management Services.  The
System  may  use  the  same  processes  for  collecting   the
contributions  required  by  this  subsection that it uses to
collect the contributions received from those employees under
Section 15-157 of the Illinois Pension Code.  An employer may
agree to pick up or pay the contributions required under this
subsection on behalf  of  the  employee;  such  contributions
shall be deemed to have been paid by the employee.
    A  person  required  to  make  contributions  under  this
subsection  (a)  who  purchases optional service credit under
Article 15 of the Illinois Pension Code  must  also  pay  the
contribution  required under this subsection (a) with respect
to that optional service credit.  This contribution  must  be
received by the System before that optional service credit is
granted.
    The  State  Universities Retirement System shall promptly
deposit all moneys collected under this subsection  (a)  into
the  Community College Health Insurance Security Fund created
in Section 6.9 of this Act.  The moneys collected under  this
Section  shall  be  used  only for the purposes authorized in
Section 6.9 of this Act and shall not  be  considered  to  be
assets   of   the   State   Universities  Retirement  System.
Contributions made under this Section are not transferable to
other  pension  funds  or  retirement  systems  and  are  not
refundable upon termination of service.
    (b)  Beginning January 1, 1999, every  community  college
district  (other than a community college district subject to
Article  VII  of  the  Public  Community  College   Act)   or
association  of  community college boards that is an employer
under  the  State  Universities   Retirement   System   shall
contribute  toward  the  cost of the community college health
benefits provided under Section 6.9 of  this  Act  an  amount
equal  to 0.50% of the salary paid to its full-time employees
who participate in the State Universities  Retirement  System
and are not members as defined in Section 3 of this Act.
    These  contributions shall be paid by the employer to the
State Universities Retirement System as service agent for the
Department of Central Management Services.   The  System  may
use  the  same  processes  for  collecting  the contributions
required by this subsection  that  it  uses  to  collect  the
contributions  received  from  those  employers under Section
15-155 of the Illinois Pension Code.
    The State Universities Retirement System  shall  promptly
deposit  all  moneys collected under this subsection (b) into
the Community College Health Insurance Security Fund  created
in  Section 6.9 of this Act.  The moneys collected under this
Section shall be used only for  the  purposes  authorized  in
Section  6.9  of  this  Act and shall not be considered to be
assets  of  the   State   Universities   Retirement   System.
Contributions made under this Section are not transferable to
other  pension  funds  or  retirement  systems  and  are  not
refundable upon termination of service.
    (c)  On  or before November 15 of each year, the Board of
Trustees of the State Universities  Retirement  System  shall
certify  to  the Governor, the Director of Central Management
Services, and the State Comptroller its estimate of the total
amount of contributions to be paid under  subsection  (a)  of
this  Section  for  the  next fiscal year.  The certification
shall include a  detailed  explanation  of  the  methods  and
information  that  the  Board  relied  upon  in preparing its
estimate.  As soon as possible after the  effective  date  of
this  Section, the Board shall submit its estimate for fiscal
year 1999.
    (d)  Beginning in fiscal year 1999, on the first  day  of
each  month,  or  as soon thereafter as may be practical, the
State Treasurer and the State Comptroller shall transfer from
the General Revenue Fund  to  the  Community  College  Health
Insurance   Security   Fund   1/12   of   the  annual  amount
appropriated for that fiscal year to  the  State  Comptroller
for  deposit  into  the  Community  College  Health Insurance
Security Fund under Section 1.4 of the  State  Pension  Funds
Continuing Appropriation Act.
    (e)  Except  where  otherwise  specified in this Section,
the definitions that apply to  Article  15  of  the  Illinois
Pension Code apply to this Section.
(Source: P.A. 90-497, eff. 8-18-97.)

    Section  10.   The  Illinois  Pension  Code is amended by
changing Sections  1-113.2,  1-116,  2-121,  2-121.1,  3-110,
7-139,  7-141,  7-141.1, 7-145.1, 7-157, 7-164, 7-166, 7-167,
7-184, 7-211,  8-125,  8-139,  8-153,  8-171,  8-244,  9-149,
9-194,  11-124,  11-134.2,  11-148,  11-167,  11-181, 11-182,
11-223,  13-303,  13-309,  13-310,  13-311,  13-314,  13-603,
14-118,  14-120,  14-128,  14-130,  15-107,  15-111,  15-112,
15-120, 15-134.5, 15-136.4, 15-139, 15-140,  15-141,  15-142,
15-144,  15-145,  15-154,  15-158.2,  15-181, 16-133, 16-135,
16-136.4, 16-138, 16-140, 16-143, 16-149.4,  16-184,  17-106,
17-117,  17-133,  17-150,  18-128,  20-121,  20-123,  20-124,
20-125,  and  20-131  and  adding  Sections 1-120, 7-224, and
15-132.2 as follows:

    (40 ILCS 5/1-113.2)
    Sec. 1-113.2.  List  of  permitted  investments  for  all
Article  3  or 4 pension funds.  Any pension fund established
under Article 3 or 4 may invest in the following items:
    (1)  Interest bearing direct obligations  of  the  United
States of America.
    (2)  Interest bearing obligations to the extent that they
are  fully  guaranteed  or insured as to payment of principal
and interest by the United States of America.
    (3)  Interest bearing bonds, notes, debentures, or  other
similar  obligations  of  agencies  of  the  United States of
America.  For the purposes of this Section, "agencies of  the
United  States of America" includes: (i) the Federal National
Mortgage  Association  and   the   Student   Loan   Marketing
Association;  (ii)  federal  land banks, federal intermediate
credit banks, federal farm credit banks, and any other entity
authorized to issue direct debt  obligations  of  the  United
States  of  America  under  the  Farm  Credit  Act of 1971 or
amendments to that Act; (iii) federal home loan banks and the
Federal Home Loan Mortgage Corporation; and (iv)  any  agency
created by Act of Congress that is authorized to issue direct
debt obligations of the United States of America.
    (4)  Interest bearing savings accounts or certificates of
deposit,  issued  by federally chartered banks or savings and
loan associations,  to  the  extent  that  the  deposits  are
insured  by  agencies  or  instrumentalities  of  the federal
government.
    (5)  Interest bearing savings accounts or certificates of
deposit, issued by  State  of  Illinois  chartered  banks  or
savings  and  loan  associations,  to  the  extent  that  the
deposits  are insured by agencies or instrumentalities of the
federal government.
    (6)  Investments in credit unions, to the extent that the
investments are insured by agencies or  instrumentalities  of
the federal government.
    (7)  Interest bearing bonds of the State of Illinois.
    (8)  Pooled  interest  bearing  accounts  managed  by the
Illinois Public Treasurer's  Investment  Pool  in  accordance
with  the  Deposit  of  State Moneys Act and interest bearing
funds or pooled accounts managed, operated, and  administered
by  banks,  subsidiaries  of  banks,  or subsidiaries of bank
holding companies in accordance with the laws of the State of
Illinois.
    (9)  Interest bearing bonds or tax anticipation  warrants
of  any  county,  township,  or  municipal corporation of the
State of Illinois.
    (10)  Direct obligations of the State of Israel,  subject
to  the  conditions  and limitations of item (5.1) of Section
1-113.
    (11)  Money market mutual  funds  managed  by  investment
companies  that  are  registered under the federal Investment
Company Act of 1940 and the Illinois Securities Law  of  1953
and   are   diversified,   open-ended  management  investment
companies; provided that the portfolio of  the  money  market
mutual fund is limited to the following:
         (i)  bonds,  notes,  certificates  of  indebtedness,
    treasury  bills,  or other securities that are guaranteed
    by the full faith and credit  of  the  United  States  of
    America as to principal and interest;
         (ii)  bonds,  notes,  debentures,  or  other similar
    obligations of  the  United  States  of  America  or  its
    agencies; and
         (iii)  short   term   obligations   of  corporations
    organized in the  United  States  with  assets  exceeding
    $400,000,000, provided that (A) the obligations mature no
    later than 180 days from the date of purchase, (B) at the
    time of purchase, the obligations are rated by at least 2
    standard  national  rating  services  at  one  of their 3
    highest classifications, and (C) the obligations held  by
    the  mutual  fund  do not exceed 10% of the corporation's
    outstanding obligations.
    (12)  General  accounts  of  life   insurance   companies
authorized to transact business in Illinois.
    (13)  Any combination of the following, not to exceed 10%
of the pension fund's net assets:
         (i)  separate  accounts  that  are  managed  by life
    insurance companies authorized to  transact  business  in
    Illinois  and  are  comprised  of  diversified portfolios
    consisting of common or preferred stocks, bonds, or money
    market instruments; and
         (ii)  separate  accounts   that   are   managed   by
    insurance  companies  authorized  to transact business in
    Illinois, and are comprised of real estate or loans  upon
    real estate secured by first or second mortgages; and
         (iii)  mutual   funds   that   meet   the  following
    requirements:
              (A)  the  mutual  fund   is   managed   by   an
         investment  company  as defined and registered under
         the federal  Investment  Company  Act  of  1940  and
         registered  under  the  Illinois  Securities  Law of
         1953;
              (B)  the mutual fund has been in operation  for
         at least 5 years;
              (C)  the  mutual  fund  has total net assets of
         $250 million or more; and
              (D)  the   mutual   fund   is   comprised    of
         diversified   portfolios   of  common  or  preferred
         stocks, bonds, or money market instruments.
(Source: P.A. 90-507, eff. 8-22-97.)

    (40 ILCS 5/1-116) (from Ch. 108 1/2, par. 1-116)
    Sec. 1-116.  Federal contribution and benefit limitations
limitation.
    (a)  This  Section  applies  to  all  pension  funds  and
retirement systems established under this Code.
    (a-5)  All   pension   funds   and   retirement   systems
established under this Code shall comply with the  applicable
contribution  and  benefit limitations imposed by Section 415
of the U.S. Internal Revenue Code of 1986 for  tax  qualified
plans under Section 401(a) of that Code.
    (b)  If   any  benefit  payable  by  a  pension  fund  or
retirement  system  subject  to  this  Section  exceeds   the
applicable  benefit  limits  set  by  Section 415 of the U.S.
Internal Revenue Code of 1986 for tax qualified  plans  under
Section 401(a) of that Code, the excess shall be payable only
from an excess benefit fund established under this Section in
accordance with federal law.
    (c)  An  excess  benefit fund shall be established by any
pension fund or retirement system  subject  to  this  Section
that  has  any  member  eligible  to  receive  a benefit that
exceeds the applicable benefit limits set by Section  415  of
the  U.S.  Internal  Revenue  Code  of 1986 for tax qualified
plans under Section 401(a) of that Code.   Amounts  shall  be
credited  to the excess benefit fund, and payments for excess
benefits made from the  excess  benefit  fund,  in  a  manner
consistent with the applicable federal law.
    (d)  For  purposes  of  matters  relating  to the benefit
limits set by Section 415 of the U.S. Internal  Revenue  Code
of  1986, the limitation year may be defined by each affected
pension fund or retirement system for that fund or system.
(Source: P.A. 90-19, eff. 6-20-97.)

    (40 ILCS 5/1-120 new)
    Sec. 1-120. Payment to trust.
    (a)  If a person is a minor or has been determined  by  a
court to be under a legal disability, any benefits payable to
that  person  under this Code may be paid to the trustee of a
trust created for the sole benefit of that person  while  the
person is living, if the trustee of the trust has advised the
board of trustees of the pension fund or retirement system in
writing  that  the benefits will be held or used for the sole
benefit of that  person.   The  pension  fund  or  retirement
system shall not be required to determine the validity of the
trust   or   of   any   of  the  terms  of  the  trust.   The
representation of  the  trustee  that  the  trust  meets  the
requirements  of  this  Section shall be conclusive as to the
pension fund or retirement system.  Payment  of  benefits  to
the  trust shall be an absolute discharge of the pension fund
or retirement system's liability with respect to the  amounts
so paid.
    (b)  For  purposes  of  this  Section,  "minor"  means an
unmarried person under the age of 18.
    (c)  This Section is not a limitation on any other  power
to  pay  benefits  to or on behalf of a minor or person under
legal disability that is granted under  this  Code  or  other
applicable law.

    (40 ILCS 5/2-121) (from Ch. 108 1/2, par. 2-121)
    Sec. 2-121.  Survivor's annuity - conditions for payment.
    (a)  A survivor's annuity shall be payable to a surviving
spouse  or  eligible child (1) upon the death in service of a
participant with at least 2 years of service credit,  or  (2)
upon  the  death  of  an annuitant in receipt of a retirement
annuity,  or  (3)  upon  the  death  of  a  participant   who
terminated service with at least 4 years of service credit.
    The change in this subsection (a) made by this amendatory
Act  of  1995 applies to survivors of participants who die on
or after December 1, 1994, without regard to whether  or  not
the participant was in service on or after the effective date
of this amendatory Act of 1995.
    (b)  To  be  eligible  for  the  survivor's  annuity, the
spouse and  the  participant  or  annuitant  must  have  been
married  for  a  continuous  period  of  at  least  one  year
immediately  preceding  the  date of death, but need not have
been married on the day of the participant's last termination
of service, regardless of whether such  termination  occurred
prior to the effective date of this amendatory Act of 1985.
    (c)  The  annuity  shall be payable beginning on the date
of a participant's death, or the first of the month following
an annuitant's death, if the spouse is then age 50  or  over,
or  beginning  at  age 50 if the spouse is then under age 50.
If an eligible  child  or  children  of  the  participant  or
annuitant  (or  a  child  or  children of the eligible spouse
meeting the criteria of item (1), (2), or (3)  of  subsection
(d)  of this Section) also survive, and the child or children
are under the care of the eligible spouse, the annuity  shall
begin  as  of the date of a participant's death, or the first
of the month following an annuitant's death,  without  regard
to the spouse's age.
    The change to this subsection made by this amendatory Act
of  1998 (relating to children of an eligible spouse) applies
to the eligible spouse of a participant or annuitant who dies
on or after  the  effective  date  of  this  amendatory  Act,
without  regard to whether the participant or annuitant is in
service on or after that effective date.
    (d)  For  the  purposes  of  this  Section  and   Section
2-121.1,  "eligible  child"  means  a  child  of the deceased
participant  or  annuitant  who  is  at  least  one  of   the
following:
         (1)  unmarried and under the age of 18;
         (2)  unmarried,  a  full-time student, and under the
    age of 22;
         (3)  dependent  by  reason  of  physical  or  mental
    disability.
    The inclusion of unmarried students under age 22  in  the
calculation of survivor's annuities by this amendatory Act of
1991  shall  apply to all eligible students beginning January
1, 1992, without regard to whether the  deceased  participant
or annuitant was in service on or after the effective date of
this amendatory Act of 1991.
    Adopted  children  shall have the same status as children
of the participant or annuitant, but only if the  proceedings
for  adoption  are  commenced  at least one year prior to the
date of the participant's or annuitant's death.
    (e)  Remarriage of a surviving spouse prior to attainment
of age 55 shall disqualify  the  surviving  spouse  from  the
receipt  of  a  survivor's  annuity, if the remarriage occurs
before the effective date of this amendatory Act of the  91st
General Assembly.
    The  changes  made  to this subsection by this amendatory
Act of the 91st General Assembly  (pertaining  to  remarriage
prior to age 55) apply without regard to whether the deceased
participant  or  annuitant  was  in  service  on or after the
effective date of this amendatory Act.
(Source: P.A. 89-136, eff. 7-14-95; 90-766, eff. 8-14-98.)
    (40 ILCS 5/2-121.1) (from Ch. 108 1/2, par. 2-121.1)
    Sec. 2-121.1.  Survivor's annuity - amount.
    (a)  A surviving spouse shall be entitled to 66  2/3%  of
the  amount of retirement annuity to which the participant or
annuitant was entitled on the date of death,  without  regard
to  whether  the participant had attained age 55 prior to his
or her death, subject to a minimum payment of 10% of  salary.
If  a  surviving spouse, regardless of age, has in his or her
care at the date of death any eligible child or  children  of
the  participant, the survivor's annuity shall be the greater
of the following: (1) 66 2/3% of  the  amount  of  retirement
annuity to which the participant or annuitant was entitled on
the  date  of  death,  or (2) 30% of the participant's salary
increased by 10% of salary on account  of  each  such  child,
subject  to  a  total  payment  for  the surviving spouse and
children of 50% of salary.  If eligible children survive  but
there  is  no  surviving  spouse,  or if the surviving spouse
remarries or dies or becomes disqualified by remarriage while
eligible children  survive,  each  eligible  child  shall  be
entitled to an annuity of 20% of salary, subject to a maximum
total payment for all such children of 50% of salary.
    However,   the  survivor's  annuity  payable  under  this
Section shall  not  be  less  than  100%  of  the  amount  of
retirement  annuity to which the participant or annuitant was
entitled on the date of death, if he or she is survived by  a
dependent disabled child.
    The  salary  to  be  used  for determining these benefits
shall be the  salary  used  for  determining  the  amount  of
retirement annuity as provided in Section 2-119.01.
    (b)  Upon   the   death   of   a  participant  after  the
termination of service or upon death  of  an  annuitant,  the
maximum  total  payment  to  a  surviving spouse and eligible
children, or to  eligible  children  alone  if  there  is  no
surviving  spouse,  shall be 75% of the retirement annuity to
which the participant or annuitant was entitled, unless there
is a dependent disabled child among the survivors.
    (c)  When a child ceases to be  an  eligible  child,  the
annuity  to that child, or to the surviving spouse on account
of that child, shall thereupon cease, and the annuity payable
to the surviving spouse or other eligible children  shall  be
recalculated if necessary.
    Upon  the  ineligibility  of the last eligible child, the
annuity shall immediately revert to the amount  payable  upon
death  of  a  participant or annuitant who leaves no eligible
children.  If the surviving spouse is then under age 50,  the
annuity  as revised shall be deferred until the attainment of
age 50.
    (d)  Beginning January 1, 1990, every survivor's  annuity
shall  be  increased  (1)  on  each January 1 occurring on or
after the commencement of the annuity if the deceased  member
died  while  receiving  a retirement annuity, or (2) in other
cases, on each January 1 occurring  on  or  after  the  first
anniversary  of the commencement of the annuity, by an amount
equal to 3% of the current amount of the  annuity,  including
any  previous  increases  under  this Article. Such increases
shall apply without regard to whether the deceased member was
in service on or after the effective date of this  amendatory
Act  of  1991,  but  shall not accrue for any period prior to
January 1, 1990.
    (e)  Notwithstanding any other provision of this Article,
beginning January 1, 1990,  the  minimum  survivor's  annuity
payable to any person who is entitled to receive a survivor's
annuity  under  this Article shall be $300 per month, without
regard to whether or not  the  deceased  participant  was  in
service on the effective date of this amendatory Act of 1989.
    (f)  In  the  case  of  a proportional survivor's annuity
arising under the Retirement Systems Reciprocal Act where the
amount payable by the System on January 1, 1993 is less  than
$300  per  month,  the  amount payable by the System shall be
increased beginning on that date by a monthly amount equal to
$2 for each full year that  has  expired  since  the  annuity
began.
(Source: P.A. 86-273; 86-1488; 87-794; 87-1265.)

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

    (40 ILCS 5/7-139) (from Ch. 108 1/2, par. 7-139)
    Sec. 7-139.  Credits and creditable service to employees.
    (a)  Each participating employee shall be granted credits
and creditable  service,  for  purposes  of  determining  the
amount of any annuity or benefit to which he or a beneficiary
is entitled, as follows:
         1.   For  prior service: Each participating employee
    who is an employee of  a  participating  municipality  or
    participating instrumentality on the effective date shall
    be  granted  creditable  service,  but  no  credits under
    paragraph 2 of this subsection (a), for periods of  prior
    service  for which credit has not been received under any
    other pension fund or retirement system established under
    this Code, as follows:
         If the  effective  date  of  participation  for  the
    participating      municipality      or     participating
    instrumentality  is  on  or  before  January   1,   1998,
    creditable service shall be granted for the entire period
    of  prior service with that employer without any employee
    contribution.
         If the  effective  date  of  participation  for  the
    participating      municipality      or     participating
    instrumentality is  after  January  1,  1998,  creditable
    service  shall  be granted for the last 20% of the period
    of prior service with that employer, but no more  than  5
    years,    without    any    employee   contribution.    A
    participating employee may establish  creditable  service
    for  the  remainder  of  the period of prior service with
    that  employer  by  making  an  application  in  writing,
    accompanied by payment of an employee contribution in  an
    amount  determined  by  the  Fund,  based on the employee
    contribution rates in effect at the time  of  application
    for the creditable service and the employee's salary rate
    on the effective date of participation for that employer,
    plus  interest at the effective rate from the date of the
    prior service to the date of  payment.   Application  for
    this creditable service may be made at any time while the
    employee is still in service.
         Any  person  who has withdrawn from the service of a
    participating     municipality      or      participating
    instrumentality prior to the effective date, who reenters
    the  service  of  the  same municipality or participating
    instrumentality after the effective date  and  becomes  a
    participating  employee is entitled to creditable service
    for  prior  service  as  otherwise   provided   in   this
    subdivision  (a)(1)  only if he or she renders 2 years of
    service as a participating employee after  the  effective
    date.  Application for such service must be made while in
    a  participating  status.   The salary rate to be used in
    the calculation of the required employee contribution, if
    any, shall be the employee's salary rate at the  time  of
    first  reentering  service  with  the  employer after the
    employer's effective date of participation.
         2.  For current service, each participating employee
    shall be credited with:
              a.  Additional credits of amounts equal to each
         payment of additional  contributions  received  from
         him   under  Section  7-173,  as  of  the  date  the
         corresponding payment of earnings is payable to him.
              b.  Normal credits of  amounts  equal  to  each
         payment  of  normal contributions received from him,
         as of the date the corresponding payment of earnings
         is payable to him, and normal contributions made for
         the purpose  of  establishing  out-of-state  service
         credits  as permitted under the conditions set forth
         in paragraph 6 of this subsection (a).
              c.  Municipality credits in an amount equal  to
         1.4   times   the   normal   credits,  except  those
         established by out-of-state service credits,  as  of
         the  date  of  computation  of  any benefit if these
         credits would increase the benefit.
              d.  Survivor credits equal to each  payment  of
         survivor    contributions    received    from    the
         participating   employee   as   of   the   date  the
         corresponding payment of earnings  is  payable,  and
         survivor  contributions  made  for  the  purpose  of
         establishing out-of-state service credits.
         3.  For periods of temporary and total and permanent
    disability  benefits,  each employee receiving disability
    benefits shall be  granted  creditable  service  for  the
    period  during  which  disability  benefits  are payable.
    Normal and survivor  credits,  based  upon  the  rate  of
    earnings  applied  for disability benefits, shall also be
    granted if such credits would result in a higher  benefit
    to any such employee or his beneficiary.
         4.  For  authorized leave of absence without pay:  A
    participating  employee  shall  be  granted  credits  and
    creditable service for periods  of  authorized  leave  of
    absence without pay under the following conditions:
              a.  An  application  for credits and creditable
         service is submitted to the board while the employee
         is in a status of active employment,  and  within  2
         years  after  termination  of  the  leave of absence
         period for which credits and creditable service  are
         sought.
              b.  Not   more   than  12  complete  months  of
         creditable service for authorized leave  of  absence
         without   pay  shall  be  counted  for  purposes  of
         determining any benefits payable under this Article.
              c.  Credits and  creditable  service  shall  be
         granted  for  leave of absence only if such leave is
         approved by the governing body of the  municipality,
         including  approval of the estimated cost thereof to
         the municipality as  determined  by  the  fund,  and
         employee   contributions,   plus   interest  at  the
         effective rate applicable for each year from the end
         of the period of leave to date of payment, have been
         paid to the fund in accordance with  Section  7-173.
         The   contributions   shall  be  computed  upon  the
         assumption earnings continued during the  period  of
         leave at the rate in effect when the leave began.
              d.  Benefits  under  the provisions of Sections
         7-141, 7-146, 7-150 and 7-163 shall  become  payable
         to  employees  on  authorized  leave  of absence, or
         their designated beneficiary, only if such leave  of
         absence is creditable hereunder, and if the employee
         has  at  least  one year of creditable service other
         than the service granted for leave of absence.   Any
         employee  contributions due may be deducted from any
         benefits payable.
              e.  No credits or creditable service  shall  be
         allowed  for leave of absence without pay during any
         period of prior service.
         5.  For military service: The governing  body  of  a
    municipality  or  participating instrumentality may elect
    to allow creditable service  to  participating  employees
    who  leave  their employment to serve in the armed forces
    of the United States for all  periods  of  such  service,
    provided  that  the  person  returns to active employment
    within 90 days after completion of full time active duty,
    but no creditable service shall be  allowed  such  person
    for  any  period that can be used in the computation of a
    pension or any other pay or benefit, other than  pay  for
    active  duty,  for  service  in  any  branch of the armed
    forces  of  the  United  States.   If  necessary  to  the
    computation of any benefit,  the  board  shall  establish
    municipality  credits  for  participating employees under
    this  paragraph  on  the  assumption  that  the  employee
    received earnings at the rate received  at  the  time  he
    left  the  employment  to  enter  the  armed  forces.   A
    participating  employee  in the armed forces shall not be
    considered an employee during such period of service  and
    no  additional  death  and  no  disability  benefits  are
    payable for death or disability during such period.
         Any  participating  employee who left his employment
    with a municipality or participating  instrumentality  to
    serve  in  the  armed forces of the United States and who
    again became a  participating  employee  within  90  days
    after completion of full time active duty by entering the
    service  of  a  different  municipality  or participating
    instrumentality, which has elected  to  allow  creditable
    service   for  periods  of  military  service  under  the
    preceding paragraph, shall  also  be  allowed  creditable
    service  for  his  period of military service on the same
    terms that would apply if he had  been  employed,  before
    entering   military   service,  by  the  municipality  or
    instrumentality which employed  him  after  he  left  the
    military  service  and  the  employer  costs  arising  in
    relation  to  such  grant  of creditable service shall be
    charged   to   and   paid   by   that   municipality   or
    instrumentality.
         Notwithstanding  the  foregoing,  any  participating
    employee shall  be  entitled  to  creditable  service  as
    required  by  any  federal  law relating to re-employment
    rights of persons who served in the United  States  Armed
    Services.   Such creditable service shall be granted upon
    payment by the member of an amount equal to the  employee
    contributions  which  would  have  been  required had the
    employee  continued  in  service  at  the  same  rate  of
    earnings during the military leave period, plus  interest
    at the effective rate.
         5.1.  In   addition   to   any   creditable  service
    established under paragraph 5  of  this  subsection  (a),
    creditable  service may be granted for up to 24 months of
    service in the armed forces of the United States.
         In order to receive creditable service for  military
    service   under   this  paragraph  5.1,  a  participating
    employee must (1)  apply  to  the  Fund  in  writing  and
    provide   evidence   of  the  military  service  that  is
    satisfactory  to  the  Board;  (2)  obtain  the   written
    approval   of   the   current   employer;  and  (3)  make
    contributions to the  Fund  equal  to  (i)  the  employee
    contributions  that  would  have  been  required  had the
    service been rendered as a member, plus  (ii)  an  amount
    determined  by  the  board  to be equal to the employer's
    normal cost of the benefits  accrued  for  that  military
    service,  plus  (iii) interest on items (i) and (ii) from
    the date of first membership in the Fund to the  date  of
    payment.   If  payment  is made during the 6-month period
    that begins 3 months after the  effective  date  of  this
    amendatory Act of 1997, the required interest shall be at
    the   rate   of   2.5%  per  year,  compounded  annually;
    otherwise, the required interest shall be  calculated  at
    the regular interest rate.
         6.  For  out-of-state  service:  Creditable  service
    shall  be granted for service rendered to an out-of-state
    local governmental body under the  following  conditions:
    The   employee   had  participated  and  has  irrevocably
    forfeited all rights  to  benefits  in  the  out-of-state
    public  employees  pension  system; the governing body of
    his   participating   municipality   or   instrumentality
    authorizes the employee to establish  such  service;  the
    employee   has   2   years   current  service  with  this
    municipality  or   participating   instrumentality;   the
    employee makes a payment of contributions, which shall be
    computed  at  8% (normal) plus 2% (survivor) times length
    of service purchased times the average rate  of  earnings
    for the first 2 years of service with the municipality or
    participating   instrumentality   whose   governing  body
    authorizes the service established plus interest  at  the
    effective  rate on the date such credits are established,
    payable from the date the employee completes the required
    2 years of current service to date  of  payment.   In  no
    case  shall more than 120 months of creditable service be
    granted under this provision.
         7.  For retroactive service:  Any employee who could
    have  but  did  not  elect  to  become  a   participating
    employee,  or  who  should have been a participant in the
    Municipal  Public  Utilities  Annuity  and  Benefit  Fund
    before that fund was superseded, may  receive  creditable
    service  for  the  period  of  service  not  to exceed 50
    months; however, a current or former county board  member
    may establish credit under this paragraph 7 for more than
    50  months  of service as a member of the county board if
    the excess over 50 months is approved  by  resolution  of
    the  affected  county  board  filed  with the Fund before
    January 1, 1999.
         Any employee who is a participating employee  on  or
    after  September  24,  1981  and  who  was  excluded from
    participation by the age restrictions removed  by  Public
    Act 82-596 may receive creditable service for the period,
    on  or  after  January  1,  1979,  excluded  by  the  age
    restriction  and,  in  addition, if the governing body of
    the   participating   municipality    or    participating
    instrumentality  elects  to  allow creditable service for
    all employees excluded by the age  restriction  prior  to
    January  1,  1979, for service during the period prior to
    that date excluded by the age restriction.  Any  employee
    who   was   excluded   from   participation  by  the  age
    restriction removed by Public Act 82-596 and who is not a
    participating employee on or after September 24, 1981 may
    receive creditable service for service after  January  1,
    1979.  Creditable  service  under this paragraph shall be
    granted upon payment of the employee contributions  which
    would  have  been  required  had  he  participated,  with
    interest at the effective rate for each year from the end
    of the period of service established to date of payment.
         8.  For    accumulated   unused   sick   leave:    A
    participating employee who is applying for  a  retirement
    annuity  shall be entitled to creditable service for that
    portion of the employee's accumulated unused  sick  leave
    for which payment is not received, as follows:
              a.  Sick  leave  days shall be limited to those
         accumulated under a sick leave plan established by a
         participating    municipality    or    participating
         instrumentality which is available to all  employees
         or a class of employees.
              b.  Only  sick  leave  days  accumulated with a
         participating    municipality    or    participating
         instrumentality  with  which  the  employee  was  in
         service within 60 days of the effective date of  his
         retirement   annuity   shall  be  credited;  If  the
         employee was in service with more than one  employer
         during this period only the sick leave days with the
         employer  with  which  the employee has the greatest
         number  of  unpaid  sick   leave   days   shall   be
         considered.
              c.  The  creditable  service  granted  shall be
         considered solely for the purpose of  computing  the
         amount  of  the  retirement annuity and shall not be
         used  to  establish  any  minimum   service   period
         required  by  any  provision of the Illinois Pension
         Code, the effective date of the retirement  annuity,
         or the final rate of earnings.
              d.  The creditable service shall be at the rate
         of  1/20 of a month for each full sick day, provided
         that no more than 12 months may  be  credited  under
         this subdivision 8.
              e.  Employee   contributions   shall   not   be
         required   for   creditable   service   under   this
         subdivision 8.
              f.  Each    participating    municipality   and
         participating instrumentality with which an employee
         has service within 60 days of the effective date  of
         his  retirement  annuity  shall certify to the board
         the number of accumulated  unpaid  sick  leave  days
         credited  to the employee at the time of termination
         of service.
         9.  For service  transferred  from  another  system:
    Credits  and  creditable  service  shall  be  granted for
    service under Article 3, 4, 5, 14 or 16 of this  Act,  to
    any  active  member  of  this  Fund,  and to any inactive
    member who has been a county sheriff,  upon  transfer  of
    such credits pursuant to Section 3-110.3, 4-108.3, 5-235,
    14-105.6  or  16-131.4,  and payment by the member of the
    amount  by  which   (1)   the   employer   and   employee
    contributions  that  would  have  been required if he had
    participated in this Fund as a sheriff's law  enforcement
    employee  during  the  period  for  which credit is being
    transferred, plus interest thereon at the effective  rate
    for  each  year,   compounded  annually, from the date of
    termination of the service  for  which  credit  is  being
    transferred  to  the  date  of  payment,  exceeds (2) the
    amount actually transferred to the Fund. Such transferred
    service shall be deemed to be service as a sheriff's  law
    enforcement employee for the purposes of Section 7-142.1.
    (b)  Creditable service - amount:
         1.  One month of creditable service shall be allowed
    for  each  month  for which a participating employee made
    contributions as required under  Section  7-173,  or  for
    which  creditable service is otherwise granted hereunder.
    Not more than 1 month of service shall  be  credited  and
    counted for 1 calendar month, and not more than 1 year of
    service  shall  be  credited and counted for any calendar
    year.  A calendar month means a nominal  month  beginning
    on  the  first  day  thereof, and a calendar year means a
    year beginning January 1 and ending December 31.
         2.  A seasonal employee shall be given 12 months  of
    creditable  service if he renders the number of months of
    service normally required by the position in  a  12-month
    period  and he remains in service for the entire 12-month
    period.  Otherwise a fractional year of  service  in  the
    number of months of service rendered shall be credited.
         3.  An   intermittent   employee   shall   be  given
    creditable service for  only  those  months  in  which  a
    contribution is made under Section 7-173.
    (c)  No   application   for   correction  of  credits  or
creditable service  shall  be  considered  unless  the  board
receives   an   application  for  correction  while  (1)  the
applicant  is  a  participating  employee   and   in   active
employment    with    a    participating    municipality   or
instrumentality, or  (2)  while  the  applicant  is  actively
participating in a pension fund or retirement system which is
a   participating   system   under   the  Retirement  Systems
Reciprocal Act.  A participating employee or other  applicant
shall not be entitled to credits or creditable service unless
the required employee contributions are made in a lump sum or
in installments made in accordance with board rule.
    (d)  Upon  the granting of a retirement, surviving spouse
or child annuity, a death benefit or a separation benefit, on
account of any employee, all individual  accumulated  credits
shall  thereupon terminate. Upon the withdrawal of additional
contributions, the credits applicable thereto shall thereupon
terminate.   Terminated  credits  shall  not  be  applied  to
increase the benefits any remaining employee would  otherwise
receive under this Article.
(Source: P.A. 90-448, eff. 8-16-97.)

    (40 ILCS 5/7-141) (from Ch. 108 1/2, par. 7-141)
    Sec.   7-141.    Retirement   annuities   -   Conditions.
Retirement  annuities  shall  be  payable  as hereinafter set
forth:
    (a)  A participating employee who, regardless  of  cause,
is   separated   from   the   service  of  all  participating
municipalities    and    instrumentalities    thereof     and
participating   instrumentalities  shall  be  entitled  to  a
retirement annuity provided:
    1.  He is at least age 55, or in the case of a person who
is eligible to have  his  annuity  calculated  under  Section
7-142.1, he is at least age 50;
    2.   He  is  (i)  an  employee  who  was  employed by any
participating municipality or  participating  instrumentality
which   had  not  elected  to  exclude  persons  employed  in
positions normally requiring performance  of  duty  for  less
than  1000  hours  per  year  or  was  employed in a position
normally requiring performance of duty for 600 hours or  more
per   year  prior  to  such  election  by  any  participating
municipality or participating instrumentality included in and
subject to this Article on or before the  effective  date  of
this  amendatory  Act of 1981 which made such election and is
not entitled to receive earnings for employment in a position
normally requiring performance of duty for 600 hours or  more
per    year    for   any   participating   municipality   and
instrumentalities thereof and participating  instrumentality;
or  (ii) an employee who was employed only by a participating
municipality    or    participating    instrumentality,    or
participating      municipalities      or       participating
instrumentalities,  which  have elected to exclude persons in
positions normally requiring performance  of  duty  for  less
than  1000  hours  per  year after the effective date of such
exclusion or which are included  under  and  subject  to  the
Article  after  the  effective date of this amendatory Act of
1981 and elects to exclude persons in such positions, and  is
not entitled to receive earnings for employment in a position
normally requiring performance of duty for 1000 hours or more
per   year   by   such   a   participating   municipality  or
participating instrumentality;
    3.  The amount of his annuity, before the application  of
paragraph (b) of Section 7-142 is at least $10 per month;
    4.  If  he  first  became  a participating employee after
December 31, 1961, he has at least 8 years of service.   This
service  requirement  shall  not  apply  to any participating
employee, regardless of participation date,  if  the  General
Assembly terminates the Fund.
    (b)  Retirement annuities shall be payable:
    1.  As provided in Section 7-119;
    2.  Except  as  provided  in  item 3, upon receipt by the
fund of a written application by the  board.   The  effective
date  may  be not more than one year prior to the date of the
receipt by the fund of the application;
    3.  Upon attainment of age 70 1/2 if (i) the  member  (i)
has  not  submitted  an application for the annuity, (ii) the
member has at least 8 years  of  service  credit  and  is  no
longer  in  service,  and  (ii)  is  otherwise entitled to an
annuity under this Article  (iii) the pension  amount  is  at
least  $30 per month, and (iv) the Fund is able to locate the
member;
    4.  To the beneficiary of the deceased annuitant for  the
unpaid amount accrued to date of death, if any.
(Source: P.A. 87-740.)

    (40 ILCS 5/7-141.1)
    Sec. 7-141.1. Early retirement incentive.
    (a)  The General Assembly finds and declares that:
         (1)  Units of local government across the State have
    been functioning under a financial crisis.
         (2)  This financial crisis is expected to continue.
         (3)  Units   of  local  government  must  depend  on
    additional sources of revenue and, when those sources are
    not forthcoming, must establish cost-saving programs.
         (4)  An   early   retirement   incentive    designed
    specifically to target highly-paid senior employees could
    result in significant annual cost savings.
         (5)  The  early  retirement incentive should be made
    available only to those units of  local  government  that
    determine  that an early retirement incentive is in their
    best interest.
         (6)  A unit of local government adopting  a  program
    of  early  retirement  incentives  under  this Section is
    encouraged to implement personnel procedures to prohibit,
    for at least 5 years, the rehiring (whether on payroll or
    by independent contract) of employees who  receive  early
    retirement incentives.
         (7)  A  unit  of local government adopting a program
    of early retirement incentives under this Section is also
    encouraged  to  replace  as  few  of  the   participating
    employees  as  possible and to hire replacement employees
    for salaries totaling no  more  than  80%  of  the  total
    salaries  formerly  paid to the employees who participate
    in the early retirement program.
    It is the primary purpose of this  Section  to  encourage
units of local government that can realize true cost savings,
or  have  determined  that  an early retirement program is in
their  best  interest,  to  implement  an  early   retirement
program.
    (b)  Until  the  effective date of this amendatory Act of
1997, this Section does not apply to any employer that  is  a
city,  village, or incorporated town, nor to the employees of
any such employer.  Beginning on the effective date  of  this
amendatory  Act  of  1997,  any  employer under this Article,
including  an  employer  that  is   a   city,   village,   or
incorporated   town,    may  establish  an  early  retirement
incentive program for its employees under this Section.   The
decision of a city, village, or incorporated town to consider
or  establish  an  early  retirement  program  is at the sole
discretion of that city, village, or incorporated  town,  and
nothing  in  this  amendatory Act of 1997 limits or otherwise
diminishes  this  discretion.   Nothing  contained  in   this
Section  shall  be  construed  to require a city, village, or
incorporated town to establish an  early  retirement  program
and  no  city, village, or incorporated town may be compelled
to implement such a program.
    The benefits provided in this Section are available  only
to  members  employed  by  a  participating employer that has
filed with the Board of the Fund a  resolution  or  ordinance
expressly  providing  for the creation of an early retirement
incentive program under this Section for  its  employees  and
specifying   the  effective  date  of  the  early  retirement
incentive program.  Subject to the limitation  in  subsection
(h),   an  employer  may  adopt  a  resolution  or  ordinance
providing a program of early retirement incentives under this
Section at any time.
    The resolution or ordinance shall be in substantially the
following form:

               RESOLUTION (ORDINANCE) NO. ....
         A RESOLUTION (ORDINANCE) ADOPTING AN EARLY
         RETIREMENT INCENTIVE PROGRAM FOR EMPLOYEES
          IN THE ILLINOIS MUNICIPAL RETIREMENT FUND
    WHEREAS, Section 7-141.1 of  the  Illinois  Pension  Code
provides  that a participating employer may elect to adopt an
early retirement incentive program offered  by  the  Illinois
Municipal   Retirement  Fund  by  adopting  a  resolution  or
ordinance; and
    WHEREAS, The goal of adopting an early retirement program
is to realize a substantial savings  in  personnel  costs  by
offering  early  retirement  incentives to employees who have
accumulated many years of service credit; and
    WHEREAS, Implementation of the early  retirement  program
will  provide  a budgeting tool to aid in controlling payroll
costs; and
    WHEREAS, The (name of governing body) has determined that
the adoption of an early retirement incentive program  is  in
the  best  interests of the (name of participating employer);
therefore be it
    RESOLVED (ORDAINED) by the (name of  governing  body)  of
(name of participating employer) that:
    (1)  The  (name  of  participating  employer) does hereby
adopt the Illinois Municipal Retirement Fund early retirement
incentive program as  provided  in  Section  7-141.1  of  the
Illinois   Pension  Code.   The  early  retirement  incentive
program shall take effect on (date).
    (2)  In order to help achieve  a  true  cost  savings,  a
person  who  retires  under  the  early  retirement incentive
program shall lose  those  incentives  if  he  or  she  later
accepts  employment  with any IMRF employer in a position for
which participation in IMRF is required or is elected by  the
employee.
    (3)  In order to utilize an early retirement incentive as
a  budgeting  tool, the (name of participating employer) will
use its best efforts either to limit the number of  employees
who   replace  the  employees  who  retire  under  the  early
retirement program or to  limit  the  salaries  paid  to  the
employees  who  replace  the  employees  who retire under the
early retirement program.
    (4)  The effective date  of  each  employee's  retirement
under  this early retirement program shall be set by (name of
employer) and shall be no earlier than the effective date  of
the  program  and no later than one year after that effective
date;  except  that  the  employee  may  require   that   the
retirement date set by the employer be no later than the June
30 next occurring after the effective date of the program and
no  earlier  than  the date upon which the employee qualifies
for retirement.
    (5)  To be eligible for the  early  retirement  incentive
under  this  Section,  the employee must have attained age 50
and have at least 20 years of creditable service  by  his  or
her retirement date.
    (6)  The  (clerk  or  secretary)  shall  promptly  file a
certified copy of this resolution (ordinance) with the  Board
of Trustees of the Illinois Municipal Retirement Fund.
CERTIFICATION
    I,  (name),  the  (clerk  or  secretary)  of the (name of
participating employer) of the County  of  (name),  State  of
Illinois, do hereby certify that I am the keeper of the books
and  records of the (name of employer) and that the foregoing
is a true and correct copy of a resolution  (ordinance)  duly
adopted  by  the  (governing body) at a meeting duly convened
and held on (date).
SEAL
(Signature of clerk or secretary)

    (c)  To be eligible for the benefits  provided  under  an
early   retirement   incentive  program  adopted  under  this
Section, a member must:
         (1)  be a participating employee of this  Fund  who,
    on  the  effective  date of the program, (i) is in active
    payroll status as an employee of a participating employer
    that has filed the required ordinance or resolution  with
    the  Board, (ii) is on layoff status from such a position
    with a right of re-employment or recall to service, (iii)
    is on a leave of absence from such a position, or (iv) is
    on disability but has not been receiving  benefits  under
    Section  7-146 or 7-150 for a period of more than 2 years
    from the date of application;
         (2)  have never  previously  received  a  retirement
    annuity  under  this  Article  or  under  the  Retirement
    Systems  Reciprocal  Act using service credit established
    under this Article;
         (3)  (blank);  file with the Board within 60 days of
    the  effective  date  of  the  program   an   application
    requesting the benefits provided in this Section;
         (4)  have at least 20 years of creditable service in
    the  Fund  by  the date of retirement, without the use of
    any creditable service established under this Section;
         (5)  have attained age 50 by the date of retirement,
    without the use of any  age  enhancement  received  under
    this Section; and
         (6)  be  eligible  to  receive  a retirement annuity
    under this Article by the date of retirement,  for  which
    purpose   the  age  enhancement  and  creditable  service
    established under this Section may be considered.
    (d)  The employer shall determine the retirement date for
each employee participating in the early  retirement  program
adopted  under this Section.  The retirement date shall be no
earlier than the effective date of the program and  no  later
than  one  year  after  that  effective date, except that the
employee may require that the  retirement  date  set  by  the
employer  be  no  later than the June 30 next occurring after
the effective date of the program and  no  earlier  than  the
date  upon  which the employee qualifies for retirement.  The
employer shall give each employee participating in the  early
retirement  program  at  least  30 days written notice of the
employee's designated retirement date,  unless  the  employee
waives this notice requirement.
    (e)  An  eligible  person  may establish up to 5 years of
creditable service under this Section.  In addition, for each
period of creditable service established under this  Section,
a  person  shall  have  his  or  her age at retirement deemed
enhanced by an equivalent period.
    The creditable service established under this Section may
be  used  for  all  purposes  under  this  Article  and   the
Retirement Systems Reciprocal Act, except for the computation
of  final rate of earnings and the determination of earnings,
salary, or compensation under this or any  other  Article  of
the Code.
    The age enhancement established under this Section may be
used   for   all   purposes  under  this  Article  (including
calculation  of  the  reduction  imposed  under   subdivision
(a)1b(iv)  of  Section  7-142),   except  for  purposes  of a
reversionary   annuity   under   Section   7-145   and    any
distributions  required  because of age.  The age enhancement
established under this Section may be used in  calculating  a
proportionate   annuity   payable  by  this  Fund  under  the
Retirement Systems Reciprocal Act, but shall not be  used  in
determining  benefits  payable  under  other Articles of this
Code under the Retirement Systems Reciprocal Act.
    (f)  For all creditable service  established  under  this
Section,  the  member  must  pay  to  the  Fund  an  employee
contribution  consisting  of  4.5%  of  the  member's highest
annual salary rate used in the  determination  of  the  final
rate  of  earnings  for  retirement annuity purposes for each
year of creditable service granted under this  Section.   For
creditable service established under this Section by a person
who  is  a  sheriff's  law  enforcement employee to be deemed
service as a sheriff's law enforcement employee, the employee
contribution shall be at the rate of 6.5% of  highest  annual
salary per year of creditable service granted.  Contributions
for  fractions  of  a year of service shall be prorated.  Any
amounts that are disregarded in determining the final rate of
earnings under subdivision (d)(5) of Section 7-116 (the  125%
rule)  shall  also be disregarded in determining the required
contribution under this subsection (f).
    The employee contribution shall be paid to  the  Fund  as
follows:  If the member is entitled to a lump sum payment for
accumulated  vacation,  sick  leave,  or  personal leave upon
withdrawal  from  service,  the  employer  shall  deduct  the
employee contribution from that lump sum and pay the deducted
amount directly to the Fund.  If there is no  such  lump  sum
payment or the required employee contribution exceeds the net
amount  of  the  lump  sum payment, then the remaining amount
due, at the option of the employee, may either be paid to the
Fund before  the  annuity  commences  or  deducted  from  the
retirement annuity in 24 equal monthly installments.
    (g)  An annuitant who has received any age enhancement or
creditable  service under this Section and thereafter accepts
employment with or enters into a personal  services  contract
with an employer under this Article thereby forfeits that age
enhancement  and  creditable  service.   A  person forfeiting
early retirement incentives under this  subsection  (i)  must
repay  to  the  Fund  that  portion of the retirement annuity
already  received  which  is  attributable   to   the   early
retirement  incentives  that  are being forfeited, (ii) shall
not be eligible to participate in any future early retirement
program adopted under this Section, and (iii) is entitled  to
a  refund  of the employee contribution paid under subsection
(f).  The Board shall deduct the required repayment from  the
refund  and  may  impose  a  reasonable  payment schedule for
repaying the amount, if any, by which the required  repayment
exceeds the refund amount.
    (h)  The  additional  unfunded  liability  accruing  as a
result of the adoption  of  a  program  of  early  retirement
incentives  under  this  Section  by  an  employer  shall  be
amortized over a period of 10 years beginning on January 1 of
the second calendar year following the calendar year in which
the latest date for beginning to receive a retirement annuity
under  the  program  (as  determined  by  the  employer under
subsection (d) of  this  Section)  occurs;  except  that  the
employer may provide for a shorter amortization period (of no
less  than  5  years)  by adopting an ordinance or resolution
specifying  the  length  of  the  amortization   period   and
submitting a certified copy of the ordinance or resolution to
the  Fund  no later than 6 months after the effective date of
the program.  An employer, at its discretion, may  accelerate
payments to the Fund.
    An  employer  may  provide more than one early retirement
incentive program  for  its  employees  under  this  Section.
However,  an  employer  that has provided an early retirement
incentive program for its employees under  this  Section  may
not  provide another early retirement incentive program under
this Section until the liability  arising  from  the  earlier
program has been fully paid to the Fund.
(Source: P.A. 89-329, eff. 8-17-95; 90-32, eff. 6-27-97.)

    (40 ILCS 5/7-145.1)
    Sec. 7-145.1.  Alternative annuity for county officers.
    (a)  The  benefits  provided  in this Section and Section
7-145.2 are available only if the county board has filed with
the Board of the Fund a  resolution  or  ordinance  expressly
consenting  to  the  availability  of  these benefits for its
elected county  officers.   The  county  board's  consent  is
irrevocable  with  respect  to  persons  participating in the
program, but may be revoked  at  any  time  with  respect  to
persons who have not paid an additional optional contribution
under this Section before the date of revocation.
    An   elected   county  officer  may  elect  to  establish
alternative credits for an alternative annuity by electing in
writing  to  make  additional   optional   contributions   in
accordance  with  this  Section and procedures established by
the board.  These alternative credits are available only  for
periods of service as an elected county officer.  The elected
county officer may discontinue making the additional optional
contributions  by notifying the Fund in writing in accordance
with this Section and procedures established by the board.
    Additional optional  contributions  for  the  alternative
annuity shall be as follows:
         (1)  For  service as an elected county officer after
    the option is elected, an additional contribution  of  3%
    of  salary  shall  be contributed to the Fund on the same
    basis and under  the  same  conditions  as  contributions
    required under Section 7-173.
         (2)  For service as an elected county officer before
    the  option  is elected, an additional contribution of 3%
    of the salary for the applicable period of service,  plus
    interest  at  the effective rate from the date of service
    to the  date  of  payment,  plus  any  additional  amount
    required  by  the  county board under paragraph (3).  All
    payments for past service must be  paid  in  full  before
    credit is given.
         (3)  With  respect  to  service as an elected county
    officer before the option is elected, if payment is  made
    after  the  county  board has filed with the Board of the
    Fund a resolution or ordinance  requiring  an  additional
    contribution  under this paragraph, then the contribution
    required under paragraph (2) shall include an  amount  to
    be determined by the Fund, equal to the actuarial present
    value   of   the  additional  employer  cost  that  would
    otherwise  result  from  the  alternative  credits  being
    established  for  that   service.    A   county   board's
    resolution     or    ordinance    requiring    additional
    contributions under this paragraph (3) is irrevocable.
    No additional optional contributions may be made for  any
period  of  service  for  which  credit  has  been previously
forfeited by acceptance of a refund,  unless  the  refund  is
repaid  in  full with interest at the effective rate from the
date of refund to the date of repayment.
    (b)  In lieu of the retirement annuity otherwise  payable
under  this  Article,  an  elected county officer who (1) has
elected to  participate  in  the  Fund  and  make  additional
optional  contributions  in accordance with this Section, (2)
has held and  made  additional  optional  contributions  with
respect  to  the  same  elected  county office for at least 8
years, and (3) has attained age 55 with at least 8  years  of
service credit (or has attained age 50 with at least 20 years
of service as a sheriff's law enforcement employee) may elect
to  have  his  retirement annuity computed as follows:  3% of
the participant's salary for each of the  first  8  years  of
service credit, plus 4% of that salary for each of the next 4
years of service credit, plus 5% of that salary for each year
of service credit in excess of 12 years, subject to a maximum
of 80% of that salary.
    This formula applies only to service in an elected county
office  that  the officer held for at least 8 years, and only
to service for which additional optional  contributions  have
been  paid  under this Section.  If an elected county officer
qualifies to have this formula applied  to  service  in  more
than  one elected county office, the qualifying service shall
be accumulated for purposes  of  determining  the  applicable
accrual  percentages,  but  the  salary  used for each office
shall be the separate salary calculated for that  office,  as
defined in subsection (g).
    To the extent that the elected county officer has service
credit that does not qualify for this formula, his retirement
annuity  will  first  be  determined  in accordance with this
formula with respect to the service  to  which  this  formula
applies,  and  then in accordance with the remaining Sections
of this Article with respect to the  service  to  which  this
formula does not apply.
    (c)  In lieu of the disability benefits otherwise payable
under  this  Article,  an  elected county officer who (1) has
elected to participate  in  the  Fund,  and  (2)  has  become
permanently  disabled  and  as  a  consequence  is  unable to
perform the duties of his office, and (3) was making optional
contributions in accordance with this Section at the time the
disability was incurred, may elect to  receive  a  disability
annuity   calculated   in  accordance  with  the  formula  in
subsection (b).  For the  purposes  of  this  subsection,  an
elected   county  officer  shall  be  considered  permanently
disabled only if:  (i) disability occurs while in service  as
an  elected  county  officer  and  is  of such a nature as to
prevent him from reasonably  performing  the  duties  of  his
office at the time; and (ii) the board has received a written
certification  by at least 2 licensed physicians appointed by
it  stating  that  the  officer  is  disabled  and  that  the
disability is likely to be permanent.
    (d)  Refunds of additional optional  contributions  shall
be  made  on  the same basis and under the same conditions as
provided under Section  7-166,  7-167  and  7-168.   Interest
shall be credited at the effective rate on the same basis and
under the same conditions as for other contributions.
    If  an  elected  county  officer  fails to hold that same
elected county office for at least 8 years, he or  she  shall
be  entitled  after leaving office to receive a refund of the
additional optional contributions made with respect  to  that
office, plus interest at the effective rate.
    (e)  The   plan  of  optional  alternative  benefits  and
contributions shall be available to persons who  are  elected
county  officers  and  active  contributors to the Fund on or
after November 15, 1994.  A person who was an elected  county
officer and an active contributor to the Fund on November 15,
1994 but is no longer an active contributor may apply to make
additional  optional  contributions under this Section at any
time  within  90  days  after  the  effective  date  of  this
amendatory Act of 1997; if the person is  an  annuitant,  the
resulting  increase  in  annuity shall begin to accrue on the
first day of the month  following  the  month  in  which  the
required payment is received by the Fund.
    (f)  For   the  purposes  of  this  Section  and  Section
7-145.2, the terms  "elected  county  officer"  and  "elected
county  office"  include,  but  are  not  limited to: (1) the
county clerk,  recorder,  treasurer,  coroner,  assessor  (if
elected),  auditor, sheriff, and State's Attorney; members of
the county board; and the clerk of the circuit court; and (2)
a person who has been appointed  to  fill  a  vacancy  in  an
office  that  is  normally filled by election on a countywide
basis, for the duration of his or her service in that office.
The  terms  "elected  county  officer"  and  "elected  county
office" do not include any officer or office of a county that
has not consented to the availability of benefits under  this
Section and Section 7-145.2.
    (g)  For   the  purposes  of  this  Section  and  Section
7-145.2, the term "salary" means the final rate  of  earnings
for  the  elected  county office held, calculated in a manner
consistent with Section 7-116, but for that office only.   If
an  elected  county  officer qualifies to have the formula in
subsection (b) applied to service in more  than  one  elected
county  office,  a  separate  salary  shall be calculated and
applied with respect to each such office.
    (h)  The changes to this Section made by this  amendatory
Act  of  the 91st General Assembly apply to persons who first
make an additional optional contribution under  this  Section
on or after the effective date of this amendatory Act.
(Source: P.A. 90-32, eff. 6-27-97; 91-685, eff. 1-26-00.)

    (40 ILCS 5/7-157) (from Ch. 108 1/2, par. 7-157)
    Sec.  7-157.  Surviving  spouse  annuities  - marriage to
terminate.  If a  any  surviving  spouse  annuitant  marries,
before reaching age 55, the annuity shall be terminated as of
the  end  of  the calendar month following the month in which
the  marriage  occurs,  unless  the  marriage  occurs   after
December 31, 2000.
(Source: P.A. 81-618.)

    (40 ILCS 5/7-164) (from Ch. 108 1/2, par. 7-164)
    Sec.  7-164.  Death benefits - Amount.  The amount of the
death benefit shall be:
    1.  Upon the death of an employee with at least one  year
of  service  occurring  while  in  an employment relationship
(including employees  drawing  disability  benefits)  with  a
participating  municipality or participating instrumentality,
an amount equal to the sum of:
         (a)  The employee's normal, additional and  survivor
    credits,  including interest credited thereto through the
    end of the preceding calendar year, but excluding credits
    and interest thereon allowed for periods of disability.
         (b)  An amount equal to the employee's annual  final
    rate  of  earnings.  An  employee who dies as a result of
    injuries connected with his duties shall be considered to
    have a year of service for purposes of this benefit.
    2.  Upon the death of an employee with less than  1  year
of   service   occurring   while   in   the  service  of  any
participating  municipality  or  instrumentality,  an  amount
equal to the sum of his accumulated  normal,  additional  and
survivor  credits  on  the  date  of  death,  excluding those
credits  and  interest  thereon  allowed  during  periods  of
disability.
    3.  Upon the death of an employee who has separated  from
service  and  was not entitled to a retirement annuity on the
date of death, an amount equal to the sum of his  accumulated
normal,  survivor and additional credits on the date of death
excluding those credits and interest thereon  allowed  during
periods of disability.
    4.  Upon  the  death  of  an  employee  in  an employment
relationship, or an employee who has service and was entitled
to a  retirement  annuity  on  the  date  of  death,  when  a
surviving spouse or child annuity is awarded, $3,000.
    5.  Upon the death of an employee, who has separated from
service  and was entitled to a retirement annuity on the date
of death,  and  no  surviving  spouse  or  child  annuity  is
awarded,  $3,000  plus  an  amount  equal  to his accumulated
normal, survivor and additional credits on the date of death,
excluding those credits and interest earned  thereon  allowed
during periods of disability.
    6.  Upon  the death of an employee annuitant, $3,000 and,
unless a surviving spouse, child or reversionary  annuity  is
payable, the sum of (i) the excess of the normal and survivor
credits,   excluding   those   allowed   during   periods  of
disability, which the annuitant had as of the effective  date
of  his  annuity  over  the  total annuities paid pursuant to
paragraph (a) 1 of Section 7-142 to the date of  death,  plus
(ii) the excess of the additional credits, excluding any such
credits  used  to  create  a  reversionary  annuity,  used to
provide the annuity granted pursuant to paragraph  (a)  2  of
Section  7-142  over the total annuity payments made pursuant
thereto to the time of death.
    7.  Upon  the  death  of   an   annuitant   receiving   a
reversionary  annuity  or of a person designated to receive a
reversionary annuity prior to the receipt of such annuity the
sum of the additional credits  of  the  person  creating  the
reversionary  annuity  as  of  the  effective date of his own
retirement annuity over the reversionary annuity payments, if
any, made prior to the date of death  of  such  annuitant  or
person designated to receive the reversionary annuity.
    8.  Upon   the   death   of   an  annuitant  receiving  a
beneficiary annuity which was  effective  before  January  1,
1986,  the  excess  of  the  death  benefit which was used to
provide the annuity, over the sum  of  all  annuity  payments
made  to  the  beneficiary.  Upon  the  death of an annuitant
receiving a beneficiary annuity effective January 1, 1986  or
thereafter,  the  sum  of  (i)  the  excess of the normal and
survivor credits, excluding those allowed during  periods  of
disability,  which the annuitant had as of the effective date
of his annuity over the  total  annuities  paid  pursuant  to
paragraph  (c)  of Section 7-165, to date of death, plus (ii)
the excess of the  additional  credits,  excluding  any  such
credits  used  to  create  a  reversionary  annuity,  used to
provide the annuity granted  pursuant  to  paragraph  (d)  of
Section  7-165  over the total annuity payments made pursuant
thereto to the time of death.
    9.  Upon the marriage prior to reaching  age  55  (except
for a surviving spouse who remarries after December 31, 2000)
or  death  of  a person receiving a surviving spouse annuity,
unless a child annuity is payable, the sum of (i) the  excess
of  the  normal and survivor credits, excluding those credits
and interest thereon allowed during  periods  of  disability,
attributable  to  the  employee  at the effective date of the
annuity or date of death, whichever first occurred, over  the
total of all annuity payments attributable to paragraph (a) 1
of  Section  7-142  made  to the employee or surviving spouse
plus (ii) the excess of the additional credits, excluding any
such credits used to create a reversionary annuity or used to
provide the  annuity  attributable  to  paragraph  (a)  2  of
Section 7-142 over the total of such payments.
    10.  Upon  the marriage, death or attainment of age 18 of
a  child  receiving  a  child  annuity,  if  no  other  child
annuities are payable, the sum  of  (i)  the  excess  of  the
normal  and  survivor  credits  excluding  those  credits and
interest thereon allowed during periods of disability, of the
employee at the effective date of  the  annuity  or  date  of
death,  whichever  first  occurred,  over  the  total annuity
payments attributable to paragraph (a)  1  of  Section  7-142
made to the employee, surviving spouse and children plus (ii)
the  excess  of  the  additional  credits, excluding any such
credits used  to  create  a  reversionary  annuity,  used  to
provide  the  annuity  attributable  to  paragraph  (a)  2 of
Section 7-142 over the total annuity  payments  made  to  the
employee, surviving spouse and children, pursuant thereto.
    11.  Upon  the  death of the participating employee whose
annuity was suspended upon his return to employment:
         a.  If  a  surviving  spouse  or  child  annuity  is
    awarded, $3,000;
         b.  If no  surviving  spouse  or  child  annuity  is
    awarded  and  he  had  less  than one year's service upon
    return, $3,000 plus the excess of  the  normal,  survivor
    and  additional  credits, including interest thereon, but
    excluding those allowed during a period of disability, at
    the effective date of the suspended annuity,  plus  those
    allowed  after his return, over all annuity payments made
    to the employee;
         c.  If no  surviving  spouse  or  child  annuity  is
    awarded  and  he  has  one  year  or more of service upon
    return, the higher of (a) the payment under  subparagraph
    b  of this paragraph or (b) the payment under paragraph 1
    of this  Section,  taking  into  consideration  only  the
    service  and  credits  allowed after his return, plus the
    excess of the normal, survivor  and  additional  credits,
    including   interest  thereon,  excluding  those  allowed
    during periods of disability, at the  effective  date  of
    his  suspended  annuity over all annuity payments made to
    the employee.
    12.  The $3,000 death benefit provided  in  paragraphs  4
and  6  shall  not be payable to beneficiaries of persons who
terminated service prior to September  8,  1971,  unless  the
payment  or agreement for payment provided by Section 7-144.2
of this Article is made prior to the date of death.
    13.  The increase in certain death benefits  from  $1,000
to $3,000 provided by this amendatory Act of 1987 shall apply
only to deaths occurring on or after January 1, 1988.
(Source: P.A. 85-941.)

    (40 ILCS 5/7-166) (from Ch. 108 1/2, par. 7-166)
    Sec.    7-166.   Separation   benefits   -   Eligibility.
Separation benefits  shall  be  payable  as  hereinafter  set
forth:
    1.  Upon separation from the service of all participating
municipalities     and    instrumentalities    thereof    and
participating instrumentalities, any  participating  employee
upon  the termination of his participation as a participating
employee who, on the date of application for such benefit, is
not entitled to a retirement annuity shall be entitled  to  a
separation benefit;
    2.  Upon separation from the service of all participating
municipalities     and    instrumentalities    thereof    and
participating instrumentalities, any  participating  employee
upon  the termination of his participation as a participating
employee who, on the date of application for such benefit, is
entitled to a retirement annuity of less than $30  per  month
for  life  may  elect to take a separation benefit in lieu of
the retirement annuity.
(Source: Laws 1963, p. 161.)

    (40 ILCS 5/7-167) (from Ch. 108 1/2, par. 7-167)
    Sec. 7-167. Separation benefits  -  Payment.   Separation
benefits  shall  be  paid in the form of a single cash sum as
soon as practicable after receipt by the board of:
         1.  a written application by the employee  for  such
    benefits; and
         2.  written   notice   from   the   last   employing
    participating  municipality or instrumentality thereof or
    participating  instrumentality,  certifying   that   such
    participating   employee   has   separated  from  service
    terminated his participation.
(Source: Laws 1963, p. 161.)

    (40 ILCS 5/7-184) (from Ch. 108 1/2, par. 7-184)
    Sec. 7-184. To determine prior service.
    To determine  the  length  of  prior  service  from  such
information as is available.  Any such determination shall be
conclusive  as to any such period of service, unless within 2
years of the issuance of the first individual statement to an
employee, the board reconsiders  the  case  and  changes  the
determination.
    The change to this Section made by this amendatory Act of
the  91st  General Assembly applies without regard to whether
the individual is in service on or after the  effective  date
of this amendatory Act.
(Source: Laws 1963, p. 161.)

    (40 ILCS 5/7-211) (from Ch. 108 1/2, par. 7-211)
    Sec. 7-211. Authorizations.
    (a)  Each  participating municipality and instrumentality
thereof and each participating instrumentality shall:
         1.  Deduct all normal and  additional  contributions
    and  contributions  for  federal Social Security taxes as
    required by the Social Security Enabling  Act  from  each
    payment   of   earnings  payable  to  each  participating
    employee who  is  entitled  to  any  earnings  from  such
    municipality  or instrumentality thereof or participating
    instrumentality, and  to  remit  all  such  contributions
    immediately to the board; and
         2.  Pay  to the board contributions required by this
    Article.
    (b)  Each participating employee shall, by virtue of  the
payment  of  contributions  to  this  fund,  receive a vested
interest in the  annuities  and  benefits  provided  in  this
Article and in consideration of such vested interest shall be
deemed  to  have  agreed  and  authorized  the deduction from
earnings  of  all  contributions  payable  to  this  fund  in
accordance with this Article.
    (c)  Payment   of   earnings   less   the   amounts    of
contributions  provided  in  this  Article  and in the Social
Security Enabling Act shall be a full and complete  discharge
of  all  claims  for  payment  for  services  rendered by any
employee during the period covered by any such payment.
    (d)  Any covered annuitant may authorize the  withholding
of all or a portion of his or her annuity, for the payment of
premiums  on  group  accident  and  health insurance provided
pursuant to Section 7-199.1.  The annuitant may  revoke  this
authorization at any time.
(Source: P.A. 84-812.)

    (40 ILCS 5/7-224 new)
    Sec.  7-224.   Section  415 limitations.  Notwithstanding
any other provisions of this Article, the  combined  benefits
and  contributions  provided to any participating employee by
all  plans  of  any  participating   municipality   and   its
instrumentalities and any participating instrumentality shall
not  exceed the limitations specified in Section 415(b), (c),
and  (e)  of  the  Internal  Revenue  Code  of  1986.   If  a
participating employee's benefits or contributions under this
Article, combined with those under  any  other  plan  of  the
participating   municipality  and  its  instrumentalities  or
participating instrumentality, would otherwise violate  those
limitations,  the  benefits and contributions under the other
plan  shall  be  reduced,  rather  than  the   benefits   and
contributions  provided  under  this  Article.  To the extent
that  the  other  plan  fails  to  limit  such  benefits  and
contributions, that plan shall be disqualified.
    (40 ILCS 5/8-125) (from Ch. 108 1/2, par. 8-125)
    Sec. 8-125.  Annuity.
    "Annuity":  Equal  monthly  payments  for  life,   unless
otherwise specified.
    For  annuities  taking effect before January 1, 1998, the
first payment shall be due and payable one  month  after  the
occurrence  of  the  event  upon which payment of the annuity
depends, and the last payment shall be due and payable as  of
the  date of the annuitant's death and shall be prorated from
the date of the last preceding payment to the date  of  death
for  deaths  that  occur  on  or  before  March 31, 2000. All
payments made on or after April 1, 2000 shall be made on  the
first day of the calendar month and the last payment shall be
made  on  the  first  day  of the calendar month in which the
annuity  payment  period  ends.  All  payments   for   months
beginning with April of 2000 shall be for the entire calendar
month, without proration. A pro rata amount shall be paid for
that  part  of  the month from the March 2000 annuity payment
date through March 31, 2000.
    For annuities taking effect on or after January 1,  1998,
payments  shall  be  made as of the first day of the calendar
month, with the first payment to be made as of the first  day
of the calendar month coincidental with or next following the
first day of the annuity payment period, and the last payment
to be made as of the first day of the calendar month in which
the annuity payment period ends.  For annuities taking effect
on  or  after  January 1, 1998, all payments shall be for the
entire calendar month, without proration.
    For the purposes of this Section,  the  "annuity  payment
period"  means  the  period  beginning  on  the day after the
occurrence of the event upon which  payment  of  the  annuity
depends,  and  ending  on the day upon which the death of the
annuitant or other event terminating the annuity occurs.
(Source: P.A. 90-31, eff. 6-27-97.)
    (40 ILCS 5/8-139) (from Ch. 108 1/2, par. 8-139)
    Sec. 8-139.  Reversionary annuity.
    (a)  An employee, prior to  retirement  on  annuity,  may
elect  to  take  a lesser amount of annuity and provide, with
the actuarial value of the amount by  which  his  annuity  is
reduced,  a reversionary annuity for a wife, husband, parent,
child, brother or sister.  The option shall be  exercised  by
filing   a  written  designation  with  the  board  prior  to
retirement, and may be revoked by the employee  at  any  time
before  retirement.   The  death of the employee prior to his
retirement shall automatically void the option.
    (b)  The death of the designated  reversionary  annuitant
prior  to  the employee's retirement shall automatically void
the option.  If the reversionary  annuitant  dies  after  the
employee's  retirement,  and before the death of the employee
annuitant, the reduced annuity  being  paid  to  the  retired
employee  annuitant  shall  be  increased  to  the  amount of
annuity before reduction for the reversionary annuity and  no
reversionary annuity shall be payable.
    The  option  is  subject to the further condition that no
reversionary annuity  shall  be  paid  to  a  parent,  child,
brother, or sister if the employee dies before the expiration
of  365  days from the date his written designation was filed
with the board, even though he has retired and is receiving a
reduced annuity.
    (c)  The employee exercising this option shall not reduce
his retirement annuity by more than $400 a month, or elect to
provide a reversionary annuity of less than  $50  per  month.
No  option shall be permitted if the reversionary annuity for
a widow, when added to the widow's annuity payable under this
Article, exceeds 100% of the reduced annuity payable  to  the
employee.
    (d)  A  reversionary  annuity  shall  begin  on  the  day
following  the  death  of  the annuitant and shall be paid as
provided in Section 8-125.
    (e)  The increases in annuity provided in  Section  8-137
of  this  Article  shall,  as  to  an  employee so electing a
reduced annuity relate to the amount of the original annuity,
and such amount shall constitute the annuity  on  which  such
automatic increases shall be based.
    (f)  For  annuities  elected  after  June  30,  1983, the
amount  of  the  monthly  reversionary   annuity   shall   be
determined by multiplying the amount of the monthly reduction
in  the  employee's  annuity  by  the factor in the following
table based on the age of the employee and the difference  in
the  age  of  the  employee  and  the age of the reversionary
annuitant at the starting date of the employee's annuity:
                       Employee's Age
Reversionary
Annuitant's
Age    50-51  52-54  55-57  58-60  61-63  64-66  67-69   70 &
                                                         Over
30 or
more
years
younger 3.03   2.56   2.18   1.84   1.55   1.29   1.08   0.91
25-29
years
younger 3.16   2.68   2.29   1.94   1.63   1.37   1.15   0.97
20-24
years
younger 3.35   2.85   2.44   2.07   1.75   1.48   1.25   1.06
15-19
years
younger 3.60   3.08   2.65   2.26   1.92   1.63   1.39   1.19
10-14
years
younger 3.96   3.40   2.94   2.53   2.16   1.85   1.59   1.37
5-9
years
younger 4.46   3.84   3.35   2.90   2.51   2.16   1.88   1.64
0-4
years
younger 5.15   4.47   3.93   3.44   3.00   2.61   2.29   2.02
1-5
years
older   6.12   5.36   4.76   4.21   3.71   3.26   2.88   2.56
6-10
years
older   7.48   6.61   5.93   5.30   4.71   4.16   3.70   3.29
11-15
years
older   9.37   8.35   7.58   6.83   6.11   5.40   4.82   4.32
16-20
years
older  11.99  10.78   9.84   8.93   8.02   7.13   6.43   5.87
21-25
years
older  15.59  14.06  12.91  11.82  10.73   9.66   8.88   8.35
26-30
years
older  20.42  18.49  17.15  15.96  14.80  13.65  12.97  12.82
31 or
more
years
older  27.07  24.72  23.34  22.32  21.45  20.62  20.85  23.28
(Source: P.A. 90-31, eff. 6-27-97; 90-766, eff. 8-14-98.)

    (40 ILCS 5/8-153) (from Ch. 108 1/2, par. 8-153)
    Sec. 8-153.  Widow's  remarriage  marriage  to  terminate
annuity. A widow's annuity shall terminate when she remarries
if the marriage takes place before the date 60 days after the
effective  date  of  this  amendatory Act of the 91st General
Assembly. If a widow remarries 60  or  more  days  after  the
effective  date  of  this  amendatory Act of the 91st General
Assembly,  the  widow's  annuity   shall   continue   without
interruption.
    When  a  widow dies, if she has not received, in the form
of an annuity, an amount equal to  the  total  credited  from
employee's contributions and applied for the widow's annuity,
the  difference  between  such annuity credits and the amount
received by her shall be refunded to her, provided, that if a
reversionary annuity is payable  to  her,  or  to  any  other
person  designated  by the employee, such amount shall not be
refunded but the reversionary annuity shall  be  payable.  If
there  is  any child of the employee who is under 18 years of
age, the part of any such amount that is required to  pay  an
annuity  to  the  child  shall  be transferred to the child's
annuity reserve. In making refunds  under  this  Section,  no
interest  shall  be  paid  upon  either  the total of annuity
payments made or the amounts subject to  refund.  Any  refund
shall be paid according to the provisions of Section 8-170.
    A  subsequent change in marital status of the widow shall
not effect any restoration of any rights under  this  Article
except  in  the  case  of  declaration  of  invalidity  of  a
subsequent  marriage wherein the declaration of invalidity is
based upon charges of bigamy by the subsequent husband or the
legal disability of the subsequent husband to  enter  into  a
marriage.
(Source: P.A. 83-706.)

    (40 ILCS 5/8-171) (from Ch. 108 1/2, par. 8-171)
    Sec.  8-171.  Refund  in  lieu of annuity.  In lieu of an
annuity, an employee who withdraws and  whose  annuity  would
amount  to less than $800 $300 a month for life, may elect to
receive a refund of his accumulated contributions for annuity
purposes, based on the amounts contributed by him.
    The widow of any employee, eligible for annuity upon  the
death  of  her husband, whose widow's annuity would amount to
less than $800 $300 a month for life, may, in lieu of widow's
annuity,  elect  to  receive  a  refund  of  the  accumulated
contributions for annuity  purposes,  based  on  the  amounts
contributed  by her deceased employee husband, but reduced by
any amounts theretofore paid to him in the form of an annuity
or refund out of such accumulated contributions.
    Accumulated  contributions  shall  mean  the  amounts   -
including  the interest credited thereon - contributed by the
employee for age and service and widow's annuity to the  date
of his withdrawal or death, whichever first occurs, including
any  amounts  contributed  for him as salary deductions while
receiving duty disability benefits,  and,  if  not  otherwise
included,  any accumulations from sums contributed by him and
applied to any pension fund superseded by this fund.
    The acceptance of such refund in lieu of widow's annuity,
on the part of a widow, shall not deprive a child or children
of the right to receive a child's annuity as provided for  in
Sections  8-158  and 8-159 of this Article, and neither shall
the payment of a child's annuity in the case of  such  refund
to  a  widow reduce the amount herein set forth as refundable
to such widow electing a refund in lieu of widow's annuity.
(Source: P.A. 86-1488.)

    (40 ILCS 5/8-244) (from Ch. 108 1/2, par. 8-244)
    Sec. 8-244. Annuities, etc., exempt.
    (a)  All annuities,  refunds,  pensions,  and  disability
benefits  granted  under  this  Article, shall be exempt from
attachment or garnishment process and shall  not  be  seized,
taken,  subjected  to,  detained, or levied upon by virtue of
any judgment, or any process or proceeding whatsoever  issued
out  of  or  by  any court in this State, for the payment and
satisfaction in whole or in part of any debt, damage,  claim,
demand,   or   judgment  against  any  annuitant,  pensioner,
participant,   refund   applicant,   or   other   beneficiary
hereunder.
    (b)  No annuitant, pensioner, refund applicant, or  other
beneficiary  shall  have  any right to transfer or assign his
annuity, refund, or disability benefit or any part thereof by
way of mortgage or otherwise, except that:
         (1)  an annuitant or pensioner  who  elects  or  has
    elected  to  participate  in  a non-profit group hospital
    care plan or group medical surgical  plan  may  with  the
    approval   of  the  board  and  in  conformity  with  its
    regulations authorize the  board  to  withhold  from  the
    pension  or annuity the current premium for such coverage
    and pay such premium  to  the  organization  underwriting
    such plan;
         (2)  in  the  case  of  refunds,  a  participant may
    pledge by assignment, power of attorney, or otherwise, as
    security for a loan from a legally operating credit union
    making loans  only  to  participants  in  certain  public
    employee  pension funds described in the Illinois Pension
    Code, all or part of any refund which may become  payable
    to him in the event of his separation from service; and
         (3)  the  board,  in  its discretion, may pay to the
    wife of any annuitant, pensioner,  refund  applicant,  or
    disability   beneficiary,  such  an  amount  out  of  her
    husband's annuity pension, refund, or disability  benefit
    as any court of competent jurisdiction may order, or such
    an  amount  as  the  board may consider necessary for the
    support of his wife or children, or both in the event  of
    his  disappearance  or  unexplained  absence  or  of  his
    failure to support such wife or children.
    (c)  The  board  may  retain  out  of any future annuity,
pension, refund or disability benefit payments, such  amount,
or amounts, as it may require for the repayment of any moneys
paid  to  any  annuitant,  pensioner,  refund  applicant,  or
disability  beneficiary  through  misrepresentation, fraud or
error.  Any such  action  of  the  board  shall  relieve  and
release  the  board  and  the fund from any liability for any
moneys so withheld.
    (d)  Whenever an annuity or disability benefit is payable
to a minor or to a  person  certified  by  a  medical  doctor
adjudged  to  be  under  legal  disability, the board, in its
discretion and when it is in to  the  best  interest  of  the
person  concerned, may waive guardianship proceedings and pay
the annuity or benefit to the person providing or caring  for
the  minor  or  and  to  the  wife,  parent or blood relative
providing or caring for the person under legal disability.
    In the event that a person certified by a medical  doctor
to  be  under  legal  disability  (i)  has  no  spouse, blood
relative, or other person providing  or  caring  for  him  or
her,  (ii) has no guardian of his or her estate, and (iii) is
confined to a Medicare approved, State certified nursing home
or to a publicly owned and operated nursing  home,  hospital,
or mental institution, the Board may pay any benefit due that
person  to the nursing home, hospital, or mental institution,
to be used for the sole benefit of  the  person  under  legal
disability.
    Payment  in  accordance with this subsection to a person,
nursing home, hospital, or mental institution for the benefit
of a minor or person  under  legal  disability  shall  be  an
absolute  discharge  of  the Fund's liability with respect to
the amount so paid.  Any person, nursing home,  hospital,  or
mental  institution  accepting  payment under this subsection
shall notify the Fund of the  death  or  any  other  relevant
change  in  the  status  of  the  minor or person under legal
disability.
(Source: P.A. 86-1488.)
    (40 ILCS 5/9-149) (from Ch. 108 1/2, par. 9-149)
    Sec. 9-149.  Widow's  remarriage  marriage  to  terminate
annuity.     A  widow's  annuity  shall  terminate  when  she
remarries if the marriage takes place before the date 60 days
after the effective date of this amendatory Act of  the  91st
General Assembly.  If a widow remarries 60 or more days after
the effective date of this amendatory Act of the 91st General
Assembly,   the   widow's   annuity  shall  continue  without
interruption.
    When a widow dies, if she has not received, in  the  form
of  an annuity, an amount equal to the total sums accumulated
and credited from the employee's  contributions  and  applied
for   the   widow's  annuity,  the  difference  between  such
accumulated annuity credits and the amount received by her in
annuity payments shall be refunded to her; provided that if a
reversionary annuity is payable to her or to any other person
designated by the employee, this such aforesaid amount  shall
not  be  refunded,  but  the  reversionary  annuity  shall be
payable.
(Source: P.A. 81-1536.)

    (40 ILCS 5/9-194) (from Ch. 108 1/2, par. 9-194)
    Sec. 9-194.  To invest  the  reserves.    To  invest  the
reserves  of  the  fund  in  accordance  with Sections 1-109,
1-109.1, 1-109.2, 1-110, 1-111, 1-114, and 1-115 of this Act.
Investments made in accordance with Section  1-113  shall  be
deemed  to  be  prudent  the  provisions set forth in Section
1-113 of this Act.
    The retirement board may sell any security held by it  at
any time it deems it desirable.
    The board may enter into agreements and execute documents
that it determines to be necessary to complete any investment
transaction.
    All  investments  shall be clearly held and accounted for

to indicate ownership by the board.  The board may direct the
registration of securities in its own name or in the name  of
a  nominee created for the express purpose of registration of
securities by a savings and loan association or  national  or
State  bank  or  trust  company authorized to conduct a trust
business in the State of Illinois.
    Investments shall be  carried  at  cost  or  at  a  value
determined  in  accordance with generally accepted accounting
principles.
(Source: P.A. 82-960.)

    (40 ILCS 5/11-124) (from Ch. 108 1/2, par. 11-124)
    Sec. 11-124.  Annuity.
    "Annuity":  Equal  monthly  payments  for  life,   unless
terminated  earlier  under Section 11-148, 11-152, 11-153, or
11-230.
    For annuities taking effect before January 1,  1998,  the
first  payment  shall  be due and payable one month after the
occurrence of the event upon which  payment  of  the  annuity
depends.   Until  August   1, 1999, and payment shall be made
for any part of a  monthly  period  in  which  death  of  the
annuitant  occurs.   Beginning  August  1, 1999, all payments
shall be made on the first day  of  the  calendar  month  and
shall  be  for  the entire calendar month, without proration.
The last payment shall be  made  on  the  first  day  of  the
calendar  month  in which the annuity payment period ends.  A
pro rata amount shall be paid for that part of the month from
the July 1999 annuity payment date through July 31, 1999.
    For annuities taking effect on or after January 1,  1998,
payments  shall  be  made as of the first day of the calendar
month, with the first payment to be made as of the first  day
of the calendar month coincidental with or next following the
first day of the annuity payment period, and the last payment
to be made as of the first day of the calendar month in which
the annuity payment period ends.  For annuities taking effect
on  or  after  January 1, 1998, all payments shall be for the
entire calendar month, without proration.
    For the purposes of this Section,  the  "annuity  payment
period"  means  the  period  beginning  on  the day after the
occurrence of the event upon which  payment  of  the  annuity
depends,  and  ending  on the day upon which the death of the
annuitant or other event terminating the annuity occurs.
(Source: P.A. 90-31, eff. 6-27-97.)

    (40 ILCS 5/11-134.2) (from Ch. 108 1/2, par. 11-134.2)
    Sec. 11-134.2. Reversionary annuity.
    (a)  An employee, prior to  retirement  on  annuity,  may
elect  to  take  a lesser amount of annuity and provide, with
the actuarial value of the amount by  which  his  annuity  is
reduced,  a reversionary annuity for a wife, husband, parent,
child, brother or sister.  The option shall be  exercised  by
filing   a  written  designation  with  the  board  prior  to
retirement, and may be revoked by the employee  at  any  time
before  retirement.   The  death of the employee prior to his
retirement shall automatically void the option.
    (b)  The death of the designated  reversionary  annuitant
prior  to  the employee's retirement shall automatically void
the option.  If the reversionary  annuitant  dies  after  the
employee's  retirement,  and before the death of the employee
annuitant, the reduced annuity  being  paid  to  the  retired
employee  annuitant  shall  be  increased  to  the  amount of
annuity before reduction for the reversionary annuity and  no
reversionary annuity shall be payable.
    The  option  is  subject to the further condition that no
reversionary annuity  shall  be  paid  to  a  parent,  child,
brother, or sister if the employee dies before the expiration
of  365  days from the date his written designation was filed
with the board, even though he has retired and is receiving a
reduced annuity.
    (c)  The employee exercising this option shall not reduce
his retirement annuity by more than $400 per month, or  elect
to provide a reversionary annuity of less than $50 per month.
No  option shall be permitted if the reversionary annuity for
a widow, when added to the widow's annuity payable under this
Article, exceeds 100% of the reduced annuity payable  to  the
employee.
    (d)  A  reversionary  annuity  shall  begin  on  the  day
following  the  death  of  the annuitant and shall be paid as
provided in Section 11-124.
    (e)  The  increases  in  annuity  provided   in   Section
11-134.1 of this Article shall, as to an employee so electing
a  reduced  annuity,  relate  to  the  amount of the original
annuity, and such amount  shall  constitute  the  annuity  on
which such increases shall be based.
    (f)  For  annuities  elected  after  June  30,  1983, the
amount  of  the  monthly  reversionary   annuity   shall   be
determined by multiplying the amount of the monthly reduction
in  the  employee's  annuity  by  the factor in the following
table based on the age of the employee and the difference  in
the  age  of  the  employee  and  the age of the reversionary
annuitant at the starting date of the employee's annuity:
                       Employee's Age
Reversionary
Annuitant's
Age    50-51  52-54  55-57  58-60  61-63  64-66  67-69   70 &
                                                         Over
30 or
more
years
younger 3.03   2.56   2.18   1.84   1.55   1.29   1.08   0.91
25-29
years
younger 3.16   2.68   2.29   1.94   1.63   1.37   1.15   0.97
20-24
years
younger 3.35   2.85   2.44   2.07   1.75   1.48   1.25   1.06
15-19
years
younger 3.60   3.08   2.65   2.26   1.92   1.63   1.39   1.19
10-14
years
younger 3.96   3.40   2.94   2.53   2.16   1.85   1.59   1.37
5-9
years
younger 4.46   3.84   3.35   2.90   2.51   2.16   1.88   1.64
0-4
years
younger 5.15   4.47   3.93   3.44   3.00   2.61   2.29   2.02
1-5
years
older   6.12   5.36   4.76   4.21   3.71   3.26   2.88   2.56
6-10
years
older   7.48   6.61   5.93   5.30   4.71   4.16   3.70   3.29
11-15
years
older   9.37   8.35   7.58   6.83   6.11   5.40   4.82   4.32
16-20
years
older  11.99  10.78   9.84   8.93   8.02   7.13   6.43   5.87
21-25
years
older  15.59  14.06  12.91  11.82  10.73   9.66   8.88   8.35
26-30
years
older  20.42  18.49  17.15  15.96  14.80  13.65  12.97  12.82
31 or
more
years
older  27.07  24.72  23.34  22.32  21.45  20.62  20.85  23.28
(Source: P.A. 90-31, eff. 6-27-97; 90-766, eff. 8-14-98.)

    (40 ILCS 5/11-148) (from Ch. 108 1/2, par. 11-148)
    Sec. 11-148.  Widow's remarriage to terminate annuity.  A
widow's  annuity  shall  terminate  when she remarries if the
marriage takes place  before  the  date  60  days  after  the
effective  date  of  this  amendatory Act of the 91st General
Assembly. If a widow remarries 60  or  more  days  after  the
effective  date  of  this  amendatory Act of the 91st General
Assembly,  the  widow's  annuity   shall   continue   without
interruption.
    When  a  widow dies, if she has not received, in the form
of an annuity, an amount equal to the total  sum  accumulated
to  his  credit from employee's contributions and applied for
the widow's annuity, the difference between such  accumulated
annuity  credits  and  the  amount received by her in annuity
payments shall be  refunded  to  her,  provided,  that  if  a
reversionary  annuity  is  payable if to her, or to any other
person designated by  the  employee,  such  aforesaid  amount
shall  not  be refunded but the reversionary annuity shall be
payable. If there is any child of the employee who  is  under
18 years of age, the part of any such amount that is required
to  pay  an  annuity to the child shall be transferred to the
child's  annuity  reserve.  In  making  refunds  under   this
Section,  no  interest shall be paid upon either the total of
annuity payments made or the amounts subject to  refund.  Any
refund  shall  be paid according to the provisions of Section
11-166.
    A subsequent change in marital status of the widow  shall
not  affect  any restoration of any rights under this Article
except  in  the  case  of  declaration  of  invalidity  of  a
subsequent marriage wherein the declaration of invalidity  is
based upon charges of bigamy by the subsequent husband or the
legal  disability  of  the subsequent husband to enter into a
marriage.
(Source: P.A. 83-706.)

    (40 ILCS 5/11-167) (from Ch. 108 1/2, par. 11-167)
    Sec. 11-167.  Refunds in lieu of annuity.  In lieu of  an
annuity,  an  employee who withdraws, and whose annuity would
amount to less than $800 $300 a month for life may  elect  to
receive  a  refund of the total sum accumulated to his credit
from employee contributions for annuity purposes.
    The widow of any employee, eligible for annuity upon  the
death of her husband, whose annuity would amount to less than
$800  $300  a  month  for  life,  may,  in  lieu of a widow's
annuity,  elect  to  receive  a  refund  of  the  accumulated
contributions for annuity  purposes,  based  on  the  amounts
contributed  by her deceased employee husband, but reduced by
any amounts theretofore paid to him in the form of an annuity
or refund out of such accumulated contributions.
    Accumulated  contributions   shall   mean   the   amounts
including   interest  credited  thereon  contributed  by  the
employee for age and service and widow's annuity to the  date
of  his  withdrawal  or  death,  whichever  first occurs, and
including the accumulations from any amounts contributed  for
him  as  salary  deductions  while  receiving duty disability
benefits; provided that such amounts contributed by the  city
after  December 31, 1983 while the employee is receiving duty
disability benefits.
    The acceptance of such refund in lieu of widow's annuity,
on the part of a widow, shall not deprive a child or children
of the right to receive a child's annuity as provided  for in
Sections 11-153 and 11-154 of this Article, and neither shall
the payment of a child's annuity in the case of  such  refund
to  a  widow reduce the amount herein set forth as refundable
to such widow electing a refund in lieu of widow's annuity.
(Source: P.A. 90-655, eff. 7-30-98.)

    (40 ILCS 5/11-181) (from Ch. 108 1/2, par. 11-181)
    Sec. 11-181. Board created.  A board of 8  members  shall
constitute  the board of trustees authorized to carry out the
provisions of this Article.  The board shall be known as  the
Retirement  Board  of  the  Laborers'  and  Retirement  Board
Employees'  Annuity  and Benefit Fund of the city.  The board
shall consist of 5 persons appointed and 2 employees and  one
annuitant elected in the manner hereinafter prescribed.
    The  appointed members of the board shall be appointed as
follows:
    One member shall be appointed by the comptroller  of  the
city,  who  may  be  himself  or  anyone  chosen  from  among
employees  of  the  city who are versed in the affairs of the
comptroller's office; one member shall be  appointed  by  the
City  Treasurer  of  the city, who may be himself or a person
chosen from among employees of the city who are versed in the
affairs of the City Treasurer's office; one member  shall  be
an  employee  of  the  city appointed by the president of the
local labor  organization  representing  a  majority  of  the
employees  participating  in the Fund; and 2 members shall be
appointed by the civil service commission or  the  Department
of Personnel of the city from among employees of the city who
are  versed  in the affairs of the civil service commission's
office or the Department of Personnel.
    The member appointed by the comptroller shall hold office
for a term ending on December 1st of the first year following
the year of appointment.  The member appointed  by  the  City
Treasurer shall hold office for a term ending on December 1st
of  the  second  year following the year of appointment.  The
member appointed by the civil service commission  shall  hold
office  for  a  term  ending on the first day in the month of
December of the third year following the year of appointment.
The  additional  member  appointed  by  the   civil   service
commission  under  this  amendatory  Act  of  1998 shall hold
office for an initial term ending on December  1,  2000,  and
the  member  appointed  by  the  labor organization president
shall hold office for an initial term ending on  December  1,
2001.   Thereafter  each appointive member shall be appointed
by the officer or body that appointed his predecessor, for  a
term of 3 years.
    The  2  employee members of the board shall be elected as
follows:
    Within 30 days from and after the appointive members have
been appointed and have  qualified,  the  appointive  members
shall arrange for and hold an election.
    One  employee  shall  be  elected  for  a  term ending on
December 1st of the first year next following  the  effective
date;  one for a term ending on December 1st of the following
year.
    The initial annuitant member shall be  appointed  by  the
other  members  of  the  board  for an initial term ending on
December 1, 1999.  Thereafter, The annuitant  member  elected
in  1999  shall  be  deemed to have been elected for a 3-year
2-year term ending on December  1,  2002.    Thereafter,  the
annuitant member shall be elected for a 3-year term ending on
December  1st of the third year following the election 1st of
the next odd-numbered year.
(Source: P.A. 90-766, eff. 8-14-98.)

    (40 ILCS 5/11-182) (from Ch. 108 1/2, par. 11-182)
    Sec. 11-182. Board elections; qualification; oath.
    (a)  In each year, the  board  shall  conduct  a  regular
election,  under  rules adopted by it, at least 30 days prior
to the expiration of the term of the  employee  member  whose
term next expires, for the election of a successor for a term
of  3 2 years.  Each employee member and his or her successor
shall be an employee who holds a  position  by  certification
and  appointment  as  a  result  of competitive civil service
examination as distinguished from temporary  appointment,  or
so  holds  a position which is not exempt from the classified
service or the personnel ordinance of a city that has adopted
a career service ordinance, for a period of not less  than  5
years  prior  to date of election.  At any such election, all
persons who are employees at the time such election  is  held
shall  have  a  right to vote.  The ballot shall be of secret
character.
    (b)  In each odd-numbered year, The board shall conduct a
regular election, under rules adopted by it, at least 30 days
prior to the expiration of the term of the annuitant  member,
for  the  election  of  a  successor for a term of 3 2 years.
Each annuitant member and his or her  successor  shall  be  a
former  employee  receiving  a retirement (age and service or
prior service) annuity from the Fund.  At any such  election,
all  persons  who are receiving a retirement (age and service
or prior service) annuity from  the  Fund  at  the  time  the
election  is  held have a right to vote.  The ballot shall be
of secret character.
    (c)  Any appointive or elective member of the board shall
hold office  until  his  or  her  successor  is  elected  and
qualified.
    Any  person elected or appointed as a member of the board
shall qualify for the office by taking an oath of  office  to
be administered by the city clerk or any person designated by
the  city  clerk.  A copy thereof shall be kept in the office
of the city clerk.
    Any appointment shall  be  in  writing  and  the  written
instrument shall be filed with the oath.
(Source: P.A. 90-766, eff. 8-14-98.)

    (40 ILCS 5/11-223) (from Ch. 108 1/2, par. 11-223)
    Sec. 11-223.  Annuities, etc., exempt.
    (a)  All  annuities,  refunds,  pensions,  and disability
benefits granted under this  Article  shall  be  exempt  from
attachment  or  garnishment  process and shall not be seized,
taken, subjected to, detained, or levied upon  by  virtue  of
any  judgment, or any process or proceeding whatsoever issued
out of or by any court in this State,  for  the  payment  and
satisfaction  in whole or in part of any debt, damage, claim,
demand,  or  judgment  against  any  annuitant,  participant,
refund applicant, or other beneficiary hereunder.
    No annuitant, refund applicant, or other beneficiary  may
transfer or assign his annuity, refund, or disability benefit
or  any  part thereof by way of mortgage or otherwise, except
as provided in Section 11-223.1, and except in  the  case  of
refunds,  when a participant has pledged by assignment, power
of attorney, or otherwise, as security  for  a  loan  from  a
legally   operating   credit   union  making  loans  only  to
participants  in  certain  public  employee   pension   funds
described  in  the  Illinois Pension Code, all or part of any
refund which may become payable to him in the  event  of  his
separation  from  service.   The board in its discretion may,
however, pay to the wife or to the unmarried child  under  18
years   of   age  of  any  annuitant,  refund  applicant,  or
disability beneficiary, such an amount out of  her  husband's
annuity refund, or disability benefit as any court may order,
or such an amount as the board may consider necessary for the
support  of  his wife or children or both in the event of his
disappearance or unexplained absence or  of  his  failure  to
support such wife or children.
    (b)  The  board  may  retain  out  of any future annuity,
refund, or  disability  benefit  payments,  such  amount,  or
amounts  as  it  may  require for the repayment of any moneys
paid  to  any  annuitant,  pensioner,  refund  applicant,  or
disability beneficiary through  misrepresentation,  fraud  or
error.   Any  such  action  of  the  board  shall relieve and
release the board and the fund from  any  liability  for  any
moneys so withheld.
    (c)  Whenever an annuity or disability benefit is payable
to  a  minor  or  to  a  person certified by a medical doctor
adjudged to be under legal  disability,  the  board,  in  its
discretion  and  when  it  is  in to the best interest of the
person concerned, may waive guardianship  or  conservatorship
proceedings  and  pay  the  annuity  or benefit to the person
providing or caring for the minor or and to the wife,  parent
or  blood  relative  providing or caring for the person under
legal disability.
    In the event that a person certified by a medical  doctor
to  be  under  legal  disability  (i)  has  no  spouse, blood
relative, or other person providing  or  caring  for  him  or
her,  (ii) has no guardian of his or her estate, and (iii) is
confined to a Medicare approved, State certified nursing home
or to a publicly owned and operated nursing  home,  hospital,
or mental institution, the Board may pay any benefit due that
person  to the nursing home, hospital, or mental institution,
to be used for the sole benefit of  the  person  under  legal
disability.
    Payment  in  accordance with this subsection to a person,
nursing home, hospital, or mental institution for the benefit
of a minor or person  under  legal  disability  shall  be  an
absolute  discharge  of  the Fund's liability with respect to
the amount so paid.  Any person, nursing home,  hospital,  or
mental  institution  accepting  payment under this subsection
shall notify the Fund of the  death  or  any  other  relevant
change  in  the  status  of  the  minor or person under legal
disability.
    (d)  Whenever  an  annuitant,  applicant  for  refund  or
disability beneficiary disappears  and  his  whereabouts  are
unknown, and it cannot be ascertained that he is alive, there
shall  be paid to his wife or children or both such amount as
will not be in excess of the amount payable to  them  in  the
event  such  annuitant,  applicant  for  refund or disability
beneficiary had died on the date  of  disappearance.   If  he
returns,  or  upon satisfactory proof of his being alive, the
amount  theretofore  paid  to  such  beneficiaries  shall  be
charged against any moneys payable to him under this  Article
as  though  such  payment  to  such beneficiaries had been an
allowance to them out of the moneys payable to  the  employee
as   an   annuitant,   applicant  for  refund  or  disability
beneficiary.
(Source: P.A. 83-706.)

    (40 ILCS 5/13-303) (from Ch. 108 1/2, par. 13-303)
    Sec. 13-303.  Reversionary annuity.
    (a)  An employee, prior to  retirement  on  annuity,  may
elect  a  lesser  amount  of  annuity  and  provide, with the
actuarial value  of  the  amount  by  which  his  annuity  is
reduced, a reversionary annuity for a wife, husband, parents,
children, brothers or sisters.  The election may be exercised
by  filing  a  written  designation  with  the Board prior to
retirement, and may be revoked by the employee  at  any  time
before  retirement.   The  death  of  the  employee  prior to
retirement shall automatically void the election.
    (b)  The death of the designated  reversionary  annuitant
prior  to  the employee's retirement shall automatically void
the election, but, if death of  the  designated  reversionary
annuitant  occurs after retirement, the reduced annuity being
paid to the retired employee annuitant shall remain unchanged
and no reversionary annuity shall be payable.
    No reversionary annuity shall be  paid  if  the  employee
dies  before  the  expiration  of  730 days from the date the
written designation was filed with the board, even though the
employee retired and was receiving a reduced annuity.
    (c)  An employee exercising this option shall not  reduce
the  annuity  by  more  than  25%,  nor  elect  to  provide a
reversionary annuity of less than $100 per  month.   No  such
option  shall  be permitted if the reversionary annuity for a
surviving  spouse,  when  added  to  the  surviving  spouse's
annuity payable  under  this  Article,  exceeds  85%  of  the
reduced annuity payable to the employee.
    (d)  A  reversionary  annuity  shall  begin  on  the  day
following  the death of the annuitant, with the first payment
due and payable one month later, and shall  continue  monthly
thereafter until the death of the reversionary annuitant.
    (e)  The   increases   in  annuity  provided  in  Section
13-302(d) shall, as to an  employee  so  electing  a  reduced
annuity,  relate  to  the amount of reduced annuity, and such
lesser amount shall constitute  the  annuity  on  which  such
increases shall be based.
    (f)  For  determining  the  actuarial  value  under  this
option   of  the  employee's  annuity  and  the  reversionary
annuity, the Fund shall use an actuarial table recommended by
the Fund's actuarial consultant and approved by the Board  of
Trustees  the  following actuarial table shall be used: "1951
Group Annuity Male Table of Mortality," set back 5 years  for
employees, with 3% interest.
(Source: P.A. 87-794.)

    (40 ILCS 5/13-309) (from Ch. 108 1/2, par. 13-309)
    Sec. 13-309.  Duty disability benefit.
    (a)  Any  employee who becomes disabled, which disability
is the result of an injury or illness compensable  under  the
Illinois  Workers'  Compensation Act or the Illinois Workers'
Occupational Diseases Act, is entitled to a  duty  disability
benefit  during  the  period  of  disability  for  which  the
employee  does not receive any part of salary, or any part of
a retirement annuity under this Article; except that  in  the
case  of an employee who first enters service on or after the
effective date  of  this  amendatory  Act  of  1997,  a  duty
disability  benefit  is  not  payable for the first 3 days of
disability that would otherwise be payable under this Section
if  the  disability  does  not  continue  for  at  least   11
additional  days.  This benefit shall be 75% of salary at the
date disability begins.  However, if the  disability  in  any
measure  resulted  from  any physical defect or disease which
existed at the time such injury was sustained or such illness
commenced, the  duty  disability  benefit  shall  be  50%  of
salary.
    Unless the employer acknowledges that the disability is a
result  of  injury  or illness compensable under the Workers'
Compensation Act or the Workers' Occupational  Diseases  Act,
the  duty  disability  benefit shall not be payable until the
issue  of  compensability  under  those   Acts   is   finally
adjudicated.  The period of disability shall be as determined
by  the Illinois Industrial Commission or acknowledged by the
employer.
    The first payment shall be made not later than one  month
after  the  benefit is granted, and subsequent payments shall
be made at least monthly. The Board shall by  rule  prescribe
for  the  payment of such benefits on the basis of the amount
of salary lost during the period of disability.
    (b)  The benefit shall be allowed only if  the  following
requirements are met by the employee:
         (1)  Application is made to the Board within 90 days
    from the date disability begins;
         (2)  A  medical  report is submitted by at least one
    licensed  and  practicing  physician  as  part   of   the
    employee's application; and
         (3)  The  employee  is  examined  by  at  least  one
    licensed  and practicing physician appointed by the Board
    and found to be in a  disabled  physical  condition,  and
    shall  be re-examined at least annually thereafter during
    the continuance of disability.  The employee need not  be
    re-examined by a licensed and practicing physician if the
    attorney  for  the district certifies in writing that the
    employee is entitled to receive  compensation  under  the
    Workers'  Compensation  Act  or the Workers' Occupational
    Diseases Act.
    (c)  The benefit shall terminate when:
         (1)  The employee returns  to  work  or  receives  a
    retirement  annuity  paid  wholly  or  in part under this
    Article;
         (2)  The disability ceases;
         (3)  The  employee  attains  age  65,  but  if   the
    employee  becomes  disabled  at age 60 or later, benefits
    may be extended for a period of  no  more  than  5  years
    after disablement;
         (4)  The   employee   (i)   refuses   to  submit  to
    reasonable examinations by  physicians  or  other  health
    professionals  appointed  by  the  Board,  (ii)  fails or
    refuses to consent to and sign an authorization  allowing
    the  Board  to  receive  copies  of  or  to  examine  the
    employee's  medical  and hospital records, or (iii) fails
    or refuses to provide complete information regarding  any
    other  employment for compensation he or she has received
    since becoming disabled; or
         (5)  The employee willfully and continuously refuses
    to follow accept medical advice and treatment  to  enable
    the  employee  to return to work.  However this provision
    does not apply to an employee who relies in good faith on
    treatment by prayer  through  spiritual  means  alone  in
    accordance  with  the tenets and practice of a recognized
    church or religious denomination, by  a  duly  accredited
    practitioner thereof.
    In the case of a duty disability recipient who returns to
work,  the  employee  must make application to the Retirement
Board within 2 years from the date the employee last received
duty disability benefits in order to become again entitled to
duty disability benefits based on the injury for which a duty
disability benefit was theretofore paid.
(Source: P.A. 90-12, eff. 6-13-97.)

    (40 ILCS 5/13-310) (from Ch. 108 1/2, par. 13-310)
    Sec. 13-310.  Ordinary disability benefit.
    (a)  Any employee who becomes disabled as the  result  of
any  cause  other  than  injury  or  illness  incurred in the
performance of duty for the employer or any  other  employer,
or  while  engaged  in  self-employment  activities, shall be
entitled to an ordinary  disability  benefit.   The  eligible
period  for this benefit shall be 25% of the employee's total
actual service  prior  to  the  date  of  disability  with  a
cumulative maximum period of 5 years.
    (b)  The  benefit  shall  be allowed only if the employee
files an application in writing with the Board, and a medical
report is submitted by at least one licensed  and  practicing
physician as part of the employee's application.
    The  benefit  is  not  payable  for  any disability which
begins during any period of  unpaid  leave  of  absence.   No
benefit  shall  be allowed for any period of disability prior
to 30 days before application is made, unless the Board finds
good cause for the delay  in  filing  the  application.   The
benefit  shall  not  be  paid during any period for which the
employee receives or is  entitled  to  receive  any  part  of
salary.
    The  benefit  is  not  payable  for  any disability which
begins during any period of  absence  from  duty  other  than
allowable  vacation  time  in any calendar year.  An employee
whose disability begins during any such ineligible period  of
absence  from  service  may  not  receive  benefits until the
employee recovers from the disability and is in  service  for
at least 15 consecutive working days after such recovery.
    In the case of an employee who first enters service on or
after  the  effective date of this amendatory Act of 1997, an
ordinary disability benefit is not payable for  the  first  3
days of disability that would otherwise be payable under this
Section  if  the disability does not continue for at least 11
additional days.
    (c)  The benefit shall be 50% of the employee's salary at
the date of disability, and shall terminate when the earliest
of the following occurs:
         (1)  The employee returns  to  work  or  receives  a
    retirement  annuity  paid  wholly  or  in part under this
    Article;
         (2)  The disability ceases;
         (3)  The employee willfully and continuously refuses
    to follow medical advice  and  treatment  to  enable  the
    employee  to return to work.  However this provision does
    not apply to an employee who  relies  in  good  faith  on
    treatment  by  prayer  through  spiritual  means alone in
    accordance with the tenets and practice of  a  recognized
    church  or  religious  denomination, by a duly accredited
    practitioner thereof (Blank);
         (4)  The  employee  (i)  refuses  to  submit  to   a
    reasonable   physical   examination  within  30  days  of
    application by a physician appointed by the  Board,  (ii)
    or  in  the  case  of  chronic  alcoholism,  the employee
    refuses to join a rehabilitation program licensed by  the
    Department of Public Health of the State of Illinois, and
    certified by the Joint Commission on the Accreditation of
    Hospitals,  (iii) fails or refuses to consent to and sign
    an authorization allowing the Board to receive copies  of
    or   to  examine  the  employee's  medical  and  hospital
    records, or (iv) fails or  refuses  to  provide  complete
    information    regarding   any   other   employment   for
    compensation  he  or  she  has  received  since  becoming
    disabled; or
         (5)  The eligible period for this benefit  has  been
    exhausted.
    The  first payment of the benefit shall be made not later
than  one  month  after  the  same  has  been  granted,   and
subsequent  payments  shall  be made at intervals of not more
than 30 days.
(Source: P.A. 90-12, eff. 6-13-97.)

    (40 ILCS 5/13-311) (from Ch. 108 1/2, par. 13-311)
    Sec. 13-311.  Credit for Workers' Compensation  payments.
If an employee, or an employee's spouse or children, receives
compensation  under any workers' compensation or occupational
diseases law, the surviving spouse's or  child's  annuity  or
the  disability  benefit  payable under this Article shall be
reduced by the amount of the compensation so received if  the
amount   is  less  than  the  annuity  or  benefit.   If  the
compensation exceeds the annuity or benefit,  no  payment  of
annuity or benefit shall be made until the period of time has
elapsed  when  the  annuity  or  benefit payable at the rates
provided  in  this  Article  equals  the   amount   of   such
compensation.   However, the commutation of compensation to a
lump sum basis as provided in the  workers'  compensation  or
occupational  diseases  law shall not increase the annuity or
benefit provided under this Article; the annuity  or  benefit
to  be  paid  hereunder  shall  be  based  on  the  amount of
compensation awarded under such laws prior to commutation  of
such  compensation.  No interest shall be considered in these
calculations.
(Source: P.A. 87-794.)

    (40 ILCS 5/13-314) (from Ch. 108 1/2, par. 13-314)
    Sec.   13-314.  Alternative    provisions    for    Water
Reclamation District commissioners.
    (a)  Transfer of credits.  Any Water Reclamation District
commissioner  elected  by  vote  of  the  people  and who has
elected to participate in this Fund may transfer to this Fund
credits and creditable service accumulated  under  any  other
pension  fund or retirement system established under Articles
2 through 18 of this Code, upon payment to the  Fund  of  (1)
the  amount  by which the employer and employee contributions
that would have been required if he had participated in  this
Fund during the period for which credit is being transferred,
plus  interest, exceeds the amounts actually transferred from
such other fund or system to this  Fund,  plus  (2)  interest
thereon  at  6% per year compounded annually from the date of
transfer to the date of payment.
    (b)  Alternative annuity.  Any  participant  commissioner
may elect to establish alternative credits for an alternative
annuity  by  electing  in writing to make additional optional
contributions in accordance with this Section and  procedures
established  by the Board.  Such commissioner may discontinue
making the additional optional contributions by notifying the
fund  in  writing  in  accordance  with  this   Section   and
procedures established by the Board.
    Additional  optional  contributions  for  the alternative
annuity shall be as follows:
         (1)  For service after the  option  is  elected,  an
    additional   contribution   of  3%  of  salary  shall  be
    contributed to the Fund on the same basis and  under  the
    same  conditions  as contributions required under Section
    13-502.
         (2)  For contributions on past  service  before  the
    option  is  elected, the additional contribution shall be
    3% of the salary for the applicable  period  of  service,
    plus  interest  at  the  annual rate from time to time as
    determined by the Board,  compounded  annually  from  the
    date  of  service  to the date of payment.  Contributions
    for service before the option is elected may be made in a
    lump sum payment to the Fund or by  contributing  to  the
    Fund  on  the same basis and under the same conditions as
    contributions  required  under  Section  13-502.      All
    payments  for  past  service  must be paid in full before
    credit is given.  No  additional  optional  contributions
    may  be  made  for any period of service for which credit
    has been previously forfeited by acceptance of a  refund,
    unless  the refund is repaid in full with interest at the
    rate specified in Section 13-603, from the date of refund
    to the date of repayment.
    In lieu of the retirement annuity otherwise payable under
this Article, any commissioner who has elected to participate
in the Fund and make  additional  optional  contributions  in
accordance with this Section, has attained age 55, and has at
least  6  years  of  service  credit,  may  elect to have the
retirement  annuity  computed   as   follows:   3%   of   the
participant's average final salary as a commissioner for each
of  the  first  8  years  of  service credit, plus 4% of such
salary for each of the next 4 years of service  credit,  plus
5%  of  such salary for each year of service credit in excess
of 12 years, subject to a maximum of 80% of such salary.   To
the  extent  such  commissioner  has made additional optional
contributions with respect to only  a  portion  of  years  of
service   credit,   the  retirement  annuity  will  first  be
determined in accordance with this Section to the extent such
additional optional contributions  were  made,  and  then  in
accordance with the remaining Sections of this Article to the
extent  of  years  of  service  credit  with respect to which
additional optional contributions were not made.  The  change
in  minimum  retirement  age  (from  60  to  55) made by this
amendatory Act of 1993 applies to persons who begin receiving
a retirement annuity under  this  Section  on  or  after  the
effective  date  of  this  amendatory  Act, without regard to
whether they are in service on or after that date.
    (c)  Disability benefits.   In  lieu  of  the  disability
benefits   otherwise   payable   under   this   Article,  any
commissioner who (1) has elected to participate in the  Fund,
and  (2) has become permanently disabled and as a consequence
is unable to perform the duties of office, and (3) was making
optional contributions in accordance with this Section at the
time the disability was incurred,  may  elect  to  receive  a
disability  annuity calculated in accordance with the formula
in subsection (b).  For the purposes of this subsection, such
commissioner shall be considered  permanently  disabled  only
if:  (i) disability occurs while in service as a commissioner
and is  of  such  a  nature  as  to  prevent  the  reasonable
performance of the duties of office at the time; and (ii) the
Board  has  received  a  written  certification by at least 2
licensed  physicians  appointed  by  it  stating  that   such
commissioner is disabled and that the disability is likely to
be permanent.
    (d)  Alternative  survivor's  benefits.   In  lieu of the
survivor's benefits otherwise payable under this Article, the
spouse or eligible child of any deceased commissioner who (1)
had elected to participate in the Fund, and  (2)  was  either
making  additional  optional  contributions  on  the  date of
death, or was receiving  an  annuity  calculated  under  this
Section at the time of death, may elect to receive an annuity
beginning  on  the date of the commissioner's death, provided
that the spouse and commissioner must have  been  married  on
the date of the last termination of a service as commissioner
and  for a continuous period of at least one year immediately
preceding death.
    The annuity shall be payable beginning on the date of the
commissioner's death if the spouse is then age 50 or over, or
beginning at age 50 if the age of the spouse is less than  50
years.   If  a  minor  unmarried  child  or  children  of the
commissioner, under age 18, also survive, and  the  child  or
children  are  under  the  care  of  the eligible spouse, the
annuity  shall  begin  as  of  the  date  of  death  of   the
commissioner without regard to the spouse's age.
    The annuity to a spouse shall be 66 2/3% of the amount of
retirement  annuity earned by the commissioner on the date of
death, subject  to  a  minimum  payment  of  10%  of  salary,
provided  that  if an eligible spouse, regardless of age, has
in his or her care at the date of death of  the  commissioner
any unmarried child or children of the commissioner under age
18,  the  minimum  annuity shall be 30% of the commissioner's
salary, plus 10% of salary on account of each minor child  of
the  commissioner,  subject  to  a  combined total payment on
account of a spouse and minor children not to exceed  50%  of
the  deceased commissioner's salary. In the event there shall
be no spouse of  the  commissioner  surviving,  or  should  a
spouse  die  while  eligible minor children still survive the
commissioner, each such child shall be entitled to an annuity
equal to 20% of salary  of  the  commissioner  subject  to  a
combined total payment on account of all such children not to
exceed  50%  of  salary of the commissioner. The salary to be
used in the calculation of these benefits shall be  the  same
as  that  prescribed  for determining a retirement annuity as
provided in subsection (b) of this Section.
    Upon  the  death  of  a  commissioner   occurring   after
termination  of a service or while in receipt of a retirement
annuity, the combined total payment to  a  spouse  and  minor
children,  or  to  minor children alone if no eligible spouse
survives, shall be limited to 75% of the amount of retirement
annuity earned by the commissioner.
    Adopted children shall have status as natural children of
the commissioner only if the proceedings  for  adoption  were
commenced  at  least  one  year  prior  to  the  date  of the
commissioner's death.
    Marriage of a child or attainment of  age  18,  whichever
first  occurs,  shall render the child ineligible for further
consideration in the payment of annuity to a spouse or in the
increase  in  the  amount   thereof.   Upon   attainment   of
ineligibility   of   the   youngest   minor   child   of  the
commissioner, the annuity shall  immediately  revert  to  the
amount  payable upon death of a commissioner leaving no minor
children surviving. If the spouse is under  age  50  at  such
time, the annuity as revised shall be deferred until such age
is attained.
    (e)  Refunds.     Refunds    of    additional    optional
contributions  shall  be made on the same basis and under the
same conditions as provided under  Section  13-601.  Interest
shall  be  credited  on  the  same  basis  and under the same
conditions as for other contributions.
    Optional  contributions  shall  be  accounted  for  in  a
separate   Commission's   Optional   Contribution    Reserve.
Optional  contributions  under this Section shall be included
in the amount of employee contributions used to  compute  the
tax levy under Section 13-503.
    (f)  Effective  date.  The effective date of this plan of
optional alternative benefits and contributions shall be  the
date  upon which approval was received from the U.S. Internal
Revenue Service.  The plan of optional  alternative  benefits
and  contributions  shall  not  be  available  to  any former
employee receiving an annuity from the Fund on the  effective
date,  unless  said  former  employee  re-enters  service and
renders at least 3 years of additional service after the date
of re-entry as a commissioner.
(Source: P.A. 90-12, eff. 6-13-97.)

    (40 ILCS 5/13-603) (from Ch. 108 1/2, par. 13-603)
    Sec. 13-603.  Restoration of rights.  If an employee  who
has  received a refund subsequently re-enters the service and
renders one year of contributing service  from  the  date  of
such  re-entry,  the  employee  shall  be  entitled  to  have
restored  all  accumulation  and  service  credits previously
forfeited by making a  repayment  of  the  refund,  including
interest  of  8% per annum from the date of the refund to the
date of repayment at a rate equal to the  higher  of  8%  per
annum  or  the actuarial investment return assumption used in
the Fund's most recent Annual Actuarial Statement.  Repayment
may be made either directly  to  the  Fund  or  in  a  manner
similar to that provided for the contributions required under
Section  13-502.   The  repayment must be made in a lump sum.
The service credits represented thereby, or any part thereof,
shall not become effective unless the  full  amount  due  has
been  paid  by  the  employee,  including  interest.   If the
employee fails to make a full repayment, any partial  amounts
paid  by  the  employee shall be refunded without interest if
the employee dies in service or withdraws.
(Source: P.A. 87-794.)

    (40 ILCS 5/14-118) (from Ch. 108 1/2, par. 14-118)
    Sec. 14-118.  Widow's annuity - Conditions  for  payment.
A  widow  who  exercises  the right of election to receive an
annuity pursuant to this Section is entitled to  a  lump  sum
payment of $500 plus a widow's annuity, if:
         (1)  she was married to the deceased member:
              (i)  in  the  case  of a member who dies before
         the effective date of this  amendatory  Act  of  the
         91st General Assembly, for at least one 1 year prior
         to  his death or retirement, whichever first occurs,
         and also on the day of the last termination  of  his
         service as a State employee; or
              (ii)  in  the  case  of a member who dies on or
         after the effective date of this amendatory  Act  of
         the  91st  General  Assembly,  for at least one year
         immediately prior to the date of  death,  regardless
         of the date of withdrawal;
         (2)  the  deceased  member  had  at least 8 years of
    creditable service if death occurred while in service, or
    while on leave of  absence  from  service,  or  while  in
    receipt  of  a nonoccupational disability or occupational
    disability benefit, or after retirement;
         (3)  she was nominated exclusively  to  receive  the
    entire death benefit payable under this Article;
         (4)  death  of the member occurred after withdrawal,
    and he had  fulfilled  the  prescribed  age  and  service
    conditions  for  establishing  a  right  in  a retirement
    annuity; and
         (5)  she elected  to  receive  the  widow's  annuity
    within  6  months from the date of death of the employee,
    otherwise the survivors annuity if applicable,  shall  be
    payable.
      If  a widow's annuity beneficiary becomes entitled to a
survivors annuity and a widow's annuity, she shall  elect  to
receive only one of such annuities.
    The surviving spouse of a person who (1) died on or after
January 1, 1985, (2) withdrew from service prior to August 1,
1953,  (3)  was  receiving  an annuity from the system at the
time of death, and (4) meets all other requirements  of  this
Section,  shall  be  entitled  to the benefits provided under
this Section.
    A widow's annuity shall be payable beginning on the first
of the month following the date of death of the member if the
widow has then attained age 50 or, if she is under age 50  on
such date, on the first of the month following her attainment
of such age; provided, that if an unmarried child or children
of  the  member  under age 18 (or under age 22 if a full-time
student) also survive him, and  the  child  or  children  are
under  the  care  of  the eligible widow, the widow's annuity
shall begin on the first of the month following the  member's
death  without  regard  to  the  age of the widow.  If she is
under age 50 at the death of the member and she qualifies for
a widow's annuity, she is entitled to receive  the  lump  sum
payment  immediately  upon  application,  but  payment of the
widow's annuity shall be deferred as provided above.
    The  provision  for  a  widow's  annuity  shall  not   be
construed  to  affect  the payment of a reversionary annuity.
If a widow qualifies for more than one  widow's  annuity,  or
for  a  widow's  annuity  and  a survivors annuity, she shall
elect to receive only one of such annuities.
    This Section shall not apply to the  widow  of  any  male
person who first became a member after July 19, 1961.
(Source: P.A. 90-448, eff. 8-16-97.)

    (40 ILCS 5/14-120) (from Ch. 108 1/2, par. 14-120)
    Sec.   14-120.   Survivors  annuities  -  Conditions  for
payments.  A survivors annuity is established for all members
of the System.  Upon the death of any male person who  was  a
member  on  July  19,  1961,  however, his widow may have the
option of receiving the  widow's  annuity  provided  in  this
Article, in lieu of the survivors annuity.
    (a)  A  survivors annuity beneficiary, as herein defined,
is eligible for a survivors annuity if  the  deceased  member
had completed at least 1 1/2 years of contributing creditable
service if death occurred:
         (1)  while in service;
         (2)  while  on  an  approved  or authorized leave of
    absence   from   service,   not   exceeding   one    year
    continuously; or
         (3)  while   in   receipt   of   a  non-occupational
    disability or an occupational disability benefit.
    (b)  If death of the member occurs after withdrawal,  the
survivors  annuity  beneficiary  is eligible for such annuity
only if the member had fulfilled at the  date  of  withdrawal
the prescribed service conditions for establishing a right in
a retirement annuity.
    (c)  Payment   of   the  survivors  annuity  shall  begin
immediately if the beneficiary is 50 years or over,  or  upon
attainment  of age 50 if the beneficiary is under that age at
the date of the member's death. In the case of survivors of a
member whose death occurred between November 1, 1970 and July
15, 1971, the payment of the survivors  annuity  shall  begin
upon  October 1, 1977, if the beneficiary is then 50 years of
age or older, or  upon  the  attainment  of  age  50  if  the
beneficiary is under that age on October 1, 1977.
    If  an  eligible child or children, under the care of the
spouse also survive the member, the survivors  annuity  shall
begin  immediately  without regard to whether the beneficiary
has attained age 50.
    Benefits under this Section shall accrue and  be  payable
for  whole calendar months, beginning on the first day of the
month after the initiating event occurs  and  ending  on  the
last day of the month in which the terminating event occurs.
    (d)  A survivor annuity beneficiary means:
         (1)  A spouse of a member or annuitant if:
              (i)  in  the  case of a member or annuitant who
         dies before the effective date  of  this  amendatory
         Act  of  the  91st  General  Assembly,  the  current
         marriage  with the member or annuitant was in effect
         for at least one year at the date of the  member  or
         annuitant's  death  or  withdrawal,  whichever first
         occurs; or
              (ii)  in the case of a member or annuitant  who
         dies   on  or  after  the  effective  date  of  this
         amendatory Act of the  91st  General  Assembly,  the
         current marriage with the member or annuitant was in
         effect  for  at  least one year immediately prior to
         the  date  of  death,  regardless  of  the  date  of
         withdrawal.
         (2)  An unmarried child under age 18 (under  age  22
    if  a  full-time  student) of the member or annuitant; an
    unmarried stepchild under age  18  (under  age  22  if  a
    full-time  student)  who  has  been such for at least one
    year at the date of the member's death or  at  least  one
    year  at  the date of withdrawal, whichever first occurs;
    an unmarried adopted child under age 18 (under age 22  if
    a  full-time  student)  if  the adoption proceedings were
    initiated at  least  one  year  prior  to  the  death  or
    withdrawal  of  the  member or annuitant, whichever first
    occurs; and an unmarried child over age 18 if he  or  she
    is   dependent   by   reason  of  a  physical  or  mental
    disability, so long as the physical or mental  disability
    continues.   For  purposes of this subsection, disability
    means inability to  engage  in  any  substantial  gainful
    activity by reason of any medically determinable physical
    or  mental  impairment which can be expected to result in
    death or which has lasted or can be expected to last  for
    a continuous period of not less than 12 months.
         (3)  A  dependent parent of the member or annuitant;
    a dependent step-parent by a marriage  contracted  before
    the  member  or annuitant attained age 18; or a dependent
    adopting parent by  whom  the  member  or  annuitant  was
    adopted before he or she attained age 18.
    (e)  Payment  of  a  survivors  annuity  to a beneficiary
terminates upon: (1) remarriage before  age  55  that  occurs
before  the effective date of this amendatory Act of the 91st
General Assembly or death, if the beneficiary  is  a  spouse;
(2)  marriage or death, if the beneficiary is a child; or (3)
remarriage before age 55 or death, if the  beneficiary  is  a
parent.  Remarriage of a prospective beneficiary prior to the
attainment  of  age  50  disqualifies the beneficiary for the
annuity expectancy hereunder, if the remarriage occurs before
the effective date of this amendatory Act of the 91st General
Assembly.  Termination due to a marriage or remarriage  shall
be  permanent,  regardless  of  any future changes in marital
status.
    The substantive changes made to this subsection  by  this
amendatory  Act  of  the 91st General Assembly (pertaining to
remarriage prior to age 55 or 50)  apply  without  regard  to
whether  the deceased participant or annuitant was in service
on or after the effective date of this amendatory Act.
    Any person whose survivors annuity was terminated  during
1978  or  1979  due  to remarriage at age 55 or over shall be
eligible to apply,  not  later  than  July  1,  1990,  for  a
resumption of that annuity, to begin on July 1, 1990.
    (f)  The term "dependent" relating to a survivors annuity
means  a beneficiary of a survivors annuity who was receiving
from the member at the date of the member's  death  at  least
1/2  of the support for maintenance including board, lodging,
medical care and like living costs.
    (g)  If there is no eligible spouse surviving the member,
or if a survivors annuity beneficiary includes a  spouse  who
dies  or is disqualified by remarriage remarries, the annuity
is payable to an unmarried child or children.  If at the date
of death of the member there is no spouse or unmarried child,
payments shall be made to a dependent parent or parents.   If
no   eligible  survivors  annuity  beneficiary  survives  the
member, the non-occupational death benefit is payable in  the
manner provided in this Article.
    (h)  Survivor  benefits  do  not  affect any reversionary
annuity.
    (i)  If a survivors annuity beneficiary becomes  entitled
to  a  widow's  annuity or one or more survivors annuities or
both such annuities, the beneficiary shall elect  to  receive
only one of such annuities.
    (j)  Contributing  creditable  service  under  the  State
Universities  Retirement  System and the Teachers' Retirement
System of the  State  of  Illinois  shall  be  considered  in
determining  whether  the  member  has  met  the contributing
service requirements of this Section.
    (k)  In lieu of the Survivor's Annuity described in  this
Section,  the  spouse  of the member has the option to select
the Nonoccupational Death Benefit described in this  Article,
provided  the  spouse  is  the  sole  survivor  and  the sole
nominated beneficiary of the member.
    (l)  The  changes  made  to  this  Section  and  Sections
14-118, 14-119, and 14-128 by this amendatory  Act  of  1997,
relating  to  benefits for certain unmarried children who are
full-time students under age  22,  apply  without  regard  to
whether  the  deceased  member was in service on or after the
effective date of this amendatory Act of 1997.  These changes
do not authorize the repayment of a refund or  a  re-election
of   benefits,  and  any  benefit  or  increase  in  benefits
resulting from these changes is not payable retroactively for
any period before the effective date of this  amendatory  Act
of 1997.
(Source: P.A. 90-448, eff. 8-16-97; 91-357, eff. 7-29-99.)

    (40 ILCS 5/14-128) (from Ch. 108 1/2, par. 14-128)
    Sec.    14-128.    Occupational   death   benefit.     An
occupational death benefit is provided for a  member  of  the
System  whose  death,  prior  to retirement, is the proximate
result of bodily injuries sustained  or  a  hazard  undergone
while in the performance and within the scope of the member's
duties.
    (a)  Conditions for payment.
    Exclusive  of  the  lump sum payment provided for herein,
all annuities under this Section shall accrue and be  payable
for  complete  calendar months, beginning on the first day of
the month next following the month in  which  the  initiating
event occurs and ending on the last day of the month in which
the terminating event occurs.
    The  following  named  survivors  of  the  member  may be
eligible for an annuity under this Section:
         (i)  The member's spouse.
         (ii)  An unmarried child of the member under age  18
    (under  age  22  if  a  full-time  student); an unmarried
    stepchild under age 18  (under  age  22  if  a  full-time
    student)  who  has been such for at least one year at the
    date of the member's death; an  unmarried  adopted  child
    under age 18 (under age 22 if a full-time student) if the
    adoption  proceedings  were  initiated  at least one year
    prior to the death of the member; and an unmarried  child
    over  age  18 who is dependent by reason of a physical or
    mental disability, for so long as such physical or mental
    disability continues.  For the purposes of  this  Section
    disability  means  inability to engage in any substantial
    gainful activity by reason of any medically  determinable
    physical  or  mental  impairment which can be expected to
    result in death or which has lasted or can be expected to
    last for a continuous period of not less than 12 months.
         (iii)  If no spouse or eligible children survive:  a
    dependent  parent  of the member; a dependent step-parent
    by a marriage contracted before the member  attained  age
    18; or a dependent adopting parent by whom the member was
    adopted before he or she attained age 18.
    The  term  "dependent"  relating to an occupational death
benefit means a survivor of the member who was receiving from
the member at the date of the member's death at least 1/2  of
the support for maintenance including board, lodging, medical
care and like living costs.
    Payment   of   the   annuity  shall  continue  until  the
occurrence of the following:
         (1)  remarriage before age 55 that occurs before the
    effective date of this amendatory Act of the 91st General
    Assembly or death, in the case of a surviving spouse;
         (2)  attainment  of  age  18   or   termination   of
    disability,  death,  or  marriage,  in  the  case  of  an
    eligible child;
         (3)  remarriage  before age 55 or death, in the case
    of a dependent parent.
    If none of the aforementioned beneficiaries is living  at
the  date  of  death  of  the  member,  no occupational death
benefit shall  be  payable,  but  the  nonoccupational  death
benefit shall be payable as provided in this Article.
    The change made to this subsection by this amendatory Act
of  the 91st General Assembly (pertaining to remarriage prior
to age 55) applies without regard  to  whether  the  deceased
member  was in service on or after the effective date of this
amendatory Act.
    (b)  Amount of benefit.
    The  member's  accumulated  contributions  plus  credited
interest shall be payable in a lump sum to such person as the
member has nominated by written direction, duly  acknowledged
and  filed  with  the  Board, or if no such nomination to the
estate of the member.  When an annuitant is re-employed by  a
Department,   the  accumulated  contributions  plus  credited
interest payable on the member's account shall, if the member
has not previously elected a reversionary annuity, consist of
the  excess,  if  any,  of  the  member's  total  accumulated
contributions  plus  credited  interest  for  all  creditable
service over the  total  amount  of  all  retirement  annuity
payments received by the member prior to death.
    In  addition  to  the  foregoing  payment,  an annuity is
provided for eligible survivors as follows:
         (1)  If the survivor is a spouse only,  the  annuity
    shall be 50% of the member's final average compensation.
         (2)  If  the  spouse  has  in  his  or  her  care an
    eligible  child  or  children,  the  annuity   shall   be
    increased  by an amount equal to 15% of the final average
    compensation on account of each such child, subject to  a
    limitation  on  the  combined  annuities  to  a surviving
    spouse and children of 75% of final average compensation.
         (3)  If there is no  surviving  spouse,  or  if  the
    surviving  spouse dies or remarries while a child remains
    eligible, then each such child shall be  entitled  to  an
    annuity  of  15%  of  the deceased member's final average
    compensation, subject to a limitation  of  50%  of  final
    average compensation to all such children.
         (4)  If  there  is  no  surviving spouse or eligible
    children,  then  an  annuity  shall  be  payable  to  the
    member's dependent parents, equal to 25% of final average
    compensation to each such beneficiary.
    If any annuity payable under this Section  is  less  than
the  corresponding  survivors  annuity,  the  beneficiary  or
beneficiaries  of the annuity under this Section may elect to
receive the survivors annuity and the  nonoccupational  death
benefit  provided  for in this Article in lieu of the annuity
provided under this Section.
    (c)  Occupational death claims  pending  adjudication  by
the   Industrial   Commission  or  a  ruling  by  the  agency
responsible for determining the liability of the State  under
the  "Workers'  Compensation  Act"  or "Workers' Occupational
Diseases Act" shall be  payable  under  Sections  14-120  and
14-121 the Survivor's Annuity Section of this Article until a
ruling   or   adjudication  occurs,  if  the  beneficiary  or
beneficiaries:  (1)  meet  all  conditions  for  payment   as
prescribed  in this Article; and (2) execute an assignment of
benefits  payable  as  a  result  of  adjudication   by   the
Industrial  Commission  or a ruling by the agency responsible
for determining the liability of the State under  such  Acts.
The  assignment  shall be made to the System and shall be for
an amount equal to the excess of benefits paid under Sections
14-120 and 14-121 the  Survivor's  Annuity  Section  of  this
Article  over benefits payable as a result of adjudication of
the workers' compensation claim computed  from  the  date  of
death of the member.
    (d)  Every  occupational death annuity payable under this
Section shall be increased on each January 1 occurring on  or
after  (i)  January 1, 1990, or (ii) the first anniversary of
the commencement of the annuity, whichever occurs  later,  by
an  amount  equal to 3% of the current amount of the annuity,
including any previous increases under this Article,  without
regard  to  whether the deceased member was in service on the
effective date of this amendatory Act of 1991.
(Source: P.A. 90-448, eff. 8-16-97.)

    (40 ILCS 5/14-130) (from Ch. 108 1/2, par. 14-130)
    Sec. 14-130.  Refunds; rules.
    (a)  Upon withdrawal a member  is  entitled  to  receive,
upon written request, a refund of the member's contributions,
including  credits  granted  while  in  receipt of disability
benefits, without  credited  interest.   The  board,  in  its
discretion  may  withhold payment of the refund of a member's
contributions for a period not to exceed  1  year  after  the
member has ceased to be an employee.
    For purposes of this Section, a member will be considered
to  have  withdrawn  from service if a change in, or transfer
of, his position  results  in  his  becoming  ineligible  for
continued   membership   in  this  System  and  eligible  for
membership in another public  retirement  system  under  this
Act.
    (b)  A   member   receiving   a   refund   forfeits   and
relinquishes  all accrued rights in the System, including all
accumulated creditable service.  If the person again  becomes
a  member  of  the System and establishes at least 2 years of
creditable  service,  the  member  may   repay   the   moneys
previously  refunded.   However,  a former member may restore
credits  previously  forfeited  by  acceptance  of  a  refund
without returning to  service  by  applying  in  writing  and
repaying  to  the System, by April 1, 1993, the amount of the
refund plus regular interest  calculated  from  the  date  of
refund to the date of repayment.
    The  repayment of refunds issued prior to January 1, 1984
shall consist of the amount refunded  plus  5%  interest  per
annum compounded annually for the period from the date of the
refund  to  the  end of the month in which repayment is made.
The repayment of refunds issued after January 1,  1984  shall
consist  of the amount refunded plus regular interest for the
period from the date of refund to the end  of  the  month  in
which  repayment  is  made.  However, in the case of a refund
that is repaid in a lump sum between January 1, 1991 and July
1, 1991, repayment shall consist of the amount refunded  plus
interest  at  the  rate of 2.5% per annum compounded annually
from the date of the refund to the end of the month in  which
repayment is made.
    Upon  repayment,  the member shall receive credit for the
service, member contributions and regular interest  that  was
forfeited  by  acceptance  of  the  refund as well as regular
interest for the period of  non-membership.   Such  repayment
shall  be made in full before retirement either in a lump sum
or in installment payments in accordance with such  rules  as
may be adopted by the board.
    (b-5)  The  Board may adopt rules governing the repayment
of refunds and establishment of credits  in  cases  involving
awards of back pay or reinstatement.  The rules may authorize
repayment  of  a refund in installment payments and may waive
the payment of interest on  refund  amounts  repaid  in  full
within a specified period.
    (c)  A  member  no longer in service who is unmarried and
on the date of retirement or who does not  have  an  eligible
survivors   annuity  beneficiary  on  the  at  that  date  of
application therefor is entitled to a refund of contributions
for widow's annuity or survivors annuity purposes,  or  both,
as  the  case may be, without interest.  A widow's annuity or
survivors annuity shall not be payable upon the  death  of  a
person  who  has  received  this refund, unless prior to that
death the amount of the refund has been repaid to the System,
together with regular interest from the date of the refund to
the date of repayment.
    (d)  Any member who has service credit  in  any  position
for  which  an alternative retirement annuity is provided and
in relation to which an increase  in  the  rate  of  employee
contribution  is  required,  shall  be  entitled to a refund,
without interest, of  that  part  of  the  member's  employee
contribution which results from that increase in the employee
rate  if  the  member  does  not qualify for that alternative
retirement annuity at the time of retirement.
(Source: P.A. 90-448, eff. 8-16-97.)

    (40 ILCS 5/15-107) (from Ch. 108 1/2, par. 15-107)
    Sec. 15-107.  Employee.
    (a)  "Employee" means  any  member  of  the  educational,
administrative,  secretarial,  clerical, mechanical, labor or
other staff of an employer whose employment is permanent  and
continuous or who is employed in a position in which services
are  expected  to  be  rendered  on a continuous basis for at
least 4 months or one academic term, whichever is  less,  who
(A)  receives  payment  for  personal  services  on a warrant
issued pursuant to a payroll voucher certified by an employer
and drawn by the State Comptroller upon the  State  Treasurer
or  by an employer upon trust, federal or other funds, or (B)
is on a leave of absence without pay.   Employment  which  is
irregular,  intermittent or temporary shall not be considered
continuous for purposes of this paragraph.
    However, a person is not an "employee" if he or she:
         (1)  is  a  student  enrolled   in   and   regularly
    attending  classes in a college or university which is an
    employer, and is employed on a temporary  basis  at  less
    than full time;
         (2)  is  currently receiving a retirement annuity or
    a disability retirement annuity  under  Section  15-153.2
    from this System;
         (3)  is on a military leave of absence;
         (4)  is eligible to participate in the Federal Civil
    Service   Retirement   System  and  is  currently  making
    contributions to that system based upon earnings paid  by
    an employer;
         (5)  is  on  leave  of  absence without pay for more
    than  60  days  immediately  following   termination   of
    disability benefits under this Article;
         (6)  is  hired  after  June  30,  1979  as  a public
    service employment program participant under the  Federal
    Comprehensive  Employment  and  Training Act and receives
    earnings in whole or in part from  funds  provided  under
    that Act;
         (7)  is employed on or after July 1, 1991 to perform
    services  that  are  excluded by subdivision (a)(7)(f) or
    (a)(19) of Section 210 of the federal Social Security Act
    from the definition of employment given in  that  Section
    (42 U.S.C. 410); or
         (8)  participates   in   an   optional  program  for
    part-time workers under Section 15-158.1.
    (b)  Any employer may, by filing a  written  notice  with
the  board,  exclude  from  the  definition of "employee" all
persons employed pursuant  to  a  federally  funded  contract
entered  into  after  July  1,  1982  with a federal military
department  in  a  program  providing  training  in  military
courses to federal military  personnel  on  a  military  site
owned  by  the United States Government, if this exclusion is
not prohibited by the federally funded  contract  or  federal
laws or rules governing the administration of the contract.
    (c)  Any person appointed by the Governor under the Civil
Administrative Code of the State is an employee, if he or she
is  a participant in this system on the effective date of the
appointment.
    (d)  A participant on lay-off status under civil  service
rules  is  considered  an employee for not more than 120 days
from the date of the lay-off.
    (e)  A participant is considered an employee  during  (1)
the first 60 days of disability leave, (2) the period, not to
exceed  one  year,  in  which  his  or  her  eligibility  for
disability  benefits  is  being  considered  by  the board or
reviewed by the courts, and (3) the period he or she receives
disability benefits under the provisions of  Section  15-152,
workers'  compensation  or  occupational disease benefits, or
disability income under an insurance contract financed wholly
or partially by the employer.
    (f)  Absences without pay, other than  formal  leaves  of
absence, of less than 30 calendar days, are not considered as
an interruption of a person's status as an employee.  If such
absences  during any period of 12 months exceed 30 work days,
the  employee  status  of  the  person   is   considered   as
interrupted as of the 31st work day.
    (g)  A  staff  member  whose employment contract requires
services during an academic  term  is  to  be  considered  an
employee during the summer and other vacation periods, unless
he  or she declines an employment contract for the succeeding
academic term or his or her employment  status  is  otherwise
terminated,  and  he or she receives no earnings during these
periods.
    (h)  An  individual  who  was  a  participating  employee
employed  in  the  fire  department  of  the  University   of
Illinois's  Champaign-Urbana  campus immediately prior to the
elimination of that fire department and who immediately after
the elimination of that fire department  became  employed  by
the  fire  department  of  the  City of Urbana or the City of
Champaign shall continue to be considered as an employee  for
purposes  of  this  Article  for  so  long  as the individual
remains employed as a firefighter by the City  of  Urbana  or
the  City  of  Champaign.   The  individual shall cease to be
considered an employee under this  subsection  (h)  upon  the
first   termination  of  the  individual's  employment  as  a
firefighter by the City of Urbana or the City of Champaign.
    (i)  An individual who is employed on a  full-time  basis
as an officer or employee of a statewide teacher organization
that  serves  System participants or an officer of a national
teacher organization  that  serves  System  participants  may
participate  in  the  System and shall be deemed an employee,
provided  that  (1)  the  individual  has  previously  earned
creditable service under this  Article,  (2)  the  individual
files  with  the  System  an irrevocable election to become a
participant, and (3) the individual does not  receive  credit
for that employment under any other Article of this Code.  An
employee  under this subsection (i) is responsible for paying
to the System both (A) employee contributions  based  on  the
actual  compensation  received  for  service with the teacher
organization and (B)  employer  contributions  equal  to  the
normal  costs  (as  defined in Section 15-155) resulting from
that service; all or any part of these contributions  may  be
paid  on  the employee's behalf or picked up for tax purposes
(if  authorized   under   federal   law)   by   the   teacher
organization.
    A person who is an employee as defined in this subsection
(i) may establish service credit for similar employment prior
to  becoming  an  employee under this subsection by paying to
the System for that employment the contributions specified in
this subsection, plus interest at the effective rate from the
date of service to the  date  of  payment.   However,  credit
shall not be granted under this subsection for any such prior
employment  for which the applicant received credit under any
other provision of this Code, or during which  the  applicant
was on a leave of absence under Section 15-113.2.
(Source:  P.A.  89-430,  eff. 12-15-95; 90-448, eff. 8-16-97;
90-576, eff. 3-31-98; 90-766, eff. 8-14-98.)

    (40 ILCS 5/15-111) (from Ch. 108 1/2, par. 15-111)
    Sec. 15-111.  Earnings.  "Earnings": An amount  paid  for
personal  services equal to the sum of the basic compensation
plus extra compensation  for  summer  teaching,  overtime  or
other  extra  service.   For  periods  for  which an employee
receives service  credit  under  subsection  (c)  of  Section
15-113.1 or Section 15-113.2, earnings are equal to the basic
compensation  on which contributions are paid by the employee
during such periods.  Compensation for  employment  which  is
irregular, intermittent and temporary shall not be considered
earnings,  unless  the participant is also receiving earnings
from the employer as an employee under Section 15-107.
    With respect to transition pay paid by the University  of
Illinois  to  a  person  who  was  a  participating  employee
employed   in  the  fire  department  of  the  University  of
Illinois's Champaign-Urbana campus immediately prior  to  the
elimination of that fire department:
         (1)  "Earnings"  includes transition pay paid to the
    employee  on  or  after  the  effective  date   of   this
    amendatory Act of the 91st General Assembly.
         (2)  "Earnings"  includes transition pay paid to the
    employee before the effective date of this amendatory Act
    of  the  91st  General  Assembly  only  if  (i)  employee
    contributions under Section  15-157  have  been  withheld
    from that transition pay or (ii) the employee pays to the
    System  before  January  1,  2001  an amount representing
    employee  contributions  under  Section  15-157  on  that
    transition pay.  Employee contributions under  item  (ii)
    may be paid in a lump sum, by withholding from additional
    transition pay accruing before January 1, 2001, or in any
    other manner approved by the System.  Upon payment of the
    employee    contributions    on   transition   pay,   the
    corresponding employer contributions become an obligation
    of the State.
(Source: P.A. 87-8.)

    (40 ILCS 5/15-112) (from Ch. 108 1/2, par. 15-112)
    Sec. 15-112.  Final rate of  earnings.   "Final  rate  of
earnings":  For an employee who is paid on an hourly basis or
who  receives  an  annual  salary  in  installments during 12
months of each academic year,  the  average  annual  earnings
during  the  48 consecutive calendar month period ending with
the last day of final termination  of  employment  or  the  4
consecutive academic years of service in which the employee's
earnings  were  the  highest,  whichever is greater.  For any
other employee, the average  annual  earnings  during  the  4
consecutive  academic  years  of  service in which his or her
earnings were the highest.  For an employee with less than 48
months or  4  consecutive  academic  years  of  service,  the
average earnings during his or her entire period of service.
The  earnings  of  an  employee  with  more than 36 months of
service prior to the date of becoming a participant are,  for
such  period, considered equal to the average earnings during
the last 36 months of such service.  For an employee on leave
of absence with pay, or on leave of absence without  pay  who
makes  contributions  during such leave, earnings are assumed
to be equal to the basic compensation on the date  the  leave
began.    For  an  employee on disability leave, earnings are
assumed to be equal to the basic  compensation  on  the  date
disability  occurs  or  the  average  earnings  during the 24
months immediately preceding the month  in  which  disability
occurs, whichever is greater.
    For  a  participant who retires on or after the effective
date of this amendatory Act of 1997 with at least 20 years of
service  as  a  firefighter  or  police  officer  under  this
Article, the final rate of earnings shall be the annual  rate
of  earnings  received  by the participant on his or her last
day as a firefighter or police officer under this Article, if
that is greater than the final rate of earnings as calculated
under the other provisions of this Section.
    If a participant is an employee for  at  least  6  months
during  the  academic  year in which his or her employment is
terminated, the annual final rate of earnings shall be 25% of
the sum of (1) the annual basic compensation for  that  year,
and  (2)  the  amount earned during the 36 months immediately
preceding that year, if this is greater than the  final  rate
of  earnings as calculated under the other provisions of this
Section.
    In the determination of the final rate of earnings for an
employee,  that  part  of  an  employee's  earnings  for  any
academic year beginning after June 30,  1997,  which  exceeds
the  employee's earnings with that employer for the preceding
year by more than 20 percent shall be excluded; in the  event
that  an  employee has more than one employer this limitation
shall be calculated separately for  the  earnings  with  each
employer.    In  making  such  calculation,  only  the  basic
compensation of employees shall be considered, without regard
to  vacation  or  overtime  or  to   contracts   for   summer
employment.
    The   following   are   not  considered  as  earnings  in
determining final rate of earnings: severance  or  separation
pay, retirement pay, payment in lieu of unused sick leave and
payments  from an employer for the period used in determining
final rate of earnings for any purpose  other  than  services
rendered,  leave  of  absence or vacation granted during that
period, and vacation of up  to  56  work  days  allowed  upon
termination  of  employment  under  a  vacation  policy of an
employer which was in effect on or before January 1, 1977.
    Intermittent periods of service shall  be  considered  as
consecutive in determining final rate of earnings.
(Source: P.A. 90-65, eff. 7-7-97; 90-511, eff. 8-22-97.)

    (40 ILCS 5/15-120) (from Ch. 108 1/2, par. 15-120)
    Sec.   15-120.   Beneficiary;  survivor  annuitant  under
portable  benefit  package.  "Beneficiary":  The  person   or
persons  designated  by  the  participant or annuitant in the
last written designation on file with the  board;  or  if  no
person  so  designated  survives,  or if no designation is on
file, the estate of the participant or annuitant.  Acceptance
by  the  participant of a refund of accumulated contributions
shall result in cancellation of all beneficiary  designations
previously filed. A spouse whose marriage was dissolved shall
be   disqualified   as  beneficiary  unless  the  spouse  was
designated as beneficiary after the  effective  date  of  the
dissolution of marriage.
    After  a  joint  and survivor annuity commences under the
portable benefit package, the survivor annuitant of  a  joint
and  survivor  annuity  is  not  disqualified, and may not be
removed, as the survivor annuitant by a  dissolution  of  the
survivor's marriage with the participant or annuitant.
(Source: P.A. 83-1440.)

    (40 ILCS 5/15-132.2 new)
    Sec.  15-132.2.  Retire  and  retirement.   A participant
"retires", and his or her "retirement" begins,  when  his  or
her annuity payment period begins.

    (40 ILCS 5/15-134.5)
    Sec. 15-134.5.  Retirement program elections.
    (a)  All  participating  employees are participants under
the traditional benefit package prior to January 1, 1998.
    Effective as of the date  that  an  employer  elects,  as
described  in Section 15-158.2, to offer to its employees the
portable  benefit  package  and  the  self-managed  plan   as
alternatives to the traditional benefit package, each of that
employer's  eligible employees (as defined in subsection (b))
shall be given the choice to elect which  retirement  program
he  or  she  wishes  to  participate  in  with respect to all
periods of covered employment  occurring  on  and  after  the
effective  date  of  the employee's election.  The retirement
program election made by an eligible employee must be made in
writing, in the manner prescribed by the System,  and  within
the time period described in subsection (d) or (d-1).
    The  employee  election  authorized  by this Section is a
one-time, irrevocable election.  If  an  employee  terminates
employment  after  making  the  election  provided under this
subsection (a), then upon his or her subsequent re-employment
with an employer the original  election  shall  automatically
apply  to  him  or  her, provided that the employer is then a
participating employer as described in Section 15-158.2.
    An eligible employee who  fails  to  make  this  election
shall,  by  default,  participate  in the traditional benefit
package.
    (b)  "Eligible employee" means an employee (as defined in
Section 15-107) who is either a currently  eligible  employee
or  a newly eligible employee.  For purposes of this Section,
a  "currently  eligible  employee"  is  an  employee  who  is
employed by an employer on the effective date  on  which  the
employer offers to its employees the portable benefit package
and  the self-managed plan as alternatives to the traditional
benefit package.  A "newly eligible employee" is an  employee
who first becomes employed by an employer after the effective
date  on which the employer offers its employees the portable
benefit package and the self-managed plan as alternatives  to
the  traditional  benefit  package. A newly eligible employee
participates in the traditional benefit package until  he  or
she  makes an election to participate in the portable benefit
package or the self-managed plan.  If an  employee  does  not
elect  to  participate in the portable benefit package or the
self-managed plan, he or she shall continue to participate in
the traditional benefit package by default.
    (c)  An eligible employee who at the time he  or  she  is
first  eligible  to make the election described in subsection
(a) does not have sufficient age and service to qualify for a
retirement  annuity  under  Section  15-135  may   elect   to
participate  in the traditional benefit package, the portable
benefit package,  or  the  self-managed  plan.   An  eligible
employee  who has sufficient age and service to qualify for a
retirement annuity under Section 15-135 at the time he or she
is  first  eligible  to  make  the  election   described   in
subsection  (a)  may  elect to participate in the traditional
benefit package or the portable benefit package, but may  not
elect to participate in the self-managed plan.
    (d)  A   currently   eligible  employee  must  make  this
election within one year after  the  effective  date  of  the
employer's adoption of the self-managed plan.
    A  newly eligible employee must make this election within
6 months after the date on  which  the  System  receives  the
report  of  status  certification  from  the employer 60 days
after becoming an eligible employee. If an employee elects to
participate   in   the   self-managed   plan,   no   employer
contributions shall be remitted to the self-managed plan when
the employee's account balance transfer  is  made.   Employer
contributions  to  the self-managed plan shall commence as of
the first pay period that begins after  the  System  receives
the employee's election.
    (d-1)  A  newly  eligible  employee  who,  prior  to  the
effective  date  of  this  amendatory Act of the 91st General
Assembly, fails  to  make  the  election  within  the  period
provided  under subsection (d) and participates by default in
the traditional benefit package may make a late  election  to
participate   in   the   portable   benefit  package  or  the
self-managed plan instead of the traditional benefit  package
at  any time within 6 months after the effective date of this
amendatory Act of the 91st  General  Assembly.  The  employer
shall  not  remit  contributions to the System on behalf of a
newly eligible employee until the earlier of  the  expiration
of the employee's 60-day election period or the date on which
the  employee  submits  a  properly completed election to the
employer or to the System.
    (e)  If a  currently  an  eligible  employee  elects  the
portable  benefit  package,  that  election  shall not become
effective until the one-year anniversary of the date on which
the election is filed with the System, provided the  employee
remains  continuously employed by the employer throughout the
one-year waiting period, and any benefits payable  to  or  on
account  of  the employee before such one-year waiting period
has ended  shall  not  be  determined  under  the  provisions
applicable  to the portable benefit package but shall instead
be determined in  accordance  with  the  traditional  benefit
package.  If a currently an eligible employee who has elected
the portable benefit package terminates employment covered by
the System before the one-year waiting period has ended, then
no  benefits  shall  be determined under the portable benefit
package provisions while he or she is inactive in the  System
and upon re-employment with an employer covered by the System
he  or  she  shall begin a new one-year waiting period before
the  provisions  of  the  portable  benefit  package   become
effective.
    (f)  An  eligible employee shall be provided with written
information  prepared  or  prescribed  by  the  System  which
describes the employee's  retirement  program  choices.   The
eligible  employee shall be offered an opportunity to receive
counseling from  the  System  prior  to  making  his  or  her
election.    This   counseling   may  consist  of  videotaped
materials, group presentations, individual consultation  with
an  employee  or  authorized  representative of the System in
person or by telephone or  other  electronic  means,  or  any
combination of these methods.
(Source: P.A. 90-766, eff. 8-14-98.)

    (40 ILCS 5/15-136.4)
    Sec.  15-136.4.  Retirement  and  Survivor Benefits Under
Portable Benefit Package.
    (a)  This Section 15-136.4 describes the form of  annuity
and  survivor  benefits  available  to  a participant who has
elected the portable benefit package and  has  completed  the
one-year  waiting  period  required  under  subsection (e) of
Section 15-134.5.  For purposes of  this  Section,  the  term
"eligible  spouse" means the husband or wife of a participant
to  whom  the  participant  is  married  on  the   date   the
participant's  retirement  annuity  begins, provided however,
that if the participant should die prior to the  commencement
of  retirement annuity benefits, then "eligible spouse" means
the husband or wife, if any,  to  whom  the  participant  was
married  throughout the one-year period preceding the date of
his or her death.
    (b)  This subsection (b) describes  the  normal  form  of
annuity  payable  to  a  participant  subject to this Section
15-136.4.  If the participant is unmarried on the date his or
her annuity payments  commence,  then  the  annuity  payments
shall  be  made  in  the  form  of  a  single-life annuity as
described in Section 15-118.  If the participant  is  married
on  the  date  his or her annuity payments commence, then the
annuity payments shall be paid in the  form  of  a  qualified
joint  and  survivor annuity that is the actuarial equivalent
of the single-life annuity.  Under the "qualified  joint  and
survivor  annuity",  a  reduced  amount  shall be paid to the
participant for his or her lifetime and his or  her  eligible
spouse,  if  surviving  at  the participant's death, shall be
entitled  to  receive  thereafter  a  lifetime   survivorship
annuity  in  a  monthly  amount  equal  to 50% of the reduced
monthly amount that was payable to the participant.  The last
payment of a qualified joint and survivor  annuity  shall  be
made  as  of the first day of the month in which the death of
the survivor occurs.
    (c)  Instead of the normal form of annuity that would  be
paid under subsection (b), a participant may elect in writing
within the 90-day period prior to the date his or her annuity
payments commence to waive the normal form of annuity payment
and  receive  an  optional  form  of  annuity as described in
subsection (h).  If the participant is married and elects  an
optional  form  of  annuity under subsection (h) other than a
joint  and  survivor  annuity  with   the   eligible   spouse
designated  as  the  contingent annuitant, then such election
shall require the consent of his or her  eligible  spouse  in
the  manner  described in subsection (d).  At any time during
the  90-day  period  preceding  the  date  the  participant's
annuity commences, the participant may  revoke  the  optional
form elected under this subsection (c) and reinstate coverage
under  the  qualified  joint and survivor annuity without the
spouse's consent, but an election to revoke the optional form
elected  and  elect  a  new  optional  form  or  designate  a
different contingent annuitant shall not be effective without
the eligible spouse's consent.
    (d)   The eligible spouse's consent to any election  made
pursuant  to this Section that requires the eligible spouse's
consent shall be in writing and shall acknowledge the  effect
of the consent.  In addition, the eligible spouse's signature
on  the written consent must be witnessed by a notary public.
The eligible spouse's consent need not  be  obtained  if  the
system  is  satisfied  that there is no eligible spouse, that
the eligible spouse cannot be  located,  or  because  of  any
other  relevant  circumstances.  An eligible spouse's consent
under  this  Section  is  valid  only  with  respect  to  the
specified  optional  form  of  payment  and,  if  applicable,
contingent annuitant designated by the participant.   If  the
optional  form  of  payment  or  the  contingent annuitant is
subsequently changed (other  than  by  a  revocation  of  the
optional  form  and  reinstatement of the qualified joint and
survivor annuity), a new consent by the  eligible  spouse  is
required.   The eligible spouse's consent to an election made
by a participant pursuant to this Section, once made, may not
be revoked by the eligible spouse.
    (e)   Within a reasonable period of  time  preceding  the
date  a  participant's annuity commences, a participant shall
be supplied with a written explanation of (1) the  terms  and
conditions   of  the  normal  form  single-life  annuity  and
qualified joint and survivor annuity, (2)  the  participant's
right  to  elect a single-life annuity or an optional form of
payment under subsection (h) subject to his or  her  eligible
spouse's  consent,  if  applicable, and (3) the participant's
right to reinstate coverage under  the  qualified  joint  and
survivor  annuity  prior  to  his or her annuity commencement
date by revoking an election of an optional form  of  benefit
under subsection (h).
    (f)  If  a  married participant with at least 1.5 years 5
years of service dies prior to commencing retirement  annuity
payments  and  prior to taking a refund under Section 15-154,
his  or  her  eligible  spouse  is  entitled  to  receive   a
pre-retirement  survivor  annuity,  if  there  is not then in
effect a waiver of the pre-retirement survivor annuity.   The
pre-retirement survivor annuity payable under this subsection
shall  be a monthly annuity payable for the eligible spouse's
life, commencing as  of  the  beginning  of  the  month  next
following the later of the date of the participant's death or
the date the participant would have first met the eligibility
requirements  for  retirement,  and  continuing  through  the
beginning  of  the  month  in which the death of the eligible
spouse occurs.  The monthly  amount  payable  to  the  spouse
under  the  pre-retirement survivor annuity shall be equal to
the monthly amount  that  would  be  payable  as  a  survivor
annuity  under  the  qualified  joint  and  survivor  annuity
described  in  subsection  (b)  if:  (1)  in  the  case  of a
participant who dies on  or  after  the  date  on  which  the
participant   has   met   the  eligibility  requirements  for
retirement, the participant had  retired  with  an  immediate
qualified  joint  and  survivor annuity on the day before the
participant's date  of  death;  or  (2)  in  the  case  of  a
participant  who  dies  before the earliest date on which the
participant would have met the eligibility  requirements  for
retirement age, the participant had separated from service on
the  date  of  death, survived to the earliest retirement age
based on service prior to his or her death, retired  with  an
immediate   qualified  joint  and  survivor  annuity  at  the
earliest retirement age, and died on the day after the day on
which  the  participant  would  have  attained  the  earliest
retirement age.
    (g)  A married participant who has not retired may  elect
at  any  time  to  waive  the pre-retirement survivor annuity
described in subsection (f).  Any such election shall require
the consent of  the  participant's  eligible  spouse  in  the
manner   described  in  subsection  (e).   A  waiver  of  the
pre-retirement survivor annuity shall increase the  lump  sum
death benefit payable under subsection (b) of Section 15-141.
Prior  to  electing any waiver of the pre-retirement survivor
annuity, the participant shall be  provided  with  a  written
explanation   of   (1)   the  terms  and  conditions  of  the
pre-retirement  survivor  annuity  and  the  death   benefits
payable   from   the   system   both  with  and  without  the
pre-retirement survivor annuity, (2) the participant's  right
to  elect  a  waiver  of  the pre-retirement survivor annuity
coverage subject to his or her spouse's consent, and (3)  the
participant's  right  to  reinstate  pre-retirement  survivor
annuity  coverage  at  any time by revoking a prior waiver of
such coverage.
    (h)  By filing a  timely  election  with  the  system,  a
participant  who  will  be  eligible  to receive a retirement
annuity under this Section  may  waive  the  normal  form  of
annuity  payment  described  in  subsection  (b),  subject to
obtaining the consent of  his  or  her  eligible  spouse,  if
applicable,  and  elect  to  receive any one of the following
optional annuity forms:
         (1)  Joint  and  Survivor  Annuity   Options:    The
    participant  may  elect  to  receive  a  reduced  annuity
    payable  for  his  or  her  life  and  to have a lifetime
    survivorship annuity in a monthly amount  equal  to  50%,
    75%,  or  100%  (as  elected  by the participant) of that
    reduced  monthly   amount,   to   be   paid   after   the
    participant's  death  to his or her contingent annuitant,
    if the contingent annuitant is alive at the time  of  the
    participant's death.
         (2)  Single-Life   Annuity   Option   (optional  for
    married participants).   The  participant  may  elect  to
    receive a single-life annuity payable for his or her life
    only.
         (3)  Lump  sum  retirement  benefit. The participant
    may elect to receive a lump sum retirement  benefit  that
    is  equal to the amount of a refund payable under Section
    15-154(a-2).
All optional annuity forms shall be in an amount that is  the
actuarial equivalent of the single-life annuity.
    For  the  purposes  of this Section, the term "contingent
annuitant" means the  beneficiary  who  is  designated  by  a
participant  at  the  time the participant elects a joint and
survivor annuity to receive the lifetime survivorship annuity
in the event the beneficiary survives the participant at  the
participant's death.
    (i)  Under  no  circumstances  may  an option be elected,
changed,  or  revoked  after  the  date   the   participant's
retirement annuity commences.
    (j)  An  election  made  pursuant to subsection (h) shall
become inoperative  if  the  participant  or  the  contingent
annuitant  dies  before  the  date  the participant's annuity
payments commence, or if the  eligible  spouse's  consent  is
required and not given.
    (k)  (Blank).  For purposes of applying the provisions of
Section 20-123 of this Code,  the  portable  benefit  package
shall  be  treated  as if it were provided by a participating
system that has no survivor's annuity benefit.
    (l)  The  automatic   annual   increases   described   in
subsection  (d)  of  Section 15-136 shall apply to retirement
benefits under the portable benefit package and the automatic
annual increases  described  in  subsection  (j)  of  Section
15-145  shall  apply  to survivor benefits under the portable
benefit package.
(Source: P.A. 90-448, eff. 8-16-97; 90-766, eff. 8-14-98.)

    (40 ILCS 5/15-139) (from Ch. 108 1/2, par. 15-139)
    Sec.   15-139.    Retirement   annuities;   cancellation;
suspended during employment.
    (a)  If  an  annuitant  returns  to  employment  for   an
employer within 60 days after the beginning of the retirement
annuity  payment  period,  the  retirement  annuity  shall be
cancelled, and the annuitant shall refund to the  System  the
total  amount  of the retirement annuity payments which he or
she received. If the retirement  annuity  is  cancelled,  the
participant shall continue to participate in the System.
    (b)  If an annuitant retires prior to age 60 and receives
or  becomes entitled to receive during any month compensation
in excess of the monthly retirement  annuity  (including  any
automatic  annual increases) for services performed after the
date of retirement for any employer under  this  System,  the
State  Employees'  Retirement  System  of  Illinois,  or  the
Teachers'  Retirement  System  of the State of Illinois, that
portion  of  the  monthly  retirement  annuity  provided   by
employer contributions shall not be payable.
    If an annuitant retires at age 60 or over and receives or
becomes   entitled   to  receive  during  any  academic  year
compensation in excess of the difference between his  or  her
highest  annual  earnings  prior to retirement and his or her
annual retirement annuity computed under Rule 1, Rule 2, Rule
3 or Rule 4 of Section 15-136, or under Section 15-136.4, for
services performed after  the  date  of  retirement  for  any
employer  under  this  System,  that  portion  of the monthly
retirement annuity provided by employer  contributions  shall
be  reduced  by  an  amount  equal  to  the compensation that
exceeds such difference.
    However, any  remuneration  received  for  serving  as  a
member  of  the  Illinois  Educational  Labor Relations Board
shall be excluded from "compensation"  for  the  purposes  of
this  subsection (b), and serving as a member of the Illinois
Educational Labor Relations Board shall not be deemed to be a
return to employment for the purposes of this  Section.  This
provision  applies  without  regard  to  whether  service was
terminated prior to the effective date of this amendatory Act
of 1991.
    (c)  If an employer certifies that an annuitant has  been
reemployed  on  a  permanent  and  continuous  basis  or in a
position in which the annuitant is expected to serve  for  at
least  9 months, the annuitant shall resume his or her status
as a participating employee and  shall  be  entitled  to  all
rights applicable to participating employees upon filing with
the  board  an election to forego all annuity payments during
the period of reemployment. Upon subsequent  retirement,  the
retirement  annuity  shall  consist  of the annuity which was
terminated  by  the   reemployment,   plus   the   additional
retirement  annuity  based  upon  service  granted during the
period of reemployment, but the combined  retirement  annuity
shall  not  exceed the maximum annuity applicable on the date
of the last retirement.
    The total service and earnings credited before and  after
the  initial  date  of  retirement  shall  be  considered  in
determining  eligibility  of  the  employee or the employee's
beneficiary  to  benefits  under   this   Article,   and   in
calculating final rate of earnings.
    In determining the death benefit payable to a beneficiary
of  an  annuitant  who again becomes a participating employee
under  this  Section,  accumulated  normal   and   additional
contributions   shall   be  considered  as  the  sum  of  the
accumulated normal and additional contributions at  the  date
of   initial   retirement  and  the  accumulated  normal  and
additional contributions credited after that date,  less  the
sum of the annuity payments received by the annuitant.
    The  survivors  insurance benefits provided under Section
15-145 shall not be applicable to an  annuitant  who  resumes
his  or  her  status  as a participating employee, unless the
annuitant, at the time of initial retirement, has a survivors
insurance beneficiary who could qualify for such benefits.
    If the annuitant's employment is  terminated  because  of
circumstances  other than death before 9 months from the date
of reemployment, the provisions  of  this  Section  regarding
resumption  of  status  as a participating employee shall not
apply. The normal and survivors insurance contributions which
are deducted during this period  shall  be  refunded  to  the
annuitant  without  interest,  and  subsequent benefits under
this Article shall be the same as those which were applicable
prior to the date the annuitant resumed employment.
    The amendments made to this Section  by  this  amendatory
Act  of  the  91st  General  Assembly apply without regard to
whether  the  annuitant  was  in  service  on  or  after  the
effective date of this amendatory Act.
(Source: P.A. 86-1488.)

    (40 ILCS 5/15-140) (from Ch. 108 1/2, par. 15-140)
    Sec. 15-140.  Reversionary annuities.  A  participant  in
the  traditional  benefit  package  entitled  to a retirement
annuity may, prior to retirement, elect  to  take  a  reduced
retirement  annuity  and  provide with the actuarial value of
the  reduction,  a  reversionary  annuity  to   a   dependent
beneficiary,  subject  to  the  following conditions: (1) the
participant's written notice  of  election  to  provide  such
annuity  is received by the board at least 30 days before the
retirement annuity payment period begins, and (2) the  amount
of  the  reversionary annuity is not less than $10 per month,
and (3) the reversionary  annuity  is  payable  only  if  the
participant dies after retirement.
    The  participant  may  revoke  the  election  by filing a
written  notice   of   revocation   with   the   board.   The
beneficiary's  death  prior  to retirement of the participant
shall constitute a revocation of the election.
    The amount of the  reversionary  annuity  shall  be  that
specified  in  the  participant's notice of election, but not
more than the  amount  which  when  added  to  the  survivors
annuity payable to the dependent beneficiary, would equal the
participant's  reduced  retirement annuity.   The participant
shall specify in the notice  of  election  whether  the  full
retirement annuity is to be resumed or the reduced retirement
annuity  is  to  be  continued,  in the event the beneficiary
predeceases the annuitant.
    The reversionary annuity payment period  shall  begin  on
the  day  following  the  annuitant's  death.  A reversionary
annuity shall not be payable if the  beneficiary  predeceases
the annuitant.
(Source: P.A. 84-1028.)

    (40 ILCS 5/15-141) (from Ch. 108 1/2, par. 15-141)
    Sec. 15-141. Death benefits - Death of participant.
    (a)  The   beneficiary   of   a   participant  under  the
traditional benefit package is entitled to  a  death  benefit
equal to the sum of (1) the employee's accumulated normal and
additional  contributions  on  the  date  of  death,  (2) the
employee's accumulated survivors insurance  contributions  on
the  date  of  death, if a survivors insurance benefit is not
payable, (3) an amount equal to the employee's final rate  of
earnings,  but  not  more than $5,000 if (i) the beneficiary,
under rules of the board, was dependent upon the participant,
(ii) the participant was a participating employee immediately
prior to his or her death, and (iii)  a  survivors  insurance
benefit is not payable, and (4) $2,500 if (i) the beneficiary
was  not dependent upon the participant, (ii) the participant
was a participating employee immediately prior to his or  her
death,  and  (iii)  a  survivors  insurance  benefit  is  not
payable.
    (b)  If the participant has elected to participate in the
portable  benefit  package  and  has  completed  the one-year
waiting period  required  under  subsection  (e)  of  Section
15-134.5,  the death benefit shall be equal to the employee's
accumulated normal and additional contributions on  the  date
of  death  plus,  if  the employee died with 1.5 or 5 or more
years  of  service  for  employment  as  defined  in  Section
15-113.1, employer contributions in an amount  equal  to  the
sum  of  the accumulated normal and additional contributions;
except that if a pre-retirement survivor annuity  is  payable
under  Section 15-136.4, the death benefit payable under this
paragraph shall be reduced, but to not less than zero, by the
actuarial value of  the  benefit  payable  to  the  surviving
spouse.   If  the  recipient  of  a  pre-retirement  survivor
annuity dies before an amount equal to all accumulated normal
and  additional  contributions  as  of the date of death have
been paid out, the remaining difference shall be paid to  the
member's   beneficiary.    The  primary  beneficiary  of  the
participant must be his or her spouse unless the  spouse  has
consented  to  the  designation of another beneficiary in the
manner described in subsection (d) of Section 15-136.4.
    (c)  If payments are made  under  any  State  or  federal
workers' compensation or occupational diseases law because of
the  death  of  an employee, the portion of the death benefit
payable from employer contributions shall be reduced  by  the
total amount of the payments.
(Source: P.A. 90-448, eff. 8-16-97; 90-766, eff. 8-14-98.)

    (40 ILCS 5/15-142) (from Ch. 108 1/2, par. 15-142)
    Sec.  15-142.  Death benefits - Death of annuitant.  Upon
the death of an annuitant receiving a retirement  annuity  or
disability  retirement  annuity,  the annuitant's beneficiary
shall, if a survivor's insurance benefit is not payable under
Section 15-145 and an a pre-retirement  survivor  annuity  is
not  payable  under  Section 15-136.4, be entitled to a death
benefit equal to  the  greater  of  the  following:  (1)  the
excess,  if  any,  of  the  sum  of  the  accumulated normal,
survivors insurance, and additional contributions as  of  the
date  of  retirement  or  the  date the disability retirement
annuity began, whichever is earlier,  over  the  sum  of  all
annuity  payments  made  prior  to  the date of death, or (2)
$1,000.
(Source: P.A. 90-448, eff. 8-16-97; 90-766, eff. 8-14-98.)

    (40 ILCS 5/15-144) (from Ch. 108 1/2, par. 15-144)
    Sec.  15-144.   Beneficiary  annuities.    This   Section
applies  only  to  the  death  benefits of persons who became
participants before August 22, 1997 (the  effective  date  of
Public Act 90-511).
    If  a  deceased  participant  has  specified in a written
notice on file with the board prior to his or her  death,  or
if  the participant has not so specified, but the beneficiary
specifies in the application for the death benefit  that  the
benefit be paid as an annuity or as a designated cash payment
plus  an  annuity,  it  shall  be  paid  in  the  manner thus
specified, unless the annuity is less than $10 per month,  in
which  case  the death benefit shall be paid in a single cash
sum.  If the  death  benefit  is  paid  as  an  annuity,  the
beneficiary may elect to take an amount not in excess of $500
in  a  single  cash sum. The annuity payable to a beneficiary
shall be the  actuarial  equivalent  of  the  death  benefit,
determined  as  of  the  participant's  date of death, on the
basis of the age of the beneficiary at that time.
    The beneficiary annuity payment period shall begin on the
day following the death of the deceased and  shall  terminate
on  the  date  of the beneficiary's death. If the beneficiary
may receive the death benefit  in  a  single  cash  sum,  but
elects  to receive an annuity, he or she may, within one year
after the death of the participant or annuitant, revoke  this
election  and  receive in a single cash sum the excess of the
amount of the death benefit upon which the annuity was  based
over the sum of the annuity payments received.
(Source: P.A. 83-1440.)

    (40 ILCS 5/15-145) (from Ch. 108 1/2, par. 15-145)
    Sec.  15-145.   Survivors  insurance benefits; conditions
and amounts.
    (a)  The survivors insurance benefits provided under this
Section shall be payable  to  the  eligible  survivors  of  a
participant  covered  under  the  traditional benefit package
upon the death of (1) a participating employee with at  least
1 1/2  years  of  service,  (2)  a participant who terminated
employment with at least 10 years  of  service,  and  (3)  an
annuitant  in  receipt  of a retirement annuity or disability
retirement annuity under this Article.
    Service under the State Employees' Retirement  System  of
Illinois,  the  Teachers'  Retirement  System of the State of
Illinois  and  the  Public  School  Teachers'   Pension   and
Retirement Fund of Chicago shall be considered in determining
eligibility for survivors benefits under this Section.
    If  by law, a function of a governmental unit, as defined
by Section 20-107, is transferred in whole or in part  to  an
employer,  and  an  employee  transfers  employment from this
governmental unit to such employer within 6 months after  the
transfer  of  this  function,  the  service  credits  in  the
governmental   unit's   retirement  system  which  have  been
validated  under  Section  20-109  shall  be  considered   in
determining  eligibility  for  survivors  benefits under this
Section.
    (b)  A surviving spouse of a deceased participant, or  of
a  deceased annuitant who did not take a refund or additional
annuity  consisting  of   accumulated   survivors   insurance
contributions  who  had  a survivors insurance beneficiary at
the time of retirement, shall receive a survivors annuity  of
30%  of  the final rate of earnings.  Payments shall begin on
the day following the participant's or annuitant's  death  or
the  date  the  surviving spouse attains age 50, whichever is
later, and continue until the death of the surviving  spouse.
The annuity shall be payable to the surviving spouse prior to
attainment  of  age  50 if the surviving spouse has in his or
her care a deceased participant's  or  annuitant's  dependent
unmarried  child  under  age  18 (under age 22 if a full-time
student) who is eligible for a survivors annuity.  Remarriage
of a surviving spouse prior to  attainment  of  age  55  that
occurs  before  the  effective date of this amendatory Act of
the 91st General Assembly shall disqualify him or her for the
receipt of a survivors annuity.
    (c)  Each dependent unmarried child under age  18  (under
age  22 if a full-time student) of a deceased participant, or
of a  deceased  annuitant  who  did  not  take  a  refund  or
additional   annuity   consisting  of  accumulated  survivors
insurance  contributions  who  had  a   survivors   insurance
beneficiary  at  the  time  of  his  or her retirement, shall
receive a survivors annuity equal to the sum of  (1)  20%  of
the  final rate of earnings, and (2) 10% of the final rate of
earnings divided by the number of children entitled  to  this
benefit.   Payments  shall  begin  on  the  day following the
participant's or annuitant's death  and  continue  until  the
child marries, dies, or attains age 18 (age 22 if a full-time
student).   If the child is in the care of a surviving spouse
who is eligible for survivors insurance benefits, the child's
benefit shall be paid to the surviving spouse.
    Each  unmarried  child  over  age  18   of   a   deceased
participant  or  of a deceased annuitant who had a survivor's
insurance beneficiary at the time of his or  her  retirement,
and  who  was  dependent upon the participant or annuitant by
reason of a physical or mental disability which  began  prior
to  the date the child attained age 18 (age 22 if a full-time
student), shall receive a survivor's annuity equal to the sum
of (1) 20% of the final rate of earnings, and (2) 10% of  the
final  rate  of  earnings  divided  by the number of children
entitled to survivors benefits.  Payments shall begin on  the
day  following  the  participant's  or  annuitant's death and
continue until the child  marries,  dies,  or  is  no  longer
disabled.   If the child is in the care of a surviving spouse
who is eligible for survivors insurance benefits, the child's
benefit may  be  paid  to  the  surviving  spouse.   For  the
purposes  of  this  Section,  disability  means  inability to
engage in any substantial gainful activity by reason  of  any
medically determinable physical or mental impairment that can
be  expected  to result in death or that has lasted or can be
expected to last for a continuous  period  of  at  least  one
year.
    (d)  Each  dependent parent of a deceased participant, or
of a  deceased  annuitant  who  did  not  take  a  refund  or
additional   annuity   consisting  of  accumulated  survivors
insurance  contributions  who  had  a   survivors   insurance
beneficiary  at  the  time  of  his  or her retirement, shall
receive a survivors annuity equal to the sum of  (1)  20%  of
final rate of earnings, and (2) 10% of final rate of earnings
divided by the number of parents who qualify for the benefit.
Payments  shall  begin  when the parent reaches age 55 or the
day  following  the  participant's  or   annuitant's   death,
whichever  is  later,  and  continue  until  the parent dies.
Remarriage of a parent prior to attainment of  age  55  shall
disqualify the parent for the receipt of a survivors annuity.
    (e)  In addition to the survivors annuity provided above,
each survivors insurance beneficiary shall, upon death of the
participant  or  annuitant,  receive  a  lump  sum payment of
$1,000 divided by the number of such beneficiaries.
    (f)  The changes made  in  this  Section  by  Public  Act
81-712   pertaining   to  survivors  annuities  in  cases  of
remarriage prior to age 55  shall  apply  to  each  survivors
insurance  beneficiary  who  remarries  after  June 30, 1979,
regardless of the date  that  the  participant  or  annuitant
terminated his employment or died.
    The change made to this Section by this amendatory Act of
the  91st General Assembly, pertaining to remarriage prior to
age 55,  applies  without  regard  to  whether  the  deceased
participant  or  annuitant  was  in  service  on or after the
effective date of this amendatory Act  of  the  91st  General
Assembly.
    (g)  On  January  1, 1981, any person who was receiving a
survivors annuity on or before January 1, 1971 shall have the
survivors annuity then being paid increased by  1%  for  each
full  year which has elapsed from the date the annuity began.
On January 1, 1982, any survivor whose  annuity  began  after
January  1,  1971, but before January 1, 1981, shall have the
survivor's annuity then being paid increased by 1%  for  each
year  which  has elapsed from the date the survivor's annuity
began. On January 1, 1987, any survivor who began receiving a
survivor's annuity on or before January 1, 1977,  shall  have
the  monthly survivor's annuity increased by $1 for each full
year which has elapsed since the date the survivor's  annuity
began.
    (h)  If  the  sum  of  the  lump  sum  and  total monthly
survivor benefits payable under this Section upon  the  death
of  a  participant  amounts to less than the sum of the death
benefits payable under items (2) and (3) of  Section  15-141,
the difference shall be paid in a lump sum to the beneficiary
of  the  participant  who  is  living  on  the date that this
additional amount becomes payable.
    (i)  If the  sum  of  the  lump  sum  and  total  monthly
survivor  benefits  payable under this Section upon the death
of an annuitant receiving a retirement annuity or  disability
retirement  annuity  amounts  to  less than the death benefit
payable under Section 15-142, the difference shall be paid to
the beneficiary of the annuitant who is living  on  the  date
that this additional amount becomes payable.
    (j)  Effective  on  the  later of (1) January 1, 1990, or
(2) the January 1 on or next after  the  date  on  which  the
survivor  annuity  begins,  if the deceased member died while
receiving a retirement annuity, or in  all  other  cases  the
January  1  nearest  the  first  anniversary  of the date the
survivor annuity payments begin,  every  survivors  insurance
beneficiary  shall  receive an increase in his or her monthly
survivors annuity of 3%.  On each January 1 after the initial
increase, the monthly survivors annuity shall be increased by
3%  of  the  total  survivors  annuity  provided  under  this
Article,  including  previous  increases  provided  by   this
subsection.   Such  increases  shall  apply  to the survivors
insurance beneficiaries of each  participant  and  annuitant,
whether  or  not  the employment status of the participant or
annuitant  terminates  before  the  effective  date  of  this
amendatory Act of 1990.  This subsection (j) also applies  to
persons  receiving  a  survivor  annuity  under  the portable
benefit package.
    (k)  If the Internal Revenue Code of  1986,  as  amended,
requires  that  the  survivors  benefits be payable at an age
earlier than that specified  in  this  Section  the  benefits
shall   begin  at  the  earlier  age,  in  which  event,  the
survivor's beneficiary shall be entitled only to that  amount
which  is  equal  to the actuarial equivalent of the benefits
provided by this Section.
    (l)  The changes made to this Section and Section  15-131
by  this  amendatory  Act  of  1997, relating to benefits for
certain unmarried children who are full-time  students  under
age  22,  apply without regard to whether the deceased member
was in service  on  or  after  the  effective  date  of  this
amendatory  Act  of 1997.  These changes do not authorize the
repayment of a refund or a re-election of benefits,  and  any
benefit  or increase in benefits resulting from these changes
is not  payable  retroactively  for  any  period  before  the
effective date of this amendatory Act of 1997.
(Source: P.A. 90-448, eff. 8-16-97; 90-766, eff. 8-14-98.)

    (40 ILCS 5/15-154) (from Ch. 108 1/2, par. 15-154)
    Sec. 15-154.  Refunds.
    (a)  A   participant  whose  status  as  an  employee  is
terminated, regardless of cause, or who has been on  lay  off
status  for  more  than  120 days, and who is not on leave of
absence, is  entitled  to  a  refund  of  contributions  upon
application;  except  that  not  more  than  one  such refund
application may be made during any academic year.
    Except as set forth in subsections (a-1) and  (a-2),  the
refund shall be the sum of the accumulated normal, additional
and  survivors  insurance  contributions,  less the amount of
interest credited on these contributions each year in  excess
of 4 1/2% of the amount on which interest was calculated.
    (a-1)  A  person  who  elects,  in  accordance  with  the
requirements  of  Section  15-134.5,  to  participate  in the
portable benefit package  and  who  becomes  a  participating
employee under that retirement program upon the conclusion of
the  one-year  waiting  period  applicable  to  the  portable
benefit  package  election  shall  have  his  or  her  refund
calculated  in  accordance  with the provisions of subsection
(a-2).
    (a-2)  The refund payable to a participant  described  in
subsection  (a-1)  shall  be  the  sum  of  the participant's
accumulated normal and additional contributions,  as  defined
in Sections 15-116 and 15-117.  If the participant terminates
with  5 or more years of service for employment as defined in
Section 15-113.1, he or she  shall  also  be  entitled  to  a
distribution  of employer contributions in an amount equal to
the  sum   of   the   accumulated   normal   and   additional
contributions, as defined in Sections 15-116 and 15-117.
    (b)  Upon   acceptance   of  a  refund,  the  participant
forfeits all accrued rights and credits in the System, and if
subsequently reemployed, the participant shall be  considered
a  new  employee subject to all the qualifying conditions for
participation and eligibility for benefits applicable to  new
employees.  If  such  person  again  becomes  a participating
employee and continues as such for 2 years, or is employed by
an employer and participates for at  least  2  years  in  the
Federal  Civil  Service  Retirement  System, all such rights,
credits, and  previous  status  as  a  participant  shall  be
restored upon repayment of the amount of the refund, together
with  compound  interest thereon from the date the refund was
received to the date of repayment at the rate of 6% per annum
through August 31, 1982, and at  the  effective  rates  after
that date.
    (c)  If  a  participant  covered  under  the  traditional
transitional  benefit  package  has  made survivors insurance
contributions, but has  no  survivors  insurance  beneficiary
upon  retirement,  he  or  she  shall  be entitled to elect a
refund of the accumulated survivors insurance  contributions,
or to elect an additional annuity the value of which is equal
to  the  accumulated survivors insurance contributions.  This
election  must  be  made  prior  to  the  date  the  person's
retirement annuity is approved by the Board of Trustees.
    (d)  A participant, upon application, is  entitled  to  a
refund  of  his  or  her accumulated additional contributions
attributable to the additional contributions described in the
last sentence of subsection (c) of Section 15-157.  Upon  the
acceptance   of  such  a  refund  of  accumulated  additional
contributions,  the  participant  forfeits  all  rights   and
credits which may have accrued because of such contributions.
    (e)  A  participant  who  terminates  his or her employee
status and elects  to  waive  service  credit  under  Section
15-154.2,  is entitled to a refund of the accumulated normal,
additional and survivors  insurance  contributions,  if  any,
which  were  credited the participant for this service, or to
an additional annuity the value of  which  is  equal  to  the
accumulated   normal,   additional  and  survivors  insurance
contributions, if any; except that not  more  than  one  such
refund application may be made during any academic year. Upon
acceptance  of  this  refund,  the  participant  forfeits all
rights and credits accrued because of this service.
    (f)  If  a  police  officer  or  firefighter  receives  a
retirement annuity under Rule 1 or 3 of Section 15-136, he or
she shall be entitled  at  retirement  to  a  refund  of  the
difference    between   his   or   her   accumulated   normal
contributions and the normal contributions which  would  have
accumulated  had such person filed a waiver of the retirement
formula provided by Rule 4 of Section 15-136.
    (g)  If, at the time of retirement, a  participant  would
be  entitled  to a retirement annuity under Rule 1, 2, 3 or 4
of Section 15-136, or under Section 15-136.4,   that  exceeds
the  maximum  specified  in  clause  (1) of subsection (c) of
Section 15-136, he or she shall be entitled to  a  refund  of
the employee contributions, if any, paid under Section 15-157
after  the  date upon which continuance of such contributions
would have otherwise caused the retirement annuity to  exceed
this maximum, plus compound interest at the effective rates.
(Source: P.A.  90-448,  eff.  8-16-97;  90-576, eff. 3-31-98;
90-766, eff. 8-14-98.)

    (40 ILCS 5/15-158.2)
    Sec. 15-158.2. Self-managed plan.
    (a)  Purpose.  The General  Assembly  finds  that  it  is
important for colleges and universities to be able to attract
and  retain the most qualified employees and that in order to
attract and retain these employees, colleges and universities
should have the flexibility to provide a defined contribution
plan as an alternative for eligible employees who  elect  not
to  participate  in  a  defined  benefit  retirement  program
provided   under   this   Article.   Accordingly,  the  State
Universities  Retirement  System  is  hereby  authorized   to
establish  and  administer  a  self-managed plan, which shall
offer participating employees the opportunity  to  accumulate
assets  for  retirement through a combination of employee and
employer contributions that may be invested in mutual  funds,
collective investment funds, or other investment products and
used  to purchase annuity contracts, either fixed or variable
or a combination thereof.  The plan must be  qualified  under
the Internal Revenue Code of 1986.
    (b)  Adoption  by  employers.   Each  employer subject to
this  Article  may  elect  to  adopt  the  self-managed  plan
established under this Section; this election is irrevocable.
An employer's election to adopt the self-managed  plan  makes
available  to  the  eligible  employees  of that employer the
elections described in Section 15-134.5.
    The State Universities Retirement  System  shall  be  the
plan  sponsor  for  the self-managed plan and shall prepare a
plan document and prescribe such rules and procedures as  are
considered  necessary  or desirable for the administration of
the self-managed plan.  Consistent with its fiduciary duty to
the participants and beneficiaries of the self-managed  plan,
the  Board  of Trustees of the System may delegate aspects of
plan administration as it sees fit to companies authorized to
do business  in  this  State,  to  the  employers,  or  to  a
combination of both.
    (c)  Selection of service providers and funding vehicles.
The System, in consultation with the employers, shall solicit
proposals  to  provide  administrative  services  and funding
vehicles for the self-managed plan from insurance and annuity
companies and mutual fund companies, banks, trust  companies,
or  other financial institutions authorized to do business in
this  State.    In  reviewing  the  proposals  received   and
approving  and  contracting  with no fewer than 2 and no more
than 7 companies, at least 2 of which must be  insurance  and
annuity  companies, the Board of Trustees of the System shall
consider, among other things, the following criteria:
         (1)  the nature and  extent  of  the  benefits  that
    would be provided to the participants;
         (2)  the  reasonableness of the benefits in relation
    to the premium charged;
         (3)  the suitability of the benefits  to  the  needs
    and  interests  of  the  participating  employees and the
    employer;
         (4)  the ability of the company to provide  benefits
    under  the  contract  and  the financial stability of the
    company; and
         (5)  the efficacy of the contract in the recruitment
    and retention of employees.
    The System, in consultation  with  the  employers,  shall
periodically  review  each  approved  company.  A company may
continue  to  provide  administrative  services  and  funding
vehicles for  the  self-managed  plan  only  so  long  as  it
continues  to  be an approved company under contract with the
Board.
    (d)  Employee Direction.  Employees who are participating
in the program must be allowed  to  direct  the  transfer  of
their  account  balances among the various investment options
offered, subject to applicable contractual provisions.    The
participant  shall  not  be  deemed  a fiduciary by reason of
providing such investment  direction.   A  person  who  is  a
fiduciary  shall  not  be  liable for any loss resulting from
such investment direction and shall not  be  deemed  to  have
breached any fiduciary duty by acting in accordance with that
direction.    Neither  the System nor the employer guarantees
any of the investments in the employee's account balances.
    (e)  Participation.  An employee eligible to  participate
in  the  self-managed  plan  must  make a written election in
accordance with the provisions of Section  15-134.5  and  the
procedures  established  by the System.  Participation in the
self-managed plan by an electing employee shall begin on  the
first  day of the first pay period following the later of the
date the employee's election is filed with the System or  the
effective  date as of which the employee's employer begins to
offer participation in the self-managed plan.  Employers  may
not make the self-managed plan available earlier than January
1, 1998.  An employee's participation in any other retirement
program  administered  by the System under this Article shall
terminate on the date that participation in the  self-managed
plan begins.
    An  employee  who  has  elected  to  participate  in  the
self-managed   plan   under   this   Section   must  continue
participation while employed in an eligible position, and may
not participate in any other retirement program  administered
by  the  System  under  this  Article  while employed by that
employer  or  any  other  employer  that  has   adopted   the
self-managed plan, unless the self-managed plan is terminated
in accordance with subsection (i).
    Participation in the self-managed plan under this Section
shall   constitute   membership  in  the  State  Universities
Retirement System.
    A participant under this Section shall be entitled to the
benefits of Article 20 of this Code. modified to reflect  the
following principles:
         (1)  The  amount of any retirement annuities payable
    under this Section depend solely  on  the  value  of  the
    participant's vested account balances and are not subject
    to a maximum annuity benefit limitation or any adjustment
    pursuant   to   the   proportional   retirement   annuity
    provisions  of  Article  20.   If  a  participant  in the
    self-managed plan under this Section elects to apply  the
    provisions  of  Article  20,  the  dollar  amount  of the
    proportional retirement annuity payable from  the  System
    shall  be  deemed  to  be  zero and the provisions of the
    second paragraph of Section 20-131 shall not  apply  with
    respect to the retirement annuity benefits payable to the
    participant under this Section.
         (2)  For  purposes  of  Section 20-123 of this Code,
    the self-managed plan shall be  treated  as  if  it  were
    provided by a participating system that has no survivor's
    annuity benefit.
         (3)  Notwithstanding  Section  20-125  of this Code,
    upon reemployment by a participating system of a  retired
    participant  in  the  self-managed  plan,  the retirement
    annuity payment made to such participant from any annuity
    contracts acquired from  the  participant's  self-managed
    plan account balances shall not be suspended.
    (f)  Establishment of Initial Account Balance.  If at the
time  an  employee  elects to participate in the self-managed
plan he or she has rights and credits in the  System  due  to
previous  participation  in  the traditional benefit package,
the System  shall  establish  for  the  employee  an  opening
account balance in the self-managed plan, equal to the amount
of contribution refund that the employee would be eligible to
receive  under  Section  15-154  if  the  employee terminated
employment  on  that   date   and   elected   a   refund   of
contributions,  except  that  this  hypothetical refund shall
include interest at the effective  rate  for  the  respective
years.   The  System  shall  transfer assets from the defined
benefit retirement program to the self-managed plan, as a tax
free transfer in accordance  with  Internal  Revenue  Service
guidelines,  for  purposes  of funding the employee's opening
account balance.
    (g)  No Duplication of Service  Credit.   Notwithstanding
any  other  provision  of  this  Article, an employee may not
purchase or receive service or service credit  applicable  to
any other retirement program administered by the System under
this  Article  for any period during which the employee was a
participant in the self-managed plan established  under  this
Section.
    (h)  Contributions.    The  self-managed  plan  shall  be
funded by contributions from employees participating  in  the
self-managed  plan  and employer contributions as provided in
this Section.
    The contribution rate for employees participating in  the
self-managed  plan  under  this Section shall be equal to the
employee contribution rate  for  other  participants  in  the
System,   as  provided  in  Section  15-157.   This  required
contribution shall be made as  an  "employer  pick-up"  under
Section  414(h)  of  the Internal Revenue Code of 1986 or any
successor Section thereof.  Any employee participating in the
System's traditional benefit package  prior  to  his  or  her
election  to  participate  in  the  self-managed  plan  shall
continue  to  have  the  employer  pick  up the contributions
required under Section 15-157.  However, the  amounts  picked
up  after  the  election  of  the  self-managed plan shall be
remitted to and treated as assets of the  self-managed  plan.
In  no  event  shall  an employee have an option of receiving
these  amounts  in  cash.   Employees  may  make   additional
contributions  to  the  self-managed  plan in accordance with
procedures prescribed by the System, to the extent  permitted
under rules prescribed by the System.
    The  program  shall provide for employer contributions to
be credited to each self-managed plan participant at  a  rate
of  7.6%  of  the  participating  employee's salary, less the
amount used by the System to provide disability benefits  for
the employee.  The amounts so credited shall be paid into the
participant's  self-managed  plan  accounts in a manner to be
prescribed by the System.
    An amount of employer contribution, not exceeding  1%  of
the  participating  employee's  salary, shall be used for the
purpose of providing the disability benefits of the System to
the employee.  Prior to the beginning of each plan year under
the self-managed plan, the Board of Trustees shall determine,
as  a  percentage  of  salary,   the   amount   of   employer
contributions  to  be  allocated  during  that  plan year for
providing  disability   benefits   for   employees   in   the
self-managed plan.
    The   State  of  Illinois  shall  make  contributions  by
appropriations to the System of  the  employer  contributions
required  for  employees  who participate in the self-managed
plan under this  Section.    The  amount  required  shall  be
certified  by the Board of Trustees of the System and paid by
the State in accordance  with  Section  15-165.   The  System
shall  not  be  obligated  to  remit  the  required  employer
contributions  to any of the insurance and annuity companies,
mutual fund  companies,  banks,  trust  companies,  financial
institutions,  or  other  sponsors  of  any  of  the  funding
vehicles  offered  under  the  self-managed plan until it has
received the required employer contributions from the  State.
In  the  event  of  a  deficiency  in  the  amount  of  State
contributions,  the  System  shall implement those procedures
described in subsection (c) of Section 15-165 to  obtain  the
required funding from the General Revenue Fund.
    (i)  Termination.  The self-managed plan authorized under
this  Section may be terminated by the System, subject to the
terms of any relevant contracts, and the System shall have no
obligation to reestablish the self-managed  plan  under  this
Section.   This  Section does not create a right to continued
participation in any self-managed plan set up by  the  System
under  this Section.  If the self-managed plan is terminated,
the participants shall have the right to participate  in  one
of  the  other  retirement programs offered by the System and
receive service credit in such other retirement  program  for
any years of employment following the termination.
    (j)  Vesting;   Withdrawal;   Return   to   Service.    A
participant  in  the  self-managed plan becomes vested in the
employer contributions credited to his or her accounts in the
self-managed plan on the earliest to occur of the  following:
(1)  completion  of  5  years  of  service  with  an employer
described  in  Section  15-106;  (2)   the   death   of   the
participating   employee   while   employed  by  an  employer
described in Section 15-106, if the participant has completed
at least 1 1/2 years of service;  or  (3)  the  participant's
election  to  retire  and  apply the reciprocal provisions of
Article 20 of this Code.
    A participant in the self-managed  plan  who  receives  a
distribution   of   his   or  her  vested  amounts  from  the
self-managed plan while not yet eligible for retirement under
this Article (and Article 20, if applicable)  upon  or  after
termination  of  employment  shall forfeit all service credit
and  accrued  rights   in   the   System;   if   subsequently
re-employed,  the  participant  shall  be  considered  a  new
employee.    If   a   former   participant  again  becomes  a
participating   employee   (or   becomes   employed   by    a
participating  system  under  Article  20  of  this Code) and
continues as such for at least  2  years,  all  such  rights,
service  credits,  and previous status as a participant shall
be restored upon repayment of the amount of the distribution,
without interest.
    (k)  Benefit amounts.  If an employee who  is  vested  in
employer  contributions  terminates  employment, the employee
shall be entitled to a benefit which is based on the  account
values   attributable   to   both   employer   and   employee
contributions and any investment return thereon.
    If   an   employee   who   is   not  vested  in  employer
contributions terminates employment, the  employee  shall  be
entitled  to  a  benefit  based  solely on the account values
attributable  to  the  employee's   contributions   and   any
investment return thereon, and the employer contributions and
any  investment  return  thereon  shall  be  forfeited.   Any
employer  contributions  which are forfeited shall be held in
escrow by the company investing those contributions and shall
be used as directed by the System for future  allocations  of
employer  contributions  or  for  the  restoration of amounts
previously forfeited by former participants who again  become
participating employees.
(Source:  P.A.  89-430,  eff. 12-15-95; 90-448, eff. 8-16-97;
90-576, eff. 3-31-98; 90-766, eff. 8-14-98.)

    (40 ILCS 5/15-181) (from Ch. 108 1/2, par. 15-181)
    Sec. 15-181. Duties of employers.
    (a)  Each employer, in  preparing  payroll  vouchers  for
participating employees, shall indicate, in addition to other
information:  (1)  the  amount  of employee contributions and
survivors  insurance  contributions  required  under  Section
15-157, (2) the gross earnings payable to each employee,  and
(3)  the  total  of  all contributions required under Section
15-157.   An  additional  certified  copy  of  each   payroll
certified  by each employer shall be forwarded along with the
original  payroll  to  the  Director  of  Central  Management
Services, State Comptroller, and other officer receiving  the
original certified payroll for transmittal to the board.
    (b)  Each employer, in drawing warrants or checks against
trust  or  federal  funds  for  items  of  salary  on payroll
vouchers certified by employers, shall draw such warrants  or
checks  to  participating  employees  for  the amount of cash
salary or wages specified for the period, and  shall  draw  a
warrant  or  check  to  this  system  for  the  total  of the
contributions required under Section 15-157.  The warrant  or
check drawn to this system, together with the additional copy
of the payroll supplied by the employer, shall be transmitted
immediately to the board.
    (c)  The  City  of  Champaign  and the City of Urbana, as
employers of persons who participate in this System  pursuant
to  subsection  (h) of Section 15-107, shall each collect and
transmit  to  the  System  from  each  payroll  the  employee
contributions required under Section  15-157,  together  with
such  payroll  documentation as the Board may require, at the
time that the payroll is paid.
(Source: P.A. 90-576, eff. 3-31-98.).

    (40 ILCS 5/16-133) (from Ch. 108 1/2, par. 16-133)
    Sec. 16-133.  Retirement annuity; amount.
    (a)  The amount of the retirement annuity  shall  be  the
larger of the amounts determined under paragraphs (A) and (B)
below:
         (A)  An   amount   consisting  of  the  sum  of  the
    following:
              (1)  An amount  that  can  be  provided  on  an
         actuarially   equivalent   basis   by  the  member's
         accumulated contributions at the time of retirement;
         and
              (2)  The sum of (i)  the  amount  that  can  be
         provided  on  an actuarially equivalent basis by the
         member's  accumulated   contributions   representing
         service  prior  to July 1, 1947, and (ii) the amount
         that can be provided on  an  actuarially  equivalent
         basis  by  the  amount  obtained  by multiplying 1.4
         times   the   member's   accumulated   contributions
         covering service subsequent to June 30, 1947; and
              (3)  If there is prior  service,  2  times  the
         amount   that   would  have  been  determined  under
         subparagraph (2) of paragraph (A) above  on  account
         of  contributions  which would have been made during
         the period of prior service creditable to the member
         had the System been in operation and had the  member
         made  contributions  at  the  contribution  rate  in
         effect prior to July 1, 1947.
         (B)  An  amount  consisting  of  the  greater of the
    following:
              (1)  For creditable service earned before  July
         1,  1998  that  has not been augmented under Section
         16-129.1:  1.67% of final average salary for each of
         the first 10 years of creditable service,  1.90%  of
         final  average  salary for each year in excess of 10
         but not exceeding 20, 2.10% of final average  salary
         for  each year in excess of 20 but not exceeding 30,
         and 2.30% of final average salary for each  year  in
         excess of 30; and
              For  creditable service earned on or after July
         1, 1998 by a member who has at  least  24  years  of
         creditable  service on July 1, 1998 and who does not
         elect to augment  service  under  Section  16-129.1:
         2.2%  of  final  average  salary  for  each  year of
         creditable service earned on or after July  1,  1998
         but before the member reaches a total of 30 years of
         creditable  service and 2.3% of final average salary
         for each year of creditable  service  earned  on  or
         after  July  1,  1998 and after the member reaches a
         total of 30 years of creditable service; and
              For all  other  creditable  service:   2.2%  of
         final  average  salary  for  each year of creditable
         service; or
              (2)  1.5% of final average salary for each year
         of creditable service plus the sum $7.50 for each of
         the first 20 years of creditable service.
    The amount of the  retirement  annuity  determined  under
    this paragraph (B) shall be reduced by 1/2 of 1% for each
    month that the member is less than age 60 at the time the
    retirement annuity begins.  However, this reduction shall
    not  apply  (i)  if  the  member has at least 35 years of
    creditable service, or (ii)  if  the  member  retires  on
    account  of  disability  under  Section  16-149.2 of this
    Article with at least 20 years of creditable service.
    (b)  For purposes of this Section, final  average  salary
shall  be  the  average  salary for the highest 4 consecutive
years within the last  10  years  of  creditable  service  as
determined  under  rules  of  the  board.   The minimum final
average salary shall be considered to be $2,400 per year.
    In the determination of final average salary for  members
other  than  elected officials and their appointees when such
appointees are allowed by statute, that part  of  a  member's
salary  for  any  year  beginning  after  June 30, 1979 which
exceeds the member's annual full-time salary  rate  with  the
same  employer  for the preceding year by more than 20% shall
be excluded.  The exclusion shall not apply in  any  year  in
which  the  member's creditable earnings are less than 50% of
the preceding year's mean salary for  downstate  teachers  as
determined by the survey of school district salaries provided
in Section 2-3.103 of the School Code.
    (c)  In  determining the amount of the retirement annuity
under paragraph (B) of this Section, a fractional year  shall
be granted proportional credit.
    (d)  The  retirement  annuity  determined under paragraph
(B) of this Section shall be available only  to  members  who
render  teaching  service after July 1, 1947 for which member
contributions are required, and to  annuitants  who  re-enter
under the provisions of Section 16-150.
    (e)  The   maximum   retirement  annuity  provided  under
paragraph (B) of this Section shall be 75% of  final  average
salary.
    (f)  A  member  retiring after the effective date of this
amendatory Act of 1998 shall receive a pension equal  to  75%
of final average salary if the member is qualified to receive
a retirement annuity equal to at least 74.6% of final average
salary  under this Article or as proportional annuities under
Article 20 of this Code.
(Source: P.A. 90-582, eff. 5-27-98; 91-17, eff. 6-4-99.)

    (40 ILCS 5/16-135) (from Ch. 108 1/2, par. 16-135)
    Sec. 16-135.  Supplementary retirement annuity.
    (a)  An annuitant who is receiving a  retirement  annuity
on June 30, 1961 of less than $50 for each year of creditable
service  forming  the  basis  of the retirement annuity shall
have his or her retirement annuity increased to $50 per  year
for each year of such creditable service, but not exceeding a
total annual retirement annuity of $2,250.
    (b)  In   order   to  be  entitled  to  the  increase  in
retirement annuity provided under this Section, an  annuitant
is required to make an additional contribution of $5 for each
year  of  creditable service, not to exceed 45 years together
with interest at the rate of 3% per  annum  from  August  25,
1961.
    (c)  The  supplementary retirement annuity provided under
this Section shall begin to accrue on the first of the  month
following  receipt  of  the  required  contribution  from the
annuitant and shall continue to be paid only  to  the  extent
that funds are available in the Supplementary Annuity Reserve
established under Section 16-184.

(Source: P.A. 83-1440.)

    (40 ILCS 5/16-136.4) (from Ch. 108 1/2, par. 16-136.4)
    Sec. 16-136.4.  Single-sum retirement benefit.
    (a)  A  member  who  has  less than 5 years of creditable
service shall be entitled, upon written  application  to  the
board,  to  receive  a retirement benefit payable in a single
sum  upon  or  after  the  member's  attainment  of  age  65.
However, the benefit shall not be paid while  the  member  is
employed  as  a  teacher  in  the schools included under this
Article or Article 17,  unless  the  System  is  required  by
federal law to make payment due to the member's age.
    (b)  The retirement benefit shall consist of a single sum
that is the actuarial equivalent of a life annuity consisting
of  1.67%  of the member's final average salary for each year
of creditable service.  In  determining  the  amount  of  the
benefit,  a  fractional  year  shall  be granted proportional
credit.
    For the purposes of this Section,  final  average  salary
shall  be  the  average  salary  of  the  member's  highest 4
consecutive years of service as determined under rules of the
board.  For a member with less than 4  consecutive  years  of
service,  final  average  salary  shall be the average salary
during  the  member's  entire  period  of  service.   In  the
determination of final average salary for members other  than
elected  officials  and their appointees when such appointees
are allowed by statute, that part of a member's salary  which
exceeds  the  member's  annual full-time salary rate with the
same employer for the preceding year by more than  20%  shall
be  excluded.    The exclusion shall not apply in any year in
which the member's creditable earnings are less than  50%  of
the  preceding  year's  mean salary for downstate teachers as
determined by the survey of school district salaries provided
in Section 2-3.103 of the School Code.
    (c)  The retirement benefit determined under this Section
shall be available to all members who render teaching service
after  July  1,  1947  for  which  member  contributions  are
required.
    (d)  Upon acceptance of the retirement  benefit,  all  of
the  member's  accrued  rights  and credits in the System are
forfeited.  Receipt of a single-sum retirement benefit  under
this  Section  does  not make a person an "annuitant" for the
purposes of this Article, nor a "benefit recipient"  for  the
purposes of Sections 16-153.1 through 16-153.4.
(Source: P.A. 87-11.)

    (40 ILCS 5/16-138) (from Ch. 108 1/2, par. 16-138)
    Sec.  16-138.   Refund  of  contributions  upon  death of
member  or  annuitant.    Upon  the  death  of  a  member  or
annuitant, the following amount shall be  payable  (i)  to  a
beneficiary,  nominated  by written designation of the member
or annuitant filed with the system, or (ii) if no beneficiary
is nominated,  to  the  surviving  spouse,  or  (iii)  if  no
beneficiary is nominated and there is no surviving spouse, to
the decedent's estate, upon receipt of proper proof of death:
    (1)  Upon  the death of a member, an amount consisting of
the sum of  the  following:   (A)  the  member's  accumulated
contributions;  (B)  the sum of the contributions made by the
member toward the cost of the automatic increase  in  annuity
under  Section  16-152,  without  interest  thereon;  and (C)
contributions  made  by  the  member  toward  prior  service,
without interest thereon.
    (2)  Upon  the  death   of   an   annuitant,   unless   a
reversionary  annuity  is  payable  under  Section 16-136, an
amount determined by subtracting the total amount of  monthly
annuity  payments  received  as  a  result  of  the  deceased
annuitant's retirement from the sum of:  (A)  the accumulated
contributions at retirement; (B) the sum of the contributions
made  by  the  deceased  toward  the  cost  of  the automatic
increase in annuity under Section  16-151,  without  interest
thereon;  and  (C) any contributions made by the deceased for
prior service or other purposes, exclusive  of  contributions
toward the cost of the automatic increase in annuity, without
interest thereon.
(Source: P.A. 83-1440.)

    (40 ILCS 5/16-140) (from Ch. 108 1/2, par. 16-140)
    Sec. 16-140.  Survivors' benefits - definitions.
    (a)  For the purpose of Sections 16-138 through 16-143.2,
the following terms shall have the following meanings, unless
the context otherwise requires:
         (1)  "Average  salary":  the  average salary for the
    highest 4 consecutive years within the last 10  years  of
    creditable service immediately preceding date of death or
    retirement,  whichever  is  applicable,  or  the  average
    salary  for  the  total  creditable service if service is
    less than 4 years.
         (2)  "Member":   any   teacher   included   in   the
    membership of the system.  However, a teacher who becomes
    an annuitant of the system or a  teacher  whose  services
    terminate  after 20 years of service from any cause other
    than retirement is considered a member,  subject  to  the
    conditions and limitations stated in this Article.
         (3)  "Dependent beneficiary": (A) a surviving spouse
    of a member or annuitant who was married to the member or
    annuitant  for  the 12 month period immediately preceding
    and on the date of death of  such  member  or  annuitant,
    except  where  a child is born of such marriage, in which
    case the qualifying period shall not be applicable; (A-1)
    a surviving spouse of a member or annuitant who  (i)  was
    married  to  the  member  or annuitant on the date of the
    member or annuitant's death,  (ii)  was  married  to  the
    member  or  annuitant  for a period of at least 12 months
    (but not necessarily the 12 months immediately  preceding
    the member or annuitant's death), and (iii) first applied
    for  a  survivor's benefit before April 1, 1997, and (iv)
    has not  received  a  benefit  under  subsection  (a)  of
    Section 16-141 or paragraph (1) of Section 16-142; (B) an
    eligible  child  of  a  member  or  annuitant;  and (C) a
    dependent parent.
         Unless   otherwise   designated   by   the   member,
    eligibility for benefits shall be  in  the  order  named,
    except  that a dependent parent shall be eligible only if
    there is no other dependent beneficiary.  Any benefit  to
    be  received  by or paid to a dependent beneficiary to be
    determined under this paragraph as provided  in  Sections
    16-141  and  16-142 may be received by or paid to a trust
    established  for  such  dependent  beneficiary  if   such
    dependent  beneficiary is living at the time such benefit
    would be received by or paid to such trust.
         (4)  "Eligible  child":  an  unmarried  natural   or
    adopted  child  of  the  member or annuitant under age 18
    (age 22 if a full-time student).  An unmarried natural or
    adopted child, regardless of age,  who  is  dependent  by
    reason  of  a  physical  or mental disability, except any
    such child receiving benefits under Article  III  of  the
    Illinois Public Aid Code, is eligible for so long as such
    physical  or  mental  disability  continues.   An adopted
    child, however, is eligible only if the  proceedings  for
    adoption were finalized while the child was a minor.
         For  purposes of this subsection, "disability" means
    an  inability  to  engage  in  any  substantial   gainful
    activity by reason of any medically determinable physical
    or  mental  impairment which can be expected to result in
    death or which has lasted or can be expected to last  for
    a continuous period of not less than 12 months.
         The  changes  made  to  this  Section  by Public Act
    90-448,  relating  to  benefits  for  certain   unmarried
    children  who  are full-time students under age 22, apply
    without regard to whether  the  deceased  member  was  in
    service  on  or  after  the  effective  date of that Act.
    These changes do not authorize the repayment of a  refund
    or a re-election of benefits, and any benefit or increase
    in  benefits  resulting from these changes is not payable
    retroactively for any period before the effective date of
    that Act.
         (5)  "Dependent parent": a parent who was  receiving
    at  least  1/2  of  his  or  her support from a member or
    annuitant for the 12-month period  immediately  preceding
    and  on  the  date of such member's or annuitant's death,
    provided however, that such dependent  status  terminates
    upon  a  member's  acceptance  of  a  refund for survivor
    benefit contributions as provided under Section 16-142.
         (6)  "Non-dependent   beneficiary":   any    person,
    organization or other entity designated by the member who
    does not qualify as a dependent beneficiary.
         (7)  "In  service":  the condition of a member being
    in receipt of salary as a teacher at any time  within  12
    months  immediately  before  his  or  her death, being on
    leave of absence for which the  member,  upon  return  to
    teaching,  would  be  eligible to purchase service credit
    under subsection (b)(5) of Section 16-127,  or  being  in
    receipt   of  a  disability  or  occupational  disability
    benefit.  This term does not  include  any  annuitant  or
    member  who  previously  accepted  a  refund  of survivor
    benefit contributions  under  paragraph  (1)  of  Section
    16-142  unless the conditions specified in subsection (b)
    of Section 16-143.2 are met.
    (b)  The change to this Section made by Public Act 90-511
applies without regard to  whether  the  deceased  member  or
annuitant  was  in  service on or after the effective date of
that Act.
    The change to this Section made by this amendatory Act of
the 91st General Assembly applies without regard  to  whether
the  deceased  member or annuitant was in service on or after
the effective date of this amendatory Act.
(Source: P.A. 89-430, eff. 12-15-95;  90-448,  eff.  8-16-97;
90-511, eff. 8-22-97; 90-655, eff. 7-30-98.)

    (40 ILCS 5/16-143) (from Ch. 108 1/2, par. 16-143)
    Sec.  16-143.  Survivors' benefits - other conditions and
limitations. The benefits provided under Sections 16-141  and
16-142,  shall be subject to the following further conditions
and limitations:
    (1)  The period during which a member was in receipt of a
disability  or  occupational  disability  benefit  shall   be
considered as creditable service at the annual salary rate on
which the member last made contributions.
    (2)  All  service  prior  to  July  24,  1959,  for which
creditable service is granted towards  a  retirement  annuity
shall be considered as creditable service.
    (3)  No  benefits  shall be payable unless a member, or a
disabled member, returning to service, has made contributions
to the system for at least one month  after  July  24,  1959,
except  that an annuitant must have contributed to the system
for at least 1 year of  creditable  service  after  July  24,
1959.
    (4)  Creditable   service   under  the  State  Employees'
Retirement  System  of  Illinois,  the   State   Universities
Retirement System and the Public School Teachers' Pension and
Retirement Fund of Chicago shall be considered in determining
whether   the   member   has   met   the  creditable  service
requirement.
    (5)  If  an  eligible   beneficiary   qualifies   for   a
survivors'  benefit because of pension credits established by
the participant or annuitant in  another  system  covered  by
Article  20,  and the combined survivors' benefits exceed the
highest survivors' benefit payable  by  either  system  based
upon  the  combined  pension  credits, the survivors' benefit
payable by this system shall be reduced to that amount  which
when  added  to  the  survivors' benefit payable by the other
system would equal this highest survivors'  benefit.  If  the
other  system  has  a similar provision for adjustment of the
survivors' benefit, the  respective  proportional  survivors'
benefits  shall  be  reduced proportionately according to the
ratio  which  the  amount  of  each  proportional  survivors'
benefit bears to the aggregate of all proportional survivors'
benefits. If a  survivors'  benefit  is  payable  by  another
system  covered  by  Article  20,  and the survivor elects to
waive the monthly survivors' benefit and accept  a  lump  sum
payment  or  death  benefit in lieu of the monthly survivors'
benefit, this system shall, for the purpose of adjusting  the
monthly  survivors' benefit under this paragraph, assume that
the survivor  had  been  entitled  to  a  monthly  survivors'
benefit  which,  in  accordance with actuarial tables of this
system, is the actuarial equivalent of the amount of the lump
sum payment or death benefit.
    (6)  Remarriage of a surviving spouse prior to attainment
of age 55 that occurs  before  the  effective  date  of  this
amendatory  Act  of the 91st General Assembly shall terminate
his or her survivors' benefits.
    The change made to this item (6) by this  amendatory  Act
of  the  91st  General  Assembly  applies  without  regard to
whether the deceased member or annuitant was in service on or
after the effective date of this amendatory Act of  the  91st
General Assembly.
    (7)  The  benefits  payable  to  an  eligible child shall
terminate when the eligible child marries, dies,  or  attains
age  18 (age 22 if a full-time student); except that benefits
payable  to  a  dependent  disabled  eligible   child   shall
terminate  only  when the eligible child dies or ceases to be
disabled.
(Source: P.A. 90-448, eff. 8-16-97.)

    (40 ILCS 5/16-149.4) (from Ch. 108 1/2, par. 16-149.4)
    Sec.  16-149.4.   Supplementary   disability   retirement
annuity.
    (a)  An   annuitant  receiving  a  disability  retirement
annuity on June 30, 1961 of less than $50 for  each  year  of
creditable  service  forming  the  basis  of  the  disability
retirement   annuity   shall   have  his  or  her  disability
retirement annuity increased to $50 per year for each year of
such creditable service, with a minimum annuity of $1,000 per
year.
    (b)  In  order  to  be  entitled  to  the   increase   in
disability retirement annuity provided under this Section, an
annuitant  is  required to make an additional contribution of
$5  for  each  year  of  creditable  service,  together  with
interest at the rate of 3% per annum from August 25, 1961.
    (c)  The supplementary retirement annuity provided  under
this  Section shall begin to accrue on the first of the month
following receipt of  the  required  contributions  from  the
annuitant  and  shall  continue to be paid only to the extent
that funds are available in the Supplementary Annuity Reserve
established under Section 16-184.
(Source: P.A. 83-1440.)

    (40 ILCS 5/16-184) (from Ch. 108 1/2, par. 16-184)
    Sec. 16-184.  Supplementary Annuity Reserve.
    (a)  Except as provided in subsection (b), a  reserve  to
be  known as the Supplementary Annuity Reserve is established
for the purpose of  crediting  funds  received  and  charging
disbursements  made for supplementary annuities under Section
16-135 and Section 16-149.4.
    This Reserve shall be credited with:
         (1)  The  total  of  all   contributions   made   by
    annuitants to qualify for supplementary annuities.
         (2)  Amounts  contributed to the System by the State
    of Illinois that are sufficient to assure payment of  the
    supplementary annuities.
         (3)  Regular   interest  computed  annually  on  the
    average balance in this reserve.
    This Reserve  shall  be  charged  with  all  supplemental
annuity payments under Section 16-135 and Section 16-149.4.
    (b)  On  the  July  1  next occurring after the effective
date of this amendatory Act of the 91st General Assembly, the
Supplemental Annuity Reserve is abolished and  any  remaining
balance  After  all  supplementary annuity payments have been
completed, any remaining funds shall be transferred from that
this Reserve to the Employer's Contribution Reserve.
(Source: P.A. 88-593, eff. 8-22-94.)

    (40 ILCS 5/17-106) (from Ch. 108 1/2, par. 17-106)
    Sec.   17-106.   Contributor,    member    or    teacher.
"Contributor",  "member"  or  "teacher":   All members of the
teaching force of the city, including  principals,  assistant
principals,  the  general  superintendent  of schools, deputy
superintendents  of  schools,  associate  superintendents  of
schools, assistant and district superintendents  of  schools,
members  of  the  Board of Examiners, all other persons whose
employment requires a teaching certificate issued  under  the
laws   governing   the   certification   of   teachers,   any
educational,  administrative,  professional,  or  other staff
employed in a charter school operating in compliance with the
Charter Schools Law who is certified under the law  governing
the  certification  of  teachers, and employees of the Board,
but excluding persons contributing concurrently to any  other
public  employee  pension  system  in  Illinois  for the same
employment or receiving  retirement  pensions  under  another
Article  of  this  Code  for that same employment (unless the
person's eligibility to participate  in  that  other  pension
system  arises from the holding of an elective public office,
and the person has held that public office for  at  least  10
years),  persons  employed  on  an  hourly basis, and persons
receiving pensions from the Fund who are employed temporarily
by an Employer for 100 days or less in any  school  year  and
not on an annual basis.
    In the case of a person who has been making contributions
and  otherwise  participating  in  this  Fund  prior  to  the
effective  date  of  this  amendatory Act of the 91st General
Assembly 1991, and whose right to participate in the Fund  is
established  or  confirmed by this amendatory Act, such prior
participation  in  the  Fund,  including  all   contributions
previously  made and service credits previously earned by the
person, are hereby validated.
(Source: P.A. 89-450,  eff.  4-10-96;  90-32,  eff.  6-27-97;
90-566, eff. 1-2-98.)

    (40 ILCS 5/17-117) (from Ch. 108 1/2, par. 17-117)
    Sec. 17-117. Disability retirement pension.
    (a)  The  conditions  prescribed  in  items  1  and  2 in
Section 17-116  for  computing  service  retirement  pensions
shall  apply  in  the  computation  of  disability retirement
pensions.
         (1)  Each teacher retired or retiring after 10 years
    of service and with less than 20 years of service because
    of permanent  disability  not  incurred  as  a  proximate
    result  of  the  performance  of  duty  shall  receive  a
    disability  retirement  pension  equal to 2.2% of average
    salary for each year of service after June 30,  1998  and
    for  each year of service on or before that date that has
    been augmented  under  Section  17-119.1  and  1 2/3%  of
    average salary for each year of other service.
         (2)  If  the total service is 20 years and less than
    25  years  and  the  teacher's  age  is  under  55,   the
    disability  retirement  pension  shall  equal  a  service
    retirement  pension  discounted  1/2 of 1% for each month
    the age of the contributor is less  than  55  down  to  a
    minimum   age   of  50  years,  provided  the  disability
    retirement pension so computed shall not be less than the
    amount payable under paragraph 1.
         (3)  If the total service is 20 years  or  more  and
    the  teacher  has attained age 55, and is under age 60, a
    disability  retirement  pension  shall  equal  a  service
    retirement pension without discount.
         (4)  If the  total  service  is  25  years  or  more
    regardless  of  age,  a  disability pension shall equal a
    service retirement pension without discount.
         (5)  If the total service is 20 years  or  more  and
    the  teacher  is  age  60  or  over, a service retirement
    pension shall be payable.
    (b)  For disability retirement  pensions,  the  following
further conditions shall apply:
         (1)  Written application shall be submitted within 3
    years from the date of separation.
         (2)  The  applicant  shall  submit to examination by
    physicians appointed by the Board within  one  year  from
    the date of their appointment.
         (3)  Two  physicians,  appointed by the Board, shall
    declare the applicant to be suffering from  a  disability
    which wholly and presumably permanently incapacitates him
    for  teaching or for service as an employee of the Board.
    In the event of disagreement by the physicians,  a  third
    physician,  appointed  by  the  Board,  shall declare the
    applicant    wholly    and     presumably     permanently
    incapacitated.
    (c)  Disability  retirement  pensions  shall begin on the
effective date of resignation or the day following the  close
of  the  payroll  period  for  which  credit  was  validated,
whichever is later.
(Source: P.A. 90-32; eff. 6-27-97; 90-566, eff. 1-2-98.)

    (40 ILCS 5/17-133) (from Ch. 108 1/2, par. 17-133)
    Sec.  17-133.  Contributions  for  periods of outside and
other service.  Regularly certified  and  appointed  teachers
who  desire to have the following described services credited
for pension purposes  shall  submit  to  the  Board  evidence
thereof and pay into the Fund the amounts prescribed herein:
         1.  For  teaching  service by a certified teacher in
    the public schools of the several states  or  in  schools
    operated by or under the auspices of the United States, a
    teacher shall pay the contributions at the rates in force
    (a)  on  the date of appointment as a regularly certified
    teacher after salary adjustments are completed, or (b) at
    the time of reappointment after  salary  adjustments  are
    completed, whichever is later, but not less than $450 per
    year  of  service.   Upon  the  Board's  approval of such
    service and the payment of  the  required  contributions,
    service  credit  of  not  more  than  10  years  shall be
    granted.
         2.  For service as a playground instructor in public
    school playgrounds, teachers shall pay the  contributions
    prescribed   in   this   Article   (a)  at  the  time  of
    appointment,  as  a  regularly  certified  teacher  after
    salary adjustments are completed, or  (b)  on  return  to
    service  as  a  full time regularly certified teacher, as
    the case may be, provided such rates or amounts shall not
    be less than $450 per year.
         3.  For service prior to September 1, 1955,  in  the
    public  schools  of  the  City  as  a substitute, evening
    school  or  temporary  teacher,  or  for  service  as  an
    Americanization  teacher  prior  to  December  31,  1955,
    teachers  shall pay the contributions prescribed in  this
    Article  (a)  at  the time of appointment, as a regularly
    certified teacher after salary adjustments are completed,
    (b) on  return  to  service  as  a  full  time  regularly
    certified  teacher,  as  the  case  may be, provided such
    rates or amounts shall not be less than  $450  per  year;
    and  provided  further  that  for teachers employed on or
    after  September  1,  1953,  rates  shall   not   include
    contributions   for   widows'  pensions  if  the  service
    described in this sub-paragraph  3  was  rendered  before
    that  date.   Any  teacher  entitled to repay a refund of
    contributions under Section 17-126 126  of  this  Article
    may  validate  service  described  in  this  paragraph by
    payment of the amounts prescribed herein,  together  with
    the  repayment  of  the  refund,  provided  that  if such
    creditable service was the last service rendered  in  the
    public  schools  of  the  City  and  is not automatically
    reinstated by repayment  of  the  refund,  the  rates  or
    amounts shall not be less than $450 per year.
         4.  For  service  after June 30, 1982 as a member of
    the Board of Education, if required  to  resign  from  an
    administrative  or  teaching position in order to qualify
    as a member of the Board of Education.
         5.  For service during the 1986-87 school year as  a
    teacher  on  a special leave of absence with full loss of
    salary, teaching for an  agency  under  contract  to  the
    Board of Education, if the teacher returned to employment
    in  September,  1987.  For service under this item 5, the
    teacher must pay the contributions at the rates in  force
    at the completion of the leave period.
      For  service  described in sub-paragraphs 1, 2 and 3 of
this Section, interest shall be charged  beginning  one  year
after the effective date of appointment or reappointment.
    Effective  September  1,  1974,  the  interest rate to be
charged  by   the   Fund   on   contributions   provided   in
sub-paragraphs 1, 2, 3 and 4 shall be 5% per annum compounded
annually.
(Source: P.A. 90-566, eff. 1-2-98.)

    (40 ILCS 5/17-150) (from Ch. 108 1/2, par. 17-150)
    Sec.  17-150.   Suspension  of  pensions.   Until July 1,
2000, pension  payments,  exclusive  of  those  made  to  the
survivors   of   persons  who  were  contributors,  shall  be
suspended while the  recipient  is  employed  in  a  teaching
capacity,  outside  the City in which the Fund exists, by any
public school or charter school in  this  State,  unless  the
recipient  is so employed temporarily as a substitute teacher
for 100 days or less in a school year or on an  hourly  basis
with  earnings not in excess of the sum payable for 100 days'
substitute service.
    Beginning July 1, 2000, pension payments shall no  longer
be  suspended  while  the recipient is employed in a teaching
capacity, outside the City in which the Fund exists,  by  any
public  school  or  charter  school  in  this  State, and any
pension that is in a state of suspension under  this  Section
on   July   1,   2000  shall  be  reinstated  on  that  date.
Notwithstanding Section 17-157, the change  to  this  Section
made  by  this  amendatory  Act  of the 91st General Assembly
applies without regard to whether or not the pensioner was in
service on or after the effective  date  of  this  amendatory
Act.
(Source: P.A. 90-566, eff. 1-2-98.)

    (40 ILCS 5/18-128) (from Ch. 108 1/2, par. 18-128)
    Sec.   18-128.    Survivor's  annuities;  Conditions  for
payment.
    (a)  A survivor's annuity shall be payable upon the death
of a participant while in service after June 30, 1967 if  the
participant  had  at least 1 1/2 years of service credit as a
judge, or upon death  of  an  inactive  participant  who  had
terminated  service as a judge on or after June 30, 1967 with
at least 10 years of service credit, or upon the death of  an
annuitant  whose  retirement becomes effective after June 30,
1967.
    (b)  The surviving spouse of a  deceased  participant  or
annuitant  is  entitled  to a survivor's annuity beginning at
the date of death  if  the  surviving  spouse  (1)  has  been
married  to  the  participant  or  annuitant for a continuous
period of at least one year immediately preceding the date of
death, and (2) has attained age 50, or,  regardless  of  age,
has  in  his or her care an eligible child or children of the
decedent as provided under subsections (c) and  (d)  of  this
Section.  If the surviving spouse has no such child in his or
her  care and has not attained age 50, the survivor's annuity
shall begin  upon  attainment  of  age  50.   When  all  such
children of the deceased who are in the care of the surviving
spouse  no  longer  qualify  for  benefits  and the surviving
spouse is under 50  years  of  age,  the  surviving  spouse's
annuity shall be suspended until he or she attains age 50.
    (c)  A  child's annuity is payable for an unmarried child
of an annuitant or participant so long as the  child  is  (i)
under  age  18, (ii) under age 22 and a full time student, or
(iii) age 18 or over if dependent by reason  of  physical  or
mental  disability.   Disability means inability to engage in
any substantial gainful activity by reason of  any  medically
determinable physical or mental impairment which can expected
to  result in death or which has lasted or can be expected to
last for a continuous period of not less than 12 months.
    (d)  Adopted children  shall  have  the  same  status  as
natural  children,  but  only if the proceedings for adoption
were commenced at least 6 months prior to the  death  of  the
annuitant or participant.
    (e)  Remarriage prior to attainment of age 50 that occurs
before  the effective date of this amendatory Act of the 91st
General Assembly shall disqualify a surviving spouse for  the
receipt of a survivor's annuity.
    The change made to this subsection by this amendatory Act
of  the  91st  General  Assembly  applies  without  regard to
whether the deceased judge was in service  on  or  after  the
effective  date  of  this  amendatory Act of the 91st General
Assembly.
    (f)  The changes made in survivor's annuity provisions by
Public Act 82-306 shall apply to the survivors of a  deceased
participant  or  annuitant  whose  death  occurs  on or after
August 21, 1981 and whose service as a judge terminates on or
after July 1, 1967.
    The provision of child's annuities for dependent students
under age 22 by this amendatory Act of 1991  shall  apply  to
all  eligible  students  beginning  January  1, 1992, without
regard to whether the deceased judge was  in  service  on  or
after the effective date of this amendatory Act.
(Source: P.A. 87-794.)

    (40 ILCS 5/20-121) (from Ch. 108 1/2, par. 20-121)
    Sec.   20-121.  Calculation  of  proportional  retirement
annuities.  Upon retirement of the employee,  a  proportional
retirement  annuity  shall  be computed by each participating
system in which pension credit has been  established  on  the
basis  of pension credits under each system.  The computation
shall be in accordance with the formula or method  prescribed
by  each  participating system which is in effect at the date
of the employee's latest withdrawal from service  covered  by
any  of  the systems in which he has pension credits which he
elects to have considered under this Article.   However,  the
amount   of   any   retirement   annuity  payable  under  the
self-managed plan established under Section 15-158.2 of  this
Code  depends solely on the value of the participant's vested
account balances and  is  not  subject  to  any  proportional
adjustment under this Section.
    Combined  pension  credit  under  all  retirement systems
subject to this Article shall be  considered  in  determining
whether  the  minimum  qualification  has  been  met  and the
formula or method of computation which shall be applied.   If
a  system  has  a  step-rate  formula  for calculation of the
retirement annuity, pension credits covering previous service
which have been established under  another  system  shall  be
considered  in  determining  which  range  or  ranges  of the
step-rate formula are to be applicable to the employee.
    Interest on pension credit shall continue  to  accumulate
in  accordance  with  the provisions of the law governing the
retirement system in which  the  same  has  been  established
during  the  time  an  employee  is in the service of another
employer, on  the  assumption  such  employee,  for  interest
purposes  for  pension  credit,  is continuing in the service
covered by such retirement system.
(Source: P.A. 79-782.)

    (40 ILCS 5/20-123) (from Ch. 108 1/2, par. 20-123)
    Sec.  20-123.   Survivor's   annuity.    The   provisions
governing  a  retirement  annuity  shall  be  applicable to a
survivor's annuity.  Appropriate credits shall be established
for  survivor's  annuity  purposes  in  those   participating
systems  which provide survivor's annuities, according to the
same conditions and  subject  to  the  same  limitations  and
restrictions  herein prescribed for a retirement annuity.  If
a participating system has no survivor's annuity benefit,  or
if  the  survivor's  annuity  benefit  under  that  system is
waived, pension credit established in that this system  shall
not  be  considered  in  determining  eligibility  for or the
amount of the survivor's annuity which may be payable by  any
other participating system.
    For  persons  who  participate  in  the self-managed plan
established under Section 15-158.2 or  the  portable  benefit
package  established  under  Section 15-136.4, pension credit
established under Article 15 may be considered in determining
eligibility for or the amount of the survivor's annuity  that
is  payable  by  any  other participating system, but pension
credit established in any other system shall  not  result  in
any  right  to  a  survivor's  annuity  under  the Article 15
system.
(Source: P.A. 79-782.)

    (40 ILCS 5/20-124) (from Ch. 108 1/2, par. 20-124)
    Sec. 20-124.  Maximum benefits.  In no  event  shall  the
combined retirement or survivors annuities exceed the highest
annuity  which  would  have been payable by any participating
system in which the employee has pension credits, if  all  of
his pension credits had been validated in that system.
    If  the  combined  annuities  should  exceed  the highest
maximum as determined in accordance with  this  Section,  the
respective   annuities   shall   be  reduced  proportionately
according to the ratio which the amount of each  proportional
annuity bears to the aggregate of all such annuities.
    In  the  case  of  a participant in the self-managed plan
established under Section 15-158.2 of this Code to  whom  the
provisions of this Article apply:
         (i)  For   purposes   of  calculating  the  combined
    retirement annuity and the  proportionate  reduction,  if
    any, in a retirement annuity other than one payable under
    the  self-managed  plan,  the  amount  of  the Article 15
    retirement annuity shall be  deemed  to  be  the  highest
    annuity  to  which the annuitant would have been entitled
    if he or she had participated in the traditional  benefit
    package  as  defined  in Section 15-103.1 rather than the
    self-managed plan.
         (ii)  For  purposes  of  calculating  the   combined
    survivor's  annuity  and  the proportionate reduction, if
    any, in a survivor's annuity other than one payable under
    the self-managed plan,  the  amount  of  the  Article  15
    survivor's  annuity  shall  be  deemed  to be the highest
    survivor's annuity to which the survivor would have  been
    entitled if the deceased employee had participated in the
    traditional   benefit   package  as  defined  in  Section
    15-103.1 rather than the self-managed plan.
         (iii)  Benefits payable under the self-managed  plan
    are  not  subject  to  proportionate reduction under this
    Section.
(Source: P.A. 79-782.)

    (40 ILCS 5/20-125) (from Ch. 108 1/2, par. 20-125)
    Sec.  20-125.   Return  to  employment  -  suspension  of
benefits.  If a retired employee returns to employment  which
is  covered  by  a  system  from  which  he  is  receiving  a
proportional  annuity  under  this  Article, his proportional
annuity from all participating  systems  shall  be  suspended
during   the   period  of  re-employment,  except  that  this
suspension does not apply to any distributions payable  under
the  self-managed  plan established under Section 15-158.2 of
this Code.
    The provisions of the Article under which such employment
would be covered shall govern the  determination  of  whether
the  employee  has  returned to employment, and if applicable
the exemption  of  temporary  employment  or  employment  not
exceeding   a   specified  duration  or  frequency,  for  all
participating systems from  which  the  retired  employee  is
receiving   a   proportional   annuity  under  this  Article,
notwithstanding any contrary provisions in the other Articles
governing such systems.
(Source: P.A. 85-1008.)

    (40 ILCS 5/20-131) (from Ch. 108 1/2, par. 20-131)
    Sec.  20-131.    Retirement   Annuities   and   Survivors
Annuities - Guarantees.
    (a)  This  amendatory Act of 1975 (P.A. 79-782) shall not
be  applied  to  deprive  any  person  or  his  survivor   of
eligibility  for  an  annuity  or to reduce the annuity or to
deprive such person of rights to which  he  or  his  survivor
would  have  been entitled under the provisions of Article 20
which were in effect immediately prior to September 5,  1975,
if he was an employee immediately prior to that date.
    (b)  If the combined retirement annuity benefits provided
under Public Act 79-782 are less than the combined retirement
annuity  benefits  that  would  have  been  payable under the
alternative formula of Section 20-122, the system under which
retirement  would  have  occurred,  as  provided  by  Section
20-122, shall increase the proportional retirement annuity by
an amount equal to the difference.
    (c)  Subsection (b) of this Section does not apply to the
retirement annuity benefits payable  under  the  self-managed
plan established under Section 15-158.2 of this Code.
(Source: P.A. 86-820.)

    (40 ILCS 5/15-158.1 rep.)
    Section  15.   The  Illinois  Pension  Code is amended by
repealing Section 15-158.1.

    Section 20.  The Illinois  Pension  Code  is  amended  by
changing Sections 15-136, 15-136.2, and 15-185 as follows:
    (40 ILCS 5/15-136) (from Ch. 108 1/2, par. 15-136)
    Sec.   15-136.    Retirement  annuities  -  Amount.   The
provisions  of  this  Section  15-136  apply  only  to  those
participants who are participating in the traditional benefit
package or the portable benefit package and do not  apply  to
participants who are participating in the self-managed plan.
    (a)  The  amount  of  a participant's retirement annuity,
expressed in the form of  a  single-life  annuity,  shall  be
determined  by whichever of the following rules is applicable
and provides the largest annuity:
    Rule 1:  The retirement annuity shall be 1.67%  of  final
rate  of  earnings for each of the first 10 years of service,
1.90% for each of the next 10 years  of  service,  2.10%  for
each  year  of  service in excess of 20 but not exceeding 30,
and 2.30% for each year in excess of 30; or for  persons  who
retire on or after January 1, 1998, 2.2% of the final rate of
earnings for each year of service.
    Rule  2:  The  retirement annuity shall be the sum of the
following,  determined   from   amounts   credited   to   the
participant  in  accordance with the actuarial tables and the
prescribed rate  of  interest  in  effect  at  the  time  the
retirement annuity begins:
         (i)  the  normal annuity which can be provided on an
    actuarially equivalent basis, by the  accumulated  normal
    contributions as of the date the annuity begins; and
         (ii)  an  annuity  from employer contributions of an
    amount  equal  to  that  which  can  be  provided  on  an
    actuarially equivalent basis from the accumulated  normal
    contributions  made  by  the  participant  under  Section
    15-113.6  and  Section  15-113.7 plus 1.4 times all other
    accumulated normal contributions made by the participant.
    With respect to  a  police  officer  or  firefighter  who
retires  on  or  after  August 14, the effective date of this
amendatory Act of 1998, the accumulated normal  contributions
taken  into account under clauses (i) and (ii) of this Rule 2
shall include the additional normal contributions made by the
police officer or firefighter under Section 15-157(a).
    The amount of a retirement annuity calculated under  this
Rule  2  shall  be  computed  solely  on  the  basis  of  the
participant's  accumulated normal contributions, as specified
in this Rule and defined  in  Section  15-116.    Neither  an
employee  or employer contribution for early retirement under
Section 15-136.2 nor any other employer contribution shall be
used in the calculation of the amount of a retirement annuity
under this Rule 2.
    This amendatory Act of the 91st  General  Assembly  is  a
clarification   of   existing   law   and  applies  to  every
participant and annuitant without regard to whether status as
an employee terminates before  the  effective  date  of  this
amendatory Act.
    Rule  3:  The  retirement annuity of a participant who is
employed at least one-half time during the  period  on  which
his or her final rate of earnings is based, shall be equal to
the   participant's  years  of  service  not  to  exceed  30,
multiplied by (1) $96 if  the  participant's  final  rate  of
earnings  is  less than $3,500, (2) $108 if the final rate of
earnings is at least $3,500 but less than $4,500, (3) $120 if
the final rate of earnings is at least $4,500 but  less  than
$5,500,  (4)  $132  if the final rate of earnings is at least
$5,500 but less than $6,500, (5) $144 if the  final  rate  of
earnings is at least $6,500 but less than $7,500, (6) $156 if
the  final  rate of earnings is at least $7,500 but less than
$8,500, (7) $168 if the final rate of earnings  is  at  least
$8,500  but  less than $9,500, and (8) $180 if the final rate
of earnings is $9,500 or more, except that  the  annuity  for
those   persons   having   made  an  election  under  Section
15-154(a-1)  shall  be  calculated  and  payable  under   the
portable   retirement   benefit   program   pursuant  to  the
provisions of Section 15-136.4.
    Rule 4:  A participant who is at least age 50 and has  25
or  more years of service as a police officer or firefighter,
and a participant who is age 55 or over and has at  least  20
but  less  than  25  years  of service as a police officer or
firefighter, shall be entitled to  a  retirement  annuity  of
2 1/4% of the final rate of earnings for each of the first 10
years  of  service as a police officer or firefighter, 2 1/2%
for each of the next 10 years of service as a police  officer
or  firefighter,  and  2 3/4%  for  each year of service as a
police  officer  or  firefighter  in  excess  of   20.    The
retirement  annuity  for  all other service shall be computed
under Rule 1.
    For purposes of this Rule 4, a participant's service as a
firefighter shall also include the following:
         (i)  service that is performed while the  person  is
    an employee under subsection (h) of Section 15-107; and
         (ii)  in  the  case  of  an  individual  who  was  a
    participating employee employed in the fire department of
    the  University  of  Illinois's  Champaign-Urbana  campus
    immediately   prior  to  the  elimination  of  that  fire
    department and who immediately after the  elimination  of
    that  fire department transferred to another job with the
    University of Illinois, service performed as an  employee
    of  the  University  of Illinois in a position other than
    police officer or firefighter,  from  the  date  of  that
    transfer until the employee's next termination of service
    with the University of Illinois.
    (b)  The  retirement annuity provided under Rules 1 and 3
above shall be reduced by  1/2  of  1%  for  each  month  the
participant  is  under  age  60  at  the  time of retirement.
However, this reduction shall  not  apply  in  the  following
cases:
         (1)  For  a  disabled  participant  whose disability
    benefits have been discontinued because  he  or  she  has
    exhausted   eligibility  for  disability  benefits  under
    clause (6) of Section 15-152;
         (2)  For a participant who has at least  the  number
    of  years  of service required to retire at any age under
    subsection (a) of Section 15-135; or
         (3)  For that portion of a retirement annuity  which
    has   been   provided   on  account  of  service  of  the
    participant during periods when he or she  performed  the
    duties  of  a  police  officer  or  firefighter, if these
    duties were performed for at least  5  years  immediately
    preceding the date the retirement annuity is to begin.
    (c)  The  maximum retirement annuity provided under Rules
1, 2, and 4 shall be the lesser of (1) the  annual  limit  of
benefits  as specified in Section 415 of the Internal Revenue
Code of 1986, as such Section may be  amended  from  time  to
time  and  as  such  benefit  limits shall be adjusted by the
Commissioner of Internal Revenue, and (2) 80% of  final  rate
of earnings.
    (d)  An  annuitant whose status as an employee terminates
after August 14, 1969 shall receive  automatic  increases  in
his or her retirement annuity as follows:
    Effective  January  1  immediately following the date the
retirement annuity begins, the  annuitant  shall  receive  an
increase  in  his or her monthly retirement annuity of 0.125%
of the monthly retirement annuity provided under Rule 1, Rule
2, Rule 3, or Rule 4, contained in this  Section,  multiplied
by  the number of full months which elapsed from the date the
retirement annuity payments began to January  1,  1972,  plus
0.1667%  of  such  annuity,  multiplied by the number of full
months which elapsed from January 1, 1972, or  the  date  the
retirement  annuity  payments  began,  whichever is later, to
January 1, 1978, plus 0.25% of such annuity multiplied by the
number of full months which elapsed from January 1, 1978,  or
the  date the retirement annuity payments began, whichever is
later, to the effective date of the increase.
    The annuitant shall receive an increase  in  his  or  her
monthly  retirement  annuity  on  each  January  1 thereafter
during the annuitant's life of  3%  of  the  monthly  annuity
provided under Rule 1, Rule 2, Rule 3, or Rule 4 contained in
this  Section.  The change made under this subsection by P.A.
81-970 is effective January  1,  1980  and  applies  to  each
annuitant  whose  status  as an employee terminates before or
after that date.
    Beginning January 1, 1990, all automatic annual increases
payable  under  this  Section  shall  be  calculated   as   a
percentage  of  the  total annuity payable at the time of the
increase, including all increases  previously  granted  under
this Article.
    The  change  made  in  this subsection by P.A. 85-1008 is
effective January 26, 1988, and is applicable without  regard
to whether status as an employee terminated before that date.
    (e)  If,  on  January 1, 1987, or the date the retirement
annuity payment period begins, whichever is later, the sum of
the retirement annuity provided under Rule 1  or  Rule  2  of
this  Section  and  the  automatic  annual increases provided
under the preceding subsection or Section  15-136.1,  amounts
to  less  than the retirement annuity which would be provided
by Rule 3, the retirement annuity shall be  increased  as  of
January  1,  1987, or the date the retirement annuity payment
period begins, whichever is later, to the amount which  would
be  provided by Rule 3 of this Section. Such increased amount
shall be considered as the retirement annuity in  determining
benefits  provided under other Sections of this Article. This
paragraph applies without regard  to  whether  status  as  an
employee   terminated  before  the  effective  date  of  this
amendatory Act of  1987,  provided  that  the  annuitant  was
employed  at  least  one-half time during the period on which
the final rate of earnings was based.
    (f)  A participant is entitled to such additional annuity
as may be provided on an actuarially equivalent basis, by any
accumulated additional contributions to his  or  her  credit.
However, the additional contributions made by the participant
toward the automatic increases in annuity provided under this
Section  shall  not  be taken into account in determining the
amount of such additional annuity.
    (g)  If, (1) by law, a function of a  governmental  unit,
as  defined by Section 20-107 of this Code, is transferred in
whole or in part  to  an  employer,  and  (2)  a  participant
transfers  employment  from  such  governmental  unit to such
employer within 6 months after the transfer of the  function,
and (3) the sum of (A) the annuity payable to the participant
under  Rule  1,  2, or 3 of this Section (B) all proportional
annuities payable to the participant by all other  retirement
systems  covered  by  Article 20, and (C) the initial primary
insurance amount to which the participant is  entitled  under
the  Social Security Act, is less than the retirement annuity
which would have been payable if  all  of  the  participant's
pension  credits  validated  under  Section  20-109  had been
validated under this system, a supplemental annuity equal  to
the  difference  in  such  amounts  shall  be  payable to the
participant.
    (h)  On January 1, 1981, an annuitant who was receiving a
retirement annuity on or before January 1,  1971  shall  have
his  or  her  retirement annuity then being paid increased $1
per month for each year of creditable service. On January  1,
1982,  an  annuitant  whose  retirement  annuity  began on or
before January 1, 1977, shall  have  his  or  her  retirement
annuity  then being paid increased $1 per month for each year
of creditable service.
    (i)  On January 1, 1987, any annuitant  whose  retirement
annuity  began  on  or before January 1, 1977, shall have the
monthly retirement annuity increased by an amount equal to 8¢
per year of creditable service times the number of years that
have elapsed since the annuity began.
(Source: P.A. 90-14, eff. 7-1-97; 90-65, eff. 7-7-97; 90-448,
eff. 8-16-97; 90-576, eff.  3-31-98;  90-655,  eff.  7-30-98;
90-766, eff. 8-14-98.)

    (40 ILCS 5/15-136.2) (from Ch. 108 1/2, par. 15-136.2)
    Sec.  15-136.2.  Early  retirement  without  discount.  A
participant whose retirement annuity  begins  after  June  1,
1981 and on or before September 1, 2002 and within six months
of   the   last   day  of  employment  for  which  retirement
contributions  were  required,  may  elect  at  the  time  of
application to make a one time employee contribution  to  the
System  and  thereby  avoid the early retirement reduction in
retirement annuity specified under subsection (b) of  Section
15-136.  The exercise of the election shall obligate the last
employer  to also make a one time non-refundable contribution
to the System.
    The one time employee and employer contributions shall be
a percentage of the retiring participant's highest full  time
annual  salary  rate  during  the  academic  years which were
considered in determining his or her final rate of  earnings,
or  if  not  full  time  then  the full time equivalent.  The
employee contribution rate shall  be  7%  multiplied  by  the
lesser  of the following 2 sums: (1) the number of years that
the participant is less than age 60; or  (2)  the  number  of
years  that the participant's creditable service is less than
35 years.  The employer contribution shall be at the rate  of
20%  for  each year the participant is less than age 60.  The
employer shall pay the employer contribution  from  the  same
source   of  funds  which  is  used  in  paying  earnings  to
employees.
    Upon receipt of the application and election, the  System
shall   determine   the   one   time  employee  and  employer
contributions.  The provisions of this Section shall  not  be
applicable  until  all  the above outlined contributions have
been  received  by  the  System;  however,  the   date   such
contributions   are  received  shall  not  be  considered  in
determining the effective date of retirement.
    Employee and employer contributions  under  this  Section
shall  be  used  only  to  eliminate  the reduction for early
retirement under Rules 1 and 3 of Section  15-136  and  shall
not  be  used in calculating annuities under Rules 2 or 4 set
forth in Section 15-136.  This amendatory  Act  of  the  91st
General  Assembly  is  a  clarification  of  existing law and
applies to every participant and annuitant without regard  to
whether status as an employee terminates before the effective
date of this amendatory Act.
    For  persons  who  apply to the Board after the effective
date of this amendatory Act of 1993 and before July 1,  1993,
requesting a retirement annuity to begin no earlier than July
1,  1993  and no later than June 30, 1994, the employer shall
pay both the employee  and  employer  contributions  required
under this Section.
    The  number  of  employees retiring under this Section in
any fiscal year may be limited at the option of the  employer
to  no  less  than 15% of those eligible.  The right to elect
early retirement without discount shall  be  allocated  among
those  applying  on  the basis of seniority in the service of
the last employer.
(Source: P.A. 90-65, eff. 7-7-97; 90-511, eff. 8-22-97.)

    (40 ILCS 5/15-185) (from Ch. 108 1/2, par. 15-185)
    Sec. 15-185.  Annuities, etc., exempt.   The  accumulated
employee  and  employer  contributions shall be held in trust
for each participant and annuitant, and this trust  shall  be
treated  as  a spendthrift trust.  Except as provided in this
Article, all cash, securities  and  other  property  of  this
system,  all  annuities and other benefits payable under this
Article and  all  accumulated  credits  of  participants  and
annuitants  in  this  system  and  the right of any person to
receive an annuity or other benefit under this Article, or  a
refund  of  contributions,  shall not be subject to judgment,
execution,  garnishment,  attachment,  or  other  seizure  by
process, in bankruptcy or otherwise,  nor  to  sale,  pledge,
mortgage  or  other  alienation, and shall not be assignable.
The board, however, may deduct from the benefits, refunds and
credits payable to the participant, annuitant or beneficiary,
amounts owed  by the participant or annuitant to the  system.
No  attempted  sale,  transfer  or assignment of any benefit,
refund or credit shall prevent the right of the board to make
the deduction and offset authorized  in  this  Section.   Any
participant  or  annuitant  may authorize the board to deduct
from disability benefits or annuities, premiums due under any
group hospital-surgical insurance program which is  sponsored
or  approved  by  any  employer; however, the deductions from
disability benefits may not begin prior to 6 months after the
disability occurs.
    A person receiving  an  annuity  or  benefit  under  this
Article   may also authorize withholding from that annuity or
benefit for the purposes enumerated in and in accordance with
the provisions of the State Salary  and  Annuity  Withholding
Act.
    This Section is not intended to, and does not, affect the
calculation  of any benefit under this Article or dictate how
or to what extent employee or employer contributions  are  to
be   taken   into   account  in  calculating  benefits.  This
amendatory  Act  of  the   91st   General   Assembly   is   a
clarification   of   existing   law   and  applies  to  every
participant and annuitant without regard to whether status as
an employee terminates before  the  effective  date  of  this
amendatory Act.
    Public  Act 86-273 is a clarification of existing law and
shall  be  applicable  to  every  participant  and  annuitant
without regard to whether status as  an  employee  terminates
before the effective date of that Act.
(Source:  P.A.  90-65,  eff.  7-7-97;  90-448,  eff. 8-16-97;
90-511, eff. 8-22-97; 90-655, eff. 7-30-98.)

    Section 25.  The Illinois  Pension  Code  is  amended  by
changing  Sections  15-136,  15-139,  15-146,  15-146.1,  and
15-154 as follows:

    (40 ILCS 5/15-136) (from Ch. 108 1/2, par. 15-136)
    Sec.   15-136.    Retirement  annuities  -  Amount.   The
provisions  of  this  Section  15-136  apply  only  to  those
participants who are participating in the traditional benefit
package or the portable benefit package and do not  apply  to
participants who are participating in the self-managed plan.
    (a)  The  amount  of  a participant's retirement annuity,
expressed in the form of  a  single-life  annuity,  shall  be
determined  by whichever of the following rules is applicable
and provides the largest annuity:
    Rule 1:  The retirement annuity shall be 1.67%  of  final
rate  of  earnings for each of the first 10 years of service,
1.90% for each of the next 10 years  of  service,  2.10%  for
each  year  of  service in excess of 20 but not exceeding 30,
and 2.30% for each year in excess of 30; or for  persons  who
retire on or after January 1, 1998, 2.2% of the final rate of
earnings for each year of service.
    Rule  2:  The  retirement annuity shall be the sum of the
following,  determined   from   amounts   credited   to   the
participant  in  accordance with the actuarial tables and the
prescribed rate  of  interest  in  effect  at  the  time  the
retirement annuity begins:
         (i)  the  normal annuity which can be provided on an
    actuarially equivalent basis, by the  accumulated  normal
    contributions as of the date the annuity begins; and
         (ii)  an  annuity  from employer contributions of an
    amount which can be provided on an actuarially equivalent
    basis from the accumulated normal contributions  made  by
    the   participant  under  Section  15-113.6  and  Section
    15-113.7 plus 1.4  times  all  other  accumulated  normal
    contributions made by the participant.
With  respect  to a police officer or firefighter who retires
on or after the effective date  of  this  amendatory  Act  of
1998, the accumulated normal contributions taken into account
under  clauses  (i) and (ii) of this Rule 2 shall include the
additional normal contributions made by the police officer or
firefighter under Section 15-157(a).
    Rule 3:  The retirement annuity of a participant  who  is
employed  at  least  one-half time during the period on which
his or her final rate of earnings is based, shall be equal to
the  participant's  years  of  service  not  to  exceed   30,
multiplied  by  (1)  $96  if  the participant's final rate of
earnings is less than $3,500, (2) $108 if the final  rate  of
earnings is at least $3,500 but less than $4,500, (3) $120 if
the  final  rate of earnings is at least $4,500 but less than
$5,500, (4) $132 if the final rate of earnings  is  at  least
$5,500  but  less  than $6,500, (5) $144 if the final rate of
earnings is at least $6,500 but less than $7,500, (6) $156 if
the final rate of earnings is at least $7,500 but  less  than
$8,500,  (7)  $168  if the final rate of earnings is at least
$8,500 but less than $9,500, and (8) $180 if the  final  rate
of  earnings  is  $9,500 or more, except that the annuity for
those  persons  having  made  an   election   under   Section
15-154(a-1)   shall  be  calculated  and  payable  under  the
portable  retirement  benefit   program   pursuant   to   the
provisions of Section 15-136.4.
    Rule  4:  A participant who is at least age 50 and has 25
or more years of service as a police officer or  firefighter,
and  a  participant who is age 55 or over and has at least 20
but less than 25 years of service  as  a  police  officer  or
firefighter,  shall  be  entitled  to a retirement annuity of
2 1/4% of the final rate of earnings for each of the first 10
years of service as a police officer or  firefighter,  2 1/2%
for  each of the next 10 years of service as a police officer
or firefighter, and 2 3/4% for each  year  of  service  as  a
police   officer   or  firefighter  in  excess  of  20.   The
retirement annuity for all other service  shall  be  computed
under Rule 1.
    For purposes of this Rule 4, a participant's service as a
firefighter shall also include the following:
         (i)  service  that  is performed while the person is
    an employee under subsection (h) of Section 15-107; and
         (ii)  in  the  case  of  an  individual  who  was  a
    participating employee employed in the fire department of
    the  University  of  Illinois's  Champaign-Urbana  campus
    immediately  prior  to  the  elimination  of  that   fire
    department  and  who immediately after the elimination of
    that fire department transferred to another job with  the
    University  of Illinois, service performed as an employee
    of the University of Illinois in a  position  other  than
    police  officer  or  firefighter,  from  the date of that
    transfer until the employee's next termination of service
    with the University of Illinois.
    Rule 5:  The retirement  annuity  of  a  participant  who
elected  early  retirement  under  the  provisions of Section
15-136.2 and who, on or before  February  16,  1995,  brought
administrative  proceedings  pursuant  to  the administrative
rules adopted by the System to challenge the  calculation  of
his  or  her  retirement  annuity  shall  be  the  sum of the
following,  determined   from   amounts   credited   to   the
participant  in  accordance with the actuarial tables and the
prescribed rate  of  interest  in  effect  at  the  time  the
retirement annuity begins:
         (i)  the  normal annuity which can be provided on an
    actuarially equivalent basis, by the  accumulated  normal
    contributions as of the date the annuity begins; and
         (ii)  an  annuity  from employer contributions of an
    amount  equal  to  that  which  can  be  provided  on  an
    actuarially equivalent basis from the accumulated  normal
    contributions  made  by  the  participant  under  Section
    15-113.6  and  Section  15-113.7 plus 1.4 times all other
    accumulated normal contributions made by the participant;
    and
         (iii)  an  annuity  which  can  be  provided  on  an
    actuarially   equivalent   basis   from   the    employee
    contribution for early retirement under Section 15-136.2,
    and  an  annuity from employer contributions of an amount
    equal to that which can be  provided  on  an  actuarially
    equivalent basis from the employee contribution for early
    retirement under Section 15-136.2.
    In  no event shall a retirement annuity under this Rule 5
be lower than the amount obtained by adding (1)  the  monthly
amount   obtained  by  dividing  the  combined  employee  and
employer contributions made under  Section  15-136.2  by  the
System's annuity factor for the age of the participant at the
beginning  of  the  annuity payment period and (2) the amount
equal to the participant's annuity if calculated  under  Rule
1, reduced under Section 15-136(b) as if no contributions had
been made under Section 15-136.2.
    With  respect  to  a  participant  who is qualified for a
retirement annuity under this Rule 5 whose retirement annuity
began before the effective date of this amendatory Act of the
91st General Assembly, and for whom an employee  contribution
was made under Section 15-136.2, the System shall recalculate
the  retirement  annuity  under this Rule 5 and shall pay any
additional amounts due in  the  manner  provided  in  Section
15-186.1 for benefits mistakenly set too low.
    The  amount of a retirement annuity calculated under this
Rule 5 shall  be  computed  solely  on  the  basis  of  those
contributions  specifically set forth in this Rule 5.  Except
as provided in clause  (iii)  of  this  Rule  5,  neither  an
employee nor employer contribution for early retirement under
Section  15-136.2, nor any other employer contribution, shall
be used in the calculation of  the  amount  of  a  retirement
annuity under this Rule 5.
    The General Assembly has adopted the changes set forth in
Section  25  of  this  amendatory  Act  of  the  91st General
Assembly in recognition that the decision  of  the  Appellate
Court for the Fourth District in Mattis v. State Universities
Retirement  System  et al. might be deemed to give some right
to the plaintiff in that case.  The changes made  by  Section
25  of this amendatory Act of the 91st General Assembly are a
legislative implementation of the decision of  the  Appellate
Court for the Fourth District in Mattis v. State Universities
Retirement System et al. with respect to that plaintiff.
    The  changes made by Section 25 of this amendatory Act of
the 91st General Assembly apply without regard to whether the
person is in service as an employee on or after its effective
date.
    (b)  The retirement annuity provided under Rules 1 and  3
above  shall  be  reduced  by  1/2  of  1% for each month the
participant is under  age  60  at  the  time  of  retirement.
However,  this  reduction  shall  not  apply in the following
cases:
         (1)  For a  disabled  participant  whose  disability
    benefits  have  been  discontinued  because he or she has
    exhausted  eligibility  for  disability  benefits   under
    clause (6) of Section 15-152;
         (2)  For  a  participant who has at least the number
    of years of service required to retire at any  age  under
    subsection (a) of Section 15-135; or
         (3)  For  that portion of a retirement annuity which
    has  been  provided  on  account  of   service   of   the
    participant  during  periods when he or she performed the
    duties of a  police  officer  or  firefighter,  if  these
    duties  were  performed  for at least 5 years immediately
    preceding the date the retirement annuity is to begin.
    (c)  The maximum retirement annuity provided under  Rules
1,  2,  and  4,  and  5 shall be the lesser of (1) the annual
limit of benefits as specified in Section 415 of the Internal
Revenue Code of 1986, as such Section  may  be  amended  from
time  to time and as such benefit limits shall be adjusted by
the Commissioner of Internal Revenue, and (2)  80%  of  final
rate of earnings.
    (d)  An  annuitant whose status as an employee terminates
after August 14, 1969 shall receive  automatic  increases  in
his or her retirement annuity as follows:
    Effective  January  1  immediately following the date the
retirement annuity begins, the  annuitant  shall  receive  an
increase  in  his or her monthly retirement annuity of 0.125%
of the monthly retirement annuity provided under Rule 1, Rule
2, Rule 3, or Rule 4, or Rule 5, contained in  this  Section,
multiplied  by  the  number of full months which elapsed from
the date the retirement annuity payments began to January  1,
1972,  plus 0.1667% of such annuity, multiplied by the number
of full months which elapsed from January  1,  1972,  or  the
date  the  retirement  annuity  payments  began, whichever is
later, to  January  1,  1978,  plus  0.25%  of  such  annuity
multiplied  by  the  number of full months which elapsed from
January 1, 1978, or the date the retirement annuity  payments
began,  whichever  is  later,  to  the  effective date of the
increase.
    The annuitant shall receive an increase  in  his  or  her
monthly  retirement  annuity  on  each  January  1 thereafter
during the annuitant's life of  3%  of  the  monthly  annuity
provided  under  Rule 1, Rule 2, Rule 3, or Rule 4, or Rule 5
contained in  this  Section.   The  change  made  under  this
subsection  by  P.A.  81-970 is effective January 1, 1980 and
applies  to  each  annuitant  whose  status  as  an  employee
terminates before or after that date.
    Beginning January 1, 1990, all automatic annual increases
payable  under  this  Section  shall  be  calculated   as   a
percentage  of  the  total annuity payable at the time of the
increase, including all increases  previously  granted  under
this Article.
    The  change  made  in  this subsection by P.A. 85-1008 is
effective January 26, 1988, and is applicable without  regard
to whether status as an employee terminated before that date.
    (e)  If,  on  January 1, 1987, or the date the retirement
annuity payment period begins, whichever is later, the sum of
the retirement annuity provided under Rule 1  or  Rule  2  of
this  Section  and  the  automatic  annual increases provided
under the preceding subsection or Section  15-136.1,  amounts
to  less  than the retirement annuity which would be provided
by Rule 3, the retirement annuity shall be  increased  as  of
January  1,  1987, or the date the retirement annuity payment
period begins, whichever is later, to the amount which  would
be  provided by Rule 3 of this Section. Such increased amount
shall be considered as the retirement annuity in  determining
benefits  provided under other Sections of this Article. This
paragraph applies without regard  to  whether  status  as  an
employee   terminated  before  the  effective  date  of  this
amendatory Act of  1987,  provided  that  the  annuitant  was
employed  at  least  one-half time during the period on which
the final rate of earnings was based.
    (f)  A participant is entitled to such additional annuity
as may be provided on an actuarially equivalent basis, by any
accumulated additional contributions to his  or  her  credit.
However, the additional contributions made by the participant
toward the automatic increases in annuity provided under this
Section  shall  not  be taken into account in determining the
amount of such additional annuity.
    (g)  If, (1) by law, a function of a  governmental  unit,
as  defined by Section 20-107 of this Code, is transferred in
whole or in part  to  an  employer,  and  (2)  a  participant
transfers  employment  from  such  governmental  unit to such
employer within 6 months after the transfer of the  function,
and (3) the sum of (A) the annuity payable to the participant
under  Rule  1,  2, or 3 of this Section (B) all proportional
annuities payable to the participant by all other  retirement
systems  covered  by  Article 20, and (C) the initial primary
insurance amount to which the participant is  entitled  under
the  Social Security Act, is less than the retirement annuity
which would have been payable if  all  of  the  participant's
pension  credits  validated  under  Section  20-109  had been
validated under this system, a supplemental annuity equal  to
the  difference  in  such  amounts  shall  be  payable to the
participant.
    (h)  On January 1, 1981, an annuitant who was receiving a
retirement annuity on or before January 1,  1971  shall  have
his  or  her  retirement annuity then being paid increased $1
per month for each year of creditable service. On January  1,
1982,  an  annuitant  whose  retirement  annuity  began on or
before January 1, 1977, shall  have  his  or  her  retirement
annuity  then being paid increased $1 per month for each year
of creditable service.
    (i)  On January 1, 1987, any annuitant  whose  retirement
annuity  began  on  or before January 1, 1977, shall have the
monthly retirement annuity increased by an amount equal to 8¢
per year of creditable service times the number of years that
have elapsed since the annuity began.
(Source: P.A. 90-14, eff. 7-1-97; 90-65, eff. 7-7-97; 90-448,
eff. 8-16-97; 90-576, eff.  3-31-98;  90-655,  eff.  7-30-98;
90-766, eff. 8-14-98.)

    (40 ILCS 5/15-139) (from Ch. 108 1/2, par. 15-139)
    Sec.   15-139.    Retirement   annuities;   Cancellation;
Suspended during employment.
    (a)  If   an  annuitant  returns  to  employment  for  an
employer within 60 days after the beginning of the retirement
annuity payment  period,  the  retirement  annuity  shall  be
cancelled,  and  the annuitant shall refund to the System the
total amount of the retirement annuity payments which  he  or
she  received.  If  the  retirement annuity is cancelled, the
participant shall continue to participate in the System.
    (b)  If an annuitant retires prior to age 60 and receives
or becomes entitled to receive during any month  compensation
in  excess  of  the  monthly  retirement annuity for services
performed after the date of retirement for any employer under
this  System,  the  State  Employees'  Retirement  System  of
Illinois, or the Teachers' Retirement System of the State  of
Illinois,  that  portion  of  the  monthly retirement annuity
provided by employer contributions shall not be payable.
    If an annuitant retires at age 60 or over and receives or
becomes  entitled  to  receive  during  any   academic   year
compensation  in  excess of the difference between his or her
highest annual earnings prior to retirement and  his  or  her
annual retirement annuity computed under Rule 1, Rule 2, Rule
3,  or  Rule  4,  or  Rule  5  of Section 15-136 for services
performed after the date of retirement for any employer under
this System, that portion of the monthly  retirement  annuity
provided  by  employer  contributions  shall be reduced by an
amount  equal  to  the   compensation   that   exceeds   such
difference.
    However,  any  remuneration  received  for  serving  as a
member of the  Illinois  Educational  Labor  Relations  Board
shall  be  excluded  from  "compensation" for the purposes of
this subsection (b), and serving as a member of the  Illinois
Educational Labor Relations Board shall not be deemed to be a
return  to  employment for the purposes of this Section. This
provision applies  without  regard  to  whether  service  was
terminated prior to the effective date of this amendatory Act
of 1991.
    (c)  If  an employer certifies that an annuitant has been
reemployed on a  permanent  and  continuous  basis  or  in  a
position  in  which the annuitant is expected to serve for at
least 9 months, the annuitant shall resume his or her  status
as  a  participating  employee  and  shall be entitled to all
rights applicable to participating employees upon filing with
the board an election to forego all annuity  payments  during
the  period  of reemployment. Upon subsequent retirement, the
retirement annuity shall consist of  the  annuity  which  was
terminated   by   the   reemployment,   plus  the  additional
retirement annuity based  upon  service  granted  during  the
period  of  reemployment, but the combined retirement annuity
shall not exceed the maximum annuity applicable on  the  date
of the last retirement.
    The  total service and earnings credited before and after
the  initial  date  of  retirement  shall  be  considered  in
determining eligibility of the  employee  or  the  employee's
beneficiary   to   benefits   under   this  Article,  and  in
calculating final rate of earnings.
    In determining the death benefit payable to a beneficiary
of an annuitant who again becomes  a  participating  employee
under   this   Section,  accumulated  normal  and  additional
contributions  shall  be  considered  as  the  sum   of   the
accumulated  normal  and additional contributions at the date
of  initial  retirement  and  the  accumulated   normal   and
additional  contributions  credited after that date, less the
sum of the annuity payments received by the annuitant.
    The survivors insurance benefits provided  under  Section
15-145  shall  not  be applicable to an annuitant who resumes
his or her status as a  participating  employee,  unless  the
annuitant, at the time of initial retirement, has a survivors
insurance beneficiary who could qualify for such benefits.
    If  the  annuitant's  employment is terminated because of
circumstances other than death before 9 months from the  date
of  reemployment,  the  provisions  of this Section regarding
resumption of status as a participating  employee  shall  not
apply. The normal and survivors insurance contributions which
are  deducted  during  this  period  shall be refunded to the
annuitant without interest,  and  subsequent  benefits  under
this Article shall be the same as those which were applicable
prior to the date the annuitant resumed employment.
(Source: P.A. 86-1488.)

    (40 ILCS 5/15-146) (from Ch. 108 1/2, par. 15-146)
    Sec.  15-146.   Survivors  insurance  benefits  - Minimum
amounts.
    (a)  The  minimum  total  survivors  annuity  payable  on
account of the death of a participant shall  be  50%  of  the
retirement  annuity which would have been provided under Rule
1, Rule 2, or Rule 3, or Rule 5 of Section  15-136  upon  the
participant's  attainment  of  the  minimum  age at which the
penalty for early retirement would not be applicable  or  the
date  of  the participant's death, whichever is later, on the
basis of credits earned prior to the time of death.
    (b)  The  minimum  total  survivors  annuity  payable  on
account of the death of an annuitant  shall  be  50%  of  the
retirement  annuity  which is payable under Section 15-136 at
the time of death or 50% of the disability retirement annuity
payable  under  Section  15-153.2.  This  minimum   survivors
annuity  shall  apply  to  each participant and annuitant who
dies after September 16, 1979, whether  or  not  his  or  her
employee status terminates before or after that date.
    (c)  If  an annuitant has elected a reversionary annuity,
the retirement annuity referred to in this  Section  is  that
which  would  have  been  payable  had such election not been
filed.
(Source: P.A. 90-448, eff. 8-16-97; 90-766, eff. 8-14-98.)

    (40 ILCS 5/15-146.1) (from Ch. 108 1/2, par. 15-146.1)
    Sec.  15-146.1.   Survivors  insurance   benefits-Maximum
amounts.   (a) The maximum total survivors annuity payable on
account of any deceased participating employee shall  be  the
lesser of:  (1) 80% of the final rate of earnings; or (2) (A)
$400  per  month  if  one  survivors insurance beneficiary is
entitled to a survivors annuity, or (B)  $600  per  month  if
there are 2 or more such beneficiaries.
    (b)  The  maximum  total  survivors  annuity  payable  on
account of the death of any person occurring after retirement
or  after  termination of his or her employee status shall be
the lesser of:  (1) 80% of the final rate  of  earnings;  (2)
(A)  $400 per month if one survivors insurance beneficiary is
entitled to a survivors annuity, or (B)  $600  per  month  if
there  are  2  or  more such beneficiaries; or (3) 80% of the
retirement annuity payable to the annuitant at  the  date  of
retirement under the provisions of Rule 1, Rule 2, or Rule 3,
or Rule 5 of Section 15-136, or 80% of the retirement annuity
which  would  have  been  payable  to  the  participant  upon
attainment  of the minimum age at which the penalty for early
retirement would not be applicable  or  the  date  of  death,
whichever  is later, based upon credits earned as of the date
of death.
    (c)  The  maximum  total  survivors  annuity  payable  on
account of the death of any person whose death  occurs  while
in  receipt  of a disability retirement annuity under Section
15-153.2 shall be the lesser of (1) 80% of his or  her  final
rate  of  earnings,  (2)  (A) $400 per month if one survivors
insurance beneficiary is entitled to a survivors annuity,  or
(B)   $600  per  month  if  2  or  more  survivors  insurance
beneficiaries qualify for this benefit, or  (3)  80%  of  the
retirement   annuity  which  would  have  been  payable  upon
attainment  of  the  age  at  which  the  penalty  for  early
retirement would not be applicable  or  the  date  of  death,
whichever  is  later, based upon the participant's credits on
the date of  death,  or  80%  of  the  disability  retirement
annuity whichever is greater.
    (d)  If the minimum annuity provided under Section 15-146
exceeds  the maximum annuity provided under this Section, the
minimum annuity shall be payable.
    (e)  If an annuitant has elected a reversionary  annuity,
the  retirement  annuity  referred to in this Section is that
which would have been payable  had  such  election  not  been
filed.
    (f)  If a survivors insurance beneficiary qualifies for a
survivors  or  widows   annuity  because  of  pension credits
established by the participant or annuitant in another system
covered by Article 20, and the combined  survivors  annuities
exceed  the highest survivors annuity which could be provided
by either system based upon the combined pension credits, the
survivors annuity payable by this system shall be reduced  to
that  amount  which,  when  added  to  the  survivors annuity
payable  by  the  other  system,  would  equal  this  highest
survivors  annuity.   If  the  other  system  has  a  similar
provision  for  adjustment  of  the  survivors  annuity,  the
respective proportional survivors annuities shall be  reduced
proportionately  according  to  the ratio which the amount of
each proportional survivors annuity bears to the aggregate of
all proportional survivors annuities.  If a survivors annuity
is payable by another system covered by Article 20,  and  the
survivor  elects  to waive the survivors annuity and accept a
lump sum payment or death benefit in lieu  of  the  survivors
annuity,  this system shall, for the purpose of adjusting the
survivors annuity under  this  subsection,  assume  that  the
survivor  was  entitled  to  a  survivors  annuity  which, in
accordance with actuarial  tables  of  this  system,  is  the
actuarial equivalent of the amount of the lump sum payment or
death benefit.
    (g)  The  total  monthly survivors annuity payable to the
beneficiaries of  any  annuitant  who  terminated  employment
before  July  14, 1959 and whose death occurs after September
16, 1977 shall not exceed $200.
    (h)  Whenever a reduction in  the  survivors  annuity  is
made  as  authorized  above,  the  survivors  annuity to each
dependent  parent  shall  be   proportionately   reduced   or
eliminated,  and  if  further  reduction  is  necessary,  the
survivors  annuity  payable  to  every  other person shall be
proportionately decreased.
(Source: P.A. 86-272.)

    (40 ILCS 5/15-154) (from Ch. 108 1/2, par. 15-154)
    Sec. 15-154.  Refunds.
    (a)  A  participant  whose  status  as  an  employee   is
terminated,  regardless  of cause, or who has been on lay off
status for more than 120 days, and who is  not  on  leave  of
absence,  is  entitled  to  a  refund  of  contributions upon
application; except  that  not  more  than  one  such  refund
application may be made during any academic year.
    Except  as  set forth in subsections (a-1) and (a-2), the
refund shall be the sum of the accumulated normal, additional
and survivors insurance contributions,  less  the  amount  of
interest  credited on these contributions each year in excess
of 4 1/2% of the amount on which interest was calculated.
    (a-1)  A  person  who  elects,  in  accordance  with  the
requirements of  Section  15-134.5,  to  participate  in  the
portable  benefit  package  and  who  becomes a participating
employee under that retirement program upon the conclusion of
the  one-year  waiting  period  applicable  to  the  portable
benefit  package  election  shall  have  his  or  her  refund
calculated in accordance with the  provisions  of  subsection
(a-2).
    (a-2)  The  refund  payable to a participant described in
subsection (a-1)  shall  be  the  sum  of  the  participant's
accumulated  normal  and additional contributions, as defined
in Sections 15-116 and 15-117.  If the participant terminates
with 5 or more years of service for employment as defined  in
Section  15-113.1,  he  or  she  shall  also be entitled to a
distribution of employer contributions in an amount equal  to
the   sum   of   the   accumulated   normal   and  additional
contributions, as defined in Sections 15-116 and 15-117.
    (b)  Upon  acceptance  of  a  refund,   the   participant
forfeits all accrued rights and credits in the System, and if
subsequently  reemployed, the participant shall be considered
a new employee subject to all the qualifying  conditions  for
participation  and eligibility for benefits applicable to new
employees. If  such  person  again  becomes  a  participating
employee and continues as such for 2 years, or is employed by
an  employer  and  participates  for  at least 2 years in the
Federal Civil Service Retirement  System,  all  such  rights,
credits,  and  previous  status  as  a  participant  shall be
restored upon repayment of the amount of the refund, together
with compound interest thereon from the date the  refund  was
received to the date of repayment at the rate of 6% per annum
through  August  31,  1982,  and at the effective rates after
that date.
    (c)  If a  participant  covered  under  the  transitional
benefit  package  has made survivors insurance contributions,
but has no survivors insurance beneficiary  upon  retirement,
he  or  she  shall be entitled to a refund of the accumulated
survivors  insurance  contributions,  or  to  an   additional
annuity  the  value  of  which  is  equal  to the accumulated
survivors insurance contributions.
    (d)  A participant, upon application, is  entitled  to  a
refund  of  his  or  her accumulated additional contributions
attributable to the additional contributions described in the
last sentence of subsection (c) of Section 15-157.  Upon  the
acceptance   of  such  a  refund  of  accumulated  additional
contributions,  the  participant  forfeits  all  rights   and
credits which may have accrued because of such contributions.
    (e)  A  participant  who  terminates  his or her employee
status and elects  to  waive  service  credit  under  Section
15-154.2,  is entitled to a refund of the accumulated normal,
additional and survivors  insurance  contributions,  if  any,
which  were  credited the participant for this service, or to
an additional annuity the value of  which  is  equal  to  the
accumulated   normal,   additional  and  survivors  insurance
contributions, if any; except that not  more  than  one  such
refund application may be made during any academic year. Upon
acceptance  of  this  refund,  the  participant  forfeits all
rights and credits accrued because of this service.
    (f)  If  a  police  officer  or  firefighter  receives  a
retirement annuity under Rule 1 or 3 of Section 15-136, he or
she shall be entitled  at  retirement  to  a  refund  of  the
difference    between   his   or   her   accumulated   normal
contributions and the normal contributions which  would  have
accumulated  had such person filed a waiver of the retirement
formula provided by Rule 4 of Section 15-136.
    (g)  If, at the time of retirement, a  participant  would
be entitled to a retirement annuity under Rule 1, 2, 3, or 4,
or  5 of Section 15-136 that exceeds the maximum specified in
clause (1) of subsection (c) of Section  15-136,  he  or  she
shall  be entitled to a refund of the employee contributions,
if any, paid under Section 15-157 after the date  upon  which
continuance of such contributions would have otherwise caused
the  retirement annuity to exceed this maximum, plus compound
interest at the effective rates.
(Source: P.A. 90-448, eff.  8-16-97;  90-576,  eff.  3-31-98;
90-766, eff. 8-14-98.)

    Section 90. Severability.
    (a)  It  is  the  intent of the General Assembly that the
changes made by Section 25 of this amendatory Act of the 91st
General Assembly are not  severable  from  one  another,  and
should  any  of  the  changes  made by Section 25 be declared
invalid, then the remainder of those changes shall not remain
in effect.
    (b)  Except  as  set  forth  in   subsection   (a),   the
provisions  of  this  amendatory  Act  of  the  91st  General
Assembly  are  severable under Section 1.31 of the Statute on
Statutes.  Without limiting the foregoing, it is  the  intent
of the General Assembly that should the provisions of Section
25  of  this  amendatory  Act of the 91st General Assembly be
declared invalid, then the remainder of this Act shall remain
in effect.

    Section 95.  The State Mandates Act is amended by  adding
Section 8.24 as follows:

    (30 ILCS 805/8.24 new)
    Sec.  8.24.  Exempt  mandate.  Notwithstanding Sections 6
and 8 of this Act, no reimbursement by the State is  required
for  the  implementation  of  any  mandate  created  by  this
amendatory Act of the 91st General Assembly.

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

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